Britain throughout the 16th century and long before was a money economy. The poorest being perhaps the most reliant on cash, having no land or other means of production with which to produce the necessities of life, wages and charity having to supply all. Nor are ordinary people confined to simple buying and selling, but also credit, borrowing, lending, interest and debt.
Any type of production requires capital investment, be it seed, livestock, wool for spinning, ore for smelting, paper for printing. This capital may be available from a previous surplus, inherited wealth or a new wife’s dowery, but it may not. A bad harvest leaves little seed corn for planting the next year; a crash in prices leaves insufficient profit to re-invest in materials for the next cycle of production; setting up costs can be higher than inherited wealth. Market opportunities opening up can make higher levels of investment highly desirable without yet providing the higher returns to do so. All these situations lead the ordinary farmer or artisan as well as the merchant or gentleman to look for ways to borrow money. Long periods between investment and sale, such as from planting until harvest , from paying and feeding workpeople to selling their produce , again can produce a need to borrow . Hard times put even the poorest members of society in need of the money market, borrowing to tide them over till they can recover from a period of sickness, find a new job, till money due to them should arrive, or they can obtain charity.
Proof of the widespread need for and use of borrowing and therefore of lending can be seen in wills and inventories of people from all walks of life :
Inventory of John Batten, Husband man of Stoke Gifford
…debts oweinge to John batten of Stocke harrys as followeth; Thomas hort of pellnie oweth£2 10s 0d. Richard clement 15s 6d . Thomas Edmondes £24 0s 0d .William linch £2 os od . …..Summa totalis £57 10s 10d.
Inventory of Henry Clarck Vicar of Stoke Gifford
….one band wherin William Smith and John Taylor of Stoke stand bound to the deceased for payment of twenty pounds £20 0s 0d. …Summa totalis £34 10s 3d.
inventory of Joan Stambourne , Widow of Winterbourne
…Debts due unto her upon a bande of fower poundes paid forth of the bande £2 0s 0d. ….Summa totalis £6 6s.
Inventory of John Stinchcombe , Labourer of Winterbourne
…debt due to Thomas Jarvis of Winterbourne by bond £6 0s 0d. to Ann Bradstone of Thornburie for debt £1 0s 0s.to Katherine Lovell for wages 3s 0d.to Mr Matheww Bucke for 4 monthes rent £7 16s 8d. …Summa totalis £17 6s 2d.
Inventory of Margery Strange Spinster of Stoke Gifford
….the debts owed by specialty and without specialty £4 7s 4.5d more owed without specialtie 6s 6d. Summa totalis £9 11s 11.5d
Bills and Bonds - How to move your money around.
Whilst cash transactions were undoubtedly the most common it was not always preferable or indeed possible to hand over cash at the point of sale or agreement. For example :
A cloth merchant sells a few parcels of cloth five or six times a year up in London at Leadenhall market. Rather than traipsing up and down to London on each occasion he has an agent or factor who receives the cloth, stores it in a warehouse, takes samples to the market, sells the cloth on the strength of the samples, and collects the money. At the end of the year, or any agreed period, he will send or deliver the total amount to the cloth merchant. The cloth merchant thus has a large amount of money sitting in London all year. Should he need to buy any raw materials in London, say dyestuffs, then rather than send cash by road up from the country, he can write to his agent and ask him to buy them on his behalf, paying for it out of his money which the agent holds on account for him. At the end of the year the agent will simply send the balance of the cash to the merchant. The letter instructing the agent to buy the dyestuffs is a Bill.
Alternatively one merchant could buy his dyestuffs off another merchant who lives locally but his money is tied up in London so he instructs his agent in London to pay the money to the other merchants agent . This is also a Bill.
A bill or bond is also a simple agreement to pay a sum of money on a given date , so a farmer agrees to pay a miller 10s to mill a load of corn and agrees to pay the money in three weeks time once the milling has been done. An example of this simple sort of bill is:
Memorandum that we Richard Kirby and Mathew Morden of Helperthorpe do owe and confess ourselves and either of us to be indebted the sum of 2li 1s of lawfull money of England to be paid to Henry Best of Elmswell or his assignes at or upon 24 June next ensuing the date herof . In witness wherof we have both herunto set our hands this 6 May 1626.
Using agents with whom you have accounts, is illustrated by this example:
4th March 1641 I doe herby promise to pay unto Rachell Browne of York or her assignes in London by the hands of Mr Isacke Knipe factor in Blackwell hall the summe of One Hundreth Pounds upon the 20th day of April next. Witness my hand the day and year written above. Edward firth.
Bonds were frequently used to document a straight loan as well as facilitate trading activity. Thus if widow Warren lends Blacksmith Weller £2 6s 0d till michaelmas when business should have picked up and Mr Washington will have finally paid him for the fancy new gate, then she will probably require the blacksmith to make out a bond which she will keep until he pays her back. Something along the lines of; I David Weller do own that I owe £2 6s to Mistrss Warren to be paid to her or her assignes at michaelmas next. In witness I set my hand this 12th of August 1578.
Since the ‘1571 Act Against Usuary’ usuary was illegal. Technically usuary occurs when the lender is guaranteed a profit without regard to the borrowers risk. Usuary was seen as a grave moral offence and a potentially destabilising force. 1584 ‘An Alurum against Usurers’- Thomas Lodge "those degenerate merchants who have wandered from their true calling, employing their goods for ungodly and dishonest purposes in order to destroy gentilmen. ….not only they enrich themselves mightilie by others misfortunes , but also eate our English gentrie out of house and home." The userer was seen as pulling himself up the social ladder not only at others expense but of pulling down those very people whom God had put at the top, thus subverting God’s will and the natural order.
There were however ways of lending money at a profit which didn’t count as usuary:
By having a sleeping partner who shared the risk –thus widow warren could have made a profit from lending money to the blacksmith if she had become his partner with her taking part of any profit the blacksmith made or indeed any loss should things go wrong.
Lending charitably where could have used the money more profitably elsewhere-so if widow warren lent the money to David Weller because he was going through a sticky patch when she could have made much more by investing the same money in a new dye vat then she is entitled to charge interest in compensation .
Expenses incurred may also be recouped-so widow Warren may charge blacksmith Weller for getting Geoff Hardy to write out the bond.
If the loan is overdue then interest may be charged without being usuary- so David Weller had better be sure that he pays up on time.
Overseas lending might incur risk due to currency fluctuations- so if she has any international connections then its no holds barred for widow warren.
If she is willing to take the risk of prosecution then Widow Warren also needs to know that the penalty for lending money at up to 10% interest is a fine of one and a half times the loan and that no one was ever successfully prosecuted for this ( though there may have been cases brought which the lender bribed their way out of ) but the penalty for charging over 10% was three and a half times the loan and all the interest so far paid and people were informed on and prosecuted for this.
By 1590 lending at 10% had become partially acceptable a booklet was published which gave tables to work out interest on any sum "from one to a thousand pounds up to twentie one years "at 10%.
Scams and Wheezes
Scams can be divided into those which were designed to get around the 1571 Act but were otherwise fairly honest and those which could be seen as outright fraud and theft.
The genuine sale of something at a highly inflated price to cover the interest was one way around the law- so if our blacksmith wished to borrow another £2 form the fairly well off Mistress Warren she may agree providing that he also buys a length of dyed cloth at twice its normal selling price.
Or maybe a loan is made without any interest but the borrower has to give the lender a ‘gift’-so that’s how she got that brand new lock on her door.
The sale of discounted paper is Dave Evans the carter’s speciality sailors leaving their ships are not paid off in cash but with a ticket which they can cash in London but many of them don’t want to go all the way to London for their pay so, like Ronnie, they sell their ticket to the likes of Evans the carter for 75%of it’s face value and when he next goes up to London he collects the full amount and makes himself a 25% profit .
Coleshill 1570 describes discounting paper thus "A man lacking money cometh to a broker and asketh where upon good assurance Cli is to be found. He saith , syr dare you trust me , then make a bond of CXXli to me due a yere to come and I will provide for you so that you shall not lose above Xxli in the C, And he goeth to know whoe will buy the byll. And one saith he will give Cli so he may have the debt made over to him by letter of Attorney or the Byll altered in his owne name."
The Double Stoccado however takes things a bit further. When the borrower, young Lawrence Washington , tried to borrow money the broker said that he had no money but that he was willing to let him have some goods which, when sold , would yield the cash and not lose more than 10-12% , which would make it worth the brokers while. The broker then sold the goods on young Lawrence’s behalf, Lawrence having signed a bond for the full amount. The goods however did not fetch the price promised and Lawrence only got 75%of the money which he had made the bond out for. Thus in effect he paid 25% interest on the loan and the broker had the bond which he could take to court if Lawrence didn’t pay and no Usuary could be proved.
The Black Book’s Messenger (Robert Greene 1592 ) tells of outright fraud.:
"There are fome do nothing but walk up and down Paul's, or come to men's fhops to buy wares with budgets of writings under their arms, and thefe will talk with any man about their fuits in Law, and difcourfe unto them how thefe and thefe men's bonds they have for money, that are the chiefeft dealers in London, Norwich, Bristol, and such-like places, and complain that they cannot get one penny. "Why, if fuch a man doth owe it you," will fome man fay that knows him, "I durft buy the debt of you. Let me get it of him as I can." "0," faith my budget man, "I have his hand and feal to fhew. Look, here elfe," and with that plucks out a counterfeit bnd, as all his other writings are, and reads it to him. Whereupon, for half in half they prefently compound, and after he hath that ten pound paid him for his bnd of twenty, befides the forfeiture, or fo forth, he fays, "Faith, these Laywers drink me as dry as a fieve, and I have money to pay at fuch a day, and I doubt I fhall not be able to compass it. Here are all the Leasfes and Evidences of my Land lying in fuch a fhire. Could you lend me forty pound on them till the next Term, or for fome fix Months, and it fhall then be repaid with interest, or I'll forfeit my whole inheritance, which is better worth than a hundred marks a year."
The wealthy Gentleman, or young Novice, that hath ftore of Crowns lying by him, greedy of fuch a bargain, thinking, perhaps, by one claufe or other to defeat him of all he hath, lends him money and takes a fair Statute merchant of his Lands before a Judge. But when all comes to all, he hath no more land in England than a younger brother's inheritance, nor doth any fuch great Occupier as he feigneth know him, much less owe him any money. Whereby, my covetous mafter is cheated forty or fifty pound thick at one clap."
Half a crown
12d or 1s
2s 6d or 1/8 of a pound
5s or ¼ of a pound
6s 8d or 1/3 of a pound
10s or ½ of a pound
13s 4d or 2/3 of a pound
20s or one pound
20s or 1li
Copyright © 1999 The Tudor Group