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Title: A history of commerce

Author: Clive Day

Release date: March 30, 2023 [eBook #70410]

Language: English

Original publication: United States: Longmans, Green, and co., 1922

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*** START OF THE PROJECT GUTENBERG EBOOK A HISTORY OF
COMMERCE ***

A
HISTORY OF COMMERCE
BY
CLIVE DAY, Ph.D.
KNOX PROFESSOR OF POLITICAL ECONOMY IN YALE UNIVERSITY

REVISED AND ENLARGED

LONGMANS, GREEN, AND CO.
55 FIFTH AVENUE, NEW YORK
39 PATERNOSTER ROW, LONDON
TORONTO, BOMBAY, CALCUTTA AND MADRAS
1925
Copyright, 1907, by
Longmans, Green, and Co.
Copyright, 1914, by
Longmans, Green, and Co.
Copyright, 1922, by
Longmans, Green, and Co.

First Edition, May, 1907
Reprinted, April, 1908; June, 1909; August, 1910
August, 1912
New Edition, June, 1914
Reprinted, February, 1916; April, 1917

August, 1919
September, 1920
August, 1921
New Edition thoroughly revised, September, 1922
Reprinted, February, 1923; January, 1924,
May, 1925

MADE IN THE UNITED STATES

To
E. L. D.

PREFACE
The year 1914 marks one of the great turning points in history. I have
accordingly revised the part of this book covering the recent period to close
the narrative at that date, and have added another part, covering the history
of commerce in the war and in the two or three years of peace immediately
following. The commerce of the great nations of the world has departed
since 1914 far from its accustomed paths and forms. In my attempt to make
intelligible the commercial changes of the time I have had to take account
of matters in public finance, currency and foreign exchange which are
usually treated apart from the history of international trade. I have thought it
better, by touching on these outside subjects, to show the reasons for the
course which commerce has followed, rather than to omit the reasons
because they are hard for the student of the history of commerce to
understand.
Clive Day

CONTENTS
PART I
ANCIENT COMMERCE
CHAPTER PAGE
I. General Conditions 1
II. Oriental Period 9
III. Greek Period 17
IV. Roman Period 26
PART II
MEDIEVAL COMMERCE
V. Conditions about the Year 1000 31
VI. Town Trade 41
VII. Land Trade 54
VIII. Fairs 63
IX. Sea Trade 70
X. The Levant Trade 79
XI. Commerce of Southern Europe 90
XII. Commerce of Northern Europe 102
XIII. Development of the Medieval Organization of Commerce 113
XIV. Commerce and Politics in the Later Middle Ages 123
PART III
MODERN COMMERCE
XV. Exploration and Discovery 128
XVI. Development of the Economic Organization 139
XVII. Credit and Crises 150
XVIII. The Modern State and the Mercantile System 161

XIX. Spain and Portugal 174
XX. The Netherlands 190
XXI. England: Survey of Commercial Development 199
XXII. England: Exports 209
XXIII. England: Imports; Shipping; Policy 219
XXIV. France: Survey of Commercial Development 229
XXV. France: Policy 242
XXVI. The German States 250
XXVII. Italy and Minor States 263
PART IV
RECENT COMMERCE
XXVIII. Commerce and Coal 270
XXIX. Machinery and Manufactures 280
XXX. Roads and Railroads 290
XXXI. Means of Navigation and Communication 302
XXXII. The Wares of Commerce 317
XXXIII. The Modern Organization 329
XXXIV. Commercial Policy 345
XXXV. England: Commercial Development, 1800-1850 357
XXXVI. England: Reform of Commercial Policy 368
XXXVII. England: Commercial Development, 1850-1914 376
XXXVIII. England: Pre-War Problems 386
XXXIX. German States 400
XL. Germany Under the Empire 408
XLI. France 422
XLII. Minor States of Central and Northern Europe 431
XLIII. States of Southern Europe 442

XLIV. Eastern Europe 454
PART V
UNITED STATES
XLV. Organization of Production, 1789 469
XLVI. Internal Trade and Foreign Commerce, 1789 485
XLVII. Commerce and Policy, 1789-1815 498
XLVIII. National Expansion, 1815-1860 511
XLIX. Exports, 1815-1860 530
L. Imports, Policy, Direction of Commerce, 1815-1860 540
LI. National Development, 1860-1914 552
LII. Exports, 1860-1914 566
LIII. Imports, Policy, Direction of Commerce, 1860-1914 578
PART VI
WORLD WAR
LIV. Commerce and the World War, 1914-1918 593
LV. United Kingdom, 1914-1920 607
LVI. France and the Problem of Reparations 622
LVII. Central and Eastern Europe, 1914-1920 634
LVIII. United States, 1914-1920 648
Index 671
LIST OF MAPS
NO. PAGE

1. The Ancient World (colored) Facing 9
2. Roman Roads in Southern Britain 28
3. Tolls on the River Loire 58
4. The Fairs of Champagne 66
5. Trade Routes between Asia and Europe 85
6. The Venetian Empire 91

7. Trade Routes between Germany and Italy 94
8. The Hanseatic Commercial Empire about 1400 106
9. Commercial Geography of Europe about 1250 108
10. Trade Relations of a German Merchant about 1400 114
11. A Medieval Map of the World The Laurentian Portolano
of 1351. Reproduced by permission from Beazley’s
“Prince Henry, the Navigator,” (Putnams). Facing 129
12. Discoveries of the Portuguese 131
13. Map of the Known World in the Time of Columbus 132
14. European Powers in America (colored) Facing 166
15. The Spanish Monarchy 175
16. European Powers in the East about 1700 193
17. Spheres of Trade of English Companies in the Early
Seventeenth Century 203
18. The French Colonial Empire 237
19. Germany in the Eighteenth Century 251
20. Italy, 1515 263
21. Waterways of North Central Europe 294
22. Growth of the European Railroads 298
23. The British Empire, 1902 (colored) Facing 362
24. Development of the German Zollverein 403
25. The Trans-Siberian Railroad 463
26. North America in 1782 470
27. United States, Acquisition of Territory, 1783-1853 513
28. River Transportation in 1860 517
29. Canals of the United States Facing 520
30. Railroads, 1830-1850 524
31. Railroads, 1850-1860 525

32. Products of the United States 568
33. Course of Steamship Lines in 1880 587

A HISTORY OF COMMERCE

PART I.—ANCIENT COMMERCE

CHAPTER I

GENERAL CONDITIONS

1. The purposes of commerce.—The reader will follow more
intelligently the history of commerce if he will stop a moment at the start to
consider the purposes of commerce and the difficulties which must be
overcome if it is to be successfully carried on.
As to the purposes we may be brief. The largest part of the time and
energy of the ordinary man is consumed in getting the material things which
furnish him with the means of subsistence and of culture. We are
accustomed to think of the farmer and the manufacturer as charged
especially with supplying our material wants, but a little reflection will
show that the work of these classes, without the aid of another class, would
be of little use to us. The food and clothing and tools and other desirable
articles which they produce are valuable only when they are put into the
hands of a man who wants them and can use them. Articles which we all
should pronounce desirable, the ripe fruit of the farmer and the finished
product of the manufacturer, have still only the possibility of good in them;
and this possibility is realized only when they are put in the place where
they are wanted at the time when they are wanted. It is the business of the
merchant to attend to the proper distribution of wares, in place and time. He
does not change the form of things, like the farmer or the manufacturer, but
he is as truly a producer as they are.
Ice may be manufactured in summer by the ammonia process, or it may
be saved from the preceding winter, or it may be brought in summer from
Greenland. To the consumer it makes no difference which one of these
methods is employed; he wants his ice in summer, and the trader who
satisfies his wants by saving or transporting the ice is as useful a member of
society as the manufacturer who makes the ice.
2. Obstacles to the development of commerce. (1) Personal.—Great as
are the advantages of commerce, ages of progress were required to give it
the position which it holds in the modern world. It has had to make its way
against innumerable obstacles; and to some of these obstacles the reader is
asked now to give his attention.

There is, first of all, the difficulty which we may term personal. A man
now accepts trade as a matter of course. He devotes himself to some special
line of production, the growing of wheat or the making of shoes, feeling
sure that he can exchange his surplus for whatever else he wants, and
making his exchanges without hesitation. An uncivilized man, however, is
accustomed to satisfy his wants in only two ways, by his own labor in
production or by robbing another man. He is suspicious of any offer to
exchange wares, and is unwilling to apply himself to any special line of
production that would make him dependent on trade. The ignorance and
suspicions of men were in early times the greatest hindrances to the rise of
commerce, as they are still in backward portions of the world; it has
required generations of experience to teach men wants for things which
they did not themselves produce, and to teach them to satisfy these wants
by exchange. Commerce took on definite proportions and became of
considerable importance only when a special class of traders and merchants
arose, who made it their business to study wants, to inspire new ones, and to
provide the means of satisfying them.
3. (2) Physical obstacles.—Another difficulty in the pursuit of
commerce, which we may term physical, appears in the exchange of articles
which are produced at some distance from each other, so that they need to
be transported by land or sea. A farmer who sets out for the city with a load
of grain will have to count carefully the cost of getting it to market. Assume
that he feeds himself and his horses from his wagon-load; evidently, if the
road is long, or so bad that progress is slow and many horses are necessary,
he may find all the wheat consumed on the journey before he has secured a
purchaser. In this aspect the facilities for transportation, whether by land or
water, by pack-animal, cart, canal boat or steamer, are of great importance.
It has been estimated that a human burden bearer would require more than a
day and a half to move a ton of goods a mile; a strong pack-horse can carry
three hundredweight a considerable number of miles in a day; while on
first-rate level roads a horse can drag a ton even further. Another factor in
this question is the character of the ware. A farmer who could not afford to
bring wheat to market might still find it profitable to bring butter, which has
much greater value in the same bulk, so that the profits on a wagon-load
might pay the expenses of the journey. Gold can be exported from the
interior of Alaska under difficulties which would make the transportation of
any other product impossible.

4. (3) Risk of loss at the hand of public enemies or robbers.—The
carrier of merchandise has to face not only physical difficulties, but also
dangers from another source. From time to time we read in the modern
newspaper of high rates charged for war insurance, when ship or cargo may
be captured and confiscated by an enemy on the sea. The merchant must
count his insurance charges before he can figure out his profits. This
illustration will make clear the character of one of the obstacles to
commerce, which we may term military, by some stretching of the current
meaning of the word. It gives, however, no idea of the extent of this danger
in earlier times, when not only were wars far more common, but when even
in times of peace the state was so weak that the merchant, in every mile of
his progress, was exposed to attack by highwaymen on land and by pirates
at sea. Either the merchant must bear his own risks, or pay somebody to
protect him against them. In either case the result would be the same, the
necessity of charging higher prices for the wares, and so making sales less
attractive and less common.
5. (4) Political restrictions.—Still another element can be distinguished
in history, which seems often to be an obstacle to the development of
commerce. This element may be termed the political. A man is not only a
producer and consumer; he is also, whether he is conscious of it or not, a
member of the state, and subject to some kind of political organization
which restrains and directs him in his economic life. His efforts to further
his own interests are restricted by laws meant to protect the interests of the
people as a whole against the selfishness of individuals. A merchant in the
United States who proposes to import some ware from another country will
find that he must pay not only the natural transportation and insurance
charges, but possibly also a customs duty in addition, that would make the
exchange unprofitable. If he proposed to import a foreign ship for use in the
American coasting trade he would find that he is absolutely prohibited from
doing this, no matter how much he might be willing to pay as duty.
These restraints are imposed nowadays, not because the government
assumes that individuals cannot take care of themselves and is afraid that
they may lose money by making purchases abroad, but because it thinks
that they may hurt the interests of producers in the home market, whom it
proposes to protect. We shall find that governments in earlier times
restrained the flow of commerce to protect not only producers but also
consumers and even the merchants themselves; and that regulations were

imposed, of such variety and such strictness, that they made a very
important element in the commercial life of peoples. The church as well as
the state interfered with the course of exchange in the Middle Ages, and
thought it necessary to safeguard public morals by many restrictions which
have since disappeared.

QUESTIONS AND TOPICS

1. Consider some articles of your clothing; try to ascertain from what
different sources the materials were gathered by the merchant for the
manufacturer, and how the finished product reached you. Do the like for a
common implement, a lead-pencil or pocket knife, or an article of furniture.
What countries were drawn upon to supply the food and setting of your
breakfast table? [Compare The cost of a dinner, Outlook, March 13, 1897,
quoted in Clow’s Introduction to the Study of Commerce, Silver, Burdett &
Co., 193-194.]
2. What articles would you have to do without if your supply were
limited to the things produced within a radius of 10 miles of your home?
Within a radius of 100? Within a radius of 1,000?
3. Ice was given as an example of a ware which varies greatly at different
times. Are all wares subject to such variation? [If you find what seems to be
an exception, verify it by the wholesale prices quoted in newspapers.]
4. What is the use of grain elevators and wheat speculators?
5. Can you detect any difference between city people and country people
in making a bargain?
6. What has been the attitude of the North American Indians to trade?
With what wares have traders had to tempt them?
7. Arrange the following articles in the degree of their transportability,
i.e., according to the distance which they may be carried with profit: raw
cotton, coal, potatoes, silver, building stone, gold, wheat, cotton cloth,
diamonds, hay, coffee, salt, silk ribbons, copper. [The price per pound of
many of these wares is given in the newspaper.]
8. Give an instance of articles wasting, unused for lack of good wagon-
roads; for lack of railroads.
9. In what regions has piracy persisted to recent times? [Read some
description of Borneo or of the Philippine Islands, or a description of
Chinese junk trading and Chinese river life.]

10. What effect did the Civil War have on American commerce? [See
reference in chap. 51.]
11. In what regions of the world is land trade still unsafe?
12. To what restrictions, if any, does an American merchant have to
submit who desires to trade in one of the following wares: cigars,
gunpowder, whisky, lottery tickets, imported iron, cigarettes, improper
literature?
13. Government restrictions now are due usually to one of three objects:
(1) collection of revenue, (2) protection of other producers, (3) protection of
the consumer and the public. Classify the wares above according to the
object of the legislation.
14. Read Bourne, Romance of trade, 96-137, on the close relations of
politics and commerce.

BIBLIOGRAPHY

The reader will find at the end of most of the following chapters titles of
books suggested for further reading and study; titles of books that are
warmly recommended are marked by an asterisk, titles that are particularly
noteworthy are marked by two asterisks. In all cases the references are
restricted to books available in English. The prices given are in most cases
those at which the book was sold before the war, and are retained as giving
some indication of the relative expense involved in the purchase of the
books; prices have changed so much during and after the war that an
attempt to list current prices appears impracticable.
Bibliography.—The best available bibliography of English books on the
history of commerce is Sonnenschein’s Bibliography of social and political
economy, London, 1897, reprinted from The Best Books and The Reader’s
Guide. Useful bibliographical information will be found also in Palgrave’s
Dictionary, and in the Subject Index of the British Museum Library, which
has been published at brief intervals since 1902, and which lists all the new
books added to the Library. The American Economic Review, established in
1911, is a quarterly publication which has devoted particular attention to the
bibliography of economic subjects, and which should be consulted for the
announcement of new books, the summary of articles in periodicals, and the
appreciation of important works in book reviews. The American Library
Association Catalogue, which has appeared in various editions, gives full

bibliographical information about popular books which are on sale in the
American market.
In default of a general bibliography the student must refer to books
describing conditions in England. The most complete and scholarly
bibliography is that given by Cunningham, in appendixes to his Growth,
etc. References which to most students will be more useful are given in
Traill’s Social England. Both these sources cover the whole period, into the
nineteenth century. For the medieval period the general student has a
bibliography approaching near to perfection by Charles Gross, Sources and
literature of English history, London and N. Y., 1900, and the student of the
history of commerce will find many references in the Select bibliography of
English mediaeval economic history, edited by Hubert Hall, London, 1914.
A revision of C. K. Adams, Manual of historical literature, which has been
undertaken by the American Historical Association will be of great value
when completed.
Manuals.—Cheesman A. Herrick, **History of Commerce and industry,
N. Y., 1917, resembles in plan the present book. Bibliographies are
appended to the different chapters. Two English manuals on the history of
commerce, H. de B. Gibbins, *History of commerce in Europe, London,
Macmillan, 1891, and J. R. V. Marchant, Commercial history, London,
Pitman [about 1901], suffer from the attempt to compress an immense
number of facts into a small compass. William C. Webster, *General history
of commerce, Boston, Ginn, 1903, $1.40, marks a decided advance in the
selection and presentation of material, but is lacking in scholarship; the
present writer discusses this book in detail in Yale Review, Feb., 1904, vol.
12, p. 436 ff. It has scattered bibliographies, unclassified. George W.
Sanford, *Outlines of the history of commerce, Chicago, Powers & Lyons,
1902, occupies a place by itself, and should be of decided value in
supplementing any manual. It gives topical outlines of the different chapters
in the history of commerce, suggestions and references for reading, and
skeleton maps for the student to fill in. It seeks to give no information
directly.
General Works.—Of the general works on the history of commerce
most are old and out of print. Of these only one need be noted here,
Lindsay’s *History, of which the first volume covers ancient and medieval
times. This will be of value to any school library, if it can be procured. John
Yeats, Growth and vicissitudes of commerce, Boston, Boyle, covers the

whole subject, from ancient to recent times, in a volume of about 400
pages; it was compiled about 1870, from other compilations, and is not to
be trusted entirely, but is about the only book of its kind now in the market.
Bourne’s *Romance of trade and Oxley’s *Romance of commerce answer
well to the description Bourne gives of his book, “an interesting gossip-
book about commerce”; both books contain readable discussions of various
topics in the history of commerce, and references will be given to them
hereafter. Morris, History of colonization, 2 vols., N. Y. Macmillan, 1900,
would be a valuable book to the teacher if it were well done, as it covers the
history of colonization and commerce from earliest times to the present. It
is, however, so badly constructed and so unreliable that it cannot be
recommended. See the reviews in The Nation, Yale Review, American
Historical Review. A far better book on the subject is A. G. Keller,
**Colonization, N. Y. 1908.
The book which I recommend most strongly to teachers who are
restricted in their choice is Cunningham’s **Growth; it will enable the
teacher to dispense with many other books, and no other book could be
substituted for it. Ashley’s *Economic history, always desirable, is less
necessary for the purposes in view here. Ashley’s **Economic Organization
of England, London, 1914, is an admirable survey of English economic
history and is well suited to serve as collateral reading, but has little on the
history of commerce proper. If Cunningham’s large work is provided, the
teacher and student can afford to neglect the smaller manuals on English
economic history by Cunningham and MacArthur, Warner, Price, Cheyney
(revised edition, 1920), Usher, and others. Frederic A. Ogg *Economic
development of modern Europe, N. Y., 1917, deserves separate mention
since it embraces not only England, but also the more important countries
on the Continent; it covers the earlier periods briefly, but treats the
nineteenth century fully, and has extensive bibliographies.
Many of the general histories of Europe and England can be used to
advantage by the teacher or student of the history of commerce. The only
work, however, which can receive special mention here is Traill’s *Social
England; chapters contributed by various writers cover the history of
commerce from earliest times to 1885.
Maps.—The student must look to the general historical atlas for help in
studying the history of commerce. He will find that the more elaborate
atlases are hardly worth the extra expense for his purposes.

William R. Shepherd, **Historical Atlas, N. Y., Holt, revised ed. 1921,
includes considerable economic material, is provided with a full index of
places, and will serve all ordinary needs.
The outline maps of the McKinley Publishing Company (Philadelphia),
and the Rand McNally Co., will be found valuable for the use both of
teacher and class.
In many cases a modern atlas is more desirable than a historical atlas.
Longmans’ **School atlas, N. Y., 1901, is an admirable work, which should
be in the hands of every student, and the Century **Atlas is indispensable
for reference purposes.

THE ANCIENT WORLD

CHAPTER II

ORIENTAL PERIOD

6. Prehistoric commerce. Ancient Egypt.—The origins of commerce
are lost in obscurity. Before people are sufficiently civilized to leave written
records of their doings they engage in trade; we can observe this among
savage tribes at the present day, and we know that it held true of the past,
from finding among the traces of primitive man ornaments and weapons far
from the places where they were made. Such evidences, interesting as they
are, belong to the prehistoric period, and this sketch of early commerce
must begin with the peoples who had acquired the art of writing and have
left us records from which we can gain some idea of their history.
First among these peoples, in point of time, were the Egyptians. Three
thousand years before Christ, at the time when the great pyramids were
built, this people had already attained a developed civilization, which, in the
opinion of modern scholars, can be traced back even thousands of years
more. The Egyptians, however, were not a commercial people. Their main
resource was agriculture, and though they developed some of the industrial
arts to great efficiency they used the products for direct consumption rather
than for trade. Their country, a strip of the Nile valley over five hundred
miles long, and but a few miles wide, was so much alike in its different
parts that it offered little inducement to internal exchange over great
distances; while its isolation by deserts was a bar to the growth of foreign
commerce. The sea, in this early period, was a hindrance, rather than a help,
to communication.
7. Rise of Egyptian commerce; characteristic wares.—Egypt never
became a commercial country so long as it remained under its native rulers.
With the period known as the New Empire, however, beginning about 1600
b.c., commerce at least became more important than it had been before.
Regular communication was established with Asia, and caravans brought to
the country the products of Phœnicia, Syria, and the Red Sea district.
Before the eyes of Joseph and his brethren “behold, a company of
Ishmaelites came from Gilead with their camels bearing spicery and balm
and myrrh, going to carry it down to Egypt”; to this caravan Joseph was
sold as a slave. The wares named here were characteristic imports of Egypt;

among others were precious woods, ivory, gold, wine, and oil. Among the
exports of the country were grain, linen, and manufactured wares like
weapons, rings, and chains. Even to a late period trade was carried on by
barter, the use of coins being rare, and many of the imports came as tribute,
for which the Egyptians needed to make no return.
8. Development of Egyptian commerce in a later period.—Only in the
last period of Egyptian independence, a few centuries before the country
was conquered by Alexander, did commerce bind it closely to other portions
of the ancient world. The government, which formerly had discouraged
trade, now permitted and encouraged it; Greek merchants came in
considerable numbers to Egypt; and an active commerce sprang up. It is
said that Necho, the king who ruled about 600 b.c., sent out Phœnician
sailors to attempt the circumnavigation of Africa; and the same king took up
the work of cutting a canal across the isthmus of Suez which was completed
shortly afterward. The canal was allowed to fill up with sand, but was
reopened later, and its course may be distinctly traced, it is said, along the
route of the modern canal.
9. Rise of commerce in the Mesopotamian Valley.—The district
northwest of the Persian Gulf, centering in the river valleys of the Tigris
and Euphrates, offered opportunities for the rise of civilization which led to
the establishment of settled governments while Egypt was still living
secluded from the rest of the world. This district was rich in agricultural
products, but lacked the metals, some of the building materials, and other of
the raw materials of industry. Though it was bordered in part by deserts,
communication with other districts was far easier than in the case of Egypt;
and commerce with other countries early acquired an importance here
which Egyptian commerce attained only in the last period of the country’s
history. Ancient Babylon, which rose to importance some time after 3000
b.c., under a Semitic people (with a language akin to that of the Jews), was
a market-place for wares brought not only from the South (Arabia) and
West (Syria), but also from the East (Iran, the later Persia). Clay tablets,
used like modern paper for the preservation of records, have been
discovered and deciphered in modern times, and show an active trade in the
precious metals, grain, wool, building materials, etc.
10. Development of commerce under the Assyrian and Persian
empires.—Military expeditions extended the commercial relations of the
people of this district; and the conquests of an Assyrian, who founded a

great empire about 745 b.c., were guided in part by commercial
considerations. Babylon, Armenia, Syria, and parts of Iran and Palestine,
were brought under one rule; peoples on the frontiers were held in check,
and order was fairly well maintained within; so that merchants could
traverse the different parts of the empire, and meet at its capital, Nineveh, to
exchange their wares. The Assyrian empire was made by the sword, and it
fell by the sword after a brief duration; but its place was taken by
succeeding states, and commerce continued to grow. The Persian empire,
which enjoyed its full power for about two hundred years, until its
destruction by Alexander in 330 b.c., included an area more than half that of
modern Europe; it stretched from the Mediterranean on the West to the
Indus on the East, from the Indian Ocean and the Persian Gulf to the Black
and Caspian seas. Within these boundaries lay some of the richest regions
of the ancient world, the products of which could now be exchanged
without passing from under the protection of the Great King.
11. Relative insignificance of the commerce of the ancient empires.
The Jews. The Phœnicians.—In the Oriental states which we have hitherto
considered, commerce never grew to a position of decisive importance in
the national life, however great it may seem when we compare it with its
meager beginnings. It served mainly the needs of luxury, and left untouched
the economic position of the mass of the people. If we seek in the ancient
Orient a people whose very existence depended on trade we must look
further. We do not find the Jews to have been such a people, though we are
accustomed nowadays to think of them as devoted largely to the pursuit of
trade. The descriptions of the Bible show that they lived mainly a pastoral
and agricultural life; and down to the time of the Roman Empire they
counted for little in the world of commerce. A truly commercial people we
do find, however, in near neighbors of the Jews, the Phœnicians, who
inhabited a strip of land on the coast of Syria and Palestine, scarcely ten
miles wide in most places and little over a hundred miles long. They could
gain a scanty food supply from the level ground, and had timber in
abundance on the mountains that separated them from the interior, but had
to look to trade with other peoples for the means of growth which their
home denied them.
12. Commerce of the Phœnicians. Beginnings of sea-trade.—From
raw materials which were in many cases procured from other countries they
manufactured products which found a market throughout the ancient world.

Their cloths and glass were celebrated; they exported large amounts of
metal ware; and they had a monopoly of the purple dye extracted from a
species of shell-fish, which was highly prized throughout this period. These
wares were but a few of those in which they regularly traded; the reader
who would have a more detailed account of the wares of Phœnician
commerce, especially the imports, is advised to study the description in the
Bible. They maintained an active exchange with peoples to the South, East,
and North of them by caravan routes, while they were the first people of
antiquity to secure such mastery over the sea that it could be made the
medium of regular and extensive transportation. The beginning of these sea
voyages is lost in the obscurity of the past. We know that they were highly
developed by 1500 b.c., when Sidon was the leading Phœnician city, and
that they did not cease to extend when the primacy of the Phœnician cities
passed to Tyre. The Phœnicians taught the art of navigation to the ancient
world. Their ships were long the accepted models of construction, and the
Greeks learned from them to direct their course at night by the North, or, as
the Greeks called it, the Phœnician star.
13. Development of sea-trade; wares of Phœnician commerce.—
Beginning, presumably, with fishing and short coasting trips, and reluctant
always to venture out in the stormy season, they had reached the islands of
Cyprus and Rhodes, and had established regular commerce with Greece in
the heroic age of Greek history, say before 1000 b.c. From this point their
progress was rapid, and soon they had traversed the whole Mediterranean,
and passed outside it into the Atlantic. The means of cheap transportation
which they controlled gave them an immense economic advantage. We may
accept as a product of the imagination the story that on their arrival in Spain
they found silver so plentiful that they not only filled their ships but made
their utensils, even their anchors, from it; still the story shadows forth a
truth. They found wares in some districts cheap and begging a market
because of their abundance, which were rare and highly prized elsewhere;
and they could make great profits by exchanging wares so as to put each
where it was most wanted. From the island which we now call England they
procured tin, which is a very rare metal in Europe, and which was
especially desired as a component of the important alloy bronze. They got
copper in Cyprus and Spain, also silver and iron in Spain, and gold and
ivory in Africa. They carried westward the wares of the Orient (cf. our
words cinnamon, cassia, hyssop, cumin, manna, all from Hebrew forms),

and manufactures, which not only gratified the momentary needs of
Europeans but served also as models for imitation.
14. Establishment of colonies by the Phœnicians. Carthage.—The
Phœnicians are noteworthy not only as the greatest merchants and the first
navigators of the ancient world; they were the leaders also in the founding
of colonies. At points important for commercial or naval reasons they
established stations which enabled them to trade in security with the natives
and to control the sea. Gades, for instance (the modern Cadiz), near the
straits of Gibraltar, was a rallying-point from which the Carthaginians
extended their voyages to the tin islands in the North, and far down the
Atlantic coast of Africa on the South. Similar stations were established on
many of the Mediterranean islands (Malta, Sicily, Sardinia, Balearics); and
one founded on the north coast of Africa, Carthage (near the site of modern
Tunis), grew to especial importance. The power of the Phœnicians declined,
a few centuries after 1000 b.c., partly by reason of internal dissensions and
the attacks of land-powers like Assyria, partly by reason of the commercial
rivalry of the Greeks, who had risen to an independent position and cut the
lines of communication between East and West. In this period Carthage fell
heir to the Phœnician establishments in the western Mediterranean, and
maintained its power and policy on substantially similar lines until it
received its great defeats at the hands of Rome.

QUESTIONS AND TOPICS

1. What evidences of prehistoric commerce are given by Indian arrow-
heads, wampum, Indian ornaments, or the relics of the mound-builders?
2. What modern countries have the strip-form of Egypt? [See a map of
South America.]
3. Are there any modern countries like Egypt in the uniformity of their
conditions and products, diminishing the stimulus to internal trade? [Study,
for example, conditions in Alaska, Nevada, or Australia.]
4. Are any of the exports of ancient Egypt still characteristic wares of the
country? [See the Statesman’s Year-Book, index under words Egypt,
commerce.]
5. What can you infer as to the security of trade from the fact that it was
carried on by caravans, bands of merchants?

6. What physical barriers obstructed Egyptian commerce? [See map 33 of
Longmans’ School atlas, noting the deserts and the cataracts of the Nile.]
7. Write an essay on the economic conditions of Egypt, from references
to that country in the Bible.
8. What countries of the modern world fill the space occupied by the
ancient empires of the East? What commerce do they carry on? [See
Statesman’s Year-Book.]
9. Can you suggest any reasons why the commerce of these regions
seems now much less important than in ancient times?
10. Write an essay on the economic conditions of later Babylon, from
descriptions in the Bible. [See Babylon, in the subject-index of the Oxford
Bible.]
11. Write an essay on the economic life of the Jews from the descriptions
of the Bible.
12. Write a similar essay on the Phœnicians. [See Sidon and Tyre in the
subject-index.]
13. Show the similarity of conditions in Phœnicia and in Norway, forcing
the inhabitants of both countries to the sea. [Study the physical
characteristics of Norway in a geography, and note the history of the
Vikings, and the importance of commerce and navigation in modern
Norway.]
14. Write a report, from information to be got from the Encyclopædia
Britannica, on one of the following subjects:—
(a) The commerce and manufactures of the Phœnicians. [See the index in
the last volume of the ninth edition, under Phœnicians.]
(b) The manufacture and trade in glass in the ancient world. [See vol. 10,
p. 647.]
(c) The Phœnician purple. [See the references under the word Purple, vol.
20, p. 116, and the index.]
(d) Early navigation. [See the index.]
15. Wares of Phœnician commerce. [Bible, Ezekiel, chap. 27.]

BIBLIOGRAPHY

Ancient Commerce.—The best available survey of the economic
development of the ancient world is Cunningham’s **Western civilization
in its economic aspects, vol. 1, Ancient times, Cambridge (N. Y.)

Macmillan, 1898; this may be used for parallel reading throughout. On
Egypt, Adolf Erman, Life in ancient Egypt, London, 1894, is interesting and
reliable. Readers of English are fortunate also in having a translation of
Holm’s *History of Greece, N. Y., Macmillan, 1894, 4 vols.; it may be
made to serve as a history of commerce in the Mediterranean down to the
second century. The popular books on Alexander’s conquests and their
results, by Wheeler and Mahaffy, give, unfortunately, little attention to
economic affairs. P. V. N. Myers, *History of Greece, Boston, Ginn, 1895,
is a convenient manual for general reading. Alfred E. Zimmern, **The
Greek Commonwealth, revised ed., Oxford, 1915, is an interesting account
of the economic and political factors in Athens of the fifth century.
On economic development in the Roman world the student has now
available a good manual by Tenney Frank, **An economic history of
Rome, Baltimore, 1920. A detailed account of conditions in the provinces is
provided by Mommsen’s *Provinces of the Roman Empire, N. Y., Scribner,
1887, 2 vols., $6. The current Roman histories give a distorted idea of
Roman commerce by viewing it from the capital.
Maps.—In default of an atlas of the history of commerce students must
seek the maps scattered through special works, or rely upon an ordinary
historical atlas. Justus Perthes’ *Atlas antiquus (about $.75) can be
recommended for use in ancient history; it is admirably executed, and is
provided with an index.

CHAPTER III

GREEK PERIOD

15. Greece, physical character and products.—The mention of the
Greeks at the close of the last chapter introduces us to a people who were,
for a time, the leading merchants of the Mediterranean. The peninsular part
of Greece has an area less than that of the State of Maine, little more than
half that of the State of New York. It is, however, most richly diversified
geographically, and no country in the world of an equal area, it is said,
presents so many islands, bays, peninsulas, and harbors. The coast line of
this little country is longer than that of Spain. No point is more than a few
miles from the coast, and there are few points on the coast from which an
observer does not see an island. In the Greek sea, moreover, every island is
in plain sight either of the mainland or of another island, and in the good
season the winds are very regular. Favoring conditions such as these are of
vast importance in the early days of navigation, when sailors faced real
perils due to their inexperience, and perils of the imagination which were
even greater. At home the Greeks inhabited a country which was not rich
enough to support them without exertion, but was, on the other hand, not so
poor as to force them to use all their ingenuity in finding the means of
subsistence. They could easily produce a surplus of oil and wine, but found
a deficiency of other products, especially grain and, in the early period,
manufactured wares.
16. Rise of Greek commerce. Colonies.—Though it would be hard to
conceive a better nursery for the growth of commerce than existed under
the conditions here described, the Greeks, when we first get knowledge of
them, about 1000 b.c., were not yet ready to take advantage of their
opportunities. There was some commerce, it is true, but it lay entirely in the
hands of the Phœnicians, who brought utensils and cloth and took away
timber and metals. Little by little the Greeks rose to commercial
prominence, and gained the place formerly held by the Phœnicians. A
striking feature of this revolution was the Greek colonial movement, which
covered some five hundred years, and ended about 600 b.c. Greek
emigrants settled throughout the Ægean Sea and established themselves as a
fringe on the coast of Asia Minor and about the Black Sea; in the West they

chose by preference the shores of southern Italy and Sicily, but founded
colonies as far as Malaga in modern Spain, and created a great commercial
center on the site of modern Marseilles. The colonies kept up an active
intercourse with the mother country, and Greek sailors and merchants
ousted the Phœnicians from their commanding position. The Greeks at
home began to produce wares for export, seeking customers not only
among the colonists but in other markets also; they emancipated themselves
from their former dependence on Oriental manufactures, and developed the
clay, bronze, and woolen industries to a point not dreamed of before.
17. Rapid development in the fifth century, B.C.—In this, which may
be termed the preparatory period of Greek commerce, the leadership rested
with the Greek colonies in Asia; Miletos was the first of the Greek cities in
commercial importance. The advance of the Persian kings about 500 broke
the power of the Greek colonies in the East; at the same time the western
colonies, especially Syracuse, grew rapidly in importance, and forced
Carthage to recognize their supremacy in the northern Mediterranean. The
mother country itself was, however, that part of the Greek world which
showed the most striking gains. The successful resistance to the Persians
was followed by a remarkable development not only in politics but in
industry and commerce as well, and Greece now took for two centuries the
position which England occupies in the modern world. The little island of
Ægina (near Athens), rocky and sterile, supporting to-day but 6,000
inhabitants, became for a time the most important market of the Greek
world; it amassed fabulous riches by a commerce penetrating all seas, aided
by an artificial harbor and a strong war navy. Another great commercial
city, destined to a longer career, was Corinth; this city was the natural
medium of trade with the western colonies, not only because it offered an
opportunity to reach them without rounding the dreaded promontory of the
southern tip of Greece, but also because some of the leading colonies of the
West were Corinthian or closely allied to the Corinthians.
18. Rise of Athens to leadership. Exports.—The city of Athens, which
had developed rapidly in the century preceding the Persian wars, rose to the
first place among the Greek cities in the century in which they occurred
(500-400 b.c.). The Athenians broke the power of Ægina in armed conflict,
and appropriated its commerce; the Athenian sea-port, the Piræus, became
the leading commercial port of the Greek world, and remained so until the
Macedonian period (about 300). Readers must be referred to one of the

narrative histories of Greece for an account of the way in which Athens
built up its empire in the Ægean Sea, and for the story of the varied fortunes
of its political power. Even in times of defeat, when its war-navy was
scattered and its leagues and alliances broken up, it was still able to control
a large part of the trade of the Ægean and Black seas, and maintained an
important commerce with the South and West. The favorable situation of
the city, and the ability and energy of its navigators and business men,
enabled it to conduct a large carrying trade for other peoples, and many of
the exports were foreign wares which were merely transshipped in the
Piræus. Of native wares it exported silver and coin, from the mines near the
city, some natural products (oil, figs, honey, wool, marble) of comparatively
slight importance, and especially manufactured wares, of which pottery was
the chief.
19. Athenian imports and policy.—The chief import was wheat, on
which Athens was then as dependent as England is now; the city had grown
so great by trade that the surrounding country was unable to support it. The
great granary of Athens was the level country north of the Black Sea, and
the Athenians made extraordinary efforts to control the narrow entrance to
the Black Sea, that they might assure their food supply. They were not
entirely dependent on this source, however, and imported wheat also from
Sicily, Egypt, Syria, and the mainland to the North. Among the other
imports were ship-building materials, salt fish, slaves, raw materials for the
Athenian manufacturers, and articles of luxury. The breadth of the Athenian
trade is pictured in the statement of a contemporary: “What delicacies there
are in Sicily, or Lower Italy, or Cyprus, or Egypt, or Lydia, or on the
Pontus, or in Peloponnesus, or anywhere else, they all are brought to Athens
by her control of the sea.”
The commercial policy of the Athenians was framed with an eye
especially to the interests of the consumer. What duties were levied were
low, and had no leaning to “protection” in the modern sense. The export of
articles especially desired (wheat, ship-building materials) was restricted in
the hope of keeping up the home supply, and commercial advantages were
granted or withheld with the idea of exercising political pressure on other
states; but nothing like modern protectionism can be found in the
commercial policy of this period.
20. Contrast of the ancient and modern world; effect of Macedonian
and Roman conquests.—In the course of our narrative we are now

approaching a point when a great change came over the ancient world. The
isolation of the earlier states of antiquity is their most striking feature. Each
one lives only unto itself. It rises in civilization and then declines, without
sharing its gains and losses with other states. It may conquer and hold them
for a time, it is true, but it rules them as foreign territory, with alien
interests; and the great empires crumble as readily as they are made. This
characteristic of ancient history is one of its main difficulties to the student,
for it deprives him of any bond of connection between the peoples, and
forces him to pass from one to another of them, until he feels lost in the
complexity of the narrative.
The modern world, with its common fund of culture and its community
of interests uniting different peoples, could arise from these conditions only
after long centuries of struggle. The unity of the Christian faith was needed
to confirm the union of peoples in a common civilization. The process of
union begins, however, at the point which we have reached; the great
conquests of Alexander of Macedon, and those of Rome, did much to break
down the barriers between peoples, and to prepare them for the acceptance
of a common civilization and a common religion. It is to be hoped that the
student knows already something of the narrative of those conquests. We
shall have to confine ourselves to the results as they appear in the history of
commerce. Here the reader can merely be reminded that Alexander united
the eastern world into an empire extending from Greece to India, a little
before 300 b.c., and that the Romans began about 200 b.c. to extend their
authority outside the Italian peninsula, and before the birth of Christ had
subjected to it practically all the peoples whose history we have been
studying.
21. Effect of Alexander’s conquests on commerce; decline of Greece.
—In appearance the empire of Alexander outlived its founder but a few
years, and then dissolved. Alexander, however, was a civilizer as well as a
conqueror; he endowed the East with a common fund of Greek culture; and
however distinct or hostile the states might seem thereafter the peoples were
united as they had never been before. Commerce took on a new aspect.
Greece, which before had been at the center of the great commercial
movements, was now left on the western edge. Greek merchants could for a
time use their former commanding position to share in the great commercial
development, but in the long run their struggle was hopeless. The most
energetic Greeks left their home to settle in eastern countries which were

richer, more populous, and closer to the great currents of trade. Corinth was
the only city which managed to maintain and extend its trade. Athens
declined rapidly in commercial importance; and grass grew and cows were
pastured in the streets of other towns which had once been important
markets.
22. Rise of great cities.—Some indication of the development of
commerce, and of the rearrangement of its important centers, can be got
from a study of the great cities of the ancient world. Before the time of
Alexander there were only three cities of the Mediterranean with a
population of over 100,000, Syracuse, Athens, Carthage; none of these had
a population far above that figure. About 200 b.c., scarcely more than a
century afterward, there were four cities with a population over 200,000,
Alexandria, Seleukia, Antioch, Carthage; one city with a population far
above 100,000, Syracuse; and of cities with a population about 100,000
there were Corinth, Rome, Rhodes, Ephesos, and possibly others. The
names of some of these cities are already familiar to us. Carthage was
enjoying its last century of commercial greatness, before Rome robbed it of
its influence in the northern Mediterranean. Syracuse was the chief Greek
colony of the West, destined also to fall under the Roman power just before
200. Other names, however, are entirely new to history, or first became of
great importance at this time, and the best idea of the commerce of the
period can be got by considering the reasons for their greatness.
23. Alexandria, Seleukia, Antioch.—Alexandria, as its name suggests,
was founded by the Macedonian conqueror. It was situated on a tongue of
land between a lagoon and the sea, near the most western of the mouths of
the Nile. It had a double harbor, formed by the island Pharos, which has
given the name for lighthouse in some of the modern languages (French,
phare, Italian, fáro), as the most celebrated lighthouse of antiquity was
erected there. Alexandria furnished the only good harbor for large vessels
on the coast of Egypt; it had access to the Nile, tapping one of the great
granaries of antiquity, and connected with the Red Sea through the canal
that ran from the Nile to the Bitter Lakes. It was at the point where the sea-
route from the far East reached the Mediterranean, and it became by right
the greatest market and the largest city that the world had known.
Next to it in size and importance came two other cities, Seleukia and
Antioch, which were founded even later than Alexandria. Seleukia, on the
Tigris, took the place of the earlier Babylon and the later Bagdad; it was

situated in a rich plain at the points where the routes from the Persian Gulf
and the Persian highlands met on their way westward. Antioch was at the
focus of the routes by which the trade with inner Asia was carried on.
Situated at a point where the Euphrates approaches to within a few days’
march of the coast, and where the valley of the Orontes offers the best
means of reaching the sea from the interior, it had the full benefit of the
revival of eastern commerce which followed the conquests of Alexander
and the enlightened rule of his successors.
24. Rhodes.—Only one other city, Rhodes, deserves especial attention,
and this not because of its size alone but also because it was so specifically
a commercial city. The little island could offer but scanty products to
commerce, but it enjoyed an exceptionally favorable position, where
navigators from Egypt and Syria, avoiding the dangers of the open sea,
would put in for shelter and to trade. Rhodes followed a far-sighted foreign
policy, guided by the idea of securing the greatest freedom of trade; it
policed the seas and repressed piracy with vigor; and established a code of
mercantile law which was celebrated as a model and which invited dealings
in its market. The Rhodians were skilful navigators, and developed the
principles of commercial association to a point of high efficiency. It is little
cause for wonder, therefore, that commerce flowed hither from all parts of
the eastern Mediterranean and even from the Black Sea; that foreign
merchants sent their sons there to learn the conduct of commerce; and that
great riches were accumulated, of which one evidence was furnished by the
many colossi, gigantic statues, about the city.

QUESTIONS AND TOPICS

1. Prove the statement in the text, regarding the Greek islands. Take a
good map, measure off on the scale 25 miles, the distance at which hills of
about 125 feet are visible (the Greek islands are mountainous and the air
very clear), and show by what stepping-stones timid sailors could advance.
2. Study in detail the influence of the physical characteristics of Greece
on the people and their history. [See Myers, chap. 1; Holm, vol. 1, chap. 2.]
3. Write a report on the evidences of early civilization and trade. [Holm,
vol. 1, chap. 8.]
4. Write a report on the early commerce carried on by Phœnicians.
[Holm, vol. 1, chap. 9.]

5. Make a careful study of the Greek colonial movement, noting, (a) the
motives to colonization, (b) the extent of Greek colonies, (c) the relations
with the mother-country, (d) the mode of life in the colonies, (e) the
influence on the commercial development of the different parts of Greece.
[Myers, chap. 5; Holm, vol. 1, chaps. 12, 13, 14, 21, 25.]
6. Write a report on the history of the Greek colonies of the West,
especially Syracuse and its contest with Carthage. [Holm, vol. 1, chap. 25;
vol. 2, chap. 6, 29; Freeman, Story of Sicily, N. Y., Putnam, 1892, $1.50.] ·
7. Study the growth of the sea-power and empire of Athens, indicating on
a map the allied or subject cities. [Myers, chaps. 15, 16; Holm, vol. 2, esp.
chap. 17.]
8. Contrast Athenian exports of this period with the exports of modern
Greece. [Statesman’s Year-Book.]
9. What is the leading port of modern Greece? [Same.]
10. Write an essay comparing the Athenian and the British empires,
noting, (a) advantages of geographical position, (b) products of the home
country, exports and imports, (c) naval power and naval stations, (d) policy
to members of the empire, (e) commercial policy of the home country. [See
Myers or Holm, and the chapters in this book on England; compare E. A.
Freeman, Greater Greece and Greater Britain, London, 1886.]
11. Compare the imports of ancient and of modern Greece. [Statesman’s
Year-Book.]
12. Make a chart, naming on a horizontal line the leading states of
antiquity, from Egypt to Rome, placing dates (3000, 1500, 1000, etc.) in a
column at the left, and indicating changes in the history of each state in the
appropriate place in its column.
13. Draw a map showing the extent of Alexander’s conquests, and
comparing the empire with earlier Oriental empires. [See the maps in
Myers, and if no good historical atlas is available consult the maps in the
Oxford Bible, teacher’s edition.]
14. Study the influence of the Macedonian conquests on civilization and
commerce. [Myers, chaps. 25, 26, 27; Holm, vol. 3, esp. chap. 27.]
15. Write a report on the economic decline of Greece after the
Macedonian conquest. [Holm, vol. 4.]
16. Is England exposed to such a change in the currents of trade as
furthered the decline of Greece?

17. Why do great cities rarely grow up without the aid of commerce?
[The answer to this question is suggested in a later chapter, but the student
should be able to work it out himself.]
18. Are there any exceptions? What is the commerce of Washington, D.
C.? Is there any one of the cities named in this section which may have
owed its size to something beside commerce?
19. Has there been any later period in which great cities have risen
suddenly, as in this period after Alexander?
20. Write a commercial history of Carthage from the information to be
got in a Roman history, or in the Encyclopædia Britannica. Write a
commercial history of Syracuse in the Roman period, from the same
sources.
21. Write a report on the commerce and civilization of one of the cities,
using Holm, vol. 4, and the encyclopedia.
22. Endeavor to trace the later history of one of these cities, and to
discover its population now, using the encyclopedia and a geographical
gazetteer.

BIBLIOGRAPHY

See chapter ii.

CHAPTER IV

ROMAN PERIOD

25. The Roman state; Rome not a commercial city.—In entering on
the period of Roman domination we need spend no time over the earlier
history of the city which came to rule the world. The Romans were not a
commercial people. Even in the last two centuries b.c., when Rome
extended her sway over the eastern countries which have already been
noticed, and subjected a large part of the West as well, Rome did not
become a commercial center. The city grew to unparalleled size, it is true,
and required immense imports of food to support the population. These
imports came, however, as taxes and tribute to the conquerors. Rome
supplied no exports of considerable amount, and built up no great carrying
and forwarding trade such as would have made the city the center for the
exchanges of other people. The service which the Romans gave to the world
of their time, and for which they received such rich reward, was not
economic but political in character; they were the greatest organizers and
administrators of antiquity, and by their skill in the arts of war and
government succeeded in living on the labor of subject peoples. They were
not mere parasites. They earned all that they received by one great
contribution, “pax Romana,” Roman peace, which continued almost
unbroken for centuries, and which furnished an opportunity for commercial
development before unknown.
26. Development of commerce in the Roman East.—The study of
commerce in the Roman period resolves itself, as suggested above, into a
study of commerce in the different regions of which the great Roman state
was composed. In the East commerce developed on the lines which have
already been described; Alexandria and Antioch continued to be great
markets for Oriental wares, coming now even from India and China; and
Carthage remained an important outlet for the African trade. Asia Minor,
northern Africa, and southeastern Europe reached the very pinnacle of their
historical development in the Roman period; these countries have never
since attained to anything like the prosperity they then enjoyed. We shall
not have the time hereafter to notice the commerce of these regions in
detail; the reader may take it for granted that merchants struggled

strenuously to keep the place they had reached, and that decline came
slowly, when it did come later.
Our attention must be directed hereafter mainly to the West. It was there
that the most important states of modern Europe arose, and there that
commerce grew up in its modern form. Our chief interest must be to know
what progress the peoples of the West made under Roman rule, and how far
commerce had developed among them.
27. Backward condition of the people of the West.—The peoples of the
West were far behind those of the East in civilization. They have sometimes
been compared to the American Indians, and though the comparison is
inexact in detail and may easily mislead, it gives still a rough indication of
their backwardness. They lived more from the products of their flocks and
herds than from agriculture, when the Romans came in contact with them;
they had practically no towns, and no considerable trade.
The five hundred years (roughly) of Roman rule made some striking
changes in the Roman provinces of the West (modern Spain, France,
England; not Germany or countries farther east). It kept the people in order,
and gave them an opportunity to acquire the elements of a higher
civilization. The fact that modern Spanish and French are based on Latin
remains always a striking testimony to the Roman influence on the
provincials.
28. Limited influence of Rome on the commercial development of the
West.—It is easy, however, to overestimate the results of this influence,
especially so far as regards economic progress. Rome gave her subject
peoples of the West a chance at commercial development, but none had
sought it and few were ready to profit by it. The Roman government
constructed a system of military roads, models of their kind, which enabled
troops and messengers to reach speedily the different provinces. Romans
settled in the provinces as officials or private gentlemen, and Roman culture
was acquired by the wealthy provincials; cities and large landed estates
formed centers of industry and exchanged manufactured products for the
raw materials of the surrounding districts.

ROMAN ROADS IN SOUTHERN BRITAIN
The course of some of the roads is uncertain, and the number would be increased or diminished
according to the authority followed. The map gives, however, a fair picture of the Roman road
system; it was, evidently, not so extensive as our modern railroad system.

The roads, however, seem to have served mainly Roman purposes, and
the cities and culture depended mainly on Roman influence for their
support. The mass of the people remained passive, and advanced slowly.
Most of them lived by agriculture in the country districts, producing the
things necessary for their own subsistence and a small surplus for the
Roman tax-gatherer; they received for their surplus no wares which would
have formed the basis of commerce. However much Rome did to efface the
differences of race, language, and national tradition, such differences
remained to hinder commerce; and peoples were still separated by great
distances and by serious physical barriers. The commercial development of
the West, though it may seem great in comparison with conditions in the
following period of disorder, was very limited even at the height of Roman
power.

29. Decline of Roman power and of commerce in the West.—The time
came soon when the provincials could no longer look to Rome for
protection and stimulus. In the third century, a.d., the Roman government
began to go to pieces. It lacked the force to repress internal revolts in the
provinces, and to repel the inroads of barbarians on the frontiers. The
process of decline had already proceeded far before the “Fall of Rome”
(476), when even the shadow of authority passed from the Roman Emperor
of the West. The remnants of Roman rule centered henceforth about the
eastern capital, Constantinople. In the West barbarian chieftains established
government of a kind on the fragments of the Roman state, but endeavored
in vain to follow the models which the Romans had set them. The motives
to commerce grew weaker as Roman culture disappeared, and the obstacles
to commerce increased rapidly with the decline in public order. Brigandage
and piracy became more profitable than honest industry; roads and bridges
deteriorated; the course of rivers was obstructed. Even a great ruler like
Charlemagne, who had himself crowned Emperor in 800, could do little to
stay the process of decline, and weaker successors could do still less. The
last remnants of the Roman organization seemed to have passed away, and
the European world passed into the “Dark Ages.”

QUESTIONS AND TOPICS

1. Endeavor to verify the statements in the text by studying the
descriptions of Roman commerce in the current Roman histories. Ask the
following questions of them. What wares, beside manuscript books and a
few other items of no great importance, did the people of Rome produce for
export? What wares beside food for the people and luxuries for the rich did
they import?
2. Show how the taxes and tribute from conquered provinces can be
regarded as war-insurance.
3. Write a report on the civilization and commerce of one of the
provinces of the Roman Empire. [See Mommsen, Provinces, esp. vol. 1,
chap. 7, Greek Europe; chap. 8, Asia Minor; vol. 2, chap. 12, Egypt; chap.
13, the African Provinces.]
4. Write a similar report on one of the provinces of the West. [Vol. 1,
chap. 2, Spain; chap. 3, Gaul; chap. 4, Germany; chap. 5, Britain.]

5. Study the civilization of Roman Britain, distinguishing carefully the
life of the upper (Roman) classes, and the life of the common people. What
effect would this contrast of classes have on the extent and character of
commerce in the Roman period? [Consult manuals of English history.]
6. Study the economic and political factors in the fall of Rome.
[Cunningham, West. civ., vol. 1, p. 170 ff.; Adams, Civ., chap. 4.]
7. Compare the fall of Rome with the growth of political corruption in
some modern cities, as affecting the prosperity of commerce.

BIBLIOGRAPHY

See chapter ii.

PART II.—MEDIEVAL COMMERCE

CHAPTER V

CONDITIONS ABOUT THE YEAR 1000

30. Political conditions affecting commerce; the modern system of
government.—The reader who studies the history of commerce in the
medieval period faces a system of government entirely different from that
of modern times, which he must understand before he can appreciate the
peculiar conditions of commerce then. We can illustrate the modern method
of government by taking a country, say France, for an example. We wish to
understand the relations of the capital, Paris, to other parts of the country,
say the district around Bordeaux, in the southwest corner. An observer of
this country will find that Paris and Bordeaux are united by different means
of communication and transportation, telegraphs and posts, railroads,
highways and canals, which are constantly employed in the service of
government. On the path from the province to the capital go the reports of
the officials who are in charge of the government of Bordeaux; and, if they
fail in their duties, petitions and complaints from private citizens, asking
relief, will take the same path. By this path, also, the taxes collected at
Bordeaux will stream to the treasury at Paris, to be employed in maintaining
the government. Part of these taxes will be expended at Paris, to support the
officials who live in the capital, the central army, etc. Part, however, must
be used to fulfil the local needs of Bordeaux; and on the road from the
capital to the province we shall find money and wares, going as salaries to
officials, appropriations for public works and the like. On this road,
furthermore, we shall find a stream of messages, sent by the central
government to its local subordinates, directing them in their work; these
messages will answer the reports of officials and the petitions and
complaints of subjects.
31. Impossibility of applying modern methods of government in the
period after the fall of Rome.—The system of government, thus roughly
outlined, was the system used in the period when Rome was still strong. But
when the power of Rome declined it became constantly more difficult to
maintain a system of the kind; every obstacle to the free passage of men and
wares weakened the hold of the government on its provinces. The roads
grew worse, and while they were still passable the danger of traversing

them increased, so that the expense of maintaining this government became
prohibitive. The reports from officials and the petitions from subjects were
delayed or lost; only a small part of the local taxes reached the treasury at
the center. The central government, on its side, found that it had no longer
the means to pay the bills for salaries and public works in the provinces,
and found that its commands were not received there, or were not obeyed,
because the government could no longer send officials and troops to force
obedience.
32. The feudal system; rise and character.—The time came, finally,
when the government had to recognize publicly the change in conditions,
and to adopt a system of quite a different kind, known as the feudal system.
In substance it told the man who before had been a salaried official that it
could no longer pay salaries, and that he must support himself henceforth
from the revenues of land which would formerly have gone to it as taxes. It
maintained still a nominal superiority, and exacted from the feudal lords
who now assumed the responsibility of government certain payments for
general public service, occasionally a sum of money and more frequently
personal service of a military or judicial kind. Practically, however, the state
had split into little pieces; the central government had lost the right even to
nominate the successor of an official, and each was succeeded in the duties
and profits of government by his son, as though he had been a petty king. It
is impossible to state accurately the number of little governments of this
kind that existed in the different countries of Europe; in France, in the tenth
century, it is supposed to have exceeded 10,000. The character of
government varied greatly, of course, according to local conditions, not
only in different countries but in different parts of the same country, but it
was everywhere extremely low when measured by modern standards. This
will be apparent as we survey the conditions under which commerce was
carried on in the period known as the Dark Ages.
33. Difficulties and dangers of transportation.—Attempt was made to
maintain the roads, which of course are essential to trade by sea as well as
by land, by making the proprietors through whose land they ran responsible
for their repair. Many of the proprietors managed to escape contribution,
and what work was done was largely wasted, through ignorance and lack of
proper superintendence. We shall see that even in later periods the roads
were bad; in this early time they were so bad that they seem to have been

mere tracks, of service to passengers on foot or on horseback, but of little
use for wagon traffic.
The merchant suffered even more, however, from bad men than from bad
roads. Government was so weak that robbery was common; people were so
ignorant of everything outside the narrow sphere of local interests that they
suspected every stranger, and too often with reason. There is a whole series
of English laws, beginning about 700 and continuing for centuries, of which
this is an early example; “If a man come from afar, or a stranger, go out of
the highway, and he then neither shout nor blow a horn; he is to be
accounted a thief, either to be slain or to be redeemed.”
34. Restrictions imposed to insure security. The market.—The
dangers of travel required a merchant to go in company with others, and the
danger that a merchant would himself turn robber made it necessary for him
to subject himself constantly to public supervision, and to get residents who
would act as sureties for his good behavior. In England, even in the eleventh
century, the central government thought it necessary to pass a law “that
every man above twelve years of age make oath that he will neither be a
thief nor cognizant of theft.” Such a general statute would surely be of little
use.
Many other statutes of a more specific nature were passed, which may
have helped to repress robbery, but which must have hampered trade at the
same time. The idea in general was to force a man to make his purchases in
public, so that if he appeared at home with new wares he could get
witnesses to prove that he came honestly by them. Cattle formed a large
part of the personal property in early times, and as these could readily be
stolen, many laws were passed restricting the trade in cattle. Other things
were included in the restriction, however, as the need of protecting
commerce became more apparent. In England, in the tenth century, a man
was not allowed to buy or sell any goods above the value of twenty pence,
unless he did it within a town where a public official and witnesses could
legitimate the bargain. In this practice is found the origin of the market, a
medieval institution of which more will be said later. A market was a place
appointed by the government, where bargains could properly be made; and
only small exchanges of household produce could be made outside it, in the
open country. Beginning in the need that was felt to prevent thieving it
developed as a public institution, which the people found it profitable to
extend as a means of collecting tolls and of regulating internal trade.

35. Society organized to exist with the minimum of commerce; the
medieval village.—The striking and important feature in the life of
European peoples at this period was not the large amount of commerce
carried on, but the small amount. The people were organized on a system
which enabled them to support life with the least commerce possible.
Instead of being concentrated in towns, they were isolated in little groups,
often called manors, one of which would be composed often of less than
100 people, who got their living from the square mile or so of land
surrounding them. It is not necessary here to discuss the social and political
life of these little groups, though it is proper to remark that often some of
the inhabitants were slaves, and many more were only half-free, like the
Russian serfs of the nineteenth century.
36. Self-sufficiency of the villages; low stage of the arts of production.
—The economic life of these village groups is the side in which we are
interested, and the chief point in that was the self-sufficiency of each group.
A village tried to produce everything that it wanted, to be free from the
uncertainty and expense of trade. We find, then, that almost all the people in
a village were agriculturists, and these raised the necessary food supply by
methods which were always crude, and were often very cumbersome and
wasteful. The stock was of such a poor breed that a grown ox seems to have
been little larger than a calf of the present day, and the fleece of a sheep
weighed often less than two ounces. Many of the stock had to be killed
before winter, as there was no proper fodder to keep them, and those that
survived were often so weak in the spring that they had to be dragged to
pasture on a sledge. Insufficient stock meant insufficient manure, and
though the fields were allowed to lie fallow every third year they were
exhausted by constant crops of cereals, and gave a yield of only about six
bushels of wheat an acre, of which two had to be retained for seed.
Not only the food but nearly everything else had to be raised where it
was to be consumed. Houses were constructed of materials from the forest,
clothes were made out of flax and wool from the village fields, furniture
and implements were made at home. Nearly every village had a mill,
usually run by water, to grind its meal or flour; some villages had a smith or
carpenter; few special artisans beside those suggested were to be found in
the ordinary manor.
37. Evils resulting from the lack of commerce.—Before we proceed to
describe the growth of European commerce from such origins it will be

well to stop and consider the results of a system which was based on the
lack of commerce. With regard to the main product, food staples, the result
was an alternation of waste and want. A good year brought a surplus for
which there was no market outside the village, and which could not be
worked up inside for lack of manufacturing skill and implements. A bad
harvest, on the other hand, meant serious suffering, because there was no
opportunity to buy food supplies outside the manor and bring them to it.
Nearly every year was marked by a famine in one part or another of a
country, and famine was often followed by pestilence. Diseases now almost
unknown in the civilized world, like leprosy and ergotism or St. Anthony’s
fire, were not infrequent. The food at best was coarse and monotonous; the
houses were mere hovels of boughs and mud; the clothes were a few
garments of rude stuff. Nothing better could be procured so long as
everything had to be produced on the spot and made ready for use by the
people themselves. Finally, these people were coarse and ignorant, with
little regard for personal cleanliness or for moral laws, and with practically
no interests outside the narrow bounds of the little village in which they
lived.
38. Exceptional instances of higher organization of industry.—These
conditions existed all over western Europe, and may be taken as typical of
the period about the year 1000. Though they determined the commerce, or
better the lack of commerce, at this time, they were not absolutely
universal. Great feudal princes and great monasteries owned each a
considerable number of villages or manors, and tried to introduce a more
advanced economic system among them. A great lord would have his
shoemaker and tailor, his saddler, swordsmith, etc.; and would have a
considerable number of women gathered in a sort of factory making
clothes. It is noteworthy, however, that the difficulties of transportation
were so great that for a long time to come it was not practicable to
concentrate the food supplies of a large group of manors in one place, and
the owner would have to go to the food instead of having it brought to him.
So we read of the kings and princes being always on the road, traveling
with court and retinue from one manor to another, eating up the surplus that
had accumulated and then moving on.
39. Common wares of commerce in the period of the manor.—
Absolute self-sufficiency was impossible; it was the ideal at which the
managers of the manor aimed, but there were few manors which could

supply all the necessaries of life. The list, however, of articles which had to
be procured by commerce with the outside world was small. Salt was one
item, of special importance as it was so difficult to keep live stock through
the winter, and the animals had to be killed and salted down. Iron was
necessary for various implements, though it was so expensive that it was
spared in every possible way. Other articles had to be bought as occasion
arose, stones for the mill or tar to keep the murrain from sheep. These wares
were essential to existence; by channels so obscure that they cannot now be
traced they reached the places where they were wanted, and were purchased
with part of the manor’s scanty surplus. Cattle and horses formed also, as is
natural, common objects of exchange.
40. The slave trade in Europe.—One ware which had long been an
object of commerce was of especial importance in the period just after the
fall of Rome, and, indeed, for some time later; this was slaves. The slave
trade extended over all Europe, and had great markets on the
Mediterranean, the North, and the Baltic seas. Merchants drove troops of
slaves in chains from one country to another, or exported them in lots of
100 or more. In the slave markets of the Baltic as many as 700 are said to
have been put up for sale at once. A number of English laws regulated the
slave trade of the time. It seems to have been largely confined to convicts,
but a law of Alfred provided that a father should not sell his daughter to
servitude among strange people. Later the English laws forbade the trade
entirely, but we read of Bristol merchants in the eleventh century who not
only bought slaves all over England for export to Ireland, but bred them as
well; and the trade persisted in various sections even later.
41. Distant commerce confined to rare luxuries.—Under conditions
such as these the term “foreign commerce” in its modern sense is
meaningless. The areas which now form the countries of Europe did not
specialize in the production of different wares, so that we can trace a regular
exchange of products between them. Most of the common wares of
commerce circulated inside a restricted area. Only the rich could afford to
pay for the transportation of wares over any distance, and they would spend
their money only for valuable luxuries. The dignitaries of the church, by
reason of their higher culture and connection with a universal organization,
created a demand for a few foreign wares, and the governing classes wanted
some things which could not be produced at home. Wines and spices were

brought up from southern Europe, along the river routes and over the passes
of the Alps, and furs were brought down from the North.
Distant sea voyages were still uncommon. An English law of about 900
provided that “if a merchant thrived so that he fared thrice over the wide sea
by his own vessel” he might be promoted to a higher social class; and later
laws refer to merchant ships again. The Scandinavians have left records of
adventurous voyages to the North and West, and a vast number of silver
coins found in Russia and the Baltic countries shows that a land trade with
southwestern Asia persisted in the period of which we treat. It is only
toward the close of this period, however, that we begin to get details about
distant commerce, and can see that it is firmly established. The Institutes of
London, issued in the eleventh century, and regulating the commerce of the
town, mention ships coming from Flanders, from Rouen and other places in
France, and from Germany. Foreign merchants bought wool and pigs, and
sold wine, furs, spices, gloves, and fish.
42. Character of the merchant in the early Middle Ages.—We know
even less of the person of the merchant, in this period (about 1000 a.d.),
than of the wares that he carried. It is certain, at any rate, that the merchant
was not the specialist that he afterwards became, but was a jack-of-all-
trades. He might be wholesaler and retailer, transporter and pedler, and
often an artisan too. Nothing like the country store of the present day
existed, and trade outside the few centers where markets had been
established was carried on by pedlers, who carried their wares on the back
or on a pack animal. Every merchant was sure to be something of a soldier,
as he was thrown largely on his own resources for self-defence; and he
often assumed the garb of a missionary or pilgrim to get the help of the
church in carrying on his trade. The pilgrim was exempt from many
burdens laid on the ordinary traveler or merchant, and though this
exemption had later to be abolished, because it was so frequently abused, it
seems to have been of great use in helping commerce through its early
stages.

QUESTIONS AND TOPICS

1. Modern France has, approximately, an area of 200,000 square miles.
Calculate the average size of the feudal state about the year 1000, and
compare it with the county in which you live.

2. Can you suggest anything in cow-boy life on the plains of the West
reminding you of feudal conditions, when the State was weak?
3. What district, known to you, has the least commerce with the outside
world?
4. How does the yield of wheat, as given in the text, compare with the
yield in different parts of the U. S.? [See Abstract of the United States
Census.]
5. Show why the lack of commerce requires small groups of people to
produce everything for themselves, and why this self-sufficiency involves a
low standard of living.
6. How does commerce remedy the waste and want which are
characteristic of self-sufficiency? Why cannot people plan to produce just
enough food?
7. Report on the wares and workmen collected on the estates of a great
king. [Falkner, Statistical documents of the Middle Ages, Philadelphia,
1896, 10 cents, pp. 2-5.]
8. Name some wares, important in the stock of even the smallest country
store, which did not appear in commerce in the period of the manor. Show
the necessity of each one of the wares mentioned in the text.
9. Why could a profitable commerce in slaves be carried on when other
wares did not pay the merchant?
10. What are the luxuries which a trader now can afford to pack into the
uncivilized districts of Africa and America?

BIBLIOGRAPHY

References on the rise and character of feudalism may be found in many
manuals of European history; among others Emerton, Introduction, 236;
Mediæval Europe, 477; Robinson, Middle Ages, 119. Brief accounts,
mainly for the student of political history, may be found in the above, in
Adams, European Hist., 185-191; and in the same author’s *Civilization,
chap. 9. The best account of the feudal system in English is Seignobos,
**Feudal regime, N. Y., Holt, 1903.
Most of the books describing conditions in this period treat them either
from the political or the agrarian standpoint; the writer knows nothing,
suitable for student’s reading, discussing the origins of commerce at this

time. See, therefore, Cunningham, Growth, vol. 1, book 1, or the smaller
manuals on English economic history.

CHAPTER VI

TOWN TRADE

43. Significance of towns in the economic organization; decline of the
Roman towns.—In the latter part of the Middle Ages, beginning after the
year 1000, a striking change took place in the life of Europe; the people
advanced so rapidly in their economic and political organization that we can
make this a new era in their history. It will be necessary to notice the
important changes in detail, but we can summarize them now, from the
economic standpoint, by saying that people advanced from the stage of the
village or manor to that of the town. A town, as the word will be used here,
means a group of at least several hundred, perhaps several thousand people,
settled closely together, and maintaining themselves in large part by
manufactures and trade. Such towns had existed, as noted above, in the
Roman Empire of the West. In Roman Gaul (modern France) there were
over one hundred of them. They depended for their existence, however, on
the stimulus of Roman culture, and on the security which good government
could afford to their trade. A manufacturing class evidently could not eat the
wares it made, and needed the chance to exchange them for food products
from the country districts if it was to maintain itself. In the period before,
during, and after the German invasions the chance for exchange grew
steadily less, as we have seen. Some of the towns were entirely destroyed in
the period of disorder which followed the fall of the Roman government.
London, for instance, which had been a flourishing town under Roman rule,
must have become a mere heap of rubbish, for when it was rebuilt in later
times no attempt was made to follow the lines of the old streets, and new
streets were laid out over the ruins of former houses. When a town was not
actually destroyed it ceased to live; the inhabitants had to take to agriculture
to support themselves, and the town shrank to a mere village, which could
not be distinguished from the manors about it. Of more than 500 modern
French cities scarcely 80 can be traced back to the Roman period, and all of
these lost their identity as towns and became simple villages in the
intervening time.
44. Rise of towns after 1000; conditions determining their location.—
We read of towns in Europe before the year 1000 but they scarcely deserve

the name; they were rather the germs from which towns were later to
spring. Considerable numbers of people would collect in the place where
some great feudal lord spent most of his time, or where a monastery had
been founded; garrisons would be established at places suitable for military
operations. We must regard such groups, however, as supported by taxation
rather than by the trade of individuals, from which most urban groups arise.
Trade of this kind became, however, so considerable after the year 1000 that
real towns grew up in constantly increasing numbers. Their position was
determined by two important conditions of existence, political protection
and the chance for profitable trade. People found the former by nestling
under the walls of some castle or monastery; the many French towns which
bear the name of some saint show how much the protection of the church
was prized. The latter object was generally attained by founding the town at
some break in a line of transportation, where goods had to be transshipped
and where merchants would naturally congregate to rest and exchange their
wares (cf. Ox-ford, Cam-bridge, etc.). We find the most considerable towns,
therefore, along the seacoast and rivers, and at breaks or intersections of the
land routes.
45. Development of manufacturing in the towns.—The rise of the
towns brought with it, as has been suggested, a new era in manufactures. In
the ordinary village it did not pay men to specialize in the production of
wares, as the market was so small. A shoemaker, for instance, could not
make a living by selling 50 or 100 pairs of shoes a year. If we think,
however, of a village growing into a town surrounded by a considerable
country population, we see that the market has widened into an area of size
sufficient to support a number of specialists. Manufacturing became a
profession to which men devoted most of their time. A man could learn his
trade much more thoroughly, and could afford to make the tools which
would enable him to exercise it most efficiently. The result was an increase
in production which enabled the people on a given area to live far more
comfortably than they had done before.
46. Effect of the towns in improving the conditions in the country.—
This movement was bound to change the conditions of life in the country
districts. The people there were freed from the necessity of devoting part of
their time to work which they never did well; they could apply most of their
energy to agriculture, and could use the surplus crop which they thus
obtained, for a profitable exchange with the artisans of the town. The

growth of towns affected them in another way. In the purely manorial
period a serf could not better his condition by running away; he had
nowhere to go except to other manors like the one he had left, where his
condition might actually be worse than before. In the towns, however,
practically all the population were free; the artisans were numerous and
intelligent enough to provide for their own protection, and did not need to
subject themselves to a lord. The towns were islands of freedom in a sea of
serfdom or of half-freedom. The custom established itself that a serf who
could escape from his lord, and who lived a year and a day within the walls
of a town, became a free man, and could not be reduced to his former
position. Landlords found that they must bid against the attractions of the
town if they were to keep the laborers in the country, and agreed to lighten
their burdens if they would stay. Many influences worked together, and the
results were modified by many factors, especially of a political kind, in
various countries, but the upward movement of the country population was
general throughout western Europe. Free men produced more than serfs,
and this was another influence increasing the surplus of the country
districts, and furthering trade thereby.
47. The “foreign” trade of this period was that between towns, even
in the same country.—The student who has begun the history of
commerce with the notion, as common as it is erroneous, that the foreign
trade of a country is more important than its internal trade, and who is
impatient to arrive at the description of this foreign trade, will be
disappointed to learn that even in the latter part of the Middle Ages it
scarcely existed in the modern sense. We mean now by foreign trade that
between states—between the United States and Germany, for example. In
the manorial period, as has been suggested, foreign trade was rather that
which existed between manors. In the period under discussion it was that
which existed between towns. The towns existing inside the boundaries of a
modern European country did not, it is true, differ as much among
themselves, in their products, as they differed, taking them altogether, from
the towns of another country. But the expense of transportation restricted
most trade still to a comparatively small radius, and the town, rather than
the country, was the natural trading unit. The radius of profitable trade, for
most articles, was so small that an English town would have its most
important commercial relations with the other English towns rather than
with the towns of foreign countries. The town, moreover, was the unit for

regulating trade. Each town would have its own customs tariff, and to a
merchant of London it made little difference whether he traded with
Southampton or with Paris; national regulation was less important than
municipal. Climatic and historical influences, it is true, made a clearly
marked distinction between the great sections of Europe, the North and the
South, the East and the West, and we shall have to take up some of these
sections in detail; but we shall use our time most effectively by spending it
not on the features of trade in the different modern countries considered
separately, but on the characteristics of trade common to all the advanced
countries.
48. Small size of the medieval towns.—A point deserving special
emphasis in the description of the medieval town is this, that though the
town comprised practically all the mercantile and manufacturing population
of a country, and though it marked a tremendous advance over the village,
yet the town was a very small affair when measured by modern standards.
In England in the thirteenth and fourteenth centuries the average size of the
first class of towns was probably below 5,000 inhabitants; few had more
than 10,000 and many had less than 1,000. On the Continent, in the last
centuries of the Middle Ages, even celebrated cities like Nuremberg and
Strassburg had not over 20,000 inhabitants. Frankfort on the Main had
scarcely 10,000, and other cities which played a great part in economic and
political history had even less.
49. Rural characteristics of the towns.—Another misconception must
be guarded against. Though the town was a distinctly industrial group in
comparison with the village, yet each town had grown from a village, and
retained many features of its agricultural infancy even to a late period. Most
of the townspeople owned some land which they used for garden plots, and
every town had considerable amounts of arable and pasture land outside the
walls which was used for the benefit of the townspeople if not actually
worked by them. In Coblentz, in the thirteenth century, work on the city
walls was stopped during harvest by lack of labor, and in London at the
same period people were allowed to keep pigs “within their houses,” and
the attempt to keep vagrant swine off the streets was a distinct failure.
50. General description of a town.—There were generally a few streets
that were broad and straight, as they were the old highways on which the
town had grown up. The attempt was made to keep these clear of
encroaching houses and shops by sending a horseman through them once a

year with a spear held horizontally, and by forcing the removal of
obstructions. Most of the streets, however, had grown up from village by-
paths and were narrow and crooked. They were rarely paved, and as they
served as the repository for all kinds of offal and garbage we can
understand why the townspeople wore wooden overshoes when they went
out, and even the saints in the pictures were painted with them on. The
houses were of wood in the early period, and there were no chimneys, so
that fires were frequent and disastrous until they forced people to a better
mode of building. Travelers in Europe now remark upon the picturesque
beauty of the old houses, and upon the merits of their construction, but it
should be noted that most of these relics date from the very end of the
Middle Ages and that they were the select few of their time, and give no
indication of the character of the average house. Most of the people lived in
narrow quarters, dark and drafty, unsuited for good work places and
unwholesome as habitations. Wares were exposed for sale either in the open
market-places which are so common in European towns, or in little shops
like pedlers’ booths at the front of the house. The municipal government
spent little or nothing for public works or police protection; it tried to make
the inhabitants share in performing all absolutely necessary duties, but
succeeded so ill that all the towns were sinks of disease, and breach of the
peace was a constant occurrence.
51. Improvement in conditions in the later Middle Ages.—In the early
period of the towns, say before 1300, conditions were distinctly worse than
they were in the last two centuries of the Middle Ages, when commerce had
attained such development that it brought great wealth to some and
comparative comfort to many among the city people. The town of
Colchester, in England, ranked as one of importance in 1295, but a tax roll
of that date shows a striking poverty in the stock in trade assessed for
taxation, in the small value of household furniture, in the insignificant
amount of most of the assessments, and in the preponderance of rural
wealth like live-stock and agricultural produce over other kinds of personal
property. In the fourteenth century, however, the population of the town
doubled, and in the fourteenth and fifteenth centuries the towns of England
in general freed themselves from the worst features of medieval squalor,
accumulated wealth, and expended large sums in building and
improvements.

52. Town organization. The merchant gilds.—Much more might be
said about the general characteristics of the medieval town, but the student
of the history of commerce must devote most of his time to its economic
life. He must prepare himself to accept and understand conditions quite
different from those of modern times, and must try to realize how much the
world has gained by the advance of the commercial organization from these
early stages. In every town the merchants and manufacturers were
organized in gilds and subject to strict regulation. The Anglo-Saxon word
gild means “a contribution to a common fund,” and came to be applied to
the society itself. Societies had existed in the first part of the Middle Ages
with social and religious objects, and about the eleventh century, with the
springing up of trade, commercial gilds became more and more common. It
is supposed that the dangers and difficulties of trade were then so great that
merchants united in bands for a journey, as caravans are now formed in the
unsettled countries of the East. A collection of early gild rules shows that
the members were subject to regulations like the following: Every one was
obliged to carry armor, a bow and twelve arrows on penalty of a fine; they
must stand by and help each other when they set out for a journey; in case
one member had not sold his wares the others must wait one day for him; if
one was imprisoned or lost his wares on the road the others must ransom
him. The organization was probably temporary at first, and the company of
merchants dissolved at the end of the trip; but as such caravans became
more regular at any place there grew the tendency to permanence of
organization. These merchant gilds were at first also private associations,
formed voluntarily by the merchants to protect themselves; but they
received public recognition and became a part of the town government as
the town saw the advantage it could get from them in pushing its trade and
protecting it against the efforts of rivals. They included not only
professional merchants, but all who bought and sold, including many
artisans. Of the nine members who belonged to the Shrewsbury merchant
gild in its earliest period two were fishermen and one was a butcher.
53. Position of the merchant gilds; their privilege of monopoly.—
These merchant gilds did not exist in all parts of Europe, and differed much
from each other in the various regions where they did exist. In England,
which we shall choose to illustrate their operation, they became regular
parts of the town government. They were granted one most important
privilege, the exclusive right of trading within the town. “Foreigners,”

which meant at this period the people from any other town, whether English
or not, were allowed to bring their wares to the town and to sell them
wholesale, but they were forbidden to purchase wares which the
townspeople wanted for themselves, and they were not allowed to keep
shops and to sell retail. The gilds were not like modern “trusts,” for, in the
first place, their membership was very broad, and, in the second, they were
associations of men, not of capital, and there was no division of profits
among the members. There was a strong feeling of solidarity among the
members, however, and competition between them was discouraged. In
some places there was a law that if a gildsman made a bargain for any ware
another gildsman had the right to share in it if he gave security that he could
pay for the portion he desired.
54. Development of manufactures in the towns; the common
handicrafts.—The growth of towns led, as has been said, to a
specialization in manufactures which was impossible before. All the
industries that had been carried on in villages were continued in towns by
professional craftsmen, and new ones were added as the demand for them
grew. There were from a dozen to a score of handicrafts which supported
for centuries the staple manufacturing groups of the towns: butchers,
bakers, brewers, blacksmiths, goldsmiths, coppersmiths, masons,
carpenters, cabinet-makers, wheelwrights, skinners or furriers, tanners,
shoemakers, saddlers and harness-makers, weavers, dyers, fullers, and
tailors. Most of these terms will be familiar to the reader. Coppersmiths
took the place of the modern tinsmiths before the introduction of tinned
iron. Fullers improved the texture of cloth after it had been woven, by
beating and washing it with fuller’s earth, a clay which absorbs the grease
from the wool; the cloth loses in length and breadth but gains in body and
thickness.
55. The craft gilds.—The craftsmen, like the traders, were organized in
gilds, which followed shortly after the rise of merchant gilds. The general
reason for their existence was the desire on the part of members of a
particular craft to be free to regulate their professional affairs as they
pleased, and the willingness on the part of the public authorities to grant
them this privilege when it seemed to promise better work and better
products for the consumer. To insure efficient regulation the grant of
monopoly was necessary, and accordingly no one was allowed to practise a
craft who did not belong to the appropriate gild. We shall see that the

monopoly was greatly abused in later times and was a serious hindrance to
the development of manufacturing. At the start, however, the craft gilds
were liberal; they desired a large number of members to increase their
political importance, and admitted them freely; inside the gild the class
distinctions were at first unimportant. “The regulations drawn up by the
crafts aimed at the prevention of fraud, and the observance of certain
standards of size and quality in the wares produced. Articles made in
violation of these rules were called ‘false,’ just as clipped or counterfeit
coin was ‘false money.’ For such ‘false work’ the makers were punished by
fines (one half going to the craft, the other half to the town funds), and,
upon the third or fourth offence, by expulsion from the trade. Penalties were
provided, as far as possible, for every sort of deceitful device; such as
putting better wares at the top of a bale than below, moistening groceries so
as to make them heavier, selling second-hand furs for new, soldering
together broken swords, selling sheep leather for doe leather, and many
other like tricks.”
56. Town policy; imports, exports, protection.—Every town felt a
community of interests among its inhabitants and a competition with the
inhabitants of other towns, which expressed themselves in a town policy
very like the national commercial policy of the modern state. We can
consider this municipal policy under several different heads.
(1) Every town had what may be called a “revenue tariff,” consisting of
duties levied on articles brought within the walls, with additional dues for
the use of the market. As an example we can cite a brief extract from one of
the London tariffs, giving the customs on victuals. “Every load of poultry
that comes upon horse, shall pay three farthings, the franchise excepted.... If
a man or woman brings any manner of poultry upon horse, and lets it touch
the ground, such person shall pay for stallage three farthings. And if a man
carries it upon his back and places it upon the ground, he shall pay one half-
penny, of whatever franchise he may be.” It is interesting to note that this
custom still survives in some European cities (octroi).
(2) Prohibitions to export goods, now rare in national policy (though
suggested recently to keep English coal at home), were common in the town
policy, when the supply of necessaries was small. “No butcher, or wife of a
butcher, shall sell tallow or lard to a strange person for carrying to the parts
beyond sea; by reason of the great dearness and scarcity that has been

thereof in the City of late.” “No person shall carry corn or malt out of the
City, under penalty of forfeiture.”
(3) The modern idea of protection was applied by the towns in a number
of different ways. Bread from one part of London could not be sold in
another part, which formed a separate jurisdiction. The protection at this
period was attained more commonly, however, by aiming it against persons
rather than wares; the merchant always accompanied his wares at this
period, so it was easy to discriminate against “foreigners,” by making them
pay special dues from which members “of the franchise,” i.e., townspeople,
were excepted, and by restricting their chances for profit. Reference has
been made above to the monopoly of retail trade reserved to townspeople
and designed to protect the “home market.”
57. The market and its regulations.—(4) The market was an institution
used in this period to regulate trade for the benefit of the townspeople; the
name is applied now especially to meat shops simply because regulations
were imposed on butchers after other dealers were freed from them. The
townspeople were afraid that traders bringing provisions for sale could
impose on their needs and force higher prices by making separate individual
bargains. Therefore they required the country people to bring their
provisions to a certain place (market-place) at a certain time, that they
might have the benefit of competition among sellers; and tried to force the
traders to sell out their stock before the close of the market. That all the
townspeople might have an equal chance they were forbidden to buy goods
on their way to market (“forestalling”); to buy larger amounts than they
needed (“engrossing”); and to buy goods for retailing before the ordinary
consumers had supplied their needs (“regrating”). After the close of the
market the town shop-keepers looked after the needs of retail trade.
Ignorance and distrust were still so powerful in the town period that
merchants were subject to constant supervision; they had to employ
officials to weigh and measure for them, and could not employ brokers to
hunt up customers unless the agents were also officials acting under oath.
58. Attempts to regulate prices. The assize of bread.—The town
government went even so far as to set the prices at which wares must be
sold. We are familiar, nowadays, with instances of the regulation of prices
by public authority, as in the case of hack fares. Such instances, however,
are now exceptional, while in the Middle Ages innumerable attempts at
public regulation, covering practically all wares, were made at different

times and places. Most of them were soon given up, because they defeated
their own object; when the price was set too low the ware was no longer
offered, and people suffered more by going without than by paying the
higher price. Thus it was found unwise to set a price for a necessary like
wheat; and high wheat prices were allowed to work their own cure by the
inducement they offered to an increase in supply. It was as hopeless to set a
fixed price for bread, but the government determined that at least the baker
should not make improper profits from the necessities of his customers. It
established, therefore, the “assize of bread,” a sliding-scale which fixed the
weight or the price of a loaf according to the market price of wheat, and so
restricted the power of the baker to raise his charges unduly. The same
system was applied to ale, and assizes of this kind have lasted down to the
nineteenth century in some countries.

QUESTIONS AND TOPICS

1. Show what would happen to our modern cities if there were an
interruption of commerce, either physical (perhaps the giving out of coal) or
political (wars, strikes attended with violence, etc.).
2. Study the effect on a modern city of such a brief interruption as a great
blizzard.
3. Find the reasons for the rise and growth of the following: London,
York, Paris, St. Omer, Lille, St. Denis, Lyons, Bruges, St. Cloud. [Use a
geography and the encyclopedia.]
4. Starting from the statements in the text, that in a manor of 100
inhabitants the only specialists were perhaps miller and smith, try to think
of specialists who would appear as the group grew in size to 1,000; to
10,000; to 100,000; to 1,000,000. For example, when would the following
appear: watch-maker, artificial limb-maker, shoe-maker, saddler? [The
business directory of a city may supply helpful suggestions.]
5. How has the growth of cities in the U. S. affected the agriculture of the
surrounding districts and the welfare of the farmers?
6. Compare the size of medieval towns with that of towns and villages
familiar to you, and try to realize the conditions if all the larger cities were
swept off the map. [See Abstract of the Census of U. S. giving the
population of all places having 2,500 or more inhabitants, arranged by
States.]

7. (a) Make a list of the ten or fifteen largest towns in modern England.
[Statesman’s Year-Book, index, England, cities and towns.] (b) Compare
this with a list of towns in early times and discover what large towns are of
recent origin. [Cheyney, English towns, pp. 35-39. Beware of the large
figures of population, p. 38; they are misleading.]
8. Write a report on the economic and social life of a medieval town. [See
M. D. Harris, Life, or the original local customs in Cheyney, English towns,
pp. 2-6.]
9. Write a similar report on the merchant gilds. [Harris, Life, chap. 7;
Cheyney, English towns, pp. 12-20.]
10. Reviewing the list of trades in the text, try to realize how the people
managed in the manorial period, when professional specialists in these
trades were lacking.
11. Study the list of craft gilds in York, 1415; find from dictionary and
encyclopædia the meaning of each trade mentioned; arrange them in
classes, as for example: food, clothing, building utensils, personal service,
etc. [Cheyney, English towns, pp. 29-32.]
12. Write a report on the town artisans and the craft gilds. [Harris, Life,
chap. 13; Cheyney, English towns, pp. 21-29.]
13. Compare medieval and modern ideas on the regulation of trade.
[Farrer, The State in its relation to trade, N. Y., Macmillan, 1902, $1.]

BIBLIOGRAPHY

Gross, Sources, §§ 24a, 72.
General.—For the significance of towns in the development of the
industrial organization the student may be referred to two important books,
differing in details: Schmoller, Merc. system; Bücher, Indust. evolution.
Chapters on the rise of towns and town life will be found in Adams, *Civ.;
Emerton, Med. Eur.; Robinson, Middle Ages; Munro, Hist.; etc. Greater
emphasis is, of course, laid on the economic (including commercial) aspects
of town life in **Ashley and *Cunningham. Jessopp, *Coming, gives a
vivid picture of urban and rural life of the period. Mary D. Harris, **Life in
an old English town (Coventry), London, 1898 (N. Y., Macmillan, $1.75),
should be very useful to student and teacher. Green, **English Towns, is
valuable and interesting for the English towns of the fifteenth century.

Sources.—Cheyney, **English towns and gilds, Penn. Translations,
Phila., 1895, $.20, gives an excellent selection, which can be used to
advantage with advanced students.

CHAPTER VII

LAND TRADE

59. Roads neglected, or left to benevolent associations.—The
maintenance of the roads was still left to local authorities. We find in the
court records of manors that the people reported stretches of road which
were in bad condition, and ordered that they should be repaired under
penalty of fine; but a road had to be very bad before it attracted attention,
and received little care at best. The clergy were the leaders in maintaining
the roads, for their estates were scattered and they felt the need of
transportation as none other but merchants did. Pious persons also devoted
themselves to this object, as a meritorious work like visiting the sick or
caring for the poor; they formed associations to keep roads in repair, and
left bequests to allow the work to be carried on after their death. The Alpine
hospices, which are so familiar to visitors in Switzerland now, were
established by religious orders to help travelers and merchants on their way.
60. Difficulties of transportation by road.—A feudal lawyer
distinguished in theory five kinds of roads: the path, the wagon road of
eight feet, the road of sixteen feet, the highway of thirty-two feet, and the
Roman roads of sixty-four feet. There was nothing in reality to correspond
to this distinction. The Roman roads were still in use, but they were too
much worn and too few in number to raise the general level of
transportation. When an English king wanted to transport provisions to
Scotland about 1300, he required four horses, or, in the northern counties,
eight oxen to a wagon. Transportation by wagon was so difficult that pack
animals were still in general use and travelers nearly always went on
horseback, both men and women riding astride, and twenty miles being
considered a fair day’s journey. The town of Bristol was granted a county
court in 1373 to save the townspeople the journey to Gloucester, “distant
thirty miles of road, deep, especially in winter time, and dangerous to
passengers.” At the very end of this period (1499) a glover traveling to
market at Aylesbury was drowned with his horse in a pit which a miller had
dug to get clay from the road. A court acquitted the miller on the ground
that he had no malicious intent, and really did not know of any other place
where he could get the kind of clay he wanted.

61. Lack of bridges.—Bridges were still rare. Those which the Romans
had built fell into ruins; they were rebuilt in wood, or replaced by bridges of
boats, by simple ferries, or by mere fords. Complaint was made to the
English Parliament in 1376 that nobody was bound to maintain the bridge
over the Trent near Nottingham; the bridge was “ruinous,” and “oftentimes
have several persons been drowned, as well horsemen, as carts, man and
harness”: Parliament refused authority to keep the bridge in repair. A large
number of towns had grown up on rivers, as is shown, for instance, by the
number of English town names ending in -ford, -bridge, -ferry; and the
difficulty and danger of crossing the streams were serious obstacles to trade.
Pious and public-spirited people took up the work which the government
was still unable to undertake, and devoted their time and money to the
construction and repair of bridges; the church assisted by the grant of
indulgences (remitting church punishments for sins) to those who
contributed. Even now the religious character of some of the European
bridges is attested by the chapels built on or near them.
62. Advantages of river transportation.—The difficulties of land
transport led to the use of river navigation wherever it was practicable. It is
said that the flow of many European rivers was more full in the Middle
Ages than it is now, and though the course was apt to be obstructed by mill
dams and fish-weirs, and little was done to preserve the channel, merchants
could transport by rivers bulky articles which would not have paid for their
carriage on land. A single boat, it is estimated, carried as much as 500 pack
animals would take, and it often paid to go far out of the shortest way to a
market to follow navigable water. It was cheaper, for instance, to bring salt
from Lüneburg to Brandenburg by way of Lübeck and Stettin, though the
direct land route was of course far shorter.
63. Danger of violence on the road.—The physical difficulties of travel
were accompanied by danger of violence of which people nowadays have
little conception. The church attempted to secure the safety of merchants,
and cooperated with the political authorities in maintaining the “Peace of
God,” and in repressing disorder. The feudal system had developed into a
more efficient system of government in its later period, and something like
the modern state rose from it before the close of the Middle Ages. But in
spite of all efforts highway robbery and violence were regular and normal
occurrences, even in the more advanced countries. In many parts of Europe
merchants still traveled in temporary bands or “caravans,” for better

protection, and students going to college in England were encouraged to
carry arms on the journey.
64. Complicity of feudal lords in robbery.—The King of France tried
in vain, in the thirteenth century, to make feudal lords responsible for
crimes committed in their territories. The lords were often accomplices in
the crimes; the King himself was not always above suspicion; and even
dignitaries of the church or heroes of the crusades turned highway robbers
on occasion. An indication of the conditions is given by a complaint of the
English House of Commons in 1348. “Whereas it is notoriously known
throughout all the shires of England that robbers, thieves, and other
malefactors on foot and on horseback, go and ride on the highway through
all the land in divers places, committing larcenies and robberies; may it
please our lord the king to charge the nobility of the land that none such be
maintained by them, privately nor openly; but that they help to arrest and
take such bad fellows.” A century before, two merchants from the continent
had been robbed in Hampshire; the culprits were arrested, but could not be
convicted for a long time; finally more than sixty persons were executed for
complicity in this and similar crimes, the number including many men of
position, numerous royal officials and some even of the king’s household.
Shakespeare’s story of Prince Hal’s exploits on the road may not be true,
but it is not at all improbable.
65. Tolls imposed by feudal authorities.—It would be a great mistake to
suppose that the merchant’s expense comprised only the sums necessary to
transport his goods over bad roads and to protect himself against robbers. In
addition every merchant had to pay the feudal tolls: tolls for the repair of a
road which was not kept up, and tolls for protection which he had to furnish
himself. Feudal lords were everywhere, and every feudal lord tried to make
money out of the movement of men and goods. As early as the time of
Charlemagne (809) we find the central government attempting to keep the
ways of commerce open. Charlemagne forbade the compelling of travelers
to use bridges when there were short-cuts, or the building of bridges in dry
places to extort passage money from travelers, or the stretching of ropes
across streams to force ships to pay for the right of passage with money or
wares. The attempt was vain. The power of the central government fell into
the hands of local lords, and was exercised by them without regard to any
but selfish and local interests.

66. Variety and number of tolls.—The variety of feudal tolls is almost
inconceivable. Attempts by scholars to classify them as we should modern
fees and taxes are useless, because no principle underlay the system. A
French scholar has made a list of seventeen different kinds of tolls, but this
is rough and incomplete. We can say in general that tolls were levied
everywhere and on everything. Even a jongleur, the equivalent to the
modern organ-grinder, could not pass the gates of Paris without making his
monkey show off to pay his own way. A man had to pay toll not only when
he went over a bridge; he had to pay a toll when he went under it, and could
not escape the toll by going around it.

Places at which tolls were levied are marked by a line across the river, or, when many were levied at
one place, by lines drawn near the river. The tolls as shown were established at different times
down to the seventeenth century, and affected different wares; so that a merchant did not have to
pay all of them at any time. The map of the Hudson is inserted as a help in estimating distances.

In the thirteenth century there were on one side of the Rhone four toll-
stations on a stretch of little over thirty miles. In the fourteenth century
there were 74 tolls on the Loire, from Roanne to Nantes; 12 on the Allier;
10 on the Sarth; 60 on the Rhone and Saone; 70 on the Garonne or on the

land-routes between la Reole and Narbonne; 9 on the Seine between the
Grand Pont of Paris and the Roche-Guyon. There were 13 toll-stations on
the Rhine between Mainz and Cologne. In a few hours’ walk around
Nuremberg one passed 10 stations.
The traveler abroad, whose route follows the line of medieval trade, is
struck with the number of feudal castles which he passes. He admires the
picturesque ruins, perhaps, without realizing that each castle was once a toll
station and without reflecting that the Hudson shows a higher stage of
civilization than the Rhine.
67. Abuses of the tolls.—The burden of the tolls was aggravated by the
fact, already suggested, that the merchant got nothing in return except the
right to look out for himself. The merchants were forced to associate to do
what the river lords neglected: keep up the tow-paths, drag the river-bed,
build warehouses and wharves. The merchant might pay a lord for a safe-
conduct which was supposed to assure him protection in a certain territory,
and then be robbed by the lord himself.
According to the feudal theory exemption from tolls must be granted in
certain cases. Supplies for the army and navy, for the king and higher
officials, for churches, hospitals, and monasteries, should pay no toll.
Scholars at the universities enjoyed in theory an immunity which they could
not secure in fact. The merchant, however, was always regarded as fair prey,
and wares of commerce which were supposed to be exempt, as in France,
for instance, wares on their way to Lyons fair, enjoyed only partial
immunity. A sixteenth-century French writer instances as an example of the
oppression of tolls the case of a merchant who shipped to the East some
cloth that was wet on the voyage and had to be sent back to Paris to be
redyed; all along the road in France the tolls had to be paid over again. The
collectors levied toll even on grain that was being taken to mill, on cattle
that were to be used as plow animals, on agricultural implements and
manure.
68. Development of the toll system.—With the growth of commerce the
toll-stations of course increased in value; and the practice grew up of
leasing them to contractors, who paid a high sum for the privilege and had
to devise, an old author tells us, “ten thousand new and unusual tyrannies,
frauds and exactions” to make any profit for themselves. Many kept
taverns, and managed to detain the merchant for days on various pretexts,
such as absence of the proper official. Some made the merchant pay to be

relieved of the necessity of having his wares unpacked and weighed and
measured in detail. Many kept the tariff secret, and extorted what they could
on every occasion. Some lived far from the highway, and some put their
offices by design on impracticable roads, and fined the merchants heavily
who went by another route.
On some routes, as along the middle Rhine, Bingen to Coblenz, it was
almost impossible for commerce to be carried on except along the river, and
very heavy tolls could be levied here without danger of the merchants
escaping; but under other conditions the collectors established wings, as
they were called, secondary offices on the side-roads to prevent evasion of
the toll. Some collectors established regular pools, to use the modern term
applied to railroad combination; twenty-five or thirty of them, representing
perhaps five or six separate toll-areas, associated and agreed upon their
rates; then they pooled and divided their profits.
69. Constraint of trade by tolls.—The establishment of toll-stations put
an artificial constraint on trade, which kept it in the paths most convenient
for the collectors, not most suitable to the merchants. Lords would not
allow new and better roads to be built, for fear that profits on the old roads
would be impaired. The compulsion to follow certain routes (German
Strassenzwang) became a serious evil as commerce developed and sought
new openings; and the loss to the public was far greater than any gain by
the toll receiver.
Peculiarly noxious customs clustered around the rights which feudal
lords claimed for themselves in the period when the central government was
powerless. The right to a wrecked ship, which had once been the
prerogative of the king, could be distorted so that the whole cargo of a
Regensburg ship was confiscated in 1396 because a single little cask had
fallen off into the Danube. It was an accepted rule in Germany that if a
wagon broke down so that the axle touched the ground it became a part of
the land and belonged to the lord of the territory; break-downs must have
been frequent, in view of the wretched condition of the roads, and it has
been suggested that lords sought to cause them by traps and pitfalls.
70. Burden of the tolls on trade.—The most evident effect of the tolls
was the additional cost of transportation which must be paid, of course, by
the consumer. The price of a ware might rise, within a comparatively short
distance, so much that it could not be sold at all. It has been estimated that
in the fourteenth century the Rhine tolls merely on the stretch between

Bingen and Coblenz amounted to two thirds of the value of the wares. Even
in the fifteenth century, and after some reform had been effected in the
French tolls, the price of goods was doubled by carriage from Nantes to
Orleans on the Loire or from Honfleur to Paris on the Seine.
Besides the loss of money there was the loss of time; a merchant might
arrive at his destination too late to find a market for his wares, or might find
that they had deteriorated on the road. The monks of Beauvais took three
pennyworths from each horse load that passed by, and on fast days they
spent so much time in selecting their fish that the rest of the load spoiled
before it reached Paris.

QUESTIONS AND TOPICS

1. Make a study of the roads in your own State, noting (a) the extent of
good and of bad roads, (b) the effect on transportation, (c) the system under
which the roads are maintained, (d) organized attempts at improvement.
Study the system of New Jersey and its effects. [Documents aiding in this
study may be obtained from the Department of Agriculture, Washington,
and probably from the government of your own State—apply to State
Librarian for information.]
2. To what extent is river navigation practised in your State? Was it not
more important before the introduction of railways?
3. Estimate the distance between the points named in the text, sect. 62, by
land and by water.
4. Have we had in the U. S. in recent times any similar dangers of
violence in transportation? [Read the history of gold-mining in California,
in H. H. Bancroft or other available books.]
5. Robber knights in medieval Germany. [Baring-Gould, Story, chap. 22.]
6. Read the first part of Shakespeare, Henry IV, about the exploits of
Prince Hal and Falstaff on the highway.
7. What would be the effect on trade in your State if tolls were levied on
the border of every county, or even inside the counties?
8. Using a good map find from the scale of miles the length of one of the
stretches mentioned in sect. 66 (for example, Mainz to Cologne), and insert
the toll stations; then transfer this, changing the scale if necessary, to some
road or railroad entering the place where you live.

9. Modern railroad officials are sometimes called “robber barons.”
Assuming the truth of charges made against them, discuss the
appropriateness of the term, indicating points of likeness and of difference
with respect to medieval nobles.
10. Compare medieval and modern compulsion in the choice of routes.
What is alleged to be the attitude of transcontinental railroads to the
construction of the Panama Canal?
11. Using the method suggested in sect. 66 apply the statements in sect.
70 to conditions at home, and show how much medieval tolls would add to
the present low charges of transportation.

BIBLIOGRAPHY

By far the best reference that can be given is Jusserand, **English
wayfaring life. If a library containing older books is available much of
interest will be found in Smiles, *Lives of the engineers, London, 1862, vol.
1. A good study will be found also in the Economic Review, vol. 7, July,
1897: Alice Law, English towns and roads in the thirteenth century.

CHAPTER VIII

FAIRS

71. Fairs; the reason for their existence.—The foregoing description of
medieval commerce will have shown that trade was far less extensive than
it is now, and will suggest the reason for one of the characteristic trading
institutions of the time—the fairs.
Every person with wares to sell seeks a purchaser who desires those
particular wares and who will give him in exchange something that he
himself desires. Nowadays, for instance, a farmer brings his country
products to the city, seeks out a produce merchant who will give him money
for it, makes his purchases at the dry goods store with the money, and
returns contented; he has exchanged his surplus for what he lacks. If there is
no special store where he can sell his produce he must seek out buyers by
going around to the separate houses, and if there is no general store where
he can make his purchases he must again hunt up the individuals who make
or sell what he desires. Where exchange is still relatively rare it may be a
very troublesome process to find the buyers and sellers of particular wares,
and the following device has almost always been adopted to meet the
difficulty; people who desire to trade agree to meet at a certain time and
place, so that there will be every chance that buyer and seller will find each
other and secure that coincidence of supply and demand which exchange
implies. The current of trade is dammed for a time as it were; then allowed
to flow in much greater volume for a little while, then dammed again.
72. Comparison of fairs with markets and modern exchanges.—Even
now the old custom of “market days” persists in some places, and once it
was universal; townspeople and country people agreed on a certain day, and
met in the market-place then to exchange their wares. A fair is the same
kind of institution as a market, and grew up for similar reasons, but it
represented a further step of development, for it attracted buyers and sellers
from a far greater area, and served the needs of wholesale as well as retail
trade. The fair is, of course, much less advanced than the modern exchanges
(stock and produce), from the fact that it was intermittent instead of being
continuous, as well as for other reasons; but in the Middle Ages it was the

means by which commerce grew strong, and the prosperity of commerce
could be measured by the prosperity of fairs.
The fairs always attracted people for social as well as business purposes;
life in the Middle Ages would be regarded as insufferably dull at the present
time, and both townspeople and country people enjoyed the excitement
which the fair brought with it. There were “side-shows” in plenty, then;
wild animals, trained dogs, and monstrosities, poets and musicians, actors
and clowns, dancing and gambling halls; and there was a good opportunity
to turn a penny dishonestly as well as honestly. The court roll of the English
fairs of St. Ives tells us of a defendant who was caught selling a ring of
brass for 51⁄2d., saying “that the ring was of the purest gold, and that he and
a one-eyed man found it on the last Sunday in the Church of St. Ives, near
the Cross.”
73. Privileges of merchants trading at a fair.—The fair ordinarily grew
up under the protection of some feudal lord, secular or ecclesiastical, who
endeavored in every way to further its growth that he might increase his
revenue from the taxes he imposed on it. The lord of a fair endeavored to
attract merchants by guaranteeing them protection on their way, and there
were many cases in which the lord took up the cause of merchants of his
fair who had been robbed or maltreated by others, and forced restitution.
Furthermore, he endeavored to secure exemption from tolls for wares on the
way to his fair, and sometimes merchants on their way to a fair were freed
from the attachment of the person for debt. Inside the fair a freedom of
trade was allowed which was unusual at the time, and various special
privileges were granted the merchants. The most important of these was a
special court in which cases of breach of contract and the like could be
tried. It was called the Court of Pie Powder (Pie, French pied, foot; curia
pedis pulverizati, court of dusty foot) from the dusty feet of the merchants,
or, as some said, because justice was done as speedily as dust would fall
from the foot. At any rate this court did give a rough and ready means of
settling commercial disputes by referring them to a committee of traders,
which was highly prized because commercial law was still in its infancy,
and no justice could be looked for in a manorial or a feudal court.
74. Great fairs in Europe. The fairs of Champagne.—It would be
possible to give a long list of fairs, for every country of Europe had them in
varying number at different times. The oldest was probably that of St. Denis
at Paris, which may have been founded (as its patrons alleged) in the

seventh century, and which was certainly in active operation long before the
time of Charlemagne. In a later period another Paris fair, that of St.
Germain, became more important, and later still the fairs in the French
province of Champagne became the most flourishing in Europe. The
prosperity of these fairs was due in part to their geographical position,
which made them a natural trade center and distributing point when
commerce on land was more important than that on sea, but still more,
apparently, to the good government and wise policy of the Counts of
Champagne. The Counts gave sufficient protection both at home and
abroad, maintained regular and reasonable dues, and did everything to
stimulate the confidence of the merchant class. They got an enviable
reputation by their strictness in forcing the proper execution of contracts
made at the fairs, and took such precautions to assure the payment of debts
contracted there that some merchants (or bankers) went to the fairs simply
to loan money.

Most of the traffic of the Champagne fairs went North and South, by way of Flanders and of Italy.
Merchants from Normandy ascended the river Oise to its junction with the land route. The route of
German merchants is unknown, but most of them probably went by way of Bruges.

75. Trade at the Champagne fairs; other continental fairs.—In the
thirteenth century, the period of their greatest prosperity, six fairs were held
at different places in Champagne, of which Troyes and Provins, southeast of
Paris, were the most important. Each lasted over six weeks, and, following
in rotation, they supplied an almost continuous market. Here one might find
all the wares which formed the objects of commerce in Europe; textiles of
silk, wool, and linen; minor manufactures and jewelry; drugs and spices;
raw materials like salt and metals; leather, skins, and furs; foods and drinks,
live stock and slaves. The bulk of the trading was done by merchants from
various parts of France and Flanders (modern Belgium) and by Italians who
came up over the Alpine passes; there were also Germans and Spanish, and,
in less number, English, Dutch, and Swiss. Wares came from more distant
countries, Scandinavia and the eastern Mediterranean, but changed hands
on the way.
The fairs declined as heavier dues were imposed, and especially when
Champagne was brought directly under the French king, about 1300; wars
diverted the merchants from Champagne to Flanders, and the growth of sea-
trade favored this same movement. The Champagne fairs dwindled to
insignificance, and their place was taken by the fairs of Bruges and
Cologne, of Frankfurt on the Main, Geneva, and Lyons.
76. English fairs.—England was near the circumference of trade in this
period, instead of being at the center as it now is, and its commerce was not
so highly developed as that of some of the Continental countries. The
English fairs, therefore, were of less importance, and in most cases did not
attract merchants from distant countries. The largest English fair was
Stourbridge Fair held about a mile from Cambridge, in an excellent position
for trade with the low countries across the Channel, and for the distribution
of goods through the thickly populated districts of England. Another great
English fair was that of Winchester, held each year for sixteen days,
beginning on August 31st. “The hill-top was quickly covered with streets of
wooden shops; in one the merchants from Flanders, in another those of
Caen or some other Norman town, in another the merchants from Bristol.
Here were placed the goldsmiths in a row, and there the drapers; while
around the whole was a wooden palisade with guarded entrance,—

precautions which did not always prevent enterprising adventurers from
escaping payment of toll by digging a way in for themselves under the
wall.... All trade was compulsorily suspended at Winchester, and within a
‘seven-league circuit,’ guards being stationed at outlying posts, on bridges
and other places of passage, to see that the monopoly was not infringed. At
Southhampton, outside the circuit, nothing was to be sold during the fair-
time but victuals, and even the very craftsmen of Winchester were bound to
transfer themselves to the hill and there carry on their occupation during the
fair. There was a graduated scale of tolls and duties; all merchants of
London, Winchester, or Wallingford who entered during the first week were
free from entrance tolls; after that date newcomers paid tolls, except the
members of the merchant gild of Winchester.”

QUESTIONS AND TOPICS

1. Following the reasons given in sect. 71 to explain the rise of fairs,
show why they have declined in recent times. What effect will the extension
of railroads and the development of trade between Asia and Europe have
upon the fairs of Nijni Novgorod?
2. Set down all the points of likeness and of difference, so far as they
occur to you, of: market, fair, produce or stock exchange.
3. Study the history of fairs in your own State. Did the “county fair” once
have more economic importance than it has now?
4. Does a modern stock-exchange seek to attract customers by offering
guarantees of special security, as in the case of fairs? [Study the rules of the
exchange, and the pains taken to secure honesty and solvency of members.]
5. Study, on a good map, the advantages of location (transportation by
land and water, nearness to advanced commercial people) of the
Champagne towns; of their successors in commercial importance.
6. Indicate on a sketch map of England the position of medieval fairs.
[See the index of Cunningham or Ashley]
7. Write a report on English fairs in the Middle Ages [same reference.]
8. Write a report on one of the following topics:
(a) The great fairs of Europe. [Horne, Harper’s Magazine, vol. 46, p.
376.]
(b) The fair of Nijni Novgorod. [T. Child, Harper’s Magazine, vol. 79, p.
670.]

(c) Kentucky fairs. [James Lane Allen, Harper’s Magazine, vol. 79, p.
553.]

BIBLIOGRAPHY

Gross, Sources, has no separate section on fairs, but includes a number of
books on them, to be found by consulting the index. A bibliography will be
found also in the article **Fairs, by John Macdonald, in the Encyc. Brit.;
this article can be heartily recommended to teacher and student. For modern
fairs see Poole’ s Index of Periodical Lit. Bourne, Romance of trade,
devotes chap. 3 to fairs.

CHAPTER IX

SEA TRADE

77. Rise of sea commerce. The Scandinavians.—We might suppose, in
view of the difficulties and dangers of travel on land, that the trade of
Europe would have been forced to the sea during the feudal period. In the
last two centuries of the Middle Ages there was, in fact, a growth of
maritime commerce which prepared the way for the great discoveries and
the oceanic period of modern commerce. Before this period, however, the
means of navigation were still so slight that regular and extended commerce
on the sea was the exception rather than the rule.
In Northern Europe the Scandinavians were the leaders in the
development of navigation. We get an idea of the ships that they used from
one which was discovered a few years ago in a burial mound in southern
Norway, where it had been preserved since the ninth century, it is supposed.
It is an open boat, clinker built, and fashioned to go in either direction; it is
about 75 feet long, and has places for 15 oars on each side, but no
arrangement for a sail. Similar boats, with the addition of a rudder and
hutch at each end, are still used in the Lofoten Islands. They are well suited
to carry passengers along the coast, but have small cargo capacity, and, of
course, are unfit for long sea voyages. The Scandinavian Vikings, indeed,
used them mainly for raiding and piracy, and in them harried for centuries
the coasts of western Europe, with a recklessness which accorded with their
warlike character. A chronicle speaks of Danes who were tossed about for
nearly a month before they made their landing in England. Along with these
war vessels the Scandinavians must have had some cargo-ships, the details
of which are unknown to us; a modern writer conceives them to have been
clumsy and slow, “tub-shaped, round-bowed, and flat-bottomed.” Sailing
ships were certainly used from a very early period.
78. Development of shipping in Northern Europe.—The Bayeux
tapestry, which pictures the events of the conquest of England by the
Normans in 1066, shows what was substantially the Viking type of vessel to
have been used in that expedition; the boats were undecked, and several
foundered at anchor before starting. A modern writer thinks that few were
over 30 tons in size, and that none carried over 40 or 50 men. About two

centuries later the seals of Sandwich and Dover show a ship still undecked,
but provided with a rudder working over the side, fighting platforms at bow
and stern, and a mast with a crow’s-nest at the top. It is doubtful how far we
can trust representations such as these on the tapestry and seal, which were
often executed by persons unfamiliar with the object and were sure to be
conventional. We can, if we choose, follow the statements in the chronicles,
which would make the ships much larger, holding a hundred men or even
several hundred; the chronicles are notorious, however, for the constant
exaggeration in matters of statistics, and the truth lies probably somewhere
in between our two sources of information. Down to the fifteenth century
the single mast with the square sail was the usual rig. Some vessels,
however, carried two masts, one near the center and one toward the bow,
and could spread six sails. For shorter trips and for the coasting trade
smaller boats were used, sometimes propelled only by oars.
79. Development of shipping in the Mediterranean.—Navigation
developed more rapidly in the Mediterranean, especially after the beginning
of the Crusades, than in northern Europe. It is hard to believe the statements
according to which the Mediterranean ships carried 1,000 or even 1,500
pilgrims, after all allowance is made for the crowding which would be
permitted at this time, but the Mediterranean ships undoubtedly surpassed
others in size and equipment. Venice presented to France in 1268 some
ships which measured 110 by 40 feet, which were 111⁄2 feet deep in the hold
and had a height between decks of 61⁄2 feet. These ships carried a
complement of over 100 men, and must have measured 400 or 500 tons,
while English ships of the period rarely exceeded 50 or 100. Mediterranean
shipping regulations of about this date show advanced ideas concerning the
construction, the equipment, and the loading of ships; all ships were
inspected and none could sail which did not comply with the regulations.
The ship-builders of the Mediterranean ports retained the type of the
classical galley, depending mainly upon oars for its propulsion. The hull
was much longer than in the northern type of sailing ships and did not rise
far above the water; both characteristics depended on the need of placing
the oarsmen where they could work to advantage. The three square sails
were a comparatively late improvement on the earlier rig, which consisted
ordinarily of one sail; a fair wind was utilized for helping the boat on its
course, but the chief reliance was placed on the oars.

80. Backwardness of the art of navigation.—The control of a ship is as
important as its construction, if it is to serve commerce, and the growth of
maritime commerce in the last centuries of the Middle Ages was due as
much to improvements in the art of navigation as to superior ship building.
During the early Middle Ages, as in ancient times, ship captains took their
lives in their hands when they ventured out of sight of a familiar coast. The
only means they had for determining their position at sea was “dead-
reckoning,” i.e., estimating the distance that they had traveled from a
known point, and the course that they had steered; and to know their course
they had to rely upon the stars, which of course were obscured in stormy
weather, when their help was most wanted. It was customary, on voyages in
the open sea, to sail due north or south to the parallel of the destination,
then to turn at right angles and sail due east or west; errors in the course of
8 or even 10 degrees were not uncommon. The means of fixing the course
in any weather, the mariner’s compass, which was discovered by the
Chinese, and is supposed to have been known to the Arabs at this time, was
still unknown in Europe.
81. Introduction of the compass, and of navigators’ directories.—The
first documentary evidence of acquaintance with the compass in the West
dates from a little before 1200; and within fifty years we find it mentioned
in nearly a dozen different places, both in the North and South of Europe. It
has been suggested that Mediterranean sailors may have been the first to
learn of the compass, from the Arabs, but that they could not use it in its
early form of a magnetized needle floated on water by a rush or cork,
because of the choppy seas; later the needle was balanced, as at present, on
a point. In 1300 the compass was in general use. It is possible to exaggerate
its importance as a cause of the great maritime explorations; for without it
the Northmen had made their distant expeditions to the North and West, and
with it the Portuguese crept along the west coast of Africa only slowly and
timidly for a considerable period. As a means to regular navigation,
however, it was indispensable; and the great extension of commercial
voyages in the last two centuries of the Middle Ages is inconceivable
without it. Medieval types of “sailing directions” now came into use; these
were manuals telling the sailor about the coast, the tides, the bottom, and
other features of the route he was to traverse. One of them, written probably
before 1400, covered the whole West of Europe from Spain to the mouth of
the Finnish gulf, enabling the mariner who was provided with a compass

(used for determining the time of tides) to navigate the coast with a fair
degree of safety.
82. Limits of early trading voyages.—Maritime voyages were made to
suit the conditions of the time. In the first part of the period under
discussion (say before 1300), they were attempted only for short distances
and in the part of the year when severe storms were rare. “To sail after
Martinmas (November 11) is to tempt God,” writes an old chronicler; and
in the early days of the Hanseatic League there was a regulation by which
ships were not to sail after November 11, and were to be in port if possible
before that time. Some time afterwards an amendment was adopted which
allowed ships laden with beer, herrings, or dried cod to sail as late as
December 6, because the cargo was perishable or was needed for the Lenten
market. The extent of the voyage was at first short. The sailors of Bordeaux
would go as far as the coast of Brittany and Normandy; the Normans would
go as far as England and Flanders; and so the chain of voyages was kept up.
83. Medieval seaports; contrast with modern.—Vessels were so small
that they needed no great depth of water in their harbors, and could ascend
rivers for a considerable distance. So the English town of Bawtry, lying on
the little river Idle, which flows into the Trent, which flows into the
Humber, which flows into the North Sea, was called in an official document
“the port of Bawtry”; and the town of York, situated on the river Ouse,
another branch of the Humber, claimed the right to share in wrecks at sea,
as though it were on the seaboard. Ports of this kind were actually preferred
to those on the coast which form the great harbors of modern times, for they
gave access to the interior markets without the expense of land
transportation, and they offered better security not only against tempests but
also against pirates. Towns like Rouen on the Seine, Nantes on the Loire,
Bordeaux on the Garonne, Narbonne and Aigues Mortes (“Dead waters”),
on lagoons of the Mediterranean coast, were the great French ports of the
early period.
84. Decline of medieval seaports in later times.—Occasionally a
medieval port would keep its importance later; from the list above we can
select Bordeaux, and there are a number of other examples in Europe—
London, Antwerp, and Hamburg, for instance. Often, however, the port was
superseded by another on the same river but nearer the sea; the trade of
Rouen went to Havre; the trade of the Humber river system has gone to
Hull; the commerce of Bremen has gone to Bremerhafen. The town of

Bruges, in Flanders (modern Belgium), once the most important port in
Europe, is situated at a distance of seven miles from the sea, and this might
be seven hundred as far as its present oceanic commerce is concerned. Its
trade has been taken by seaports giving easy access to large vessels; in the
same way the trade of Narbonne and Aigues Mortes has passed to
Marseilles.
85. Development of maritime commerce; persistence of medieval
ideas.—After about 1300 the distances covered by sea voyages grew much
greater. Galleys were sailed and rowed from Venice all the way to Bruges,
and met there vessels from the far North and East of Europe; English sailors
traded regularly with southern France, Spain, and the Scandinavian
countries. The expense of transportation by sea, however, was still great.
The price of spices was in Bruges two or three fold what it was in Venice;
and English wool transported to Florence sold there for two to twelve times
as much as it brought at home. It is hard for us, in modern times, to realize
such facts, but the student should note them carefully, for they go far toward
explaining the slight development of commerce even in the latter part of the
Middle Ages.
The high cost of transportation is itself a fact demanding explanation.
Inefficient ship-building and navigation would account for it in large part,
but other factors are still to be considered. These distant voyages were
carried on in the face not only of real dangers serious enough, but also of
far greater dangers imagined by ignorant and credulous men. An English
chronicler says that in 1406, when English ships were going to Bordeaux,
they entered an unfrequented sea, and four vessels from Lynn were
engulfed in a whirlpool which swallowed up the flood and vomited it forth
again three times a day. The Arabian Nights have been called sober and
realistic in comparison with the ideas held by the medieval mariner of the
wonders and dangers of the unknown parts of the world.
86. Piracy.—At sea, as on land, the merchant faced dangers of violence
which were probably as serious an obstacle to the growth of commerce as
the physical difficulties of navigation. Ships went always armed, and sailed
when possible in fleets for better protection. Sometimes one that had
ventured out alone could beat off its enemies, as in the case of a trading ship
from Stralsund which was attacked in 1391 but won a complete victory, and
brought back (it is said) 100 pirates, packed in casks with only the heads
sticking out, for a bloody punishment. Pirates came from every source. An

ordinary merchantman would turn pirate if it met a weaker vessel from
some town which was so far distant or so weak that reprisals need not be
feared. A mariner of Winchelsea in England, who had seized and plundered
a vessel owned by Dorsetshire merchants, became mayor of Winchelsea a
few years later, and in the fifteenth century a Canterbury abbot was
convicted of plundering a wine ship and was forced to make restitution.
Even ships sent out by the public authorities for protection against pirates
attacked and plundered ships not only of other nationalities but of their own
too. Six ships which had been organized in 1316 to protect Berwick from
freebooters harried the English coast to the south, and the fleet of the
Cinque Ports (five towns on the English Channel), used its spare time in
preying on English commerce and attacking English towns.
87. Organized piracy; privateering.—Piracy became a regular
profession, in which partners organized for greater efficiency. The “Victual
Brothers” formed an organization, modeled after that of the Knights
Templars, for carrying on piracy; their motto was “God’s friend and all the
world’s enemy.” They had a stronghold at Gotland, in the Baltic Sea, and
were long a terror to traders and fishermen; their power was broken in 1394
only by a fleet of thirty-five ships sent against them. A fleet of Venetian
galleys on their way north were attacked off Lisbon in 1485 by a piratical
expedition of six ships, which killed and wounded over four hundred men
and took enormous booty; it is said that the discoverer Christopher
Columbus was one of the corsairs. War at sea was carried on even more
barbarously than war on land. Crews and passengers of captured merchant
vessels, whether taken after resistance or not, were frequently tossed
overboard, sometimes with their hands tied behind their backs, or were
hung to the yards, or murdered on the deck in cold blood.
An appearance of legitimacy was given to the attack on merchant vessels
in time of war; “letters of marque” were not considered necessary to justify
attacks by private vessels against merchant vessels of the enemy, and as war
was the rule rather than the exception in Europe privateering was nearly
constant. During the Hundred Years’ War between England and France, in
spite of booms and chains, watches and beacons, almost every town on the
south coast of England was sacked and burnt by French privateers. Even at
London the streets which opened on the river were defended by chains, to
hinder a landing within the city, and the people thought of building high

stone towers on both sides of the river, with a chain stretched between them,
to defend the shipping from night attacks.

QUESTIONS AND TOPICS

1. Ships and exploits of the Vikings. [Beazley, Prince Henry, chap. 2; C.
F. Keary, The Vikings in western Christendom, N. Y., 1891, chaps. 5, 6, 9.]
2. In connection with the small vessels of the early Middle Ages the
reader is reminded of the exploits of various “captains” of the present day
who cross the ocean alone, and he might profitably hunt up a description of
one of the boats employed and compare it with the description in the text. A
ton is 100 cubic feet of internal volume.
3. If the reader lives at a trading port he should ascertain the tonnage and
rig of the vessels ordinarily employed, and thus prepare himself to
understand the conditions of medieval navigation.
4. Compare the medieval galley with the ancient galley described in
classical histories. [Beware of pictures given in the text-books; many are
pure products of the imagination.]
5. Write a report on the history of the compass. [Encyclopædia
Britannica; consult Poole’s Index for articles in recent periodicals.]
6. Measure distances in sect. 82, and apply them to the sea- or lake-coast
of the U. S.
7. Indicate on an outline map of Europe the position of the ports named,
in sect. 82, using the conventional signs of death (†) and birth (*) to show
those that declined and those that gained in importance.
8. Write a report on the credulity of early sailors. [Voyages of Sinbad the
Sailor in the Arabian Nights, a popular romance of the Indian trade in the
ninth century; Voyages of Sir John de Mandeville, N. Y., Macmillan, 1900,
$1.50; Selections in Cassell’s Library, paper, $.10.]
9. What is the difference between a government war-vessel, a privateer,
and a pirate? [Dictionary and encyclopedia, or some manual of international
law.]

BIBLIOGRAPHY

Articles and bibliographies by *Clowes in Traill’s Social England; John
Fiske, *Discovery of America; Alice Law, Notes on English medieval

shipping, in the Economic Review, 1898, vol. 8; Cornewall-Jones, The
British merchant service; Lindsay, History, vol. 2.

CHAPTER X

THE LEVANT TRADE

88. Wares of the Levant trade. Slaves.—The “colonial products” of the
modern world (tea, coffee, spices, etc.) have familiarized us with a class of
wares which cannot be produced at home and are imported from distant
countries. In the commerce of medieval Europe there were wares like these
which could not be produced near the place where they were to be
consumed, because of the severe climate, or the lack of technical skill, and
yet which were eagerly desired by the upper classes. These wares were
obtained from Asia, and formed the basis for an Oriental trade which was
one of the most important branches of medieval commerce. There was one
ware of Oriental trade in which there was a reciprocal exchange; this was
slaves. Slaves were exported from Europe to the great market at Cairo in
Egypt, and were imported from western Asia and Africa. At the very end of
the fifteenth century there were said to be 3,000 slaves in the single city of
Venice. Most of the wares, however, flowed in only one direction; and to
give an idea of the character and importance of the trade we shall preface
our narrative of its development by a description of the chief products
imported into Europe.
89. Spices.—Among the raw materials a very important place was taken
by spices, the product of tropical plants and trees which thrive only in a few
parts of the world even now. The food of the common people in the Middle
Ages would seem intolerably coarse and monotonous to a modern laborer,
on whose table appear regularly products from all parts of the world; and
even the diet of the rich needed a great deal of condiment if it was to be
palatable. A staple import, then, was pepper, the berry of a vine growing in
India and in the islands of Asia, which was used in Europe by all who could
afford the luxury of a seasoning. For common use the price was prohibitive.
Cloves, from the Molucca Islands, were even more expensive, costing two
and three times as much as pepper; they were used for seasoning food and
drink, and also as medicine. Cinnamon, nutmegs, and mace served similar
purpose, and ginger took a place among medieval luxuries of this kind
second only to pepper.

90. Drugs; perfumes; sugar.—Beside the spices which were employed
in medicine by medieval apothecaries many wares were imported which
served solely or mainly for drugs. Among them were rhubarb, aloes,
balsam, borax, gum tragacanth, gum benzoin, cubebs, cardamoms,
camphor, etc.
Sugar belongs in this list of wares, on the border-line between medicines
and table delicacies. It was far too costly to be an article of common
consumption, and the gift of a small piece of loaf sugar implied far more
devotion than would be evidenced now by a present of the finest
confectionery. It found its main employment in medicine, therefore, and
though it was used in increasing quantities for sweetening food and drink
and for preserving, native honey was the medium commonly used.
91. Precious stones; preponderance in general of luxuries over
articles of general utility.—Another category of wares, which found a
ready market among the upper classes of medieval Europe was precious
stones. The part of Europe which now produces a considerable quantity of
these, the region of the Ural Mountains, was still unexplored; the source of
supply in the New World was of course unknown; and Europe looked
entirely to Asia and Egypt for its supply. Diamonds, emeralds, rubies,
sapphires, lapis lazuli, etc., were collected in various parts of the East,
passed through innumerable hands, and finally found a resting-place among
the jewels of some great lord or lady of the West. Pearls came from the
Indian Ocean, and ivory from Africa, through the hands of Asiatic traders.
Europe was able to make a return in kind from the Mediterranean coral
fisheries; the greater part of European coral was exported to meet the
demand in the East, being carried to Egypt by Spanish or Italian ships, and
distributed from there to India and China.
The reader who has followed thus far this category of eastern products
must be struck by the preponderance in it of costly luxuries over articles of
general consumption. The expenses of transportation over great distances
and through dangerous districts were, in fact, so great that most of the
Eastern wares had necessarily to comprise great value in a small bulk, and
sought their market only among the upper classes of Europe, who could
afford to pay well to gratify their desires.
92. Dyestuffs; alum.—Among the raw material brought from the East
there was only one important class of wares which served manufacturing
industries, the dyestuffs. Indigo (Greek, Indikon, Indian) came from the

East as its name implies, the chief staple for it being Bagdad. It gives a fast
and deep blue and had been imported in Europe even in ancient times; with
the revival of commerce after the Crusades it became again an article of
commerce, and was used constantly thereafter as a dyestuff, in spite of the
attempt to substitute for it the native woad, an herb of the mustard family.
Some of the red dyes were produced in Europe, notably madder, mentioned
in one of Charlemagne’s laws, and the scarlet or carmine obtained from the
kermes insect in Southern France and Spain. Both of these dyes were
imported to some extent, however, and another red dye which was an
important import was Brazil-wood. The name suggests an American origin,
but was given it in fact because its redness made it seem like glowing coals
(cf. English brazier), and the South American country received its name
later from the tree found growing in it. Brazil-wood was brought to Europe
in blocks and was then ground up for use in dyeing and painting. A common
yellow dye of the Middle Ages, saffron, was also imported when the best
quality was desired, and yellow arsenic (orpiment) was used as a pigment.
Lac (shellac) was used for a dye as well as for varnish. More important than
any of the separate dyes was alum, which came to be regarded as
indispensable for fixing the color when wool or silk had been dyed in the
piece. This was procured mainly in Asia Minor, and was one of the most
highly prized products of the eastern trade.
93. Other raw materials of industry.—In comparison with the dyes
most other raw materials of industry were unimportant as objects of trade.
Cotton (Arabic kotn) was imported both in its finished form and as a raw
material. The cotton manufacture in Europe had, of course, nothing like its
present importance, but it was already well established in Germany, where a
staple cloth was made out of a mixture of cotton and flax, and it required
more of the raw cotton than the plantations of southern Europe could
supply. Small amounts of flax were imported from Egypt, because of the
superior quality of the product.
Silk was, however, the only textile material which was a very important
ware in its raw form. The culture of the silkworm, which had been carried
on for centuries in China, but so far as possible had been kept a secret from
other peoples, spread gradually to the West and was introduced into Europe
by the Emperor Justinian in the sixth century. The Arabians introduced
mulberry plantations and the raising of silkworms into Sicily and Spain, and
the culture thrived so far as to leave a surplus for export after supplying the

home manufactures. Christian peoples, however, did not succeed so well in
the culture; France could as yet furnish no appreciable quantity of raw silk,
and the output in Italy was unsatisfactory both in respect to quality and
quantity. The growing silk manufacture in Europe had therefore to meet its
deficiency by trade with the East, getting part of its supply of raw material
from China and Persia, but the bulk from the countries about the Caspian
Sea.
94. Textile imports; exports from Europe.—Among manufactures
imported from the East textiles held the most important place. Europe was
strong enough in the manufacture of linen and woolen goods to export them
in considerable quantities to Asia, but it lacked in the manufacture of cotton
and silk not only raw material but the technical skill to compete with the
artisans of the East; and imported large quantities of finished cloth.
Dignitaries of the church and the merchant princes of the late Middle Ages
demanded for clothing and for furniture fabrics of finer quality and of
greater quantity than the looms established by the Mohammedans in Spain
and Sicily could supply, and sought them chiefly in the countries bordering
the eastern end of the Mediterranean. From this district came a great variety
of silks, woven often as brocades with gold or silver threads, and the early
types of velvet and satin. Silk goods formed the chief but not the sole
constituent of the textile imports; with them came fine cottons from India,
cloth made from the hair of camels and other animals, and linen from Egypt
and Syria, which surpassed all of western make. Europe depended also on
the East for fine china and glass.
Before the end of the Middle Ages the Italian silk manufacture had
grown strong enough to turn the tide, and to export to the East. Through the
greater part of this period, however, the only European textiles exported to
Asia were the woolens and common linens which were produced in
England, Flanders, and other of the more advanced countries. Besides these
manufactures the main exports consisted of raw materials: wool, hides,
metals (gold, silver, and tin), and food stuffs.
95. Revival of Oriental trade about 1000, under the leadership of
Italians.—As commerce with the East had lasted throughout the period of
Roman rule, and had cultivated tastes among rich Romans and provincials
which could only be satisfied by its continuance, we find evidence even in
the Dark Ages that it was still carried on. A document dated 716 shows that
the rich monastery of Corby in northern France received pepper, cloves, and

other spices from southern France; and Marseilles maintained its
commercial relations with the East. The trade in this period, however, was
carried on almost entirely by Syrians and Jews; the peoples of western
Europe had not yet learned to profit by active participation in it, and it had
sunk to comparative insignificance. The revival came about the year 1000
with the general awakening of economic life in Europe which had for its
most striking feature the growth of towns. As the possibilities for trade
became greater, and the demand for luxuries kept pace with them, the
eastern trade felt a powerful stimulus, and grew rapidly in importance. It
was now carried on mainly by the people who were destined to control it
until the great discoveries left them outside the path of progress,—the
Italians. A group of towns in the far south of the Italian peninsula, Bari,
Trani, Brindisi, and Taranto, took advantage of their nearness to the Levant
(the eastern end of the Mediterranean) to establish commercial relations
which returned large profits and developed into a considerable trade.
Another group of towns near the Bay of Naples, of which Amalfi was the
chief, shared in the profits of this trade, and still another town, standing
alone near the head of the Adriatic Sea, Venice, began already to assume the
commanding position in the Oriental trade which she was destined to make
good against all rivals.
96. Routes between Asia and Europe.—The main routes serving as the
paths of trade between Asia and Europe during the Middle Ages were three
in number. The central route, the oldest and for much of this period the most
important, began at the head of the Persian Gulf; after the foundation of
Bagdad near the site of ancient Babylon (about 750 a.d.) it found there its
first important stopping-place. Thence a caravan route led around and
through the desert to Damascus, where it branched off to the coast of
ancient Phœnicia in one direction, to Egypt in the other. Aside from partial
interruptions this route was used steadily until near the close of the Middle
Ages, when it was partially blocked and commerce was forced to the south.

TRADE ROUTES BETWEEN ASIA AND EUROPE
The map shows only the chief lines of trade, omitting side routes for the sake of clearness. See the
text, sect. 96, for description of the uses to which the routes were put.

The southern route, reaching Europe through Egypt, was mainly
maritime. It had to contend with two great difficulties: the great stretch of
open water presented by the Indian Ocean, and the difficulty of navigation
in the Red Sea, on the west coast of which strong north winds blow through
much of the year. The first of these difficulties became less serious in the
Christian era, as navigators learned to time their voyages to suit the
monsoons, the winds blowing at regular seasons in the Indian Ocean.
Vessels could leave an Egyptian port in July and reach India by the
southwest monsoon in little over two months. The second difficulty was
obviated by starting for the East not from the Gulf of Suez but from a point
part way down the coast (Berenice), reached by a trip on the Nile and by
caravan. This route became of greatest importance at the close of the
Middle Ages.

The third route, entirely overland, led from India across the mountains to
the River Oxus, where it was joined by a caravan route from China.
Branching near Bokhara, one part led to the Caspian Sea and up the Volga,
another left the Caspian to the north and reached Europe at the Black Sea
(Trebizond, Constantinople). This route traversed high mountain passes and
long desert stretches, and was suitable only for the carriage of valuable
articles of small bulk. For about two centuries after 1250 it was kept open
by the Mongols or Tartars, who lived on good terms with the Christians;
then it was blocked by the Turks.
97. Character of the crusades; number of crusaders.—To assign to
economic motives the chief part in the crusades would be a distortion of the
great movement which marked the life of Europe in the two centuries
following 1100. Not hope of gain but vague ideals of this life and the life to
come drove hundreds of thousands of men to the perilous journey to the
Holy Land from which so few returned. Indirectly commerce had its share
in this movement; it had drawn the peoples closer together, stimulated
curiosity and broadened interests. Men sought an outlet for their surplus
energy, and a relief from the monotony of medieval life; ascetic ideals
imposed upon them holy tasks which they could fulfil to the benefit of their
souls. The effect can be traced in an increase in the pilgrimages of
individuals to holy places. The people of Europe needed only organization
and a leader to unite their scattered forces; they found their organization in
the church, their leader in the Pope and his delegates, their goal in the
delivery of the Holy Sepulcher from the hands of the infidels who were
abusing Christian pilgrims.
Any estimate of the numbers who engaged in the crusades must be pure
guesswork. The statistics of medieval chronicles, always notoriously
inaccurate, seem to reach the acme of unreliability in the figures of the
crusaders engaged in the different expeditions. The main body of the first
crusade, which started in 1095, was compared in number with the sands of
the seashore or the stars in heaven; even moderate contemporaries made it
600,000 or at least 300,000 strong; perhaps it was really 100,000. There
were six or eight separate expeditions lasting down to 1270, and we may
say that a million men, roughly speaking, and probably many less rather
than more, took part.
98. Commercial aspect of the crusades.—Even the transportation of
this number of men, with their baggage and equipment, must have been a

great stimulus to the growth of Mediterranean shipping. The first crusade
went almost entirely by land, but the sufferings and losses were so great that
crusaders were driven to the sea route, and this became gradually the
regular way of reaching the Holy Land. Italian merchants accompanied the
expedition from the beginning, not as real crusaders but as contractors for
transportation and supplies, turning both the needs and the successes of the
crusaders to their commercial profit. A fleet from Genoa and Pisa
accompanied the first crusade along the coast of Syria, selling provisions.
The Venetians waited until Jerusalem had been taken; then fitted out a fleet
which fought the Pisans, quarreled with the Greeks, and in return for very
slight services rendered to the crusaders demanded that in every city
captured they should have a market, church, and freedom from taxes.
“Whilst the warriors of Christendom were fighting for glory, for kingdoms,
or for the tomb of Christ, the merchants of Venice fought for counting-
houses, stores, or commercial privileges.” “The other crusaders obeyed the
new impulse, the Venetians utilized it.”
The fourth crusade, starting soon after 1200, was fairly captured by the
Venetians and turned into a commercial expedition for their profit. When
the time for starting came, the feudal knights, improvident as ever, could
not pay the sum agreed on for their transportation, and Venice used her
power over them as debtors to force them to aid her, first to capture Zara on
the Adriatic, a Christian city but a commercial rival, then to take
Constantinople itself, the key to the trade of the Black Sea. The crusade
accomplished nothing against the infidels; it was merely a means by which
Venice built up her commercial and colonial empire at the expense of other
Christians.
99. Effect of the crusades on knowledge of the East and of eastern
wares.—Aside from the help which the crusades gave the Italians in
building up their fleets and in establishing trading posts or colonies in the
East, they were of no less importance in extending the market for eastern
wares in Europe. The crusaders lost their provincialism, and acquired new
fashions (shaving the beard and bathing); they became acquainted with fine
stuffs and dyes and were no longer satisfied with the coarse products of
home. The European vocabulary was not large enough to give names to the
new acquisitions, and we can trace back to this period many words which
were borrowed from Arabic, the common language of the Mohammedans:
alcove, sofa, mattress, talisman, elixir; many of commercial significance,

bazar, tariff, corvette, barracks. Not only the words but the things
themselves became native in many cases; the crusades spread in Europe the
cultivation of the lemon, apricot, watermelon, rice, and sugar cane.
European literature described the marvels of the Orient, the silks of Syria,
the tapestries of Persia, the precious stones and perfumes of Arabia; the
names of eastern countries became familiar and knowledge of geography
widened rapidly.

QUESTIONS AND TOPICS

1. Selecting any one among the more important wares, sects. 88-94, write
a report on its production, uses, value, and history as an article of
commerce. [Encyclopedia; commercial geographies; encyclopedias of
commerce and of manufactures, as those by McCulloch, Waterston,
Homans, Ure.]
2. Taking British India as a characteristic source for the Eastern wares,
contrast the exports then and now. [Statesman’s Year-Book, index, India,
exports.]
3. What seaports of those named in sect. 95 are still of importance?
[Statesman’s Year-Book, index, Italy, shipping.]
4. What evidences have the other ports left of their former greatness?
[Encyc.; *Baedeker’s guide-books.]
5. Which one of the three routes, sect. 96, is now the most important?
6. What railways have been constructed or proposed along the line of
ancient routes? [See a good atlas, and note the proposed railway from Asia
Minor through the Mesopotamian valley to the Persian gulf. What effect
may this railway have on the importance of Constantinople?]
7. Read a description of one of the ancient centers of trade in modern
times. [Consult books by modern travelers in south-western Asia.]
8. Where now can be found pilgrimages like those of the Christians to
Jerusalem? What is their commercial influence? [See Mecca in the
encyclopedia; and in Poole’s Index.]
9. How does the average number of crusaders going per year to Palestine
compare with the number of Americans going abroad?
10. Prepare, from descriptions in the current history manuals or from a
historical atlas (Droysen’s, for example), a map showing the route of each

crusade; number each route that the development of the sea-route may be
more apparent.
11. Show the development of Venice in the period of the crusades, by
comparing her commerce and power at the two dates limiting the period.
[References in next chapter.]

BIBLIOGRAPHY

Aside from the current manuals of the history of commerce very little has
appeared in English on the routes and wares of the Levant trade. Lincoln
Hutchinson, *Oriental trade and the rise of the Lombard Communes,
Quarterly Journal of Economics, 1901-2, 16: 413-432 (esp. 415-421), can
be recommended; and Cheyney, **Eur. background, has two excellent
chapters on the subject (Levant wares in chap. 1; routes in chap. 2).
The reader will have to rely largely on accounts of the crusades, in which
there are incidental references to commerce: Adams, *Civ.; Robinson (*
bibliography); Emerton, Med. Eur. (bibliog.); etc.

CHAPTER XI

COMMERCE OF SOUTHERN EUROPE

100. Position of Venice; early history.—The course of the eastern trade
can best be followed in connection with the fortunes of the city of Venice
which still shows, in the splendid palaces lining its canals, the evidence of
its former greatness.
The beginnings of the city are traced back to the period of barbarian
invasions when fugitives from the mainland sought shelter on the islands a
short distance from shore. The inhabitants, thus protected from the
unending wars of the feudal period, were at the same time forced to seek
their living on the sea, first as fishermen but more and more as merchants.
The Italian conquests of the Emperor Justinian (about 500 a.d.), brought
them into relations with Constantinople which were maintained by trade
and frequent embassies. Even before the year 1000 the Venetians had won a
secure position in Constantinople by an imperial charter which granted
them, among other privileges, freedom from the vexatious tolls and delays
imposed by subordinate customs officers. Still more important was a charter
of 1082, which granted lands and buildings in Constantinople for a special
Venetian quarter, which freed the Venetians from all taxes and at the same
time required their trade rivals, the Amalfitani, to pay taxes to them for the
right to trade.
101. Expansion of Venetian empire during the crusades.—Before the
crusades, therefore, Venice had a commanding position in the eastern trade.
It confirmed this position by a series of bitter struggles with its rivals,
especially the cities of Genoa and Pisa which were rising to great
prominence. These cities imperiled for a time Venetian control of the Black
Sea trade at Constantinople; but the outcome of the fourth crusade (1204),
was a victory for Venice which left her supremacy for the time
unquestioned.

THE VENETIAN EMPIRE

In the share taken by them in the partition of the Eastern Empire the
Venetians showed that common sense which is always found at the bottom
of all their actions. They left to the crusaders the inland provinces and took
for themselves the coast-towns and islands which promised the best
commercial returns and were easiest to defend. In Constantinople itself they
took a large part of the city, in which their podestat ruled almost as an
independent sovereign. At places commanding the all-important sea route to
the East, in the Peloponnesus or Morea, in Crete and in Eubœa, naval
stations were established under the control of officers sent out by the home
government. The strict rules by which these officers were governed gives an
insight into the discipline which existed in the Venetian foreign service. In
every place in which the Venetians founded a principality their capital was
surrounded by Italian colonies; there where one found formerly only nests
of pirates, the terror of Venetian commerce, one found now friendly ports,
refuges fortified and secure, where Venetian captains and merchants, certain
of a good reception, could ask asylum and protection.

102. Extent of Venetian commerce.—Thanks to the colonial empire
which they established the Venetians controlled the trade of the eastern
Mediterranean more efficiently than Great Britain has controlled the world
commerce of the nineteenth century; the field of operations was narrower,
and “trade followed the flag” in those early times as it has never done since.
Foreigners might trade if they would pay sufficiently for the privilege;
without this recognition of their inferiority they were public enemies to be
given short shrift.
Venice established her colonies or trading factories not only along the
shore of the eastern Mediterranean and the Black Sea; Venetian merchants
penetrated deep into Russia, and into Central Asia through the Crimea. So
bold were their enterprises that the home government, fearful for its
interests, passed a law to limit their extent. “Dalmatia, Albania, Romania,
Greece, Trebizond, Syria, Armenia, Egypt, Cyprus, Candia, Apulia, Sicily
and other countries, kingdoms and islands were the fruitful gardens, the
proud castles of our people, where they found again profit, pleasure,
security.” The old chronicler names but one side of the equation of trade;
the products from all these countries and from the far East behind them
were brought to Venice to be exchanged for the products of the West.
Martino da Canale says of an earlier period what must at any rate have been
true of his own (thirteenth century): “The Venetians went about the sea here
and there, and across the sea and in all places, and bought merchandise and
brought it to Venice from every side. Then there came to Venice Germans
and Bavarians, French and Lombards, Tuscans and Hungarians, and every
people that lives by merchandise, and they took it to their countries.”
103. Development of the institutions of commerce in Venice.—
Reference has been made in an earlier chapter to the Venetian regulations
on the building, rigging, and manning of ships, which anticipated by many
centuries similar legislation in the countries of northern Europe. The extent
of her commercial relations led Venice to a development of book-keeping
and banking which made her in these important branches the instructor of
Europe, to whom the sons of wealthy merchants in other countries were
sent to school. The reader will appreciate how great is the debt of other
countries to Italy when he reflects on the number of Italian words having to
do with commerce and banking which have become current in general
commercial use; among them are conto, conto corrente, porto, risico,
disconto, brutto, netto, deposito, folio, bilanza, etc.

104. Venetian commercial policy.—The Venetian commercial policy
may be described briefly as the maintenance of as strict a monopoly as
possible in the trade east of Italy, and the regulation of trade between Venice
and the North or West which would give the Venetians the greatest
advantage when they sold their Oriental wares to other Europeans. This
policy, as well as the material character of the commerce, can be studied in
connection with the two great branches of Venetian trade in Europe, the
overland commerce with Germany, and the sea commerce with
northwestern Europe.

TRADE ROUTES BETWEEN GERMANY AND ITALY
The different routes varied in importance at different periods, and some routes were used besides
those indicated on the map. The Brenner Pass was always of great importance to Venetian trade;
the St. Gothard Pass was not opened until the thirteenth century.

105. Overland trade with Germany.—As the Venetians were
essentially a sea-faring people, and as it was easier to reach the large cities
of central and southern Germany by land than by sea, they took the passive
part in their German trade, staying at home and allowing the Germans to
come to them for wares. The trip overland from central Germany took
roughly two weeks or a little less; trade letters of the fifteenth century were
a month or more on the way between Venice and Bruges. Different routes
were chosen according to the starting-point of the journey. The chief route
was that leading over the Brenner, one of the lowest of the great Alpine
passes, lying between Augsburg in Germany and Verona in Italy; but very
often the merchant struck off to the East before reaching Verona into the
valley of the Drave or the Brenta. Coming from the East, from Vienna, for
instance, the Semmering pass was commonly chosen.
106. Strict control over German merchants in Venice.—On reaching
Venice the merchant was put at once under strict supervision. He could not
choose his own lodgings, but must stay at the “Fondaco dei Tedeschi”
(German factory, using that word in its earlier sense of a trading post). This
was a building (in its later form a handsome palace now used as a
government office) which belonged to the city, and which served at once as
a hotel, a warehouse, and an office for controlling the trade. When a
merchant arrived he was disarmed and given a room; a careful list was
made of all his wares, which served as a basis for the government dues; and
an inspector was assigned to him. This inspector acted as an interpreter and
as a broker, helping the merchant make his bargains, but it would be a great
mistake to suppose that he was appointed mainly to serve the merchant’s
convenience; his main business was to “shadow” the merchant constantly,
to see that he broke none of the numerous regulations designed to assure to
the government its dues and to the Venetian people their profits. Germans
could bring to Venice only the wares of their own country and of
northeastern Europe, because the Venetians wanted to carry on themselves
the trade with Flanders; Germans could trade with no other foreigners in
Venice, and could not trade even among themselves, in order that the
Venetians might have the sole market; they must sell out their whole stock
in Venice, without the option of withdrawing part of it and carrying it
further. One is tempted to ask why the Germans came to Venice at all, to
submit to such severe restrictions. The answer is easy; they had no other

place to go to, for the wares they wanted. Thanks to her position and to her
skill in trade and war Venice had a monopoly of Oriental wares which
enabled her for some time to make what regulations she pleased without
fear of losing her customers.
107. Importance of the trade between Venice and Germany.—The
German trade in Venice amounted, according to an estimate of the fifteenth
century, to a million ducats a year, and the ducat of this period was worth
considerably more than the modern dollar. It supplied Germany with the
coveted eastern wares which we have already enumerated, and, moreover,
with some of the products of Venetian manufactures, which were then
highly developed and which were stimulated by protective tariffs. These
manufactures included glass, which is even now a specialty of the city, fine
textiles, weapons, paper, etc. The Venetian trade, on the other hand,
furnished to Germany a market for her metals (gold, silver, iron, copper,
lead, tin), furs, twine, rosaries, and manufactures of leather and horn, and
the coarser textiles.
108. Commerce by sea with northwestern Europe.—With the
countries west of Germany Venice carried on an “active” commerce; that is,
instead of waiting for foreigners to come to her she brought the wares to
them, as she could well do by the sea route. The crusade of 1204, to which
we have already referred as a turning-point in Venetian development, was
composed in large part of knights from northwestern Europe, and the
relations established then with Flanders, Champagne, and neighboring
districts, were continued by trade. The first reference to Venice discovered
in English documents is dated 1201, but before the close of the thirteenth
century a brisk commerce with England had grown up; at one time in the
reign of Edward I over 2,000 sacks of wool were found in the possession of
Italian trading companies. The trade followed at first the land route across
France, but soon took to the sea, and though the land traffic was never
wholly abandoned it became less important and was discouraged by special
dues.
109. Regulation of this commerce; the Flanders galleys.—Soon after
1300 the government took charge of this trade and regulated it on principles
which were followed for the two hundred years during which it remained
important. Separate voyages were, as a rule, prevented, and Venetian
merchants who wished to participate in the trade must join in the fleet of
“Flanders galleys” which sailed at intervals (usually once a year), as the

opportunity for trade seemed favorable. On these occasions the Venetian
senate voted a certain number of galleys for the voyage, and auctioned off
the right to freight them. Each galley was propelled by 180 oarsmen, and
carried for its protection a force of archers commanded by four young
patricians who were sent out that in this way they might see the world and
learn to serve their native city. The cargo was carried on the account of
private merchants, but the supreme control of the fleet was vested in a
captain appointed by the Venetian government, and bound to follow its
instructions. The voyage to Flanders and back occupied the greater part of a
year, as the galleys touched and traded at many ports along the way. The
route generally taken included the following stopping-places: Capo d’Istria
(Pola), Corfu, Otranto, Syracuse, Messina, Naples, Majorca, the principal
ports of Spain and Morocco, and Lisbon. In the English Channel the fleet
divided, some galleys going to Southampton or London, others to Sluys (the
port of Bruges, connected with it by a short canal), Middelburg, and
Antwerp. The chief objective was the city of Bruges, the great market
where the trade of northern Europe, in the hands of the Hanseatic
merchants, and the trade of southern Europe in the hands of the Venetians,
came together.
110. Development of other cities in Italy; freedom and vigor of their
policy.—Space forbids the consideration in detail of the history and policy
of other Italian cities, of which some rose to the first rank in commerce,
though none attained to the greatness of Venice. The lack of a central
government in the peninsula enabled each city to frame its policy solely
with an eye to its own interests. The Italian cities were able to free
themselves from the laws and customs that had been necessary in an earlier
time, but which lay like fetters on developing trade and industry. The city of
Florence, for instance, showed a liberality in its policy regarding land
tenure, industry, domestic and foreign commerce, which was strikingly
modern. The result was an extraordinarily rapid development in commerce,
manufacture and finance, but also, unfortunately, a jealous rivalry between
the cities, which expressed itself not only in commercial competition but
also in destructive wars.
111. Genoa.—Genoa, situated in a position corresponding to that of
Venice on the other side of the Italian peninsula, grew great like her in the
course of the crusades. In conflict with Pisa, which had become a
threatening commercial rival, Genoa was a complete victor by the naval

victory of Maloria in 1284. Against Venice the city was not so fortunate.
Genoa recovered in part from the blow dealt her by Venice in the fourth
crusade, when the Greek empire was re-established at Constantinople
(1261), and won some important naval victories in the constant succession
of wars culminating in the battle of Chioggia in 1380. The Genoese
managed always to secure a share of the Oriental trade; they helped to
establish the system of joint stock companies; and contributed to the
development of banking and public finance. They lacked, however, the
advantages of the Venetian situation, both as regarded their opportunity for
trade and their capacity for defence. They were drawn into the net of
continental politics, and as at home they had never shown the ability of the
Venetians to pacify or to crush rival factions, their force was wasted in
useless political conflicts.
112. Inland cities; Florence.—Besides the two great seaports of Venice
and Genoa other cities of northern Italy grew rich by industry and
commerce at this period, notably Milan. The chief commercial city in the
interior, however, was Florence in central Italy. Though Florence had no
seaport of its own until after 1400, when it overpowered Pisa and Leghorn,
it carried on an extensive commerce in its chief product, wool and silk
textiles. Great trading houses bought up the raw material through agents
settled in markets like Bruges, or traveling for years at a time, and sold the
finished product through a similar network of agencies. The amount of
manufacturing and commerce in the city stimulated the development of
banking institutions, and Florentine bankers gained not only a regal position
at home, but also a commanding voice in international politics.
113. Other Mediterranean cities; Marseilles, Barcelona.—On the
Mediterranean coast of France the only great port at this period was
Marseilles, which had developed rapidly in the course of the crusades. It
exported to Italy and the East French textiles (woolen and linen), wood,
metals, wine, oil, soap, etc.
In Spain the Arabs had developed the arts of civilization to a point which
was far above that of the contemporary Christian states. Toward the close of
the Middle Ages, however, the contest between them and the Christian
kings for the supremacy of the peninsula absorbed the best energies of both
parties, and caused an actual decline in material civilization. One city,
however, Barcelona, carried on a very extensive commerce, and was one of
the most important ports of the Mediterranean. Its inhabitants enjoyed

unusual freedom under the kings of Aragon and were reputed to be among
the best sailors of their time; they had trading stations along the coast of the
Mediterranean as far as Egypt and Syria, and as merchants or pirates
frequented the Grecian archipelago.

QUESTIONS AND TOPICS

1. Study: (a) the position of Venice in the Mediterranean; (b) the
peculiarities of the site of the city; and write a report on the influence of
these factors on the history of Venice in its different periods.
[Encyclopedia.]
2. Compare the policy pursued by Venice toward Amalfi in
Constantinople to the early policy of the Standard Oil Company. [See the
account of railroad rebates in accounts of the Standard Oil Company by
Lloyd or Tarbell.]
3. Compare the Venetian and the Athenian sea-empires in respect to (a)
extent, (b) duration, (c) policy. [See chapter 2, and for further information
on Venetian history see Brown.]
4. Make a map showing Venetian trade relations in the fifteenth century.
[Falkner, Statistical Documents, V.]
5. Summarize the account of commercial transactions at that period.
[Same.]
6. Write a report on the contributions of the Italians to book-keeping. [Cf.
Beckmann, Hist. of inventions, Bohn’s Library, vol. 1, pp. 1-5.]
7. Write a similar report on their contributions to banking. [Encyc.,
Palgrave’s Dict., or some history of banking.]
8. Write out the English equivalents of the Italian words in sect. 103.
9. What resemblance can you find between Venetian policy toward
Germans, and Boer policy toward English in the South African Republic?
[See one of the many accounts of conditions preceding the war in South
Africa.]
10. From the description in sect. 109 draw on an outline map the route of
the Flanders galleys.
11. Write a report on the political conditions in Italy in the last centuries
of the Middle Ages. [Current manuals of European history; Burckhardt,
Civilisation of the Renaissance, London, 1878.]
12. Write a report on the rivalry of Venice and Genoa. [Brown, Venice.]

13. Write a report on the chief periods in the history of Genoa.
[Encyclopedia.]
14. Study the history of the Medici family as showing the character of
commercial and political life in Florence. [Encyclopedia; various
biographies.]
15. Write a brief report on the commercial history of Marseilles or of
Barcelona. [Encyclopedia.]

BIBLIOGRAPHY

A bibliography of the history of Venice is given by Brown, pp. xix-xxiii.
A good brief survey of Venetian history, with a description of the modern
city and a map, will be found in the Encyc. Brit. The history in the Story of
the Nations series cannot be recommended. The best book for our purposes
is Horatio F. Brown, *Venice, N. Y., Putnam, 1893. The history of other
Italian cities is treated, with some attention to commerce, in Bella Duffy,
The Tuscan republics with Genoa, N. Y., Putnam, 1893.

CHAPTER XII

COMMERCE OF NORTHERN EUROPE

114. Development of commerce in South and North.—Medieval
commerce reached its highest development on opposite sides of the
continent of Europe, in the Levant trade of the South and in the trade
carried on by the Hanseatic cities of the North. Commerce was, of course,
not confined to these localities. We have seen already how German
merchants and the Flanders galleys united the North and South of Europe;
and every one of the present European countries took a greater or less share
in the exchange of wares. We have already described, however, the general
character of commerce in the medieval period, and must refer the reader to
that description for some idea of the commerce of countries which are not
treated in detail in this sketch.
115. Conditions and wares of the Baltic trade.—The wares of the
northern trade present a contrast to those which furnished the material of
eastern commerce. In the first place the countries of central Europe found in
Scandinavia and the Northeast, which formed the trading ground, peoples
who were their industrial inferiors; these peoples were glad to receive
manufactures instead of supplying them. Secondly, the cost of carriage was
much less in the North than in the South, not only because transportation
was almost entirely by sea and over a shorter route, but also because the
tolls on trade were much less than in the Asiatic countries. It was possible,
therefore, to trade in bulky articles of comparatively small value.
The luxuries which formed so large a part of the eastern exports were
scarcely represented in the northern trade. Amber can be put in this class,
though the trade in it was of no great importance; this was a fossilized resin
which was found on the coast of the Baltic, and which was used for
ornaments. Wax was a far more considerable item of export, which may,
perhaps, be regarded as a luxury, since it found its chief employment in the
form of candles used in church services.
116. Exports from the Baltic, mainly raw materials.—Most of the
exports from northeastern Europe were raw materials serving the simpler
needs of man. Among the foodstuffs fish took the first place. Until the
fifteenth century the herring, which does not now range outside the waters

of the North Sea and the open ocean, came each year in late summer to the
Swedish and German coasts of the Baltic; and the trade in dried and salted
fish, especially herring, was one of the chief branches of northern
commerce. The whole population of western Europe was at this time
Roman Catholic, and the consumption of fish was of course stimulated by
the rules of the church. Other foodstuffs exported were honey, butter, and
salt meat.
The Northeast had no textiles to offer to the rest of Europe, but in its furs
it had a substitute for them which was most highly prized. The furs included
not only the finer varieties, the use of which was restricted to the upper
classes, but also common grades that were desired as much for their warmth
as for their appearance. Houses were so poorly heated that comfort was
impossible without thick clothing. We can understand, therefore, the
complaint of a German bishop who said that “we strive as hard to come into
the possession of a marten skin as if it were everlasting salvation.”
Other raw materials exported were skins and tallow from animal industry,
and forestry products which were destined to be the mainstay of the Baltic
trade in later times, various forms of timber and the group of products
known later as “naval stores,” including pitch, tar, and turpentine.
117. Exports from the West to the Baltic countries.—In return for its
imports western Europe sent to Russia and Scandinavia its manufactures
and the raw products which could not be obtained in the Northeast. The list
includes wheat, wine, salt, and metals, and, among the manufactures,
especially cloth and beer. The merchants of the West conducted the trade
not only between their home districts and the less developed countries, but
also between these countries; they carried herrings, for instance, from
Scandinavia to Russia.
118. Contrast of the history of the commercial cities in Italy and in
Germany.—The cities of Germany, which took advantage of the
opportunities for trade in the North, were like those of Italy in their freedom
from royal authority. There seems, therefore, a chance that they might fight
among themselves for the trade, and that one of them might get a
commanding position as did Venice in the South. No one of them, however,
had the peculiar advantages of the geographical position and the freedom
from attacks by land which Venice enjoyed. They were too evenly matched
to settle quickly the question of supremacy, and they ran such dangers from
the attacks of feudal lords that they could not afford to quarrel among

themselves. Instead of competing they united, in the Hansa or Hanseatic
League, which was the most remarkable commercial association of the
medieval period.
119. Rise of the Hanseatic League.—The word “hanse” meant in early
German a society, a band of men, and was applied to a number of
commercial associations besides the particular league to which we apply it
here. This league grew up gradually in the thirteenth and fourteenth
centuries. The merchants of various German cities found it necessary to
unite for the protection of their interests abroad, and the beginnings of the
association are found in the island of Gotland, in the Baltic and in the city
of London, where Germans carried on a considerable trade. After a while
the cities at home took up the association which their merchants had started
in foreign countries, and in the fourteenth century a great league grew up,
centering in the cities at the southwestern corner of the Baltic, of which
Lübeck was the chief. Sailors were still afraid to navigate the waters around
Denmark, because of the dangerous currents and shoals, so Baltic wares
were carried across the isthmus, and cities like Lübeck grew great on this
trade and on that which came down the Elbe valley.
120. Extent and organization of the League.—“When the ambassadors
of the Hanseatic League in England in 1376 were asked for a list of the
members who made up their vast association, they answered scornfully that
surely even they themselves could not be supposed to remember the
countless names of towns, big and little in all kingdoms, in whose name
they spoke.” The league was in fact very extensive, for it included not only
the chief German seaports, but also towns in the interior and some towns
outside of Germany altogether. The number varied from time to time; in the
period of greatest power it was nearly 100, stretching from Dinant in
modern Belgium to Krakau and Reval in the East, and including towns as
far inland as Göttingen in Germany. The towns never formed a very close
union, but sent their representatives every year or so to a meeting-place
where they could discuss matters of common interest, decide upon the
policy to be followed, and raise what resources they could for carrying the
policy through.
121. Control of the commerce of northern Europe by the League.—
The aim in general was the protection of commerce from the attacks of
pirates and feudal lords and the negotiation of commercial treaties which
would extend the privileges of members and preserve their monopoly of

trade. The League was so successful that it obtained in the closing centuries
of the Middle Ages a predominance in the commerce of northern Europe
comparable to that of the Dutch and of the English in later times. In the
West it had to share its trade with other peoples. In this direction Bruges
was the terminus of many of the voyages; at that port the Hanseatics met
the Venetians, coming in the Flanders galleys, and secured also many wares
from western Europe. This was by no means, however, the limit of their
western voyages. They had an important trading station in England, with a
great group of buildings, the “Steelyard” near London bridge, and invested
their capital in English tin mines; one of their favorite voyages was to
Bourgneuf, south of the Loire, on the western coast of France; and they sent
their ships in some periods as far as Spain and Portugal.

THE HANSEATIC COMMERCIAL EMPIRE ABOUT 1400

The North and East of Europe were, however, the field of their greatest
success. In Scandinavia (including Iceland) and Russia, they gained a
complete monopoly of commerce; the peoples of those countries were so
backward that they permitted the Germans to do the most important part of

their trading for them, and the governments were weak and were easily
forced to grant the privileges desired.
122. Methods of trading; factories.—The methods which the
Hanseatics employed in their trade are worthy of special attention, because
they were characteristic of the time, being very similar to those of the
Venetians in the East, and because they have been employed under similar
conditions in later periods. They established “factories” in the sense of
trading posts (not manufactories), where most of the trade was carried on. A
factory was, in the first place, a fortress where the merchants could be safe
from attacks by the natives; at Novgorod, for instance, the group of
buildings was enclosed and was carefully guarded by men and by great
watch-dogs both day and night. The factory was, moreover, a place where
the trade could be regulated, and where the merchants could be kept under
supervision. To let a man trade as he pleased would have subjected not only
himself but all his compatriots to danger, for the natives made little
distinction between foreigners and would readily have punished one
merchant for the fault of another. The factories were centers of social life,
with their rough initiations and their games, and they were useful in training
young men in commerce; but they were kept under such strict discipline
and minute regulation that they seem like garrisons in the enemy’s country.

The map follows a contemporary description of the wares which were brought for sale to Bruges and
Flanders, omitting some of the less important and those difficult to identify. Of the countries left
blank on the map, Italy excelled in manufactures (textiles and glass), and France had a notable
export trade in wine.

123. Flanders and Bruges.—Between the regions under the commercial
control of the Hanseatics on one side and the Venetians on the other lay a
sort of neutral zone where both parties met, centering in the region about
modern Belgium. This district was favored not only by the junction in it of
the northern and southern trade; it had other advantages of position in that it
lay near the mouths of great rivers, the Scheldt, Meuse, and Rhine, and was
also at the crossing of important land routes. It had enjoyed an early
development of industry in its towns, and had been liberally treated by its
feudal rulers.
At different periods the great commerce which flowed to and through this
district chose different points for its concentration. In the fourteenth century
the favored spot was Bruges (the Flemish word meaning bridges), the
greatest market in northern Europe, vying even with Venice. Here could be
found Scandinavians, Germans, English, French, Portuguese, Spaniards,
and Italians, exchanging the wares from different sources; a contemporary
writer names 30 different countries, both Christian and Mohammedan,
which fed the market of Bruges with their commodities. The natives were
content to let foreigners carry on the business of transportation; they stayed
at home and grew rich from the wares, money and credit instruments which
commerce brought to their doors.
124. Decline of Bruges in the fifteenth century; rise of Antwerp.—
Partly because of this passive part which they assumed, partly because of
the practice of medieval countries in diverting their trade from one place to
another, the people of Bruges had but a precarious hold on their commerce,
and lost it in the fifteenth century. The silting up of its harbors, making
these unfit to hold the larger ships now coming into use, explains in part the
decline of Bruges, but political forces were at work also to divert commerce
to another center. In the fifteenth century the place of Bruges as the great
market of northern Europe was taken by Antwerp, which had fought its way
up against all rivals, and which held the leadership now for one hundred
years.
125. Conditions of commerce in England.—England lay on the outside
of the great currents of medieval commerce. It had an advantage which it
had enjoyed since pre-Roman times, the practical monopoly of tin
production in Europe; and added to this in the latter part of the Middle Ages
a still more important monopoly, that of wool production. Sheep were

raised, of course, in other parts of Europe, and the merinos of Spain yielded
a finer grade of wool than could be produced in England. For some reason,
however, the sheep industry did not prosper elsewhere as it did in England.
Possibly the constant wars and raids which disturbed the feudal states of the
continent may have prevented the production of a commodity which could
be so easily destroyed or carried off as booty. At any rate, the more settled
political conditions in England, where internal war became soon a rare
exception, favored the development of all the national resources. Aided by
the prevalence of peace at home, and by the disappearance of feudal tolls on
trade, the English advanced rapidly in the fourteenth and fifteenth centuries
and instead of exporting the raw wool began to make it into cloth and to
export the finished product. Trade was furthered also by the continental
conquests of English kings, which brought England and the South of France
into close relationship, and built up a large import trade in French wines.
126. English trade passive until the close of the Middle Ages.—Most
of the trade in English wares, however, was in the hands of foreigners until
the very close of the Middle Ages. The English kings showed more interest
in the development of their resources by the encouragement of alien
merchants than they showed in the extension of commerce carried on by
natives. Hanseatics and Venetians fetched and carried the wares of distant
countries for the English; and the “Merchants of the Staple,” a society
composed largely of aliens, enjoyed a legal monopoly of the export of the
most important raw materials which England supplied to European
commerce—wool and sheepskins, leather, tin, and lead.
English merchants became restive in the inferior position assigned to
them both at home and abroad, and before the end of the Middle Ages
began to fight for equal rights or for privileges, but they did not secure final
and complete victory until the beginning of the modern period, in the
sixteenth century.

QUESTIONS AND TOPICS

1. Pursue on sects. 114-117 studies similar to those suggested above
(sects. 88-94) for the Levant wares. For the character of the Baltic trade at
present consult the Statesman’s Year-Book, index, Norway or Sweden. The
history of the trade in amber may be made an interesting study, as the article
has been an object of commerce since prehistoric times.

2. Origin of the Hanseatic League. [Zimmern, pp. 11-29.]
3. What place does Lübeck hold in the commerce of modern Germany?
[Statesman’s Year-Book, Germany, last table in section on commerce.]
4. What effect may the Elbe-Trave Canal, opened June 16, 1900, have
upon the future of the city? [See U. S. Consular reports and newspapers
about that date.]
5. Contrast the organization of the Hanseatic League and of the Venetian
empire.
6. Report in detail on the organization of the League, and its weaknesses.
[Zimmern, 202-220.]
7. Write an essay on the life in a Hanseatic factory. [Zimmern, 137-147,
Bergen; 179-201, London.]
8. Compare the Hanseatic factory with an Indian trading post.
[Descriptions of such posts can be found in histories of the Hudson’s Bay
Company.]
9. Write a report on the rise and fall of Bruges or of Antwerp as a
commercial center. [Encyclopedia.]
10. Write a report on one of the following topics in English medieval
commerce:
(a) Exports.
(b) Imports.
(c) Shipping.
(d) Attitude of the king.
(e) Institution of the Staple.
[Sufficient material on all these points may be found in Cunningham,
Growth, and if the student is able to use a book like that he will get far more
benefit than in abstracting the summaries (often inaccurate or misleading)
in the smaller manuals.]

BIBLIOGRAPHY

For general bibliography consult Gross, Sources, and Palgrave’s
Dictionary.
General accounts will be found in Encyc. Brit., article Hanseatic League,
and in Zimmern, **Hansa Towns, a book which can be strongly
recommended. It includes a map and illustrations, but has no bibliography.

For descriptions of English commerce in this period see Cunningham, **
Growth, or the articles in Traill’s Social England. Briefer accounts are, of
course, to be sought in manuals already mentioned.

CHAPTER XIII

DEVELOPMENT OF THE MEDIEVAL ORGANIZATION OF COMMERCE

127. Types of medieval traders; pedler, shopkeeper.—Enough has
already been said to guard the reader against the idea that great wholesale
merchants of the modern type were common in the Middle Ages. The
regular type of trader was the artisan who manufactured the goods he sold,
or the pedler who collected a stock of goods in a town and carried them
about in a pack for sale. The pedler’s stock was not unlike that which he
would carry around the country nowadays,—sewing materials, toilet
articles, etc. An illumination in a manuscript of the fourteenth century,
representing monkeys opening a pedler’s box, shows vests, caps, gloves,
musical instruments, purses, girdles, hats, cutlasses, pewter pots, and other
articles. An English statute of the fourteenth century, describing a similar
stock in trade, mentions rabbit skins as one of the articles which the pedlers
took in exchange for their wares, and an English author of the period
accuses them of catching cats for their skins. The petty shopkeeper stood a
step above the pedler. He had a regular shop in a town, where he displayed
his wares, and often went on trips to the markets of other towns, where he
set up a booth and carried on such trade as the town regulations allowed.
128. Merchants.—Still another step above the shopkeeper was the real
merchant, who had his warehouse, from which he supplied the retail
traders, and who bought up considerable quantities of goods at the great
fairs at home and abroad. It is doubtful whether we can find in this class in
northern Europe any men who devoted themselves entirely to wholesale
trade; and merchants had not yet specialized so that each would devote
himself exclusively to the trade in a particular ware. We can illustrate the
point by a German merchant, whose account books have been preserved so
that it is possible to follow his business operations exactly. Vicko von
Geldersen was a draper of Hamburg, where he rose to wealth and a high
position. He imported cloth wholesale, and sold it both wholesale and retail.
But he made use of his connection with Bruges, which was the great cloth
market, to send there for sale iron, honey, meat, butter, etc., and to import

such wares as oil, spices, figs, and almonds, which he sold to smaller
dealers in many cities of Germany.

See section 128 for a description of the trade of this merchant. The map shows only his German
business, and indicates roughly, by the size of the circle, the importance of each town in his

commercial dealings. Note how trade tended to the water routes.

Members of the class to which Vicko belonged were the leaders of
commerce in the North of Europe during the Middle Ages; they
accumulated wealth which seemed great at the time, and formed an
aristocratic class in social and political life. Their sons were brought up to
follow the family business, and often trained to it by extensive study and
residence in foreign countries.
129. Development of commercial association in the Middle Ages.—In
the Middle Ages we find the beginnings of that process of association
which can be traced step by step to the formation of the great “trusts” of the
present day, and which forms one of the most important features in the
development of commerce. To point out the various advantages which arise
from the association of laborers and of capitalists would lead us into
political economy; and to describe in detail the development of the various
forms of association would require an excursion into legal history equally
out of place. We must content ourselves with indicating some of the main
features which are easily intelligible.
The need of association was felt especially in the Middle Ages because it
was necessary that a merchant or his representative should accompany his
wares on the road. It was often difficult for a merchant to look after a
commercial venture in person; he could not trust it to a hireling; and the
slight development of the carrying and commission profession made it
impossible for him to leave it to a class of persons who nowadays make it
their business to attend to such matters. The merchant, therefore, would
associate with him some one who could represent his interests; and a
modern author asserts that in comparison with the amount of business many
more commercial companies were formed then than at present. The
merchant would choose by preference a member of his family, and family
partnerships were the prevailing form of association at first. With the
growth of commerce, however, greater freedom of association was
demanded, and the group ceased to be limited by considerations of
relationship.
130. Advantages of association.—By joining together, two or more men
could follow different lines; one would stay at home while another could
accompany the wares, and perhaps still another could attend to sales in a
distant city. The advantages of this are apparent, and of not less importance

are the benefits arising from the better utilization of capital. A person who
had accumulated wealth, but who on account of advanced age, physical
disability, or other circumstance could not himself employ it in commerce,
would join with him a man who contributed to the enterprise the necessary
business activity.
Capitalists gained also in another way, for they were enabled by
association to share the risks of an enterprise. A man who put all his money
into one ship or cargo ran the risk of being ruined; and foregoing
paragraphs have shown that the dangers in the path of commerce were by
no means slight. By distributing his capital in a number of enterprises,
however, as could easily be done if he entered into association with others,
he could hope to make up for any probable loss by the profits of his
successful ventures, and can be regarded as insuring himself. We find, in
fact, that the shipping business was for the most part carried on in this way.
131. Forms of association; partnership.—Commercial association took
ordinarily the form of a “commenda” (Latin commendare, entrust). The
“commendator” contributed capital in the form of money, wares or a ship,
while the other party, called the “tractator” contributed only his personal
services to the enterprise; of the profits one fourth went to the tractator and
the remainder to the commendator. The tractator who saved his earnings
could in time also contribute capital, and was given a greater share of the
profits and more freedom in conducting the business.
The commenda, corresponding to a “silent partnership,” was older and of
more importance in commercial undertakings than the ordinary partnership
of the present day; but the latter form of association grew up also at this
time, and was used in commerce as well as in industry. The joint-stock
corporation belongs in its important applications to a later period.
132. Spread of the practice of association from Italy.—The different
forms of partnership developed especially in Italy in the last few centuries
of the Middle Ages, when the growth of commerce was most rapid, and
they became extraordinarily extensive and important. They secured the
union of capital and executive ability which enabled far greater enterprises
to be carried on than would have been possible without them. The Italian
commercial house of the Peruzzi, for instance, had fourteen branches and
one hundred and fifty factors or agents. Even the assistants in the business,
who did not themselves contribute capital to it, were interested in its
success by a system of profit sharing. From Italy the practice of association

spread to the North of Europe, and it became practically universal in
commercial undertakings. Each of the larger firms had its characteristic
trade-mark, distinguishing its bales of goods.
133. Position of the Jews in medieval commerce.—The Jews held a
peculiar position in medieval Europe. They were distrusted and disliked by
the Christians, because of their difference in religion, and because of their
business ability, which made competition with them a difficult matter.
Though they were scattered throughout Europe they kept touch with each
other, and so enjoyed exceptional advantages in the pursuit of commerce
and the extension of business relations. In the early part of the Middle Ages
they were indispensable; Christians were not educated up to their level in
business, and had to leave to them the major part of the slight commerce of
the times. As Christian peoples developed, however, they demanded for
themselves the place which the Jews had won; and by a long series of
restrictions and persecutions they forced the Jews into some particular
branches of business where the Christians could not follow them. The
church taught for a time that it was wrong to lend money at interest, and
discouraged Christians from seeking gain by this means. The Jews,
therefore, seized the opportunity which was denied to Christians, and
became money-lenders. Their position was always precarious, for the law
gave them no protection, and they were subject constantly to robbery by
feudal princes and by the people, who believed everything evil of them.
From England they were banished altogether, for several centuries. They
showed astonishing skill and fortitude, but in the last centuries of the
Middle Ages they lost their position even as leaders in credit operations.
The church then permitted money-lending if the terms were not
extortionate; and Christians from southern Europe, “Caursines” (named
from Cahors, in the south of France) and “Lombards,” succeeded the Jews
as the money-lenders of Europe.
134. Character of currency in the Middle Ages.—One of the serious
obstacles to the development of commerce was the character of the
currency in the various countries of Europe. Assuming that the reader
appreciates the importance of money as facilitating the operations of
exchange, and knows the qualities of good money, we may confine
ourselves to pointing out some of the characteristic faults of medieval
currency.

(1) Merchants could not rely upon the government to maintain the
standard of value. In many countries the kings debased the coinage again
and again, to secure the means of carrying on war or paying public
expenses of other kinds. Every debasement, as it left the coins with less
pure metal, lowered their purchasing power and raised prices; many
innocent people suffered and everybody grew reluctant to make bargains
and contracts.
(2) In many countries, especially those on the Continent, the privileges of
the great feudal lords included the right to keep a mint and to issue coins.
The central government restricted this right, as it grew stronger, but in
general the currency of medieval Europe was made up of a vast variety of
coins of standards even less reliable than that of the king’s coinage. There
was danger that a coin, even if it was of good weight, could not be passed at
its full value outside the locality where it was minted.
(3) Even in countries like England, where feudal coinage was put down
and where debasement by the government was exceptional, counterfeits
were not rare, and the clipping of coin was very common.
These characteristics of medieval currency made the money-changer a
necessary figure in the commercial world; he was to be found everywhere,
even in the small towns, buying and selling the various coins in circulation.
135. Difficulty in making payments in distant places.—While the
money-changer facilitated payments in any given place, he was not of much
assistance to a merchant desirous of making a payment in a distant town or
country. The merchant, it is true, could buy from him foreign money with
which to make the payment; but the transportation of the actual coin was
not only dangerous and expensive, but also subject to legal restriction, and
was to be avoided if possible. The merchant would probably prefer to send
instead of money some ware, which he could sell to advantage at the
destination, and then with the proceeds make his payment. For example,
when Michael Behaim of the Nuremberg Company wanted to send 1,000
gulden from Breslau to Nuremberg, he found it expedient to buy an amount
of wax which he could sell in Nuremberg for the required sum, and he
shipped that instead of money.
136. Introduction of the bill of exchange.—It might not, however,
always be convenient for a man to meet his obligations in this way; he
might not have the commercial knowledge, or perhaps he might have no
good opportunity to ship a ware. Behaim, in the case cited, had in fact

resorted to the wax shipment only from necessity, after he found it
impossible to make his payment by the means of remittance now become
general, the bill of exchange.
Suppose that B. in Breslau owed the 1,000 gulden, to A. in Nuremberg,
for spice; and suppose that D. in Breslau was the creditor of another
Nuremberg merchant C, to the extent of 1,000 gulden, perhaps for furs. It
would be absurd for B to ship the money or to go out of his way to ship wax
to A, and for C to ship the same value to D, when the payments could be
made to cancel each other. Why should not B pay to D in Breslau the 1,000
guldens due him, and tell C to pay the same amount to A in Nuremberg?
This could be accomplished by means of bills of exchange; D could write
out an order to C directing him to pay the money, and sell it to B, who
would thus have the means of paying his debt in Nuremberg to A.
Such an operation implies, however, not only regular commerce of
considerable volume but also mutual confidence among the participants.
How could B know whether D actually had a correspondent in a distant
place who would meet his obligations promptly? It was not, in fact, until the
thirteenth century that bills of exchange were used to any considerable
extent; then they were developed in Italy, and spread from there.
137. Development of banking in Italy.—In Italy, also, the money-
changers developed other forms of banking. As they were dealers in money,
business men in want of capital for their operations naturally sought it of
them. The money-changers might lend it from their own stock or act as
brokers and secure the money from some man who had a surplus. The short
step from this to the common form of modern banking was made when
merchants deposited their surplus cash with the money-changer, and he had
thus a considerable stock, which he could lend so long as he kept sufficient
reserve to meet the demands of depositors. It soon became unnecessary for
money to pass at all in large transactions; a man could get a loan from a
bank simply by having a deposit ascribed to him on the books, and could
assign this loan to others as he chose to pay it out. The characteristic danger
of banking, the attempt to make a great deal of credit out of a little capital,
appears early in Italy, with its results of failures and crises. The advantages
of the banking system, however, the economizing of time and money and
the facilitating of business operations, were so clear that banking kept its
place, and spread toward the close of the Middle Ages from Italy to other
countries.

QUESTIONS AND TOPICS

There is, in the history of commerce, no topic more difficult and none
more important than the development of the organization. The student who
has learned the facts has made only a beginning; he must grasp the
significance of the facts if he is to gain anything from his study. The teacher
is advised, therefore, to enlarge on the advantages of association and
cooperation, as they are treated, from one point of view, in Adam Smith’s
celebrated discussion of the division of labor, and in many manuals of
economics.
So much depends on the degree of advancement of the pupil, and on his
particular environment in country, town or city, that it is difficult to suggest
specific questions or topics. In general, the teacher should suggest the
meaning of earlier development by constant reference to the present
organization. Why have pedlers disappeared in so many districts, where do
they still remain, and why? What is the proportion of retail and wholesale
merchants in your city; how far has the specialization of wholesale trade
progressed? Answers may perhaps be found in a business directory. The
student who is competent to work out the history of business organization in
his own town will not fail to get new light on the history of earlier
development; and a report on the history of some particular branch of trade
at home should be an excellent exercise to be worked out. Another exercise
would be the history of the different forms of association (partnerships,
joint-stock companies), and a study of the reasons lying behind the rise and
fall of a particular form. The choice of questions and topics here must be
left to the ingenuity and discretion of the teacher.
The history of the currency in England [see Cunningham] is an easier
topic.
On the rise of credit instruments (bills of exchange, banking), the student
will probably be best prepared if he is given reading, either in review or in
anticipation, in some general manual which will enable him to appreciate
the importance of credit institutions now, and will hence interest him in
their origin. [Cf. Usher, The origin of the bill of exchange, Journal of Pol.
Econ., Chicago, June, 1914, 22: 566-576.]
An exercise which should be profitable and rather easy is a report by the
student on the life of some English merchant. [See Fox Bourne, or consult

the Dictionary of National Biography on names like Richard Whittington,
William Canynges, William de la Pole, etc. Further biographical material is
provided by Alice Law, Some notable “King’s Merchants,” Economic
Review, 1902, 12: 309 ff.; 1903, 13: 411 ff.]
If Bourne’s Romance of trade is available the student may prepare an
abstract of chap. 1 (the Jews) or chap. 4 (money and credit).

BIBLIOGRAPHY

The student will find bibliographies of some of the topics treated in this
chapter by consulting the appropriate articles in Palgrave’s Dictionary. Most
of the best literature is foreign. The best references in English are to
**Ashley and *Cunningham.
The important and difficult subject of the development of capitalistic
organization is treated by John A. Hobson, *Evolution of modern
capitalism, new ed., 1916, chap. 1, W. Sombart, **The quintessence of
capitalism: a study of the history and psychology of the modern business
man, London, 1915, and by Pirenne, *The stages in the social history of
capitalism, American Hist. Rev., Apr. 1914, 19: 494-515. One aspect of the
subject is covered by Arthur H. Woolf, Short history of accountants and
accountancy, London, 1912.

CHAPTER XIV

COMMERCE AND POLITICS IN THE LATER MIDDLE AGES

138. Development of the modern political system in the later Middle
Ages.—Toward the close of the Middle Ages the feudal system of
government gave place gradually to a system more like that which the
Romans had established and with which we are familiar now. As trade and
intercommunication increased, and towns grew up holding a population of
considerable wealth, the kings found it possible to make into a reality the
position of nominal headship which tradition and the church conferred upon
them. They found in the mercantile and manufacturing classes people who
could afford to pay taxes, and who were willing to pay large sums to be
relieved from the oppressions of the feudal lords. It became possible once
more to transport supplies and to send troops to distant localities, and the
kings devised means by which they could keep in touch with their officials,
and hold them to loyal service. The result was a great increase in the power
of the central government, at the expense of the feudal lords.
139. Variety of development in different countries.—The
development, as sketched above, was very different in the different
countries. It came early in England, and local lords lost practically all of
their independence. In France it was a very gradual process, extending over
the last four centuries of the Middle Ages. Even in the sixteenth century and
later, the kings, though they seemed to enjoy great power, did not abolish all
the remnants of feudalism, which continued down to the French Revolution
in 1789, to the great harm of industrial development. In Spain the union of
the crowns of Castile and Aragon just before 1500 completed the process,
by establishing nearly absolute royal authority over the greater part of the
peninsula. In Germany and Italy the result was different. The same man,
who called himself the Emperor of the Romans, claimed the royal power in
both countries, but in attempting too much he lost everything. He wasted
the royal resources in vain attempt to establish his authority, and became a
mere figure-head. The control of government passed in those countries to
local authorities; but it is important to note that these included not only
feudal lords, but also cities which had become strong enough to throw off

feudal authority and to establish for themselves almost complete
independence.
140. Effect on commerce of a strong and of a weak central
government.—In a country in which the cities established complete
independence they seemed for a time to have gained by throwing off the
royal power. Each city could control its affairs and shape its policy to suit
local interests; and the great cities of Italy and Germany before the close of
the Middle Ages were the most advanced and prosperous parts of Europe.
Though they controlled only small areas of land they had great resources
from their commerce, and even in war could hold their own with the feudal
lords fighting in the old-fashioned way.
They were strong enough to fight a feudal lord; they were not, however,
strong enough to fight a modern king. While they were building up their
power at the expense of rival cities and at the expense of the country
districts, the kings of lands to the west of them were quietly engaged in
uniting all the cities and the country districts, too, under one rule. The cities
in France and England seemed for a time to lose, because they were forced
by the kings to make concessions to each other and to the country districts.
When, however, they had become used to consider themselves as only parts
of a bigger whole, the nation, they found that their sovereign was far better
fitted to represent their interests and further their progress than any one of
them was individually. The struggle of the independent cities of Italy and
Germany against the national states of England, Spain, and France was not
decided until after the discovery of America and the sea-route to Asia, when
the national organization proved decisively its superiority to the municipal.
141. Rise of a national commercial policy.—The rise in power of the
central government in countries like England and France is proved by the
appearance, toward the close of the Middle Ages, of a national commercial
policy. The reader will remember that even in these countries the towns
were at first so independent that each adopted a commercial policy of its
own; as though, nowadays, for instance, Boston and New York and
Philadelphia should each have its own independent tariff and set of
commercial regulations. A merchant of Dover was a foreigner in
Southampton, and if he wanted to collect a debt due him from a
Southampton merchant he would appeal, not to the central government and
the law of the land, but to the Dover government; and the Dover
government would put pressure on the Southampton government, perhaps

by arresting any merchant from Southampton and holding his goods, until
the debt was paid. About 1300 the English king was at last strong enough to
make general regulations in matters like this of the collection of debts, and
about the same time he established a national tariff at the ports, as a regular
system, and forced the various towns to give up the right to levy what dues
they pleased. A similar change took place in France at nearly the same time;
the idea grew strong that the general interest of all Frenchmen was superior
to the particular interests of any town or individual, and the people of
France began to look to the king instead of to the local authorities for
protection and control.
142. Medieval ideas on commerce.—When commerce was undeveloped
and only an incidental feature in the economic life of peoples, those high in
authority in church and state held ideas of it which have faded away as
commerce has proved its power and shown its benefits. Many kinds of
commerce, including some forms of money-lending now considered
legitimate, were prohibited because they seemed to give a man something
for nothing. In ordinary trade one man was thought to make his profit at the
expense of another, and government was always vigilant to protect the
weaker party. A government, moreover, looked on foreign commerce rather
as a privilege of its citizens than as their right, and used it freely as a
political weapon instead of considering it an economic necessity. The ports
of the kingdom were the “king’s gates,” which he could open or close at his
pleasure, to further his royal policy.
143. Characteristic features of commercial policy.—Among the
characteristic features of national economic policy in the later centuries of
the Middle Ages we find the following:
(1) Export and import could be carried on only by favor of royal license,
which was granted to and withdrawn from groups of natives and foreigners
as suited the king’s ideas.
(2) The export of necessaries was frequently prohibited (as had
previously been the custom with the towns), to increase the supplies of the
kingdom and keep an enemy from getting the good of them.
(3) The export of money, as a specially valuable asset of the kingdom,
was prohibited and its importation was favored.
(4) The growth of native industries was stimulated by a variety of
regulations. The English cloth manufacture was protected, for instance, in
the following ways: the export of raw material (wool, teasles, etc.) was

forbidden from time to time, that the home manufacturer might supply
himself more cheaply; the import of foreign cloth was restricted; and the
wearing of fur was limited to certain classes, that the home market for
woolen manufacture might be larger. Among the protected industries was
shipping. “Navigation acts,” requiring the use of native ships, were
common, though they ordinarily remained in force but a short time and had
not yet hardened into a system.
(5) The foreign trade of a country was not only restricted, as at present, to
certain points on the frontier where duties could be collected, but was often
concentrated in one or more special places, the “staples.” The government
could then oversee the trade more easily, could collect its dues, insure good
quality, and protect merchants more readily, and it could also make better
use of trade as a weapon of policy, directing the stream of goods where it
pleased, and so rewarding or punishing other states.

QUESTIONS AND TOPICS

1. Review the sections on feudalism, and see how the modern system of
government grew up from feudalism as the forces which had created
feudalism were reversed. [Cf. Seebohm, Prot. Rev., pp. 15-21.]
2. Write a report on the rise or decline in power of the central government
in one of the following countries, in the period 1100-1500: France, England,
Germany, Italy, Spain. [Consult the current history manuals, or the
encyclopedia.]
3. In connection with sect. 140 read the sections in a later part of the
book, describing the advantages which have come to Germany and Italy in
recent times by their union under strong central governments.
4. Write a report on medieval doctrines on one of the following subjects:
(a) Loans at interest.
(b) Profits in trade.
[Cunningham, Growth, or Ashley, vol. 1, chap. 3; vol. 2, chap. 6.]
5. Write a report on “protection” in the medieval state. [See Cunningham
or Ashley on commercial policy, or read J. S. Nicholson, The English corn
laws.]
6. What has been the history of the meaning of the word staple?
[Dictionaries, especially Murray’s New English Dict.; Cunningham.]

BIBLIOGRAPHY

The subject of this short chapter takes the reader within the bounds of
political history, and he is referred to the many history manuals for further
reading and references. The growth of the French monarchy has been well
treated by Adams, Civilization, chap. xiii, or Growth of the French nation.

PART III.—MODERN COMMERCE

CHAPTER XV

EXPLORATION AND DISCOVERY

144. The revolution about 1500; topics to be considered.—The period
centering about the year 1500 was marked by changes so rapid and so
extensive that they deserve the name of revolution. The changes affected
not only the intellectual life of Europe (the Renaissance) and its religious
life (the Protestant Revolt or Reformation); they caused a revolution also in
the world of politics and in the world of industry and commerce. It will be
necessary to survey some of these changes before we return to the narrative
of the history of commerce. Three main topics will occupy the attention:
first, the extension of the commercial area by exploration and discovery;
second, the development of the commercial organization by new forms of
cooperation; third, the rise of modern states in Europe, and their influence
on the growth of commerce.
145. Growth of geographical knowledge. Asia.—About the year 1000,
to most people in Europe “the world” meant scarcely more than the village
in which they lived, so limited were their interests and their knowledge.
Pilgrims to the holy places in Palestine brought back with them knowledge
of this edge of Asia, but what the Greeks and Romans knew of that
continent and of Africa had been forgotten, and even the better educated
people thought of the outer parts of the world as mysterious regions,
wrapped in darkness or peopled with prodigies, when they thought of them
at all. The growth of the Levant trade and the crusades caused an increase in
interest and in information. After the year 1200, when a great Mongol or
Tartar Empire was established in inner Asia by Genghis Khan, Europeans
began to penetrate Asia seeking aid from the Mongols against their enemies
the Turks. Ambassadors, missionaries, merchants, and explorers made the
journey so frequently that a regular guide-book was written by an Italian
soon after 1300; and about the same time the Venetian Marco Polo returned
from a long stay in China and described his travels. He had gone by land,
through Persia, Turkestan, and Mongolia, and, returning by sea, he could
tell also about Japan, the great Malay islands, Burmah, India, etc. Before
the invention of printing knowledge spread slowly, but the maps of the
fifteenth and sixteenth centuries show that the results of these explorations

were not lost, and Europe had become conscious that Asia was bounded by
a sea on the east.

A MEDIEVAL MAP OF THE WORLD
(The Laurentian Portolano. 1351)

146. Need of a sea route to Asia; means of navigation.—The
explorations by land in Asia were of great importance in spreading
knowledge of the countries from which the wares of the Levant trade came,
but they were of little assistance to traders who sought to develop
commerce on the old routes. With the decline of the Mongol power and the
spread of the Turks, passage across Asia became constantly more difficult.
The available routes finally narrowed to one, that through Egypt, and trade
on this route was burdened with very heavy tolls. The European people
were urged by powerful economic motives to seek out the sea route to India
which was now believed to exist.
The means of navigation were still those of the later Middle Ages. The
ships in which some of the most adventurous voyages were taken were of
fifty tons or even less. The rig had been improved slightly, so that the ships
could be handled more readily than when they bore the old square sails; and

instruments for ascertaining the position at sea were also improved. Still,
when we add to the actual peril of distant voyages the imagined dangers
which the minds of men ascribed to unknown seas, we must admit that the
early explorers met a test of courage to which men nowadays are rarely put.
147. The lead in maritime exploration taken by Prince Henry of
Portugal.—Italians were, in general, the guides who led Europeans through
the seas of darkness to the East. Conditions at home, however, forced them
to seek service abroad in realizing their plans, and Portugal was the first of
the European countries to effect great oceanic discoveries. The country was
small and undeveloped, but it enjoyed in the fifteenth century the guidance
of a singularly able line of kings. It had in the person of Prince Henry, “the
Navigator,” an enthusiast who devoted practically his whole life and fortune
to the cause of discovery. When but twenty-four years old he retired from
the world to a promontory at the southern extremity of the country, and
there he worked for over forty years, until his death in 1460. Prince Henry
combined the commercial motive with missionary zeal and a medieval
hostility to the Mohammedans, but the character of his work was entirely
modern and business-like. He gave what was most needed for success,
organization; he attracted sailors and pilots from all Europe; stimulated
development in the science and art of navigation; equipped and inspired
expeditions.
148. Exploration of the West Coast of Africa; difficulties, real and
imagined.—The great achievement of Portuguese navigation was the
discovery of the sea route to India around Africa. The coast of the northwest
corner of Africa was well known to sailors of several European countries,
and the belief was current in many minds that circumnavigation was
possible. Some Genoese sailors had actually attempted to reach India in this
way in the thirteenth century, but they had disappeared without leaving a
trace. There was all the difference in the world between the theory and the
practice of European navigators; the limit of their voyages had practically
always been Cape Bojador, far north on the west coast. A strong inshore
current and short but furious storms made coasting dangerous. The coast of
dreary sand dunes afforded no good anchorage; mist or dust dimmed the air
and frightened sailors with the thought that they were actually entering the
sea of darkness; Cape Bojador was a forbidding obstacle in that it projected
far out beyond the coast line, and was supposed to be extended by perilous
reefs. Furthermore, most people submitted to the opinion of ancient

philosophers, that the tropics were uninhabitable by reason of the intense
heat of a blazing sun, which approached nearer the earth in those regions.

See Sections 148-149.

149. Discovery of the Cape of Good Hope (1487) and of the sea route
to India (1498).—Under the stimulus of Prince Henry the Portuguese
passed Cape Bojador in 1434, and were rewarded on a more extended
voyage about ten years afterward by the discovery of Cape Verde. The
name, “Green Cape,” is significant; the explorers had passed the southern
edge of the desert and found a watered country with waving palms. In this
enterprise, as in most others, the first steps proved to be the hardest. Though
progress was steady it was slow, and at the death of Prince Henry in 1460
the Portuguese had not passed beyond Sierra Leone. They had, however,
accumulated valuable experience and gained confidence; the long period of

preparation fitted them to advance more rapidly as time went on. In 1471
they passed the equator, without the scorching that some had feared; and in
1487, under Diaz, they turned the southern extremity of the Continent,
named by the sailor the Cape of Storms, but renamed Cape of Good Hope
by the King, as an augury for the future. The illness and death of the King
prevented the Portuguese from utilizing their discovery immediately; but in
July, 1497, Vasco da Gama was despatched with a fleet bound for India,
which anchored at Calicut (southwest coast; not Calcutta), in May, 1498.
Oceanic commerce with India had begun, and the tolls and charges which
had hampered trade by the land routes were things of the past.

Map of the known world in the time of Columbus.

150. Belief that Asia could be reached by sailing westward.—While
the Portuguese were pushing on down the west coast of Africa in their
search for a route to India, the minds of some men were occupied with the
thought that the same object could be attained more easily by sailing
directly west from Europe. The earth was known to be round and was

thought to be smaller than it actually is. Asia was known to be bounded by a
sea on the East. Why not reach India by sailing around the globe? Perhaps,
they thought, the east coast of Asia was but a little way from the west coast
of Europe or Africa. Skippers who ventured to the Azores, the Canaries, and
other islands not far from Europe, brought back stories of foreign objects
washed up on the beaches, or of land dimly descried on their voyages.
The belief that land existed beyond the horizon was commonly held, and
Columbus does not deserve the credit of originating the idea. Nor can his
discovery of the New World in 1492 be regarded as one of those acts
without which the history of the world would be very different. The
Portuguese were certain to touch America sooner or later in
circumnavigating Africa, for they planned to steer due south from Guinea to
the latitude of the Cape, to avoid the calms and currents of the coast, and an
equatorial current carried their ships westward. Under these conditions the
Portuguese Cabral, on his way to India around the Cape, actually did land
on the coast of what is now Brazil, in 1500.
151. Discovery of America (1492); partition of the world outside
Europe between Spain and Portugal.—Columbus, however, certainly
deserves the fame which has been given him, for the courage he showed in
turning theory into action; and the consequences of the discovery, however
we apportion the credit for it, make it one of the turning-points in the
world’s history. Europe was disappointed, it is true, in the hope that a
shorter route to India had been found. Balboa proved by the discovery of
the “South Sea,” or Pacific Ocean (1513), that the new land was a continent
by itself, and the great distance between America and Asia became known
by the voyage of Magellan around the earth (1519-1522), “doubtless the
greatest feat of navigation that has ever been performed.” Time was needed
to prove that America offered more than Asia to build up European
commerce, and the full measure of its possibilities was not realized until the
nineteenth century. At the time Portugal seemed to have gained more than
Spain. The non-Christian world was divided between these two powers, by
a papal decree, which gave to Portugal Africa and Asia (except the
Philippines) and to Spain the Americas (except Brazil). So long as other
European states obeyed papal authority and feared the might of Spain and
Portugal, they were bound to respect this division; and the first period of
discoveries was followed by a series of voyages, carried on especially by

English and Dutch, seeking a passage northeast or northwest through Arctic
seas, that would enable them to evade the monopoly granted by the Pope.
152. Effect of the discoveries on the field of commerce; growth of a
world commerce.—Contrasting medieval and modern commerce we find
that the discoveries produced great changes both in the area and in the
articles of trade. Maritime commerce in the Middle Ages was restricted in
general to the seas of Europe (Baltic, North, Mediterranean, Black) and to
the edge of the Atlantic; exchange was hindered not only by physical
obstacles but also by the claims of various states to the exclusive control of
inland waters (Hansa in the Baltic, Venice in the Adriatic). When once
sailors had learned to leave the coast and steer boldly into the open ocean,
secure in the consciousness that they were approaching not a “sea of
darkness” but a land much like that which they had left behind them, the
ocean became a means of uniting continents rather than of separating them.
The principle that the sea is free to all was not accepted, it is true, for some
time; states tried to extend to the open sea the same narrow principle of
exclusion that had been practised with respect to interior waters. These
claims led to bitter national conflicts in the sixteenth and seventeenth
centuries, but they fell gradually into oblivion as the hopelessness of
making them effective became apparent; and the European commerce of a
former period expanded into a world commerce.
153. Effect of the discoveries on the wares of commerce.—Europe had
become acquainted with Asiatic wares in the course of the Levant trade, so
that the market for them was well established when the first Portuguese
ships returned from India. Transportation by the sea route, however, with its
diminished costs and with the greatly increased cargoes, caused such a
decline in the price of eastern goods that the market for them expanded
immensely. What had before been costly luxuries for the rich became now a
part of their regular necessaries, and became for other classes luxuries or
comforts which they could afford to purchase. It is in this period that tea,
coffee, and sugar became common articles of consumption in some of the
European countries. The part played by those three articles in the commerce
of an advanced country can be seen from the fact that before the end of the
eighteenth century they formed over one fourth of the total imports of
England. Other wares, such as Indian textiles, which had been known to
Europe before, but which were too bulky to pay for the import of cheaper

grades, could now be placed on the market in large quantities, when
protective duties did not exclude them.
154. Importance of the precious metals in the American trade; effect
on prices in Europe.—The American continent offered at first only one
class of wares of prime importance, namely, the precious metals. The
Spanish secured great quantities of gold in the early years of their
conquests, but about 1550 the output of gold was exceeded by that of silver,
which reached enormous proportions, as a result of the discovery of new
mines in Mexico and Peru, and by the use of the amalgamation process.
Before 1550 the production of the precious metals in Europe and Africa
exceeded the supply from the New World, but then the balance changed;
and during the seventeenth century the American supply was more than
five-fold that gained in the Old World. The result was an increase in the
stock of money in Europe so great that a revolution in prices ensued; silver
became so plentiful that a given weight of it would purchase only one half
or one third, sometimes even one fourth or one fifth, of what it would have
bought before the discovery of the American mines. The serious results of
this price revolution on different classes in Europe must be left to the
imagination of the reader, as they lie outside the scope of this manual. No
other American product competed in importance with silver, in the early
period, but as the North American continent and the West Indies were
settled with whites and negroes some important staples were brought from
those parts to Europe. The islands proved to be especially well suited to the
production of sugar, while the mainland contributed in tobacco, a ware
before unknown in Europe, but one which could soon rely on a large and
increasing demand. Food staples like maize and potatoes continued
unimportant, not only as wares of commerce but also as articles of
European production, until comparatively recent times.
155. Improvement in the means and methods of navigation.—With
the extension of navigation new qualities were needed in ships; speed to
cover the great distances, carrying capacity for the storage of bulky cargoes,
and stability sufficient to ensure safety in tropical hurricanes or eastern
typhoons. The medieval galley, rowed with oars, was, of course, unsuited to
long voyages, and sails came into universal use. The favorite types of vessel
all showed, however, the influence of medieval models. The caravel, of
small tonnage and easily managed, was simply a galley fitted with masts
and sails. The galleon was larger, having two or three decks; in it the

attempt was made to unite the lines and speed of a galley with the stability
and dimensions of a cargo carrier. Finally, the carrack, with four or five
decks, combined great carrying capacity with the defensive strength of a
floating fortress. Piracy continued to be a plague, especially in the
Mediterranean and in waters outside Europe, and the large merchantman
with a considerable number of guns enjoyed a great advantage over smaller
vessels. We read of ships of a thousand tons and over. The size of the
Hanseatic ships trading to London increased so much in the sixteenth
century that they could no longer pass London Bridge, or lie at the wharf of
the Steelyard; and the increase in the size of ships caused changes in the
importance of ports, by which Seville gave place to Cadiz, Rouen to Havre,
Dordrecht to Rotterdam.
Improvements were effected also in the art of navigation, especially in
the means of determining the position east and west. The simple means of
the later Middle Ages could give some idea of a vessel’s latitude, but very
little of its longitude. The introduction of the log in the seventeenth century
enabled a sailor to measure distance traversed more accurately, and the
invention of the chronometer in the eighteenth century gave at last a reliable
and practical means of determining longitude at sea. Progress in scientific
astronomy was made of service to sailors by tables which were the
forerunners of the modern “nautical almanac”; and charts and sailing
directions became, as the result of generations of experience, more
trustworthy and more useful.

QUESTIONS AND TOPICS

1. Character and life of Prince Henry of Portugal. [E. G. Bourne, Prince
Henry the Navigator, Yale Review, Aug., 1894, 3: 187-202, reprinted in
Essays in historical criticism, N. Y., 1901; or one of the readings in the
bibliography.]
2. Measure on the map the distances traversed in the voyages in search of
the sea-route to India; indicate these distances on a straight line, with the
dates, that the rapid increase in the extent of the voyages may be apparent.
3. Early life and first voyage of Columbus. [Bourne, Spain, chaps. 1 to
3.]
4. Early Christian pilgrimages to the East. [Beazley, chap. 1.]

5. European explorers in Asia. [Cheyney, chap. 3; Verne, vol. 1, part 1;
Beazley, chap. 3.]
6. Write a report on one of the countries of the East visited by Marco
Polo. [See the translation of his travels.]
7. Development of geographical science before 1500. [Beazley,
Introduction, chap. 5.]
8. Make tracings of typical maps, of antiquity, of the Middle Ages, and of
the period of the great discoveries; and compare them with a modern map
of the world. [See maps in Beazley and Cheyney.]
9. Maritime exploration before the fifteenth century. [Beazley, chap. 4.]
10. What were the means and methods of navigation in the fifteenth
century? [See Cheyney, p. 53 ff., and Fiske, Discovery.]
11. Voyages in search of a passage to India through the Arctic Ocean.
[Oxley, Romance, chap. 6; Verne, vol. 1, part 2, chap. 3; or Payne.]
12. Write a report on the history of tea, coffee, or sugar as a ware of
commerce. [Use the references suggested for wares of the Levant or Baltic
trade.]
13. Write a similar report on gold, silver, or tobacco.
14. Effect of the fall in value of silver in England. [Cunningham, Growth,
vol. 2, sect. 182.]
15. Development of the art of navigation in modern times. [Encyc. Brit.,
Navigation.]

BIBLIOGRAPHY

Classified bibliographies of the period of the discoveries will be found in
Cheyney, and in Cambridge modern hist., vol. 1.
General accounts will be found also in those two sources. Cheyney’s **
European Background includes some half dozen chapters on important
topics in the history of commerce; these chapters offer, in some cases, the
only available reading in English, and the book can be warmly
recommended. Another book, which is inexpensive, readable, and very
valuable, is Beazley’s **Prince Henry; this is full on the beginnings of
exploration, and has an especially good collection of early maps. The first
part of Fiske’s **Discovery of America presents an admirably written
survey of conditions leading to the explorations. The first volume of the
Exploration of the World by Jules Verne, N. Y., Scribner, 1879, 3 vols.,

covers the medieval period as well as that of the great discoveries; it has the
merits and failings which the author’s name suggests.
For Prince Henry and the Portuguese discoveries see **Beazley,
Stephens, Portugal, chap. 7, Cheyney, chap. 4, or, for a brief and readable
account, Oxley, Romance, chap. 7.
For the period following the discoveries, E. J. Payne, Voyages of the
Elizabethan seamen, London, 1880, can be recommended; it contains
original accounts of the exploits of the great English seamen of the time of
Elizabeth (Hawkins, Frobisher, Drake, etc.). Howard Pyle, *The
Buccaneers, N. Y., Macmillan, and David Hannay, The sea trader, London,
1912, continue the narrative to a later period.

CHAPTER XVI

DEVELOPMENT OF THE ECONOMIC ORGANIZATION

156. Agriculture.—The next important subject to be discussed in
considering the great changes in commerce in the modern period is the
development of the economic organization. The influence of the discovery
of new lands, new routes, and new wares is so obvious that the discoveries
are often represented as the chief cause of the growth of commerce in the
modern period. They were unquestionably very important factors in this
growth, but European commerce was developing without them, and would
have felt their influence much less if it had not been changing in its internal
structure. Men were applying new methods of cooperation, which enabled
them to make more of their resources at home and to utilize with greatest
effect the opportunities for gain abroad. Even at the end of the period the
commerce of England with Europe was larger than with all the other
continents together.
We shall review briefly in the following sections the main changes in the
different branches of production. The topic of agriculture must be dismissed
with but a few words. There was a general movement toward freedom of
the agricultural classes of western Europe at the beginning of the period.
Wars and other political interruptions checked the movement in France, and
brought about an actual decline of the cultivators in Germany; England was
the only important country in which the country classes became perfectly
free. In Europe as a whole, however, the conditions of production in
agriculture were decidedly better than they had been in the Middle Ages,
and the increased product supported a larger population and furnished a
basis for a more extended trade.
157. Development of manufacturing organization in England;
persistence of gild restrictions elsewhere.—In manufactures, also, there
was a movement toward freedom in the more favored countries. We shall
see, in the history of England, how greatly English manufactures, and the
commerce depending on them, advanced under the leadership of merchants
and capitalists who broke through the old gild restrictions. The striking
feature, however, in the manufactures of most countries of this period is the
maintenance of the gild system, which became a most serious check on

industrial advance. It will be remembered that the gilds grew originally out
of the union of artisans in any trade, who banded together to protect their
interests, and who were granted certain privileges, especially that of
monopoly, that they might regulate the trade more efficiently and so protect
the interests of consumers also. At the present time the interests of
consumers are sufficiently protected by the competition of producers, who
do not need government regulations to tell them that they must sell good
wares at low prices if they desire to succeed; and just as soon as exchange
becomes sufficiently active to stimulate competition the public gains by
having restrictions abolished. In most of the European countries, however,
the gild privileges and restrictions were retained until the nineteenth
century, with results set forth in the following paragraph.
158. Evils of the gilds.—(1) The privilege of monopoly was abused by
limiting entrance to the gild in various ways, so that production was
restricted and prices were raised to the detriment of merchant and
consumer. Laborers suffered, also, by the lessened demand for their
services. (2) Gilds came into frequent conflict over the question as to which
had the right to exercise a particular branch of trade or manufacture; these
quarrels were similar to those arising between trade unions at the present
time. Manufacturers suffered from the separation of allied trades; and time
and money, which ought to have gone into the business, were wasted in
long lawsuits. (3) The full members of the gilds, the masters, tried to keep
the laborers (apprentices and journeymen) in an inferior position, and
granted promotion by favor rather than by merit; laborers lost the incentive
to good work and were tempted to idleness and disorder. (4) The masters
tried to preserve equality among themselves. Any master who was
sufficiently enterprising to attempt to extend his business by introducing
improvements or by employing more men was pulled back to the general
level. (5) Technical improvements were prevented also by the regulations
which were adopted originally to secure good quality of the product, but
which hardened into a routine prescribing the details of every process of
manufacture. (6) After all the restrictions, consumers did not get good
quality even when they paid high prices. They could not punish the
producers of poor goods by withdrawing their custom; and scamped work,
adulteration, and fraud were common.
159. Development of the commercial organization. Rise of
wholesalers.—Reviewing the substance of the last few paragraphs we find

that the advance in agriculture was local and incomplete, while in
manufactures it failed, in great measure, to displace a wornout system
inherited from a preceding period. Only in commerce itself were the
changes rapid and general in western Europe. Methods of business which
before had been practised in only a few Italian cities, were now adopted in
the country north of the Alps, and developed rapidly in the leading
commercial districts.
A class of professional wholesale merchants now sprang up. Before this
time, of course, merchants had on occasion dealt in considerable quantities
of wares, but even the leading medieval merchants seem to have been glad
to keep up their business by selling in small quantities to consumers. Only
in the last century of the Middle Ages do we find in Germany merchants
who confined themselves entirely to wholesale trade. As yet they had not
become specialists in any one particular ware. An idea both of the variety
and of the extent of their transactions can be gained from the business of
John von Bodeck, who was a merchant in Frankfort about 1600. He bought
silk and drugs in Venice, spices in Amsterdam, and sent them for sale to
Hamburg; he bought iron and wax in Hamburg and sent them to Spain; he
bought indigo and wool in Spain and sent them to Amsterdam and Antwerp;
he bought rye in Amsterdam and sent it to Genoa.
160. Development of the commission trade; services of factors.—
Bodeck must have traded in these wares often without knowing much about
them himself, and generally without seeing them. Such a business would
have been impossible in the Middle Ages when a merchant accompanied his
wares or shared his responsibilities with a few associates. It was made
possible now by the development of the commission trade. Commission
merchants, or factors, made it their profession “to buy and sell for other
business men for a certain profit which is given them for their trouble by
the principals.” Sometimes they were in business on their own account also;
sometimes they were specialists in various lines. A writer of the seventeenth
century distinguished five classes: those who lived in a manufacturing or
commercial center and bought goods for others; those who sold goods for
others; the correspondents of business men and bankers who made
collections and remittances of money for them; forwarders, who received
and forwarded goods at places of transshipment; and, finally, the agents for
carriers, who distributed and collected the load of a freight wagon in a city.
The duties of a mercantile factor, in general, were to advise his principal

frequently concerning the market for wares, the course of exchange, etc., to
acknowledge letters punctually, and to follow orders exactly. The
commission varied from 5 per cent of the value of the goods in the West
Indies to 2 per cent or even less in some of the European countries.
161. Improvement in means of communication; posts.—Commission
business of the kind described in the preceding paragraphs implied much
greater frequency of communication among merchants, and it is noteworthy
that the system of public posts was founded in Europe about the beginning
of this period, and developed rapidly during it. Relays of horses with
postilions and with the necessary officials were established by the
governments of various countries, to insure regular communication; the
system was meant at first only for official business, but was soon extended
to serve the needs of private individuals. Some idea of the advance can be
got from a statement made at the opening of the railroad from Strassburg to
Basel, giving the time required to go from the one to the other of these
places in earlier times. The distance, about seventy-five miles, or less than
the distance between New York and Philadelphia, was covered in the
sixteenth century by a coach in eight days, in 1600 by a diligence in six
days, in 1700 by the same vehicle in four days, and in 1800 by “express”
(Eilwagen) in two days and a half. In the eighteenth century a man in
England could send a letter fifteen miles for a penny, thirty miles for
twopence, and so on up, the sum increasing with the distance; postage from
London to France was tenpence, to New York a shilling.
Merchants needed no longer to rely upon the friendly offices of the
traveler who happened to be going in the desired direction, and were free
from the expense of special couriers. Knowledge of market conditions in
distant places spread more broadly and more rapidly than it had ever done
before. Shrewd speculators could still sometimes make great profits by
getting possession early of some special bit of news, but the essentials of
commercial information were available for all. The modern newspaper grew
up, by several stages, from written reports that were passed around as
circulars in this period, telling of the state of the market, prices, conditions
of transportation, etc.
162. Need of closer association among merchants; risks of commerce.
—The most striking change in the organization of commerce, regarding
especially that with distant countries and other continents, was the growth
of association among merchants. We have noted the development in the

Middle Ages of the partnership and other forms of association; we have
now to study the rise of great companies which form a connecting link with
the corporations and trusts of the present day.
Among the reasons for the rise of great commercial companies the
following are to be noted. (1) Distant commerce was exposed constantly to
armed attack. The protection of a country’s navy extended but a small
distance from home. Ships in European waters were threatened by pirates in
times of peace, by privateers in times in war; in waters outside Europe they
faced trade rivals from other European countries, and hostile natives who
were not bound by the civilized rules of peace and war. Distant commerce
was essentially military in character, and required for successful
prosecution greater military force than a small group of men could afford.
(2) Partly because of dangers suggested above, partly because of the natural
perils of the sea under the conditions of navigation at the time, partly
because of the very novelty of the trade, distant commerce was very
hazardous. If five men sent out a ship they might make a great fortune, but
they might lose everything. If they associated themselves with ninety-five
others and together sent out twenty ships they were pretty sure to lose some
of these, but they were pretty sure to make from the other ships enough to
return large profits.
163. Association required by government; reasons.—It was natural,
under the circumstances, that associations of men should spring up for
carrying on commerce in distant parts. We must note further, however, that
these associations were required by European governments, that a certain
field was assigned to each company in which it was given a monopoly, and
that in this field trade by individuals and by other associations was
prohibited. The reasons for this course were, in brief, as follows:
(1) The peoples of distant countries did not distinguish between
individual merchants. As all Chinamen look alike to us, so all Englishmen
or even all Europeans were alike to them. An unscrupulous trader, who
cheated, robbed, or killed a native, escaped the consequences of his crime
and left them to be borne by his countrymen who sought later to carry on
the trade. The home government could not punish such offences, and it
could not afford to let them continue. It required, therefore, that a man
proposing to trade to a distant country should have an interest in the
permanent welfare of the trade, by making him contribute money to the
association, and subscribe to its rules.

(2) The government could diminish the risks of distant commerce by
assuring merchants who spent money in building up a trade that they should
not be deprived of the fruits of their labors by newcomers who had made no
sacrifices. It seemed as proper to encourage in this way the investment of
capital in commerce as to encourage investment in manufactures by
granting patents.
(3) Finally, governments were led naturally to apply the prevalent ideas
of guild regulation to distant commerce, and found some practical
advantages in doing this; it was easier to tax and to regulate an association
of men than a number of individuals.
164. Association in the form of the regulated company.—Many of the
objects enumerated above could be obtained by union in what was called a
“regulated company.” The regulated company had a monopoly of a certain
field of trade, and established regulations which were binding on the
members trading in that field. Every one, however, who secured admission
by paying the entrance fee and promising obedience to the rules, traded
thenceforth with his own capital, and kept his profits for himself; there was
no pooling of capital or profits. The character of such a company may be
suggested to readers by the organization of the modern stock exchange. No
one who is not a member can trade on the exchange, and every member is
bound to follow certain rules in his dealings, but every member keeps his
capital and profits distinct from those of the others.
The larger part of the early English commercial companies were
regulated companies of this kind. To a certain extent they attained the
objects of association which have been enumerated above; some of the
worst evils of individual trade were impossible so long as the company
adopted wise regulations and could force members to live up to them.
165. Objections to the form of the regulated company.—Still, the
regulated company was at best a loose association. Individual traders had
no greater interest in it than the amount of their entrance fees, and regarded
their momentary individual interests as more important than the permanent
interests of the group. This weakened the control of the company over the
associates, and rendered difficult the prevention of abuses. A strong and
active policy was hardly possible, moreover, when associates kept the bulk
of their capital in their own hands, and could withdraw in periods of
adversity, so that the resources available to push the interests of the
association diminished when most needed.

The problem set before Europe in this condition of affairs was as
important as it was difficult. The future of European commerce, even of
European civilization, depended on some solution which would make from
the individual impulse to gain, the instinctive selfishness of every man, a
collective force which would enable a number of men to work for gain
together. The partnership had united the interests of a very few men,
simplifying the problem by starting with members of the same family, who
were naturally bound together. The relation of merchant and factor was
another move in the right direction, as it united in loyal support of each
other two men separated by considerable distance, and with no other
common interest than that of their business. The principle of association
must, however, be extended far beyond the bounds of factorship, or
partnership, or of the regulated company, if Europe was to rise to the
opportunity presented by trade with distant countries.
166. The joint stock company, and its advantages.—The problem,
reviewed briefly, was to get: (a) a permanent stock of capital, (b) so large
that it must be contributed by a very considerable number of people, (c)
under the management of a few people who would employ it efficiently,
and for the advantage of all the contributors. The solution was the joint
stock company. Early examples of this form of association are to be found
in Italy, but it developed north of the Alps only after the founding of the
Dutch and English East India Companies about 1600.
Let us see how the stock company meets the demands for an improved
form of association which were imperative at this time. (1) It insures
permanence of operation. Individual stockholders or managers may die, but
the company does not die with them; their places are filled, and the
company continues with its original capital. (2) The contributor does not,
like a partner, need to be a business man; does not, like a silent partner,
need to have especial trust in the person of the managers. The contributor
may be a foreigner, a child, or a woman, and the sources from which capital
may be drawn are thus immensely extended. (3) Capitalists of every class
are willing to contribute to the undertaking because of the peculiar
safeguards which this form of association offers to them. In the first place,
though the investment is permanent, from the standpoint of the company,
and so enables the management to carry out far-sighted plans, yet it
endures, from the standpoint of the individual subscriber, only so long as he
pleases. The system of transferable shares enables a stockholder to sell out

his interest at any time, and so change his investment. In the second place,
the stockholders have a voice in the management of the company
proportionate to their interest in it. They choose the persons to whom they
will entrust the active direction of affairs, require periodical reports on the
course of business from the managing directors, and have the power to
change the directors if the conduct of affairs is not satisfactory.
167. Good and bad sides of joint stock companies.—The reader would
err if he assumed that all the advantages suggested above were secured
immediately on the founding of the first stock companies. Experiments of
various kinds were tried at the start, and only gradually did the companies
take the form which they have assumed in modern law. The English East
India Company, for instance, which was founded in 1600 as a regulated
company, was made over into a joint stock company by degrees, and could
not be regarded as permanently established on this basis for over fifty years.
Generations of bitter experience were required to teach people the possible
dangers as well as the possible benefits of this form of association.
Incompetence and corruption were prevalent in the management of
affairs. The worst abuses of our modern corporations give one but a faint
idea of the enormities that were perpetrated in the early period of joint stock
history. In spite of all, the joint stock companies accomplished the purpose
for which they were created; they attracted capital at home, stimulated the
prosecution of a definite policy abroad, and extended commercial interests
as individuals or other forms of association would have been unable to do.
The American reader may remember that Virginia was founded and
Massachusetts was developed by joint stock companies. Other forms of
association, especially partnership, were more suitable for many purposes,
and increased constantly in number; but alongside them several hundred
stock companies grew up in Europe of which perhaps a hundred were
founded to develop great commercial and colonial undertakings.

QUESTIONS AND TOPICS

1. Write a report on the break-up of the manor and the rise of modern
farming in England. [Cheyney, Indust. hist., chap. 5, or one of the other
manuals of English economic history.]
2. Write an essay comparing the restrictions of the guilds with those of
modern trade-unions.

3. What are the functions of wholesale merchants and hence what was the
importance of their rise at this time?
4. Who were some of the notable merchants of the period? [Bourne,
Romance, chap. 12, or English merchants.]
5. What examples can you find nowadays of the different classes of
commission merchants mentioned in the text? What commission do they
charge?
6. Write a report on the rise of the modern postal system. [See Encyc.
Brit., articles Post-office, Postage stamps.]
7. Write a similar report on the history of the newspaper. [Encyc. or
Bucher, **Indust. Ev., chap. 6.]
8. Endeavor to understand the reasons for mercantile association, and for
the requirement of this association by the government, by reviewing the
changes in conditions since this period, and seeing why association is not
necessary or compulsory now.
9. Study Cunningham, Growth, vol. 2, sect. 188, on regulated and joint-
stock companies, and pick out examples of each type in the following
sections.
10. Write a report on the various forms which the (English) East India
Company assumed during the first century of its existence, and the reasons
for the changes. [Cunningham, or Hunter, **Hist. of British India.]
11. Write a report on abuses and corruption in this company. [Hunter.]

BIBLIOGRAPHY

A bibliography accompanies the chapter by Cunningham on **Economic
change, Cambridge mod. hist., vol. 1, which furnishes the best brief account
in English of topics considered in this chapter.
Histories of various countries at the period of the Reformation present
descriptions of their agricultural, industrial, and commercial organization;
but I know of no general and comprehensive treatment in English of topics
treated here.
The only topic on which there is abundant material available is that of
commercial organization. See Cheyney, **Eur. background, chap. 7
(chartered commercial companies), chap. 8 (typical American colonizing
companies); Hewins, **English trade, chap. 3 (trading companies); Hunter,
Hist. Brit. India (East India Co.). R. B. Westerfield, *Middlemen in English

business, Trans. Conn. Acad., May, 1915, 19; 111-445, is a scholarly study
of the development of the organization of marketing, and W. R. Scott, *The
constitution and finance of joint-stock companies, Cambridge Univ. Press, 3
vol., 1910-1912, is an authoritative work on the history of that subject.

CHAPTER XVII

CREDIT AND CRISES

168. Growth of credit business and of banking.—The rise of the joint
stock companies was a great step in the development of the power of capital
and of credit. Individual savings, which before might have been hoarded
and made useless to society, were drawn from their hiding-places to form
the capital and loans by which the great companies extended the scope of
commerce in this period. Another step in advance, which deserves notice
here, was the extension of banking north of the Alps. The medieval doctrine
that it was wrong to take interest on loans lost its force when it appeared
that loans were wanted by merchants who would put them to a good use;
and society concluded that it was wise to encourage the lending of money
by permitting the lender to take interest for it. There is a great difference,
however, between the lending by an ordinary individual, who has more than
he knows what to do with, and the business of lending as practised by a
banker. The difference is this, that an ordinary individual lends his own
money, while a banker lends that of somebody else. When credit operations
have become sufficiently extensive the banker appears as a man who makes
dealing in credit his profession. He steps in between the people who have
capital but lack the ability or inclination to employ it profitably, and the
people who have the ability and inclination to conduct business enterprises
but lack the desirable amount of capital. The banker is a specialist in this
profession, and by his special knowledge can do more than any one else
could to collect the surplus capital and place it where it can be used to the
best advantage.
169. Description of the rise of discount and deposit banking in
England.—The history of banking is too large a topic to be considered here
in detail. The early banks were marked by a number of individual
peculiarities, and occupied often a public position as agents of the
government; these points need not detain us. The development of ordinary
commercial banking can be illustrated by the business of the London
goldsmiths in the seventeenth century. The goldsmiths were required by the
character of their stock to keep strong-boxes (“safes”), which served the
purpose of a modern safe-deposit vault; and they united dealings in gold

and silver coin with their original business. They were naturally the persons
to whom a man would apply who wanted the means of keeping cash and
other valuables more securely than was possible on his person or at his
office or home; and thus they received in time considerable deposits from
merchants and others. Probably they made some charge at first for the
accommodation, but soon they were encouraging deposits by paying some
interest, and by undertaking to perform services such as collection and
remittance for their customers. They could afford to do this by reason of the
fact that they did not let the cash lie idle in their vaults, but lent it to the
government and to business men; they had become banks of discount and
deposit. A tract published in 1676, entitled “The Mystery of the New
fashioned Goldsmiths or Bankers,” gives this account of their operations.
“Having thus got Money into their hands, they presumed upon some to
come as fast as others was paid away, and upon that confidence of a running
Cash (as they call it) they begun to accommodate men with moneys for
Weeks and Moneths, upon extraordinary gratuities, and supply all
necessitous Merchants that overtraded their Stock, with present Money for
their Bills of Exchange, discounting sometimes double, perhaps treble
interest for the time, as they found the Merchant more or less pinched.”
170. Rise of “money-power” as shown in the history of the Fugger
family.—The reader will perhaps comprehend more clearly the great
development of business in the modern period if we follow here the history
of one of the families of South Germany which rose to the first rank among
the money powers. The Fugger family was descended from a simple
country weaver, who settled in Augsburg and died there in 1409. His sons
rose to high place in the crafts of weavers and merchants, and accumulated
wealth, like many others, by trade in spices, silks, and woolen cloth. Under
a grandson, Jacob (1459-1526), who had been trained in Venice, the family
business underwent a striking change. We should call Jacob a financier
rather than a merchant. He and his brothers continued, it is true, to deal in
merchandise, but they made their great profits by dealing in money and
capital. If a prince or king wanted a loan they made it to him, charging a
good round sum in commission and interest, gaining often a security for
their advance, such as a mine or the right to collect some taxes, from which
they could make good profit. If a king like Charles V, whose dominions
were widely scattered, wanted to disburse some of his revenues in a distant
province, they undertook to sell him the necessary exchange and avoided

the transportation of the coin itself. Their business extended from Hungary
and Poland in the East to Spain in the West, from Antwerp in the North to
Naples in the South.
171. Description of the Fugger business.—The records of the Fugger
firm have been preserved, and we can learn the extent and character of its
business by the statement of its resources as they appeared in 1527. The
figures are in florins, of which each had a purchasing power equal roughly
to eight dollars to-day.
Mines (Tyrol, Hungary) 270,000
Other real estate (city and country) 150,000
Merchandise (copper, silver, brass, textiles) 380,000
Cash (in home office and 14 factories) 50,000
Loans 1,650,000
Private accounts of associates 430,000
Various current affairs 70,000
3,000,000
The reader will note the large sums appearing under mines and
merchandise, showing that the Fuggers still maintained their dealings in
wares, after they made finance their special business. The chief item,
however, is that of loans, which included sums borrowed by the Pope, the
Emperor, and kings of Europe. The Fuggers and other great financiers had
immense influence on the politics of their time, for they could command
money and credit while sovereigns were still trying in vain to build up an
adequate revenue system. They made fabulous profits, over 50 per cent a
year, in prosperous periods, and the Fuggers managed to make an average
profit of over 30 per cent a year for over thirty years. In the case of most
firms, however, there were lean years as well as fat ones, and the general
average would be very much less. More striking than the rate of profit is the
increase in the size of the capital. Taking two Italian banking firms, the
Peruzzi about 1300, and the Medici about 1440, and comparing them with
the Fuggers in 1546, we find that the capital was about as follows,
expressed in modern purchasing power: Peruzzi, $800,000, Medici
$7,500,000, Fuggers $40,000,000.

172. Weakness of the Fugger and other banking firms.—The great
financial firms of the sixteenth century seem to have been premature. They
lacked the permanence of the later joint stock companies, for they still
retained the medieval form of a company based chiefly on family
relationship, and required constant reorganization. Their success in the
hazardous operations of the time depended entirely on the sagacity of the
heads of the family, and as genius cannot be transmitted indefinitely they
went to pieces ordinarily in the third generation from their establishment.
The head of the Fugger firm about 1550 tried to wind up the business and
withdraw the capital, but found it impossible to do this, and became
involved in more and more enterprises. The balance of the firm in 1563
showed decided weakness; members of the family began to quarrel among
themselves; and the firm finally lost in unfortunate loans practically all its
accumulations. The bankruptcy of one of these firms involved wide-spread
disaster, for as time went on they carried on their business less and less on
the money contributed by members, and more and more on their credit. All
classes in the community—nobles, burghers, peasants whose savings did
not exceed ten florins, even servants—deposited their money at interest
with the financiers, and were involved in their fall.
173. Description of business in Antwerp in the sixteenth century.—
After considering the new forms of business from the standpoint of
individual firms it will be profitable to study them in the city that was the
business center of the time, where all the great firms were represented by
agents. This city, in the first part of the sixteenth century, was Antwerp,
which rose as the medieval port of Bruges declined. There have been, of
course, greater cities and greater markets since that time, but never before
or since, it is said, has the world seen such concentration of the trade of
different peoples in a single place. The town owed its development almost
entirely to the foreigners who flocked there to trade, and though it saw less
of Italians and Hanseatics than Bruges had done, it was the one great
gathering place for the Portuguese, Spanish, English, and German
merchants who were now the leaders. It is said that over five hundred
vessels sailed in or out of the port in one day, and that the English
merchants alone employed over 20,000 persons in the city. The poet Daniel
Rogiers said of the Antwerp exchange, “One heard there a confused
murmur of all languages, one saw there a motley mixture of all possible
costumes; in short the Antwerp bourse seemed to be a little world in which

all parts of the great were united.” In contrast with Bruges, trade in Antwerp
was almost entirely unrestricted, and this was perhaps the chief reason why
the merchants of the time selected it as the place in which to develop the
new forms of business.
174. Rise of the Antwerp exchange; its significance.—Antwerp
presented in the sixteenth century the first case of a great bourse or
exchange, that is, a place in which men meet daily and effect their
exchanges without displaying and transferring the wares themselves, by the
use of paper securities representing the wares. Such an institution cannot
exist until the volume of trade is large enough to cause a steady and
continuous flow of wares, in contrast to the spurts that marked the period of
the fairs. It requires, moreover, that the objects dealt in be of such a kind
that they can be represented at the exchange by some document or sample,
so that the buyer can learn the quality of the ware without actually
inspecting it. This is possible when a ware can be graded, put into a certain
class the characteristics of which are so closely defined and so well known
that the buyer needs only to decide whether he cares to take a certain
quantity at a certain price.
175. Development of business on the exchanges; produce and money.
—The use of the word “ware” in the foregoing description may suggest the
produce exchange as the earliest and most important form of the exchange.
Produce of various kinds, especially pepper, did form an object of exchange
trade in Antwerp; and there was a considerable development of the produce
exchange later in Amsterdam. At the “candle-auctions” on the Royal
Exchange of London in the seventeenth century, goods were offered with an
inch of lighted candle on the desk, and were knocked down before the
candle went out; a single parcel of silk, indigo, or spice sold in this way was
sometimes worth half a million dollars. The produce exchange, however,
did not reach its full development until the nineteenth century, and we shall
leave its significance in the commercial organization for later consideration.
The “ware” which formed the main object of trade on the Antwerp
exchange was loanable capital, represented by various paper instruments.
Princes who desired to borrow money, and who formerly would have
applied to individual financiers like the Fuggers, turned to the exchange of
Antwerp or of Lyons, where loanable capital from all over Europe was
collected. Through the medium of the exchange a French king could and
did borrow money of a Turkish pasha; and it was said that payments

amounting to a million crowns were made in a single morning without the
use of a penny of cash.
176. Advantages offered to industry and commerce by the exchanges.
—Antwerp and Lyons had served especially political needs in their loans;
they were embarrassed by the insolvency of royal debtors, and soon
declined. Their place was taken by Amsterdam, London, Hamburg,
Frankfort, and other cities, and with the rise of these new money centers a
change of importance is to be noted. The new exchanges attracted capital
for investment in private or semi-private economic undertakings, serving
the needs of the new companies which were being established. Ordinary
people with comparatively small savings would not have known (as they
would not know now) where to invest their money if they had not had the
stock exchange to turn to for an indication of enterprises seeking capital,
and of the current price of the stock. The stock exchange was the natural
and necessary accompaniment of the stock company.
Shares of trading and industrial companies and of public debts became
the objects of a regular commerce, which was not confined by national
boundaries, but which drew capital from all sources. When shares of the
Dutch East India Company were put on the market in 1602 they were taken
up to a considerable extent by capitalists of Antwerp who no longer had use
for their money at home; much of the money needed to rebuild London
after the fire of 1666, and a large part of the capital of the Bank of England,
came from the Dutch; shares of the English companies trading with Asia
and Africa circulated freely on the Amsterdam exchange; a loan to the
German Emperor was floated in London.
177. Growth of speculation; early abuses.—Modern forms of
speculative business grew up with the exchanges. A pamphlet published as
early as 1542 described the “monstrous thing” that Antwerp merchants had
devised; they bet with each other on the course of foreign exchange, one
saying it would be 2 per cent, one 3 per cent, etc., and afterwards they
settled by paying the differences. This is substantially the same operation as
that which is carried on regularly to-day. When the trade in shares of stock
was established traders would speculate on a rise or a fall, or a combination
of both. Shrewd speculators organized a system of news gathering and
forwarding which gave them the first knowledge of important events
affecting the price of securities, and enabled them to anticipate the turn of
the market. London speculators got word through a private channel of the

signing of the treaty of Rijswijk in 1697, a day before the English
ambassador arrived with the official announcement; their eagerness to buy
bank stock aroused suspicion, and the reason for their purchase appeared
when the news was published and the price of the stock rose from 84 to 97.
Underhanded methods of trade were common. Speculators would set
afloat rumors to depress the price of securities, and then buy in. One day
during the reign of Anne in England a well-dressed man rode furiously
through the street proclaiming the death of the Queen. The news spread and
the funds fell; the Jew interest on the exchange bought eagerly, and were
suspected later of being responsible for the hoax, though it was not proved
against them. The Englishman, Child, who made a fortune in speculation,
and who was called in a pamphlet of 1719 “the original of stock-jobbing,”
would have one set of brokers spread rumors of disaster, and sell a little of
his stock publicly, while another set bought for him “with privacy and
caution”; in a few weeks he would reverse the process and come out ten or
twenty per cent ahead.
178. Dangers of the new system of business; promotion of
unprofitable enterprises.—The appeal of joint stock companies to the
public through the medium of the stock exchange proved to be so effective
in gathering capital that a great many worthless undertakings were floated.
When times were good, that is, when enterprises had proved successful,
when people had saved money for investment and looked with confidence
to the future, almost anything in the shape of a company could get
subscribers to its stock. The reader should note that there were two sides,
one good and one bad, to the new methods by which commerce was being
developed. The facility of getting capital from a great number of subscribers
made possible more and larger undertakings than had been known before,
and was an unmixed benefit when the new undertakings were devised to fill
a real need of society. There was, however, a separation before unknown
between the subscriber and the undertaking; the contributor of capital might
be entirely ignorant of the economic basis of the enterprise, and might sink
his money for a return which came late or not at all. There was thus a
chance for the diversion of the capital of society to worthless purposes; the
business organization had become more powerful, but at the same time
more delicate and subject to derangement. We find in this period the
beginning of commercial crises marked by the misdirection of invested

capital, disappointment of investors, and distrust and lethargy, until spirits
rose with the recovery of lost ground, and good times began again.
179. Description of the “Bubble Period” in England.—Commercial
crises occurred in all of the advanced countries during this period. We shall
not, however, attempt an enumeration of them here, but shall use the
available space for a description of the most important crisis, that which
affected both England and France about 1720.
The crisis in England was closely connected with the course of the South
Sea Company, which had been established in 1711 as a trading corporation.
The company had secured the right to export slaves to the Spanish colonies,
had developed a promising whale-fishery, and was thought to be a large and
flourishing concern. It was then transformed into a financial company, with
the bold plan of assuming the whole national debt, for which it made
extravagant offers. “The large sum offered by the company, which made
success impossible, stimulated the imaginations of the people, who fancied
that a privilege so dearly purchased must be of inestimable value, and the
complication of credulity and dishonesty, of ignorance and avarice, threw
England into what it is scarcely an exaggeration to term a positive frenzy.”
All classes rushed to buy the stock, which at one time was quoted at
1,000. Then the weakness of the scheme became apparent; the stock fell as
rapidly as it had risen, and investors or speculators were ruined in large
numbers. This was only one of the bubbles which were inflated and which
burst about this time. Other companies were promoted for making salt
water fresh, for extracting silver from lead, for trading in human hair, and
for a wheel of perpetual motion. Insurance was now coming into
prominence, and this offered a favorite field for promoters. Subscriptions
were received for companies that proposed to insure against losses of
servants, against burglars and against highwaymen; one scheme was
“Plummer and Petty’s Insurance from Death by drinking Geneva” (gin). We
get a vivid idea of the spirit of the period from the fact that one promoter,
who announced a company “for an undertaking which shall in due time be
revealed,” secured 2,000 guineas in a single morning, with which he
immediately made off.
180. The crisis of the Company of the Indies in France.—Just before
the time of the English crisis one curiously similar in character occurred in
France. A Scotchman, John Law, who was an able banker and financier,
promoted a Company of the West, expanded later into the Company of the

Indies, which united with its commercial projects an attempt to finance the
government. Extravagant ideas were formed of the possibilities of Law’s
“system,” and the roads to Paris were blocked by people hurrying there to
speculate in shares. Two of the ablest scholars in France deplored the
madness at one interview, and at the next found themselves bidding against
each other. Coachmen, cooks, and waiters became millionaires by lucky
speculation; tradespeople in the street where the exchange was established
made fortunes by letting out their stalls and chairs. The price of stock rose
until it frightened even the promoter of the system, who interfered in the
hope of checking speculation, but who found soon that he was unable to
check either the rise or the fall of the stock. The crash which quickly
followed was especially serious, as the whole currency consisted now of
discredited notes issued by the company. Ruin was widespread, and credit
received a blow which made the promotion of legitimate enterprises
difficult for a long time thereafter.

QUESTIONS AND TOPICS

1. Prepare yourself to see the significance of the facts of this chapter by
reviewing the functions and benefits of credit institutions like banks. [See
Bullock, Introd., chap. 9, or other current manuals of economics.]
2. Write a report on the way in which churchmen and scholars came to
justify the taking of interest on loans. [Cunningham, Growth, or Ashley,
**Ec. hist., vol. 2, sect. 65 and others following, esp. 72.]
3. Fill in the outline of the text, sect. 169, by details to be found in
Cunningham, Growth, vol. 2, sect. 180.
4. Write a report on the business career of Sir Thomas Gresham, one of
the great English financiers of the sixteenth century. [Encyc., Dict. of nat.
biography, and references in those sources.]
5. Write a report on Antwerp in the sixteenth century. [See Motley, Rise
of Dutch Republic, N. Y., 1858, vol. 1, 81 ff., chap. 13.]
6. Benefits and dangers of speculation. [Hadley, Economics, chap. 4.]
7. Manias and panics, modern and recent. [Bourne, Romance, chap. 11.]
8. Write a report on one of the following topics:
(a) The tulip mania. [Oxley, Romance of commerce, chap. 3.]
(b) The “Bubble” period in England, [Cunningham, Growth, vol. 2, sect.
218; Oxley, chap. 2; cf. Lecky, Hist. of England, and cf. Macaulay’s history

of bubbles about the time of the founding of the Bank of England.]
(c) John Law and the Mississippi Bubble. [Oxley, chap. 1.]
(d) The Fugger family. [Paul Van Dyke, A captain of industry of the
sixteenth century, Harper’s Magazine, June, 1910, 120: 276-284.]

BIBLIOGRAPHY

As the subjects of this chapter have been treated generally by specialists,
and considered in their relation to modern economics rather than earlier
history, the reading is scattered, and, for our purposes, unsatisfactory.
The chapter by Cunningham in the first volume of the Cambridge
modern history covers in part the ground of this chapter. The important
commercial crises are described in the histories of England, France, etc.

CHAPTER XVIII

THE MODERN STATE AND THE MERCANTILE SYSTEM

181. Growth of modern states under the influence of commerce.—If
the modern reader is impressed, in studying the history of Europe before
1500, with the influence on commerce of the lack of strong government, he
will be equally impressed, in the period from 1500 to 1800, with the
strength of government and with the important part it played in commercial
development. We have here to sketch in brief the changes in political
conditions, leaving to later chapters a consideration of the details as they
appear in the history of different countries. Commerce itself was the great
force that broke the power of feudalism. Commerce crept through the
barriers that kept localities apart; it established a circulation of wares
through a large area of country; and it concentrated wealth in the cities
which it built up. These were the very changes needed to allow the world to
escape from feudal anarchy, and to construct a system of government
similar to that which the Romans had employed. Kings had now subjects
able and willing to pay taxes, and, by means of commerce, they could
transport their taxes, turn the proceeds into any shape they chose, and apply
them wherever it was necessary.
182. Decline of feudal power with the rise of mercenary armies.—A
large part of the new revenues was spent by governments in strengthening
their military position. Feudal lords were good fighters in the old-fashioned
way, and would not give up their local power without a struggle. They had
to yield finally, however, before the standing armies which kings called into
existence towards the close of the Middle Ages. Feudal lords loved to fight,
but they were only amateurs, after all, and did not make fighting a business.
The mercenaries, on the other hand, whom kings collected as soon as they
could afford the expense, were professionals, who submitted to a certain
amount of discipline because they could make a living by doing so.
Enterprising men collected a number of recruits, taught them to use their
arms, and drilled them until they counted for far more than an equal number
of untrained men; the leaders studied tactics and strategy, and knew how to
make the most of their superiority. The leaders were perfectly willing to let
their troops to any one who could pay the price, but as feudal lords were

always in want of ready money the advantages of the new armies went
almost entirely to the kings. The introduction of gunpowder in warfare
increased the superiority of the mercenary armies, by adding to the value of
training, and here again the kings, with ready money to invest in the latest
improvements, had an advantage.
183. Growth in power of the central government as shown in the
development of taxation.—By the year 1500 the process had gone so far
that many of the states of Europe had assumed a shape substantially like
that which they have to-day; and feudalism as a great political force was
dead. Government could now proceed to develop on the basis of an
extended territory. Some measure of the gain of the central government in
power can be had by noting the increase of its resources from taxation.
English taxes yielded about half a million pounds in the sixteenth century,
seven and a half million in the next century, and about forty million towards
1800. In little over a hundred years the yield of taxes in Prussia increased
twenty-eight fold. The revenue system was still crude and wasteful. Every
European state followed at one time or another the practice of raising
money by selling the right to hold an office. Every European state lost
money, not only by the inefficiency of the revenue system, but also by
corruption of officials; often half or more of money that the people paid in
taxes never reached the treasury. In spite, however, of these inevitable
faults, national resources were concentrated as they had never been before,
and the central government gained a power before unknown.
184. Persistence of medieval conditions in the modern period.—From
the modern standpoint no better field could be found for the use of this
power than in the reform of internal conditions. Centuries after feudalism
had lost its controlling position the local differences and the spirit of
separatism which marked the feudal period remained to plague the
merchant and the statesman. Commerce was hindered by local variations in
laws and in weights and measures; by the persistence of barriers to the
development of trade and manufacture which had grown up in the medieval
system of tolls and gilds; by the maintenance of the class distinctions
marking feudal society, and putting on a different basis the merchant, the
agriculturist, and the noble. A country like England, which early threw off
the most oppressive of its medieval institutions, gained a great start over
countries where they were allowed to continue. Statesmen in these other
countries recognized the need of reform, and made attempts to realize it

from time to time; they made slow progress, not only because the task of
reforming old customs was at best tedious and expensive, but also because
their attention was distracted from the task for much of the time by the
pressure of foreign affairs.
185. Attempts at reform, leading in many cases to over-regulation.—
All the European governments in this period did pay attention to the
development of internal resources. One of the chief features of the
mercantilist theory, that animated government policy during the seventeenth
and eighteenth centuries, was the emphasis laid on the circulation of money
and wares inside the country. The new national governments helped to
further internal commerce by repressing disorder, and by reforming, to
some extent at least, the system of laws and courts to which business men
could appeal for the settlement of disputes. Most of the governments paid
considerable attention also to the development of the postal system.
Governments could serve their people well in ways like these, but
unfortunately they expended their energy on other objects that were useless
or harmful. “The state moulds men into whatever shape it pleases,” was an
idea of the time, which led to an enormous amount of government
regulation. In few states of the Continent was a man free to seek his profit
where he would; he was entangled in a network of government regulations
that fixed the rules of his trade, the prices of his wares, even the articles
which he might or might not consume. An excellent example is furnished
by the grain trade, which governments regulated so strictly that in many
cases laws caused the very famines which they were designed to prevent.
186. Attention distracted from internal reforms by foreign interests.
—A consciousness that government regulation had gone too far for the
interests of commerce grew strong before the end of the eighteenth century,
when a school of thinkers, the physiocrats, protested earnestly against it.
Their formulas, “don’t govern too much,” “let things alone” (laisser faire),
were to be realized in the nineteenth century. At the time, however, they had
little effect; the faith in the power of government was still strong in the
minds of rulers, and their attention was distracted by other interests. When
rulers had crushed the resistance of their subjects, and established their
absolute authority, they had a surplus of power which they were inclined to
apply abroad. The period from the sixteenth to the eighteenth centuries is
filled with strife between the European states, each attempting to get
possession of some of the territory and power of a rival. The states of

Europe were still young, with all the vigor and all the inexperience of
youth, and not until they had tried conclusions with each other were they
willing to settle down as they have done in the nineteenth century. It was
said above that internal reform was the best object of government
expenditure “from the modern standpoint.” Kings and peoples were not
modern, and to a king of the time one of the best objects appeared to be a
war with another king by which he might get more people under his power.
187. Wars occasioned by religious and dynastic interests.—In tracing
later the commercial histories of the different countries it will be necessary
to refer occasionally to these wars, but it will conduce to clearness if we
stop a moment here to examine their causes and character. Some of the wars
were religious, growing out of the Protestant revolution. The states of the
South remained Catholic, and those of the North became Protestant with
comparatively little opposition, but in the center, in France and Germany
especially, where neither side had at first a clear supremacy, the Protestant
movement led to disastrous civil wars.
Another series of wars may be called dynastic, as they grew out of the
ambitions of rulers to extend their power in Europe at the expense of other
ruling families. In the sixteenth century the chief contestants were Spain
and France. Spain dropped from the first rank, and France and Austria
continued the struggle for supremacy through the seventeenth and
eighteenth centuries. The dynastic wars seem to the student of the history of
commerce as unfortunate as those that came from religious differences.
They diverted men and resources from production to destruction; they
checked at the same time commercial development and the reform of
government.
188. Wars occasioned by commercial interests; military aspect of
commerce in this period.—Still another class of wars can be distinguished
in which the religious or dynastic motive might enter to some extent, but in
which the commercial motive was predominant. The reader should be
cautioned against an extravagant idea of the power of government to extend
commerce. At the present time this power seems very slight indeed. It was,
however, far greater in the period under consideration. References in
preceding sections to the prevalence of piracy and to the warlike attitude of
merchants of different nations toward each other have suggested the
military character of commerce, inviting the armed protection of the state.
“One fact stands out clearly,” says a recent authority on the history of India,

“No European nation has won the supremacy of the East which did not
make it a national concern.” The prize in distant commerce went not to the
best producers and merchants, but to the group of the best fighters; not size
and resources, but ability to organize and willingness to risk resources in
conflict, determined the question of success. The little state of Holland
made her fortune by an eighty years’ war, in which she broke the power of
the Portuguese and Spanish in the East. The English were still unready to
embark their national resources in distant ventures, but they won their
position in continental India in the eighteenth century by military support
which the French kings refused their subjects.
189. Wars arising from the conflict of colonial interests in the New
World.—Between 1600 and 1815 was a constant succession of wars,
arising from the fact that five European powers had colonies in the New
World which they were seeking to maintain or to extend. Holland and
Portugal lacked the territorial basis to maintain their struggle when larger
states armed for the conflict; France and Spain found their best energies
absorbed by dynastic interests in Europe which tied their hands abroad;
England emerged victorious from the conflict and found herself repaid, by a
position of commercial supremacy, for the expense to which she had been
put. Out of the one hundred and twenty-six years between 1688 and 1815
she had spent more than half, sixty-four, in wars ranging from seven to
twelve years in length.
190. Political importance of commerce in this period, connected with
the desire of governments for ready money.—Commercial expansion in
this period depended, as said above, on the political power of the home
country. Did not, on the other hand, the political power of the state depend
on commerce? A statesman of the time would have answered this question
in the affirmative, and with an emphasis which would seem strange now.
We think nowadays that the resources of a state depend upon the prosperity
of the people, no matter whether this prosperity comes from agriculture or
from manufactures, from internal trade or from foreign trade. Statesmen,
however, of the period under discussion, set a peculiarly high value on
foreign commerce, and regarded it as a more important branch of industry
than any other.

The chief reason for this view lay in the fact that most of the European
states produced little or none of the precious metals, and could get them
only by trade with a neighbor or with a distant country. Now money is “the
sinews of war,” and when states were constantly at war with each other, a
good supply of money seemed to the statesman a matter of the first
necessity. We regard money nowadays only as a means of procuring other
forms of capital by exchange, and do not worry about the money supply so
long as capital in other forms is abundant. It may have been the fact,
however, that in the early period of the modern state the fiscal and military
systems operated more smoothly when the stock of money in the country
was abundant.
191. The mercantile system, aiming to increase the stock of ready
money in the country.—Whether rulers were justified or not in the anxiety
that they showed about the money supply, they made it a cardinal point in
their policy to regulate commerce so as to increase, if possible, the stock of
the precious metals in the country. They argued that the country would
make money if it sold more merchandise to foreigners than it bought of
them, for then the foreigners would have to make up the balance in coin or
bullion. This was called “a favorable balance of trade,” as tending to bring
money into the country. On the other hand, if the country became indebted
for foreign merchandise to an amount greater than could be offset by the
exports, the country would owe a cash balance abroad, and this was an
“unfavorable” balance of trade. At the beginning of the period the
government tried to effect its object simply by prohibiting the export of
bullion (gold and silver); this was the “bullionist” policy.
Prohibitions were found to be ineffective, however, and were a serious
hindrance to some branches of commerce, that with the East especially, in
which the foreigners demanded considerable supplies of the precious
metals. The export of bullion, therefore, was generally permitted, and the
government contented itself with a regulation of the commerce in
merchandise which, it hoped, would bring more bullion into the country
than was carried out.
192. Features of the mercantile system; restriction of imports.—If the
student will remember that the main object of the mercantile system, as it
was expressed in the commercial policy of the seventeenth and eighteenth
centuries, was to increase the credits in a country’s foreign trade, and

diminish the debits, so as to get a balance in cash, the main features of the
policy will be easily intelligible.
In the first place, imports were discouraged. A Spanish mercantilist
thought that his country suffered “an infinite wrong” from the importation
of fish from abroad, which, by his reckoning, cost the country three million
piasters a year; he suggested either that home fisheries should be built up so
that the money need not leave the country, or that permission be obtained
from the Pope to eat meat on Saturdays, which would diminish the
necessity for importation. A typical example of the ideas underlying the
policy is furnished by an appeal of the English salt-makers in the
seventeenth century, urging that the use of foreign salt in the curing of fish
be prohibited on the ground that it was the “wisdom of a kingdom or nation
to prevent the importation of any manufacture from abroad which might be
a detriment to their own at home, for if the coin of the nation be carried out
to pay for foreign manufactures and our own people left unemployed, then
in case a war happen with our potent neighbours, the people are
incapacitated to pay taxes for the support of the same.”
Mercantilism and modern protectionism easily ran together, as is
apparent in the quotation, but the spirit animating restrictions was in this
period mainly mercantilist, based, that is, on consideration of the flow of
precious metals. The methods of tariff regulation, moreover, differed from
those of modern protectionism; statesmen did not, in most cases, attempt to
scale the duties so as just to balance the advantages of the foreign producer,
but resorted to downright prohibition of the wares which they desired to
exclude from the home market.
193. Encouragement of exports, manufactures, and shipping.—In the
second place, exports were encouraged, for they represented the credit
items in a country’s trade, and might bring home a balance in cash. Even
imports could be tolerated if they led to a more than corresponding increase
in exports. The trade with East India was looked on with suspicion for some
time because, as said above, it required the export of considerable bullion;
but finally it established itself in public esteem, on the ground that a large
part of the eastern wares was transshipped in England and exported to other
European countries, so that the bullion was recovered from them.
Altogether the best kind of imports, however, was held to be the raw
materials of manufacture; if these could be worked up in England and
exported, the country cleared not only the sum originally due for the

imported material, but also the extra charge for the manufacture. Home
industries were given various privileges by the government, because they
either spared the importation or increased the exportation of the wares
which they produced.
Shipping and the fisheries were regarded with special favor, not only
because they helped to produce a favorable balance of trade, but also
because they were feeders for the national navy, and thus augmented the
strength of the country in war.
194. Failure of the mercantile system to affect the distribution of the
precious metals.—Such were, in brief, the characteristics of commercial
policy in the time of the mercantile system. The word “system” may give a
false impression, for though the main ideas of mercantilism were generally
accepted during the seventeenth and eighteenth centuries, they were greatly
modified in their practical application, and were seldom carried to their
logical conclusions. For example, though statesmen professed a desire to
stimulate exports, yet export duties were generally retained in this period
for the revenue that they returned, and they hurt in some cases, without
question, the sale of wares abroad.
After this review of the characteristics of commercial policy the reader
will naturally inquire what were its effects. On one point an answer can be
given with considerable assurance; the policy had no important effect on the
distribution of the precious metals. Gold and silver were brought from
America, the chief source of supply, to Spain, and flowed from Spain to the
countries where they were needed in business; it seemed as though all the
people of the world were in an unconscious conspiracy to defeat the plans
of statesmen for checking or directing the flow. It is noteworthy that Spain,
the country which had the best chance apparently to accumulate treasure
and which pursued a policy of exaggerated mercantilism, was always
complaining of the dearth of gold and silver, while Oriental states, which
had never heard of mercantilism, accumulated large stores of bullion. The
attempts of European countries to rob other countries of their treasure by
legislation present, from one point of view, an absurd spectacle, for they
were all applying the same principles in much the same way, action and
reaction were equal, and no amount of political straining affected the
distribution due to economic demand.
195. Important effects of the mercantile system in other ways.—The
commercial policy of the mercantilist period had effects in other directions,

if it did miss the mark at which it aimed. It was important, considered
merely as a policy of restriction, in checking the exchange of commodities
between states. Just as manors and the districts centering around a city had
aimed at self-sufficiency in an earlier period, so the states of this period
were led by their dislike of imports to attempt the production of everything
possible within their borders; and an international organization, in which
each state would specialize in the products for which it was best fitted, and
would depend on commerce with others for supplying deficiencies, was
hindered from developing. The mercantile system furnished a natural basis
for the system of national protection, which grew up from it, and which has
not entirely outgrown even yet its mercantilist origins. One of the most
obvious effects of mercantilist commercial policy can be traced in its
influence on the foreign relations of states. It was not, as is often said, the
chief cause of the many wars which vexed Europe at this period; their cause
lay deeper than any theory of favorable or unfavorable balances of trade.
The balance of trade theory did, however, affect the political grouping of
countries to a considerable extent, and inclined statesmen to look for friends
or foes in the countries with which the balance was favorable or
unfavorable. England, for example, made herself the ally of Portugal
through a large part of the modern period, because Portugal bought her
manufactures, and sold in return wines and other commodities which could
not be produced at home; and England kept alive the traditional hostility
toward France because the trade with that country showed regularly an
unfavorable balance.
196. Colonial policy.—Based on considerations like the preceding, the
colonial policy of this period was marked by restrictions entirely opposed to
modern ideas of commercial freedom. A government which permitted or
encouraged the establishment of colonies in distant lands, considered it a
duty to itself to see that other governments or the colonists themselves did
not rob it of the rewards of success. The colonial policy of the period has
sometimes been pictured as purely one-sided, selfishly sacrificing the
colonists to the interests of the people at home. This view leaves out of
account not only the generous help given by European governments to their
dependencies, but also a great mass of legislation aiming to benefit the
colonists by assuring them a market in the home country, and imposing
sometimes serious restrictions on the inhabitants there. A government did
no more than hold resolutely to the idea that emigrants, wherever they

might be, were still citizens of their native state and bound to help maintain
its power. The government tried ordinarily to frame its regulations so that
mother country and dependency would devote themselves to different lines
of production, and so supplement rather than compete with each other. It
considered it only natural and proper that the colony should trade mainly or
entirely with the mother country. As said above, this was a period of bitter
conflict among the European states, and a country’s commerce was thought
to be one of the mainstays of its military and naval power; it seemed,
therefore, to be the plain duty of colonists to contribute by their commerce
to the resources on which the independent existence of the whole nation
was thought to depend.

QUESTIONS AND TOPICS

The student will do best, probably, to study carefully one of the
references to manuals in the bibliography as a means to an understanding of
the topics of this chapter.
1. An exercise requiring considerable time, and supposing some
acquaintance with narrative history, but promising valuable results, is the
following. Select one of the European states: England, France, Spain, the
Netherlands. Make a chronological summary of its wars during the period
1500-1789, classifying the wars under one of the heads suggested, and
aiming to get the total years spent in each kind of war and at peace.
Estimate the gains and losses by war, and so reach a position to judge of the
merits of the policy pursued.
2. Sections 181-2 cover, to some extent, the ground of chap. 15. Review
that chapter, and, if possible, review the history of some state like France, to
appreciate the significance of the political development. [Adams, French
nation.]
3. Make a written summary of the hindrances to commerce in France at
the end of this period. [Taine, The ancient regime, N. Y., Holt, 1876, $2.50;
Edward J. Lowell, The eve of the French Revolution, Boston, Houghton,
1900, $2.]
4. Thomas Mun, an Englishman who lived in the seventeenth century,
wrote that the regular means “to encrease our wealth and treasure is by
Forraign Trade, wherein wee must ever observe this rule; to sell more to
strangers yearly than wee consume of theirs in value.” State the arguments

by which Mun would support this proposition, and determine your own
opinion on the question.
5. Make a brief written statement of the difference between mercantilism
and protectionism.
6. Define the attitude which the mercantilist would assume toward each
of the following trade phenomena: import of raw silk, export of silver plate,
export of silk goods, import of knives, import of gold bullion, import of salt
fish.
7. Study, in a book on economics, the influences determining the
distribution of the precious metals, and show how mercantilism was bound
to fail in its object of increasing the money in circulation in a given country.
[For a brief and clear discussion see F. A. Walker, Pol. econ., advanced, N.
Y., Holt, sects. 176-178.]
8. Discover, in the writings and speeches of American protectionists,
evidence of mercantilist views. [See, for example, Roberts, Government
revenue, Boston, 1884, or R. W. Thompson, History of protective tariff
laws, Chicago, 1888.]
9. Criticism of the old colonial policy. [Adam Smith, Wealth of nations,
Book 4, chap. 7, part 2, reprinted in Rand, Ec. hist., chap. 1.]

BIBLIOGRAPHY

A bibliography, unfortunately ill suited to the purposes of untrained
students, is appended to chap. 22 of Cambridge mod. hist., vol. 3. See also
the histories of economics by Cossa and Ingram, under mercantilism.
Of general discussions the student must choose between the chapter
noted above, J. N. Figgis, Political thought in the sixteenth century, which is
abstruse and theoretical, or Cheyney, Eur. background, chap. 6, Political
institutions of Central Europe, 1400-1650, which is concrete and
descriptive; neither is satisfactory for our purposes. Probably the most
intelligible discussion will be found to be Seeley’s **Expansion of England,
especially lecture 4, the old colonial system; and lecture 6, commerce and
war. Schmoller, **The mercantile system, deserves its place as an economic
classic, but will be found difficult by beginners. A brief account of
mercantilism, by Ingram, will be found in the Encyc. Brit., 9th ed., 19: 354-
358.

Among the smaller manuals can be recommended: Cunningham and
McArthur, chap. 4; Warner, chap. 9. Thomas Mun, England’s treasure by
forraign trade, N. Y., Macmillan, 1895, $.75, presents mercantilist views in
their typical form, and is an excellent source for somewhat advanced
students; chapters may be assigned for discussion and criticism.

CHAPTER XIX

SPAIN AND PORTUGAL

197. Extent and power of the Spanish monarchy.—Pursuing now the
history of modern commerce by studying its development in different
countries, we turn first to the states of the Iberian peninsula, whose great
possessions outside of Europe seemed to assure their commercial
supremacy.
Shortly before the close of the last century of the Middle Ages three
events of great significance occurred in Spanish history. One was the union
of the crowns of Castile and Aragon, which brought the greater part of the
Iberian peninsula under one ruler. The second was the completion of the
centuries old war against the Moors, by the conquest of their last stronghold
in Granada. The third was the discovery of America by Columbus. The
great Spanish king of the sixteenth century, Charles V, was the most
powerful sovereign in the world. He governed at home with undisputed
absolutism; he was ruler by one title or another of some of the richest
European countries outside of Spain (especially the Netherlands); and he
enjoyed in his own right the sovereignty not only over the greater part of
America, but over Asiatic and African possessions as well.
198. Rapid development of Spanish industry and commerce.—The
rise to greatness of the Spanish kings was paralleled by the development of
the Spanish industrial organization. Spain had throughout the Middle Ages
been rich only in her raw materials; she had exported wool, iron, and wine,
and had imported all her manufactures, largely in foreign ships. The long
wars against the Moors had turned people from the industrial arts, so that
manufactures were primitive except in a few cities like Barcelona. The most
advanced classes in manufactures and trade were not the native Christians
but Moors or Jews. A decided advance can be noted under Ferdinand and
Isabella, but the movement did not gain full headway till the sixteenth
century. Then, it is said, the laborers employed in the textile industries of
Toledo rose from 10,000 to 50,000 in about twenty-five years, and still
merchants could not supply the demand and had orders for five or even ten
years ahead. The industries based on wool, it is said, grew till they
supported nearly a third of the population; Spain began to import raw silk

and export the finished product, a reversal of previous conditions; great
factories were established to make soap and other wares; and the amount of
business transacted in Spain made the fairs of Medina del Campo one of the
important clearing houses of Europe. Over 100 ships measuring from 300 to
500 tons left Spain yearly for the colonies, and at least as many cleared for
European ports; 50 ships or more, it is said, often left the harbor of Santa
Maria together, carrying away the salt that was manufactured there.

The map shows approximately the extent of the Spanish possessions
under Philip II, (1556-1598).

199. Economic decline in the following period.—Astonishing as is this
rapid economic development, it is less striking than the economic decline
that followed. Lack of space forbids the discussion in detail of the complex
causes which brought about, first, an actual decline of productive power,
and then a condition so nearly stationary that Spain was passed by nearly all
the other states of western Europe. One important factor, the colonial
system of the Spanish kings, will be reserved for discussion later as a
separate topic. In this place we shall take up some of the significant facts
showing the decline, and suggest some influences that make it intelligible.
The most serious symptom of decadence was an actual decrease of
population. In 1723 the total population of Spain was under six million,
three million less than the figures show for 1594, when the decline had
probably already begun. This decrease is the more significant in that it
affected largely the urban groups whose numbers reflect the prosperity or
reverses of industry and trade; large cities lost half or even three quarters of
their population in half a century. Before the middle of the seventeenth
century the wool manufacture consisted only of a few unimportant factories
of coarse materials; the silk tax of Granada brought in less than a quarter of
what it had yielded under Charles V; and Spain had to rely on other
countries to furnish the manufactured wares for export to her colonies. The
decline affected not only the quantity of the population, but, to all
appearances, its quality as well; beggary and vagrancy became a national
curse.
200. Causes of decline; faulty political organization.—The decline in
population cannot be explained by emigrations to America, for the drain
from that source was small, as will be shown later. Executions by the
Inquisition, numerous as they were, could not alone have checked the
population. More serious was the expulsion, under ecclesiastical influences,
of the Moriscoes of the South, numbering perhaps a million. These people
of Moorish blood, the leaders in the agriculture and industry of Spain, in
1609 followed into exile the Jews who had been the leaders in trade; the
native Spanish were unfit to fill the gaps thus made in the industrial ranks.
Deeper-lying causes were at work, however. The damage from any single
event could have been repaired if there had been wholesome vigor in the

Spanish political organization, as there was and as there is still among the
Spaniards as a people. It was the fortune of Spain, at this critical period of
her history, to have the control of affairs vested in the hands of rulers who
were negligent of her condition, by the distraction of their interests or by
natural incompetence, and who wasted her resources. The framework of
government offered no chance for good councils to reach the monarch’s
ears. Men of business sense were excluded from office even in the towns,
so far as possible, and were a rarity in the national parliament; power lay in
the hands of lay and ecclesiastical lords who had inherited feudal ideas, the
reverse of business-like, from the earlier period of the crusade against the
Moors, and who had no understanding of the measures needed for industrial
development. There can be little doubt that the prime evil from which Spain
suffered was (as it still is) bad government.
201. The burden of taxes.—The chief political abuse appeared in the
form of taxes so burdensome in their amount and in the method of
collection that industry was stifled. Taxes increased so rapidly in the
sixteenth century that in 1594 it was asserted that they amounted to 30 per
cent on a man’s property, and that farmers could not exist no matter how
small a rent they paid; they left Spain or went to prison. The “alcabala,” a
tax supposed to be 10 per cent on a ware every time it was bought and sold,
was raised until it absorbed most of the profits of trade and was a leading
factor in the decline of industry. A Spanish author of the eighteenth century
(Ulloa) shows that a man engaged in the manufacture of a certain stuff
would have had to pay in taxes actually more than he earned; “hence it
follows that he would have gained more by making nothing, and in Spain it
is profitable not to work.” Some industries, more fortunate, paid 60 per cent
or 40 per cent of the value of the goods as a tax to the government.
202. Customs duties, on the frontier and inside the country.—The
same ruinous excesses marked the policy in customs duties. The
government established rates which were for the time enormously high, or
absolute prohibitions with the death penalty for infraction. Commerce
would have ceased almost altogether if it had not been for the absolute need
of foreign wares in Spain after the destruction of home manufactures. The
wares were procured partly by smugglers through the corruption of the
customs guards, partly by the connivance of the government, which allowed
foreigners such favors in measurement and valuation that often not over a
quarter of the nominal duty was paid. This allowed wares to enter, but it

killed the remnants of active Spanish commerce with Europe, for the favors
granted to foreigners were refused to natives. Other measures almost as
monstrous were attempted, and failed only because the government lacked
power to enforce them. Spanish shipping declined until it practically ceased
to exist outside the protected colonial traffic.
Finally, to complete this picture of the difficulties under which commerce
labored in Spain, duties existed not only on the frontiers but in the interior
of the country, hindering the free passage of goods and the development of
resources. Spanish kings made attempts to abolish the internal customs
frontiers, which failed through the opposition of interested persons and the
royal need for money. It was not until 1717 that the internal duties were
done away with, and even then the remedy was insufficient, and Andalusia
kept its internal tariff barriers.
203. Examples of bad policy; the Mesta.—An excellent example of the
evils of the government’s economic policy is furnished by the history of the
Mesta, an association of stock raisers largely devoted to the production of
merino wool. The flocks grazed in summer on the highlands of Leon, and
descended in winter to Estremadura. The Mesta got such privileges that it
killed the agriculture within its reach. Where the sheep had once fed the
land could never be alienated for another purpose; no one could bid against
the Mesta for the lease of pastures; proprietors along the route of the sheep
must sit passive and see the crops destroyed by them. Estremadura, once
one of the richest provinces of Spain, became one of the poorest, and parts
of it now are nearly desert. The policy of favoring one interest, by
sacrificing to it other interests more important, was characteristic of the
diseased political condition of Spain; and the wasting of national resources
shown in the case of the Mesta was but one of many examples of neglect.
The canals and aqueducts of the irrigation system, on which the Moors had
lavished their care, were allowed to deteriorate and go out of use; and the
forests were cut down to the permanent detriment of the soil and water
supply.
204. Failure to develop colonial trade.—In the foregoing sketch we
find sufficient explanation of the decline of the domestic industry and
commerce of Spain; we have still left to consider the question why the evils
of the home system were not repaired by the chances for commercial
development which the discovery of America and of the sea route to eastern
possessions opened. Before the attention of Spanish rulers was absorbed by

the attempt to suppress the Protestant movement in Europe and to subject
the Netherlands, the crown had won an immense area outside of Europe;
even to-day the extent of the Spanish possessions at this period is attested
by the hold which the Spanish language still has on the world. Of all the
European countries Spain was the one which appeared in the sixteenth
century to have the best chance to build up a great commercial empire
based on world-wide possessions. Why was not this chance accepted?
205. Spanish colonial policy. Taxes.—It was a misfortune for the
Spaniards that they quickly discovered precious metals in America, and in
seeking to increase their supply were diverted from a more substantial basis
of prosperity. But the final blame for failure lies again not with the people
nor with the nature of the colonies, but with the government. The
explanation is to be sought in the colonial policy of the Spanish kings. At
first the trade to America was comparatively unrestricted. Before, however,
merchants could establish the trade relations which would have enabled
them to develop the resources both of Spain and the transmarine
possessions, the government laid its heavy hand on the trade and held it
down so tightly that it never acquired vigor. Heavy taxes were levied on
trade, and, as in the case of taxes at home, these often were framed in such a
short-sighted way that they brought far more loss to commerce than gain to
the treasury. The “palmeo,” for instance, was an export duty levied in the
eighteenth century on wares merely according to their bulk, without regard
to their value; its effect was to encourage the export of foreign
manufactures, which had great value in a small bulk so that they could
afford to pay the duty, while the coarser Spanish exports were taxed out of
existence.
206. Restriction of trade to appointed fleets.—Ships could not sail to
America as might suit the convenience of merchants, but had to sail from a
given port (Seville or Cadiz), at a given time, to a given port in America
(Porto Bello near the modern Colon, or Vera Cruz). The government by this
restriction made it easier to protect the ships at sea, and to collect taxes
from their cargoes, but it bound the arms of merchants so fast with its
official red tape that they were weak and helpless. In theory two fleets left
Spain each year, one for Central America and one for South America; in
fact there were years together, especially in the eighteenth century, when
fleets did not sail, and when the colonial possessions might have been
entirely non-existent so far as regarded benefit to the mother-country.

207. Restriction of the market by the discouragement of emigration.
—On arrival in America a cargo was sold sometimes for a tremendous
advance over cost. Sometimes, however, and more and more frequently as
time went on, a fleet would find on arrival that there was no market for its
goods, and they would be sacrificed or brought back to Spain unsold. A
special reason for this will appear later, when we refer to the growth of
smuggling. One general cause, however, for the weakness of Spanish
colonial commerce must be noticed in this place. In contrast to the English,
who stimulated emigration and so built up a market for their wares in the
colonies, the Spanish kings kept emigration under a system of regulation
which was almost inconceivably strict. Colonists were discouraged from
settling in the New World not only by the difficulty of getting permission to
go out, but also by the poor chances for making a living when they arrived.
They were strictly forbidden to engage in any industry which could threaten
to compete with a Spanish industry; they were tied down to residence in
some particular province; and they were prevented from developing the
resources about them by restrictions which applied not only to trade with
the mother-country but also to intercolonial trade. Trade with the
Philippines, for instance, was closely restricted or even prohibited. Districts
in the southern part of South America were subject to similar burdensome
restrictions. A settler on the La Plata might have to get his European wares
by a trip across the Continent to Lima, then up the west coast, and across
the isthmus to Porto Bello. When the privilege of receiving two ships a year
was granted to Buenos Ayres a customs frontier was established in the
interior to prevent goods from reaching Peru by this route.
208. Supply of the market by smugglers.—Spanish colonists increased
but slowly, therefore, in numbers and riches, and furnished a poor market
for Spanish exports. The Indians were even worse customers. Natives who
went barefoot and had no beards were forced, it is said, to buy razors and
silk stockings at exorbitant prices, but of course they had no natural desire
for those or other European wares, and took only an inconsiderable amount.
As the home manufactures declined in vigor, exports to the colonies came
to consist almost entirely of the wares from other European countries, and
even these were obtained mainly through smugglers. The government could
maintain its regulations against Spaniards, but not against foreigners, who
absorbed the most profitable parts of the trade, and spoiled the market for
merchants who obeyed the restrictions. The English and Dutch islands

became the stations for an illicit trade which flourished as the regular trade
declined. After 1713 England had the right, by treaty, to the monopoly of
the African slave trade with the Spanish possessions, and was privileged to
send out nearly five thousand negroes a year. The English had moreover the
right to send out one trading ship of 500 tons; they secretly enlarged the
capacity of the ship and used accompanying transports to carry still more
cargo.
209. Wares of the colonial trade.—Of the products which Spanish
America furnished to commerce silver continued the most important during
the colonial period; the list of a ship’s cargo begins always with an
enumeration of the “plate,” in bullion and coin, of which but a small part
was gold. A fleet which left America in 1582 comprised 37 ships, “and in
every one of them there was as good as thirty pipes of silver one with
another, besides great store of gold, cochinilla, sugars, hides, and Cana
Fistula (arrow-root?) with other apothecary drugs.” Descriptions of cargoes
in the eighteenth century are substantially similar; among additional wares
enumerated we find indigo, cocoa, vanilla, sarsaparilla, “Jesuit’s bark,”
(quinine) “Paraguay tea” (maté), etc. The chief export from the La Plata
region was hides, of which two ships brought nearly 40,000 in 1723. Most
agricultural products were too bulky to pay for transportation.
The Spanish exported to the colonies assorted cargoes; one of 1625
included “Wines, Figs, Raisins, Olives, Oyle, Cloth, Cursies (kerseys, light
woolens named from an English town), Linnen, Iron and Quicksilver for the
mines.”
210. Reform of the colonial system about 1750.—In the eighteenth
century the old Spanish colonial system went to pieces. The government
recognized at last that it could not execute the laws which it had made, and
that the system which was meant to form the basis of a great empire
resulted only in stifling Spanish commerce and in encouraging foreigners to
great illegal gains. Foreigners were still excluded in theory; the importance
of the change lay in the opening of the trade to the Spanish who had before
been excluded by restrictions and taxes. Spanish merchants were allowed
first to send out ships independent of the fleets, and then in 1748 the fleets
were given up altogether. The prohibition on commerce between the
colonies was removed, and many new ports in America were opened to the
European trade. An indication of the results that might follow such a change
in policy had been furnished by the experience of Havana. When this city

was captured by the English in 1762 and thrown open to English trade, 727
merchant vessels entered the harbor in less than a year. Even though the
prohibition of trade with foreigners was still retained, the effect of the
reform in policy was nothing less than magical. In ten years the trade and
the customs duties increased about eightfold.
The reform came too late to benefit the Spanish industrial system. The
colonies were destined to exercise their new strength in breaking their old
bonds; while the home industries had decayed so far that a revival was
impossible in competition with industries of more progressive nations. We
leave Spain in the eighteenth century as we found her in the fifteenth
century, serving the other countries of Europe by the production of raw
materials, and dependent on them for her manufactured goods. Running
through the list of the principal Spanish exports in the eighteenth century
we find among them some that had undergone the first stage of
manufacture, like wine, oil, soap, soda, and iron; but most were simple raw
materials such as wool, salt, fruits, and nuts.
211. Portugal; promise of commercial greatness in the sixteenth
century.—The little country of Portugal, numbering perhaps a million
inhabitants, built up in the sixteenth century a commercial empire worthy to
rank with that of Spain, and exceeding in importance that which any of the
more northern states in Europe had yet established. I have already
recounted the achievements of the Portuguese in maritime explorations. The
part which they played in these expeditions prepared them for the oceanic
commerce which developed after the discovery of America and of the sea
route to India. While other nations stronger than Portugal in resources and
industrial development were still unready to put forth their strength in
distant commerce, Portugal shared with Spain the extra-European world,
and gained for herself the richest part, the East. Da Gama returned to
Lisbon in 1499 with a cargo which repaid sixty times the cost of the
expedition. This was the beginning of a series of voyages devoted
especially to the importation of pepper and other spices, which could be
bought so cheaply in the East that they returned immense profits in Europe.
Even the gold and diamonds which came later from Brazil were less
valuable to Portugal than the monopoly she now possessed in the spices,
drugs, dyes, and manufactures, which formerly had been obtained only by
the expensive land route.

212. Failure of Portugal to maintain her position.—Portugal was
favored not only by conditions in Europe, which gave her the start on other
states, but also by conditions in Asia which enabled her able agents to build
up, through naval power, a commercial overlordship which brooked no
competitors, either Asiatic or European.
Portugal was, however, destined to play a great part in European
commerce for only one century. We cannot, as in the case of Spain, say that
a mistaken policy was the cause of her decline, for although the Portuguese
commercial policy was very similar to the Spanish and would have shown
the same weaknesses if it had been allowed to develop, more important
forces were at work to drive Portugal from the rank which fortune had
conferred upon her.
213. Weakness in resources; bad effects of Spanish rule, 1580-1640.—
Portugal was not only small but industrially undeveloped, and from the very
first depended on other countries for the wares which she exported to the
East. Her explorations and her distant commerce were due to the energy of
the dynasty rather than that of the people, and it was the misfortune of the
country, in the critical period 1580 to 1640, to fall under the rule of Spanish
kings whose influence on her commercial interests was entirely for the bad.
Of the 806 vessels which Portugal sent to India, 1497-1612, only 186 sailed
after 1580, and not only the number but the quality declined in a period
which should have been marked by growth. Countries like England and
Holland, which were far stronger economically than Portugal, refused
longer to allow her the profits of trade while they did the work of
production, and the English broke the power of the Portuguese in India,
while the Dutch drove them from the eastern islands.
214. Failure of Portugal to recover her position by commerce with
Brazil.—After the recovery of her independence in 1640, Portugal could
look only to her American possession, Brazil, for the means of developing
her commerce. The Dutch were expelled from that possession, and the
discovery of gold there stimulated the growth of trade. Comparing the latter
part of the eighteenth century with the earlier part of the seventeenth, the
commerce between Portugal and Brazil is said to have increased twenty-
fold. In place of a dozen ships a hundred sailed every year for America,
returning with sugar, tobacco, hides, brazil-wood, gold, and diamonds.
The profits of this commerce, however, went for the most part to
foreigners. Conditions at home had gone from bad to worse. The slight

advance which the country had achieved in agriculture and manufactures
before the discoveries had been lost by the attraction of all energetic spirits
into commerce and navigation. African slaves took the place of free men in
the fields. Portugal staked everything in the sixteenth century on the chance
of commercial greatness, and when she lost, lost all.
215. Dependence of Portugal on England.—“In 1754 Portugal scarcely
produced anything towards her own support. Two thirds of her physical
necessities were supplied by England. England had become mistress of the
entire commerce of Portugal, and all the trade of the country was carried on
by her agents. The English came to Lisbon to monopolize even the
commerce of Brazil. The entire cargo of the vessels that were sent thither,
and consequently the riches that were returned in exchange, belonged to
them. Nothing was Portuguese but the name.” Reviewing the list of exports
to Brazil we find, in fact, that they were wares which Portugal was herself
unable to produce, and which were supplied by England: woolens, hats,
stockings, gloves, metals, linens, etc. England had taken advantage of her
economic and political weakness to make a mere dependency of her,
imposing treaty obligations which gave the English producers every
advantage in her markets, and which reduced her to a state of pitiable
subjection.
The great Portuguese statesman, Pombal, who made the statements
quoted at the beginning of this section, attempted to reanimate industry, and
succeeded to a slight extent in throwing off the English supremacy. At the
close of the eighteenth century, however, Portugal had still only one strong
national industry, the production of wine (port, so called from its place of
shipment, Oporto) for the dinner tables of the English upper classes; and in
spite of the efforts of Portuguese statesmen even the wine trade was
controlled by English merchants.

QUESTIONS AND TOPICS

1. What are the chief exports of Spain at present? [Commercial
geography or Statesman’s Year-Book.]
2. Write a report on beggary and vagrancy in Spain after 1500. [Moses, in
Journal Pol. Econ.; Prescott or Motley.]
3. Write a report on the results (especially the economic results) of one of
the following:

(a) The Inquisition.
(b) Expulsion of the Jews.
(c) Expulsion of the Moriscoes.
[See the various books by H. C. Lea.]
4. Verify the statements concerning the character of Spanish government
in sect. 200. [Prescott or Motley.]
5. With reference to sect. 201, what is regarded as a reasonable rate of
taxation in the U. S. now? [See a manual of Civics, that by John Fiske, for
instance.]
6. Write a report on the decline of Spain in productive power as the result
of bad government. [Moses in Jour. Pol. Econ., Jones in No. Amer.
Review.]
7. In what parts of the world is Spanish still the common language?
8. Write a report on the beginnings of Spanish colonial policy. [Bourne,
chap. 14.]
9. Write a report on the Spanish system of fleets. [Bourne, chap. 19;
Roscher.]
10. Was there any good reason for the sailing of ships in fleets? [See in
Oxley the chapter describing the exploits of Drake and other freebooters.]
11. Write a report on the great Spanish fairs in America. [Bourne, pp 291-
293; Roscher.]
12. Spanish emigration to America. [Bourne, chap. 16; Moses, Spanish
rule.]
13. Restrictions on intercolonial trade. [Bourne, p. 289 ff.; Moses;
Roscher.]
14. History of smuggling in the Spanish colonies. [Bourne, chap. 19;
Roscher; manuals of English history in connection with the treaty of 1713
and the “War of Jenkins’ Ear,” 1739.]
15. Write a brief report on the characteristics and history as a ware of
commerce of one of the following: cochineal, cocoa, vanilla, cinchona, or
quinine. [Encyc.; Willis, Practical flora; manuals and encyclopedias of
commerce.]
16. Assuming that most of the manufactures in the list of exports from
Spain were furnished by other countries, what do you infer as to the
economic hold of Spain on her colonies—was trade with the mother-
country a necessity to the dependencies?

17. Write a report on the reform of the colonial system and the light that
the results throw on early policy. [Bourne, p. 295 ff.; Roscher.]
18. History of the Portuguese in the East in the sixteenth century.
[Stephens, chap. 9; W. W. Hunter, History of British India, vol. 1.]
19. Effects of the sixty years of Spanish rule. [Stephens, chap. 13.]
20. History of the Portuguese in Brazil. [Stephens, chap. 10; Keller in
Yale Review, Feb., 1906.]

BIBLIOGRAPHY

Reference may be made at this point to C. K. Adams, Manual of
historical literature, third ed., N. Y., Harper 1888, as a bibliographical aid
which is far from answering modern requirements, but which may still be of
use to a teacher in handling such collections of books as may be found in a
city library. A bibliography of Spanish history in the sixteenth century is
appended to Cambridge Mod. Hist., vol. 1, chap. 11, and is continued in
later volumes. A bibliography is given also in Martin A. S. Hume, The
Spanish people, N. Y., 1901, a book which covers Spanish history from the
earliest to present times, and which pays some attention to social history.
Of general books on Spanish history, Prescott, Motley, etc., may still be
put to good use. Attention should, however, be especially directed to the
writings of *H. C. Lea, which contain valuable social and economic,
material. A useful paper by Bernard Moses, **The economic condition of
Spain in the sixteenth century, has been published both in the Journal of
Polit. Econ., Chicago, 1892-3, vol. 1, pp. 513-534, and in Report of Amer.
Hist. Assoc., 1893, Washington, 1894, pp. 123-133. The Story of Spain in
the Story of the Nations series is of no value for our purposes.
On the colonial history and policy of Spain the student has several
excellent books: E. G. Bourne, **Spain in America (with bibliography);
Häbler, **The colonial kingdom of Spain, in H. Helmolt, Hist. of the
World, vol. 1, pp. 386-422, N. Y., Dodd, Mead & Co., 1902; Roscher, **
The Spanish colonial system, N. Y., Holt, 1904, Moses, *The establishment
of Spanish rule in America, N. Y., Putnam, 1898.
Two scholarly works in the series of Harvard Economic Studies deserve
the attention of the serious student: Clarence H. Haring, Trade and
navigation between Spain and the Indies in the time of the Hapsburgs, vol.

19, 1918, and Julius Klein, The Mesta, a study in Spanish economic history,
1273-1836, vol. 21, 1920.
The best single reference on Portugal is H. Morse Stephens, *Portugal.
For the Portuguese colonial ventures see Keller, **Colonization, chap. 3,
The Portuguese in the East, chap. 4, The Portuguese in Brazil.

CHAPTER XX

THE NETHERLANDS

216. Establishment of the United Netherlands.—With the decline of
Spain and Portugal the supremacy in European commerce passed definitely
to the countries of the North. The country which first took the lead, and
which we shall consider next, was the Netherlands, or as it is often called
from its main province, Holland. The Netherlands, which has now an area
but one fourth of that of New York State, was a part of the possessions
which by marriage and politics had come under the rule of the Spanish
crown. Its natural resources are slight, and in the early part of the sixteenth
century it was far behind the adjoining Spanish territory now known as
Belgium, which contained the developed manufactures of Flanders and the
great port of Antwerp. The Dutch were strong, however, in the individual
capacities of the people, and in spite of the disparity of the contest were
able to win their independence from Spain in the Revolution which came in
the last part of the sixteenth century.
A variety of causes combined to urge the Dutch to revolt. They suffered
under Spanish rulers political oppression, and religious persecution
designed to crush the Protestant movement which they had embraced. They
suffered also, however, under the commercial restrictions of Spanish policy.
These they could bear so long as they found an outlet for their growing
commerce by trade with the East through Portugal, but the union of the
crowns of Spain and Portugal in 1580 closed even this outlet, and forced
them to fight for the means of existence and of growth.
217. Rise of Dutch commerce.—The Dutch were forced to the sea by
the difficulties of life at home, and had made good progress in commerce
with their European neighbors before their revolt. They had become used,
also, to distant voyages by explorations designed to open up new routes for
trade. In the vain attempt to establish a northeast route to India by the Arctic
ocean they showed especial energy; and the names Tasmania, Van Diemen’s
Land, New Zealand, attest their boldness later in exploring the southern
hemisphere. When, therefore, they had achieved their independence and
needed no longer to fear the threats of Spanish and Portuguese rulers, they
made rapid strides in oceanic commerce. Before 1602 sixty-five ships had

made the return voyage to India, and throughout the seventeenth century an
active commerce was maintained with both Asia and America.
218. Dutch commercial policy.—We are tempted, by the position that
the Netherlands took against Spanish oppression, to ascribe to the Dutch a
greater love of liberty than they actually had. The government which they
established for themselves was marked by serious faults of oppression and
corruption, and their commercial policy was nearly as narrow as that of
Spain. The exclusion of foreigners from trade with their distant
dependencies was only natural in this period of commerce; even the Dutch,
however, were not free to trade as they pleased. The colonial commerce was
absorbed by great companies, which were granted a monopoly of trade in
certain areas, and which regulated this trade with extreme minuteness. The
companies had a complicated organization which prevented efficiency and
encouraged the improper use of personal and political influence.
219. The Dutch West India Company.—The Dutch West India
Company, founded in 1621, controlled the trade west of the Cape of Good
Hope, comprising commerce with the west coast of Africa, and the east
coast of the Americas. This company was an extraordinary specimen of its
kind. It paid high dividends for a time, but its earnings were necessarily
precarious for it made them not from the ordinary operations of commerce
and colonization, but from armed attacks on the Spanish silver fleets. It was
really a corporation of privateers. The character of the company can be
estimated from the fact that it actually opposed peace between the
Netherlands and Spain; in its remonstrance of 1633 it said that the services
desired of it “for the welfare of our Fatherland and the destruction of our
hereditary enemy could not be accomplished by the trifling trade with the
Indians, or the tardy cultivation of uninhabited regions, but in reality, by
acts of hostility against the ships and property of the King of Spain and his
subjects.”
The Dutch soon lost their possessions in Brazil and New Netherland
(New York), and the original company was dissolved; the possessions
which the Dutch retained on the coast of Guinea and in South America were
unimportant. Small islands in the Gulf of Mexico, which in themselves
produced little of value, served as stations for the Dutch carrying trade,
which continued to be considerable.
220. The East India Company.—The East India Company, founded in
1602, which secured from the Dutch government the monopoly of trade and

rule from the Cape of Good Hope to the Straits of Magellan, enjoyed a
longer existence. It established trading stations on various points of the
Asiatic coast and in South Africa, but found the mainstay of its power in the
rich islands of the Malay archipelago, especially in the small group of spice
islands and in Java. Here it broke the power of the Portuguese, and gained
for itself a partial or total monopoly of some of the products, which were
among the most highly prized luxuries of Europe.
In 1677 a fleet consisting of one small vessel and six large ships, of
which each carried a crew of about 100 sailors and 25 marines, brought a
cargo booked at nearly two million gulden (or several million dollars). The
cargo included immense quantities of pepper, nutmegs, mace, and
cinnamon; raw silk, and silk and cotton textiles from Persia and India;
indigo, borax, saltpeter, shellac, fine woods, etc. Neither tea nor coffee
appears in this list, but in the next century, when the Dutch had developed
their commerce with eastern Asia and had stimulated the cultivation of new
products in Java, these and other wares became of the first importance. The
cargo of a fleet of 1739 included the following wares, in the order of their
value; tea, coffee, pepper, sugar, mace, nutmeg, camphor, indigo, cloves,
etc.

Note that several powers had established themselves on the coast of India; the British did not win the
position of unquestioned superiority until toward 1800.

221. Leading position of the Dutch in European commerce.—
Historians often speak of this distant commerce of the Dutch as forming the
basis for their great prosperity in the seventeenth century. Figures are
lacking which would enable us to determine the exact proportion of this
distant trade to the total, but the importance of this new branch of
commerce was probably exaggerated by reason of the strong appeal it made
to the imagination of men of the time. Certainly the Dutch were not
dependent on the Indian trade for the position they took among commercial
nations then. In the seventeenth century more than half of the Dutch ships
sailed for some port on the North or Baltic seas. In 1640, 1,600 ships out of
a total of 3,450 passing through the Sound to the Baltic were Dutch; and at
this time a Dutch official declared that grass would grow in the Amsterdam
exchange and ships would be sold for firewood if the Baltic trade were not
kept free.

Thirty to forty Dutch ships went every year to Archangel, then the chief
port of Russia, and carried the products in which the Hansa had formerly
dealt to the Netherlands and to the west coasts of France and Spain; Dutch
ships almost monopolized the trade between Spain and the northern
countries after 1648, exporting 15,000 to 16,000 bales of wool a year from
that country while French and English together exported but 3,000. Dutch
exports reached a figure in the seventeenth century which was not attained
by the English until 1740. Even the Dutch fisheries, which employed over
2,000 boats, were said to be more valuable than the manufactures of France
and England combined. A Dutch contemporary asserts, indeed, that as many
persons were occupied in the fisheries as in commerce.
222. Growth of business activity.—The prosperity of Dutch foreign
commerce was reflected in business activity at home. The Netherlands
rapidly outstripped the southern low countries (now Belgium), which
suffered cruel repression under Spanish rule; and the great commerce of
Antwerp passed to Amsterdam. Speculation and banking developed in their
various forms and the Netherlands became the money center of Europe.
Scholars find in the Dutch business life of this period many features which
are strikingly modern; speculation in stocks, commercial crises, pools, and
“trusts.” Manufactures felt the impulse of progress, and broke the bonds of
the old gild system for more modern forms of enterprise. Large
establishments grew up; new industries were introduced (hats, silk, tanning,
etc.); the Huguenot refugees expelled from France were granted a welcome
for which they gave a rich return.
223. Commercial decline of the Netherlands.—When and why did the
Netherlands lose the commanding position in European commerce? What
country took the lead away from it? Those are questions which the student
of the history of commerce must face, and in the following paragraphs the
answers will be given.
There is no doubt about the last point; Netherland lost the leadership to
England. The time when this change occurred can be stated with almost
equal brevity; it was during the one hundred years between 1650, roughly
the date when Cromwell gathered up the scattered forces of England to use
them for her commercial advancement, and 1750, when the commercial
supremacy of England could no longer be questioned.
The reasons for the change are as usual the hardest as they are certainly
the most valuable topics to be studied. One reason can be stated here as a

fact, to be proved afterwards in detail, that England was growing stronger.
On the Dutch side, was the Netherlands growing weaker, or did it simply
fail to keep pace with the English advance?
224. Reasons for decline.—So far as the facts are known Dutch
commerce increased in amount till about 1730 and maintained about the
same figures afterwards; but world commerce was growing so rapidly that
relatively the Netherlands fell behind. The very size of the Netherlands told
against the country in a political contest with other powers. It implied, too,
a lack of native resources to support commerce when the hold of the Dutch
on foreign trade was weakening. Furthermore, the Netherlands was like the
Hanseatic League in that it lacked a strong central power and policy, and
gave great independence to the separate units of which it was composed.
The important units, in the economic aspect, were cities, which were able to
carry on a small-scale commerce very successfully, but which could not
unite to bring their best people to the front in a big-scale organization which
could compete with that of other countries. The Dutch did not pull together
to make the most of what they had, and the inefficiency and corruption
which had always characterized the local governments grew worse with
time. Rule by family rings brought with it favoritism and inordinately high
taxes, under which industries labored and dwindled. Manufactures which
had formerly flourished now declined. Weak at home, and, in comparison
with other European states of the eighteenth century, weak abroad, the
Netherlands fell from the first rank of commercial states, retaining in its
colonies and in its developed banking system only reminders of its former
greatness.
225. Character of the Dutch East India Company.—In the eighteenth
century, when the Netherlands was struggling to maintain its commercial
position, it was hindered rather than helped by the East India Company. The
company seemed to have the chance to make stupendous profits, for it sold
its wares for very high prices in Europe, and it paid for them in Asia very
little or even nothing. It used its power to force the natives to supply it with
some of these wares at nominal prices or absolutely gratis. The very fact,
however, that the company could get its wares in this way, as a state would
get them by taxation, suggests that the company had expenses like those of
a state and unlike those of an ordinary commercial corporation. This was
the fact; the company had to support the civil and military establishment of
a regular government. This government shared, to the full, the political evils

of the time; both at home and in the East it was corrupt and inefficient. It
was strong enough to hold its own against the Portuguese, or against the
English when they began their expansion in the East; but it was no match
for the English when their strength developed in the eighteenth century.
226. Decline of the Company after 1700.—After 1700 the Dutch East
India Company fell behind rapidly. It enjoyed such a high reputation, and
kept its condition secret so successfully, that its credit was unimpaired, and
it continued to pay dividends by borrowing money. For nearly two hundred
years it declared dividends at rates ranging from 121⁄2 per cent to 20, 40, or
even 50 per cent; the average dividend from 1602 to 1796 was over 18 per
cent. The crash was bound to come finally; the company paid its last
dividend in 1782, and was dissolved in 1798, leaving debts of over fifty
million dollars, which were assumed by the Dutch government.

QUESTIONS AND TOPICS

1. Commerce and industry of the Netherlands in the fifteenth century.
[Blok, vol. 2, chap. 12.]
2. Commercial considerations involved in the revolt of the Netherlands.
[Rogers, Holland, Cambridge Mod. Hist., or one of the older books like
Motley.]
3. Beginnings of Dutch commerce with the Indies. [Blok, vol. 3, chap. 9.]
4. From what Dutch source were the names Tasmania, Van Diemens
Land, New Zealand, derived; when and how were they attached to countries
later bearing them? [Encyclopedia.]
5. The Dutch in North America; was their commerce with New
Netherlands important, and did the loss of their possession affect seriously
their carrying trade? [See manuals of U. S. history and the references given
in them; note the effect of the English Navigation Acts.]
6. The Dutch in South America. [See Edmundson, Dutch trade on the
Amazon, English Historical Review, 1903, 18: 642-663, and later.]
7. The policy of the East India Company: trade and territorial expansion,
monopoly, regulation of production. [Day, Dutch in Java, chap. 2.]
8. The Dutch in the East Indies. [Rogers, Holland, chaps. 20, 22.]
9. Write a report on Dutch commerce at the height of its prosperity:
countries traded with, wares, shipping, fisheries. [Blok, History, vol. 4,
book 6, part 3, chap. 1, part 4, chap. 4; vol. 5, book 7, chap. 4.]

10. The Bank of Amsterdam; its peculiarities and historical importance.
[Rogers, Holland, chap. 24; Adam Smith, Wealth of nations, Book 4, chap.
3; C. F. Dunbar, Theory and history of banking, N. Y., 2d. ed., 1903, chap.
8.]
11. Forerunners of modern trusts in the Netherlands. [A. Sayous, Early
trusts in Holland, Political Science Quarterly, N. Y., 1902, 17: 369-380.]
12. The naval war of the English and Dutch in the time of Cromwell and
Charles II. [Manuals of English history.]
13. Dutch commerce in the period of its decline. [Blok, History, vol. 5,
book 8, chap. 5; vol. 6, book 9, chap. 3, book 10, chap. 4.]
14. Internal troubles of the Dutch. [Rogers, Holland, chap. 34.]
15. The “contingent system” of the Dutch East India Company. [Day,
Dutch in Java, p. 61 ff.]
16. Organization of the Dutch East India Company, and its faults [Dutch
in Java, chap. 3.]

BIBLIOGRAPHY

The English economist, James E. Thorold Rogers, has included in his
*Story of Holland, N. Y., Putnam, 1889, several chapters on topics of
economic importance. A better, though larger and more expensive work, is
Blok’s **History of the people of the Netherlands. N. Y., Putnam, 5 vol.,
1898-1912.
I have attempted to cover the colonial and commercial history of the
Dutch in their most important dependency in The Dutch in Java, N. Y.,
Macmillan, 1904.

CHAPTER XXI

ENGLAND: SURVEY OF COMMERCIAL DEVELOPMENT

227. Survey of England’s position and resources about 1500.—The
importance which English commerce assumed in this period and has since
maintained, justifies us in pausing at the start to consider the conditions
prevailing at the beginning of the period, about 1500.
England and Wales together had an area much smaller than that of most
of the important continental states, about equal to the area of Illinois, and
less than that of New England. Ireland was a sort of colonial possession,
counting for little; Scotland remained till about 1700 an independent
kingdom, and continued to be relatively unimportant after the union.
England (a term which will be used roughly for other parts of the United
Kingdom as they were included) had from nature one endowment of
supreme advantage, separation by the Channel from the Continent, which
made unnecessary for defense the government of a military absolutism, and
allowed an early development of popular freedom.
From the economic standpoint, however, the climate favored grazing
rather than tillage, and the mineral resources, aside from tin, were still of
comparatively little use. England was a poor as well as a small country in
1500, needing to rely upon the energy of the people and upon their
cooperation among themselves and with the government to win a place
among the leading countries.
228. England’s chief advantage; her advanced organization.—
Progress had been made, however, in various lines of which the importance
was to appear as time went on. Serfdom had disappeared from the country
districts, and production was stimulated by a fair reward for work well
done. On the basis of their flourishing sheep industry the English had built
up a cloth manufacture which had outgrown the narrow restrictions of the
old gild system, and won the inestimable advantage of an organization like
that of modern times; the industry was not so much ruled by antiquated
custom or by the laws of politicians, as guided by specialists who had
invested their capital in manufacture or trade, and who linked their fortunes
with progress and extension.

229. Benefits of the English political constitution.—Finally, in
summing up the advantages which the English of this period enjoyed, we
must put as perhaps the chief and certainly a very important one, their
political development. They were not only spared from the necessity of
using their resources to repel a foreign invasion, they had attained to
national unity among themselves; and they had a government which,
however crude it may seem now, was much more closely in touch with the
people than that of most states, and which proved capable of further
development at comparatively slight expense, measured in men and money.
The student who, in estimating the commercial assets of England during
this period, left out of account the English constitution would go wide of
the mark. Spanish inquisition and expulsions, Dutch corruption, French
oppression and revolution, German or Italian disunion—to be free from
these was worth great wealth.
230. Development of the English into an active commercial people
about the fifteenth century.—The English historian, Seeley, combats the
idea that it is “in the blood” of Englishmen, that it is “the genius of the
race” to be a maritime and colonizing people. During the Middle Ages, in
fact, the English were not great navigators, in spite of the facilities offered
by the excellent harbors and the rivers penetrating far inland; English
commerce was carried on largely by foreigners, as has been said in a
previous section. The advance of the English from passive to active
commerce came at the close of the Middle Ages, in the fifteenth and
sixteenth centuries. In 1400 English merchandise was mostly borne in
foreign ships; in 1500, it is said, English vessels carried more than half of
all the cloth exported, and about three fourths of all the other wares.
231. Agencies helping to extend English commerce.—Among the
influences aiding the development of English commerce in this period we
must put the skilful diplomacy of the sovereigns of the Tudor line, which
secured important privileges for English merchants in other countries, and
the energy of the fellowship of Merchants Adventurers, which made the
most of these privileges. The Merchants Adventurers differed from the
Merchants Staplers (see section 126), in three important points, each of
which marks an advance: they were all native Englishmen instead of
foreigners; they exported manufactured goods, chiefly cloth, instead of raw
materials; they were not bound to a fixed staple but “adventured” to
different places. Though the association was not nearly so close as that of

later stock companies, it was strong enough to protect the interests of
English commerce against abuses by individual merchants and attacks by
foreigners; and was especially helpful in pushing English trade along the
coast of the North Sea (Flanders, Netherlands, Germany).
232. Enlargement of the commercial area.—Beyond these nearby
districts English merchants were building up an important trade with Spain
and Portugal in the South, and with the Scandinavian countries in the North,
where the Hanseatic League was now unable to hold its own. English ships
were voyaging further still. Bristol merchants like Sturmys and Canning
built up merchant fleets of considerable size, and sent them as far as the
eastern shore of the Mediterranean and the coasts of Iceland and Finland. A
London grocer recorded in his diary about 1550 the voyage of an English
vessel to “Russier” laden with “English bookes of the Scriptures” and with
other wares which probably sold to better advantage.
Nor have we yet reached the limit of English voyages. American readers
are familiar with the exploits of the Cabots, which began a series of
frequent voyages to America, and which were followed by daring
expeditions to the far North in search of a passage to India, either east or
west. These distant voyages were too venturesome as yet to be the means of
regular commerce; they sought rather discoveries or plunder. The English
merchant who went outside the narrow circle of civilized Europe turned his
hand chiefly to smuggling, kidnapping, robbery, and murder. John Hawkins
shared with Queen Elizabeth the profits of the African slave trade, and was
proud to add to his coat of arms a demi-Moor proper, bound with a cord, to
record his achievements.
233. Relative standing of the English ports.—An idea of the relative
rank in foreign commerce of the English ports can be gained from the
proportions which they contributed to the customs revenue. The most
striking fact is the immense lead of London over other ports, like that of
New York in the United States now; it contributed half of the total in the
time of Henry VII (say 1500). The second port, Southampton, fell in this
period from 18 per cent to 9 per cent; the Flanders galleys had ceased
coming, and the Guinea trade, by which it revived later, had not yet begun.
Newcastle upon Tyne paid 5 per cent of the total, while the port of Bristol,
destined to be later the great haven for the American trade, paid only 3 per
cent and was exceeded by Boston. No other port than those named
contributed as much as 3 per cent of the total customs revenue. The list of

minor ports comprises some which had been great in the Middle Ages but
which were now rapidly declining in relative importance (Ipswich,
Sandwich, etc.), some, like Hull, which were destined to grow in
importance, while great modern ports like Liverpool and Cardiff are not yet
heard of at all.

234. Partition of the field of commerce among companies.—The
reader will remember the discussion in a previous section of the difficulties
experienced in this period when commerce was left to individuals, and the
reasons for the association of the merchants who traded to any country.
With that discussion in mind the organization of English commerce in the
period of the later sixteenth century and following years will not seem so
strange as it may appear to be at first. An ordinary Englishman could trade
about 1600 with only three countries: France, Spain, and Portugal.
Commerce with the rest of the world could be carried on only by members
of specific companies, who had mapped out and occupied the routes of
trade much as modern railroads divide the territory inside a country.
Beginning in the North and going around the compass the companies were
as follows: the Eastland Company, trading to Scandinavia and the Baltic;

the Russia Company; the Merchant Adventurers, controlling trade from
Denmark to France, where the free-trade gap appears; the Levant Company,
trading in the Mediterranean; the Guinea or Africa Company; the East India
Company, with its immense Asiatic field; and then the various companies
familiar to students of American History, the Virginia Company, the
Plymouth Company, later the Hudson’s Bay Company, etc. By means of the
trade of these companies England marketed her surplus wares, especially
her woolen fabrics, and imported the goods of which she stood in need—
naval stores from the Baltic, manufactures and wine from the Continent,
gold from Africa (cf. the English “guinea” of twenty-one shillings), Oriental
products, and furs and fish from America. The colonies which had been
founded in the New World were still too young to affect greatly the sum
total of English trade in the early seventeenth century, but increased rapidly
in commercial importance.
235. Characteristics of the companies.—In their organization and
development these companies show such variety that it is impossible here to
do more than indicate some common features of their history. They tended
to one of the two types (joint-stock or regulated) which have been
described, and sometimes wavered between the two. The monopoly which
they enjoyed made them unpopular with the public, who thought that it was
used to secure unduly high profits, and still more unpopular with private
merchants who were prevented from sharing in the trade. These merchants
who could not gain admission to the companies, because of lack of capital,
or distance from London, formed a class of “interlopers” or smugglers
trading inside the companies’ preserves. Toward the close of the
seventeenth century the feeling against the companies grew so strong that
reform was forced upon them; entrance fees were lowered or exclusive
privileges were taken away and the trade was thrown open. Some of the
companies continued to exist, however; the greatest of them all, the East
India Company, kept its hold on the trade with Asia, and other companies
continued as semi-public or private corporations after their chief privileges
had been annulled. The Levant Company was not dissolved till 1825, and
the Hudson’s Bay Company is still in existence, as an ordinary trading
corporation.
236. Rapid growth of commerce in the eighteenth century.—The
period in which the companies were most active, roughly the seventeenth
century, was preparatory to the period of individual enterprise which in the

eighteenth century brought England to the leading position among the
commercial states. The advance is shown by the following table, giving in
millions of pounds sterling (and a rough equivalent in dollars) the annual
average of trade in the different periods:

Average of Imports Exports
1698-1701 £ 5.5 $ 27 £ 6.4 $ 32
1749-1755 8.2 41 12.2 61
1784-1792 17.7 88 18.5 92
1802 31.4 157 41.4 207

The figures show that the foreign trade of England grew between five
and six fold in the course of the century; that it advanced considerably in
the first half, but moved with the speed of a revolution in the second.
237. Relative share of different continents in English commerce.—An
indication of the direction of the trade, and of the relative importance of
different elements in it, is given in the following tables, the figures again
being simplified to round millions. The commerce of England was
distributed as follows:

Europe America Asia Africa Total
1698-1701 £ 9.2 $ 46 £ 1.7 $ 8 £ 0.8 $ 4 £ 0.1 $ .5 £ 12.0 $ 60
1749-1755 13.8 69 4.5 12 1.8 9 0.2 1 20.4 102
1784-1792 19.6 98 10.8 54 4.9 24 0.9 4 36.2 181
1802 39.4 197 23.3 116 8.7 43 1.3 6 72.8 364

The student may perhaps need the caution that he should not attempt to
learn outright such statistics as are given here; the attempt would be a waste
of energy. The figures give more concisely than any other method of
description the measurement of a country’s commerce, and are valuable for
reference. They must, however, be translated into a more simple expression
of facts before an ordinary student can grasp their significance and hold it
permanently in mind. In the few lines of text following the first table the

author has suggested the most obvious conclusions to be drawn from it, and
will point out others applicable here.
The trade with Europe was still by far the most important part of English
commerce, being equal to more than all the rest of the trade together. It
grew steadily throughout the eighteenth century, as the figures show, but
still it was a less important part of the whole in 1800 than it had been in
1700. At the earlier date other continents furnished but one fourth of the
total; in 1800 they furnished nearly one half. The two most important,
America and Asia, were coming up with nearly equal speed, their
commerce increasing roughly fivefold in the course of the century. America
had a clear lead over its older rival, while Africa counted for very little in
the total.

QUESTIONS AND TOPICS

1. Town life and trade about 1500. [Soc. Eng., 3: 131-145.]
2. Economic and social conditions in England in the sixteenth century.
[Harrison’s Description, ed. by L. Withington, London, 1902, readable but
too diffuse for a student who has not learned to select what he needs from a
book.]
3. Significance of the “enclosures” in English agriculture. [Soc. Eng., 3:
544-550; 4: 114-118, 239-241.]
4. Development of the manufacturing system, as seen in the cloth trade.
[Ashley, Eng. econ. hist., vol. 2, chap. 3.]
5. Political conditions about 1500. [Seebohm, Prot. rev., 46-55.]
6. The Merchants Adventurers: who were they, in what did they trade and
with what countries, principles of organization, services to English
commerce? [Lingelbach, Merchants Adventurers, Univ. of Pa. Pub., 2
series, vol. 2, N. Y., 1902, or Cunningham, Growth; brief account in
Cheyney, Eur. background.]
7. English discovery and exploration in the sixteenth century. [Soc. Eng.,
3: 209-228; 477-508.]
8. Write an account of the career of Hawkins. [Payne, Voyages; J. A.
Froude, English seamen, N. Y., Scribner, 1895.]
9. Write a similar report on Drake. [Same references, or Oxley, chap. 5.]
10. Indicate on a sketch map the position of ports named in sect. 233,
drawing a line by each port with a length proportional to the importance of

the port. What are the chief ports now? [See a later section of this book and
its note; Statesman’s Year-Book.]
11. Select one of the companies named in sect. 234 and report in detail on
its commerce and career. [Hewins, Eng. trade; Cunningham, Growth, with
references. Brief narratives of the East India Company and of the Hudson’s
Bay Company will be found in Oxley, chaps. 8. 9.]
12. Struggle between the East India Company and the interlopers.
[Cunningham; Hunter, Hist. of British India.]
13. Prepare a graphic chart of the figures in sect. 236 in the following
manner. Draw a perpendicular line at the left-hand edge of a sheet of paper,
mark off two equal spaces, and place the dates, one at the top, one in the
middle, and the last two on either side of the end of the line. Lines are then
to be drawn, horizontally, proportional to the figures of trade at each date.
This can readily be done with the aid of a foot rule, divided into fractions of
an inch. Choose first the largest figures of the table, in this instance those
for 1802, to be sure of having room enough on the paper for all the lines.
Let one of the small divisions of the rule represent a sum of a million
pounds or ten million dollars. If, for instance, 1⁄16 is taken to represent a
million pounds, the line for the imports of 1802 will be a little short of two
inches (31⁄16). Let this line then be continued by a dotted or wavy line to
represent exports; the continuation in this case would be a little over 21⁄2
inches, and the whole line would be a little over 41⁄2 inches (72⁄16). Pursue
the same method with the other figures, and the result will be a graphic
representation of the course of trade during the period.
The scale may be varied to suit convenience, but of course figures cannot
be directly compared with each other unless they are plotted to the same
scale.
14. Prepare a chart by similar methods, but using different colors or
characteristic lines to indicate trade with different regions.
15. Reduce the figures of trade with different continents to percentages of
the total, at different periods.
Make up your mind as to the number of conclusions to be drawn from the
tables which you are capable of remembering—whether one, two, or more;
resolve to remember those and to refer back to the tables for the others.

BIBLIOGRAPHY

As Gross, Sources, does not cover the modern period, the student in
search of more extended bibliographical information than that given here
must rely on less satisfactory guides. Cunningham, **Growth, will be the
best for an advanced student; see the foot-notes and the bibliographical
index. Traill’s **Social England contains less scholarly but perhaps more
useful bibliographies on commerce and kindred topics. Some of the school
manuals give classified references; Andrews’ *History can be especially
recommended.
Of the general works on English history in the period under consideration
the following pay some consideration to commercial development, and
those which are starred present information that is valuable and easily
available: *Busch, Froude, Gardiner, Macaulay, Stanhope, *Lecky. If a
single work is desired for collateral reading the best is Traill’s **Social
England, to which I have in large part confined my references for topical
reading.
Cunningham, **Growth, is indispensable for this period; I assume that
this book is in the hands of the teacher and that he will avail himself of the
abundant material it offers for reading and written reports. Besides smaller
books on English economic history, already mentioned, the following can
be made useful: Hewins, **English trade; Seeley, *Expansion; Toynbee,
Industrial revolution. Bourne, *English merchants, is useful; his English
Seamen is unfortunately out of print. There is a considerable literature,
however, on the war and merchant navy, especially in the sixteenth century
(see references in Social England); and Lindsay and Cornewall-Jones cover
the entire period.

CHAPTER XXII

ENGLAND: EXPORTS

238. Survey of topics to be considered in studying the development of
English commerce.—Such is the bare outline of the development of
English commerce in the period preceding 1800. Two chapters will now be
devoted to the discussion of facts which will fill in the outline and will
explain the development. That the reader may follow more intelligently a
survey will be given in this place of the topics to be considered, and their
bearing on the general question.
We must know (1) the character of English exports. The exports of a
country show in what lines it is strong enough to compete with foreign
producers, and are the means by which it buys commodities produced
abroad. We shall then consider (2) the advantages which enabled England to
produce these wares so efficiently that other countries were glad to buy of
her, and (3) the countries in which these wares found a market. On the other
side we want to know (4) the imports, the wares which England wanted but
could not herself produce to advantage, and (5) the countries from which
the imports came. Another factor of importance will be (6) the development
of English shipping. Finally we have to consider (7) the government policy
by which statesmen sought to further and regulate the development, as
manifested in foreign policy and wars, in the customs tariff, and in the
colonial system.
239. (1) Analysis of exports.—The total export to foreign countries of
merchandise of English origin (i.e., not including goods from other
countries transshipped in England) amounted about 1800 to a little over
£29,000,000. The most important items were as follows, in millions of
pounds: manufactures of wool, 7.7, or over one fourth of the whole;
manufactures of cotton, 4.1; manufactures of iron and steel, 2.0;
haberdashery, 1.5; linens, 1. These five items include over one half of the
total, and no other item amounted to as much as one million. It is
noteworthy that all the raw materials together scarcely exceeded one
million. When we come to study the internal development of England we
must look, evidently, for a great expansion in certain manufacturing
industries to explain the position which their products now took in trade.

240. (2) Development of production, explaining the growth of the
export trade. Agriculture.—Turning our attention now, not to the foreign
commerce of England but to the conditions at home which made this
commerce possible, we find that during the two centuries following 1600
there was a steady development of internal resources. The growth of
population stimulated improvement in agriculture; and cultivators managed,
by new crops and methods, to increase largely the output in spite of the
disadvantages of soil and climate. Root crops (turnips and carrots) and
clover were grown on fields which before had been allowed to lie fallow,
and the produce, converted into meat and manure, was almost pure gain. By
better feeding and breeding the weight of a head of stock was increased
twofold or even more. Potatoes and other vegetables were introduced from
America and the Continent. Capitalist farmers effected such a revolution in
the methods of agriculture, that pasture farming became relatively much
less important, and the production of cereals increased so that there was a
food supply to maintain a manufacturing population, and sometimes a
surplus for export.
241. Internal commerce and means of transportation.—The
conditions of internal commerce, measured by the difficulties and dangers
of road transportation, were still bad at the beginning of this period, but
improved rapidly in the eighteenth century. A writer said in 1767: “There
never was a more astonishing Revolution accomplished in the internal
system of any country than has been within the compass of a few years in
that of England. The Carriage of Grain, Coals, Merchandize, etc., is in
general conducted with little more than half the Number of Horses with
which it formerly was. Journies of Business are performed with more than
double Expedition. Improvements in Agriculture keep pace with those of
Trade.” The canals, which were extended rapidly after the success of the
Bridgewater Canal, constructed in 1758 to connect Manchester with coal
mines seven miles distant, lowered the cost of transportation to one quarter
or less, in the districts which they served. As a result manufacturers could
rely on a steady supply of raw material for their works, and of food for their
employees, and had also a chance to put their finished goods on the market.
The eighteenth century, moreover, was a period of great development in
English banking, and the extension of credit operations was at the same
time an effect and a cause of the growth of trade.

242. Manufactures; advance from the gild to the domestic system
and its significance.—We turn now to the history of English manufactures,
a topic which is not only, as we have intimated, of great importance for the
growth of English commerce, but which is of general interest as showing
the stages of development through which other countries passed later.
Gilds still persisted in England, but they had lost the power of control
which they had formerly had and which they still maintained on the
Continent. The more important industries had passed into the stage known
as the “domestic system.” The change, at first view, is not striking, for the
manufacturing was still done by petty artisans working at home with their
own tools. The ownership of the raw material, however, had passed from
the artisans to an employer, who took the risk of the manufacture and
reaped profits corresponding to his success in conducting it.
Brain power now took a place in manufactures above hand power. The
new class of employers were men who could devote their energy entirely to
studying the larger questions of production. They had the chance to look
away from the petty details of work, which had for centuries absorbed
men’s attention, and to become both broad-sighted and far-sighted. They
studied the needs of the market, at home and abroad; they bought the raw
material wherever it could be had best and cheapest; and then marketed the
product, wherever it would bring them the best returns.
243. The new employers aided by the immigration of foreign
laborers.—Success in manufacture still depended largely on the quality of
labor, and one great advantage which England owed to her political and
religious freedom was the immigration of skilled laborers seeking refuge
from the persecutions of the Continent. Refugees, of whom the Huguenots
from France were the most important, brought with them improvements in
the woolen manufacture and stimulated the development of other industries:
silk, linen, cotton, calico, paper, etc. It is, however, hard to see how the
labor of these people could have had a great effect in extending foreign
trade if they had not been guided by their employers, who were men of
considerable capital, with broad views and wide acquaintance, willing to
take large contracts and eager to extend the market for their goods. An
English pamphlet of the period says that the towns in which the silk and
cotton manufactures developed owed their industries “to the public spirit of
two or three men in each.” The development of this process, by which
artisans lost their former independence and came to work for an employer,

can be seen from a statement of the economist Adam Smith, who wrote in
1776. “In every part of Europe,” he said, “twenty workmen serve under a
master for one that is independent.” This was not yet true of “every part” of
Europe, and even in the western states of the Continent the process had not
advanced so far as in England, where the author had made most of his
observations.
244. Dependence of technical progress on the new class of employers.
—It is noteworthy that the great inventions to which the modern
development of manufactures has often been ascribed could not have been
made of practical importance unless this system of organization had
developed previously. The gilds were bitterly opposed to any changes in
their system of routine, and independent artisans would not find it worth
their while to introduce costly improvements. Many inventions had been
made before the eighteenth century which would have been of the greatest
importance in manufacture if there had been any one to take them up and
put them through; they fell dead, however, on the world of their time, or
were killed by the opposition of petty producers. An illustration of the way
in which premature inventions disappeared can be given from the
experience of a man who, to all appearances, had devised a repeating
firearm before the end of the sixteenth century. A German recommended to
an English statesman “one of his countrymen, who had invented a
harquebuse, that shall containe ten balls or pelletes of lead, all the which
shall goe off, one after another, having once given fire, so that with one
harquebuse one may kill ten theeves or other enemies without recharging.”
The importance of such an invention needs only to be suggested, but, so far
as the writer knows, nothing further was heard of it.
245. The domestic system preparatory to the great revolution in
manufactures in the eighteenth century.—Not until the latter part of the
eighteenth century were the times ripe for the great technical changes in
manufacture, which the introduction of machinery implied. Then the
advance came with the speed of revolution. In the lifetime of an ordinary
man (1770-1840) the whole face of England changed; the great textile
towns and the “black country” of the coal and iron industry grew up; canals
and railroads cut through the agricultural districts to connect the industries
with each other and with the outside world; a social and political revolution
accompanied the economic. No attempt can here be made to describe the
changes in detail, and the discussion of the factory system and other

features of the present organization to which they gave rise can better be
postponed. The following paragraphs will suggest the development in some
of England’s chief export industries.
246. Progress of the cotton manufacture.—The cotton manufacture
was the first to show the possibilities of the application of machinery. Two
main processes are to be distinguished in the manufacture of cotton, as in
that of other textiles; first, the spinning of the yarn from the fiber, and
second, the weaving of the yarn into cloth. The first great improvement was
the invention by Kay in 1738 of the fly-shuttle, which saved the time and
energy of the weaver and enabled him to double his output of cloth. Still,
the industry was small and grew slowly. The amount of raw cotton imported
from Turkey and the West Indies would seem now perfectly insignificant,
and was exceeded by the amount of linen yarn imported from Ireland alone.
The cotton manufacture was hampered especially by the slowness of cotton
spinning (six spinners working with the old-fashioned wheel were needed
to supply yarn to one weaver); and by the weakness of the yarn, which
required linen to be used for the warp of cloth. Inventions which met these
difficulties were the spinning-jenny of Hargreaves, patented 1770, which
enabled a spinner to make eight threads at once instead of one (later, twenty,
thirty, even one hundred and twenty); and Arkwright’s roller spinning
frame, patented 1769, which made cotton yarn strong enough for warp, by
stretching the strand before it was twisted. Improvements followed in other
processes (carding, printing, etc.); water-power was used more generally,
and a mere beginning made with the application of steam. A Kentish
clergyman, Cartwright, invented a power loom which greatly increased the
possibilities of weaving but which did not become a practical success until
the nineteenth century; long after 1800 the hand-loom weavers kept up a
hopeless struggle in competition with it.
The full effect of all these changes was not felt until the nineteenth
century, but their importance in this period can be measured by the imports
of raw cotton. In the forty-three years, 1741-1784, the annual imports rose
from 4,000 to 28,000 bales, while in the sixteen years following they
increased to 150,000 bales (1800).
247. Slower development of the woolen manufacture.—No such
rapidity of development as this can be traced in the woolen manufacture, for
it had long been England’s mainstay, and changed more slowly partly
because it was so firmly established. Little by little, however, the spinning-

wheel was displaced by the jenny, and other sources of power than the
human body were utilized. As in the case of cotton, power weaving was not
important until after 1800; but the manufacture of worsteds (in which the
fibers are longer than in woolens, and are kept parallel) was greatly helped
by a second invention of Cartwright, for wool-combing by machinery.
248. Development of the iron industry with the use of pit-coal.—The
only other industry of this period which our space allows us to treat is that
of iron. Until the eighteenth century iron was made almost entirely by
smelting with charcoal, the primitive process which can be traced back to
prehistoric times. A ton of iron required two loads of charcoal, and a load of
charcoal two loads of wood, so that the industry depended largely on the
wood supply, and was carried on at petty forges scattered through England,
but established mainly in the South. A large proportion of the English iron
supply was imported from Sweden. Coal, as we use the word, called then
pit-coal or sea-coal, had for centuries been mined for domestic use, but had
no importance in manufacture. Various men tried to smelt iron by coal or
coke, but their experiments had no practical result till about 1760, when
blast furnaces using coal were successfully established, and the industry
began a period of rapid development, furthered about 1790 by the
application of steam-power to the blast. Henry Cort invented in this period
the processes by which pig was changed to malleable iron in a coal-
puddling furnace, and the malleable iron was worked into bars by rollers
instead of by the slow action of forge hammers. The production of iron had
increased fourfold (17,000 to 68,000 tons) in the period 1740-1788, and in
the period of eight years following nearly as much again was produced
(125,000 tons in 1796). The industries depending on iron passed into a new
stage, and the large export of iron and steel in 1800 is explained.
249. (3) The chief markets for England’s exports.—The market for
English wares varied, of course, according to the country to which they
were sent. The most favorable market for manufactures was afforded by the
colonies in America, until the outbreak of the war of independence. The
colonists were a high grade of customers; they had cultivated tastes and
were willing to work hard to gratify them. By reason of natural conditions
even more than by legislation they found it difficult to establish
manufactures, and bought manufactured wares of England with the raw
products which their environment afforded in abundance. A book published
just before the revolution says that the “colonies are furnished from

England with materials for wearing apparel, household furniture, silk,
woolen, and linen manufactures, iron, cordage, and sails, great guns, small
arms, ammunition, lead, brass, iron, and steel, whether wrought or
unwrought; in a word England furnishes them with almost everything
needful for the luxuries, as well as conveniences of life, except provisions.”
In European countries English manufactures did not find such a clear
field. There were some branches (silk, linen, lace, paper, tin-plate, etc.) in
which other countries were distinctly superior, and no European country
depended on England as did the colonies. English woolens, however, went
practically everywhere, and other products of the textile and metal
industries were sure of a ready market in most countries.
For exports to other continents the English had to choose articles which
would stimulate less civilized people to production and exchange. Very
considerable sums in gold and silver were sent to Asia, and the half-savage
Africans were tempted with gunpowder, iron, rum, spirits, beads, etc.

QUESTIONS AND TOPICS

1. Endeavor to get a clear understanding of the meaning of each of the
topics, and of their bearing on each other, by thinking of the present-day
commerce of the U. S. and asking yourself: what are the main facts about
(1) our exports, (2) our natural advantages, etc. Then ask yourself how
knowledge of any one of these topics will be of use to you in understanding
the others, and so understanding commerce in general. For instance, what
bearing has our tariff policy on our imports and exports, respectively? What
are the weaker points in our system of production as shown by imports;
what countries are strong in those points? The student is most earnestly
advised to learn the contents of this manual by understanding and not by
memorizing. He should always be asking himself: what use is this fact to
me?
2. Transform the figures, sect. 239, into a graphic chart, and compare the
results with exports at the present day. [See Statesman’s Year-Book for
recent figures.]
3. Development of English agriculture in the seventeenth century. [Soc.
Eng., 4: 115-122, 439-445; Prothero, *Pioneers and progress of English
farming, London, 1888.]

4. Development of agriculture in the eighteenth century. [Soc. Eng., 5:
99-110, 301-305, 452-459; Prothero.]
5. Condition of English roads and of carriage by land. [Cunningham,
Growth, vol. 2, sect. 232, and references there; Smiles, Lives of the
engineers, vol. 1.]
6. Canals, and their benefits. [Soc. Eng., vol. 5, pp. 322-326;
Cunningham and references.]
7. Write an essay on the “domestic” system of manufactures, and the
contrast it presents with earlier and later systems. [Hobson, Capitalism,
chap. 2, sect. 11; Cunningham, Growth, vol. 2, sect. 227 and following.]
8. The influence on English industrial development of immigration from
the Continent. [Cunningham, Growth, vol. 2, sects. 172, 199, 229, etc.]
9. Compare with sect. 244 sects. 283 ff., in the chapter on France, to
realize the advantages of the English at this period.
10. Write a report on English manufactures in one of the following
periods, from the descriptions in Social England.
(a) Seventeenth century [vol. 4, 122-130, 445-454, 581-588.]
(b) Eighteenth century, before the great inventions [vol. 5, 110-117, 305-
322.]
11. Write a report on the history of one of the great industries (cotton,
woolen, iron), choosing one of the following aspects of it: methods of
manufacture, introduction of machinery, change in organization (domestic
and factory system, etc.), importance in commerce. [Besides references like
Cunningham and Social England the student will find the encyclopedia and
Ure’s Dictionary of manufactures helpful, and probably easier to use.]
12. The great inventions. [Social England, 5: 459-474, 591-604.]
13. Write a biographical sketch of one of the following men: Richard
Arkwright, Edmund Cartwright, Samuel Crompton, James Watt.
[Encyclopedia; Dictionary of national biography; or one of the popular
books on the history of invention.]

BIBLIOGRAPHY

On the industrial revolution see, besides Toynbee, Charles Beard, *The
industrial revolution, London, 1901, with bibliography of larger works;
Usher, *Indust. hist. of Eng., chap. 12-14, treats the technical changes in

considerable detail, and gives further references with brief descriptive
notes.
The best study of the earlier system of manufacture is George Unwin,
Industrial organization in the sixteenth and seventeenth centuries, Oxford,
1904; but Hobson’s *Evolution of modern capitalism, new edition, 1916, is
better suited to the needs of the elementary student.
On transportation there are good brief and general surveys by Edwin A.
Pratt, *History of inland transport and communication, London, 1912, and
by Adam W. Kirkaldy and A. D. Evans, History and economics of transport,
London, 2d ed., 1920. The most complete account is provided by W. T.
Jackman, *Development of transportation in modern England, 2 vol.,
continuous paging, Cambridge Univ. Press, 1916.

CHAPTER XXIII

ENGLAND: IMPORTS; SHIPPING; POLICY

250. (4) Analysis of English imports in the modern period.—After this
survey of one side of English trade we have to consider the other, the
imports which England purchased with her surplus wares. In round millions
of pounds the imports at the end of the eighteenth century were as follows,
in the order of their values: sugar 7.1, tea 3.1, grain 2.7, Irish linen 2.6,
cotton 2.3, coffee 2.2, wood 1.5, butter 1.0, tobacco 1.0, hemp 1.0. These
wares amounted to more than half of a total import of 42.6. If the list were
extended to less important wares a number of manufactured goods would be
found on it, but these evidently could in general be produced to better
advantage in England than anywhere else. England had already made
herself the “workshop of the world,” and drew from other countries mainly
raw materials and foods which could not be produced at home. Some of the
colonial imports were shipped again, as will be shown later, but a large
proportion of them was consumed at home by a population which was not
only growing in size, but was enabled by means of commerce to gratify its
taste for products comparatively new (sugar, tea, coffee, tobacco).
251. (5) Sources of the imports.—At the period when these figures were
compiled war had interrupted the trade of England with France and the
Netherlands, but an active commerce still continued with other parts of the
Continent. The imports from European countries were largely minor
manufactures, which do not appear in the list above, but raw materials also
were furnished by the less advanced European states. Wool came from
Spain; hemp, flax, and tallow from Russia; wood, iron, and copper from
Scandinavia.
For some of the most important imports we must look to countries
outside of Europe. The trade with Asia supplied all of the tea, and part at
least of the other commodities (coffee, cotton, sugar) which we now
associate with America, as well as a considerable amount of Indian
manufactures, especially textiles. This trade still rested in the control of the
East India Company, which had grown to be a great political power in Asia,
with a government and army of its own. At home it had had a checkered
career. As the result of bitter attacks in the seventeenth century it widened

its membership, but it still maintained the monopoly of trade with Asia till
1793, when it conceded to private merchants a certain share in the trade
with India.
252. Peculiar character of the English colonies.—It is to the continent
of America that we must turn for the field outside of Europe that in its
performances and in its promises offered most to English commerce. After
the early period of exploration, treasure-hunting, and piracy, English
colonization in America developed in a form entirely its own. Emigrants
went out, not to seek gold mines or to establish trading stations, but to
found homes. Emigration was not so much a government policy as a
popular movement, that attracted some of the best stock of English blood.
There were great differences between the people of the different colonies on
the Atlantic coast, as every student of American history knows, and there
was again a difference between the colonies in the South and those on the
islands. But in general it may be said that no European country could vie
with England in the commercial quality of its colonial population. Certainly
none could rival England in the quantity of colonists of European stock.
The first census of the United States in 1790 showed a population (nearly
four million), merely in this group of former English colonies, amounting to
nearly half that in England and Wales.
253. Resources and industries of the colonies in America.—Though
the personal qualities of the English were duplicated on the other side of the
Atlantic, the physical environment was absolutely different. Products of the
field, the forest, and the sea, which were eagerly desired and hard to get in
England, were to be had in abundance in the New World. The conditions for
manufacture, on the other hand, were unfavorable; capital and labor found
such an attractive field in the extractive industries (the production of raw
material), that there was little temptation for the colonies to engage in the
finishing of goods. In the plantation colonies of the South and the islands
almost nothing was manufactured. Even in the center and North, where the
difficulties of life and the talents of the people made manufacture more
practicable, most industries were of a household character, rough clothing
and implements being made in the spare hours at home; or were ordinary
village trades,—milling, tanning, etc. All the fine manufactures were bought
from England with raw or semi-raw products.
254. Specialties of different colonies.—The island colonies (Jamaica,
Barbadoes, etc.) sent plantation products. The sugar-cane supplied sugar

and molasses and, by a simple process of manufacture, rum. American
cotton until Whitney’s invention of the cotton-gin in 1793 came almost
entirely from the islands, and indigo and various drugs were secured from
the same source. The colonies on the mainland supplied a greater variety of
products, by reason of their climatic differences. Nearly all of them
contributed to the supply of skins and furs; and lumber and naval stores
(pitch, tar, turpentine) were secured from the forests all the way from New
England to Georgia. Different sections, however, had their specialties; the
Carolinas sent rice, Virginia tobacco, New England codfish and whale-oil.
255. Commerce with Africa.—There was a marked peculiarity in the
commerce with Africa. The exports to this country always exceeded the
direct imports by a considerable sum. An English writer of the eighteenth
century tells about the manufactures which were sent out, and continues:
“we have, in return, gold, teeth (i.e., ivory), wax, and negroes; the last
whereof is a very beneficial traffic to the kingdom, as it occasionally gives
so prodigious an employment to our people both by sea and land.” His
meaning is this: the slave trade was so “beneficial” because the slaves
which were purchased with beads and rum were not brought to England but
shipped to the American colonies where they were put to work. The English
figured, therefore, that they got not only the price of the slaves in American
products, but also had the business of carrying them to America, and could
hope for a future return from their labor in the field. It is estimated that
20,000 slaves a year were sent out during the eighteenth century, and the
chief port of the trade, Liverpool, employed 190 ships as slavers in 1771.
256. (6) Shipping and the carrying trade.—At the beginning of the
period which we are studying (1500-1600) the English, as we have seen,
where emancipating themselves from their former dependence on foreign
ships. In the course of the period they learned to carry not only their own
goods but those of other nations as well, and took from the Dutch the
leadership in the carrying trade of the world. The reader will note, if he
refers to the figures showing the trade of England about 1800, that the
imports amounted to about 42 million pounds, while the exports of British
merchandise were but 29 millions. England would seem to have been
gaining a great amount of goods for nothing, or to have been going in debt
for them. The difference is to be explained in part by the earnings of
English freight, which other countries paid in wares, but in the larger part
by the export of goods which were brought to England from other countries

merely to be transshipped and exported again. At the close of the century
foreign merchandise to the value of over 11 millions was exported, the
wares being mainly those of colonial origin (coffee, sugar, Indian textiles,
tobacco, tea, indigo, etc.).
257. Struggle of English seamen and government with the Dutch.—
Two separate sets of forces were at work to raise the English merchant
marine, those of individuals and those of the government. The English in
the seventeenth century could not navigate as cheaply as the Dutch, since
they required larger crews for the same work, but they seem in the
eighteenth century to have been abreast or ahead of the general
development of navigation; and unusual facilities for ship-building were
offered to them in their American colonies. The government, on the other
hand, was eager to foster every effort to extend English shipping, not only
because of its economic advantage, but because of the addition to the naval
resources of the kingdom in war with other powers. Until after 1650 the
English merchant marine, in spite of individuals and government, was
greatly inferior to the Dutch. Statements which are doubtless exaggerated
give us still some measure of the difference; the Dutch were said to own
four fifths of all the ships engaged in oceanic commerce, or as many as
eleven kingdoms of Christendom; ten Dutch ships traded to Barbadoes for
one English. The latter half of the seventeenth century is filled with a bitter
struggle for supremacy between the English and the Dutch, waged with all
the weapons both of peace and war.
258. The Navigation Acts; victory of English over Dutch shipping.
—“The first nail in the coffin of Dutch greatness,” says an English
historian, was the Navigation Act passed under Cromwell in 1651. This was
but one of a series of measures extending before and afterward, designed to
further the English carrying trade at the expense of rivals. Briefly, goods
from a European country could be brought to England only in English ships
or in ships of the country, so that, for instance, the Dutch could not carry
Baltic wares to England; while the products of other continents could be
imported or exported only in English ships; and some wares that were
enumerated (sugar, tobacco, etc.) must be brought to England before they
could be exported to any other European country. To maintain this policy
the English engaged in a long contest with smugglers in America, and
fought several great naval wars with the Dutch. The result was, as we have
seen, a victory for English commerce over the Dutch, though it is hard to

say how much credit should be given the government policy, and how much
was due to the energy of the individuals who were building up English
business at this period.
The effect of the new oceanic trade was to build up the ports in the West;
Liverpool came into prominence in the eighteenth century, and Bristol also
grew. The distribution of trade among the ports did not, however, change
greatly. An estimate of the eighteenth century gave to London still two
thirds of the total, while the remaining third was divided in equal parts
among the ports of the east, the south, and the west coasts.
259. (7) Government policy. Commerce and war.—Just as in shipping,
so in other commercial interests, the efforts of individuals to make money
for themselves were restrained or furthered by government regulations
aiming to advance the English people as a whole. Every matter of
commerce was at the same time a matter of politics. Mention was made in
an introductory chapter of the part played by England in the great wars of
the period. It will be remembered that English policy in general was
characterized by a shrewd recognition of the commercial advantages to be
gained in war, either by territorial acquisitions or by trading privileges, and
every war in which England engaged ended, as a rule, with a treaty that
gave her some new colonial market or some advantages in trade with a
European country. England fought France consistently, not because of old
traditions of enmity, but because France was a commercial rival, refusing
English manufactures and attempting to market her own in England, and
because France had possessions in America and India that England desired.
England allied herself with Portugal, on the other hand, because the trade of
the two countries was complementary rather than competitive.
260. Customs policy.—The customs policy of the period was governed
by mercantilist ideas, described in an earlier chapter. The government drew
a considerable portion of its revenue from the customs duties, but
nevertheless subordinated the collection of revenue to other considerations
in framing the tariff, and regarded it chiefly as a means of building up
national power in contest with other states. To further this end the
importation of manufactured wares was in many cases taxed or prohibited,
that foreigners might not draw money for work which Englishmen were
thought competent to do. Raw materials, like wool, which could be used as
the basis of English industries, were kept in the country by duties or
prohibitions on export; while the export of other wares, which put

foreigners in debt to England, was encouraged. Other measures, now
inconceivable, were designed to stimulate certain industries; an Englishman
could be buried only in a woolen shroud; a Scotchman only in Scotch linen;
buttons and button-holes were regulated by legislation; English ships must
carry English sails.
261. Burden of the tariff.—In a sense it is wrong to speak of any
“system” of customs policy at this time, for the tariff, by constant changes,
had become extraordinarily confused, and included many inconsistencies.
“The collection and administration of such a complicated system was most
wasteful; while the taxes, when taken together, were so high as to interfere
seriously with the consumption of the article and to offer a great temptation
to the smuggler.” The most rigorous measures failed to stop the smuggling
which brought into England a large proportion of the goods on which duties
or prohibitions were imposed. Reforms attempted by different statesmen
alleviated to some extent the burden of the tariff on merchants, but left it
still so heavy and cumbrous that with the advances of the nineteenth
century it was felt to be intolerable. In this period almost no one thought of
free trade. The tariff undoubtedly stimulated the growth of certain industries
(silk, for example), but it is noteworthy that the cotton industry, which was
destined to become the most important of any in England, grew up not only
without any favor but under actual discouragements.
262. Colonial policy.—An English historian who has been quoted
several times before said that England “conquered and peopled half the
world in a fit of absence of mind,” implying that the movement was one of
natural expansion rather than of conscious policy. This seems true when we
contrast English colonization with that of other powers. Still, the
government held from the first the idea that the colonies were a part of the
home country, and should contribute in special ways to its advancement,
and these ideas grew stronger and took more definite form as the colonies
grew in size. The government permitted the movement of men and capital
to America under the condition that the resources of the colonies should be
made to supplement, not compete with, the resources of the mother country.
We have to note here the regulations in which the government ideas were
embodied.
263. Restrictions on colonial enterprise, regarded as justifiable at the
time.—By the application of the Navigation Acts the colonists were
required to employ English ships for their commerce, and to send certain

enumerated wares of their production to England before they could be
disposed of to another country; and by other acts they were restricted in the
manufacture or exchange of certain articles (woolens, hats, bar-iron, and
steel) for which English manufacturers desired to reserve the market. Aside
from these restrictions the colonists were left free to produce and to trade as
they pleased. They paid the usual duties, as a rule, on wares entering the
English ports, but were allowed a drawback when the wares were exported
again.
Comparing these restrictions with, for instance, those of Spain, we are
struck with their liberality; still more so when it is added that the
government gave some special favors to the colonists in the form of
bounties, and colonial ships were put on an equal footing with those built at
home, so that New England was a great gainer by the stimulus to ship-
building and sailing. England was the natural market for most of the
colonial wares, and the colonists, as we have seen, had few temptations to
go into manufacturing. None of these restrictions, therefore, bore with great
weight on the colonists, and an attempt to interfere in their trade with the
French West Indies (by the Molasses Act of 1733) was evaded. The English
colonial system was accepted as natural and reasonable by the colonists in
general until shortly before the Revolution.

QUESTIONS AND TOPICS

1. Make a graphic chart of imports and compare with present conditions,
as suggested above under exports.
2. Insert the wares named in 251 and the following sections in the chart
of imports according to continents, sect. 237.
3. History of the East India Company in the eighteenth century.
[Cunningham, Growth; B. Willson, Ledger and sword, London, 1903, vol.
2.]
4. Compare the colonial market of England with that of Spain (see chap.
20) and that of France (see chap. 25).
5. Write a report on the economic and commercial characteristics of one
of the thirteen colonies, in the period preceding the Revolution. [See the
chapters describing the condition of the separate colonies in 1765, in Lodge,
English colonies, N. Y., Harper, 1881, $3.]

6. English imports of naval stores, and schemes to stimulate exports from
America. [Lord, Industrial exper., part 2.]
7. Write a report on the commercial history of one of the island colonies,
(a) Jamaica, or (b) Barbadoes. [See encyclopedia, and references there; R.
Montgomery Martin, History of the British colonies, London, 1834, vol. 2,
chap. 2, Jamaica; chap. 7, Barbadoes, chap. 16, West Indian commerce;
Amos K. Fiske, West Indies, N. Y., Putnam, 1899, $1.50, chaps. 18-19,
Jamaica; chap. 37, Barbadoes.]
8. History of the African trading companies. [Cunningham, Growth, vol.
2, sect. 194.]
9. History of the slave trade. [Cunningham, index, and references in his
notes; Weeden, index; Encyc. Brit.]
10. The plantations, the Royal African Company and the slave trade,
1672-1680. [E. D. Collins, in Rep. of Amer. Hist. Assoc., 1900,
Washington, 1901, vol. 1, pp. 139-192.]
11. History of the merchant navy; development of ship-building and
navigation. [See the articles on the Navy, by W. Laird Clowes, Soc. Eng.,
vols. 3, 4, 5. The student should endeavor to extract from these articles,
which are rather fragmentary, only those facts which bear on the merchant
marine, and should guard against confusing this with the war navy.]
12. Write an essay on the colonial and commercial aspects of Cromwell’s
foreign policy. [Reference may be made to the following, among the
biographies of Cromwell: F. Harrison, Lond. 1888, chap. 13: Firth, N. Y.
1900, chap. 19; John Morley, N. Y. 1900, book 5, chap. 8; Roosevelt, N. Y.
1900, p. 225 ff. See also Frank Strong, The causes of Cromwell’s West
Indian expedition, Amer. Hist. Review, Jan., 1899, 4: 228-245; George L.
Beer, Cromwell’s economic policy, Polit. Sci. Quarterly, 1901, 16: 582-611;
1902, 17: 46-70.]
13. Of what country would ships have to be, according to the Navigation
Acts, to carry: wool from Spain; gold from Africa; spices from India; furs
from America?
14. The policy of the Navigation Acts and their effects. [Cunningham,
Growth, vol. 2, sects. 204, 222.]
15. Rise of the port of Liverpool. [Encyc., and references there.]
16. Report on one of the three commercial treaties, of 1703, of 1713, and
of 1786, as illustrating the policy of the period. [Hewins, English trade,
chap. 5.]

17. Abuses of the customs duties, and the reform by the younger Pitt.
[Lecky, Hist., chap. 16, Cabinet ed., 5: 295 ff.]
18. The commercial legislation of England and the American colonies,
1660-1760. [See the article with that title by W. J. Ashley, Quarterly Journal
of Economics, 1899-1900, 14: 1-29; republished in his Surveys, London.,
1900.]
19. American smuggling, 1660-1760: to what extent was it practised;
does it prove the English policy to have been oppressive? [Ashley, Surveys,
336-360.]

BIBLIOGRAPHY

See chapter xxi.

CHAPTER XXIV

FRANCE: SURVEY OF COMMERCIAL DEVELOPMENT

264. Natural advantages of France in the modern period.—In
preceding sections we have considered countries which for a time took the
leading place in commerce among the states of Europe. We have now to
study the development of the other states, to understand the share they took
in commerce, and to note so far as possible the causes which kept them
below the leaders.
Taking first France, we find a country which throughout the period
enjoyed the reputation of being the richest state of Europe. Not only in area
and population did it greatly exceed its traditional rival, England; it had also
advantages of soil and climate which caused it to be regarded as favored
beyond all others. Fronting both the Mediterranean and Atlantic, with easy
access to the North Sea and Baltic, it had a better position for the sea
commerce of the period than any other country, while internal
transportation was facilitated by a remarkable system of navigable rivers,
that brought the interior of the country into easy communication with the
coast. Nor can we say that the French people of this period were inferior to
those of other countries in their economic capacity. Before the beginning of
the period and at intervals during its course they give evidence of
productive ability which would have led to very different results under
conditions such as more favored people, like the English, enjoyed. This
holds true even of manufacturing, a branch of production in which the
French have commonly been considered inferior by natural bent to the
English.
265. The chief reason why France did not rise to leadership.—In spite
of size, resources, and population, France did not rise above the second
place mainly through the fault of the French organization, the arrangements
that the French nation had for working together. We may compare the
French state to a modern industrial corporation, which has a large capital
invested in a valuable plant, and has good business openings; but in which
the business is wrecked by quarrels among the stockholders, and by such a
poor organization that president and directors can disregard the interests of
the stockholders, can conduct affairs for their selfish profit, and can waste

the company’s resources in enterprises that do not pay. The point will be
made more clear if, as an introduction to the history of commerce in France,
we sketch the general history of the country from the later Middle Ages to
the French Revolution of 1789.
266. Progress checked by the Hundred Years’ War with England, and
by religious conflicts.—In the fourteenth century it seemed as though
France were going to lead Europe in the development of a new period.
Agriculture and manufactures were flourishing; internal trade was active;
and French ship-owners, growing accustomed to longer voyages, ventured
far down the west coast of Africa and established trading stations even on
the coast of Guinea. The country was plunged again into a condition of
medieval chaos by the Hundred Years’ War (1336-1453), a war that hurt
France vastly more than England because it was fought entirely on French
soil. French and English armies, and “free companies” of organized bandits
ravaged the country; the weight of taxes grew; trade dwindled, cities
declined, and artisans emigrated.
The country had hardly recovered from this war (which ended in 1453),
when it was again disturbed, this time by a series of civil wars between
Protestants and Catholics, attended by the same unfortunate economic
effects. The religious conflict was finally closed by a settlement which was
even more disastrous; the French Protestants, to the number of nearly half a
million and making up the most valuable industrial element in the
population, were expelled from France as the Jews and Moriscoes had been
expelled from Spain. The loss to France can be measured by the gain of
other countries; the establishment and development of important
manufactures can be traced in each of three countries, England, Prussia, and
the Netherlands, to the influx of the Huguenot refugees.
267. Effect of the absolute monarchy on French development.—
France secured finally freedom from foreign invasion and from internal
dissension, but at a terrible cost. The whole power of the state was vested in
the hands of the king. The stockholders lost all power to direct the concerns
of the company. Rarely this power was exercised by a king both wise and
strong, like Henry IV. During the long reign of Louis XIV it was wielded by
a king who was strong but who was not wise; who wasted the rich resources
of his country in fruitless wars, while he neglected the opportunities for
reforms at home and for commercial expansion abroad. Too often the rule
was held only in name by the king, but in fact by the royal favorites,

worthless adventurers who by pleasing the taste of the sovereign gained the
power to direct as they chose the policy of this great country. This evil is
especially marked in the eighteenth century, when England was prepared to
take advantage of every mistake of France, in building up her world power.
268. Failure to reform conditions inherited from the feudal period.—
The absolute monarchy played a vital part in the history of French
commerce, not only by its disregard of commercial interests abroad, but by
its lack of business sense in home affairs. As the details will appear in the
following pages it is necessary here to call attention only to some general
points. The kings did not complete the unification of the country by
breaking down the feudal toll barriers, of which some remained until the
Revolution. They encouraged the separation of classes, just as they allowed
the separation of sections; the French were split into groups, mutually
jealous and hostile, which lacked the feeling of common interest, and were
unable to cooperate. The most serious distinction between classes was in
regard to taxation. Nobles and clergy were granted privileges, often of a
kind that hindered production, while they paid very little to the public
treasury. The productive classes, on the other hand, the business men and
laborers, bore nearly the whole burden. The weight of this burden was
tremendous, for the machinery of government had become more and more
complicated and more and more inefficient with the passage of time, so that
the government had to demand a great deal from the taxpayers to
accomplish very little in the public service. An idea of the condition in the
eighteenth century can be gathered from the fact that the peasant is
estimated to have paid from one half to four fifths of his gross income to a
government which gave him almost nothing in return.
269. Bloom of French commerce in the fifteenth century as shown in
the business of Jacques Cœur.—Returning now from this political survey
to the history of commerce proper, we find before the year 1500 one name
standing out prominently in the history of French commerce, that of
Jacques Cœur, a merchant of Bourges. A contemporary says of him: “His
ships carried to the East the cloths and merchandise of the kingdom. On
their return they carried back from Egypt and the Levant different silk
stuffs, and all kinds of spices. On their arrival in France some of these ships
ascended the Rhone, while others went to supply Catalonia and the
neighboring provinces, competing in this way with the Genoese and the
Catalonians in a branch of trade that up to that time they alone had

exploited.” At the height of his fortunes, about 1450, he had a silk factory in
Florence, did business with England and thought of establishing an office in
Flanders also. The work of Cœur survived him, and French commerce
developed rapidly in the intervals of peace following. Great interest was felt
in France in the explorations of the sixteenth century, and though the French
were behind the Spanish and Portuguese in the work, they led the English
and Dutch, and the names of Verrazano (an Italian in the French service)
and Cartier testify to their energy.
270. The bulk of French commerce still with nearby countries.—
France was still unprepared, however, to engage extensively in oceanic
commerce. The chief part of its trade in the sixteenth century was with its
immediate neighbors; it found the best market for its exports in Spain, and
it sought a large part of its imports in Italy. French military expeditions to
Italy about 1500 had far more effect at the time than the discovery of the
New World or of the sea route to India; the Italians stimulated and gratified
new tastes and introduced new methods in business. The best days of the
Levant trade had passed away, but the number of French ships engaged in it
increased rapidly, until the outbreak of the religious wars at home. France
shared with Venice the profits of its trade, and was the first of the European
states to secure from the Sultan at Constantinople a “capitulation” in the
modern form, defining the condition on which foreigners could trade.
271. Decline during the period of the religious wars.—The promising
development was checked by the religious wars of the later sixteenth
century; France must endure a period of anarchy at home and powerlessness
abroad. French commerce declined at its source, as production languished;
and was attacked abroad by competitors and by the pirates who infested the
coasts. About 1600 the French merchant marine had almost disappeared
from the Atlantic; voyages to foreign lands had ceased, and even the
coasting trade had passed into the hands of the English, Flemish, and Dutch.
Marseilles still maintained relations with the Levant, but the French
merchants there were being mercilessly bled by Turkish governors, and
were being rapidly driven out of the market by the English and Dutch.
France seemed actually saved from ruin by the few years of peace and good
government given by Henry IV and his minister Sully.
272. Recovery after 1600.—The first three quarters of the seventeenth
century, until the disastrous foreign wars of Louis XIV, were on the whole a
period of peace and progress. Under Henry IV taxes were low, the means of

internal communication by land and water were restored and improved, and
new industries were introduced. The revival of trade was shown in the
prosperity of fairs. The great foreign minister, Richelieu, was interested
mainly in questions of politics, and hampered the development of French
resources by heavy taxes, but in some ways he continued the work of Henry
IV. The English of this period called themselves “Kings of the Sea” and
termed Richelieu a “fresh-water admiral”; French ships, afraid to refuse the
English a salute and unwilling to accord it, sailed under the Dutch flag.
Richelieu said, in the government newspaper, “France, bounded by two
seas, can maintain herself only by sea power,” and began the construction
of a navy which would give confidence to the merchant marine.
273. Founding of commercial companies, and colonial expansion.—
The revival of French commerce was evidenced by the incorporation of
companies designed to trade with distant parts of the world, and by the
encouragement and growth of colonization. The list of commercial
companies founded, 1599-1642, including reorganizations, amounted to
twenty-two, including in its scope Canada, the West Indies, Guinea, the
west coast of Africa, Madagascar, East India, and the Malay Archipelago
(Java, etc.). The government accorded great privileges to the companies,
and the royal influence was exerted in every way to help them; men were
forced even by intimidation to invest in them, and nobles were allowed to
participate without lowering the dignity of their order. The colonies were
likewise pushed by the force of the government; emigration was
encouraged and discharged soldiers and poor girls were sent out by the
government to further the growth of population. The number of Europeans
in Canada was perhaps 2,500 in 1660, and increased to 10,000 in the next
twenty years; a considerable number of French settled also in various
islands of the West Indies. France stood next to Spain as a colonial power,
measuring merely by the area to which she could lay claim.
274. Reasons for the failure of these enterprises.—Most of these
commercial and colonial enterprises were failures. They showed the
characteristic faults of the time: inefficiency of organization, a failure to
appreciate the difficulties of their task, and impatience in their attempts to
solve the problems. They had special elements of weakness, moreover, in
their rather artificial character, and in the fact that they carried with them
abroad the class distinctions and prejudices of the home country. Still, the
seventeenth century was for all nations a time of experiment in distant

commerce and colonization; a large proportion of failures was natural, and
the French had attained a sufficient measure of success before 1700 to have
enabled them to enter the international competition of the eighteenth
century with good prospects. Their prospects were blighted, and France lost
its opportunity to become a “world-power” by the fault of the French
political constitution, which put the interests of the people at the mercy of
one man, the king.
275. Mistaken policy of Louis XIV.—The “Great Monarch,” Louis XIV,
did not lack good advisers. The philosopher Leibnitz proposed, at this
critical period in French history when the country could choose to be either
a land or a sea power, that it should select the latter alternative, and base its
greatness on control of the sea and of commerce. He said that France
needed peace at home to permit an expansion of its power abroad, where
the richest prizes of power were to be had; and he urged the occupation of
Egypt, to give France the control of trade to the Levant and the far East. But
Louis thought that the French frontier was too near to Paris and saw
tempting morsels of territory on the other side of it; he found the arrogance
of the Dutch galling to his pride; he wanted to raze the Pyrenees by putting
a French prince on the Spanish throne. He engaged, therefore, in a series of
continental wars continuing nearly fifty years, which returned little or no
gain in Europe, and destroyed the power of France in the other continents.
Louis’ policy prompted his biographer to a comment of sad significance,
“The inhabitants of the several nations of Europe have scarce ever any
interest in the wars of their sovereigns.”
This sovereign found France vigorous and offering brilliant promises of
development; he left her weighted with taxes and debt. A distinguished
Frenchman said toward the close of this reign that a tenth of the people
were reduced to beggary, and of the remainder over one half were in no
condition to give alms, they were so near to beggary themselves.
276. Decline of the French colonial empire in the eighteenth century.
—The colonial possessions which France surrendered to England at the
close of the wars (the Hudson’s Bay Territory, Nova Scotia, and
Newfoundland) seem comparatively unimportant, but their loss was
significant. The two countries had chosen different paths. England
continued to build up a colonial empire; France continued to spend her
resources in continental wars, at the cost of her commerce and her colonies.
The Seven Years’ War, ending in 1763, marks practically the end of the

conflict. France surrendered all her possessions on the North American
continent, and some of those in the West Indies and Africa; and abandoned
forever the hope, at one time most promising, of building up an empire in
India. So little were the colonies appreciated in France that some good
Frenchmen rejoiced at their loss, and only wished that more of “those
wretched possessions” might have been transferred, to ruin the enemy!
277. Growth, notwithstanding, in the commerce of France.—The
reader must not infer from preceding paragraphs that French commerce was
stationary or declining in the eighteenth century. Colonial expansion was
often a long-time investment, from which a country could hope to recover
the full return only after the lapse of generations, sometimes after the
colony had established its freedom. The full effect of the French policy is
apparent only in the nineteenth century, and elements which we have not
yet considered must be taken into account to explain why France has been
passed by other countries in the race for industrial supremacy. In the
eighteenth century, in spite of a misguided foreign policy, in spite of
burdensome taxes, and in spite of a vicious organization of internal trade
and manufactures which will be described later, France profited by her size
and resources to build up a great foreign trade. Some features of this trade
will be apparent from the following table, to which the same remarks apply
that have already been made on the subject of statistics. The figures show in
millions of livres (and a rough equivalent) the trade of France with the
various continents in 1716, when the country was just recovering from war
and commerce was unduly depressed, and 1787, when a short period of
unusually active trade preceded the French Revolution.

Commerce of France by Continents

1716 1787
Europe liv. 176.6 $ 35. liv. 804.3 $ 161
America 25.8 5. 269.9 54
Asia 9.2 2. 52.1 10
Africa 1.1 0.2 6.5 1
Total 214.9 43. 1153.5 230

278. Analysis of French commerce in the eighteenth century.—
Without attempting to draw too much from figures which are known to be
inaccurate, we can base on this table some few important conclusions. The
commerce of France grew at a rate not far from that of England’s in the
eighteenth century. The commerce of France, however, continued in much
greater degree to be European; the chief trade of the country was with its
neighbors, Italy and Germany, and, after them, with England and the Baltic.
To these countries France sent manufactures amounting to less than one

third of the total exports (122 million), the remainder being made up of
articles of food and drink and various other raw materials. The failure of
France to manufacture goods which would hold their own in the world
market must be regarded as her vital weakness. We see it especially well
illustrated in the trade with the United States. During the later years of the
Revolution (1781-1783) France sent to the United States exports amounting
to over eleven million livres a year. A few years afterward (1787-1789),
when the restoration of peace should have stimulated the trade, it had
dropped to less than two millions. The French had sent poor wares, and
could not hold the trade when the English were free to compete again.
279. Value of the French sugar colonies.—It was the fortune of the
French to keep of their colonies in America just those which were capable
of the most rapid economic development. They were West India islands in
which sugar was produced by slave labor. Comparatively few Frenchmen
had settled in the islands, and in the long run they were to prove of little
advantage to the home country, but in the eighteenth century they were
veritable gold mines. The leading position in sugar production, which had
first been taken by the Portuguese in Brazil, passed early from them to the
English, and was taken before 1750 by the French, who soon controlled the
European market. A part, also, of the imports from Africa comprised sugar
from islands in the Indian ocean, while the African slave trade was
exploited for the benefit of American planters.

QUESTIONS AND TOPICS

1. Striking characteristics and chief weaknesses of the political system of
France. [Seebohm, Prot. rev., 40-46, 210-212; Cheyney, Eur. background,
115-121; Taine, Ancient régime.]
2. Effect of the Hundred Years’ War (a) on the people, (b) on the power
of the king. [Adams, Growth, chap. 9.]
3. Effect upon France of the religious wars, and the emigration of the
Huguenots. [Adams, 180 ff., 227 ff.]
4. Write a report on the career of Jacques Cœur. [Encyc. Brit.]
5. Write a report on one of the French explorers. [Manuals of U. S.
history and references; Thwaites, France in Amer., chap. 1: Parkman,
Pioneers of France.]

6. Write a brief report on the history of the commerce of Marseilles.
[Encyc.]
7. Reforms under Henry of Navarre. [Adams, Growth, p. 183 ff.; P. F.
Willert, Henry of Navarre, N. Y., Putnam, 1893, $1.50, chap. 8.]
8. Reforms by Richelieu, 1624-1642. [J. B. Perkins, Richelieu, N. Y.,
Putnam, 1900, $1.50, chaps. 6, 9.]
9. Economic organization and commerce of the French in America.
[Bateson in Camb. mod. hist., vol. 7, chap. 3; Thwaites, France, chap. 8;
Parkman, Old régime, part 2.]
10. Make a written summary of the wars of Louis XIV, showing gains
and losses of territory, in Europe and in the rest of the world. [Adam
Growth, p. 216 ff.]
11. Opportunity lost by Louis XIV to build up an empire by sea power.
[Mahan, Sea power, chap. 2, and pp. 141 ff., 198 ff., 219 ff.]
12. Prepare a written summary of the results of the French wars of the
eighteenth century. [Adams, Growth, chap. 14.]
13. Prepare a graphic chart from the table of figures, sect. 277, as
suggested above in the case of England, and study the conclusions to be
drawn from figures and chart.
14. Combine the charts for England and for France, and draw conclusions
from the comparison. Endeavor, if possible, by extending your reading, to
settle the questions which this comparison will suggest. Note, however, that
the figures refer to different dates, that they are a far less accurate index of
the facts than you would suppose, and, finally, that the reduction to modern
currency is very rough.
15. Write a report on the history and commerce of one of the following
West India islands under French rule: (a) San Domingo, (b) Guadeloupe, (c)
Martinique. [Encyclopedia; Homans’ Cyc. of commerce; C. B. Norman,
Colonial France, or Bryan Edwards’ History, if that book is available.]

BIBLIOGRAPHY

Of the general works on French history, Adams, **Growth of the French
nation, is excellent.
Of the works on particular periods all the books of James Breck Perkins
can be highly recommended for the attention paid to economic conditions; I
refer above only to the small book on Richelieu. See the A. L. A. Catalogue

for titles of others. Paul Lacroix, The XVIIIth century, London, no date, is a
popular illustrated work, with a chapter on commerce, of no great
importance. Books discussing the conditions leading to the French
Revolution are valuable for the light they throw on the organization of
France in the period of modern history. Books by Taine, E. J. Lowell, and
R. H. Dabney will be useful in this connection; and vol. 4, no. 5, of the
Univ. of Penn. Translations (Typical Cahiers of 1789) is a convenient
selection from sources.
A bibliography of French colonial history in America will be found in the
Guide of Channing and Hart, in the Cambridge mod. hist., vol. 7, pp. 766-
771, or in R. G. Thwaites, France in America, N. Y. Harper, 1905. The last
named book is not so serviceable for purposes in view here as others in the
same series; and the student will turn by preference to Cambridge mod.
hist., vol. 7, chap. 3, where the subject of the French in America (1608-
1744) is treated by Miss Mary Bateson, with due regard to economic
interests. Of Parkman’s works see especially The old régime, Boston, Little,
1902, $2. Norman, Colonial France, London, 1886, covers briefly the
history of all the French colonies; the French West Indies are included in A.
K. Fiske. S. L. Mims, Colbert’s West India policy, New Haven, 1912, is a
scholarly study of a particular topic.

CHAPTER XXV

FRANCE: POLICY

280. History of the French customs tariff.—After this survey of the
development of French commerce we can gain an appreciation of the
opportunities for still greater growth that were lost, by considering the
obstacles with which the merchant had to contend.
First of all, as a matter of course, there was the customs tariff on the
frontier. This went through the normal course of development in the period
under consideration. The government attempted to reduce to some sort of
system the scattered duties of the earlier period; and under the influence of
mercantilist doctrines it ceased to use the duties chiefly for raising revenue.
The idea of using the tariff to protect home industries, which was at first
held vaguely and applied only occasionally, gained strength with time and
was made by Colbert, a minister of Louis XIV, the chief point in the tariff
system. In 1664, and again three years later, the duties were raised to
protect home manufactures; duties were raised twofold and more, and when
wares were found still entering the kingdom they were in some cases
absolutely prohibited. The high tariff led to reprisals on the part of other
countries, and strained political relations with them; it was one of the causes
of open war with the Dutch. It remained throughout the period a serious
obstacle to commerce with advanced industrial countries like England and
Netherland; the breaches made in it by commercial treaties were
comparatively unimportant; and smuggling formed in France as in England
the real safety-valve of the commercial system.
281. Persistence of customs frontiers inside France.—Far more serious
than the frontier tariff were the customs duties inside of France. The French
kings had made their country by the political union of feudal fragments, and
had never used their great power to abolish the evidences of former
separation and to unify their territory for the purposes of commerce. We
must distinguish three different sections of the country. The North, roughly
speaking, was an area in which internal trade was free, i.e., in which the
provinces were not separated by customs barriers. The South, on the other
hand, was composed of provinces “reputed foreign” which had kept their
tariffs, so that trade here was not free, and wares passing between this and

other parts of France had to pay duty. Still a third section was the East,
“provinces foreign in fact”; these provinces did not form part of France at
all, commercially speaking, for they were outside the national customs
frontier, enjoying free trade with other countries and paying duties when
they sent wares to other parts of France. If the reader will recall the
economic evils that resulted in the Middle Ages from the separation of
districts he will readily appreciate how much France lost by carrying over a
medieval system to modern times. It was impossible for a district to make
the most of its resources by specializing in production. A producer did not
have France for a market; a consumer did not have France for his source of
supply; each was bound by provincial restrictions.
282. Persistence of local toll barriers.—Still the picture is not complete.
There were not only provincial tariffs inside of France but also local
customs inside the provinces. Let us consider the case of a merchant of
Paris who desired to export a package of cloth to England in the sixteenth
century. He had to pay not only the national export duty, but also at fifteen
places on the way down the Seine he had to pay local customs; at Rouen he
must pay provincial customs; and we must add to his list of expenses
freight, pilotage, etc. Wine carried from Bercy (near the Swiss frontier) to
Paris, in the next century, had to pay sixteen different dues on the way to
market. In the sixteenth century there were over a hundred tolls or customs
on the Loire; in the next century there were still twenty-eight on the stretch
from Orleans to Nantes; and some persisted till the French Revolution.
Conditions improved in the course of time, as the above figures suggest, but
improvement was obstructed by the opposition of local interests and
retarded by the delay of the law; and the Revolution was needed to wipe
away these remnants of the Middle Ages with many others.
283. Manufactures; the gild system maintained in spite of its bad
effects.—Before we leave the commercial history of France in this period
we must consider still another subject, the organization of manufacturing, to
understand why the country did not make better use of its resources, and
why it entered the nineteenth century handicapped in competition with a
country like England. Three general topics will be considered: (1) the gild
system; (2) the national regulation of manufactures; (3) the royal or
privileged manufactures.
(1) The gilds which in England during this period gave place to a more
modern and more efficient system persisted in France and even extended

their influence. When the government was in want of money it found the
gilds more convenient subjects of taxation than scattered artisans; for fiscal
reasons, therefore, and not for any economic advantages, it encouraged and
even compelled artisans to unite in gilds on the old model. The result was a
rigid separation of allied trades and a complication of processes which
would seem incredibly stupid to a modern merchant or to the head of a
modern factory.
284. Separation of trades.—At Amiens there were nine distinct
corporations, each with its specific regulations, engaged in the manufacture
of woolens alone. Every gild watched jealously to see that another gild did
not infringe on its petty field, and there was an interminable bickering
among them over the question of monopoly. The quarrel of the goose-
roasters and the poulterers lasted half a century, and went against the
poulterers, who were restricted to the sale of uncooked game; but the
roasters emerged from the conflict only to meet another foe, the cooks, who
were flushed with a recent triumph over the gild of “vinegarers-mustarders”
(who made sauces); and after another half-century the cooks succeeded in
limiting the right of the roasters to sell cooked meat. This is an example of
the conflicts which all the time absorbed the energy and the resources of
people who were engaged in kindred lines of retail trade and manufactures;
cobblers and shoemakers; old-clothes men and tailors; watchmakers and
clock-makers; bakers and restaurant-keepers; and so on through a list that
seems interminable. Some tradesmen had a specially long list of enemies.
The mercers, for instance, who dealt in certain lines of dry-goods, in the
course of a century had sixteen decisions of the supreme court (Parlement)
in their conflict with the glovers; and fought also the “bonneters-cappers,”
and nearly all the other tradesmen whose wares they sold. The question,
who had the right to make and sell buttons, rose nearly to the dignity of a
question of state; search was made in private houses for illegal buttons, and
private individuals were arrested in the street for wearing them.
285. Influence of the gilds in preventing technical progress.—Space is
lacking for a description of all the evils that the gild system entailed on
French industry in this period, and the reader is referred to the general
discussion of the gilds in a previous chapter, with the assurance that all the
evils there enumerated were well represented in France. We cannot leave
the topic, however, without notice of the obstacles which the gilds put in the
way of inventions and technical improvements. A coppersmith who devised

a new helmet was set upon by the armorers; a hatter, who improved his
wares by mixing silk with the wool, was attacked by all the other hatters;
the inventor of sheet lead was opposed by the plumbers; a man who had
made a success in print-cloths was forced to return to antiquated methods
by the dyers. The gildsmen opposed not only new wares and methods, but
also the use of machinery and production on a large scale. A Lyons silk-
weaver could keep only four looms; a Lille serge-maker secured the right to
have twenty looms, that he might carry on experiments looking to
improvement of the manufacture, only by special privilege and against the
vigorous protest of the city government. In spite of all opposition there was
improvement, but the difficulties were so great that nine reformers must
have failed where one succeeded. The history of the French gilds of this
period is a history of wasted opportunities.
286. Narrow restrictions imposed on manufactures by the
government.—(2) Industries were tied down not only by the narrow
regulations of the gilds but also by laws of the central government. Every
government believed in this period that it was unwise to let manufacturers
follow their own ideas in all respects, to stand or fall according to their
success in pleasing the public. Even England had an extensive system,
prescribing the standards for the products of certain manufactures. The
English system, however, did comparatively little harm, if it accomplished
little good, while there can be no question that a similar system in France
was carried so far that it was a serious check to industrial development. This
excessive growth of government regulation was most marked under
Colbert, the minister of Louis XIV, to whom reference has already been
made as a leader in the extension of the protective tariffs; and the system
continued throughout the period. Taking the cloth manufacture for an
illustration, Colbert fixed by law, for each kind of cloth, the length and
breadth, the dimensions of the selvage, the number of threads in the warp,
the quality of the raw materials, and the method of manufacture. His
instructions for dyeing contained 317 articles, to which dyers must
conform. To fix responsibility and force compliance all cloth had to bear the
special marks of the weaver, dyer, and finisher, the seal of the gild, and
sometimes another mark. These regulations grew constantly more
complicated; an official said in 1787 that the regulations on manufactures
filled eight volumes in quarto.

287. Burden of these restrictions on manufactures.—There can be no
question, either of the honesty of Colbert’s intentions or of the energy he
showed in carrying them out. He sent out agents everywhere to study
industries and to talk with the manufacturers, that he might legislate to the
best advantage. One man, however, cannot know a hundred businesses
better than the men who are carrying them on. Colbert and his successors
were ignorant of many points, were deceived in many others. The result was
a mass of regulations of which many were utterly bad, injuring both
producer and consumer. The regulation prescribing a minimum breadth for
cloth would have killed an industry in one part of France that wove strips
for flags, an industry in another part that could sell cloth cheaper by
weaving so narrow a breadth that one man could tend the loom. These
industries, after a tedious and expensive delay, secured exemption from the
law; others, less fortunate, were destroyed. A manufacturer ran always the
risk of having his wares confiscated, not because they were bad and people
did not want them, but because they failed to conform in some point to
hide-bound regulations. An official inspector, shortly before the French
Revolution, said that in every week of years past he had seen 80 or 100
pieces of cloth, good except from the government standpoint, cut in pieces
or burned because they were irregular. Even the French revolted at some of
the regulations, and half of the laws were evaded with the connivance of
officials.
288. Special privileges granted to certain manufactures; resulting
abuses.—(3) While the government restricted in this fashion the natural
development of manufactures, it granted not only exemption from its own
rules but liberal grants of money taken from taxpayers to stimulate favored
industries. This practice, begun in the sixteenth century, grew under and
after Colbert. It enabled certain industries to expand as they would
otherwise have been unable to do, and to reach the higher grade of
organization which was coming as a natural growth in England.
Unfortunately, however, the privileges went not to the most deserving but to
the loudest and most adroit claimants. To gain the privileges, which
included everything from exemption from taxes and handsome subsidies
down to titles of nobility, the manufacturer did not need to show that he had
some technical improvement to introduce; it was sufficient if he promised
to bring in a foreign industry or even to extend one already in existence at
home. The royal factories abused their power to raise prices to the

consumers and to lower the wages of the laborer. Some of them came to be
regarded as public calamities. They showed in general the characteristics of
the hothouse plant, which cannot thrive unaided, and most of them failed
after a longer or shorter career. We can say of them as of many other
manifestations of the French policy of the period; some good may have
resulted in ways unknown to us, but the evils are apparent, and justify us in
calling the policy bad.

QUESTIONS AND TOPICS

1. The protective policy, as applied by Colbert. [Palgrave’s Dict.; A. J.
Sargent, Economic policy of Colbert, N. Y., 1899, chap. 4.]
2. Measure on a map the length of one or more of the stretches on which
tolls were levied, sect. 282; estimate the average distance separating toll
barriers; apply to a map of your own vicinity.
3. If you are familiar with the organization of some modern manufacture
write an essay showing how efficiency would be impaired by insisting on
the separation of allied trades. [The advanced student will find helpful and
suggestive on this and similar topics, Bücher, Indust. ev., chaps. 6, 7, 8.]
4. Write a report on any instances known to you of bad results following
the strict division of occupations among trade unions.
5. Write a report on any instances known to you of opposition to
technical improvements, the introduction of machinery, etc., by modern
trade unions.
6. Attempt of Colbert to establish regulations for manufacturers: object,
methods, variety of regulations, results. [Sargent, Colbert, chap. 3.]
7. With what object and to what extent do governments now seek to
regulate manufactures? [Farrer, State in relation to trade, London & N. Y.,
Macmillan, $1.]
8. Compare with the French the English experience with privileged
manufactures. [Hewins, Eng. trade, chap. 1; Encyc. Brit., article
Monopoly.]
9. Origin and early history of the modern system of patents for
inventions. [Same references; Encyc., article Patents.]

BIBLIOGRAPHY

See preceding chapter.

CHAPTER XXVI

THE GERMAN STATES

289. Political survey of Germany about 1500.—After considering a
country in which the central government was, so to speak, too strong for the
interests of commercial development, it will be instructive to take up
countries in which it was certainly too weak, Germany and Italy.
Germany presented a striking contrast in its political and in its economic
development at the beginning of the period, about 1500. In political
organization, the central government had almost no power; it was the mere
shadow of a reality. The real power rested in hundreds of petty states, of
which some were but a few square miles in extent. There was no authority
which could keep in order these little states and the different classes of
people which composed them. The history of Germany in this period is a
sad story of conflicts between classes,—peasants, burghers, knights, and
princes; conflicts between Catholics and Protestants; conflicts between the
states themselves. In these struggles the best energies of the Germans were
absorbed; they were marking time or even going backward while the more
fortunate peoples of Europe were advancing. The Germans learned at last to
despair of realizing their dream of a national government. Not all parts of
the country, however, were equally unfortunate; some came under the rule
of princes who managed to build up a strong power at home and abroad.
Two of these local states are of especial importance, for between them they
have divided the fragments of the old Germany, and made great states in
modern Europe. One of them, Prussia, is the nucleus of what we now call
Germany. The other, Austria, which included the Germans of the South,
added to them fragments of territory peopled by other races, and made the
state of Austria-Hungary.

The objects of the map are: (1) to show the possessions of the Hohenzollerns (Prussian) and
Hapsburgs (Austrian); (2) to show the small fragments of which remaining Germany was
composed. To preserve clearness, many of the smaller fragments are not indicated. Note that the
Empire included some states not German (Flanders), and did not include all German states (East
Prussia, Silesia).

290. Development of the economic organization.—There was a
contrast, it was said, between the political and the economic development.
The very lack of a central power had enabled some of the sections and
classes to advance rapidly by freeing them from control. In the fifteenth
century the agricultural classes, who had been serfs in the Middle Ages and
who were to be reduced again to serfdom later by the political oppression to
which constant wars gave rise, were free and prosperous. The cities were
more rich and populous than those of any other country north of Italy. Not
only had manufacturing and mining made rapid progress, but banking and

commerce too. The Fuggers and the Welsers of southern Germany were
great promoters and financiers, with interests extending over all Europe,
from which they drew enormous wealth. German merchants showed the
most enterprise and energy of any north of the Alps; they distributed among
other countries of the Continent the Levant wares which they secured from
Venice, and they controlled the commerce of the West of Europe with the
North and East. We shall begin our sketch of the decline of German
commerce by returning now to the history of the Hanseatic League, which
we left in full control of this last branch of trade.
291. Condition of the Baltic trade.—The Baltic trade suffered in the
period about 1500 from influences over which merchants had no control.
The Protestant Reformation caused a decline in the demand for some of its
staple wares: wax, which had been largely used for candles in church
services, and fish, of which the consumption had been greatly furthered by
the Catholic periods of fasting. The most valuable fish, moreover, the
herring, ceased to enter the Baltic Sea, and by limiting their feeding ground
to the North Sea enabled the Dutch to become leaders in the fishing
industry. Imitation of Italian fashions in dress, with which the French
became acquainted about 1500, caused less demand for furs. All these
changes hurt the Baltic trade, but they were far from destroying it. This
trade grew, in fact, throughout the period; it could afford to dispense with
the luxuries of commerce for it controlled the necessaries, grain and meat,
lumber and naval stores. The reasons for the decline of the Hanseatic
League are to be sought not in the character of the trade but in the character
of the League itself.
292. Decline of the Hanseatic League.—The League lacked
organization. The many towns of which it was composed were so separated
by physical distance and by divergence of interests that they could not
cooperate efficiently. They were strong enough to crush other towns which
sought to enter their field, but they were unequal to the contest with
national states; and the political consolidation of the countries of northern
and western Europe raised up enemies with whom they could not compete.
In nearly twenty years (1476-1494) only one common meeting of delegates
was held. Dissensions broke out inside the towns, and they began to quarrel
among themselves. Lübeck, in the center, put forth claims opposed to the
interests of towns on the edge of the League, on the lower Rhine and in
Prussia. Rising commercial towns in the western part of the Netherlands,

like Rotterdam and Amsterdam, grew up outside the League and in
opposition to it. The turning-point in the decline may be put at 1535, when
Denmark and Sweden were strong enough to break the Hansa’s monopoly
by opening the passage into the Baltic to the ships of all peoples. Soon other
states were carrying the war into the enemy’s country. Sweden threw the
larger part of the Russian trade to the Dutch. The English built up a
prosperous trade in the Baltic Sea and on the Arctic Ocean at Archangel.
They flooded the German market with English cloths, and when the Hansa
resisted, Elizabeth expelled the members of the League from England. In
1601 an Englishman could say of the Hansa towns: “Most of their teeth
have fallen out, the rest sit but loosely in their head.” Of the great League
soon only three towns remained as Hanseatic members, Lübeck, Bremen,
and Hamburg.
293. Decline of the commerce of south Germany.—While the cities of
north Germany were losing their hold on a growing commerce, the cities of
the South found a large share of their trade taken from them by the
discovery of the ocean route to India. The German cities (Nuremberg,
Augsburg, Ulm, etc.) fought with desperation to maintain their commerce,
and proof exists that they carried on an active commerce with Italy after
they ceased to obtain there the Oriental wares, and had to content
themselves with Italian products. Even this trade, however, fell to a large
extent into the hands of the Italians, who flooded southern Germany and
drove native Germans out of business.
The Germans were not entirely unprepared for the changes following the
discoveries, for they had long gone in considerable numbers to the Spanish
peninsula, by land through southern France or from a French or Italian
harbor to Barcelona. Many Germans had settled in Portugal, and for a time
the great merchants of south Germany shared in the Indian trade at its
source, in Lisbon. The great German financiers shared also for a brief
period in the commerce of the New World. The Ellingers and Welsers
leased the copper mines of San Domingo; the Crombergers had silver mines
at Sultepeque; the Tetzels exploited the copper mines of Cuba. The Welsers
founded Venezuela by a military expedition which they financed, and held
the country for a few years.
294. The chief cause of decline of German commerce in this period
was political.—The most obvious explanation of the failure of Germany to
take a place with the other states in the commercial expansion following the