Gresham's Law by John Guy

Author:John Guy
Language: eng
Format: epub
Publisher: Profile
Published: 2019-06-10T16:00:00+00:00

— 14 —

INTO THE BLACK

Throughout most of 1565, Thomas Gresham lived at Osterley or lodged with Richard Candeler in his London factor’s office in Lombard Street, from where he could conveniently supervise his building works. While in the city, he made his bargains and negotiated foreign loans in his usual style, then left his Antwerp factor, Richard Clough, to follow his careful instructions. In May, Gresham advised Cecil that he was unable to meet him at Greenwich, where the chief minister was mulling over plans to open a silver mine in Cumberland, excusing himself on the grounds that he was entertaining ‘divers of my kinsfolk’ at Osterley.1 Always he kept a tight rein on Clough, checking on the repayment and prolongation of the government’s loans, and in particular closely monitoring fluctuations in interest rates.2

That year, once the trade embargo had been lifted and the markets reopened, turned out to be a record one for London’s merchants in Antwerp. Normal trading with the Netherlands and Spain had resumed and the dearth of credit was suddenly replaced by a superfluity. Antwerp seemed to be swimming in cash. As Gresham informed Cecil in June, the advantage lay in checking the rates available in Germany and on Lombard Street too.3 While Antwerp had been paralysed by the embargo, other markets had sprung up, notably in Hamburg, and Thomas found he could occasionally borrow more cheaply there. In any case, his policy of exploiting the strength of sterling after the general re-coinage, coupled with falling interest rates, meant that he had reduced Elizabeth’s foreign debts to around £64,000 (over £64 million in modern values).4 Government finances, overall, were for the first time modestly in surplus, as Cecil noted with obvious satisfaction in a series of private memos in May. From now on, it would be possible to send Gresham larger sums than before to expedite loan redemptions.5

During the winter of 1565–6, Elizabeth sought to speed up the negotiations in Bruges by appealing to Philip II to treat directly with her, ruler-to-ruler. She recalled Sir Thomas Chaloner as her ambassador in Madrid, sending in his place Dr John Mann with instructions to open the conversation. A prickly Oxford academic not well suited to the role, Mann landed at Bilbao on 17 March 1566 and reached Madrid on 3 April. Philip was too busy to see him, as he was supervising the planning and first phase of construction of his magnificent palace-monastery of San Lorenzo de El Escorial just outside the city, which he had designed to resemble Solomon’s Temple. Only on 19 May could Mann secure an audience, after which it took the Spanish ruler until midsummer to respond to Elizabeth’s request.6

While Gresham was awaiting news of Mann’s mission, he spent the time on his own Spanish diplomacy, seeking to recover the losses he had sustained personally through overreaching himself in his ill-fated expedition to the fairs of Medina del Campo and Villalón in Mary I’s reign, when several bankers had made themselves bankrupt owing him cash.

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