Unseen Hand in British History - Ian D. Colvin

I. The Merchant Adventurers

In my Germans in England I endeavored to show that the staple of our history through the Middle Ages was the long struggle for economic independence. There, as in a forgotten casket, lay the key to the national spirit and the national policy. I traced the upward course of England from "the wool farm of the Hansa" to a strong industrial Power; from the production of wool England ascended to the production of cloth, and this trade in cloth was gradually wrested from the hands of foreign merchants and shippers and transferred to English ledgers and English bottoms. National heroism blossomed from this material story as our English rose springs from our soil of heavy clay. I showed how the Crown for centuries was in pawn to the foreigner, and how it was rescued from that evil plight by the patriotism and ability of Englishmen. Thus, for example, Simon de Montfort wore the rough English cloth as a symbol of the nobility of English production; Warwick the King-Maker fought the German merchant on the sea; Sir Thomas Gresham "practiced" against him on the Antwerp Bourse and in the London Law Courts; and Queen Elizabeth, resting on her policy of production, raised England to be the strongest Power in Europe.

And the achievement was not only of power; but, what is better than power, security and harmony. The harmonious and well-attuned State of England sang in Elizabeth's time like a choir of birds in spring. We need not go so far as to endorse the dictum of Schmoller, that "the great and splendid deeds in State and economics are usually done when those invested with the power of might and justice are at the same time the leaders of the economic organization." All I would say is that the security and harmony of the State depend upon the co-operation of governors and producers.

We may then take up our story in this happy reign of Elizabeth and seek to find a national policy in the influences which made it fortunate. And first of all I would say that in that reign England achieved her economic independence.

In support of this statement let me call a hostile but contemporary witness, the Alderman of the German Steelyard, that is to say, the chief agent in London of "the Society of German Merchants of the Holy Roman Empire." The letter, which is dated February 23, 1581, is given by the excellent Sartorius in his history of the Hanseatic League.

"How abominable," exclaimed the Alderman, who was writing to the Worshipful Senate of Lubeck, "how abominable that such a Company (the Merchant Adventurers) could suppress the Hanse, considering that at other times a few Hanse towns have kept the whole kingdom of England under their thumbs."

The complaint of this German merchant of the sixteenth century illuminates our whole subject, for it might be taken as the aim of a national policy never to get under the thumb of any other nation. And if England was extricated from that disagreeable position by a company, it must be of profit to study what manner of company it was, and how it won this great victory in the war of liberation.

It was, first of all and above all, national, and called itself the Fellowship of Merchant Adventurers of England. It was not a joint-stock company, nor did it belong to any one town, although it had its headquarters in London; but was nothing less than the organized and regulated export trade of the nation. Its secretary, John Wheeler, gives us the best account of it. The company, he says, consisted of

"a great number of wealthy and well-experimented merchants of London, Yorke, Norwich, Excester, Ipswich, Newcastle, Hull, etc. . . . linked in company for the exercise of merchandise and seafare, trading in cloth, kersie and all other, as well English as forraign commodities vendible abroad . . . according to the ordinances, lawes and customs devised and agreed upon by the common consent of all the merchants free of the said fellowship." "They are not," he adds, " as fewe as 3500 persons in number, enhabiting London and sundry cities and partes of the realme, especially the townes that lye conveniently for the seas." They were all wholesale merchants in a great way of business, being forbidden to sell "by retayle or cuttinge out anie kynde of merchandise, nor shall keepe open shoppe or shewhouse upon paine of three skore pounds."

They included "almost all who traded in the woolen manufacture to Germany and the Netherlands," and as the great English export was then cloth, and Germany and the Netherlands the chief market, we may take it that these 3500 merchants represented the greater part of the foreign commerce of England in so far as it lay in English hands. Within their own sphere of influence "between the rivers of Somme in France and the Sea we in the German Sea" they had a monopoly well protected by Royal charters, and the whole fellowship was governed by an authority to which all the members took an oath of obedience.

Their interior organization and methods of trade are not so much to our purpose. But it may be mentioned in passing that they did not trade with a joint stock; but each with his own cloth and his own factor to sell it. And yet they did not compete one against the other, but were "regulated" upon lines of mutual help and good fellowship. Every merchant could only export the quantity of cloth allowed to his rank by seniority. In his first year a Freeman of the Fellowship was allowed to ship 400 cloths; in his fourth year 450; in his fifth year 500, and so on till the limit of 1000 cloths was reached at the fifteenth year of his fellowship. The quality of his cloth and his prices of purchase and sale were alike supervised. He was bound in obedience to "Mr. Governor or his Deputy and Assistants," and in good fellowship to the members of his profession. And if such regulations should shock those lawyer-politicians who believe in free trade forevery one but themselves, I would only reply that the Inns of Court are one of the last remaining relics of a system which once covered every activity of life.

But what is of first importance to our subject is that this company, both by its own laws and the law of England, was national in its functions and constitution. In those days, which are now so much despised, the English merchant did not consider himself merely as an individual bent on gain by legal traffic, but as one engaged upon a national work. The ideal is beautifully put by Thomas Mun, who wrote a little later than our period but had not forgotten its high traditions.

"The love and service of our country," says Mun, "consisteth not so much in the knowledge of those duties which are to be performed by others, as in the skilful practice of that which is done by ourselves; . . . for the Merchant is worthily called the Steward of the kingdom's stock, by way of commerce with other nations; a work of no less Reputation than Trust, which ought to be performed with great skill and conscience, that so the private gain may ever accompany the publique good." The Merchant Adventurer must be, first of all, a "natural-born subject of this realm."

In the Laws and Ordinances it is laid down that "no persone whatsoever not beinge a true subject of his kynges Majestie . . . nor persone not borne of father and mother bothe Englishe" is eligible for membership. Moreover, no one married to a foreign woman might become a member, and no member could hold real property abroad. These are not only the rules of the company, but are laid down in the Royal Charter by which the company had legal right to exist. The charter of 1564 stipulated that if any Freeman of the Fellowship:

". . . marry or take to wife any woman born out of this realm of England and other our Dominions or shall at any time or times hereafter purchase obtain get or have to himself or to any person or persons to his use or upon any confidence or trust any lands tenements or hereditaments in any of the said parts or places beyond the seas out of our Dominions that then and from thenceforth . . . the same person . . . shall be ipso facto disfranchised off and from the said Fellowship of Merchant Adventurers of England" forever.

Thus the Merchant Adventurers were not only English by birth but English by interest. Moreover, they were bound by oath "by Almighty God to be good and true to your Sovereign Lord the King." And the Oath went even further:

"And if you shall know any manner of person or persons, which intend any hurt, harm or prejudice to our Sovereign Lord the King or unto his Land, or to the Fellowship aforesaid, or Priveliges of the same, you shall give knowledge thereof, and do it to be known to the said Governour or his Deputy: and you shall not color or free any Foreigner's Goods which is not Free of this Fellowship of Merchant Adventurers of England."

All these stringent laws and regulations are only to be explained by the fact that the company was a national economic weapon forged in and for a national economic struggle. And this struggle was with no less a foe than the German Cities, the "inveterate enemies," as Wheeler calls them, of the Merchant Adventurers. Indeed I have ventured to suggest that the company was modelled on the Hanseatic League, as the League was no doubt modelled on the Italian Cities and they perhaps on Carthage. Thus we find the Venetian Navigation Law becomes the German Law of "Hanse goods on Hanse ships" and the law of the Merchants of England as expressed in our Navigation Acts. The rules of the Merchant Adventurers against marrying a foreign woman or holding foreign property are also derived from the Hanseatic League.

The League owed its strength to its organization. The united Cities of Germany directed by Lubeck were powerful enough to enthrone and dethrone kings and maintain Governments in their pay. They regulated the commercial policy of England and secured under English customs preference not only over other foreigners but over the native born. To fight this great organization the whole strength of English commerce had to be drilled and regimented, banded and bound together by oath and good fellowship. The Society of Merchant Adventurers was in fact a mercantile army which used its united resources to fight that power which held England under its thumb. The Elizabethan merchant knew too well the organized strength of the enemy to believe in the modern doctrine of unrestricted competition.

In the time of Elizabeth the English Government worked in such happy concord with the Merchants that it would be puzzling to say how far the foreign policy of England was the Queen's and how far the Company's. Elizabeth, we might say, came to the throne as the head of a national movement. Mary had leant upon the Emperor and upon Spain. The Hanseatic League, which had openly insulted Anne Boleyn, carried the Imperial eagle on its coat of arms. While Mary lived it had hopes of recovering its privileges lost in the reign of Edward VI, and was in fact reinstated in some of them. Its position as the chief carrier of English cloth and of Baltic produce, the monopolist of Norway, Iceland, and Russia, the engrosser of the spice trade of Portugal, and the coiner and moneylender of Northern Europe, had created in England a national opposition founded on the national interest. As the Empire was in general alliance with Rome and controlled Venice, this party was Protestant; as it rested on English manufacture it favored protection, and as Elizabeth was derived from the family of a Merchant Adventurer and was Protestant in faith, it stood for Elizabeth against the Catholic and Imperialist Mary. Such was the Party of the Merchant Adventurers upon which Elizabeth leaned for support. And the working alliance so formed is the key to Elizabeth's policy.

We see it first of all in finance. In 1553 the Adventurers and the Staplers together had taken charge of the King's debts and so obtained the King's support against the Hanseatic League. In the reign of Mary their influence working in the Privy Council checked the foreign party of Philip. And when Elizabeth came to the throne their loans made her independent of the Empire. The tradition is that the Queen's first application to the Adventurers was unfavorably received. Thus, for example, Maitland, quoting Stow:

"Our intercourse with the City of Antwerp, which was formerly in a manner the Treasury of the Kings of England . . . being stopped by the Duke of Alva, and the Queen in great want of money, she was obliged to apply to the Company of Merchant Adventurers of the City of London for a Loan, who, thro' great inadvertency were thought to have spurn'd at the message, by bringing the Affair before a General Court where to Her Majesty's great dishonor, her demand was rejected by the holding up of hands. But this proceeding being highly resented by the Privy Council . . . divers of the Aldermen and Merchants, to the number of thirteen, and Lady Joan Laxton lent the Queen, for the term of six months sixteen thousand pounds, at six percent. . . . which was then prolonged on the same terms for six months longer." However that may be, the Queen came more and more to look upon her " mere merchants " for loans to support her policy. " The State papers of Elizabeth's reign," says Lingelbach, " are replete with the accounts of their financial operations, undertaken sometimes on their own behalf, sometimes in the interests of the Queen. Indeed it is no exaggeration to say that during Gresham's first sojourn on the Continent they practically financed the Crown."

And this dependence of the Crown on the Merchants was not, as we might gather from the unfortunate episode of 1570, regarded as a burden, but as part of the Company's policy. When the German Hanse lent money to the English Crown it controlled the policy of England; when the Adventurers became the Queen's Bankers the Mercers' Hall took the place of the Steelyard. This is indicated clearly enough by the letter of Sir Thomas Gresham to the Queen on her accession. The German merchants, he explained to her, had been the principal cause of the depreciation of the currency and the "undoing of this realm." Their privileges must never be restored, but the Queen should always lean upon her own "mere merchants," upon whom she could always depend in her necessities.

A national finance meant a national policy: if the Queen went to her merchants for money she was bound to support them in their enterprises, and take their side against the Hanseatic League and its friends in Europe. The Queen had to make herself independent of the foreign merchant, not only in money but in all other commodities necessary to war.

"Until whose time (Queen Elizabeth)," says Maitland, "tho' the Trade of the nation was carried on much more by the natives thereof than had been formerly, yet had the Society of the Dutch (German) Haunce at the Steelyard much the advantage of them, by means of their well-regulated societies and the privileges they enjoyed; insomuch that almost the whole trade was driven by them to that degree, that Queen Elizabeth herself, when she came to have a war, was forced to buy the Hemp, Pitch, Tar, Powder and other Naval Provisions which she wanted of Foreigners and that too at their rates. Nor were there any stores of either in the land to supply her occasions on a sudden but what, at great rates, she prevailed with them to fetch for her, even in the time of war, her own subjects being then very little Traders.

"To remedy which, she fell upon the consideration how she might at home have a well-grounded dependence, to have those necessary commodities by her, that so she might not want them when she most needed them; and after great deliberation, no better expedient could be found by the said Queen and her Council than by encouraging her own subjects to be Merchants, which she did by erecting out of them several Societies of Merchants, as that of the Eastland Company and other Companies; by which means, and by cancelling many of the privileges of the fore-mentioned Dutch Haunce Society, the trade in general by degrees came to be managed by the natives of this realm. And consequently the Profits of those Trades accrued to the English Nation; Trade in general and English Shipping were increased; her own Customs vastly augmented; and, what was at first the great End of all, obtained, viz., that she had constantly lying at home, in the hands of her own subjects, all sorts of naval Provisions and Stores, which she could make use of as her Occasions required them, without any dependence on her Neighbours for the same.

"And thus by means of the erecting of the forementioned Societies and preserving and encouraging that of the Merchant Adventurers, was the trade at first gained from Foreigners to the Natives of this Realm, to its inestimable Advantage."

This excellent summary is true in spirit but errs in detail. The Queen did not create these Companies. The Merchant Adventurers boasted a more ancient lineage. They had a charter from John, Duke of Brabant, as far back as 1248, and in 1399 received "a very beneficial and ample charter" from Henry IV. The Eastland Company, as Maitland himself tells us, dates from the sixth year of the same reign, and the Russia Company was promoted in the reign of Edward VI, and held its charter from Mary. But it was the virtue of Elizabeth that she backed her Merchants as they had never been backed before, and took measures also to protect the industries which furnisher the wares they exported.

Almost all Europe, from Archangel to the Levant, was parceled out among her Merchant Adventurers. The Russia Company sailed round the North Cape to the frozen waters of the Arctic; the Eastland Company took its name from the southern shores of the Baltic; the Merchant Adventurers in the Netherlands we have already seen; and Merchant Adventurers were organized for the trade with Italy, with the Levant, and with Turkey. All these companies were Merchant Adventurers. The separation grew from groups within the main organization. Thus the Russia Company consisted of some London and Bristol Merchant Adventurers who resolved to exploit the North Cape route with a joint stock, but most of the Merchant Adventurers remained merely in fellowship for mutual support.

"The Companie of Merchant Adventurers," says Wheeler, "hath noe banke nor common stocke, nor common factour to buye or sell for the whole companies, but everie man tradeth a part and particularlie with his own stocke, and with his owne factour or servaunt."

It is important to remember that these Associations of Merchants were not Companies in the modern sense; but were united in fellowship, much as our lawyers and doctors are now united, for the government of their calling and the protection of their interests at home and abroad. If a group of them united to trade with Russia or Spain they could still belong to the Society. Thus the mercantile interest of England in Elizabeth's time was organized for special purposes but united in the general interests, so that it could bring its whole influence to bear upon any one point.

In foreign policy they are a power. They support Russia against Danzig and Poland and bring home in triumph a Russian Ambassador to London. They bribe the German Emperor himself. In 1544 we find the Merchant Adventurers of Newcastle contributing to a "sesse" for a gift of 1000 to the Emperor for the prosecution of his wars and the maintenance of their privileges.

We gather from the resentment of Danzig that they were also suspected of bribing the Order of the Teutonic Knights, for it was the partiality of that Order to the English which prompted Danzig to transfer her allegiance to Poland. When the Duke of Alva turned them out of Flanders, the Queen no doubt on their behalf granted a pension to the Counts of East Friesland for the privilege of settling at Emden. The waning power of the Hanseatic League, even with the assistance of the Emperor, was not sufficient to turn them out of Germany.

"The aforesaid Adventurers Company," says the Imperial bull of 1597 which sought to enforce the Imperial statute of 1582 "have erected a special Societie, Staple, Colledge, Confederacie and Alliance, by means whereof they have not only made diverse and sundrie Monopolish Prohibitions, Treaties and Accordes, hurtfull to the Commonwealth of the Holy Empire, against us, and against the rights and ordinances of the said Empire, and against all use of Merchants, but have also raised cloth and other wares, according to their own wills, to such a dearnesse that the price thereof is almost as high again as it was wont to be when the Hanses might use their privileges."

It was the Merchant Adventurers as much as the Royal Navy which defeated the Spanish Armada.

"In 1587," says Lingelbach, "some of their members were instrumental in delaying the payment of the Spanish bills drawn on the bank of Genoa, and by still further turning the mercantile credit against Spain in the marts of the Netherlands the Adventurers delayed the Armada for a year. In the same year 110 ships now held in readiness by the Merchant Adventurers were ordered to proceed to watch the Duke of Parma off Holland."

Thus we begin to perceive the inner meaning of the foreign policy of Elizabeth. Its main purpose was the economic independence of England, and that end was sought, not by the Government alone, but by the Government and the Merchant Adventurers of England acting in co-operation. The liberation of England from the German thumb was the main work in hand. To that end alliance was sought with Russia and Denmark: with Russia in order to obtain commodities necessary to shipping; with Denmark which, however, remained coy and difficult to secure the passage of the Sound for English ships. The "outlying" cities of the Netherlands, which had never been admitted into the Hanseatic League, were encouraged in their wars with the League and with Spain. When Flanders and Brabant shut out English cloth at the bidding of Philip, England bribed Emden, Stade, and Hamburg to smuggle English cloth into the Empire. And as the German Merchant financed the American and Indian trade of Portugal and Spain, England by blockading Flanders struck at the jugular vein of the Imperial system. And so we might trace English policy, always "finding a vent" for English cloth and fighting the Imperial mercantile system in France, in Italy, and in Turkey, Elizabeth not disdaining to use even the Porte against the Empire. And everywhere her Merchants, acting as her agents and intelligencers, bound to one another and to her by oath, by instinct, and by interest, worked secretly and powerfully in Courts and in Bourses, on sea and on land, fighting, exploring, " practicing," for the strength and security of England. And the chief lesson left to us by our Merchant Adventurers is that if English commerce is once more to be victorious it must be organized upon a national basis.