Funding the Government Learning Objectives:

Think-Pair-Share Why would a medieval king require large amounts of money? Try to come up with at least three developed reasons.

Why did Edward need money? Edward fought many wars, including against the French, Welsh and the Scots. These were very expensive. His castle-building and town-building programmes in Wales were also very expensive. Surely the solution for Edward was just to put up taxes. However, this was easier said than done – why?

Tax and Trade When John and Henry III tried to tax the barons too much, they rebelled. Edward wanted to avoid this. He did raise taxes a bit but too much would lead to another rebellion. However another way to make money was through duties. These were taxes on goods which were sold (similar to VAT nowadays). A percentage of the value of each sale would go to the king. One of the most important duties was on wool. The more that was sold, the more money the king collected. Therefore Edward needed to develop trade as much as possible. But…there was a big problem!

Thinking Time… Study this picture of a medieval silver penny. The coin isn’t circular as parts of it have been clipped off. Study this picture of a medieval silver penny. What’s wrong with it? Why might this have happened? What problems would this cause for trade?

The Coin Problem England’s coins were made from solid silver. So a one penny coin contained a penny’s worth of silver. However some people would illegally make money by clipping coins. They would shave small amounts of silver from coins and sell it on. The coins would then still be used, but wouldn’t coin the right amount of silver.

The Coin Problem Due to clipping, people believed the coins were worth less. As a result, traders raised their prices. This made goods more expensive for people. Foreign merchants refused to accept damaged coins. It was also very hard to catch coin clippers. However the finger of blame was often pointed at Jewish money lenders.

A New Coinage Your Tasks: Explain how Edward I solved the problem of coin clipping. Why would Edward have wanted to solve this problem? Extension: The cheapest medieval coin a modern coin collector can buy is an Edward I penny. Why do you think these coins are cheapest? In 1275, Edward brought in harsher punishments for coin clipping. In November 1278, 270 Jews were executed for allegedly clipping coins. However, the problem wasn’t solved. So in 1279 Edward ordered that all the old coins were to be replaced with new ones. These would be harder to clip without being noticed. As a result people had faith in the new coins. This led to more trade, leading to more duty being paid, and this made Edward richer.

Italian Bankers Taxes and duties weren’t enough to pay for Edward’s wars. He decided to borrow money from Italian bankers as well. He did a deal with the Riccardi bankers. In return for a large loan to fund the war with Wales, the Riccardi got to manage the collection of taxes and duties. This way Edward got lots of money quickly. In return the Riccardi got a better return on their loan.

Italian Bankers However, it went wrong for the Riccardi. In 1294 Edward went to war with France and needed more money. However the Riccardi kept their money in France and the French king wouldn’t give them access to it. Edward decided to scrap the deal with the Riccardi and instead borrowed money from a different group of Italian bankers, the Frescobaldi. Your Task: It is 1294 and you are Edward I. Write a letter to the Frescobaldi requesting a loan. Explain why you need the money and why you got rid of your old bankers.