Wool, Banks and the Royal Purse

A Kingdom Built on Wool

Thirteenth-century England was a farming country, and its richest export by far was wool. The damp grasslands of the Cotswolds, Lincolnshire, the Welsh borders and the Yorkshire moors fed flocks that fleeced some of the finest wool in Europe. Most was shipped through London, Boston and Hull to Flemish weavers in Bruges and Ghent, who turned it into cloth and sold it back across Europe. Edward I understood that whoever controlled this trade controlled the kingdom’s wealth. His financial system was built on it.

The Wool Customs of 1275

At his first parliament in April 1275, Edward asked the merchants and barons to grant him a customs duty on wool exports. They agreed: half a mark (six shillings and eightpence) on every sack leaving an English port, with a smaller duty on hides. This was the ‘Ancient Custom’ — a steady, predictable income paid by exporters at the dockside. The duty was light enough that wool merchants tolerated it, and it brought in roughly £10,000 a year — a transformative addition to royal revenue.

In 1294, with war breaking out against France and rebellion in Wales, Edward demanded a far heavier maltolt — literally ‘the bad tax’ in Anglo-French — of forty shillings on every sack, six times the ordinary rate. Merchants protested, calling the levy crippling and ruinous, and the maltolt became a flashpoint in the political crisis of 1297 that forced Edward to confirm Magna Carta and accept new limits on his powers.

The Riccardi of Lucca

Customs revenue was steady but not enough on its own to fund a war. For credit, Edward turned to Italy. From 1272 the Riccardi of Lucca became royal bankers. They lent on a far larger scale than English moneylenders could, and they were paid back through the wool customs — the king redirected the duty straight to them at the ports until the loans were cleared. Between 1272 and 1294 the Riccardi advanced around £400,000 to the crown, financing the first Welsh war, the early Welsh castle programme and Edward’s diplomatic missions.

The system collapsed in 1294. War with France meant French royal officers seized Riccardi assets in Paris; at the same moment Edward froze their English accounts to fund his own campaigns. The bank could not survive losing both ends and went bankrupt. Edward turned almost immediately to a new house from Florence, the Frescobaldi, who took over royal lending until they too crashed in 1311 under Edward II.

The Great Re-Coinage, 1279–80

The English silver penny had been the only coin in regular use since the eleventh century, and after generations of clipping, sweating and counterfeiting most pennies in circulation were short of their proper weight. In 1279 Edward ordered a complete re-coinage. Old coins were called in and melted down. New pennies were struck on a heavier flan with a larger inscription that made clipping obvious; he also introduced a four-penny groat and a quarter-penny farthing for the first time. The scheme paid for itself through the seigniorage — the small profit the mint took from each coin — and gave merchants a trustworthy currency that supported the wool trade.

The Statute of Merchants, 1285

Edward’s government also wrote rules to make trade safer for creditors. The Statute of Merchants of 1285 (an extension of an earlier 1283 Statute of Acton Burnell) let creditors register a debt before the mayor of a chartered town. If the debt was not paid by the agreed date, the creditor could seize the debtor’s movable goods and, after three months, his lands as well. For a wool merchant in Boston or a draper in Lincoln, the new procedure was revolutionary: it turned credit, the engine of commerce, into a faster, more enforceable contract. Foreign merchants gained too, encouraging Italian and Flemish buyers to pay English producers up front for next year’s wool clip.