You’ll probably remember something of Richard from school, but as an aide memoire here is the potted description in Christopher Lee’s This Sceptred Isle. He summarises thus: “Richard I (1157-99) was to rule for just ten years, mostly in absentia. But in that decade he built a naval town, Portsmouth, on the south coast; drew up the first Articles of War; sold Scotland its independence; led a great Crusade; and would be called Richard Coeur de Lion”. What a guy.
Richard the Lionheart was captured on his way home from the Holy Land, taken near Vienna by Leopold V, Duke of Austria. Richard had fallen out with Leopold during the Crusade, when early attempts at forging a common European foreign policy towards the Middle East had faltered just short of Jerusalem. Leopold was quite rightly excommunicated for the kidnapping by Pope Celestine III (imprisoning a crusader really did cross the line in the twelfth century). Leopold sold Richard to the Holy Roman Emperor, Henry VI (was also excommunicated).
Henry demanded a ransom for 150,000 marks for the release of Richard. This is something in the region of two billion quid at today’s prices but that figure doesn’t quite convey the magnitude of the ransom. Sending two billion quid from London to Vienna can be done today with a transit van full of 500 euro notes, but in 1193, the problem of moving something like twice the total annual income of the English Crown across a thousand miles of warring European principalities took some amazing logistics. This was a unique episode in English history and had far-reaching consequences. Forum friend David Boyle wrote an absolutely outstanding book about this: “Blondel’s Song“. In it, he says,
Taxation for Richard’s ransom had a profound effect on English government. The accounts may have long since disappeared – and may even have been destroyed by those who felt embarrassed by the public record of their generosity to Richard when his brother was on the throne. But it marked the beginning of the shift from feudal payments to the very start of taxing income.
I would be impossible to imagine collecting taxes on such a massive scale (or, indeed, at all) in many modern countries, so the feat should not be underestimated. It took an inventive series of taxes, enforced and collected, to get the King back.
Both clergy and laymen were taxed for a quarter of the value of their property, the gold and silver treasures of the churches were confiscated, and money was raised from the scutage and the carucage taxes.[From Richard I of England – Wikipedia, the free encyclopedia]
Scutage was the tax paid by knights to get out of military service (and was one of the main causes of the discontent leading to the Magna Carta in 1215). Carucage was the land tax. The authorities had initially created it as the medieval equivalent of Nick Clegg’s mansion tax, imposed on anyone with property worth more than ten shillings. But this didn’t bring in the anticipated revenue, so a few months later it was time for a full-blown land tax. It was first imposed in 1194 and fell upon landowners at an initial rate of two shillings per 100 acres. Through these and other taxes, the English gathered several tons of silver. David says twenty tons, but in Alison Weir’s “Eleanor of Acquitaine: By the Wrath of God, Queen of England“, the figure implied is considerably higher, more like fifty tons. The money was brought to London in the form of treasure (melted down to form ingots) and coins.
My 1962 copy of “Money in Britain” says that there were no continuously minted gold coins in England until the reign of Henry III (1216-72). The coins for the ransom must have been mainly in the form of the silver pennies brought into existence under Richard’s father, Henry II. His mint master, Isaac the Jew, set the 92.5 percent pure silver standard (“the ancient right standard of England”) that continued until the 1920s. In 1257 the twenty penny (one-twelfth of a pound Sterling) gold coin was struck. This didn’t last very long and in 1265 it was replaced with a twenty four penny “florin” worth one-tenth of a pound. There were still florin coins when I was a kid, as they were minted until 1967, but they didn’t have the same economic impact as Henry III’s florin which was worth a couple of hundred quid at today’s prices.
Meanwhile, under Queen Eleanor’s direction, the growing piles of cash were stashed in the crypt of St. Paul’s, then the administrative centre of London. It took a long time to build the ransom there. When the Germans popped in in 1193 to see how things we coming along — checking out the tally sticks and the pipe rolls to assess the rate of collection and to take delivery of the first tranche of the ransom — there were only about fifteen tons of silver. This was loaded onto a fleet of ships and sent off to Henry. At the end of the year, on 20th December 1193, Queen Eleanor set off with the rest of the cash, arriving at Henry’s court on 17th January, so it only took three weeks. Now, of course, sending money from England to Germany can take as little as three or four days.
The money was transported to Germany under a simple regulatory structure, the “King’s Peril”, which meant that were the money to have been lost along the way, it was an English problem. Until the money was actually in Henry’s hands then it was Richard’s responsibility, even in Henry’s lands. Eleanor made it, and handed the balance of the ransom over on 4th February and Richard was released. He landed back in England on 13th March 1194, bringing this incredible episode in English history to an end and the only records of the greatest tax raid in English history that remained were the tally sticks.
Why did they send atoms, rather than bits about atoms? They had no alternative. The bill of exchange, the standard cross-border payment instrument in these pre-SEPA times, was a century away. And in any case, bills of exchange were not cheap. Peter Spufford in his magnificent Power and Profit, the Merchant in Medieval Europe, talks about the “specie point” at which it became cheaper to transport bullion than to buy a bill of exchange! And while bills of exchange boosted the money supply for commerce, they did not replace bullion, as sooner or later imbalances would need to be settled and so the wagon trains of gold and silver would rumble between trading centres.
The colossal ransom paid for Richard had some considerable consequences. The impact on Austria remains to this day. Leopold used part of the ransom to found the city of Wiener Neustadt, but more importantly the Austrian mint was founded in 1194 to make coins from the silver handed over as Richard’s ransom. This had an impact across central Europe as other rulers began to centralise their coinage too and local currencies began to vanish. Henry VI also created a new silver coinage in Sicily.
The impact back in England was also long lasting. Throughout this period, the Jewish community in England were called upon to extend huge loans to the Crown to add to the ransom. This had a terrible consequence, because in order to provide these loans they had to call in their loans to other people — minor aristocrats, farmers, business people and so on — which caused great resentment. In March 1194 a conference of Jewish financiers was organised in Northampton and representatives from major cities attended, other than (for example) York and Bury St. Edmunds, since the Jews there had be slaughtered in the pogroms of 1190. (These were widespread. Paul Johnson’s A History of the Jews, for example, tells how “all the Jews who were found in their own houses in Norwich were slaughtered”.) The purpose of the 1194 conference was to work out how much more the Jews could contribute to the ransom, as indeed they were called on to do. Under Richard, there had been an inquiry into the pogroms and Christian-Jewish financial supervision committees created. David says these were partly an early attempt at banking regulation and partly to protect the Jewish community in return for its considerable contributions to the ransom. Christopher Dyer explores this further in Making a Living in the Middle Ages—The People of Britain 850-1520, saying that the Jews were the Crown’s mechanism for indirectly taxing landowners. The heavy taxes imposed on the Jewish community were passed on in interest rates, so that the common borrowers would blame the Jews rather than government spending for their reduced circumstances. Having come to England after the Norman conquest as moneychangers and bullion dealers, England’s Jews were reduced by a combination of taxation and murder until they were eventually expelled in 1290.
A side effect of the silver exodus form England was that while local currencies circulated to substitute for the missing pennies for a while, the money literally ran out. After all, a quarter of England’s coinage had vanished (which David calls a “deflationary shock that England needed”), but somehow commerce continued. Spufford reminds us that “Only in the short run did political, or occasionally religious, actions have greater effects than trade balances on the large-scale movement of silver and gold, coined and uncoined”. It is an astonishing testament to England’s wealth and administration that the very, very high level of taxation necessary to pay that (literally) King’s Ransom could be imposed and collected, yet in the long run the economy survived and grew. I’ll be thinking about that when I finish at hmrc.gov.uk in a couple of days time and press “Submit” yet again.
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