The rise of international financial centres made a crucial contribution to the development of the late medieval economy by stimulating the integration of markets and the growth of professional credit and financial services. Antwerp’s conspicuous growth at the end of the fifteenth century was also a crucial period for London’s development into the financial, as well as the commercial, capital of England. Historians traditionally explained this by the success of London’s merchants in capturing most of England’s cloth exports in the fifteenth century and funnelling them to Antwerp, thereby earning the wealth which financed the expansion of London’s trade into all the English regions (Fisher 1940: 83) More recently, John Oldland has also identified the years from c. 1470 to 1520 as the period when the spectacular expansion of the city’s foreign trade initiated the revival of its economy, making it the ‘engine for the recovery’ of the whole kingdom (Oldland 2014: 55–92).
However, other recent interpretations have placed more emphasis on the part which London’s greater access to capital played in drawing provincial merchants to the city to obtain the trade credit which the monetary-led recession of the 1440s had made much harder to find in the provinces. Jennifer Kermode considered that the problems in the provincial economy had begun in the fifty years in the late fourteenth and early fifteenth centuries, which was the ‘critical period in the transformation of England’s economy’ when London emerged as the central place in an expanding hierarchy of towns, ‘drawing to itself a number of key functions including that of financial capital’ (Kermode 1994: 72–88). She saw ‘the growing scale of London’s involvement in the main Yorkshire towns’, and ‘the deeper penetration of the north by London investors’ as evidence of ‘the entrepreneurial failure’ of northern merchants which allowed the region to be ‘taken over by the alternative financial strength offered by Londoners due to their greater access to finance and credit’ (Kermode 1991: 476, 496–7, 499–501). The problem with this interpretation, as Dr. Kermode subsequently acknowledged when she investigated the subject further, is that the Statute Staple and Merchant certificates of credit and debt, which she uses as her principal source, and which cover the whole of England in this period, do not show the dominant presence of Londoners as creditors in provincial registries and towns, even in the fifteenth century (Kermode 1994: 79–80).
Most recently Richard Goddard has also concluded from his study of the staple certificates for the period 1353–1532, that London’s rise to become the financial capital can be explained by the same central place theory popularised by geographers (Goddard 2016:186, 189, 191, 236) This theory asserts that merchants gravitate towards towns which supply ‘high order’ financial and legal services precisely because of the concentration of wealth that existed there. In contrast with regional financial centres where he believes merchants’ willingness to lend depended chiefly on local commercial conditions, he concludes that London rose to be the financial capital because its commercial wealth, and larger pool of potential lenders and borrowers, made provincial merchants confident that they could always be sure of raising trade credit there. Similarly, people seeking a profitable investment for their money, came to believe that the debts they registered in London would be paid back, and so they increased the amounts of capital they injected into the city, making more available for loans and credit (Goddard 2016: 205, 241). He speculates that this process ‘must have reached a critical mass at some point in the fourteenth century, after which it became an unstoppable force’ (Goddard 2016: 241).
Hence, although Goddard acknowledges that London’s importance to England’s international trade always set it apart from the provincial towns, he singles out as the dominant cause of its development into England’s financial capital ‘its evolution into the principal centre to obtain trade finance in England’, whereby ‘financial services…became progressively centred upon the capital’ (Goddard 2016: 234–6, 247). As the fifteenth-century recessions made it harder to obtain credit at reasonable rates in the provinces, he considers it likely that merchants decided that ‘the most secure business option was to abandon their home Staples and instead obtain trade finance in London,’ and that it is likely that some of them also used ‘the available and cheap credit’ obtained there to transact business back in their home markets. Consequently, he speculates that London’s greater, and more liquid, money supply persuaded merchants to move south to obtain the trade credit they needed, and that ‘many of them reacted by re-organising their commercial activities to centre upon London’ (Goddard 2016: 205, 241–2). In this interpretation, the availability of capital, and the credit it financed, determined the course, volume, and direction of trade, rather than developments in trade creating the demand for credit, and also the means to finance it.
The question remains how and when Londoners acquired such a concentration of wealth to become the kingdom’s dominant creditors since they were not originally the leaders of the major export trades of wool and cloth which enriched England from Anglo-Saxon times. By the end of the thirteenth century wool was responsible for nearly all the kingdom’s export earnings, but since London was far from the best wool-producing areas of Yorkshire, Lincolnshire, and the Welsh Marches, and it was not as convenient a port as Boston for the Flemish merchants who had originally been its principal customers, it is not surprising that it only overtook Boston as the chief wool port of the kingdom after 1300. Similarly, Bristol’s cloth exports far outnumbered London’s until c. 1370, while Southampton also emerged then as a rival base for Italian imports. In view of these differing interpretations with conflicting dates, can we say with any greater certainty when London became the financial capital of England, and how and why it came about? Was it only decided when the recessions of the fifteenth century caused provincial finance so to shrink that London’s merchants were left to dominate the credit market for the entire kingdom, or, as this present article suggests, was the process of establishing London as the financial capital of England more protracted, and also more complex than the search for trade credit would suggest, and was it determined finally, not by that, but by developments in England’s overseas trade? (Goddard 2016: 201, 203–7, 241).
The Statute Merchant and Staple Certificates of Debt
One source for comparing relative changes in the wealth and credit of the capital and the provinces is the huge collection of Statute Merchant and Staple certificates in the National Archives, which both Kermode and Goddard have used as their principal evidence. The certificates were created by Edward I’s statutes of Acton Burnell (...
