Sir Thomas Gresham – the Tudor Monarchs’ Banker and Spy
In my new book How to Survive in Tudor England we meet some interesting characters, among them Thomas Gresham. When it came to sixteenth-century dodgy dealing, Thomas was your man yet his success rate was so incredible, he got away with it, time after time. He swindled foreign monarchs, foreign banking houses, his fellow English merchants and even his own family members out of money and goods. Despite this, even in the twenty-first century, the City of London owes its global financial influence to Sir Thomas. The historian John Guy calls him ‘the first true wizard of global finance’.
Portrait of Sir Thomas Gresham in the Rijksmuseum, Amsterdam
Thomas Gresham was born in Milk Street, off Cheapside in the City of London in 1518 or 1519. Both his father, Sir Richard, and his uncle, Sir John, had served as lord mayors of London, were members of the powerful Mercers’ Company and belonged to the Merchant Adventurers’ Company. Thomas attended St Paul’s School and Gonville College (later to become Gonville and Caius), Cambridge, so he was well educated. His family exported more cloth from London than anyone else and the trade between the city and Antwerp in the Low Countries was expanding.
Antwerp was a large centre of commerce and merchants and bankers from across Europe came there to do business, dealing in high end luxury goods, from sumptuous textiles to works of art. Sir Richard had supplied tapestries for Archbishop Wolsey’s splendid new palace at Hampton Court. In 1543, in the reign of Henry VIII, Thomas joined his father’s and uncle’s enterprise, becoming a liveryman of the Mercers’ Company and handling the Antwerp end of the trading network. But this wasn’t just on behalf of the Greshams because Thomas was also acting for the king.
By the 1540s, having broken from the Church of Rome and declared himself the Supreme Head of the Church in England, Henry was paranoid that the country would be invaded by one or other or even an alliance of the Catholic monarchs in Europe. The defence of the realm was paramount and required vast sums of money to pay for the construction of coastal fortifications and warships, arms and armaments and the wages of professional foreign mercenaries brought in to support the English. Undercover of his legitimate business as a merchant, Thomas was acting as the king’s agent, importing weapons, foreign currency and bullion, either by hiding the contraband inside bales of cloth or by bribing the ‘searchers’ (customs officials) to look away.
Having been operating on his own account as well as for his father and uncle, Thomas took over the family business when his father died in February 1549. By this date, he and his network of agents were working on behalf of the new king, Edward VI, or rather for the Lord Protector, the Duke of Somerset, the young king’s maternal uncle. The duke was determined to raise England’s profile as a warrior nation by making war on the Scots. To afford it, Somerset needed to borrow money from abroad and bring in more weapons and mercenaries. His methods, which included further debasing the English coinage, making it unacceptable for foreign trading, along with sweeping religious changes, proved so unpopular that there were serious uprisings in the South-West of England and East Anglia, further depleting the royal coffers. Once again, Thomas Gresham was the go-to man but even he had difficulties raising money as the cloth trade was in a deep recession.
The changes from Protestantism back to Catholicism when Mary became queen didn’t bother Thomas Gresham. He seems to have had little commitment to either religion, preferring ecumenical money which he understood better than anyone. He served Mary and her Spanish husband, Philip, as well as he had Henry and Edward. When Protestant Elizabeth came to the throne he continued his work. He realised that England’s currency had to be improved. In fact, it required the collection, melting down and re-minting of every coin to something like its value in Henry VII’s day when English coinage was the envy of Europe.
Thomas had a hard time persuading Queen Elizabeth that re-minting was vital, despite the time and effort involved. Fortunately, William Cecil, the queen’s chief minister, understood the importance of reliable currency and brought a Frenchman from the mint at Versailles who had invented a machine that could strike coins, instead of doing this by hand. Thomas shipped over a contingent of German metallurgists and the process began in November 1560. The following July, Elizabeth made an official visit to the mint at the Tower of London to see the work being done by the French, Germans and English. By 1562, England had new coinage and some new denominations, including the popular silver sixpence [later known as a tanner] and three-pence [known as a thruppenny bit], coins which were still being issued in the twentieth century.
Thomas had already received recognition for his services to the Crown over the years before the re-coinage began. At Christmas 1559, Elizabeth knighted him as her special economic advisor. One method Sir Thomas had used to make his own fortune and raise huge sums of money for the royal coffers was by trading on the Antwerp Bourse. It was the international stock market of the day. He bought foreign currency when the rate of exchange for pounds sterling was high, receiving as many foreign coins as possible, then exchanging them back to sterling when rates were low, so he got back more pounds than he’d paid out at the start. As far as possible, he did the same when borrowing the enormous amounts required by the Crown and doing his best to repay the debts when sterling was strong. It worked often enough for Sir Thomas to become very wealthy and yet remain a reliable trader – for the most part.
But the Wars of Religion, between Catholic and Protestant states, were breaking out across Europe. Now wasn’t a good time for the financial markets and Antwerp was at the heart of the conflict as the Netherlands, mostly Protestant, were ruled by Philip II, the Catholic King of Spain. Sir Thomas decided it would solve many of his difficulties if England, and more specifically London, was at the centre of the world’s monetary trade. Antwerp’s Bourse was a building designed as a meeting place for merchants and bankers with regulated trading hours. In London, such business was conducted in Lombard Street – literally in the street – with no shelter from the English weather nor any degree of privacy to discuss contracts and deals. This last had always been seen as a means of ensuring transparency and honesty but times were changing. Monarchs and merchants didn’t want every casual passerby to know of their financial difficulties or sharp practices.
With merchants withdrawing from Antwerp, fearing the approach of war, Sir Thomas determined to build a proper bourse in London. His fine town house, Gresham House, just off Bishopsgate, was nearing completion. The house surrounded an inner courtyard, keeping the noise of the city at bay, decorated with the Gresham badge: the Golden Grasshopper. It had its own stable block and a large walled garden faced south. Eight alms houses for the deserving poor – probably Thomas’s fellow mercers grown old and fallen on less prosperous times – were included in the house design, though tucked away behind the main wing, out of sight. As far as Thomas was concerned, this charitable gesture fulfilled his civic obligations as a leading citizen. Unlike his father, uncle and other wealthy mercers, he had no time to spare, serving as a sheriff or lord mayor or taking up any other civic office. But he did have time, in January 1565, to send his personal surveyor to the mayor and aldermen of London with an offer to build a bourse, similar to that in Antwerp and using the Flemish labourers who had constructed and almost finished Gresham House. The offer was accepted.
A site for the new bourse was found between Cornhill and Threadneedle Street and the city authorities bought up the plot. Eighty families were evicted and re-housed and the old buildings demolished at a cost of £3,500 or £3.5 million at today’s values. And just like the costs of large civic projects today, they soon spiralled. Although Sir Thomas could well afford the outlay, he was determined to recoup the money in profits once the bourse began trading.
The grand building was constructed of bricks made at Battersea, oak beams from Suffolk and Hampshire but vast quantities of marble were shipped in at huge expense from Europe. Sir Thomas employed the Flemish bricklayers and masons who had built his house but the Bricklayers’ Company protested that English workmen were being robbed of their rightful employment and local labourers were taken on as well.
Despite the industrial disputes, the building was roofed and ready for business by Christmas 1567. Gresham intended to call it the London or Gresham’s Bourse. On the ground floor was an open quadrangle surrounded by a covered arcade of marble columns and paved with black and white marble where the merchants and money men could transact business. Entry was through a wide classical arch on the south side, bearing Gresham’s arms, with a belfry on which was mounted an enormous golden grasshopper – Thomas was making certain the world knew this was his pet project. Above the arcading on the upper floor were 120 small shops, selling everything from silks, velvets and jewellery to apothecaries’ remedies and surgeons’ services. Nothing of this building – England’s first shopping mall – survives, having been utterly destroyed by the Great Fire of London just a century later, although by 1666, it was old fashioned and in decay. Nevertheless, it has been rebuilt a number of times since and a Victorian version still stands.
The Royal Exchange in 1644
On 23 January 1571, after three years of business had proved its success, Queen Elizabeth came to open it officially. Feasted at his house by Sir Thomas, she was then given a guided tour, visiting the boutiques which were ‘richly furnished with all sorts of the finest wares in the city’, according to John Stow, a contemporary observer. No doubt, Sir Thomas was feeling smug and self-satisfied but then the queen ruined his day. A trumpet sounded and a royal herald announced that Gresham’s Bourse was now ‘the Royal Exchange and so to be called from henceforth and not otherwise,’ – my italics. Worse still, his coat-of-arms above the grand entrance was shoved aside to make room for Elizabeth’s royal arms. Whatever Thomas’s thoughts on the subject, the queen wanted it made clear that she was the ultimate authority in England where money matters were concerned.
In his early career, Sir Thomas was involved in importing weapons of war from Europe into England but by the 1570s, he was reversing the procedure. Among his various business interests he had a couple of iron foundries in Kent. The Weald of Kent had been a centre of the iron industry since medieval times because both iron ore and plentiful supplies of charcoal were available locally. In 1574 and again in 1578 Sir Thomas was granted licences to export cannons, made at his own foundries, to Denmark. The guns were shipped down the River Medway from the heart of Kent, into the Thames and across the North Sea but one at least of his ships came to grief. We know because an English-built ship, dendro-dated to c.1570, was rediscovered in 2003, sunk it the Thames Estuary. It was carrying a cargo of cast iron bars, lead pipe, tin and cannons marked with the grasshopper logo and the initials ‘TG’.
Sir Thomas was now sixty and decided it was time to draw up his will. Never one for straightforward dealing, his bequests would have his family, executors, employees and various institutions tied up in litigation for decades to come, trying to sort out the mess. Properties bequeathed had sub-clauses and provisos attached. For example, Gresham House was left to his wife for her lifetime but her sons from her first marriage had lived there too. When Thomas’s widow died in 1596, were her sons allowed to remain or to be evicted? Nobody was certain.
On Saturday evening 21 November 1579, Thomas had returned to Gresham House having been busy at the Royal Exchange for most of the day. ‘He suddenly fell down in the kitchen and being taken up was found speechless and presently dead.’ His funeral in St Helen’s Bishopsgate was held on 15 December with all the dazzle and display expected as he was laid to rest in a grand tomb, designed by him and constructed by his favourite Flemish architect. The tomb survived the Great Fire of London and the Blitz of 1940 but was damaged twice in the 1990s by terrorist bombs. However, it has been repaired.
Sir Thomas Gresham’s tomb in St Helen’s Church, Bishopsgate, London [GRM 21]
There was a good reason why Sir Thomas’s stepson should leave Gresham House because, after his widow’s death, Thomas intended that the house should become a college to rival and exceed any centre of learning at Oxford or Cambridge. London didn’t have a university or any kind of higher educational institution apart from the Inns of Court which taught lawyers and barristers.
Sir Thomas’s ideas were revolutionary. Unlike Oxbridge colleges, students at Gresham didn’t have to be of a particular religious persuasion [Church of England only], they weren’t required to take an entrance exam nor was there any testing of subjects studied. Students could be merchants, craftsmen or apprentices or anyone who wanted to benefit from further education. There were no fees, no live-in requirements nor were students obliged to attend a set number of lectures. Everything was informal and no paper qualifications were required or awarded. Perhaps the most shocking thing was that about half the lectures were to be given in English not just in Latin, as at every other seat of learning from grammar schools upward. This was education aimed at the common sort.
The lecturers were to be paid salaries and given free accommodation in the fine rooms of Gresham House – now to be known as Gresham College. At Oxford and Cambridge the lecturers received payment of tuition fees directly from the students, so the teachers of popular subjects were more highly paid and professors for less popular subjects hard to find. But at Gresham, all professors were treated equally, even though some suites of rooms were grander than others. But Sir Thomas had failed to stipulate how many lectures in which language the professors should deliver. The trustees, jointly the City of London and the Mercers’ Company, were to pay the professors from the profits made at the Royal Exchange but Gresham’s will made no mention of repairs or upkeep of the building and how that should be paid for.
Despite so many difficulties, times of success and failure, Gresham College is still going. Its original building, Sir Thomas’s splendid house, is long gone and the college was moved to a new site but its free lectures, open to all with a desire to learn, have millions of students across the world, thanks to the internet. However devious and underhanded Sir Thomas was as a wheeler-dealer and financial whizz-kid, his legacy continues to benefit us after more than 400 years through Gresham College.
Gresham College in the 1600s
If you wish to read about many other interesting characters, places, clothing, food and pastimes of the sixteenth century, see my new book How to Survive in Tudor England.
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