Transcript for Shedcast 33

There I was enjoying the delights of Sunday breakfast, Tea, toast and Rose’s Lemon and Lime marmalade, when I came across a review of new biography by John Guy, one of my very favourite historians, on a chap called Thomas Gresham. Gresham has always hovered, a bit like my children, on the edge of my consciousness, largely because Gresham’s law was mentioned in the 1 incomprehensible year of Economics I did as a supplementary course at St Andrews. So I thought, hey, why not do an episode on the lad?  I thought it might be a good way not only of telling a story of his life but building a picture of international Trade in Elizabeth’s reign, including the relationship between England and Morocco. There is one problem I should point out, which is that my financial competence is at best weak, so I apologise for any howlers. Also worth mentioning at this point is my debt to the book I mentioned, ‘Gresham’s Law’ by John Guy on which this episode very much depends.

In brief, who was Thomas Gresham? I did a quick poll on t’internet, and it appears a good 2/3rds of you in my scientific survey don’t know, so let me give you a quick fly by so you know what to expect. Gresham was born into a London Merchant family in something like 1518; he joined the firm’s cloth business, and then spent much time in Antwerp, working the foreign exchange markets on behalf of the English crown. His life gives a fascinating insight into doing business before the days of paper money in particular, and the complexities of working for the government. Gresham most famously set up the Royal Exchange in London, England’s first bourse, and on his death a founded Gresham College, which is still knocking about today and is amazing! Loads of free lectures on YouTube, or you can go along.

As a subject, it’s been rather interesting. As that outfit of philosophers, the Stranglers informed me some time ago, there are no more heroes anymore, and Gresham doesn’t feel like a hero – we are not talking Florene Nightingale here. As a clumsy analogy, it seems to me that we have a complicated and slightly hypocritical relationship with financiers – on the one hand we detest the almost obscene incomes some generate, and there’s a deep suspicion that something shady is going on – bankers are right down there as the 5th least trusted professions, you might be interested to know, just below paparrazi. On the other hand, Financial services generate a massive £75bn of annual UK tax revenue, which makes North Sea oil tax Revenue look like the takings of the East Grinstead charity shop, which we then use to fund schools, hospitals and the like. That uncomfortable tension is all there in Gresham’s life. Just to give you a flavour, here is his sister Christiana on her bro:

Avaricious, and one that only looketh to singular profit without respect of persons

Ouch. His step mother Isabel, when she died realised she needed to rely on him to execute her will and had to be a beneficiary, but stitched the terms up like the proverbial kipper because she trusted her step son just about as far as she could throw the royal exchange building. On the other hand, here is a man who served his country well, helped Elizabeth finance an existential war against Europe’s superpower, had working relationships with colleagues that lasted a lifetime, and founded two institutions that survive today. Life is complicated.

A deal of myth has grown up over the centuries about Gresham – no great surprise of course. His career was not of the sort to really get historians terribly excited, but in 1839 J W Burgon published a substantial biography that would be the standard for a century or so. Those Victorians were a patriotic lot, most unfashionable in England now of course, and they were often given to bigging up characters of the past, and in Burgon’s work Gresham was painted as a patriotic hero, and a jolly nice chap, husband and father to boot – not bad when he apparently laid the foundation stones of England’s future commercial greatness. One of the myths layered on top of Burgon’s work was the spirit of Smiles’s book and philosophy ‘Self Help’, added by a banking historian, claiming that Gresham as a baby, was discovered in a field, when a grasshopper alerted someone to his presence. This clever little sleight of hand allowed Gresham to become a self made man, and also explain why his symbol was a Grasshopper. More recently, closer study of the significant amount of material Gresham left behind has rather modified views. Gresham’s wife, was often presented as a grasping hard hearted locust after Gresham’s death – it’s now become a bit clearer just what a financial mess Gresham left her to deal with. Gresham’s supposed avarice has rather been emphasised, and his lack of empathy has made him difficult for biographers to love. Ian Blanchard for example is quite brutally dismissive:

An energetic and competent man, albeit of limited abilities, who spent his life trying to live up to the Gresham myth created by his father, Thomas Gresham possessed one true talent, for self-advertisement, which ensured him a place in history

So Blanchard polished the thing off by describing Gresham’s true talent as nothing more than a maker of myths. Christiana would have been pleased. John Guy is rather more generous, but again his image is not of a far-sighted commercial visionary – rather a competent, trader, with a love of the deal and an expertise in working the exchange market that would service his country well. But an unsympathetic man in many ways.

Well, we shall see. Let’s start off with the origins of the family, and it’s probably worth just aiming just below the water line and punching a hole in one of the myths; Gresham was no self made man. He was born the son of Richard Gresham, who had made his name establishing a merchant business in London – so Thomas was born probably in Milk Street in London’s commercial district. I sense a shudder, because of course Gavin will remind me that there’s a private school in Holt called Greshams established in 1555, which I think Stephen Fry went to by the way, so surely Thomas Gresham was from there? Well, the Gresham who moved to Holt was actually Thomas’s great grandfather, a lawyer who built a manor house in Holt, which is about 4 miles from the eponymous village of Gresham. Thomas’s father Richard had 4 children the eldest being Sir John, who seems to have majored in spending the family inheritance and relaxing quietly. Anyway, Gresham School was a beneficiary of the dissolution of the monasteries, founded by Richard’s brother John with the proceeds of a priory. On the way, Richard Gresham had made sure that the Greshams were one of those families of the middling sort who shared in the proceeds of the dissolution. Thomas by the way was the second child, to be followed by Christiana and then Elizabeth.

It was James Gresham who was the first to use the Grasshopper symbol, which is a surprisingly cool symbol, not sure they. There are also many theories about this; the baby marker story already heard; and then the theory that the word comes from a pun on the word for grass. Or another, which is that it was a pun on the anglo saxon form of the name, Graes ham combined with a thick Norfolk accent. I’m going to stick my neck out and say we’ve no idea, but it is a cool symbol.

Thomas’s Mum died when he was very young, and his dad Richard married again, to one Isabel who as we have heard would not entirely trust her step son. Richard’s business primarily as a Mercer did very well, which brings us to a general theme of this story. Your successful early modern merchant was characterised by flexibility; and big bucks were on offer by working with the crown, although big risks too. Soon Richard was working for Henry VIII, supplying arms, and providing loans, in addition to the cloth business. Richard was very much a member of the community of merchants too, interested in playing a role as a leader of the business community; he was elected three times as master of the Mercers livery company, was sheriff of London in 1531 and mayor of London 1537-8; his election that time was largely due to Thomas Cromwell, who fixed it for him. Such are the privileges of power, but interestingly his son would show very little interest in that kind of recognition, and political power or you might argue that kind of community spirit. Thomas would turn out to be a wheeler and dealer, more your Del Boy than your Dick Whittington.

Anyway, one point then is that Thomas was brought up in the lap of luxury, and very well educated at St Pauls and at Cambridge. He turned out to have a talent for languages – the normal Latin of course, but also ancient Greek, and then modern Flemish and French. He’d come to be expert at Italian, passable at German, and have a smidge of Spanish. Vital stuff for the international Merchant. As his Dad focussed on foreign exchange dealing, Thomas moved into the family firm, managing the textiles side of the business with his uncle, also John; in 1544, as his 10 year Apprenticeship came to an end, he became on of the liverymen of the Mercers company. This was something of an honour, but mainly the opening of commercial doors; as a liveryman, Thomas could now trade entirely on his own, and take on apprentices. At public occasions he would wear the Mercers’ robes, a dark marron colour called pewke, which piece of information I was childish enough to find funny. Sorry.

Before becoming a Liveryman, but in the same year of 1544, Gresham got married just 25 years old, to one Anne Ferneley, daughter of a Suffolk merchant, widow,  and mother of two. Thomas and Anne were to be married for 35 years. Whether they were 35 happy years is probably questionable. It seems likely that their marriage was not the result of a great passion – Anne was well endowed with lands, both her own and entailed on her sons. As is sadly normal, Anne leaves less of an imprint of her life and attitudes, but social status and being well off and living in comfort seem to have been two of the things she hoped to get from marriage and in which for the most part she was not disappointed.

As to the personal life between them, well, who can really tell. But Gresham was a controlling sort of man – he took over all his wife’s properties, and her sons to manage them; and used the income to fund his business. I suppose that’s OK in the sense that like marriage often being an arrangement, it was pretty normal at the time, but many other couples took a much more partnership approach. And the fact that Anne appears not to have an allowance, and therefore all her expenditure is recorded in Gresham’s account books, does seem rather like a cap in hand situation for Anne. And that wasn’t very normal. Many husband and wife relationships in a time without welfare support and all the paraphernalia of the modern state were often very much partnerships, with the wife deeply involved either in managing the money, or even trading. Not here.

Then there’s how much they were in each other’s company; Thomas would travel to and from Antwerp around 120 times, and travelling in the 16th century across the Narrow seas was not like a Roll on Roll off ferry of these days – each trip was a bit of a challenge, not just the weather, but also the threat of French, Breton, English and Scottish pirates that plied their trade; Gresham often got sea sick and did not enjoy the journeys. Now often Anne came with him, and set up home in central Antwerp, though moving out to the suburbs during a period of xenophobia when they feared for their safety. But often also she did not come, and especially during one period when their relationship was particularly strained. The principal reason on that occasion was that Gresham had an affair with one Winifred Dutton, and the pair of them had a child.

That’s a revealing occasion. To father an illegitimate child for a bloke was viewed as nothing more than a venal sin if with an unmarried woman; obviously as you’ll all be aware it was viewed rather differently for women. Winifred is married to Thomas Dutton, an assistant in the Gresham firm, very soon after the child’s birth. It is possible that Winifred was already married actually when the affair happened – which would have been viewed even at the time as very naughty indeed. Anyway, it was expected in such a situation for the woman to be well supported; and for the illegitimate child to be also. This does happen in this case; and Anne brings the girl, also called Anne, into the household. But, unsurprisingly to the modern eye, Mrs Gresham appears to have been angry and resentful, and for a few years stopped travelling with Thomas. On the other hand, that may have also had something to do with the birth of their own son, Richard, their only child together, born in 1547. It’s hard to tell, but Gresham’s affair does seem to have put a strain on the marriage.

After Thomas has effectively retired from business it was claimed that he had another affair and another child by a servant called Anne Hurst; the details of the affair come out in a court case over the settlement Gresham made when Anne was married. It’s a rather sad and pathetic case of there’s no fool like an old fool; when Anne Hurst became pregnant, in a panic Gresham makes a financial settlement and arranges her to marry one of his other servants, John Markham. At the court case it transpired that Anne was something of a tricker. In fact she’d been having an affair with John Markham all along, and the child was in her view, John’s, not Greshams. Gresham seems to have been played, and been the kipper in the whole thing, as in stitched up like. It was something of an ironic end to the life of a subtle financial trickster, to be so stitched.

I suspect you didn’t expect to listen to Gresham’s domestic goings-on when you downloaded this episode, so I must get on to the business of business soon, but why don’t I just finish mining this seam of Gresham and his domestics? There’s one more thing to add into the mix of his relationship with his wife, which was the labyrinthine arrangements of his will, which left Anne with substantial debts, and limited her room for manoeuvre by tying up assets and bequests so that she couldn’t touch them; and to make a foundation of Gresham college that probably in retrospect was beyond the Gresham means – though fair dos, the foundation was not be made until after Anne’s death. The will speaks of a very controlling nature; it also betrays a certain lack of sympathy for his companion of 35 years. Anne was forced to devote much of her remaining 20 years fighting court cases to recover some money, and make the most of what she was bequeathed. It gave her also  a reputation also for avarice, and there’s no doubt Anne had high expectations about the style of life she expected to live; but at least in part, it was a situation into which she’d been dumped.

Elsewhere the evidence of Gresham’s family feelings are a bit mixed. He does on other occasions show that his financial brain never switches off, and he is bit unscrupulous and unfeeling in making bequests. A good example is the marriage of Anne, his illegitimate daughter, to Nathaniel Bacon – a relation of Nicholas Bacon, Cecil’s pal by the way. Gresham arranges the marriage rather early in Anne’s life, she’s just 13 years old. And he keeps tight control for rather too long over her dowry in a way that leads to conflict with his son in law. But in the end, Gresham does the decent thing, and actually he and Nathaniel have a strong relationship by the time Gresham dies.

Then there’s the wider family relationships. On the debit side, since we are going to have to mention double entry bookkeeping at some point, there is the aforementioned dispute with his sister, but there’s also his step-mother’s will. This makes generous provision for Thomas, and makes him overseer of the will. But it’s also covered with suspicious warnings and provisions that Thomas was to be absolutely debarred from attempting to change any provisions, and if he did all bequests to him would be immediately revoked. Plus Gresham was not to enter Isabel’s property for 8 weeks after her death – leaving the strong impression that she suspected Thomas to be perfectly capable of having sticky fingers to which might stick a few choice items.

But look, there’s another side to this. While he might be controlling and be more than a little concerned to make the very most of any financial opportunities that came his way, Gresham recognised his responsibilities to his wider family and to the family firm, in a way that his indolent elder brother John really didn’t. Mrs Gresham was at the head of a large, well maintained household; after they moved into Gresham house and Osterley House west of London their style of life was very grand indeed. There are many records of family gifts, and visits to Inwood House, a property in Norfolk where Gresham would entertain the whole family. Isabel at very least recognised that Thomas was the right man to administer her will; and in the dispute with Christiana, we really don’t know much of what Christiana was like. Actually, Thomas was preventing her from using their youngest sister Elizabeth’s inheritance to help her own debts – Thomas might well have been right, and he was unrepentant, and rather unhappily insisted that her opinion of him was shaped by ‘those persons whose poisoned tongues have stirred this discord’. In the end, Gresham agreed to make an annual payment of £135 for Christiana’s maintenance so all ended well.



Enough of all this soft domestic stuff. Let’s get back to where the real sex is – I speak of course of double entry book keeping. I don’t really know what double entry bookkeeping is, but in long and invigorating debates in the local I have been given to understand what an important development in commerce it was. Well, there’s a contradiction in Thomas in double entry bookkeeping in the same way as in his private life, though I guess the analogy might be stretching it. Anyway, although the principles had been around for a while, it’s uptake in the remote and barbaric corners of Europe, such as England were just really taking off in the 16th century, and Thomas’s accounts were the first example in the British Isles, so that’s professional then. However, in his accounts he jumbles up both personal expenditure and income, as well as business, which sucks. The theme here, which I think we will see, is that although Gresham was an innovative thinker and proble, solver, he really wasn’t a methodological man of greater and wider visions. He was, in short, all about the deal. He’s a hare, not a tortoise.

In his early career, Thomas more than lived up to his father’s expectations before he died in 1549, as a Merchant and Mercer, running the House of Gresham’s operations in Antwerp. He organised the sale of English cloths in the fairs and markets on Antwerp and neighbouring towns such as Emden, and bought silks such as velvet, satin, taffeta, and sarsenet. Sarsenet is apparently a fine, soft silk used often as a lining. Good golly, the things you learn writing a shedcast. My brain sadly, became full, some time ago, so the entry of sarsenet into my head means another, possibly prized piece of information is probably as we speak being pushed out, dribbling from my ear. I wonder what it was.  Oh well easy come and all that.

Gresham had the first of two paintings done around this time, in 1544. It’s a full length picture, which is apparently a bit of a thing, full length normally being reserved for royalty and that sort of person. Both Gresham’s portraits are an education actually; here we see a young man, full of confidence, loving his role in life as a man of commerce, confident of cutting the deal and of succeeding; the eyes are not dewey. This is not a monk or priest this is a man of commerce determined to get his way; he’s mainly in black, looking like a fixer, not a party goer, a serious bloke. Maybe I’m reading a lot into it but have a look on the website.

Antwerp, in these years at least, was the principal market for the English, and the principal trading centre in northern Europe. Money and trade brought a massive range of skills and trade – artists following the money as well as traders. It brought a wide range of nationalities too, because unlike many other centres, Antwerp did not attempt to run a closed shop through livery companies, it welcomed all to trade. So, there were traders from Spain, Germany, over a 100 merchants from England, Portuguese, Jews fleeing the inquisition, Greeks, Armenians, black Africans, turks. And, especially Italians, from Florence, Lucca and Genoa. It was one of Europe’s largest cities – 84,000 strong in 1544, a wealthy city, served by a modern harbour which in a good year saw 2,500 ships transporting 250,000 tons of merchandise through its doors.

The busiest times were around the fairs, starting at the Pentecost fair near the end of April, through to August and the St Bavio fair. In between were the pasche fairs and the cold fair 30 miles away at Bergen; the season finished late October/November after the years’s harvest had been sold at the Cold Fair. For English merchants selling something like 100,000 cloths a year, the busiest times were Easter to Whitsun, and in London on the Thames the English ships were readied and loaded a fortnight ahead to make the most of a season you could not miss and survive. Since 1407, the English merchants trading in the Netherlands had been organised into one company, the company of Merchant Adventurers, an organisation dominated by the Mercers, operating out of Mercer’s Hall in London.

Central to all of this business, of course, was finance and credit. Trading was concentrated at Antwerp’s New Bourse, a gothic style, colonnaded building built by the city, where merchants from all these countries could meet, discuss deals, and shake on the deal – and then scurry away to get their factors and clerks to put together the contracts. In London, a pimple on the buttock of European commerce by comparison, although a growing pimple it has to be said, merchants all had to meet in the street around Lombard street, and often of course, that meant getting rained on.

The word Bourse, incidentally, comes from the French bourse, which means Wallet or purse. The legend is that the name arose at Bruges, from the sign of a purse, or three purses, on the front of the house which the merchants there bought to meet in. Others argue for the origin being in Antwerp, but the sign of a purse is commonly agreed.

Now that sounds vibrant and exciting enough, but the ways of commerce were complicated by foreign exchange, and knowledge and skill about exchange rates, or indeed pure luck, could make or break a merchant. Exchanges rates were marked up every day at the entrance to the New Bourse, and then as now was an arcane art – the drivers might have differed a little to todays, though I am sure many like war, the availability of credit  and confidence played a part. But another factor was the quality of coin.

As I am again sure you are aware, late medieval commerce developed the idea of credit and exchange to get round some of the problems associated with transporting coin. The larger merchants and banks would have offices in multiple locations; so if you wanted to sell something in Italy and be paid in England you would take out a bill of exchange from the merchant you sold to in Italy, to be redeemed at that Merchant’s office in coin in England. Straightforward enough you might think. But there were a couple of other factors involved. One was the brokerage fees you’d need to add on top, though that was simply a matter for negotiation. The other was the coin in which you were dealing; there were a myriad of types of coin available, and I suppose that’s the same as the modern world with all its currencies, but in a time where the bullion value formed the basis of a coin’s value, you also needed to know what type  of coin, when it was minted, as well as where it came from – because their quality varied.



In the 1540’s this was a major problem for English merchants, because Henry VIII had heavily devalued the coinage, reducing the bullion content by more than half,  to give him the opportunity lever himself onto some poor horse with the help of various winches and pulleys and chase his dream of being Henry V; as a result English goods looked expensive. There was yet another factor though – which was that unscrupulous ruffians and bounders clipped coins collecting tiny bits of coin, a bit like collecting lint from your tummy button, and then you’d melt down and sell the resulting bullion. So often deals were made which specified that ‘valued’ or ‘permission’ money was to be used – coin that had been checked to be free from clipping or indeed from the presence of naval lint. This coin could demand premiums of 1 to 3%, depending on market conditions.

Might this be the time to talk about Gresham’s Law? This states something along the lines of bad money drives out good – the idea being that clipped coin or coin with a low intrinsic bullion value will be used for transactions and the good coin horded. The law was not in fact the invention of our eponymous hero – it was a claim made by a Victorian, Henry McLeod in 1857. In fact, the idea was commonplace by the 16th century, having been espoused before by, among others, Copernicus. And also the very concept apparently is inaccurate – actually the very opposite will happen, good coin will be preferred to bad, it’s just that a premium will be charged for good coin – the rule only works if good and bad coin are available at the same price. So nerks. That is not to say that Gresham did not have clear, well formulated and firmly articulated views; but in this area, his mantra was instead that debasement caused the value of sterling to fall on foreign exchanges, with two bad consequences; fine bullion was conveyed out the kingdom, to support foreign trade; and the premium of valued or permission coin rose to unsustainable levels, raising the cost of borrowing.

Merchants took a number of actions to try and mitigate against vagaries like this; and once again flexibility was the name of the game. Gresham proved his basic trading competence by varying the kind of cloths he took to market. So, the normal short cloth began to give way to Kerseys which I am told is a lighter weight, cheaper cloth, ending up with a dense warm fabric. I understand that Kersey was so called after the village of Kersey in Suffolk and is described as, and I quote, “a warp-backed, twill-weave cloth woven on a four-treadle loom”. Wow. Que? Some of you out there presumably know what this means.

The flexibility went deeper than this; on one occasion some naughty Germans cornered the market on Tin from Bohemia and pushed prices up by 40%. But of course, the other major centre for European tin was none other than our very own Poldark country, Cornwall – so, for while the inflated price lasted, Gresham sold tin. It’s a feature of both Gresham and Early Modern trade that rather than reflect on the ethics of fixing the market in this way, Gresham thought hmm, there’s a good idea, took the naughty Germans’ idea and pitched it to the Duke of Northumberland in Edward VI’s reign, suggesting they create a monopoly in lead. After all, what with the stripping of the monasteries, England had quite a bit knocking around. The idea was too rich for Northumberland though.

The other thing about bullion coinage was that, until the South American silver mines really got going, bullion was of itself valuable, scarce and its movement controlled. So quite literally the scarcity of bullion could adversely affect trade, or prices. So, the movement of certain coin was sometimes restricted, because Monarchs keen on raising vast armies to beat seven bells out of each other wanted loan money to be available. So, Charles V, for example, banned certain currencies, especially his own gold currencies, to be transported out of the kingdom. His agents conducted regular checks on merchants to make sure bullion stayed in the country.

The complexities this led to would be extraordinary, and if I give you a couple of examples, remember that transporting coins was a factor in most of Gresham’s deals and trading. We are still in Henry VIII’s reign, when the king’s representative in Antwerp was one Stephen Vaughan; it is about this time, under the regime of Northumberland, that Gresham begins to change his focus away from the Merchant trade towards specialising in raising loans for the government and managing their foreign debt – though for the moment he played a supporting role. In 1545, Vaughan had finally managed to agree loans in Antwerp of about £32,000, or £32m in today’s money; it had been hard, because it was a time of war, and interests rate were high at between 12 and 14%; in fact it had taken him about a year to organise. They now needed an expert to advise them on how to get the money to Calais – and this is where Gresham came in. Gresham effectively smuggled the money out of the low countries, hiding the money in 25 large bags sending them across northern France in different carts. On another occasion, Gresham shipped money from Antwerp packed away in bales of silk and taffeta. The whole process was fraught with danger – government officials, bandits, deserting soldiers; but whatever might be said about Gresham, he was no coward. After a month’s graft all the money had made it. Leaving him with the even harder task of getting his expenses paid by the English government.

By this stage, Gresham was in the business of eying the potential to become the government’s exchange agent, and the signs looked good when Vaughan stepped back from the role, to be replaced by William Damsell. Gresham was in direct correspondence with the government now, in the form of Somerset; and meanwhile with Somerset’s war in Scotland foreign debt was rising; by the end of Henry’s reign debt stood at around £350,000, £75,000 of it raised abroad. Under Somerset’s successor, Northumberland, Gresham had his chance. William Damsell was a victim of both his own relative lack of skill, and that curse of life, the unreasonable boss; he failed to roll over a loan, and then organised a loan with rates of interest the PC thought too high – ignoringt he impacts of war on the availability of credit. Finally, Damsell had been forced to agree to take part of the loan in jewels. It was a not uncommon wheeze to pay part of the loan in goods, but when this happened, it sucked; in the case of jewels, they were often over priced, and anyway you had to sell them still, to get bullion. On one occasion, Gresham himself was stuffed with a deal where he had to take substantial quantities of cloth as part of the loan, which was still kicking about the place a year latter in a falling market flooded with English cloth. In Damsell’s case he also ended up taking payment partly in fustian; fustian by the way is, and I quote again, a ‘thick, hard-wearing twilled cloth with a short nap, usually dyed in dark colours’. I do like a short nap – 40 winks in particular. I also learned that fustian was often used to stuff clothing as padding, hence Shakespeare’s use of the word as pompous, puffed up. He was good with metaphors that chap.

This time, though, Damsell was summarily dismissed, and in London Northumberland held a beauty contest for who to replace him. Thomas takes up the story…

I was sent for unto the council and brought to them afore the king’s majesty, to know my opinion, as they had many other merchants, what way and with what charge, his majesty might grow out of debt

We don’t know exactly what Gresham pitched, but he and Northumberland had a pretty good working relationship, or at least productive; Gresham’s rise to fame was also probably achieved by treading on the previous bloke, since it seems Gresham probably verbally knifed Damsell for accepting a high rate of interest, jewels and fustian. This was a stabbing that would come back to haunt him when he also him hard times. It is probably around this time that his path also crossed with one William Cecil



By the time Somerset’s Scottish wars had crashed and burned, foreign debt stood at around £200,000, and the value of England’s coin lower than ever. Gresham it has to be said didn’t get off to a flyer, his first deal suffering from the same problems that had beset Damsell, so much so that the PC threatened to dump the deal Gresham had arranged and default. Gresham sent a series of letters, pleading that if they took this disastrous course, it would be many years before England could raise credit again; it seems to have worked.

Gresham’s creativity at this point came to the fore. He made two proposals; the first was to corner the market on lead, which as we know was considered too ambitious. The other was to rig the exchange markets. Gresham’s proposal was that Northumberland give him a float of about £1,200 every week. With this float, Gresham would secretly send his fellow merchants or assistants to trade in Sterling; they could buy to raise the value of sterling, or sell to lower it. Because each trade would be small scale, and none of the trades traced back to Gresham, the prices could be adjusted. This piece of price fixing sounded great to the PC, and Gresham received his float regularly for a while. It was a wheeze most wizard, Gandalf levels of wizard-ness. Before Gresham put his plan in place, the exchange rate was £1 sterling to 16 flemish crowns. Now Gresham was able to repay many loans and get 22 Flemish crowns per pound. All the while Gresham was charging his brokerage fees of course.

Despite his success, Gresham would find it hard to replace Northumberland’s sagacity; I am a bit of a Northumberland fan as it happens, as a politician who did what he thought was required rather than that which was popular. He also ended the Scottish wars on the basis that they couldn’t afford it, and would address the debased English coinage. The failure of his attempt to put Lady Jane Grey on the throne is one of the tragedies of English history. Anyway, enough of the what-ifs, Gresham’s manipulation of the exchange rates brings us to the real Gresham’s law. Thus he would later write to Mary’s Privy Council

As the exchange rate is the chiefest thing that eats out all princes and all men that use it to the impoverishment of a whole realm, so being unto, it is the most proiftabliest and matter for the Queen’s majesty for the wealth of her realm that can be devised by the wit of man

Gresham’s search for the control of foreign debt was possibly his most significant long term contribution, and indeed short term, allowing Elizabeth, despite rising costs and a creaking taxation system, to remove her expensive foreign debt and exposure to exchange rate variations.

On that vein, another scheme Gresham proposed to Northumberland pointed the way to the even more successful way to avoid foreign debt, though with this scheme Gresham all but torched his reputation and relationships with his fellow merchants. You get the feeling with Gresham that a sense of belonging was much less important than cutting the deal, making a splash, and building a reputation. His idea was that rather than borrowing on expensive foreign markets, why not exploit the wealth in England? He therefore proposed to raise forced loans from English merchants. I think forced loans might be not too harsh a phrase. The loans would be raised from merchants in England, but paid to Gresham in Antwerp, and only in valued coin mind, so that he could then replay existing foreign loans. The loans would be repayable to the merchants in 2 to 3 months, at minimal interest. It gets worse. Gresham told his fellow merchants to stay away from the foreign exchange market while he was trading to make sure he could get the right price. But the piece de resistance, the icing on the cake, the stitch in time – Gresham had Northumberland and Cecil hold the merchants’ ships, which were at the time all loaded up and desperate to sail for the Bergen Cold fair. Basically, the merchants had to pay up or suffer catastrophic trading losses.

Well, good golly. Gresham had a call from his uncle, a far from happy bunny.

I have spoken with my uncle Sir John Gresham, whom hath not a little stormed with me for the setting of the price of the exchange, and sayeth that it lies in me now to do the merchants of this realm pleasure to the increase of my poor name among the merchants for ever

Essentially, Gresham’s name was mud. But d’you know what? Spookily the merchants all managed to pay up to the tune of £30,000. It’s always the well heeled that moan the most. Sir John should have been less angry; Gresham’s attitude I suspect was that he would do well for himself by doing a brilliant job for the country and his bosses irrespective of vested interests; and as we’ll come to, presenting unvarnished opinions to those in power was a feature that would sometimes bite Gresham on the bum. So at the same time as setting up this deal, Gresham was also urging Northumberland to revoke the privileges of the Hanseatic League, set up by Edward IV in 1474, and lobbied Northumberland to hold his ground when the league responded with fury; he would make the same point to Elizabeth. In this he fought the corner for his fellow English merchants – because in his view it made economic sense.

Just to jump ahead a bit, the English loan approach would be the corner stone of Gresham’s future attempts as the government banker to reduce the cost of money for English government; and he would succeed, despite Mary’s disastrous and expensive war, which raised foreign debt to a stonking £350,000, and the destruction of Antwerp as a commercial centre by the Duke of Alva’s reign of terror. Gresham proposed increasing refinements to his forced loan scheme to Cecil once Elizabeth came to the throne. He removed the element of coercion, but made the loans attractive by offering competitive rates of interest. The merchants made a decent return, and the transaction costs for the government was reduced – none of the transportation pain, and since all the transactions were in sterling all the costs and risks of exchange rate dealing were removed. This was not the only way that Gresham successfully removed England’s foreign debt; he was also simply a good deal maker, watching the market and exchange rate with an eagle eye, and more often than not rolling over old loans at a lower rate of interest – and paying down debt with the resulting saving. But there is a feather in Gresham’s cap here – the clearing of England’s foreign debt, a situation for which Philip II would have given his eye teeth.

Gresham’s position didn’t survive the arrival of Mary, though he would try to make the most of the new regime by cutting the most ferociously complicated deal in Spain. The idea in brief was to raise funds for government loans in Antwerp, and redeem them in Spanish reale in Spain, and turn a profit by using the greater bullion value of the Spanish reale. I’m really not going to go into it, but the deal would hang over Gresham for years; the amount of money he wanted to rise would cause bankruptcies among Spanish merchants and simply be too much to raise at the Spanish fairs. Plus, Gresham’s brokerage rates could be described as aspirational, and at some point he would be caught. The Spanish deal was another example of Gresham’s love of the deal – and sometimes he was just a bit too innovative for his own good.

There was someone else who deeply mistrusted Gresham and his deal making, and unfortunately this was the Earl of Winchester. Unfortunately, because Winchester was the Lord Treasure, and in John Guy’s words, Winchester thought Gresham was a spiv and a fraud. And as a good civil servant, Winchester swore he would have Gresham, grasp him firmly by the short and curlies, and twist. Twist firmly. After Gresham had smuggled £12,000 across the channel for Mary, bribing officials liberally along the way, Winchester called in all his accounts to be audited; the audit being carried out by that famous Elizabethan courtier, Walter Mildmay. Here the Spanish deal came into play – Mildmay found that Gresham had returned less money to Mary than he should from the deal, and owed a stonking £5,000,m or £5m in today’s values. Gresham claimed the deal had gone bad due to defaulting, over stretched Spanish merchants, but Winchester demanded proof – letters from the Spanish defaulters – or he would make Gresham pay himself. In the end Gresham would manage to clear most of it, partly because he got Philip II’s support. Gresham takes over the story:

I saw the king’s majesty in right good health, thanks be given to God,…in his robes and the Duke of Savoy with him, which feast was very honourably and solemnly kept by his majesty with all his nobles and gentlemen with him

Gresham was at the top of his game now, an experienced trader, but also experienced in working the system. Because whatever he might believe about doing the right thing, Gresham was an operator, and well and deeply aware of the importance of the political connections and support that were needed to survive, and the importance of greasing the wheels of commerce, and pulling the levers of patronage.



On this theme, you might remember, if you have listened to the History of England episode when Mary is dying, that Mary’s couriers, seeing the way the wind was blowing, callously slipped away from Richmond, jumped on a horse and galloped furiously to see the Princess Elizabeth. Somehow, probably briefed by Cecil, Gresham learned what was going on, and joined the queue of hopefuls – and got himself an audience, which again he probably owed to Cecil. Thomas takes over the story, that Elizabeth:

Promised me by the faith of a queen that she would not only keep one ear shut to hear me, but also, if I did her no other service than I had done to king Edward her brother and Queen Mary her sister, she would give me as much as ever both they did…and thereupon her majesty gave me her hand to kiss it; and I accepted this great charge again

Gresham was the royal banker once more. He would discover, like many others, that Elizabeth was actually rather meaner than her brother and sister. Unlike many others, Gresham could not let the promise drop, from which attitude Elizabeth would give him no change.

Back to that point about patronage though. Gresham’s accounts are full of evidence of the networks he built, of all kinds. Networks of merchants, business associates and suppliers; a network of informers; and a network of influential patrons who could protect his interests at court. He gave imported silks as sweeteners to his county cloth suppliers, small gifts to officials and tax collectors in London and Antwerp to grease the wheels of commerce, and to encourage officials to look through their fingers at key moments. He gave cash gratuities to tradesmen and craftsmen, figuring they’d appreciate that more than a bolt of silk; and at the other end of the scale he gave gifts to his monarchs. As one New year gift he gave a roll of fine Holland linen. Holland linen was a fine, plain woven linen from Europe, btw. In return he got a silver gilt jug; by which token he knew his standing was going up. Gift giving was a subtle and important social language.

At court, Gresham hitched his wagon to exactly the right people during the reign of Elizabeth – namely Cecil and Dudley.  Influential people came to see Gresham as the man that could get them exotic and useful gifts; such as the enormous trouble he went to in procuring a Turkish horse for the Queen, but there were many and various little services; a constant stream of silk headpieces for the queen for example, also silk stockings sent to Dudders so he could present them to the queen. He influenced his patrons in other ways too, lending money to them – he became one of Dudley’s largest creditors, for example. Gresham’s network of agents were useful in many ways – providing business information and for a period, Gresham was appointed to the court of Margaret of Hungary, regent of the Netherlands as a diplomatic representative, and his network provided knowledge; his business dealings and information were served by his own private postal service. That knowledge was also useful currency in his dealings with Cecil.

All of this paid dividends, not only in Gresham’s ability to do his job, but in pounds shillings and pence. In 1574, Gresham had decided that his time as the government banker was done; and a final audit of his books was conducted by a group that included Cecil, Dudley, Mildmay, Francis Knollys and Walsingham. The audit took the best part of a year, and when the results came in, it was not good news for Gresham, not good news at all. His brokerage fees were considered excessive; he’d been charging per diems at the rate given by Edward and Mary of 20s a day, not the meaner rate given him by Elizabeth of 13s. Together with other issues, the commissioners found Gresham to be £18,149 in debt.

Now this was a stonking sum of money – £18 million in today’s money. Gresham had done well for himself, but he was no Thomas Wolsey or William Cecil; as he kept reminding everybody, he’d often used his own money to complete deals, sometimes not paid back. He had been given a couple of grants of land, but relatively small beer, although well situated next to his house at Osterley. He’d also done other favours for Elizabeth that cost him a bob or two – one of these being to play gaoler to Lady Mary Grey, the younger sister of Jane Grey, the 9 day queen. Mary had committed the same crime as her elder sister Frances, and secretly got married; since Elizabeth demanded the right to control the marriages of those theoretically in the succession, Elizabeth went ballistic as she’d done with Frances. Mary was sent round a series of custodians, of whom the Greshams were the third. Her husband, the 7 foot tall Thomas Keys was consigned to the Fleet for a while. The Greshams did not take well to the role of gaolers – it was risky; treat Mary too kindly and Elizabeth would shout at them, too harshly and they’d be in trouble with Cecil who saw Mary Keys as a viable candidate for the throne. And it was expensive. The Greshams moaned mightily until in 3 years time Mary was moved on to her stepfather.

But I digress. Basically, although he was not in Walsingham’s league, for whom government service was anything but financially enriching, and he was by no means poor, nor had Gresham profited in the way that Cecil had – and £18,149 would ruin him. He managed to argue the commissioners down, and managed to get the bill reduced to £10,000 – it would still be the end of him. He knew he had to do something. And so, he called in his favours with Cecil and Dudley, and landed himself an audience with the queen at Kenilworth.

As he rode there, he might have wished that he’d been a little less direct with Elizabeth over the years. When Elizabeth had come to the throne he’d written her a memo to advise her on her financial policy. In it he shamelessly bigged up his achievements; and advised Elizabeth that she should restore the value of sterling, keep the Hanseatic towns away from those privileges that held back English merchants, and to repatriate her debt to English merchants, where she could control it. That sounds all fine and dandy; but the language was direct, and he rather laid into her Dad as the architect of England’s fiscal problems

It may please your majesty to understand that the first occasion of the fall of the exchange rate did gown by the king’s majesty, your late father, in abasing his coin from 6 oz fine to 3 oz fine…secondly by reason of his wars, the king’s majesty fell into great debt in Flanders

It was dangerous to say such things so directly to a monarch, Elizabeth no less than anyone else, and you have to feel a bit of admiration for Gresham’s intellectual honesty don’t you? As his time in the court of Margaret of Hungary rather demonstrated, diplomacy was not Gresham’s strongest suit.

In a couple of other areas, buttock clenching is a bit more the order of the day; a letter lecturing the queen on her marriage, a letter taking her to task about her promise to reward him – although fair dos on the second one it has to be said, princes should live up to their promises. But this, and a failure to raise a loan in Emden when Antwerp was nixed by the Spanish terror, had slightly blotted the Gresham copy book with the queen. So as he rode towards Kenilworth, I doubt Gresham would have been entirely confident. However, behind the closed doors Gresham managed to summon his diplomatic skills, or maybe Elizabeth saw this as an injustice for a man who had worked hard, conscientiously and skilfully for his state; and so she pardoned the debt entirely, and Gresham, was off the hook.




As you will have noticed, we have not mentioned anything about one of Gresham’s other legacies – the Royal exchange. There is a tradition that the idea of the exchange came out of the clearest out and out tragedy of Thomas’ life- the early death of his son Richard in 1567. There is little doubt that Thomas and Anne were devastated by the Richard’s death, if you are looking for emotion and feeling in Gresham’s emotional make up, it’s certainly there. The theory has been that the royal exchange, and indeed Gresham College, were an emotional reaction of a man whose legacy in the form of his son and heir had been thwarted; a sort of search for meaning.

They might have been, but Gresham had apparently mooted the idea of the exchange months before Richard’s death. The idea itself was not new – it had been mooted before in Henry VIII’s reign but come to nought. Now Gresham himself said that maybe he’d pay for an exchange to be built.

Gresham at this point, 1566, was at the top of his game, a successful, authoritative if not necessarily popular man of business. In 1563 he’d commissioned a second painting by a genius called Anthonius Mor. As a man that cannot even draw stick men that look like sticks, I cannot express fully the genius of Mor’s portraits of Thomas and Anne. In Thomas’s picture you see a man of complete confidence and authority, the sort of bloke you seriously would not like to cross or meet in an alley on a dark night. As John Guy says, this is a picture of a diplomat and statesman, there are no images and signals saying ‘merchant’. Anne looks rather more uncertain and unsure of herself with a sort of slightly worried smile. You need to look at them on the website, they are seriously good. And not a stick in sight.

Gresham’s exchange, as it was probably going to be called, was part of London’s coming of age as a commercial centre; London’s dominance of world financial markets are some centuries away, but it starts here; not because of what Gresham built, but because what he built was a sign of London’s feet taking a step further down the path. The idea was to recreate Antwerp’s New Bourse in London – colonnades where merchants could meet, with the walls lined with seats. Upstairs were spaces for boutiques, below cellars for merchandise. Nothing of Gresham’s exchange exists now, it has been rebuilt twice, but his grasshopper still proudly stands on its roof. In the original, there were grasshoppers all over the place by all accounts.  At the time, its significance was appreciated, partly to Gresham’s discontent it has to be said; because Elizabeth stepped forward and renamed it the royal exchange the tinker, rather taking over a bit of Gresham’s glory. It is worth noting that this is not simply a work of philanthropy; Gresham would have all the rents during his lifetime, from the boutiques on the first floor that attracted milliners, booksellers, apothecaries, goldsmiths and so on. On his death, the income would then be divided between the city of London and the Mercer’s Company. Gresham’s exchange was destroyed in the great fire of 1666, then to be rebuilt in a new style, but despite the vagaries of its history, there it is still.

The other legacy for which he is known of course is Gresham college. But that would come later. By the age of 55 Gresham had suffered enough and retired, living most of his time at Osterley with its grand deer park. But there was one more deal, which is in itself quite interesting – because it took place with an Islamic power, Morocco.

Elizabeth’s relationships with Islamic powers is one of those side notes of history which I think we will find time for in more detail sometime, but in the words of Aragon, this is not that time. Suffice to say that as the Spanish net began to draw tighter, Elizabeth was not averse to looking for allies wherever she could find them, including in the Islamic world – the Ottoman Sultan, and with Morocco, principally. Elizabeth was by no means the first – Francis I of France had caused outrage with his friendship with the Ottomans for example. But for Elizabeth, relationships with powers such as these might counter Spanish power in the Mediterranean – but also give opportunities for trade. Morocco in particular, was a great source for sugar and, crucially, for saltpetre, the critical component of Gunpowder.

By 1576, Gresham was definitely feeling the effects of age. He had for many years now been lame, following a fall from a horse and a broken leg that had set badly, possibly leaving shards of bone. The leg caused him regular pain. His eyesight was failing too, though there’s more than a bit of whiny exaggeration when he wrote to Walsingham complaining that he was

‘sixty two years of age and blind and lame…as likewise all my servants be dead and gone that I have brought up, saving one whose name is Edmund Hogan’

He wasn’t blind, and he wasn’t 62, and was in the middle of his affair with Anne Hurst at the time but hey, never let the truth get in the way of a good whine. But he was also worried about his financial situation – now that he wasn’t earning, his debts had mounted to £5,800, or pretty much £6m in today’s money. So, when the prospect of one more deal hove into sight, he was on.

The Barbary coast, or Morocco as we now know it, had been the subject of low level trade since the 1550s, trading English cloth for sugar, but trade was relatively low because the Pope had told the Christian world not to trade with the infidel. So when the pope excommunicated Elizabeth, the raspberry was blown pope-wards and trade rather took off – though Cecil and Elizabeth were keen to avoid selling arms.

What followed should really come under the title skullduggery. Essentially Walsingham was convinced that England’s lack of saltpetre seriously threatened English security; he and Gresham has already tried to source a supply from Europe, and failed. So when, in 1576, Muley Abdel el-Malek deposed the Sultan of Morocco and put out feelers for trading relationships, desperate to source canon balls for the coming struggle with Portugal, Walsingham was interested. The key English agent was a man called Edmund Hogan, who had been with Gresham since 1547 when he started as an apprentice; Hogan brought back samples of Salpetre that showed their quality. Cecil, Dudley and Walsingham agreed that using Gresham and Hogan as front men, they could get round their supply problem. The difficulty was that Elizabeth could not know about a trade in arms, canon balls, otherwise she’d ban the trade. At one stage it looked as though the game was up, when Portuguese spies in England caught Hogan arranging supply of the cannon balls, but the PC hushed it up, and the ships sailed at night from the Isle of Wight. Interestingly, a ship salvaged from the sea near Gibraltar held a cannon marked with Gresham’s name, evidence that merchants like Gresham often had to pay for the ships they commissioned to be armed at their expense.

The deal went through, and Gresham delivered the saltpetre and a cool £2,000 for himself and Hogan, which helped with the debts. Unfortunately, Sultan Muley was dead within a year, and the promise of greater trade rather withered on the vine. Sadly, even this deal, though did not solve his debt problem – partly because Gresham lost a packet sponsoring the explorations of Martin Frobisher for a North West passage to the East. But for Gresham it was now too late – on Saturday 21 November 1579 on his way back from the Royal exchange, he suffered a stroke and died at Gresham House; the funeral was held in December, and Gresham buried in a very grand tomb at St Helen’s Bishopgate.

As noted before he left his wife a thoroughly beastly will and less of his wealth than she felt she deserved; and Anne would spend much of her life paying off Gresham’s debts and trying to overturn his will, until she died in 1596. At this point, Thomas’s last bequest came into operation. The deal was this – that the City of London and the Mercers use some of the proceeds from the Royal exchange to fund 7 professors to give lectures in a range of subjects. The College has a long and rather chequered history; the lectures were to be delivered in Latin and in English and by 19th century such lectures in Latin were rarely attended; the college had to be refounded and rehoused several time. But hey, Gresham College has survived, and I was almost entirely ignorant of it – another great reason to incarcerate yourself in a shed smelling vaguely of rodent oriented wildlife and write podcasts. So hie thee to the Gresham college website – and a link is on the shedcast web page. The College gives 130 free lectures every year, and there are over 2,000 absolutely free on their website, and loads on History; including various lectures on Gresham incidentally, including one by John Guy. I seriously advise you to go there and fill up your boots.

So that’s is finally it; I am sorry, I expected the shedcast to be half this length, I think what you have just experienced is a case of verbal diarrhoea, a rather undisciplined piece of writing, but hey, I enjoyed it. It is difficult to make a financier attractive; and I guess that’s why the Victorians tried to construct this picture of the philanthropic, patriotic national hero. Like most myths there is a kernel of truth in that; certainly, Gresham seems to have been thoroughly charmed by Elizabeth, and he was a loyal servant to multiple English monarchs. He was thoroughly Elizabethan in his attitudes to England, during a period when patriotism was strong and growing.

But he’s not a particularly spiritual man; sadly, I failed to talk a lot about his religion, because actually it’s rather difficult to see any great commitments either way – he served Mary as loyally as Edward and Elizabeth. There is just a hint in his sponsoring of some preachers that he was a conventional protestant, but really, religion was not his bag.

What was his bag was making money and cutting deals, and he was quite prepared to cut ethical corners so to do – although there are no great crimes attached to his name; we are talking about doing deals that don’t quite accord with government rules, smuggling bullion, over charging his per diem rates, that sort of thing. His portraits don’t emphasise a loving, playful sort of chap and his personal relationships are deeply chequered; but far from being devoid of family feeling. He cared deeply about status and reputation, and I suspect it was that which drove his foundations rather than a desire to improve the lot of his fellow man, but also legacy was important to your Tudor magnate – and he clearly deeply felt the loss of his son. He was not afraid to speak truth to power, sometimes to the point of hubris – but he knew his worth, and so did Elizabeth, Cecil, Dudley and the PC; he learning his trade the hard way through apprenticeship, he was competent, energetic and effective. His understanding of the importance of credit and exchange helped England meet the challenges it faced later in Elizabeth’s reign; Elizabeth faced the Spanish threat on firm financial foundations she can hardly have dreamt of when taking over the debt Mary left her to deal with, and that was one of the greatest gifts his talent delivered. Plus, he left long standing legacies in the Royal Exchange and Gresham college which are still with us. It’s not a bad legacy.

Thank you for listening folks, and thank you particularly for being members. The next time you will hear my voice will be in two weeks time, when we start a pryle of podcasts on Margaret Beaufort. Until then everyone, live long and prosper.

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