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 _Facing_ 129
The Laurentian Portolano of 1351. _Reproduced
by permission from Beazley’s “Prince Henry, the
Navigator,” (Putnams)._
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.
[Illustration: 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.
[Illustration: 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, §§ 24_a_, 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.
[Illustration:
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 5-1/2d., 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.
[Illustration:
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 11-1/2 feet deep in the hold and had a
height between decks of 6-1/2 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.
[Illustration: 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.
[Illustration: 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.
[Illustration: 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.
[Illustration:
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.
[Illustration:
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.
[Illustration:
TRADE RELATIONS OF
A GERMAN MERCHANT
About 1400
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.
[Illustration: 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.
[Illustration: DISCOVERIES
OF THE
PORTUGUESE
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.
[Illustration: 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.
[Illustration:
EUROPEAN
POWERS
IN
AMERICA
(About 1700)
]
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.
[Illustration: 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.
[Illustration:
EUROPEAN POWERS
IN THE EAST
ABOUT 1700
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
12-1/2 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.
[Illustration:
SPHERES OF TRADE OF
ENGLISH COMPANIES
IN THE EARLY 17th CENTURY
]
=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 2-1/2 inches, and the whole line would be
a little over 4-1/2 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.
[Illustration: FRENCH COLONIAL EMPIRE
From the 17th to the early 19th Centuries]
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.
[Illustration:
GERMANY
IN THE
18th CENTURY
_Boundary of the Empire_
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 discoveries is the disadvantage of her position. It has
been said that the diversion of commerce to the oceanic routes exposed
the countries of central Europe (Italy, Germany, etc.) to a condition
of commercial glaciation, such as Norway would experience physically if
it lost the warm current of the Gulf Stream. The difference in distance
of a few hundred miles in voyages of thousands does not explain the
matter. No physical differences suffice to explain why Amsterdam rose
and why Hamburg fell so rapidly. The weakness of Germany was not
physical. Nor was it economic; German merchants of this period had
more free capital, more business ability and greater energy than the
merchants of any other country. Germany’s weakness was political. The
payments which merchants and other Germans made in the form of taxes
and loans to political authority did not form a single fund which could
be used for furthering German interests at home and abroad. The money
went to a great number of rival governments, and was consumed in their
particular quarrels, not helping but actually hurting German business
interests.
=295. The natural outlets of commerce stopped by hostile states.=—The
political weakness of Germany enabled other states, now rising
to power, to crumble off fragments of the country, in which they
established a commercial policy hostile to German interests. Before
long the mouth of every one of the large rivers which were the natural
commercial outlets of the country had passed under foreign control. The
Rhine was Dutch; the Weser Swedish; the Elbe Danish; the Oder Swedish;
the Vistula Polish. Tolls hampered the passage of wares as effectually
as though Germany were surrounded by a physical barrier on the sea
side; and German ships almost disappeared from the ocean.
German commerce suffered especially by the rise of the Dutch to an
independent position. So long as Antwerp was the great market of the
Continent Germans traded freely with it, and through it to Lisbon.
The substitution of Amsterdam for Antwerp was a most serious blow to
German interests. The Dutch had very different ideas from those of the
Flemish; they wanted to do all the trade themselves and to force other
people to a position of commercial dependence on them. They made the
lower Rhine practically useless for their rivals, raising the tolls
sixfold and more, and thereby coming into a control of the trade as far
as Frankfort on the Main.
=296. The damage done by internal dissensions and by the Thirty Years’
War.=—Germany was not only cut off from the outside world by tariff
barriers, but cut up inside by the tolls of cities and territories.
Every city on a trade route wanted to make itself a “staple,” _i.e._,
have all goods passing the vicinity brought there for taxation and for
sale. Frankfort on the Oder, for instance, demanded that all boats
passing down the river Warthe should come _up_ to Frankfort before they
could continue their journey down the Oder to Stettin. The cities of
Stettin, Frankfort, and Breslau, all situated on the Oder, instead
of using that river for peaceable exchange, made bitter commercial
war on each other with tolls and prohibitions. Conditions grew still
worse after the Thirty Years’ War (1618-1648), a terrible conflict
which, without exaggeration, cost Germany one hundred, perhaps two
hundred, years of development. The physical means of transportation
declined. On the Elbe, for instance, the dikes ceased to be repaired,
the tow-path disappeared, the banks crumbled; and sand bars and snags
became so common that navigation was difficult and costly. Tolls not
merely doubled; they increased fivefold and more. Space is lacking for
a description of all the evils; they were practically a reproduction of
the conditions which happier states had left behind them five hundred
years before.
=297. Restriction of manufactures by the gilds.=—German manufactures
followed about the same course as that of the French which we have
traced above. The gilds merited the term given them by an economist of
the seventeenth century who said they were the “curse of Germany”; they
seem to have been in some respects even more narrow than the French
gilds. The same old evils reappear, but the reader must be asked to
take these for granted and to direct his attention to some new aspects
of the gild organization. Specially noteworthy are the obstacles put in
the way of any man who desired to become a full member of a gild. Many
gilds succeeded in making the exercise of the trade a family monopoly
by the regulation that no man could become a master who did not marry
the daughter or the widow of a master. One gild expelled a man because
he had married a wife whose grandmother was alleged to have come from
a shepherd’s family; other gilds expelled members because they had
ridden an executioner’s horse or drunk with an executioner. A man had
at best to pay very high fees to become a master, and this artificial
restriction on the number of full members not only kept the ordinary
workmen in a wretched position, but also raised the price of goods to
the consumer.
The monopoly of the gilds became more oppressive all the time. Most
of their money, except the considerable part they spent in carousing,
they used in lawsuits and in quarrels with rivals. For miles around
a German town the gilds permitted no competitors, and they made it a
regular part of their business to hunt down and exterminate independent
producers.
=298. The eighteenth century marked by general depression, with some
signs of improvement.=—In Germany, in general, there was little
improvement in conditions in the eighteenth century. The country was
still intersected with tariff barriers. The Rhine was cut into four
sharply defined parts, and the Elbe, by reason of tolls, had lost its
trade in some wares of the first importance: steel, iron, copper,
olive oil, wine, fish, etc. To the conflicts between cities there was
still no end. The cities of southern Germany, weighted with taxes
and surrounded by closed markets, declined still more in commercial
importance. There were, however, some hopeful signs of progress.
Two cities of the interior, Frankfort on the Main and Leipzig, were
building up a business which rested not only on trade in wares but on
dealings in bills of exchange, currency, commercial loans, etc. Beside
the rise of these banking centers special importance attaches to the
revival of commerce on the coast of the North Sea. Hamburg and Bremen
seized the opportunity offered by the American Revolution and the
European wars to which it gave rise to extend their trade as neutral
carriers, and had soon passed their old rivals, the Dutch.
=299. The rise of Prussia important mainly from the political
standpoint.=—Taking German commerce as a whole, we leave it in 1800
still depressed and sluggish. The picture would be incomplete, however,
if nothing more were said. In one part of Germany there had been
great activity for centuries; in the North and East, namely, where
the ancestors of the present Emperor William II were building up the
state of Prussia. This activity, however, was mainly political, and
the history of it does not belong here; we can refer to it only as
a most remarkable example of state-making, in which commercial and
industrial interests were made subordinate to the establishment of a
strong government over a united people. The Hohenzollern rulers did not
succeed in making a rich state out of a group of scattered territories
of which some were, in natural resources, among the poorest in Germany.
They did make a strong state, which won for itself a place among the
great powers, and later took the lead in unifying Germany.
There was a moment in the history of the Hohenzollerns when it seemed
possible that they might anticipate the idea of William II: “Our
future lies upon the water.” If the Great Elector (1640-1688) had
secured the Pomeranian coast of the Baltic or kept even Stettin, he
might have realized the plans he held to turn Prussia into a sea
power, with fleet, colonies, and transmarine commerce. Fortune fixed
the interests of the state on land, however, and when a good Baltic
harbor was secured later it was too late to change. Frederick the Great
was urged, a century afterward, to direct his policy to the sea, and
actually founded some companies for trade with the East, but the time
had passed, or had not yet come, for the success of Prussia in oceanic
trade.
=300. Reforms in Prussia favoring economic development.=—In regard to
their internal conditions, however, the territories of the Prussian
state enjoyed a great advantage over others in Germany. The obstacles
to trade in the form of tolls and staples were removed when political
interests did not require their maintenance. The tariff systems,
enormously complicated and cumbrous, were revised. The growth of
manufactures was furthered by attracting skilled artisans from other
countries; and the city of Berlin received a great stimulus from the
Huguenots who found a refuge there. Some of the worst abuses of the
gilds were reformed, and manufactures were protected, as in France, by
customs duties and by royal privileges. New methods were applied in
agriculture, and new land was opened to settlement and cultivation; a
large number of the laborers, however, still remained unfree. It would
be easy to add many details, but in closing this section on Germany the
reader is again advised that the important side of Prussian history in
this period was political, not economic. Prussia was preparing herself
for the work of unifying Germany, and to accomplish that work a strong
government was needed rather than a rich people. The riches have come
to Germany in our own time.
=301. Contrast of Prussia and Austria.=—Prussia was a state which
started in the heart of Germany (near Berlin), and remained almost
entirely German as it spread. Austria, on the other hand, was
originally a territory on the southern border of the German people, the
rulers of which managed by skill and luck to extend their power over
fragments of adjoining peoples of a different stock, over Bohemians
and other Slavs (relatives of the Russians), and over the Magyars or
Hungarians (relatives of the Turks). These other peoples were behind
the Germans in their industrial development; they had come into Europe
later, had been less subject to civilizing influences and more exposed
to internal quarrels and wars. Furthermore, the Austrian Germans were
behind the other Germans, on whom they were industrially dependent in
the sixteenth century. Germans from the North took their manufactures
into Austria for sale, carried on the trade of Austria and controlled
the mines of Austria.
=302. Political factors hindering development of the lands subject to
Austria.=—The territories subject to the ruling family of Austria, the
Hapsburgs, began the period, therefore, in a backward condition, and
they had no opportunity throughout the period to catch up. Internal
trade was hindered not only by the national diversity of German, Slav,
and Magyar, but also by the persistence of provincial tariffs, which
underwent no important reform until nearly 1800, and which were not
abolished even then. Austria did not suffer so much as Germany from
civil war, but like Germany went through the crisis of the religious
wars, which nearly ruined Bohemia; and had a plague of its own in
resisting the advance of the Turks from the Balkan Peninsula. Austria
suffered like France, moreover, from an absolute government which too
often used the national resources in the interests of the royal family
and not in the interests of the people as a whole.
=303. Slow progress of industry and commerce.=—It is, therefore, not
surprising that in 1700 Austria stood commercially in about the same
position it had occupied two centuries before. The country exported the
raw products of industry, wool, flax, linen, hides, copper, etc., and
received them again after they had been manufactured by other peoples.
An economist of the time said that the total manufactures of Austria
were not equal to those of a single Dutch city like Leyden. Even this
small amount of manufacture was controlled by gilds, and suffered from
the characteristic faults of the gild system.
In the eighteenth century, however, the government began to appreciate
the importance of national commercial development. It fought the claims
to monopoly put forward by the gilds, and encouraged manufacturers to
extend their business, by premiums and privileges, as in France and
Prussia. Austrian iron and steel wares made a place for themselves in
commerce; the cloth industry of Bohemia, once ruined by war, revived
again under the factory system; stockings, glass, porcelain, etc., were
produced in increasing quantities.
=304. Attempts of the government to stimulate development.=—The
government stimulated the development of manufacture by its customs
tariffs as well as by its internal policy. The duties on articles
which the government thought could be made at home were raised
rapidly, especially after 1700, and became in many cases prohibitory.
Undoubtedly the growth of manufactures was furthered by this policy,
though many industries betrayed the weakness of their origin by failing
after a short period of apparent prosperity. The tariff gave rise,
however, to much smuggling and corruption, and injured greatly some
parts of the country: the Tyrol, which lies between Italy and Germany
and had prospered on the transit trade; and sections like Hungary
which produced only raw materials.
To atone in some measure for these necessary results of a protective
system, the government attempted also to extend aid to foreign
commerce. Triest and Fiume were made free-ports, _i.e._, they were put
on the outside of the tariff frontier to attract trade. Venice was
forced to renounce her claim to the exclusive right to navigate the
Adriatic, and commercial treaties were made with Turkey, Russia, and
states in northern Africa. Consuls were sent out to represent Austrian
interests in foreign countries, and attempts were made to secure a
share even in the trade with India.
=305. Austrian commerce still backward in 1800.=—Still Austrian trade
attained no great development. The government which gave with one
hand took with the other. Special privileges did not make up for the
general weakness of the productive organization. Rulers complained
that in spite of all their efforts commerce languished. Most of the
foreign trade was absorbed by five companies, which divided the field.
Two of them were limited locally, trading with Turkey and with Asia
Minor respectively; while the other three traded in special wares with
various countries. One imported colonial wares like sugar; another
exported linens; while the third exported various raw materials to
Italy, France, and Spain. During the wars beginning in 1776 Austrian
merchants attempted to build up a trade with North America, and an
agent of the government was installed at Philadelphia in 1783, but
during the following years of peace Austria had no chance of success in
competition with trade rivals.
QUESTIONS AND TOPICS
1. Write a report on the political constitution of Germany at the end
of the Middle Ages, and the resulting conditions. [Baring-Gould, Story
of Germany, chaps. 46, 52; Seebohm, Prot. rev., 26-33; Janssen, Hist.,
vol. 2, book 4, chap. 1; Freytag, Pictures, XVIIIth cent., vol. 1,
chap. 4.]
2. Development of business and business methods at the beginning of
the period. [See above, chap. 18; Cunningham’s chapter on Economic
change in Cambridge mod. hist., vol. 1; Janssen, Hist., vol. 2, book
3, chap. 3; Freytag, Pictures, XVth cent., vol. 1, chap. 10.]
3. Condition of manufacturing. [Janssen, Hist., vol. 2, book 3, chap.
2.]
4. Condition of agriculture. [Janssen, Hist., vol. 1, book 3, chap. 1.]
5. Decline of the Baltic trade. [Zimmern, Hansa towns, period 3.]
6. Decline of the Hansa in England. [Zimmern, 324-353]
7. Write a brief report on the commercial history of (_a_) Nuremberg,
(_b_) Augsburg. [Encyc.; Guide books of south Germany.]
8. Class conflicts, political and economic troubles about 1500.
[Seebohm, ** Prot. rev., 136-140; Janssen, Hist., vol. 4, book 7;
Frank Goodrich, *A social reformer of the fifteenth century, Yale
Review, Aug., 1896, 5: 168-181.]
9. Do the Germans control the mouths of all the rivers mentioned in
sect. 295 at the present time?
10. Write a report on the effects of the Thirty Years’ War, from the
economic and commercial standpoint. [S. R. Gardiner; Thirty Years’ War
(Epoch Ser.), N. Y., 1874, 217-221; Anton Gindely, Hist. of the Thirty
Years’ War, N. Y., 1884, vol. 2, chap. 11; Freytag, Pictures, XVth
cent., vol. 2, chaps. 3, 5, 6.]
11. Write a brief report on the commercial history of one of the
following towns: Frankfort on the Main, Leipzig (or Leipsic), Hamburg,
Bremen. [Encyc.; Homans, Cyc. of commerce, for the early nineteenth
century.]
12. Effect of the protective tariff in building up the Prussian silk
industry. [Schmoller, Merc. syst., pp. 81-91.]
13. Indicate on a sketch map of Austria-Hungary the spaces occupied
by the following peoples: Germans, Bohemians, Ruthenians, Hungarians,
Southern Slavs. [Atlas, Encyc.]
14. The wars with the Turks: how long did they last; how far did the
Turks penetrate Europe; what was the effect on industry? [S. Whitman,
Austria, N. Y., Putnam, 1899, $1.50, chap. 16; E. A. Freeman, Ottoman
power in Europe, London, 1877, chaps. 4, 5.]
15. Reforms in Austria in the eighteenth century, and their effect.
[L. Leger, Hist. of Austro-Hungary, N. Y., Putnam, 1889, 379 ff., 388
ff.].
16. Write a brief report on the commercial history of Vienna. [Encyc.]
BIBLIOGRAPHY
Writings in German are voluminous; English books on the history of
the period are concerned almost entirely with political affairs. The
translation of Janssen’s *History, St. Louis, Herder, 1897 ff., can be
recommended for the beginning of the period, and Freytag’s *Pictures
of German life, London, 1862, contains some readable and useful
descriptions.
CHAPTER XXVII
ITALY AND MINOR STATES
=306. Political condition of Italy in the modern period.=—In the
history of Germany we have seen the fate of a country that entered the
modern period lacking a political organization that would enable it to
hold its own in competition with rivals. The history of Italy in this
period presents the same conditions and the same results. At the end
of the Middle Ages there were five important states in the peninsula:
Milan, Venice, Florence, Rome, and Naples. None was strong enough to
unite the country; each was strong enough to prevent another from
reaching that end. The border territory of Savoy, whose rulers have
united the peninsula in recent times, resolving, in the words of one,
to “treat Italy as an artichoke, to be eaten leaf by leaf,” counted as
yet for little. The quarrels of the Italian states invited interference
by stronger neighbors, Spanish, French, and Austrian; and Italy became
the prey of adventurers and tyrants who lived as parasites on the
resources that should have nourished industry and commerce.
[Illustration: ITALY 1515]
=307. Position of Venice at the beginning of the period.=—Venice,
which had enjoyed the commercial primacy among the Italian states, saw
in the Portuguese discoveries a threat to her prosperity which only
the strongest measures could avert. There was no physical reason why
Venice should not adopt the sea route to India, and, if necessary,
fight with the Portuguese for the Indian trade at its source. All
her traditions, however, pointed the other way; all her investments
were tied up in the route through Egypt; and, most important, all her
resources were required in the Mediterranean. The island city had
been drawn into an expansion on the mainland which involved her in
continental intrigues and sapped her strength at sea, at the very time
when her sea power was of the greatest importance; the navy of the
Ottoman Turks was rapidly developing and the scourge of the Barbary
pirates (from the Mediterranean coast of Africa) had begun.
=308. Blows at Venetian trade both by sea and land routes to
India.=—For a moment Venice halted undecided between the two routes.
Venetian ambassadors were especially instructed to procure maps,
letters from voyagers, and all other information that would help
the home government determine its policy with respect to the recent
developments. Venice made repeated attempts to buy from Portugal the
right to dispose of all the spices brought to Lisbon, a proposition
that naturally was declined. Venice had to buy in small lots, on what
terms the Portuguese chose to set; more and more silver flowed from
Italy to Lisbon, and it became increasingly difficult to get spices
in Venice. Meanwhile the government was sending explorers eastward,
in the hope of opening one of the old routes to trade, and seriously
considered for a time the piercing of the Suez isthmus with a canal.
Venice found the Ottoman Turks favorable to trade through their
dominions, but had not the strength to maintain her old commercial
connections when Cairo was finally captured by the Turks in 1517.
=309. Relative decline of Venetian commerce.=—From this time the
energies of Venice were absorbed in an unequal conflict with the
Turks in the eastern Mediterranean. Venice had prepared herself in a
measure for the Turkish advance, by removing her chief staple from
Alexandria to the island of Cyprus, but this too was lost in 1571 after
a heroic defense. The battle of Lepanto and others following it were
empty victories; on the east coast of the Mediterranean Venice had to
surrender, and consent to trade on the terms which the Turks imposed.
Trade was still maintained. Aleppo became in the later period a market
in which the Venetians had great establishments, drawing thence the
wares that came by caravan from Bagdad, Persia, and India. Venice
herself became constantly more beautiful, and was in the seventeenth
century, as now, one of the show-places of Europe, where foreign
visitors flocked by thousands. Her manufactures of glass and silk and
many artistic luxuries remained unexcelled. It is, however, by quantity
and not quality that we measure the greatness of a state’s commerce;
Venetian trade scarcely entitled the city to a place even in the second
rank of commercial states, when it finally lost its independence in
1797.
=310. Decline of commerce and industry in Tuscany.=—The history of
decline in other parts of Italy must be dismissed more briefly.
Florence, which at the beginning of this period ranked next to Venice
in manufactures, trade, and banking, found the markets of northern
Europe closed by the Dutch revolution, by the religious wars and by the
tariff barriers of the protective policy. Bankruptcy became frequent in
the latter part of the sixteenth century. The woolen manufactures of
Florence, which, it is said, employed 30,000 men in 1338, employed 971
in 1767. Hampered not only by weakness abroad but also by restrictive
legislation at home, the Tuscan people declined to poverty and
indolence. Prosperity was to be found in only one spot, the city of
Leghorn, which had been made a free port; but this city prospered just
because it had been placed on the outside of Tuscany, and the riches
amassed there went largely into the hands of foreign residents.
=311. Decline in other parts of Italy.=—South of Tuscany conditions
grew still worse. The Roman territory had never been of commercial
importance, and the Neapolitan territory lost in this period what
prosperity it had once had. Under a Spanish government, which was
almost incredibly bad, the national resources were wasted abroad while
Turks ravaged the coast, kidnapping slaves, at home; and the producing
classes were crushed by heavy and unfair taxes.
North of Tuscany conditions were little better. The report of a
commercial agent who was sent by the Austrian state to investigate
upper Italy in 1754 shows commercial weakness everywhere. The country
was divided by tariff barriers into a great number of distinct
territories, of which scarcely any were large enough to give play for
the development of industries which they were endeavoring to protect.
The forces of industry and commerce were scattered and lost among
a great number of small towns, and trade was largely controlled by
foreigners, both Jewish and Christian.
=312. Conditions in the Scandinavian countries.=—It would be
unprofitable to attempt here to trace the course of commerce in all
the other states of Europe during this period, and this part of the
book will close with a brief description of commercial conditions in
the North and East. The districts included in Scandinavia are already
familiar to the reader as forming an important field for the Hanseatic
trade in the Middle Ages. The population was sparse, industry was
undeveloped, towns were few and small; the knowledge and capital
necessary for an active independent trade were lacking, and people were
content to stay at home and let foreign merchants come to them with
manufactures and take away their surplus products. The iron industry
of Sweden, favored by rich ores, extensive forests for fuel and
abundant water power, attained considerable importance; but the exports
continued in general to be raw materials, especially those used in food
and for ship building. Governments attempted to hurry the development
of their peoples by protective duties and by the founding of commercial
companies, with slight success. Gustavus Adolphus, a king of Sweden in
the seventeenth century, formed the bold project of making the Baltic
“a Swedish lake,” by control of the entrance and the coasts, but his
successors proved unable to maintain the position which he won. The
keys of the Baltic fell into the hands of Denmark, and that country
made a good profit by collecting tolls on the flow of a trade to which
it contributed little itself.
=313. Rise of Russia to a position among the European states about
1700.=—Russia was even more backward than the Scandinavian states. Like
them it had been dependent on the Hanseatic merchants for its commerce
with western Europe, and remained passive after their fall, accepting
what wares reached it overland or through the port of Archangel on
the Arctic coast, whither English and Dutch shippers ventured. Until
Peter the Great opened his “window on the West,” by the founding of
St. Petersburg on the Baltic about 1700, Russia was hardly a European
state. Peter attempted, with remarkable energy, to bring Russia to the
European standard in commerce and industry as well as in politics. He
reformed, though he did not abolish, the system which gave the Czar a
monopoly of trade in the most important wares; he revised the tolls
on trade; he sent young men abroad to study commerce, and tried in
other ways to elevate the merchant class. Peter did not succeed in
his attempt to free Russian commerce from its dependence on western
merchants, and his attempt to build up a merchant marine was a failure.
In the East, Russian commerce fared better. Occasional caravans had
gone before this from Siberia to China. The Czar now sent on his own
account caravans which consumed three years on the long trip from
Peking to Moscow; and individuals developed the trade which the crown
had stimulated.
=314. Character of Russian commerce in the eighteenth century.=—Russia
could be regarded in the eighteenth century as a European state. It
belonged, however, to the Europe of the Middle Ages rather than of the
modern period. Most of the population, including even the few who were
occupied with manufacturing, were serfs. The people as a whole were on
a low standard of living, and were densely ignorant. Commercial law
was undeveloped, and trading practices were those of a half civilized
community. The government interfered with exchange by arbitrary and
vexatious restrictions. The country could export, with rare exceptions,
only raw products. From China it imported tea, silk, gold, jewels,
etc., of which only a part was kept at home; while it was dependent
on western Europe for most of its colonial wares (sugar, coffee,
spices, and drugs), and for all the finer manufactures (textile, metal,
pottery, paper, etc.).
QUESTIONS AND TOPICS
1. Condition of Italy about 1500. [Seebohm, Prot. rev., 21-26, with
sketch-map.]
2. Venice about 1500: commerce, government, policy on sea and land.
[Horatio F. Brown, Venice, chaps. 16, 17; or Cambridge mod. hist.,
vol. 1, chap. 8, by the same author.]
3. Contest of Venice with the Turks. [Brown, Venice, chap. 19.]
4. Decline of Venetian commerce. [A. H. Lybyer, The Ottoman Turks and
the routes of Oriental trade, English Hist. Rev., Oct., 1915, 30:
577-588.]
5. Attempt of Gustavus Adolphus to make of Sweden a great power.
[Encyc. Brit., Gustavus II.]
6. Social and economic conditions in Russia about 1700. [W. R.
Morfill, Story of Russia, N. Y., Putnam, 1900, $1.50, chap. 13; H. M.
Thompson, Russian politics, N. Y., 1896, chap. 2.]
7. History of Russia in the eighteenth century. [Manuals of European
history; Thompson, chap. 3.]
BIBLIOGRAPHY
Aside from fragmentary sections in the current manuals the reader
of English will find little literature available on the history of
commerce in the minor states. Such suggestions for collateral reading
as are given above will probably satisfy the needs of students who are
not sufficiently advanced to use foreign languages.
TOPICS FOR REVIEW
After covering the history of commerce in different countries the
student will find it profitable to review certain general topics,
piecing together what he has learned of their local history and
endeavoring to get a clear conception of the general development. The
following are suggested for study in the modern period (1500-1800):
(_a_) shipping; (_b_) transportation on roads and rivers; (_c_)
production and exchange of foodstuffs; (_d_) production and exchange
of textile materials (flax, wool, cotton, silk); (_e_) production and
exchange of finished textiles (linen, woolen, cotton, silk); (_f_)
production and exchange of iron; (_g_) development of the system of
manufactures (gild, domestic and factory systems); (_h_) development
of banking; (_i_) effect of wars on the commerce of different
countries; (_j_) European colonial systems; (_k_) commercial policy;
(_l_) trade of Europe with Asia; (_m_) trade of Europe with North and
South America.
PART IV.—RECENT COMMERCE