Schmoller - The Mercantilism System

BOOK 330. 15 1.SCH56 c.
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
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

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
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-

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 wôolfells 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

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

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

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

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

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

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

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

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 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

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

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
(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

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
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.

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

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
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

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
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

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
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

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
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
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
(ÔberadmiralitdtscoUegiuiii)
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

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
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

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
dêtats
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

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

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

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

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

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
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

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 ê/
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

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

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
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

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
wêapons.
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

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
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

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
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 {Âufkl'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

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.

Schmoller - The Mercantilism System

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BOOK 330. 15 1.SCH56 c.

SCHMOLLER # MERCANTILE SYSTEM AND

and 2nd Editions

THE MERCANTILE SYSTEM

ILLUSTRATED CHIEFLY FROM PRUSSIAN HISTORY

BEING A CHAPTER FROM THE

STUDIEN UEBER DIE WIRTHSCHAFTUCHE POLITIK FRIEDRICHS DBS GROSSEN

Gushing & Co.

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

GuSTAV ScHMOLLER was born

After studying at the University of

Tubingen, he became in 1864 extraordinary, and

ordinary, Professor of the PoHtical Sciences {Staafswissenschafteti)

at the reorganised University of Strass-

burg, and in 1882 was

succeed Adolf Held at

the University of Berlin.

In 1887 he was elected a

of Sciences, and also appointed

Historiographer for Brandenburg.

he took part in the foundation on that occasion of

and has exercised great influence over

Since 1878 he has edited a substantial series of

Social Science {Staats-

Sozialwissenschaftliche Forschungen), largely the

and from 1881 onward he has conducted the

Jahrbiich filr Gesetzgebimg, Verwaltung

His most important writings hitherto have been the

History of Economic Opinions

Gerfnany during the Reformation {Zur Geschichte der

nationalokonomischen Ansichten in Deutschland wdhre7id

der Reformatio7isperiode, in the Tubingen Zeitschrift fiir

History of the Small Industries of Ger-

mafiy in the igth Century {Zur Geschichte der deutschen

Kleingewerbe im ig. Jahrhundert, Halle, 1870)

Law and Economy

Ueber einige Grundf-a-

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

an Herrn Professor Dr. Heinrich von

Strassbuig Gild of Drapers

{Die Strassburger Tucher- und Weberzunft,

^liidies in the Economic Policy of Frederick the

des Gi'osseny in his

Jahrbuch 1884, 1886, 1887, and sepa-

Conti'ibutions to the Literary History of the Political

The Historical Evolution of

Business Utidertaking {Die geschichtliche Entivickelung der

1890 and subsequent

on Economic Doctrine arid Method

has been incessant and wide -reaching

a Hst of his writings

for the foregoing account.

the Me7'cantile System here translated, with

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

dated Sept. 30, 1883, and was pub-

have been added in Appendix

as dealing with the

some pages from

Report on the volumes

of Acta Borussica which deal with the Silk Industry, read

before the Berlin

Sciences on April 21, 1892,

19 and 23, 1892, and afterwards separately.