How far do you agree that the main turning point in the development of England’s
financial institutions came in the reign of Henry I?
During the period 1066 to 1216, there were a number of developments made to England’s financial
institutions and undeniably the most significant of these was the development of the Exchequer, set up
under Henry I, as it led to a more sophisticated financial system in England. Whilst other kings did build on
the development of the Exchequer, mainly Henry II, and made other minor contributions to the financial
system, it is evident that the reign of Henry I was the turning point.
To a great extent, it is evident that the main turning point in the development of England’s financial
institutions came in the reign of Henry I and the establishment of the Exchequer, a central government
department responsible for collecting taxes and accounting for royal money. Whilst Henry I built on the
foundations laid by William I, as shall be later discussed, his system was much more sophisticated and
solved the inherent weaknesses in William I’s system. Prior to the development of the Exchequer, sheriffs
would often pocket some of the money from the royal farm for themselves but the Exchequer solved this
issue as it meant that money was counted and accounted for, particularly with the introduction of pipe
rolls and tally sticks to ensure all the money was collected, preventing sheriffs from taking the money. This
system was much more efficient and thus the most important development of the financial system. Some
historians may argue that due to the Exchequer not functioning during Stephen’s reign, Henry I’s reign was
not the main turning point and it was instead Henry II’s reign as he re-established the Exchequer. However,
largely Henry II built on the foundations laid by Henry I despite making some minor improvement so
therefore, the reign of Henry II and the establishment of the Exchequer was the main turning point in the
development of the Exchequer. Also, later kings such as Richard and John heavily relied on this system to
raise money and it was able to cope under their financial pressures, particularly those from Richard due to
his financial demands such as his war with France and the 3rd Crusade. Therefore, it is evident that the
development of the Exchequer during the reign of Henry I was the main turning point in the development
of financial institutions.
To a lesser extent, some historians argue that the main turning point in the development of England’s
financial institutions arose during the reigns of William I or Henry II. William I laid the foundations for the
financial system during the time period, largely keeping the Anglo-Saxon, unified tax system as it worked
well, as well as establishing the treasury to collect royal monies. However, this was not the main turning
point as whilst he did lay the foundations which Henry I built on, this system was very simple and less
sophisticated and effective as the one Henry I later introduced. Moreover, some historians argue that
Henry II’s reign was the main turning point in the financial system as he re-established and improved upon
Henry I’s system. During the civil war in Stephen’s reign, government was decentralised and the Exchequer
no longer functioned but it was restored by Henry II and he added to it, drawing up the charter of barons
to tax the barons more effectively. However, Henry II heavily depended on the system developed by Henry
I so despite making the system more sophisticated, his reign was not the main turning point in the
development of financial institutions and it was instead the development of the Exchequer by Henry I, not
its reintroduction. In addition, William II’s reign saw stagnation due to his disinterest in finance and thus his
reign was not the main turning point. Similarly, Stephen’s reign saw regression in the financial system due
to the civil war and his decentralisation of government, meaning that the Exchequer ceased to operate.
Therefore, it is evident that other kings, whilst contributing to the financial system, were not the turning
point in the development of England’s financial system.
To conclude, it is clear that Henry I’s reign was the main turning point in the development of England’s
financial institutions. Henry I built on the foundations laid by William I to develop a more sophisticated
financial system and whilst Henry II did then build on and develop the Exchequer, the actual development
of the Exchequer itself rather than the later developments was the main turning point.
