A guild merchant for wool dominated and regulated the wool trade in many boroughs. In Leicester, only guildsmen were permitted to buy and sell wool wholesale to whom they pleased or to wash their fells in borough waters. Certain properties, such as those near running water, essential to the manufacture of wool were maintained for the use of guild members. The waterwheel was a technological advance replacing human labor whereby the cloth was fulled. The waterwheel turned a shaft which lifted hammers to pound the wet cloth in a trough. Wool packers and washers could work only for guild members. The guild fixed wages, for instance to wool wrappers and flock pullers. Strangers who brought wool to the town for sale could sell only to guild members. A guildsman could not sell wool retail to strangers nor go into partnership with a man outside the guild. Each guild member had to swear the guildsman's oath, pay an entrance fee, and subject himself to the judgment of the guild in the guild court, which could fine or suspend a man from practicing his trade for a year. The advantages of guild membership extended beyond profit in the wool trade. Members were free from the tolls that strangers paid. They alone were free to sell certain goods retail. They had the right to share in any bargain made in the presence of a guildsman, whether the transaction took place in Leicester or in a distant market. In the general interest, the guild forbade the use of false weights and measures and the production of shoddy goods. It maintained a wool beam for weighing wool. It also forbade middlemen from profiting at the expense of the public. For instance, butchers' wives were forbidden from buying meat to sell again in the same market unless they cooked it. The moneys due to the king from the guilds of a town were collected by the town reeve.
When the king wanted to raise an army, he summoned his major baron tenants-in-chief, who commanded their own armed dependent vassals, and he directed the sheriffs to command the minor tenants-in-chief and supply them with equipment. A baron could assemble an army in a day, but might use it to resist any perceived misgovernment by a king. Armed conflict did not interfere much with daily life because the national wealth was still composed mostly of flocks and herds and simple buildings. Machinery, furniture, and the stock of shops were still sparse. Life would be back to normal within a week.
Henry wanted to check this power of the barons. So he took over or demolished their adulterine castles and restored the older obligation of every freeman to serve in defense of the realm, the fyrd, which was a military draft. At the King's call, barons were to appear in mail suit and helmet with sword and horse, knights and freeholders with 213s.[16 marks] of rent or chattels in coat of mail with shield and lance, freeholders of 133s.[10 marks] with lance and hauberk [coat of armor] and iron headpiece, burgesses and poorer freemen with lance and headpiece and wambais, and such as millers with pike and leather shirt. The spiritual and other baronies paid a commutation for personal service, called "scutage", at the rate of 27s. per knight's fee. Barons and knights paid according to their knight's fee a scutage ranging from 10s. to 27s. As of 1181, the military obligations of villeins were defined. The master of a household was responsible for every villein in his household. Others had to form groups of ten and swear obedience to the chief of the group. The sheriff was responsible for maintaining lists of men liable for military service and procuring supplies. This national militia could be used to maintain the peace. The sheriff could call upon the military array of the county as a posse comitatus to take a band of thieves into custody or to quell disorder. For foreign wars, Henry decided to use a mercenary army and a mercenary fleet.
However, the nobility who were on the borders of the realm had to maintain their private armies for frequent border clashes. The other nobility now tended towards tournaments with mock foot battles between two sides. Although subject to knightly rules, serious injury and death often resulted. For this reason, the church opposed them, but unsuccessfully.
New taxes replaced the Danegeld tax. Freeholders of land paid taxes according to their plowable land ("hidage", by the hide, and later "carucage", by the smaller Norman carucate). The smaller measure curtailed estates and increased taxation. It was assessed from 2-5s. per carcuate [100 acres] and collected for the king by knights with little or no remuneration, and later by inquest of neighbors. The towns and demesne lands of the crown paid a tax based on their produce that was collected by the itinerant justices. Merchants were taxed on their personal property, which was determined by an inquest of neighbors. Clergy were also taxed. This new system of taxation increased the royal income about threefold. There was a standard for reliefs paid of 100s. [5 pounds] for a knight's fee and 2,000s. [100 pounds] for a barony. At the end of Henry's reign, his treasure was over 900,000 pounds. Every hide of land paid the sheriff 2s. annually for his services in the administration and defense of the county. This was probably the old Danegeld.
Barons and their tenants and subtenants were offered an alternative of paying shield money ["scutage">[ of 26s.8d. per fee in commutation for and instead of military service for their fiefs. This enabled Henry to hire soldiers who would be more directly under his own control and to organize a more efficient army.
Henry II restored the silver coinage to its standard of purity. The first great inflation in England occurred between 1180 and 1220. Most goods and services increased threefold over these forty years.
Great households, whether of baron, prelate, monastery, or college gave their officers and servants allowances of provisions and clothing called "liveries". The officer of such departments as the buttery [cellar storing butts of wine], the kitchen, the napery [for linen cloth], and the chandlery had his fixed allowances for every day and his livery of clothing at fixed times of the year or intervals of years.
The administration of a great estate is indicated by the Pipe Roll of the Bishopric of Winchester, 1208-1209, as follows:
"Downton: William FitzGilbert, and Joselyn the reeve, and Aylward the cellarer render account of 7 pounds 12s.11d. for arrears of the previous year. They paid and are quit. And of 3 pounds 2s.2d. for landgafol. And of 12d. by increment of tax for a park which William of Witherington held for nothing. And of 2s.6d. by increment of tax for half a virgate of land which James Oisel held without service. And of 19s. for 19 assize pleas in the new market. And of 10s. by increment of tax for 10 other assize pleas in the market this year. Sum of the whole tax 36 pounds 14s.8d. In quittance of one reeve, 5s. In quittance for repairing the bridge, 5s.; of one forester, 4s.; of two haywards from Downton and Wick, 4s.; of one hayward from Witherington, 20d.; of fourteen drivers from Downton, Wick, and Nunton, for the year, 28s.; of two drivers from Witherington for the year, 4s.4d.; of two drivers for half the year, 2s.; of one swineherd, of one neaterd, of one cowherd, for the year, 6s.; of three shepherds from Wick, Barford, and Nunton, for the year, 6s.; of one shepherd from Witherington, for the year, 20d.; of four customary tenants, for the year, 8s. Sum of the quittances, 74s.8d. Remainder 33 pounds.