The first experiment on a large scale in the use of the power thus acquired was not altogether happy in its results. At the opening of the year 1539 the country was in an extremely critical position. Revolution within and invasion from without were threatening to overturn the Tudor throne. Large sections of the community were enraged at the dissolution of the monasteries, and still more at the desecration of venerated objects like the shrine of St. Thomas at Canterbury, or the numerous wonder-working roods and madonnas which had pandered to the emotions of the superstitious. Open rebellion, it is true, had met with a terrible retribution at the hands of Thomas Cromwell, who now filled Wolsey’s place; but it had been crushed by fraud rather than force, and was ready to burst into fresh flame at the hint of foreign assistance. And seldom had the time seemed more auspicious for the conquest of our island by a foreign coalition. In June 1558 Charles V and Francis I had made a peace having every aspect of solidity; and six months later they entered into an agreement which was tantamount to a joint rupture of diplomatic relations with England. Scotland would be certain to join such a promising enterprise, while treason at home was to be stirred up by Cardinal Pole, who, armed with the thunders of a papal bull, was moving heaven and earth to procure the ruin of the sacrilegious king and to avenge the slaughter of his own friends and relatives, a large batch of whom had been executed at the end of 1538.
Henry saw that some sacrifice must be made to avert the storm. Besides fortifying the coasts, drilling troops, and terrifying the seditious by an exhibition of the utmost savagery of the law, he determined on a concession which should render peace with England more profitable than an attempt to crush her. On February 26, 1539, proclamation was made that, for the space of seven years from April following, foreign merchants were free to trade with England on payment of such customs and subsidy only as were paid by the king’s own subjects.[[87]] The only branch of trade excepted from the concession was the export of wool, on which the old duties were maintained. Here was free trade at a single stroke, or what practically amounted to it, since the duties paid by natives were very low. Heavy as the sacrifice was, it was justified by the occasion and by the result. Before the lapse of many weeks the international tension was relieved, and the country was able to breathe freely once more. The principal effect of the move was to buy off the hostility of Charles V, whose Flemish subjects were the chief gainers by it. It must be remembered that the change applied to exports as well as imports. The result was that the Flemish cloth dealers were enabled to ship their supplies from England on the same terms as the Merchant Adventurers, whose mart at Antwerp was thus in danger of being superseded by a similar centre for Flemish buyers in London. In addition to conciliating the emperor, it is also probable that the new policy caused some alleviation of the internal situation in England. The lower total sum paid in duties and the increased freedom of competition among importers must have caused a fall in the prices of foreign products. But the effect produced in this direction may easily be exaggerated, since England was then, in the matter of necessaries, practically self-supporting.
It soon became evident that the inauguration of a free-trade policy was intended as a merely temporary expedient to tide over a difficult situation.[[88]] The prosperity of England’s rising commerce was threatened, and with it the fulfilment of her destiny among the nations. Protection was essential to her merchants if they were to elbow their way to a foremost place amid the jostling crowd of Flemings, Easterlings, Bretons, Spaniards, and Italians who thronged the marts of Europe. The serious effects of the change were immediately evident in the falling-off of the number of ships engaged in the cloth export. Flemish buyers in London used Flemish bottoms in preference to English. Yet a healthy mercantile marine was vitally necessary to national security at a period when the regular navy had to be largely supplemented by merchant vessels in time of war. Accordingly, it was not long before Henry looked round for a convenient pretext for the evasion of his pledge. He was now no longer the chivalrous youth of the Holy League. Hard experience had taught him many a lesson in the game of statecraft as played by the rulers of the Renaissance, and he counted it folly to sacrifice his country’s commerce when the need for sacrifice had passed. In fact, to one who reads the history of the sixteenth century, it seems matter for surprise that the great powers should ever have been at pains to make commercial treaties or pledges, their infringement being of almost daily occurrence.
The virtual revocation of the free trade edict of 1539 was effected in the summer of 1540. In the Parliament which sat from April to July of that year—Thomas Cromwell’s last Parliament—an Act[[89]] was passed which had a more important bearing on English shipping than any since the Navigation Acts of Henry VII. Those Acts were cited and re-enacted. In addition, it was provided that, in view of ‘the no little detriment and decay that hath and is likely to ensue to the navy’ by reason of the late concession, all foreigners who might wish to avail themselves of its advantages must in future ship their goods in English bottoms. This astute move placed the commercial rivals of England on the horns of a dilemma; for, if they persisted in trading on equal terms with the Merchant Adventurers, the measure of their success would be also the measure of the growth of a new carrying trade which would be of enormous advantage to our naval resources. The English merchants would also receive some compensation for the loss of their privileged position, since they were themselves the owners of most of the ships which carried their wares, and would thus participate in the new monopoly. The day of the shipowner as a distinct class, with interests opposed to those of the manufacturer, had not yet arrived.
Lest extortionate profits should be exacted by owners of shipping, the Act further proceeded to fix maximum rates of freight from London to the principal ports of Europe, varying for different commodities. From the details given it is evident that, apart from the Staplers’ trade of wool, woolfells and hides, the only article of export of any importance was cloth. Cloth, in a partly or completely manufactured state, was sent to Flanders for distribution throughout western Germany, to Denmark, France, the Peninsula, and the Mediterranean.[[90]] The control of the cloth export to eastern Germany and the Baltic was vigorously contested between the English and the Easterlings. In spite of oft-renewed efforts of the former, their position at Danzig and the neighbouring ports was very precarious, and the Hansa held the bulk of the trade. The imports were more varied: from Flanders came velvet, chamlet, fustian, Cologne hemp or thread, madder, nails, hardware, hops, together with Mediterranean or ocean-borne produce such as sugar, almonds, currants, prunes, dates, and pepper; Denmark sent wheat and rye, flax, canvas, pitch and tar, ‘compters,’ ‘osmonds’,[[91]] bowstaves, iron, wax, feathers, and fish; wines and woad (used in dyeing cloth) were obtained from Bordeaux; wines, raisins, figs, oil, and salted meats, from Spain; and sweet wines, spices, carpets, rare textiles, gems, and other eastern goods, from the Mediterranean. When it is remembered that any large transference of cash was forbidden by the laws of almost all nations, it will be realized that the output of cloth and wool must have been enormous to balance such a long list of costly imports. To return to the Navigation Act, one more provision of which is of interest: it was laid down that shipowners were to post a notice in Lombard Street giving, for the information of shippers, the dates of sailing and ports of destination of their vessels.
Loud-voiced indignation abroad was the immediate consequence of the passage of this great measure. The Flemings were the hardest hit, more especially as the Easterlings, rivals of theirs as well as of the English, were exempt from its operation, being enjoined to use English ships only when none of their own were available. Chapuys, the imperial ambassador, wrote bitterly: ‘Two years ago, when in fear of war and stoppage of trade, the King issued an edict placing foreign merchants on the same terms as English for customs, etc. Now, seeing no more danger of war, and wishing to increase his own shipping, he has issued an ordinance forbidding merchants to ship goods in other than English bottoms. It concerns most the people of Antwerp.’[[92]]
A prolonged diplomatic conflict was inevitable, for Henry was not disposed to withdraw from his position unless circumstances should compel him to do so. The threatened internal conflagration had been smothered; also, the good relations between Charles V and Francis I showed signs of giving place once more to the usual state of hostility habitual to those sovereigns. The financial disadvantages of the free trade policy were illustrated by a document drawn up in September 1540.[[93]] It showed that the loss to the revenue, consequent on the reduction of foreigners’ payments, was £15,450 in the space of eighteen months. Of this total London was responsible for £14,000, it being thus evident that the great bulk of foreigners’ traffic passed through the capital.
Reprisals were immediately resorted to by the Imperial Government. In the Netherlands an edict was promulgated forbidding the lading of English ships when any others were available. England retorted by prohibiting the employment of Flemish ships by Englishmen in any circumstances whatever. Chapuys repeatedly urged his master to revive the old Spanish laws against the import of ‘untrue’ cloths and the freighting of foreigners’ ships in Spanish ports, but it would seem that this was only partially, if at all, carried out. Henry had a yet stronger card to play, and, early in 1541, he forbade by proclamation the export of wool and undressed cloth, thus starving the Flemish craftsmen of raw material, and reviving the evils of the suspension which preceded the Magnus Intercursus of 1496. The dispute dragged on until the summer of 1542, when the attitude of France rendered imperative a political agreement between England and the Empire. Charles could not face the prospect of a new war with France with England hostile; on the other hand, the Queen of Hungary, Regent of the Netherlands, began to talk of reopening the whole question of commercial relations between England and her subjects, which relations still rested on the basis of the hated Malus Intercursus of 1506.
Neither side had now anything to gain by being obdurate. Accordingly, Chapuys and Gardiner, Bishop of Winchester, two of the ablest diplomatists of the time, were employed to settle the commercial question as a preliminary to a closer union between the two enemies of France. It was agreed that the objectionable edicts on either side should be revoked, and that the emperor’s subjects, both in Spain and the Netherlands, should be exempt from the operation of the Navigation Act.[[94]] This was certainly a surrender of the main point at issue by the English Government; it must be remembered, however, that the original free trade concession was not perpetual, but would expire automatically in 1546. When that date arrived, as a matter of fact, it was not renewed. The Flemings were still inclined to cavil at details of the settlement, but commercial interests had now to bow to politics, and ere long Henry and Charles were making war in person on the soil of France. So unbrilliantly ended the fiscal struggle caused by the first departure from the commercial policy of Henry VII.
Apart from the above incident, the record of commerce under Henry VIII shows a steady progress along familiar lines rather than the introduction of any startling innovations. Many factors contributed to this result. Owing to rivalry with France, the country, on the whole, maintained the traditional alliance with the House of Burgundy, of which the emperor was now the heir and the representative. Since he was also King of Spain, the maintenance of amity with him forbade any widespread oceanic enterprises. With the Hansa, too, Henry was unwilling to quarrel, although the extension of the cloth export was certain to bring on trouble with them sooner or later. There were good reasons for deferring the evil day as long as possible: the Hanse community in London was rich and law-abiding, and could be unconstitutionally taxed without making effective protest—towards one forced contribution alone they paid £1,000;[[95]] also they could supply naval stores, the rigging for ships, and even ships themselves in time of need. Thus the English merchants had to be content with a share only of the North Sea trade, together with an increasing interest in the Peninsula and the Mediterranean. The mediaeval commercial system had not, in fact, been developed to the fullest extent of its possibilities. Until that had been done extensions elsewhere were not worth fighting for.