Question 9

How successful was Henry VII in managing the royal finances?

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Henry's 'ordinary' income (from regular sources) increased from some £70,000 to £113,000 a year during the course of his reign
His own contribution to this increase was greatest from royal land (from £29,000 to £42,000)
Elton writes that 'he spent a profitable 23 years collecting land' (England under the Tudors 1953)
He added the lands of the defeated Yorkists to the Lancastrian lands
Passed Acts of Resumption to claim back some former crown lands
His instinct was to amass land rather than make grants of it to favourites
Also he didn't have an extensive family to endow
Nobles attainted by Henry but later pardoned rarely got back all of their former lands
They also had to pay a price for what they did recover
Income from land was mainly from rents paid by tenants
This was enhanced by strict supervision by his financial agents such as Lovell, Bray and Heron, and of course by Henry himself
He personally signed entries in the Royal Chamber's accounts – this was unique
JD Alsop wrote 'Henry VII was the last English sovereign to devote regular attention to the details of crown finance' (The Structure of Early Tudor Finance in Revolution Reassessed 1986 ed. Coleman and Starkey)
By the end of the reign most revenues were paid into the Chamber rather than the Exchequer ie in the royal household where he could audit it and get at it

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Henry maximised land revenue by the full exploitation of his right of wardship
When a noble died leaving a minor as his heir, the child became a ward of the king who then administered their inheritances
He sometimes held onto the lands of his wards when they reached the age of majority so that the revenues went to him
He also collected all that was due to him under his other feudal rights - marriage: he had the right to give heirs and heiresses in marriage at a profit to the crown; livery: the payment made to recover lands out of wardship; relief: paid to the crown on the transfer of land through inheritances
Henry set up commissions to search out all that was due to him
1487 received only £350 from wardship and marriage
1503 a new post was set up; master of the King's Wards, to get the maximum yield from these sources
1507 figure was £6,000
'Profits of justice' was another source of income for Henry and consisted of: legal fees charged by royal courts for the issue of writs; fines imposed as punishments
Henry preferred to fine his subjects rather than punish them in other ways
It isn't known how much was raised from fines, some of which was remitted or converted into bonds of recognisances
This involved individuals pledging loyalty and good behaviour
Fines were a political weapon as well as a financial device
He threatened to hit his subjects' pockets if they stepped out of line

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Henry's customs revenue increased from an annual average of £33,000 in the first 10 years of his reign to £40,000 by the end of it
Thus land overtook it as the biggest source of income
Henry was compromised by political considerations so his part in determining the yield from customs is ambivalent
He wanted trade to grow to increase customs revenue
So he signed trade agreements with Spain, Portugal, France, Netherlands, Florence, Denmark
He increased customs duties and saw need to reduce smuggling
Wanted to reduce the duty-exemptions enjoyed by privileged foreign merchants engaged in English trade but political considerations stayed his hand
Revenue fell when a trade war with the Netherlands began cutting off English cloth exports there 1493-1496
This ended when the Dutch agreed to stop supporting the Yorkists
Fearing the Hanse merchants might support plots against him he left their privileges largely untouched
Henry had to perform a balancing act between his income and his political security
Trade fluctuations and smuggling were largely outside his control

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Henry got his subjects in and out of parliament to grant direct taxes to conduct wars and rebellions
His early parliaments granted 'fifteenths and tenths' (taxing movable goods) to conduct the Stoke campaign (1487) and prepare for war against the Scots and French in 1490s
Not all of these grants were used for their intended purposes
At such times Henry borrowed from some of his people (and he paid it back)
1491 secured a benevolence (not repayable) to assist his war preparations
He was also granted money by the Church

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There were limits to how much Henry could get his subjects to pay
Sometimes they rebelled - 1489 in Yorkshire and 1497 in Cornwall
Had to abandon attempts to get better rates of tax than the 'fifteenths and tenths' (based on out-of-date assessments of people's assets)
Henry learned that the more he 'lived of his own' the better his subjects liked it
The less he bothered parliaments with requests for extra funds the less resentment was generated and the less he had to make political concessions
He was faced with a system in which the main direct tax needed consent of parliament, could only occasionally be requested and did not represent the country's ability to pay
First half of reign summoned 6 parliaments but only one in the second
Reason – threats to him had subsided
Also he had increases in his 'ordinary' income by enough to manage in peace-time
The Cornish tax rebellion (1497) alarmed him
The rebels' march on London was halted at Battle of Blackheath
After this he was wary of provoking his subjects with tax demands in and out of parliaments
Henry was successful in securing extraordinary grants when he needed them
1485-97 not in a position to make radically new or swingeing tax demands while seeking to make the Tudor regime acceptable

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Henry gave the impression of being very rich
1497 Milanese ambassador spoke of his 'immense treasure'
It was well for Henry that he was seen in this way
It made him appear a more attractive ally and a more powerful enemy
His 'immense treasure' was to some extent an illusion
It came about because he had a policy of having most revenue paid in cash into the royal chamber and royal expenditures paid out from it
The earlier Exchequer system disbursed much of the cash collected at source without it passing through the Exchequer, though the accounting was done there
David Starkey in comparing Henry's real wealth with the French king's says: 'Louis XII's revenues were vast, but little came to his coffers in cash. Henry VII's income was comparatively small, but almost all of it came to the King's Chamber in coin that was lovingly counted, bagged and coffered. Louis was rich on paper, and that impresses historians; Henry was rich in cash, and that impressed contemporaries.' (Revolution Reassessed, 1986)

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In examining how well Henry managed the expenditure side of his financial account, it can be said that he like Edward IV (1461-83) died solvent
JR Lander says Henry 'was the first English King since Henry II to die solvent' (Conflict and Stability 1969)
Henry did more than this – he left a surplus
There was little cash eventually, but a quantity of jewels and gold plate to the value of 2 years income
His extravagances were mainly calculated rather than reckless: bought jewels as an investment; spent on buildings, pageants and his own magnificent tomb in Westminster Abbey
It was money well-spent on propaganda or public relations
He was showing his power and splendour and putting a distance between his image and that of the nobles

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Henry spent money but to get solvency he avoided what other richer European rulers regularly engaged in: wars
This a necessary perspective in which to view his financial achievement
The English monarchy was relatively poor, and there wasn't much he could do about it
1498 the Spanish ambassador said that Henry 'likes to be thought very rich' but was 'less rich than is generally said'
His solvency and prudence make an interesting contrast with Henry VIII's indebtedness
Circumstances though did not allow his financial management to be outstandingly successful in every respect
More outstanding was the statesmanlike skill with which he performed the balancing act between financial and political aims

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