The Unseen Hand in British History

by
Ian D. Colvin

Original Copyright 1917

All rights reserved. This book and all parts thereof may not be reproduced in any form without prior permission of the publisher.

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Table of Contents

Front Matter
Introduction
Merchant Adventurers
Well-Grounded Dependence
Jack and the Giant
Experiment in Prohibition
John Bull in Grocery Trade
Family Jars
State of Europe
Mountain of Gold and Iron
The Restoration
The Hand of a King
Balance of Power
Union
Stalemate Peace
Chatham
Naval Policy
Theory of Free Trade
Two Cases in Point
Conclusion

Introduction

Those who study our past without being innocent of our present must have felt a certain discontent with the stock reasons of history. They know that the motives attributed to the men of yesterday would not be sufficient to move the men of to-day. The student of politics would be considered a fool if he accepted the explanations of politicians for present events. Why then should the student of history accept the explanations of politicians for the events of the past?

The ruling motive in politics, as intelligent men know very well, is interest. Those resounding cries and plausible principles on which to the young and innocent the battle appears to be fought are usually the pretext, the flag, the color of action; men, and especially politicians, seldom avow their true motive, but nearly always wrap it up in some virtue, faith, or plausible abstraction. It is true that there are other motives which occasionally move men. And they may even seem for a moment more powerful than the more material incentives. But even where they are sincere they are not constant. It is constancy of pressure which gives strength and influence to organized interest. A few men on great occasions work for a cause: most men all the time work for their own ends. If we quarrel with this truth we quarrel with human nature. After all, men and nations must first of all live, and livelihood must therefore remain the basis of human action.

We are in danger if our statesmen look for motives higher than the interest of the nation, for the statesman is a trustee and has a crooked view of morality if he indulges his private convictions at the public expense. The director of a brewery who used his position to further his pet cause of teetotalism would hardly have the sympathy of the judge when his company came into the Bankruptcy Court.

It is probable, then, that as long as human nature remains as it is and has been, the unseen hand of organized interest will make history, and the most that a nation may hope for is that this unseen hand should be native and friendly and not alien and hostile. And it is the purpose of this book to show, by examining a segment of our history, that England is most happy when the national interest and the Government work together, and least happy when our Government is controlled by the unseen hand of the foreigner.

My book on The Germans in England, although it had a more modest intention, was in some sort an essay upon English history in the Middle Ages. For it attempted to show that the main plot of our story was the struggle between a national interest and a foreign economic tyranny. The Hanseatic League, according to its own agent in London, at one time held England "under its thumb." And the revolt against this German domination was only brought to a successful issue, after a struggle lasting three hundred years, in the reign of Elizabeth. That great Queen headed a National Party which expelled the German, and established the economic and, therefore, the political independence of England.

The Spanish marriage was part of the design of the Hanseatic League to re-establish its supremacy in England, a supremacy shaken in the tragically short reign of Edward VI. Here again evidence recently published confirms my view.

In the Calendar of State Papers (Spain) for the year 1553, edited by Mr. Royall Tyler, the archives of Vienna, Simancas, Besancon, and Brussels furnish a full account from the Imperial side of the marriage negotiations. While they are proceeding, a Hanseatic Embassy is in London negotiating the restoration of the Hanseatic privileges. The two negotiations go hand in hand. On June 13 the Emperor writes from Brussels to the Imperial Ambassador in London, Jehan Scheyve, that

". . . as the men of Cologne and the other towns are our subjects of the Empire," "he must assist the ambassadors those towns are sending to England to solicit for the re-establishment of the ancient privileges and liberties enjoyed of old in England by their inhabitants."

Lord Paget, Master of the Household, who, according to Mr. Tyler, "had specialized in Imperial affairs" and was "anxious to recoup heavy losses suffered under Northumberland," was the willing tool of the German Ambassador. Dr. Gardiner, Bishop of Winchester, the Lord Chancellor, was less willing, but assented to the restoration of the privileges, which was confirmed on October 24, 1553:

". . . the said Towns shall continue, the said decree notwithstanding, to bring into and carry out of England all manner of goods, and carry on their trade according to the privileges they enjoyed before the publication of the said decree."

Simon Renard, Scheyve's successor, reports to the Emperor his arguments with Gardiner concerning the marriage. The Chancellor agreed it was "a great offer, a great match, an earnest of great affection," but he had his doubts:

"He did not know what the merchants of England would say to it, except that it was intended to enrich foreigners by opening the gates of the country to them and impoverish its unfortunate inhabitants. When the privileges of the Stillyard were . . . restored . . . the English merchants had complained and displayed dissatisfaction. I made answer that if the Queen approved of delay I would not be able to disagree. . . As for the objections that might be made by the merchants, I thought the alliance would mean riches and advantages for them rather than poverty, because navigation would be safer and trade freer."

The sly Renard goes on to report how he immediately informed Paget, who informed the Queen, of the Chancellor's objections, with the result that "the Queen was very angry with the Chancellor." Thus was the interest of England betrayed, and thus did Mary to gain the affections of a Prince lose the affections of her subjects.

Here, then, we see, not for the first nor the last time, the secret hand in the affairs of England. "We are betrayed by what is false within." The interest of the nation is sold by a needy courtier and surrendered by a weak statesman. Yet it is of good cheer to know that England had the power to free herself from this dependency upon a foreign economic system; that after long travail she gave birth to a National Government and a National Party which together raised her to economic and political freedom.

What were the forces which inspired that saving power? I am content to enumerate two: patriotism, or the spirit of nationality, and interest coinciding with patriotism. As to which of these two forces is the stronger in history I do not feel competent to decide. A friend who despises my material views suggests that none have died in this great war for interest, whereas millions have died for patriotism. It is a plausible point, and yet let us remember that this war is in itself a great national emotion, which is the reaction against injuries to the national interest. National hatreds and national antagonisms are the expression of economic rivalry. But if this be denied, it remains true that while men upon a great occasion are willing to die for patriotism, they live and work as a general rule for interest. It is a motive which never sleeps and never dies, but operates silently and secretly behind all the pretexts and pretensions of human action. When interest is in conflict with patriotism the State strikes feebly and uncertainly, and is found willing to betray. But when interest and patriotism unite in the Government, then it is resolute and bold: it fights with energy, power, and skill, and is terrible and unrelenting towards its enemies.

Thus we find England in a war with Spain acting with the whole force of her national strength, swiftly, resolutely, with the success that comes from whole-hearted action. The contrast between the action of England and Spain was marked by a shrewd contemporary. Giovanni Gritti, Venetian Ambassador in Rome, reports a conversation with Pope Sixtus V to his Doge and Senate:

". . . The King," said His Holiness, "goes trifling with this Armada of his, but the Queen acts in earnest. Were she only a Catholic she would be our best beloved, for she is of great worth. Just look at Drake! Who is he? What forces has he? And yet he burned twenty-five of the King's ships at Gibraltar and as many again at Lisbon; he has robbed the flotilla and sacked San Domingo. His reputation is so great that his countrymen flock to him to share his booty. We are sorry to say it, but we have a poor opinion of this Spanish Armada, and fear some disaster. The King should have sailed when we told him, in September of last year. Rapidity is of prime importance; what can the King do? He has no money," etc.

Now what was the secret of this contrast? In Spain the economic and military organizations were separate and hostile. The Spanish trade was financed from Flanders and Germany. The Hanseatic League supplied Spain with ships, naval stores, and munitions of all sorts at ruinous prices. Yet Germany was neutral in the conflict, and at least one Hanseatic city (Stade) had been bought by England and was acting in her interest.

The Spaniards hated the German and Flemish merchant, and with good reason: on the one side there was exploitation, on the other resentment, and with such relations there could be no harmonious action between the military and the economic organizations.

Contrast the position in England. Her Merchant Adventurers were a national organization two thousand strong, conducting almost the whole foreign trade of the country. They were all natural-born Englishmen, not allowed so much as to marry a foreign wife or hold real property abroad. They were bound by solemn oath to act as the secret agents of their country, and to report to their Government everything that seemed to threaten the national interest.

By operations on the Continental bourses they stopped Spanish credit, and delayed the sailing of the Armada for a whole year. And when the Armada did sail the Company sent out a fleet of no less than a hundred armed ships as its contribution to the national defences. In the one case interest and patriotism pulled together; in the other an unsound economic system was reflected in wasteful and inefficient preparations.

There are people who affect to believe that the sentiment of nationality is a modern growth, and hardly existed before railways, the post, and the Press brought all parts of a kingdom into touch with one another. I think, upon the contrary, that the sentiment of English nationalism was stronger in Elizabethan days than in our own. We find it expressed in letters of State, in the national drama, and even in mercantile correspondence with a passion which leaves no room for doubt.

We see it in the letters of the Queen. When the Duke of Anjou is proposed as her husband, she seeks an assurance that the Duke will not accept the offer of the sovereignty of the Netherlands:

"I dare not," she writes, "assure Monsieur how his greater matter will end till I be assured what way he will take with the Low Countries. For rather will I never meddle with marriage than have such a bad covenant added to my part. Shall it ever be found true that Queen Elizabeth hath solemnized the perpetual harm of England under the glorious title of a France's heir? No, no! It shall never be."

And we find this national spirit expressed in the policy of the great merchant companies, which set before themselves as their chief end the economic strength and independence of their country. This policy is so well expressed by the merchant Thomas Mun, who wrote his famous England's Treasure by Forraign Trade between 1630 and 1640, that I may take him as representative of the Elizabethan tradition.

"The Merchant," he begins, "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 whole purpose of his book, as we see in every page, is the economic strength and independence of his country by manufactures and a profitable trade. But for our immediate purpose it is only necessary to display the spirit by one noble passage:

"If we duly consider England's Largeness, Beauty, Fertility, Strength, both by Sea and Land, in multitude of warlike People, Horses, Ships, Ammunition, advantagious situation for Defence and Trade, number of Seaports and Harbours, which are of difficult access to enemies, and of easie outlet to the Inhabitants, wealth by excellent Fleece wools, Iron, Lead, Tynn, Saffron, Corn, Victuals, Hides, Wax, and other natural endowments, we shall find this Kingdome capable to sit as master of a Monarchy. For what greater glory and advantage can any powerful Nation have than to be thus richly and naturally possessed of all things needful for Food, Rayment, War, and Peace not only for its own plentiful use, but also to supply the wants of other Nations, in such a measure, that much money may be thereby gotten yearly, to make the happiness compleat . . . and indeed our wealth might be a rare discourse for all Christendome to admire and fear, if we would but add art to nature, our labor to our natural means. . . ."

The country, in fact, is to base itself upon its own wealth and manufactures: it must have "wares" with which to trade, lest, like Spain, it loses its treasure by exchange. National industry is the only true basis of a sound economy.

The national principle, then, inspired both the Government and the commerce of Elizabethan England, and it is this principle which underlies what is called the Mercantile system. The main object of the Mercantile system was not, as some suppose, a favorable balance of trade; it was nothing less than the independence and strength of the kingdom. In the dark ages from which England was emerging, England had been weak and dependent owing to her lack of shipping, of munitions, and of treasure. The source of naval power was the Baltic: it contained all those commodities without which sailing ships could not be built and rigged, and this source of naval power was commanded by the Hanseatic League. Again, in metals, in gunpowder, and in arms Germany commanded the market. Even the long English bow was brought from the north in Hanseatic ships.

The currency of Europe throughout the Middle Ages was the silver of the Empire, mined in Bohemia, the Tyrol, and elsewhere by powerful German-Jewish syndicates. When Spain discovered the mines of the new world this financial power extended its operations so as to exploit the discovery, and the Spanish fleets depended upon German finance. The mint and currency of England were operated by Germans; German capitalists underwrote our national loans, and England's financial dependence was one of the main reasons of her political dependence on the Imperial system.

All these wants it was the design of Elizabethan policy to supply. The national aim was to substitute a "well-grounded dependence" for a dependence upon foreigners. With this object Burghley brought over the Hochstetters and other German metallurgists who prospected for ore in the north of England and in Ireland; with this object the mineral and battery works were founded as a national enterprise; with this object also a whole series of statutes were passed into law for the protection of those "exquisite knowledges" of the handicrafts upon which the arming and equipment of soldiers and sailors depended.

To discover independent sources of "treasure" was one of the main objects of Elizabethan exploration; but another main object was to find a new Baltic free from "the badde dealings of the Easterlings" from which England might draw pitch, tar, masts for ships, flax, hemp, turpentine, salt fish, and all things necessary to shipping. Newfoundland, our first English colony, was hailed with enthusiasm as an English Baltic, and our Bristol fishermen laid the foundations of England's naval power by making themselves "lords of the harbors" of that island.

The exploration of Virginia had a kindred purpose. The staple trade of England, the cloth trade, required an independent supply of dyes: our Elizabethan economists were not content to be at the mercy of France, of Spain, and of Turkey for woad, logwood, lac, indigo, and the rest of those coloring materials without which the "exquisite knowledges" of English dyeing would have been in vain. Hakluyt is full of references to the search for these materials, a search evidently inspired by the master-minds which controlled the operations of our sailors.

Just as the North Cape route to Archangel was England's reply to a Hanseatic monopoly in the Baltic, so her first voyage to India was forced upon our English grocers by the hostility of Spain and the Empire in the Mediterranean and the Levant. The Muscovy Company cherished the grandiose idea of a river and caravan route from Archangel to the Caspian, opening a way to the East through Persia and Turkestan. But this route proving costly and dangerous the national enterprise of the East India Company was somewhat unwillingly undertaken.

It was undertaken unwillingly for several reasons. The national resources in shipping and seamen were small, and it was feared they might be wasted upon a costly and doubtful enterprise. Spices, and especially pepper, were then more important to our national economy than they are now, for England lived through the winter on powdered and pickled meats. But as India was a tropical country which, moreover, manufactured cloths and fabrics of all kinds for its own necessities, it was feared with some justice that there would be no "vent" in that quarter for English cloth, and that we should have to export our hard-won and much-valued "treasure" to buy goods which although important were costly and not of vital necessity.

Our grocers argued, on the other hand, that the monopoly, which the Dutch had wrested from Spain and Portugal, was forcing pepper to famine prices, and that the money invested in this trade would return like a spaniel "with a duck in its mouth." The enterprise was therefore permitted upon conditions. The number of ships engaged and amount of treasure to be exported were limited, and the Adventurers were bound to carry with them a certain quantity of English cloth to be marketed in the East. These conditions indicate how clearly understood and firmly held were the lines of our national policy at the opening of the seventeenth century.

But while these spacious and romantic world-enterprises fascinate the student, we should not forget that the chief interest of England in foreign policy lay nearer home. England's staple trade, as we have seen, was cloth suitable for wear in a cold climate, and her chief market was the Empire. To keep open the mouths of the Rhine and Hamburg to the English cloth fleets was the main object of English policy. Here we find the true explanation of our interest both in the balance of power and the independence of the Netherlands. Any Power which controlled the greatest entrepot of British trade threatened the very life of England. From the time of Burghley and indeed long before to the time of the younger Pitt and of Sir Edward Grey the independence (or the "neutrality") of the Netherlands has always been one of the master-keys of England's foreign policy.

II

Our history in the seventeenth and eighteenth centuries will be found to ring the changes upon these main themes. The Elizabethan harmony is changed to discord with the Stuarts, not because of religious and constitutional differences as some suppose, but because of deep-rooted economic causes which worked for change and revolution under the surface. James I and his courtiers were notoriously under the control of the unseen hand of Gondomar; English merchants could find no remedy against the corruption and tyranny of Spain; they had a Government which they could no longer trust.

But Gondomar's was not the only unseen hand which worked against the interest of England in the Stuart Court. The Dutch were suspected of a secret understanding with Spain; they had supplanted the Hanseatic League in the control of the Spanish foreign trade. Dutch ships had not only a monopoly of the Spanish coastal traffic, but had even become the carriers for Spanish America. In Russia and the Baltic, by a system of national corruption, Holland was engaged in closing both Archangel and the Sound to the English merchants. In Asia the massacre of Amboyna was only one of the many acts of violence by which our English grocers were driven out of the spice trade. For these grievances our merchant companies could obtain no remedy from the Stuarts.

Both James and Charles were suspected of being in Dutch pay, and the close correspondence between Holland and the Royalist cause was manifest in the Civil Wars. And the early Stuarts not only failed to protect English interests abroad, they were committed to a policy of hostility to the merchant companies at home. This quarrel between the Stuarts and the organized trade of England I have examined in some detail, as I take it to prove that the greatest calamity which can befall a country is discord between her economic and political organizations. The civil wars were financed by the merchants of England because Charles followed his father in robbing them both of their trade privileges and of their capital, while failing to give their trade any adequate protection abroad.

Holland, like Spain, neglected her manufactures: against the advice of her greatest statesman she came to depend more and more upon her carrying trade and her banking business. Cromwell, on the other hand, followed the Mercantilist policy of Elizabeth, being inspired thereto, no doubt, by the City companies on whose financial support his power was first founded. His war with the Dutch and his alliance with Spain have puzzled those historians who look for the springs of his policy in religious and constitutional grounds. If we stoop to more "sordid" considerations the puzzle is solved. England had long supplied the unfinished cloth which was worked up in Holland and sold to Spain for the gold of the Indies. Dutch ships carried English cloth to Spain; England was the journeyman, Holland the capitalist. In Cromwell's time Spain was no longer to be feared as a naval Power, but to be courted as a profitable market for English trade, and the Dutch commercial system interposed itself between England and Spain.

When the neediness and fanaticism of Cromwell led him to break with Spain he broke also with the City of London, and from that time the Mercantile interest worked for the Restoration. Charles II came back on the Mercantile ticket; and his national policy is evidently inspired, like the policy of Elizabeth and of Cromwell, by the great Merchant Companies. For a time we see the harmony of political and economic organization restored, and England as happy and contented as in the days of Elizabeth. But a new factor has begun to work, a new unseen hand begins to influence the policy of the Court against the interest of England.

France had imitated England in founding herself upon the power of production. Henri IV, Richelieu, Colbert, all worked for the industrial and naval independence of France. They organized trade, planted new industries, encouraged shipbuilding; both at home and throughout the world the political and military power of France supported her commercial power. From Italy she gained the "exquisite knowledges" of the silk manufacture; from England she smuggled over both weavers and wool; from Holland she attempted to wrest both the linen manufacture and the shipping trade; she formed alliances in the Baltic to secure herself in naval stores, and organized a shipbuilding industry superior in speed of production to those of England and Holland. Her geographical position and military power opened for her manufactures the feebly protected markets of Spain, the Empire, and Italy, and her port of Marseilles was used to give her command of the Levant and Constantinople. Gaining strength from home production she aspired to a world-commerce, and both in Asia and in North America her agents and explorers prepared the foundations of an empire.

It was the hidden hand of this new and aggressive Power which seduced the later Stuarts from the national interest. The methods of Louis XIV were simple and primitive. He provided Charles II with a French mistress and a French pension; and these practices were gracefully extended to embrace as many statesmen, politicians, and courtiers as were thought necessary to French policy.

Excuses have been made for Charles. His most cogent and most spirited defender is Dr. Shaw, the learned editor of the Treasury papers. Dr. Shaw's case is that Charles was forced by the niggardliness of his Parliament "to look abroad for means to square his income"; that in turning to Louis for help "Charles did nothing per se immoral or inimical to English interest," because "in Charles's day the enemy in the path (of our naval expansion) was not France, but Holland."

Now it may be possible for the moralist although it is impossible for the statesman to agree that it is no worse for a monarch to offer than to accept a bribe. But, in fact, Dr. Shaw is wrong. By 1672 Holland was already a declining Power; the declension had been noted even in the days of Cromwell, when the "mountain of gold" had been shattered by the "mountain of iron." And as England was conscious of the failing strength of Holland, so she was conscious of the growing power of France, a power founded, like England's, in wise navigation laws and the protection of industry. The English Parliament was niggardly because Charles was suspect. If the Government had been true to the pole-star of English interest, the English Parliament would probably have been generous. Thus both the Pitts, whose fidelity to the English interest was unquestioned, had only to ask and their needs were supplied.

However that may be, the dependence of the later Stuarts on a trade rival proved their ruin. The French Power extended until it embraced Spain and a great part of Italy, overran Southern Germany and threatened the mouths of the Rhine. The balance of power and the "vent" of English cloth were both threatened, and England was forced into a system of alliances to save Northern Europe from becoming a monopoly of the French cloth manufacture.

The choice of Hanover was popular both because it seemed sufficiently remote from French influences and because it covered Hamburg, now the greatest entrepot of the English cloth trade. A Hanseatic city which had at one time held England "under its thumb" was now contemptuously maintained as an English quay for the North European market.

The struggle between the manufacturing and maritime Powers of France and England forms the balance of our story. In this struggle we see an England reduced thrice to an inconclusive peace; thrice betrayed by lawyers and politicians, yet returning again and again to the true bent of a national policy which was in the end victorious. That policy was to strike at the sources from which the enemy drew his power, and it was for this reason that a war begun in Europe spread to the ends of the earth.

Both France and England drew a great part of their naval and economic power from North America and the West Indies. Cape Breton and the Newfoundland Banks were the nurseries of their seamen. From there France drew the supplies of fish with which she traded in Spain and the Mediterranean, where Bourbon influence and military power gave her command of the markets. From Canada France drew the timber to supply her marvellous shipbuilding yards, of which the organization and celerity were the wonder and despair of England and Holland. From Canada also she drew the peltries which gave her the Continental monopoly of the vastly profitable hat trade. Her plantations in the West Indies enabled her to supply Spain, Holland, and Germany with sugar, and thus from those great sources she commanded the most valuable trades in Europe, and supplied the armies which dominated the Continent.

Against such a Power England was sometimes tempted to despair, yet those politicians, like Bolingbroke and Bute, who were suspected of lukewarmness in the struggle she never forgave. Although France supplied the Continent with her commodities and manufactures, they were never allowed to enter the English market. England preserved her sugar-supply by maintaining the English market as the monopoly of her West Indian planters, and prohibited France from breaking into the British commercial system. Even when Bolingbroke seduced an exhausted country to the stalemate peace of Utrecht he was defeated in his design of opening the British market to French wines and brandies, for English trade being then organized upon a national basis had power to defend itself and the national interest against political betrayals. If the Mercantile system failed in Ireland and New England, owing to its egotism, it nevertheless succeeded in protecting England against that commercial penetration which is the most dangerous of all attacks upon the integrity of a State.

The commercial union with Scotland, until then an outpost of French commercial power, and the Methuen Treaty with Portugal were well-calculated blows in this economic struggle. But the master-strokes came when the master-mind of the elder Pitt brought the Government and naval power of England into complete harmony with her economic power. We shall not understand the policy of Pitt unless we realize that that statesman worked in co-operation with the merchants and city companies of London. The blows which he aimed at the Bourbon Power had their origin, not in his own mind, but in the minds of his advisers, the merchants of London. Cumming, the Quaker, prompted the capture of the French West African Empire, on which France depended for the labor which produced her sugar; and William Beckford drew up plans of campaign for Canada and the West Indies.

Pitt, like Marlborough, was betrayed by the politicians, yet his work established the supremacy of England's naval power and decided in advance the ultimate issue of the struggle.

If we examine the political economy of Adam Smith in the light of these historical considerations we see clearly the fallacies of his system. The factor of national power decided these great economic struggles; trade is seen to be, not a peaceful exchange to the mutual advantage of individuals, but a struggle between organizations and whole nations. One nation attempts to exploit another and to prevent its rival by force from access to a market or to a supply of raw material. Although Adam Smith writes of the wealth of nations, this question of the use of national power has almost no place in his system. He imagines an ideal world modelled upon a poetic conception of Tahiti, not a real world in which England fought with France for control of the sugar trade, or the Newfoundland Banks and drying stations. Where these national considerations force themselves upon him, as in his famous reference to the Navigation Laws, it is as an admission which threatens his whole system. Adam Smith imposed on generations which granted his premises because, like him, they were imperfectly acquainted with history. His premises being granted, his logic is invulnerable; but the whole structure falls to the ground when its foundations are examined in the light of history.

First France, as we shall see, and then England, allowed her policy to be guided by these Free Trade ideals. In the former case the result was the French Revolution; in the latter, the rise of the new German Empire to industrial and therefore to political power. Owing to the tyranny of space and time, I no more than glance in my last chapter at this latter development, which has its fruits in the present war.

It does not concern us that these struggles between nations are sordid, cruel, and immoral. Perhaps they are, perhaps they are not; but the fact remains that they form the staple of history; that they have always been waged in the past and, therefore, presumably will continue to be waged in the future. No statesman has the right to assume that human nature and the nature of nations, which have remained constant since history began, will change fundamentally in his day and generation. If he so presumes he will end by betraying his trust. The only safe rule is fidelity to a national policy founded upon national interest. What this policy is must be gathered from history and experience, not from morality and metaphysics. And if we look at the course of the present war, and then at the practice of a Chatham or a Burghley, we must conclude that England is best served when her rulers have the clearest conception of the relations between the economic interest and the national strength of their country.

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.

II. A Well-Grounded Dependence

The policy of England under Elizabeth is generally called "mercantile": the name does her policy something less than justice. I would rather call it national, since it was founded less upon the wealth than the strength and security of England. The merchant was supported as "the steward of the kingdom's stock"; he "found a vent" for English cloth, and supplied the kingdom with "treasure." But the policy of England was something more than this, something greater. It was to have "at home a well-grounded dependence"; it was that England should no longer "stand to the courtesy of strangers." It was, in short, to produce within the kingdom the essentials of national life.

We see this policy grow as much naturally as by design out of the circumstances. And especially we find it growing out of that "noble and rich commodity," English cloth.

Cloth, let us remember, was now the staple trade of England. There had been a time when the staple trade of England was mainly wool, a time when England was "the wool farm of the Hansa." For hundreds of years it had been the policy of the National Party in England to "drape" English wool into English cloth, and to market English cloth in English ships. There is no other commodity, says Hakluyt,

"that may set so many poor subjects on work, . . . that doth bring in so much treasure, and so much enrich the merchant, and so much employ the Navie of this realm as this commodity of our wool doth." Therefore, "ample and full vent of this noble and rich commodity is it that the commonweale of this realme doth require."

Here then is one main line of Elizabethan policy, to drape English wool and find a vent for English cloth, not only to "bring in treasure" and to "employ the Navie," but to set "many poor subjects on work." Any injury to the English cloth trade threw the whole realm into confusion "to the spoil," as Hakluyt says, "of the merchant, of the clothier, and of the breeder of the wool, and to the turning to bag and wallet of the infinite number of poor people employed in clothing in several degrees of labor here in England."

When we remember that it was the interest of Flanders to prevent Englishmen from draping their wool, and the interest of the Hanseatic League to prevent Englishmen from selling their cloth, we begin to perceive the origin of the various lines of England's foreign policy.

The story of our English woolen industry is so important to our subject that I may be forgiven for saying a little more upon it. It was the national industry, and yet it had been borrowed from Flanders. Edward III had rendered this great service to England; he had planted Flemish weavers.

"The Bang and State," says Fuller, "began now to grow sensible of the great gain the Netherlands got by our English wool, in memory whereof the Duke of Burgundy not long after instituted the Order of the Golden Fleece, wherein indeed the Fleece was ours, the Golden theirs, so vast their emolument by the trade of clothing. Our King, therefore, resolved, if possible, to reduce the trade to his own country, who as yet were ignorant of that art, as knowing no more what to do with their wool than the sheep that wear it, as to any artificial and curious drapery, their best cloths then being no better than friezes, such their coarseness for want of skill in their making. But soon after followed a great alteration."

By the plantation of what Fuller calls "Dutch men," England got "this treasury of foreigners." It was a gradual process carried on through centuries; even in Elizabeth's time many "Dutch men" were brought over for the "heightening of the manufacturers to a higher perfection." These latest immigrants were settled mainly in the East. Their branch of the industry was called "the New Drapery," and they were appropriate subjects for a church history, since they were obstinate Nonconformists.

But in the meantime I desire only to point out in passing that while it was Elizabethan policy to secure that the control of trade should be in English hands, an exception was made for foreigners who could teach her people either a new manufacture or the heightening of an old. A famous Dutch statesman, writing only a little later, sets forth the Naturalization Policy of Elizabeth:

"And tho," says Jan de Witt, "the Protestant merchants, by reason of the great peace and good situation of England, would have most inclined to settle there, yet were they discouraged from coming into a country where there were no city-excises or imposts on lands, or any other taxes equally charging all, whether inhabitants or strangers, but heavy Taxes and Customs laid on all goods imported and exported, by which foreigners and their children and grandchildren, according to the laws of the land, must pay double as much as the natural English: Yea, in the subsidies of Parliament, which extend to perpetuity on foreigners and their children, they must pay double assessment, besides which all strangers are excluded from their guilds and halls of trade and manufactures, so that none have the freedom there to work, either as journeyman or master workman, save in that whereof the inhabitants are ignorant."

Here then we arrive at an excellent national policy as regards foreigners: they are only to be admitted for the improvement of the national industry. And I find it stated elsewhere that when they were so admitted they were forced to employ English apprentices in order that their secrets might be learnt by Englishmen.

Cloth, then, was an imported industry, which it was Elizabethan policy to bring to greater strength and perfection. England felt herself strong in her cloth industry; her wool was the best; her labor was cheap; her falling rivers gave cheap power for her looms.

Thus Hakluyt, writing of the year 1582:

"The wools being natural, and excellent colors for dyeing . . . here also natural, in all the art of clothing then we want one only special thing. For in this so temperate a climate our people may labor the year throughout . . . and the people of this realm by the great and blessed abundance of victual are cheaply fed, and therefore may afford their labor cheap. And where the clothiers in Flanders by the flatness of their rivers cannot make walk-mills (fulling-mills) for their cloths, but are forced to thicken and dress all their cloths by the foot and by the labor of men, whereby their cloths are raised to a higher price, we of England have in all shires stores of mills upon falling rivers, and these rivers being in temperate zones are not dried up in summer with drought and heat as the rivers be in Spain and hotter regions, nor frozen up in winter as all the rivers be in all the North regions of the world, so as our mills may go and work at all times, and dress cloths cheaply. Then we have also for scouring our cloths earths and clays, as Walker's clay and the clay of Oberne, little inferior to soap in scouring and in thicking. Then also have we some reasonable store of alum and copperas here made for dyeing, and people to spin and to do the rest of all the labors we want not. So as there wanteth if colors might be brought in and made natural but only oil; the want whereof if any man could devise to supply at the full with anything that might become natural in this realme, he . . . might deserve immortal fame in this our Commonwealth."

This pleasant little pastoral of English cloth is taken, I should say, from a letter written by Hakluyt to one of our Merchant Adventurers, the "principal factor at Constantinople." Hakluyt charges him to discover all the secrets of the Turkish cloth trade. He is to send samples of Turkey-dyed cloth to the Dyers' Hall; he is to take with him an "apt young man" brought up in the art of dyeing, or to bring home skilled Turkish dyers and weavers in silk and wool, even if in doing so he has to bribe "some great Bashaw" or "insinuate yourself" into the favor of the French Ambassador (then the chief foreign Power in Constantinople). He is to learn all the secrets of Turkish dyeing,

"be they of herbs, simple or compound, be they plants, barks, woodberries, seeds, grains, or mineral matter, or what else soever." If "anile that coloreth blue" is compounded of a herb, he must get the seeds or roots, so that it may become a "natural commodity of this realm." "For thus was woad brought into this realm, and came to good perfection, to the great loss of the French, our old enemies." Saffron had also been brought into England in this way, and there were hopes that "sumack, the plant wherewith the most excellent blacks be dyed in Spain," might also be naturalized. The naturalization of all dyes was most important "to the benefit of this realm." There was "a wood called logwood or Palo Campechio," which was cheap "and yieldeth a glorious blue," but "our workmen cannot make it sure." He must therefore "endeavor earnestly" to discover the secret. There was also a certain seed called sesamum grown in Egypt and imported into Italy. It yielded oil, and might possibly prosper in this realm.

If, however, any of these dyes could not be grown in England, our merchants might have them planted in some other foreign country of suitable climate. "For if a commodity that is to be had of mere necessity be in one hand, it is dearly purchased." What Hakluyt would have thought of an England content to depend altogether upon one possible enemy country for its dyes we need not trouble to speculate. The Factor must make himself master of the English woolen industry before he leaves England, so that he might know how to modify our manufacture to suit Turkish tastes:

"In England we are in our clothing trade to frame ourselves according to the desires of foreign nations, be it that they desire thick or thin, broad or narrow, long orjshort." There was one "proviso always," "that our cloth pass out with as much labor of our people as may be, wherein great consideration ought to be had, for (if vent might so admit it) as it were the greatest madness in the world for us to vent our wool not clothed, so were it madness to vent our wool in part or in the whole turned into broadcloth, if we might vent the same in kersies. For there is great difference in profit to our people between the clothing of a sack of wool in the one and the like sack of wool in the other, of which I wish the merchant of England to have as great care as he may for the universal benefit of the poor. And the turning of a sack of wool into bonnets is better than both, etc. And also not to carry out of the realm any cloth white, but dyed if it may be, that the subjects of this realm may take as much benefit as is possible, and rather to seek the vent of the clothes dyed with the natural colors of England than such as be dyed with foreign colors."

Here we have a national policy in the woolen industry. Cloth is to be sold rather than wool; finished cloth rather than unfinished; the more highly worked cloths rather than the simpler fabrics; dyed rather than undyed; and dyed with English rather than with foreign colors. And all with the object " that the subjects of this realm may take as much benefit aa is possible."

And we see this policy of Hakluyt's letter translated into numberless statutes and acts of the Privy Council. Thus, for example, alum is necessary to the dressing and dyeing of cloth. The Medici had possessed almost a monopoly of alum giving a great advantage to the Florentine weaver. The alum used for English cloth had come from Italy and Germany a danger from the national point of view. Consequently we find many references to the search for English alum in our Elizabethan archives. Thus under June 1565 x:

"Indenture between Cornelius de Vos on the one part, and others on the part of the Queen, for the working of all manner of mines or ores of alum, copperas, or the 'liquors' of them, specially within the Isle of Wight."

Or, again, James Lord Mount joy writes to Cecil from Poole on May 22, 1566, thanking him for sending Dr. Julio, and reporting progress of the mineral, copperas, and alum works. And so it goes on throughout the reign until the alum industry is established in Yorkshire, and English cloth made secure in this respect.

Wool-cards are another essential of the woolen industry. They had been imported from Flanders, and made of German brass-wire another dangerous dependency. But this brings us into the great enterprise of metal production, for wool-cards, being made of brasswire, latten and zinc and copper must be found and worked, and these were German secrets time out of mind.

"Mining" says Janssen "is an essentially German art, and the German methods have been copied by all other nations . . . It was a German who discovered the veins of ore in Scotland, and taught the Scotch the science of mining. In the year 1452 the King of England imported miners from Weissen, Austria, and Bohemia to work the Royal mines."

Members of the Hanseatic League had farmed the tin mines of Cornwall as far back as the time of the Black Prince. And when Elizabeth required brass for wool-combs and ordnance she had to look to Germany for experts.

The Hochstetters I might describe as the Metall-gesellschaft of the sixteenth century. They were a numerous tribe whose headquarters were Augsburg. They had subjected the copper and silver mines of the Tyrol to what Janssen calls "a most wasteful and oppressive exploitation." They had in fact worked out many of their mines, and they had got into certain other little troubles. Thus, for example, Ambrose Hochstetter had tried to make a corner in quicksilver.

"He had," says Janssen, "bought up quicksilver to the amount of 200,000 florins, but he lost the third part of it, because in the meanwhile large quantities of the article were found in Spain and Hungary." Like some modern financiers he had "put on the semblance of being a good Christian," with the result that "not only princes and noblemen, but peasants, farmers, and servants placed their money with this merchant."

"Numbers of farm servants and others" so writes Clemens Sender of Augsburg "who did not possess more than ten florins, lent it out to him, thinking it would be in safe keeping, and that they should receive a yearly percentage." Janssen makes the pensive comment upon this human little story that "the Town Council built a prison for debtors on the occasion of Hochstetter's bankruptcy."

Whether these little troubles had anything to do with the migration of the Hochstetters, I do not know; but certain it is that we find them busily employed under Cecil. Joachinf Hochstetter, the spendthrift son of Ambrose of quicksilver fame, "often spent from 6000 to 10,000 florins on one banquet, and gambled away at other times ten, twenty, or thirty thousand florins." We may take it that when Ambrose was put in the new prison, son Joachim was glad enough to leave Augsburg. Joachim turns up in Scotland in the year 1526 as head of a group of Germans and Dutchmen who receive a grant for forty-three years of all gold and silver mines. "By 1631," as we are not surprised to hear, "it was necessary to pay the passages of the miners to their homes."

Daniel Hochstetter may possibly have been a son of Joachim. We hear of Daniel Hochstetter in England as early as September 10, 1564, when he goes into partnership with Thomas Thurland, "for working mines and minerals in certain parts of the realm." This was, in fact, a reconstruction of the "corporation for working mines in England" formed by the Queen as early as 1561, when Her Majesty signed an indenture with John Steynbergh and Thomas Thurland. The company in due course developed into the "Society of the Mines Royal," closely related with the Mineral and Battery Works started about the same time. I grieve to say that not only had the miners to be smuggled in from Germany by Gresham, but half the capital had to be raised in Germany. The Elizabethans are not altogether happy about these Germans. Hochstetter and his workmen are suspected of obstructing the search for "calamine stone" the Elizabethan name for the ore out of which spelter is refined; at another time the English shareholders complain that the profits are also absorbed by Hochstetter "and by none other." The work of prospecting was costly, but Cecil kept the Germans in money.

"It is joyful news," writes Hochstetter to Alderman Duckett, "that Mayster Secretary (Cecil) hath shown himself so friendly and forward in this our work of our mineral, and that his money hath been so ready . . . in the works of the mines there must be no want of money."

It is possible to trace a conflict between the English Government and the German capitalist for the control of these infant industries. Thus it is laid down in an indenture between the Queen, William Humphrey of the Mint, and a German called Christopher Shutz for the Mineral and Battery Works that there are never to be more than eight "strangers" in the partnership, and that their total interest is not to exceed one-third. Severe penalties are incurred for any concealment of transfer or ownership of shares. Hochstetter endeavors to evade such precautions with all the arts of the company promoter. He proposes (in 1565) to "join with him in company divers others, and in that respect doth mean to make divident of the commodities and profits" and "to reserve to himself some parts of the same and some parts of good will and friendship to dispose freely unto others." And he offers free shares to the Earls of Pembroke and Leicester, to Cecil, to Tarnworth, and to Alderman Duckett, "desiring that it may please them to accept the same in good part."

Moreover it is eventually discovered that behind Hochstetter and his German miners is the great German firm of Haug, which was eminent in the textile and spice trade but had taken over from the Fuggers mines in Hungary.

But the object with Cecil was something of which Hochstetter's sordid soul did not dream.

"Great cost," the Council writes to Lord Scrope in June 1559, "has been bestowed upon the copper works of the Royal mines near Keswick, far above any commodity that has come to the Company by them; for their desire was that Her Majesty and the realm might be served with that commodity to make ordnance rather than stand to the courtesy of strangers who served the realm as they pleased."

And W. R. Scott, speaking of these two mining companies, shows the national plan that underlay the whole undertaking:

"At first sight it would seem that its operations namely, the making of brass and wire were disconnected, but this was not so in reality, since both were used in the production of wool-cards. What is more striking is the existence in this undertaking of an 'integrated industry.' It owned 'calamine mines' in Somersetshire. Thence the ore was conveyed to Nottingham or London (the company had brass factories at both places), copper was purchased from the Mines Royal Society, and brass was made. In Monmouthshire the company was possessed of iron mines, whence it obtained ore to make 'osmond iron,' which was drawn into wire. Finally the wire, whether of iron or brass, was used in the manufacture of wool-cards."

But more important even than wool-cards, the brass was made into ordnance. At the beginning of the reign the Imperial Power controlled munitions, save for a small proportion made in England. We might trace this dependence through the archives. Thus, for example, a paper without date of the reign of Mary l gives a list of powder and other munitions bought abroad, "for transmission whereof licensse is to be demanded of the King of Spain."

On August 1, 1552, Sir Peter Hoby writes to Cecil that "Mr. Damsell requires money for the King's gunpowder at Antwerp," and in the early years of Elizabeth there are numberless entries concerning "arms, armor, and munitions to be provided by Sir Thomas Gresham," then the Queen's agent at Antwerp. The realm, in fact, "stood to the courtesy of strangers" to such a degree that an independent political policy could hardly be followed.

"Supplies of saltpetre and sulphur for gunpowder, and of iron and copper for ordnance," says Dr. Cunningham, "could only be procured through ports that were controlled by prospective enemies; there is no wonder that the Spaniards should have contemptuously calculated that it would be an easy matter to conquer England, because she lacked armor."

This was a main object of the presence of the Hochstetters, the search for calamine stone, the smelting of latten, on which Cecil kept so close and careful an eye. For this reason he coaxed over German experts, supplied them with capital, and protected the infant industries by patents, monopolies, tariffs, and prohibitions. And Cecil had his reward. By the end of the reign he had so well grounded a dependence in the matter of ordnance that the Spaniards were actually trying to smuggle English cannon into Spain. In 1591 they were offering 19s. to 22s. a hundredweight for English ordnance, "and a pension of forty ducats a month for life to the man who would smuggle them over." Thus in his old age the great Burghley might lean back and rub his hands over the "well-grounded dependence" of England.

I have gone into this matter of metal in some detail because it is a useful example of how one industry hangs upon another. Wool-cards were the key industry of the woolen industry, and they required brass for their manufacture. The profits from the sale of wool-cards gave the means for carrying further the manufacture of ordnance. Moreover in the manufacture of wool-cards the drawing of wire was essential, and thus incidentally England established her wire industry.

"The United Battery and Wire Company," says a pamphleteer, "by joining their long heads and purses together have first, after much puzzling and botching, brought the art of making brass-wire to such perfection as to undermine and almost totally exclude importation thereof from Holland and Germany."

We might trace this policy of a "well-grounded dependence" by taking up any single commodity, and following it through the State Papers of the reign. Gunpowder might furnish another example. The Imperial ports controlled the supply both of sulphur and saltpetre. As late as 1595 we hear of ten Merchant Adventurers procuring supplies of "saltpetre and powder" from the port of Stade, which had been bribed to betray the interests of the Empire, and "underhand by Sir Francis Vere with the merchants of Amsterdam." But as early as March 1561 the Queen had concluded an agreement with one Gerard Honrick, "a German captain who undertakes the making of saltpetre," and all through the reign we find evidence that the saltpetre men are busy refining the earthen floors of cowsheds and stables to extract that villainous commodity. So with salt, necessary to the fishing industry, which had hitherto been got from France and Germany. In 1563 Gaspar Seelar, a German, and in 1565 Francis Berty, a Frenchman, were given grants to make salt in England.

And we find Cecil busying himself with all the furniture of ships, so as to be independent of the Baltic, growing timber, hemp, and flax, planting a colony of Flemish linen-weavers at Stamford in order to furnish the Navy with sail-cloth. There is, in fact, no industry then known which he does not either plant or encourage, so determined is he to make England independent and secure by this national policy of a well-grounded dependence on home production.

Here, then, is the national policy on which England's greatness was founded, a policy of independence, a policy of strength, not a policy of wealth and of cheapness merely. And to this policy we must return if we are to hand down the noble heritage received from our forefathers to our children as their secure possession.

III. Jack and the Giant

The policy of England was, as we have seen, a national policy. It was born of the determination of Englishmen to be no longer "under the thumb" of the foreigner. It was carried out, not by the Government alone, nor alone by the Merchant Adventurers, but by both working in harmony together. Let us now see how this policy came into conflict with a vast Continental Power, and brought England through in safety and with honor.

We might call it the story of Jack and the Giant. England, at the beginning of Elizabeth's reign, had Scotland and Ireland against her, and was almost without an Army and a Navy and the means to build and arm them. Her chief assets were a brave Queen, wise Ministers, a strong and adventurous Mercantile Marine, a cloth manufacture founded on the best wool in the world, and the spirit of the English people.

On the other side lay the vast dominions of the House of Hapsburg. Our history books teach us that England fought Spain; but in truth the conflict was with something far bigger than Spain. It was with an Imperial Power and an Imperial mercantile system which at that time controlled most of the wealth and the military and naval resources of the world.

Before Spain discovered the West and Portugal the East Indies Germany controlled the treasure and the trade of the world. In trade the power of "the Society of German Merchants of the Holy Roman Empire" extended from Bergen to Venice, from Novgorod to London.

"It was," says Janssen in his great History of the German People, "in the fifteenth century that the Hanseatic League attained the summit of its power. Its commercial authority extended into Russia, Denmark, Norway, England, Scotland, France, Spain, and Portugal; into the interior of Germany, Lithuania, and Poland. Russia and the Scandinavian countries were completely subject to it, in a commercial sense; and England itself, at the close of the fifteenth century, stood in the same position to Germany with regard to trade as Germany later, up till within a short time ago, stood to England."

As to treasure, we shall not hesitate to assert," says Fischer, "that Germany was formerly the Mexico and Peru of Europe." That "joylly gentleman," the Count of Mansfeld, who tried to entrap Sir Thomas Gresham, owned a copper mine of almost inexhaustible wealth. We have already seen how the mediaeval Metallgesellschaft, the tribe of Hochstetter, cleaned out the mines of the Tyrol. The Hapsburgs derived an income of 300,000 gold florins from the mines of Schwatz alone. The gold mines in the region of Bergreichenstein kept 350 mills busy, and yet they were poorer than the gold mines of the Riesengebirge. The silver mines of the Erzgebirge furnished ores so rich that the Syndic had tables and chairs made of the metal, and it was on the command of silver, the standard of currency, that the Easterlings founded their financial power.

Christopher Columbus and Vasco da Gama between them changed the financial and commercial system of the world. Compared with the treasure of the Aztecs the mines of Germany were what our South African friends call "a low-grade proposition," and Venice, which depended on the caravan routes from the Gulf and the Red Sea, could not compete with the s eaborne traffic by way of the Cape of Good Hope.

But the Germans were strong in their funded capital and organized trade, and they set about at once to get control of the new commerce.

"The North Germans," says Janssen, "took a lively interest in the Portuguese discovery, and the Hansa sent many of their vessels by the new route; Vasco da Gama was assisted by a German in his first voyage to the Indies."

In 1503 the Welsers and other German merchants founded a commercial house at Lisbon. Dom Emanuel gave them privileges "exceeding indeed those given to his own subjects." They had "precedence in Indian commerce. All spices, Brazilian woods, and other goods coming from India or the newly discovered islands" they could buy and transport free of duty, and they were allowed to establish their own Court of Justice in Lisbon. German vessels sailed with the Royal Fleets. Three of Francisco de Almeida's greatest ships for the Indian Expedition of 1505 were German, and it is calculated that the German merchants reaped from that adventure a profit of no less than 175 percent. This is all according to Janssen, and according to Wheeler the Hanseatic merchants financed the Spanish voyages.

The ships of the Hanseatic League carried the spices and treasure to Flanders, Hamburg, and the Baltic, and returned to Spain with manufactured goods, munitions, marine stores of all kinds, and corn. In this scheme of commerce England was designed to play a subordinate part. Her wool and half-finished cloth were carried to Flanders in Hanseatic bottoms, and there woven, or finished and dyed, for the Spanish and Imperial markets. The Italian possessions of the House of Hapsburg, and the subordination of Venice, Naples, Florence, and the Pope, completed the circle of the Imperial system.

It was against this old, majestic, rich, and embattled system that Elizabethan England rose in revolt. To the faint-hearted if faint hearts there were in Elizabethan England it might well seem a hopeless prospect; but there were certain weak points in the imposing fabric, certain joints in the giant's armor. Charles V had never been able to unite his Empire into a political whole. He had, in fact, divided it into two on one side the old German Empire, and on the other Burgundy, Spain, and Italy. These two political divisions had no common factor save the House of Hapsburg, and this House, politic and able as it was, was not master of a statesmanship to unite such varied and conflicting interests.

The Empire of Germany itself had no central Power strong enough to keep it together. Attempts had been made; but they failed through lack of means and the jealousies of States and of interests.

At the Diet of Nuremberg in 1522-1523 the Princes put forward a scheme intended to unite and strengthen the Empire. "A general Customs duty," says Janssen, "both on exports and imports, was to be levied on all goods not included in the absolute necessaries of life, and this duty was to be at the rate of 4 percent, on the marketing price of the commodities."

The project at once divided Imperial politics into two parties, on the one side the Princes and the agricultural interest, on the other the forces of Commerce and Finance. The Free Trade case was put with great force by the Hanseatic League. In a petition of grievances of February 2, 1523, the cities urged that the tariff would be "the ruin of all trade and would provoke the people to fatal sedition." And again: "All artisans and good workmen would be driven by it into other countries and Germany would be utterly beggared." The Tariff Reformers, on their side, maintained that

"this new tax would not fall heavily on the common people," as food and raw material were not to be taxed, but "only such goods as came under the head of luxuries and non-essentials." Other nations had adopted such tariffs "and even higher taxes on all articles of commerce," yet "trade and business had by no means diminished in consequence." Besides, the foreigner would pay: ". . . this Customs duty only affected foreign countries, such as Bohemia, Hungary, Poland, England, whence the taxable goods were imported."

The Hanseatic League, hard pressed by these arguments, sent a treasonable delegation to the King of France at Lyons, and the King, being at war with the Emperor, had no hesitation in advising his subjects that they were cruelly wronged. At the same time they sent a patriotic deputation to the Emperor at Valladolid.

"The sole result of such a measure," the Emperor was told, "would be complete ruin of all trade, wholesale and retail, large, small, or medium, and the emigration of all mercantile people from Germany into foreign lands." And these Free Traders, who had just been practicing with the Emperor's enemies, were not ashamed to urge that the tariff "would incite the common people, who, as it was, were already showing many signs of insubordination, to still worse revolt and seditiousness."

Although Martin Luther had been assisting the cities in their agitation, they assured the Emperor that his books had been denounced, forbidden, and confiscated. Nor did they neglect more practical arguments. The tax, they said, would yield little to the Emperor: such taxes were easily diverted into other pockets, and the Emperor would lose the support of those patriotic financiers who had always been willing to lend him money for his wars at from 8 to 12 percent. The unseen hand was not altogether absent from these negotiations:

"The Imperial Councillor Hannart received 500 guilders; each of the other three councillors with whom the envoys had dealings were promised 200 guilders," and Hannart thereupon promised the towns "that he would be a favorable and ready advocate with the Emperor and estates in all their complaints."

These lofty and potent arguments prevailed; the Emperor threw his influence on the Free Trade side, and the Imperial Customs duty was "in a lamentable manner allowed to remain in abeyance . . . a result by no means conducive to the welfare of the Empire."

In this policy of wealth before unity and trade before production the German cities persisted through the rest of the century, and when Elizabeth came to the throne their complaint against England was not that its cheap cloth was injurious to the weavers of the Empire, but that this cloth was being carried in English and not in German ships, and sold by English and not by German merchants.

But before we come to the conflict with England we might quote a little further from the excellent Janssen to show the effect of this commercial system upon Germany. He gives us a picture of mingled wealth and discontent. German manufacturers were already in a bad way:

"Everything is scamped; every journeyman wants to be a master . . . they all aim at injuring one another; the work is finished off in a hurry and with regard to outward appearances only; the purchasers on their side think only of cheapness and not of the quality of the goods."

In all ranks of life foreign goods and new fashions were in vogue.

"Extravagance in dress," wrote another contemporary, "has impoverished the German nobility; they desire to make the same show as the rich city merchants; heretofore they were the leaders in fashion; but now they do not draw from their estates a twentieth part of what the merchants earn. . . I fear all this will bring much evil to Germany."

"Fashions changed completely every year." Gailer von Kaiserberg exclaims at the scandal that "women wear hats with ears . . . and . . . aureoles like saints in churches. . . . Their whole bodies are full of folly, under the belt, over the belt, inside and outside . . . the names of their fashions is legion. . . . The Government ought to forbid the abominably short dresses." Even the peasants and their wives "are beginning to buy the most costly foreign goods, and to dress themselves in velvet and silk as if they belonged to the nobility."

The old manufacturers were decaying; the new wealth destroyed old trades. The merchants blamed the Church for her extravagance; the Church blamed the merchants for their usury. Every class, every interest, every State, was in a ferment of jealousy and ripening for revolt. The huge dividends drawn from foreign trade; the wild speculations in metals and pepper; the company promoting and commodity cornering all these activities brought wealth of a sort but neither tranquility nor unity to the Empire.

As Germany was given over to commerce, so Spain was concentrated on spoil and glory. She neglected her manufactures and used her manhood for her fleets and her armies. Despite her treasure she was beggared by great wars and applied to her German creditors in a continual state of neediness. Almost everything she required was imported, and the gold she brought from abroad went into the pockets of other nations. Her economic life, as it depended on distant and risky operations, was both splendid and insecure. To Flanders she looked for cloth; to Germany for ships and corn. Without German supplies, said Burghley after the Armada, "Spain is not able to make a Navy ready to carry the meanest Army that can be imagined."

Elizabeth was hardly upon the throne before her national policy was in conflict with this vast and unwieldy system.

In 1560 she was approached by an embassy from the German cities with a list of insolent demands.

1. "That their former privileges may remain whole.

2. "That they have a confirmation of these in the usual form, as granted by the Queen's progenitors.

3. "That whenever the English subjects shall be relieved from paying a larger toll and custom, the Hansa merchants shall also be relieved from the same."

If these proposals did not please the Queen, the Germans suggested that a third person the Emperor or King Philip for choice should arbitrate between them.

"Or if this does not please her, to stand a trial at law before some indifferent Kings or Princes or Universities, they (the German merchants) to pay, pending judgment, the same custom as her own subjects."

These conditions did not please the Queen. Her commissioners had been so weak as to agree to "a trial-at-law at Bruges, Ghent, or Louvain," as to one part of the dispute; but the Queen swept it aside as an outrage on her royal dignity. The German merchants were informed that they would have to pay:

"similar toll and custom as the English subjects of this kingdom . . . provided they carry none of the said cloths to Antwerp or any of the Imperial cities of Brabant, Flanders, Holland, or Zealand, nor transport the cloths called kersies out of the Hanseatic cities into Italy."

Queen Elizabeth, it is clear, was determined to keep her chief cloth market for her own merchants; but she did not feel herself strong enough to sweep away all the Hanseatic privileges. The Germans were to pay 1d. less in the pound on imports and exports than other foreigners, and on cloths 12d. less in the pound. They were also to be granted licensses to export a certain limited quantity of cloth to "Antwerp and elsewhere."

The Germans were fain to accept, but were by no means content with these terms. Throughout the reign they never ceased to work petition and "practice" for the restoration of their "obsolete privileges," as the English contemptuously called them. Their persistence was so inveterate that even the deep and patient Burghley so far forgot himself as to become "rude."

As for the Queen, she never forgot the insult of the proposed arbitration. Long after, in a broadside which she wrote in terse, vigorous Latin, she referred to it. "They even wished," she wrote, to the great prejudice of her royal dignity, "to call their disputed privileges to judgment before the Princes." Yet the English Government was careful not to break with the Hanse: licensses to export "whites" were dangled before it, and it may be regarded as one of the master-strokes of Elizabethan policy that almost to the end of the reign the cities still cherished hopes of the English Government.

Encouraged by her success in the cloth trade, Elizabeth struck another blow for English industry. In the preamble of an Act of 1562 it is set forth that the

"girdlers, cuttlers, saddlers, glovers, pointmakers, and such-like craftsmen," as well as "their wives and families" had "sustentation" by these trades, which were also "a good education of a great part of the youth of this realm in good art and laudable exercise." These trades, however, had been "utterly impoverished by the abundance of foreign wares," dumping, in fact "the exquisite knowledges thereof" were decayed and "divers cities and towns within the realm of England much thereby impaired," and "the whole realm greatly endamaged."

On these excellent grounds the importation of "girdlers, rapiers, knives, sheaths, hilts, pummels, lockets, chapes, scabbards, horse furniture of all kinds, gloves, points, stirrups, bits, leather, lace, and pins " was, therefore, to be prohibited "from or after the feast of St. John Baptist now next ensuing."

It is plain from the list that the Queen was not only seeking to protect her artisans, but had a special care for the small arms industry. However that may be, the Act was bitterly resented in Flanders. No doubt the Hanse, which was strong in Bruges and Antwerp, poured oil on the fire.

"These regulations," says Anderson, "greatly alarmed the Netherlander; and the citizens of Antwerp more especially became quite enraged to see the English taking such large strides towards a universally extensive commerce. Moreover, the raising of the custom on cloth exported to the Netherlands, and of merchandise imported from thence into England, had given great offence to the Netherlander. All these considerations now induced the Duchess of Parma, governess of the Netherlands, to issue her proclamation prohibiting the exportation of any materials for the above manufactures to England. Moreover, by way of retaliation, but under pretext of the plague, which at this time raged in England, she prohibited the importation of English woolen goods into the Netherlands.

"In this year, therefore, the English Company of Merchant Adventurers were obliged to carry their woolen cloths to Embden, in East Friesland, where for a while they kept their staple, entirely deserting the Netherlands. Whereupon Philip II of Spain absolutely prohibited all his subjects from trading with the English at Embden. Yet in the end the steadiness of Elizabeth got the better of all opposition; for Philip, knowing that the true interest of his Netherland subjects required peace and commerce with England, found himself obliged to revoke all his prohibitions, and to admit the English to trade with the Netherlands as formerly on the bottom of the Intercursus Magnus"

Here was another victory for the Queen and her Merchant Adventurers. But the fight was only beginning. In 1566 an Act was passed "for the better employment and relief of great multitudes of the Queen's Majesty subjects using the art and labor of clothworking." For every nine unwrought cloths exported, the exporter was to ship one cloth "wrought and dressed, that is to say rowed, barbed, first-coursed, and shorn from the one end to the other," and the export of unwrought Kent and Suffolk cloth was totally forbidden. In 1567 the Merchant Adventurers succeeded in detaching Hamburg from the Hanseatic League. For ten years they maintained themselves there; but at the end of that time Hamburg was forced by the other cities to expel them. The Hanse agitated in successive Imperial Diets for the total banishment of the "monopolish" Merchant Adventurers from the Empire. Queen Elizabeth, I grieve to say, replied by bribing the Count of East Friesland and the Duke of Brunswick with pensions, and by supporting the "outlying towns" of the Netherlands in their revolt against Spain and the Hanseatic League.

The Merchant Adventurers moved again to Emden: driven from there by "the Spanish Party," they settled "in a heap" in the decayed Hanseatic town of Stade.

At the Diet of Augsberg in 1582 the Hanse succeeded in obtaining an Imperial decree for the expulsion of the English Merchant Adventurers. The decree was found very difficult to enforce, nevertheless some four years later the situation looked very black for England.

"This great matter of the lack of vent," Burghley wrote to Hatton, "not only of cloths, which presently is the greatest, but of all other commodities, which are restrained from Spain, Portugal, Barbary, France, Flanders, Hamburg, and the States, cannot but in process of time work a great change and dangerous issue to the people of the realm, who heretofore in time of outward peace lived thereby, and without it must either perish for want or fall into violence to feed and fill their lewd appetites with open spoil of others."

And a Spanish spy in London writes gleefully to Philip in 1586:

"The whole country is without trade and knows not how to recover it: the shipping and commerce here having mainly depended upon the communication with Spain and Portugal. They feel the deprivation all the more now with the loss of the cloth trade with Germany, which they formerly carried on through Holland and up the Rhine, but have now been deprived of by the capture of Nutz on that river. If Berck be taken also, which please God it will be, now that the neighbouring places have fallen, they will not be able to send any cloths at all, and this is causing much dissatisfaction all over the country. The rest of their trade with the other German ports and Muscovy is a mere trifle, as all they brought from those places was sent by them to Spain, and their Spanish trade being now gone, the other is of no use to them, as they do not know what to do with the merchandise they bring hither."

This was on the eve of the Armada; the alarm of Burghley and the glee of the Spaniard help us to realize how important a part this economic conflict played in the war, of which the Spanish Armada was an incident more picturesque but hardly more important.

How the Germans and Spaniards worked together in the preparation of the great fleet I briefly described in my last volume. Let me quote here only one clinching piece of additional evidence.

"The Easterlings," says Burghley in a note of 1591, "had covertly in their great hulks, outwardly fraughted with peaceable merchandise, during the space of two years, conveyed into Spain the greatest part of all the masts, cables, cordage, saltpetre, and powder that served to furnish the said Navy. Besides the furniture of the Spanish ships with such provisions, there were no greater nor stronger ships in that Army (the Armada) than was a great number of the Hanse towns."

Burghley laughed at the mere idea that the Germans were forced to fight. It could not have been done, he said, unless they had gone to Spain "furnished as ships of war"; and if it had not been for their help "Spain is not able to make a Navy ready to carry the meanest Army that can be imagined."

The German merchant ships, it may be explained, at this time usually sailed unarmed in their commercial ventures, relying on the amity of the Spaniards for protection. And this is an important point, for it illustrates how cheapness may be defeated by strength, a point altogether forgotten by the Free Traders.

"If Her Majesty," says a contemporary Englishman who was no doubt a Merchant Adventurer, "revokes her decree against the Hansa merchants, it is to be considered that they may prejudice the trade of the English merchants at Stade; if they of the Hansa Steads carry English goods as freely to Hamburg as the English merchants to Stade, by reason of their shipping in hoyers, sailing with three or four men and a boy, the largeness of their stowage and their amity with the Spaniard, and the English passing with ships of other building, many mariners, much munitions and provisions of defence, by reason of the hostility of the Spaniards, the Hanses by this means should be able to afford English commodities better cheap than the English merchants to the decay of them and their navigation, and many English thereby drawn to trade at Hamburg, and by degrees the trade now at Stade overthrown, and finally disappointing of this realm both of their trade and navigation."

When the cloth fleets of the Merchant Adventurers sailed to Hamburg or to Stade, they were not only armed to the teeth, but were escorted by Her Majesty's ships of war. If the course of trade had depended upon pure economics, the English mercantile marine would have been driven off the sea by the "hoyers" of the Hanseatic League. But pure economics never did, and probably never will, determine such questions. For what England sought was not the cheapest way of carrying her cloth; but that way which might best serve her end of strength and independence.

Yet if the question could be argued on those narrow grounds of profit and loss, we might find that the Elizabethans set the profit derived by their own control of the cloth markets of Europe against the loss sustained by the more expensive system of carriage. Thus, for example, Janssen:

"The English cloths and English wool," the Hanse represented to the Imperial Estates in 1582, "had become at least half as dear again, and of the 200,000 pieces which were exported by Englishmen, three-quarters at least came to Germany; the German cloth manufacturers were reduced to such extremity that numbers of towns, which had before counted many hundreds of cloth-workers and journeymen innumerable, were now either entirely without master-workmen or else had very few, and these few were obliged to content themselves with making inferior cloth. At the fairs of Frankfort it was principally English cloth that was sold . . . there was now scarcely a single servant or peasant girl who did not have some of her wearing apparel made of English cloth."

If we consider this passage, we see that despite the cost of well-manned and well-armed ships, the English clothier was able to drive German cloth out of the German market. He was then able to raise the price of his cloth, and he was besides able to secure the profits of shipping and marketing for his own countrymen. The mercantile marine which he created artificially, the Free Traders would say helped to maintain his national freedom and security, matters of more consequence than gold. The cloth fleet of London helped the Dutch to blockade Parma when Drake was fighting the Armada. These are considerations which cannot be computed upon the mathematical systems of our Free Trade economists; but they were well enough understood by the men who laid the foundations of England's greatness.

And we perceive also, in the longer voyages of our Elizabethan sailors, this underlying conception of a national policy. Everywhere the same ideas are at work: the Adventurers seek "a well-grounded dependence," a supply whether of gold or ships' stores or dyestuffs or spices free from the control of their possible enemies, and a vent for English cloth.

The Muscovy Company was founded, as I showed in The Germans in England, to secure an independent supply of all things necessary to shipping. Its foundation coincided with the attempt to break the power of the Hanseatic League in London, and our merchants realized that the power of the League was based on a monopoly of the Russian and Baltic trades. Hence the development of the circuitous Archangel route.

But our Elizabethans found that the Germans were strong in Muscovy, so they fell upon the contemplation of still longer voyages. Christopher Carlile debates the question in the pages of Hakluyt. This Elizabethan sea-captain seeks to persuade

"the merchants of the Muscovian Company and others" to put up capital for a "voyage to the hithermost parts of America." "Great gifts," he argues, are necessary to maintain the Russian trade. And "the Dutchmen (i.e. the Germans) are there so crept in as they daily augment their trade thither, which may well confirm that uncertainty of the Emperor's disposition to keep promise with our nation." The Archangel voyage was only possible once in a year, and if they went through the Sound, the King of Denmark is like to enforce a tribute on us."

"Moreover, "the bad dealings of the Easterlings are sufficiently known to be such towards our merchants of that trade, as they do not only offer them many injuries overlong to be written, but do seek all the means they can to deprive them wholly of their occupying that way: and to the same purpose have of late clean debarred them their accustomed and ancient privileges in all their great towns."

The hostility of Spain was equally dangerous in the Mediterranean. Let us therefore try North America. There we would find all the commodities of the Baltic and Russia:

". . . as pitch, tar, hemp and thereof cordage, masts, losshe (reindeer) hides, rich furs and other such like without being in any sort beholden to a King of Denmark or other prince or State that shall be in such sort able to command our ships at their pleasure as those do at this day by means of their strait passages (i.e. the Sound and Gibraltar) and strong shipping."

In the west and south parts of North America they might even expect to grow wine and oil, and if they planted colonies and civilized the natives, the country might become "a very liberal utterance of our English cloths." As the new land was "bigger than all Europe" and "bending to the northward," the inhabitants would have "wonderful great use of our said English cloths after they shall come once to know the commodity thereof."

Our fishermen had long been supreme on the Newfoundland Banks. Both Spaniards and French who went there for whale and cod acknowledged the English to be "lords of the harbors where they fish," as the Dutch were masters of the Greenland whale fisheries. And it was thought that Newfoundland might become the Baltic of the English.

"There is nothing," says Edward Hales, in his journal of Sir Humphrey Gilbert's voyage, "which our east and northerly countries of Europe, but the like also may be made in them as plentifully by time and industry, namely, rosen, pitch, tar, sope-ashes, deal-board, masts for ships, hides, furs, flax, hemp, corn, cables, cordage, mien-cloth, metals, and many more. . . . The trees for the most part all yielding gum and turpentine."

As to Virginia, Ralph Lane writes to Hakluyt on September 3, 1585, from

"the new fort," that "what commodities soever Spain, France, Italy, or the East Parts (the Baltic) do yield unto us, in wines of all sorts, in oils, in flax, in rosens, pitch, frankincense, currants, and such like, these parts do abound with the growth of them all." Moreover, "the people naturally are most courteous and very desirous to have cloths." There were also dyes: "the tree that beareth the masticke," "shoemake . . . used in England for black," and various trees including a bark called by the natives Tangomockonomindge, "which dyes are for divers sorts of red" although "their goodness for our English cloth remains yet to be proved."

Gold was, of course, a principal object of these voyages: a Saxon metallurgist named Daniel went down with Humphrey Gilbert in the Delight when she sank in a breaking sea amongst flats and sands in thick and hazy weather between Cape Race and Cape Breton on August 29, 1583. But even Raleigh in his treasure hunt to Guiana does not forget to report "towards the south part of the river great quantities of Brasil wood and diverse berries that dye a most perfect crimson and carnation."

And Hakluyt himself in his "Epistle dedicatorie to Sir Robert Cecil," sets down "our chief desire" as being "to find out ample vent of our woolen cloth, the natural commodity of this our realm," and to this end mentions as "fittest places" the "manifold islands of Japan and the northern parts of China" because they are reported to have a cold climate like Flanders.

The quest of ivory, gold, spices, and grains of Paradise took the Merchant Adventurers to the west coast of Africa in 1553; the intrigues of Spain in Venice and the Mediterranean generally led our grocers and Italian merchants to equip James Lancaster's voyage to the East Indies for spices in 1593. But the main set of the Elizabethans was to the north-east and north-west, to find an uncontrolled source of ships' stores and a free market for English woolens.

And now having made the circuit of English policy, let me summarize once more its main character and purpose. It was to make England independent in all things of the Imperial system, from the shepherd on the Downs to the merchant on the sea. English wool was to be carded with English combs made of English brass; woven into English cloth finished with English alum and dyed with English dyes; English cloth was to be carried in English ships manned by English sailors and armed with English guns and marketed by English merchants in ports kept open and friendly by English policy. Such essential commodities as could not be naturalized were to be planted in English colonies.

Whether this policy was designed by one head or by many it is possible at least to surmise. There is evidence that it sprang from the close association between the English Government and the Merchant Adventurers. The Government looked to the merchants for money and intelligence; the merchants to the Government for diplomatic support and armed protection. Both fought the same enemy: hence the swiftness and felicity which mark all Elizabeth's strokes of policy.

Tom Thumb is intelligent and alert because he has a single purpose: the giant is slow and uncertain because his interests are divided. The German merchant and the Spanish statesman are forever working at cross-purposes: the Germans supply the Spaniards with bad stores and munitions; the Spaniards despise and detest the Germans. Bribery and corruption on the one side, a smouldering hatred on the other blazing up on occasion to the Fury of Antwerp characterize the ungainly combination of German and Spaniard. The King of Spain for all his wealth is badly and expensively served. Elizabeth has a Navy made for her by her merchants and her sailors. Philip tries to buy both sailors and Navy and finds that everything crumbles like touchwood in his hands. Elizabeth, despite her poverty, is well supplied and well equipped; Philip, despite his wealth, is inefficient and unready.

"Just look at Drake!" said the Pope to the Venetian Ambassador. "Who is he? What forces has he? And yet he burned twenty-five of the King's ships at Gibraltar. He has robbed the flotilla and sacked San Domingo. . . . We are sorry to say it; but we have a poor opinion of this Spanish Armada and fear some disaster."

And how is this contrast to be explained? In both Germany and Spain industries are neglected, everything is sacrificed, in the one to commerce, in the other to the search for gold: in England industries are cherished, and those "exquisite knowledges" on which the strength of the State depends are nourished and protected. Elizabeth has a national policy founded on production; by that policy she conquers, by the lack of that policy Spain is defeated and Germany destroyed.

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.

V. John Bull in the Grocery Trade

Now that we have got so far in the quarrel between the Stuarts and the Merchant Adventurers, let us retrace our steps a little to the origins of another great quarrel no less disastrous, between the Stuarts and the East India merchants.

The East India Company was one of the last roses of our Elizabethan summer. It began, like most Elizabethan enterprises, in our quarrel with Spain and the Empire. In mediaeval times England got her groceries from Venice: English grocers are called Italian merchants to this day. But Venice had been drawn into the Spanish and Hanseatic intrigue against England. "I have always heard," said Queen Elizabeth to a Venetian in 1583, "that Venice was a city founded in the sea; but now I rather think it to be founded in the River of Oblivion."

Elizabeth had hoped to detach Venice from the Imperial cause, and with some reason. For Venice had flourished as the European depot of the overland route from Asia. The sea route discovered by Portugal and now in the hands of Spain fatally injured the Venetian trade. But Venice was too much in awe of the Emperor, who carried German frightfulness into Italy, to venture upon an independent policy. Hence Elizabeth's bitter jibe.

Venice raised the duties upon English cloth, and Elizabeth retorted by forbidding any but English ships of the Levant Company to import Venetian currants. Then she tried to establish a direct trade with Constantinople, where, despite Venetian intrigues, she succeeded in placing an English Ambassador. Spain replied by trying to blockade English trade from Naples and at the Straits of Gibraltar. Thus Philip Jones, in his narrative of the worthy sea-fight between English and Spanish ships at Pantalarea, "within the Streights," tells how the King of Spain, "grudging at the prosperity of this kingdom, gave orders to the captains of his galleys in the Levant to hinder the passage of all English ships."

The English counter-move was to develop a new trade route to Asia by way of the North Cape, Archangel, the Caspian, and Constantinople. The secret of this design was given away by a certain Baron Schomberg to Mendoza in 1682, and Philip was advised to influence Denmark to send out ships to intercept the new trade.

The upshot was that the City of London ran out of spices, and the Dutch who had just returned from their first voyage to India with full cargoes, ran up the price of pepper in London from 3s. 5d. to 6s. and even 8s. per lb. 4

This was too much for Mincing Lane, and the grocers and Levant merchants combined to form the East India Company, whose first recorded meeting was held on September 24, 1599.

Now the English were rather doubtful about this East Indian trade. India, it was thought, would have no great use for English woolens, and therefore spices would have to be paid for with treasure. "The exhaustion of our treasure" was one of the stock arguments against the East India Company during the seventeenth century. There is nothing new under the sun. Tiberius and Pliny made the same complaint against the Indian trade of ancient Rome, whose fleet of 120 vessels sailed every year from Myos Hormos on the Red Sea, laden mainly with silver, to the Malabar Coast and Ceylon and returned with silks and spices, which were carried from the Red Sea to the Nile upon the backs of camels, and thence by ship from Alexandria to Rome.

The charter therefore limited the company's export of bullion to £30,000, the company, on its side, promising to "bring in after every voyage . . . as great a quantity of silver or foreign coin as they shall carry out the first voyage only excepted."

A free trade to India was no more possible in those times than a voyage to the moon: Spain and Portugal, at that time united, claimed a monopoly, and the Dutch rebels had organized themselves into a great Company or League of Cities to wrest this monopoly from Spain and appropriate it to the United Netherlands. Both the Portuguese and the Dutch maintained their claims by fortresses, armies, and fleets against all comers, and nothing but a strong organization on a national basis could have lived in such a world. The English company was therefore granted "the whole entire and only trade and traffic from the Cape of Good Hope to the Straits of Magellan for fifteen years, on the condition that the trade "be not hurtful but shall be shown profitable."

Now the company had suffered in its earliest days from the attentions of a swashbuckler called Sir Edward Michelborne, and to him James granted a license which was in fact a breach of the company's charter. "This license," says Anderson, "was probably well paid for to a King always profuse."

Michelborne was, not to put too fine a point upon it, a pirate, and although his fights with valiant Japonians and others make pretty reading in Purchas, his raids upon Guzerat junks and Mogul shipping got the company into serious trouble.

In 1618 the King and his courtiers made another raid upon the company. "The King," as John Chamberlain reports, "has granted a patent to Sir James Cunningham to raise a Scottish East India Company. . . . They only yet make a noise and show . . . hears they would fain compound and sell their rights to the East India Company."

There is just a suspicion of blackmail in the business. The London company reports on March 10 that the King is "very favorably disposed" and "would not be swayed by fair promises against the East India Company." Bacon, then Lord Chancellor, writes to the Governor,

"desiring him to proceed to let his lordship be admitted into this society, which motion seconding the former gracious speeches delivered by His Majesty (and honorable reports given by many of the Lords of the Council of His Majesty's constant resolution to preserve and maintain the privileges and honor of this company) gave good satisfaction, both of His Majesty's and their lordships' favor, and doth infer that the troublesome business for the Scottish patent is ended."

But it was by no means ended. In December the matter is still being argued, not only between Cunningham and the company, but between the company and the King: "The King blamed the company for not having yet satisfied Sir James Cunningham, relating from point to point all particular passages therein, and concluded that he would admit of no further excuse; but expected to have the money paid, if for no other respect yet for his sake." At the same time the King asks the company for a loan of £20,000, which the company owing to their "many losses and discouragements" refuse to give.

There was something impotent and degenerate in James's policy as in his character. Elizabeth had in her time screwed money out of her merchants; but Elizabeth was at least faithful to their interests. James could protect them neither from the Spaniards nor the Dutch. In 1618 a Royal Commission reported on the Navy that out of forty-three ships of war "nearly half were utterly unserviceable, and were with difficulty kept from sinking by incessant repairs, without the slightest prospect that they would ever again be fit for sea." In 1617 the Dutch had a fleet of thirty sail and four thousand soldiers in the East Indies, and enforced its monopolies not only upon the Portuguese but upon the English. Our East India Company valiantly fitted out six ships "to try what the Hollanders will do"; but six against thirty were too, long odds.

Those two English heroes, Nathaniel Courthope and "Hurly-burly Captain John Jourdain," and many more like them, fell in the unequal struggle that ensued. In 1619 the Dutch procured a favorable treaty from King James. Their commissioners had come over in November 1618, "their chief confidence being in His Majesty's favor," and were reported to "carry themselves insolently." By the end of January, the negotiations being "likely to break," the King intervened, promising "neither to spare any travail . . . nor be in anything more partial than if they were both his own subjects." Incidentally he demanded half and received the whole value of an interloper seized by the English company.

By July a treaty was concluded. It was received by the English with dismay and by the Dutch with jubilation.

"The London Company," says Hunter, "obtained no compensation for past injuries, reckoned at £100,000 during a single year, and no share in the control of the Dutch fortifications to whose cost they were to contribute. . . . The English should have one-third and the Dutch two-thirds of the trade, paying for the garrison in a corresponding ratio. Each company to furnish ten ships of war for common defense. All forts to remain in the hands of their present possessors which practically meant of the Dutch, as we had then so few and certain proposed fortifications of the English were to be postponed for two or three years, until both companies could agree upon them. The treaty to be binding for twenty years . . . supervised by a joint Council of Defense in the Indies with an appeal . . . to the States General and the King."

The English company felt itself betrayed. It petitioned the King especially against the articles touching the forts, "as utterly cutting off the company from all hope and expectation," etc., and Chamberlain summed up the feeling of our poor London grocers:

"Say what they can, things are passed as the other would have it, which makes the world suspect that they have found great friends and made much use of their wicked mammon."

The Dutch felt so secure that they did not even honor the partial terms of the treaty. Thus Thomas Batten wrote from Jakatra on October 15, 1620:

"The Dutch have glory of all conquests and keep our necks still under their girdles . . . and many English, which during the quarrel did but little envy their pride here, do since the peace hate them most deadly, and would fight with them, they care not on what odds."

The massacre of Amboyna was only the worst of many outrages. The English at Amboyna were accused, falsely, of a plot to capture the fort, and Captain Towerson and nine of his men were examined, "with that extreme torture of fire and water which flesh and blood could not endure," and were afterwards shot.

Now if this had happened in Elizabeth's time Amsterdam would have been laid in ruins; but neither James nor Charles ever succeeded in getting any satisfaction out of the Dutch. And when the disconsolate Englishmen tried to make good by helping the Persians to take Ormuz from the Portuguese, Buckingham insisted that a tenth part of the booty belonged to him as Lord High Admiral. At the same time the King put in for the whole as the proceeds of piracy. The two positions were, as one might say, mutually destructive. But the Company's ships were held up and in danger of losing the trades, and as necessity knows neither law nor logic, the company paid £20,000.

Things went from bad to worse: the Dutch cut down the English nutmeg-trees at Puloran; Charles forced the company to sell him saltpetre at his own valuation, raised the customs on pepper until it stood at 75 percent, of the value, and chartered privateers which got the company into all manner of difficulties with the Great Mogul. A crisis came in 1635. Endymion Porter, who gave Herrick

"Not only subject-matter for our wit,

But also oil of maintenance for it,"

bethought himself of the East Indies as a means of filling his cruise. He organized an interloping expedition which was to be financed by Sir William Courteen under the royal patronage. "Charles," we are told, "entered heartily into the project and put down his name for £10,000." He did not, we gather, put down the money.

"I conceive it very requisite," Edward Nicholas wrote to Porter, "that there were some declaration how the King is to have the benefit of the said 10,000, for which His Majesty hath written, which may show that it is intended that His Majesty is to have only the benefit of that sum, the interest and assurance money for the same being first deducted."

The preparations were made secretly; but the company got wind of the project. They approached the King, who assured them, "upon the word of a king and as he is a Christian king," it was only "a voyage of discovery." A month later the Governor-Deputy and two committees are again at Whitehall, and are kept waiting "all the morning" and "all the afternoon." The King took their petition at last without vouchsafing a word. This was in March: in April the fleet sailed.

"This shall nothing discomfort us," said our grocers bravely but bitterly. "Wee hope the East India Company maie stand and flourish when these new undertakers maie be wearie of what they have taken in hand, when they have to their cost well paid for the same."

It was at this time that the King raised the pepper duty to 75 percent. At this time, too, another interloper, the Roebuck, shrewdly suspected to be under the protection of the King, made prizes of Surat and Diu ships in the Red Sea. The company's president and council at Surat were thereupon imprisoned by the Mogul's governor and "great sums of money enforced from them." The company's estate was also seized, "to the utter ruin of the trade." The company, which had painfully built up its position in India and in Persia, felt its honor compromised, and the Dutch were quick to use the opportunity "to ingratiate themselves with the Mogul and King of Persia." The King confessed that the Roebuck went out "with our privity and license albeit with no authority to commit any act which might bring so apparent prejudice and damage to our said East India Company." But he protected the Roebuck and authorized still another voyage.

The company was now in a desperate position from the Persian Gulf to the Moluccas. A memorandum to His Majesty, assigned to May 1637, represents that "His Majestic hath an ill opinion of their persons and endeavors," that the interlopers were ruining the trade, that the State gave them no protection and countenance against the Dutch, beg for a final investigation and settlement and threaten to discontinue the trade.

Two years later, in the petition of October 27, 1639, "the company finds it impossible under present conditions to continue the trade." The King, evidently frightened, sent the Archbishop of Canterbury to promise amends both against the Dutch and the interlopers. Yet in 1641, "as no recompense had hitherto been obtained for the injuries suffered from the Dutch," the company had failed to raise the necessary capital for a new voyage. Moreover, "notwithstanding the Order in Council, Mr. Courten was fitting out ships from England, and establishing factories in the East Indies."

Events were now sloping steeply towards disaster. The King, in want of money to subdue rebellion in Scotland, took two measures, one against the East India Company and the other against the Merchant Adventurers, which precipitated the civil wars.

VI. Family Jars

The historian, like the detective, gathers truth from clues and thumb-prints: he looks into the motives of humanity, and puts his own reading on the maxim that "Interest never lies." Religion especially, that most respectable of sanctions, is to be distrusted as a clue to events. In the Thurloe State Papers a letter of intelligence from The Hague reports that the Dutch "have resolved to order the ministers of the Church to form their sermons and prayers according to the sea occurrences." And so it is more often than the innocent suppose: the occurrences dictate the sermons and prayers, and not the sermons and prayers the occurrences.

It is amusing to find that even some of our most exhaustive historians do not trouble to inquire how the characters of their history made their living. They speak, for example, of Sir Edwin Sandys as a "Patriot" or a "Puritan," it is of more importance to me that he was secretary of the Virginia Company and a director of the East India Company, both of which had a standing quarrel with the Court. John Selden, another "patriot" of the Opposition, was counsel to the Virginia Company, and John Pym was treasurer to the Providence Island Company. It may be said that Sandys was the son of a Puritan archbishop and a Radical in politics. He propounded the unhistorical doctrine, elaborated afterwards by Rousseau, of the Social Contract between King and People. But what made him a leader, what force gave him his power in Parliament?

The Virginia Company was powerful: it consisted of nearly a thousand persons. Hakluyt himself had been one of the founders, and in the charter of 1606 we are told that the shareholders consisted of "knights, gentlemen, merchants, and other adventurers of our Cities of London, Bristol, Exeter, and Plymouth." It was, in fact, a national organization to found an empire in opposition to the American Empire of Spain. And here we are again met by that unseen hand which wrought so much secret mischief between King and People.

"The Spanish Government," says Professor Pollard, in his Life of Sandys, "viewed the growth of Virginia with apprehension. Gondomar was perpetually intriguing against it, and James's anxiety to conclude the Spanish match inclined him to give ear to the Spanish Ambassador's complaints."

When Sandys's tenure of office expired in the spring of 1620 the majority was anxious to re-elect him, but the King intervened and demanded the election of his own nominee. The company, he said, was a "seminary for a seditious Parliament." And again: "Choose the devil if you will, but not Sir Edwin Sandys."

The King was in the meantime toying with a scheme to make money out of that vile weed tobacco. In exchange for giving Virginia tobacco protection against the Spanish leaf, he was to have a pre-emption at 2s. 0d. a pound, "clear of all customs, freights, or impositions." The tobacco thus bought he was to sell to a body of traders to be called "the King's Merchants" at 5s. a pound, who were to have a monopoly of licensing the retailers, and the retailers were to sell "to the alehouses in penny papers, 13 to the dozen," which would afford to the ale-house keepers the not very tempting profit of a penny in the shilling.

How far these diverse considerations influenced "our English Salamon" we need not stop to inquire. Sufficient to say that by 1624 matters had come to a crisis, and the King proceeded against the company by the same procedure of Quo warranto as Sir George Makgill in his famous action against Sir Edgar Speyer.

The Opposition, which included Ferrar, Sandys, Lord Cavendish, and Sir John Danvers, all spoke for the company in Parliament.

"Gondomar and his successors were not spared, and declared to have used their utmost endeavors to destroy the company and the Plantation." The Lord Treasurer commanded Sandys in the King's name to go out of town; but the King, no doubt scenting trouble, disavowed the action and allowed Sandys to return. "The business appearing very foul, many, at first unwilling, were now content to have it ripped up. . . . This was assented to by a general silence, but not without soft muttering that any other business might in the same way be taken out of the hands of Parliament."

The company was dissolved, to the discontent of the shareholders, and the administration taken over by the Crown.

And so we might trace these quarrels between King and companies through the two reigns. The New England Company resigned its charter on April 25, 1635, complaining chiefly that certain persons, "unknown to the council of the company" had obtained a grant of three thousand miles of sea-coast and "thrust out" the company's people in Massachusetts Bay. Matters being desperate, and "finding it too great a risk to rectify what had been brought to ruin," they surrendered their charter "with reservation of their lawful rights."

But let us return to the main stream of contention, the quarrel between the Crown and the greatest of all the companies, the Merchant Adventurers themselves. In 1629 we find them on the Parliamentary side in the dispute over tonnage and poundage, but "hope there is that the Merchant Adventurers leading the way (in the payment of customs) the rest of the sheep will follow." By May 16 Coke reports that "by two hands" the company have agreed to ship their cloth, Coke's brother Gore assisting in the accommodation.

Then there is, for example, the troublesome affair of the Duke of Lennox. This kinsman of the King, a Stuart and a Scot, had been made His Majesty's Alnager and Collector and Farmer of the Old and New Draperies. He had also been given a patent to ship out a certain number of white undressed cloths. The combination of public office and mercantile license was unfortunate, for the duties of Alnager, or Inspector of Cloth for export, and of Customs Officer gave the Duke a position of vantage in his trading operations. The Merchant Adventurers were therefore glad to lease the patent from His Grace upon certain conditions at a rental of £2600 per annum; but these conditions not being fulfilled the company sought release from the contract. The King intervened on behalf of the Duchess the Duke being dead.

The company's petition to the Privy Council upon this case sets forth the history of the export cloth trade to the Netherlands. Incidentally it alleges that Her Grace's officer, one Anthony Story, had been exporting cloth through a stranger, an Anthony Winckler or Winkell, probably a Dutchman, "contrary to the privileges of this fellowship and a particular Order of Council."

The quarrel drags: when the Duchess dies the new Duke takes it up. The company pitifully complaining of "the daily decrease of the vent of white cloth beyond seas, in respect the stranger is so intent upon making this sort of cloth himself," and "the weak estate of the fellowship," offers the Duke £2000 and then £2200 instead of £2600. The Duke holds out; the dispute is referred to the King, and the King decides that the company shall not only pay the full amount half-yearly in advance, but "shall entertain and pay all such servants as were formerly employed in that business by the late Duchess." And His Majesty adds that the Duke can sell cloth to whom he pleases if this order is not accepted by the company.

Then there is the affair of Edward Misselden, an affair of which I should like to tell the story if I had only the space, since it involves the King's financial relations with Holland, the quarrel between Laud and the Presbyterians, Dutch wives, and many other interesting matters. It must suffice here to say that Misselden, working secretly for the King, tried to betray the company and dismally failed.

In the meantime both the Dutch and the interlopers are depressing the trade of the company. In 1634 the King had appointed a strong committee to consider the regulation of the trade, and especially the question of interloping. The company presented "a deduction of the title of Merchant Adventurers to the trade of all the draperies of England vented in Germany and the Low Countries," which begins with a history of the company from 1296 downwards. In 1615, through their vent in Germany by way of Hamburg and their trade in the Low Countries,

"they uttered 90,000 cloths a year, being the greatest height of the trade in draperies. Then came in the new company, and among them the interlopers, who in two years brought down the vent of draperies to 40,000 cloths. Even when the new company was dissolved, the council had allowed an open trade into Germany and the Low Countries except only in white cloth, "which liberty has now been in existence for nine or ten years."

This liberty had resulted in great inconveniences. The interlopers had fixed a mart at Amsterdam, "whither they carry on a trade mostly in Dutch bottoms, and not being under regulation, not only sell falsified commodities, but include white cloths to the great damage of the Merchant Adventurers." The company therefore petitioned either for "an effectual exclusion of the interlopers," or for their admission into the freedom of the Merchant Adventurers upon reasonable fines, so that they might be brought "to an orderly course of trading."

It is evident that at this time the Government was making an earnest attempt to reconcile itself with the company. On December 7, 1634, a proclamation was issued in general accord with the "deduction" of the Merchant Adventurers, and no doubt with the advice of the committee. On the one side it limited the export both of the old and the new draperies to the Mart Towns of the Merchant Adventurers. On the other hand, the company was to admit "all such of the King's subjects dwelling in London and exercised in the profession of merchandise and not shopkeepers" on the payment of a fine.

The proclamation raised a storm both in England and the Netherlands. The clothiers of Kent petitioned against the restriction on their sales whereby they were "like to be ruinated and driven to barter for base commodities," and the clothiers of Devon protested that they now could not sell one-tenth of what they had formerly sold.

But the serious trouble came from the Netherlands. It appears that Rotterdam had agreed to pay £6000 to King Charles for a monopoly of the English cloth trade, and it withheld payment until the monopoly should be made effective. Amsterdam, which had lived on the interlopers, intrigued in the States General against Rotterdam and the Merchant Adventurers, and encouraged the protection party in Holland. The States General thereupon prohibited the importation of English colored cloths, and Amsterdam even carried things so far as to procure a decree for the expulsion of the Merchant Adventurers. As for the interlopers, they declined either to give up their Dutch wives or their Nonconformity, and the company thereupon refused to accept them as freemen.

Such was the situation which the intervention of Laud and the affairs of the Duke and Misselden exasperated. By 1639 we gather that the Government has abandoned its attempt to make peace with the company. Here, for example, are the "Notes by Secretary Windebank touching the course taken with the Merchant Adventurers for reducing them to the Government of the Church of England":

"The prevention of their marriages with the Hollanders upon pain of disfranchising; the interruption [of] the intelligence which they hold with the Puritan faction here; the calling them into the Star Chamber for breach of their charter in maintaining foreign Church government against Statute Elizabeth; for receiving factious ministers and such as have been banished the Church of England for Nonconformity; and for their dispensing with foreign marriages contrary to their charter, whereby His Majesty loses his subjects; the secrets of the kingdom are revealed, our clothing trade brought into those parts; and our commodities of wool and fullers' earth transported."

The Crown and the merchants were now separated by a gulf of misunderstanding, estrangement, hostility. Things had gone so far that only a spark was needed to set all these dry sticks of antagonism in a blaze. The King struck steel on flint, driven to it by lack of money to meet the Scotch rebels.

"On Saturday last," writes a correspondent, "by a warrant under the King's hand, all the money in the mint, about £100,000, brought in by the merchants, was seized upon for the King's present necessity, the merchants being ordered to repair to the Lord Treasurer to receive security for their principal and 8 percent, interest. This stop has put the merchants into great disorder, wherefore they join all together to petition His Majesty and to set down the ill consequences that it will beget. The merchants knew nothing about the seizure till Sunday night, after the King was gone from Whitehall to Oatlands."

Dismay, anger, panic, and agitation ruled in the City only partly allayed when Charles compounded for £40,000 on the security of the Farmers of the Customs.

The King took other measures, ill calculated to restore the confidence of the City of London. He ordered a coinage of base money to pay the Army at the rate of three-pence of silver in the shilling; and was only induced to change his mind by the representations of Sir Thomas Roe and the City Corporation. In August he compelled the East India Company to sell him its stock of pepper, offering in return the security of the Farmers of the Customs for payment over two years. Not only were the grocers in some reasonable doubt as to the return of their money; but the King immediately threw the pepper on the market, thereby producing a crisis in the spice trade.

The end was now near. The Merchant Adventurers were strong in the House of Commons, and the East India Company had thoughtfully distributed stock among the members. Pym first proposed that the City bands should protect Parliament, and on January 3, 1642, the committee of the whole House adjourned to Guildhall, the center of the organized trade of London. And it is noteworthy also that before the House adjourned it appointed committees to sit in the Grocers' Hall, the Hall of the East India merchants.

Thus we gather from the main facts of this great national crisis that the quarrel was less constitutional and religious than commercial and economic. Parliament was the instrument by which two great organized trades protected themselves against the injuries and depredations of the Government, and religion and Parliamentary privileges were used as a cloak to cover the real quarrel. This was natural, as both the Merchant Adventurers and East India Company were bound to the King by an oath, the most solemn and binding part of their fellowship: and they were thus driven to seek the highest and most plausible pretext for the breach of their vows.

But the true motive is nevertheless confessed at the moment of crisis. Thus in the petition of the Mayor, Aldermen, and Common Council of London, presented to the King at Whitehall on January 9, 1641, these good people represent to His Majesty that his policy "tended not only to the overthrow of the whole trade of that City and Kingdom, which they felt already in a deep measure, but threatened the utter ruin of the Protestant religion and the lives and liberties of all his subjects." The trade motive is put first.

The truth is that the foreign policy of the Stuarts was a family policy, and had no relation or was even hostile to the interests of England. Elizabeth's policy was a policy of economic independence, of vent for English cloth, and of free access to those spices which were necessary to the powdering down of English beef for winter consumption. It was a policy which Englishmen understood and liked, the more as it brought England into conflict with Spain and the Empire. Queen Elizabeth might almost have proclaimed the religion of Mahomet and abolished Parliament altogether if she had so desired; an England satisfied of her fidelity to its interests would have submitted to almost any invasion of its religious beliefs and constitutional customs.

Yet it would not be fair to suppose that the interest of England lay altogether with the companies and against the King. On the contrary, there are indications of a conflict of interest between agriculture and foreign trade, and between the cloth industry and the cloth trade. The East India trade especially was thought by many to be a waste of our treasure and of our ships and an injury to our cloth manufacture. Our weavers and their allies, the shearmen, dyers, and finishers, all showed discontent with the management of our foreign trade by the companies. It might be interesting to draw a chart of the civil wars according to industries. We should find shipping on the side of Parliament as well as the towns of the Merchant Adventurers, the chief exception being Newcastle, whose Merchant Adventurers had a standing quarrel with the London Company.

London, Bristol, Southampton, Exeter, Plymouth, Ipswich, Boston, and Hull were all for the Parliament. And so with the new manufacturing towns. Clarendon tells us that "Leeds, Halifax, and Bradford, three very populous and rich towns (which depending wholly upon clothiers naturally maligned the gentry), were wholly at their disposition." And the cloth industry would be divided. The old drapery of Wilts, Gloucester, Oxford, and Somerset went with the King; the new drapery of East Anglia with Parliament. This might be explained partly by the fact that the new drapery was largely in the hands of Dutch immigrants, who were content to use the coarse wools to make new kinds of cloth which came into competition with the old and were frowned upon by His Majesty's alnagers. The records show a more or less constant conflict between these East Anglian weavers and the Privy Council. They were suspected of exporting fullers' earth and half-finished cloth to their friends in Holland; they refused to comply with the regulations of the industry; and incidentally they were obstinate Nonconformists.

It is to the credit of Charles that he stood for the weaver against the merchant, for the farmer against the shipper; but this division in itself might have been accommodated. The difference which could not be accommodated was the surrender of British interests to Spain and to Holland. Royal neediness and family policy led the Stuarts to prefer foreign interests over the interests of England. This was the root of that long and bitter conflict which led to the Civil Wars, and the unhappy struggle has this lesson for us of the present day: harmony in a State depends on the understanding between the Government and the national interests.

VII. The State of Europe

The National Policy of the Long Parliament and of Cromwell is in the main the policy of the Merchant Adventurers. Here for a brief space we almost seem to find that ideal State propounded by Schmoller where economic and political control are united: that it came short of that ideal we shall see in the latter part of the story. But at the beginning the Merchants of London are the unseen hand behind Cromwell and the Long Parliament.

The Merchant Adventurers lend Parliament £30,000; when the King applies to the governor for a loan of £20,000 the matter is immediately reported to Parliament, and the House thanks the company and votes a convoy for its cloth fleet to the Elbe. At the same time an ordinance is passed which in fact enormously strengthens the company. The company is declared to have been "very serviceable and profitable unto this State and for the better government and regulation of trade, especially that ancient and great trade of clothing." The company is given rights to levy money on members and their goods, to imprison members, and to administer an oath approved by Parliament. The fine for admission is doubled, all previous privileges are confirmed; membership is limited to those who have been bred merchants. "No person shall trade into those parts limited by the corporation but such as are free of the corporation, upon forfeiture of their goods."

The Levant Company lends Parliament £8000 and obtains a similar ordinance. Its services to the State are recited in the preamble. It had "built and maintained divers great ships," "advanced and maintained navigation," "vented kersies, says, perpetuanas," and "transported into foreign parts for several years together above twenty thousand broadcloths per annum besides other commodities dyed and dressed in their full manufacture." It was therefore continued as a corporation and given power of "free choice and removal" of "all ministers and officers by them maintained either at home or abroad, whether they are dignified or called by the title or name of Ambassadors, Governours, Deputies, Consuls, or otherwise."

They are to have power to "levy moneys on the members of their corporation and strangers, upon all goods that shall be shipped in English bottoms, as also upon all the goods of English shipped in strangers' bottoms which go into or come from the Levant seas, for and towards the necessary charge and maintenance and support of their ministers, officers, and government." None are to trade in those parts but "such as are free brothers" on forfeiture of goods or ships. The fellowship is to admit any person "by way of redemption," but only "if such person be a meer merchant and otherwise capable thereof," on payment of certain fines which are named, and the company is to have the right to distrain, imprison, and administer an approved oath.

The Eastland Company is also high in the favor of Parliament; but it is noteworthy that the East India Company, although it promises £6000 on getting its Bill against interlopers through Parliament, suffers a check. The House of Commons its members well primed with special terms of subscription speedily send it up to the House of Lords; but the House of Lords rejects it. Nevertheless the company lends Parliament £4000 and is vigorously supported in its quarrel with the Dutch.

If the Civil Wars had really been fought upon questions of religion and government we should expect to find the foreign policy of the Commonwealth pursuing the same objects. The Civil Wars would naturally be followed by an alliance with Holland and a war with Spain, and it is considered rather shocking by our historians that the Commonwealth followed exactly the opposite course, went to war with Holland and made friends with Spain. Gardiner confesses that "the strong Puritan zeal which is supposed to have animated the officers (of the Fleet) is . . . conspicuously absent from their letters." "Yet," he consoles himself, "the tide of religious emotion which had swept over the country could not fail to leave behind it a mental and spiritual vigor which prompted men to worthy action on mundane fields."

The idea of a seventeenth-century English sailor uplifted on a tide of religious emotion to fight a Dutchman does not altogether satisfy our sense of reality. Gardiner is equally puzzled by the understanding with Spain, and here his reasoning even becomes grotesque.

"It is undeniable," he says, "that by advanced Puritans the policy of agreement with Spain was at that time held to be the Protestant policy; probably because Spain, though still remaining the home of the Inquisition, had no Protestants left to persecute while Protestants were still numerous in France." And again: "The animosity of the heroes who had fought against Spain with Drake and Raleigh appeared to have died out in the hearts of the sailors of the Commonwealth. The fact was that the understanding with Spain was merely political, and in no way bound the nations together after existing conditions had passed away."

But why was there this "merely political understanding"? Was it, as Gardiner suggests, because there were no longer any Protestants in Spain? Or was there some more substantial and reasonable motive? Now Gardiner mentions that the party which favored the war with Holland desired a commercial treaty between Spain and England: if he had put these two facts together he might have solved both conundrums. For this is the policy of the merchant Thomas Mun and of the Merchant Adventurers.

While we have been absorbing ourselves in these little domestic quarrels at home a great change has come over Europe. The Imperial system had long since collapsed. The Thirty Years' War, from 1618 to 1648, had made a desert of a great part of Germany, and broken into pieces and desolated the Empire.

In all history there is no greater collapse. Hamburg had become, and remained for two hundred years, the pensioner of England; Lubeck, the illustrious, bowed her proud head to the upstart States of Sweden and Denmark; Danzig had prudently left the Empire before the disaster occurred, and was "tied for better or worse to Poland."

"On the Middle and Upper Rhine the balance of trade, which had formerly been largely in favor of the products of Germany . . . had now entirely shifted in favor of France. The towns of Westphalia and the adjoining districts lay low; and if the Rhenish were in a somewhat better state, it was as hangers-on of the Dutch that they picked up a small share of their neighbors' prosperity."

Spain, which had formed a part of the economic as well as the political system of the Empire, found it difficult to stand alone. She had relied for almost everything upon Germany and the Netherlands, and had neglected her shipbuilding and her manufactures.

"At this time," says Adam Anderson, speaking of the year 1647, "her want of manufactures, produce, and other necessaries, within herself, for the supplying of her vast American colonies, occasioned all the gold and silver brought from thence home to be paid away, as fast as they received it, to the English, Dutch, French, Germans, and Italians, for all kinds of necessaries for her said colonies."

And no doubt Anderson founds himself on Thomas Mun, who observes that while Spain's West Indian mines of gold and silver are the richest in the world, yet all parts of Christendom are partakers of this treasure "by a necessity of commerce," for Spain being unable to supply herself and the West Indies "with those varieties of foreign wares whereof they stand in need, . . . their moneys must serve to make up their reckoning."

Although Spain was "the fountain of money," she was forced to a base copper coinage by her "wars and want of wares." And again: "Spain by wars and want of wares doth lose that which was its own." Her treasure went all to foreign countries, especially to the Netherlands and to Italy.

While Spain thus guttered away like a candle alight at both ends, two countries were rising, the one to commercial, the other to industrial, greatness. Those unconsidered estuaries and sea meadows which had become the seven provinces had first raised themselves to power on the back of that noble fish the little silver herring. A certain Dutchman, one William Beakelson of Biervliet, who lived at the beginning of the fifteenth century, discovered the exquisite knowledge of Beakeling or pickling, and these pickled herrings, packed in little oaken kegs with oaken shavings, made so great a trade for the Dutch that in the seventeenth century it employed a thousand great busses and a hundred and seventy smaller vessels, and yielded to Holland more than eight millions of guilders per annum.

From herrings the Hollanders proceeded to whales, and sought to establish a monopoly of the Greenland fisheries. They also invaded the Baltic, allied themselves with Denmark, and in 1511 fought a great but inconclusive battle with the fleet of the Hanseatic League.

These wars with the "German merchants of the Holy Roman Empire" continuing, embroiled the Dutch with the House of Habsburg, and as the Dutch commanded the estuary of the Rhine, the chief vent for English cloth, Elizabeth gave them her disinterested support in the long wars of independence. Their political importance was well understood by our Elizabethan statesmen.

"The Low Countries," says Burghley in a State Paper of 1583, "hitherto have been as a counterscarp to your Majesty's dominions. . . . The King of Spain without the Low Countries may trouble our skirts in Ireland but never come to grips with you; but if he once reduce the Low Countries to an absolute subjection, I know not what limits any man of judgment can set unto his greatness."

By English aid the Dutch achieved their independence and proceeded to secure the Spanish trade.

"As to Spain," says De Witt, "it is very observable that all the welfare of that kingdom depends on their trade to the West Indies, and that Spain affords only wool, fruit, and iron; and in lieu of this requires so many Holland manufactures and commodities that all the Spanish and West Indian wares are not sufficient to make returns for them . . .

"It is well known that Spain during our wars lost most of their naval forces; and that we during our peace have for the most part beat the Eastern (Hanseatic) merchants and English out of that trade. So that it is now certain that in Spain all the coast is navigated with few other than Holland ships, and that their ships and seamen are so few, that since the peace they have publicly begun to hire our ships to sail to the Indies, whereas they were formerly so careful to exclude all foreigners thence. It is manifest that the West Indies being as the stomach to the body of Spain must be joined to the Spanish head by a sea force, and that the kingdom of Naples with the Netherlands being like two arms they cannot lay out their strength and vigor for Spain, nor receive any from thence but by shipping. All which may be very easily done by our naval power in time of peace and may as well be obstructed in time of war."

It may be surmised that the sack of Antwerp and the Thirty Years' War had driven Flemish and German capital into the strong sea-girdled towns as into a safe deposit. De Witt boasted that the Dutch merchants had the use of money at 3 percent. "without pawn or pledge," and they were able to erect a great mercantile system on cheap credit.

"The Hollanders may buy and lay out their ready money a whole season before the goods they purchase are in being and manufactured, and sell them again on trust, which cannot be done by any other nation considering the high interest of money."

Nearness to the Baltic and an understanding with Denmark gave them command of shipbuilding material. "Almost all great ships for strangers are built by the Hollanders," says De Witt. They were the sea-carriers not only for Spain but for France and indeed for all Europe.

"It is nevertheless evident that the Hollanders have wellnigh beaten all nations by traffic out of the great ocean, the Mediterranean, Indian and Baltic Seas; they are the great and indeed the only carriers of goods throughout the world."

Their greatest achievement was, as we have already seen, in the East Indies, where, as De Witt says, the trade of spices and Indian commodities was "pretty well fixed" to Holland. Their East India Company was the finest trade organization in the world: we might call it a Dutch development of the Hanseatic system.

The company was divided into four chambers: Amsterdam, Zeeland, Hoorn and Enkhuisen, Delft and Rotterdam. The towns equipped their own ships and traded with their own stock; but they contributed also to the joint stock of the company and met in Grand Council on matters of common policy. They were at least as strong as the States General; they directed fleets and armies; they built fortresses, garrisoned cities, and conquered countries. They claimed and enforced a monopoly of the trade of Asia, and those who call the Dutch free traders should remember that the chief source of Dutch wealth was held against all comers by an armed monopoly.

In 1620 two English skippers, Shilling and Fitzherbert, annexed the Cape of Good Hope in the name of King James. The annexation was never enforced, and thirty years later the Dutch founded Cape Town, "the frontier fortress of India," which gave them command of the Indian Ocean. Their fortresses in Batavia, Ceylon, and elsewhere commanded every trade route: they maintained this trade empire not by cheapness but by organized power.

Nor was the rise of Holland founded altogether upon trade. Besides the shipbuilding and fishing industries they had their linen and woolen manufactures. The troubles in Flanders had driven many Flemish weavers and cloth-finishers to take refuge in the United Provinces, and Holland took over a great part of the finishing of English cloth. Using her position of command over the Rhine Valley as a lever, she forced the Merchant Adventurers to bring their cloth unfinished, finished it in her own workshops and distributed it throughout Europe. There lay the root of the quarrel between Dutch and English.

One or two of the more thoughtful Dutch burghers realized that the foundation of their wealth lay not in trade but manufacture.

"Though," says De Witt, "we should lose our freight ships, yet we should not therefore lose our manufactures, fisheries, and traffic; but on the contrary by these means, and by lessening the taxes at any time, the freight ships would easily be induced to return to Holland. We know that heretofore in Flanders, Brabant, and Holland many inhabitants were maintained by manufactures, fisheries, and traffic, when the Easterlings (Hanseatics) were the only carriers and mariners by sea; as also that the said owners of freight ships were for the most part gradually compelled by our manufactures, fisheries, and traffic to forsake these Easterlings and to settle in Holland."

Here at least we have the sound doctrine that shipping grows out of manufacture, and that production is the foundation of wealth. But the shipping interest and the cloth-finishing trade were together too strong for the national policy of De Witt. He protests that "the undrest English cloths are not charged at all, and the English traders enjoy every way more freedom and exemption from taxes in Holland than even our own inhabitants."

And this is the secret of that decay which brought Holland to ruin in the end. The easy wealth begotten of trade tempted her to forsake the more laborious course of a national manufacture.

France, under a line of great kings and statesmen, understood better the foundations of national power. In the seventeenth century she was rapidly developing into a great industrial Power, following the same principles of protection and organization as England under Elizabeth.

But the policy of France, as it was not fully developed or understood in Cromwell's day, may be left over for another occasion.

Such then was the Western Europe on which Cromwell looked out after he had defeated the Cavaliers and cut off the head of his King. If the ruling impulse of his government had been religious and constitutional he would have looked at the enormous wealth and power of Holland with complacency and at the decline of Spain with pleasure. But the motive being the healthy motive of mankind, the motive of livelihood, the mind and policy of the Commonwealth were what we shall see in our next chapter.

VIII. The Mountain of Gold and the Mountain of Iron

How far Charles had been in the power of the Dutch it would be interesting to know. We know that he borrowed money from them. In 1625 he authorized the Duke of Buckingham to borrow £300,000 from the States General on the security of his Crown jewels, which were sent to Amsterdam as the Crown jewels of the Plantagenets had been sent to Cologne. In the one case as in the other we may suppose that royal policy was influenced by royal necessities. In 1629 he sold English iron cannon, weighing four thousand tons in all, to the States General in order to redeem his Crown jewels. The transaction could hardly have pleased a British public jealous both of its economic independence and its naval power.

In the speeches which were made at the time of the great crisis between King and Parliament we find references to a foreign hand; but whether the influence indicated was Dutch or French or Spanish I am unable to say. Clarendon accuses the French of stirring up strife in England for their own purposes: but naturally does not suggest that the Dutch had any hand in the business. Yet that there was some understanding between Charles and the Dutch is clear, and not only between Charles and the Prince of Orange, but between Charles and the Burgher Party. Perhaps the whole truth is disclosed in the report of Sir John Henderson to the Commonwealth: "Their principal reason was if Monarchic continued, then the general engrossing of trade by the Hollanders would also continue."

However that may be, the Netherlands, both Prince and States General, secretly and openly favored the cause of Charles. They gave the Royalists refuge, raised money for them and entered into negotiations with the King for the lease of the Scillies. When St. John and Strickland went over to The Hague in 1651 they were insulted in the streets and put off with illusory negotiations.

The Dutch had other ends in view. They were using the English troubles as the Hanseatic League had used the Wars of the Roses, and their design was to get the trade of the world into Dutch hands.

In 1649 the Dutch Minister at the Russian Court told the Tsar that as the English had murdered their King, the only course for a self-respecting monarch to take was to close his country to English trade. This trade, said the Dutch, could be done by them with more profit to the Tsar, and they made good their words by offering to pay 15 percent, upon imports and exports.

"Whereby the Hollanders reaped such advantage that the Polish envoy, in the year 1689, affirmed they had in that year two hundred factors in Archangel."

But the Sound was even more important. In September 1649, Strickland writes from The Hague:

"The treaty is ended between the States and the King of Denmark; they pay him about five and thirty pound a year for all the custom of their ships which are to pass through the Sound. Those of this country who trade thither shall pay here to the States the same rates they paid there before they go out, and upon the States certificate are to pass without any stop. The King of Denmark is to have about four score thousand advanced, which is to be paid back again by six thousand pounds a year without interest, they to pay themselves out of what they are to pay him. I am told one secret of this agreement is, that the King of Denmark is obliged not to grant this privilege or make any such bargain with any but them; in particular not with England, France, Sweden nor any else. The Swedes do more than any dislike this agreement of the States about the Sound."

Strickland adds that all the Dutch are reading a book about "the misfortunes of the House and Family of the Stewards," and adds: "it is not amiss that your honors see and observe the working humors of other States."

The Commonwealth liked so little these "working humors" of the Dutch that they proceeded to negotiate an alliance and commercial treaty with Sweden and to impose, or rather to reinforce, the Navigation Laws.

Now the Navigation Act of October 9, 1651, was neither the first nor the last of its kind in English history. The principle which it embodied may be traced back through many statutes to the reign of Richard II, an unhappy monarch who engaged in a hopeless struggle with the Hanseatic League.

The sensation caused by the Act of Cromwell was because Cromwell enforced it without fear, corruption, or hesitation against the greatest maritime power in the world. It was thrown down like a gauntlet.

Moreover the Act covered all the territories of the Commonwealth, whether in the New World or the Old, so that it hit hard the Dutch carrying trade between Europe, the West Indies, and North America. It forbade the importation of the produce of any country, save the country to which the ship belonged, except in vessels owned by Englishmen or the inhabitants of English colonies, and manned by crews of which more than one half were Englishmen. It was a heavy blow, and it was directed not only against the carrying trade of Holland, but against her fishing and whaling: salt fish and oil were only to be imported in English ships.

There has been some attempt by our Liberal historians to represent the Dutch as the pioneers of the freedom of the seas, to which is opposed the barbaric tyranny of our Navigation Laws. Even Gardiner, who ought to have known better since he knew all the facts, rather leans to this view. The truth is that where the Dutch had the power, as in the Indian Ocean, they enforced a mare clausum; where they were weak, as in the Channel, they upheld a mare liberum. Grotius was a lawyer-politician who tried to substitute treaties for naval expenditure. If the Dutch theory was in Grotius, the Dutch practice was in Amboyna and in the farming of the Sound.

Then Gardiner sheds tears over the declension from "the spiritual and ideal aims" of the Civil War to the "new commercial policy which did not profess to have more than material aims."

"The intention of the framers," he goes on, "by the very nature of the case, was not to make England better or nobler, but to make her richer." And he is encouraged to proceed to the hazardous generalization: "During the century and a quarter which preceded the Treaties of Westphalia religion had been, if not the exclusive cause, at least the frequent pretext of the wars by which Europe had been desolated. In the wars which raged for nearly a century and a half after the signature of those treaties questions of commerce took the place formerly occupied by questions of religion."

If Gardiner took his stand on the word "pretext" there would be nothing to argue, for pretexts do not or should not matter either to the historian or to the moralist. But in so far as he seems to urge a radical difference in the motives of mankind, and to claim a sort of moral superiority for a war upon a point of doctrine over a war fought for mastery in commerce, there might be something to say. There are religious and moral pretexts in plenty after as before the Treaties of Westphalia, for after as before men sought to put the best face on their actions. Yet if we look into the heart of events, the struggle for existence between nations, the attempt to exploit on the one side, the refusal to be exploited on the other; the competition for world-trade and for territory these are the constant factors and principal motives in all wars, not excepting the Crusades.

We need not apologize for Cromwell: his intention in the Navigation Acts was not merely to make England "richer," as Gardiner says; but to make England strong, independent, and secure. These are the highest objects of statesmanship. A statesman who forgets these aims in spiritual ideals and religious or moral enthusiasms betrays his trust: he is like the director of a brewery who uses his position to further teetotal principles.

The Navigation Act struck a shrewd blow at Dutch commerce. And it was only part of the protective policy which England opposed to the commercial policy of the Dutch.

"There are now in Holland," says De Witt, "many more English commodities which we could very well spare, that are transported and used by us than Holland hath wares in England, because the Holland and other manufactures have for the most part long since been prohibited, and since the prohibition in England of importing any goods save those of the growth and manufacture of the country by foreign ships into England, all our navigation to that kingdom is at a stand."

In the enforcement of the Navigation Act, Ayscue seized fourteen Dutch ships at the Barbados, and as Cromwell had issued letters of reprisal against France, Dutch ships were also seized on the suspicion of carrying French goods. The Dutch were almost forced to fight although they had no desire that way. Their policy was trade for trade's sake; they had taken all power from their Stadtholder, and had no less than five Boards of Admiralty. "The English," said the Dutch Ambassador who was sent over to mediate, "are about to attack a mountain of gold; we are about to attack a mountain of iron."

The Dutch were fat; the English poor, hungry, and athletic after their Civil Wars. And the Merchant Adventurers, the Muscovy Company, the Eastland Company, and the East India Company were determined to settle accounts. "I believe," said Thomas Scot, "we are rivals for the fairest mistress in all Christendom trade." The Dutch had shut the English out of Russia, the Baltic, and the Spice Islands, and were oppressing the cloth trade with the Netherlands and Germany. The English determined to reply in the Channel.

Before the war began, Samuel Avery, the Governor of the Merchant Adventurers, had petitioned Cromwell to enter into negotiations with Spain for the transfer of the mart town of the cloth trade to Bruges, the reason given being "the multiplied encroachments and violations both of the provincial States of Holland and of the general States of the whole land upon the petitioners' ancient rights and privileges."

The Dutch were at the same time "practising" against the English cloth trade in Germany.

"There is," writes one of Cromwell's agents at The Hague, "a business hatching between the States and the King of Denmark about hindering all trade between England and Hamburg, to which end either a fort must be built on the River of Elbe, or the King of Denmark must for a time upon conditions give the town of Gulick into the States hands."

The Dutch moved the King of Denmark to seize twenty English ships in the Sound. On the south they arranged terms with Spain so as to prevent English cloth passing through the Scheldt. The English reply was the enforcement of the Navigation Act, the seizure of Dutch shipping, treaties with Sweden and Portugal, approaches to Spain, and the naval war by which Blake and Ayscue drove the Dutch herring fleet into harbour, destroyed or captured a great fleet of merchantmen, defeated the Dutch navy in a long running fight off Portland, 1 and secured command of the Channel.

Thus the Mountain of Iron defeated the Mountain of Gold.

The terms showed the extent of the victory. The Dutch promised to expel the Royalists and exclude the Prince of Orange. The Dutch East India Company was condemned to pay the English East India Company £85,000 with £3615 for the families of the Englishmen who had suffered at Amboyna. The island of Pulerun went to the English. Our Baltic merchants were awarded £97,973 0s. 10d. for the seizure of their ships in the Sound.

These terms are given by Gardiner, but this excellent historian has overlooked the richest fruits of the victory the terms secured for the Company of the Merchant Adventurers. In the completeness of their triumph and the humiliation they imposed on the Dutch I can compare them with nothing but the Treaty of Utrecht of 1474, by which the Hanseatic League confirmed their commercial privileges in England. All the

"ancient privileges, immunities and franchises" of the Merchant Adventurers are confirmed; all "invasions, violations, and elusions" "rectified and amended"; all "impositions, taxes, convoys, tolls, customs, and other payments whatsoever contrary to the said grant of Philip the Good anno 1446 . . . since imposed . . . utterly and for ever renounced, abolished, disclaimed, and discharged."

It is in fact a Free Trade treaty as far as Holland is concerned:

". . . it shall be lawful for the said Merchant Adventurers of England from henceforth to import into the said United Provinces, or any of them, . . . any cloths, kerseys, bays, or other woolen manufactures made in England or any the Dominions thereof, drest or dyed in the cloth or otherwise, without any manner of prohibition whatsoever, and the same or every part thereof therein to put to sale as they shall think fit."

So completely did the Dutch surrender the cause of their weavers in the cause of their merchants. The reasons of this surrender, as we gather from the correspondence, were in the main two the naval victories over the Dutch and the threat to transfer the mart town of the English cloth trade to the Spanish Netherlands. This threat was almost as dreadful to Holland as Blake's Navy, for English cloth had become so important an article of trade to the Dutch that they could not get along without it.

"I can testify to have heard through the mouths of one of the Governors themselves," says one of Cromwell's intelligencers, "that they would rather assault all the world by sea without any distinction than suffer their commerce to be diverted or that it should be carried or transmigrated into any other part as in effect formerly the commerce through the assistance of the English was driven out of Flanders."

A party continued to agitate against the terms; but the Dutch were now too devoted to commerce to found themselves upon industry, and their bitter party politics was another cause of weakness.

"The Orange Party," says Cromwell's correspondent above quoted, "will only laugh if the English should give a check to the commerce of Holland, to verify the prediction that the deceased Prince Henry and the Orange Party have so often said, that England coming to be a Commonwealth would ruin the commerce of Holland and draw it wholly to themselves."

The Dutch were, in fact, so divided between agriculture and commerce, between prince and burgher, between Amsterdam and Rotterdam, between one province and another, that they had no longer a national party or the unity and power to protect their interests. Despite occasional efforts, showing power and heroism, they were destined to sink gradually into weakness and decay such weakness and decay as overtakes a nation which betrays its industries for the sake of its trade, and relies on the treatises of its lawyers more than on the power of its Navy.

IX. The Restoration

If we examine the policy of Oliver Cromwell we shall find it in the main the policy of Elizabeth. For that great queen, as we gather from his speeches, he had a profound admiration: in his roughly passionate and poetical nature he worshipped her memory.

"The Queen Elizabeth of famous memory," he calls her in his speech of September 17, 1656, and adds, a little defiantly: "We need not be ashamed to call her so."

Yet Cromwell was moved by something Elizabeth only used, that is to say, the religious motive. What the English interest asked for at the time was to keep sitting on the Dutchman's head and to maintain the declining Spain as a balance to the increasing France. For the Netherlands had not been thoroughly defeated. They were busy patching up the spider's web that had been rent by the war. In his speech of January 25, 1658, Cromwell accuses the Dutch of conspiring with Denmark and Spain against England and Sweden:

"It is a design against your very being; this artifice, and this complex design, against the Protestant interest wherein so many Protestants are not so right as could be wished! If they can shut us out of the Baltic Sea, and make themselves masters of that, where is your trade? Where are your materials to preserve your shipping? Where will you be able to challenge any right by sea or justify yourselves against a foreign invasion in your own soil? Think upon it; this is in design! I believe if you will go and ask the poor mariner in his red cap and coat, as he passeth from ship to ship, you will hardly find in any ship but they will tell you this is designed against you."

But Cromwell pleaded for a war with Spain: he pleaded for it passionately, earnestly, as one who argues against a strong feeling in his own party. He appeals to religion, to the memory of Queen Elizabeth, to race feeling. The Spaniard, he keeps on saying, is the "natural enemy," "the root of the matter," the sworn and implacable foe of the Protestant religion. Moreover, money was wanted to pay the Army, and Cromwell had hopes of looting the Plate fleet.

So Cromwell went to war with Spain, and thereby lost the support of the City of London. Adam Anderson, always a shrewd judge in such matters, describes Cromwell's anti-Spanish policy as "self-interested" and "against the solid interest of England," as it too much depressed Spain and strengthened France.

And Bishop Burnet is much to the same effect:

"The war after that broke out in which Dunkirk was indeed taken and put in Cromwell's hands; but the trade of England suffered more in that than in any former war, so he lost the heart of the City by that means."

The Dutch and the French reaped the profit, the one in commerce, the other in strength. Yet Holland, by the aggrandisement of France, lost in security. "A good patriot of Holland," said De Witt, "ought to wish that France and England may decrease and that Spain may not increase in strength." The increase of French power was now to overshadow Europe.

Nevertheless, we may call Cromwell's policy in the main a commercial policy. He worked to open the Baltic for our shipping by allying himself with Sweden and fighting Holland and Denmark; he even tried to secure a lease of Bremen, as an English stronghold and staple town; he entered into a design to open the Mediterranean by securing a fortress on the southern entrance of the Straits; he avenged Amboyna; he enlarged our Empire in the West Indies.

Yet we see from several indications that there is still a conflict between commerce on the one side and industry and agriculture on the other. The East India policy that bone of contention shows a violent oscillation. Between 1653 and 1657 Cromwell even allows an open trade with India with disastrous results. In 1657 he re-established the old company.

Even the Merchant Adventurers had not things all their own way.

"There were," says Thomas Burton in his Diary, "strong arguments brought on account of the Free Merchants to prove that a Free Trade (i.e. an unregulated trade) was most for the good of this nation.

"Sir Christopher Pack, who is Master of the Merchant Adventurers Company, turned in the debate like a horse, and answered every man. I believe he spoke at least thirty times.

"Mr. Lloyd helped him as much as could be, but both reason and equity, and the sense of the committee being against them, they were forced at last to give up the cudgels, but with much ado. Sir Christopher Pack did cleave like a clegg, and was very angry he could not be heard ad infinitum, though the committee were forced at last to come to a compact with him, that he should speak no more after that time. He said at last he hoped to be heard elsewhere. The man will speak well, and when I heard that the consultation was at Whitehall about the admission of the Jews, of all the headpieces that were there, he was thought to give the strongest reasons against their coming in of any man."

[NOTE: According to Whittock, Menasseh ben Israel offered £200,000 for full admission for the Jews to all the rights of citizenship. The English merchants were against it on the ground that "such an admission of the Jews would enrich foreigners and impoverish the natives of the land."]

The fight with the Free Traders resulted in a partial defeat of the company. Native merchants were allowed to trade into Germany and the Netherlands "without prejudice to the marts at Dort and other places in Holland," and this in spite of the fact that Cromwell was on the side of the company:

"It seems His Highness had published a proclamation, not long since, on the behalf of the Merchant Adventurers against the Free Traders, but they were surprised in it and condemned unheard."

Moreover, the conflict between the cloth-workers and the Merchant Adventurers over the export of undressed cloth was still unsettled. The cloth-workers still pleaded the statute of Elizabeth; the merchants still pleaded their charter and their licenses.

"I am clearly satisfied," says Burton, "that the cloth-workers are injured highly and eaten up in their trade; but the merchants by their influence and power at Court have always mastered them . . . so much so that the statute was altogether useless to the poor cloth-workers."

On December 23, 1656, after a long debate the Merchant Adventurers won in committee by a narrow majority.

It is plain that the great company did not feel itself altogether secure under the Commonwealth. Fanaticism was a force even less calculable than corruption. And its charters which came from the Crown were thought to be insecure under a Republic.

The excellent Sir Christopher Pack was no doubt advised by the company's lawyers that a Crown was necessary, and he made a valiant attempt to regularize matters by making Cromwell King of England. To the good merchant it seemed a simple matter. He strolled into the House one day, and after saying, "He had found a paper, I know not where," he proceeded to read the famous remonstrance. The Radicals and fanatics were beside themselves:

"Those who still retained some affection to the Commonwealth fell so furiously upon Pack for his great presumption that they bore him down from the Speaker's chair to the bar of the House."

The incident has puzzled the historians; but it is sufficiently explained by the fact that Pack was governor of a company whose privileges were held from the Crown and were being attacked by a party. Cromwell was on the company's side, therefore Cromwell should be made king.

There is evidence that Cromwell inclined to favor the proposal; but the Radicals were too strong both for Cromwell and for Pack. Men of stake in the country had reason to fear Parliament: it was mean, it was corrupt, it was fanatic. Those who sought a favor from Parliament went with money in their hands, and Cromwell from painful experience distrusted it so much that he set about to form a House of Lords as a balance. We see in his later speeches an experienced and settled disgust of Parliament "that arbitrariness of committees."

". . .committees erected to fetch men from the extremest parts of the nation to London to attend committees set to determine all things. And without any manner of satisfaction. Whether a man come with never such right and never such wrong, he must come and he must go back again as wise as he came." And again: "Whether or no in cases civil or criminal, if a Parliament assume an absolute power, without any control, to determine the interests of men in property and liberty; whether or no this be desirable in a nation? if you have any sense . . . then I think you will take it for a mercy that that did not befall England at that time . . . which would have swallowed up all religious and civil interest, and brought us under the horridest arbitrariness that ever was exercised in the world."

And yet again this notable outburst which explains so much:

"These hundred and forty honest men could not govern; they attacked a settled Ministry; they flew out at liberty and property, insomuch that both were like to have been destroyed; they held that if one man had twelve cows, another that had none ought to share with his neighbor. Who could have said any thing was his own if they had gone on?"

Certainly not the organized companies of England. As long as Cromwell lived they had one strong and solid pillar to the State: when he died nothing remained but "arbitrariness" or Restoration. In 1659 things were so bad in the City that some merchants almost ceased to visit their places of business; through want of employment a great number of poor were on the point of starvation; Cromwell had given the East India Company a charter; his son Richard granted a license to an interloper, and threw this branch of trade into confusion. At the same time the Council of State sought to borrow £30,000 from the company and were bought off with £15,000.

How far the companies assisted in the Restoration may be suspected, but not definitely known. On March 30, 1658, Charles is trying to induce Spanish Flanders to prohibit commerce with England. The Venetian agent reports that his motive is "to get something by it, his allowance here failing him, having great want of money."

A little later one of the Commonwealth spies reports that London Royalists had sent over £10,000 to their master in one month, "that the Spaniards might see he had friends here ready to assist him." "I dare not," he continues, "inquire into the names of these great citizens lest I should make them jealous."

It is certain that the return of Charles was beautifully organized. It was done from London, and not by the Royalists.

"Holies told me," says Burnet, "the Presbyterians pressed the Royalists to be quiet, and to leave the game in their hands." And again: ". . . the turn was sudden: for the City sent and invited him (Monk) to dine the next day at Guildhall; and there he declared for . . . the secluded members . . . and some happening to call the body that then sat at Westminster the Rump of a Parliament, a sudden humor ran like a madness through the whole City of roasting the rump of all sorts of animals; and thus the City expressed themselves sufficiently." "Monk," John Stukely reports, "seemed at first to court the Rump; but since I hear he hath closed with the City which can pay his Army surer and sooner."

The Republicans, we are told, "went about as madmen to rouse up their party; but their time was past . . . and then every man thought only how to save or secure himself."

The East India Company was among the first to welcome Charles, and presented him with a service of plate worth £3000, and the Duke of York with £1000 in cash. On April 3, 1661, Charles granted it the same charter as had been granted to it by his grandfather.

On January 1, 1661, His Majesty granted the Merchant Adventurers a royal charter "confirming all their liberties and immunities, with a proviso in favor of the liberties of the citizens of London." The other companies were treated with a similar indulgence. And it may be added that although old Sir Christopher Pack was disabled ostentatiously from holding any public office, he continued to enjoy his substantial possessions and died at a ripe age in the odour of sanctity.

From all these hints we may surmise that the same great organized interests which dethroned Charles I restored Charles II. They had broken with the Crown reluctantly; they returned to the Crown gladly, feeling, no doubt, that any settled government was better than the arbitrariness and corruption of professional politicians.

X. The Hand of a King

***TRANSLATE THESE QUOTES FROM FRENCH*****

The policy which we call Mercantilism in England, in France has been called Colbertism. But we might trace its development long before Colbert. There was a curious conflict between Henri IV and his Minister, Sully, over the protection of manufactures. Sully inclined to the view that manufactures did not suit France, which was an agricultural country, and that artisans did not make good soldiers. It was true that the realm was impoverished by buying luxuries from Italy; but the best way to stop that evil was by sumptuary laws and the forbidding of luxuries to the people who sent abroad for them. Henri IV replied that he would rather fight three pitched battles with Spain than engage with his bourgeois, "et sur tout leurs femmes et leur filles": "Pour contenter les sujets sans appauvrir le royaume, il fallait manufacturer soi-meme les etoffes strangeres riches et cheres."

At that time the manufacturing city of Tours was demanding protection, the notables of Rouen approved; but the merchants of Lyons, "qui vivaient de leur douane et non de la fabrique, etaient naturellement pour le systeme de la porte ouverte." The King took the side of the manufacturers and forbade the importation of silks and cloths of gold and silver. Like Simon de Montfort in England, he had begun the campaign at the wrong end: prohibition without manufactures was impossible. The interdict imposed in January 1599 was withdrawn in the following year. Nevertheless Henri IV persisted in his policy of protection, renewed his interdicts from time to time, and gave grants and monopolies to manufacturers. We see the first-fruits of an economic conflict in disputes between the merchants of Rouen and the Merchant Adventurers over the importation of English cloth.

Richelieu continued this policy of protection. "Son ambition," says Lavisse, "est celle des protectionistes de tous les temps; il faut vendre le plus possible aux etrangers et leur acheter le moins possible." "Pourvu," he said, "que nous S9achions nous bien aider des avantages que la nature nous a procures, nous tirerons l'argent de ceux qui voudront avoir nos marchandises, qui leur sont si necessaires, et nous ne nous chargerons point beaucoup de leurs denrees, qui nous sont si peu utiles."

He protected French manufactures, gave privileges to French merchants, and sought to create a mercantile marine by navigation laws. "Mais le roi avait trop d'affaires. H menageait les Anglais et les Hollandais et n'osait pas appliquer center eux son 'Acte de Navigation.'"

Nevertheless the French went ahead with their manufactures. Paris was already producing "des plus belles et plus riches tapisseries du monde"; Saint Quentin made toiles as fine and beautiful as the Dutch; Amiens serges and camelots; Paris, Tours, Lyons, and Montpellier velvets, satins, taffetas, and other silks as good as any in Europe; but above all Tours made the most wonderful "pannes and velvets, employing in her silk manufacture no less than 20,000 workmen."

But Colbert he was the great Protectionist. He protected every industry: "Colbert a demande a toute la France: Qui veut des manufactures?"

"It is necessary," he wrote in 1663, "to assist with protection and with money all the cloth manufactures of the realm," and not only cloth, but iron, steel, soap, linen, candles, cottons, lead, copper everything. If Germany produced certain metals consumed in France, then he sent spies to debauch workers of Nuremberg to come into France and teach them the arts of smelting. He even offered protection to the most delightful and necessary manufacture of all; he encouraged the youth of France to marry young by fiscal devices and took steps to discourage the number of celibates in the Church. He organized companies of manufacturers, regulated and improved the societies of merchants, reduced and regularized, although he did not succeed in abolishing, the provincial customs, regulated the manufacture of cloth, restored the navigation laws and founded naval colleges and shipbuilding yards.

Marc-Antoine Giustinian, the Venetian Ambassador in France between 1665 and 1668, reports to his Government that Colbert, desiring to make France superior to all other countries in wealth and industry, merchandise and arts, was acclimatizing the industries of other countries. This was true in particular of England. He had just given some workmen brought from England a palace for a workshop. The English tanning industry was also engaging his attention, and he was trying to produce in France Dutch cloth, butter, and cheese.

And Jan de Witt, in his Interest of Holland, notes the success of this protective policy. France, he says, has become a manufacturing country owing to the "new and very high imposition laid upon all foreign imported goods, and especially manufactures." Then France must have a world-commerce, so companies were organized a Company of the North for the commerce of the Baltic; of the West Indies for Africa and America; of the Levant; and of the East Indies. The St. Lawrence and the Mississippi, the West Indies, Madagascar, India, Assam all were embraced in a French world-policy, based upon a certain logical plan with its center a powerful and energetic State.

This growing strength of France obtruded itself gradually and disagreeably both upon England and Holland. Thus, for example, on May 1, 1638, the Merchant Adventurers petition the Privy Council on their wrongs in France. "They complain that they are not allowed to import into France serges, perpetuanas, Spanish cloths, and other sorts of English draperies, that their goods are searched by the dealers in French draperies, and illegally taxed," etc. And so we might trace a growing quarrel as the power of Spain declines and the power of France grows. Gardiner, always absorbed in the religious side of the quarrel, tells us how in 1651 Cromwell was "hankering after" a policy hostile to France.

"It is undeniable," adds this learned but innocent historian, "that by advanced Puritans the policy of agreement with Spain was at that time held to be the Protestant policy; probably because Spain, though still remaining the home of the Inquisition, had no Protestants left to persecute, whilst Protestants were still numerous in France."

The French, as a matter of fact, were trying to barter recognition of the Commonwealth for redress of the grievances of French merchants. In 1654 Cardenas, the Spanish Ambassador, prevailed upon the Council to prevent the relief of Dunkirk, and on September 4 Blake destroyed Vendome's fleet on the way from Calais. But, as we have seen, Cromwell's "private interest" led him away from this mercantile policy, and when Blake attacked the Plate Fleet of Spain the Protector forfeited the affections of the City of London.

The policy of France was equally obnoxious to the United Netherlands. In 1659 Fouquet established a Navigation Act giving French tonnage a protection of 50 sous a ton. In 1667 Colbert went a long step forward: "Les droits sur les marchandises manufacturees, sur les tissus, les laines, les dentelles de la Hollande et de l'Angleterre furent doubles."

It is not surprising that this policy raised both in Holland and England "les plus vives reclamations." In a few years the French customs on English manufactures had been tripled. In Holland the second tariff produced "uneveritable revolution commerciale." The Dutch made the most eloquent speeches to Louis XIV on the advantages of Free Trade. Divine Providence, "la felicite de sa creature," "une amitie et une societe universelles," were all introduced into the argument: "il cut besoin de cette correspondance universelle et de ce debit mutuel que nous appelons commerce, il est facile de comprendre que ceux qui facilitent ledit commerce facilitent aussi les moyens qui rendent lespeuples heureux et contents: el qu'au contraire" etc. etc.

This Free Trade cant not succeeding, the Dutch proceeded to make their own people happy by entirely prohibiting the importation of French wines and brandies and putting a very heavy duty on French silks.

Now in the war that followed it was the interest of England to side with Holland and Spain; but France offered England a return to the customs of 1664, besides Walcheren and the mouths of the Scheldt, while she gave to Charles a pension of 3,000,000 francs a year. The policy of Louis was to support the mistress of a king; in this he showed himself contemptuous both of our morality and our constitution: he should have supported the wife of a minister.

However that may be, French gifts and blandishments seduced our English Court from our national policy which, as we have seen, is to attack the strongest power.

When Colbert died France was well established in the woolen trade, with no less than 50,000 looms, and her silk manufactures were valued at fifty millions of francs. The State revenues had increased by twenty-eight millions of francs. When he began his labors Colbert estimated that the Dutch employed 16,000 vessels out of the 20,000 which were then sufficient for the trade of the world, and that they carried almost the entire oversea trade of France. But Colbert's policy produced French ships for French cargoes, and at the expense chiefly of Holland, France grew strong in her fisheries, her mercantile marine, and her navy.

Now in her national policy, as we have seen, France trod heavily on English toes. Both in the trade literature and the debates of Parliament we can trace the growing animosity.

In 1675, according to Anderson, "the English House of Commons, being much out of humor with the conduct of their King, Charles the Second, and that of his bad Ministers, acting so much in favor of France, and so diametrically opposite to England's true interests; and observing the immense consumption of French wares of all kinds in England; and, on the other hand, how little of English merchandise was taken off by France (now ardently pursuing the improvement of her own woolen, silk, and linen manufactures), that House entered into an examination of the general balance of trade between England and France; and found that England was annually, for some time past, above one million sterling losers by her trade with France."

This national competition grew more fierce and furious as time went on. The French tempted our weavers across the Channel; Parliament enacted the most hideous penalties against this emigration and the sale of trade secrets. France imported our wool, we forbade its export; France smuggled it across.

"France," says Sir Josiah Child, "lays an imposition of 50 or 60 percent, upon our drapery. The Swedish laws amount to a prohibition of the English from sending their own manufactures to Sweden in English shipping." Sweden was at that time supposed to be wholly under the influence of France.

The cloth trade petitioned Parliament; Parliament petitioned the King. But the King was known to be the pensioner of Prance, and both his activities and his inactivities were suspect. A pamphlet said to have been written by the direction of Arlington gives vent to the popular feeling:

"That not above three years ago, France was hardly able to send forth twenty ships of war, and now they have sixty large ones, ready furnished and well armed; and do apply all their industries and pains in every part to augment the number. Could the ghost of Queen Elizabeth return back into the world again she would justly reproach the Ministers of State in England for having abandoned her good maxims, by tamely suffering before our eyes a maritime power to increase, which she so diligently kept down throughout the whole course of her reign. Whereas you (a Minister of State is indicated) are so far from opposing the growth of this power that you rather seem to desire England should facilitate the way to make it grow the faster, and to render it yet more formidable than it is, by the acquisition of the seaports which, in conclusion, must infallibly bring France to be mistress of the commerce of the Indies. All the world knows the vast quantity of money and arms which the French have accumulated to that end alone, out of the richest to purses of that kingdom. Our power and greatness consist principally in the matter of commerce; I therefore conclude, by an unerring consequence, that commerce 'ought' to be the chief object of our jealousy, and that we are as bound to be as tender of the conservation of this benefit as of the apples of our eyes."

The French were not only laying a great design of world-empire: they were making themselves supreme in Europe. By 1677 they had made so much progress in the conquest of the Spanish Netherlands that Parliament pressed the King to an alliance with the Dutch. ". . . His secret engagements with the French Bang," says Anderson bitterly, "were too strong to incline hin> seriously to break with him."

It is of all things the most disturbing to a nation to suspect its Government of treachery to the national interest. But Charles was astute: his chief desire being to remain I had almost said in office he knew how to yield before the breaking-point came. By 1678 things had got so far that Parliament passed an Act "for raising money by a poll, etc., to enable His Majesty to enter into an actual war against the French King; and for prohibiting, for three years to come, and to the end of the subsequent session of Parliament, the importation into England of all French commodities whatever."

"It was indeed," says Anderson with a tang quite comically English, "more than time for England to interpose, and save the almost expiring liberties of Europe, while at the same time she put some stop to an inundation of French wines, brandies, silks, linen, paper, salt, and an innumerable variety of frippery, millinery and haberdashery wares, toys, etc., which prohibition and that of the wear of East India manufactures brought the general balance greatly in our favor in the course of twenty years. This law was passed much against King Charles's inclination, who was a constant pensioner of France, and a determined foe equally to the religion and liberties of his own kingdom. But the ferment of the people of England was at this time so great, by the discovery of the Popish plot, etc., that he was obliged to comply."

James II was a better man than his brother; but unfortunately his spiritual home was in France. And France, despite the profound mistake of revoking the Edict of Nantes, was extending her power in all directions. She had humbled Genoa and made herself mistress of the trade of the Mediterranean; she had taken most of the Spanish Netherlands and thus possessed the most skilled industrialists of Europe; she had taken Metz and Strasburg and commanded the Rhine; she had fortified the famous ports of Toulon and Brest, and was said to have more than sixty thousand sailors as many as England and Holland put together and a hundred ships of the line. She was establishing herself in Newfoundland, North America, and India, and although the French Government had overstrained the national resources by war and extravagance the weakness was as yet hardly visible. And thus it came about that the friendship of James II for France was fatal to his crown and dynasty.

"King James the Second," says Anderson, "in the very beginning of his reign, having great occasion for the friendship of the French King, for enabling him to accomplish the two grand points he had in view, viz. the establishing of Popery and of despotic power in England, got an act of Parliament passed, cap. vi, absolutely to repeal the said prohibition. Whereupon ensued an inundation of French commodities, to the value of about four millions sterling, within the compass of less than three years' time; whereby all the evils formerly complained of were renewed; so that the nation would have been soon beggared, had it not been for the happy revolution in the year 1688; when all commerce with France was effectually barred."

Thus James had attached himself to a Power which the most powerful interests in England looked upon as an enemy. He followed, in fact, the policy so often fatal to English Governments, of leaning upon a foreign Power against his own subjects. And when we look upon the history of this unfortunate line we find that all its monarchs made the same fatal error. James favored Spain when Spain was still powerful and dangerous; Charles borrowed from Holland when the Dutch were shutting us out of the Baltic and the Spice Islands; James II found a sacred friendship in France when the French were fighting us with tariffs and were in almost open war with us at sea, in the Hudson Bay, and in India. It was not a question of constitutional liberty, for Elizabeth had done as she liked with her Parliament; nor was it a quarrel altogether of religion, for religion was more a color than a motive. Where the Stuarts failed was in devotion to the national interest: in their foreign policy they pursued aims personal and dynastic, which left them out of touch or brought them into conflict with the organized trade of the country. They never sufficiently perceived that a national policy must be founded upon the national interest.

XI. The Balance of Power

The "Glorious Revolution" of 1688 is a favorite theme of the Whig historian, who looks upon it as a sort of tabernacle in which are enshrined all his favorite maxims and principles like the emerods and mice in the Ark of the Israelites. But to students who preserve their common sense the search for these so-called Liberal principles seems a vain and dreary business. The age is one rather to encourage the cynic such a quagmire of corruption and treachery that nothing but rushes, that sway in every wind and are rooted in mud, might be expected from it. Macaulay has idolized that arid lawyer, Somers, who proved from "Grotius, Brisonius, Budeus, Spigelius, and the Code" that "abdication" was the right word to use when a king was chased out of his kingdom by his subjects and his son-in-law. "The Party of Liberty" opposing a Toleration Act is matter more for mirth than admiration. And Mackintosh himself in a moment of candor confesses that there are other fatal obstacles to the traditional view of the Whigs:

"The Whigs and Tories," he says of the great debate of 1689, "would now appear to have changed places. The former became of a sudden strangely insensible to the importance of securing the rights and privileges of the subject. They were satisfied with deposing James and enthroning William, and would impose the triumph of their party and their idol as the triumph of the people. The Tories took the higher ground of securing the nation in its liberties, and to them belongs the chief merit of the subsequent declaration of rights."

As for William, a "Calvinist First Minister of a Calvinist Republic," among whose allies and secret confederates were the King of Spain, the Republic of Venice, and the Pope, he could hardly have had any burning zeal either for Liberal principles or the Protestant religion.

When we come to those great interests which are the secret motives of men and nations we get at once upon solid ground. For with the reign of William we go down into that great troubled ocean of war which lasted with intervals of peace for upwards of a century war, the object of which was nothing less than the mastery and commerce of the world.

The student of the seventeenth century sees the struggle approaching. The protective policy of Henri IV, of Richelieu, and of Colbert had built up France as a strong manufacturing and naval Power.

In 1674 the famous "balance" or "old scheme" of trade was drawn up by some London merchants, and this balance, modeled in detail by subsequent economists, but always recognized as right in substance and in fact, became the short formula on which hostility to France was based.

Now this theory of the balance of trade was used astutely by Adam Smith the greatest of all controversial strategists to discredit the whole mercantile conception of a national policy. So before we go further we must examine a little more closely the principles of what is called Mercantilism. For on those principles, as we shall find, the national policy of England was based.

The so-called scheme, or "old scheme" as it is called, in those lively controversies between the Mercator and the British Merchant, was presented by the London merchants to the Lords Commissioners for the Treaty of Commerce with France on November 29, 1674. It was drawn from the Customs returns, and showed that "the exports of our native commodities and manufactures to France are less by at least a million sterling than the French native commodities and manufactures we receive." The total exports of England to France was put at £171,021 6s. Sd., and of France to England at £1,136,150. Nor was this all, for the French were manufacturing excellent woolens, linens, and silks, and the adverse balance in manufactured goods was paid for in gold.

It was the recent fashion among our economists and historians to sneer at the notion that an adverse balance in trade might exhaust the treasure of a nation. But England at that time was just emerging from a condition when money was so scarce as to make an extensive national commerce almost impossible. Throughout the Middle Ages the Hanseatic League had commanded and restricted for its own purposes the currency of Europe: in the seventeenth century the Dutch commanded money at from 3 to 4 percent, whereas the English rate was 6 or 7. There were frequent and severe money famines in Spain owing, as the English believed, to her necessity of importing all manufactures as much as to her constant wars; and the theory was firmly held that, England having no mines, the sale of her manufactures was her means of obtaining gold.

To say that the Mercantilists regarded gold as the only real wealth is to misrepresent them. Mun, one of the clearest and the best of their writers, put the opposite in his terse and admirable phrase: "They that have wares cannot want money." But the Mercantilists knew as well as we know now that a command of money was a necessity to the independence as well as the prosperity of the nation. It was true then as it is now that the borrower is the slave. Therefore the national policy was to keep enough treasure within the kingdom for the needs of the Crown, the rents of land, and the national commerce, and the means to this end was to encourage the export and discourage the import of manufactures.

Mun clearly distinguished between the gain of the merchant and the profit of the kingdom, and it is the glory of Mercantilism that it subordinated private gain to national ends, its object being not merely wealth, but the security and independence of the kingdom. This doctrine inspired the Navigation Laws against Holland; and this doctrine opposed England in turn to the Powers of Spain, Holland, and France.

Thus, for example, Sir Theodore Janson, as the first of his General Maxims in Trade, lays it down "that a trade may be of benefit to the merchant and injurious to the body of the nation."

And he proceeded thus to elaborate this maxim:

- "That the exportation of manufactures is in the highest degree beneficial to a nation.

- "That the exportation of superfluities is so much clear gain.

- "That the importation of foreign materials to be manufactured by us, instead of importing manufactured goods, is the saving a great deal of money.

- "That the exchanging commodities for commodities is generally an advantage.

- "That all imports of goods which are re-exported leave a real benefit.

- "That the letting ships to freight to other nations is profitable.

- "That the imports of things of absolute necessity cannot be esteemed bad.

- "That the importing commodities of mere luxury is so much real loss as they amount to.

- "That the importation of such goods as hinder the consumption of our own, or check the progress of any of our manufactures, is a visible disadvantage, and necessarily tends to the ruin of multitudes of people."

These were the real principles of the Whigs of the Revolution. They applied them to the trade with France, and they found that the French trade was dangerous to England. Our imports from France of linens interfered with the linen trade of Ireland and Lancashire; of silks with the silk manufacture of Spitalfields and Canterbury; their brandy struck at our "extracts of malt and molasses"; and as for "all manner of toys for women and children, fans, jessamin gloves, laces, point-laces, rich embroidered garments, and rich embroidered beds and other vestments, of an incredible value," these choice products of French genius, as they had to be bought with "treasure," were held to impoverish the nation.

Moreover, France, as we have seen, now commanded Southern Germany, and was there introducing French woolens in opposition to our own; she threatened Holland and the Spanish Netherlands, the great entrepot of the English woolen trade; she had an alliance with Sweden, directed against our interests in the Baltic; she was establishing a Bourbon dynasty in Spain, thereby arriving at a monopoly of the most profitable trade of Europe; she was strong in Italy through her connexion with Spain; and her consummate diplomacy as well as geographical advantage gave to Marseilles a growing share of the Levantine and Turkish trade.

Here, then, we have the general lines of a commercial and industrial rivalry between France and England which, whatever we think of the balance of trade argument, was in itself no fiction but a fierce reality. The two nations were rivals for that "fair mistress of trade," not merely the trade of Christendom, but of the world. As the case was ironically put by one of the pamphleteers of the time:

"That two woolen drapers, two mercers, two linen drapers, and two stationers vying for customers in their distinct trades ought only to trade with each other, I proceed to show that we should only trade with France."

If we were to trace the moves in this great contest we should arrive at some notion of the motives underlying the national policy of England at that time.

It was first of all necessary to get a Government free from any taint of enemy influence.

"The retreat of King James," says another pamphleteer, "the happy Revolution that followed it, and the reduction of Ireland have been the degrees by which the nation has been put in a state to act with vigor against the common enemy. It was not enough to be governed by a Prince that would not be discouraged by difficulties nor disturbed by dangers, who commands his armies in person and animates them by his example. The state of affairs required, besides this, that this Prince should have credit enough in Germany to oppose with success the intrigues of France there, and that he should be at the head of the forces of a powerful Republick both by sea and land."

The French design to be master of the Low Countries gave England the same interest in Holland as when Elizabeth had fought there the designs of Spain.

"'Tis a truth of which none can doubt," says the same writer, "that the conquest of the Low Countries would put France into a condition of giving laws to all Europe." And again: "If Flanders be an accession to France, Holland must soon follow, and England next. They are like ninepins; the throwing down one carries the rest. Antwerp itself, were it in French hands, would command the trade of Christendom."

Here, then, was the reason for bringing over William. The alliance with Holland enabled England to meet France upon the sea on slightly more than equal terms. Intimate relations with Hamburg and Denmark countered the alliance of France with Sweden in the Baltic. The German Princes were subsidized and the Empire reanimated into something faintly approaching its old unity. The French command of the Rhine Valley and of Flanders was contested by arms.

But the sinews of war came from the Peninsula, and there Louis obtained the Spanish succession for the Dauphin. It was a stroke which threatened the whole British trade system. "We are in the greatest danger," exclaims an ingenuous pamphleteer, "of losing our trade, our liberty, and our religion." The Mediterranean could be shut against us:

"Nor is there anything to hinder the French from monopolizing the wool of Spain, which would at once destroy our fine drapery, which is perhaps the only considerable manufacture in which we have no dangerous rival. . . . Besides, can we doubt that whenever the French shall desire it, the Spaniards will clog our trade to Spain with such exorbitant duties, and give us such other troubles and vexations that we shall be obliged to quit that gainful commerce, which will be engrossed by France, where all the money that comes from America will then enter in return for the linen and woolen manufactures; it will be able to supply their Indies and Spain withal."

England's replies were the Methuen Treaty with Portugal of December 27, 1703, and the capture of Gibraltar on July 24, 1704, two of the greatest strokes in our history, for the one secured us the gold of the Indies, the other the trade of the Mediterranean.

John Methuen, it may be worth remembering, was the son of Paul Methuen of Bradford, in Wiltshire, when the Wiltshire Bradford was to the cloth trade of England what its northern namesake has since become. Paul was "the greatest cloathier of his time," and in the reign of Charles II had helped to get the cloth-finishing trade from the Dutch by importing skilled workers from Holland. John was one of those rare diplomatists who understood the interest of his country. He was fortunate also in being in the graces of the King of Portugal, whose Prime Minister was laboring to create a national cloth manufacture by a policy of high duties.

The unseen hand of Methuen was all-powerful.

"Methuen," says the British Merchant, "carried this treaty by his personal interest with the King, with whom alone he transacted it, and whose chief Minister knew nothing of it till he had orders to sign it."

It might have been written upon a half-sheet of note-paper, and had only three articles. Upon the one side the King bound himself and his successors "to admit for ever hereafter into Portugal the woolen cloths and the rest of the woolen manufactures of the Britains as was accustomed," upon the condition:

"That Great Britain admitted Portuguese wines at the rate on which French wines were admitted, less a third."

For this not only Methuen but his relations were buried in Westminster Abbey by a grateful nation; but it is fair to remember that although the achievement was his, the conception belonged to our Merchant Adventurers. As far back as the Long Parliament our London merchants had memorialized the Government on the lines of the Methuen Treaty.

The value of this treaty was never doubted by any Englishman before the time of Adam Smith, and it is still the admiration of foreign economists,

"By that glorious treaty," exclaims the British Merchant, ". . . we paid our Armies in Spain and Portugal and drew from thence in the late war considerable sums for our troops in other parts without remitting one farthing from England, and at the same time coined in the Tower above a million of Portugal gold in three years. By this treaty we gain a greater balance from Portugal than from any other country whatsoever."

And, with that late exception, it is the universal testimony of the eighteenth century that our forefathers drank themselves to victory. Our statesmen set an heroic example to the rest of the nation. Those mantling and golden ruby-hearted wines, in whose sunny depths glowed the brave and ardent soul of Portugal, gave at once the inspiration and the means of victory. And if France was cruelly revenged in the gout of Chatham and the pricking toes of many other noble Englishmen, may we not say that they suffered gladly in a great style for a great cause?

By these measures, and by that act of royal folly the Revocation of the Edict of Nantes, as well as by the genius of Marlborough and Maurice, the French power, lately supreme in Europe, was crippled. The attack on the economic foundations caused the military and naval superstructure to totter and crumble.

That the war had to be fought over again was due to a party quarrel which robbed England of the fruits and security of a complete victory.

XII. Union

Even if I do no more than attempt to sketch the main lines of our national policy, it is necessary to consider more closely the great question of Union. There is an obvious side to this question which is yet too often forgotten. The approach to England on the north is by way of Scotland, and on the west by way of Ireland. These two countries are like bulwarks and bastions to a fortress: if they are occupied by the enemy the central keep is in danger.

The main reason for Union is a military reason. As long as Scotland was separate from England the national enemies, France, Spain, or the Empire, designed their attack on England through Scotland. And so in Ireland: there is hardly a recorded war in which the enemy has not attempted an attack on England by way of Ireland. And so in both cases the mere necessity of defense must have made it part of the national policy to bring about the union of the three kingdoms. In other words, the Union with Scotland and Ireland was as much an English as a Scottish or Irish question: if the one had the right to desire independence the other had the right to deny it, for no nation could be expected to trust its very life in the hands of another.

But with this question of defense is bound up the question of interest. Thus we have seen how the long friendship between Scotland and France was accompanied by an active trade between the two countries. Scotland supplied France with wool and fish in exchange for lawns and claret, and when England and France were fighting for supremacy this trade support from Scotland was hostile to the English cause. And in the same way, when England was fighting Holland the Scotch trade in unfinished cloth was felt by English statesmen as a factor in the conflict.

Protector Somerset, a great statesman in his day, had offered Scotland union after the Battle of Pinkie: a union based on "Free Trade, equality, and amity."

"What," he argued, "can be more offered than intercourse of merchandise in the abolishing all such our laws as prohibit the same? . . . We have offered to leave the name of the nation and to take the indifferent old name of Britains again. We intend not to disinherit your Queen, but to make her heirs inheritors also of England. We seek not to take from you your laws or customs."

James, as we have seen, had brought about a Union of the Crowns, but he had failed to establish a union of interests and therefore a union of hearts. In 1604 he attempted a commercial treaty of Free Trade, and although it omitted nearly everything of consequence wool, cattle, hides, and linen yarn in the produce of Scotland, it was rejected by the English Parliament.

Both attempts failed, and most of the seventeenth century is occupied by bitter quarrels between the two nations. Cromwell with his rude genius for statesmanship made a heroic attempt to settle matters by opening to Scotland all the "privileges, freedom, and charges" of English commerce. This policy seems to have been forced upon him by the hostile correspondence between Scotland and Holland. It succeeded so far as to leave him free to attack the Dutch, but it exasperated English interests.

Charles II had no reason to love Scotland: he was besides indebted to the mercantile interest for his Restoration, and he returned to the narrowest tenets of the mercantile policy. The Navigation Act confined the trade of the Plantations to English vessels, and the English farmer was protected against Scotch cattle and Scotch wool by restrictions and prohibitions at the Border. The Scotch protested and retaliated in vain, and then in their practical way set to work to create a world-commerce of their own. When we consider the poverty of Scotland at that time, its small population, and its small resources, we have reason to be proud, those of us who are Scotch, of that heroic endeavor.

The East and West Indies, Africa, and the Mediterranean were strewn with their pathetic failures. Everywhere, or so they suspected, England barred the way, but undiscouraged they embraced a scheme on which they staked nothing less than the fortunes of their country. They designed to capture the commerce of the world at a stroke by forming a settlement on the Isthmus of Darien. At every turn they found the unseen hand of English and Dutch commerce against them. They were refused capital in London and in Amsterdam. There remained Hamburg, and at first the Hamburg merchants, who had no East India trade, promised £200,000. But Hamburg was then ruled from London: it lived as a depot for the English cloth trade in Germany, and when Sir Paul Rycaut, the English Resident, vetoed the scheme, neither the prayers of Paterson nor the attractions of the project could persuade the merchants to fulfil their promise. To such a pass had the great Hanseatic City fallen.

But the people of Scotland themselves contributed £400,000 equal, it is said, to two-thirds of all the coin then circulating in the country, and they filled their little fleet with articles which they deemed certain to find a market in New Spain and the tropics. Edinburgh contributed 4000 periwigs; religion was united with commerce in a consignment of 1600 Bibles; Kilmarnock sent blue-bonnets; Aberdeen stockings; Dunkeld plaids and tartans; and Culross gridirons, those famous girdles on which the cakes of Scotland were baked.

The tragic story of the settlement of St. Andrew need not detain us; its ruin was the ruin of Scotland's hopes of an independent trade system, and left union with France or Holland the only alternative to union with England.

It was for English statesmen a great opportunity and they took it. We might say, taking it all in all, that the negotiation of the Act of Union is the most perfect single piece of English statesmanship, conceived upon broad and generous lines and carried through with an unsurpassed adroitness.

It was managed by a series of deals or bargains, the English aiming only at one great national system,—the Scotch contending for compensations, advantages, and payments.

In Defoe's History of the Union we are shown very clearly how the thing was done.

"Thus stood," says Defoe, "the affairs of this island at the end of the year 1705, when the aversion between the two kingdoms by the several steps I have noticed was come to a great height; the people seemed exasperated against one another to the highest degree; the Governments seemed bent to act counter to one another in all their councils; trade clashed between them in all its circumstances, and every Parliament run further and further into the most disobliging things that could be; England laid a new impost upon Scots cloth; Scotland prohibited all the English woolen manufacture in general and erected manufactories among themselves, which, had they been prudently managed too, might have been very advantageous to them; but of that by the way. Scotland freely and openly exported their wool to France, Germany, and Sweden to the irreparable loss of the English manufactures, having great quantities of English wool brought into Scotland over the borders, which it was impossible for England to prevent; so that the famous trade of wool to France by Romney Marsh, commonly called Owling, was entirely dropped, and France not supplied only but glutted with wool.

"On the other hand, England was proceeding to prohibit the importation of Scots cattle and to interrupt by force their trade with France, and had this last proceeded to practice all the world would not have prevented a war between both nations."

Although the Crown was at war with France, Scotland, like the ally Holland, claimed a right to a Free Trade with France. Such was the perilous situation saved by the treaty.

The basis of the treaty was "Free Trade between all the subjects of the island of Great Britain without any distinction," not only the coasting trade but the Plantations, and an Act of Navigation adapted to both countries. The flock-masters of Roxburgh, Selkirk, and Tweeddale were compensated with bounties for the loss of their export trade in wool, the bounties to be paid on the condition that local manufactories were started "for the employment and subsistence of the poor "and "the consumption of the wool at home." Thus the right of Scotland to use its own raw material in its own manufactures was recognized at the same time as she was given a free market for both raw materials and manufactures in England.

England's aim in this great deal was nothing less than to change the current of Scottish commerce from east and west to north and south. Scotland's trade policy had made her the natural ally of France against England. The Union of the Crowns had not sufficed to change this bias. All through the seventeenth century the wars between England and Scotland, the liaison between Scotland and France, had continued. The change was effected at a most critical point in the history of the English struggle with France for commercial supremacy. And from that time on by slow degrees the Lowlands of Scotland veered round the political compass until their interest and their politics coincided with the Union. By 1745, according to Lecky, "in the Lowlands the balance of opinion was probably hostile to Jacobitism." Although "the Union had left much discontent behind it," "the commercial and industrial classes dreaded change, and the great city of Glasgow was decidedly Hanoverian."

The romantic Highlands, which cared nothing for commerce, lived by fishing, cattle, smuggling, raiding, and fighting in the armies of France. Their claymores were drawn for a Stuart; but the cannie Lowlands looked at the head of George on their guineas, and reflected profoundly on what they had to lose. Thus by the ties of interest Scotland was united with England and the Union lasts to this day.

In our own time President Taft attempted the same stroke of policy with Canada. His offer of Reciprocity was designed to change the channels of Canadian commerce from east and west to north and south. If he had succeeded Canada would have been lost to the British Empire, yet his attempt was ardently supported by Mr. Asquith and his colleagues in this country, so far, under the influence of Free Trade, had Liberalism fallen from the standard of Whig statecraft.

When we turn to the history and commerce of Ireland we enter a dimmer and more doubtful region. We gather that Ireland was always looked upon as a Plantation, whereas Scotland had the stronger position of a Kingdom. Scotland was strong enough to make terms; Ireland only made rebellion. In the Middle Ages we see the House of York installed as the popular party in Ireland. Richard of York, we are told, followed a policy of conciliation and Home Rule:

"The local independence of Ireland was now for the first time seriously attempted. Richard held a Parliament, which acknowledged the English Crown while repudiating the English legislature and the English courts of law."

How far the Civil Wars which followed were inspired by national policy and how far by questions of the ownership of land and personal and clan rivalries it would be difficult to determine.

But it is certain that Ireland had an early connection with the Empire and the Imperial system of commerce. The Senchus Mor, which is as old as the fourteenth century, says that the King of Erin "received stock from" or, in English, paid tribute to, "the King of the Romans, . . . that is when the seaports of Dublin and Waterford and Limerick are subject to him."

The Ostmen of early Irish literature were either foreign merchants "hosted" by the citizens, or Eastmen, that is to say, Easterlings. Considering the fact that Ostmen became prelates in Ireland we may prefer the latter derivation, and there is evidence that these Ostmen or Easterlings were a strong element in the Irish cities. We may suppose that Ireland played a humble role in the Hanseatic or Imperial trade system, supplying Flanders with wool and Spain with hides and provisions. And when the House of York, after surrendering to the Hanse, was finally expelled from England by the National Party under the Tudors, Ireland remained faithful to the Imperial connection.

Religion, certainly, was not the original or main cause of the strife between Ireland and Tudor England, for well before the Reformation the King of the Romans was using Ireland as a cat's-paw against Henry VII. Thus both Lambert Simnel and Perkin Warbeck, the two Yorkist pretenders, landed in Ireland. Simnel was crowned in Dublin by the Earl of Kildare and sailed across the Irish Channel with a mixed force of Irish and Germans under a Captain Swartz, to be defeated with great slaughter at the Battle of Stoke.

Henry VII, being in a weak position, tried a policy of Home Rule and conciliation. He invited the Irish chiefs over to London and thoughtfully offered them wine served by Lambert Simnel, now reduced to the position of servant. And when it was reported that all Ireland could not govern the Earl of Kildare, he replied, "Then let the Earl of Kildare govern all Ireland."

Perkin Warbeck's invasion was also launched from Flanders by way of Ireland and likewise failed. But the liaison between Kildare and the Imperial Court continued into the next reign, and the Emperor Charles V, who at one time had 170 sail ready in Antwerp to invade England, was in familiar communication with the Geraldines and the O'Briens. That Kildare favored Charles V, who sacked Rome and imprisoned the Pope, on the score of religion will hardly be considered likely by those who have studied the characters of the two gentlemen.

The correspondence, which is to be found in Froude, is interesting, for it shows that these Irish nobles spoke of Charles as "our Sovereign Lord the Emperor," and professed their willingness to bring Ireland under the Imperial Crown. The correspondence and the rebellion which followed at last convinced Henry that the policy of conciliation was a failure, and the policy of conquest and settlement which he began was energetically followed by Elizabeth. The Geraldines had been trusted by the Tudors; they had been allowed to conduct the government of Ireland, and they had systematically betrayed the confidence of their sovereign. And so we see, even in those early times, the alternation from Home Rule to a strong Government, from conciliation to repression. And we see also the cause. The Home Rule of the Geraldines led to anarchy in Ireland and treachery to England; and the Tudors were forced by the threat of invasion to take into their own hands or the hands of English deputies the government of Ireland.

In the seventeenth century we are able to trace the growth of a hostile system of commerce which strengthens the racial and religious hostility. Strafford, among the very greatest of seventeenth-century Englishmen, reports that the English trade had been "spoiled by the pirates" before his arrival; but his energetic measures had suppressed the "Biscayners." The trade had increased exceedingly in consequence. Although,

". . .there was little or no manufacture among them," there were "some small beginnings towards a clothing trade, which I had and so should still discourage all I could . . . in regard it would trench not only upon the clothing of England, being our staple commodity, so as if they should manufacture their own wools, which grew to very great quantities, we should not only lose the profit we made now by indraping their wools, but His Majesty lose extremely by his customs, and in conclusion it might be feared they would beat us out of the trade itself, by underselling us, which they were well able to do. Besides in reasons of State so long as they did indrape their own wools, they must of necessity fetch their clothing from us, and consequently in a sort depend upon us for their livelihood, and thereby become so dependent upon this Crown as they could not depart from us without nakedness to themselves and children."

Strafford proposed to compensate them with a linen trade:

"Yet have I endeavored another way to set them on work, and that is by bringing in the making and trade of linen cloth, the rather in regard the women are all naturally bred to spinning, that the Irish earth is apt for the bearing of flax, and that this manufacture would be in the conclusion rather a benefit than other to this kingdom."

Strafford's compensation of a linen for a woolen manufacture was more reasonable then than later, for the Irish woolen industry except the making of friezes by the cottagers on a non-commercial scale had not yet come into existence. But with the fall of Strafford a narrower policy triumphed; the fanaticism of the Commonwealth was followed by the selfishness of the Restoration; Irish cattle were shut out, and even the Irish provision trade with the Plantations was stopped. The Irish turned to wool-growing and the foreign trade with France and Spain. The French looms were kept going with Irish wool, and the Dunkirk and Biscayan pirates with Irish provisions.

As food, wool, and labor were cheap in Ireland, English weavers emigrated from the south and west of England, so that a flourishing cloth trade was soon established in Dublin and one or two other Irish towns.

It was now the turn of the English manufacturing interest to take alarm, and we find a growing agitation among the Whigs to penalize the Irish cloth industry. William was a ready instrument in this policy, for the Dutch hated Ireland on account of her competition with their linen trade. Heavy duties were put on the exportation of Irish woolens, and the Navigation Acts were used to prevent the exportation of Irish cloth to the Plantations. Even the Irish linen manufacture, the ewe lamb of Ireland, was penalized.

The effect of this barbarous policy was disastrous to Ireland. "The ruin," says Lecky, "was absolute and final." It fell more heavily upon the Irish Protestants, who were principally concerned in manufacture, than upon the Catholics. Thousands of Irish Protestants went to the colonies and became by their bitterness against England an element of danger and revolution. Others went to France, while the Irish wool now smuggled over wholesale was a further help to the trade of the enemy. The economic effect upon Ireland herself was equally disastrous: the whole population was thrown upon agriculture and a bad season produced famine. Swift, the greatest of all pamphleteers, championed the Irish cause in prose which it is even now a pleasure to read. His ardent and yet practical genius, his savage irony, his diabolical wit were all pressed into the service of Irish industry. He wrote in vain except for the adoration he won from the Irish people yet his policy of an Ireland contented and loyal, founding herself upon her own manufactures and the fruits of her own soil, remains the true though neglected signpost to a reconciliation between the two countries.

Thus it came about that at the very time the Whigs by a broad act of statesmanship were founding the interest of Scotland in their own manufactures and the English market they were inflicting upon Ireland a wrong which was kept rankling by its own nature. Cruelty and acts of injustice are forgotten; but a policy which is a continual injury to the living interest of a country is always remembered since it is always present. The Union of Ireland with England is justified by the safety of the greater island: since Ireland is a posterngate through which every enemy has tried to enter. But if the Union is necessary, the complement is just, that Ireland should have the status and privileges of the kingdom of which it is a part, and that the national policy should be shaped, not in the interests of one, but of both.

[NOTE: The younger Pitt, it is well worth remembering, attempted to do fiscal justice to Ireland before he attempted political union. His Resolutions of 1785 proposed free trade and reciprocity between the two countries. They were accepted by the Irish Parliament, but were rejected by the English. They were then recast to the detriment of Ireland, and in their new form were accepted by the English Parliament but rejected by the Irish. If the original Resolutions had been accepted it is probable that the Union with Ireland would have been as popular in both countries as the Union with Scotland. "The pity of it, lago!"]

XIII. A Stalemate Peace

The Whigs were the party of commerce and manufactures: their rule was inspired by a national policy in which the protection of manufactures, the security of "vent," and the maintenance of sea-power were the cardinal points. In as far as they concerned themselves with religion they favored toleration for dissent on the not very high ground laid down by Sir William Petty "that the heterodox party of every country are, generally speaking, the most industrious, and contribute most to the riches of the nation." But the Roman Catholics were not admitted to this latitude on ground of much the same level because France was Catholic and France was the great trade rival.

The Tory party, representing Land and Church at that time one and the same thing had no such bitter feeling against France. The English squire liked his claret and his brandy, and found an occasional market in France for his surplus of corn. Torism and Trade can never Agree is the title of one of Davenant's pamphlets, and he scornfully quotes an alleged saying of Lord Castlemain's: "England can subsist without trade which is not at all necessary."

The more politic pamphleteers of the British Merchant strove to prove that rents depended on the treasure introduced by trade so as to persuade the landed interest that the war was being fought for its benefit.

"When trade was stopped with France," they argued, "rents soon advanced, and industry being encouraged, new manufactures were daily set up and there was a full employment for the poor. The price of cloth increased. . . . The gentleman and the farmer, the merchant and the manufacturer soon experienced the mighty benefit."

But the country gentleman was not easily to be persuaded by logic or rhetoric; what he perceived more clearly was that while his labor was being withdrawn he had to pay a land tax of several shillings in the pound. For this he was hardly consoled by the expensive and brilliant victories of Marlborough.

In these circumstances the High Tory Bolingbroke came into office, and after one "legitimate gamble" for the conquest of Canada resolved upon peace. Now the modern historian inclines to favor the Peace of Utrecht as wise and moderate statesmanship. The judicious if lymphatic Lecky, while he cannot but censure the means by which they were gained, is well satisfied with the terms both of the Treaty of Peace and the Treaty of Commerce.

"It is somewhat humiliating," he writes, "that the measure which most seriously injured the Tory Ministry of Anne was that which will now be almost universally regarded as their chief glory. The object of Bolingbroke was to establish a large measure of Free Trade between England and France; and had he succeeded he would have unquestionably added immensely both to the commercial prosperity of England and to the probabilities of a lasting peace."

The means, unfortunately, are not in question. England had entered into the Grand Alliance for certain purposes and upon certain conditions. One condition was that there should be no separate treaty. Yet Bolingbroke obtained separate negotiations with the enemy and made separate terms which were to be conditional upon a peace with the other allies. While he was assuring Holland that he would take no step without her consent, he was arranging his own terms with France. To this end he had replaced Marlborough by Ormonde, and had instructed Ormonde not to fight the enemy. Although Marlborough had the French beaten, Ormonde refused to press the victory home. The depth of degradation to which an English general was thus reduced by a politician may be gathered from Ormonde's first letter to Saint-John:

"Prince Eugene and the States having proposed to attack the enemy, or, if that be found too hazardous, to besiege Quesnoy, His Grace fears it will be very difficult for him to disguise the true reason of his opposing all proposals that shall be made for undertaking anything, having no excuse for delays, all the troops we expected and the heavy cannon being to be here on Saturday."

But worse was to follow. Ormonde entered into communications with Marshal Villars for the destruction of his ally, and when he heard that Eugene designed to surprise a town: "I am humbly of opinion some means should be found to give advice of it to Mareschal Villars, who may possibly think we owe him that good office."

Even the benefits of Free Trade could hardly have obliterated such a stain upon our national honor. The separate peace was concluded: our soldiers cursed Ormonde and Bolingbroke, and sat moodily in their camps ashamed to look the Allies in the face. "Some left their colors to serve among the Allies, and others afterwards withdrew, and whenever they recollected the Duke of Marlborough and the late glorious times their eyes filled with tears." But England was thought to be sick of the war, a sufficient justification in political eyes:

"The nation here are five hundred to one for peace," wrote the Lord Treasurer (Oxford). "The ferment begins to work, and it will be impossible to answer for the turn the House of Commons will take if these delays provoke them further. They all feel how many hundred thousand pounds this needless protraction costs them. . . . In the meantime the merchants lie off and will not come into port."

It is good to remember that in this great betrayal London had no hand: the merchants, as frequently, were stronger for the honor and interest of their country than the politicians.

What is the part of Honour in National Policy? It may be thought a sordid occupation to grub for the roots of a national policy in the loam of a British interest; but I do not ignore this fact also, that while the root is in the soil, the English rose that springs therefrom is in the sun. Interest alone should dictate the lines of a national policy; but honor must observe its fulfilment. For honor is the higher interest of a country: upon its honor depends the trust of its neighbors and the spirit of its subjects. If a nation departs from honor in one case it lowers the value of all its treaties and alliances both of the past and of the future; and it inflicts upon its nationals a lower status in the world. A nation's word is given usually in its immediate interest: it should be kept in its general interest. Thus from the root of interest grows the English rose of honor.

Bolingbroke hoped to keep his conduct of the peace secret. He calculated that weariness of war and his Parliamentary majority would carry him through; but there was one difficulty: the merchants would not "come into port." The merchants of England were then organized upon a national basis, and they were the leaders of the national industry. All the guilds and companies of merchants and weavers were dead against that Treaty of Commerce which Lecky regards as the chief glory of the reign of Anne.

This treaty was for what was then called "a Free Trade" with France. It put the two countries on the most favored nation basis, and it restored the French tariff of 1664. Or it appeared to do so, for while Lecky says that "some classes of goods" were exempt for future negotiation, he omits to mention that among them was English cloth, by far the greatest of all English exports. Moreover the effect of the measure was to abolish the Methuen Treaty, and it needs more than even Mr. Lecky's assertion to prove that "the enormous market which the English woolen manufacture would have received in France immeasurably outweighed any advantages England could have received from the Portuguese trade."

France at the time was the rival of England as a manufacturing Power. The French were believed to live largely on chestnuts, and French wages were lower than English. The English manufacturers produced ample statistics to prove their case, and if there is now any reason to doubt their conclusion, it is because the Revocation of the Edict of Nantes and the development of machinery in England were in a way of producing industrial results in both countries which at that time it was impossible to foresee.

The campaign against the treaty was carried on in the street and in Parliament. The Press controversy is readable even now. On the one side the British Merchant was the organ of the London companies; on the other the Mercator, written largely, as most people supposed, by Defoe, represented the views of Bolingbroke and Arthur Moore.

The British Merchant is not content to argue merely the case of the treaty: it goes to the root of the matter and sets forth the principles of a national commerce. It lays down the whole doctrine of Protection: "The first and best market of England are the natives and inhabitants of England."

The debate inside the House began on June 9, 1713, when a Grand Committee considered a Bill to make effectual the 8th and 9th articles of the treaty. Bolingbroke's spokesman in the House was Arthur Moore, "the only man whom he seems to have consulted on the question, and who was suspected of corrupt motives and had little personal weight."

And we may agree with the House, not for the popular reason that Moore was "the son of a Monaghan gaoler," but from a candid consideration of his interest in the matter. The unseen hand was the Assiento Contract which gave the South Sea Company certain trading privileges in the Spanish Indies, and this contract was part of the treaty. Moore was a director of the South Sea Company, and a little while afterwards was censured by the company for carrying on a clandestine trade to its prejudice. Altogether, the "advanced views" of this enterprising Irishman, however much they may impress the modern Free Trader, were hardly likely to convince the bigoted and cynical British public of his own day.

On the other side was the organized commerce of England.

"The Turkey Company, those that traded to Portugal and Italy, and all who were concerned in the woolen and silk manufactures, appeared before both Houses, and set forth the great mischief that a commerce with France on the foot of the treaty would bring upon the nation; while none appeared on the other side to answer their arguments, or to set forth the advantage of such a commerce. It was manifest that none of the trading bodies had been consulted in it."

Tindal, who is here quoted, adds that when it came before the Commissioners for Trade and Plantations, "Arthur Moore, who had risen up from being a footman without any education to be a great dealer in trade, and was the person of that Board in whom the Lord Treasurer confided most . . . took it away and never brought it back to them, but gave it to the Lord Bolingbroke, who carried it to Paris, and there it was settled."

According to Hansard, the House first heard "Mr. Cooke, a merchant, who, in behalf of the Levant Company, made a long speech, wherein, with great solidity of reason and argument, he showed how detrimental the opening a trade with France would be to the British woolen and silk manufactures and to all the branches of our trade." On June 10, "the Spanish, Italian, and Portugal merchants, and the weavers of London" presented petitions. One of them speaking rather freely, "some Court members" proposed to censure him.

"But General Stanhope, Mr. Lechmere, Sir Peter King, and Mr. John Smith said, 'that unless they gave the merchants full liberty of speech, the House would never be able to form a right judgment on that important affair; and they hoped that no man should be reprimanded for standing up for the trade of Great Britain.' This, together with a noble spirit that appeared in the House on behalf of the merchants, by the great number of members, both Tory and Whig, who, all at once, stood up to defend Mr. Torriano, made the courtiers drop that matter; and so Mr. Wyat spoke for the Italian merchants; Mr. Milner for the Portugal trade, and Col. Lekeux for the London weavers."

Arthur Moore was the only member who put up a real fight for the Bill, "but his arguments being strained and precarious," even his own party rejected them.

The Bill was lost when Sir Thomas Hanmer, who led the Tory Jacobites, confessed that he had been converted by the arguments of the traders and manufacturers, and that the passing of the Bill:

". . . would be of great prejudice to the woolen and silk manufacturers of this kingdom, consequently increase the number of poor, and in the end affect the land."

The merchants, in fact, had captured the landed interest by sheer weight of argument, for none doubted Hanmer's honesty***; the Bill was defeated by 194 against 185 most of the Court and the Scotch members voting for the Bill. The Government had already taken alarm; Oxford had even proposed to drop the Bill, judging that it was certain to be rejected in the Lords.

"Be that as it will," says Boyer, "the London drapers, mercers, and weavers were overjoyed at the rejecting of the Bill, and on Friday night, the 19th of June, expressed their satisfaction by bonfires and illuminations."

[*** Editor's note: Ha ha ha! ho ho ho! This is absurd. The London 'Merchants' bribed and blackmailed every public figure in Britain. This was an orchestrated take down of the Tory opposition.]

The defeat of the Bill was the beginning of the end of Bolingbroke. Although he was probably the greatest orator and the cleverest politician of his time; although he knew how to appeal to the patriotic and monarchical sentiment, then, and perhaps still, the strongest in the British breast, he had failed in honor and in loyalty. And as England then valued character before eloquence a prejudice from which she has since shaken herself free, Bolingbroke never again recovered his position. He escaped impeachment by fleeing to France, and Walpole, who had completed his downfall, in course of time reigned in his stead.

The long administration of Walpole rested upon the understanding between the agricultural and the mercantile interests, which the fight over the Treaty of Commerce had helped to bring about.

XIV. Chatham

Let us now approach the greatest man and the greatest time in our English story. But to understand the policy and the character of Pitt we must understand also the conditions in which he lived, the problems he had to face, the difficulties he had to fight.

The trade of England at first thought itself fortunate in the House of Hanover, both because the Electorate commanded Hamburg, Stade, and Emden, and because it gave England an ally opposed to and apparently secure against the menace of the House of Bourbon. When Hanover endeavored to add Bremen to her territories it was no doubt because England desired an advanced base for her commerce and her sea-power in the Baltic.

Yet the House of Hanover carried with it obligations and disadvantages which made England sometimes repent of her bargain. The plains of Hanover, distant as they were, came within the scope of French ambitions, and their defense was found to be costly and difficult. All England wanted was access to the markets of Germany; she was forced by the Georges to defend and to pay for the defense of its interior.

Here was a continental policy which England disliked. Like the mermaid in the story drawn by the love of a prince, she had to take to feet instead of her fish's tail, and drag herself painfully over those ugly and unaccustomed regions. The sea and its interest for England were forgotten in the intrigues and wars of Austria, France, and the Empire.

Walpole, founding himself on an uneasy coalition of town and country, had devoted himself to keeping in office and at peace. His policy, founded upon production, was the traditional policy of England. He has been praised for following and developing it: he could hardly have done otherwise. If he maintained office by the arts of corruption, it is not on record that he was ever himself corrupted. But he lived supinely upon a truce which he must have known to be precarious, for it left every question that vexed the world unsettled between England and the House of Bourbon. It was ignoble to seek a foundation for English trade in contraband with Spanish America, and when Spain found herself secretly backed by France, England had to face either war or a smuggler's punishment. As Walpole had neglected his Navy, the pride of England, which was greater than his own, proved his downfall.

Carteret, who succeeded, had the merit of high mettle. No Englishman can think of him without pride, although it is doubtful if he had a true conception of England's interests. He was, like his sovereign, a continental statesman.

"I want," he said to Fox, "to instil a nobler ambition into you; to make you knock the heads of the Kings of Europe together, and jumble something out of it which may be of service to this country." And again: "What is it to me who is a judge or who a bishop? It is my business to make kings and emperors, and to maintain the balance of Europe."

But he failed because he did not see, as Frederick saw, and Pitt, that the balance of power was a maritime and a trade question. He entangled himself and England in the affairs of Central Europe and there lost the heart of the English people, whereas Pitt knew that the war would be decided in America, in India, and in the Mediterranean, but especially in America.

How Pitt came by his knowledge is doubtless a vain question. It is like asking where Keats or Shakespeare found his poetry. The alchemy of genius transmutes all things to its own element, and as it may make a poet out of a surgeon's apprentice, so it may make a statesman out of a cornet of horse. Yet it may be said at least that Pitt inherited a great tradition of national policy, which he could find put with clearness and logic in the pamphlets and the State Papers of his time.

England understood her own interests, and the City of London especially, with its great trading companies, composed only of natural-born Englishmen, and all bound by oath to serve the common good, were a natural school of statesmanship. Pitt no doubt inherited some of his grandfather's City friends; but at any rate it is true that the seeds of his achievements are to be found scattered about in the letters he received from his friends the City merchants: Beckford, king of the West Indian sugar trade, Alderman Sayre, Allen of Bath, and the rest. The City believed in him and supported him against the Court and the Court Party, against Newcastle, against Bute. Those cool business men, who so well concealed their ideals under a cloak of commerce, bared their hearts to Pitt. They had found a man, and they believed, followed, supported him with a passionate adoration, for that, although it may sound ridiculous, is hardly too strong a phrase.

England then suffered, or thought she suffered, terrible things from lawyers, courtiers, and politicians. It may not be believed in these more enlightened times that in those the lawyer was unpopular. I find traces of this extraordinary prejudice as far back as the reign of Edward I, who won the hearts of his barbarous subjects by hanging his Chief Justice. The offence for which this martyr suffered was corruption, which in those days, like witchcraft, was considered a crime. In the reign of Edward III, a superstitious House of Commons petitioned that lawyers might not be made knights of the shire on the ground that they used their position not in the interests of their constituents but of their clients and of themselves. And we find this prejudice lingering into the eighteenth century.

Pitt shared this unaccountable dislike possibly because lawyers were chiefly employed by their friends the politicians to keep him out of place and power, or possibly because Pitt had a supercilious contempt for people whose very trade destroyed conviction and sophisticated truth. On one famous or infamous occasion he turned upon Murray. "I must now," he said, "address a few words to the Solicitor; they shall be few but they shall be daggers." He paused, and Murray's agitation was visible to the whole House. "Judge Festus trembles," said Pitt, "he shall hear me some other day." And at another time he burst out upon the whole breed of lawyers as "the bloated spiders of Westminster Hall."

In those times, too, the politician to such lengths went the prejudices of our forefathers was considered rather as a curse than as a blessing. But there was some excuse for this strange opinion. The House of Commons was not as now, in the hands of a caucus administered by some trustworthy servant of the public like the Master of Elibank, but was under the influence of one or two great families, and the electorate, shocking as it may sound, was corrupted not with public but with private money. The Duke of Newcastle, who had a block of fifty members, not counting Scotchmen, spent most of a great private fortune with this nefarious object; though it is not recorded that he ever collected money for the purpose from the prospective enemies of his country.

The Administrations of Newcastle followed a principle which must sound strange to these days when the best men are invariably chosen, that "capacity is little necessary for most employments." As this maxim found no place for Pitt, he was never allowed power except when the country had been reduced to a position of danger so grave that the politicians feared not only for the nation but for themselves. We might indeed compare Pitt to Gulliver tied to the ground by innumerable bands woven and thrown over him by a race of malignant pygmies. And yet it has to be said, in justification of his century, that despite his gout, his unaccommodating temper, and his lack of great means, he was allowed to govern the country when the country most needed him.

We have seen how France animated the crumbling power of Spain, and used the vast empire of that country to support her growing strength at sea. Her manufacture of fine stuffs and her port of Marseilles gave her the trade in the Levant which had once belonged to Venice. Her empire in Canada and her fortified positions on Cape Breton gave her command of a timber trade to support her shipping, a fish trade invaluable in Spain and the Mediterranean, and a fur trade to maintain her continental monopoly in the hat manufacture. Her West Indian islands supplied with sugar nearly all Europe except England, and her growing military power in India threatened both the English and the Dutch East India Companies.

But we have also to look at France in Europe to realize the tremendous power of England's enemy at that time. She had the South German States at her command, as she held the gates of the Rhine; on the eve of the stalemate peace of 1748 her armies were invading Holland. Sweden and Denmark were her allies. In Naples and Denmark the House of Bourbon was enthroned. And when in 1756 France detached Austria from England, it seemed to most observers that she had secured the empire of the world. By that alliance she was put in possession of Ostend, Nieuport, and Bruges. Her armies invaded Hanover and seized the port of Emden, thus encircling Holland from sea to sea.

Hamburg, the great depot of the English cloth trade in North Germany, Holland, the depot of the English cloth trade on the Rhine and in the Netherlands, were both in danger. Long before Burghley had told Queen Elizabeth that the Netherlands were the counterscarp of her dominions. Pitt had said the same thing in 1750: "If the Dutch had been ruined, and the Emperor dispossessed, this nation . . . must have yielded to every demand our enemies might have been pleased to make upon us."

With the loss of Minorca our position in the Mediterranean was also desperate, and Pitt was so far reduced in the first year of his Administration that he offered Spain Gibraltar in return for Minorca and her neutrality.

It was in these circumstances that the country rose in revolt against the Too-Late Government of Newcastle and demanded Pitt. The City of London, that ancient stronghold of a national policy, forced Pitt upon the Court and upon Newcastle. But Pitt added to the devotion of London the allegiance of the landed interest. Pitt made that appeal which reaches the heart of the English country, the appeal to patriotism.

"Pitt's programme, and his clearly expressed intention of making no Party distinctions, awoke in them a new zeal for public affairs: 'They deserted their hounds and their horses,' says Glover, 'preferring for once their Parliamentary duty, and under their new Whig leader, the gallant George Townshend, displayed their banner for Pitt.'"

Pitt, as he stood for a national policy, had England behind him, and "a willing giving House of Commons, on whom the King might call for anything for an English object."

Pitt's policy was a development of the traditional policy of England adapted to the new circumstances of world-empire. Although committed to continental campaigns by the engagements with Prussia and Hanover and the danger to Italy, his main design was to strike at the sources of the enemy's strength in world-trade. His first great stroke was the capture of the French West African empire, upon which depended a rich trade in ivory and dyes, and the supply of slaves for the French West Indian sugar plantations. He acted upon the advice of one Cumming, a Quaker merchant, whose conscientious scruples were salved by a bloodless victory, and his friend Alderman Sayre. But Pitt knew well that the chief source of French strength lay in North America: and to drive France from that continent was the chief end of his policy.

The story of that great conquest is well known: it is indeed one of the epics of English history. The deeds of Boscawen and Saunders, of Amherst, Howe, and Wolfe need no telling here. But it is well to remember as a practical maxim in war that a mastermind laid down the main principles of that great campaign, and chose its leaders for their zeal, their energy, and their youth. Pitt, like Napoleon, did not believe in old men.

And his ardor in administration supported their efforts in the field. He reformed the Admiralty, rebuilt the Navy, reorganized and reinspirited the Army. He replaced German mercenaries by English militia for the defense of England. And when an expedition sailed, its guns, its munitions, and stores were all the objects of his care and anxiety, for there was nothing too small for his mind to consider if it contributed to a great design. His energy in striking was backed by his care in choosing and in preparing. He put no faith in a gamble, however legitimate; his plans and preparations went as far as might be to make success a certainty.

It would take us beyond the scope of this little book to follow his achievements in detail; but we must note his captures in the French West Indies as of an importance equal to the conquest of Canada. France had drawn vast revenues from her matchless sugar plantations: their loss threw the national revenues into confusion and transferred the bulk of this wealth to England. The British took over the sugar trade of Europe. He had been urged to this great stroke by his friends the merchants of London. By the conquest of Guadeloupe alone England gained a sugar trade worth £425,000 in the first year besides a flourishing market for her manufactures. As a strategic position in the West Indies it was hardly less valuable. A little later India was lost to France by the victories of Clive and Coote. The whole world now lay at the victorious feet of England.

But small men have an itch to betray the achievements of the great. In September 1761, Pitt discovered that Spain, which had hesitated long, had at last determined to join France and Austria in the Family Compact. With his true instinct for war he proposed that England should strike first and anticipate the blow. But the politicians and placemen were frightened.

"I submitted my advice for an immediate declaration of war to a trembling Council," he said. Pitt had certain knowledge from intercepted correspondence that Spain was only waiting until her treasure fleet reached Cadiz, and his plan was to capture this fleet and deal a first and deadly blow at Spanish power.

His colleagues debated the proposal through three successive Cabinet Councils and rejected it. Pitt and Temple thereupon resigned, and three months afterwards, when the Spanish treasure fleet was safe in the roads of Cadiz, England was forced to that declaration of war which Pitt had advised. Then the Too Late Government of Bute determined upon the betrayal of England's allies and England's conquests. Bute ended the alliance with Frederick on the ground that that monarch would not make peace, and entered upon secret and separate negotiations with France.

Bute's greatest trouble, as his best biographer says, was "the uniform success of the English arms." The treaty was less favorable to England than the terms stipulated by Pitt before the later victories. Guadeloupe, Martinique, Marie Galante, and St. Lucia were all restored to France, so that she was left in a stronger position in the West Indies. But worst of all, France was reinstated in the Newfoundland fisheries. It was upon those fisheries that Pitt had been adamant, for they were the secret of French power on the sea. They were the main source of her wealth, the nursery of her seamen. Without them the locks of the Bourbon Samson were shorn, and Pitt had said that to secure them he was willing to fight six or seven years more in America. They had been obtained, and they were now surrendered.

It would be idle to inquire whether Pitt felt more the stain on British honor or the surrender of British interests. If the statesmanship be right, honor and interest are one. The alliance with Frederick was a matter of honor to maintain; it had been a matter of interest to procure. The betrayal reacted on the interest because it destroyed the good repute of England, and England was left with her foes united and her allies disgusted.

The effect of the betrayal soon became manifest. The French trade in the West Indies, more than any other single cause, seduced the American colonists from their allegiance, and when England was in vain trying to reduce her colonists to obedience, France, strong in her naval power, intervened. It was thus by the treachery and cowardice of politicians that England lost the best part of her Empire.

And now let us come to Pitt's share in the great American controversy, for it has been a little misunderstood. Pitt was a Mercantilist, and he would not reconcile himself to give up to New England Old England's monopoly of manufactures and her control of trade policy. When Franklin proposed that all restrictions should be taken off American manufactures he got no encouragement from Pitt nor from any of the Whig Party, nor did Pitt sympathize with the American interest in the West Indian trade. There Pitt took the narrow view, but in the minor matter of taxation he was all for meeting the colonists, taking the line best put by Chesterfield in a letter to his son:

"For my part, I never saw a froward child mended by whipping, and I would not have the Mother Country become a stepmother. Our trade to America brings in, communibus annis, two millions a year; and the Stamp Duty is estimated at but one hundred thousand pounds a year; which I would by no means bring into the stock of the Exchequer, at the loss or even the risk of a million a year to the national stock."

Pitt, like Chesterfield, was too wise to kill a goose that laid such golden eggs. But did he desire merely to keep the colonies like a goose in a pen egg-laying for the City of London? If that was his dream for the young British nations it was unworthy of his genius and their future. Upon such terms there could have been no stability of empire. For such an ideal did not allow for the growth of young and powerful nation through agriculture to industry, and from the production of raw materials to the manufacture of wares.

Now there is some ground for the belief that such was Chatham's conception of empire. His great speech on the Stamp Tax in 1766, with all its paternal love for the Americans and its championship of their immediate cause, is in one respect illogical.

"The Americans are the sons, not the bastards, of England. . . . The Commons of America, represented in their several assemblies, have ever been in possession of the exercise of this, their constitutional right, of giving and granting their own money. They would have been slaves if they had not enjoyed it. At the same time this kingdom, as the supreme governing and legislative Power, has always bound the colonies by her laws, by her regulations and restrictions in trade, in navigation, in manufactures in everything except that of taking their money out of their pockets without their consent. Here I would draw the line."

The line, it must be said, is arbitrary. It would be hard indeed for a son, and not a bastard of England, to be denied that right of manufactures which is the life of a nation by an assembly in which he had no voice. Nor is the distinction between customs, which Pitt claimed the right to impose upon America, and internal taxation as strong as Pitt claimed and no doubt supposed.

It is difficult to believe that a statesman of Pitt's visions and ardent sympathy with the colonists should have been content with such a conception. He knew, of course, that at that time American manufactures were not likely to be formidable, and he hoped also, by securing the French West Indies, to remove the temptation to a contraband system of trade. But his mind, which was constructive and logical, could not have been satisfied with such expedients. He must have looked further. He must have seen that Imperial trade and manufactures could not permanently be regulated by a purely English Parliament. And so we find it. In a letter to Lord Shelburne of October 24, 1773, he says:

"I hope Government will have the wisdom and humanity enough to choose the happy alternative, and to give to America a constitutional representative, rather than hazard an unjust and impracticable war."

And in the Chatham Papers there are two schemes for the representation of the colonies in an Imperial Parliament. The colonies were to have fifty members in the House of Commons, elected not by their direct vote, but by their local assemblies, and were to have ten Peers in the House of Lords.

Here, then, was no selfish ideal of empire. How far it might have been practicable then is another question. Owing to the growth of a whole hierarchy of self-governing institutions as well as of the spirit of colonial nationalism, it is almost certainly impracticable now.

But Chatham would probably have acquiesced in the kindred and more feasible plan of a Cabinet or Council of Empire in which the United Kingdom and all the self-governing Dominions should be represented on a basis of equality. That might be, as nearly as possible, an executive body, armed with powers received from the constituent assemblies and unhampered by debate or publicity. Such a Council, of which there is already the germ in the Imperial Conference, might solve this problem of a free and yet united Empire on which eighteenth-century England made such disastrous shipwreck.

If now we sum up Pitt's policy we find that it was national since it obliterated parties and brought together the Tory squire and the Whig merchant. Its design was a strong and independent British Empire based upon sea-power. It aimed at the destruction of the Bourbon supremacy, both because that supremacy threatened the British market in Europe and because it was a menace to the British world-empire. Its method of fighting this Bourbon supremacy was to strike at the sources of its wealth and naval strength in Canada and the West Indies.

Although Pitt thoroughly understood the importance of the European battlefield, he put his main trust in the Navy of England, and aimed his chief blows at the props and supports of the Bourbon naval power. In this policy he leaned upon the companies and the merchants of the City of London, understanding well that as they then represented the production, so they represented the interest of England.

XV. Naval Policy

IF we go back far enough into our history we come to times when England had no Navy, as in the minority of Henry VI, and to times also when Englishmen were forbidden to carry our staple wares oversea, as in the reign of Edward III. In the Middle Ages the Hanseatic League enforced by all means their policy of Hanse goods on Hanse ships, and arrogantly claimed for themselves a monopoly of our trade in the North Sea. They enforced it by sinking our ships, destroying our foreign merchant settlements, as at Bergen, and blockading our ports. During the Wars of the Roses we find frequent reference to the Hanseatic blockade. Thus, for example, when Edward IV fled to Flanders he was pursued by the German fleet which was then blockading Lynn, at that time one of our chief ports on the East Coast.

Our English kings were often content to buy ships from the Germans, who by their command of the Sound controlled the source of naval power. As the Germans were usually the royal bankers, the royal coiners, and the royal tax-collectors, both political and naval power were thus much in their hands. Throughout the Middle Ages England was struggling fitfully and sometimes desperately to free herself from this German exploitation.

"The Common People (of England)," says the Danzig chronicler, writing of the Wars of the Roses, "took the side of any Party which opposed the (German) Merchant."

And the author of the Libel of English Policy, the first and by no means the least of our political economists, who wrote in the dark days of Henry VI, advised that we should check the German Power by a strong Navy stationed in the Channel. As the Germans had to go to Brittany for salt, it was possible to intercept them:

"Thus if they would not our friends bee

We might lightly stoppe hem in the see."

The poet's policy was a policy of protection and seapower; but chiefly sea-power:

"Keep then the sea that is the wall of England,

And than is England kept by Goddes hande."

A strong policy was the best means of securing peace. "Power causeth peace finally."

Sea-power was the policy of England:

"Than I conclude if never so much by land

Were by carres brought unto their hand,

If well the sea were kept in governance

They should by sea have no deliverance.

Wee should hem stop, and we should hem destroy,

As prisoners we should hem bring to annoy.

And so we should of our cruell enimies

Make our friends for fear of merchandies."

In other words, we should command the Channel and blockade Flanders, and thus we could dictate peace to all Europe.

I confess that my heart goes out to this nameless English poet of the fifteenth century, this practical dreamer, who looked down sadly upon an England in the dust, her Navy sold, her statesmen bribed, her poor the prey of the foreign usurer and merchant. He did not merely lament; his practical English genius traced the main currents of European trade to their confluence in the English Channel, and discovered the national policy of England to lie in economic independence and sea-power. To this poet-patriot-economist, who anticipated Captain Mahan, and laid down a hundred years in advance the Mercantile policy which made England great, too little honor has been done. It is one of the tragedies of our history that his very name has been forgotten.

But the difficulty was that the Germans controlled the trade in bullion and in naval stores. Their command of the mines of Hungary and Bohemia, and the forests, the flax, the hemp, and the pitch of the Baltic, made them impregnable.

To break this monopo^ our Muscovy Company was formed in the reign of Edward VI, and succeeded in securing an independent supply of naval stores by way of Archangel. The Indies gave a gold currency to Europe, and although that source also was controlled by the Germans it could be tapped by sea. Our Elizabethans tapped it, and sought at the same time for an alternative supply of timber and pitch in North America. They developed, as we have seen, metal and sailcloth industries, built their own ships and ceased buying men-of-war from Lubeck. Thus for the first time the naval power of England was placed upon a sound economic basis.

The main object of an English Navy was to secure a "vent "for the English cloth trade. It was the object of Hanseatic policy to carry English cloth in German ships to Flanders; it was the object of Tudor policy to have this trade in the hands of the English Merchant Adventurers. And one of the chief uses of the English Navy was to convoy our cloth fleets to Emden or to Hamburg. The Germans thought they could beat us out of the trade by using undermanned and unarmed ships, trusting to the protection of neutrality and the Spanish navy. Their great hulks were manned only by a few men and boys, and carried no guns, whereas the English ships, merchantman as well as Queen's ship, bristled with guns and armed men. As long as the Hanseatic League could maintain its neutrality this policy succeeded; but Elizabeth discovered their contraband trade with Spain, and Drake brought in whole fleets and shoals of German ships as prizes of war to our Admiralty Courts. Thus a weak and cheap commerce was driven off the sea by a strong and expensive commerce.

The Dutch, who were also rebels against the Hanseatic League, rose to power by hard fighting and daring navigation. They succeeded in bribing Denmark into giving them preferential terms in the Sound, and in getting the English merchants turned out of Russia, and thus secured a practical monopoly in the ship chandlery business. At the same time they claimed a monopoly of the East India trade. These methods succeeded so well that the Dutch grew very rich, and being a grasping as well as a heavily taxed people, they set about to save money by economizing on their navy.

Their policy was cunning yet foolish. They sought to substitute legal maxims for naval power, and engaged lawyers to write books on the Freedom of the Seas instead of shipwrights and munition-makers to maintain that freedom. Grotius began the campaign early in the century with his Mare Liberum, which is much admired by our international lawyers. It proved that the high seas were open to all, although at that time the Dutch were doing all in their power to close the Indian Ocean to English commerce. John Selden wrote a patriotic reply called Mare Clausum, but James feared that it might offend his father-in-law, the King of Denmark, to whom he was in debt, and forbade its publication.

Our Liberal and Whig historians are full of sympathy with the Dutch for their attempt to make merchandise more sacred than life. Thus Gardiner, for example:

"To the Dutch belongs the credit of leading the way in a course which has at last been adopted by the consent of the European nations, when in 1650 they embodied in a clause of their treaty with Spain the new principle that the neutral flag protected the enemy's goods, except in case of contraband of war. It is true that the very insertion of this article in the Spanish Treaty, not to speak of the opinion of even Dutch authorities on international law, may be taken as evidence that the English Court did but reduce into practice the accepted doctrine; but this practice was none the less destructive to Dutch trade, and, unless the commerce of the Republic was to be ruined, the statesmen at The Hague could not allow the English claim to pass unchallenged," etc.

The innocence of Dr. Gardiner will be realized when I add that he admits: (1) that the Dutch navy had fallen into a "state of inefficiency"; (2) that English traders had been driven out of the Spice Islands by a "mixture of force and fraud"; and (3) that the Dutch had secured from Denmark a favored posit: on as regards the Sound dues, "and this concession was accompanied by an express declaration from the King that no other nation was to benefit by a similar act of grace."

The Dutch declared for a mare liberum in order to trade with both belligerents and save the cost of a navy. The English, at whose expense this benevolent policy was to be carried out, were not at that time governed by Sir Edward Grey, but by Cromwell, and his reply was the Navigation Act.

This Act was not new, as we have seen, but its drastic application was considered novel by the Dutch. The Act and English prize law forced them into war; the mountain of gold came in contact with the mountain of iron with disastrous results to the softer metal. The Dutch suffered for their own avarice and lack of foresight.

"The character of the Dutch is such," said de Witt, "that, unless danger stares them in the face, they are indisposed to lay out money for their own defense. I have to do with a people who, liberal to profusion where they ought to economize, are often sparing to avarice where they ought to spend."

Holland refused to learn by adversity. She grew more and more careless and corrupt in her Admiralty administration; more and more niggardly in her naval expenditure. In the wars of the Spanish Succession her fleets were so badly convoyed "that for one ship we lost, they lost five," and, worse still, these losses "begat a general notion that we were the safer carriers."

The downfall of Holland as a maritime power was no doubt the inevitable result of her Free Trade policy. She neglected manufacture for carriage, and thus became dependent on the production of other nations. Thomas Mun shrewdly pointed to this fundamental weakness when the Dutch were still supreme. He compared Holland to a bird in borrowed plumes: "If every fowl should take his feather the bird would rest near naked." "Their ships," he added, "cannot be spared from their traffic." De Witt, their greatest statesman, warned them in vain against their Free Trade policy:

"The undrest English cloths are at importation not charged at all, and the English traders enjoy every way more freedom and exemption from taxes in Holland than even our inhabitants." The strength of the nation, he pointed out, was founded in production and not in foreign trade: "We know that heretofore in Flanders, Brabant, and Holland many inhabitants were maintained by manufactures, fisheries, and traffic, when the Easterlings were the only carriers and mariners by sea; as also that the said owners of freight ships were for the most part gradually competed by our manufactures, fisheries, and traffic to forsake those Easterlings and to settle in Holland."

It allowed that manufacturing power was the source of mercantile power, as mercantile power of naval power. The nation which neglected the foundations could not maintain the superstructure.

And so it was with Holland. She was allowed to continue in her oversea trade and empire long after her power to defend it had gone.

England followed an opposite policy. She founded herself upon her manufactures, and developed her shipping as a subsidiary industry. Her Merchant Adventurers owned ships for the purpose of carrying English cloth to foreign harbours and bringing back what was received in exchange. Her ships were heavily armed and strongly manned for the defense of this trade. She did not believe in the doctrine that cheapness was the controlling factor; on the contrary, she believed that strength would in the end defeat cheapness.

And so in the end it proved. It is possible that the Navigation Laws at first reduced the bulk and the profits of English trade; but they maintained English trade in a strong national organization, and they maintained the supply of English seamen. Holland was content to man her ships with foreigners; England insisted that her ships should be manned in the main by Englishmen. And she was content to bear this handicap in cost because she knew that it meant an advantage in strength.

As to cost, in her cloth and other manufactures, England had commodities which other countries could not do without. Therefore she could decree that those commodities should be carried in English ships manned by English sailors. The Dutch, who were without manufactures of their own to carry, had to content themselves with what they could pick up in foreign markets and carry from port to port. They were not the source of wealth, but merely the means of exchange, and their position was thus vulnerable and precarious. When any foreign nation felt itself strong enough at sea to carry on its own trade, Holland had no remedy save intrigue, corruption, and contraband. Hence her lawyer's policy of free goods in free ships so much admired by Gardiner and our modern statesmen. In the end it proved the destruction of Holland.

France imitated the policy of England: she founded her naval power upon her manufacturing power and upon her national trade. She used her national strength to attack the commercial system of Holland and of England and by the latter part of the eighteenth century she had reduced Dutch commerce to a position of dependency. When England used her naval power against France and the rebel colonies, Holland was reduced to make a living profitable but precarious by her contraband trade with France and America, and when that contraband trade was checked, she had no other resource than the gage of battle.

And for this test her policy founded upon cheapness was the worst of all possible preparations. She could not spare ships from her trade for her navy, and although she was allied with almost all the Powers of Europe against England, one stroke of the lion's paw laid her in the dust.

Consider the position when on December 20, 1780, England declared war against Holland. England was already confronted by the united arms of France, Spain, and America. The Northern League, including Russia, Prussia, Denmark, Sweden, and Holland, were linked together to defend The Hague doctrine of free goods in free ships, in other words, to force the British blockade of France and America. Thus all Europe and America were ranged upon one side and the British Navy on the other. Holland had some excuse for thinking herself secure.

Yet England, strong in her policy of production, economic independence, and naval power, opposed them all single-handed and forced them to a drawn peace. The Northern League demanded "the freedom of the seas," the right, that is to say, of trading with belligerents in neutral ships; England took her stand on the position laid down by Elizabeth long before to the Hanseatic Ambassadors.

Her doctrine was the doctrine of Vattel, that "the effects belonging to an enemy found on board a neutral ship are seizable by the rights of war." She refused to confine her seizures to contraband or to allow the trade of her enemies to be carried on by other nations. In the face of the whole world she stood upon her right to use her naval power for the destruction of her enemies.

Now this conflict has been raised by our modern sophists to the plane of morality. They assert it as a moral doctrine that in war for war is implied merchandise is more sacred than life, or at least than the life of the soldier and the sailor. It is such a doctrine as might be advanced by a huckstering trader; that it can have no basis in morality or in anything save greed of gain must be obvious to every honest mind. For as the destruction of life, which is the breath of God, is admitted in war, upon what moral distinction should property, the work of man, be spared? The question is in fact a question of policy, not of morality, and it is obviously the policy of the stronger Power at sea to take full advantage of that power.

The center of the Dutch contraband trade with America was the island of St. Eustatius: it drove such an enormous traffic that Rodney called it the greatest emporium on earth. It was, in fact, a mountain of gold with so little iron that its whole garrison consisted of only fifty-five soldiers. In this and the neighboring islands Rodney captured 150 vessels, many of them with rich cargoes, and these with the stores on the island itself were valued at no less than four millions sterling. There was besides a Dutch West Indian fleet of thirty large merchant vessels, guarded with true Dutch economy by one Dutch man-of-war. All this vast property fell into the hands of the English.

The seizure of the property on the island offended the susceptibilities of Burke, and Lecky regards it as "justifying the strongest condemnations," although the capture of the ships and their cargoes was "fully in accordance with the rights and usage of war." I am not enough of a lawyer to set any value on such a distinction. The whole purpose of the settlement was contraband trade: every merchant on the island was up to the neck in it. The property belonged to an enemy or was destined to an enemy. Why should an honest English sailor be expected to split hairs?

St. Eustatius was prize of war, "and the blow," as Lecky says, "was one of the most terrible that could be inflicted upon Holland." The Dutch colonies of Demerara, Essequibo, Berbice, Negapatam, Sumatra, and Trincomali were seized and their world-trade system cut to ribbons. It had existed upon sufferance and legal assumptions: it did not correspond with any real power; and its fall is only an illustration of the truth that wealth cannot for ever survive the power to defend it.

Those who deplore this harsh doctrine would do well to reflect that this wealth was the result of power. The Dutch had taken it by force from Spain or the natives: to expect that property seized upon one tenure may be kept by another can hardly be called reasonable. The possessor who declines in strength will always seek to substitute a title of law for a title of power; but those who succeed to the power will not respect the law which stands in the way of their succession to the property. Whatever morality may teach, this at least is the teaching of history.

France, unlike Holland, based her maritime power upon her manufacturing power, and was in consequence a much more formidable enemy. She had besides by her great military strength the means to push her mercantile system throughout the Continent: her influence, commercial and political, extended to Spain, Italy, Southern Germany, and Ho 1 land. The British power kept open the Hanse towns, Portugal, and certain island and fortress depots in the Mediterranean.

But as France depended for a great part of her raw material upon the East and West Indies, Cape Breton, and Canada, England was able to strike at her power at its source and in its sea communications. The chief was the Newfoundland cod fisheries, upon which France depended for the training of her seamen, the victualling of her fleets, and a great part of her Spanish trade. It was well understood both in France and England that upon those fisheries depended the sovereignty of the seas. They engaged nearly 3000 French ships and boats and a hardy breed of sailors. "To obtain the fishery," said Pitt, in the peace negotiations of 1761, "he would fight six or seven more years in America, and if he were capable of signing a treaty without it would be sorry he had recovered the use of his gouty right hand." Chouseul was equally firm. "La peche est ma folie," he said: and refused absolutely to give up the fishery. It was this difference which brought the negotiations to naught.

The furs and timber of Canada were a factor hardly less important, since the one supplied the naval yards and the other a principal manufacture of France with their raw material, while the West Indian islands were the source of the chief French trade in tropical products.

Thus economic considerations dictated the strategy of the Seven Years' War, and Pitt aimed to strike at France through her commerce. Even the operations on the Continent were not purely military, but were a conflict for the command of the chief depots for the English cloth trade.

France remained impregnable as long as she continued true to her policy of production. But unfortunately for France a school of philosophers arose to deride the principle of nationality and preach a universal Free Trade. By the Eden Treaty with England France betrayed her manufacturing interest. The invasion of cheap English cloth and cotton and silk fabrics produced an economic crisis which led to the Revolution. The Revolution introduced politics into the French navy, and, together with the loss of Canada, so weakened French naval power as to give England a great superiority at sea. To this advantage England added by the genius of her sailors, and even when the naval power of Spain was combined with the naval power of France the English Navy not only defeated but annihilated the enemy.

Napoleon sought to redress the balance by conquests on land and by a war on British commerce, in which fast privateers played the part now played by German submarines. At sea French policy succeeded so badly that by the end of the eighteenth century "not a single merchant ship is on the sea carrying the French flag."

The British, on the other hand, although they lost many ships, hardly felt their losses in the wealth they gained from a monopoly of world-trade. It is calculated that 2.5 percent of our shipping was taken by the enemy; but its bulk and value nevertheless vastly increased. The French were reduced, as Napoleon said, to use the land for the conquest of the sea. They drove the House of Orange from Holland, and once more brought the Dutch into the war against us. Denmark was threatened with war unless she closed the mouth of the Elbe to British manufactures. Hamburg and Bremen were commanded to suspend all commerce with England. As the result of victorious wars, from Emden to Trieste, almost all the ports of the European seas were closed to British commerce.

The City of Hamburg was the hub and center of this great conflict between land and sea power. Since the time of Elizabeth it had been the great depot of the English cloth trade in Northern Europe. It was the principal seat of the Merchant Adventurers, known in its latter days as the Hamburg Company, whose College occupied the same dominating position in the Hanseatic city as the Steelyard had once occupied in the City of London.

When the armies of the Revolution entered Belgium and Holland, and closed Antwerp and Amsterdam to British ships, Hamburg succeeded to a great part of their trade.

"Though the streets were unlighted and unpaved, the feasts of the merchant princes were worthy of Lucullus. It was currently said that you should breakfast in Scotland, sup in France, but dine at Hamburg, and that nowhere else in Europe could you order thirty-two wines from your merchant and have them all good."

It was almost an English city. English ships crowded its quays; English manufactures filled its warehouses; its merchant princes sat on English chairs, slept in English beds, and dined at English tables. Its English weekly newspaper, the Hamburg Correspondent, was the organ of English influence in Europe, and its streets were crowded with French Royalists who carried on a political campaign against the Republic.

Napoleon soon discerned that Hamburg was the center of the English commercial system in Northern Europe, and this clear perception guided his policy in that part of the world. As early as February 23, 1798, he had reported to the Directory that four courses were possible in the war against Britain first, to attempt an invasion; secondly, to seize Hanover and Hamburg; thirdly, to make an expedition to the Levant; lastly, failing all of these, to make peace.

By the end of 1800 he had so far carried his design as to complete the Second Armed Neutrality, which embraced Russia, Sweden, Denmark, and Prussia. But this measure was defensive in pretext. It adopted the policy long before advanced by Holland of free goods on neutral ships. Its first article stipulated the free navigation for neutral vessels from port to port and on the coasts of nations at war; its second freed goods belonging to belligerents on neutral vessels; its third laid down a stringent definition of blockade; its fourth and fifth limited the right of search and of capture. It was in fact an anticipation of the Declarations of Paris and of London, and had the same object, the weakening of English naval power.

But part of its result was to range those Powers against England, for as England refused to surrender her naval power the signatories were driven to enforce their policy. They were thus skillfully drawn into Napoleon's plan for excluding English commerce. Paul enforced this policy upon a reluctant Russia; Denmark, on March 29, 1801, entered Hamburg and declared the Elbe closed to England; a few days later she occupied Lubeck with the same object. Prussian troops overran Hanover and Bremen, and closed the Weser and the Ems to British trade. The reply of England was to force the Sound and bombard Copenhagen.

The Second Armed Neutrality fell into ruins before Nelson's cannon-shot; the Danish troops withdrew from Hamburg a few weeks after the battle; the Prussians evacuated Bremen a little later; and in June a new Russian Emperor signed a maritime convention with England.

In the new war of 1803 Napoleon returned to his scheme. He seized Hanover with the object of controlling Hamburg, and even offered the Electorate to Prussia if she would consent to enforce his coast system.

Prussia refused, and the Battle of Jena laid the Hanseatic towns open to the conqueror. Hamburg had refused an alliance with Prussia, preferring the lawyer's defenses of neutrality. As usual they were in vain.

On November 21, 1806, Napoleon issued his Berlin Decrees, declaring a blockade of the British Isles and forbidding her commerce with the Continent.

Marshal Mortier was sent with the Eighth Corps of the Grand Army to take possession of Hamburg, Bremen, and Lubeck. He was commanded to disarm the inhabitants, occupy Cuxhaven, close the river so as to prevent any Englishmen escaping, and seize all Englishmen, English houses, and English merchandise. "I need not tell you that the principal point is to begin by disarming and arresting all native Englishmen, even English bankers established in the country for twenty years." On January 23, 1807, Napoleon formally confiscated all British merchandise and British colonial produce seized in the Hanseatic cities.

England replied to these measures by her Order in Council blockading France and the Allies of France. But her principal object was to force the continental markets for her manufactured goods. She designed not only to establish her own blockade, but to force the blockade of the enemy, a complicated system intelligently based upon her commercial interest.

The last of the Merchant Adventurers naturalized themselves as citizens of Hamburg, and remained as the informal custodians of English interests. The whole population of the city was educated in a system of smuggling which set the Berlin Decrees at naught. Even Bourienne, Napoleon's commandant in the city, was initiated into the system and condescended to make a large fortune by winking at the business.

Napoleon's army in Poland were clad in 70,000 English cloaks, which Bourienne helped to smuggle through. The whole complicated coastline of North Germany, admirably suited for the purpose, was made the basis of a vast contraband system. On September 5, 1807, the Majestic, with Admiral Russell in command, annexed the then Danish island of Heligoland. This "thin strip of grassy down, some two miles in circumference," became a great depot of British trade.

"A miscellaneous crowd of merchants, clerks, and smugglers rapidly poured into the island of seagulls. . . . The English merchants on the island, who formed a Chamber of Commerce, reported that from August 9 to November 20, 1808, upwards of 120 vessels fully laden had discharged their wares on the island, and that the annual value of goods transhipped and imported would amount to 8,000,000 pounds sterling. Such was the influx that what with kegs, cases, and human beings there was hardly place to stand. . . . When the French Government prohibited refined sugar, the traders of Heligoland deluged the Continent with the raw article. When the raw article was forbidden they shipped rivers of eau sucree. When the douanier refused eau sucree, they put their hands into their pockets and coolly bribed him. . . . Mock funerals would be organized, in which consignments of colonial goods played the role of corpse. Not a trick was left untried. By 1809 the blockade had practically broken down."

England's policy followed the natural course of trade, since England was the source of the manufactures and had control of the colonial produce of the world. Napoleon's policy was artificial and set itself to stem this natural current. Everywhere his barriers leaked. At the fairs of Leipzig and Frankfort English manufactures were displayed on every stall. Stuve, a citizen of Osnabruck in Westphalia, writes in his Memoirs that in the years 1808-1809 long trains of wagons brought English goods from the coast through the city, and King Jerome himself connived at the traffic. In vain Napoleon adjured his brother Louis to enforce the Decrees in Holland.

"Before being kind, you must be the master," he wrote. "You have seen . . . by my Decree that I mean to conquer the sea by the land. You must follow this system."

Nevertheless the trade continued. In October 1810 the Fontainebleau Decrees carried the continental system to the furthest possible limits. All British manufactures were to be confiscated and burnt. Tribunals were set up to try those engaged in the traffic and to reward informers. Napoleon justified the measure "by circumstances."

"The immense stores at Heligoland threatened ever to flow into the Continent, if a single point remained open to English trade on the coasts of the North Sea, and if the mouths of the Jahde, Weser, and Elbe were not closed against it for ever." Davout, an incorruptible soldier, had reported from Hamburg the extent of the traffic, and the Emperor after annexing Holland annexed the Hanseatic towns.

At the same time he carried the war into Italy, where the republics were, like the Hanse towns, depots for English trade, and he sent an army through Spain to close England's valuable market at Lisbon.

It is undeniable that England was brought at times to a serious pass by these measures. When they were at the height of their rigor, English trade was reduced almost to a stand in Europe, and the markets of Asia and America were not sufficient to take off the glut of goods. But a country overstocked is in a stronger position than a country which is starved, and England was able to hold out longer than her enemy. And the course of the struggle had this political effect, that England, which sought to break the blockade, was everywhere looked upon as the friend and deliverer of Europe.

Prussia, faced by starvation or war, reorganized her forces and took the field. Russia, whose main trade had been in corn for England and materials for the English Navy, groaned under the impositions, and the Emperor was forced by his nobles to make a peace with England which meant war with France. The peace between England and Russia of July 1812 "virtually put an end to the continental system." Sweden, threatened with the establishment of French customhouses, made common cause with Russia. The whole of Northern Europe rose in revolt against the Food Controller.

In the wars which followed, Napoleon clung desperately to Hamburg, so desperately that Davout was surrounded in the town. But the sea at last proved too much for the land. The nations of the north which depended on the sea and upon naval stores for a livelihood did the bidding of the master of the sea; the merchants of the Hanse were the servants of the master of trade.

What France suffered by the sea blockade of England is graphically told by contemporary witnesses.

"The state of France as it fell under my observation in 1807," wrote an American traveller quoted by Mahan, "exhibited a very different perspective" from that of Great Britain. "The effects of the loss of external trade were everywhere visible in the commercial cities, half deserted and reduced to a state of inaction and gloom truly deplorable; in the inland towns, in which the populace is eminently wretched, and where I saw not one indication of improvement, but on the contrary numbers of edifices falling into ruin; or the high roads, where the infrequency of vehicles and travellers denoted but too strongly the decrease of internal consumption and the languor of internal trade; and among the inhabitants of the country, particularly the south, whose misery is extreme in consequence of the exorbitant taxes, and of the want of outlet for their surplus produce. In 1807 the number of mendicants in the inland towns was almost incredible."

Not only were the prices in the Empire from 50 to 100 percent higher than the prices in London, but France had to pay more than the other continental nations, and all foreign articles decreased in price in proportion as the distance from Paris increased.

In the course of this life-and-death struggle it may be interesting to note that both sides disregarded what is called International Law. The British Orders in Council which replied to Napoleon's decrees declared that:

"All ports and places of France and her Allies, or of any other country at war with His Majesty, and all other ports or places in Europe from which, although not at war with His Majesty, the British flag is excluded, and all ports in the colonies of His Majesty's enemies shall from henceforth be subject to the same restrictions, in point of trade and navigation, as if the same were actually blockaded in the most strict and rigorous manner."

International Law, in fact, is nothing of higher sanction than the rules which a belligerent lays down and is able to enforce for his own conduct of a war. Those who seek to find in it a code to which all nations owe and give obedience are doomed to wander forever in a maze of fallacies and a forest of exceptions.

And it is worth remembering that England was not ashamed at that time to use her regulations for the increase of her trade as well as the injury of her enemy. Upon this Captain Mahan, an unprejudiced neutral, makes a very sensible commentary:

"The whole system," he says, "was then, and has since been, roundly abused as being in no sense a military measure, but merely a gigantic exhibition of military greed; but this simply begs the question. To win her fight Great Britain was obliged not only to weaken Napoleon but to increase her own strength. The battle between the sea and the land was to be fought out on commerce."

Here, then, we arrive at a wide view of naval power: it is used to secure the economic strength of its possessor and to destroy the economic strength of an enemy. It has always been so used, and despite Hague Conventions made by the weaker sea Powers in all ages, it will always be so used, if the statesmen who use it are intelligent and faithful to their trust. If they are foolish or false to the interest of the nation they govern they make naval power of no avail, and would better have remained at peace.

XVI. The Theory of Free Trade

The influence of philosophy over nations, like the influence of religion, is fitful, uncertain, incalculable. But as with religion so with philosophy. Ideas are less an influence over affairs than historians suppose, since they are often the mere cloak and color of interest. Man, as Rochefoucauld says, moulds his ideas upon his desires, not his desires upon his ideas. Yet it may be admitted that principles and catchwords give point, direction, and sometimes even victory to a cause, especially when the affairs of a nation are managed through the clumsy and fallacious machinery of popular government. And in absolute rule also there are cases in which rulers, under the influence of a set of ideas usually false, have committed their subjects to ruin and disaster. Those statesmen are wise who remember the words of the Empress Catherine to Diderot, when that vehement philosopher was pressing her to put his ideas into practice:

"Mr. Diderot," she said, "I have listened with the greatest pleasure to all that your brilliant intelligence has inspired; and with all your great principles, which I understand very well, one would make fine books, but very bad business. You forget in all your plans of reform the difference in our positions; you only work on paper, which endures all things; it opposes no obstacle either to your imagination or your pen. But I, poor Empress as I am, work on the human skin, which is irritable and ticklish to a very different degree."

The doctrines of Free Trade, now associated with the principles of Liberalism, began in France, and perhaps also in England, as the revolt of agriculture against the new power of manufactures. Sully, the statesman of Henri IV, to whom the Physiocrats looked back as their patron saint, called tillage and pasturage "les deux mamelles de la France." He opposed the royal policy of encouraging manufactures on the ground that artisans made poor soldiers, and prescribed laws against luxury as the best means of conserving capital. France rejected his advice, and a great line of statesmen of the opposite school encouraged industry, commerce, and colonies. But Agriculture, which provided the men and the means for these adventures, limped doubtfully after Commerce, like Sancho Panza in the train of Don Quixote, and this latent hostility found expression in the writings of Rousseau and Quesnay.

These philosophers imagined a world fallen from a state of innocence, equality, and freedom, and regarded the simplicity of country life as the condition nearest their ideal. Rousseau, who combined with an equal ardor the pursuit of private vice and public virtue; Quesnay, who looked back upon the country from apartments beneath those of Madame de Pompadour, expounded rather a cult than a science. Of the two Quesnay had the more scientific training; but in his day medicine, even in Paris, was still in the empirical stage, and Quesnay, the father of Free Trade, was also the parent of a formula for squaring the circle.

Rousseau, if he had lived now and in this country, would have been called a Little Englander. He postulated a State small enough to be managed by the direct voice of all its citizens and preached a return to a state of society which never existed, where the family should be managed by the State and the State by the individual, and where all should live in promiscuous concubinage by universal consent.

Quesnay translated this social Free Trade into the language of economics. He argued that agriculture was the only productive industry, and lumped the rest of society as a class, sterile. As wealth was derived only from the soil, it followed that only the soil should be taxed a conclusion which must have a little embarrassed the class he singled out for admiration.

These engaging ideas, which afforded matter for mirth to Voltaire, greatly impressed two excellent and respectable Scotch philosophers who visited France at that time. David Hume was so much taken with Rousseau that he invited him to England; an experiment in philanthropy which left poor David a sadder if not a wiser man. Adam Smith, who visited France as the tutor of the Duke of Buccleuch, was no less enchanted with the views of Quesnay. We do not gather that he was convinced of the possibility of squaring the circle, nor could he quite reconcile himself to the doctrine that only agriculture produced wealth. But he went a certain distance on the road: the agriculturist, he agreed, was the most nearly indispensable.

"As a marriage which affords three children is certainly more productive than one which affords only two, so the labor of farmers and country laborers is certainly more productive than that of merchants, artificers, and manufacturers."

Adam Smith's preference of agriculture over commerce and manufactures is not to be explained solely by his natural gratitude to the Duke of Bucceuch or by his detached admiration for the Physiocrats of France. It had long helped to influence the party system of England. In the quarrel between the Stuarts and the Merchant Adventurers by far the greater part of the landed interest was on the side of the Court. Buckingham's hostility to commerce had probably the same source. Agriculture was slow to take up the mercantile quarrel with France, for the English squire regarded France as an occasional market for his corn, a factor in keeping up the price of his wool and the source of claret, partiality to which must be esteemed a sign of grace. The land paid for a series of expensive wars with men and with money, and saw no profit therefrom. Bolingbroke, the leader of the Tory Party in the time of Queen Anne, and Bute, its manager in the time of George III, as well as Walpole, whose interests were those of an English squire, were always ready to make or to keep the peace with France. The Whigs were in those times the Party of War as well as the Party of Protection.

Adam Smith, as a humble adherent of the Tories, wrote a book now regarded as one of the classics of Liberalism. It had as its political purpose to break down that armory of protection with which the commerce and industry of England fought the commerce and industry of France. In this work he engaged with all the zeal of a Scot and all the dangerous logic of a moral philosopher.

The training of the philosopher gives both strength and weakness to the book. Its strength is its logic and perspicuity: the premises being granted; everything follows inevitably to the conclusion. But the weakness lies in the premises themselves, the unregarded foundations of the work. These are not the rock of history and experience, but the sand of theory. The whole system is based upon a conception of society which had no existence in fact.

Although our good Adam speaks of the Wealth of Nations, he had never faced the problem of what nationality meant. The conflicts of nations had no meaning for him: they were merely

"A Tale, Told by an idiot, full of sound and fury Signifying nothing."

He conceived of society not as organized nations but as free individuals. Trade to him was an exchange to the mutual benefit of two individuals: industry the division of labor to the general welfare of society. The general lines of his system would have remained the same if nations had not existed. If he remembered the nation at all it was to admit it as an exception to one of his rules, as in his famous admission on the navigation laws.

But for the rest the division of labor should be regulated only by the extent of the market; cheapness and the natural course of trade are the best and indeed the only guides; and commerce being a process by which both parties gain, any restraint upon its freedom must of necessity be harmful.

History, unfortunately, does not teach these comfortable doctrines: trade, like the rest of nature, is red in tooth and claw, and in all ages nations have used their political, naval, and military power for the economic enslavement and exploitation of their neighbors.

If trade were of mutual advantage, England was as rich and happy under the domination of the Hanseatic League as under the national policy of Queen Elizabeth. If trade were a peaceful exchange, the Dutch would not have tried to close the Baltic and the Indian Ocean to the English merchant; and France and England would not have fought for a monopoly of the Newfoundland Banks and the West Indian islands. There would have been no advantage in possessing supplies of raw material under political control; France and England would have been content for ever to send their wool to Flanders to be draped, and to get their spices and sugar from the Spaniards or the Dutch. As national conflicts took place over these and many other such questions, we are forced to the conclusion that trade is not as Adam Smith shows it, merely the natural division of labor and the beneficial exchange of products, but a conflict and an exploitation.

But if this be true, it follows that national and commercial organizations may be necessary to preserve a country from exploitation, if not to exploit other countries. England could hardly have been redeemed from the domination of the Hanseatic League if her trade had not been organized upon a national basis by the Merchant Adventurers, protected by the royal favor of a national government. Holland could not have wrested the spice trade from Portugal without organizing her commercial and naval resources in the East India Company. The individual English trader could hardly have lived in that conflict of organized commerce which raged for the possession of the Indian market.

The Bank of England, the Merchant Adventurers, or, as they were then usually called, the Hamburg Company, the Levant Company, and all the other trade organizations of eighteenth-century England joined in the fight to maintain a vent for English manufactures against the prohibitions of the Bourbons and of Napoleon.

Adam Smith cannot find any virtue either in regulated or in joint-stock companies. Of the former he says that they are either oppressive or useless; of the latter that they are inefficient and wasteful. He is forced to make an exception as for banks, canals, and other "purposes of remarkable utility," but in principle he maintains that in the interests of the public the merchant should not be encouraged to combine, but prevented from combination. The principal object of combination, in the eyes of Adam Smith, is restraint of trade and the raising of prices. As these are evils to the community, merchants should be restrained from combining.

Yet we have seen over and over again in the course of our story that English merchants have combined to protect the national trade from the attacks of foreign competitors. Without such combinations they would have been helpless either to secure the markets they sought or to protect themselves on the road to these markets. From the time of Henry VII, when the Merchant Adventurers assisted the King to open the Netherlands to English cloth, through the time of Elizabeth when they helped to defeat the Spanish Armada and secured the open market of the Empire, to the time of Chatham when the East India Company defeated the French in India and created the Indian Empire, great associations of merchants had supported the national trade in all its major enterprises.

Companies of merchants had maintained fortresses, fleets, and standing armies, as Adam Smith admits. His contention that these are better maintained by the nation may be granted the more readily, as if his principles were valid they would not have to be maintained at all.

And as with the organization of trade on a national basis, so with tariffs and bounties. The one is the army, the other the trenches by which the army is protected. Let us see by two concrete examples how the levelling of these trenches may bring disaster and ruin to a nation, and how the opposite policy may raise up an empire from the dust.

XVII. Two Cases in Point

In the time of Elizabeth, Hakluyt remarked on the great advantage which falling rivers gave to the woolen manufacture of England. They furnished the power for the "walk mills" for the dressing and fulling of English cloth. One invention begets another. Early in the eighteenth century we hear of marvelous machines being used in England for silk spinning, and the spinning both of wool and cotton was accelerated almost infinitely by the use of the jenny. Arkwright set up a spinning-mill with horse-power at Nottingham in 1771, and a little later used water-power for the same purpose in his mill at Cromford in Derbyshire. Crompton's watermule was invented in 1775. "Through these changes," says Dr. Cunningham, "the carding, roving, and spinning of cotton were no longer continued as cottage employments, and weaving was the only part of the manufacture which was not concentrated in factories."

Water-power was followed by steam at Nottingham in 1785 and at Manchester in 1789; by 1784 there was a "factory problem." Although the weaving of the cotton was not done by machinery until the beginning of the nineteenth century, machine-spun yarn gave England a great advantage thirty years before. In 1771-1775 the annual importation of cotton-wool was 4,764,000 Ib.; in 1776-1780, 6,706,000; in 1781-1785, 10,941,000, and in 1786-1790, 25,443,000.

This great cotton industry had been founded not upon Free Trade but upon Prohibition. By a series of statutes from the beginning of the eighteenth century the British Government had prohibited the importation of cotton goods and printed calicoes from India, except for re-export. As Manchester is no longer Free Trade, it is unnecessary to remind her that her industry was founded upon Protection.

In the woolen trade the spinning- jenny came in, rather slowly, about 1785; but, as we have seen, fulling-mills had long been in use, and the growth of the industry was limited only by the supply of raw material.

In the hardware trades the expansion was even more remarkable. England led the way in applying coal to the smelting of iron, and so obtained an advantage over the rest of Europe.

English industry, secure in its home market and world-empire, protected by tariffs and navigation laws and a Government closely in touch with its interests, commanding a great store of raw materials, had expanded in every direction until it supplied almost the whole world. Its only rival was the industry of France, and towards the end of the eighteenth century the English manufacturer realized that he could now produce more cheaply than his French competitor in almost every manufacture except silk. In that industry alone the French command of the raw material gave France the advantage. In everything else the almost prohibitive duties of the French Customs were barely sufficient to keep out the flood of English manufactures.

Unfortunately for France the statesmen of Louis XVI had embraced with enthusiasm the teaching of Quesnay and his brother economists. They believed that agriculture was the only indispensable industry, and were prepared to sacrifice manufactures on the altar of physiocracy. An opportunity was offered for an experiment in these glorious principles by the Treaty of Peace of 1783, which provided for a Treaty of Commerce. In 1785 the French Government invited Mr. Pitt to send a plenipotentiary, and Mr. Pitt chose William Eden, afterwards Lord Auckland.

Eden, like a wise man, first consulted the English manufacturers, and after hearing the views of Sheffield, Birmingham, Manchester, Norwich, Essex, Yorkshire, Gloucestershire, and the rest, he went to France prepared to seek what our manufacturers wanted, "a fair and simple reciprocity." He found in the French Ministry "every appearance not merely of fairness but of extreme facility." He was puzzled. "It is neither unjust nor discreditable to them," he wrote to Carmarthen, "to presume that in the plan they are pursuing they look to the advantage of France and not to that of Great Britain." He wondered what could be their motive. Did they want an alliance against some other Power? Was there "any finesse and game in what they are doing"? "But whatever may be the prevalent motive, it seems beyond a doubt that the immediate consequences are highly eligible for the interests of His Majesty's subjects."

As the negotiations proceeded Eden became more and more mystified. Was it right to take advantage of these simple Frenchmen. It seemed, as Mr. Bonar Law would put it, "like stealing candy from children."

"There are," he wrote to Pitt, "great plans going forwards here for settling warehouses at Bordeaux, Marseilles, etc., to supply English goods to all the world. I think it right to throw cold water on the zeal of some individuals who are very alert in such speculations."

And again: "I am firmly convinced that the proposed duty will give us a full access to the French markets and will be thought so low here as to be the subject of much outcry."

As the French showed themselves facile, the English Ministers increased their demands. Eden wrote to protest that he could not "with a fair face" advance such outrageous proposals. Yet they were granted. In the end all English manufactures were admitted at from 10 to 12 percent, although England prohibited the silks of France. All that France gained in return was a reduction on French wines and brandies, on brandy from 9s. 6d. to 7s. per gallon, and on wine from £96 4s. 1d. to £45 19s. 2d. per tun. This reduction brought French wines to the same level as the wines of Portugal; but the Methuen Treaty was safeguarded by a condition that England was free to lower the duty on Portuguese wines by the stipulated proportion.

Eden in the midst of his triumph remained uneasy. When the French Government asked for a lowering of the English duties on silk he had replied that the British Government dared not do it for fear of riots among the weavers of Spitalfields. Yet the French Government admitted English gauzes; one of the few silk manufactures in which England excelled France.

"The Comptroller-General (Colonne) lamented rather warmly," he reports to Pitt, "and in a sort of speech that you would not find it practicable to open the silk trade. M. Vergennes informed him that there are 'trente mille polissons dans la ville de Londres qui ont une voix sur ce chapitre,' to which he answered that there were above double that number at Lyons, who would execrate him for admitting all the numerous manufactures of England, by the same instrument which will exclude the only well-established manufacture of France."

Eden reproaches himself with "having urged on the French Ministers on some of the most material articles a lower duty than is just or right." As they had accepted them, there was sure to be trouble in France.

"This is not a business," he wrote to Lord Carmarthen, "in which I feel solicitous for the applause and triumph of the moment. It is impossible that the treaty can go forwards with any permanent execution if this country is to be overwhelmed with English manufactures, and is not at the same time enabled to send wines, brandies, cambrics, linens, etc., to pay for them." 1

It was a sagacious foreboding. The treaty was signed on September 26, 1786. On November 8, 1787, Eden wrote to Pitt:

"M. de Montmorin has talked again with me about the commercial treaty. He says that the representations from the different parts of Normandy, and even from Bordeaux also, against our pottery and against the cottons, are urgent to a degree of clamor and violence; and it is said that in Normandy above 4000 manufacturers are begging in the streets of Rouen, etc. I wish that we had set these two articles at 15 percent. It is now impracticable to do anything . . . I really think that, unless something is done, the rage against the Treaty here may grow too strong to be resisted."

Eden, nevertheless, mourned the cupidity of our English manufacturers, who had induced him to ask too much. Surely a remarkable phenomenon this sagacious diplomatist reproaching himself not only for asking but for receiving too much on the ground that the completeness of his victory must imperil its permanence!

The truth is that the teaching of Quesnay was not the only factor in these surprising negotiations. Upon the English side was the English fleet and the Prussian armies. Holland, it may be remembered, had sunk under the influence of France, a situation dangerous to the interest of England. An insult to the Princess of Orange gave Pitt his opportunity. Our Minister at the Prussian Court advised the King to avenge the insult to his sister. Prussian troops were pouring into Holland at the very moment when Eden was negotiating the Commercial Treaty. Peace and war trembled in the balance. Pitt insisted not only upon an end to French interference in Holland, but the reduction of the French navy to a peace footing. Montmorin, who succeeded Vergennes, told Eden that he would rather have risked war than assented to such an accommodation. He had, however, been overruled by the Finance Minister, the Archbishop of Toulouse, whose influence prevented war, but "many thought sealed the fate of the French monarchy."

And so it was. English manufactures poured into France in a devastating flood. The great manufacturing centers became centers of poverty, idleness, and revolution. A bad harvest was added to bad trade. Those starving polissons, the poor betrayed artisans of France, poured into Paris. The wildest rumours were circulated as to the motives which had influenced the Ministry to betray the interest of France. It was reported that Rayneval, who had negotiated the commercial treaty on the side of France, and the young Comte de Vergennes had been speculating in the English funds.

The late Mr. J.W. Welsford, in his great little book, The 'Strength' of Nations, gives an admirable account of the havoc wrought in France by the commercial treaty, and its results in precipitating revolution. He quotes Arthur Young, who was in France in 1787 and found all the French manufacturers:

"great politicians, condemning with violence the new commercial treaty with England." At Amiens he was told that "Amiens would be ruined, and that on this point there was but one opinion." At Beauvais: "the opinion universally among the manufacturers here is, that the English fabrics are so superior in cheapness, from the wise policy of the encouragements given by Government, that those of Beauvais, should they come in competition, must sink . . . and they think that the most mischievous war would not have been so injurious to France as this most pernicious treaty." At Lille, "I nowhere met with more violence of sentiment relative to the treaty than here; the manufacturers will not speak of it with any patience; they wish for nothing but a war; they may be said to pray for one as the only means of escaping that ideal ruin which they are all sure must flow from the influx of English fabrics to rival their own. This opinion struck me as an extraordinary infatuation."

And Arthur Young thus summarized the effects of the treaty:

"The rivalry of the English fabrics in 1787 and 1788 was strong and successful . . . the general mass of the consumption of national fabrics sunk perhaps three-fourths. . . . The inevitable consequence was turning absolutely out of employment immense numbers of workmen."

In fact it was no infatuation; the treaty ruined France. The English manufacturers were amazed at their own success. A Glasgow manufacturer wrote:

"It seems strange infatuation in the French to allow woolens to be imported from a sheep country . . . iron from the only country in the world which has ironstone, iron ore, coal, and lime (the four compounding parts of iron) often in the same field and in the neighborhood of the sea . . . strange that they should receive pottery from a country full of coal and of the finest clays in the world next to China . . . cotton from a nation that has West India settlements. . . . The price of cotton goods depends now a good deal upon machinery, where we have a solid superiority over the French from the cheapness of our coal, by which the steam-engine has an hundred advantages over works conducted by wind or water. This last observation ensures us in the superiority of woolen, for although Mr. Arkwright has as yet applied his machine only to cotton, yet there can be little doubt that it will be equally applied to woolen."

It was indeed strange, so strange that the twice "trente mille polissons" of Lyons, the four times "trente mille polissons" of Paris, felt themselves sold, and determined to have "une voix sur ce chapitre." They were reduced to famine; they threatened to eat their Deputies; they raged against King, Queen, and Ministers. The guns of the Bastille, then almost as obsolete as the Tower, were trained upon the industrial quarter of Paris. All the demands of the National Assembly were granted; but as these demands were for constitutional reforms they had no influence at all upon the situation. Empty bellies are not filled with Acts of Parliament. The Bastille was stormed; Monarchy fell; the Directorate blindly avenged the wrongs of France upon the wrong people; Napoleon succeeded, and proceeded to restore the industries and markets of France, all too late, by invading Holland and shutting out the manufactures of England.

II

Let us draw our next example from a period a little later. The Napoleonic Wars had been fought. Napoleon had been defeated and driven out; the continental system had been laid in the dust, but France continued to protect, by a policy of prohibition, the tender young industries which Napoleon had succeeded in rearing upon the ruins wrought by the Eden Treaty.

England, however, continued to regard Germany and the United States as the favored preserve of her commerce. Germany especially was the happy hunting ground of the English commercial traveller. Hamburg was again almost an English city; the Frankfort and Leipzig Fairs were full of English merchandise; the Prussian farmer and the Prussian grenadier clad themselves in English woolens. In these happy circumstances the establishment of the Zollverein seemed to the British manufacturer an impious disturbance of a state of nature ordered by Providence.

On March 22, 1833, a Treaty of Commercial Union was concluded between Prussia, Bavaria, Wurtemberg, the Electorate of Hesse, and the Grand Duchy of Hesse. At first the Prussian Government allayed British fears by promising to impose only a low duty on foreign manufactures, but as time went on these promises were found to be, as the diplomatists say, "illusory." Many British manufactures were even prohibited by the height of the tariff, and British trade, especially the cotton and woolen trades, languished in consequence. In these painful circumstances the British Government sent over Sir John Bowring to make representations and to report on the subject.

Sir John Bowring was, according to his lights, a very intelligent man. He dabbled in literature and was the author of a hymn which is still sung with gusto in evangelical circles. He twice engaged in business; but on both occasions "sought official employment in consequence of commercial disaster." Like his friend Cobden, he was better qualified for directing public business than his own, and he was one of the principal agitators against the Corn Laws, one of the most eminent and respectable apostles of Free Trade.

This excellent gentleman wrote an admirable report on the Zollverein, which he presented to Lord Palmerston in the year 1840. It was a document at once alarming and conciliatory: it warned the British manufacturers of the danger of German protection and instructed the German people in the advantages of British Free Trade. The word "sinister" occurs several times in the course of the report, and in every case it is used to describe the efforts of the German manufacturer to protect himself against British competition. He is benevolent towards the Zollverein. It is "the substantial representative of a sentiment widely, if not universally, spread in Germany that of national unity." He had the foresight to see its great political importance:

"The intimate connection between commercial and political interests is obvious, and the advocates of the League did not fail to perceive that no political alliance would be so strong as that based upon a community of pecuniary and social interests. Under a wise direction the machinery of the Zollverein would become a very mighty political engine which would be brought to bear with great power upon the future concerns of Europe and the world at large."

There were dangers, however:

"The peril to its beneficial results will grow out of the efforts which will be made and which are already made to give by protections and prohibitions an undue weight to the smaller and sinister interests of the Verein. But if its tariffs be so moderate and so judicious as to allow full play to the interests of the consumers in the fields of competition if there should be no forcing of capital into regions of unproductiveness if the claims of manufacturers to sacrifices in their favor from the community at large be rejected if the great agricultural interests of Germany recover that portion of attention to which they are justly entitled if the importance of foreign trade be duly estimated." in short, if the German market be kept open to British manufactures "the Zollverein will have the happiest influence on the general prosperity."

Unfortunately these sinister tendencies had already made sinister progress: "The avowal of the Prussian Government that it was their intention only to levy a moderate duty of from 10 to 15 percent, is by no means carried into effect by the rate of the duties levied." Cotton goods had to pay from 30 to 120 percent, woolens from 20 to 50 percent. Owing to the German method of levying duties by weight,

"the general result of the tariff is to exclude the foreign articles of low quality and general consumption and thus to keep the large demand exclusively for the home manufacturer." The evil results were already evident. At the Leipzig Fair, "houses which had been large importers of British goods . . . had to substitute home-made for foreign manufactures in their warehouses."

Frankfort-on-Main was suffering most of all, as it was a great entrepot for British goods. The sales of British cotton goods had diminished about a third in a single year, and at its annual fair many of the warehouses were to let. It would, of course, hurt the German manufacturer because it:

"removed . . . a large portion of that competition whose impetus is so favorable to improvement. . . " nevertheless, "the shifting of demand from the foreign to the native fabrics is everywhere obvious."

And Sir John Bowring proceeds to give an example which must have made the hair of John Bright and his other friends to stand on end.

"There was a district," he says, "in Berlin frequently called Petty Manchester, in the Spandauer Street and neighborhood, in which were many large warehouses of British cotton goods. They have almost wholly disappeared. The owners have retired from a losing trade, either on their savings, or have engaged in other adventures some even in manufactures competing with England so that all their influence, which was once on the side of Free Trade, is now flung into the protecting and prohibitory scale."

Sir John was a little comforted by the belief that: "the tendency of opinion in Germany is towards Free Trade"; that "almost every author of reputation represents the existing system as an instrument for obtaining changes in favor of commercial liberty," and that "one of the most distinguished writers on the Commercial League, in cautioning the capitalist from embarking his wealth in the protected branches of industry, says: '. . . You are erecting edifices upon sand.'"

He had hopes, too, from the Hanse towns, Lubeck, Hamburg, and Bremen, whose Free Trade policy attracted the "great interest and sympathy" of "all who desire to see commerce unfettered," etc. The Hamburg warehouses would be ruined if she entered the Zollverein:

"Whatever facilities the Hanse towns might obtain from the Zollverein, they can never be in a situation more favorable than they now enjoy from direct intercourse with foreign countries."

Sir John's chief hope, however, was based upon a change in English policy. If only the British Corn Laws could be abolished it would strengthen the agricultural and Free Trade interest in Germany:

"Were foreign markets accessible to the German agriculturist, there is no doubt the flow of capital towards German manufactures would be checked, first by the increased demand for agricultural labor, and secondly by the loss of the advantages which the German artisan now possesses in the comparative cheapness of food."

This is the scheme to which Sir John again and again returns: British agriculture is to be deprived of protection on the chance that Germany will change its policy to Free Trade. Otherwise he fears that although protection is "not at all likely to promote the future well-being and permanent interests of Germany," it will nevertheless continue.

"There is in fact only one course to be adopted, unless it is intended that a trade of many millions sterling per annum shall be finally sacrificed. The tariffs of Great Britain must be modified pari passu with the tariffs of the Commercial League. Such modifications are so obviously, so essentially, so permanently in the interest of the fifty millions of Britons and Germans whom they would bring more closely and unite more firmly together that . . . I cannot but persuade myself that important changes will be welcomed on both sides."

It must, however, be done at once:

"The sinister interests opposed to a more enlarged intercourse do indeed wax stronger and stronger; for though, on the whole, the reception of a British Commissioner at Berlin was most kind and cordial . . . yet there was also an outbreak of feelings naturally generated in the minds of those who profit by monopoly, whose object it was to throw distrust on all my proceedings, to awaken jealousies, to irritate the worst elements of rivalry and nationality. . . . Our own restrictions, our own high duties, our own prohibitions were constantly thrown into my path, and were undoubtedly the greatest difficulties with which I had to grapple in the progress of discussion."

Only the "liberal" tendencies of recent British legislation enabled Sir John "in some respects to modify the friendly impressions which our custom-house laws convey to foreign nations."

Poor Sir John Bowring! With all his cuteness, even Englishmen perhaps even Free Traders will admit that he cuts at this distance rather a mean and contemptible figure. The Germans, in spite of his blandishments, persisted in their policy. The sacrifice of English agriculture was made in vain. Germany accepted the free market for Prussian corn, but gave nothing in return. On the contrary, she built herself up on a policy of Union and Protection, until her organized strength overshadowed the world.

Conclusion

The time has come when we must once more draw our shallop to the shore of history. It has been a swift voyage through two centuries and there has been time only to glance at the great features of the landscape. At our setting out we saw England "under the thumb" of the Hanseatic League, the economic serf of the old German Empire. We were the witnesses of her liberation by two organized forces working in harmony the State and our national commerce. Neither would have succeeded without the other. And when we hear abuse of monopolies or trusts, it is worth remembering that a regulated company, embracing almost our whole English export trade and working upon national lines, was the chief weapon in our greatest war for freedom.

We saw the national system of England, founded upon production and security, break to pieces the commercial system of Holland, founded upon trade and upon wealth. Then we saw the long and doubtful conflict between the two national systems of England and France, ending in the victory of England when France betrayed those polissons her craftsmen, whose "exquisite knowledges" were and still are the chief glory of that nation of genius.

In those great conflicts we find that England hammered out a national policy upon the anvil of experience, in the fiery stithy of war. It is the policy of the unknown poet of the Libel, the policy of Sir Thomas Gresham, of Burghley, of Francis Bacon, of Thomas Mun, of Oliver Cromwell, of Chatham, and not only of those writers and statesmen but of the whole body of Englishmen who conducted our commerce and affairs. It is a policy which has been caricatured, and in particular its theories as to treasure and the balance of trade have been misrepresented.

Adam Smith was ignorant of a time which the founders of Mercantilism remembered, when the Hanseatic and Imperial trade system by its monopoly of the precious metals brought about the "undoing" of the realm. To get in the hands of our own merchant bankers such a supply of treasure as should make England independent of any foreign Power was the most urgent need of Elizabethan England; and the balance of trade an excess of exports over imports was thought to be a practical means to that desirable end. But the Mercantilists are justified by modern example and by the severest of all tests.

In the present war our Free Trade financiers and statesmen were reduced to the same expedient: a whole series of prohibitions of export supported the exchange. That a high duty was not imposed was a consequence of mere bigotry. Our Free Trade rulers, in their Prohibition-without-Protection policy, might indeed be said to resemble an austere spinster who should reluctantly decide that war-babies are essential to the State, but remain firmly resolved nevertheless that no mere man should reap any profit or pleasure from her departure from the strait path of virtue.

And now let me sum up the main ends of this traditional English policy:

1. To be independent in all necessities of war; and therefore

2. to feed England as far as possible from her own soil;

3. to work up our own raw materials into manufactured goods;

4. to keep our own market for our own wares;

5. to import raw materials and treasure in exchange for manufactured goods;

6. to keep an open "vent" for our manufactures abroad; and therefore

7. to secure ourselves against competing nations at such points as the Netherlands, the Straits of Gibraltar, and the Sound of Denmark; for which purpose

8. to maintain our supremacy at sea, and

9. the balance of power in Europe.

10. By union to secure the safety of our base in these islands.

In my brief account of this policy I have said too little of the great industry of agriculture, which has always been and still is the chief interest of England. It is unfortunate that agriculture has too often been in conflict with a combination of the other interests: the revolutions, civil wars, and party struggles of our English story are always in some measure due to this great conflict.

In the eighteenth century, when agriculture had more to fear from the Baltic than the Bourbons, the Tory landed interest limped painfully behind the aggressive foreign policy of the commercial Whigs. But when England was in danger, the true-blue English countrymen sank everything but patriotism and rallied to the national banner under the two Pitts, and on that glorious foundation of unity England rose to the supreme height of her national power.

Agriculture saved England in the Napoleonic wars both by furnishing Wellington with men and by feeding the industrial population, yet commerce under the unhappy inspiration of the cotton-spinners betrayed the landed interest in a vain endeavor to stop Tariff Reform in Germany and the United States. The dog lost the bone in snatching at the shadow: British tillage, the best nursery for the race, the best market for our manufactures, the best insurance against the perils of war and of famine, was ruined to no purpose.

And so we come to the resurrection of the German Empire, after its long sleep of two hundred years. We are only now, said Bismarck, getting over the Thirty Years' War. In the eighteenth century, so low had Germany fallen, that ships leaving German ports were often ballasted in sand scornfully called in France "le produit d'Allemagne."

Schmoller, the favorite economist of the present Emperor, thus describes the sad state of Germany in the seventeenth and eighteenth centuries:

"Those Hanseatic towns that were not ruled by Dutch business managers were in slavery to English creditors. . . . In the period from 1670 to 1750, the bitterest lamentations were heard in Germany about this commercial dependence, about French manufacturers, about the traders from every prince's land that overran the country: the torrent of complaint touching the pitiable condition of the Imperial Government increased like an avalanche. . . . At last all the voices, alike of scholars and of the people, came together in unison. There is but one way out of it; we must do what Holland, France, and England have done before us; we must exclude the foreign wares; we must once more become masters in our own house. Facts had taught them, with inexorable clearness, that at 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 and prohibition laws, with fleets and admiralties, with companies, and with a trade under State guidance and discipline those who would not be hammer would assuredly be anvil."

Free Trade and the lack of national unity and a national policy based upon a secure home market and native production had brought Germany to this terrible pass. The Hanseatic cities were mere depots for the English manufactures and every German city had its colony of English merchants. So also in the United States where every store sold English wares and the whole country supplied itself with English goods.

Happy days! Only one little Maximin the gods defied. And that was poor, persecuted, unhappy Friedrich List, the national economist who inspired the commercial policy of two of the greatest nations of the world, and died miserably upon a drift of snow. He had a cold welcome, poor List, and a cold exit imprisoned and exiled, driven from one State to another, because he dared to think of the economic independence of his country. He was the implacable enemy of England, yet I might almost call him comrade, for what he detested was the commercial penetration of Germany by England, and what I detest is the commercial penetration of England by Germany.

List worked as secretary of the German Commercial League with the object of securing protection for German manufacturers, and he bitterly complained of pro-British tactics in the ports and cities of Germany.

"It is notorious," he wrote, "what a powerful means of controlling public opinion abroad is possessed by the English Ministry in their secret service money not accustomed to be niggardly where it can be useful to their commercial interests. An innumerable army of correspondents and leader-writers, from Hamburg and Bremen, from Leipzig and Frankfort, appeared in the field to condemn the unreasonable desires of the German manufacturers for a uniform protective duty, and to abuse their adviser in harsh and scornful terms, such as that he was ignorant of the first principles of political economy as held by the most scientific authorities, or else had not brains enough to comprehend them. The work of these advocates of the interests of England was rendered all the easier by the fact that the popular theory and the opinion of German learned men were on their side."

It is a curious experience to read List at the present time. I feel as if I were reading my own writings, only everything is reversed as if it were through the looking-glass. Put Manchester, Bradford, and London in the place of Hamburg, Bremen, and Frankfort, and List's writings might be used very well for our Protection propaganda. It is noteworthy how he insinuates that the leader-writers of the German Free Trade Press are in the pay of the English importers. Then he praises our power of organization, the mutual support of Government and industries, the intelligence and vigor of our commercial policy, the thrift and skill of our workmen, the productive power of our agriculture. He gazes with awe upon the totals of our production in the various industries. "England now," he says, "manufactures more iron and steel wares than all the other nations on earth" her cloth manufacture, her linen manufacture, her silk manufacture, her leather goods they are all supreme. Although he hates us, he cannot but sing our praises. He speaks of England as

"a world's metropolis which supplies all nations with manufactured goods . . . a treasure-house of all great capital a banking establishment for all nations, which controls the circulating medium of the whole world, and by loans and the receipt of interest on them makes all the peoples of the earth her tributaries . . . an example and a pattern to all nations in internal and in foreign policy, as well as in great inventions and enterprises of every kind, in perfecting industrial processes and means of transport," etc. etc. But was Germany to submit to English domination and English culture? Think of how England had treated Germany: "Germany was that which Franklin once said of the State of New Jersey, 'a cask which was tapped and drained by its neighbors on every side.' . . . In vain did the Germans humble themselves to the position of hewers of wood and drawers of water for the Britons. The latter treated them worse than a subject people . . . To fill up the measure of their contempt, the doctrine was taught from a hundred professorial chairs, that nations could only attain to wealth and power by means of universal free trade."

Yet in recent years owing to the Tariff of the Zollverein (then partly created) things were improving. The Zollverein Tariff was protective at least in regard to the heavier articles:

"Let us freely confess it, for Dr. Bowring has incontrovertibly shown it, that the Zollverein Tariff has not, as was before asserted, imposed merely duties for revenue . . . let us freely admit that it has imposed protective duties of from twenty to sixty percent, as respects the manufactured articles of common use."

That was a beginning; but Germany must go further; she must wholly discard Adam Smith and the "cosmopolitan school." The Commercial Union and the Tariff, these were the foundations: upon these ". . . a union flag, the possession of a navy and mercantile marine" and everything else necessary to German unity and greatness would surely follow.

It is recorded that during the Corn Law agitation List came over to London to study our politics on the spot. Cobden met him and said in ignorant complacency, "Well, List, I suppose you have come over here to change your opinions." To which List replied that what he saw made him more confirmed in his opinions than before.

Cobden was a demagogue: List was a student of affairs and a student of history. Looking into the past he saw, as we have seen in our brief survey, that trade between nations is not an exchange equally beneficial to both parties, but a constant struggle and exploitation, in which stronger nations profit by the weaker, and in which there are the elements of victory and defeat.

Adam Smith borrowed from French philosophy an ideal world and an ideal past. He thought in terms of that pervasive eighteenth-century fiction the noble savage or the simple life. List was too well acquainted with history and affairs to make such a mistake. He knew the power of the Hanseatic League, its struggle with Elizabeth, the rise and fall of Venice and of Holland, the commercial and naval policy of England; he had studied all the elements of the commercial struggles between nations, and realized well that the political organization and policy of a State could not be separated without error in thought and disaster in practice from its economic life.

Unhappy List did not live to see the Zollverein vindicated by results. It might be interesting to trace the economic and political development of Germany from List to the present day; but the task must be reserved for a future occasion. Prussia, we should have to note, was at first the chief obstacle to Protection. Not until American grain began to compete with Prussian grain did the agrarian policy swing round into agreement with the industrial. But the Zollverein, owing to the construction of its Tariff, was protective in its effect from the beginning. Bismarck, at first a Free Trader, changed with the Prussian junkers to Protection, and united the two great interests of agriculture and manufactures in 1879, declaring also for the protection of labor, so that the rise of German industries may be said to correspond with the development of the German protective and productive national system.

No one who knows anything of economic history would suggest that Protection is the only means of fostering manufactures and that all a nation requires for the growth of its industries is to clap on a high duty. List put the matter fairly when he described customs duties as the "chief means of establishing and protecting the internal manufacturing power." But it must be used with skill and with knowledge, and these being granted the larger the Free Trade area it surrounds the more likely it is to be successful. Its value lies not only in protection but in negotiation. The Germans looked back with admiration upon that masterpiece of English statecraft, the Methuen Treaty with Portugal, and used their tariff to the same end the exchange of their manufactured goods for the natural products of other countries. Germany has beaten us in commercial treaties because her statesmen had something in their hands whereas ours had nothing to offer. But Germany has also defeated protected nations both in commerce and industry, because her strength in the other powers of a State is better developed and more skillfully used than theirs.

The tariff has another political advantage no less important, it unites and harmonizes national interests. It gives all interests a certain bias which unites them against the foreigner. Our sharp party divisions, when fairly considered, are a struggle between production and importation: a tariff throws the balance of power, where it should be, on the side of the producer. The producers of a State, being altogether committed to its interests, are the best fitted to control its policy. A merchant or a shipper, who lives by importation, is often more interested in the success of the country from which he draws his goods than of that in which he sells them.

A tariff, then, tends to create and strengthen the national sentiment and combines all interests in the general interest of the country. A tariff, in fact, is the foundation, as it is the chief weapon of a national policy.

This fact should not tempt our producers to despise all the other means by which the Germans have overtaken us in industrial power their guild system which unites master and workman; their exporting system which unites shippers and manufacturers; their linked company system which enables various industries to cooperate for the capture of foreign markets; their banking system which regulates, nourishes, and supports their industries; their co-operative banking, buying, and selling which strengthen and unite their agriculture; their patent laws and their technical education, their State railways and shipping subsidies with the advantages they offer to the home producer.

All these are important; but they all rest upon the secure base of the Imperial tariff. It is not only that Germany uses heavy guns and quick-firers and high explosives against our lighter and slower artillery; but that the German industries are entrenched whereas ours fight on the open ground.

This is the lesson we are relearning now by hard experience. The Germans learned it long ago. The Free Trader who studies history is faced by a long series of most uncomfortable coincidences. When the German Empire was rejecting a national economic system, England was forging such a system under the guidance of the Tudors. The one rose to greatness, the other fell into ruin.

"By her Free Trade," says Schulze-Gaevernitz, "England has done us more good than whatever harm she has done us by her political opposition. Where would the German sugar industry be the pioneer of our industrial progress; where the German textile and iron industries; where the whole body of the new German finance without the rich and all-absorbing English market? Carried on her back by Free Trade England, we ventured to reach out for English world-power. . . . Really we cannot reproach the Briton!

"And not for economic dominion only, but for naval dominion. It was the power gained by her national policy of production that tempted Germany to emulate the proud boast of the Hanseatic League "Mein feld ist die weld" ("My Field is the World.")

Modern Germany erected a tariff and became strong; modern England abandoned protection and became weak.

If security be more important than opulence, who can refuse to accept the moral? We must return to a national system founded upon production. We must protect British industries and agriculture with a British tariff in order to recover our security, our strength, and our economic independence.