Money Man Sir Thomas Gresham

By Peter Fischer

Thomas Gresham was the central player in financial affairs at the court of three very different English rulers in the turbulent sixteenth century: King Edward VI and Queens Mary I and Elizabeth I.

Power struggles between Catholics and Protestants, the Inquisition, conflicts with Spain and France, unrequited love, smuggling and espionage - this was the background against which Thomas Gresham acted as the first modern investment banker, raising billions in government loans for the English crown in Antwerp, the financial capital of the time.

He was one of the richest men of his time, so rich that he was able to have the first London stock exchange built at his own expense, the Royal Exchange. But the early death of his only son, a serious accident that crippled him, and increasing self-doubt overshadowed his success.

Against the historical background, based on extensive research, Thomas Gresham appears as a Renaissance man between the Middle Ages and modernity, but also as a private man, a husband and a family man.

This book is a biographical novel, not a historical or economic history textbook. The historical context and Gresham's official activities are based on well-documented facts., mostly are written in sixteenth-century English, which today is difficult to understand today.

• Language: English
• Publisher: Peter Fischer
• Release date: Oct 26, 2022
• ISBN: 9798215197899

Book preview

Before the Privy Council

G od help me! said the young man as he mounted his horse. Today was his great day. He, Thomas Gresham, was today to speak before the king and the lords of the Privy Council. He had set out early from his home in Lombard Street, through the busy, narrow streets of the city of London along the magnificent Pall Mall to the new St. James Palace.

He would present his plan on how King Edward, and with him all England, should be freed from the debt burdens that had pushed the country to the brink of ruin. There was a lot of money at stake, exchange rates, loans to be taken out in Antwerp from the rich merchants, and for him it was the post of Royal Agent in Antwerp, which would make him one of the most important men in the world of finance in all England.

John Dudley, the powerful Earl of Warwick and the king's most important advisor, had become aware of the young man some time ago. He had quickly recognized Gresham's abilities and appreciated not least his secrecy and loyalty. He had therefore decided to have him sent to Antwerp as the new Royal Agent.

The post had become vacant after the previous holder, Sir William Dansell, had been relieved of his post due to his unsuccessfulness. In London they had put up with his actions for a while, but by early 1551 the lords of the Privy Council finally had enough: Dansell continued to be unsuccessful, the crown's debts had continued to grow, and he had neither a plan nor the skills to solve the problem. There was also the suspicion that he had been lining his own pockets, which, of course, he vehemently denied. He was therefore removed from his post and ordered to report to London. Dansell feared, and rightly so, that nothing good awaited him there and that he would be made the scapegoat for the late king's wastefulness and mismanagement, so he delayed his return for almost a whole year.

Gresham knew that today's appearance would be a milestone in his life. He had been working for the Crown for some time and, despite his young age, was considered the preeminent financial genius among England's merchants. His father, Sir Richard Gresham, had already been active not only as Lord Mayor of London but also as Royal Agent to the former King, and this activity had already provided him with a handsome fortune, which his son intended to increase considerably. He also knew, however, that the task awaiting him would not be easy, for the former King Henry, the father of the present one, had completely ruined the state's finances with his wastefulness and wars. It did not change much that he had brutally appropriated the assets of the church and the numerous adversaries who had fallen victim to the executioner during his reign.

He reached St. James Palace well before the appointed time, where the guard at the palace gate stopped him:

"Halt! Who are you? What is your desire?

I am Thomas Gresham. I come by command of His Grace the Duke of Northumberland, and I am to report to His Majesty and the Lords.

The soldier on guard told him to wait, moved away and reported to his officer, who came out of the guardroom and examined Gresham.

So, Master Gresham, you say? The guard told me you are summoned before his majesty and the lords. My Lord Northumberland’s letter­, please.

Gresham handed him a letter from Northumberland's office. The officer received the letter, read it carefully and with some respect, folded it up again and gave it back to Gresham.

His until then dismissive mine became somewhat more friendly:

Well, everything seems to be in order. Enter and be patient for a while. I will send for a chamberlain to come and fetch you.

Gresham entered the guardroom, was immediately offered a seat and one of the guards was sent to fetch the chamberlain, as announced. After some time, a grey-haired gentleman appeared, dressed all in black and easily recognizable as a courtier by his appearance and attire.

Master Gresham? Please excuse the inconvenience, but you were not expected so early.

He looked at Gresham, who had stood up and bowed, then continued: I have been informed by His Grace's secretary of the reason for your appearance. Please follow me.

Gresham followed the courtier across a cobbled courtyard to a side portal of the palace. Passing guards, pages, clerks and other court servants, they climbed a wide wooden staircase to the first floor of a side wing of the palace. There, his companion led Gresham into a room to instruct him on how to proceed.

As far as he knew, he, Master Gresham, had not yet appeared before His Majesty, and therefore he thought it necessary to instruct him on how to conduct himself before His Majesty.

First, as soon as he entered the room, he had to take off his headgear, namely with his right hand, then take the hat in his left hand and hold it with an outstretched arm at the height of his left leg, but under no circumstances should he hold the hat in front of him with both hands like a beggar or supplicant. He must also make sure that he turns the outside of the hat towards His Majesty and does not show him the sweatband. During the whole time he should open the coat to the sides with his arms pointing downwards, so that his front side is always visible. This was the custom, he said, so that everyone could see that he was not secretly concealing a weapon. But as he saw, Master Gresham was unarmed.

Then, after waiting a short moment, he should take six steps toward His Majesty and bow again, this time a little lower. After that, he should approach the king again and bow to the king so deeply that he almost seems to kneel. If His Majesty extended his hand to him, he should bow deeply over it, so that it looked as if he were kissing it. Of course, this would be not the case, he was not allowed to touch the king under any circumstances.

Then he had to wait whether the king deigns to address the word to him. When answering, he must not look directly at the king, but just past his left side. The correct form of address the king would be either 'Majesty' or 'Your Grace'.

When the king or one of the court officials later would give him the sign that he could leave, he should, going backwards, leave the room in the same way as he had come.

After he had finished his lecture, the courtier asked him to take a seat on one of the chairs and to be patient until his majesty and the lords deigned to receive him. Thereupon he departed, leaving Gresham behind, who immediately got up again and went to the window to distract himself somewhat by the sight of the bustle in the palace forecourt. In his mind he went over and over again what he would recite. He must  not forget anything, leave anything out, everything was important.

About a quarter of an hour had passed when the door of the room opened again and a servant entered.

Master Gresham, His Majesty and the Lords await you. Please follow me.

Gresham followed him down a hall to a door that opened as if by magic. A large room opened before him, only moderately lit on one side by a row of leaded windows. Opposite the windows on the left side of the room, Gresham caught sight of a large table covered with a Turkish rug with a geometric pattern. Along its long side sat six gentlemen in reclining chairs, all still engrossed in conversation with each other and seeming not to notice the entrant. They were all, except one, dressed entirely in black, with white lace collars, some with gold chains of office, and all wore a lip and chin beard in the Spanish style, like himself and as was fashionable at the time. Among those present, Gresham recognized, besides Dudley, Sir Cecil, as well as Paulet, Marquis of Winchester, the powerful Lord High Treasurer, who held the long white rod as the sign of his office.

With at some distance from the table and the rest, a young man, almost a boy, sat in an armchair. It was the king, Edward the Sixth, the only son of the late King Henry with his third wife, Jane Seymour, who had died shortly after his birth. Edward, who was of delicate build, not at all like his father, looked somewhat absent-mindedly at Gresham, who had entered. It was the first time Gresham had seen his king up close, and he was amazed at how young Edward was, almost like a child. Gresham, on the other hand, at thirty-one, was already a grown man, an experienced merchant and, for some time, a married man.

In the back of the room there were a number of servants who had accompanied their masters and were to be at their disposal if necessary. In addition to these, a number of scribes were seated at a separate table near the window and appeared to be writing protocols when the court official announced in a solemn voice:

Your Majesty, Milords, Master Thomas Gresham!

Gresham approached his sovereign in the prescribed manner and was already standing directly in front of him, bowing low, when the latter first seemed to notice him. He returned the greeting with a slight nod, and indicated with a wave of his hand that Gresham could rise again.

It was then John Dudley, the Duke of Northumberland, whom Gresham knew well, who addressed him, welcomed him on behalf of His Majesty and the Lords, and asked him to present his proposals.

Gresham thanked Dudley for the high honour, as he said, and began with a summary of current conditions. Without naming Dansell directly, he described how, through incompetence and arrogance, lenders had been alienated and the creditworthiness of the crown abroad had suffered greatly. It was therefore hardly possible at present to borrow money in Antwerp at less than fourteen percent interest, and the exchange rate between the English and Flemish shilling had also developed very unfavourably. The first goal must therefore be to restore the reputation and thus the creditworthiness of the crown.

Gresham saw how the king had followed his remarks with greater attention than he had expected from this young person, but that his words had also aroused displeasure in some of the lords. It was very unusual, it was generally felt, to speak of the king's credit in this way, even to hint that it might not be beyond any doubt. With a less gracious prince than King Edward was, this might easily have meant the Tower, if not worse.

But as Dudley nodded in agreement, Gresham went on to say that this meant nothing else than that all agreements with the Crown's creditors had to be honoured in the most punctual manner. He added, that this also meant that in the future creditors should not be coerced into extending against their will the terms of the loans granted. Once the confidence of the creditors has been regained, it would be necessary to deal with the exchange rate, which were of the utmost importance and had not been given sufficient attention so far. But a more favourable exchange rate alone could save up to eight thousand pounds a year, he continued.

This prospect had clearly improved the general mood among the lords, and only the Lord High Treasurer did not seem to like this lecture at all, because it was also a rather blunt criticism of him and his previous approach. This had, as was generally known, not always been advantageous for the king, but it had made him one of the richest men in England. 

Then there was the vexed problem, Gresham continued, that because of unfavourable current conditions the Crown was often forced to take on jewellery and gems of dubious value along with the loans, adding to its costs. In general, the goal should be to make the country independent of foreign lenders by improving its own money and strengthening its own economy. If there were a need for credit, the crown should turn to its own merchants, who were willing and able to provide it, as he could assure.

The lords were increasingly interested in Gresham's remarks, for none of the previous speakers had so clearly pointed out the problems and at the same time proposed concrete measures to solve them. Moreover, there was no reason to doubt the truth of his words or his knowledge, for despite his young years he was already an experienced merchant and not least the son of Sir Richard. The Gresham were also a highly respected merchant family and had given young Thomas a good and thorough education. Only Paulet's mine had not yet brightened in any way, and one could literally see him already working on a plan to put this Gresham in a less favourable light with the king.

Finally, Gresham said, he wanted to point out how much the improvement of English money was of central importance. The fine silver content of the coins had fallen steadily over the years and therefore they were only accepted abroad at considerable discounts. Because an appreciation of money would improve the exchange rate, gold and silver would thus also come back to England instead of rather leaving it, were currently the case, to the detriment of king and country.

Gresham had finished his lecture and bowed to the king and the lords, most of whom now appeared approving and some of whom were already beginning to converse in hushed voices with their table neighbours. Since a discussion was neither planned nor customary, Dudley again took the floor. He bade Gresham farewell and thanked him in the name of his Majesty, who had not said a word during the audience itself, and the promise that he would have to await further orders from his King.

A short time later Gresham received word from Dudley that he had been appointed Royal Agent in Antwerp and that he should proceed to Antwerp without any further delay

Antwerp

At the turn of the year 1551/2, Gresham and his wife Anne moved to Antwerp to take up residence in the spacious city palace of his friend and business partner Caspar Schetz. Gresham had known Schetz for a long time from his earlier trips to Antwerp and had already enjoyed his hospitality.

Flanders was of a dignified prosperity, famous throughout the occidental world. It was not only the splendour of the cities, first of all Antwerp, but of all Flanders. It was the industriousness, high education and skill in financial matters, as well as the cosmopolitanism in the cities that made up this wealth. At that time, Antwerp was at the height of its power and importance as a commercial and financial metropolis north of the Alps.

Thomas Gresham therefore could not wait to finally live and work in this cosmopolitan city, because compared to Antwerp, London was almost provincial. Here in Antwerp, not only were the major financial transactions carried out, but here trade was conducted according to the most modern methods and instruments were used that made international trade possible in a novel way.

Gresham was also anxious to see the vast fleet of merchant ships from all over the world that lay at anchor in the Scheldt, sometimes as many as two or three thousand ships, he had been told in London. What a difference that was from London! But that was going to change, he thought, London was going to be like Antwerp, or even more beautiful and powerful. It was his hometown, after all, and he would do everything to achieve this goal.

Antwerp was the most important city in Flanders at that time, even if it was not the capital. The population was about a hundred thousand souls, including merchants from almost every known country in the world.

In a way, Gresham felt the same in Antwerp as he did at home in London, for there were many similarities. Like his hometown, this city was also located on a river, was a typical port and trading city. Even a kind of fortress like the Tower existed here, a sinister castle called the Rock, in Flemish Het Steen, a fearsome masonry, located directly on the water. Like its London counterpart, it was also used as a prison, where many a poor soul awaited his end at the hands of the executioner. And like London, there was construction everywhere. The old half-timbered houses from earlier times gradually disappeared from the centre, beautiful modern stone houses were built everywhere, both residential buildings and counting houses. Around the market stood the magnificent houses of the powerful guilds and a new town hall was under construction. Along the harbour, as well as in the city, warehouses for the myriad of goods from all over the world were everywhere and, of course, there were pubs and whore houses, as in all port cities.

Although the foreign merchants had their own languages, dresses and habits among themselves, they were as well a cosmopolitan community. They lived a lavish lifestyle, the general wealth made it possible. Elaborate pageants with the most splendid disguises, banquets of immense pomp and refinement, as well as with eminent artists and intellectual giants of all fields, that was Antwerp. There was not a day, some said not an hour, when there was not a feast, a splendid theatrical performance or a ball, and singing, music and laughter could be heard around the Grote Markt.

Most merchants were multilingual and Dutch was commonly spoken, German, Frisian, Spanish as well as French were also widely spoken and there were quite a few among merchants and their wives who spoke up to seven languages. Among the educated merchants Latin was often used as a common language that played a central role in higher education throughout Europe and which Gresham was also fluent in.

Trade between the Spanish Netherlands and England was of the utmost importance to both sides, but the Netherlands in general and Antwerp in particular were England's gateway to the continent. From Antwerp came to England all the goods of the world, especially gold and precious stones, silk, the finest fabrics with gold and silver threads, spices, sugar and other luxury goods. Among these were the very finest lace, made of linen yarn in Brussels and everywhere in Flanders towns, which were in great demand throughout Europe. But also, in large quantities salted fish, hops and, last but not least, weapons and ammunition, an area that was to be a focus of Gresham's activity, along with fundraising.

England's exports, in addition to agricultural products and foodstuffs such as beer and cheese, consisted primarily of wool and cloth as well as tin and lead, raw materials from the islands that had been coveted since ancient times. The wool and cloth trade, however, which was controlled by the London Mercers Guild and of which Gresham was a member, was by far the most important part of the trade and at the time of Gresham's arrival in Antwerp was worth over one million pounds sterling a year.

If Thomas Gresham also moved to Antwerp with his wife Anne,