james and his finances

extravagance as main reason for financial problems? how far were financial problems his own making?

outstanding financial problems when james became king

• £420,000 in national debt when he took the throne

• crown lands had decreased during elizabeth’s reign, and therefore large proportion of ordinary revenue was reduced

• structure of fiscal system meant ordinary revenue was no longer enough to sustain the crown, had to become more reliant on subsidies

• the value of each subsidy had dropped by a half, (problems with the tax collection system) whilst at the same time inflation had risen

• example of flaws in subsidy collection was duke of buckingham with yearly income of £400,000 only being taxed £400

• outdated systems such as purveyance and wardship still in place which caused tension between crown and parliament

james extravagance

• james liked to shower his friends with wealth and titles which was incredibly costly.

• by 1610 was giving away £80,000 a year gifts whereas elizabeth had spent £30,000 a year

• james spent excessively on scottish favourites which increased tension between james and parliament

• spent excessively on luxurious goods such as £185,000 spent on jewels over 9 years and expenditure on royal wardrobe quadrupled

• spent excessively on events, with sons funeral and daughters wedding costing more than £100,000.

effective action james took to deal with financial problems

• his pursuit of peaceful foreign policy means much less money was spent on wars

• made a new system for custom duties (with was large source of ordinary revenue) to be collected with financiers instead of government agents which reduced smuggling and encouraged diligent collection

• book of rates published in 1608 massively increased import duties

• sailsbury’s appointment as Lord Treasurer effective at increasing income, by tightening up outstanding subsidies and recusancy fines

failure of the great contract

• james recognised that ordinary revenue was no longer enough with growing inflation, proposed in great contract of 1610 that parliament should pay crown £200,000 annually along with initial £600,000 to pay off royal debts, and crown would compromise giving up purveyance and wardship as sources of ordinary income

• contract failed, parliament did not trust james to spend wisely, saw him as ‘leaky cistern.,’ due to extravagance, also worried james would become financially independent and not need to call upon parliament again

finances post the great contract

• following great contract whilst crown found ways to generate more income (granting monopolies, selling titles, increased impositions) national debt was now reaching one million, james continued to spend excessively on favourites £20,000 for the new house of george villiers, and military spending had tripled

• great financial problems remained at end of james reign and it becomes more apparent that the great contract would have been a more successful alternative