James Is financial position within three years of coming to the throne was enough to secure his reputation as a financially inept monarch. The scale of his unbridled extravagance and generosity had accumulated him a debt of ï¿½816,000 by this point, and as royal spending continued to rise dramatically, one financial crisis gave way to another and it began to emerge that this ruinous lavishness would have serious implications both on the country’s economy as well as the King’s reputation. The annual expenditure incurred by Queen Elizabeth was immediately extended by James to cover his extremely conspicuous spending at court and on fees and pensions to courtiers, prompting Henry IV of France to hail him as ‘the wisest fool in Christendom’.
There can be no doubt that James’ financial handlings opened up fundamental and permanent fractures in the already creaking structure of English public finances. Yet the truth in these charges implicit in the image of him as financially inept cannot be concluded without a closer examination of why exactly he failed in placing the Crown’s finances on a firmer footing and, for that matter, whether or not the financial problems encountered by James were indeed his own making, due to incompetence and extravagance.
James’ carefree extravagance led him to have already accumulated a debt of ï¿½816,000 by 1606, despite the astute warning issued to him by the Archbishop of York, that ‘he would exhaust the treasure of the kingdom’1, should this recklessness continue. On his arrival into England from Scotland, James recognised the country’s comparative wealth, and thus his ensuing spending spree, viewed particularly critically by contemporaries because much of his bounty was directed towards the hated Scots. Similarly, royal patronage, especially that extorted by his particular favourites, Robert Carr and George Villiers, swallowed up more royal revenue, as did expenditure on the royal household, which doubled by 1610. Attempts to restrain the King’s extravagance, such as Salisbury’s publication of the 1608 ‘Book of Bounty’ to prohibit the Crown’s major gifts such as land, hence lowering the expectations of courtiers, failed because James simply offered monetary endowments instead.
Here, James’ financial incompetence is clear, as it contributed to the failure of attempts made in his reign to undertake the crucial reform of royal finances. These lavish grants of money, office and lands persisted thereafter for the most part of his reign, and although extravagance was not unusual for a European monarch at this time, Salisbury warned that James’ excessiveness would become a ‘major cause of royal indebtness’2. Indeed, as these profligate habits became engrained in the Jacobean court, a burden of debt was soon established, and in this way we can see that with regards to reckless extravagance, James did deserve his reputation as a financially inept monarch.
The financial expedients introduced by James to ensure short-term gains for the royal income led to many of the constitutional crises of the early Stuart dynasty. The monarch was expected to ‘live of his own’, that is, on his ordinary revenue, and at the beginning of James’ reign, the most important source of obtaining this revenue was by the regal lands. However, James failed to maximise his income from the land because, as the financial situation intensified, successive Lord Treasurers saw the sale of land as being the quickest and easiest way to raise money, so that by the end of his reign, this land had ceased to be a significant part of royal revenue. Thus, James’ mismanagement of this affair obliged him to turn, instead, to the second major source of royal income: customs revenue. The introduction of customs duties, or impositions, on imported goods alarmed parliament, as it had not approved these duties and consequently saw the King as undermining its control of taxation.
What made impositions a major political issue was the 1606 Bate Case, when the Crown stated that impositions were lawful due to the ‘absolute’ prerogative of the monarch. This act of levying impositions was politically damaging in that it only served to confirm public fears that the crown was ‘intent on undermining the powers of parliament’3. Thus we can see that James’ impositions, designed to resolve the Crown’s insolvency, actually had the negative effect of raising both constitutional and ideological opposition to the sovereign; for this reason, it is fair to dub James a financially inept monarch. The remainder of James’ attempts to raise money were equally unsuccessful, such as the ‘sales of honours’, whereby the King created and granted the title of ‘Baronet’, which met opposition for devaluing the existing peerage, and ‘sales of monopolies’, resisted for their disregard of any considerations other than increasing royal revenue. Having examined James’ mostly egocentric efforts to resolve the financial problems, and the reasons for their respective failures, we can understand better why he became known as financially inept.
Perhaps the most concerted attempt of James’ to put the Crown’s finances on a firmer footing was The Great Contract, engineered by Lord Treasurer Salisbury in 1610. This negotiated fair taxes with the Commons, in return for the abolition of their feudal payments to the crown, and other lesser revenues. The failure of this otherwise sound proposal stemmed largely from a lack of confidence felt in James’ financial aptitude by many MPs, who disliked the idea of funding the King’s extravagance and feared the Scots would be the major beneficiaries. Thus we can see how James’ reputation as a financially inept monarch contributed to the fragmentation of an idea which could have begun to ease the problems of government finance. However, in this instance, we must too consider that despite its eventual failure, The Great Contract was a genuine attempt to tackle the root cause of the financial problem, that is, the persistent refusal of the wealthy to pay taxes which bore some realistic relation to their true incomes. In this way, perhaps James’ financial abilities require some reassessment, bearing in mind his willingness to bargain with parliament over his divinely-given prerogative in order to mend the urgent situation of the Crown’s debt. Furthermore, we must acknowledge that these attempts at reform, despite their lack of significant success, were nevertheless much greater efforts on the behalf of the King to curb royal expenditure and restructure the financial system than made by previous monarchs.
In the same way, we must retrace our judgement of the debts accumulated by James over the length of his reign. There is certainly no denying James’ absurd extravagance in the face of crippled revenues which barely covered the costs of government, yet we must consider the situation of England when James inherited it. Elizabeth bequeathed him not only a substantial debt of around ï¿½420,000, but also a Crown suffering from the effects of serious long-term under-funding. Although this debt should not be seen as a crushing millstone around the new King’s neck, nor as the prime cause of his later financial difficulties, it has to be recognised that, in order to sufficiently cover the everyday needs of the state on such a budget, even the slightest additional expenditure would have posed difficulties to the royal revenue. For this reason, it is not entirely fair to brand James ‘financially inept’, for although in many respects he deserves his reputation for being unduly extravagant, it was simply unfortunate that this failing was so pronounced against the backdrop of an already insolvent Treasury.
It was not just Elizabeth’s legacy to James in 1603 that left a revenue system in need of radical reform; there were faults entrenched in the medieval financial system itself, which made it extremely difficult for the new monarch to carry out any lasting reforms. The structure of local government had always been corrupt, culminating in the Tudor reign when the English tax-paying classes had begun to give only sporadic, meagre financial support to a monarchy which was supposed to meet all its own peacetime expenses, that is, ‘live of its own’. While the propertied classes grew wealthier, the financial system became marked as a relic of creaking antiquity, yet with the sales of monastic lands, James’ predecessors were able to postpone the inevitable collapse of the royal financial system. This collapse could not, however, be delayed beyond the great inflation of the sixteenth century, which saw the Crown’s ordinary expenses ‘rise about fivefold, whilst its revenue, ill-suited to adjust to inflation, could not keep pace with the rise in prices’4. Thus, there can be little wonder that the first Stuart monarch found himself soon suffering from economic crises, and for this reason, it is possible that James was undeserving of the title: ‘financially inept’.
Another reason often ignored by earlier critics justifying why James faced such immense difficulties with finances is that he had to manage the additional household expenses of a family, involving regular ongoing expenditure, a problem unencountered by his predecessor. Although with the knowledge of his empty Treasury James could well have cut down on the opulence of certain festivities, such as the ï¿½93,000 spent on his daughter’s marriage, it is understandable that family costs had to increase royal spending. Similarly, we can defend James’ extravagance to an extent by appreciating how, as the first representative of a new dynasty not yet securely established, he could not escape the need to buy support from his new subjects, as well as equip his court, fund the old Queen’s funeral and his own coronation. Furthermore, his extravagance was particularly important to compensate for Elizabeth’s extreme meanness during her last years, which had offended against the widely accepted principle that ‘for a king not to be bountiful were a fault’5. Hence, James might have been unduly extravagant in distributing patronage, but the damaging economic consequences of this were offset by the political support he gained from the grateful recipients of his bounty, and in this way, we can see how what easily may have been termed ‘extravagance’ or ‘financial ineptitude’ could possibly have had a deeper significance.
Nonetheless, the scale of the rise in expenditure far exceeded anything that could be entirely counterbalanced by these factors. Although for some of James’ spending, there was a very sensible administrative and political case, for much else there was not. From the start of his reign, James displayed an extravagance that the insolvent Treasury simply could not withstand, and these together with parliamentary tensions caused by impositions and the failed Great Contract suggest why James was known as ‘financially inept’. However, it has been customary to place all of the blame for the Crown’s financial troubles at the time on James himself, where in fact, although managing her own finances successfully, Elizabeth did so at the cost of her successor, who thus received a throne heavily in debt following wars and inflation.
Any subsequent extravagance, such as that of the royal family, was dubiously scrutinised, and instantly labelled as bad kingship. It is consequently necessary to acknowledge that despite some indisputable extravagance, James had, after all, inherited a faulty, medieval system desperate for modernisation, and he did indeed make some attempts at reform. These various efforts meant that despite a lack of considerable improvement, he left a financial situation little worse that he inherited, and thus we can conclude that essentially, James’ financial extravagance did not single-handedly bring about the collapse of the Crown’s finances, and his contribution to the royal Treasury’s eventual complete bankruptcy, although substantial, should not have earned him the title of a ‘financially inept monarch’.