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 Chapter 7

Receivables and
Investments

After studying this chapter, students should be able to:

◼ Explain how to account for accounts receivable, including bad debts (LO1).
◼ Explain how information about sales and receivables can be combined to evaluate how efficient a
company is in collecting its receivables (LO2).
◼ Explain how to account for interest-bearing notes receivable (LO3).
◼ Explain various techniques that companies use to accelerate the inflow of cash from sales (LO4).
◼ Explain the accounting for and disclosure of various types of investments that companies make
(LO5).
◼ Explain the effects of transactions involving liquid assets on the statement of cash flows (LO6).

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 INSTRUCTOR’S MANUAL

Chapter Outline
LO 1 Accounts Receivable

Accounts receivable are receivables arising from the sale of goods or services with a verbal promise to pay
within a specified period of time.
◼ Do not bear interest.
◼ Selling on credit causes two problems:
• Slows down the inflow of cash to the company.
• Possibility that customer may not pay bill on time or at all.
◼ To remain competitive, most businesses sell on credit.

The Use of a Subsidiary Ledger

◼ The transaction to record a sale on credit can be analyzed as follows:

• Operating activity.
• Accounts Receivable increases and Sales Revenue increases.
• Both the balance sheet and the income statement are affected.
◼ Subsidiary ledger is the detail for a number of individual items that collectively make up a single
general ledger account known as a control account.
• Tracks the balance owed by each customer.
◼ Control account is the general ledger account that is supported by a subsidiary ledger.
◼ Plant and Equipment and Accounts Payable also have subsidiary ledgers.
◼ Subsidiary ledger does not take the place of the control account in the general ledger.
• At any point in time, the balances of the accounts that make up the subsidiary ledger should
total to the single balance in the control account.
◼ Remainder of chapter uses only the control account. Whenever a specific customer’s account is
increased or decreased, the name of the customer will be noted next to the control account.

The Valuation of Accounts Receivable

◼ Credit department of a business is responsible for performing a credit check on all potential
customers before granting them credit.
• Company knows that not all customers will be able to pay their account when due.
◼ A reduction in receivables for an allowance is how most companies deal with bad debts in their
accounting records.
◼ Bad debts are unpaid customer accounts that are uncollectible.
◼ Allowance is called allowance for doubtful accounts or the allowance for uncollectible accounts.

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 CHAPTER 7 RECEIVABLES AND INVESTMENTS

◼ An attempt to report accounts receivable at their net recoverable amount (or net realizable value),
the amount expected to be collected in cash.
• Gross accounts receivable less allowance for doubtful accounts equals net recoverable amount
of accounts receivable.

Two Methods to Account for Bad Debts

There are two methods to account for bad debts – the direct-write off method and the allowance method.
◼ The direct write-off method.
• The recognition of bad debts expense at the point an account is written off as uncollectible.
• The effect of the transaction to write-off the account under the direct write-off method:
 Operating activity.
 Accounts Receivable decreases and Bad Debts Expense increases.
 Both the balance sheet and the income statement are affected.
• By ignoring the possibility that not all of its outstanding accounts receivable will be collected,
the company is overstating the value of their receivables.
• Creates a timing problem because it does not match expense (bad debts) associated with sales
in the same period in which sales were made.
 Violates the matching principle.
◼ The allowance method.
• Overcomes the deficiencies of the direct write-off method by estimating the amount of bad
debts before they actually occur.
• A method of estimating bad debts on the basis of either the net credit sales of the period or the
accounts receivable at the end of the period.
• The effect of the adjustment can be identified as follows:
 Operating activity.
 Allowance for Doubtful Accounts increases and Bad Debts Expense increases.
 Both the balance sheet and the income statement are affected.
• The effect of writing off a specific customer’s account can be identified as follows:
 Operating activity.
 Allowance for Doubtful Accounts decreases and Accounts Receivable decreases.
 Only the balance sheet is impacted.
◼ Summary of the two methods.
• Under either method, the entry to write off a specific customer’s account reduces Accounts
Receivable. It is the other side of the adjustment that differs between the two methods.
 Under the direct write-off method, an expense is increased.
 Under the allowance method, the allowance account is reduced.

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INSTRUCTOR’S MANUAL

Two Approaches to the Allowance Method of Accounting for Bad Debts

Because the allowance method results in better matching, accounting standards require it rather than the
direct write-off method unless bad debts are immaterial. Two methods are used to estimate bad debts – the
percentage of net credit sales approach and the percentage of accounts receivable approach.
◼ Percentage of Net Credit Sales Approach
• Emphasizes matching bad debts expense with revenue on the income statement.
• Uses the past relationship between bad debts and net credit sales to predict bad debt amounts.
 Net means that credit sales have been adjusted for sales discounts and returns and
allowances.
• Use historical average percent of net credit sales that resulted in bad debts, applied to current
period’s credit sales.
 Analyze to make sure estimate is realistic for the current period.
• The transaction to estimate bad debts using the net credit sales approach can be analyzed as
follows:
 Operating activity.
 Allowance for Doubtful Accounts increases and the Bad Debts Expense increases.
 Both the balance sheet and the income statement are affected.
• Ignore any balance in the allowance account under this method.
◼ Percentage of Accounts Receivable Approach
• Emphasizes the net realizable value of accounts receivable on the balance sheet.
• Matches bad debts with the balance of accounts receivable at the end of the period.
• Bases bad debts on a percentage of the accounts receivable balance at the end of the period.
• The transaction to estimate bad debts using the percentage of accounts receivable approach
can be analyzed as follows:
 Operating activity.
 Allowance for Doubtful Accounts increases and the Bad Debts Expense increases.
 Both the balance sheet and the income statement are affected.
• Apply an uncollectible percentage to current period’s ending accounts receivable.
 Must consider balance in the allowance account.

IMPORTANT: This method does not yield the amount of the increase to Bad Debt
Expense and the amount of the increase to the Allowance for Doubtful Accounts. The
amount calculated is the ending balance of the Allowance account. It is necessary to
consider any existing balance to arrive at the debit to Bad Debt Expense.
To summarize:
Under the percentage of net credit sales approach, the balance in the allowance account is
ignored and the bad debts expense is simply a percentage of the sales of the period.
Under the percentage of accounts receivable approach, however, the balance in the
allowance account must be considered.

7-4
 CHAPTER 7 RECEIVABLES AND INVESTMENTS

◼ Aging of accounts receivable is a refinement of the percentage of accounts receivable approach

to estimate bad debts. (Exhibit 7-1)
 Refines the calculation, considering the length of time receivables have been outstanding.
 An aging schedule is a form used to categorize the various individual accounts receivable
according to the length of time each has been outstanding.
• Estimated uncollectibility increases as the period of time the accounts have been
outstanding lengthens.

LO 2 The Accounts Receivable Turnover Ratio

◼ Managers, investors, and creditors are interested in how well a company manages its accounts
receivable.
• One simple measure is to compare a company’s sales to its accounts receivable.

◼ Accounts Receivable Turnover = Net Credit Sales

Average Accounts Receivable
• The number of times accounts receivable are collected during the period.
◼ Number of days’ sales in receivables is a measure of how long it takes to collect receivables.
Number of Days in the Period
Accounts Receivable Turnover ratio
◼ Analyze the ratios.
• Compare ratios with prior years to see if company is experiencing slower or faster collections.
• Compare ratios to other companies in the same industry.
• If receivables are turning over too slowly, company’s credit policies may be too lenient and
they may be selling to customers who may not be able to pay.
• If receivables are turning over too quickly, the company’s credit policies may be too tight and
sales are being lost.
◼ Use the Ratio Analysis Model, and the Business Decision Model to analyze the accounts
receivable rate of collection.
• Ratio Analysis Model:
1. Formulate the Question.
2. Gather the Information From the Financial Statements.
3. Calculate the Ratio.
4. Compare the Ratio With Other Ratios.
5. Interpret the Ratios.
• Using the Business Decision Model:
1. Formulate the Question.
2. Gather Information from the Financial Statements and Other Sources.

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 INSTRUCTOR’S MANUAL

3. Analyze the Information Gathered.

4. Make the Decision.
5. Monitor Your Decision.

LO 3 Notes Receivable

A note receivable is an asset resulting from accepting a promissory note from another entity.
◼ Promissory note is a written promise to pay a definite sum of money on demand or at a fixed or
determinable date in the future.
◼ Payee is the party that will receive the money from a promissory note at some future date.
• Holds a note receivable and earns interest revenue.
• Note receivable – an asset resulting from the acceptance of a promissory note from another
company.
◼ Maker is the party that agrees to repay the money for a promissory note at some future date.
• Has a note payable and interest expense.
• Note payable – a liability resulting from the signing of a promissory note.
◼ Promissory notes are issued:
• By banks when a company wants to borrow money.
• In the sale of consumer durables with relatively high purchase prices (autos).
• To replace an existing overdue account receivable.

Important Terms Connected With Promissory Notes

◼ Principal – the amount of cash received or the fair value of the products or services received, by
the maker when promissory note is issued.
◼ Maturity date – the date the promissory note is due.
◼ Term – the length of time a note is outstanding, the period of time between the date the note is
issued and the date it matures.
◼ Maturity value – the amount of cash the maker is to pay the payee on the maturity date of the note.
• Principal plus interest.
◼ Interest – the difference between the principal amount of the note and its maturity value.
• Principal times rate times time = interest.
◼ Accounting for a Note Receivable:
• The effect of the receipt of the note can be analyzed as follows:
 Operating activity.
 Notes Receivable is increased and Sales Revenue is increased.
 Both the balance sheet and the income statement are affected.
• Adjustment at end of the accounting period:

7-6
 CHAPTER 7 RECEIVABLES AND INVESTMENTS

 Needed to record interest earned but not yet received during the period.
 The effect of the transaction can be analyzed as follows:
• Operating activity
• Increase Interest Receivable and increase Interest Revenue.
• Both the balance sheet and the income statement are affected.
• The effect of receiving the principal and interest on the maturity date can be analyzed as
follows:
 Operating activity.
 Cash is increased, Notes Receivable is decreased, Interest Receivable is decreased, and
Interest Revenue is increased.
 Both the balance sheet and the income statement are affected.

LO 4 Accelerating the Inflow of Cash from Sales

Credit card sales and discounting a note receivable allow a company to accelerate the inflow of cash.

Credit Card Sales (Exhibit 7-2)

◼ Most merchants find that they must honor at least one or more types of credit cards (VISA,
MasterCard) to remain competitive.
◼ Company pays a fee to the credit card company in return for passing the responsibility for
collection to the credit card company.
◼ The credit card company is responsible for collection and therefore assumes the risk of
nonpayment.
◼ Company receives cash more quickly.
◼ Company remits credit receipts to the issuer of the card. The effect of the transaction can be
analyzed as follows:
• Operating activity.
• Accounts Receivable is increased and Sales Revenue is increased.
• Both the balance sheet and the income statement are affected.
◼ When reimbursement is transmitted to the company, a collection fee (an expense for the company)
is generally deducted. The effect of the transaction can be analyzed as follows:
• Operating activity.
• Cash increases, Collection Fee Expense increases, and Accounts Receivable decreases.
• Both the balance sheet and the income statement are affected.
◼ Some credit cards allow the merchant to present receipts directly for deposit in a bank account, in
essentially the same way as cash and checks are deposited.
 Accelerates collection even more for the company that accepted the credit card, since this
deposit method makes it equivalent to receiving cash.

7-7
 INSTRUCTOR’S MANUAL

 Collection fee is charged at the time of deposit. The effect of the transaction can be
analyzed as follows:
• Operating activity.
• Cash is increased, Collection Fee Expense is increased, and Sales Revenue is
increased.
• Both the balance sheet and the income statement are affected.

Discounting Notes Receivable

◼ Promissory notes are negotiable, which means that they can be endorsed, sold to the bank, and the
company can then receive cash before the maturity.
• Discounting is the processing of selling a promissory note.
◼ Note can be sold on the date of issuance or any time prior to its maturity date.
◼ Discounting is usually done with recourse, that is, if the maker fails to pay the bank, the
discounting company is responsible for the debt.
• Creates a contingent liability from the time the note is discounted until its maturity.
• Contingency is not recorded as a liability but is stated in a footnote to the financial statements
because it is not an actual liability until maker defaults on the note.

LO 5 Accounting for Investments

Companies invest idle cash in a variety of financial instruments.

◼ Cash equivalents are highly liquid financial instruments that have an original maturity to the
investor of three months or less.
• Included with cash and are not considered short-term investments.
◼ Equity securities are investments in the common or preferred stock of another company. Equity
securities do not have a maturity date.
• A form of ownership in the business.
• No maturity date.
◼ Debt securities are investments in the bonds issued by corporations and governmental agencies.
• Bond investments have a maturity date.
◼ Classification as current or noncurrent depends on management’s intent.

Investments in Highly Liquid Financial Instruments

7-8
 CHAPTER 7 RECEIVABLES AND INVESTMENTS

◼ Seasonal nature of most businesses leads to a potential cash shortage during certain times of the
year and an excess of cash during other times.
◼ Companies deal with cash shortages by borrowing from a bank (note) or from other entities in the
form of commercial paper.
◼ CD – Certificate of Deposit:
• The effect of the purchase of a CD can be analyzed as follows:
 Investing activity.
 Short Term Investments-CD is increased and Cash is decreased.
 Only the balance sheet is affected.
• Interest is calculated for the time invested, usually a fraction of a year.
 I=P×R×T
• The effect of the adjustment for interest may be needed if year-end comes between purchase
and maturity.
 Operating activity.
 Interest Receivable increases and Interest Revenue increases.
 Both the balance sheet and the income statement are affected.
• The effect of the receipt of principal and interest can be analyzed as follows:
 Investing and Operating activity.
 Cash increases, Interest Receivable decreases, Short-Term Investment-Cd decreases, and
Interest Revenue increases.
 Both the balance sheet and the income statement are affected.

Investments in Stocks and Bonds

Companies invest in either in debt securities (bonds) or equity securities (stocks). The company that invests
is the investor and the company whose stocks or bonds are purchased is the investee.
◼ No Significant Influence
• No significant influence exists if investor primarily interested in interest, dividends, capital
appreciation.
• Can be for the short-term or long-term.
• Often the investment is made in anticipation of a need for cash at some distant point in the
future (plant expansion).
• Usually 0-20% of the common stock of another company is purchased.
• Requires use of the fair value method.
◼ Significant influence
• A company buys a relatively large percentage of the common stock of the investee in order to
secure significant influence over the company’s policies.
 A company buys a large percentage of the common stock of the supplier of its raw
materials to ensure a steady source of inventory.

7-9
INSTRUCTOR’S MANUAL

• Equity method of accounting for investment is used if investor is able to secure influence over
investee.
• Appropriate when at least 20% but less than 50% of the common stock of the investee is
owned.
◼ Control
• Buy stock in another company with the purpose of obtaining control over the other entity.
• Normally requires ownership of more than 50% of investee’s stock.
• Consolidated financial statements are prepared, combining statements of the individual
entities into a single set of statements.
• Investor is the parent, investee is the subsidiary.
◼ Accounting for an investment in bonds.
• The effect of the transaction when bonds are purchased at face value can be analyzed as
follows:
 Investing activity.
 Investment in Bonds increases and Cash decreases.
 Only the balance sheet is affected.
• When interest is received, the effect of the transaction can be analyzed as follows:
 Operating activity.
 Cash increases and Interest Revenue increases.
 Both the balance sheet and the income statement are affected.
• If interest is not received at the end of an accounting period, company must accrue interest
earned but not yet received.
• If bonds are sold before maturity date, the difference between the proceeds received from the
sale of the bonds and the amount paid for the bonds is a gain or a loss.
 Gain or loss is reported in the Other Income and Expenses section of the income
statement.
 The effect of the transaction can be analyzed as follows:
• Investing activity.
• Cash increases, Investment in Bonds decreases, and Loss on Sale of Bonds increases.
• Both the balance sheet and the income statement are affected.
◼ Accounting for an investment in stock when there is no significant influence (fair value method):
• Recorded initially at cost, including brokerage fees, commissions or other fees paid to acquire
the shares. The effect of the transaction can be analyzed as follows:
 Investing activity.
 Increase Investment in Common Stock and decrease Cash.
 Only the balance sheet is affected.

• Dividends do not accrue over time.

7-10
 CHAPTER 7 RECEIVABLES AND INVESTMENTS

 Company has no legal obligation to pay dividends until the board of directors declares
them.
 The effect of the transaction to record the receipt of the dividends can be analyzed as
follows:
• Operating activity.
• Cash is increased and Dividend Income is increased.
• Both the balance sheet and the income statement are affected.
• When stock is sold, the difference between the cash proceeds and the amount recorded on the
books for the stock is a gain or loss. The effect of the transaction can be analyzed as follows:
 Investing activity.
 Cash increases, Investment in Common Stock decreases, and Gain on Sale of Stock
increases.
 Both the balance sheet and the income statement are affected.

Valuing and Reporting Investments on the Financial Statements

◼ Whether investment is a current asset or a noncurrent asset depends on the company’s intent.
• If company intends to sell the investments within the next year, they are current assets.
• All other investments are classified as noncurrent.
◼ Investments are generally reported at their fair value on the year-end balance sheet.
• When gains or losses from recognizing the changes in the fair value of investments should be
recorded on the income statement is complex.

LO 6 How Liquid Assets Affect the Statement of Cash Flows

Cash equivalents are not considered significant activities to be reported on a statement of cash flows.
◼ The purchase and sale of investments are considered significant investing activities.
• The purchase of investments is reported as an investing cash outflow.
• The sale of investments is reported as an investing cash inflow.

◼ Accounts and notes receivable are reported in the operating section.

• Indirect method adjusts net income to reflect the cash collected/paid.
• A decrease in accounts or notes receivable is added to net income because if accounts or notes
receivable decreases, the company must have collected more cash than reported sales for this
period.
• An increase is deducted because if accounts or notes receivable increases, the company must
have collected less cash than reported sales for this period.

7-11
 INSTRUCTOR’S MANUAL

Lecture Suggestions

The fundamental difference between the percentage of sales and percentage of accounts receivable
LO 1 methods is a difficult concept for students to comprehend. They know how to make the estimate,
but they do not really know what the number that they calculate represents. One tool to use to try
to help them distinguish between the two methods is to emphasize that when you use an income
statement number (revenues) to calculate your estimate, the answer you get is an income statement
amount (bad debt expense). But when you use a balance sheet number (ending accounts
receivable) to calculate your estimate, you get a balance sheet amount (ending balance of
allowance) and if you need to determine the income statement number (bad debt expense) you
have to back into it.

To summarize:

• The percentage of net credit sales method: Sales and Bad Debt Expense both appear on
the income statement. Therefore, when you multiply the credit sales by the applicable
percentage, the figure obtained is the amount of the adjustment. Ignore any balance in the
allowance account.

• The percentage of accounts receivable method: Accounts Receivable appears on the

balance sheet. Therefore, when you multiply the accounts receivable by the applicable
percentage, the figure obtained is a balance sheet number – the number needed in the
allowance account. Under this method, you must therefore consider any balance in the
allowance account in order to come up with the amount of bad debt expense needed for
the adjustment.

The direct write-off method is easier to use and does not involve estimates. Why then is the
LO 1 allowance method required by GAAP? Can you think of any company that could be allowed to
use the direct write-off method?

ABC Company has consistently estimated bad debts as 3% of net credit sales. ABC is not having a
good year and the CFO wants the accountant to change the percentage used this year in order to
show a bigger profit. Would the percentage have to increase or decrease to show more profit? Is
this ethical? Would there be any valid business reasons to change the percentage? Can estimating
bad debts be a way of manipulating income?

Under the allowance method, the balance in the Allowance for Doubtful Accounts is subtracted
from Accounts Receivable to determine the net realizable value. Can we make things easier and
just credit Accounts Receivable directly? Why or why not?

7-12
 CHAPTER 7 RECEIVABLES AND INVESTMENTS

Refer to previous discussions of the cash cycle, current ratio, and inventory turnover. Now
LO 2 students can see the usefulness of these ratios in determining how quickly a company can turn its
investment in inventory into cash to reinvest. The days in accounts receivable ratio completes the
picture. The student can then compare the days in accounts receivable to the stated credit terms of
the company. If the terms are net/30 and the average days in accounts receivable are 75 days, this
could cause a significant cash flow problem for the company.

The formula for calculating interest is:

LO 3 Interest = Principal × Interest Rate × Time

Students often get confused about the time factor. Since interest rates are stated as an annual
percentage, if the note is outstanding for less than a year, the formula needs a time period. Interest
can be stated in months or days. Often 360 days is assumed to be the number of days in the year
for interest calculations.

The credit card companies charge a fee to the merchant when a customer uses their charge card.
Do you think when a company discounts a note receivable at the bank it will receive the maturity
LO 4 value of the note or will there be a fee charged?

If Macy’s accepts its own credit card as a form of payment, will it be treated the same as a
\ MasterCard sale?

Students should be able to compare and contrast the differences between debt securities and equity
LO 5 securities. Focus on why companies invest in the different types of securities and how that affects
the accounting and reporting of those investments.

7-13
 INSTRUCTOR’S MANUAL

Projects and Activities

LO 1 Accounts Receivable
In-class discussion: Accounts receivable and bad debts
Hues, Inc. had an Accounts Receivable balance at December 31, 2014 of $130,000. Their subsidiary ledger
showed the following customer balances:
Honey $ 12,000
Iris 10,000
Jonquil 20,000
Kaffe 30,000
Lily 45,000
Mauve 5,000
Neutra 8,000
$130,000

◼ Is it likely that every one of these customers will pay the entire debt they owe?
◼ If not, which one(s) will not pay? How much are they not going to pay?
◼ If Hues is certain that some of the accounts will be uncollectible, but does not know which
customers and how much, what should Hues do?
◼ Suppose Hues decides to wait until an account actually becomes uncollectible. Eventually, the
$45,000 Lily account cannot be collected, in the year following the sale. Which fundamental
principle is violated?
◼ How can Hues remove a specific account from Accounts Receivable in the current year if they do
not know specifically who will not pay?
◼ How does Hues know at the time of the sales that some of the accounts will not be paid?
◼ How can Hues use that information to estimate how much of the $130,000 will eventually be
written off?
◼ What does Hues do with the estimated amount? Is it an expense for the current year? Should Hues
remove it from Accounts Receivable? Why or why not? Explain how the estimate is accounted
for.
Solution
This deliberately oversimplified exercise may help students arrive on their own at the “theory” of the bad
debt allowance. Present it before discussing the allowance in detail, perhaps even before students read the
section in the text, so that they think it through themselves in simple terms before they convince themselves
that they do not understand the accounting terminology. Proceed one question at a time.
◼ Will every customer pay all they owe? Sadly, no.
◼ Who is not going to pay, and how much, is the problem. Hues has no idea whatsoever, or they
would not have extended credit to that customer in the first place.
◼ What does Hues do? Some students will suggest a “wait and see what happens” attitude, or will
say that a company should always try to collect everything.
◼ If Hues waits until the $45,000 account goes bad, about 35 percent of last year’s ending balance is
written off, a very significant number. The matching principle is violated.

7-14
 CHAPTER 7 RECEIVABLES AND INVESTMENTS

◼ How can Hues remove one customer from the books this year? They can’t! They have to account
for the possibility of bad debts before they happen.
◼ Hues knows some accounts will not be collected from their own past experience. Newspapers
contain articles discussing the effects of unpaid accounts on business. A business must realize that
by extending credit to customers, they will incur an additional expense called Bad Debts. Every
business must decide if they are willing to accept this risk.
◼ Hues has historical information on bad debts, so it can calculate a mathematical “average” bad
debt percentage to apply to this year’s ending accounts receivable, to estimate the bad debt
expense that will result from this year’s sales.
◼ Hues wants to recognize the expense in the year of the sale. Because Hues has no customer
account to decrease; the estimated expense cannot be used to reduce Accounts Receivable. But
Hues is certain it will eventually collect less than the total accounts receivable. At this point, ask if
students notice this is similar to Accumulated Depreciation, which reduced an asset without
altering the historical cost balance of the asset account itself. This bad debt estimate, whatever
name it is given, creates another contra account. Students should realize that the name it is given
(and they’ll find there are many) is not important, but its function is the important part. Refer to it
as a “BUT” on the balance sheet. We have $130,000 of accounts receivable, BUT we only
realistically expect to collect, for example, $92,000.

In-class discussion: Alternate terminology

The following is taken from the asset section of a recently issued annual report ($ in millions): 1
Loans, net of unearned income $655,464
Allowance for loan losses (25,455)
Total loans, net $630,009
◼ What sort of business do you think this company is in? (Their total assets in millions of dollars are
approximately $1,864,660.)
◼ Explain the allowance in terminology that you have learned in this chapter.
◼ Is the basic accounting for these transactions the same as what you have learned for retailing?
Don’t worry about additional industry-specific rules you may not know.
Solution

◼ These amounts are from the balance sheet of Citigroup Inc., a banking and financial services
company.
◼ The allowance is their bad debt allowance. The unearned income (not addressed in the question)
results from the deferral of commitment fees and loan origination costs. These are amortized over
the life of the loan at the related loan’s yield.
◼ Accounting for loans and loan impairments is covered by separate standards as well as by banking
regulations, but the basic principle is the same. The company makes an allowance for the
possibility that everyone who borrows money will not necessarily pay it back.

1
Citigroup, Inc., 2012 10-K, p. 142.

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INSTRUCTOR’S MANUAL

In class discussion: Determining the allowance for bad debts

In their 2012 Annual Report, IBM has the following footnote regarding Allowance for Uncollectible
Receivables:2
Notes and Accounts Receivable - Trade - An allowance for uncollectible trade receivables is
estimated based on a combination of write-off history, aging analysis, and any specific, known
troubled accounts.

Financing – Financing receivables include sales-type leases, direct financing leases and loans... The
methodologies that the company uses to calculate its receivables reserves, which are applied
consistently to its different portfolios, are as follows:

Individually Evaluated – The company reviews all financing receivables considered at risk on a
quarterly basis. The review primarily consists of an analysis based upon current information
available about the client, such as financial statements, news reports, published credit ratings,
current market-implied credit analysis, as well as the current economic environment….

Collectively Evaluated – The company records an unallocated reserve that is calculated by

applying a reserve rate to its different portfolios, excluding accounts that have been specifically
reserved. This reserve rate is based upon credit rating, probability of default, term, characteristics
(lease/loan) and loss history…

◼ What method or methods does IBM use to estimate its bad debts?
◼ Can a company use a combination of both methods?
◼ Can the company change its method of estimating bad debts?
Solution

◼ IBM uses a combination of methods – they look at specific accounts receivable to determine
collectability and also use an unallocated reserve for different portfolios, excluding the amounts
that have been specifically reserved.

◼ Yes, a company can use any method that reasonably estimates bad debts and does not violate the
matching principle.

◼ A company can change its method of determining bad debts but it must have a logical business
reason to do so since the consistency principle is being violated. Estimates cannot be used to
manipulate income.

2
International Business Machines Corporation, Annual Report, 2012, p. 85.

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 CHAPTER 7 RECEIVABLES AND INVESTMENTS

LO 5 Investments in Highly Liquid Financial Instruments

In-class discussion: AMR cash and investments
AMR Corporation, in their December 31, 2012 Annual Report, lists the following ($ millions) 3:
2012
Cash $ 474
Short-term investments 3,408

Note 44 details the composition of the short-term investments:

Overnight investments and time deposits $ 306

Corporate and bank notes 2,121
U.S. government agency mortgages 545
Commingled funds 435
Other 1
Total $3,408

Note 4 also states:

“All short-term investments are classified as available-for-sale and stated at fair value. Unrealized
gains and losses are reflected as a component of accumulated other comprehensive income (loss).”

◼ What determines if investments will be classified as short-term or long term?

◼ Should a company have more money in cash or in short term investments?
◼ What does the note mean when it states that “all short-term investments are stated at fair value”?
◼ What are the following types of securities:
• Time deposit
• Overnight investment
• Corporate and bank notes
• US Government agency mortgages and notes
• Commingled funds
Solution

◼ The company’s plan for holding the securities, regardless of their characteristics, dictates their
classification as current or noncurrent.
◼ Cash is generally a nonearning asset. Good cash management dictates that a company has enough
cash on hand to meet its current obligations, but excess cash should be invested in various forms

3
American Airlines, Inc., 2012 10-K, p. 64.
4
Ibid, p. 77.

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 INSTRUCTOR’S MANUAL

of marketable securities to earn interest and dividends. There is no right answer to this question
since we are not sure of the immediate cash needs of American Airlines.
◼ Short-term investments are originally recorded on the books at cost. However, they are
subsequently adjusted to their fair value, which is the quoted selling price of the stock on the date
of the balance sheet.
◼ Definitions:
• Time deposit – savings account or CD held in a financial institution, for a fixed term or with
the understanding that the customer can withdraw only by giving advanced notice
• Overnight investment – After deposits are credited and checks are paid, any excess available
balances may be invested nightly to earn a competitive rate of return.
• Corporate and bank notes – debt issued by corporations and banks
• US Government agency notes and mortgages – debt issued or backed by the US government
• Commingled Fund is a type of mutual fund which consists of multiple kinds of assets from
several accounts combined together which reduces the overall risk.

Decision Analyzing Receivables Turnover

Models
You are the credit manager for Wood Products, a retail furniture store. You want to make sure your
customers are paying their receivables within the credit terms.
Below is some pertinent information from your analysis of the 2014 financials for Wood Products, along
with the information you have gathered:
Net credit sales, 2014 $6,000,000
Net credit sales, 2013 $5,700,000
Accounts Receivable January 1, 2014 $700,000
Accounts Receivable, December 31, 2014 $720,000
Wood Products credit terms n/45
Wood Products receivable turnover 2013 8.30 times
Industry average receivable turnover 8.5 times

Using the Ratio Analysis Model and the Business Decision Model, determine (1) the receivables turnover
and (2) if the customers are paying their bills on a timely basis.
Solution
You may want to point out to students that generally the financial statements do not have the figure for net
credit sales, so net revenue is used. Will this make a difference? This exercise also shows that the Business
Decision Model can be used for any business decision, not just the decision to lend or invest money.

Ratio Analysis Model:

1. Formulate the Question. What is the receivables turnover ratio for Wood Products?

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 CHAPTER 7 RECEIVABLES AND INVESTMENTS

2. Gather the Information From the Financial Statements. The ratio uses average
receivables, which is obtained from the two most recent balance sheets and net credit sales,
which is obtained from the income statement.

3. Calculate the Ratio. Receivables turnover ratio = Net Credit Sales

Average Accounts Receivable
Average accounts receivable = Beginning Receivables + Ending Receivables
2
Average accounts receivable = $700,000 + $720,0000/2 = $710,000
Receivables turnover ratio = Net Credit Sales = $6,000,000 = 8.45 times
Average Accounts Receivable $710,000

4. Compare the Ratio With Other Ratios. Wood Product’s receivables turnover ratio
increased slightly from the prior year, from 8.30 to 8.45 times. It is slightly below the industry
average of 8.5.

5. Interpret the Ratios. It appears that the receivables turnover for Wood Products is improving
and is in line with the industry average. The company may also want to look at the number of
days’ sales in receivables, which calculates the number of days, on average, that accounts
receivable are outstanding. For Wood Products for 2014, this is 43 days (360/8.45).

Using the Business Decision Model:

1. Formulate the Question. Are the collections of accounts receivable in line with the credit
terms offered by Wood Products?

2. Gather Information from the Financial Statements and Other Sources. This information
will come from a variety of sources, including, but not limited to:
• The balance sheet which provides information about liquidity.
• The income statement which provides information regarding profitability.
• The statement of cash flows which provides information on the inflows and outflows
of cash.
• The outlook for the retail furniture industry, including consumer, trends, labor issues,
and other factors.
• The outlook for the economy in general.
• The notes to the financial statements which will provide additional information about
the company to supplement the financial statements.
• An internet search which will provide current and historical information on the retail
furniture industry, and its competitors.

3. Analyze the Information Gathered.

a. Use the Ratio Analysis Model to compute and analyze the receivables turnover
ratio. As the previous analysis suggested, Wood Product’s receivable turnover ratio is
improving and is just slightly below industry average.

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INSTRUCTOR’S MANUAL

b. Are there other liquidity ratios that can be computed? The days’ sales in receivables
is perhaps a more important ratio to be used in the decision. As previously computed, the
days’ sales in receivables for 2014 is 43 days. This needs to be compared to Wood
Product’s credit terms which are net 45 days. Wood is giving their customers 45 days to
pay their bills and they are paying them within 43 days, slightly early!

4. Make the Decision. Wood Product’s customers are paying the amounts they owe Wood
on a timely basis. The collections of accounts receivable are in line with the credit terms
offered by Wood Products.

5. Monitor Your Decision. A downturn in the economy could cause customers to take
longer to pay the receivables. Also, if Wood Products has any major customers, Wood
should monitor their financial health. Wood Products may also want to look at their credit
policies to determine if they are too stringent. Are there customers that Wood is not
selling to that they could reconsider?

7-20
Other documents randomly have
different content
“In his house he is bountiful both to strangers and poor people. Some hold, when hospitality died, she
gave her last groan among the yeomen of Kent. And still at our yeoman’s table you shall have as many
joints as dishes; no meat disguised with strange sauce; no straggling joint of a sheep in the midst of a
pasture of grass, but solid, substantial food.
“He hath a great stroke in the making of a knight of the Shire. Good reason, for he makes a whole line
in the subsidy book, where, whatsoever he is rated, he payeth without regret, not caring how much his
purse be let blood, so it be done by the advice of the physicians of the state.
“In his own country he is a main man on juries; where, if the Judge open his eyes on a matter of law,
he needs not to be led by the nose in matters of fact.... Otherwise (though not mutinous in a jury) he
cares not whom he displeaseth, so he pleaseth his own conscience.
“In a time of famine he is the Joseph of the country and keeps the poor from starving ... and to his poor
neighbour abateth somewhat of the high price of the market. The neighbour gentry court him for his
acquaintance, which either he modestly waveth, or thankfully accepteth, but in no way greedily
desireth.
“In war, though he serveth on foot, he is ever mounted on a high spirit, as being a slave to none, and
subject only to his own Prince. Innocence and independence make a brave spirit, whereas otherwise
one must ask his leave to be valiant on whom one depends. Therefore if a state run up all to noblemen
and gentlemen, so that the husbandmen be only mere labourers or cottagers (which one calls but
'housed beggars'), it may have good cavalry, but never good bands of foot.... Wherefore to make good
infantry it requireth men bred not in a servile or indigent fashion, but in some free and plentiful
manner.”
The ancestors of the yeomanry had suffered much in the anarchy of the fifteenth century, when the
violent ejection of freeholders seems to have become almost as common[81] as it had been in the evil
days before the reforms of Henry II. But the Tudor monarchy had put an end to that nightmare of
lawlessness, and in any society governed by law this body of small property-owners was bound to be a
powerful element, even though they had no occasion for making any concerted use of their power, as
during the greater part of our period they had not. One must not, of course, exaggerate their
importance, or forget that, though a special dignity was attached by opinion to all freeholders, they
included in reality men of various economic positions. Many of them must have been quite poor. In the
eastern counties, where they are most numerous, they frequently own not more than three or four
acres apiece, and can hardly, one would suppose, have supported themselves without working for
wages in addition to tilling their holdings. Nevertheless the part which they played in the routine of rural
life was an indispensable one, and the very diversity of the elements which they included made them a
link between different ends of the social scale. It was from the more substantial among them that the
government was most anxious to recruit the military forces. The obligation of serving the State as
voters and upon juries fell upon the 40s. freeholders. The security of their tenure caused them to be the
natural leaders of the peasantry in resisting pressure from above. No efforts of Elizabeth’s Government
could induce the yeomanry of the North[82] Riding to abandon the old religion; and when tenants and
lords fall out over common rights and enclosures, it is often the freeholders—though on occasion they
enclose themselves—who speak[83] for the less independent classes and take the initiative in instituting
legal proceedings. The upward movement which went on among this class in many parts of England
meant a change in the distribution of material wealth which necessarily involved a corresponding
change in the balance of social forces and in the control of political power. To Harrington,[84] who
sought in the seventeenth century to find in economic causes an explanation of the revolution through
which the country had passed, it seemed that the seeds of the civil war had been sown by the Tudor
kings themselves in the care which they showed for the small proprietor. In destroying feudalism to
establish the monarchy, they had raised a power which was more dangerous to the monarchy than
feudalism itself. They had snapped the bond between landlord and tenant by the Statute of Retainers.
They had given the tenant security by forbidding depopulation. Most important of all, by encouraging
alienation they had caused an enormous transference of property from the upper to the middle and
lower middle classes. “The lands in possession of the Nobility and Clergy of England till Henry VII.
cannot be estimated to have over-balanced those held by the People less than four to one. Whereas, in
our days, the Clergy being destroyed, the Lands in possession of the People over-balance those held by
the Nobility at least nine in ten.” But property is political power individualised and made visible. The
destruction of the monarchy was only the political expression of an economic change which had begun
in the reign of Henry VII. “He suffered the balance to fall into the power of the people.... But the
balance being in the People, the Commonwealth (though they do not see it) is already in the nature of
them.” We need not accept Harrington’s view in its entirety in order to appreciate the significance of the
change which he describes. Certainly the yeomanry were growing in political power, and were strong in
that spirit of self-respect and pride in their order, which, when, as too often, it is confined to a single
class, means social oppression, but which, when widely diffused throughout society, is the mother of
public spirit and political virtue. The long discipline of tiresome public duties which they had borne
throughout the Middle Ages had formed them into a body which was alive to political issues and
conscious of political influence, and which, when participation in public affairs became not only a duty
but a right, would use their power to press urgent petitions from one county after another upon the
King and upon the Parliament, or by riding up from Buckinghamshire to protect Hampden at
Westminster in 1642, or by fighting behind Cromwell in Cambridgeshire, or by fighting for the King in
the West. Compared with the bulk of the population, they were a privileged class and stood by their
own; it was they who restored the franchise to the 40s. freeholders in 1654 and refused to extend it to
the copyholders. But the tenure of much of the land of England by men with whom, however poor, no
landlord or employer could interfere, set a limit to the power of wealth, and made rural society at once
more alert and more stubborn, a field where great ideas could grow and great causes find adherents.
Political and religious idealism flourish bravely in a stony soil. What makes them droop is not poverty,
but the withering shadow cast by complete economic dependence.
From such degrading subservience the freeholders, “slaves to none,” were secure. As it was, they often
left substantial fortunes to their children, and by the middle of the sixteenth century were already
following the examples of their social superiors in entailing[85] their lands. One can quite understand
therefore that there is nothing inconsistent between the glowing accounts of their prosperity at the end
of the century given by Harrison and his lamentation over the decline of the rural population, or
between the well-attested sufferings of the small cultivator in the sixteenth century and his equally well-
attested importance in the seventeenth and early eighteenth. The explanation is that the freeholders,
though most important politically, did not form the larger proportion of those substantial yeomen whose
decay was lamented. The day of their ruin was to come. But for the next two centuries they were safe
enough, and, if anything, gained on the class immediately above them, whose lands they bought or
leased, into whose families they married, and with whose children their own competed in the learned
professions, laying, as the historian of Suffolk[86] said, “such strong, sure and deep foundations that
from thence in time are derived many noble and worthy families.” Nothing in the life of the period
caused more pride than the prosperity of this solid body of small property-owners, and the contrast
which it offered to the downtrodden peasantry of the Continent. No loss has been sustained by the
modern world greater than their disappearance.

(c) The Customary TenantsToC

Important, however, as the freeholders were from a social and political standpoint, they were in most
parts of England far inferior in point of numbers to those described as “customary tenants.” It is with
the latter class that we are mainly concerned, and leaving the leaseholders on one side for examination
later,[87] we may summarise shortly certain features in their position. The number of customary tenants
varied from one manor to another, according to the extent to which in different districts farmers holding
by lease had been substituted for them, and on some by the middle of the sixteenth century there were
none at all. But there are many indications that, down to the end of that century at any rate, and
probably much longer, they formed over the great part of England the bulk of the landholding
population. Of the revenues of 74 manors held by monastic[88] houses in 1535, £116 came from free,
and £1310 from customary, tenants. On 81 of the 118 manors analysed above they are the most
numerous class. When all the different districts are grouped together, they amount to about 61 per
cent. of all landholders, and even this figure does not give an adequate idea of their numerical
importance. As we have seen, Norfolk and Suffolk are quite peculiar in the multitude of freeholders they
embrace, while the large number of leaseholders on one extensive Lancashire manor unduly weights
the figures for that county. On the Midland manors 62 per cent., in Wiltshire, Devonshire, and Somerset
77 per cent., in Northumberland 91 per cent. of all those holding land are customary tenants. No doubt
the area of land held under lease was growing in the course of the sixteenth, and still more in the
course of the seventeenth, century, and its growth is an extremely important movement, of which
something will be said later. But it seems true to say that, down to the end of the sixteenth century,
both in numbers and payments, though not in prestige and influence, the customary tenants, as distinct
from the freeholders and leaseholders, were by far the most important class in the agricultural life of
the country.
Among the customary tenants, however, there are certain important subdivisions. There are in the first
place, differences of legal status. Though villeinage by blood had been disappearing rapidly for several
generations, partly through manumission on payment of a fine to the lord, partly through the absorption
of migrating villeins into the growing industries of the towns, a certain number of villeins by blood
lingered on into the sixteenth century. Dr. Savine[89] has estimated that there were at least as many as
500 villein families in 1485, and as many as 250 in the reign of Elizabeth; and the fact that they occur
occasionally on our Norfolk[90] manors, and rather more often on those in Wiltshire[91] and
Somersetshire, suggests that his list could be considerably extended on further investigation. Even in
1561 a borough surrenders an apprentice on the ground that he is a runaway villein.[92] Even in 1568 it
is worth while in leasing[93] a manor to a farmer for the lord to reserve to himself the villeins upon it,
together with other forms of property like quarries and advowsons.
One cannot, therefore, take the almost sanctimonious abhorrence of bondage expressed by the writers
of the period quite at its face value. On the other hand, though villeinage by blood was still worth
recording, since it offered an impecunious lord an opportunity for arbitrary taxation, and still sufficiently
irksome for the rebels under Ket[94] (influenced perhaps by some dim memory of the German peasants'
programme) to set its abolition among their demands, its practical importance was slight, and it was
quite compatible with a good deal of prosperity on the part of those who were legally bondmen. How
completely out of date it was by the middle of the sixteenth century is best shown by some of the cases
in which attempts were made to enforce it. When the Earl of Bath[95] seizes £400 from a family on the
ground that the members are his villeins, and is pursued by them for nine years from one court to
another, or when a lord[96] of a manor is compelled by a royal commission appointed for the purpose of
investigating the matter, to repay the value of the beast taken from a man who is proved by the court
rolls to be his villein, and the latter, having received it back, declines to stop proceedings unless he be
paid heavy compensation in addition, one must see rather a proof of the practical disappearance of
villeinage than of its survival. Its occasional enforcement is clearly regarded as something outrageous; it
is a freak of arbitrary despotism, which has hardly more historical significance than the seizure of the
Derby winner as a copyhold heriot would have at the present day. Public opinion, even the opinion of
those engaged in estate management, condemns such attempts unreservedly, and when they come to
the ears of the authorities they strain the law on the side of the bondmen.
This change from servile to free labour, begun some two centuries before, and virtually completed in the
reign of Elizabeth, is a high landmark in the development both of economic and political society. It is a
long step towards modern industrialism on the one hand and the modern all-inclusive state on the
other. By sapping the organisation of society on the basis of tenure, and thus making room for the more
elastic relationships of the wage-contract, it prepared the way for new methods of production and for
the growth of new centres of economic power. The refusal of the courts to allow that the lord of a
manor had, qua lord, a theoretical right to dispose of the persons and chattels of his unfree tenants,
meant the final triumph of the common law in regions with which for four centuries after the Norman
Conquest it had not dared to interfere. Henceforward, while the German peasant is driven afield to
gather snails and wild strawberries for his lord, is plundered and harried and tortured without hope of
redress, his English brother is a member of a society in which there is, nominally at least, one law for all
men. His liberty may be more in shadow than in substance, yet the shadow is itself an earnest of
greater things. To us who know the misery of many of the poorer classes in the sixteenth century the
boast that “if any slaves or bondmen come here from other realms, so soon as they set foot on land
they became so free of condition as their masters,” may read like a bitter mockery. But it is something
that the boast should be made, and when England is confronted with the greatest moral issue of the
modern world, that boast will stand her in good stead.[97] She owes some acknowledgment to the
nameless serfs who fled from farm and homestead, till villeinage, in spite of the law, bled gradually to
death.
Having said so much we must hasten to guard ourselves, by adding that the final disappearance of
serfdom in this country neither involved any radical conversion of opinion, nor prevented the classes
who depended solely on their labour from being, on occasion, cruelly oppressed. It would be a mistake
to see in the attitude of the governing classes towards villeinage a symptom of humanitarian feeling for
the rights of a helpless class, such as prompted the emancipation movement of the last century. How
little humanitarianism influenced economic policy in relation to those who were too powerless to be
dangerous, is shown by the sanguinary statutes relating to the destitute, and in particular by the
extraordinary legalisation of slavery in the Act[98] of 1547, by which a confirmed vagrant might, when
captured, be made a bondman for life. Nor must we think of the disappearance of legalised serfdom as
effecting a great improvement in the lot of the ordinary wage-worker. Those who benefited by it were
not so much the workers for wages, as the landholding peasants. The wage-labourer, who was tied to
his parish by the Statute of Artificers almost as completely as the serf had been by the custom of the
manor, can hardly have seen much difference between the restrictions on his movement imposed by the
Justices of the Peace and those laid on him by the manorial authorities, except indeed that the latter,
being limited to the area of a single village, had been more easy to evade.
Even if we confine our attention to the landholding peasants, to whom the advantage (for they were
quick to seize it) was certainly real enough, we may doubt whether they did not lose almost as much by
the intrusion into agriculture of competitive commercial forces as they gained by the final disappearance
of a claim which had always been held in check by the custom of the manor, and which, since the
ravages of the Great Plague, had been steadily circumscribed by commutation. The truth is that the
sharp antithesis drawn by modern commercial societies between serfs and the free labourers on whose
slowly straightening backs our civilisation is uneasily poised, and emphasised as though it marked a line
between hopeless oppression and unqualified liberty, requires to be supplemented by categories derived
from a wider and more tragic range of experience than was open to our forefathers. There are more
ways of living “at the will of a lord" than were known to Glanvill and Bracton, and the utility of the
contrast in the sphere of legal analysis does not save it from being but a thin abstraction of the
countless forms of tyranny which spring from the world-old power of one human being to use another
as his tool. That dependence on the uncontrolled caprice of a master whom one hates to obey and dare
not abandon, which, by whatever draperies it may be veiled, is still the bitter core of serfdom,[99] is
compatible with the most diverse legal arrangements; with wage labour as with forced services, with
tenure by a competitive money rent as well as with tenure by personal obligations, with freedom of
contract as well as with inherited status, with protection by the national courts as well as with its
absence.
When we turn over the pages in which the writers of the sixteenth century declare that bondage is
contrary to “the Christian religion which maketh us all in Christ breathren, and in respect of God and
Christ conservos,”[100] and congratulate themselves on its disappearance, we must not doubt their
sincerity, but we may envy their inexperience. We must remember that a condemnation of villeinage
was quite compatible with a policy of great severity towards the wage-labourer, and was in fact not
unconnected with it, since the latter had almost everywhere stepped into places and functions formally
held by the bondman. Villeinage disappeared in England earlier than on the continent of Europe, not for
the ethical reasons given by Fitzherbert and Smith and Norden, but because the growth of a commercial
organisation of agriculture had made its maintenance both useless and impossible. The intellectual
conversion did little more than follow on the economic change to make a virtue of necessity. The
personal rightlessness of the villein and the hateful incidents of villeinage, such as chevage, merchet,
and leyrwite, had had their utility in the fact that they kept him at the disposal of the manorial
authorities as an instrument of agriculture. With the substitution of hired labour for the cultivation of the
demesne by the services of bond tenants, their maintenance lost its attractiveness. No employer wants
to retain a permanent staff, if there are “hands” whom he can take on and put off at pleasure. Villeinage
ceases but the Poor Laws begin.
Much more important than this difference of legal status are differences in the tenure by which
customary tenants hold their lands. Under the name of customary tenants are grouped together all
holders of lands which pass by surrender and admission in the court of the manor, and which are
subject to the custom of the manor as evidenced by the records of the court. But not all these lands are
held by exactly the same title. Some are held by copy of court roll according to the custom of the
manor, on the terms set out on a copy of the entry of admission. Others are held without a
documentary title, and are often said to be occupied at the will of the lord, or at the pleasure of the
lord, or by grant or permission of the lord or of the court, their essential feature being that the tenant
does not possess any instrument recording the transaction, but has, if necessary, to appeal to the
records of the court or even to its mere memory.
One must hasten to add, however, that these classes are not mutually exclusive. A copyholder is a
tenant at will, though qualified by the addition of the words “by copy of court roll according to the
custom of the manor.” It not seldom happens that in rentals and surveys he is simply described as a
tenant at will, and that the fact that he has a copy is not recorded. A tenant at will is usually (though
not always) a customary tenant, and, when he is, he can appeal to the custom with as good a right as a
copyholder, though of course the fact that his title is not in his own keeping may prejudice him if the
manorial authorities want to get rid of him. “All[101] copyhold land,” it was said, “is commonly
customary, but all customary land is not copyhold,” and one may accept the statement with the
reservation that “commonly” must not be taken to mean “always,” for it is quite usual in parts of
England for land which by no stretch of imagination can be called customary land, for example, part of
the lord’s demesne, to be let by copy of court roll. The fact that “tenant at will” was sometimes used as
a compendious phrase for “copyholder,” and that both are sometimes described simply as “customary
tenants” without further definitions, makes it impossible to offer any accurate estimate of the relative
number of those holding by copy and those holding at will. It may, however, be of interest to give an
analysis of the entries as they appear in a group of manorial documents. It is as follows[102]:—

Table III
 Total “Copyholders” “Customary “Tenants
Tenants” at Will”
Northumberland 436 362 45 29
Lancashire 451 295 156 ...
Staffordshire 272 170 ... 102
Leicestershire 311 157 ... 154
Northamptonshire 355 253 93 9
Norfolk 596 536 45 15
Suffolk 146 53 82 11
Wilts and Somerset 817 786 ... 31
Hampshire 251 251 ... ...
Ten other manors in the
158 87 45 26
south of England
Total 3793 2950 466 377

These figures, one must repeat, are merely a summary of the entries in surveys and rentals. Probably
they underestimate the number of copyholders, as we know that copyholders were sometimes entered
as tenants at will or as customary tenants for the sake of brevity, while it is not probable that tenants at
will who had not got copies were often written down as copyholders. One may suspect that this, rather
than any difference of custom, is the explanation of the relatively small number of those who are
returned as copyholders in Lancashire, Staffordshire, Leicestershire, and Suffolk. Still, these figures do
show the enormous preponderance of copyholders among the customary tenants, and show it all the
more certainly if the number of copyholders is to be taken, as is probable, as the minimum. And this
agrees with what we know from the incidental references of the writers of the time. Of 1000 tenants on
the great ecclesiastical manor of Scrooby in Nottinghamshire “the most part” were said by
Archbishop[103] Sandys in 1582 to be copyholders. Harrison[104] in 1587 spoke of copyholders as those
“by whom the greatest part of the realm doth stand and is maintained.” At the beginning of the
seventeenth century Coke[105] could say that the third part of England consisted of copyhold.
Copyholders, it is true, are far from being all of one type; for the essence of their tenure is that it
depends on the custom of the manor which varies from place to place, and when we come to consider
how far they have security against eviction these differences are of crucial importance. Still, in spite of
the varieties of copyhold tenure, it is useful to know that to the bulk of the population in the sixteenth
century landholding meant holding by copy of court roll according to the custom of the manor. No
account of the agrarian changes can stand for a moment which does not give full weight to the fact
that, in most parts of England, the copyholders greatly outnumber all other classes of tenants.
The numerical predominance of the customary tenants and among those of the copyholders, together
with the disastrous effects upon them which are ascribed by most of our authorities to the agrarian
changes of the sixteenth century, makes a somewhat detailed examination of their position essential. In
particular it is important to try to bridge the gap between the agricultural system of the sixteenth and
that of the thirteenth and fourteenth centuries, out of which it emerged, and of which it continued to
bear unmistakable traces. The problem is really a twofold one, partly legal and partly economic. First,
what was the legal nature of copyhold tenure, and how did it arise out of mediæval villeinage?
Secondly, there is the question, which for us is more important, of the type of agriculture which
prevailed among the mass of the people. The economist wants to know whether the customary tenants
were large cultivators or small, whether they included considerable capitalists and mere cottagers or
whether their holdings were of a fairly uniform pattern, whether they farmed mainly for subsistence or
for the market, whether they lived entirely by tillage or were pasture farmers as well, whether they
were tied down by custom or showed any signs of being influenced by the agricultural innovations of
our period.
Of these two questions the first has been investigated much more thoroughly than the second. We shall
return to it later in considering how far the copyholder had security of tenure, and enjoyed legal
protection against the lord who wished to evict him. But we may say at once that we accept in
substance the argument of those who hold that most copyholders are the descendants of villeins
holding villein land, that copyhold tenure is, in fact, villein tenure to which the courts from the end of
the fourteenth century have gradually extended their protection, and that the puzzling differences
between the position of one group of copyholders and another are due to differences in manorial
custom which were followed and upheld by the courts. This not only is the traditional view, in the sense
of being that which is implied in the insistence of contemporaries that copyhold originated in base
tenure, and that copyholders were tenants “whom the favourable hand of time hath much
enfranchised,”[106] but also seems to be that which best fits the situation of the copyholder as we find it
in the sixteenth century.
This line of development is suggested, though it is not proved, by the mere preponderance of
copyholders. In looking for the antecedents of so numerous and widely spread a class we can only find
them in the tenure of the mass of the people in the thirteenth and fourteenth centuries, that is in villein
tenure. Further, we do not find in villein tenure any such fundamental distinction between customary
tenure which was protected and base tenure which was not, as has been sometimes postulated as an
explanation of the qualified legal security possessed by copyholders 200 years later. On the contrary, the
tenure of the villeins is marked by the same variety of customary conditions as appears in that of the
copyholders, with the difference that, when once copyhold has taken root, these customs are enforced
by the courts. The same conclusion is borne out by the survival of ancient formulæ among the terms by
which the conditions of the copyholders are recorded in the surveys. It is quite common for copyholders
in the sixteenth century to be described as occupying “bond”[107] or “native” land; sometimes one finds
a whole list of them set down under the rubric “holding[108] native lands by copy of court roll.” The last
thing, of course, which occurred to the writer of these entries was any legal theory as to the origin of
copyhold tenure. All he was concerned to do was to describe the holdings in the way which was most
precise and left least room for possible disputes. Clearly, he must have had it in his mind that lands
which in his day were let by copy of court roll were lands which were known generally in the village as
bond lands, and which in earlier documents were described as being occupied in villeinage.
One may approach the question in another way, by looking at the circumstances of those exceptional
manors on which the tenants at will are more numerous than the copyholders, and which are instructive
just because they represent a variation from the general type. A case in point is the Manor of Knyghton
in Wiltshire. On the majority of the manors held in that county by the Earl of Pembroke the copyholders
are far the most numerous class, and on some they are the only class, among the customary tenants.
At Knyghton,[109] however, there are no copyholders; all the customary tenants hold at the will of the
lord, and when one examines the position and methods of agriculture more closely, one finds that they
display several signs of being in other respects more antiquated and conservative than is the case in
other parts of the same country; for example, all the holdings are either virgates of twenty-four acres or
some fraction and multiple of a virgate, which is not at all common on other Wiltshire manors, and
implies an unusual approximation to the conditions of the peasantry two centuries before. Is it
unreasonable to conclude that this is a case of arrested development, and that Knyghton is a manor on
which the tenants at will have never turned into copyholders, because for one reason or another it has
lain outside the main stream of agricultural development?
The connection with copyhold tenure of some of the characteristic obligations and disabilities of
villeinage points in the same direction. In spite of the general commutation of services into money
payments, which Mr. Page’s statistics show to have taken place before the middle of the fifteenth
century, one still finds the attenuated records of labour rents surviving for many generations after the
direct management of the demesne by manorial officials has been abandoned, and passing with the rest
of the farm equipment to the farmer who takes it on lease. In Norfolk and Suffolk they seem indeed to
have disappeared almost altogether, which is what one would expect in view of the fact that those
counties were the Lancashire and West Riding of the period, and no doubt, even when labour services
were still exacted, the farmer relied mainly upon hired labour. But it would be a mistake to regard the
tenants' works as everywhere so trifling as to be of no economic importance. Often, it is true, they are
inconsiderable. At South Newton,[110] for example, though the uncertainty which had been one of the
marks of villeinage still survived among the copyholders in the shape of the duty of “gift carriage,” the
transport of such timber as was wanted to the lord’s house at Wilton, the purely agricultural services
were unimportant, and the tenants of every yardland had only to mow the farmer’s meadow and to
carry his hay. At Cuxham,[111] in Oxfordshire, on the other hand, the authorities were still getting
twenty-eight boonworks in autumn from the copyholders at the end of the fifteenth century. On a
Northumbrian[112] manor belonging to Tynemouth Priory down to the dissolution of the monasteries
“every tenant did lead to the castle in the prior’s time one load of hay, mow three several dayworks of
hay, rake one daywork and sheare three severall dayworks in the corn in harvest every year.” At
Washerne,[113] in Wiltshire, the copyhold tenants' labours were in 1568 still quite an important affair:
each holder of one virgate of twenty acres “shall plough three half acres for the lord’s winter seed and
shall harrow them, and also the aforesaid tenants shall wash and shear the lord’s sheep ... and further
each of them shall mow one acre of meadow ... and gather hay thence and prepare it.... Each of the
said tenants shall reap one acre of wheat and he must bind the crop and carry it. Also each of them
shall reap one acre of barley.” On a Lancashire[114] manor in 1628 every plough hand is obliged to do
two days' work in the year with a team on the demesne, and two days with a labourer. Such elaborate
obligations as appears at Washerne are, it is true, the exception. But they show that in the middle of
the sixteenth century there were still backwaters where the remnants of agricultural services were a not
inconsiderable burden; and if their comparative lightness marks the progress from villeinage to a wage
system, their survival as clearly shows that villeinage was the pit from which copyhold tenure was
digged.
More striking still, perhaps, is the persistence of disabilities of another kind. The old marks of personal
bondage, chevage, merchet, leyrwite, liability to tallage, and the rest have almost disappeared. But
traces of them are still found clinging to the copyhold tenants. Copyholders pay a fixed sum to be free
of tallages.[115] They pay salt silver instead of the salt with which they had once been obliged to toil to
the lord’s manor-house; they are forced to act as the lord’s reeve, and collect his rents, heriots, and
strays. In one curious instance one finds something very like a tallage[116] being taken at the beginning
of the seventeenth century, though of course that is not what it is called. The tenants are simply
collected and told that they must help the lord to pay for an estate which he has bought, by giving him
three years' rent apiece, that, if they do, no more gifts will be demanded during his lifetime, and that, if
they do not, he will refuse to renew holdings as they fall in. Even merchet, the most hateful of all the
incidents of villeinage, is something more than a mere memory. As late as 1620 the tenants of Holt[117]
in Denbighshire thought it worth while to point out to the crown surveyor that “they are freed from
payment of any sum of money upon the marriage of their daughters,” and even in 1654 Leyrwite and
childwite were still being paid by the heiresses of copyhold tenants on some of the Warwickshire[118]
manors.
It will not, therefore, be surprising to find that the humble origin of copyhold tenure has left marks upon
it in other ways as well, and, in particular, that though the copyholder is not without legal protection
when the lord tries to get rid of him, that protection is often of a somewhat shadowy and ineffective
kind. His title is a customary one, and mighty as custom still is, it has for centuries been growing
gradually weaker. Its weakening is at once an advantage and a disadvantage to the peasantry. It
relieves them of odious obligations and leaves them greater room to push their fortunes. It lowers a
protecting barrier and exposes them to the dissolving forces of competition.[Next Chapter]

FOOTNOTES:

[53] Pauli, Drei volkswirthschaftliche Denkschriften aus der Zeit Heinrichs VIII. von England: How to
reform the Realme in setting them to work, and to restore tillage. “The whole welth of the body of
the realm riseth out of labours and workes of the common people.”
[54] The Commonweal of this Realm of England (Lamond), p. 63: “And I marvell no man taketh
heade unto it, what nombre first of trifles cometh hether from beyonde the seas, that we might
either clene spare, or els make them within oure owne Realme, for the which we paie inestimable
treasure every yeare, or els exchange substanciall wares and necessaries for them.” E. E. T. S.,
England in the Reign of King Henry VIII., Part II., p. 84: “Craftys men and makers of tryfullys are
too many.” Harrison in Elizebethan England (Withington), p. 15: “O how many trades and
handicrafts are now in England whereof the Commonwealth hath no need!” &c.
[55] e.g. the prayer for merchants in Edward VI.’s Book of Private Prayer: “So occupy their
merchandise without fraud, guile, or deceit.”
[56] Coventry Leet Book, Part III., pp. 679–680.
[57] See Smith, De Republica Anglorum, Lib. I. c. 23: “These are they which in the old world got
that honour to Englande ... because they be so manie in number, so obedient at the Lorde’s call, so
strong of bodie, so hard to endure paine, so courageous to adventure ... these were the good
archers in times past, and the stable troops of footmen that affaide all France that would rather die
all, than once abandon the knight or gentleman their captaine,” and Harrison in Elizabethan England
(Withington), pp. 11–13.
[58] E. E. T. S., England in the Reign of King Henry VIII., Starkey’s Dialogue, Part II., p. 49: “To the
handes are resemblyd both craftysmen and warryarys.... To the fete the plowmen and tyllarys of
the ground, beycause they, by theyr labour, susteyne and support the rest of the body.”
[59] In this essay we are concerned only with the landholders, not with the wage workers. The
relative number of persons holding land and of agricultural labourers without land is an important
question on which it is not easy to get light. The surveys and rentals, a species of private census
invaluable in giving information about the holders of property, tell us only the number of
householders, and as the labourers employed in agriculture (like many of those employed in
manufacturing industry) usually lived on the premises of their masters, they do not enable us to
calculate the number of those living entirely by their labour. Still, since they include all tenants,
whether holders of a cottage only or holders of land in addition, they enable us to say what
proportion of heads of families held land, and what proportion had none, or none except a garden.
This is of some importance. A tenant holding even as much as fifty acres can hardly have employed
more than two or three agricultural labourers, and most tenants held less than this; so that in those
places where the cottagers form a small proportion of the whole population we may conclude that a
large proportion of the villagers were landholders (for the figures on this point see the tables given
below).
Unfortunately, we do not possess for the sixteenth century even such a loose estimate as was made
by Gregory King at the end of the seventeenth. In 1688 he calculated that there were 16,560
families of nobles and gentlemen, 60,000 families of yeomen, 150,000 of farmers—presumably on
lease—400,000 cottagers and poor, 364,000 labouring people and out-servants, obviously a very
rough calculation, the most remarkable feature of which is the large number of yeomen. Poll Tax
returns might give us the kind of information we require, since they included, or were meant to
include, the whole population above a certain age, irrespective of whether they held land or not,
and sometimes divided them roughly into classes. Thus on sixteen manors in the Norfolk Hundred
of Thingoe the return to the Poll Tax of 1381 showed a population of 870 male and female
inhabitants over fifteen years of age, of whom 9 were set down as knights, 53 as farmers, 102 as
artificers, 344 as “labourers” (laboratores), 362 as “servants” (servientes). If, as is not improbable,
the first four classes held land (the labourers being serfs working on the demesne), and the last
consisted of farm and household employees who did not, this would put the landholding classes on
these manors at a little more than half the total population over the age of fifteen. But this return
was probably falsified to escape the tax; see Powell, The East Anglian Rising, App. I., and Oman,
The Great Revolt of 1381. The figures published by Dr. Savine (Oxford Studies in Social and Legal
History, vol. i., pp. 223–226) of the monastic population show that on the eve of the dissolution
there were residing in 22 houses in Leicester, Warwick, and Sussex, 255 “hinds” and 76 “women
servants,” presumably employed on the demesne farm, which gives an average to each farm of
about 11 hinds and about 3 women servants. In the Kentish Nunnery of St. Sexburge, Sheppey, the
demesne farm employed a carter, a carpenter, two cowherds, a thatcher, a horse keeper, a malter,
three shepherds. Best, describing his farming arrangements in Yorkshire in 1641 (Surtees Society,
vol. xxxiii.), states: “Wee kept constantly five plowes goinge, and milked fowerteene kine, wherefore
wee had always fower men, two boyes to go with the oxeploughe, and two good lusty mayde-
servants.” These were in each case only the permanent staff, and their comparatively small numbers
suggest that much work must have been done by men who worked on their own land and only
occasionally helped on the demesne, i.e. that the proportion of landholders to non-landholders was
high. This conclusion agrees with the evidence of the surveys, which show that, especially in the
East of England, many of both the free and the customary tenants' holdings were so small that they
could hardly have made a living out of them without working as wage-labourers as well, and also
with other indications as to the classes in rural society; e.g. out of 3780 persons mentioned in
Worcestershire recognizances, 1591–1643, as either “labourers,” “husbandmen,” or “yeomen,” 667
are entered as labourers, 1303 as husbandmen, 1810 as yeomen, the latter designation always, and
the second usually, implying a holder of land (J.W. Willis Bund, Kalendar of the Sessions Rolls,
1591–1643, Part II.) On the other hand, conditions varied enormously from place to place. Where
there was a considerable body of small landowners the number of hired labourers tended to be
small, the work of cultivation being done by the holder and his family; e.g. we read of a manor in
the seventeenth century where thirteen freeholders farmed 580 acres with the aid of only ten men-
servants and shepherds before enclosure, and six or seven afterwards (Joseph Lee, A Vindication of
a Regulated Enclosure).
Some of the surveys supply us with extreme cases of the opposite kind, where the whole manor
consists of two or three holdings or of even one great estate, and where almost the whole of the
population must have been working for wages; these illustrate Harrison’s complaint that in many
places “The land of the parish is gotten up into a few men’s hands; yea, sometimes, into the tenure
of one or two or three, whereby the rest are compelled betimes to be hired servants unto the
others, or else to beg their bread in misery from door to door” (Withington’s edition of Elizabethan
England, p. 21). A protest made to the Council from Norfolk in 1631 against its policy of trying to
keep down prices by insisting that all corn should be sold in the open market points out that in “the
woodland and pasture part” of the country there are “a great many handicraftsmen which live by
dressinge and combinge of wool, carding, spinning and weaving, etc., and the Townes there
commonly very great consisting of such like people and other artificers with many poor, and none of
them all ordinarilye having any corn but from the market.” As to the “champion part” of the county,
the document divides the rural population into three classes: “1. Tilth masters that have corn of
their own growing and sell it to others. 2. Labourers that buy it at an under-price of them unto
whom they worke. 3. Poore people that are relieved by good orders in every towne” (Original
Papers of the Norfolk and Norwich Archæological Society, 1907). But the case of Norfolk was
exceptional, owing to its position as the chief seat of the textile industries.
On the whole I am inclined to think that though the process of commutation which went on from
1350 onwards can hardly be explained except on the supposition that there was a considerable
population of persons who held little land and were ready to eke out a living by working for wages,
yet in the sixteenth century even the wage-working heads of families usually held a certain amount
of land (even if only a garden) as well. This agrees with what we are told by contemporaries of the
scarcity of wage-earners (see below, pp. 99–102). One may add, that in view of this, the fixing of
maximum wages bears a somewhat different colour from that often given it. It was only practicable,
one is inclined to say, because so few persons depended entirely on wages for a living. The social
problem in the sixteenth century was not a problem of wages, but of rents and fines, prices and
usury, matters which concern the small-holder or the small master craftsman as much as the wage-
earner. The “working classes” were largely small property holders and small traders.
[60] The summary statement given above is liable to be misleading. The reader will find a fuller
discussion of the questions arising in connection with it below in Part II., chap. iii.
[61] They include also tenants on the lands belonging to Cockersand Abbey, lying in many different
parts of Lancashire, in 1503. For the sources from which this table is constructed and its defects,
see Appendix II..
[62] The Lancashire figures are unduly weighted by those of the single large manor of Rochdale,
where, in 1626, there were 612 tenants. If this manor be omitted, there remain only 19
leaseholders on the other Lancashire manors. Like Northumberland, Lancashire seems to be (as one
would expect) a county of customary tenants.
[63] There is an error of 4 in the Norfolk figures which I have been unable to trace and correct.
[64] In Domesday Book 35 per cent. of all the tenants in Suffolk are liberi homines, 32 per cent. of
all those in Norfolk are either liberi homines or sochemanni. See Vinogradoff, The Growth of the
Manor, note 24 to chap. iii. Book III. (p. 376); Maitland, Domesday Book and Beyond, p. 23;
Seebohm, The English Village Community, map opposite p. 85. Domesday also gives a large
number of liberi homines and sochemanni in Leicestershire. In the table given above the
Leicestershire manors come after Suffolk and Norfolk as having the third largest proportion of
freeholders, viz., 21.6 per cent. The return of freeholders supplied to the Government in 1561
(Lansdowne MSS. V., 8, 9, 11, 12, 13, 14, 15) appear to be considerably understated, probably
because only the more substantial men were thought worth mentioning. They are as follows: Beds
282, Berks 166, Essex 880, Notts 189, Oxon. 198, Herts 363, York 787, Lincoln 444. The large
number in Essex is noteworthy.
[65] Smith, De Republica Anglorum, Lib I., c. 23.
[66] History of King Henry VII. (Lumley), pp. 70–72. He makes his meaning quite clear by saying
“tenancies for years, lives, and at will, whereupon much of the yeomanry lived, were turned into
demesnes.”
[67] Trans. Royal Hist. Soc., vol. xvii. (Savine, “Bondmen under the Tudors”).
[68] Ibid.
[69] Smith, De Republica Anglorum, loc. cit.
[70] MSS. of Earl of Leicester at Holkham. Billingford and Bintry MSS. No. 9 (Manor of Foxley,
1568).
[71] e.g. ibid., Sparham MSS. No. 5, a freeholder pays “a pounde of cumming seede and a
gillyflower” (c. 1590). R.O. Rentals and Surveys, Duchy of Lancaster, Portf. 6, No. 15: “nyne golden
threads of vi.d.” (1568). R.O. Land Rev. Misc. Bks., 182, fol. 1: a tenant “holds freely a cottage
paying a red rose.”
[72] Norden, The Surveyor’s Dialogue, Book I., pp. 4–5, to which the farmer answers: “Fie upon
you. Will you bring us to be slaves? Neither lawe, nor reason, nor least of all religion, can allowe
what you affirme.”
[73] Op. cit., Book III. Here is a bitter cry from the bailiff of a manor (Merton Documents, No.
4381). “Good sir let me entreat you yf the Colledge determyne to make survey this spring of the
lands at Kibworth and Barkly to send Mr. Kay or me word a month or 3 weeks before your coming
that we may have Beare and other necessaries, and I desire you to gather up all evidences that
may be needful for the Lordshipp, for all testimony will be little enough, the Colledge land is so
mingled with Mr. Pochin’s freehold and others in our towne. There ys an awarde for keepinge in of
the old wol (?) close in our fields for (from ?) Mr. Pochin’s occupation, very needfulle for the
ynhabitannts yf that awarde can be founde at the colledge where yt was loste.” (For the remainder
of this letter see Appendix I.) The Crown suffered especially, see Norden, Speculum Britanniae, Part
I., pp. xl.-xliii. of introduction (Camden Society): “In many of his Majesty’s manors, free holders,
their rents, services, tenures and landes ... become strange and unknown ... and when escheates
happen the lande that should redound to his Majesty cannot be found.” In the common entry in
manorial surveys under the heading of freeholders of “certain lands” we should probably take the
word “certain” to mean “uncertain.”
[74] For the sources and defects of this table see Appendix II..
[75] See below, pp. 105–115.
[76] See e.g. Northumberland County History, vol. ix. p. 327, below, pp. 157–158, and Calendar of
Proceedings in Chancery, temp. Eliz. B, b. 1, 58, Ll. 10, 62.
[77] Smith, De Republica Anglorum, Lib. I., c. 23: “These be for the most part fermors unto
gentlemen.” Elizabethan England (Withington), p. 120. “Yeomen” frequently occur in the sixteenth
and seventeenth centuries as lessees of the Merton Manors.
[78] See below, pp. 105–115.
[79] Norden, The Surveyor’s Dialogue.
[80] Fuller, Holy and Profane State. The concluding paragraph is obviously copied from Bacon’s
History of King Henry VII.
[81] Paston Letters, I. 12, II. 248. Plummer’s edition of Fortescue, On the Governance of England,
Intro., p. 21.
[82] Atkinson’s Quarter Sessions of the North Riding of Yorkshire, lists of recusants.
[83] e.g. Topographer and Genealogist, vol. iii. (quoted below, pp. 251–253), and Selden Society,
Select Cases in the Court of Star Chamber, vol. ii., Inhabitants of Thingden v. Mulsho; also Holkham
MSS., Burnham Documents, Bdle. 5, No. 94 (quoted below, p. 245 n.).
[84] Harrington’s works, 1700 edition, p. 69 (Oceana), pp. 388–389 (The Art of Law-giving). See
also Firth, The House of Lords during the Civil War, pp. 28–32.
[85] It is stated by good authorities that between 12 Ed. IV., when the collusive action known as a
common recovery used to evade the Statute de donis conditionalibus was confirmed by a judicial
decision (Taltarum’s case), and the introduction into settlements of “Trustees to preserve contingent
remainders” by Sir Orlando Bridgeman and Sir Geoffrey Palmer under the Commonwealth, the tieing
up of lands in one family was impossible (e.g. Johnson, The Disappearance of the Small Landowner,
pp. 11–13). But in 1538 Starkey’s Dialogue speaks strongly of the practice of entailing lands. “This
faute sprange of a certayn arrogancy, whereby, wyth the entaylyng of landys, every Jake would be
a gentylman, and every gentylman a knight or a lord” (E. E. T. S., England in the Reign of Henry
VIII., Part II. pp. 112–113, and pp. 195–196.)
[86] Reyce, Breviary of Suffolk, p. 58, quoted Victoria County History, Suffolk.
[87] See below, pp. 200–213 and 283–287.
[88] Oxford Studies in Social and Legal History, vol. i. Savine, English Monasteries on the Eve of the
Dissolution, pp. 156–159.
[89] Trans. Royal Hist. Soc., vol. xvii.
[90] R.O. Misc. Bks. Land Rev., vol. 220, fol. 220, Brisingham (Norfolk) 1589: “Alice Bartram, the
widow of W. Bartram, the lord’s villain by blood, took by surrender of said William for term of life on
4 Feby., remainder to Roger Bartram, lord’s villain by blood.” Holkham MSS., Titleshall Documents,
Terrier of Godwick, 1508: “Also five roods of the Prior in the hands of Thomas Frend, native.”
[91] Among the 742 customary tenants on the manors belonging to the Earl of Pembroke surveyed
in 1568 there appears to be 7 nativi domini, i.e. villeins by blood, viz., 1 at Washerne (Wilts), 2 at
Stooke Trister and Cucklington (Somerset), 4 at Chedeseye (Somerset), of whom one has been
manumitted.
[92] Selected Records of Norwich (Tingey), vol. vi. p. 180: “Robert Ryngwoode brought in a certain
indenture wherein Lewis Lowth was [bound] to hym to serve as a prentys for seven years. And Mr.
John Holdiche cam before the Mayor and other Justices and declared that the said Lewis is a
bondman to my lord of Norfolk’s Grace, and further that he was brought up in husbandry untyl he
was xx year old. Whereupon he was discharged of his service.”
Note the way in which Statute law is used to compel the agricultural labour which the vanishing
jurisdiction of lord over serf is ceasing to be able to enforce.
[93] Roxburghe Club, Surveys of Manors of William, First Earl of Pembroke, Manor of Chilmerke:
“Johannes Reve tenet per indenturam totum illud capitale messuagium excepta et omnino reservata
omnia wardas, maritagia fines ... nativos,” &c.
[94] Russell, Ket’s Rebellion in Norfolk, p. 49: “We pray that all bond men may be made free, for
God made all free with his precious blood shedding.” The German peasants in the articles drawn up
at Memmingen in 1525 demanded the abolition of serfdom “since Christ hath purchased and
redeemed us all with his precious blood.” The Christian appeal is a common one; see below.
[95] Selden Society, Select Cases in the Court of Requests, John Burde and another v. The Earl of
Bath. The quarrel dragged on from 1535 to 1544, when the plaintiff's goods were restored. (In
1551, however, when all bad landlords were raising their heads, his house and cattle were again
seized.)
[96] Ibid., Netheway v. George, 1534. For other cases see Selden Society, Select Cases in the Court
of Star Chamber. Carter v. Abbot of Malmesbury (vol. i., 1500), and Selby v. Middlemore (vol. ii.,
1516–1522). Mr. Leadam's remarks (int. cxxix.) show that a man who was legally a villein might be
economically very prosperous: “Thomas Carter ... was charged 40 marks for his enfranchisement.
He kept a man-servant. He rode on horseback. He gave a feast to celebrate his freedom. He was
even on friendly terms with the gentlemen of the Abbot’s household.” See also Savine, Trans. Royal
Hist. Soc., vol. xvii. Lord Stafford actually tried to seize the Mayor of Bristol and his brother as
bondmen!
[97] Hargreave’s speech in Somersett’s case (1771–1772, Howell, State Trials, xx.) is based largely
on precedents drawn from villeinage: “Though villeinage itself is obsolete ... those rules, by which
the claim of it was regulated, are not yet buried in oblivion.... By a strange progress of human
affairs the memory of slavery expired now furnishes one of the chief obstacles to slavery attempted
to be revived.... The law of England, then, excludes every slavery not commencing in England,
every slavery, though commencing there, not being ancient and immemorial. Villeinage is the only
slavery which can possibly answer to such a description, and that has long expired by the death or
emancipation of all those who were once the objects of it. Consequently there is now no slavery
which can be lawful in England.”
[98] 1 Ed. VI., c. 3. Possibly, however, the penalty of bondage was regarded as a step towards
greater leniency, as the punishment of “incorrigible rogues” had hitherto been death.
[99] More’s remarks on the lot of the wage-workers of his day have a refreshing note of reality. The
Utopians are “not to be wearied from earlie in the morning to late in the evenninge with continuall
worke, like labouringe and toylinge beastes. For this is worse then the miserable and wretched
condition of bondemen. Whiche nevertheless is almooste everywhere the lyfe of workemen and
artificers, saving in Utopia” (More, Utopia, Pitt Press Edition, pp. 79–80).
[100] Smith, De Republica Anglorum, Lib. III., ch. 8. See also Fitzherbert, Surveying (1539): “How
be it, in some places the bondmen continue as yet, the which me seemeth is the greatest
inconvenience that now is suffered by the law.” Norden, The Surveyor’s Dialogue (1608): “Which
kinde of service and slavery, thanks be to God, is in most places of this Realme quite abolished and
worne out of memory.... Truly I think it is a Christian parte so to do [i.e. manumit bondsmen], for
seeing we be nowe all as the children of one father, the servants of one God, and the subjects of
one king, it is very uncharitable to retain our brethren in bondage, sith, when we were all bond,
Christ did make us free.”
[101] Norden, The Surveyor’s Dialogue. He continues: “For in some places of this Realme Tennants
have no copies at all of their lands or tenements, or anything to show for that they hold, but there
is an entry made in the Court Books, and that is their evidence.”
[102] See Appendix II.
[103] Archbishop Sandys to Queen Elizabeth, Saturday 24 November to 4 December, 1582 (quoted
by E. Arber, The Story of the Pilgrim Fathers, pp. 61–64).
[104] Harrison in Elizabethan England (Withington), p. 120.
[105] Quoted by Nasse, The Land Community of the Middle Ages (Ouvry’s trans.). I have not been
able to trace the reference.
[106] Norden, The Surveyor’s Dialogue.
[107] E.g., R.O. Rentals and Surveys Gen. Ser., Portf. 27, No. 32, Dunstall (Suffolk): “Bond land held
by copy of court roll, 13s. 4d. Of holders of 3 bond pightells, 5s. 4d.” MSS. of Earl of Leicester at
Holkham, Tittleshall Books, No. 62, Langham Hall (Norfolk): “Redditus assissæ native tenentium. ...
John Rose per copiam, 4d.” R.O. Rentals and Surveys Gen. Ser. Portf. 14, No. 70, Barton (Staffs.):
“T. Collinson 1 messuage 1/4 virgate land de bond ... by copy 2 Hen. viii.”
[108] MSS. of Earl of Leicester at Holkham, Billingford and Bintry MSS., No. 9, Foxley: “Native
tenentium per copiam rotuli curiæ.”
[109] Roxburghe Club, Surveys of Manors of William, First Earl of Pembroke.
[110] Roxburghe Club, Surveys of Manors of William, First Earl of Pembroke.
[111] Merton Documents, 5902.
[112] Northumberland County History, vol. viii., p. 220 (one may add that in parts of
Northumberland the labourers are still called “bondagers”; Mr. Clay tells me that in the Calder valley
farmers still use “daywork” as a unit for measuring fields). See also Calendar of Proceedings in
Chancery, temp. Eliz., D. d. 2, 44, for a suit by a farmer to recover services due from tenants.
[113] Pembroke Surveys.
[114] Chetham Society Miscellanies, vol. iii.
[115] Pembroke Surveys, Estoverton and Phipheld: “Tenentes de Estoverton reddunt annuatim pro
pannagio et tallagio ... ivs.” For salt silver, ibid., South Newton. For liability to serve as Reeve, ibid.,
Paynton.
[116] Chetham Society Miscellanies, vol. iii.: “I would wish you to call the tenants first all together
and to signify unto them that my father and I have gone through with Mr. Ireland for Warrington,
and the summe we are to give is above £7000; and this was done making no doubt that towards it
every one of them being tenants would by their assistance enable us to finish it.... If they faile in
this, they may provoke us to sharp courses, especially mee, who have had a purpose to take the
third part of every living as it falls.”
[117] Wrexham Free Library, Ancient Local Records, vol. ii. MS. transcript by A.N. Palmer, “Survey of
the Town and Liberty of Holt.”
[118] Savine, Quarterly Journal of Economics, vol. xix.
 CHAPTER II
THE PEASANTRY

(a) The Variety of ConditionsToC

When one turns from what legal historians have said on the origin and development of copyhold tenure
to consider the economic position of this class of tenants, one finds oneself in a region of much greater
uncertainty. The legal historian may speak of the copyholders as constituting, in spite of minor
differences, a fairly well-defined class. The economic historian cannot. He finds, on the contrary, the
widest difference between the economic conditions of tenants holding their land by copy of court roll,
not only, as would be expected, in different parts of the country, but on the same manor. In the
thirteenth century to say that a man is a villein tells us something at least about his economic position,
at any rate when the general features of the manor on which he is a villein are known. He will probably
have a standard holding of a virgate or half-virgate; he will have rights in the common meadow land
and in the common waste; he will do work on the lord’s demesne. In the sixteenth century tenure is no
clue to economic status, and to say that a man is a copyhold tenant tells us nothing at all about the
extent of his holding or the sort of husbandry which he pursues. The vast majority of copyhold tenants
are peasants, men who make a toilsome living from their land with the help of their families and a few
hired servants. But in England by our period the line between class and class has ceased to coincide
with differences of title; if copyhold tenure is born of a humble stock, yet it has risen so much in the
world that the upper classes are not ashamed to hold out a hand to welcome it; and among
copyholders are found the names not only of many small freeholders, but also of gentlemen and
knights.[119]
Among the peasants who form the bulk of the population there is, again, the greatest diversity.
Sometimes the copyholders are simply emancipated villeins, who have commuted most of their services,
and who hold by copy instead of at the will of the lord, but whose economic condition has hardly
changed at all. Thus in Northumberland[120] the holdings of the copyholders on several manors reflect
very accurately the distribution of land between the bondage tenants in the thirteenth and fourteenth
centuries; the holdings have grown slightly in size, but they have apparently a more or less continuous
individual existence from the earliest times. In parts of Wiltshire,[121] on the other hand, though not in
all parts, there is no possibility of establishing any connection between the virgate and semi-virgate of
the fourteenth century villeins and the acreage held by the copyholders two hundred and fifty years
later; both in size and number the holdings are markedly different. In Norfolk and Suffolk ancient class
divisions have often been obliterated altogether, and bond and free lands are interlaced in the holdings
of the customary tenants in quite inextricable confusion.
Again, there is the greatest variety in the methods of agriculture.[122] Everywhere among the copyhold
tenancies arable land predominates to an extent which is in marked contrast to the frequent
preponderance of pasture land on many of the demesne farms. But to some tillage seems to be their
sole livelihood, while others are very considerable sheep-farmers. Some are cultivators on quite a big
scale, well outside the Board of Agriculture’s interpretation of a “small-holder” to-day, with 80, 90, 100,
or even 200 acres of land. Often they are better off economically than many freeholders, and when
Harrison and Sir Thomas Smith classify[123] copyholders in general with “day labourers and poor
husbandmen,” they must surely have been either speaking loosely, or else thinking not of their
economic but of their legal position. But others hold only 5, 10, 15, or 20 acres, so that arithmetical
averages of the size of their holdings are very little guide to the real distribution of land. Yet it would not
be true to say that such inequality is universal, for in the same county one finds some manors on which
the holdings seem all to be cut to a regular standard pattern, and others where the variety of size is
almost infinite, while in the North striking divergences of area seem to be as much the exception as
they are the rule in the South and the East. On some manors, again, the copyhold tenants have
enclosed land and hold much in severalty; on others nearly all of it lies in the open fields. Some have
extensive rights of common, while on other manors such rights are non-existent, or are too insignificant
to be recorded by surveyors.
In fact the impression given by the surveys is that of a condition of things which is very far from being
stationary, but in which, on the contrary, much shifting of property and many changes in the methods of
cultivation have been going on, and in which the legal position of the peasants is no guide at all to their
economic characteristics. The task of finding a manor to serve as a pattern and standard for the rest,
which is hard enough in the thirteenth century, is a sheer impossibility in the sixteenth, and the student
works with a deep sense of the danger of sacrificing fidelity to simplicity of statement.

(b) The Consolidation of Peasant HoldingsToC

But difficult as it is to reduce to any order the very diverse economic conditions of the customary
tenants at the beginning of the sixteenth century, the task, at any rate in outline, has got to be faced.
And this involves a short account of movements which take us some way back into the Middle Ages. No
one can understand the contrast between the conditions of the Irish peasantry in 1850 and their
condition to-day without knowing something of the agencies which have been at work in the interval, of
the Fair Rent Courts, the Congested Districts Board, and the Land Purchase Acts; no one can appreciate
the changes which are taking place in rural France without having taken at any rate a glance at the
position of the peasantry before the Revolution, and at the Code Napoleon. Certainly the substantial
alteration which overtook agrarian relationships in many parts of England between 1500 and 1640 is
unintelligible if it is regarded as a wave suddenly appearing in a calm sea, a revolution by means of
which commercial relationships of sometimes an almost modern elasticity developed quite rapidly in
village communities of an almost mediæval immobility. To understand the agrarian problem of the
sixteenth century we must know the sort of framework on which the new forces worked, and the sort of
tendencies of which they were the continuation.
Moreover, the history with which we are concerned is primarily the history of the peasants as
landholders, and only secondarily the history of their personal condition. Generalisations about the
disappearance of villeinage and the substitution of hired labour for the working out of rents in labour
services do not help us much here. Speaking broadly, it is no doubt true that, in spite of the survival of
many vestiges of the old order, wage-labourers are as normally the means of cultivating the demesne at
the end of the fifteenth century as servile tenants are at the end of the thirteenth. But significant as this
change is for the history of the wage-earning classes, it does not by itself seem to throw much light on
the characteristic features of the sixteenth century problem, the substitution of large tenancies for
small, the displacement of small holders, and the undermining of the customary routine of the open
field village. Certainly the two movements are connected; equally certainly that connection is not a
direct or obvious one. The change in the personal condition of the peasantry is not by itself the key to
changes in the use and distribution of property. Why should it be? In Prussia the abolition[124] of villein
services in 1807 was carried out by a decree which had as its object not a diminution, but an increase,
in the number of small tenants; and it is not self-evident that an alteration in the method of cultivating
the lord’s demesne must have produced changes in the disposition of the customary holdings in
fifteenth and sixteenth century England.
The very variety in the economic conditions of the peasantry which makes generalisation so difficult is,
however, itself a significant feature, because it is in marked contrast with the comparative uniformity
which existed among great masses of them in the thirteenth and fourteenth centuries. It suggests that
even in agriculture custom has to some extent been broken down by commercial enterprise, and that
commercial enterprise has had the natural result of accentuating inequality in the possession of
property. It warns a student of the agrarian changes of the sixteenth century that he has not only to
explain the way in which the small cultivator lost ground then before the large estate, but also how it
was that his economic position differed in many cases so much from that of the villein of two hundred
years before, and that it may very well be that the answer to the latter question will throw light upon
the former.
Let us put ourselves in the position of a jury catechising some “aged man” about the year 1500,
catechising him not about boundaries, or rights of common, or manorial customs, but about the general
changes in the distribution of property in his village. If surveys and court rolls may be trusted, there is
one thing that he could hardly fail to tell us, and that is that for as long as he can remember there has
been a great deal of buying and selling of land by the customary tenants, a great many changes in
occupancy, and on the whole a tendency for those changes to result in the concentration of several
holdings in fewer and larger tenancies. “Virgates which in grandfather's time,” he would say, “used to
belong to A., B., C., and D. now belong to A. alone. Men who used to occupy one holding each, now
occupy two or three; when they cannot buy they lease, and some have bought so much that they sublet
part of their holdings to others. Indeed there is not much sense in talking about virgates or half-virgates
at all. Once each of them had a separate holder; once Durrant’s shottes belonged to Durrant, Gunter’s
mead to Gunter, Parry’s croft to Parry, Hawkins' meade to Hawkins, Woolmer's lande to Woolmer, Blake’s
tenement to Blake. To-day, though the old names remain, they are no guide to the families holding the
land. Frankling has bought Durrant’s and Gunter’s and Blake's, Vites has bought Parry's, while Pynnole’s
and Pope’s and Hawkins' and the rest of Blake’s holdings have all passed into the hands of
Blackwell.”[125]
One thing at any rate is clear. If frequent changes of occupancy point to a free land-market, then such a
free land-market has existed for a long time among the customary tenants; and if a keen demand for
land among the peasantry is a proof that small men are thriving, and see their way to thriving still more
by adding to their properties, then there is a good deal of this healthy land hunger in English villages
before the age of the Tudors. We read to-day of how the French peasant will pinch himself and his
family to add a few acres to his little estate, and we take it as an indication that small cultivation has a
firm root in France, and that rural life is on the whole enterprising and prosperous. Certainly such a
state of things is in marked contrast with the stagnation prevailing in the lower ranges of village society
in countries where great estates pass almost intact from generation to generation between the tall
palings of family settlements, with the small man, who would get land if he could, staring helplessly
through the bars. Now, at any rate in the fifteenth century, England belonged very markedly to the first
type, not to the second; to the type where there is much buying and selling of land in small plots by
small cultivators, not to the type where land is locked up and rarely comes into the market, rarely at any
rate into a market where it can be bought by the small peasantry. This mobility of land is of much
significance when we come to consider the breaking down of customary rules before the forces of
competition, and the formation of great estates out of the holdings of the customary tenants. Let us
consider it in more detail, first from the point of view of the changes in the economic basis of rural life
which it produces, and secondly from the point of view of the process by which those changes were
brought about. We will for the present leave on one side the demesne farm and the land held on lease,
and look only at the customary land which forms the backbone of the copyholders' estates.
The first source of information to which we turn consists of the surveys and rentals, in which the
holdings of the tenants are set out in detail. To those accustomed to the picture of village life contained
in the records of the thirteenth and fourteenth centuries, the surveys of the fifteenth and sixteenth
centuries present certain features which at once arrest attention. For one thing, there is a much greater
inequality between the holdings of different customary tenants on the same manors than is usually
found among the holdings of virgators and semi-virgators two centuries before. For another thing, some
of their holdings are very much larger than anything we find belonging to the same class of tenants at
an earlier date; occasionally, indeed, they can only be described as enormous, running into 150 or 200
acres of land; often they amount to 80 or 90. In the third place, the number of customary tenants is, on
the whole, much smaller than it was 200 years before, and that even on manors where there has been
an increase in the area cultivated by them. The latter fact is significant, and we shall return to it later.
But before doing so, let us ask the meaning of the growing inequality in the holdings of the customary
tenants and of the great increase in the size of some among them.
Great as is the variety of conditions visible on a thirteenth century manor, it is on the whole true to say
that this variety usually conforms to a rough rule or principle. One can find on the same manor families
whose holdings differ very largely in size, from the 25 to 40 acres occupied by the holder of a virgate,
the 12 to 16 acres of a semi-virgator, to the 2 or 3 acres or less occupied by a cottar. But normally each
individual holds much the same amount of land as other individuals of the same class; one holder of a
virgate has about as much as another holder of a virgate, one holder of half a virgate about as much as
his fellow, one cottager about as much as another cottager. There are in fact different grades, but for
each grade there is what may be called a standard area of land, a unit of agrarian organisation, and
though that standard area varies a good deal in different parts of the country it is usually fairly easy to
discover what it is on any one manor. Outwardly, at any rate, village life is organised, and the
distribution of property is settled in the main by the authority of custom, rather than by commercial
forces acting directly upon the tenants.
Now after the middle of the fifteenth century it is common to find quite a different condition of things
from this. There are, it is true, manors where holdings preserve their primitive equality down to the very
end of the sixteenth century, especially manors in backward parts of the country, where the influence of
commerce has been little felt; especially also manors where the demesne farm, instead of being leased,
has been retained in the hands of the lord. But in the South of England these are the exception. The
rule is that with regard to the area held by the customary tenants there is no rule at all. On the same
manor copyholders may be cultivating anything from a quarter of a virgate to two, three, four, or even
more virgates; if their holdings are expressed in acres they may be holding anything from 1 acre to 100
or 150. Economically, indeed, customary tenants are often not a class at all, if the essence of a class is
common characteristics and a similarity of economic status, though in the face of certain dangers they
will act as one. On many manors the nature of their tenure is the only common link between them, and
the nature of their tenure is compatible with the greatest economic variety.
This variety is most noticeable when we examine a large number of manors one by one, since, when
the figures of many different manors are added together, their distinctive features are liable to be
concealed in the aggregate. Still, to get some idea of the scale on which the peasants carried on their
agriculture, it is perhaps worth examining the following table[126] of the holdings of 1600 odd
customary[127] tenants on fifty-two manors.
This table enables us, in the first place, to make a comparison between the economic positions of
groups of tenants in different parts of England. It will be seen that the “predominant rate”—what we
may call the predominant acreage—varies considerably. In Wiltshire it is between 20 and 25 acres, and,
including the next two columns, 36 per cent. of all the tenants hold something between 20 and 35
acres. In Northumberland the predominant acreage is between 30 and 35, and nearly one half the
tenants, 41 per cent., hold between 30 and 40 acres. Elsewhere the most common holding is a good
deal smaller. In Lancashire (if we omit the cottagers, nearly all of whom come from one manor) the
predominant acreage is between 10 and 15 acres, though a great many persons hold between 5 to 10
acres. In Staffordshire the largest group of tenants is that holding under 2½ acres, and more than one-
half of them hold less than 10 acres. In Norfolk and Suffolk the same state of things obtains, but in a
more pronounced form. Little emphasis need be laid on the large number of cottagers there, nearly all
of whom are found on a single semi-urban manor, that of Aylsham. But it is clear that the mass of the
peasantry in those counties are very small holders indeed. When the cottagers are left on one side, 22
per cent., about one-fifth, of the landholders have under 2½ acres; 54 per cent., more than one-half,
have under 10 acres. It is fortunate for them that Norfolk and Suffolk are the home of the woollen
industry.
In the second place, let us notice a fact which is more relevant to our immediate purpose. That fact is
the great variety in the scale of landholding obtaining between different tenants in the same part of the
country. In this matter, again, some counties present a marked contrast to others. In Northumberland
the uniformity in the size of the holdings of the tenants is much more marked than the variety. About
two-thirds of them appear in the four columns representing holdings from 30 to 50 acres. Only six hold
more than 50, and though on one manor there are ten tenants holding less than 2½ acres, there are,
apart from these, comparatively few holding under 25 acres. On all the manors which have been
examined in this county there is, in fact, a regular standard holding in the sixteenth century, which
varies from 30 to 45 acres on different manors, but which on the same manor varies hardly at all. But
Northumbrian agriculture is always several generations behind that of the South and East, and when we
turn to Wiltshire, or to East Anglia, or to the nine manors given at the bottom of the table, we find a
condition of things in which there is much greater irregularity. The line extends farther at both ends
than it does in Northumberland. There are more individuals and fewer clusters. The grouping of
holdings round certain standard patterns is much less marked. If we look at all the manors together, we
find that the four most populous columns contain almost exactly one-half (49.1 per cent.) of the whole
population, exclusive of cottagers without land. In Northumberland the corresponding columns contain
two-thirds, in East Anglia, Lancashire, and Staffordshire rather less, on the nine manors in the South
and Midlands about one-half, in Wiltshire a little over one-third. Again there are more large holders and
more very small holders in the South and East, than there are in Lancashire and on the Northumbrian
border. In Lancashire and Northumberland 4.4 per cent. of the tenants, exclusive of cottagers, have
holdings of more than 50 acres. In Suffolk and Norfolk the corresponding figure is 8.5 per cent., in
Wiltshire 16.9 per cent., on the nine other manors 14 per cent.

Table IV
Column Key

Total Number of 35 and under 40

A K U 85 and under 90 Acres.
Tenants Acres.
Cottages or Houses
40 and under 45
B with or without L V 90 and under 95 Acres.
Acres.
Gardens.
95 and under 100
C Under 2½ Acres. M 45 and under 50Acres. W
Acres.
2½ and under 5 50 and under 55 100 and under 105
D N X
Acres. Acres. Acres.
55 and under 60 105 and under 110
E 5 and under 10 Acres. O Y
Acres. Acres.
10 and under 15 60 and under 65 110 and under 115
F P Z
Acres. Acres. Acres.
15 and under 20 65 and under 70 115 and under 120
G Q A'
Acres. Acres. Acres.
20 and under 25 70 and under 75
H R B' 120 and over.
Acres. Acres.
25 and under 30 75 and under 80
I S C' Uncertain.
Acres. Acres.
30 and under 35 80 and under 85
J T
Acres. Acres.

A B C D E F G H I J K L M N O P Q R S T
Ten manors in
96 ... 10 1 2 1 3 1 12 27 13 10 10 ... ... 1 1 2 1 ...
Northumberland
Four manors in
168 38 14 19 29 35 7 4 7 7 2 ... ... 2 ... ... 1 ... ... ...
Lancashire
Three manors in
103 8 21 16 14 6 10 11 3 1 2 2 2 2 ... 1 1 ... ... ...
Staffordshire
Two manors in
255 30 53 24 22 22 13 22 5 10 3 7 2 5 2 7 2 2 2 2
Northamptonshire
Three manors in
129 13 17 6 6 8 3 3 5 1 10 7 8 7 7 6 2 4 1 2
Leicestershire
Five manors in
Suffolk and eight 391 52 77 40 69 28 26 19 14 5 9 4 2 4 7 3 3 1 1 1
manors in Norfolk
Seven manors in
Wiltshire and one
156 3 5 7 12 8 7 27 16 14 10 12 5 7 2 4 3 4 1 2
manor in
Somersetshire
Nine other
manors in the 366 23 58 27 52 29 31 16 22 12 11 10 13 3 6 7 6 3 5 4
South of England
Total, twenty-two
1664 167 255 140 206 137 100 103 84 77 60 52 42 28 26 29 18 17 11 11
manors

In the non-commercial, non-industrial North there is something like economic equality, something like
the fixed equipment of each group of tenants with a standard area of land which is one of the first
things to strike us in a mediæval survey, and, as we shall see later, manorial authorities for a long time
insist on that rough equality being maintained, because any weakening of it would disorganise the old-
fashioned economy which characterises the northern border. In the industrial East and South this
uniformity existed once, but it exists now no longer. Wiltshire is humming with looms; Norfolk and
Suffolk are linked to the Continent by a thousand commercial ties, and will starve if the clothiers lose
their market. The mighty forces of capital and competitive industry and foreign trade are beginning to
heave in their sleep—forces that will one day fuse and sunder, exalt and put down, enrich and
impoverish, unpeople populous counties and pour Elizabethan England into a smoking caldron between
the Irish Sea and the Pennines; forces that at present are so weak that a Clerk of the Market can lead
them and a Justice of the Peace put a hook in their jaws. It is natural that mediæval conditions of
agriculture should survive longest in the North. It is natural that they should survive least where trade
and industry are most developed, and where men are being linked by other bonds than those of land
tenure. But we must not comment until we have examined the text more closely. We would only draw
attention to the contrast between the South and the North, to the contrast also between the great
diversity in the size of the peasants' holdings in the sixteenth century, and the much greater uniformity
two or three hundred years before.
This contrast gives a clue to certain features of village life which are distinctive of our period, and at the
risk of wearying the reader one may illustrate it from the circumstances of particular manors. At
Cuxham,[128] in 1483, there are, in addition to tiny holdings of a few acres or of fractions of acres,
holdings of one-quarter of a virgate, of half a virgate, of one virgate, of four virgates. At Ibstone[129] in
the same year there are two tenants at will holding one virgate each, one tenant holding five tofts and
three crofts, while the rest hold little except cottages and gardens. At Warton[130] in Lancashire, there
are in the reign of Henry VIII., in addition to various holdings expressed in terms of acres, four holdings
of half a bovate, two of three-quarters of a bovate, seven of one bovate, two of one and a quarter
bovates, four of one and a half bovates, four of two bovates, one of two and a quarter bovates, one of
three bovates. At Barton[131] in Staffordshire, in 1556, the typical holding is one virgate of 24 acres. But
though this forms the nucleus of the copyholders' properties a good many of them have acquired so
much extra land, and a good many apparently have parted with so much of the land which they once
held, that though 24 acres is still the predominant holding, the majority of the tenants hold something
more or something less than this. At Byshopeston,[132] in 1567, there are men holding half a virgate,
two virgates, three virgates, four virgates, six virgates. At Knyghton[133] there are holders of anything
from a half to two and a half virgates.
Looking at this grouping of holdings, one is tempted at first sight to say that the virgate has ceased to
be a unit of open field tillage, and has become merely a common form, an idea which is laid up in the
minds of surveyors, and which is produced automatically, even when it corresponds to nothing in the
fluid world of agriculture. This, however, would be an error. On the contrary, the conservatism[134] of
rural arrangements is such that yardlands, bovates, virgates, and oxgangs, continue to do duty in
circumstances which seem quite incongruous, and to be used, not only in theory, but in practice, to
apportion rights over arable, meadow, and pasture, long after holdings have been redistributed in such
a way as altogether to destroy the former equality of shares. On the Leicestershire manors of
Barkby[135] and Kibworth[136] holdings were set down in terms of yardlands in 1636, though the
condition of things in which a yardland or half yardland formed one tenant’s holding had long since
given way to one in which the smaller holders occupied a few acres and the wealthier 2½, 3, and 3½
yardlands. Still, though the continuance of these measures even into the eighteenth century should be
noted, there is no reason why we should use them, and the modern reader will perhaps get a better
idea of the growing heterogeneity in the economic conditions of the customary tenants if the
distribution of their property is expressed in terms of acres.
Our first example comes from Malden[137] in Surrey. It shows on a small scale the tendency towards
concentration of property in larger parcels. In 1452 there were on that manor one holder of 24 acres,
three holders of 16 acres, two holders of 15 acres, and families holding 10, 8, 6, 5, 2 acres respectively.
That 16 acres had been the normal holding is fairly obvious; it is obvious also that though this normal
holding is still traceable, it is on the way to being obliterated. Later specimens of a similar kind come
from Ashfield[138] in Suffolk and Ormesby[139] in Norfolk. In 1513 there were on the former manor
tenants holding 7, 10, 15, 21, 22, 36, 37, 45, 107, 121 acres, and all intermediate sizes. On the latter, in
1516, the holdings were much smaller, but they were still more various in area, ranging from 2 to 31
acres. One or two of the Wiltshire and Somersetshire manors surveyed for the Earl of Pembroke in 1567
offer examples of the reverse state of things in which the tenants' holdings were all cut out to a
standard pattern. At Washerne,[140] for example, a manor where the demesnes were not leased but
retained “in the hand of the lord,” nearly all the copyholders had exactly 20 acres each. But this is an
exception which proves the rule. At Estoverton[141] there were some tenants holding 69, 48, 38 acres of
arable, and others with 12, 10, 9, 3, and 2 acres. At Donnington[142] there were holders of 63 and 52
acres in the fields and holders with only 8 or 9 acres. At South Brent[143] the divergence between large
and small customary tenants is more striking still. One occupies about 90 acres, several others over 50,
while the vast majority hold less than 30 acres in holdings which are hardly ever of the same size. At
Crondal[144] we find in 1567 exactly the same inequality in the area cultivated by different tenants,
exactly the same combination of very large with very small holdings. Taking one tithing only of that
manor—that of Swanthrop—we are met by tenants holding 112, 104, 66, 58, 47, 44, 30, 27, 25, and 3
acres. Finally, let us take two extreme instances. They are drawn from the closing years of the sixteenth
century; but their inclusion may be justified by the fact that they reveal in a pronounced form the
tendencies which we have seen at work elsewhere a century and a half before, and that they offer a
peculiarly clear example of larger customary holdings formed out of the aggregation of several smaller
ones, since the names of the previous tenants are stated by the surveyor. On the two Middlesex manors
of Edgeware[145] and Kingsbury[146] all relics of the state of things which had presumably existed there,
as on other manors, two or three centuries before, the state of things in which there were groups of
men holding virgates or half virgates, has disappeared so entirely as to leave no traces behind. On the
former the thirty-eight copyholders occupy holdings of almost any size between 1 rood and 130 acres;
out of the 722 acres of copyhold land as much as 254, a little over one-third, are in the hands of two
large tenants. On the latter there is, mutatis mutandis, the same story; out of the twenty-seven
copyholders thirteen hold less than 15 acres, eight hold more than 30, and of those eight two hold more
than 100 acres apiece.
These examples are drawn from 12 different counties.[147] Let us see more exactly what they suggest.
They suggest that, quite apart[148] from any movement on the part of lords of manors to throw the
holdings of the customary tenants into large farms and to evict their holders, quite apart from any
external shock such as was given to the organisation of village life by the change from tillage to pasture
on the part of lords and their farmers, there has been going on an internal change in the relation of the
customary tenants to each other. So far we have been concerned only with the result of that change,
not with the process by which it is brought about. The result, as evidenced by the surveys, is the
consolidation of several holdings, or parts of holdings, into fewer and larger tenancies, the appearance
of a class of well-to-do peasants by whom such larger tenancies are held, and a widening of the gap
between the most prosperous and least prosperous. Customary tenants hold 3 or 4 virgates, 80 or 90 or
100 acres, and their holdings are composed of holdings and parts of holdings which formerly belonged
to several different tenants. Customary tenants even become the landlords of other customary tenants.
At Yateleigh[149] one copyholder has as many as twenty sub-tenants, and it is not at all uncommon for
the surveyors of the sixteenth century to record the names both of owners and occupiers in estate and
field maps. There can hardly be a clearer proof of the re-arrangement of property which has been going
on among them than the fact that some of them hold more land than they can cultivate themselves and
sub-let it to smaller men, who become their sub-tenants.
May one not say, in fact, that by the beginning of the sixteenth century the rough equality which had
once existed between the holdings of different groups of customary tenants is fast disappearing, and
that by the middle of that century it has, in some parts of the country, disappeared altogether? The
village community is often no longer made up of compact groups of holders with more or less equal
holdings, more or less equal rents and services, more or less similar economic positions. Even as early
as the time when the great agrarian changes which contemporaries summed up under the name of
“enclosing” begin to produce legislation on the part of governments and riots among the peasantry, its
appearance of a systematic adjustment of property and obligation is already far on the way to
disappearance. Its members still hold shares in the open fields, and are still bound by a common routine
of cultivation, save in so far as that routine has been undermined in the ways to be described below.
But it is easy to be deceived by the external shell of organisation into thinking of village life at the end
of the fifteenth century as being much more homogeneous than it really was. After all there are
shareholders and shareholders. There is very little similarity in economic interest or social position
between the artisan who buys a £5 share in a Bolton spinning-mill and a capitalist who invests £5000 in
the same concern. There was hardly more, one may suspect, between the copyholder who cultivated a
few acres and the copyholder who held 100 or 200 acres and sublet part of his holding to a poorer
neighbour, though the lands of both were intermixed, though both held of the same manor, though both
were nominally bound by the same custom. This comparison says more than we mean; for, with few
exceptions, the inequality in the holdings of the peasantry revealed by the manorial documents is not so
great that it cannot be spanned by enterprise and good fortune. Looking back from a world in which the
mass of mankind have no legal interest in the land which they cultivate or the tools which they use,
what strikes the modern reader most in the sixteenth century is not the concentration of property, but
its wide distribution. Nevertheless, even in these petty rearrangements of holdings there is a meaning.
They are the beginning of greater things. To appreciate their importance we must obliterate from our
minds our knowledge of later developments, and regard them as the innovation which they are. We
must remember that they are the economic foundation of a prosperous rural middle class.

(c) The Growth of a Land Market among the PeasantsToC

If the surveys were our sole source of information it would not be easy to say how this regrouping of
holdings has been brought about. Even the surveys, however, do not leave us quite in the dark. They
suggest that it has taken place very largely through the play of commercial forces within the ranks of
the customary tenants themselves, through the eager purchasing of land which we noticed as one
feature of rural life at the close of the Middle Ages, and through the growth of a cash nexus between
individuals side by side with the rule of custom. This is a factor in the break up of the mediæval
condition of landholding upon which sufficient emphasis has perhaps not always been laid. The pre-
occupation of the writers of the sixteenth century with the special problem of their own day, when the
existence of a class of well-to-do copyholders was taken as something needing no explanation, and
their decay before the growth of the great leasehold estate occupied the attention of all interested in
agricultural problems, caused the significance of the development of these thriving peasants to be
forgotten in the agitation and regrets which accompanied their depression, and naturally concentrated
interest on the changes introduced by lords and great farmers, through which that depression was
mainly caused. In every age prosperity is taken as a matter of course, and, in defiance of all experience,
mankind reserves its surprise for distress.
But the special phenomenon of the growth of large customary tenancies which we have been
considering can hardly be explained except as a result of enterprise among the tenants themselves. The
piling up of customary holdings in the hands of one individual is quite a different thing from the adding
of customary holdings to the demesne which the lord retained or leased to a farmer. It means a
transference of property, but a transference not from a customary tenant to the lord or the lord’s farmer,
but from one customary tenant to another. It suggests that before the “enclosing movement” of the
sixteenth century brought its crop of evictions, economic forces had long been at work to break up the
village community into large holders and small. When in 1452 John Blackman, copyhold tenant of
Maiden,[150] holds Keyser's, Key's, and Skinner’s tenements, it can only mean that Keyser, Key, and
Skinner have parted with their tenements to John Blackman. The lord may have put pressure upon
them to sell, but the customary land is not diminished, it is simply rearranged; the result is not an
addition to the manorial demesne, but the appearance of a copyhold tenant with a great deal more land
than his neighbours. The cases in which the existence of more than one survey of the same manor
enables us to contrast the condition of the customary tenants at different dates make it quite clear that
this aggregation of holdings was a well-marked movement which went on quite apart from any
encroachment by manorial authorities on the customary land. Some time between 1340 and 1454 two
virgates at Castle Combe,[151] which at the earlier date were in separate hands, have been formed into
one holding. And naturally, the later we come, the more marked the change which we find. At Aspley
Guise[152] in 1275 the forty customary tenants each held almost exactly half a virgate. In 1542 one
finds among the tenants at will and copyholders three occupants of the original half virgate, one tenant
with 30 acres, two tenants with 60 acres each, three tenants with 75 acres each. These large holdings
have plainly been formed by the aggregation of half virgates in fewer hands and into parcels of two,
three, four, and five half virgates apiece. This case is a very clear one, because nearly all the holdings
are multiples of the original standard, even the rent being calculated from this basis.
Elsewhere the aggregation of small customary holdings into large is equally marked, but it has not been
carried out with such a nice regard to the maintenance of the original units. In the tithing of South[153]
Newton, part of the Manor of South Newton in Wiltshire, there were in 1315 seven holders of a virgate,
each of whom occupied 23 acres, seventeen holders of half a virgate with 12 acres each, and eight
cottagers. When the manor was surveyed in 1567 the customary tenants, though fewer in number,
cultivated a good deal more land than they had two and a half centuries before, so that there is no
question of their holdings having been merged in the demesne. But the land was very differently
distributed between them. Of the ten copyholders then remaining only one held the original virgate. Of
the rest there were holders of 59, 65, 80, and 96 acres, of 7, 13, and 15 acres, and of various acreages
between these wide limits. The symmetry of the earlier arrangement has entirely vanished. Instead of a
cluster of small cultivators organised in three well-defined layers, we have a chain stretching from a
mere cottager up to a petty capitalist. A very similar change has taken place on the Manor of Crondal.
[154] If one compares, for example, the arrangement of holdings on the tithing of Swanthrop in 1287
and 1567, one finds that the rough symmetry which existed at the former date has altogether
disappeared by the latter. In 1287 there were eight persons holding virgates, seven holding half
virgates, two holding quarter-virgates, and four whose holdings are not expressed in virgates. By 1567
all this has been altered. There are tenants holding 100, 66, 58, 47 acres; there are three with less than
10 acres, and there are five with holdings of various sizes between these limits, but in no case reducible
to any common measure. How could such a transformation come about, unless, as was suggested
above, there was much buying and selling of land, much rudimentary commercialism inside and behind
the decent cloak of routine which seems to be spread over our villages? Is not this explanation forced
upon us when we examine the holdings of the larger peasants and find them made up of pieces bought
from one and leased from another, pieces taken from the waste or from the lord’s demesne or from the
common pasture? And if it is correct, does it not point, on the one hand, to a good deal of enterprise
among the small holders, and since enterprise can hardly exist without a certain level of prosperity, to a
good deal of prosperity; and, on the other hand, to movements which in time are likely to dethrone
custom altogether and put competition in its place?
To these questions we shall return later. But happily we are not restricted to inferential argument for our
knowledge of these internal changes in the economy of village life before the sixteenth century. We
have the court rolls of manors, and the court rolls are full, from a very early date, of transactions which
show how the state of things which has been described was being brought about. In examining the
evidence which they offer of the shifting of property among the peasantry we shall have to go some
way back, and we shall do well to begin with a distinction and a warning—a distinction between the
legal framework of rural life and its economic tendencies, and a warning that we shall have to deal with
a somewhat tiresome mass of detail, which the general reader can avoid by turning to the summary at
the end of this chapter.
In the picture of the mediæval manor which is usually offered us the features which receive most
emphasis are its systematic apportionment of works and services, its regulation by binding customary
rules, its immobility and imperviousness to competitive and commercial influences; in short, its
character as an organisation in which even the details are settled by custom. In the “typical manor,” as
it appears in some accounts, the main lines are drawn with almost photographic sharpness. There are
the free holders on the free land, the bond tenants each with his virgate or half virgate of bond land,
and the officers and servants of the lord, a system the parts of which are knit together by the lord's
need of extracting labour services to cultivate his demesne. Now that the internal economy of a
thirteenth century manor displays to a very remarkable degree the authority of custom in all its
arrangements is not, of course, denied; and it is specially proper to emphasise it when we are
contrasting it with modern agriculture, or when we are regarding it from the standpoint of law. But this
is only one aspect of it, and if we assume that the economic relationships between the different
members of it always followed the same grouping and ran on the same lines as the legal ones, we are
likely to ascribe to them a simplicity and a hard and fast character which, we may be quite sure, they
never possessed in real life, and to miss those very innovations which throw most light on economic
development.
True of such development early rentals and surveys show little trace. But let us remember the purpose
for which they were prepared. The manorial officials were concerned with getting in an income, not with
supplying information about the methods of agriculture or the cross-relations between one tenant and
another, except in so far as they affected the manorial revenue. The source of the income was the
holding, not the holder; or, rather, it did not matter to them who the landholder was, whether he was
one individual or another, or whether he was a partnership of half-a-dozen individuals, provided that the
land, however held, yielded the customary services and payments. The nearest analogy would be an
apportioned tax which a Government divides between different localities, each locality having to raise a
certain sum, but making its own arrangements as to what individuals shall pay. It is the virgate which
pays rents, which mows the lord’s meadow, reaps the lord’s fields, carries the lord’s messages, pays a
stoup of honey and a churchshot of white corn; and as long as the meadow is mowed and the message
carried, the question what individual holds the virgate is quite a subsidiary one for the bailiff, and one
which the tenants can arrange among themselves much as they please. Each half virgate at
Cuxham[155] has got to do two boonworks or pay 4d. But the manorial economy is not at all disturbed
by the fact of one tenant holding not half a virgate, but a virgate and a half; for he has to do, or pay
some one else to do, six boonworks and pay 2s. if he does not. A half-hide at Bramshot[156] has to
make half-a-dozen different payments in money and kind; but there is another to prevent John,
Stephen, Roger, and William clubbing together to work it and arranging the payments among
themselves as they please.
Clearly in these circumstances a rigid classification of holdings by the manorial authorities is quite
compatible with a great deal of diversity in the arrangements made with each other by the holders, and
we are likely to miss a good many innovations if we look at the manor only through the eyes of officials
and as a revenue-producing concern.[157] We must no more expect to get from them an exhaustive
account of the exact individuals at any one time using the land, or of the scale on which farming is
carried on by the peasants, than we expect the shareholders' list of a limited company to tell us who
has the spending of the dividends. The shares stand in A.’s name, but the interest may go to A.’s
married daughter. The holding stands in the name of Thomas in the books of the manor, but it may be
that part or all of it is worked by Walter. To put the case in another way, to the lord and his steward a
manor is primarily a business, a business on which various obligations can be imposed and from which
various profits can be extracted. But it is also a village community consisting of peasants whose
economic relations are by no means exhausted in the interest which the lord takes in them as part of its
stock, and who have economic dealings which are important when we begin to inquire into changes in
the distribution of peasant property. The number of the holdings and the amount of payments and
services may remain quite unaltered, and yet at the same time if one individual begins to acquire
several shares his property will grow at the expense of other persons. Precisely because it is new, the
appearance of such small capitalists is not readily traceable in the stereotyped forms used by the
manorial officials. Precisely because it is new, it is of the greatest economic significance. It shows what
may be called, by contrast with later developments, the old agrarian régime, producing the new type of
well-to-do peasant who is one of the protagonists in the class struggles of the sixteenth century.
And this upward movement is no mere matter of conjecture. That behind the stiff legal framework of
the manorial organisation there was a tendency for property to pass into the hands of the more
prosperous tenants, and that there was a sort of primitive commercialism even at a time when
commercial ideas had little influence over the methods of agriculture, becomes evident if we examine
the elements out of which the small properties of the fourteenth century are composed. The gradual
formation of a class of wealthy peasants took place in three ways, through the buying up by well-to-do
men of parts of their neighbours' properties, through the colonising by villages of the unoccupied land
surrounding them, and through the addition to the customary holdings of plots which had at one time
been in the occupation of the lord, but which, for one reason or another, he found it more profitable to
sell or lease to his tenants. Even before the end of the thirteenth century it is by no means unusual to
find land changing holders pretty rapidly both by transfer and by lease. The customary land passes in
the manorial court; the outgoing tenant surrenders it, and the incoming tenant is formally admitted by
the steward. When a peasant leaves the manor or dies without heirs, the other tenants offer a sort of
small land-market, and bid for his land or part of it to add to their own. Hence holdings or fractions of
holdings change hands with some frequency at the court customary, the well-to-do, who can afford to
take more land, offering the lord an increased rent to obtain a share in a holding the possession of
which has for some reason lapsed. In the court rolls of the Lincolnshire manor of Ingoldmells,[158] for
example, there are many such transfers, six sales occurring in successive courts held in 1315 and 1316.
At Crondal,[159] in 1282, a tenant has for some reason given up his holding; the rest of the community
dart on it like minnows on a piece of bread; and it is at once split up among as many as ten other
tenants, who find sureties for the continuance of the normal services. At Hadleigh,[160] in 1305, a
tenant sells part of his land to be built upon. At Castle[161] Combe, in 1367, a villein enters by licence of
the lord on two virgates of land and a separate pasture.
Such examples of what may be called petty land speculation could be multiplied almost indefinitely, and
point to a good deal of mobility in rural society even in the thirteenth and early fourteenth centuries. At
the same time one can see signs of relationships of a more complicated character tending to establish
themselves between the tenants, and breaking up the symmetry of the manorial arrangements. There is
a marked tendency for holdings not to remain intact but to be split up among different holders.
Sometimes this takes place in the ordinary course of transference from father to son. The virgate held
by the former is divided, for example, into two cotlands, each of which is held by one child,[162] or the
heir to a holding divides it with his mother.[163] More frequently one is left to infer the actual process of
division from the way in which the Rentals describe holdings as being occupied by groups or
partnerships[164] of tenants, who share the land between them, each being responsible for a part of the
rents and services owing from the virgate. Such an arrangement does not imply that there is any
partnership in actual cultivation, any partnership in the modern sense of the word. It means, on the
contrary, that the different parts of the holding are divided among several different cultivators, and that
its apparent unity is quite artificial, simply a fiscal expression to enable the authorities to see that it
renders its share of payments and services.
Again there is much leasing and sub-letting of land by the more prosperous of the customary tenants.
Like labourers who hold allotments to-day, they often find it convenient to hire extra land and at the
same time to let out parts of their own holdings, which may be inconveniently situated, or hard to work,
or for some other reason not worth retaining. Thus in Lancashire the Clitheroe[165] court rolls show
many fines being paid in the early fourteenth century for permission to “tavern,” that is simply to lease,
land. In 1351 there are several tenants on the manor of Sutton[166] in Hampshire who have leased
cotlands from the larger customary tenants. At Crokeham on the neighbouring manor of Crondal[167]
we hear as early as 1287 of one tenant paying 12d. for his holding “through the rents of” another
customary tenant, who stands as an intermediate landlord between him and the manorial authorities.
On this manor, indeed, sub-letting of land proceeded very far, and had created by the middle of the
sixteenth century exactly the result which one would have expected, the existence, namely, of a
considerable number of subtenants holding land from the copyholders and known by the name of
Hallmote[168] tenants. Nor is mere subtenancy the most elaborate of the arrangements which arise
among these Lilliputian capitalists. The peasants deal in land, and naturally they employ land agents to
act as brokers for their bargains. When “Robert Bagges surrenders one bovate of villein land into the
hands of the lord for the use of Symon Clerk, and the same Symon forthwith surrenders the aforesaid
bovate to the lord for the use of William Flaxman, and William Flaxman pays 12d. to enter
thereupon,”[169] may we not say that we have the whole machinery of land speculation, seller,
middleman, and client, complete?
So far we are on safe ground. But it is not easy to describe the sort of conditions in which this petty
commercialism, this emergence of peasants richer and more prosperous than their fellows, takes place.
Clearly it implies the existence of small stores of capital, of some surplus over the consumption of the
current year, which its fortunate possessors can use as a starting-point for further acquisitions; nor
ought this to surprise us, for the usurer who traffics in his neighbours' misfortunes by lending money or
corn at exorbitant rates, is by no means an unfamiliar bugbear in the mediæval village. Clearly, again,
we must not look for some single primum mobile to explain how such small capitals could be brought
into existence. With all its apparent homogeneity the manorial population had, from the beginning of
things, included people some of whom were in so much better a position than others for building up
considerable properties as to make it no matter for astonishment that, as time went on, they should
improve their advantage and attract more than their share of any increase in wealth which might take
place. The appearance in the fourteenth century of a rural middle class is, indeed, much less remarkable
than the extreme slowness of its development in the more backward parts of the country. For one thing,
even the strictest equalisation of shares could not prevent the holder of exceptionally fertile land from
being better off than his less fortunate fellow. Since services and rents were based on the requirements
of the demesne, with a view to their rough apportionment among all the peasants, and were not
adjusted, like modern competitive rents, so as to sweep away the surplus arising on superior sites, the
occupants of the latter could build up, under the ægis of custom, the nucleus of a very considerable
property.[170] For another thing, the mere fact that the village was subordinated to a lord, who
exploited it by means of officers and servants, supplied village society with an upper layer of people
who had larger opportunities than the mass of the peasantry for improving their position. Stewards,
bailiffs, and greaves were frequently rewarded for their services with grants of land for which only a
nominal rent was asked, and of course the most obvious way of using their advantage was further to
increase it by adding to their properties. In a somewhat similar position to these were the peasants who
were let off easily because their labour was not needed for the lord’s estate. It is quite a mistake to
think of the mediæval villager as a man pinned down to subsistence level by the economic pressure
which grinds, as in a mortar, the poorest classes in modern society. Of course individuals were cruelly
oppressed, and when the harvest failed whole communities, as in India to-day, must sometimes have
been blotted out at a blow. But the whole story of the extraordinary upward movement which took
place among the peasantry in the fourteenth and fifteenth centuries is unintelligible, unless we admit
that the legal rightlessness of the villein was, in fact, quite compatible with a good deal of economic
prosperity. His liability to the manorial authorities, though in law unqualified, was in reality a liability
limited, on the one hand, by the rule of custom, and, on the other, by the fact that he worked, not for
an ever hungry world-market, but for a by no means insatiable local demand. Since services were
adjusted to holdings, not to holders, a family of five or six persons usually did not send more than one
or two to work on the lord’s estate, and the remainder had opportunities for economic advancement,
which necessarily became greater as the growth of population made the weight of the lord’s
requirements less exacting.[171] Moreover, the rudimentary specialisation of industrial employments,
which can plainly be seen going on in the villages of the fourteenth century, brought into existence the
man who was half peasant, half artisan or tradesman, and who could employ the money which he made
in trade to carry on his husbandry on a larger scale than his neighbours. Such, for example, were the
smiths, carpenters, turners, shoemakers, tailors, butchers, walkers, websters, and shearmen, who
appear so constantly in Poll Tax returns.[172] When a weaver is able, though a villein, to leave 3000
marks to his heirs,[173] the village capitalist has plainly come upon the scenes. Nor must we forget that,
however self-contained some manors may have been, there were others whose proximity to a chartered
town or to a seaport acted as a magnet to draw rural conditions out of the rut of custom. Among the
serfs who bought permission to emigrate, there were some who, having made money as town
craftsmen, strayed back to their “villein nest,” and acquired considerable properties with their hardly
amassed wealth, like the Italian or Austrian peasant of to-day, who, after years spent in the sunless
tenements and restaurants of New York, returns at last to be the envy of Calabrian and Tyrolese
villages. From several sides at once, therefore, from those who socially rank above the mass of the
population, from the peasant who combines trade and husbandry, from the enterprising serf who sets
out to make his fortune at a distance, forces are at work to build up the considerable holdings that are
the basis of the well-to-do peasantry of the future.
But while these causes were always operating on individuals, the most potent influence in forming a
class of prosperous peasants was, no doubt, the spread of commerce and its reaction on agriculture. Its
effect is shown by the fact that it is just in those parts of the country where trade is most highly
developed, and where, therefore, the use of money and the growth of wealth encourage speculation of
all kinds, that the commercialising of landed relationships, and the appearance of a middle class, arises
earliest and spreads furthest. The change is specially noticeable in the Eastern counties, which, from an
early date, are the home of industry. Examples of the extreme variety and irregularity in the holdings of
the customary tenants on the manors of Suffolk in the sixteenth century, which we have already
contrasted with the arrangements in the backward parts of the country such as Northumberland, begin
to make their appearance at a very early date in that county of fisheries and manufactures. At Hadleigh,
[174] where the woollen industry has set money in circulation, the processes both of splitting up the
customary holdings, and of letting two or three of them to a single tenant, is conspicuous at the
beginning of the fourteenth century, and has completely altered the distribution of property which
existed a century before. At the little fishing village of Gorleston[175] at the end of the thirteenth
century each of the former tenancies was divided up among several tenants, sometimes three or four,
sometimes eight or ten, and once as many as twenty. At Hawstead, in the same county, the free tenants
have let off part of their holdings and added to them by leasing additional land in its place. In short,
whenever trade becomes a serious factor in rural life, one finds a very general tendency for new
arrangements of land to grow up side by side with the customary holdings, which are the backbone of
the manor, because it is from them that the lord extracts his services for the cultivation of the
desmesne. As long as the necessity for labour services continues, the number of holdings does not
undergo any appreciable alteration, but the number of holdings ceases to be a guide to the number of
holders.
It is clear that the organisation of the manor is compatible with a good deal of shifting of property
among the customary tenants, and that an alteration in its arrangements begins at a comparatively
early date, without any external shock and through the desire of such tenants as can afford it to buy
and lease land from other tenants who are less well off. If such a tendency were at all general, it would
explain the gradual aggregation of larger holdings into fewer hands, and the appearance of considerable
inequality in economic status among members of the village community whose legal position was the
same. Sometimes, indeed, the authorities of the manor think that the process is going on too fast, that
tenants have forgotten that, though they deal in land as though it were their own, it is really the lord's,
and that they must not jeopardise the rents and services which he expects from it by alienating it
without his permission. Sometimes a day of reckoning comes, when “tenants having more than one
customary tenement” are “to show cause why they should not be excluded from the other tenements
but one, unless license be granted them.”[176] But in view of the multitude of transactions which come
before us, we can hardly doubt that licence was nearly always granted if the purchaser or lessee was
thought by the steward to be substantial enough to make the land do its duty,[177] and that tenants
who wanted to buy and sell, lease and let, had very little opposition to expect from the lord or his
steward.
After all the picture is one which we ought not to have any difficulty in understanding, if once we get rid
of the idea, born of our melancholy modern experience, that the buying of land in small parcels is for
the small man the road to ruin, a luxury in which none but the well-to-do can afford to indulge. We
have all heard much of the iniquities of the English system of land transfer, and have contrasted its
cumbersomeness, its expense, its uncertainty, with the facilities for buying small plots offered by
methods like those of France, where sales and mortgages are entered in a public registry, which any
one has the right to inspect. But we need not look to the Continent or the British Dominions to see a
market for real property working freely and smoothly. In our period by far the most general form of
tenure was one customary tenure or another, and whatever the disadvantages of customary tenure may
have been—and they were many—they had one great compensating advantage. Customary holdings
could be transferred easily, cheaply, and with certainty, by surrender and admission in the court of the
manor. Since there was no doubt that the freehold was in the lord, there was no expensive investigation
of titles to eat up the prospective profits of the purchaser, and the Court Rolls offered a record, one is
tempted to say a register, of the nature of the interest which a tenant had had in any holding from time
immemorial. Of course the adjustment of the respective claims of lords and tenants raised very knotty
problems, and these will be examined later. But, as long as they were in abeyance, the fact that peasant
holdings could be transferred so readily contributed to the breaking up in the regularity of manorial
arrangements, to the passage of land from one family to another, and to the formation of larger
properties out of small.[178]
Such petty transactions among the peasantry were not, however, the only way in which substantial
peasant properties came into existence. In addition to the transference of land from one tenant to
another there were other causes working to produce much the same results. The first was the
continuous taking in of plots of waste land by tenants who got permission from the manorial authorities
to make encroachments upon it. The second was the abandonment of the system of cultivating the
demesne by the labour rents of the tenants. Long before the enclosing of the common waste by lords of
manors and farmers had become a very serious grievance—that it was a grievance at an early date is
proved by the Statute of Merton[179]—one finds arrangements being made for bringing unused land
under cultivation. Sometimes this movement goes on on a very large scale indeed; the Abbey of St.
Albans gets a licence from the King in 1347 to “improve its wastes aforesaid and to grant and let them
for their true value to whomsoever of their tenants comes to take them”[180] and about the same time
500 acres of waste in the forest of High Peak[181] are let by the Crown to three tenants, much to the
disgust of the neighbouring commoners. Usually the encroachments on the waste take place piecemeal.
The process by which piece after piece was clipped off it and added to the tenants' holdings is shown
very clearly in Rentals and Court Rolls. Occasionally it goes on without sanction; a tenant surreptitiously
draws into his holding an extra piece of land for which he pays nothing, and is only found out when he
has occupied it for some time. But this is rare, for such encroachments are a source of profit to the lord,
both in the payment made for the original permission to make them and in the rent coming from them,
and the steward is therefore careful that they should be made through the court and entered in detail
on the rolls of the manor. Thus at Ashton-under-Lyne,[182] in 1422, both freeholders and customary
tenants had made large intakes of wood and waste and were paying for some of them as much as 13s.
4d. and 10s. The Halmote Court of Colne[183] in 1324 shows many tenants paying a few pence for acres