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

Commerce and Finance - Chapter IX

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

Commerce Of England.

Before The Norman Conquest; English Wool; Elizabeth's Policy; Carrying Trade.

While the Mediterranean was dotted with the commerce of
the Phoenicians and Carthaginians, the British Isles were in a
semi-barbarous state, the inhabitants living in huts and possess-
Ancient * n & ^ ne ru dest implements to supply the bare

English necessaries of life. The ancient commercial his-

tory of these islands gave no indication of the
greatness which the empire of Britain was destined to achieve
in the domain of commerce and manufacture in modern times.
Separated from the mainland of Europe and the highways of
Mediterranean civilization, the Britons remained passive, and
waited at home for traders, chiefly the Phoenicians and Cartha-
ginians, who visited their coasts, supplying them with trinkets in
exchange for tin and lead ore found in abundance lying near the
surface. Little progress was made in the scale of civilization
until after the Roman conquest. The wealth of coal and iron
stored up in these islands was unknown. Herds of wild cattle
and other animals roamed through the dense forests which at
that time covered most of the area. Little attention was paid to
agriculture and the natives lived chiefly upon fruits and the
products of hunting. The invasion of the Romans infused new
life and intelligence into the people, and gave an impetus to
their civilization. Thereafter hides, wool and furs are named
as among their exports. English wool came to be so esteemed
that merchants dealing in it were exempted from the peril of
capture in war. Eventually wheat and cheese began to be
regular articles of export.



Under Roman rule (B. C. 54-A. D. 455) the Britons partook
to some extent of the refinement of their masters, and reached
a higher state of commercial development than they again at-
tained for several centuries. These enterprising rulers built
roads, cleared forests, drained marshes, opened mines, improved
agriculture, founded towns, and introduced a thor-
ough and vigorous system of government which
was of the greatest benefit to the people. Under ,
the reign of the Eoman emperor Augustus, we find that a con-
siderable commerce had grown up, and Britain exported gold,
silver, lead, tin and iron, besides considerable quantities of wheat,
cattle, skins and wool. The imports were chiefly articles of
luxury such as ivory, gold ornaments, amber and articles in

After the decline of the Roman Empire and the withdrawal
from Britain of its energizing and protecting power, came in-
vaders from the mainland of Europe, the Saxons, Normans and
Saxons Danes, who plundered the people, disturbed their

Normans institutions and ruined their .commerce. Pirates

ravaged the coast, and trade was checked by
rapine and lawlessness, so that few foreign merchants would
risk life and property for the profits of commercial intercourse
with Britain. Now and then an enlightened king would en-
deavor to cultivate and revive commerce and the arts of peace,
but the history of English commerce is almost a blank until
the time of King Alfred the Great (A. D. 870). He founded a
navy of war galleys, each rowed by sixty or eighty men, in order
to protect his merchant ships from the depredations of pirates,
encouraged trade by cultivating friendly relations with foreign
countries, and sent embassies even as far as India on missions
of commerce.

During the Middle Ages, the Baltic and North Seas were in-
fested with pirates, chiefly Northmen, who regarded the mer-
chant ships of neighboring states as their natural plunder, This


open highway robbery on the seas was for centuries the common
employment of the younger sons of the royal and noble families
of Denmark,, Norway and Sweden, and was con-
piracies sidered a legitimate field in which they could win

fame and fortune. During the eighth and ninth
centuries the coasts of England, Scotland and France suffered
severely from the ravages of these pirates, and as previously
stated, one of the incentives to the formation of the Hanseatic
League was the mutual protection of the towns against piracy.
Furthermore, at that distant and unenlightened period, human
jealousies and rivalries were stronger in many instances than
the instincts of right and justice, and trading towns often re-
garded the seas as the domain of the strongest and committed
acts against rivals which would now be regarded as piracy.
Individuals undertook to enforce, on their own account, repara-
tion for maritime wrongs, and were not particular when the
real offender could not be reached in substituting another.

An important feature of the internal commerce of England,
and other parts of Europe as well, during the Middle Ages,
was the annual fairs which were held in the principal towns.
These fairs were the means of bringing buyer and seller together,
and a general interchange of commodities resulted. Owing to
the limited facilities for travel and transportation
^ g 00 X the lack of roads and vehicles, and the
fact that the people traveled but little, it was a
great convenience to have a common meeting time and place,
where articles of manufacture from distant parts of the country
or world could be exchanged, and the wants of the people thus
supplied. The location of these fairs was usually determined
by the question of convenience, the size and importance of the
town, or the fact that a certain point was a shrine whence came
pilgrims periodically to worship. Thus Mecca continues to
hold a fair, where large quantities of goods are sold annually.
The principal English fairs in the Middle Ages were: That of


London, known as St. Bartholomew's Fair, where wool and cloth
were the chief articles sold. This fair was not entirely abolished
until 1840. The fair at Winchester, where large quantities of
wool were sold; and the great fair of Stonebridge, to which
came merchants from all parts of Europe. This fair continued
a month, and being near the coast was attended by "merchants
of Venice and Genoa, with stores of eastern produce and their
own manufactures of silks, velvets, cotton goods and glass. The
Flemish brought the fine linens and cloths of Bruges, Liege,
Ghent and other manufacturing towns. French and Spanish
merchants came with their wines and fruits; the great traders
of the Hansa brought furs and amber, iron, copper and other
metals, flax, timber and grain, and all the products of the north.
In the same way the English farmers, or traders acting on their
behalf, carried to this fair, hundreds of huge sacks of wool for
the manufacturing towns of Europe, barley for the Flemish
breweries, with corn, horses, cattle, and many other goods."*

As means of transportation and travel improved these fairs
gradually declined, and in the age of railroads and steamships
have disappeared almost entirely as trading centers. The local
store and the traveling salesman have superseded them. The
principal fair in existence at the present time is that at Nijni-
Novgorod in eastern Eussia, which owes its existence to the prim-
itive condition of that part of the country, and the lack of trans-

The Norman Conquest brought a change in dynasties in
England, and with it contentions which retarded the progress of
commerce. The Feudal system fettered vassals, while nobles

*Gibbins' History of Commerce.

fThis fair lasts six weeks and is visited by 300,000 people from central
Asia and Europe. A town of stone consisting of 5,000 shops or bazars laid
out in streets has been erected for this fair. Special goods are sold in cer-
tain quarters of the town, thus in the Persian quarter carpets, rugs, shawls
and silks are sold; in another tea; another, skins and furs, and in another
metallic wares. The sales foot up annually about twenty million pounds)


spent their time in war and the chase. "Red deer and wild
swine were of higher value in the eyes of such men than the lives
of Saxon Serfs." Henry I, in 1110, endeavored to encourage
Norman home manufacture by establishing a colony of

conquest. 1066 Flemish weavers in London, and gave them many
privileges, but displayed his characteristic igno-
rance by condemning all foreign wool to be burnt. Then came
the crusades, in which the zealous Eichard I took a prominent
part, with the result that Eastern commodities now came more
freely into western Europe. Gold, spices and frankincense from
Arabia; precious stones from Egypt; purple cloth from India;
palrn oil from Bagdad and weapons from south Russia and the
Baltic Sea were introduced into England, and trade began to
show evidences of steady growth. Then came the Great Charter,
wrested from the miserable King John, in which were clauses
favorable to commerce, guaranteeing merchants against exces-
sive taxation and establishing a uniform system of weights and
measures throughout the kingdom. During all this time En-
glish wool was the chief basis of wealth. The considerable
amount which the English exported shows its relative value to
other products, and at the same time indicates the insignificance
of their manufactures. Only the coarsest cloths were made at
home. Most of this wool went to the looms of Flanders, where a
superior quality of fabrics was made and supplied to England

English wool and a11 P arts ^ Eur P e - Tnus England as a source
Banishment of supply for the raw product and Flanders as a
great manufacturing country were interdependent
commercially, and this tended to make them so politically, so
that when Edward I, in 1297, wished to attack France, he first
made sure of the friendship and support of Flanders, and later
sovereigns pursued the same policy. Edward I recognized the
value of commerce chiefly as a means of revenue, and for this
reason aimed to foster it by opening English ports to the mer-
chants of Germany, France, Portugal and Spain. As a further


measure for enriching his exhausted treasury and relieving
himself of enormous debts, while displaying his religious intol-
erance and bigotry, he confiscated the property of sixteen thou-
sand five hundred industrious Jews whom he banished from his

Edward III offered special privileges to the weavers and
dyers of Flanders who would settle in his realms, yet fettered
the grant with absurd regulations in order to prevent his invited
guests from becoming too rich. During his reign a citizen of
London is said to have been executed for using coal as fuel
contrary to law. The opposition to coal was based chiefly on

the fact that at that time chimneys were luxuries
1326^377 IU n t c mm only enjoyed, and the smoke from the

fires had to escape by the cracks and crevices of the
houses. Glass windows were about as rare as chimneys at that

Up to the fifteenth century England had depended almost
wholly upon foreign ships to carry away her exports and bjing
her the products of the outside world. This carrying trade
was mostly in the hands of the merchants of the Italian cities
(Genoa and Venice) and the Hansa towns, whose fleets, consisting
of many vessels, laden with wool, cotton, silks, velvets and
spices, were eagerly looked for along the English coast. But as
the English learned the advantages of manufacturing from
Flanders, so they learned the art of navigation from these for-
Deveiopment e ^ n merchantmen, and gradually began to embark
of the carrying in the business of foreign commerce. This was

vigorously opposed by the Hansa towns, who
wished to have no participators in the profits of a lucrative mo-
noply, and conflicts at sea were frequent and exceedingly har-

*This banishment occurred Nov. 1, 1290. Edward's excuse for the decree
was that the Jews were clippers of the coin of the realm, but his real
reason was to confiscate their property. Their banishment was a severe
blow to the industrial welfare of the Kingdom. Jews were not permitted
to return or re-enter England again until the time of Cromwell.

assing. But in the course of time English ships became more
numerous and went farther abroad, until the Hansa found that
English commerce could not be stifled, and the visits of Italian
ships became less frequent and profitable, until they finally
ceased in 1587. Thus about the time the New World was
discovered England was expanding in its commerce and manu-
factures, and preparing to take its place along with Spain,
Portugal and the Netherlands, as one of the leading nations. It
was far behind these, however, in point of discoveries in the
Western Hemisphere, but was destined at a later period to far
surpass them in colonial possessions. Under Henry VII English
commerce was placed upon a firm and permanent footing.
Recognizing the necessity for a naval power to protect his
merchant shipping, he built a fleet of war ships, called the
English com- Great Harry, which was the beginning of that
" navv wnic h defeated the Invincible Armada in
Henry vn the reign of Queen Elizabeth, and has given En-

gland its supremacy on the ocean even to the present time. As
soon as England was able to protect her merchant ships, piracy
declined, her flag became respected and her commerce increased.
Henry VII, after the discovery of the New World, empowered
the Cabots to undertake voyages of discovery, and it is under the
right of discoveries made by these men that England claims, at
the present time, a large part of British North America.

Henry VIII abolished the monasteries and set up the Church
of England. Up to that time the church owned and controlled
about one-fifth of all the valuable land in the realm, and upon
the dissolution of the monasteries these lands were divided and

distributed, thereby greatly improving and encour-
^^ t e n ri e f s the aging agriculture, and this in turn tended to im-

prove manufactures. Sheep were bred in large
numbers and more wool was produced. As the natural resources
of the country were developed and utilized, the means of ex-
change were improved and commerce extended. Indian spices,


Turkish carpets, gums, drugs and ivory were sought in the
Mediterranean and Eastern ports. English ships went on voy-
ages requiring a year or more for their completion, and London,
Southampton and Bristol carried on trade with distant parts of
the world in English ships.

But it was Elizabeth, the daughter and successor of Henry
VIII, who promoted British commerce most effectually. This
remarkable woman was ambitious that England should rival
Spain as the leading power of the world, and to this end she
legislated often arbitrarily, and frequently for the moment and
not for time, but yet with the single purpose always in view of
building up England's power and resources. During her reign
agriculture and the mechanic arts underwent great improve-
ments, and crops were at times so abundant that wheat was
Queen exported. Hemp and flax were successfully cul-
tivated. Manufactures greatly improved, and the

1558-1603 weaving of woolen cloth received a fresh impetus

by the arrival of a large colony of weavers from the Netherlands
who had been driven out by the religious persecutions of Philip
II of Spain. When the Invincible Armada attacked the English
navy about three hundred and fifty merchant ships were pressed
into service for the defense of England, and after the contest
was over many of the Spanish prizes served to swell the growing
English navy. Ship-building greatly developed, and the number,
size and quality of the vessels built underwent a remarkable

Elizabeth deprived foreign merchants of their privileges,
closed the London agency of the Hansa, and finally went to the
extreme length of forbidding foreign vessels to enter English

harbors. She granted numerous monopolies to
Policy 6 " encourage home enterprise, and thus between the

restrictions against foreign ships, and monopolies
at home, the people were debarred the enjoyment of many useful
commodities made abroad and compelled to pay dearly for worse


articles made at home. Monopolies became so oppres-
sive, and prices of iron, lead, coal, saltpeter, oil, vinegar,
starch, yarn, skins, leather and glass were so exorbitant, that
her subjects finally protested against the system and openly de-
nounced the laws. The queen wisely yielded to the popular
demand, thanked the House of Commons for calling her atten-
tion to the wrong, and changed her policy.

During Elizabeth's reign trade and manufactures prospered
beyond all former periods in English history. The comforts of
life were multiplied and the style of living among all classes
greatly improved. Prior to that time the common people lived
in houses with dirt floors, no pretense being made to sanitation,
and the streets were so filthy that London and many other
towns were annually visited during the summer months by an
epidemic called the "Plague." But before the end of Elizabeth's
reign much of this was changed. Houses began to be built with a
view to health and comfort. Tasteful furniture came into use,
displacing the rude arrangements of former times,
prosperity and wealth asserted its presence among the com-

mercial classes as well as among royalty and nobili-
ty. The queen's example encouraged a taste for magnificence in
apparel. Luxury at table likewise prevailed, and sumptuous
habits spread from London to every province of the realm. The
Royal Exchange, the most notable commercial emporium in En-
gland, was founded at this time and opened by the queen in per-
son. The famous East India Company was chartered by Eliza-
beth in 1600, and thus was laid the foundation of the vast En-
glish empire in India which reached its fruition in the reign of
Victoria. This, too, was the Golden Age of literature, and gave
to the world Shakespeare, Bacon, Spenser, Ben Jonson, and a
host of others who have enriched the world with productions of
inestimable value.

The East India Company chartered by Elizabeth in 1600
was the beginning of the system of foreign commerce and colo-


nization which has grown to such immense proportions, and made
England the great manufacturing and distributing center which
she is to-day. This was fashioned after the Dutch
^ as ^ ^^ Company formed about the same time,
and was given the exclusive right of com-
merce with all the countries extending from the Cape of Good
Hope eastward to the Straits of Magellan, "except such coasts
and islands as might already be occupied by some friendly
European state." The government of the company was vested
in a governor and board of directors, varying in number at
different times and under different statutes. Besides these,
local councils, having limited authority over particular terri-
tories, were established in Madras, Bombay and Calcutta. The
original purpose of the Company was the profits of commerce,
but in the exercise of its functions it gradually assumed a gov-
ernmental character. It began as a purely private corporation
of trading merchants, free from governmental direction, but
eventually was brought under a "Board of Control" appointed
for India, and subjected to home supervision.

This company met with wonderful success from the first,
realizing profits from its voyages and the sale of the products
of India of fabulous amounts. The Portuguese and Dutch, who
had previously become thoroughly established in the trade,
opposed by every possible means the encroach-
ments of the English merchants upon Indian ter-
ritory, but by winning the favor of the Great
Mogul with bribes and presents, taking advantage of the quar-
rels among the petty chiefs and siding with the one most likely
to be successful, the company in time gained a firm footing
and established agencies and trading posts in various vantage
points of the empire. The wealth of India was now poured
into the lap of Britain by ship loads. The profits of the com-
pany became enormous. Shares of 100 rose in the market to
245, 300 and even 500. Luxurious tastes were created by


the introduction of rare commodities. Spices and jewels from
India were extensively used, and rare cotton and linen fabrics
added to the wearing apparel of the rich. As the use of gun-
powder in war increased, there arose an increased demand for
nitre which Europe could not satisfy, but the supplies from
India were abundant enough to meet all needs, and the profits
were large.

The success of the East India Company and the enormous
profits which it was realizing from its royal monopoly excited
the jealousy of London merchants, with the result that a rival
company was formed which set at defiance the exclusive privi-
leges of the authorized company, and fitted out
slli P s f r Indian trade. When caught these were
treated without mercy as pirates by the East India
Company. Nevertheless they continued to struggle for a share
of Indian commerce, and in 1698 disputed in Parliament the
renewal of the charter of the original company. The result was,
a combination of the two companies under the name of the
United East India Company, which for a century held despotic
sway over England's commerce in the East. During the first
half of the seventeenth century the East India Company re-
tained purely a commercial character, but being situated far from
the protection of the home government, beyond the watchful
supervision of consuls and ambassadors, it became necessary that
the company should be able to defend itself and redress its own
wrongs. Thus a military character was attached to trading, and
forts and garrisons were built.

Owing to the contests between the native princes after the
Great Mogul dynasty fell, the French in 1750 undertook to
conflicts with destroy English power in India, and well nigh
the French succeeded, too, but owing to the valor of Lord

Clive, formerly a clerk in the company's office at
Madras, the French were defeated, the native princes made vas-
sals, and a large part of Indian territory brought under English


control. From that time until Napoleon there were more or less
of conflicts in India between the English and French, with
odds in favor of the former. In 1767 Parliament decided to
claim a share in the government of the territory thus acquired,
and appointed Warren Hastings first* governor-general. Under
his administration and those of his successors extensive ad-
ditions were made to English territory during the next fifty
years. Meanwhile the power and commercial supremacy of the
United East India Company declined. Its servants committed
the greatest extravagances and frequently returned home to
England with immense fortunes, while the company itself was
frequently in financial difficulties. In 181e3 Indian trade was
by act of Parliament thrown open to private enterprise, and in
1833 the Company was compelled to abandon entirely its trading
character. Its functions continued politically until the Great
Mutiny of 1857 gave it the death blow. In 1858 Queen
Victoria, by proclamation to the native chiefs and princes, took
over the government of India, and in 1877 she formally assumed
the title of Empress of India.

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