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SCHMOLLER # MERCANTILE SYSTEM AND


1

ITS

HISTORICAL SIGNIFICANCE

T153 DDOflflTDO

fl

Mf-^

ECONOMIC CLASSICS
EDITED BY W.
J.

ASHLEY

n-to

r),

GUSTAV SCHMOLLER

ECONOMIC CLASSICS
Vd/:'mes

now ready :
and Passages

^-A

.1

SMITH :

Select Chapters

MALTHUS
Parallel Chapters fro7n the
1st

and 2nd Editions

RICARDO :
First Six Chapters

THOMAS MUN:
England's Treasure by Eorraign Trade

RICHARD JONES
Peasant Rents

GUSTAV SCHMOLLER
Mercantile System

Forthcoming volumes

CHILD

TURCOT ROSCHER

BRENTA NO WAGNER
s'c.,

&c.

PnrSSIAlV TERRITORIES

10

Longitude

THE MERCANTILE SYSTEM


AND
ITS

HISTORICAL SIGNIFICANCE

ILLUSTRATED CHIEFLY FROM PRUSSIAN HISTORY

BEING A CHAPTER FROM THE

STUDIEN UEBER DIE WIRTHSCHAFTUCHE POLITIK FRIEDRICHS DBS GROSSEN

BY

GUSTAV SCHMOLLER
884

Neto gork

MACMILLAN AND
AND LONDON
1896
All rights reserved

CO.

Copyright, 1895,

By

MACMILLAN AND

CO.

Norfajooti iSrPSS
J. S.

Gushing & Co.

Berwick & Smith. Norwood Mass. U.S.A.

GuSTAV ScHMOLLER was born


on June
24,

at

Heilbronn in Wlirtemberg

1838.

After studying at the University of


in

Tubingen, he became in 1864 extraordinary, and

1865

ordinary, Professor of the PoHtical Sciences {Staafswissenschafteti)


at

the

University of Halle.

In

1872 he was

appointed Professor

at the reorganised University of Strass-

burg, and in 1882 was

summoned

to

succeed Adolf Held at

the University of Berlin.

In 1887 he was elected a

Member

of the Prussian

Academy

of Sciences, and also appointed

Historiographer for Brandenburg.


Professor Schmoller was one of the leading promoters of
the Eisenach Congress " for the discussion of the Social

Question " {^Zur Bespi-eclmng der sozialen Frage)^ and delivered the opening address at
its

first

meeting on Oct.

6,

1872

he took part in the foundation on that occasion of


for

the Association
itik),

Social

Politics

Verein

fur
its

Sozialpol-

and has exercised great influence over

subsequent

action.

Since 1878 he has edited a substantial series of

Investigations in Political

and

Social Science {Staats-

und

Sozialwissenschaftliche Forschungen), largely the


his pupils;

work of

and from 1881 onward he has conducted the

Jahrbiich filr Gesetzgebimg, Verwaltung


.

und

Volkswirthschaft

im deutschen Reiche.

VI

His most important writings hitherto have been the


lowing
in
:

fol-

Contributions

to the

History of Economic Opinions

Gerfnany during the Reformation {Zur Geschichte der

nationalokonomischen Ansichten in Deutschland wdhre7id

der Reformatio7isperiode, in the Tubingen Zeitschrift fiir


Staatswissenschaft i860, and separately Tubingen, 1861)
Contributions
to the
;

History of the Small Industries of Ger-

mafiy in the igth Century {Zur Geschichte der deutschen

Kleingewerbe im ig. Jahrhundert, Halle, 1870)


tain

On
:

cer-

Fundamental
to

Questio?is of

Law and Economy


(

An

Open Letter

Professor Treitschke

Ueber einige Grundf-a-

gen des Rechts und der Volkswii'thschaft : Ein offenes Sendschriben

an Herrn Professor Dr. Heinrich von


'^^^^
i

Treitschke,

Jena, 1875)
ers

Strassbuig Gild of Drapers

and WeavStrass-

{Die Strassburger Tucher- und Weberzunft,


'>

burg, 1879)

^liidies in the Economic Policy of Frederick the


ilber die wirthschaftliche Politik Fried?'ichs

Great {Studien

des Gi'osseny in his


rately)
;

Jahrbuch 1884, 1886, 1887, and sepa-

Conti'ibutions to the Literary History of the Political

and Social Sciences {Zur Litteratmgeschichte der Staats- und Speeches and Essays Sozialwissenschaften, Leipzig, 1888) on Modern Questions of Social and Industrial Policy {Zur Sozial- und Gewerbepolitik der Gegenwart : Reden und
;

Aufsdtze,

Leipzig,

1890)

The Historical Evolution of


for

Business Utidertaking {Die geschichtliche Entivickelung der


U?ite?-neh7nung,
in
his

Jahrbuch

1890 and subsequent

years)
{

and an

article

on Economic Doctrine arid Method

Volkswirthschaft,
in

Volkswirihschaftslehre
to

und

-?nethode,

contributed

1893

Conrad's

Haridworterbuch

der

Staatswissenschafteii).

His

scientific

and

literary activity

Vll

has been incessant and wide -reaching

a Hst of his writings

down
been

to

1893

will

be found

in the article

devoted to him

by Dr. Lippert
freely

in Conrad's Handw'drterbuch,

which has

drawn upon

for the foregoing account.

The Essay on

the Me7'cantile System here translated, with

the author's sanction, by the editor of this series, forms the


introduction to his Studies in the
erick the

Economic

Policy of Fred-

Great:
first

it

is

dated Sept. 30, 1883, and was pub-

lished in the

issue of his

Jahrbuch
I.,

in

1884.

To

this

have been added in Appendix


general theme,

as dealing with the

same

some pages from

his

Report on the volumes

of Acta Borussica which deal with the Silk Industry, read

before the Berlin

and published

in the

Academy of Munich

Sciences on April 21, 1892,


Allgejneine Zeitujig for

May

19 and 23, 1892, and afterwards separately.


translator has

The aim

of the

been

to present the

argument

in idiomatic

Enghsh

and he has not hesitated

to occasionally sacrifice

shades of meaning which could not be rendered without

making the version inconveniently cumbrous.


For the convenience of readers, a Hst of the
possessions of the
territorial

House of Hohenzollern

in the sixteenth
in

and seventeenth centuries has been added and


their geographical position has
at

Appendix

II.,

been indicated on the


since the author's

map

the end of the volume.

And

illustrations

of his

general thesis are taken chiefly from

German and

Prussian history, a

number of notes have been


and sugof the eighteenth century

added throughout

to explain technical expressions

gest English parallels.

The view

taken by the author should be compared with that of the


late Sir

John Seeley,

in

The Expansion of England.

Professor Schmoller

is

the leader of what

" the younger Historical School of


It

is known as German Economists."

has been his endeavour, as he declared in 1887 on enter-

ing the Berlin


Historian,

Academy,
" to

to be

both an Economist and a

and the task

that has always floated before his

eyes has been


Knies,

really

accomplish what

Hildebrand,
preit

and Roscher attempted."


is

The Essay here


is

sented
is

a most characteristic piece of his work; and

an example of a kind of teaching that

exercising great

influence in

Germany over
it

the

minds of economists, of
public.

poHticians, of officials,

and of the educated

For

these reasons

merits attention, whatever judgment

may

be arrived

at

concerning the validity of the argument.

CONTENTS.
PAGE

The Mercantile System and

its

Historical Significance.

Stages in Economic Evolution

The

Village

4
6
13
State

The Town

The

Territory

The National
Mercantilism

47
50

The Community

of Nations

78

APPENDIX
The

I.

Prussian Silk Industry in the Eighteenth Century

81

APPENDIX
List of the Princes

II.

and Territories of the House of


92

Hohenzollern

Map.
ix

THE MERCANTILE SYSTEM AND


HISTORICAL SIGNIFICANCE.

ITS

To

pass judgment as economists

upon a whole
it is

historical

period necessarily involves a comparison of

with what
to say, our

preceded and what followed; involves, that


understanding
it

as

occupying a place in some larger

movement
therefore,

of

economic evolution.

One

naturally begins,

by thinking

of the various

ways in which

men
in a

have hitherto attempted to picture to themselves the devel-

opment
parallel

of the nations,

and thereby

to

comprehend

it

complete theory.

They have
life of

either fastened

upon

the

between the

a people and the life of an

individual; or they have conceived of a series of stages, in

which (i) pastoral

life,

(2) agriculture, (3) industry,

and
(^)

(4) trade, or (a) barter, {d) the use of currency,

and

trade resting

upon

credit,

have followed one another in


are

orderly

succession.

These

conceptions which

do,

indeed, each take hold of one portion of the contents of


the process of

economic evolution, and

for the

compari-

son with one another of


ties they are

many
now

periods

and communimercantile

appropriate enough; but with regard to the


in

particular

matter we have
little

hand, the

system, they give us


astray.

help,

and may even lead us

And
B

it

is

also clear that


1

we

could, with equal

THE MERCANTILE SYSTEM

propriety, construct other formulae, taken from the history


of the population, of the settlement of the country, of the

division of labour, of the formation of social classes, of the

processes of production, or of the means of communication;

and

that each of these, so far as

it

went, and

all of

them, together with those before mentioned, would be


of service for the creation of a complete theory of the

development of mankind.
of

But none of these sequences


anything like so important and

thought seems to

me

significant as that

which

I shall

venture to put in the fore-

ground, as a means of setting the mercantile system in


its

true light.

What
life

have in mind,

is

the connection be-

tween economic
of social

and the

essential, controlling organs

and

political life,

the dependence of

the

main

economic

institutions of an y period

upon the nature o f


t ime.

the political b ody or bodies most important at the

In every phase of economic development, a guiding and


controlling part belongs to

some one or other

political
it is

organ of the

life of

the race or nation.

At one time

the association of the kindred or tribe; at another the


village or

mark; now

it

is

the district,
states,

and then the


this

state

or
It

even a federation of

which plays

part.

may

or

may
or

not coincide substantially with the


of

con-

temporary
intellectual,

organisation

the

state

or

of
it

national,
rules eco-

religious life;
as

nevertheless

nomic
and

life as

well

political,

determines
it

its

structure

institutions,

and

furnishes, as

were, the centre of

gravity of

the whole
it

mass of social-economic arrangeis

ments.
into
thfe

Of course

not the only factor that enters


;

explanation of economic evolution

but

it

ap-

pears to

me

the fullest in meaning, and the one which

AND ITS HISTORICAL

SIGNIFICANCE.
upon

exercises the most penetrating influence

the various

forms of economic organisation that have made their appearance in history.


In association with the tribe, the mark,

the village, the town (or city), the territory, the state,
the

and

confederation,

certain

definite

economic organisms
:

have been successively evolved of ever wider scope

herein

we have
it

a continuous process of development, which, though


all

has never accounted for

the facts of

economic
it.

life,

has, at every period,

determined and dominated

Within

the village, the town, the territory,

and the

state, the indi-

vidual and the family have retained their independent and


significant position; division of labour,

improvement

of the

currency, technical advance, have each pursued their course;


the formation of social classes has gone on in particular
directions; and yet

economic conditions have, throughout,

received their peculiar stamp from the prevalence at each

period of a village economy, a town economy, a territorial

economy, or a national economy; from the splitting-asunder


of the people into a

number

of village-

and town-economies
territorial

loosely held together, or

from the

rise of

or

national bodies which have taken up into themselves and

brought under their control the earlier economic organs.


Political organisms

and economic organisms are by no


;

means necessarily conterminous


brilliant

and yet the great and


at times

achievements of history, both political and ecoto

nomic, are wont

be accomplished

when economic

organisation has rested on the same foundations as political

power and order.

The idea

that

economic

life

has ever been a process

mainly dependent on individual action.

an

idea based

THE MERCANTILE SYSTEM


that
it is

on the impression
to all stages of
is

concerned merely with methods

of satisfying individual needs,

is

mistaken with regard

human

civilisation,

and

m some respects

it

more mistaken

the further

we go back.
of

The most

primitive tribe of hunters or shepherds main-

tains its existence only

by means

an organisation based

on kinship, w^herein union


journeyings to

for purposes of defence, joint

summer and winter


tribal

pastures,
tribe,

communistic
communistic
important
is

acquisition for the benefit of the

whole

guidance by the
parts.

prince, play the most

The

first

settlement and occupation of the soil

never a matter for individuals, but for tribes and clans.

Then, while the


politics remains

life of religion, of

language, of war, and of

common
life

for wider circles, the centre of

gravity of
1

economic
is

passes to the

mark ^ and

the village.

[What

known

as " the

mark theory " was

elaborated, with special

regard to Germany, by Georg von Maurer in his Einleiticng zur Geschichte der Mark-, Ho/-, Dor/- und Stadtver/assung (1854) and a series of subse-

quent works, and was accepted, popularised, and generalised by Sir Henry Maine in his Village Coniynunities in East and West (1871). Since the
present essay was written (1883), the confidence of many scholars in the theory has been seriously shaken in various ways by the works of Mr.

Frederick Seebohm, The

English

Village

Community (1883), and M.

Fustel de Coulanges, Recherches sur quelques Problemes d'Histoire (1885),

and Origin 0/ Property in Land (Eng. trans, by Mrs. Ashley, 1891). These have certainly shewn the scantiness and uncertainty of the evidence iov /ree
village

communities ownitig in common the land they cultivated, in the early Middle Ages. But even if early mediaeval villages were usually " under a lord " or " communities in serfdom," the character of their economic life was

substantially that described in the text.

As

to the sel/sufficiency of the

manorial group see Ashley, Eco7ioniic History (1888), i. pt. i, 5, and Cunningham, Introduction to Walter 0/ Henley (ed. by Miss Lamond, 1890).

For a recent restatement of " the characteristics of the ancient village community," and its relation to the city-state of the ancient world, see W. W. Fowler, The City-State o/the Greeks and Ro7nans (1893).]

AND ITS HISTORICAL


They become
economic
the

SIGNIFICANCE.

bodies which for centuries rule the

life of

the mass of the people.

The

individual
fields,

possesses, in the

way

of house

and yard, garden and

only what the

mark- or village-community concedes


the conditions
fisheries,
it

to

him and under


such

allows; he uses the pasture

and the wood, the


terms as
the

and the hunting-ground on


(^Gemeinde) permits
;

commune

he

ploughs and reaps as the village-community desires and


ordains.^
It is

hardly possible for

him

to

come

into closer

intercourse with outsiders; for to remove any of the products,

whatever they

may

be, derived directly or indirectly

from the
from the

common land, is forbidden.^ To common forest can only be allowed


tar;

take

wood

so long as

no one exports wood or charcoal or


at pleasure

to turn out cattle

on the common pasture can only be recogis

nised as a right when every one


for his
to a

feeding his

own

cattle

own

use and
of
all

not for strangers.


the

To
is

alienate land

non-member

community

forbidden; and,

indeed, as a rule,

sorts of formalities are

put in the
to

way even
1

of the free yardling {Hufner)^


limitations of village "

who wishes
" in the

[On the nature and

communalism

Eng-

lish
i.

Middle Ages, see Pollock and Maitland, History of English

Law

(1895),

614-623.]
2

Something of
ships

this

kind survived even


at

in the towns.

Thus, according

to a rule of 1204, the


sell their

men

of Liibeck are not passitn et sine necessitate to

and build new ones

for sale,

because of

their right to cut

home, nor are they to export wood wood. Liib. Urkundenbuch, p. 17,

Urk.
3

xii.

[The most

common

equivalent in the English of the later Middle

Ages

for the

German Hufe and Hufner were yardland and


and
virgarius.

yardling, answering

to the Latin virgata

For the

"

grades in the hierarchy of


^

tenants,"

cf.

W.

Roscher, Nation alokonomik des Ackerbaues,


Village Community, passim,

73 (12th ed.),

p. 267, with F.
p. 29.]

Seebohm, English

and especially

THE MERCANTILE SYSTEM


The
Its

leave the village.

village is
itself,

an economic and com-

mercial system complete in


outside world.

and closed against the

old constitution has to be broken up


states

by the creation of great

and by other

forces, before
life

another and higher development of economic


its

can make

appearance.

As the

village, so likewise

conspicuously,

does the town, and even more grow into an economic body organism),
(or
life

with a peculiar and vigorous


every particular.

of its own,

dominating
locality,

To

begin with, the choice of a

the laying-out of the plan, the construction of roadways,


of bridges,

and

of walls; then the paving of the streets, the


finally,

bringing of water, and the setting-up of lights; and,


the
ket,
etc.

common

arrangements which are necessary for the marto

and which lead

common market-houses,

public scales,

these,

together with the close juxtaposition of resithe

dences, and

higher forms of division of labour, of


all

currency, and of credit,

create

a mass of uniform,

common
itself felt

institutions,

and bring about an association of a


This necessarily makes

far closer character

than before.

both inside and outside the town.


is

For centuries
towns

economic progress
especially each of

bound up with the


institutions.

rise of the

and the formation of civic


the

Each town, and


itself

larger towns,

seeks to shut
at

up

to

itself
its its

as

an economic whole, and,

the

same

time, in

relation to the outside world, to extend the


influence, both
It
is

sphere of

economic and

political, as far

as possible.

not without significance, that, during a

considerable period of ancient and of mediaeval history,


all

complete political structures were

city-states, in

which

AND ITS HISTORICAL


political

SIGNIFICANCE.
economic

and

economic

life,

local

selfishness

and

political patriotism, political conflict

and economic
of the Gerinstilife

rivalry, all

coincided.

The economic policy

man
down
our

towns of the Middle Ages, and their economic

tutions, have played so controlling a part in


to

German

the seventeenth

and eighteenth centuries, they

project themselves, so to speak, in so

own

time, that

many directions, into we must pause a moment to speak of

them more

at length.

Not only separate


right
of

jurisdiction (^Lmmmit'dt) , but also the

holding a market, of

collecting

tolls,

and

of

coining money, were, from early times, the privileges of


the growing urban communities.

This exceptional position

was strengthened by the abolition of payments and services


in kind, as well as by the legal advantages flowing from the

principle that "town-air makes free"; and, finally, by the

conquest of the right of self-government and legislation

by the town council.^

Each separate town

felt itself to

be a

privileged community, gaining right after right by struggles

kept up for hundreds of years, and forcing


tiation

its

way, by nego-

and purchase, into one

political

and economic posiitself as

tion after the other.

The citizen-body looked upon


ever

forming a whole, and a whole that was limited as narrowly


as possible,

and

for

bound

together.

It

received

into itself only the


1

man who was

able to contribute,

who
dis-

[For some account in English of recent


to the review of Professor Hegel's

German

investigation

and

cussion concerning the origin of municipal institutions, recourse

may be
English

had

work by Keutgen,

in the

Historical Review^ Jan., 1893, and to that of Professor von Below's phlets by Ashley, in the Economic Journal, June, 1894.]

pam-

THE MERCANTILE SYSTEM


proved a certain amount of

satisfied definite conditions,

property, took an oath and furnished security that he would


stay a certain

tion only the

number of years. It released from its associaman who solemnly abjured his citizenship

before the council,

who swore

that he

would bear

his share to the

of responsibility for the town's debts,

and contribute

taxes of the town for a

number

of years,

and who handed

over to the town ten per cent, of his property.

The omnipthe town,

otence of the council ruled the economic

life of
it

when
in all

in its
its

prime, with scarcely any limit;

was supported

action by the most hard-hearted town selfishness

and the keenest town patriotism,


a

whether

it

were to crush
to
lay

competing neighbour or a competing suburb,

heavier fetters on the country around, to encourage local


trade or to stimulate local industries.

Market-rights, toll-rights, and mile-rights {Meikni-echty


are

the weapons with which

the

town creates

for

itself

both revenue and a municipal policy.


policy
is

The
a

soul of that

the putting of

fellow-citizens at an advantage,

and
and

of

competitors

from

outside

at

disadvantage.

The whole complicated system of regulations as to markets


forestalling
is

nothing but a skilful contrivance so to

regulate

supply and

demand between
sells,

the

townsman who

buys and the countryman who

that the former

may
the

find himself in as favourable a position as possible,


latter in as

unfavourable as possible, in the business of bar-

[This was the rule which forbad craftsmen from carrying on particular
Cf. the cases of
cloth, in Ashley,
in respect to the
ii.

industries within a certain distance of the town.

Nottingham
History,
i,

manufacture of
ii.),

York and Economic

pt.

(Amer.

ed. vol.

p. 29.]

AND ITS HISTORICAL


gaining.
extent,

SIGNIFICANCE.
is,

9
to

The
a

regulation of prices in the town

some

mere weapon against the

seller of corn,

wood,

game, and vegetables from the country;

just as the prohi-

bition of certain industries or of trade in the rural districts,

and the
to serve

restrictions placed

municipal

interests.

upon peddling were intended The acquisition by the town


utilised, in the first instance,

of crown-rights {Regalieny
to bring

\s2J=>

about a reconstruction of these regulations for the


the town.

benefit of

Thus the market-toll was

usually

abolished so far as burgesses were concerned, and only retained for the countryman and the unprivileged "guest"
{Gast).'^

complicated system of differential

tolls

was

everywhere devised, by which some towns were favoured

and others put


return for

at a disadvantage, in

each case either in

corresponding concessions or in accordance

with the varying hopes or fears to which trade gave rise

The same purpose was served by


possible, of rights of toll

the acquisition, wherever

on

rivers

and highroads
need

in the

neighbourhood.
articles

Day by

day,

as

arose, particular

had heavier dues imposed upon them, or were


market days,
or

forbidden for one or more


altogether;
stance,
stricted

excluded
for
inre-

the

importation of wine and beer,

from towns in the vicinity was prohibited or

on countless occasions.

export of grain, wool, and w^oolfells was


usual
1

The prohibition of the among the most


market in the local
were
rights regarded

means

for regulating the local

{Regalien, in

Germany,
money,

droits regaliens, in France,

as peculiarly attached to the sovereign authority, such as the levying of


taxes, the coining of
2

etc.]

[Compare
i.

the treatment of " foreigners " in English towns; Gross, Gild


;

Merchant,

43

Ashley, Economic History,

i,

pt.

ii.

(Amer. ed.

vol.

ii.),

25.]

10

THE MERCANTILE SYSTEM


and
it

interest;

constantly led to a complete stoppage of

trade.

Such a stoppage was the severest method of coercion

that could be

employed

in the competitive struggle; and,

though

it

frequently hurt those

who

resorted to

it,

it

was

also often employed, especially

by the stronger party, with

great success

and

profit to itself.

The limitation

of the ex-

portation of the currency and of the precious metals fre-

quently occurs in the case of the towns as early as the


thirteenth century.
the
first

In intermunicipal commerce we find


It is to

germ

of the theory of the balance of trade.


efforts the

be seen in the

towns were constantly making to

bring about a direct exchange of wares, and to render this

compulsory,

as in the Baltic trade,

by

statutes

and

ordinances which aimed at preventing the regular flow of


the precious metals to foreign countries.
All the resources of municipal diplomacy, of constitutional struggle

between the Estates

{Stdiide),^ and, in the


to

last resort, of violence,

were employed

gain control over


staple rights^: to

trade-routes {Strassenzwang)

and obtain

bring

it

about that as

many

routes as possible should lead

to the town, as few as possible pass by; that through traffic,

by caravan or
there,
1

ship,

should,

if

possible, be

made

to halt

and goods en route exposed, and offered


An
assembly of Estates
is

for sale to
repre-

["

an organised collection,

made by

sentation or otherwise, of the several orders, states, or conditions of

men

who

are recognised as possessing political power; " Stubbs, Constitutional


ii.

History of England,

158.

The

reference in the text

is

to the efforts of

the towns to secure advantages by concerted action in the imperial Diet or


in the territorial assemblies.]

staple rights of German towns differed from the English staple in were maintained primarily in the interests of the several towns. Their nature is explained in the sentence next but one in the text.]
2

[The

that they


AND ITS HISTORICAL
the burgesses.

SIGNIFICANCE.

11

The whole well-rounded law

as to strangers

or "foreigners" {Gast- oder Fremdenrechf) was an instru-

ment wherewith
side.

to destroy, or, at all events, to

diminish the

superiority of richer

and more
fair,

skilful

competitors from out-

Except during a

the foreigner was excluded from

all retail trade,

allowed only to remain a certain time, and

prohibited from lending


ship with a burgess.
fees for setting

money

to or entering into partner-

He was burdened with


stall,

heavier dues,

up a

for having his

goods weighed,

and

for the services of brokers

and exchangers.

The

gild-

organisation, which arose out of local market-privileges,

and was formed with


was to ensure
to

local objects, reached its aim,

w^hich
of

each master and each craft a livelihood

suitable to their station in life,

chiefly by the readiness

the town council, whenever

it

appeared to them necessary,

to limit for a season, or permanently, the entrance into

the town of bread and flesh, beer and wine, and wares of
all

kind from

far or near, as well as to forbid, for a year

or more,

the admission of

new masters
tolls,

to a particular

occupation.

In short, the town market formed a complete

system of currency, credit, trade,


in itself

and finance, shut up

and managed

as a united
its

whole and on a settled

plan; a system which found


in its local interests,

centre of gravity exclusively


for

which carried on the struggle


its

economic advantages with


the

collective forces,

and which
and

prospered in proportion as the reins were firmly held in


council by prudent and
energetic

merchants

patricians able to grasp the whole situation.

What, then, we have before our eyes in the Middle Ages


are municipal

and

local

economic centres whose whole

12

THE MERCANTILE SYSTEM


life rests

economic

upon
time,

this,

that the various local


their

inter-

ests have, for the

worked

way

into agreement,

that uniform feelings


local interests,

and ideas have risen out of

common

and that the town authorities stand for^vard


complete array of protecmeasures that differed, of course, from

to represent these feelings with a


tive

measures

place to place and from period to period, according as


the provision of the local market or the prosperity of a
particular industry or trade seems to be most important
at

the

time.

The whole

of

this

municipal economic

policy, with all its local partiality, was justified so long as

the progress of civilisation

and of economic well-being

depended primarily on the prosperity of the towns. This prosperity could rest upon no other "mass-psychological
cause-complex " than corporate selfishness
:

and new ecoSo long as this

nomic

structures could arise only in oases thus privileged,


of whole states.

and not on the broad bases


selfish feeling of

circles also

community within comparatively narrow brought about an energetic movement forward,


in spite of a coarseness

it justified itself,

and violence which


^
:

we to-day not only disapprove but even scarcely understand


and
sloth did
it

not until the system began to support an easy luxuriousness


degenerate.
It

had then

to be replaced

by

other mass-psychological elements and processes, and by

other social forms and organisation.


1 We may remember who ventured to work

the

armed

forays of gildsmen to hunt


at
crafts

down

those

surreptitiously

in

the country districts

(i5(5>4aj^, as

they were called in low German), the innumerable military

expeditions, sieges,

jealousy, as well as the destruction of suburbs for the

and devastations of towns, caused by mutual trade same reason, such as must be laid to the charge of Danzig in 1520, 1566, and 1734, and of Magdeburg during the Thirty Years' War.

AXD ITS HISTORICAL

SIGNIFICANCE.

13

Some limitations were, doubtless, always imposed on communal selfishness by the legal and moral ties created
by the

common

life of

the church,

by the existence of the

German empire,
which early began

and, so far as the rural districts were

concerned, by the power of the territorial principalities,


to

make

their appearance.

But in the
meaningless,

earlier period these limitations

were so

lax, so

that they

were scarcely regarded, so long as neither empire,

church, nor territory had given birth to any economic life


of
its

own

or any powerful

economic organisation.
commerce,

With
the
of

the

transformation and

enlargement of

growth of the
interests

spirit of union,

and the consciousness

common

to

whole

districts,

with the augmented

difificulties in the

way

of a proper organisation of of

economic
and

life

on the basis merely

town and village

interests,

the increasing hopelessness of victory over the anarchy of

endless petty conflicts, efforts and tendencies everywhere

made

their

appearance towards some larger grouping of

economic

forces.

The
and

town-leagues, reaching over the heads of the princes


still

of the inhabitants of the rural districts, but

main-

taining the old, selfish policy towards the country immediately around,
interests

aimed

at satisfying certain farther-reaching

and needs

of trade; but such

an attempt could

not permanently succeed.

The

greater cities sought to

widen themselves into


the great Italian

territorial states

by the acquisition
In this

of villages, estates, lordships,

and country towns.

Swiss

communes succeeded completely, certain towns and German imperial cities at least in part;

14

THE MERCANTILE SYSTEM


also of the

some

more vigorous Dutch provinces, though

they were not so originally,

came

to be hardly distinguish-

able from enlarged town-territories.


it

In Germany, however,

was, as a rule, the territorial princedom, founded

on the

primitive association of the tribe, and, resting on the corporate Estates of

communes and

knights, which created the


its

new

political unit,

unit which had for

character-

istic the

association of town

and

country, the association


side, and, frequently,

of a large

number
side,

of towns

on one

on the other

of several

hundred contiguous square

miles of country subject to the same authority.

During

the period from the fifteenth to the eighteenth century,


these territories,
tions,

in constant struggle with other institu-

grew not only into political but also into economic


It

bodies.

was now the

territorial

organism that carried

progress forward, and formed the vehicle of economic and


political development.

Territorial institutions

now became

the main matters of importance, just as municipal had

been; like them, they found a centre round which to gravitate;

and they sought

to shut themselves off

from the outer

world, and to harmonise and consolidate their forces at

home.

And

thus arose an enclosed territorial area of pro-

duction and consumption, a territorial division of labour,


a territorial
rency,

system of measures
territorial

and weights and

cur-

an independent
own
doubt
this policy

economic body, which


it,

had

its

centre of gravity, was conscious of

and

acted as a unit in accordance therewith.

No

was pursued with varying vigour

and success in the

different territories.

Where

the impulse

was given by a highly-developed and all-powerful industrial

AND ITS HISTORICAL


or commercial town,
as

SIGNIFICANCE.

15

and Venice,

in the cases of Florence, Milan, there we very early find an economic policy
Luxemburg,
in

pursued with great success; a policy which rose out of the


older municipal interests, and which performed wonders.

The House

of

Bohemia, and the House of


also,

Burgundy, in Flanders and on the lower Rhine, were,

both of them able at an early period to guide their lands in


the direction of a territorial policy on a large scale.
But, in

Germany, most

of the princes

were without the extensive


:

dominions necessary
towns,
in

for the purpose

in

some places the

other

the

knights,

remained outside the new


at

territorial

commonweal. The most distinguished princes

the beginning of the sixteenth century, those of the Saxon

house, were the lords of lands scattered in fragments

all

along the military thoroughfare of central Germany, from

Hesse

to Silesia;

and, to

partitioned these lands


family.

make things worse, frequently among the various branches of the


of

And even what one


to rule at

the Saxon

princes hap-

pened

any particular time was made up of a


districts,

number

of

separate

geographically

distinct.

The

situation of the other territories

had much the same

disadvantages.

Yet grave as were these

difficulties,

and obstinate

as

was

the conservative opposition of the older


tions, especially those of the towns,

economic

institu^

we cannot help
real

seeing,

in all directions,

that the

necessities of

life

were

relentlessly driving society toward the territorial organisation.

The old forms

of loose

combination characteristic

of

the .Middle Ages, like the town-leagues and alliances to

maintain the public peace, the town toll-system and

staple,

16

THE MERCANTILE SYSTEM


and

the town currency, the everlasting hostility of town

country,

all

the old mediaeval corporations, these

became
and eco-

every day greater hinderances in the

way

of trade

nomic

progress.

People had to get free from them and

make
and and

their

way

to larger unities, to associations of districts,


interests,

to

more

far-sighted coalitions of

such as

were to be found in the

territorial assemblies

{Landtage)

at the courts of the princes.

The more completely

the princely territories coincided with old boundaries and

primitive tribal feelings; the stronger happened to be the

system

of

parliamentary

Estates

binding,

first,

towns

together and nobles together, and then the whole municipal estate to the whole estate of the nobles; the
intelligent

more
the

and

forceful were the princes


frugal

who guided
officials

movement, with
assimilation.

and competent
never ran

to

help

them; the quicker proceeded the process of economic

To be

sure

it

its

course without

meeting with the bitterest opposition.

What
and

trouble the

HohenzoUern princes

in

Brandenburg

had before they subjected

to themselves,

even externally
of the land

in military matters, the nobles

and towns

The severance of the Brandenburg towns from the Hanseatic


League and the abolition of their independent right
of

alliance were barely accomplished during the years 1448 to

1488.

The towns did

not, however, surrender the right to


till

pursue an independent commercial policy


this.

long after
the

The very important

treaties

with

regard to

1 [The reader may be assisted in following the course of the subsequent argument by referring from time to time to the list of territories subject to the house of HohenzoUern given in Appendix II.]

AND ITS HISTORICAL

SIGNIFICANCE.

17

Frankfurt Staple (1490-15 12) were certainly afterwards confirmed by the princes concerned.

But the

initiative still

came from
ure,

the towns;

and

this

independence was retained

as late as the Thirty Years'

War, though in a lessened measin its

and with increasing moderation and prudence


Throughout the sixteenth century we

exercise.

find the

princes of Brandenburg and their neighbours giving their


attention

more and more

closely to matters of this kind.

In the commercial controversies between Pomerania and

municipal authorities took part, although

Brandenburg (1562 and 1572), both the princely and the it was Frankfurt
Stettin that

and

engaged in the
.

trial

before the Imperial


treaties of

Chamber {Reichskammergericht)
which were made
denburg,

The

mutual

defence with towns in other territories like Liineburg,^


as late as the time of in the next period

Joachim

I.

of Bransuitable,

seemed

no longer

since they aroused the distrust of the Ltineburg princes.

As the maintenance of the public peace passed into the


hands of the princes, to them, and not
to negotiate with for
to the towns,
it fell

one another
the
treaty

for its strict preservation;

instance,

in

between

Brandenburg and
between Branden-

Pomerania of July
commercial

29, 1479,^^

and

that

burg and Magdeburg of July 24, 1479.^


for
treaties,

The negotiations
signature of the

as well as

the

treaties

themselves, between Brandenburg and Poland in

1514,^ 1524-27,^ 1534,^ and 1618,^ were the work of the

1484: Riedel, Cod. dipl. brandenb.


ii.
i.

ii.

5,

417.

1501
iii.

ib.

ii.

6,

177.
ii.

2 Ib. 5 Ib.
"

5,

305.

7(5. ii.

2_ 302,

4 /^.

2,

248 and

6,

258.

6 /^. iij. 287. 426 and ii. 6, 346. Oelrichs, Beitrage zur brandenburgischen Geschichte, 265.

23,

18

THE MERCANTILE SYSTEM


At the congresses
to deal

princes and not of the towns.

with the navigation of the Elbe and Oder in the sixteenth


century,

some

of the ambassadors

came from
'
'

Frankfurt,

but

it

was those sent by the elector who led the discussion.


treaty with

The

" the

common merchant

about transit
I.,

through the Mark of Brandenburg was made by Joachim

and not by the Brandenburg towns. ^


sentation of the country in the

In short, the repreof

way

commercial policy
to

passed over,
princely

slowly but

surely,

from the towns


in
spite
all

the the
of

government.
spread,

And

if,

of

this,

impression

about

1600,

that

the

trade
is

the country was ^coming to grief, the explanation

not to

be found in this transference, but in the fact that the


prince's policy was too feebly pursued, and that he was
really at a disadvantage in dealing with Saxony,
Silesia,

Magdeburg., Hamburg, and Poland.

While thus the authority


Landeshoheit),

of the territorial prince

{^die

the jus

territorii et supe?iorifatis,

re-

ceived a

new meaning

in relation to the representation of

economic

interests towards the

world outside,

it

is

still

more important
territorial

fact that, within the country itself,

the

government pushed on energetically, by means

of resolutions of the Estates

and ordinances
It

of the prince,
if

towards the creation of new law.

was not as

there had

not already been, here and there, a territorial law.


land of the Teutonic Order the Haiidfesie
^

In the

of

Kulm had

been
1

in existence since 1233; in the principality of Bres-

Berl. St. Archiv. R. 78, 29. Fol. 62.

from the impressing of the thumb on wax document, instead of a seal, was used for various kinds of public documents, among others, for territorial ordinances.]
2

\_Handfeste, a term derived

at the foot of a

AND
laii,

ITS HISTORICAL SIGNIFICANCE.


of the

19

the

'Maw

country" {^Landrechi) since 1346.

But local law was everywhere the stronger.


fifteenth

Not

till

the
of

and sixteenth centuries did the judicial decrees

the courts of the princes of the land, the so-called " laws
of the land " {Landrechte), the state ordinances, the territorial police regulations,

and so on, begin

their victorious

career.

An

indisputable need shewed

itself for a

new

law,

dealing with civil and criminal matters, succession and


procedure, and

common

to the

whole country.

Out

of the

exercise of the princely regalia sprang ordinances for the


forests, for hunting, for fishing, for

mining, for the use of

streams, for navigation,

and

for the construction of dikes;

ordinances which were applicable to the whole country,

and supplied

its

economic
and

life

with uniform rules.


faith, of the

The

new life

of the press, of the

reformed

newly-in-

stituted schools,

of the system of poor-relief, received,

not a local, but a territorial organisation, by means of a


legislation

which soon began

to penetrate pretty far into

matters of detail.
tion was

No

less

need

for territorial

legisla-

seen in regard to trade and industry, weights


fairs.

and measures, currency and highways, markets and


But
this construction of

new

territorial

law was brought

about, and the law itself enforced, in very different ways in


the various lands.
as early as

While the

state of the

Teutonic Order,

the fourteenth

and

fifteenth century,

shewed

some

fair

beginnings of such a legislation; while the larger


Southwestern Germany, in consequence of their

states of

higher economic

development and

earlier

civilisation,

shewed, towards 1500 and during the course of the sixteenth


century,

much more

extensive

activity

in

this

20

THE MERCANTILE SYSTEM


and other northern
terri-

respect; Brandenburg, Pomerania,


tories lagged behind.

We

must, of course, allow that in

Brandenburg the new judicial tribunal {Kamme?'ge7'icht),^


created under the influence of the ideas of centralisation
characteristic of

Roman

law, as well as the

Joachimica^

and, somewhat later, various influential legal writings, like


the Consuetudmes of Scheplitz^ tended towards legal uni-

formity; nevertheless Brandenburg did not arrive, during


this period, at a recognised " law of the land," or at a generally

accepted regulation of the relations between peasants


their manorial lords.

and

The

attempt, during the years


rules
of

1490-1536, to bring the towns under

police
for

and administration which should


whole
cessful
territory,
;

be

uniform

the

was only partially and temporarily sucStettin,

and

Stralsund,

and

other

towns

in

Pomerania, Konigsberg in Prussia, and the "old town"


of

Magdeburg down -to 1700


imperial cities.

in

the

archbishopric

retained

almost

a position of

independence

like that of

The admonition, found


police which were
15 15

in the general

ordinances of
of

directed to the towns


ell

Brandenburg from

onward, that the Berlin


all

should be the regular measure of length


the Erfurt

over the land,


spices,

pound
for

for the weight of

wax and
tin,

and the

weights of Berlin for meat, copper,

and heavy wares,

remained
1

some time but a pious wish.


as the date of
its

Even two
For an

[1516

is
it

commonly assigned
p. 78.]

establishment.
to the

account of
2

in English, see Tuttle, History

of Prussia,
in 1527

Accession of

Frederick the Great,

[The

Constitutio

lated family law


3

Joachim ica was issued and the law of inheritance.]

by Joachim

I.

It

regu-

[1566^1634.]

AND
generations

ITS HISTORICAL SIGNIFICANCE.


the most that the

21

later,

Elector Augustus of
of the

Saxony had succeeded in securing was the use

Dresden bushel on his demesne


While,
for

estates.

instance,

in

Wlirtemberg

the

so-called

"ordinances of the land " {Landesordnungen) in rapid succession, from 1495 onward, had, with ever widening scope,

brought the economic activity of the country within their


regulating lines, so that a whole series
of

the most im-

portant crafts were subjected to ordinances

the whole duchy even before the Thirty Years'


as the butchers,

common to War (such


the
cloth-

the bakers, the

fishmongers,

makers, the copper-smiths, the pewterers, the workmen in


the building trades, and,
of

in

1601, even the whole body

merchants and dealers), and thus the whole land had

already obtained an economic unity;


burg, during
gild
statutes
this period,

we

find in

Branden-

only one or two quite isolated


princes
that

issued
nature,

by the

were not of

a purely local
the

such
of

as that for the weavers of

New

Mark, that for the linenweavers of the whole


that,

Mark, and
weavers of

about 1580, for the skinners and linen-

number

towns

together.
territorial

The only
unity
is

evidence of any tendency towards

to

be found in the circumstances


it

that,

from 1480 onward,

was usual

to

seek the

confirmation of the prince, as

well as of the town council, for the statutes of every local


gild {Innufig)
;

and that from about 1580 the prince's

chancery began gradually to add to the confirmation a


clause as
to the

power

of

revocation.
till

This, however,

was not

the
till
1

regular

practice

after

1640

and

it

was not

690-1 695 that the right was actually made

22

THE MERCANTILE SYSTEM


of.

use

The

practice of granting to the several artisan

associations charters

drawn up

in identical

terms dates

from

73

1.

Like the separate local gild privileges, the local town


privileges
still

maintained themselves unimpaired; the most

that could be gained

by the electoral government was, that

the burgesses of other Brandenburg towns should be treated

little

better than

men from

Stettin or Breslau.
^

It

needed

an ordinance of the prince in 1443

to

open the Frankfurt

Leather Fair to the Berlin shoemakers; and the Elector

added, apologetically, that this should not prejudice the


claims of the shoemakers' of other towns

frequented the Frankfurt

fair.

tances by one town of the

who had not yet The surrender of inheriMark to another, without the
As
late

enormous withdrawal-charges hitherto made, was the gradual result of treaties


as 148
1

between the towns themselves.

the

men

of

Spandau introduced a high withdrawal-

tax, in order to

prevent their rich

men from trying


at

to get burthither.
"^

gess-rights in Berlin

and transferring themselves

Thus

the

question at issue was not,

the

outset,

whether the various town privileges should be blended in

one body of rights enjoyed equally by every citizen of the


territory,

but simply whether

the

princely
its

government
as against

should' secure a moderate increase of

power

each particular town.

Efforts in this direction are to

be

seen in the approval by the prince of the town councillors,


the enquiries into their administration, beginning about

i6eo, and the practice of granting special privileges and

concessions.
1

This
Riedel,

last
i.

had gained a firm foothold from


2/^.1.11^118,

23, 224.

AND ITS HISTORICAL


about 1500;
for,

SIGNIFICANCE.
it

23

and

in

some respects

prepared the way


issuing general

and helped

to create,

that right of

ordinances which was

recognized as belonging to the

prince in the seventeenth and eighteenth centuries.


charters of privilege with regard to markets

The
mills,

and

apothecaries, printers, copper-hammers, paper mills, and


the
like,

the

concessions

made

to

persons establishing
estates, the

industries in connection with their

personal
all sorts,

permits issued to individual artisans and dealers of

allowing them to carry on their business without being


bers of a gild,
into

mem-

mere inroads by the prince the exclusive town economy; and yet, if they were
all

these were

only numerous enough, they necessarily


authority, rather than the
of the people in its

made

the territorial

town council, the chosen guide


life.

economic

But the princely power not only obtained an increase of


its

influence in these individual cases;


its

it

had the same

experience more widely, in

character of mediator and


for its

peacemaker.

Abundant opportunity was presented


bitter

intervention by the conflicts between town and country,

which were especially many.


right,

in

the

northeast

of

Ger-

The old regulation


the

of the

town market, the milethe

prohibition
if

of

industry in

country,

the

obligation imposed,

possible,

by every town upon the


all

people of the vicinity to carry thither

their

produce

and buy there

all

they needed,

all

this

gave frequent
of the terri-

occasion for intervention.


torial

The proceedings

assemblies from the fifteenth to the seventeenth cen-

turies in

Brandenburg, Pomerania, and Prussia are largely


this sort.

occupied with matters of

The

rural districts,

and

24

THE MERCANTILE SYSTEM

the squires {die Ritterschaft) in their name, complain that


the countryman
sell
is

shamefully cheated

when he comes

to

his corn, wool, and cattle in the neighbouring town,

that price-lists are

drawn up without the assistance

of rep-

resentatives of the squires, that they are overreached in

weight and measure, that the craftsmen unite against them,


that

countrymen are prevented from


at their

selling to

strangers

and dealers
to

own

doors, that all the legislation as


is

markets and forestalling

devised to their hurt, as in


that the

the rules against Scotch

and Nuremberg peddlers,


want
to pursue

towns

receive

runaway peasants,

without license from

their lords, that the gilds

concealed crafts-

men
that

in the country without paying any regard to the court

of the lord of

the

manor {das Geiicht


to

des

Gutshe^'ni),

by the prohibition of brewing in the country peasants

and knights are compelled

buy beer in the towns and

are there overcharged, that people have to


in barley

make payments
it,

when

it

would be more

profitable to export

and so on, and so on.

The towns upon their

take their stand on their


privileges,

"good old
are

laws,"

which,

they declare,

being

continually encroached

upon by permits
and
cattle

to country crafts-

men, by country brew-houses, by foreign peddlers, loose


rabble,

horse

dealers,
say,

dealers;

the

nobility

themselves, they

carry on trade, buy the peasants'

produce and

sell it to travelling dealers,

and get the iron


;

and other things they need from


the nobles claim the
right
of

the

Scots

moreover,

exporting their produce

whenever they
tent

like, to the hurt of the towns.

Not con-

with

this,

the towns

complain of the government

AND ITS HISTORICAL


itself,

SIGNIFICANCE.
its

25

that

it

sells the

wood

of
it

forests dearer to the

towns than to

its

vassals, that
it

authorises foreign dealers

and peddlers,
sive
iri its

that

is

not sufficiently severe and excluit

treatment of the Jews, and that

does not keep

the nobles out of trade.

When

matters like these were being

all

the time dealt

with in the legislative assemblies in long-winded memorials

and counter-memorials,
prohibitions
of

it

was natural that the municipal

export or import,

and the prohibitory

regulations of the town should play an important part in


the discussions.
It

was not a matter of indifference

to

the rural districts in

Pomerania and Magdeburg

if

one

fine

day the council of Stettin prohibited the export of corn,

and

it

was of the greatest moment

to the

townsmen whether
that, in

the nobility could claim exemption from such a prohibition.


It

was of importance for the whole country

East Prussia, at the beginning of the fifteenth century, each

country-town could impose a prohibition of export on the

neighbouring country-town without waiting for the sanction of the

High Master
this

{HocJuneister).

From

all

confusion arising from local economic

policy there was only one

way

out:

the transference of

authority in the most important of these matters from the

towns to the

territorial

government, and the creation of a

system of compromise which should pay regard to the

opposed
of

interests,

bring about an adjustment on the basis

existing

conditions,

and

yet,

while

necessarily

and

naturally striving after a certain self-sufficiency of the land


in relation to the outside world, should also strive after a

greater freedom of

economic movement within

it.

26

THE MERCANTILE SYSTEM


In the Prussian lands of the Teutonic Order
it

was

recognised as a fundamental principle as early as 1433-34,


that in future

no Prussian town should obstruct another in


In Brandenburg, likewise, the squire-

the export of corn.^

archy {Rifterschaft) obtained for themselves the right of


freely exporting their
eral

produce from the country as a genpeasants, at least, a freedom of


far,

thing,

and

for the

choice as to which town in the electorate, near or


should take their produce to.^

they

The much-disputed

ques-

tion whether foreign dealers should be permitted to go

about buying and selling was differently settled from time


to time in different assemblies

according
the whole of

as the towns or

the squires

happened

to

be the stronger; but at any rate


whether they threw open
it

they

came

to resolutions which,
it,

the country or closed

bound

equally.^-

The

keen opposition of the agrarian


policy, the advocacy

interests to the old

town

by the agrarian party of free peddling,


^

of a reform of "guest-right" {Gastrecht)


as to markets
rania,

and

of the law

and

forestalling, led in

Brandenburg, Pome-

and Prussia,
and

partly in consequence of the strength


consequence of the increase of

of the squirearchy, partly in


traffic

of general prosperity,

to a

more considerable

limitation of town privileges before the Thirty Years'

War

than was the case for some time after

it

for the frightful

Acts of the Prussian Assembly of Estates {Stdndetag),

i.

i6o, 605, 655,

et al.
2

Resolution of the local assembly {^Landtagsabschied) of 1536 and 1540


vi. i, 36, 59.

Mylius
3

See on

this point the instructive essay of

H. Riemann, The Scots

in

Pomeratiia in the i6th and ijth centuries, and their conflict


Zeitschr. f. preuss. Gesch.
iii.

zvith the gilds,

597-613.

AND ITS HISTORICAL

SIGNIFICANCE.

27

economic retrogression which the war caused, seemed to call for the systematic employment of every possible means
for

encouraging the industrial

life of

the towns.) But every

success of the squirearchy in securing parliamentary resolutions or governmental ordinances

meant a

freer traffic in

the country

and greater

liberality towards strangers.

The

fundamental principles which had governed legal relations

between town and country remained, indeed, unchanged.

Thus the

belief in the hurtfulness of forestalling,


it

did nothing,

was thought, but send up prices,

which passed
of local

over almost intact from the town statutes into the law of the
land.

Nevertheless,

it

was an essential change that a regu-

lation that in 1400 rested

on a confused congeries
and
alliances,

regulations,

customs,

privileges,

became,

about 1600, a law of the land {Landj'echt) which encompassed, with tolerable uniformity, the whole territory.

Associated with the transformation described above was


the loss of their staple privileges by all the small towns
in the fifteenth

and sixteenth centuries.


that they

They had embelonged


II.

ployed them against competing towns in their neighbour-

hood regardless
same
territory.

of

the fact
as

to

the

As early

1450 Frederick

comof

plained that, in contempt of his authority, the

men

Spandau
well

demanded
as

Niederlage'^

from

the burghers of

Cologne and Berlin.^


as

The

staple privileges of Spandau,

those

of

Oderberg,

Landsberg,

Eberswald,
those
of

Tangermiinde,

and

Brandenburg,

and

even

Berlin were, by 1600, evaded or abolished.


1634, formally surrendered the right of
1

Oderberg, in

demanding Nieder2

[Deposit of goods en route.

See supra,

p. lo.]

Riedel,

i.

11, 109.

28

THE MERCANTILE SYSTEM


a grant by the elector of a court of lower
all

iage, in return for

jurisdiction.^

These were

signs of
,

progress in

the

matter of internal freedom of trade.

Only the

right of

Niederlage enjoyed by Frankfurt survived;' and this was

even enlarged:

for, as

its

rivals

were Stettin and Breslau


electoral

and other trading towns outside the country, the


authorities thought
it

their duty to support

it.^

Although in this matter

territorial policy

treated the

greater centres of trade differently from the smaller,

and

regarded their interests


the whole country,
of the prince in

as, in

a measure, the interests of


the

other directions

government

had

to

oppose even these larger towns

as

in the matter of import

and export, prohibitive regulations,

and the

like.

The

greater and

more important the town


it

might be, the

less possible

was

to allow it to

have an

independent policy in these respects.

Though
had
the
little
first

the efforts of

Joachim
town

I.

to secure freer passage

into the houses of one

of the beer

made

in another

success; though the burghers of Berlin, even in


of

half

the eighteenth century, desperately

re-

sisted

any

further

allowance

of

the

competition
to

of

Bernau;

though the government were unable


all

obtain

equal rights in fairs for

the traders

and craftsmen of
it

other Brandenburg towns; nevertheless,


tinctly recognised,

was quite

dis-

even in the sixteenth century, that the

decision whether grain, wool, woolfells, and other wares

could be imported or exported belonged to the electoral

government.
1

In the neighbouring territories, on the con-

Riedel,

i.

12, 380.

See on this point my remarks

in the Zeitschr.f.preuss. Gesch. xix. 207-221.

AND ITS HISTORICAL


trary,

SIGNIFICANCE.

29

especially in

Pomerania and the archbishopric of

Magdeburg, we see the governments waging a long contest


over the question whether the chief towns, Stettin and

Magdeburg, or the government


together,

of the country,

or both

had the right

to prohibit trade in corn.

Such a

prohibition was issued by the town of Brunswick in the


sixteenth century quite independently, and, indeed, very
frequently.

In Pomerania the
arbitration
:

struggle

was ended in

1534-5

by

if

the Stettin council wished to forbid export

they must do so before Shrove Tuesday; the

Duke retained
and

the right both of suspending the prohibition altogether


of allowing exceptions.^

In the archbishopric of Magde-

burg we

find, in the

time of the Elector Albert, that some-

times the town requested the government, and sometimes


the government requested the town, to forbid export,
that there

and

was an attempt

to arrive at joint action

by joint de-

liberation; yet, as early as 1538, the archiepiscopal governor


{Statthalter) after a

bad harvest imposed a duty


on the export

of a quarter

of a gulden per wispel

of corn to last until

next Midsummer's Day, so as to keep a sufficient supply in


the country and yet

"not altogether prevent the peasant

from making a livelihood."

Under

the succeeding Bran-

denburg "administrators" of the archbishopric, the right


of the

government

to prohibit export in times of scarcity


territories.^

was as undoubted as in most of their other


In Brandenburg the

following rules were established

during the course of the sixteenth century.

In winter,

from ^Martinmas (Nov. 11) to the Feast of the Purification


1

Thiede, Chronik der Stadt Stettin, 464.

Magdeburg Archives.

30

THE MERCANTILE SYSTEM

(Feb. 2) no exportation should take place; Scheplitz connects


this

with the cessation of navigation during the

winter, the universal custom in earlier times.

Moreover,
squires
of

the

peasants were
the

never

to

export;
the

only -the

(knights),

prelates,

and

towns.

In time

dearth the Elector had the right of embargo; but exceptions were allowed, as, for instance, to the towns of See-

hausen, Werben, and Osterberg in the Old

Mark

(1536),

both on account of their position on the frontier as well


as because

they had

paid a considerable sum for the

privilege; the Margrave

John granted

to the Frankfurters,

in 1549, a similar privilege with regard to his appanage,


the

New

Mark.
the

duced

in

The through transport of corn not proMark was allowed at any time upon the

production of certificates of origin; and the Frankfurters

were permitted at any time to export barley in the form


of malt, even
if it

came from

the country
territories,

itself.-^

While thus corn-exporting

like

Pomerania,
to

Magdeburg and Brandenburg, had constant recourse

prohibitions of export, though they were temporary only,


these prohibitions rested on the idea of the territorial har-

monising of production and consumption; and, when the


needs were different, recourse was had without hesitation
to

an even more stringent and, in the

last resort,

perma-

nent prohibition; as Pohlmann has described in the case


of Florence,"

and Miaskowski

for the Swiss cantons.^

The

1 Mylius, Riedel, and Scheplitz, Co/isiietudhies Electoratus et MarchicB Brand. (1617), have a jiretty extensive collection of material on this subject. 2 Die Wlrthschaftspolitik der Florentiner Renaissance (1878). 8 Die Agrar-, Alpen- und Forstv erf assung der deutscken Schweiz in ihrer geschichtlichen Entwicklung (1878).

AND ITS HISTORICAL


Netherlands
prohibited the

SIGNIFICANCE,
not
only of

31

export

native

horses, weapons,

and war-material, but and

also of native corn,

gold, silver, quicksilver, copper,

brass.

In Branden-

burg, also, hops were

much more

often compulsorily kept

back than corn.


of leather

Everywhere the prohibition of the export


cattle

and

played a great part.


that

It

was always

the

same conception

was involved

the resources of
first

the land were thought of as a whole, which ought,


all,

of

to serve the

needs of the country; they ought not to

enrich a few individuals, but serve the


the

home consumer
employed
for

at

fair

hitherto

this

home producer and The regulations end by the towns were now
price.

transferred to the territories.


laid an
at

As hitherto the town had


of so

embargo, so now the territory: as the town had,


prohibited
the

times,

import
articles,

foreign

beer and
territory:

wine and manufactured


as the

now

the

town had hitherto maintained an elaborate system

of differential tolls, so
set

now

the

districts

and

territories
its

out upon a

similar

course.

Berne threatened

Oberland {qt subject

territory) with
all
its

an embargo on corn
butter to Berne.

and

salt,, if

it

did not bring

As

Nuremberg forced to its own market all the cattle that came within a circuit of ten miles ;^ as Ulm did not allow
a single head of cattle fed
its

on the common pasture

to leave

territory;- so Florence secured for itself all the cattle

sold from the subject districts without permitting their


return,

and exacted

sureties

from the owners of the great


that they

flocks driven to the


1

^laremme

would bring them


,

Baader, Niirnberger PoUzelverordnungen 201.

2 Jager,

Schwab. Stddiewesen, 728.

32

THE MERCANTILE SYSTEM


state

back within the

boundaries a third

larger.

In the

duchy of Milan, an
for the transport of

official

permission was necessary even


that

grain from place to place, so


its

the country might remain sure of

food.
territorial policy in

This transition from municipal to

Germany
material

is

most clearly shewn in the matter


its

of the

raw

for

most important industry,

to wit

wool.

When

the crisis began for the

German

cloth-manufacture,

as foreign competition became more and


as the local industry,

more

serious,

which was carried on everywhere,


place to be taken by a more conto

began

to

decay and
business

its

centrated

confined

places peculiarly

well
at

suited for cloth-making (1450-1550),


first
it

the towns tried


itself.

to render the export of

wool

difficult or to regulate

for the benefit of the

home

industry.^

The impracticaThere-

bility of such a local policy

soon shewed

upon

the

Empire

itself

made

a fruitless attempt to prohibit

the export of wool (1548-1559); but soon

abandoned the
Bavaria,

matter to the

larger

territories.

Wiirtemberg,

Hesse, Saxony, and Brandenburg then tried by repeated


laws and
the

ordinances to hinder export for the benefit of


not only that,

home producer; and

even the importaThe wool


trade

tion of cloth was partially forbidden.

and

soon afterwards the cloth industry of the whole country


received a territorial organisation.

We

have no space

here to give an account of the efforts of Brandenburg in


this direction;

they begin as early as 141 5 and 1456, and


of 1572-1611, which,

end with the famous wool laws

how-

ever, disclose to us only a part* of the


1

manifold struggles and

Schmoller, Die Strassburger Tucker- und Weberzimft (1879), 506.

AND ITS HISTORICAL

SIGNIFICANCE.

33

endeavours with regard to the matter which marked the


period.-^

Behind

all

the efforts I have described lay the conception

that the territorial trade, the territorial industry,


territorial

and the
one
cur-

market formed a united whole. ^

All the regula-

tions

already mentioned, however,

did but touch,

after the other,

particular groups of people.

The

rency system, on the other hand, touched the whole body


of the prince's subjects.
ipal, to a territorial

iThe transition from a munic-

currency in

Germany

likewise belongs

to the
tury,

period from the fifteenth to the seventeenth cenis

and

one

of the

most important, and yet one


of

of

the

most obscure, parts

the

constitutional

and ecoof

nomic

history of the territories.


it

The course
have made of

the de-

velopment, as

appears to me, ^ after the extensive, but


I
it,

by no means complete, study


briefly sketch as follows
:

may

With

the

imperial right of currency and a uniform


its

imperial standard for

theoretic bases, there had, as a


in

matter of
thirteenth,

fact,

grown up

the course of the twelfth,

and fourteenth centuries a system of altogether


These, however, were not put into a

local currencies.

decent condition, either from the technical, the financial,


or the
1

economic points of view,


state archives of Berlin

until they passed pretty


I

The

contain a rich material which

have

already worked-up into a connected statement.


2

The

idea that territorial connection involved free


as 1451
;

traffic

within the land


that year,

was present as early


given in Riedel
i.

as

we may

see from a

document of

which sought to regulate the future addition of Beeskow and Storkow to Brandenburg mainly from an economic point of view, and in the direction of freedom of trade between the electorate and
20, 206,

these " circles."

34

THE MERCANTILE SYSTEM

generally out of the hands of the princes, and under the authority or control of the towns.
their markets that
It

was the towns and

needed most urgently a well regulated


it

and

stable currency; they

was who got rid of the ceaseto


^"^

less depreciation that

had hitherto been common;

them

was due "the perpetual penny" {der ewige Pfennig)


Brandenburg, among other places, for there,

in

also, the cur-

rency (by the help of Bismarck's ancestors) passed over to


the towns.
It

was the town money, that of Liibeck, Bruns-

wick, Erfurt, Nuremberg, Halle, and other places, that was,


for the time, the

most

satisfactory.

The towns were


intelligent

rich
to

enough

to coin abundantly,

and were

enough

understand the evil results of a badly managed currency,

and the harm, that flows from


But
this

fiscal trickery.

whole movement could


local,
it

last

only as long as

traffic

was mainly
taken where

and

also

scanty.

"The penny

is

only

is struck " {der Heller gilt nu7',

wo
had
sat

er geall

schlagen ist) was a legal proverb in the Middle Ages;


strange coins, even those from the nearest town,

to be
at his

taken to the exchanger or Hausgenosse,'^


table in front of the mint,

who

and there exchanged them


this rule

for

new coins

of the place.

But

became

hardly prac-

ticable in the fourteenth century

and quite impracticable in

the fifteenth.

Every

little
its

currency-area was flooded with

cheaper pennies by

neighbours, whenever they could

1 [The ewige Pfomig was a currency which the towns that issued it solemnly undertook never to depreciate.] 2 [Hausgenosse, literally " house-companion," was the designation of moneyers or minters in several German cities, and it is variously explained
;

by some as going back to the time when the mint was in the house of the prince. In the later Middle Ages their work was chiefly that of exchangers.]

AND
manage
it.

ITS HISTORICAL SIGNIFICANCE.


The disadvantages
of

35

localisation

began

to

surpass the advantages of a municipal currency; even the

towns themselves entered upon a disgraceful competition as


to

which should debase the coinage most.

Then followed

numberless currency treaties between various towns and


princes.

Foreign coins of better quality, like the Italian

and Hungarian gold gulden and the Bohemian groschen,


forced their way
in,

and came

to

be treated as a kind of

universal currency as contrasted with the changing


usually

and

bad small coins

of each particular place.

The German kings and emperors did indeed seek to create some sort of uniformity of currency at any rate

in the southwest:

the gold gulden was regarded

as

an

imperial coin; the imperial currency ordinance of 152

was a plan pressed upon the Council


regiment)
^

of

Regency

{jReichs-

by the mint

officials

of

western

Germany.

But in spite of

later imperial ordinances,

and the attempt

to exercise control over the currency of the several Estates

by means of the Circles

{Kreise),'^ the

empire was unable

to bring about a real unity.

Here,

also, the victory be-

1 [As Mrs. Austin has remarked, " The translation commonly in use for Reichsregiment (Council of Regency) does not convey any definite or correct idea to the mind of the reader, nor does any better suggest itself." It was the supreme executive council of the empire, established, and, for a time, kept

in existence,

of Germany.

by the party that sought For its establishment

to strengthen the federal constitution


in

1500 and supersession in 1502,


with the knights and
cities,

its

and its practical downfall in 1524, see Mrs. Austin's trans, of L. Ranke's Hbtory of the Reformation in Germatty, i. 152-159, 503-506 ii. bk. iii. chs. 2 and 4.] 2 [The division of the empire into provinces, known as Rreise or Circles, dated from 1500. There were six of these at first, and the hereditary lands of the Austrian house and the electorates were excluded. In 1512 these were all brought into the system as four new circles. Their function was origire-establishment in 1521,
its difficulties
;

36

THE MERCANTILE SYSTEM


territories.

longed to the
territorial

The powerful and


make

energetic

governments were able, step by

step, to deprive

the towns of their rights of coinage, to

the mint-

masters once more the officials of the prince of the land,

and to introduce a uniform system


hundred square miles.

for at least a

few

Upon

the extent to which they

succeeded depended in large measure the trade and prosperity of the several lands in the sixteenth century.

Those

princes

who happened

to possess rich silver mines, like

the Saxon rulers, had the easiest task; and they naturally

showed most antipathy towards the attempts

to

bring

about a uniform currency for the empire or the several


circles.

The Hohenzollern princes seem


and
to have

to have

resumed

the right of coinage,


in the

coined for themselves

Mark

of

Brandenburg, at any rate from 1480 or

the towns had never completely the right.


Berlin, that
It is
it

1490 onward; while in the lands of the Teutonic Order and permanently secured

mentioned as an exception in the case of

struck

some small coins on


and again, but

its

own account

from 1540
162 1.

to 1542,

for the last time, in

In Pomerania, Bogeslaw disputed the privilege of

Stralsund in 1504; and towards 1560 the town had lost the
right.

Stettin,

in

1530, had to recognise that, even in

the time of the father of the duke then ruling, the prince

had refused,
its

for weighty reasons, to allow the

town

to have

own

currency.
and Ka7n7nergericht
its
i.

nally only to facilitate elections to the Reichsreg'nnent

(Imperial Chamber); but various administrative and executive duties were

added

later.

The

division into circles

remained

in

essential features

down

to 1803.

See Ranke, History of the Reformation,

153-154, 214-215

and elsewhere.]

AND ITS HISTORICAL


The
decisive

SIGNIFICANCE.
the

37

thing was

the exercise of

princely

right of coinage by the territorial governments themselves.

Mere ordinances,

such

as those set forth as early as the

reign of Frederick II. of Brandenburg, that Rhenish gold

gulden were to be taken at such and such a


that,

rate,

but

as

rule,

people were
useless.

to

reckon in Bohemian

groschen,

were
I.

The

essential matter

was

to re-

place municipal and foreign coins by those of the prince


in sufificient quantity.

Here,
for

also, it

appears to have been


to

Joachim

who opened

Brandenburg the way

an

energetic policy in the matter.

He

not only had gold

gulden struck in Berlin, but also silver coins, both heavy

and

light,

at seven

different

mints.

Negotiations v/ith

Saxony

for a

uniform currency failed in their purpose.


in the

The standard

Mark was

lighter.

The Brandenburg

currency 2dict of 1556 did, indeed, create a new coinage


with new subdivisions, which harmonised with the imperial currency.

But the idea of a separate


still

territorial

currency system was

dominant and

so

remained.

Only certain foreign coins were admitted, and these only


at the value set

upon them by the

territorial authority.
It

The other

territorial

and town coins were forbidden.

was from time

to time strictly

ordered that the coins that


at a certain

had been recently forbidden should be disused


date,

and exchanged

at

the mint.

The

prohibition of

export plays a smaller part in Brandenburg than in Saxony;

probably because, as
less

the

coins were lighter, there

was

temptation to send them out of the land.

But penal-

ties

were frequently (1590, 1598) threatened against Jews


silver

and Scots who bought up the old

and exported

it.

38

THE MERCANTILE SYSTEM


The
earlier universal practice of the towns, with regard

to the prohibition of foreign currency, or the exportation of their

own, the right of preempting old gold and

silver,

and

similar regulations, was now, naturally enough, copied


territorial

by the

governments.
all

Whether and how

far they

succeeded with
course,

their

penal mandates,
trade,

depended, of
of the

on the movements of

and the relation

nominal value

of the several coins to the estimate placed

upon them

in neighbouring lands
it

and

in foreign trade.
rulers

But

undoubtedly

was the prevalent idea, with


it

and
to

ruled alike, that

was the duty of the government

provide the land with a good and uniform coinage, and to


close
it

against the outside world in this respect, even

if

not in the matter of trade.

This currency

system

for

whole

principality was,

then, the institution

which, together

with the financial

system for a whole principality to be next described,

most distinctly drew the


into one

circle

which bound the

territory

economic body.^
towards centralisation,
in

As

to the finances, here the participation of the Estates

in their control tended

even

greater measure than the activity of the princes and their


Besides the book of Puckert on the currency of Saxony from 1518 to B. Kohne, Das Miinziuesen der is really no useful literature.

1545, there

Berlin,

Stadt Berlin, in Fidicin, Hlstor, diplom. Beitrdge ziir Geschichte der Stadt unsatisfactory as Leitzmann's Wegiveiser auf iii, 429 et seq., is as
Gebiete der deutschen Miinzkunde (1869). Besides these. Grote, Mone, Hegel, and others give us a good deal of information, but nothing that seizes the economic significance of the currency of the 14th to i6th centuries as a

dem

municipal, a

On Brandenburg much territorial, and an imperial institution. has been published, by Mylius, Riedel, and Raumer, but not all, by any
means, that
is

contained in the Berlin archives.

AND ITS HISTORICAL


officials.

SIGNIFICANCE.

39

Yet even

this initiative of tlie court is not to

be

undervalued.

Where

thrifty princes, carrying

on a pater-

nal rule, duly regulated


in

and extended the

official

body

(as

Saxony the Elector Augustus, in Brandenburg the Mar-

grave John), this activity was of no slight importance for


the welfare
of

the

land,

and the consolidation

of

its

economic

forces.

i\Iany of the princes of the time

were

interested in technical improvements and inventions, had


their

own

laboratories

and alchemists, sought and

to establish

mines, and erected mills, glassworks, and saltworks; here

and there magnificent

castles

fortresses

were built with

the aid of Italian architects


sans.

and foreign

artists

and

arti-

This put the household of the prince and the service


its

of the prince, with

increasing
life of

number
left

of officials, in the

centre of the economic


that
it

the territory

more

distinctly

had ever been before, and

behind a distinct
in

influence for generations.


his will, prides himself

Thus the Margrave Hans,

not unjustly upon the fact that

during his reign both the country and the people had

waxed
As

great,

and

that they

had never stood so high before


their development, so little of

in revenue

and resources. and

to territorial taxes

the material for the history of taxation in the several states

has been worked through, up to the present, that a clear

and complete survey


less,

is

still

hardly possible.^

Neverthe-

this

much

is

already clear that the construction of

municipal systems of taxation, which belongs to the period


1

For Brandenburg,

cf.

Schmoller, Die Epochen der preiissischen Finanz-

poUtik in the Jahrb. f. Gesetzg. N. F. i. 33-114. A history of the direct taxes of Bavaria up to 1800, by L. Hoffman, appears in my Forschungen, iv. 5.

40

THE MERCANTILE SYSTEM


fifteenth century,

from the thirteenth to the

was followed

by a period wherein

territorial systems

were constructed;

that the protracted struggles-

and indirect
to the

territorial

by which a system of direct taxes was created belong chiefly

period from the fifteenth to the seventeenth centhat these

tury;

new systems
the

in part abolished,

in part

profoundly modified,
finally, that

old

municipal systems;

and,

they created links and bonds of union between


circle

town and country, between


the various districts of the
tally affected
fail to

and

circle,

and between
could not

same

state,

such as fundamenit

economic

life.

To

begin with,

exert a very great influence, that the Estates

met

together in periodical assemblies, that they

became accusalter, or.

tomed, in granting the taxes, to look upon the country

and

its

well-being as a whole, and to distribute,

create taxes with that in their minds.

The same must


preparing an

be said of the inspection of the whole land by commissioners of


the Estates, for the purpose of

assessment which should deal with property everywhere on

common
the

principles.
struggle

And,
for

finally, it is

significant that in

great
all

freedom

of

taxation,

regard was

paid to

other contributions by the privileged classes,


the country.

in person or in purse, to the needs of

In

no other

field of political life

was the principle so often

invoked that the subjects were to regard themselves as

membra unius

capitis, as in relation to taxation

and

to the

other contributions

demanded from

subjects in natura.

In the towns the development would seem to have followed

some such course

as this

that the thirteenth century

was

mainly marked by the devising of the direct property tax;

AND ITS HISTORICAL


that thereupon in the

SIGNIFICANCE.

41

beginning of the fourteenth cen-

tury Umgelder'^ and other indirect taxes

came

to the front;

once more to be

rivalled,

during the course of the four-

teenth century, by the increased prominence of the property


tax.

Much

the same, I cannot help thinking, must have


of
territorial

been the

line

development.

To

the four-

teenth and fifteenth centuries belongs the struggle for the


definite establishment of the Landbedefi,'^ the Landschosse,^

and other property

taxes,

based on yardlands

{Hitfeii),

number
way

of

cattle,

houselots,

and

property

valuation.

These were constantly being tried in a rough-and-ready


in imitation of the older

town

taxes, without

any great

result.

Fixed and regular contributions, paid annually

but of very small amount, appear side by side with heavier


subsidies granted every two or three years or so, for
particular time of stress or war.

some

To

the century, next,

from 1470
is

to

1570, belongs the

attempt (for which there

evidence everywhere) to create

a system of indirect taxes for the territory; and this necessarily led to a conflict with the indirect taxes of the

towns

and
oly

the trade policy based


of
salt,

upon
it

it.

The

prince's

monopthe

involving as

did a shutting-up of

country against the outside world, together with the beer


1 [The Umgeld (or Umgelt, L'ngeld or Ungelt) was a tax on the consumption of certain commodities, such as beer and corn, which played an important part in German city finance throughout the Middle Ages.] 2 [The term Bede or Bete, for which the Latin equivalents were precaria

SiWd. petitio,

points to the original character of the tax as in theory a

more or

less

voluntary contribution of the subjects, needing to be specially asked

for

and consented
3

to.]
scot, in

{Schoss

is

possibly connected etymologically with the English

the phrase scot

and

lot.'\

42
tax,

THE MERCANTILE SYSTEM


the

excise on wine,

and the various

tolls

occupied

the foreground.

Of the changes
I

in the system of tolls,

particularly in Brandenburg,

have given an account in

another place, and


system, which had
entirely

have tried to shew

how

the older

become municipal and

feudal, gave

way
the

before

the

new
to

territorial

system during
latter
its
;

period

from

1470

1600.^

This

did,

indeed,

become more and more purely fiscal in cially in the gloomy years 1 600-1 640
in

character, espeit

yet

continued

some measure

to be affected

by economic considera-

tions.

Of equal importance for Brandenburg was the introduction of the beer tax, which from 1549 constituted
which revolved the whole administration
of the territorial debt.

the centre round

by the Estates
all

The application
it,

in

places of the same rules in levying

tended to bring

about everywhere a uniform organisation of the business,

then among the most flourishing and important


industries.

of

town

As there was

a large sale of

Brandenburg beer
it

in foreign parts, the heavy taxation

imposed upon

ren-

dered a gentle treatment necessary of the exporting towns

on the frontier: as early as the years 15 80-1 620 there was

some

serious discussion as to the consequences of the beer

tax here
effect of

and

in neighbouring states, and, indeed, of the

such territorial taxes in general upon commercial

and industrial prosperity.


tax fund {Biei-geldkasse)

The administration

of the beer

by the Estates grew into a creditnetwork.


it

system enclosing the whole land, and especially the funds


of

the several towns, within


to

its

Whoever hapto

pened
1

have any idle cash brought

the district

Zeitschrift fur preussische Geschichte iind Landeskunde, xix. 198-207.

AND ITS HISTORICAL


authorities,

SIGNIFICANCE.

43

who used

it

to

meet the never-ending

deficit;

thousands and thousands of gulden were every year with-

drawn and paid


for the
for the

in again.

The debt

office

acted as a bank

whole country,

just as the

town-chest had been


of

town in

earlier times.

The men

means through-

out the land were so closely associated with this central


institution, that the insufficiency of its

income prepared
the Thirty

the

way

for a frightful bankruptcy.-^

With the
Years'

financial

and economic

crisis

of

new epoch in the history of territorial taxation, upon which we need not here enter. In Brandenburg and some other states, it is marked by a coma

War began

plete

cessation

of

attempts
effort for

to

increase
fifty

the

beer

tax,

and by a sustained

some

or sixty years to

develop the direct taxes, the subsidies, and the assessment

on which they

rested.

During the period 1670 to 1700,

however, as prosperity once more began to return, the

tendency to develop the indirect taxes, especially the


excise,

again became predominant.

Here
lar

let us

pause.

Our purpose was


that,

to

shew by a particu-

example, that of Brandenburg,

during the course of

the period from the fifteenth to the seventeenth century, the creation of the

German

territorial state

was not merely


But the same
several states of

a political but also an


results

economic

necessity.

were brought about elsewhere.

The

Holland, the French provinces, the Italian city-states, are


1

Isaacsohn, Die Finanzen Joachims II U7id das standische Kreditwerk,m


I

Zeitschr. f.preiiss. Gesch. xiv. 455.

have myself brought together a mass

of material concerning the brewing business

and

its

taxation.

44
all

THE MERCANTILE SYSTEM


analogous phenomena.

We

have to do with a great

historical process,

by which local sentiment and tradition


the
social

were strengthened,
the

and economic forces


important

of

whole

territory

consolidated,

legal 'and
further,

economic
forces

institutions

created

by which,

the

and

institutions thus united were

led to a battle

of competition with other territories, involving


shiftings of toll, confiscations of

numerous

goods and ships, embar-

goes and staple-fights, prohibitions of importation and exportation and the like
;

while, within the country

itself,

old antagonisms softened and trade became more free.

To

so powerful

and self-contained a structure and so


reached

independent and individual a policy as the town had


reached in an earlier age, and the modern
since, the
state has

German

territory scarcely

anywhere attained.

Naturally, territorial patriotism was


as

by no means so strong

municipal before or national since; economic condi-

tions, the

methods

of production

and

of transport

and the

division of labour in the fifteenth and sixteenth centuries

did not necessitate so high a degree of unity in economic


organisation as before in the town and afterwards in
national state.
the^

The imperial
it

constitution of Germany,

imperfect as

was,
in

was

still

strong

enough

to

hold

the territories back

economic policy.
in the case of

many ways from an independent We have already remarked how greatly,


territories, their

most

geographical position

and boundaries hampered them

in their

advance towards

a position like that reached by some Italian and Dutch


districts.

Everywhere in southwestern Germany, and

to

a great extent also in central Germany, the territories of

AND ITS HISTORICAL

SIGNIFICANCE.

45

the several Estates, the dominions of the counts, of the

imperial cities, of the abbots, of the bishops, and of the

knights were so small, that,

if

for

no other cause, they

were bound to remain in the stage of a natural economy,^

and a merely

local policy.

In the northeast of

Germany

there were, indeed, larger united areas; but in density of

population, supply of capital, state of trade and transportation,

mechanism
so
far

of administration

and general

cultivation,

they were, even in 1600, inferior to western and central

Germany;
remained

that

in

their

economic

institutions

they

behind the greater

states of the southwest;

partly also, of course, in consequence of want of skill

on

the part of their rulers

and other fortuitous circumstances.


the Brandenburg ordinance conthat, in spite

Not without reason did


of all
its

cerning the privy council complain, in T604,


favourable conditions and
all its

navigable streams,

the country was

coming

to

be

less

frequented by foreign
not without

merchants, nay, even abandoned by them;


reason did
it

attribute this state of things to the


i.e.

want of

'good "Polizei";

to

an executive that was too weak,


internal

and that had too


things

little

and external unity.

And

became even worse

in the course of the great war,


capital, but,

which not only annihilated population and


what was harder
rational
still,

buried

in ruin the beginnings of a

economic policy

for the territory, both in for

Bran-

denburg and elsewhere; weakened


1

many

long years the

[A

" natural
first

a distinction

economy " as distinguished from a " money economy," dwelt upon by the economist, B. Hildebrand, means a

condition of things in which the distribution of wealth was effected without


the intervention of money, as
e.g.

by pajments

in kind.

Cf. Ashley,

Eco-

nomic History,

i.

pt,

i.

43.]

46

THE MERCANTILE SYSTEM

sense of the necessity of such a policy; and everywhere

strengthened local privilege and individual

self-will.

Yet

this very

time, the

second half of the sixteenth

century and the seventeenth century,

was an epoch which

gave every inducement for an economic transformation.

The way was

already clear, out of the narrow circle of the

small territory into the larger union of forces possible only


in the great state.

An immeasurable

horizon had been

opened

to the world's trade in India

and America; the

possession of spice colonies, and of the

new gold and

sil-

ver countries, promised measureless riches to those states


that understood
it

how

to seize their share of the booty.


it

But

was clear that


fleets,

for such purposes

was necessary

to have

powerful

and either great trading companies or


At home,
also,

equivalent state organisations.

economic

changes, of no less importance, took place.


services created an altogether
tion.
Bills of

The new postal new system of communica-

exchange, and the large exchange operations

at certain fairs, together with the banks which were

now
far-

making

their

appearance, produced an enormous and

reaching machinery of credit.


birth to a

The

rise of the press

gave
of

new kind
the

of public opinion,

and

to a

crowd

newspapers which cooperated with the postal service in


transforming
there

means

of

communication.

Moreover,

now took

place in the several countries a geographi-

cal division of labour,

which broke up the old many-sidedneighbourhoods and around


linen

ness of town industry; here the woollen manufacture was

grouping
certain

itself

in

certain
the

towns,

there

manufacture;

here

the

tanning trade, there the hardware trade.

The old handi-

AND ITS HISTORICAL


craft

SIGNIFICANCE.

47

{Hajidwerk) began

to convert itself into a

domestic

industry {Haiisiiidustriey; the old staple trade, carried on


in person

by the travelling merchants, began


shape

to

assume

its

modern

with

agents,

commission

dealers,

and

speculation.

These forces

all

converging impelled society to some large


basis,

economic reorganisation on a broader


to the creation of

and pointed

national states with a corresponding


itself

policy.
respects,

Germany

had made a
trafific,

brilliant start in

many

in the matter of
its
its

of

manufacturing procits

esses

and division of labour, and even in

foreign

trade; but neither


as a rule,

imperial or Hanseatic cities, nor,

territorial states,
it.

were capable of making

the

most
to set

of

Still

less

did the imperial power

know

how

about the great task of the economic consolida-

tion of the empire which was


in the sixteenth century
it

now

so urgently called for

was exclusively occupied in the

maintenance of the religious peace; in the seventeenth


century
it

was altogether subservient


policy
of

to the Austrian

and

Catholic

the

Hapsburg dynasty.

England's

cloths were

Sweden and flooding the German market. Denmark were organising themselves as maritime and
:

commercial powers

Spain, Portugal, and Holland divided

the colonial trade between themselves.


'^[Hausindustrie

Everywhere, save
to

and Domestic System are terms which came

be em-

ployed

in

Germany and England

to designate the industrial conditions de-

stroyed or threatened by the Factory System, to which they presented the


contrast that the work was done in the workman's home. But they are now used by economic historians as more or less technical terms to describe a stage in industrial development marked by other and even more important traits. For an account of these, following the current German classification, see Ashley, Economic History, i. pt. ii. (in Amer. ed. vol. ii.) pp. 219 seq.]

48
in

THE MERCANTILE SYSTEM


Germany, economic bodies were stretching out and
political; everywhere

becoming

new

state systems of

econ-

omy and

finance were arising, able to

meet the new needs


only in
skill,

of the time.
institutions

Only in our Fatherland did the old economic

become

so petrified as to lose

all life;

Germany were
tions

the foreign trade, the manufacturing

the supply of capital, the

good economic usages, connec-

and

traditions,

which the country had possessed up


lost.

to 1620,

more and more completely


it

And
capital

was not simply the external

loss

in

men and
Germany,

which

brought about this retrogression of

during a period of more than one century, in comparison


with the Powers of the West;
it

was not even the transfer-

ence of the world's trading routes from the Mediterranean


to the

ocean that was of most consequence ;

it

was the lack

of politico-economic organisation, the lack of consolidation

in

its forces.

What, to each in

its

time, gave riches and

superiority

first

to Milan, Venice,

Florence, and Genoa;


to Holland,

then, later, to Spain

and Portugal; and now

France, and England, and, to some extent, to

Denmark and
as superior

Sweden, was a
to

state policy in

economic matters,
to

the

territorial

as

that
to

had been

the

municipal.

Those

states

began

weave the great economic

im-

provements of the time into their political institutions and


policy,

and

to bring about

an intimate relation between

the one

and the
from

other.

States arose, forming united,

and

therefore strong and wealthy,


"different

economic bodies,
in these,

quite

earlier conditions;

quite unlike

earlier times, the state organisation assisted the national

economy and

this

the

state

policy;

and,

quite

unlike

AND ITS HISTORICAL


earlier times too,

SIGNIFICANCE.

49

public finance ser\'ed as the bond of


life.

union between political and economic


only a question of state armies,
it

It

was not

fleets,

and

civil services;

was

a question rather of unifying systems of finance

and

economy which should encompass


There had always been great

the forces of millions


to their social life.

and whole countries, and give unity


states;

but they had been

bound together neither by


of

traffic

nor by the organisation

labour nor by any other lika forces.


was,

The question

now

with a great society divided


to

into social classes

widely different one from another and complicated by


the division of labour,
sible,

bring about, as far as posnational

on the basis

of

common

and religious

feelings,

a union for. external

defence and for internal

justice

and administration,

for currency

and

credit,

for

trade interests and the whole

economic

life,
its

which should
time, of the
its

be comparable with the achievements, in

municipal government in relation to the town and


environs.

This was no mere fancy of the rulers;


itself

it

was the

innermost need of the higher civilisation

that such

enlarged and strengthened forms of social and economic

community should come

into existence.

With

the growing

community

in speech, art,

and literature, with the growth

of the spirit of nationality, with increasing

communication
trans-

and commerce, with money transactions and credit


actions

becoming

universal, the

old

mediaeval forms of
all

loose association

no longer

sufficed;

and

the rigid local,

corporate, class, and district organisations of an earlier

time became intolerable hinderances to economic progress.

Out

of misery

and

conflict of every kind

had

arisen,

in

50

THE MERCANTILE SYSTEM

Spain as well as in France, in Holland as well as in England,

the

feeling

of

unity,

the

realisation of

common
Herein

interests;

these

it

was, also, that prompted the stumbling


of association.

search after

new and wider forms


political interests

economic and
stronger

went hand in hand.


the

The

was

the

sense

of of

nationality,

economic

forces, the political

power

any
get

state,

the

more enerfor
it

getically

did

this

movement

under

way;

meant a combining and organising

of resources at

home,

even more than a measuring of them, when thus combined,


with like creations across the frontier.
history of the seventeenth

The whole

internal

and eighteenth centuries, not


else, is

only in

Germany but everywhere

summed up

in the

opposition of the economic policy of the state to that of


the town, the district, and the several Estates; the whole

foreign history

is

summed up

in the opposition to one


states,

another of the separate interests of the newly rising

each of which sought to obtain and retain


circle of

its

place in the

European nations, and

in that foreign trade

which

now included America and


power were
tions of
at issue,

India.

Questions of political
at the

which were,

same time, quesat stake

economic organisation.'

What was

was

the creation of real political economies as unified organisms, the centre of which should be, not merely a state policy

reaching out in

all

directions, but rather the living heart-

beat of a united sentiment.

Only he who thus conceives


stand
it;

of mercantilism will underit

in

its

innermost kernel

is

nothing but state

making not

state

making

in a narrow sense, but state


at the

making and national-economy making

same time;

AND ITS HISTORICAL


State

SIGNIFICANCE.
which creates out

51

making

in the

modern

sense,

of the

political
it

community an economic community, and

so gives

a heightened meaning.

The essence

of the system lies

not in some doctrine of money, or of the balance of trade; not in


tariff barriers,

protective duties, or navigation laws;


:

but in something far greater

namely, in the

total trans-

formation of society and


state

its

organisation, as well as of the

and

its institutions,

in the replacing of a local

and

territorial

economic policy by that

of the national state.

With

this accords the fact recently

pointed out with regard


that

to the literary history of the


liar

movement,
is

what

is

pecuthe

to

all

the mercantilist writers

not so

much

regulations of trade which they propose for the increase of


the precious metals as the stress they lay

on the active

circulation of money, especially within the state itself.^

The

struggle against the great nobility, the towns, the

corporations,

and provinces,

the

economic

as

well

as

political blending of

these isolated groups into a larger

whole, the struggle for uniform measures and coinage, for a well-ordered system of currency and credit, for uniform
laws and uniform administration, for freer and
traffic

more

active

within the land,

this it

was which created a new

division of labour, a
a

new

prosperity,

and which liberated


As the
territorial

thousand forces towards progress.

policy had rested on the overthrow of independent local

and town
local

policies,

on the limitation and modification

of

institutions,

upon the increasing

strength

of

the

general interests of the whole territory, so

now

there fol-

1 This is the main point in Bidermann's instructive lecture Ueber den Merkantilismus Innsbruck, 1870.
,

>

52

THE MERCANTILE SYSTEM

lowed, for centuries, a struggle between state and district,

between principality and province,


doubly
difficult in those cases

task
state

which was
did not yet

where the

include the whole nation.

This struggle was primarily an

economic one; economic and


of

it

had

to

do with the removal


of

of all the old

financial institutions,

and with the creation

new and united institutions. It was a process which in Italy and Germany reached its which in France full conclusion only in our own day new
joint interests

and

1789; which even in Great Britain was not completed till late; and in the Republic

was not quite finished in

of the

United Netherlands halted midway in

its

course.

It is

now

to

be noticed that

it

was the "enlightened,"


of the seventeenth

more or

less despotic,

monarchy

and

eighteenth centuries by which this

movement was

initiated

and pushed forward.

Its

whole activity centred in ecoadministrative

nomic measures;

its

great

reforms were

anti-municipal and anti-provincial, and aimed chiefly at


the creation of larger economic organisms.

With these

princes mercantilist policy was not something subsidiary;


all that

they planned and performed necessarily took^this

direction.
I

mentioned above
attracted

that in the

United Netherlands,
admiration about

the

which

such

universal

middle of the seventeenth century,

the towns and provthere so strong, had


it

inces retained a great deal of their old independence;

and the

local

and provincial

spirit,

even certain favourable consequences; but


to greatness,

could lead
it

power, and wealth, only so long as

was

overridden by the opposite movement towards centralisa-

AND ITS HISTORICAL


tion.

SIGNIFICANCE.

53 for

Even

the Burgundian princes had done


of

much

the

economic unity
in

the

land

by their enlightened

administration;

later times

Holland and Amsterdam

preponderated so greatly in power and resources, that


their voice

was frequently decisive and alone considered.


Independence, and by the House of Orange
complicated
official

More, however, was done for consolidation by the Eighty


Years'
in
it

War

of

the

various

relations

in

which

stood towards the decisive economic questions of the

time.

The Admiralty Board

(^OberadmiralitdtscoUegiuiii)

remained in existence only for a few years (1589-15 93); but after this the House of Orange remained at the head
of the

Admiralty in the separate

states
fleet,

and upon the


Colonial

Admiralty depended not only the


tariff

but also the whole

system, and

indeed
policy,

all

maritime trade.
the

policy, navigation
trade,

the regulation of

Levant

of

the herring and whale fisheries, and


centralised.

the like,

were

all

glance into the rich contents of

the " Resolution

Book

of the

High and Mighty Lords

the

States-General of the United

Netherlands " {Placaet-Boeck

der hochmogenden Herren Staaten-Geiierael der vereinigte

Nederlande) shews us to

how
of

large an extent the

economic
of the re-

and commercial policy of the flourishing time


public was the

outcome

common

Netherlandish
the

egoism.

Its

rapid declension

begins with

period
^
;

during which there was no governor {Sfadtholder)

and

the most signal cause of this decline was the preponder-

ance in one

field

after another,

after about

1650-1700,

of bourgeois localism

and provincialism.
1

[1650-1672.]

54
It is a

THE MERCANTILE SYSTEM


consideration of the economic history of France
fact that the mercantilism

that

most clearly brings out the

that was everywhere

making

its

way was

at least as

much

matter of transformation and union at


against the world outside.
the great houses of

home

as of barriers

Louis XI. (1461-1483) cast down


of Orleans

Burgundy and Anjou,

and

Bourbon, resisted the narrow selfishness of the corporations, sought to

bring about uniform weights and measures

in France, and forbade the importation of foreign manufactures.

The

edict of 1539, which introduced freedom

of

trade in corn in the interior of

France, particularly

between the several provinces,


that in a united political
at all times, help

sets out

with the assertion

body the

several districts should,

and support one another.

The

declara-

tion in 1577 that trade, and in

158 1 that industry, be-

longed to the droit domanial had not so


centralising significance;
^

much

a fiscal as a

as

was the case generally with the

ordinances dating from the time of the great de I'Hopital


(Chancellor 1560-1568). Richelieu's razingof the fortresses
of the nobility
^

has often been extolled as one of the most

important steps towards internal freedom of intercourse


within France; his active measures for the creation of a
1

[By an edict of February, 1577, a duty, under the

name

of traite

domaniale, was imposed on the exportation of grain, wine, cloth, and

wool; by another of July, 1577, a bureau des finances was established in each generalite, composed of two treasurers for the domain (in the narThe edict of rower sense), and two receivers-general for the customs. 1581 compelled all artisans as yet unorganised to form themselves into
meiiers,

and

to

purchase

lettres

de maitrise from the government, but gave

master craftsmen a wider range for the exercise of their trade than had
previously been permitted.]
2 [1626.

On

the subject of this paragraph,


Colbert.

cf.

J.

H. Bridges, France

under Richelieu and

Edinburgh, 1866.]

AND

ITS HISTORICAL SIGNIFICANCE.

55

French marine were among the most important contributions towards the

development
66 2-1 683)

of

an independent comColbert's
a
struggle
;

mercial policy in relation


administration
against
the
(i

to other countries.

was,

primarily,

municipal and
^

provincial

authorities

of

whom

Cheruel

says that

it

was they

really

who hindered
of

economic progress and the improvement


manufactures.

trade

and

The submission

of

the towns

to a uni-

form

ordinance, the partial abolition of


the diminution of

the provincial the

Estates,

the power of

provincial
;

governor, and

his replacement

by the intendent
great

these

were measures

which,
in

like

his

road

and

canal

works, his interest

posts and

insurance, in technical

and
ings

artistic education,

in exhibitions

and model build-

created by the state, in private and public model


establishments,
his reform
of river
tolls,

industrial

his

union of the inner provinces in a uniform customs system,

all

aimed

at
its

the one
brilliant

thing,

people under

to make of the French monarchy a noble and united

body, united in civilisation as well as in government, and

worthy of the name of nation.

The

great laws of Colbert,


les

the ordonnance civile of 1667, the edit general sur


et les forets of

eaux
1670,

1669, the ordofinance crimi7ielle of


1673, founded

the ordofmance de comme^'ce of


as well as the
cally they are

the legal

economic unity

of France;

even economiof

more important than

the tariffs
in

1664

and 1667,
1

for

these did not succeed even


I'

removing
,

[A. Cheruel, author of the Histoire de

administratio7i i?tonarchigue en

France (1855), the Histoire de France pendant la minorite de Louis XIV (1878-1880), the Histoire de France sous le ininistere Mazarin (1S82-1883),
etc.]

56
the

THE MERCANTILE SYSTEM


differences

between

the pays

d'etats

and the pays


very

(Selection}

Austria, as late

as

1748, had not got beyond


It

loose association of provinces.


in

was then determined,

imitation of

the Prussian administration, that things

should be different.

The Prussian government had been


Great Elector
(i

able, since the days of the


still

640-1 688), and


I.

more during
as

the reign of Frederick William

(1713-

1740), to create a financial, economic, and military whole,

such

there was
the

no other on the continent, and


of

this

out of

most refractory materials, out

territories

lying far apart and almost hostile one to another.


is

What
the

more, this was successfully carried through at the very


itself

period when the administration had set before

purpose of retrieving
themselves,

lost

time

within

the

territories
districts
is,

and securing what many other


already obtained by

of

Germany had
engaged
Prussia,

1600, that

their
it

unity and self -sufficiency.


in

At the very time that

was
East

Brandenburg, Pomerania,

Magdeburg,

and the Rhine provinces (Cleves and Mark),

in subjecting the towns


of the state,
1

and the nobles

to

the authority

and
d^etats

in creating a united provincial adminiswere those provinces of France


in

[The pays

which assembUes
of

of Estates survived and retained

some

authority.

The most important

these were Languedoc, Brittany, Burgundy, Provence, Artois, Hainault, the

Cambr6sis, and Beam. These were all frontier provinces, which had been brought under the direct authority of the French crown at a comparatively late date, and had been allowed to retain a good deal of their old autonomy. Colbert was unable to secure the removal of the customs barriers between these provinces and the rest of France, which was known as pays d election,

from

its

division into districts for purposes of financial administration


(i.e.

called elections, after the officials, elus

appointed iox the purpose),

who

presided over them.]

AXD ITS HISTORICAL


tration,
it

SIGNIFICANCE.

SI

took in hand the task of giving the whole group


territories a

of

poor

little

real

political
politics,

and economic

unity, of taking part in

European

and of securing,

by an independent policy in trade and industry, for these


northern lands, bare as they were of men, devoid as they

were of maritime commerce or mines or considerable


manufactures, a place by the side of the old and wealthy

Great Powers.
istration

The whole character


to

of the Prussian

admin-

from 1680

1786 was determined by the way in


its

which

this state,

with

small and broken geographical

basis, set

about combining a natiotial policy in pursuit of

German-Protestant and mercantilist objects, with the tasks


of territorial
t\i\q

handed down
it

to

it

by the past; and by

the

way

in

which

carried out,

in war

and peace, in

administration and economy, a national state policy in the

"great style" with scarcely more than territorial means.

Our present
side,

task has only

been

to

shew how close was the

connection, in Prussia as elsewhere, between, on the one

reform and
of

'.jcntralisation at

home, the transforma-

tion

territorial

economies into a national economy

(" Volks'' win'.hschaft),

and the mercantile system on the and foreign

other; how, here as elsewhere, domestic policy

policy supplemented one another as indispensable elements


in one system.

If

we pause

for a while to consider this foreign

and
the

external

economic policy
and

of

the

European

states of
it

seventeenth

eighteenth

centuries,

which

has

hitherto been the custom to regard as the essential feature


of the mercantile system,

it

is

not, of course, our pur-

58

THE MERCANTILE SYSTEM


its

pose to describe the details of


general features of
Difficulties
its

several

forms.

The

regulations are well enough known.

were put in the way of the importation of

manufactured goods; and their production and exportation were favoured by the prohibition of the export of raw
materials,
treaties.

by bounties on export,

and by commerical
to

Encouragement was given


and

domestic shipping,

to the fisheries,

to the coasting trade

by restricting or
the colo-

forbidding foreign competition.


nies,

Commerce with

and the supplying of them with European wares, was


for

reserved

the

mother country.

The importation

of

colonial produce had to take place directly from the colony


itself,

and not by way

of other

European ports; and everyto

where an attempt was made


manifold ways.

establish

dirert trading

relations by great privileged trading companies, and by


state aid in

England promoted the export


of agriculture at the

of corn

and the prosperity

same time

by the payment

of bounties;^

France hindered the export


its

of corn for the benefit of industry; Holland, in

later

days, sought to create very large

stores

of

corn and a

very free trade in corn, so as both to ensure a due domestic

supply and to encourage trade.


said,

But, as

we have already
features

an account of these several measures would go beyond


purpose of
this

the

essay.

The

general

are
to to

known; the
due

details have even yet not

been subjected
is

scientific investigation.

Our only purpose here

1 [From 1689 onward. Compare hereon the strong expressions of Cunningham, Groivth of Ejiglish Industry a7id Commerce, ii. (1892), pp. 371 seq. It is there described as " a pohcy exclusively English," " a masterly stroke of policy, since it appears to have occasioned the great advance in agricultural improvement which took place while it was maintained," " the one

AND ITS HISTORICAL

SIGNIFICANCE.

59

grasp the fundamental ideas of the system; which, naturally,

found varying expression, here in high duties, there

in low, here in the prevention, there in the


of the corn trade.
this:

encouragement

The thought pursued everywhere was


other countries fluctuated up

as competition v/ith
to cast the

and down,

weight of the power of the state

into the scales of the balance in the

way demanded

in each

case by national interests.

In proportion as the economic interests of whole


after

states,

much

agitation of public opinion, found a rallying-

point in certain generally accepted postulates, there could


not
fail to arise

the thought of a national policy, of protec-

tion by the state against the outside world, and of the sup-

port by the state of great national interests in their struggle

with foreign countries.

The conception

of a national agri-

culture, of a national industry,


fisheries, of national

of national shipping

and

currency and banking systems, of a

national division of labour, and of a national trade must

have arisen before the need was

felt of

transforming old
national and
it

municipal and
state ones.

territorial

institutions

into

But, as soon as that

had taken place,

must

have seemed a matter of course that the whole power of


the state, in relation to other countries as well as at home,

should be placed at the service of these collective interests;


just as the political

power

of the towns

and

territories

had

served their municipal and district interests.


part of the

The

struggle

England," and

scheme known as the Mercantile System which was original to " the corner-stone of English prosperity." For Adam Smith's
;

arguments against the bounty, see Wealth of Nations, bk. iv. ch. v. (ed. Rogers, ii. 8i seq.) and for Mr. Hewins' criticism and Professor Cunningham's rejoinder, Economic Jour7ial, ii. 698; iv. 512.]

60

THE MERCANTILE SYSTEM


economic
is

for existence, in
life

life

in particular, as in social

in

general,

necessarily carried on at all times by

smaller or larger groups and communities.

That

will also

be the case in

all

time to come.

And

the practice and

theory of those times, answering, as they did, to this universal tendency, were nearer reality than the theory of

Adam
this

Smith; and so also were the main ideas of Frederick List.^

We

are

not,

however,

concerned

just

now with
itself,

universal tendency; what


particular form in

we want
it

is

to

understand the

which

then expressed

and the

reason for

it;

and why

it

could, in later times, give

way

so far before other tendencies.

The
cial

great states of an earlier time display no


the
style

commer-

policy in

of

the

mercantile system, not

because the Utopia of a purely individualistic economic


life

possessed more reality then than

later,

but because

they were not united economic bodies; as soon as they

became

such, the inheritance of such


existed, and, above
It
all,

economic bodies
of the

as

had previously

town policy,

passed over to them.

was not because money and money


alto-

payments or industry or trade suddenly played an


gether
it

new

role in the days of

Cromwell and Colbert,


and
to subject
it

that

occurred to people to guide the course of exportation


trade,

and importation and colonial


to

them

governmental control.
then,

On

the contrary,

was because

just

out of the earlier smaller communities, great

national communities had grown up, whose power and sig[See the account of them in Ingram, History of Political Economy, and the remarks of Professor Marshall in Principles of Econofnics,

191-194,

3d

ed., pp. 69-70.]

AND ITS HISTORICAL

SIGNIFICANCE.

61

nificance rested on their psychological and social concert,


that they

began

to imitate, not

what Charles V. had done


-of

in Spain, ^ but

what

all

towns and territories

earlier

times had done, from Tyre and Sidon, from Athens and

Carthage onward; to carry over what Pisa and Genoa, Flor-

ence and Venice, and the German Hanse towns had done
in their time to the broad basis of whole states

and nations.

The whole idea and doctrine


it

of the.Balanc e of Trade, as

then arose, was only the secondary consequence of a

conception of economic processes which grouped them


according to
states.

Just as

up

to this time attention

had been fixed on the exportation from and importation


to particular

towns and

territories,

so

now people

tried

to grasp in their

minds the trade


in such a
it

of the state as a whole, as to arrive at a better

and

to

sum

it

up

way

understanding of

and

at

some

practical

conclusion.

Such a grouping and combination were very evidently


suggested in a country like England, where, on account of
its

insular position

and the moderate

size of

the

land,

the national

economy had
supply of

early displayed its exports

and

imports,

its

money and
political

of the precious metals,

as a connected

whole

to the eye of the observer.^


life

All

economic and

rests

upon psychical

mass-movements, mass-sentiments, and mass-conceptions,


gravitating around certain centres.
to think so far

That age could begin

and act in the


it

spirit of free trade,

which had

left

behind

the toilsome

work
;

of national

development

1 [A reference to a common assertion found, for instance, in Blanqui's History of Political Econoiny, trans. Leonard, pp. 212 seq.] 2 Cf. the essay by Dr. von Heyking, Zur Geschichte der Handelsbilanz-

theorie, 1880.

62 that

THE MERCANTILE SYSTEM


it

regarded

its

best results as matters of course,


cost;

and and

forgot

the struggle they had

an age which, with


institutions

cosmopolitan

sentiments,

with

great

interests of international traffic, with a

humanised

inter-

national law, and an individualist


diffused,

literature

everywhere

was already beginning

to live in the ideas

and

tendencies of a world economy {IVeltwirthschaft).


seventeenth century had just managed to fight
its

The way up

from local sentiment to national sentiment; international


law as yet scarcely existed.

The old bonds which had


been broken;
all

held together Catholic states had


intellectual

the

movement
the
it

of

the time centred in

the

new
more
com-

national life; and the stronger and sounder beat the pulse
of that
life,

more
that
it

it

felt

its

individuality,
itself

the

inevitable was

should bar

against the world


political

outside with a harsh egoism.

Each new

munity that forms

itself

must be carried along by a strong

and exclusive feeling


its

of

community; these

are the roots of

strength.
is

The

struggle for self-sufficiency


it

and indepen-

dence

as natural to
at

as the spirit of violent rivalry

which hesitates
to

nothing in order to come up with,


rivals

surpass,

and

to crush the
It

in

whom

it

always

sees enemies.

was the law of autarchy by which the


of those times
^

commercial policy

was exclusively guided.

The endeavour
nations.

after aut archy

naturally shews itself in an

especially violent

and one-sided form in the youth of

exovcra

[A phrase suggested by Aristotle's description of the state as n-acT-Tjs Tre'pa? t^; avrapxeia?, "having reached tlie end" (or "result") "of
I. 2, 8.]

entire self-completeness " (or " self-sufficiency"), Politics

AND ITS HISTORICAL


The doctrine
entertained
that
of the natural

SIGNIFICANCE.
of the

63

harmony
to

economic
always a

interests of all states is just as false as the

opinion then
is

an advantage

one

state

disadvantage to another. not only had


its

The

latter

was an opinion which

roots in the earlier stubborn struggles


territories,

between towns and


this

but was strengthened just at

time by the circumstance that the possession of colo-

nies, of the

Indian Spice Islands, and of the

silver

mines

of

America had

fallen to the several nations only as the


It

result of

war and bloodshed.

seemed unavoidable

that
in.

one nation should have


In

to recede

when another
districts,

pressed

reality, all social bodies,

and therefore economic bodies


and afterwards
to

among them,
nations and

at

first

towns and

states,

stand
and

one another in a double

relation; a relation of action

and reaction by which they


supremacy.

mutually supplement one another, and' a relation of dependence,


exploitation,
struggle
for

The

latter is the original

one; and only slowly, in the course


is

of centuries

and millenniums,
the great

the antagonism softened.


to
utilise

Even to-day
their
tions,

economic Powers seek

economic superiority
and
to retain

in all their international rela-

weaker nations in dependence; even


tribe,

to-day any half-civilised nation or

among whom
is

the English or French establish themselves,


first,

in danger, bal-

of a sort of slavery for debt

and an unfavourable

ance of trade, and, following closely in the wake, of


cal annexation

politithis,

and economFC exploitation,

though
for
it.

indeed,

may

turn into an

economic education

In the seventeenth and eighteenth centuries the relations,

and especially the economic

relations,

between


64

THE MERCANTILE SYSTEM


were particularly hostile and harsh, because the
creations were for the
it

States

new economico-political
trying their strength,

first

time

and because

was the

first

time that

such considerable political forces were available for the


pursuit of commercial, agricultural,
forces

and

industrial ends,

which might seem,

if

only properly employed, to

promise untold wealth

to every state,

^n

all

ages history

has been wont to treat national power and national wealth


as sisters; perhaps they were never so closely associated as then.
to use

The temptation
their political

to the greater states of that

time

power

for

conflict with their ecofor their destruc-

nomic competitors, and when they could,


tion,

was too great for them not to succumb time after time,
to set international

and either

law at naught or twist

it

to

their purposes.

Commercial competition, even


state of

in times

nominally of peace, degenerated into a


hostility:
it

undeclared

plunged nations into one war after another,


wars a turn in the direction of trade, industry,
as they never

and gave
It has

all

and colonial gain, such

had before or

after.

been often enough remarked

that the period of

the wars of religion was followed by one in which eco-

nomic

and

commercial

interests

governed
It
is

the

whole

foreign policy of European states.

true that even

the expedition of Gustavus Adolphus to

move

in the

Germany was a game which was being played for the trade
In like manner, the later wars of Sweden,

of the Baltic.

aiming

at

the
of

conquest of Poland, and the aggressive


Russia towards the Swedish and
all

movements

German
the

provinces on the Baltic, were

directed

towards

acquisition and domination of the Baltic trade.

AND ITS HISTORICAL


and
in

SIGNIFICANCE.

65

As in the East Indies, the ancient source of supply


Oriental wares,
violently pushed
for

for

pearls

spices,

the

Portuguese

their

way

first,

annihilated Arabian

trade with unheard-of brutality, and imposed

upon

all

the

Asiatic tribes and states the rule that they should carry on
trade with Portuguese alone;

so in later times the


out,

Dutch
them-

were able to drive the Portuguese


selves a like

to get for

monopoly
by

of the spice trade, to


craft

keep other
talent,

Europeans

away

and

by

mercantile

if

need were,
to hold

by insolent violence and

bloodshed,
sub-

and

the people of the East in commercial


struggle of the

jection.
liberty
itself,

The heroic
and
for

Dutch

for religious

freedom from the Spanish yoke displays


at in a

when looked

"dry

light," as a century-long

war for the conquest of East Indian colonies, and an


equally long privateering assault on
the silver
fleets of

Spain and the Spanish-American colonial trade.

These

Dutch, so lauded by the naif free-trader of our day on

account of the low customs-duties of their early days, were

from the

first

the sternest

and most warlike of monopolists


world has ever seen.

after the mercantilist fashion that the

As they suffered no trading


Asiatic,

ship,

whether European or

in East Indian waters, without a


;

Dutch pass
shut

to

be bought only with gold


treaty

as

by force
port,

of

arms and by

they kept

the

Belgian

Antwerp,

up

against
1

commerce;^

as they crushed the Prussian colony

[By the clauses in the Treaty of Westphalia, 1648, providing for "the

closing of the Scheldt," seagoing vessels were forbidden to ascend to Ant-

werp.

They must unload


in 1794.]

at

a Dutch port, and thence forward their mer-

chandise to Antwerp by river barges.

The

Scheldt was re-opened by the

French

66
in Africa,^
so at

THE MERCANTILE SYSTEM


and countless other settlements
they forbade
all

of other nations;

home

herring-fishers to take their

wares to any but the Dutch market, and prohibited their


passing into foreign service, or taking to foreign countries
the implements of their craft.

Although

at the

beginning

they had low duties on imports

and exports, they resorted

constantly to arbitrary prohibitions whenever they thought

they could thereby further Dutch interests; in 167 1 they

imposed the heaviest duties on French goods; and, in the


eighteenth century,

when they had become

too pusillani-

mous
to

to

wage war

for their

commercial ends, they resorted


In the time of their
all

the

extremest protectionism.

prosperity they were carrying on war well-nigh


time,

the

and war
skill

for

commercial ends; and they shewed


state, in

more

than any other

the seventeenth century,

in getting out of their wars fresh

commercial advantages.
rise to

Their obstinate pursuit of

monopoly gave
tariff;

England's

navigation law and Colbert's

and attracted England


like policy of pursuing

and France themselves towards a


narrowly mercantilist
objects

by force

of

arms.

The

bloody and costly wars of England with the Dutch were,

Noorden ^
of

tells us, at

bottom nothing but a duel over the

maintenance of the Navigation Acts.

The French invasion


tariff.

Holland (1672) was an answer to their foolish and ex-

travagant reprisals against Colbert's

The War of the Spanish Succession, like the War of the Grand Alliance in 1689- 169 7, was, primarily, the struggle
1

1683,
2

[The possessions of Brandenburg on the Gold Coast, obtained in 1681were surrendered to the United Netherlands in 1720.] [Karl von Noorden, author of Europdlsche Geschichte itn achtzehnten

Jahrhundert?[

AND ITS HISTORICAL


of

SIGNIFICANCE.

67

England and Holland,

in concert, against the

growing

industrial

and commercial preponderance of France, and


was a struggle

against the danger of the union of French trade with the

colonial power of Spain. ^


tive

It

for the lucra-

Spanish-American

trade

which

mainly occasioned
till

the antagonism of
of

England and France


with

after the

middle

the

eighteenth century.
colonies

The supply
European

of

the Spanish-

xA.merican

manufactures could

only take place by means of the great West Indian smuggling trade, or through Spain,
i.e.

the Spanish port-towns.


of the need, the

As Spanish industry supplied only a part


question was,
trade,
to

whom
it

Spain would allow to share in the


at smuggling, and,
if

whether
Indies.
tc)

would wink

so,

what extent and by whom; whether France could


in Spain

cir-

cumvent England, or England France,

and the

West
1739

The

war, also, of

England with Spain from


itself

1748,

with Spain and France,


than
this, to

which, in 1744, turned into a war had, in the main, no other object
^

obtain a free course for the English smuggling


it

trade with Spanish America;

was generally nicknamed

by public opinion "the Smuggler's War."

The Seven
America.
furnish the

Years'

War had

its

origin, as everyone knows,

in the colonial rivalry of

England and France

in

North
should

Whether the

Ohio and Mississippi

Romance
for

race or the Teutonic with a field for

colonisation and trade, whether maritime and commercial

supremacy
1

the

next hundred or two

hundred years
some
re-

Cf. the instructive

little

paper of H. Meinberg (suggested by

marks of T. G. Droysen) on Das Gleichgewichtssystem Wilhelms III


die enghsche Ha?idelspoiitik, Berlin, 1869.
2 [Cf.

u?id

Lecky, History of England in the Eighteenth Century^

vol.

i.

ch.

iii.]

68

THE MERCANTILE SYSTEM

should belong to England or France,

that
in

was the

far-

reaching economic quarrel into which the great king of


Prussia was drawn because he would not suffer his old ally

France

to attack his old

enemy England

Hanover,

i.e.

in

Germany.
and when

In defending Germany's neutrality in this comit

mercial and colonial war, he was drawn into


his brave troops defeated the

himself;

French

at

Rossbach

(1757) and elsewhere, they decided at the same time the


great questions of the world's trade and of future colonial

development.

Without the victories


fleet,

of

the

Prussian
to-

grenadiers and the English

England would not

day have

its

world-wide trade, and the United States of


exist.
It is

America would not

probable that French would


at

now be spoken

alike

on the Ohio and the Mississippi,

Calcutta and Bombay.

English commercial greatness and supremacy date from


the successes of the war of
in
its
1

756-1 763.

But the climax

career of colonial conquest by force of arms, and of

intentional destruction, dictated by trade jealousy, of the

competing mercantile navies


Napoleonic war.

of France, Holland,

Germany,

and Denmark, was reached by Great Britain during the

The commercial

struggle

between Eng-

land and France, the shameless brutalities of the English


fleet

on the one side and the continental blockade on

the other, form the terrible concluding


of
to

drama

in the age

commercial

wars. in

Henceforward another

spirit

begins

make

its

way
;

commercial policy and in internahave not

tional

morality

although the old traditions

yet been entirely overcome, and, indeed, can never be


entirely overcome,
so

long as there

is

such a thing as

AND ITS HISTORICAL


independent politico-economic
interests.

SIGNIFICANCE.

69

life

with separate national

The long
ades,

wars, each lasting several years, or even decfill

which

the whole period from 1600 to 1800

and

have economic objects as their main aim; the open declaration

by the Grand Alliance in 1689 that

their object

was the destruction of French commerce; the prohibition by the Allies of


all

trade,

even by neutrals, with France,


all this

without the slightest regard to international law;

shews the
national
to

spirit

of
of

the

time in

its

true

light.

The
these

passion
a

economic
it

rivalry

had been raised


like

such
it

height

that
its

was only in wars


expression and

that

could find
content, in

full

satisfaction.

To

be

the

intermediate years of peace, to


tariffs,

carry

on the
in these

conflict with prohibition,

and navi-

gation laws instead of with


did,
to

sea fights; to give, as they

years of peace,

somewhat more attention


law than
in

the

infant

voice

of

international

time

of

war

this

was in

itself

a moderating of international

passion.

The very idea


the
rests

of international law

is

a protest against

excesses of

national rivalry.
the

All international
states

law

on the

idea that

several

and nations

form,

from the moral point of view, one community.

Since the

men

of

Europe had

lost the

feeling of

com-

munity that had been created by the Papacy and Empire,


they had been seeking for some other theory which might
serve to support
it;

and

this they

found in the reawaken-

ing "law of nature."

But the particular ideas for which

70

THE MERCANTILE SYSTEM


men
strove,

in the first instance

and

for

which they sought

arguments pro

et cojitra in the

law of nature, were mainly

products of the economic and commercial struggle then

proceeding.

Inasmuch
nies on
the

as the states that

were the

first

to obtain colo-

a large scale, Spain and Portugal, had secured from a partition of

Pope

the whole oceanic world,

and

its

designation by him as their exclusive property, the law of


nature,

when

it

made

its

appearance,

put forward the


this

doctrine of

Mare

liberum.

But while in

way Hugo

Grotius in 1609 created a legal justification for his Dutch

fellow-countrymen in pushing their way into the old possessions


of

the

Portuguese and Spaniards,

the

English

maintained the opposite theory of


the exclusive lordship of

Mare

clausum, and of
seas, in

England over the British

order to free their necks from the competition of the

Dutch

in navigation

and the

fisheries.

Denmark appealed

to its sovereignty of the sea as a justification for its oppres-

sive

tolls

at

the

Sound;

and the other Baltic powers


to forbid the Great Elector to

sought, on the

same ground,

build a

fleet.

The

great principle of the freedom of the


fxrst

sea did, indeed, slowly g-in general currency; but at

each nation

only recognised the particular theory that

promised

it

some advantage.
the wars of the time were

Almost
of the

all

waged
will

in the

name

European "Balance."
its

And who
that
it

deny

that this

idea had
for the

justification,

and

laid the foundation

peaceful future of a great


first,

community

of states?

But, at
law,

it

was a mere phrase taken from international


to justify every caprice

and used

on the part

of the

AND ITS HISTORICAL

SIGNIFICANCE.

71

Great Powers, every intervention in the relations, and every


interference with the fate of the smaller states
:

it

was the

cloak which hid the silent conspiracy of the western Powers


to to

prevent the rise of a

new Power,

like the Prussian,


life

and

keep

its

trade

and

its

whole economic

in the

bonds

of dependence.

The gradual growth

of

the

milder
is

principle,

more
in the

favourable to the small states, which

summed up
'^

phrase "free ships, free goods," out of the mediaeval principle found in the Consolato ^e/

Mare, which allowed the

confiscation
neutral ships,

of
is

the

enemy's property even on friendly


But England has never accomhas, with unheard-of assurance,

one of the great gains in international law

in the eighteenth century.

modated
and with
prizes

herself to

it,

and
of

decisions

the

Court of

Admiralty about

which can have been determined by nothing but


egoism,

national

succeeded

in

injuring

the

trade
it

of

neutrals everywhere^ in time of war, even

when

could
the

not destroy
last

it.^

Biisch^ shewed,

in 1797,

that of

one hundred and forty-four years England had spent

sixty-six in the
all

most sanguinary naval wars.


less

They had
other,

been more or

concerned, on the one side, with

the conquest of colonies by force of arms,


1

on the

{^Consolato del Afare, "

seemingly a collection of the maritime usages of

the trading peoples of the Mediterranean seaboard


the middle of the fourteenth century."

made

at

Barcelona about

T. A. Walker, Science of Inter-

national
^

Law (1893), p. 395. See, also, Hallam, Middle Ages, ch. ix. pt. 2.] [For a different view of the action of England, and of the " reflections "
have been cast
"

that

upon the

judicial impartiality of the great


op. cit.

Admiralty
writer

judge," Lord Stowell, see Walker,


3

pp. 395 seq.]


influential publicist

[Johann Georg Biisch, 1728-1800, an

and

on

trade.]

72

THE MERCANTILE SYSTEM


i.e.

with the destruction of the neutral trade,


the smaller states.

the trade of

The blows
we

of the English are nearest to us in time; they

have also vitally affected


are inclined,

Germany;

and,

accordingly,

measuring
most.

with the

standard of to-

day,

to

condemn them

On
all

the whole, however,


the

they were naught else than what

more powerful

commercial powers allowed themselves in their treatment


of the weaker.

And although we condemn


injustice

the whole period

for excesses in the politico-commercial struggle,

and see
it,

everywhere

much

and error mingled with

yet

we

must allow that passions and blunders such as these


state policy,

were the necessary concomitants of the new


of the developing national economies;

we must

feel that

those states and governments are not to be praised which

did not pursue such a policy, but those who knew how to
apply
than
it

in a

more
For

skilful, energetic,
it

and systematic way


governments
fleets

others.

was precisely those


to put the

which understood how


laws, with rapidity,

might of their

and

admiralties, the apparatus of customs laws and navigation

boldness,

and

clear purpose,

at the
state,

service of the

economic

interests of the nation

and

which obtained thereby the lead in the struggle and in


riches

and industrial prosperity.


far,

Even

if

they frequently

went too
true,

and were led by theories

that were only half

and gathered riches by violence and exploitation, same time, they gave the economic
life of

yet, at the

their

people

its

necessary basis of power, and a corresponding


its

impulse to

economic movement; they furnished the

national striving with great aims; they created and liber-

AND ITS HISTORICAL


And

SIGNIFICANCE.

73

ated forces which were absent or slumbered in the states

they outstripped.
struggles

it

was natural that what in these


lost to sight in

was brutal and unjust should be

each nation in the glow of national and economic success.

We

can understand that the several peoples asked only

whether a Cromwell or a Colbert on the whole furthered


national prosperity, and not whether he did injustice to
foreigners in

some one
:

point.
its

And

historical justice does

not

demand more

it

gives

approbation to systems of
to reach the great goal of

government which help a people

national greatness and moral unity at a given time and with


the

means

of that time, at

home and abroad;

systems, more-

over,
state

which have redeemed the harshness

of national

and

egoism as regards neighbouring peoples, by a model

administration at home.

At any rate one thing


not withdraw
itself

is

clear; a single

community could

from the great current wherein the whole

group of European nations was being swept along; and


least of all,
its

one of the smaller

states

which was

still

making

way upward.

In such a time of harsh international and

economic

struggles,

he who did not put himself on his

defence would have been remorselessly crushed to pieces.

As

early as the sixteenth century,


it

it

became apparent what


it

a disadvantage

was for Germany that

had neither the

national and politico-commercial unity of France, nor the


mercantilist

regulations

to

which

both
this

England
was
still

and

France were beginning to

resort.

And

more

apparent in the seventeenth century.

The

military and

maritime Powers of the West not only drove the Germans


out of the few positions they had at
first

obtained in the

74

THE MERCANTILE SYSTEM


menaced more and more even the The Hanseatic merchants they had long possessed.

colonial v/orld; they


trade

were driven out of one position after another.


another the mouths of the great
foreign hands
:

the

One after German streams passed into Rhine came under French, Dutch, and

Spanish suzerainty, the Weser under Swedish, the Elbe under


Danish, theOder under Swedish, the Vistula under Polish
control.

The

tolls

imposed by these foreign masters

at the

mouths

of the streams gave the river trade, in


its

many

cases

intentionally,

last

blow.

While the Dutch destroyed

the Hanseatic trade in their


duties; while they
of

and the

own markets by differential English made the direct trade

Germans with Spain and Portugal impossible, by violence and the confiscation of ships; the Dutch misused, with increasing dexterity,
their
to"

growing preponderance on the


put

Rhine and

in the Baltic

Germany

itself into' a

position

of unworthy

dependence in

all

matters of business.

As the

only or most important purchasers of

German raw products


its

and the only suppliers


almost
intolerable

of Indian spices, they secured an

monopoly, which reached

climax

through the unconditional dependence of Germany' on the

Dutch money market during the period 1600-1750.


what Holland was with regard
with
regard
to to

And
Those

Indian wares, France was


objets
d' art.

manufactures and

Hanseatic towns that were not ruled by Dutch business

managers {Lieger) were in slavery

to

English creditors.

Denmark sought
and trade by
its

to destroy

German

navigation, fisheries,

its tolls

on the Sound and the Elbe, and by

commercial

companies.

And

all

these

conditions

affected

Germany

m.ost severely, not in the Thirty Years'

AND ITS HISTORICAL

SIGNIFICANCE.
later;

75

War, but one, two, or three generations

when
in

the

western Powers had firmly established their new politico-

economic

institutions.

With

naive

pleasure

their

maritime and commercial strength, with the support of a


brutal

international law, and a diplomacy which forced


less

upon weaker and

experienced peoples, by every

art of

intrigue, unprofitable

and perfidious commercial

treaties,

they openly adopted the half-true, half-false doctrine that


the trade advantage of one state always was

and always
the

must be the disadvantage


from 1670
to

of

another.

In

period

1750 the bitterest lamentations were heard in


this

Germany about

commercial dependence, about French


the torrent of complaint touch-

manufactures, about the traders from every prince's land


that overran the country
:

ing the pitiable condition of the imperial government,

which was unable


avalanche.
the

to give state

any assistance, increased

like

an

The

of

commerce
it

in

Germany, cried
of

most distinguished economic writer


interest taken in

the

time,

depends upon the


Ratisbon.
the
A.t

in the Reichstag at

last all the voices, alike of

scholars and of
is

people,
of

came together
it
;

in

unison: There

but one

way out

we

must

do what Holland, France,

and England have done before


foreign wares:

us; we must exclude the we must once more become masters in our

own
ness,

house.
that,

Facts had taught them, with inexorable clearat a

time when the most advanced nations

were carrying on the collective struggle for existence with


the

harshest

national

egoism, with

all

the

weapons

of

finance, of legislation,

and

of force, with navigation laws


fleets

and prohibition

laws, with

and admiralties, with

76

THE MERCANTILE SYSTEM

companies, and with a trade under state guidance and


discipline,

those
in

who would not be hammer would


Germany
in
1

assuredly be anvil.

The question
that there

680-1 780 was not whether

a mercantilist policy was necessary

and desirable; about


so.

was agreement, and properly

The

ideals

of Mercantilism;

though they may have been presented in

an exaggerated form, and too sharply expressed in onesided economic theories, meant, practically, nothing but
the energetic struggle for the creation of a sound state

and

a sound national economy, and

for the overthrow of local

and provincial economic


belief of

institutions;

they meant

the
of

Germany

in its

own

future,

the shaking off

commercial dependence on foreigners which was con-

tinually

becoming more oppressive, and


of

the education of

the country in the direction of


victories

economic autarchy.
the
of

The
as

the Prussian

army served

same end
state
;

the

financial

and commercial policy

the

be-

tween them they raised Prussia to a place among the


Great Powers of Europe.

The
country

difficulties in the internal

economic policy

of the

consisted in this

that the Prussian state, instead

of being a nation, included only a limited

number

of prov-

inces;
tective

and

that, at

the

same time

as

it

adopted a proit

system against France, Holland, and England,


its

also excluded

German neighbours.
was
still

The

real explana-

tion

is

that the Prussian state

but half-way out of


still,

the period of territorial

development; was

so to speak,

in the earlier century of commercial disputes with

Ham-

burg,

Leipzig,

and Danzig, with Poland, Saxony, and

AND ITS HISTORICAL

SIGNIFICANCE.
it

77

Other neighbouring territories; and


its

could make use of


like

natural superiority, as

compared with neighbours

these, only

by binding

its

provinces together in an enclosed

and exclusive combination.

We

have reached the end of these general considerations

as to the historical significance of the mercantile system.

Our argument
the fact that

rested

on the proposition

that, in spite

of

it is

the individual

and the family

that labour,

produce, trade, and consume,

it is

the larger social bodies

which, by their

common

attitude
all

and

action, intellectual

as well as practical,

create

those economic

arrange-

ments of
without,

society, in relation both to those within

and those
of every

upon which depend the economic policy


its

age in general and

commercial policy in

particular.
soli-

We

saw that the feeling and recognition of economic

darity, in regard alike to those within

and those without,

necessarily created at the

same time a corporate egoism.

From

this
its

egoism the commercial policy of every age


impulse.

receives

We

have, in the next place, laid emphasis on the propo-

sition that historical progress has consisted

mainly in the

establishment of ever larger and larger communities as the


controllers
of

economic policy in place

of small.

The

seventeenth "and eighteenth centuries seemed to us the


birth hour of

modern
selfish

states

and modern national econnecessarily

omies

and, therefore, to

have been

char-

acterised

by a

national com.mercial policy of a

harsh and rude kind.


directed
in
details

Whether such

a policy was rightly

depended on the

information

and

78

THE MERCANTILE SYSTEM


who guided
the state; whether

sagacity of the personages


it

was to be

justified as a whole, w^hether as a

whole

it

had a

probability of success, that depended, then as ever, on the

question whether

it

accompanied a great upward-moving


life.

stream of national and economic

The
this
ties,

progress of the nineteenth century beyond the mer-

cantilist policy of the eighteenth

depends,

keeping

to

thought of a succession of ever larger social communi-

on the creation
is

of leagues of states,

on alliances in

the matter of customs and trade, on the moral and legal

community
means
not
of a

of all civilised

states,

such as modern interinto existence

national law

more and more bringing


by the side of

by

network of international

treaties.

But, of course,
less

this stands another

and

important chain of connected phenomena, which

also helps to explain the contrast

between the nineteenth

century on the one side, and the seventeenth and eighteenth on the other.

The
is

struggle of social bodies with


at other times

one another, w^hich

at times military,

merely economic, has a tendency, with the progress of


civilisation, to
its

assume a higher character and

to

abandon
instinct

coarsest

and

most brutal

w^eapons.

The

becomes stronger
both rivals gain.

of a certain solidarity of interests, of a

beneficent interaction, of an exchange of goods from which


It

was in

this

way

that the strife of towns

and

territories

had been softened and moderated with time,


of still greater social bodies, the

until,

on the foundation

states, it

had passed into a moral influence, and an obliga-

tion to educate
larger

and

assist the

weaker members within the

community.

AND ITS HISTORICAL


men

SIGNIFICANCE.

79

So the eighteenth century ideas of a humane cosmopolitanism began to


instil into

the thought of a change of

policy in the economic struggles of European states at the

very time

when

the international rivalry had reached

its

highest point.

After the

War

of

Independence of the
South American

United

States, after the liberation of the


it

colonies from the mother countries, after

became
(for

increas-

ingly difficult to maintain the old, harsh, colonial policy,


after international law

had made progress

which no

one fought more energetically than Frederick the Great),

and

after the

promulgation of the doctrine of mutual gain

in international trade, there arose the possibility of a

more

humane
ment,

contest.

Undoubtedly we must regard


reached
its
first

this

move-

which

great high-water mark,

though accompanied by excessive and one-sided eulogy, in


the Free Trade period 1860-1875,

as one

of the great

advances made by mankind.

One might

say that

the

seventeenth and eighteenth centuries created the

modern

national economies, and that the nineteenth has humanised


their relations to

one another.

This being our point of

view,

we

are able to raise ourselves above the suspicion of

desiring, without qualification, to represent the embittered

commercial

strife,

the privateering

and colony-conquering

wars of England, the prohibition and navigation laws of


the eighteenth century, as presenting an ideal for our

own

day.

Yet must we declare, with equal emphasis, that the


literary-ideological
cantile

movement

that assailed

the old meruseful


as

system set out from Utopias,

which,

they were as a leaven for the transformation of public

80

THE MERCANTILE SYSTEM.


life.

opinion, were, nevertheless, very remote from real

Does

it

not sound to us to-day like the irony of


in
1

fate, that the

same England, which


its

750-1800 reached the summit


its tariffs

of

commercial supremacy by means of

and naval

wars, frequently with

extraordinary violence, and always

with the most tenacious national selfishness, that that England at the very same time announced to the world the
doctrine
tified,

that only the

egoism of the individual

is

jus-

and never

that of states
stateless

and nations; the doctrine


all

which dreamt of a

competition of

the indi-

viduals of every land, and of the


interests of all nations?

harmony

of the

economic

To

our own time has the task been given to survey both

periods from a higher standpoint; to give their due value


to the theories

and

ideals, the real psychical

motives and the

practical results of both ages;

and so

to understand them.

Sept. 30, 1883.

APPENDIX
THE PRUSSIAN SILK INDUSTRY
CENTURY.
1892.

I.

IN

THE EIGHTEENTH

HAVE already attempted, some years

since, to

shew

that

the whole mercantilist policy can only be understood


it is

when

regarded as a stage and a means in the creation of a

larger

economic and poHtical community.

As the mediaeval

city-states

and the great lordships became more and more


life,

incapable of serving as adequate organs of social


their contests

as

one with another degenerated into a chaos

of anarchy,

it

became necessary

that
be,

all

conceivable means

should be employed,
iron,"

if

need

through " blood and


states.

to erect territorial

and national

Enlightened

princely despotism was the representative and leader of this


great progressive

movement

movement which was

des-

tined to annihilate the freedom of the Estates and corporations,^ to establish

freedom of trade and great markets


all

at

home, and
economic
foreigner.
rich,
1

to

combine

the resources of the country,

as well as financial

and

military, in face of the

Those

states

most quickly became powerful and


this centralising

which carried out


which

tendency with the


;

[In the sense in


i.,

Adam

Smith uses
81

this

term

Wealth of Nations,

bk.

ch.

X., pt. 2,]

4)6 "ffcfi

82
greatest

THE MERCANTILE SYSTEM.


energy.

Germany remained

so

far

behind the

greater Itahan states, behind Burgundy, Holland, England,

and France, behind even the smaller northern


it

states,

because

remained

fast
its

bound by mediaeval forms

because, more-

over, even

greater territories were too small, too fragthis

mentary, too far from the coast, to pursue

centralising policy like the western states of Europe.

new kind of The


Ger-

Great Elector

made

a beginning

he tried

to create a

man-Baltic coast state and a naval power, and thereby to


seize

the Doitiinium

Maris

Balfici,

and the commercial


to

control of the east of Europe.


fail,

The attempt was bound


to

because Holland, Sweden, Denmark, Poland, Austria,


interests

and Russia had


position

opposed

it,

and because the


state,

and extent of the Brandenburg

as

it

then
as
it

existed, were inadequate for the task.

Abandoning,

must, the main feature of

its

plan, the attempt to secure

maritime power, only one way remained open by which


the
its

young military and Protestant


economic ends.

state

could arrive at

And

this

was to endeavour, upon the

agrarian and feudal foundation furnished by the provinces

grouped around Brandenburg, to create an industry which


should
rival

the
all

civilised

states

of the

west,

using

for

that purpose

the

devices of state-aided immigration,

of encouragement of industry,

and of protective

tariffs.

Such an industry would have


to control

alike the

power and the duty


raise

the

domestic market, to
httle

the

decaying

handicrafts of the
bit

rural

towns, to free

the country

by

bit

from dependence on west-European trade and


to strengthen
its

credit,

and

influence

on Poland and the

other eastern states.

APPENDIX
On
school
this path, then,

I.

83

Frederick WilHam

I.

and
;

his ministers
this

entered with conscious purpose and energy

and out of

came Frederick

IL,

who pursued

the

same object

with greater boldness and genius.

To

the question

how

it

was that Frederick regarded the


so very important,
if

silk industry as

occupying

not the most important, place in such

a policy. Dr. Hintze gives a simple and conclusive answer.^


Starting with the generally recognised
fact
that,

before

our modern age of iron and coal, the centre and summit of
industrial

development were

to be

found

in the finer textile

manufactures. Dr. Hintze shews us

how economic supremfrom Venice, Genoa,

acy passed from Byzantium to

Italy,

Florence, and Lucca to the greater Italian states, Milan and

Piedmont, from Italy to Spain and France, and thence to

Holland and England

and how

this transference

was always
rise

accompanied, partly as

effect, partly as cause,

by the

of

the silk industry by the side of the woollen industry.

In no

case was the production of raw silk itself the cause of the silk
industry, as
is

sometimes supposed
;

the actual production


in Italy

of
it

silk

took place elsewhere

and even
silk

and France

was a consequence of the

industry,

and came comsilk

paratively late.
industries with

France and England had created their


all

the political resources at their disposal


sacrifices.

and with the greatest

In Lyons in 1667 there


In the great

were counted 2000 looms,


1

in

1752, 9404.

denindustrie,

is the author of the 3rd volume of Die preussische SeipubUshed (through Parey, Berhn) by the Royal Academy of Sciences, 1892, as the first instalment of Acta Borussica : Denkmdler der Preussischen Staatsveywccltiiiig iin 18. Jahrluuidert. In this volume of Dr. Hintze's is given a " Darstellung," or narrative, based upon the documents in the first two volumes.]

[Dr. O. Hintze

84

THE MERCANTILE SYSTEM.

economic struggle of England against France, the prohibition


in

1688 of the importation of French

silk

wares into Eng-

land was, perhaps, after the Navigation Laws and the victories
at sea, the

most

telling blow.^

Up

to that time silk

goods to

the value of ;^ 500,000 had every year gone from France to England; in 1763 the English silk industry gave employ-

ment

to 50,000 persons.-^

But not only the great

states, the

smaller ones also, desired at any price to have a silk


facture of their own.

manu-

The

Italian traders

who

first

brought

the silk wares were followed by Italian weavers and dyers.


Ziirich

and Basel, Ulm, Augsburg, and Nuremberg, had a


as early as the sixteenth century.

good many silk-workmen


work.

In Antwerp in the seventeenth century 2000 looms were


at

In the Netherlands, Amsterdam, Haarlem, and


this industry
;

Utrecht became rich through


it

and from thence

passed to Hamburg.

Belgian and French refugees joined


in bringing
it

the Italian

workmen
About
and
silk
1

to

Denmark, Sweden,

and Russia.
able velvet

700 Leipzig had already a consider-

business; in

1750 a thousand looms

were
J.

at work.

In the Palatinate, in Munich, and in Vienna,


to call a
;

Joachim Becher^ had made various attempts


industry into

silk

existence

by means of companies
like

all

through the eighteenth century


1

attempts were
is

made
the

in

[Adam Smith remarked


which would
iv.,

in 1776 that " the silk, perhaps,

manu-

facture

suffer the

most by freedom of trade," Wealth of


withdrawal of protection see

Nations, bk.

ch.

ii.

For the

results of the

the account of the silk manufacture in C. Booth's Labour


People, vol.
i.]

and Life of the

2 [An account of John Joachim Becher (1625-1685), a universal genius and somewhat of a charlatan, is given in Roscher's Geschichte der Nationalokonomik, p. 270 on which is based the notice in Palgrave, Dictionary of Political Economy, vol. i.]
;

APPENDIX
every

I.

85

German
It

capital.

But they succeeded, on any conPrussia,

siderable
Berlin.

scale,

only in

and there especially


that,

in

can certainly be maintained

though

Hamwas as

burg and Leipzig, Krefeld and Utrecht had greater faciUties


in reaching a market, in all other respects Berlin

well fitted as
silk

many
;

other places to support a flourishing


also
it

industry

and

that,

according

to the ideas

of

the eighteenth century,


as

was bound to make the attempt

soon as the provinces of Brandenburg and Prussia were

conceived of as forming an independent economic body


ready for rivalry with Holland and England and France.

[Then
facture.]

follows an account of the measures of the govern-

ment, and of the organisation and progress of the manu-

We

have watched the foundation, upon a stubborn


at last a

soil,

of

an industry which reached


excellence
;

high degree of technical


all

and

this

by the use of

the measures that a

consistent mercantile policy could prompt.

In scarcely any

other case have like measures been apphed with so wide a

sweep and such steady persistency.

In scarcely any other

case have they been so carefully, step by step, adapted


to

the

concrete

conditions.

What we have had under


to the factory

our consideration has been a domestic industry, which

had already
yet
in

partially

gone over

form, but

which

the

workpeople

were

protected

by

gild

regulation,

state

control,

and

governmental

inspection.
for

We
great

have

had

to

do with an industry producing


and
foreign

inter-state

market, and

with

under-

86

THE MERCANTILE SYSTEM.


and
factors-

takers^ {Ujiternehmej')

{Ve?ieger) occupying

the

most

difficult

position

conceivable.

In spite of

all

the state
to

support

and protection they received, they had


the
shifting

contend with a stern competition, with


of the

chances

market, and

with

task,

both

in

the

matter of manufacture and in the matter of trade, of the

utmost severity.

The attempt on

the whole succeeded.

BerUn

in

1780where

1806 stood almost on a

level with all the other places


It

the silk industry was carried on.

was mainly through


factory

the silk industry that Berlin

became an important

town, and the town whose inhabitants were distinguished by


the best
taste

in

Germany.

Of

course

people in Berlin

could not yet produce quite so cheaply as the manufactures of

Lyons which were three centuries older;

in

many

1 [This term was used precisely in the sense of the German Unternehmer though the later specialby Adam Smith ( Wealth of Nations, bk. ii., ch. ii. ised sense occurs in blc. ii., ch. i). It was employed rarely and with anxiety as " not familiar to an English ear in this sense " by J. S. Mill {Principles of abandoned by President Francis Political Economy, bk. ii., ch. xv., i n) A. Walker ( The Wages Question, p. 244) as " an impossible term in political economy;" and for some time replaced in economic writings, following It has recently been recalled to Mr. Walker's example, by entrepreneur.

among others by Mr. W. Smart (in his translation of BohmBawerk, Capital and Interest, 1890), and Professor Alfred Marshall {Principles of Economics, 1890, bk. i., ch. iii.) as being, in Mr. Marshall's words,
scientific use,
"

the best to indicate those

who

take the risks and the

management
(literally

of busi-

ness as their share in the


2 ["

work of organised

industry."]
F<?7'J-(:/^jj-

Verleger comes ixom Verlag=Vorlage,


i.e.

something

shot-forward,

advanced).

The

Verleger sometimes advances to the small


;

producers merely the price of their products sometimes he hands over to them the raw material and pays piece-wages sometimes even the chief tool or machine belongs to him, as e.g. the loom " K. Bucher, Die Entstehung
;

der Volkswirthschaft (1893) p. 106. For this there is no current term in tlie English of to-day. Factor was very generally used in the eighteenth century

APPENDIX

I.

87

of the finer wares they were behind Krefeld, Switzerland

and Holland
Saxony.

but they had caught up with


yet got so far in

Hamburg and
1806 as to be

They had not

able to meet with unconcern the fluctuations produced by

the great war

a period

of long and terrible impoverish-

ment, together with the sudden abolition of the gild system,


of the old regulations and of
all

state support, as well as

the removal of the prohibition of importation.

But

since, in
at
is

the province of Brandenburg,

1503 looms were again

work

in

1831, and as
all,

many

as

3000

in

840-1 860,

it

clear, after

that

most of the business concerns that had

taken root before 1806 were able to maintain themselves


for at least a

couple of generations even in the current of

free international competition.


sixties

And

the

fact that

in

the

and

seventies, as living

became dearer

in Berlin,

and

the competition of Krefeld and of foreign countries

became
some

more
parts

intense,

most of the BerHn

men
the

of business, capitalists

and workmen, turned


of the
old

to other occupations,
like

while
of

industry,
in

business

dyeing,
state,

maintained themselves

an even more flourishing


silk

this fact is

no proof that the Berhn


its

industry of the

eighteenth century was not in

place.

The
and
tial

task set before the

men

of that time was to secure for

the real centre of the Prussian state a share in the industries,


in the

forms of industry, that

constituted the essen-

features of the higher civilisation of western

Europe.

in this sense; but

each industry had


{i.e.

its

own

particular

word

for

men

in this

position, as e.g. the clothiers of the woollen

England.

Putter-out
is

manufacture of the west of of looms), which was used in the hosiery trade

of Nottingham,

perhaps the mo5t exact equivalent of Vrlegeri\

88

THE MERCANTILE SYSTEM.

The

prosperity of the silk manufacture in a distant and iso-

lated

fragment of the

state,

close to the
for its

Dutch

frontier,

namely Krefeld, could not make up


east.

absence in the

Again and again did Frederick the Great endeavour

to induce the

von der Leyen brothers


;

to

with a part of their business

but

all

in

move eastward And so he vain.

had
way.

to

make an
over the

effort

to

reach the same end in another

In the course of his reign he spent some two million


silk

thalers

industry,

more indeed than

for

any

other branch of manufacture.

And what

did

he obtain

therewith?

That he had an industry which every year prothalers or more, says the

duced wares worth two million


cantihst;

mer-

no!

that he created an industry

which

in the
I say,

nineteenth century disappeared, says the free-trader.


the two
million thalers are to be looked

upon

as an expen-

diture for schooling, as

money

spent on education, which

engrafted on Berlin and the eastern provinces those powers

and

aptitudes, those
state

manners and customs, without which


terri-

an industrial

cannot endure.-' In these feudal

tories with their impoverished country towns and craftsmen,

both the undertakers and the workmen were altogether wanting

who were

indispensable for the finer manufactures aim-

ing at the world-market.

The

introduction of foreigners

and the laborious training of natives could be the work only of a political art which realised both its object and
its

materials.

It

is

significant that at first

we

are

met by
while

Frenchmen and Jews among


chiefly

the factors, and by foreigners,

Lyonese and

Italians,

among

the workpeople
It

in 1800, natives prevail in

both

classes.
silk

might with truth

be said, that by their services to the

industry the French

APPENDIX L
and the Jews repaid the Prussian
toleration.
It

89

state for

its

magnanimous

was

in this

way

that the best Jewish famihes

of BerUn, the Mendelssohns and Friedlanders, the Veits and the Marcuses, gained their reputation and social position,

and

at the

same time turned the purely mercantile Hebrew


one
:

body

into an industrial

they themselves

changed

in

character in the process, and


state

grew

side

by side with the

and

society.

Most important of

all,

Berhn
and

in

1800

had a working
business

class of great technical skill,

and a body of
;

men
silk

possessed of capital and ability

this fact

remained the great


or no the

result of the policy of Frederick,

whether

industry survived.
least merit of that policy that
it

And
stantly,

it

was not the

con-

and with
:

clear understanding,

laboured towards a

double end
tive

to create a flourishing industry

by

state initia-

and

political

means, and then, as quickly and as comset


it

pletely as
thriving
fluous.

possible, to

on

its

own

feet,

and create
super-

private businesses,

and

so

render

itself

Similarly, in a place like Krefeld,

where the favour-

ing conditions afforded by the neighbourhood of the

Dutch
tariff

created

considerable

industry

without protective

or subsidy or regulation, the king did not think of state

intervention

the most he did was to support the practical


brothers, because he saw

monopoly of the von der Leyen

that this great house was capable of elevating

and guiding
his

the whole industry in an exemplary fashion.

Moreover,

administrative wisdom, running not along the lines of rigid

schemes, but in accordance with the


before him, shewed
itself

men and
this

circumstances

precisely in

contemporary
\

application of such divergent systems of industrial policy

90
in

THE MERCAiVTILE SYSTEM.


Berlin the most

extreme

state control

and

in Krefeld

complete

laissez-faire.

The truth is, he himself, in his innermost nature, was just as much the philosophical disciple of the individualistic
enlightenment {^Aufkl'dj-ung) of the period as the
representative of princely absolutism.
sian state
last

great

Under him

the Prusfree-

was based as much on

legal security

and on

dom

of thought and individual opinion as upon discipline,

obedience, and subordination.


rare qualities in himself, he

Had

he not combined these

had not been the great king,

and on

his

death the Swabian peasant would not have asked

the naive question ''Then,

The yelping

curs, the

who is to govern the world?" men astride of principles, who did


died, understand
will
still

not understand him

when he They

him and

his

policy no better now.

less

understand the

great problem of the creation of states

and national econadvances, the

omies.
state

It

lies

in this

that as civilisation

and the national economy diverge more and more


its

the one from the other, each a separate circle with

own

organs

and yet

that this separation

must again constantly


growing interaction, a

make way

for a unifying guidance, a

harmonious joint-movement.

And

the secret of great times

and great men consists


fold

in their taking

account of

this

two-

development

in their leaving individuals to

form themlife

selves, in

their allowing free play to individual

in its

various shapes,

and yet

in

tlieir

being able to bring the

newly emerging as well


the whole.

as the old forces into the service of

As

states get larger, as social relations


it

become
to reach

more complicated,
this

will

be increasingly

difficult

ideal

-^

that

economic

forces, while living for

them-

APPENDIX L
selves should yet entirely serve the state,

91

and that the

state,
all

pursuing
its

its

own
all

ends, should at the


its

same time place

might and

members

in

the true service of the

national economy.

The

Prussian state,

in

its

own

fashion

and

after the

manner of the eighteenth century,


ideal

more
it

nearly arrived at this

than any of the other states

of the time.
conditions
so

We may

well ask whether


difficult,

we

to-day, under

much more

have approached

more

nearly.

APPENDIX

11.

PRINCES AND TERRITORIES OF THE HOUSE OF

HOHENZOLLERN.

electors of brandenburg.
Frederick L, 1411-1440.
This Frederick (of Hohenzollern), the sixth Burggrave of

Nuremberg of

that

name, was made

Statthalter of the

Mark
to

of Brandenburg by the

Emperor Sigismund,
fallen, in

whom

the

Mark had

141

1,

and invested with the Margraviate

in 1417.

Frederick
1455.

II,,

1440-147 1.

Recovery by purchase of the

New Mark

(of

Brandenburg), sold to the Teutonic Order by the

Emperor Sigismund.
Albert (Achilles), 1471-1486.

John (Cicero), 1486-1499.


Joachim L, 1499-1535.
His brother Albert
(p. 29)

was Archbishop of Mag-

deburg, and became later xArchbishop of Mayence

(and so Elector).

Joachim

II.,

1535-1571-

John George, 1571-1598.


Final incorporation of the
I.

New Mark
appanage

(which Joachim

had granted

as an

to a

younger son,

John of

Ciistrin)

92

APPENDIX

II.

93

Joachim Frederick, 15 98-1 608. John Sigismund, 1608-16 19.


1609.

Opening of the War of Succession

in Cleves.

[The Elector of Brandenburg and the Prince of Neuburg disputed the succession to a group of Rhenish and Westthe duchies of Cleves, Juliers, and phahan territories, Berg, the counties of Ravensberg and Mark " A naturCountry, of fertile meadows, shipping ally opulent

capabilities, metalliferous hills

and, at this time, in con-

sequence of the Dutch-Spanish War, and the multitude


of Protestant Refugees,
industries
it

and rising quarter of Germany.


;

to be,

was getting filled with ingenious what it still is, the busiest Country lowing with kine the
;

hum
days.

of the flax-spindle heard in

its

cottages, in those old


is

...

Country, in our days, which

shrouded

at

short intervals with the due canopy of coal-smoke,

Carlyle. became involved in the larger struggle between the Protestant and Catholic parties, which brought about the Thirty Years' War, 1618-1648, and the territory was occupied for years by the Dutch and Spanish troops.]
loud with sounds of the anvil and loom."

and

The

dispute

16 18.

Succession to the

Duchy

of Prussia.

[Albert of Hohenzollern (grandson of Albert Achilles, through

a younger son) had, in 1511, become Grand Master of the Teutonic Order, ruling in Prussia. " It is a moory flat country, full of lakes and woods, like Brandenburg; spreading out into grassy expanses, and bosky wildernesses

humming with

bees

plenty of

bog

in

it,

but plenty

sand too, but by no means so high a ratio of it as in Brandenburg; tracts of Preussen are and Itixuriantly grassy, frugiferous, apt for the plough the soil generally is reckoned fertile, though lying so far
also of alluvial
; ;

mud

northward."
consent

Carlyle.

larized, Protestantism

In 1525 the Order was secuintroduced, and Albert, with the

of his suzerain, the

Duke

of Prussia.

In 1569 Joachim

King of Poland, became II. of Brandenburg

secured from the King of Poland the co-enfeoffment of the electoral family, with the right of ultimate succession

upon

failure of heirs to the Prussian branch.]

94

THE MERCANTILE SYSTEM.


George William,
1624.
i

6 19-1640.

Treaty of Partition of the Cleves inheritance,

giving to Brandenburg Cleves, Mark, and Ravensberg.


[This was confirmed by several subsequent
treaties, in 1629 but Brandenburg did not secure entirely
till

and other years

undisturbed possession

the close of the Thirty Years'

War; and
till

a definitive Partition was not accomplished

1666.]

Frederick William, 1640-1688


1648.

The Great Elector.


(Hinter-Pommern),

Treaty of WestphaHa, assigning to BrandenEastern

burg

Pomerania

[Brandenburg had claimed the whole on the death of the last Duke in 1637: the rest of Pomerania was now assigned to Sweden.]

the

Archbishopric

of

Magdeburg

and

the

Bishopric of Halberstadt,
[These lands had become Protestant, and had for some time been governed by members of the Brandenburg house
as nominal
'

bishops

'

or as

'

administrators.']

and the Bishopric of Minden.


1656.
to

Surrender by the King of Poland of his claim

homage

for Prussia

confirmed by the Treaty

of Oliva, 1660.

KINGS OF PRUSSIA.
Frederick
I.

(of Prussia, III. of Brandenburg) succeeded

to the

Margraviate of Brandenburg and appen-

dant territories in 1688; and, with the consent


of
the

Emperor, assumed
d.

the

tide

King of

Prussia in 1701;

1713.

APPENDIX
Frederick William
1720.
I.,
1

IT.

95

713-1740.

Acquisition of Stettin, and Western

PomePeene,

rania

(Vor-Pommern) up
islands of

to the River

and the Frederick

WolUn and Usedom.


1

II., the

Great,

740-1 786.

Thus, at the accession of Frederick the Great, the Prussian territories


fell

into three groups, separated from


:

one

another by the lands of other princes

i )

the central and

most important group, composed of Brandenburg proper,

Magdeburg and Halberstadt, and Pomerania


Poland

(2) Prussia

proper, separated from (i) by a province of the


;

kingdom of

(3) the Rhenish territories, Cleves and Mark, and

the outlying

Ravensberg and

Minden.

The subsequent
the successful

history of Prussia has


effort to

consisted

largely in

obtain possession of the intervening lands, and so

to secure geographical continuity.

Of

the early political

history of Brandenburg, the


the

first
still

volume of
furnishes

Carlyle's History of Frederick


far the

Great

by

most complete,

as well as entertaining,

account in English.

Ed.