Scotland was brought close to bankruptcy by the lavish spending of King James VI, who ran up almost £5m worth of debts on jewellery, fine wine, dog food and tennis balls.
James, the son of Mary, Queen of Scots, borrowed heavily from nobles to fund his opulent lifestyle as he waited to accede to the English throne.
New analysis of historical records has revealed that, by 1603, when he succeeded Elizabeth I, the monarch owed at least £40,000 to his creditors, equivalent to more than £4.5m in today's money.
James, who became king of Scotland in 1567 at 13 months, was effectively bailed out by English taxpayers when he moved his court from Edinburgh to London following the union of the crowns in 1603.
The scale of James's debts was unearthed by Dr Julian Goodare, a reader in history at Edinburgh University. His study, published in Economic History Review, is the most detailed analysis to date of the monarch's profligacy and reveals that James was desperate to preserve a facade of great wealth, which he believed befitted a future king of England.
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He lavished tens of thousands of pounds on clothing and jewellery, travelling and subsistence for heralds and messengers, gifts to ambassadors and maintaining a large collection of horses, dogs and hawks for hunting. To celebrate the new year in 1591, James spent the modern equivalent of £114,000 on gifts for family, friends and associates. In 1599, he spent £23,000 on half a year's fodder for the royal horses and wages for their keepers and, in 1593, £20,000 on jewels for Queen Anne, including a pair of earrings with 84 rubies.
Around 1600, he bought £4,000 worth of velvet to cover his chair in church and in 1579 he spent £4,000 on a decorative cloth for his horse. A year later, he spent £3,200 on dog food and £1,600 on tennis balls.
"The Scottish fiscal system was far smaller than the English one and it was staggering under the weight of James's debts," said Goodare. "If Elizabeth hadn't died when she did, James would have continued to amass debts which could have caused his regime immense financial and political damage. He was the first king in Scotland to do this sort of thing on this scale.
"They usually needed to borrow to fight wars; James was unusual in needing to borrow to pay for his court."
Goodare believes that James's spending may have led to the Raid of Ruthven in 1582, when he was kidnapped and held captive at Huntingtower Castle in Perthshire for a year by William Ruthven, the 1st Earl of Gowrie. Goodare has established that Ruthven, who was Scotland's treasurer, was owed an equivalent of £780,000 in today's money. His accomplices were also owed money. Financial officers were liable for the money they handled, so they faced bankruptcy if the king made them spend more than they collected.
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"I'm not arguing that finance was the sole cause or even the main cause of the raid, but I think it was a more important factor than previous historians have realised."