As Tony Imperato points out, ‘Medieval feudalism placed the monarch in the position of owner of all the lands in the realm, which he distributed to his nobles in return for their loyalty and service. As their overlord, the King could demand a payment whenever changes took place in landholding arrangements.’ This paved the way for the exploitation of his nobles in order to gain revenue. There were many means in which he did this. One was the system of ‘wardship’, and ‘relief’. These were concerned with the passing of land over to the son in a noble family. If the noble holding land died before his son had reached maturity, then the King claimed ‘wardship’. This effectively made him guardian of the heir and his lands. When a ward came of age, Henry could demand a ‘livery’ payment, which was a large sum of money paid to allow the transfer of lands to its new, rightful owner. Similarly, even if the mature son of the noble was to receive the family’s estate in due course when his time came, then a ‘relief’ payment had to be made to the King. This was just another way of extracting money out of the country’s nobility, but one which none-the-less produced large dividends. As head of the legal system, Henry was also entitled to money raised from penalties or fines imposed on his subjects. These he used to great extent, especially in the exhorting of money from his nobles through fines. Bonds and recognisances boosted this income significantly, fines for illegal retaining also contributed to this sector of income. Any monies gathered from the Law Courts were also added into the treasury and used to increase the royal finances.
In the course of Henry’s reign, the economy flourished, and it was during this time that Henry’s royal finances benefited by the import (tonnage) and export (poundage) taxes placed on goods in England. This could yield impressive amounts of revenue during times of economic growth. A more obscure source of income was that of the so-called, ‘French Pension’. This was part of the Treaty of Etaples in 1492, in it, Henry was promised £5,000 per annum to remove their armies from French soil. This was obviously a useful extra sum at the King’s disposal.
All the sources of income we have read about so far is derived from ordinary or prerogative revenues, meaning that it was the King’s right to collect it, and he was obliged to use this sort of income to maintain the Kingdom, to pay for the running of government and to keep his household. However, there were alternate forms of collecting income, these were extraordinary revenues, and were used to fund particular needs of the Kingdom, such as to fight wars, that the King would be unable to afford from his own resources.
It was through these extraordinary revenues that Henry could gain more money for the royal finances. It was generally only through Parliament that a ‘grant’ for extraordinary income could be given (although it could not exceed £30,000 per annum). Tony Imperato gives an excellent description of parliamentary grants with, ‘In agreeing to a grant, Parliament was effectively authorising a one-off direct tax on the King’s subjects.’ Once authorising a grant, the Parliament, made up of the country’s noblemen, had to tax the ordinary subjects of the King to facilitate this grant. This came usually in the form of a property tax, but on occasion included a primitive form of income tax. This was an extremely unpopular form of income with the general public and noblemen, but it was necessary none-the-less. Other than parliamentary grants, Henry could also turn to loans and benevolences from his leading subjects to raise money in emergencies. Whereas loans were generally repaid, benevolences were not, and were seen as yet another way of exhorting money from the rich. Finally, the Church made infrequent contributions to the royal finances, usually to help fund wars against enemies of the Vatican.
As we can see, Henry used many methods in an attempt to improve royal finances. Now the second part of the question is posed, how successful were these measures? It must be said that he indeed was extremely successful, since the start of his reign he consolidated his position on the throne and set up a secure dynasty for his heirs to follow into. During this period the economy blossomed and England was finally back on a firm footing in the European stage after many years of obscurity. John Lotherington makes the point, ‘Henry must take personal credit for the efficiency of his financial administration.’ This was due to the Kings well reputed personal scrutinization of almost every income receipt that came into his administration. Lotherington again points out a reason as to how Henry VII was such a financially successful King when he says, ‘He ran the country on a personal basis as a personal estate.’ This was to a certain extent true, as we have seen, he oversaw the increase in the royal estates himself, and was responsible for the increase in the income gained from them as a result, we are told, by 1509 the royal estates were larger than they ever were before and provided over half the Royal financial income. By 1509 the annual revenue amounted to £100,000 compared to £65,000 in the last years of Edward IV. This proves how much Henry actually did improve royal finances, and how he brought them up to date. In fact the situation was so good he could even afford to loan major noble families like the Habsburgs huge sums of money, and still carry on running the country as per usual.
We can see examples of how successful his methods were in the legacy he left behind. His court was always lavishly kept with no expense spared, he also left one years unspent income aside for his son Henry, his heir, (who was to become Henry VIII) in order so that he would have a firm financial footing when he ascended to the throne. He has been described in his own era as, ‘The richest lord that is now known in the entire world.’ Showing how his wealth compared to other monarchs at the time. Although the figures quoted in this assignment may not seem like much, by today’s standards, however in the early 16th century they were extremely healthy. These were the methods that Henry Tudor, an unknown, untrained, minor noble with no financial management training when he came to power in 1485, had managed in the time he was on the throne until 1509, to improve royal finances to a degree even he would not have thought possible.
