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Anthony Hilton: Shining light on the murky side of Tudor financial wizard Sir Thomas Gresham

04 September 2019

resham Street is virtually the only major thoroughfare in the City of London which carries a person’s name who is not a royal. There are foods like Bread Street and Milk Street; there are churches like Bow Lane and St Paul’s Churchyard; there are gates in what used to be the city walls like Bishopsgate and Aldgate; there are trades like Ironmonger Lane or Carter Lane; there are regal names like King Street and Queen Street; there are religious names like Pilgrim Street, Angel Court or Blackfriars Passage. But the nearest as a person’s name is Whittington Avenue, after Dick Whittington, and it is nothing like Gresham Street.

Sir Thomas Gresham was a millionaire financier at the time of the Tudors. He served under three monarchs, Edward, Mary and most of all Elizabeth I, where he was effectively the Queen’s banker, which seemed to involve raising or rolling over foreign loans, mostly from Antwerp, and restoring the pound to its real value after years of debasement.

He is also said to have coined Gresham’s Law, which holds that bad money drives out good, though the idea was in fact articulated several centuries earlier. He founded Gresham College, which he hoped would rival Oxford and Cambridge, and he founded the first Royal Exchange, though the current one dates from the 1800s as Gresham’s and a subsequent one burned down.

Altogether a good egg, or so the City would have us believe. But to mark the fifth centenary of his birth, John Guy, the Cambridge historian who specialises in the Tudors, has produced a book Gresham’s Law: The life and world of Queen Elizabeth I’s Banker. He paints a much more nuanced picture.

For one thing he was not a millionaire, even if inflation is accounted for, but was deeply in debt in his later years. He lived with a show of great wealth with lands in Norfolk, a big house in London and another, with a deer park, near Osterley. But to rescue himself from these mounting debts, he decided on a last deal to export armaments to Morocco, which was then part of the Turkish empire, in return for sweetmeats and sugar, for which Elizabeth, and indeed the entire population, had an insatiable appetite. The trouble was that it was forbidden to export arms to Muslims, which meant the whole operation had to be clandestine on pain if not of death, then certainly a lengthy spell of imprisonment. But the deal collapsed anyway when the Sultan died and his successor wanted nothing to do with it, while keeping the arms.

Most of Gresham’s wealth came from skimming off a slice of the money, which was vast as he handled much of the government’s foreign business between Antwerp and London. But he was also good at his job; he understood how money worked, the importance of credit, and how to manipulate exchange rates so he could take his cut.

He was the greatest English banker of his generation, and probably greater than any who had come before, and paved the way for the City to become the financial capital of the world. Shame about his ethics.

He was not generous to acquaintances, friends or family, except of course when giving bribes, which he thought was essential as a way of getting business.

Though not impoverished, he married a rich widow, and commandeered her lands as if they were his own. He short-changed the husband of his illegitimate daughter, and he was hardly on speaking terms with his brother. His will sought to pacify them but after his death the widow was not pacified — indeed she sought an Act of Parliament to have the will changed so she could get her fair share.

There were court cases which painted him and his business methods in a poor light even by the mores of the time. What these documents show is that he was interested in money, figures and status but nothing else.

His legacies — the Royal Exchange and Gresham College — were not exactly what they seemed either. It was assumed, largely because he said so, that he paid for them. But in fact it was the City Corporation and the Mercers, the livery company which exported cloth which was Britain’s only real export apart from piracy, which really had to pay the bills.

In the case of the college, it still exists almost 450 years later, and now it is academically worthwhile and well thought of. But then so is Gresham. The difference is that Guy tells us this was not always so. Some of the time they were both pretty dire.

Gresham’s Law: The life and world of Queen Elizabeth I’s Banker by John Guy. Profile Books.