Unseen Hand in British History - Ian D. Colvin




IV. An Experiment in Prohibition

In the reign of Elizabeth we have seen the victory of a national policy, and we have found the chief cause of this victory to lie in the harmony between the organized trade and the Government of the nation. In the reigns of the Stuarts we shall see the opposite condition lead to the opposite effects: discord between the Government and the interest of the nation leading to civil war. These civil wars, which have been put down by some to a constitutional difference between Parliament and king, and by others to a religious difference between bishop and presbytery, were due in reality to a quarrel between the Government and the merchants of England.

We might trace the quarrel from the first year of James's reign. James, who feared his own shadow, was more afraid of England than of Spain when he was in Scotland. When he came to England the fear of Spain remained. Moreover, the unseen hand of Spain was busy in his Court. The Queen, an Imperialist and a Catholic, needed no money to favor Spain; but Mrs. Drammond, her first lady of the bedchamber, drew a comfortable stipend from the Spanish Embassy. There is good reason to believe that the Earl of Northampton, Lady Suffolk, and Sir William Monson all took pensions from the same source. Gardiner accepts the view that Robert Cecil himself "condescended to accept a pension of 1000, which was raised to 1500 in the following year." He relies on a statement of expenditure by Villa Mediana, the Spanish Ambassador, which is hardly sufficient evidence for those who have studied the corruption of Spain and the character of Cecil.

However that may be, the first thought of James was to make peace with Spain, and "the proclamation," says Gardiner, "was for the most part received in sullen silence, only broken here and there by exclamations of "God preserve our good neighbors in Holland and Zealand." Without being too cynical it may be permitted to surmise that anxiety for "our good neighbors" was not the only reason for the unpopularity of the peace. The prosaic and matter-of-fact Anderson mentions a more powerful motive. The King, he says, recalled "our numerous privateers which the English merchants during Elizabeth's reign had so successfully employed against Spain." "And he at once by that means," Anderson adds mournfully, "put an end to the gallant warlike exploits of our people."

But the chief reason why the peace was unpopular was that Spain and Portugal together for they were then united under one crown claimed a monopoly of the trade in the West and East Indies. As long as that claim was made there could be no real peace between the rising power of England and the decaying power of Spain; and, as a matter of fact, the whole subject was ignored in the treaty. The main issue between the two countries remained open.

James, of course, could claim certain solid, plausible advantages. Thus, for example, Article iv:

"The merchandise of England, Scotland, and Ireland may be freely imported into the Spanish Dominions without being obliged to pay the new impost of 30 percent, and shall pay none but the old duties."

Spain, he might say, was the chief source of treasure, the most valuable market for manufactured goods. Why trouble to sail to India and America for gold and spices, logwood and cochineal, when we could obtain these commodities by direct trade with the ports of Old Spain? But the logical conclusion of such an argument was that England should renounce its claim to an independent trade in the East and West Indies and depend upon Spain for spices and treasure. It was a conclusion that James did not advance and no Elizabethan would accept.

Having made this unstable peace, James proceeded to ally himself with the Free Trade Party of those times, the party, that is to say, which denounced the Merchant Adventurers, the East India Company, and all "regulated" or joint-stock trades as "monopolies." This word "monopoly," my readers will remember, had been used as a poisoned dart by the Hanseatic League against the Merchant Adventurers. Lubeck had represented to the Imperial Diet that the Merchant Adventurers were a monopoly, and therefore illegal; the Imperial Diet had accepted that view and had banished the Merchant Adventurers, and Elizabeth had replied with her own hand, in her own Latin, that her merchants were no monopoly, and that it ill became the Hanseatic League to make such a charge.

But nations have a short memory, and security in war is forgotten in peace.

The literature of this quarrel between the Merchant Adventurers and the Free Traders is voluminous and heated. There are pamphlets not a few upon both sides, and we are not altogether surprised to find that the most active pamphleteer against the company was a Dutchman, Gerard Malynes, whose position as a "Merchant Stranger" made him not altogether disinterested. Wheeler, the secretary of the Merchant Adventurers, ably, if ponderously, upheld the cause of his company.

The controversy is officially summed up on the Free Trade side in the "Instructions Touching the Bill for Free Trade" which recorded the Parliamentary debates of 1604. The journalist asserts that:

"all the clothiers and in effect all the merchants of England complained grievously of the engrossing and restraint of trade by the rich merchants of London, as being to the undoing, or great hindrance, of all the rest; and of London merchants three parts joined in the same complaint against a fourth part; and of that fourth part, some standing stiffly for their own company, yet repined at other companies."

James for the moment was on the popular side: there was no doubt some truth as well as much plausibility in the complaints.

Yet some of the arguments used against the Company by the Crown betray a dangerous ignorance of realities. The Company had pointed to the organization of trade in other countries: "the East Indies in Lesbone (Lisbon), the House of Contraction there, the Fontaco at Venice, the Trevesana at Nuremberg." The Government replied that:

"there are places of assembly for merchants . . . but without restraint of trading from any man," and went on: "how traffic by this freedom doth flourish in other countries, and principally in the Low Countries, far more than in ours, is apparent to all the world."

Now as a matter of fact the Fondaco and the Dutch and Portuguese East India Companies had been, or were, among the strongest and most exclusive trading corporations in the world. The Dutch, both in their East Indian trade and Greenland fisheries, were merciless to all interlopers, whether Dutch or English, as numberless complaints testify. Of the Dutch home trade, although the Dutch themselves called it free, the English used to say that every Dutch republic was a trading corporation. Misselden, writing in 1622, says that the merchants of Holland had been moved "to incorporate themselves and keep courts, to confront the Merchant Adventurers, which they never did before." But if the Dutch home trade was free, the chief foreign trades of the Dutch were in the hands of strong and privileged joint-stock companies.

From this it is an easy step to the position that "free traffic" is "the breeder and maintainer of ships and mariners, as by memorable example in the Low Countries may be seen."

The Merchant Adventurers had pleaded their services in war: among their defenses is a long list of ships they had contributed to the Navy; but there is to be no more war, and therefore precautions necessary to war may safely be relaxed:

"Under our gracious Salamon, a Prince of Wisdom and Peace, we are like to be in league or amity with all nations; whereby as there will be greater freedom abroad to trade to all places, so fit to have greater at home for all persons to trade. This alteration of times may make that fit now, which in times of hostility might have seemed unfit."

Considering that Spain had just refused to open the East and West Indian trades, "our gracious Salamon" was rather stretching the truth; but the noble cause of Pacifism has never been restrained by such sordid considerations as matters of fact. The Government proceeded to endorse the German slanders upon the Merchant Adventurers. The effect of the monopoly in:

"keeping up their commodities for their own private lucre . . . hath been the cause of so many edicts of the Empire against the Company of Merchant Adventurers, which hath driven them so often to shift their marts, and is the cause that our merchants are so generally hated, no other nation Christian either using or enduring such restrained companies in matters of merchandises."

It would seem to follow from these arguments that the Government favored the abolition of the companies: if they did they shrank from the conclusion. The companies were to remain; but certain of their rules which seemed to favor a monopoly were declared illegal.

One trade, however, was made altogether free, the trade with Spain. The argument freely used in those days was that a regulated trade was necessary in the case of dangerous and hostile countries; but a free trade was sufficient with countries at peace with ourselves. The trade with France was a free trade, and it was argued that as there was peace with Spain the Spanish trade should also be free. But unfortunately for that argument there was, as we have seen, no real peace with Spain on account of the contraband trade with the Spanish monopolies.

"Since the treaty with Spain was concluded," says Spedding, "Spanish officers had not only stopped and searched English merchant ships on suspicion of containing contraband goods, but had in some cases conducted the inquisition, after the example of their own higher powers, by help of torture. Remonstrances had been made by the Government, and civil answers had been received; but two years had passed, or thereabouts, without bringing any redress."

The merchants, following the old English custom, applied for letters of marque in order that they might make reprisals, and although foreign policy was strictly the business of the King in Council, their petition was laid before the House of Commons. The House of Commons, after referring the matter to a committee, sent a message to the House of Lords asking for a conference "touching joining in petition to His Majesty for redress of Spanish wrongs." The Lords fell into line: feeling was very strong on the subject, and the two chief members of the Government, Salisbury and Northampton, took it in hand to subdue the storm. Their speeches (of June 17, 1607) were reported by Bacon and are given by Spedding.

Cecil's speech might serve as a commentary on the Free Trade debate of three years before. The merchants, he said, were authors of their own miseries:

"For since the dissolving of the company which was termed the monopoly, and was set free by the special instance of this House, there hath followed such a confusion and relaxation in order and government amongst them, and as they do not only incur many inconveniences, and commit many errors, but in the pursuit of their own remedies and suits they do it so impoliticly and after such a fashion, as, except lieger ambassadors (which are the eyes of kings in foreign parts) should leave their centinel, and become merchants' factors and solicitors, their causes can hardly prosper."

For the rest, Cecil gave the Spanish merchants cold comfort. They must respect Spanish law, which the Spaniards had the right to make for themselves, and Spanish justice, which was proverbially slow. As for the trade of the Indies:

"The policy of Spain doth keep that treasury of theirs under such lock and key, as both confederates, yea, and subjects, are excluded of trade into those countries . . . such a vigilant dragon is there that keepeth this golden fleece." King James never recognized that such a right "could grow to the crown of Spain by the donative of the Pope." The result was that this trade was left "in suspense, neither debarred nor permitted. The tenderness and point of honor whereof was such, as they that went thither must run their own peril."

As for "Letters of Mart" or reprisal, did the merchants realize that Spain would have the advantage at that game? an argument which has a strangely familiar sound: "The stock of goods of the Spaniard which is within His Majesty's power and distress is a trifle; whereas the stock of English goods in Spain is a mass of mighty value." As for the petition, it was both derogatory to the King and impolitic to have laid it before the House of Commons, seeing that such matters were secret and concerned peace and war.

Northampton, being a man of less sincerity (he was in Spanish pay), took a more flattering course. Our merchants, he said, "were the convoys of OUT supplies, the vents of our abundance, Neptune's almsmen, and fortune's adventurers"; but as to their grievances, they ought to have sent them to the King and not to the Commons, etc.

And now we are to enter upon a sharper and more disastrous conflict between James and his Merchant Adventurers. We have seen that in the reign of Elizabeth it was the policy of State to advance the cloth industry of England from weaving to dyeing and finishing. This policy was carried on with circumspection, for it was a ticklish and difficult business. The Flemish, who at one time wove the wool of England, had been driven stage by stage to be the cloth-finishers and dyers for England. Here they made a stand for a very long time, opposing every attempt of England to secure the whole circuit of the cloth trade with a counter-measure. Elizabeth went no further than to force the Merchant Adventurers to export one dyed and finished cloth for every ten "whites," as the rough undyed and unfinished English cloths were called, and at the same time no pains were spared to advance the "exquisite knowledges" of dyeing and finishing.

When the Fury of Antwerp and other atrocities drove the cloth-finishing trade into Holland, we may surmise that the close alliance between the Dutch and English prevented the claims of English clothiers from being pushed to an extremity. But there was also this practical danger, that Holland controlled access to the Rhine Valley, the chief market for English cloth, and had also a flourishing trade in the Baltic. If the Dutch were unfriendly they could do great injury to the English cloth trade. And, still further, the Dutch cloth-makers were always pressing the States to protect them against English importations a claim which would have been vastly strengthened by any violent attempt to force the position upon the English side.

For these reasons the Merchant Adventurers had reconciled themselves to exporting "whites" to Holland; but there was a strong opinion in England that thereby the Company was injuring the English cloth industry.

This sentiment is well expressed in a pamphlet published among Sir Walter Raleigh's remains though some doubt has been cast upon its authorship.

"That there were," says the author, "about eighty thousand undressed and undyed cloths annually exported from England; whereby four hundred thousand pounds per annum for fifty-five years past (being above twenty millions) has been lost to the nation, which sum, had the said cloths been dressed and dyed at home, would have been gained, beside the further enlarging of traffic, by importing materials for dyeing, and the increase of customs thereon. Moreover there have been annually exported in that time, in bayes, northern and Devonshire kersies, all white, about fifty thousand cloths, counting three kersies to one cloth; whereby five millions more have been lost for want of dyeing and dressing.

"Our bayes are sent white to Amsterdam, and there dressed, dyed and shipped for Spain, Portugal, etc. where they are sold by the name of Flemish bayes, setting their own town seal upon them, so that we lose the very name of our home-bred commodities, and other countries get the reputation and profit thereof."

Here was a tempting project. The Merchant Adventurers professed that it could not be done, whereupon Alderman Cokayne stepped into the breach.

Sir William Cokayne was a very great merchant and citizen of London. His father had been Governor of the Eastland Company, and as he succeeded to the business we may suppose that he was chiefly a Baltic merchant. In 1619-20 he was Lord Mayor of London; in 1620 his eldest daughter married Charles Howard, afterwards the second Earl of Nottingham, and his six other daughters married so well that it was said of him, "his spreading boughs and fair branches have given both shade and shelter to some of the goodliest families of England."

In March 1612-1613, the Merchant Adventurers upon the one side and the Cloth Workers and Dyers of London upon the other appeared before the King in Council and stated their views for and against the prohibition of the export of whites.

On July 23, 1614, the Crown issued a proclamation prohibiting the exportation of cloths undyed and undressed after November 2, and revoking all special licenses for the same which had been granted to the Merchant Adventurers and others. Coke, who is followed by Rapin, gives an injudicious account of the inner history of this transaction: "Alderman Cockaine and some rich citizens, having, as was said, promised Rochester, Northampton, and the Lord Treasurer (Suffolk) great sums of money to procure them a patent for the dressing and dyeing of cloths; and that the King would seize into his hands the Charter of the Merchant Adventurers," etc.

The accusation of bribery is, I am afraid, supported by such documents as survive.

The old company resigned its charter, "knowing by experience that the market would not bear such a restriction." Cokayne's new company took over the privileges, undertaking that the dyeing and dressing would be done in England. The Dutch replied by prohibiting the importation of dressed and dyed cloths from England. On February 23, 1615, John Chamberlain writes to Carleton that "the new company are perplexed with complaints of the clothiers, who cannot sell their cloth. Leave is granted for its export undyed and undressed, till the workmen are provided, which is thought hard on the old company." On May 25 he reports:

"The great project of dyeing and dressing cloth is at a stand. The clothiers complain that the cloth lies on their hands, and the cloth-workers that they have less work than before. The new company quarrel and the old company, too rashly dissolved, are requested to resume the trade and set all straight again."

On August 12 following Bacon writes in some anxiety to the King concerning the powers which it is necessary to give the new company:

"For as men make war to have peace, so these merchants must have license for whites to the end to banish whites." The King should therefore "take a profit of them in the interim," which would act as "both spur and bridle to them to make peace aright to your Majesty's end."

The King in fact is to allow the new company to do what the old company had been doing, and to make them pay for the privilege. But things go from bad to worse. On February 25, 1616, Bacon writes to the King that the new company had "broken with your Majesty" for the fourth time. "First they undertook to dye and dress all the cloths of the realm; soon after they wound themselves into the trade of whites." Then they had "deserted their subscription"; that is to say, their members had not bought all the cloth they undertook to buy. The Privy Council had "wisely and truly discerned" that the actions of the new company are "unlawful and unjust." These things considered "whether your Majesty will any more rest and build this great wheel of your kingdom upon these broken and brittle pins, and try experiments further upon the health and body of your State, I leave to your princely judgment."

Bacon was afraid that the Dutch might even capture our cloth industry: "Nay I fear, and have long feared, that this feeding of the foreigner may be dangerous; for as we may think to hold up our clothing by vent of whites till we can dye and dress: so they (I mean the Dutch) will think to hold up their manufacture of dyeing and dressing upon our whites, till they can clothe."

Bacon therefore advised strongly that the patent be withdrawn from the new company and restored to the old, "and then that they among themselves take order for that profit which hath been offered to your Majesty." The only disadvantage here was that "the work of dyeing and dressing cloths which hath been so much glorified seemeth to be wholly relinquished." There was the alternative of a free trade in cloth "with this difference, that the dyed and dressed pay no custom, and the whites double custom." This course would have "popular applause."

"But," Bacon adds, "I do confess I did ever think that trading in companies is most agreeable to the English nature, which wanteth that same general vein of a republic which runneth in the Dutch and serveth to them instead of a company; and therefore I dare not advise to adventure this great trade of the kingdom (which hath been so long under government) in a free or loose trade."

In June Alderman Cokayne and the new company entertain the King at a banquet. According to one letter-writer James is given £1000 in a basin and ewer of gold. "Dyers and cloth-dressers with their shuttles and Hamburgians were presented to the King and spake such language as Ben Jonson putt in theyre mouthes." According to another the Prince of Wales also got £500 and Alderman Cokayne was knighted.

But even such interim profits could not disguise the fact that the cloth trade was at a standstill. A crisis came when the clothiers of Gloucestershire petitioned the Council that their cloth lay on their hands. James in a fury bids the Council "summon Sir William Cockayne and remonstrate seriously with him." His Majesty is to have "daily accounts "of the position, and if members of the company "fail in buying the quantities which they severally undertook," they are to be "threatened with punishment for their cozenage."

A letter from Bacon of September 13 shows that the position is getting desperate:

"Wiltshire is now come in with complaint, as well as Gloucestershire and Worcestershire, so that this gangrene creepeth on." His Majesty is advised to relieve the situation by prohibiting the wearing of any stuff made wholly of silk. This at least would "show a most princely care over thousands of the poor people; and besides, your Majesty shall blow a horn to let the Flemings know your Majesty will not give over the chase."

In the meantime the Dutch were going ahead with their cloth manufacture.

"A bounty," says Gardiner, "was offered for every fresh loom which was set up, and after a few weeks Carleton reported that as he went about the country to examine the progress that had been made, his ears were saluted with the busy sound of the shuttle in all directions."

By November the King is in a towering passion.

"His Majesty told Alderman Cockayne that if he had abused him by false information . . . his quarters should pay for it." And the same correspondent, writing a little later, reports "great distress in the cloth trade. The Hollanders and Alderman Cockayne blamed. . . ."

On January 4, 1617, Edward Sherburn reports to Carleton the sorry conclusion of the experiment:

"The Ambassadors are to be paid out of £120,000 to be borrowed of the City. . . . The new Company of Merchant Adventurers is dissolved, and the old Company restored, to the great content of the kingdom. It is thought that Alderman Cockayne will escape better than could be wished."

Rapin says that cloth was made a "free trade" as a result of this business. He is wrong. The Merchant Adventurers were restored to their privileges, and the occasion was used to exact sundry other "interim profits" by the King and his courtiers. How much the old company had to pay for the restoration of their privileges would be a difficult sum.

"The Merchant Adventurers," writes Chamberlain, "have given His Majesty £50,000 for protection from interlopers, which it is difficult to enforce, others claiming right of free trade, though several are imprisoned for it." This may or may not be the same £50,000 as is mentioned by Winwood: "The Merchant Adventurers will either pay £60,000 to the King, or perform the contract treated with Lord Fenton." One of the charges against the Earl and Countess of Suffolk was that they took £3000 of the Merchant Adventurers "to suffer their renewed charter to pass."

Nor did the mischief end there. The cloth trade continued to suffer from the shock. In March 1617 the dyers are "threatening to cut the throats of the old company, especially Sir Lionel Cranfield"; at the same time both they and the cloth-workers are petitioning the Merchant Adventurers to employ them "for relief of their great distress." Part of the cloth dyed during the experiment is unsold and unsaleable. There are complaints from the country and riots in London. Altogether a bad position.

Later we shall see the mischief done to the Crown by this sordid business. For the moment we are concerned chiefly with the experiment as part of our national policy. It was protection by strong measures by the prohibition to export a half-manufactured article. It was a failure because it was ill-considered and rashly undertaken. It teaches no lesson against protection as a national policy, and indeed it was defeated by a measure of protection or prohibition on the part of the Dutch. In due course dyeing and cloth-finishing came to England under a policy of Protection. But what it does teach us is that politicians who seek to effect at a stroke what is the work of years are likely to do more harm than good. And we are also instructed that in such matters there must be co-operation between the State and the trade. If the two work together much may be done; with the two at cross-purposes nothing and worse than nothing.