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How the Royal Exchange has come full circle

Gillian Laidlaw delves into the history of The Royal Exchange and how, in its latest guise, it has reverted to one of its original purposes – a place for fashionable shopping and business meetings over coffee or tea.

The Royal Exchange today


hen, in 1568, Thomas Gresham finally

opened a bourse in the City of London, did he

realise that he was creating the foundation for the financial markets which still flourish today? As a shrewd businessman he certainly recognised that London had been at a disadvantage when compared with its European competitors, especially Antwerp. The Royal Exchange, his answer to the Antwerp bourse, was his gift to the City and his memorial. Thomas Gresham’s father, Sir Richard, was the first English merchant to recognise the importance of the Antwerp Exchange to the city’s commercial success and seek to repeat that success in England. He was a member of the Mercers’ Livery Company, who had made his fortune shipping wool to Europe. Eventually he acquired a fleet of merchant ships which traded around the European coast and into the Mediterranean Sea. Richard was well connected in the English court. He was knighted and became King’s Agent to Henry VIII based in Antwerp, his duties involving raising foreign loans for the Crown. In 1521 he proposed a bourse for London. He submitted plans to Thomas Cromwell, the King’s secretary, seeking the King’s help in acquiring a suitable site in the City. The proposal was voted down by Common Council. Antwerp was the premier commercial city and port in Europe and well placed to trade with northern and southern Europe by land and water. It had a reputation for good business practice and attracted merchants from all over the world. In 1531 it had established a bourse as a focus for commercial activity. London was the principal market place of England but at the beginning of the 16th century it was isolated on the edge of Europe. In addition to the English merchants, usually operating under and subject to the regulations of


the livery companies, there were two influential groups of foreigners – the money lenders of Italian origin who gave their name to Lombard Street and German members of the Hanseatic League who were commodity traders from northern Europe. The Italians arrived to take taxes for the pope during the 13th century but successive monarchs found their money lending activities so useful that they encouraged them to stay with various financial incentives such as more favourable taxes than the native traders. The coffee houses around Lombard Street became their centre. The members of the Hanseatic League congregated around the Steelyard on Thames Street and they had also negotiated favourable tax deals. Between the restrictive practices of the livery companies and the advantageous tax laws for foreign merchants, many Englishmen felt that the only way they could make serious money was by operating outside England.

One group had become established in Antwerp. Known as the Merchant Adventurers, they had gained their charter in 1509 and had their headquarters at the English House in Antwerp. Although many were members of the principal liveries, like Grocers or Mercers, they had no formal organisation within the City of London

and were not subject to the rules of the livery companies. A leading member was Sir Richard Gresham.

Thomas Gresham had entered the family business in the 1540s and become involved in the wool trade in Antwerp. In 1551 he was appointed to succeed his father as Royal Agent and his position was reconfirmed in 1558 when the new Queen, Elizabeth, ascended the throne. By this time he had considerable experience of working in Antwerp, he was well connected and operated through a network of agents in other countries. As Royal Agent he was not only responsible for raising loans for the Queen but he also had to manage the national debt. This had got out of control under the Tudors because of their propensity for expensive foreign adventures and an inability to raise taxes at home; Elizabeth inherited a virtually worthless currency. Thomas developed a recovery plan and also argued that it was more appropriate for the Queen to raise funds from her countrymen than from foreigners.

A number of factors now made a bourse in London a more attractive proposition than before. Antwerp had become a less stable city in which to do business. It was within the Spanish Netherlands, part of the Catholic Hapsburg Empire, but most

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