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 Henry's ambassadors negotiated at Medina del Campo in March, 1489. Henry was making preparations, though he was anxious to put off the event to the last. In February Parliament granted him a very special subsidy of one-tenth of the annual value of lands and one-eightieth part of the whole value of men's goods. The levying of this impost created disturbances in Yorkshire, in attempting to suppress which the Earl of Northumberland was slain; but resistance was at length put down. Henry did his best for some time to assist Britanny without engaging otherwise in hostility with France; but his efforts were all thrown away. In December, 1491, the Duchess Anne married Charles VIII and the first step was taken towards a union of Britanny with France. Next year, in fulfilment of obligations, alike to Spain and to Maximilian, King of the Romans, Henry crossed the Channel and besieged Boulogne (October). The season was late, and he was quite unsupported by his allies; but he fulfilled his treaty obligations to them; and, moreover, finding Charles VIII quite willing to pay him an annual tribute of 50,000 francs, he followed the example of Edward IV and made a peace very profitable to himself (the Treaty of Etaples, November 3, 1492), after having taxed his subjects highly and drawn "benevolences" from them for an energetic war.

However unpopular this result might be in England, it certainly strengthened Henry's hands in dealing with foreign Powers. He was no longer under special obligations to Spain, and France had consented to buy his friendship. The prince who was most dissatisfied with the result was Maximilian, King of the Romans, to whom Henry had already rendered very important aid, and who seemed to consider him bound to fight his battles in France, though he had himself been by no means a steady and faithful ally. Maximilian's animosity from this time was persistent; yet it was perhaps not more injurious to Henry in particular than it was inconvenient to other Powers, when, in 1495, Spain, Venice and the Pope would have been glad to draw England into a league with Maximilian against France.

Maximilian's infant son Philip, called Archduke of Austria, was to govern the Netherlands when he came of age. But the Council which meanwhile governed in his name had very little respect for his father, who in fact was at one time not allowed the guardianship of his own son. Much more influential was Margaret Duchess of Burgundy, widow of the young Prince's grandfather, Charles the Bold; who, being a sister of Edward IV, and having sustained considerable loss of revenue by the accession of Henry VII, laboured assiduously for his overthrow. She harboured at her Court disaffected Yorkists who fled from England, and assisted their conspiracies against the new King. Her nephew, John de la Pole, Earl of Lincoln, who supported Simnel and was killed at the battle of Stoke (1487), had first escaped over sea and held conference with her. And, notwithstanding the disastrous failure of that rebellion,