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Rh (1297) forbade any increases on the amounts fixed in 1275, which were henceforth known as the ancient customs. Another attempt was made to obtain a higher scale of duties by arrangement with the merchants. The foreign traders consented to the royal proposals, which comprised duties on wine, wool, hides and wax, as well as a general tax of 1% on all imports and exports. Thus, in addition to the old customs of half a mark (6s. 8d.) per sack of wool and on each three hundred woolfells, and one mark (13s. 4d.) per last or load of leather, the foreign merchants paid an extra duty (or surtax) of 50% and also 2s. on the tun of wine—the so-called “butlerage.” The privileges granted in the Carta Mercatoria (1303) were probably the consideration for accepting these enhanced dues. The English merchants, however, for the time, successfully resisted the application in their case of the higher charges, and consequently remained under the old prisage of wine. In spite of parliamentary opposition, on the ground that they amounted to an infringement of the Great Charter, the new customs were maintained in force. After being suspended in 1311 they were revived in 1322, confirmed by royal authority in 1328, and finally sanctioned by parliament in the Statute of the Staple (1353). They became a part of the permanent crown revenue from the ports, and, with the old customs, were the basis for further development.

Just as the old direct taxes were first supplemented by, and then absorbed in, the general taxation of movables, so the customs, in the strict sense, were followed by the subsidies or parliamentary grants. One great source of English wealth in the 14th century was the export of the peculiarly fine wool of the country, and the political circumstances of Edward III.’s time suggested the manipulation of the trade in this commodity for purposes of policy as well as revenue. Sometimes, in order to influence the towns of Flanders, the export of wool was absolutely prohibited; at others, export duties of varying amounts were imposed on wool, skins and leather. In the early years of the reign these arrangements were settled by agreement with the merchants. The subsidies of this class began in 1340 and henceforward were frequently granted, though complaints were very often made. Thus, in 1348 the Commons objected to the subsidy of an export duty of £2 per sack on wool on the ground that it was really a tax on the landowners, who received a lower price for their wool in consequence of the duty. Bargains between the king and the merchants were forbidden, and this species of taxation was brought under parliamentary control by statutes passed in 1362 and 1371. Along with the special duties on wool there was an increase of the imposts on wine and general goods. By agreement with the merchants a charge of 2s. per tun on wine and 2% on goods was levied in 1347. Between 1371 and 1376 these dues were established as parliamentary grants under the names of “Tunnage” and “Poundage,” leaving the older dues intact.

One class or “estate” occupied a peculiar position. The clergy still claimed the privilege of self-taxation, and therefore it was convocation, not parliament, that voted the tenths imposed on clerical property. In some instances much heavier charges (e.g. in 1296 one-third) were decreed by the king, but the taxation of the clergy declined in productiveness during the 14th century. By the close of the reign of Richard II. the results of the transition from feudalism to a parliamentary constitution were practically complete. In respect to finance the most important of these were: (1) The disappearance or reduction to unimportance of the feudal dues. The fact that this change occurred at, relatively speaking, so early a date is of special significance for English development. (2) The royal demesne, though it had not suffered the losses that the grants of later times inflicted on it, had also lost some of its value as a source of revenue. (3) In compensation the direct taxation of property had become a ready means of supplying the growing requirements of the administration, and the mode of levy had been reduced to a well-recognized form, unsatisfactory experiments—such as the poll tax—being withdrawn. (4) The growth of import and export duties through the “old” and “new” customs and the subsidies furnished a large part of the requisite funds. In fact, in the course of a little over three hundred years the constituent parts of the public income had, without any violent change, been completely altered in relative value and in organization.

The period of the Lancastrian kings, extending over two-thirds of the 15th century (1399–1471), is noticeable for various experiments in the system of direct taxation. The standard tax—“the tenth and fifteenth”—failed to suit the changed conditions. In consequence of the decay of some of the towns allowances had to be made to them, amounting to over 15% (£6000), which, with other deductions, lowered the yield from a “tenth and fifteenth” to £31,000. As a supplement a land tax, affecting only the large owners, was voted at the rate of 5% in 1404, and repeated with wider scope, but at the lower rate of 1%, in 1411. A house tax made its appearance in 1428. Taxes on knight’s fees and other freeholds were also tried, while in 1435 and 1450 the graduated income tax was employed. The minimum rate, 2%, applied to incomes under £100 (or under £20 in the tax of 1450), and rose to 10% on the higher incomes. These devices are evidence of the demand for larger revenue, and also of the increasing unfitness of the existing direct taxation. It may be added that they indicate a disposition to adopt foreign models, particularly the methods of taxation in use in France and Italy. As to indirect taxation the receipts seem at first to have declined, and the subsidies were only granted for fixed terms (the victory of Agincourt gained a life grant to Henry V.). After the establishment of Edward IV. on the throne, the idea of a “tenth,” in the literal sense, was taken up and voted (1472) by the two houses as a special military provision; but it failed to bring in the required revenue, and the king had to fall back on grants of the old-established form. Extra taxes on aliens were levied under both Lancastrian and Yorkist rulers with little profit. The most original contribution of Edward IV. to fiscal policy was the “” (q.v.) or payment by wealthy subjects of sums requested by the king. Voluntary in form, these payments were, in fact, compulsory, and became in later times one of the great grievances against which parliament had to struggle.

Broader issues in finance marked the course of the Tudor period, and these were connected with the general history of the time. The era of national monarchies had arrived, necessitating the maintenance of greater military and naval forces, as well as more costly machinery of administration. External policy was affected by the set of ideas that developed into mercantilism (see ); but so also was fiscal policy. Finance reflected the actions of the personal rule that was the characteristic of the 16th century. Within the period, however, some decided contrasts are to be found. Prudence, carried to parsimony with Henry VII., is followed by lavish prodigality in the case of Henry VIII. Elizabeth, again, presents in her reign a very different financial policy from that of either her father or her grandfather. The desire for a vigorous foreign policy, the hope of encouraging native industry, and the sentiment of retaliation against the trade regulations of other countries are found to interfere with the aim—strictly followed in earlier times—of obtaining the largest possible yield. All the different parts of the public economy were regarded as existing only in order to be utilized for the furtherance of national power. It is this more complex character in policy, coupled with the new influences, that the discovery of America, the Renaissance and the Reformation brought into operation, which gives special interest to the financial problems of the 16th century.

Taking in order the great heads of public income placed at the disposal of the sovereign, it appears that the first head of the old receipts—the crown lands—had been from time to time diminished by grants to the king’s relatives and favourites, but had also gained through resumptions and forfeitures. On the whole, the loss and gain down to the close of the 14th century was probably balanced. The revenue was, however, inelastic, and declined in relative importance. It has been said that “it was in the 15th century that the great impoverishment of the crown estate began.” The Lancastrian kings (especially Henry VI.) lost most of the lands attached to the crown through pressure of expenditure and the wholesale plunder of officials.