The Pirate Queen (9 page)

Once the naval and land battles of the short-lived War of the Insignia against the Guises faded, and the war was declared over (mostly due to the unexpected death of Mary of Guise in June 1560), the French king, Francis II, and his queen, Mary Queen of Scots, were forced to abandon their claims to the English throne—at least on paper in the Treaty of Edinburgh. Yet the English malaise remained great, with councillors and the queen pointing out the repeated failings of Norfolk’s armies. There were seemingly endless recriminations as to when, why, and where battles were lost. And the government knew that the country had been extremely lucky to come out of its first test relatively unscathed. The only commander to escape their criticism was William Winter himself. William Cecil, secretary of state, wrapped up government appreciation of Winter when he stated, “but of Mr Winter all men speak so well that I need not mention him.”
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And it looked as if England’s good fortune would hold a little longer. Francis II died unexpectedly in December 1560,
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and his younger brother became Charles IX under the regency of his
omnipotent mother, Catherine de’ Medici. Mary Stuart was now a dowager Queen of France, with no power and no presence. While she had never ratified the Treaty of Edinburgh, both France and Spain now wanted peace with England. The near strangulation of trade they had experienced at the hands of Winter and the revitalized English fleet had hardly been expected.

With peace now firmly on the agenda, and the English and French troops out of Scotland, William Winter was once again able to turn his talents to administrative matters. Waste, and more precisely the waste of the queen’s exchequer, was a matter dear to Elizabeth’s parsimonious heart. Detailed orders regulating the operation of the Navy Board or the “Office of the Admiralty and Marine Affairs” were drawn up based in some part on his advice to tighten up on slack and wasteful accounting, with weekly reporting to the lord admiral or vice admiral instituted. The navy’s treasurer had to report monthly as well, giving written accounts quarterly; and the master of naval ordnance was obliged to make a quarterly report from his department. But the real power to spend money on ships, ordnance, and seamen remained in the lord treasurer’s hands; and the lord treasurer, the Earl of Winchester, remained at the queen’s side in the Privy Council.

The modern naval administration was beginning to take shape. Sir Benjamin Gonson was Winchester’s counterpart in the Royal Navy, which disbursed the funds on Gonson’s behalf. Gonson, himself a wealthy merchant, had another claim to fame. Within the next few years he would become the father-in-law of the queen’s most colorful corsair of the 1560s, John Hawkins.

5. The Merchants Adventurers, Antwerp, and Muscovy

Our merchants perceived the commodities and wares of England to be in small request with the countries and people about us…and the price thereof abated…and all foreign merchandises in great account, and their prices wonderfully raised; certain grave citizens of London…began to think with themselves how this mischief might be remedied: for seeing that the wealth of the Spaniards and Portuguese…they there upon resolved upon a new and strange navigation.

—RICHARD HAKLUYT, PRINCIPALL NAVIGATIONS,
1589

L
ong before and after the wily patriarch of the Hawkins family, William, had ceded his Spanish trades with Iberia to his two sons, first Bruges then Antwerp was the center of world trade in the densely populated north of Europe. Since the last great Dukes of Burgundy had moved their court to Bruges in the mid-fourteenth century and aligned themselves to the English crown, the special relationship between the House of Burgundy and England prevailed against the common enemy, France. When Marie of Burgundy married into the Habsburg line around 130 years later, the affinity between England and Burgundy was automatically transferred to the House of Habsburg.
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The great and powerful London Company of Merchants Adventurers had profited from the relationship with the House of Burgundy, then Habsburg, since the late Middle Ages. Its wealth and power resided not only in maintaining the status quo with their cloth exports across the Narrow Seas to Antwerp, but also in keeping ahead of the increasingly cutthroat competition. In the year before Elizabeth ascended the throne, the foreign merchants of the
north German Hanse towns decided at the Diet of Lübeck to start a commercial war against England, since the Merchants Adventurers were insisting with the crown that Hanse privileges (particularly the waiving of import duties) should be renewed only if the Hanse merchants imported goods solely from their own lands. The value of Hanse imports had already exceeded £200,000 ($73.39 million or £39.67 million today), and so in response, the Hanse merchants gambled that their merchandise from across Europe would mean more to the Elizabethans than the vociferous complaints of her merchant princes.
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It was a game played throughout Christendom. The Merchants Adventurers themselves enjoyed special privileges at Antwerp and held similar rights there to the German Hanse merchants based out of the Steelyard in London. So when the English vessels returned to England—importing gems, spices, and other luxuries from the Indies, wines from Italy, or silks—it took little convincing to point out to the queen that it was in her best interests to ensure that they did so on English ships at higher customs duties.
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But applying diplomatic pressure on the crown wasn’t the only way the Merchants Adventurers gained the upper hand against its competition. One of the formidable Hanse towns, Hamburg, had suffered badly from the series of religious edicts made by the pope and Philip of Spain’s father, Holy Roman Emperor Charles V, against its predominantly Protestant population. When Elizabeth became queen, her Merchants Adventurers negotiated as trusted Protestant middlemen with the city fathers at Hamburg, and then their queen. The negotiations culminated in the Merchants Adventurers doubling their European market from Antwerp to include henceforth Hamburg. This had the double benefit of also driving a wedge between the northern German cities and contributing largely to breaking up the Hanse trade block.
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When Elizabeth ascended the throne, England had been a military and trading backwater compared to Venice, Spain, and especially Portugal. Envy, as well as survival, played an important role in England’s premier overseas merchant trading group’s quest for alternative markets.
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The country’s Merchants Adventurers had long been the backbone of English export trade, representing
some 90 percent of the cloth exports as well as a strong voice urging the queen against war and Channel piracy. Both were always bad for distribution channels and frequently bad for business. The Merchants Adventurers, like the Hanse merchants, had a great deal to lose if their overseas markets were difficult to reach, or if they themselves were embroiled in a war over which they would have no control. And so, expanding their markets and monopolies made tremendous sense.

They had their own fleet of ships; their own armaments; their own treasury; and their own laws, making them a stand alone, powerful English corporation that could represent an attractive ally to the inexperienced young queen. They engaged solely in foreign trade, and were therefore the greatest receivers of foreign exchange, not to mention foreign intelligence. Strict regulation from “intermeddling” by interlopers was conferred on them by the crown to protect their trading outposts.
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In fact, their royal decree even engaged the Low Countries in its charter:

They have full authority as well from her Majesty as from the Princes, States and Rulers of the Low Countries, and beyond the seas, without appeal, provocation, or declination, to end and determine all civil causes, questions and controversies arising between or among the brethren, members and supporters of the said Company, or between them and others, either English or Strangers, who either may or will prorogate the jurisdiction of the said Company and their court, or are subject to the same by privileges and Charters thereunto granted.
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Criticism of the court’s decision was a punishable offense. Violations of the ordinary rules of the company were always punishable by a monetary fine, with repeated violations often culminating in imprisonment. Any merchant caught “intermeddling” or interloping on the Merchants Adventurers patch often would be both fined and imprisoned.
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Yet the Merchants Adventurers were still subject to royal decree, and in order to set sail, export cloth or other commodities, or claim any monopolies over any territory, they, as all of the crown’s subjects,
needed royal assent. And the best way for them to get what they needed to grow their interests was to nurture a symbiotic relationship with the crown. Nothing would have made this more apparent to either party than the brief War of the Insignia, where their cross-Channel business was severely disrupted. Since their freedom to trade was at stake as they were all staunch Protestants, they threw their considerable financial weight behind the queen and facilitated loans through Gresham, the queen’s factor in Antwerp, in exchange for royal favor.

The merchants, Gresham, the queen, and the Privy Council all knew the importance of their trade to the realm, and that protecting it was essential to England’s balance of payments. If their trade faltered, either in export to the Low Countries or the reexport of English kerseys (a lighter and cheaper cloth sold in southern Europe) over the Alps and back to Italy, Turkey, the Balkans, and Persia, then England’s fledgling economy would be ruined.
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By 1560, the queen had already realized that these powerful London merchants—probably no more than one hundred strong—were her stepping-stones into international finance and world prestige. So she let it be known that if they wanted her royal charter and her protection, there would be a reciprocal price to pay.

For better or worse, they had to agree, and the queen set her man Gresham to work on the plan that would launch England on its own road to empire. His work over the next several years would undoubtedly be fraught with difficulties, but above all else, the queen reminded him that failure was not an acceptable outcome. Gresham wisely counseled the queen that before he could work miracles, and she could strut across the world stage, she and her ministers must undertake a rapid stabilization of the pound sterling.
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Her father, Henry VIII, had in great part enriched the crown with the Dissolution of the Monasteries, pillaging Church treasures and Church lands for himself and his cronies. Still Henry wanted more, and lowered the gold and silver content of English coins. The king had unwittingly wreaked havoc with the Great Debasement of the English monies, which not only undermined confidence in the pound sterling but also made it virtually impossible in a difficult market—like the one in 1560—to fix a viable exchange rate for sterling against other currencies.

Gresham knew from years of experience that the Antwerp money market was extremely sensitive to change depending on supply and demand, and that it was often so unpredictable that rates could change significantly during the course of two Bourse times. This meant that “easy” money was often followed by a period of a dearth of funds, which would only be made available at astronomical rates of interest.
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In 1560, both conditions prevailed. Gresham’s greatest feats of prestidigitation over the next two years would be to enhance the queen’s fiscal management reputation by paying Mary’s debts, borrowing fresh funds to cover the Scottish war, assisting with the recoining of English currency, and reestablishing confidence in the pound.

The new shilling (twenty making up one pound sterling) was minted, weighing 96 grains and containing 88
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/
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grains of fine metal. The mint price was fixed at £2.18s.6d. per pound troy of sterling silver. A pound of “angel” gold was coined into £36 by tale, and a pound of crown gold, which was slightly less pure, into £33 by tale. This meant that the rate between silver and gold was slightly more than eleven to one.
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Elizabeth proclaimed on December 23, 1560, that the deadline to hand in the debased testoons stamped with a greyhound would be extended to April 1, 1561, in order to handle the volume required by the public. Stringent laws were also brought into effect to increase the penalties for “pinching” or “cutting” coins of the realm in order to siphon off silver or gold for personal use. In the event, Elizabeth nearly met her self-imposed deadline, with the old coins ceasing to be legal tender by the end of April. With the recoinage complete within a year of her announcing it, the queen congratulated herself by stating that she had won a victory over “this hideous monster of the base money.”

What made this huge undertaking even more sweet was that the government had minted the new coins at a cost of £733,248 ($261.61 million or £141.41 million today), and paid only £683,113 ($250.62 million or £135.47 million today) for the “base monies,” giving it a gross profit of £95,000 ($34.85 million or £18.84 million today). After government expenses, a net profit was estimated at £40,000 ($14.67 million or £7.93 million today).
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At last, the queen’s merchants could put their faith behind the
English pound, assured of a stable standard of weights and measures for the currency. Wild currency exchange rates became a thing of the past, and the English merchants were again in a position to take advantage of the foreign markets. The downside was that while sterling’s exchange rates were again stable, the currency had necessarily suffered some devaluation as well. This presented more problems for the smaller merchants, who were also being squeezed by Spanish wool merchants importing merino wool from the high plains of Iberia. The general public was also unhappy, since there was an acute shortage of ready cash at the existing prices. The Elizabethan chronicler, John Stow, wrote that in the fall of 1561, “the citizens of London were plagued with a threefold plague: pestilence, scarcity of money, and dearth of victuals, the misery whereof we hear too long to write.”
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