1. The word _merchant_, in its most extended application, signifies, a
person who deals in merchandise. This definition, with some
exceptions, agrees very well with general usage in this country;
although, in England, the term is principally restricted to those
dealers who export and import goods on their own account, either in
their own or in chartered vessels. In the United States, dealers of
this class are denominated _importing_ and _exporting_ merchants; or
simply, _importers_ and _exporters_.
2. Such merchants, both here and in Europe, are distinguished from
each other by the kind of goods in which they traffic, or by the
foreign country in which they have their chief correspondence; thus,
one who deals in tobacco is called a tobacco-merchant; a wholesale
dealer in wines is called a wine-merchant; a West India, East India,
or Turkey merchant, exports goods to, and imports goods from, those
respective countries.
3. The business of merchants, in foreign countries, is usually
transacted by agents, called factors, or commission merchants, to whom
goods are consigned to be sold, and by whom other articles of
merchandise are purchased and returned according to order. Sometimes
an agent, called a supercargo, accompanies the vessel; or the captain
may act in this capacity. Goods, however, are often obtained by order,
without the intervention of an agency of any kind.
4. Almost every sort of foreign merchandise is subject to the
imposition of duties by the government of the country in which it is
received. These duties are paid at the _Custom-House_, to persons
appointed by the constituted authorities to collect them. As soon as a
vessel from abroad has entered the harbor, it is visited by a
custom-house officer, called a _Tide-Waiter_, whose business it is to
see that no part of the cargo is removed, until measures have been
taken to secure the customs.
5. Goods brought into the country by importers, are frequently sold,
in succession, to several merchants of different grades, before they
come to the hands of the consumers. Cloths or stuffs of different
kinds, for instance, may be first sold by the bale to one merchant,
who, in turn, may dispose of them by the package to another, and this
last may retail them in small quantities to a greater number of
customers.
6. Dealers in a small way, in cities and large towns, are frequently
denominated shop-keepers; but those who do an extensive retail
business, are usually called merchants or grocers, according as they
deal in dry goods or groceries. In cities, the extensive demand for
goods enables retailers to confine their attention to particular
classes of articles; such as groceries, hardware, crockery, a few
kinds of dry goods, or some articles of domestic manufacture; but in
other places, where trade is more limited, the merchant is obliged to
keep a more general assortment.
7. The general retail merchant is compelled to transact business with
a great number of wholesale dealers, to whom he pays cash in hand, or
agrees to pay it at some future period, say, in four, six, nine, or
twelve months. The people in his vicinity, in turn, purchase his goods
on similar conditions, with this difference, that they often
substitute for cash agricultural and other productions, which the
merchant, at length, turns into ready money.
8. Barter, or the exchange of commodities, prevails to a great extent,
in country places, in almost every part of the United States. In such
exchanges, the currency of the country is made the standard of
reference: for example; a merchant receiving from a customer twenty
bushels of wheat, estimated at one dollar per bushel, gives in return
twenty dollars' worth of goods, at his marked prices; or, in other
words, he gives credit for the wheat, and charges the goods. On the
same principle, merchants of the first class often exchange the
productions of their own country for those of another.
9. Merchants, or store-keepers, as they are indifferently called in
some places, whose location is distant from the seaboard, visit the
city in which they deal once or twice a year, for the purpose of
laying in their stock of goods; but, in order to keep up their
assortment, they sometimes order small lots in the interim. Retailers
more conveniently situated, purchase a smaller amount of goods at a
time, and replenish their stores more frequently.
10. Commerce, on the principles of barter, or a simple exchange of one
commodity for another, must have been practised in the early days of
Adam himself; although we have no positive record of the fact; for it
cannot be imagined that the arts, which are stated in the Scripture to
have flourished long before the flood, could have existed without
commercial transactions. The period at which the precious metals began
to be employed as a standard of value, or as a medium of commercial
intercourse, is not known. They were used for this purpose in the time
of Abraham, and probably many centuries before his day.
11. The earliest hint respecting the existence of trade between
different nations, is to be found in the book of Genesis, where the
transaction regarding the sale of Joseph to the Ishmaelites, or
Midianites, is mentioned. These merchants, it appears, were travelling
in a caravan to Egypt, then the most cultivated and refined part of
the world. Their camels were loaded with balm, myrrh, and spices. The
first of these articles was the production of Gilead; the second, of
Arabia; and the last was probably from India; as in that country the
finer spices are produced. If this were really the case, commerce, in
its widest sense, was carried on much earlier than is generally
supposed.
12. The fertility of Egypt, and its central position, made it an
emporium of commerce; and there it flourished, in an eminent degree,
long before it was cultivated in Europe and in Western Asia. For
several ages, however, the Egyptians, on account of their
superstitious prejudices against the sea, carried on no maritime
commerce.
13. The Phoenicians were the first people who used the Mediterranean
Sea, as a highway for the transportation of merchandise. Tyre and
Sidon were their chief cities; and the latter was called a _great_,
and the former a _strong_ city, even in the time of Joshua, fifteen
hundred years before the advent of Christ. These people, in their
original association as a nation, possessed but a small territory;
and, being surrounded by many powerful nations, they never attempted
its enlargement on the land side.
14. The settlement of the Israelites in the "Promised Land,"
circumscribed their limits to a very small territory, and compelled
them to colonize a great number of their inhabitants. The colonies
which they formed in the various countries bordering upon the
Mediterranean and on the islands, enlarged the boundaries of
civilization, and greatly extended their trade.
15. The Phoenicians continued their colonial system for many centuries
after the period just mentioned, and even extended it to the Atlantic
coasts of Europe. But the most distinguished of all their colonies was
the one which founded the city of Carthage, on the northern coast of
Africa, about the year 869 before Christ. Elissa, or, as she is
otherwise called, Dido, the reputed leader of this colony, makes a
conspicuous figure in one of the books of Virgil's AEneid.
16. Carthage, adopting the same system which had so long been pursued
by the great cities of Phoenicia, rose, in a few centuries, to wealth
and splendor. But, changing, at length, her mercantile for a military
character, she ruled her dependent colonies with a rod of despotism.
This produced a spirit of resistance on the part of her distant
subjects, who applied to Rome for aid to resist her tyranny. The
consequence of this application was the three "Punic wars," so
renowned in history, and which terminated in the destruction of
Carthage, in the year 146 before the Christian era. During the first
Punic war, Carthage contained seven hundred thousand inhabitants; but
at its destruction, scarcely five thousand were found within its
walls.
17. The period of the greatest prosperity of Tyre, may be placed 588
years before Christ, at which time the remarkable prophecies of
Ezekiel concerning it were delivered. Soon after this, it was greatly
injured by Nebuchadnezzar; and was finally destroyed by Alexander the
Great, about the year 332 before Christ.
18. A new channel was opened to commerce by the monarch just
mentioned, he having founded a city in Egypt, to which he gave the
name of Alexandria. His object seems to have been, to render this city
the centre of the commercial world; and its commanding position, at
the mouth of the Nile, was well calculated to make it so; since it was
easy of access from the west by the Mediterranean, from the east by
the Red Sea, and from the central countries of Asia by the Isthmus of
Suez.
19. The plans of Alexander were carried out with vigor by Ptolemy, who
received Egypt as his portion of the Macedonian empire, after the
death of his master; and, by his liberality, he induced great numbers
of people to settle in the new metropolis for the purposes of trade.
Far south, on the Red Sea, he also founded a city, which he called
Berenice, and which he designed as a depot for the precious
commodities brought into his kingdom from India. From this city, goods
were transported on camels across the country, to a port on the Nile;
and thence they were taken down the river to Alexandria.
20. Ptolemy also kept large fleets both on the Mediterranean and on
the Red Sea, for the protection of commerce, and the defence of his
dominions; yet, the Egyptians, even under the Ptolemies, never
attempted a direct trade to India. They, as the Phoenicians and their
own progenitors had done for ages, depended upon the Arabian merchants
for the productions of that country.
21. The Greeks, before their subjugation to the Roman power, had paid
much attention to nautical affairs; but this had been chiefly for
warlike dominion, rather than for commercial purposes. The city of
Corinth, however, had become wealthy by the attention of its
inhabitants to manufactures and trade; but it was destroyed by the
same barbarian people who, about this time, annihilated Carthage. Both
of these cities were afterwards favored by Julius Caesar; but they
never regained anything like their former importance.
22. Rome having, at length, obtained the complete dominion of the
Mediterranean Sea, and the countries bordering upon it, as well as
that of many others more distant, and less easy of access, became the
great mart for the sale of merchandise of every description, from all
parts of the known world. For the various commodities brought to the
city, the Romans paid gold and silver; as they had nothing else to
export in return. The money which they had exacted as tribute, or
which they had obtained by plunder, was thus returned to the nations
from which it had been taken.
23. The subjected provinces continued to pour their choicest
productions into Rome, as long as she retained the control of the
empire; and thus they contributed to enervate, by the many luxuries
they afforded, the power by which they had been subdued. The _eternal
city_, as she is sometimes called, in the days of her extensive
dominion, contained about three millions of inhabitants; and, although
this immense population was chiefly supplied by importations, the
Romans never esteemed the character of a merchant. They despised the
peaceful pursuits of industry, whilst they regarded it honorable to
attack without provocation, and plunder without remorse, the weaker
nations of the earth.
24. In the year 328 of the Christian era, Byzantium was made the seat
of government of the Roman empire by Constantine, who, with a view of
perpetuating his own name, called his new capital Constantinople.
However necessary this removal may have been, to keep in subjugation
the eastern provinces, it was fatal to the security of the western
division. The rivalry between the two cities produced frequent
contests for dominion; and these, together with the general corruption
and effeminacy of the people themselves, rendered it impossible to
resist the repeated and fierce invasions of the barbarous people from
the northern parts of Europe.
25. These invasions commenced in the latter part of the fourth
century; and, in less than two hundred years, a great portion of the
inhabitants was destroyed, and the whole Western empire was completely
subverted. The conquerors were too barbarous to encourage or protect
commerce; and, like the arts of peace and civilization generally, it
sunk, with few exceptions, amid the general ruin.
26. The empire of Constantinople, or, as it is usually called, the
Eastern empire, continued in existence several centuries after the
Western empire had been overrun; and commerce continued to flow, for a
considerable time, through some of its former channels to the capital.
At length, the Indian trade, which had so long been carried on chiefly
through Egypt by the Red Sea, was changed to a more northern route,
through Persia.
27. Soon after the commencement of the pretended mission of Mohammed,
or Mahomet, in 609 of the Christian era, the power of the Arabians,
since called Saracens, began to rise. The followers of the Prophet,
impelled by religious zeal, and allured by plunder, in less than 150
years extended their dominion almost to the borders of China on the
one side, and to the Mediterranean and Atlantic on the other. The
trade of the East, of course, fell into their hands; and they
continued to enjoy it, until they, in turn, were subdued by the Turks.
28. So great was the prejudice of the Christians against the followers
of Mohammed, that, for a long time, it was considered heretical for
the former to trade with the latter; but the Saracens having a vast
extent of territory, and having control of the Mediterranean and Red
Seas, as well as of the Persian Gulf, carried on an extensive trade
among themselves.
29. The first European power which rose to commercial eminence, after
the destruction of the Western empire, was the republic of Venice.
This important city owed its origin to some fugitives, who fled for
their lives to a number of small islands in the Adriatic Sea, during
the invasion of Italy by the Huns, under Attila, in the year 452.
30. The houses first built by the refugees, were constructed of mud
and seagrass; and, so insignificant were they in their appearance,
that a writer of that period compares them to a collection of the
nests of water-fowls. The number of these islands, on which so
splendid a city was afterwards built, was, according to some,
seventy-two; but, according to others, ninety, or even one hundred and
fifty. For a considerable time, the distinction of rich and poor was
not known; for all lived upon the same fish-diet, and in houses of
similar form and materials.
31. In less than a century, the inhabitants of these islands had
established a regular government; and, in the year 732, we find them
venturing beyond the Adriatic into the Mediterranean, even as far as
Constantinople, trading in silks, purple draperies, and Indian
commodities. In 813, the French commenced trading to Alexandria, and,
in a few years, the Venetians followed their example, in despite of
the ecclesiastical prohibitions against intercourse with the
followers of Mohammed. In the tenth century, Amalfi, Pisa, Genoa, and
Florence, began to rival Venice in trade.
32. The crusades, which, for two centuries from the year 1095, engaged
so much of the attention of the Christian nations of Europe, greatly
promoted the interests of the commercial cities of Italy; as the
armies in these expeditions were dependent on them for provisions, and
for the means of crossing the sea, which lay between them and the
_Holy Land_. They also gave a new and powerful impulse to commerce in
general, by giving the people, in the unrefined parts of Europe, a
knowledge of the elegances and luxuries of the East.
33. In the thirteenth century, commerce and manufactures began to
command considerable attention in Germany and the adjacent states; but
as the seas and rivers were infested with pirates, and the roads with
banditti, it became necessary for those engaged in commerce to adopt
measures to protect their commodities, while on the way from one place
to another. The citizens of Hamburg and Lubeck first united for this
purpose; and the advantages of such a union of strength becoming
apparent, many other cities soon entered into the confederation.
34. This association was denominated the _Hanse_, or league, and the
cities thus united were called _Hanse Towns_. Most of the commercial
towns in the northern parts of the continent of Europe, at length,
became parties to the Hanseatic league. The number of these cities
varied, at different periods; but in the days of the greatest
prosperity of the association, it amounted to eighty-five.
35. Representatives from the different cities met triennially at
Lubeck, where their common treasury and archives were kept. By this
assembly, which was called a diet, rules for the regulation of
commercial intercourse were made, and other business transacted,
which related to the general welfare of the confederation.
36. In the fourteenth century, the league, in all parts of Europe,
attained a high degree of political importance, and developed that
commercial policy which it had originated, and which has since been
adopted by all civilized nations. The objects of the allied cities
were now declared to be--to protect their commerce against pillage, to
guard and extend their foreign trade, and, as far as possible, to
monopolize it, to maintain and extend the privileges obtained from the
princes of different nations, and to make rules or laws for the
regulation of trade, as well as to establish the necessary tribunals
for their due execution. The decisions of their courts were respected
by the civil authorities of the countries to which their trade
extended.
37. The treasury was chiefly supplied by duties on merchandise; and
the great wealth thus acquired enabled the allied cities to obtain
commercial privileges from needy princes, for pecuniary
accommodations. The league, in defending its commerce, even carried on
wars against kingdoms; and, at length, by its wealth and naval power,
became mistress of the Northern seas, and rendered the different
cities of the confederation in a great measure independent of the
sovereigns of the countries in which they were situated.
38. The conduct of the Hanse Towns, at length, excited the jealousies
of those sovereigns who had, for a long time, favored their union; and
the princes of Europe generally, becoming acquainted with the value of
commerce, both as means of enriching their people, and of filling
their own coffers, combined against the association. In 1518, the
governments of several states commanded all their cities to withdraw
from the league, which soon after voluntarily excluded some others.
After this the Hanse gradually sunk in importance, and finally ceased
to exist in 1630.
39. The trade to the East Indies continued to be carried on through
Persia and Egypt, subject to the extortions of the Saracens, and the
still severer exactions of the merchants of the Italian cities, until
the route to those countries, by the Cape of Good Hope, was
discovered.
40. The use of this new pathway of commerce, combined with the
discovery of America, caused an entire change in both the political
and commercial state of Europe. A strong desire of visiting the remote
parts of the world, thus laid open to the people of Europe,
immediately arose, not only among the Portuguese and Spaniards, but
also among other nations. Colonies were soon planted in the East and
in the West; and the whole world may be said to have been inspired
with new energy.
41. The Portuguese, being considerably in advance of the other
Atlantic nations in the art of navigation, soon gained the entire
control of the East India trade, and were thus raised to great
eminence, prosperity, and power. Their dominions became extensive in
Africa and Asia, and their navy superior to any that had been seen for
several ages before.
42. In 1580, or eighty-three years after Vasco de Gama found his way,
by the Cape, to Calicut, Portugal was subdued by Philip II., king of
Spain. The Spaniards, however, were not enriched by the conquest;
since their commercial energy and enterprise had been destroyed, by
the vast quantities of the precious metals obtained from their
American possessions.
43. In 1579, the people of Holland, with those of six neighboring
provinces, being then subject to Spain, united, under the Prince of
Orange, for the purpose of regaining their liberties. This produced a
sanguinary war, which continued for thirty years, during which time
the Dutch wrested from the Spaniards most of their Portuguese
possessions in India, and, in addition to this, formed many other
settlements in various places from the River Tigris even to Japan.
Batavia, on the Island of Java, was made the grand emporium of trade,
and the seat of the government of their East India possessions.
44. The prosperity of the United Provinces increased with great
rapidity; and, as they were but little interfered with by other
nations in their Eastern dominions, they enjoyed, for half a century
or more, almost the whole of the trade of the East. Besides this, they
shared largely with the rest of the world in almost every other branch
of trade. After the year 1660, other nations, by great exertions,
succeeded in obtaining considerable shares of the commerce of the
East; yet the Dutch still retain valuable possessions there.
45. The chief articles exported from Britain, in ancient times, were
tin, lead, copper, iron, wool, and cattle; for which they received in
return, gold, silver, and manufactured articles. But the commerce of
the British Islands was inconsiderable, when compared with that of
many kingdoms on the Continent, until the beginning of the eighteenth
century.
46. When Elizabeth ascended the throne of England, in 1558, the
circumstances of the nation required an extensive navy for its
protection; and the great attention which the queen paid to this means
of defence, gave animation to all maritime concerns. Under her
patronage, several companies for trading in foreign countries were
formed, which, at that time, and for a long period afterwards, were
very beneficial to trade in general. In her reign, also, the colonial
system of England had its origin, which contributed eventually, more
than any thing else, to the commercial prosperity of that nation.
Since the reign of this wise and judicious princess, the commerce and
manufactures of Great Britain have been, with a few interruptions,
steadily advancing; and, in these two particulars, she surpasses every
other nation.
47. The United States possess superior local advantages for trade, and
embrace a population unsurpassed for enterprise and energy. Since the
Revolution, the resources of our country have been rapidly developing.
Our exports and imports are already next in amount to those of Great
Britain and France and the extensive improvements which have been made
by the different states, to facilitate internal intercourse, are
increasing with great rapidity.
48. The banking system is very intimately interwoven with commercial
affairs in general. Banks are of three kinds, viz., of _discount_, of
_deposit_, and of _circulation_. The term _bank_, in its original
application, signified a place of common deposit for money, and where,
in commercial transactions, individuals could have the amount, or any
part of the amount, of their deposits transferred to each other's
accounts.
49. The term _bank_ is derived from the Italian word _banco_, which
signified a kind of bench, or table, on which the Jews were accustomed
to place the money which they proposed to lend in the markets of the
principal towns. The first bank was established in Venice, about the
middle of the twelfth century; the Bank of Genoa, in 1345; the Bank of
Amsterdam, in 1607; the Bank of Hamburg, in 1619; the Bank of
Rotterdam, in 1635. These were all banks of mere deposit and transfer.
50. _Lending-houses_ may be traced to a very ancient origin. They
were, at first, supported by humane persons, with a view of lending
money to the poor, on pledges, without interest. Augustus Caesar
appropriated a part of the confiscated effects of criminals to this
purpose; and Tiberias, also, advanced a large capital, to be lent for
three years, without interest, to those who could give security in
lands equal to twice the value of the sum borrowed.
51. In the early ages of Christianity, free gifts were collected
and preserved by ecclesiastics, partly to defray the expenses of
divine service, and partly to relieve the poor of the church; and
the funds thus provided came, at length, to be called _montes
pietatis_--mountains of piety. This appellation was afterwards
applied to the _loaning-houses_, established in modern Italy in
imitation of those of antiquity.
52. In course of time, the loaning-houses were permitted by the Roman
pontiff to charge a moderate interest on a part of their capital, and,
finally, upon the whole of it; still, they retained, for a long
period, the original denomination of _montes pietatis_. The receiving
of interest on loans was declared lawful by the Pope, about the middle
of the fifteenth century. Soon after this period, all the cities of
Italy hastened to establish these institutions; and their example was,
at length, followed in other parts of Europe.
53. But long before the Pope had granted this privilege, individuals
were in the habit of loaning money at an exorbitant usury. These were
principally Jews and merchants from Lombardy; hence, all persons in
those countries, who dealt in money, came to be called _Lombard
merchants_. The prohibitions of the Church against receiving interest
were eluded, when necessary, by causing it to be paid in advance, by
way of present or premium.
54. In the twelfth century, many of the dealers in money were expelled
from England, France, and the Netherlands, for usurious practices;
and, in order to regain possession of their effects, which they had,
in their haste, left in the hands of confidential friends, they
adopted the method of writing concise orders or drafts. Hence
originated bills of exchange, so convenient in commercial
transactions.
55. The Bank of England was established in the year 1694. Hitherto,
the banks of deposit, and loaning-houses, were entirely distinct; but,
in this institution, these two branches of pecuniary operations were
united. It seems, also, that this was the first bank that issued
notes, to serve as a medium of circulation, and to supply, in part,
the place of gold and silver.
56. In the United States, banking institutions are very numerous. They
are all established by companies, incorporated by the legislatures of
the different states, or by the congress of the United States. The act
which grants the privileges of banking, also fixes the amount of the
capital stock, and divides it into equal shares. The holders of the
stock choose the officers to transact the business of the corporation.
57. Our banks receive deposits from individual customers, loan money
on notes of hand, acceptances, and drafts, issue notes of circulation,
and purchase and sell bills of exchange. They are usually authorized,
by their charters, to loan three times the amount, and to issue
bank-notes to twice the amount, of the capital stock paid in. Few
banking companies, however, exercise these privileges to the full
extent, lest the bank be embarrassed by too great a demand for specie.
As soon as a bank ceases to pay specie for its notes, it is said to be
broken, and its operations must cease.
58. The Bank of North America was the first institution of this kind,
established in the United States. It was incorporated by Congress, in
1781, at the suggestion of Robert Morris. In 1791, after the union of
the states had been effected under the present constitution, the first
Bank of the United States was incorporated, with a capital of ten
millions of dollars. Most of the states soon followed this example;
and, before the beginning of the present century, the whole banking
capital amounted to near thirty millions of dollars.
59. The charter of the first Bank of the United States expired, by its
own limitation, in 1811; and a new one, with a capital of thirty-five
millions of dollars, was established in 1816, which also closed its
concerns, as a national bank, in 1836, President Jackson having vetoed
the bill for its recharter. In that year the number of banks was 567,
and the bank capital $251,875,292. In the year 1840, the number of
banks had increased to 722, and their capital to $358,442,692.
[Illustration: AUCTIONEER.]