Henry began his work of reorganization by taking up the work which his grandfather had begun - that of replacing the mere arbitrary power of the sovereign by a uniform system of administration, and bringing into order the various conflicting authorities which had been handed down from ancient times, royal courts and manor courts, church courts, shire courts, hundred courts, forest courts, and local courts in special franchises, with all their inextricable confusion of law and custom and procedure. Under Henry I. two courts, the Exchequer and the Curia Regis, had control of all the financial and judicial business of the kingdom. The Exchequer filled a far more important place in the national life than the Curia Regis, for the power of the king was simply measured by the state of the treasury, when wars began to be fought by mercenaries, and justice to be administered by paid officials. The court had to keep a careful watch over the provincial accounts, over the moneys received from the king's domains, and the fines from the local courts. It had to regulate changes in the mode of payment as the use of money gradually replaced the custom of payments in kind. It had to watch alterations in the ownership and cultivation of land, to modify the settlement of Doomsday Book so as to meet new conditions, and to make new distribution of taxes. There was no class of questions concerning property in the most remote way which might not be brought before its judges for decision. Twice a year the officers of the royal household, the Chancellor, Treasurer, two Chamberlains, Constable, and Marshal, with a few barons chosen from their knowledge of the law, sat with the Justiciar at their head, as "Barons of the Exchequer" in the palace at Westminster, round the table covered with its "chequered" cloth from which they took their name. In one chamber, the Exchequer of Account, the "Barons" received the reports of the sheriffs from every county, and fixed the sums to be levied. In a second chamber, the Exchequer of Receipt, the sheriff or tax-farmer paid in his dues and took his receipts. The accounts were carefully entered on the treasurer's roll, which was called from its shape the Great Roll of the Pipe, and which may still be seen in our Record Office; the chancellor kept a duplicate of this, known as the Roll of the Chancery; and an officer of the king registered in a third Roll matters of any special importance. Before the death of Henry I. the vast amount and the complexity of business in the Exchequer Court made it impossible that it should any longer be carried on wholly in London. The "Barons" began to travel as itinerant judges through the country; as the king's special officers they held courts in the provinces, where difficult local questions were tried and decided on the spot. So important did the work of finance become that the study of the Exchequer is in effect the key to English history at this time. It was not from any philosophic love of good government, but because the license of outrage would have interrupted there turns of the revenue that Henry I. claimed the title of the "Lion of justice." It was in great measure from a wish to sweep the fees of the Church courts into the royal Hoard that the second Henry began the strife with Becket in the Constitutions of Clarendon, and the increase of revenue was the efficient cause of the great reforms of justice which form the glory of his reign. It was the fount of English law and English freedom.

The Curia Regis was composed of the same great officers of the household as those who sat in the Exchequer, and of a few men chosen by the king for their legal learning; but in this court they were not known as "Barons" but as "Justices," and their head was the Chief Justice. The Curia Regis dealt with legal business, with all causes in which the king's interest was concerned, with appeals from the local courts, and from vassals who were too strong to submit to their arbitration, with pleas from wealthy barons who had bought the privilege of laying their suit before the king, besides all the perplexed questions which lay far beyond the powers of the customary courts, and in which the equitable judgment of the king himself was required. In theory its powers were great, but in practice little business was actually brought to it in the time of Henry I; the distance of the court from country places, and the expense of carrying a suit to it, would alone have proved an effectual hindrance to its usefulness, even if the rules by which it was guided had been much more complete and satisfactory than they actually were.

The routine of this system of administration, as well as the mass of business to be done, effectually interfered with arbitrary action on the king's part, and the regular and methodical work of the organized courts gave to the people a fair measure of protection against the tyranny or caprice of the sovereign. But the royal power which was given over to justices and barons did not pass out of the hands of the king. He was still in theory the fount of all authority and law, and could, whenever he chose, resume the powers that he had granted. His control was never relaxed; and in later days we find that while judges on circuit who gave unjust judgment were summoned before the Curia Regis at Westminster, the judges of the Curia Regis itself were called for trial before the king himself in his council.

The reorganization of these courts was fast completed under Henry's great justiciar, De Lucy, and the chancellor Thomas. The next few years show an amount of work done in every department of government which is simply astonishing. The clerks of the Exchequer took up the accounts and began once more regular entries in the Pipe Roll; plans of taxation were devised to fill the empty hoard, and to check the misery and tyranny under which the tax payers groaned. The king ordered a new coinage which should establish a uniform system of money over the whole land. As late as the reign of Henry I. the dues were paid in kind, and the sheriffs took their receipts for honey, fowls, eggs, corn, wax, wool, beer, oxen, dogs, or hawks. When, by Henry's orders, all payments were first made in coin to the Exchequer, the immediate convenience was great, but the state of the coinage made the change tell heavily against the crown. It was impossible to adulterate dues in kind; it was easy to debase the coin when they were paid in money, and that money received by weight, whether it were coin from the royal mints, or the local coinages that had continued from the time of the early English kingdoms, or debased money from the private mints of the barons. Roger of Salisbury, in fact, when placed at the head of the Exchequer, found a great difference between the weight and the actual value of the coin received. He fell back on a simple expedient; in many places there had been a provision as old at least as Doomsday, which enacted that the money weighed out for town-geld should if needful be tested by re-melting. The treasurer extended this to the whole system of the Exchequer. He ordered that all money brought to the Exchequer should itself be tested, and the difference between its weight and real value paid by the sheriff who brought it. The burden thus fell on the country, for the sheriff would of course protect himself as far as he could by exacting the same tests on all sums paid to him. If the pound was worth but ten shillings in the market, no doubt the sheriff only took it for ten shillings in his court. Practically each tax, each due, must have been at least doubled, and the sheriff himself was at the mercy of the Exchequer moneyers. There was but one way to remedy the evil, by securing the purity of the coin, and twice during his reign Henry made this his special care.

In the absence of records we can only dimly trace the work of legal reform which was carried out by Henry's legal officers; but it is plain that before 1164 certain great changes had already been fully established. A new and elaborate system of rules seems gradually to have been drawn up for the guidance of the justices who sat in the Curia Regis; and a new set of legal remedies in course of time made the chances of justice in this court greater than in any other court of the realm. The Great Assize, an edict whose date is uncertain, but which was probably issued during the first years of his reign, developed and set in full working order the imperfect system of "recognition" established by the Norman kings. Henceforth the man, whose right to his freehold was disputed, need but apply to the Curia Regis to issue an order that all proceedings in the local courts should be stopped until the "recognition" of twelve chosen men had decided who was the rightful owner according to the common knowledge of the district, and the barbarous foreign custom of settling the matter by combat was done away with. Under the new system the Curia Regis eventually became the recognized court of appeal for the whole kingdom. So great a mass of business was drawn under its control that the king and his regular ministers could no longer suffice for the work, and new judges had to be added to the former staff; and at last the positions of the two chief courts of the kingdom were reversed, and the King's Court took the foremost place in the amount and importance of its business.

The same system of trial by sworn witnesses was also gradually extended to the local courts. By the new-fashioned royal system the legal men of hundreds and townships, the knights and freeholders, were ordered to search out the criminals of their district, and "present" them for trial at the Shire Court, - something after the fashion of the "grand jury" of to-day, save that in early times the jurors had themselves to bear witness, to declare what they knew of the prisoner's character, to say if stolen goods had been divided in a certain barn, to testify to a coat by a patch on the shoulder. By a slow series of changes which wholly reversed their duties, the "legal men" of the juries of "presentment" and of "recognition" were gradually transformed into the "jury" of to-day; and even now curious traces survive in our courts of the work done by the ancestors of the modern jury. In criminal cases in Scotland the oath still administered by the clerk to jurymen carries us back to an ancient time: "You fifteen swear by Almighty God, and as you shall answer to God at the great day of judgment, you will truth say and no truth conceal, in so far as you are to pass on this assize."

The provincial administration was set in working order. New sheriffs took up again the administration of the shires, and judges from the King's Court travelled, as they had done in the time of Henry I., through the land. The worst fears of the baronage were justified. They were disabled by one blow after another. Their political humiliation was complete. The heirs of the great lords who had followed the Conqueror, and who with their vast estates in Normandy and in England had inherited the arrogant pretensions of their fathers, found themselves of little account in the national councils. The mercenary forces were no longer at their disposal. The sources of wealth which they had found in plunder and in private coinage were cut off. Their rights of jurisdiction were curtailed. A final blow was struck at their military power by the adoption of scutage. In the Welsh campaign of 1157 Henry opened his military reforms by introducing a system new to England in the formation of his army. Every two knights bound to service were ordered to furnish in their place one knight who should remain with the king's army as long as he required. It was the first step towards getting rid of the cumbrous machinery of the feudal array, and securing an efficient and manageable force which should be absolutely at the king's control. In the war of Toulouse in 1159 the problem was for the first time raised as to the obligation of feudal vassals to foreign service, and Henry gladly seized the opportunity to carry out his plan yet more fully. The chief vassals who were unwilling to join the army were allowed to pay a fixed tax or "scutage" instead of giving their personal service. Henry, the chroniclers tell us, careful of his people's prosperity, was anxious not to annoy the knights throughout the country, nor the men of the rising towns, nor the body of yeomen, by dragging them to foreign war against their will; at the same time he himself profited greatly by the change. The new system broke up the old feudal array, and set the king at the head of something like a standing army paid by the taxes of the barons.

Henry had, indeed, won a signal victory over feudalism. But feudalism had no roots on English soil; it was forced to borrow Brabancons, and to work by means alien to the whole feudal tradition and system, and Henry had easily overthrown the baronage by the help of the Church. But in the process the ecclesiastical party had learned to know its strength, and the king had to meet a more formidable resistance to his will when, instead of a lawless baronage, he was confronted by the Church with its mighty organization, always vigilant and menacing. The clergy had from the first looked with a very jealous eye on his projects. A sharp quarrel as to the jurisdiction of the ecclesiastical courts had early arisen between Henry and Archbishop Theobald, but the matter had been compromised for a time. Thomas had taken office pledged to defend ecclesiastical interests, and he was so far true to his pledge, that while he was chancellor he put an end to the abuse of keeping bishoprics and abbeys vacant. He had, however, as was said at the time, "put off the deacon" to put on the chancellor; and in an ecclesiastical trial which took place soon after Henry's crowning, he appears as an energetic exponent of the king's legal views. A dispute had raged for years as to the jurisdiction of the bishops of Chichester over the abbots of Battle. On Henry's accession Bishop Hilary of Chichester vigorously renewed the struggle, and a great trial was held in May 1157 to decide the matter. Hilary failing after much discussion to effect a compromise, emphatically and solemnly declared in words such as Henry was to hear a few years later from another mouth, that there were two powers, secular and spiritual, and that the secular authority could not interfere with the spiritual jurisdiction, or depose any bishop or ecclesiastic without leave from Rome. "True enough, he cannot be 'deposed,'" cried the young king, "but by a shove like this he may be clean thrust out!" and he suited the action to the words. A laugh ran round the assembly at the king's jest; but Hilary, taking no notice of the hint, went on to urge that no layman, not even the king, could by the law of Rome confer ecclesiastical dignity or exemptions without the Pope's leave and confirmation. "What next!" broke in Henry angrily, "you think with your practised cunning to set yourself up against the authority of my kingly prerogative granted me by God Himself! I command you by the allegiance you have sworn to keep within proper bounds language against my crown and dignity!" A general clamour rose against the prelate, and the chancellor, louder than the rest, talked of the bishop's oath of fealty to the king, and warned him to take heed to himself. Hilary, seeing himself thus beset, obsequiously declared that he had no wish to take aught from the kingly honour and dignity, which he had always bent every effort to magnify and increase; but Henry bluntly retorted that it was plain to all that his honour and dignity would be speedily removed far from him by the fair and deceitful talk of those who would annul his just prerogatives. The bishop could not find a single friend. Chancellor and justiciar and constable rivalled one another in taunts and sharp phrases. When he went on to urge the revision of the Conqueror's charter to Battle by the archbishop, and to appeal to ecclesiastical custom, Henry's wrath rose again. "A wonderful and marvellous thing truly is this we hear, that the charters, forsooth, of my kingly predecessors, confirmed by the prerogative of the Crown of England, and witnessed by the magnates, should be deemed beyond our powers by you, my lord bishop. God forbid, God forbid, that in my kingdom what is decreed by me at the instance of reason, and with the advice of my archbishops, bishops, and barons, should be liable to the censure of you and such as you!" He broke short discussion by declaring that the question belonged to him alone to settle. The chancellor, in a long argument, crushed the already humbled bishop, and raised the king's anger to its utmost pitch by drawing attention to the fact that Hilary had appealed to Rome to the contempt of the royal dignity. The king, his countenance changed with fury, turned passionately to the bishop, who tremblingly swore, while Archbishop Theobald crossed himself in amazement at the audacious perjury, that it was the abbot who had got the bull of which Thomas complained. Theobald entreated that the matter might be settled according to Canon law, but this the king promptly refused. Finally Hilary was forced to complete submission, and the archbishop prayed that he might be pardoned for any imprudent words he had used against the king's majesty. Henry was ever ready to yield everything in form when once he had got his own way. "Not only," he answered, "do I now give him the kiss of peace, but if his sins were a hundredfold, I would forgive them all for your prayers and for the love I bear him;" and bishop and abbot and justiciar, all by the king's orders, joined in the kiss of peace.

But no kiss of peace given at Henry's orders could turn away the rising wrath of the Church. A general feeling of danger was in the air, and both sides, in preparing for the inevitable future, chose the same man to fight their battle, - Thomas, the disciple and secretary of Theobald, Thomas, the minister of the king's reforms. The young king had turned with passionate affection to his brilliant chancellor. In hall, in church, in council-chamber, on horseback, he was never separated from his friend. Thomas, like his master, was always ready for hunting, or for hawking, or for a game of chess. He was willing, too, to save the king the cost and burden of entertainment and display. He was careful to magnify his office. He held a splendid court, where Henry's son and a train of young nobles were brought up to knightly accomplishments. He was dressed in scarlet and furs, and his clothes were woven with gold. His table was covered with gold and silver plate, and his servants had orders to buy the most costly provisions in the shops for cooked meat, which were then the glory of the city. His household was the talk of London. The king himself, curious to see how things went on, would sometimes come on horseback to watch the chancellor sitting at meat, or, bow in hand, would turn in on his way from hunting, and, vaulting over the table, would sit down and eat with him. Henry lavished gifts on him, so that according to one of his chroniclers, "when he might have had all the churches and castles of the kingdom if he chose since there was none to deny him, yet the greatness of his soul conquered his ambition; he magnanimously disdained to take the poorer benefices, and required only the great things - the provostship of Beverley, the deanery at Hastings, the Tower of London with the service of the soldiers belonging to it, the castle of Eye with 140 soldiers, and that of Berkhampstead." or was the king's favour misplaced, for Thomas was an excellent servant. Business was rapidly despatched by him; and Henry found himself relieved of the most irksome part of his work. The chancellor surrounded himself by able men, looking even as far as Gaul for poor Englishmen who were distinguished for their talent; fifty-two clerks were employed under him in the Chancery. As he grew more and more important to his master, unlimited powers were put in his hand. There are even entries in the Pipe Roll of pardons issued by him, the first instance of such a right ever used by any save king or queen. It was said that those who had the king's favour might count it as a vain thing, unless they had also the friendship of the chancellor. "The king's dominions, which reach from the Arctic Ocean to the Pyrenees, he put into your power, and in this alone was any man thought happy, that he should find favour in your eyes," runs a letter written afterwards to Thomas.

To complete the king's schemes, however, one dignity yet remained to be conferred on Thomas. He was eager, in view of his proposed reconstruction of Church and State, to adopt the Imperial system of a chancellor-archbishop. The difficulties in the way were great, for ancient custom limited the technical supremacy of the king's will in the choice of the Primate. No archbishop since the Conquest had been chosen for other reasons than those of piety and learning; no secular primate had been appointed since Stigand, and before Stigand there had never been one at all; no deacon had ever been chosen for this high office; and never had a king's officer been made archbishop, however common it may have been to put chancellor or treasurer in less important sees. Amid the anxiety and questioning which followed the death of Theobald in 1161, Thomas himself clearly saw the parting of the ways: "Whoever is made archbishop," he said, "must quickly give offence to God or to the king." Henry alone knew no hesitation. Fresh from his triumphs abroad, master of his great empire, clear and decided in his projects for the ordering of his dominions, eager with the force and determination of twenty-eight years, recognizing no check to his imperious will and the dictates of his friendship, he chose Thomas as archbishop, "Matilda dissuading, the kingdom protesting, the whole Church sighing and groaning." The king, who was then in France, sent his envoy, Richard de Lucy, to Canterbury to press the essential problem home in plain words: "If," he said, "the king and the archbishop are joined together in affection, the state of the Church will still be quiet and happy; but if the thing should fall out otherwise, what strife may come from it, what difficulties and tumults, what loss and peril to souls, I cannot hide from you." The argument prevailed, and in London, in the presence of the king's little son Henry, then seven years old, Thomas was chosen archbishop, "the multitude acclaiming with the voice of God and not of man." The deacon-chancellor was ordained priest on the 2d of June 1162, and the next day consecrated archbishop by Henry of Winchester. Two months later John of Salisbury brought him the pall from Pope Alexander at Montpellier, and for the first time since the Norman Conquest, a man born on English soil was set at the head of the English Church.