Elizabeths management of financial, economic and social affairs Flashcards
What was the financial situation in 1558?
Elizabeth inherited debts from Mary of £227,000.
- -> mainly arisen due to the war with France
- -> this debt was owed to the Antwerp exchange which charged 14%
Sir Thomas Gresham, one of Es financial advisors said there were 3 reasons for the financial difficulties:
- the debasement of the coinage
- cost of wars
- the privileged position of the Hanseatic league.
Inflation was a real issue and was worsened by the debasement of the coinage and it increased in the 1560s which led to higher prices.
Elizabeth inherited a revised Book of Rates from Mary.
The Book of Rates determined the level at which custom duties were charged and they were revised in 1558 to reflect inflation
Harvests in the 1550s were less productive and there was also an outbreak of disease.
How successfully did E deal with her debts?
- She did not embark on lavish expenditure.
- -> She would spend her summers staying with her courtiers who were expected to give her lavish gifts.
- She avoided war as much as she possibly could.
- By 1576 the Chancellor of the Exchequer said “ the realm is acquitted of this great burded”
- By 1584 the Queen had a surplus of nearly £300,000.
==> However, the war with Spain and her expedition to Ireland had a disastrous impact on her finances.
What prevented Elizabeth from fully exploiting the income from her Crown Lands?
Revenue from lands increased slightly over her reign from £86,000 to £111,000.
However:
Elizabeth’s revenue from lands were less than the gains of her nobility who had adopted more aggressive management systems.
–> Elizabeth was reluctant to exploit her tenants by using short-term leases to increase rents, which is what other nobles did.
Why did Elizabeth not fully exploit parliament as a source of tax revenue?
Elizabeth was able to ask parliament for money but did not wish to ask too often.
Assessments for parliamentary taxation were made by the local gentry who often under assessed many wealthy landowners.
–> Elizabeth did not want to pay for a professional tax collecting service and she did not want to alienate the gentry by insisting they increase assessment as she relied on them for much of her administration.
Why did Elizabeth not benefit more from customs duties?
• Elizabeth initially benefitted from customs duties after the revision of the Book of Rates which rose tax rates and also the number of imports that were subject to tax.
However, the rise of tax was not maintained and in 1590 customs only brought in £91,000 which barely kept up with inflation.
- One outcome of the new Book of Rates was an increase in smuggling, Parliament passed an Act in 1559 to try to regulate this however it didn’t work. There were not enough customs officers and there was a lot of corruption among those who were employed.
- Elizabeth could only increase the amount she got from customs duties by raising rates or encouraging more trade, she couldn’t raise rates again and so she had to try to encourage trade.
- In 1563 81% of England’s exports were woollen cloth, which didn’t create enough profit and so Elizabeth tried to encourage the finishing of cloth (the dressing and dying) so that a greater share of the profits would stay in the country as most of the profit of the sale of cloth came from the value added by the finishing process. However, most clothiers continued to export unfinished cloth.
How did E try to exploit her other sources of income?
- E got income from the Church
- -> From the “First Fruits and Tenths” - a tax that used to be paid to the pope.
- After 1581 recusancy fines were increased
- -> However, collection of these were sporadic especially in areas where JPs were sympathetic to Roman Catholicism.
How did war affect trade?
Impact on the war in the Netherlands
- War in the Netherlands had a considerable impact.
- -> E encourage Dutch rebels to remain rebellious so Spanish attention could be occupied and have less inclination to turn to England
- The outbreak of rioting in 1566 led to many Flemings coming to England
- -> their manufacturing skills enhanced royal income
How did war affect trade?
effects of piracy
The Spanish blamed England for much of the piracy in the English Channel.
The English resented the way the Spanish treated English sailors.
In 1568 Elizabeth sent help to Dutch pirates known as sea beggers.
- -> Ships carrying bullion were captured by pirates and forced to port in England
- -> Elizabeth took the bullion for herself
Result:
- Spain seized property belonging t Englishmen in the Netherlands and England retaliated similarly.
==> trade ceased until 1573 when the embargo was lifted
Outcome: had little impact on Es finances.
How serious of a problem was inflation for E
- what made it worse and what were the results
Inflation was made worse by the debasement of the coinage in 1540 –> this was accompanied by high price rises.
There was a growing pop which demanded more food which drove up prices further.
–> There was high demand but limited supply = rise in prices
How serious of a problem was inflation for E
- how did she attempt to deal with it?
- Was this successful and why?
She initially attempted to deal with it via revaluing the coinage in 1560.
- Had limited success
- -> people were suspicious about the actual value of the coins.
–> prices did not go down
==> Overall, they did not understand the root cause of inflation, which was the rising population, so they were unable to deal with it properly.
Example of the rise in the average price of foodstuffs in 1490 compared to 1570
In 1570 the price of average foodstuffs was 14% higher than in 1490.
What other methods did the gov use to control prices?
- Legislation
- -> Elizabeth only ever proclaimed a maximum price on French wine which would have had little effect on poorer households.
- Enforcing fasting during lent and “fish-days” on Wednesdays and Fridays.
- -> this was done to encourage more fishing and conserve food supplies.
- At times when prices rose too high, she forbade the export of grain.
- After the bad harvests of 1586, the “Book of Orders” sent to JPs instructed no hoarding of grain.
Oversees trade
- situation in 1558
- The export trade in cloth in 1558 was mainly confined to Antwerp.
- American trade was controlled by Spain
- Trade in the Far East was controlled by Venetians and the Portuguese.
- Elizabeth was eager to expand trade but most finances for overseas trade came from private companies in the form of joint stock companies.
e. g. Muscovy company had a monopoly on trade
Where did merchants hope to open up other trading ventures?
- Muscovy company traded woollen goods with Russia in return for furs.
- John Hawkins heard of the need for slaves in the West Indies and in 1562 he acquired 300 “slaves” and sold them in the West Indies at a profit.
- In the 1580s the Levant company was set up which formalised the trade between English merchants and the Mediterranean.
- The East India Company was set up in 1600 which laid the foundations for the British Empire.
How did the Dutch revolt impact trade?
- Badly, conditions for trade became very insecure.
