It burned down in the Great Fire of London in 1666. It was rebuilt, but that also burned down. A third was built, which exists today.
|Elizabeth at the inauguration of the Royal Exchange in 1571, built by Thomas Gresham|
In the same year, the Queen enacted a statute to allow interest payments up to 10% on any loan. Any loan with higher interest was considered usury.
Her father Henry VIII had allowed such loans as early as 1545, but a subsequent Parliament had stopped them, considering all loans to be usury.
|The original Royal Exchange|
|The Royal Exchange today.|
Usury is loaning money at abusively high interest rates. A person who loans at such high rates of interest is considered a predator, and other terms that are used commonly to describe such a person are loan shark, and a Shylock.
|Shylock, ready to cut a pound of flesh|
That's where Shakespeare comes in.
Shylock of course is the central character in Shakespeare's play The Merchant of Venice about Renaissance Venice, in which some Catholic citizens take a loan from the Jewish moneylender named Shylock, and problems ensue.
Shylock loans them money and when they can not pay him back, they get in trouble with the law, and Shylock demands that the penalty he had originally asked for be paid to him. He had asked for a pound of flesh, cut with a knife from the body of Antonio, the man who had taken the loan in the first place.
Strange, to be sure.
But it is important to note that when Shylock agrees to the loan which Antonio had requested, Shylock gives the loan without interest!
As Shylock says, he will "take no doit of usance for my moneys." "Doit" means bit or trifle -- so he is saying that he won't take even a little bit of interest on his loan to Antonio.
Shylock then is NOT a predatory lender, since he did not ask for any interest -- he only wanted the penalty for Antonio's failure to pay back the loan on time.
And let's keep in mind that while "a pound of flesh" may seem like a bizarre penalty, Antonio did agree to it.
What is this all about?
Shakespeare was 6 years old when Queen Elizabeth opened the Royal Exchange and allowed loans with interest.
She clearly did these things in order to jumpstart the economy. The Elizabethan era was famous for many things, including its booming economy.
It would be hard to imagine all of the overseas trade, and expeditions like those of Walter Raleigh, without a vibrant economy where people could take risk. And there are no such risks without loans.
If you want a one-page very quick read to learn about the history of money lending, this is a great site.
When Shakespeare was young, around this time, his father John was a successful man, and held local office. He was a glove-maker, and traded (probably illegally) in wool. He would have been at the center of most all commercial activity and opportunity in Stratford.
John Shakespeare prospered financially at this time, partly due to these events in 1571.
But John Shakespeare was taken to court twice in 1570 for moneylending. Even when there were no laws to allow or prohibit moneylending, loans were given and loans were taken, with interest rates as high sometimes as 25%.
Was John Shakespeare a predatory lender, a Shylock? I don't think so, but his son William would have seen how his father was treated by his accusers and other Stratfordians who didn't like such financial activities. It would not have been pleasant for John Shakespeare in trying to settle the matter and clear and preserve his good name. Young William undoubtedly would have been very confused by it all.
|Was John Shakespeare a Shylock?|
When you take into account that for much of history, in England and elsewhere, moneylenders and the charging interest on loans were not only considered illegal but sinful -- a sin against God -- that you start to understand and appreciate what an enormous change this was in 1571.
Englishmen, like John Shakespeare, were finally allowed by their Queen to loan and lend with interest, and they were not sinners for doing so.
Of course, to many people, moneylending was still bad, and those who did such things were risking their souls in the process.
This is why, in many places during history, only Jews were allowed to loan money with interest. It is sinful only for Christians to loan money, so they turn to the Jews for such a loan. In Shakespeare's play, the Catholic citizens like Antonio and Bassanio, do not and can not loan money to each other. That is why they need him, for his money.
So, for anyone in England after 1571, it was an exciting but incredibly confusing time. Fundamental changes such as these, to commerce and faith, touched the lives of everyone, but it also was unclear if these changes were good, or were going to last.
When you stop and consider that this was happening in the context of the English Reformation -- the end to one thousand years of Catholicism in England -- you can start to get an idea of how traumatic and tumultuous all of this was.
Imagine that you live in England in the late 1500's. You were probably born Catholic, and your parents were definitely born Catholic. But now you cannot practice your Catholic faith. You cannot perform Catholic traditions that you and your fellow Englishmen have been practicing for one thousand years.
In the course of your business (as a tavern-keeper, or a maker of carts, or a farmer, etc) you could not borrow money or loan money, as it was illegal and sinful. That means that you cannot take a loan to increase your business opportunities, nor can you give money to another who wants to take a risk -- even if that risk is worth taking.
All of a sudden, Queen Elizabeth allows moneylending. She opens an exchange.
Nothing is the same any more. What was illegal and sinful is now permissible and lawful -- and the Queen is encouraging you to do it!
Even if you wanted to believe that Queen Elizabeth was right, and righteous, you were a human being and human beings have a tendency to doubt.
You might doubt her, and the changes that were happening all around you. Sure, you might take a loan and increase your business, and make more money... but what if it is all wrong? What if it really is a sin? You might be risking your eternal soul.
These doubts might seem quaint now in 2013.
But in Elizabethan England, in 1596 for example, these are not silly doubts and mere misgivings.
Because these are the doubts and misgivings across all of England, and particularly in London, the center of it all.
Every last person in England is having these doubts.
Including William Shakespeare.
And it is because of these doubts that he wrote what I consider his greatest comedic masterpiece The Merchant of Venice.
In my version of the play, I discovered that, far from what you may have heard, Shylock is not the predator. He is not the villain of the play.
For 400 years he has been misunderstood and misrepresented as the villain of the play -- sometimes an evil, horrible, and awful villain, and more recently as a sympathetic villain -- a good man undone by his anger.
Nonsense. That's all wrong.
Shylock is not the villain.
He's the hero.
And that is why far from being thought of as a drama or as a tragedy, The Merchant of Venice is actually a very bawdy and politically incorrect comedy.
If you want to read about this subject in fuller detail, I strongly recommend James Shapiro's brilliant book Shakespeare and the Jews.
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