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Home -> Orville Marcellus Powers -> Commerce and Finance -> Chapter V

Commerce and Finance - Chapter V

1. Chapter I

2. Chapter II

3. Chapter III

4. Chapter IV

5. Chapter V

6. Chapter VI

7. Chapter VII

8. Chapter VIII

9. Chapter IX

10. Chapter X

11. Chapter XI

12. Chapter XII

13. Chapter XIII

14. Chapter XIV

15. Chapter XV

16. Chapter XVI

17. Chapter XVII

18. Chapter XVIII

19. Chapter XIX

20. Chapter XX

21. Chapter XXI

22. Chapter XXII

23. Chapter XXIII

24. Chapter XXIV

25. Chapter XXV

26. Chapter XXVI

27. Chapter XXVII

28. Chapter XXVIII

29. Chapter XXIX

30. Chapter XXX

31. Chapter XXXI

32. Chapter XXXII

33. Chapter XXXIII

34. Chapter XXXIV

35. Chapter XXXV

36. Chapter XXXVI

37. Chapter XXXVII

38. Chapter XXXVIII

39. Chapter XXXIX

40. Chapter XL

41. Chapter XLI

42. Chapter XLII

43. Chapter XLIII

44. Chapter XLIV

45. Chapter XLV

46. Chapter XLVI

47. Chapter XLVII

48. Chapter XLVIII

49. Chapter XLVIX

50. Chapter L

51. Chapter LI

52. Chapter LII

Modern Commerce.

The Cape Route To India; Portuguese Commerce; Spain's

Vast Possessions; Expulsion Of The Moors;

Dutch Commerce.

Allusion has been made to the discovery of America and of
the Cape Route to India, two events which occurred at the
dawn of the modern era of history, and were destined to exer-
cise a momentous influence upon the commerce of the world as
well as the progress and welfare of the human race. Near the
close of the fifteenth century the map of the world consisted
of central and southern Europe, the north coast of
Africa, and Asia as far as Persia. India and the
far East was a land of mystery, while the West
was a waste of waters enveloped in gloom and superstition.
With the aid of the mariner's compass bold navigators had
gradually ventured farther from land, and in 1431 a ship captain
from Bruges had sighted the Azore Islands. The Atlantic was
being gradually explored.

The Portuguese were at this time an enterprising and grow-
ing commercial and maritime people and their capital, Lisbon,
owing to its frontier position, had become an important distribut-
ing point for products on the western coast of Europe. In 1496
a Portuguese navigator, Vasco de Gama, steering his course
southward along the shores of Africa, finally doubled the Cape
of Good Hope and reached India, to return with
fabulous accounts of its wealth and mysteries.
The importance of this discovery was enhanced by
the fact that at this time the Turks, Moors and Algerians were
swarming around the shores of the Mediterranean Sea, capturing



ships and caravans and destroying commerce, so that the old
routes to India overland by caravans were no longer safe.
Venice, owing to the decline of her commerce, was no longer able
to successfully resist these inroads and attacks, and hence the new
route afforded an effectual escape from this serious difficulty.
Besides, an all sea route avoided the labor and damage to goods
incident to handling them in changing from ship to camels or
the reverse, and furthermore, by this sea route the traders were
enabled to go to India and see the country for themselves, exam-
ine its products and judge of its resources and wants, instead of
trading, as hitherto, chiefly through Arabian merchants. Thus
we see the importance of the discovery of the new route, and its
effect in diverting European commerce from Mediterranean ports,
to which it only returned after the completion of the Suez Canal
in our own time.

The Portuguese established colonies on the coast of Malabar
and the island of Ceylon. After some conflicts with the natives
on account of outrages inflicted upon them, aided by the Moham-
portuguese medan merchants and even by the Venetians who
Trade in the sought to expel their rival from this rich field of
commerce, the Portuguese succeeded in firmly es-
tablishing an extensive trade with India. By 1515 they had
captured a number of cities along the coast, subjugated the
spice bearing islands, and really controlled the commerce of the
coast of Asia extending from the Persian Gulf to the islands of
Japan. Lisbon became the seat of this extensive commerce and
the distributing point for the products of India.

Early in the spring of each year a fleet of Portuguese ships set
sail for India, convoyed by war ships. The route lay along the
west coast of Africa; and after doubling the Cape, the trade
winds assisted them in an easy and direct voyage across the
Indian Ocean to the city of Goa, on the west coast, their prin-
cipal port. Eeturning, the route was much the same, except
that the fleet touched at various trading stations along the coast


of Africa, thence at St. Helena, the Cape Verde and Azore
islands, and home. The voyage usually required about eighteen
months for its completion, and owing to inferior ships and the
imperfect knowledge of navigation which prevailed at that time,
frequently resulted in the loss of a portion of the fleet. But the
profits of this commerce were very large and the field of adven-
ture enticing.

From India the Portuguese ships brought to Europe in
greater abundance those products frequently mentioned hereto-
fore as having been imported by the caravans of Arabia and
Persia. From the west coast of Africa and the islands they
brought ivory, gold, gum, wine, cotton, and slaves. To Lisbon
came the ships of Britain, Flanders, and the Hansa towns of the
North and Baltic Sea ports, to receive their cargoes for home
consumption, and for a time Lisbon promised to eclipse the
wealth and commercial greatness of even Venice or Genoa.
Having succeeded so well in the East, the Portuguese turned
Portuguese their faces westward and discovered Brazil with its
success and vast and varied wealth. But the avarice and greed
of the Portuguese, their monopolistic spirit, their
oppression of other merchants who were their best customers,
and their generally narrow and short-sighted policy, together
with their neglect to provide for the defense of their colonies
and trade possessions, soon brought about their downfall. By
1580 the Portuguese commerce in the East had seriously de-
clined, and in that year the crown was united with that of Spain
under Phillip II. This union of the two countries continued
until 1640, when they again separated, but since that date
Portugal 'has been too weak and impoverished to achieve any
distinction in commerce.

The Spaniards of the sixteenth century were great explorers
and discoverers, but their conquests were usually inspired by an
inordinate thirst for gold and not for commercial advantages.
They were singularly lacking in the commercial faculty, and


despised the industries. They not only neglected and failed to
build up the waning Portuguese commerce in the East, but soon
became involved in a war with the Dutch, which
was * ne means not only of destroying a consider-
able portion of their own and the Portuguese
fleet, but also of driving the Dutch into the commerce of India
which the Portuguese had once so jealously kept to themselves.
By means of discoveries in the new world, under the patron-
age of Ferdinand and Isabella, by Columbus, Cabot and son and
Ponce de Leon, and the inhuman conquests of Mexico by Cortez,
of Peru by Pizarro, and of Chili by Almagro, all of which are
embraced within a period of fifty years in the last part of the
Extent of fifteenth and early part of the sixteenth centuries,

Spanish nearly the whole of the Western Hemisphere came

under the control of Spain, and so remained for
almost a hundred years. Besides crushing out in Mexico and
Peru a civilization which might have instructed Spain, and
practicing the most atrocious barbarities upon millions of inno-
cent human beings for greed of gold, and in the name of religion,
Spain did almost nothing towards developing the resources of
this new world.

Not only did Spain possess a monopoly of the Western Hemi-
sphere at the beginning of the sixteenth century, but also con-
trolled a large portion of Europe, including what is now the
empire of Germany, the Netherlands, Burgundy, Sicily, and
Milan, Tunis and Oran, together with the Canary and Cape
Verde Islands in Africa, and the Philippines and other posses-
sions in Asia. Immense in extent and of incalculable richness
as were her dominions, yet the most fertile and promising
regions were despised unless they immediately gave promise of
gold or silver in large quantities to satisfy Spanish greed and

Spain pursued the most selfish, narrow and short-sighted
policy towards her colonies, seeming to regard them as proper


subjects to be bled and fleeced for the enrichment of the home
country. She farmed the revenues to local governors, who, hav-
s anish * n & P a ^ ^e required sum to the crown, in turn

colonial enacted an enormous increase by oppressive taxes

Pohcy on the people levied in every conceivable form.

Few harbors were established, manufacturing was not only dis-
couraged but actually forbidden, as was also the raising of all
European products. Natives and Colonists were forced by every
device to purchase from the mother country all manufactured
articles, and her colonies were regarded as markets for the
goods of the mother country. The inhuman treatment of the
natives was in accord with the general spirit of Spanish colonial
policy. In 1532 the silver mines of Zacatecas, Mexico, were
opened, and about the same time, extensive mines in Peru. The
native Indians were employed to work these mines, and were so
cruelly treated that nearly all of them died, so that slaves from
Africa had to be exported to fill their places. With appalling
atrocity the Spaniards proceeded to confiscate the lands and
goods of the natives and inflict upon them every form of cruelty
and oppression.

The same year in which Columbus discovered America wit-
nessed one of the most melancholy events in Spanish history,
and one which seriously affected the prosperity of the country
the expulsion of the Moors. When the Moorish kingdom of
Grenada, after a war of ten years, fell before the soldiers of
Ferdinand and Isabella, the Mohammedans were allowed no
alternative but to leave their country or embrace Christianity.
Many chose the former course, while others, with inward repug-
nance, yielded obedience, but were driven by the cruelty of the

inquisition to repeated rebellion, by which their
th* P Moors f condition was always rendered worse than before.

They were finally commanded to renounce even
their language, dress and customs, and 800,000 Moors, men and
women, old men and children, left the land of their birth, their


blooming fields and the houses they had built, and where their
ancestors had lived for eight hundred years. The flourishing
plains of the south of Spain soon became a desert, agriculture
decayed and trade stagnated; prosperous villages were reduced to
ruins, towns once animated by commerce became depopulated,
poverty, dirt and sloth took possession of the once rich and
happy country, the departed splendor of which is still attested by
such magnificent ruins as the Alhambra.

A fate similar to that of the Moors was visited upon the
Jews*, while priests and courtiers divided the treasures of the
banished. The Jews were the most diligent and skillful work-
men in Spain, and their banishment, together with that of the
Moors, left the country impoverished in every branch of trade
and industry. The Spaniards were unable to supply the articles
which the silver of Peru would purchase, and
industries 110 hence the Spanish gold and silver which flowed in
from their conquests and discoveries went to the
markets of the Netherlands and England, there to be exchanged
for linen and woolen cloth, manufactured metals, English woolen
fabrics, and timber for ship-building. English, Dutch and Ger-
man merchants brought the articles which Spain needed, and
carried home in return gold, silver, pearls and wine.

Now observe how this fortunate condition of affairs, this
profitable trade with England and other northern countries,
was interfered with and broken up by Spain herself. During the
sixteenth century religious zeal and fanaticism were very active
in Spain, and the Inquisition spread terror to all heretics.
Philip II conceived an ambition to invade England, dethrone
Elizabeth, and restore the Catholic religion which had been
abolished by Elizabeth's father and predecessor, Henry VIII.
For this purpose, in 1588, he fitted out the greatest fleet of the
century, and gave it the boastful name of the "Invincible Ar-

*In the spring of 1492 the Jews, to the number of one hundred and
sixty thousand, according to Prescott, were expelled from the kingdom.


mada." With this he attacked the English squadron off the
south coast of England, resulting in the loss by destruction and
capture of the entire Spanish fleet. This conflict destroyed the
At War with commerce between Spain and England, and the
the English latter began to make preparations at once to
embark in American commerce and colonization
on her own account, with the result that the first permanent
English colony was planted in Virginia nineteen years later.
From that date Spanish interests in the western world began
to decline. Her colonies revolted early in the nineteenth cen-
tury and several of them acquired their independence.* Cuba
in 1868 attempted to throw off the yoke of Spanish oppression,
but failed. In 1895 another attempt was made, resulting in a
bloody war of nearly five years, during which the American
warship, Maine, was blown up in Havana harbor. This overt
act gave the United States the desired opportunity to assist the
Cubans, and led to the Spanish- American war which freed Cuba
in 1899, and resulted in Porto Eico and the Philippine Islands
being ceded to the United States. Now only the Canary Islands
and two small provinces of doubtful value on the west coast of
Africa remain as the residue of Spain's vast possessions.

Equally unnecessary and unwise was the breach between
Spain and the Dutch. The Netherlands were Spanish territory,
and the Dutch were Spain's best customers. Their ships were
in the habit of going to Lisbon for their cargoes of eastern
goods, but the fanatical Philip II undertook to force the Roman
Catholic religion upon them, and at his persecutions they re-
volted. He then closed the port of Lisbon against their ships,
and their alternative was to either give up their eastern trade or
go to India .for the goods themselves. They were too enterpris-
ing to do the former, and hence was begun the commerce of

*Mexico became independent in 1822; Peru, 1824; Chili, 1826; Colombia,
1820; Ecuador, 1830; Bolivia, 1825; Venezuela, 1831; Uruguay, 1825; Argen-
tine Republic, 1810; Paraguay, 1814; Cuba, 1899; Puerto Rico and the
Philippines were ceded to the United States in 1899.


the Dutch in India, while at the same time they joined their
forces with England in the effort to destroy the Spanish fleet.

The commercial history of Holland rivals in interest that of
Venice, and those indefatigable people achieved a commercial
importance in the sixteenth and seventeenth centuries which en-
titles them to a prominent place in history. Their lands are
below the level of the sea, on the northwest coast of Europe,
and were reclaimed from the sea by building immense dykes.
Year after year and generation after generation this sturdy and
indomitable people fought back the sea, and the soil being but
a sediment of mud, under their careful cultivation, became a
fertile garden. They were a nation of agricultur-
and character * s ^ s > manufacturers and merchants. Abstemious
and self-denying to a degree, they handled the
products of the East as merchants, but denied themselves the
use of luxuries. At the time of Philip II they had already
become one of the richest and most prosperous provinces in
Europe. Their thrift was unsurpassed. Their cities of Antwerp,
Amsterdam and Eotterdam were the commercial centers of
northern Europe. These cities had been the seat of considerable
manufacturing during the middle ages. Woolen and linen goods
were the chief products. The first optical instruments and the
pendulum clock came from Holland. The art of printing
and book-binding had been carried to a high state of perfection.

Dutch ships had, centuries before, traded at the ports along
the shores of the Baltic Sea and distributed the products received
from Venetian merchants. Gradually the Dutch had built up
extensive fisheries, until at one time the herring fisheries of
Holland gave employment to 60,000 men. In 1614 a company
was organized for the special purpose of engaging
merceatHo"me ^ n wna l e fishing. At the beginning of the seven-
teenth century (1600) the carrying trade of Europe
was practically all in the hands of the Dutch. They also pos-
sessed a monopoly of the ship building industry, and nearly every


country of Europe had its ships built in Holland. Agriculture
and cattle raising flourished extensively at this time, and to-
gether with its manufacturing industries placed the country in a
most prosperous condition.

Having broken off with Spain, the Dutch immediately turned
their attention toward the commerce of the East. A number of
merchants combined to fit out ships for the long voyage, and
the venture proving highly successful, the great Dutch East
Dutch Com- India Company was formed in 1602, with a charter
merce in the from the government. This company was the pat-
tern of all future Dutch, French and English
companies, and had authority to take possession of newly dis-
covered land, make war or peace with the natives or other in-
habitants, erect forts, establish garrisons, and appoint adminis-
trative and judicial officers. Fierce and bloody conflicts with
the Portuguese in India and the far East ensued, but with the
help of the natives the Dutch drove them from Malacca in 1651
and from Ceylon in 1658. Java, Bantam, Amboina, Ternate
and the Banda Islands were opened up to Dutch commerce, and
even a slight footing in Japan was secured. In 1660 the Dutch
conquered Celebes, one of the last possessions of the unfortunate
and misgoverning Portuguese. With this extensive commerce
flowing directly into Holland, the Dutch grew in wealth at a
wonderful pace. Amsterdam became the Venice of the North
and the great banking exchange for Europe.

Having thus established a rich and successful empire in the

East, whose gains provided the means for further expansion, the

Dutch began to turn their attention to the Western hemisphere.

They fitted out several exploring expeditions, and one of these,

in charge of Hendrik Hudson, an agent of the

inThe West' 6 * Dutch East India Company, bent on finding a

western passage to India, sailed into New York

harbor in 1609 and discovered the river which bears his name.

Five years later the Dutch built a fort on Manhattan Island,


which they purchased from the Indians for a sum equivalent to
$2-4 in our currency, and named the settlement New Amsterdam.
In 1612 the Dutch took possession of a number of the West
India Islands and established a colony in Guiana, South America.
Their western commerce was increasing, and anticipating that it
might equal or surpass their trade with the East, they formed
the "West India Company, which, however, proved anything but
successful financially.

The colonial policy of the Dutch was of the oppressive and
monopolistic character, similar in many respects to that of
Portugal and Spain, and the prosperity of their colonies was
not permanent. England came forward about the middle of the
seventeenth century as a rival to the Dutch in foreign commerce,
and passed a series of statutes in 1651 and 1660, called the
Navigation Acts, aimed at Dutch commerce. These brought on
a short but severe war with England, which resulted disastrously
for Holland. During this conflict the English forcibly took
possession of New Amsterdam and converted it into an English
colony, changing the name to New York. With the progress
of England and France the commercial power of Holland 'de-
clined. The Norwegians competed with them in the fisheries,
the Germans in the trade of central and southern Europe, and
Holland became, and has since remained, secondary in point of
commercial importance.

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