Proclaime through everie high street of this citie, This place to be no longer cal'd a Burse, But since the building's stately, faire, and strange, Be it for ever cal'd, the Royall Exchange.
Thomas Heywood, If You Know Not Me You Know Nobody
Financial trading in Tudor times was very different from today's electronic world. In the middle of the 16th century, deals were still being done in the muddy streets of the City of London. That might have continued had one Sir Thomas Gresham not suggested copying the European way of doing things, by moving the trading into a purpose-built building. As luck would have it, this move pre-empted the Spanish sacking of Antwerp in 1576, destroying its position as the financial capital of Europe and allowing London merchants to fill the vacuum.
Gresham's inspiration was the Bourse in Antwerp, where he had been Royal Agent for both King Edward VI and Queen Mary. Gresham was a very wealthy man, thanks to a sizeable inheritance and his own financial wheeler-dealing whilst in Antwerp. He invested a huge chunk of this fortune in a new London Bourse, which was built between 1566 and 1570 on land provided by the City Corporation between Cornhill and Threadneedle Street in the City of London.
The trading floor in the Flemish-style (and, in parts, Italianate) building was open to the elements, with piazzas for wet weather. Its bell-tower, crowned by a huge grasshopper, stood on one side of the main entrance, from which the bell summoned merchants at 12 noon and 6pm.
Although Gresham's aim was to build somewhere to house a trading floor, his really smart move was realising that this wouldn't be very profitable on its own. So he added two more floors on top and moved into the retail business, opening Britain's very first shopping mall. This had about a hundred kiosks or shops, with each shopkeeper paying annual rent, giving Gresham, in theory, a nice steady income.
After a slow start, Gresham's retail idea finally took off following the promise of a visit by Queen Elizabeth I in 1570. She ordered its change of name from the Bourse to the Royal Exchange. Thereafter it was known as much for the wonderful range of goods on sale as for the trading. Predictably perhaps, the new Exchange also attracted 'idlers' as well as traders and shoppers, to the distraction of the merchants going to the Exchange to do business.
Although its shopping was a pleasant diversion, Gresham's Royal Exchange was key to the new wealth of the City. Queen Elizabeth I was quick to get in on the act: she licensed legal landing quays for goods on the banks of the Thames, ensuring the Crown got its share of the wealth, while underpinning London's status as the new centre for trading.
In the late twentieth century, the Royal Exchange briefly reverted to its use as a centre for financial trading when, for nine years, it was home to the London International Financial Futures Exchange (LIFFE). However, the financial institutions have now moved away to purpose-built premises and the Royal Exchange is now purely an upmarket retail centre.
Did you know?
Sir Thomas Gresham's Royal Exchange has burned down twice: in the great fire of 1666 and again in 1838. The current Grade 1 listed building is Victorian, but still features a golden grasshopper, emblem of the Gresham family.