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The name estate of merchants is misleading because it has been applied by historians and was not a term recognised at the time. The estate of merchants is a title given to the merchant assemblies gathered by writ under Edward III, and refers to the accepted view of representation at this time. The three estates of man were the nobility the clergy and the commons. Edward worked out deals with the merchants bypassing the parliament where the three estates were represented and it is this that has led historians to see the merchants as a sub-estate with its own representation.
Edward III needed finance he was always on the verge of bankruptcy, Parliament could only be induced to grant a certain amount of direct or indirect taxation. the war with Scotland and the threatened war with France meant he had to find large amounts of finances.
Edward called 3 merchant assemblies in 1336sending writs to 105 merchants, the third assembly agreed a tax grant of 20/- on each sack of wool sold and a loan of the same amount, what makes this important is that this was agreed without consent of Parliament and in effect by-passed it. The merchants in exchange for this were granted a monopoly on the export of the wool. It should be mentioned that wool was almost the only war finance available to Edward and was his only available diplomatic tool as a wool staple was the only incentive he could offer potential allies.
Three more assemblies were summoned by the crown in 1337,the first was held on the 16 june and only 24 merchants were summoned these were the leading merchants and capitalists ,men such as William de la Pole. The seeds of destruction were sown at this time because Edward was already splitting the assembly into the major and minor contractors with consequences which will be discussed later. The second and third assmblies were to fill in gaps in a contract already agreed with the leading merchants.
The arrangement made was thus, merchants were to buy 30,000 sacks of wool half on 6 months credit and half on 12 months credit. The idea was to have a strict control over the export of the wool thereby raising the demand and the price. The king was to get half the raised profit margin and the already agreed 20/- grant. In effect the sheep farmers were to lend the wool to the merchants and the merchants were to lend the proceeds from its sale to the king.
The deal being struck was of course unconstitutional and should have been made with the M,Ps who were the representatives of these merchants. The problem for Edward was that all the deals struck with the merchant assemblies were on profits to come, many of which didn't materialise. Only a third of the sacks of wool were collected and Edward seized those at Dodrecht in 1338 giving immunities from future taxation in place of cash. Between 1338 and 1344 the assembly of merchants were called on numerous ocassions by-passing parliament and agreeing a succession of deals.
The merchant assembly had polarised into 2 distinct groups by 1344 ,a syndicate of wealthy merchants who passed their losses down to the smaller merchants. and by july 1344 2/3rds of the members withdrew formally from their contracts with the crown. The lesser merchants and the sheep farmers increasingly resorted back to their parliamentary representatives to air their grievances with the crown whilst the small syndicte of rich merchants became royal financiers. Edward tried again to call an assembly of merchants between 1348 and 1351, the black death was a fine excuse not to meet parliament and so he didn't. Edward used the time to get a merchant body together who would underwrite his ailing personal financiers these financiers were the rich merchants who could no longer take the losses they were incurring . 32 merchants agreed and were ruined within a year .
Parliament met Edward again in 1351 and had got their act together in the intervening years and the free trade enactments came into being, all the monopoly on trades was dropped in exchange for a continuation of the two 20/- subsidies on wool . The most important concession given by the crown was that no grant could be made outside of parliament and if it was then it was null and void .
So no more merchant assemblies ? WRONG! Edward continued to make deals with merchant groups, 100 merchants exporting to the staple of Bruges advanced “5,000 on the security of future subsidy in the autumn of 1351. Loans were made by boroughs in their corporate capacities, Norwich ,Lynn, and Coventry among them. London's aldermen agreed a loan of 20,000 marks on security of future subsidy. The commoners were a little miffed by this and argued against it , even presenting two of the aldermen for trial,similar opposition was seen at Coventry and York.
The Parliament met again in 1352 and Edward tried to force a wedge between them by asking for a delegation to negotiate with the great council but they refused saying that it was for all of them to negotiate not some. In exchange for a grant of two 1/16ths and 1/10ths the commons presnted a list of 43 petitions.
Edward again tried to summon a merchant assembly in 1353 to discuss the setting up of a home staple in wool and a subsidy on it . The merchants were supplemented this time by a number of knights summoned to give the proceedings an air of constitutionality,but the assembly insisted thet the legislation agreed by them should be confirmed and recorded by parliament. The commons when they debated the agreement made a number of ammendments, so Edward was finding it increasingly difficult to by-pass parliament.
Edward tried a new tack with the assembly of merchants of june 1356 , almost half were citizens of London they were the gild capitalists whose monopolies and priveliges had been eroded by Parliament. The merchants were summoned from 36 cities and boroughs and numbered some 169 men. The deal struck with them was ratified by Parliament in1357 due to Edwards strong position after the victory at Poitiers ,{HUZZAH!}, but Parliament only granted 6 months opening of the staple to native merchants not the 12months granted by the king. Parliament was worried about the re emergence of monopoly syndicates. They were right because after the 6 months were up the king licenced the continuation of staple export and by the end of 1359 an assembly of merchants had agreed a new tax grant.
The treaty of Bretigni signed in 1360 led parliament to believe, not unnaturally, that the direct and indirect taxation granted in time of war would cease, especially the heavy subsidy on wool. Edward had other ideas, and sought ,by an assembly of merchants to set up a staple in Calais using grants of buildings in Calais as his incentive. Edward got enough support to induce him to get the approval of Parliament in 1362.
The staple was set up by royal ordinance in 1363 and the commons immediatly protested because the staple had been set up by the king and a small number of merchants for their own profit. Parliament gained the abandonment of the scheme in 1365, due mainly to the fact that they now represented the majority of merchants.
In conclusion it can be seen that the estate of merchants only existed on the summons of the king. It was an attempt by Edward III to by-pass Parliament in an effort to supplement his income . The problems lay in the differing goals of the merchants involved, the vast majority making losses on the king's deals quickly went back to Parliament to address their grievances through that body, and strenthened it's position in doing so. A small number of the wealthy merchants went from organising the enterprises on behalf of the king to being the king's financiers. Due to the problems in realising the theoretical profits in their deals and the kings inability to pay his debts many of the wealthy merchants were eventually ruined. The estate of merchants may have become a part of our constitution had they been able to realise the theoretical profits used as an inducement by the king.