English trade, that is to say, trade in English hands, practically began with Edward III. and, slowly increasing under his successors, gained an enormous development under Elizabeth. Several causes operated to produce this increase. In the first place the abolition of the Steelyard, though ordered by Edward VI., was not completely carried out till many years afterwards. During this period the merchants were learning the immense possibilities open to them when this incubus should be removed. Next, the great rival of London, Antwerp, suffered, like the rest of the Netherlands, from the religious wars. Thirdly, the wise and farseeing action of Gresham transferred the commercial centre of the northern world from that town to London.

Antwerp in the fifteenth century was the richest and most prosperous city in western Europe. There were 200,000 inhabitants, a great many more than could be counted in London: 5,000 merchants met every day in the Bourse for the transaction of business: 2,500 vessels might be counted in the river: 500 loaded waggons entered every day from the country. It was the port of the great and rich manufacturing towns of Bruges and Ghent. In the latter town there were 40,000 weavers, and an army of 80,000 men fully armed and equipped, could be raised at any moment. The former town, Bruges, was the Market—the actual commercial centre—of the world. Hither came the merchants of Venice and Genoa, bringing the silks, velvets, cloth of gold, spices and precious stones from the East to exchange for the English wool and the produce of Germany and the Baltic.

The Religious Wars of the sixteenth century: the ferocities, cruelties, and savagery of those wars: depopulated and ruined this rich and flourishing country: the Inquisition drove thousands of Flemings, an industrious and orderly folk, to England, where they established silk manufactures: and the carrying trade which had been wholly in the hands of the Antwerp shipowners was diverted and went across the narrow seas to London, where it has ever since remained.

Before the ruin of Antwerp, Bruges, and Ghent, it was of these towns that the Kings of England obtained their loans. They were taken up by the merchants of the Low Countries at an interest of 14 per cent. This enormous interest, then thought quite moderate and reasonable, explains how the merchants of that time grew so wealthy. Part of the loans, also, often had to be taken in jewels. In order to negotiate these loans and to pay the interest an agent of the English Sovereign was kept at Antwerp, called the Royal Agent. Very fortunately for London, the Royal Agent under Edward VI., Mary, and the early years of Elizabeth, was Sir Thomas Gresham.

You must learn something about this great man. He was the son of Sir Richard Gresham, formerly Lord Mayor: nephew of Sir John Gresham, also Lord Mayor (who preserved Bethlehem Hospital on the Dissolution of the Religious Houses): he came of a Norfolk family originally of the village of Gresham: like Whittington he was of gentle birth. He was educated at Cambridge: he was apprenticed to his uncle after taking his degree: and he was received into the Mercers' Company at the age of twenty-four. It must be observed that from the outset the young man had every advantage—good birth, good education, good society, and wealth.

At the age of thirty-two he was appointed Royal Agent at Antwerp. At this time the City was at the height of its splendour and prosperity. Gresham walked upon the long quays, gazed at the lines of ships, saw the river alive with boats and barges, loading and unloading, watched the throng of merchants in the Bourse, saw the palaces, the rows and streets of palaces in which they lived, thought of London which he had formerly regarded with so much pride though he now perceived that it was even poor and quiet compared with this crowded centre of an enormous trade—why, the city which he had thought the envy of the whole world could show no more than 317 merchants in all, against Antwerp's 5,000: and these, though there were some esteemed wealthy, could not between them all raise a loan of even 10,000l. The King had to go abroad for the money and to pay 14 per cent. for it. Then he began to ask himself whether something could not be done to divert some of this trade to his native town.

First of all, he applied himself to the reduction of the interest. This he managed to lower from fourteen per cent. to twelve and even to ten. A gain of four per cent. on a loan of, say, 60,000l. meant a saving of 2,400l. a year.

When he came back to England he brought with him a discovery which seems simple. It is, however, the most difficult thing in the world for people to understand: we are always discovering it, over and over again.

His discovery was this—it applies to every kind of business or enterprise—It is that union will effect what single effort is powerless to attempt. The City had for centuries understood this in matters of government: they were now to learn the same thing in matters of trade. The merchants of Antwerp had a central place where they could meet for purposes of union and combination. Those of London had none. As yet union had only been practised for the regulation of trade prices and work. True, the merchant adventurers existed, but the spirit of enterprise had as yet spread a very little way.

Gresham determined to present to his fellow citizens such a Bourse as the merchants of Antwerp had enjoyed for centuries. He built his Bourse; he gave it to the City: he gave it as a place of meeting for the merchants: he gave it for the advance of enterprise. The Queen opened it with great State, and called it the Royal Exchange. It stood exactly where the present Royal Exchange stands, but its entrance was on the south side, not the west. And no gift has ever been made to any city more noble, more farseeing, more wise, or productive of greater benefits.