In their methods many of the sixteenth century corporations were surprisingly "modern." Monopolies, corners, trusts and agreements to keep up prices flourished, notwithstanding constant legislation against them, as that against secret schedules of prices pa.s.sed by the Diet of Nuremberg. [Sidenote: 1522-33] Particularly noteworthy were the number of agreements to create a monopoly price in metals. [Sidenote: 1524] Thus a ring of German mine-owners was formed artificially to raise the price of silver, a measure defended publicly on the ground that it enriched Germany at the expense of the foreigner. Another example was the formation of a tinning company under the patronage of Duke George of Saxony. [Sidenote: 1518] It proposed agreements with its Bohemian rivals to fix the price of tin, [Sidenote: 1549] but these usually failed even after a monopoly of Bohemian tin had been granted by Ferdinand to Conrad Mayr of Augsburg.

[Sidenote: Corners]

The immense difficulty of cornering any of the larger articles of commerce was not so well appreciated in the earlier time as it is now.

Nothing is more instructive than the history of the mercury "trusts" of those years. [Sidenote: 1523] When the competing companies owning mines at Idria in Carniola amalgamated for the purpose of {529} enhancing the price of quicksilver, the attempt broke down by reason of the Spanish mines. Accordingly, one Ambrose Hochstetter of Augsburg [Sidenote: 1528] conceived the ambitious project of cornering the whole supply of the world. As has happened so often since, the higher price brought forth a much larger quant.i.ty of the article than had been reckoned with, the so-called "invisible supply"; the corner broke down and Hochstetter failed with enormous liabilities of 800,000 gulden, and died in prison. The crash shook the financial world, but was nevertheless followed by still better planned and better financed efforts of the Fuggers to put the whole quicksilver product of the world into an international trust. These final attempts were more or less successful. Another ambitious scheme, which failed, was that of Conrad Rott of Augsburg [Sidenote: 1570 ff.] to get a monopoly of pepper. He agreed to buy six hundred tons of pepper from the king of Portugal one year and one thousand tons the next, at the rate of 680 ducats the ton, but even this failed to give him the desired monopoly.

[Sidenote: Regulation of monopolies]

Just as in our own memory the trusts have aroused popular hatred and have brought down on their heads many attempts, usually unsuccessful, of governments to deal with them, so at the beginning of the capitalistic era, intense unpopularity was the lot of the new commercial methods and their exponents. Monopolies were fiercely denounced in the contemporary German tracts and every Diet made some effort to deal with them. First of all the merchants had to meet not only the envy and prejudices of the old order, but the positive teachings of the church. The prohibition of usury, and the doctrine that every article had a just or natural price, barred the road of the early entrepreneur. Aquinas believed that no one should be allowed to make more money than he needed and that profits on {530} commerce should be scaled down to such a point that they would give only a reasonable return. This idea was shared by Catholic and Protestant alike in the first years of the Reformation; it can be found in Geiler of Kaiserberg and in Luther. In the Reformer's influential tract, _To the German n.o.bility_, [Sidenote: 1520] usury and "Fuggerei" are denounced as the greatest misfortunes of Germany. Ulrich von Hutten said that of the four cla.s.ses of robbers, free-booting knights, lawyers, priests and merchants, the merchants were the worst.

The imperial Diets reflected popular opinion faithfully enough to try their best to bridle the great companies. The Diet of Treves-Cologne [Sidenote: 1512] asked that monopolies and artificial enhancement of the prices of spice, copper and woolen cloth be prohibited. To effect this acts were pa.s.sed intended to insure compet.i.tion. [Sidenote: 1523]

This law against monopolies, however, was not vigorously enforced until the Imperial Treasurer cited before his tribunal many merchants of Augsburg accused of violating it. The panic-stricken offenders feverishly hastened to make interest with the princes and city magistrates. But their main support was the emperor, who intervened energetically in their favor. From this time the bankers and great merchants labored hard at each Diet to place the control of monopolies in the hands of the monarch. In return for his constant support he was made a large sharer in the profits of the great houses.

In the struggle with the Diets, at last the capitalists were thoroughly successful. The Imperial Council of Regency pa.s.sed an epoch-making ordinance, [Sidenote: 1525] kept secret for fear of the people, expressly allowing merchants to sell at the highest prices they could get and recognizing certain monopolies said to be in the national interest as against other countries, and justified for the wages they provided for labor. About this {531} time, for some reason, the agitation gradually died down. It is probable that the religious controversy took the public's mind off economic questions and the Peasant's War, like all unsuccessful but dangerous risings of the poor, was followed by a strong reaction in favor of the conservative rich.

Moreover, it is evident that the currents of the time were too strong to be resisted by the feeble methods proposed by the reformers. When we remember that the chief practical measure recommended by Luther was the total prohibition of trading in spices and other foreign wares that took money out of the country, it is easy to see that the regulation of a complex industry was beyond the scope of his ability. And little, if any, enlightenment came from other quarters.

[Sidenote: The Netherlands]

While the towns of southern Germany were becoming the world's banking and industrial centers, the cities of the Netherlands became its chief staple ports. For generations Antwerp had had two fairs a year, but in 1484 it started a perpetual market, open to all merchants, even to foreigners, the whole year round, and in addition to this it increased its fairs to four. Later a new Merchants' Exchange or Bourse was built [Sidenote: 1531] in which almost all the transactions now seen on our stock or produce exchanges took place. There was wild speculation, partly on borrowed money, especially in pepper, the price of which furnished a sort of barometer of bourse feeling. Bets on prices and on events were made, and from this practice various forms of insurance took their rise.

[Sidenote: Antwerp]

The discovery of the new world brought an era of prosperity to Antwerp that doubtless put her at the head of all commercial cities until the Spanish sword cut her down. In 1560 there were commonly 2500 ships anch.o.r.ed in her harbor, as against 500 at Amsterdam, her chief rival and eventual heir. Of these not {532} uncommonly as many as 500 sailed in one day, and, it is said, 12,000 carriages came in daily, 2000 with pa.s.sengers and 10,000 with wares. Even if these statements are considerable exaggerations, a reliable account of the exports in the single year 1560 shows the real greatness of the town. The total imports in that year amounted to 31,870,000 gulden ($17,848,000), divided as follows: Italian silks, satins and ornaments 6,000,000 gulden; German dimities 1,200,000; German wines 3,000,000; Northern wheat 3,360,000; French wine 2,000,000; French dyes 600,000; French salt 360,000; Spanish wool 1,250,000; Spanish wine 1,600,000; Portuguese spices 2,000,000; English wool 500,000; English cloth 10,000,000. The last named article indicates the decay of Flemish weaving due to English compet.i.tion. For a time there had been war to the knife with English merchants, following the great commercial treaty popularly called the _Malus Intercursus_. [Sidenote: 1506] According to the theory then held that one nation's loss was another's gain, [Sidenote: Commercial policy] this treaty was considered a masterpiece of policy in England and the foundation of her commercial greatness.

It and its predecessor, the _Magnus Intercursus_, [Sidenote: 1496]

marked the new policy, characteristic of modern times, that made commercial advantages a chief object of diplomacy and of legislation.

Protective tariffs were enacted, the export of gold and silver prohibited, and sumptuary laws pa.s.sed to encourage domestic industries.

The policy as to export varied throughout the century and according to the article. The value of ships was highly appreciated. Sir Walter Raleigh opined that command of the sea meant command of the world's riches and ultimately of the world itself. Sir Humphrey Gilbert drew up a report advocating the acquisition of colonies as means of providing markets for home products. So little were the rights of the natives {533} considered that Sir Humphrey stated that the savages would be amply rewarded for all that could be taken from them by the inestimable gift of Christianity.

[Sidenote: Buccaneering]

As little regard was shown for the property of Catholics as for that of heathens. Merry England drew her dividends from slave-trading and from buccaneering as well as from honest exchange of goods. There is something fascinating about the career of a man like Sir John Hawking whose character was as infamous as his daring was serviceable. He early learned that "negroes were very good merchandise in Hispaniola and that they might easily be had upon the coast of Guinea," and so, financed by the British aristocracy and blessed by Protestant patriots, he chartered the _Jesus of Lubeck_ and went burning, stealing and body-s.n.a.t.c.hing in West African villages, crowded his hold full of blacks and sold those of them who survived at $800 a head in the Indies. Quite fittingly he received as a crest "a demi-Moor, proper, in chains." He then went preying on the Spanish galleons, and at one time swindled Philip out of $200,000 by pretending to be a traitor and a renegade; thus he rose from slaver to pirate and from pirate to admiral.

[Sidenote: English commerce]

So pious, patriotic and profitable a business as buccaneering absorbed a greater portion of England's energies than did ordinary maritime commerce. A list of all ships engaged in foreign trade in 1572 shows that they amounted to an aggregate of only 51,000 tons burden, less than that of a single steamer of the largest size today. The largest ship that could reach London was of 240 tons, but some twice as large anch.o.r.ed at other harbors. Throughout the century trade multiplied, that of London, which profited the most, ten-fold. If the customs'

dues furnish an accurate barometer for the volume of trade, while London was increasing the other ports were falling behind not only {534} relatively but positively. In the years 1506-9 London yielded to the treasury $60,000 and other ports $75,000; in 1581-2 London paid $175,000 and other ports only $25,000.

As she grew in size and wealth London, like Antwerp, felt the need of permanent fairs. From the continental city Sir Thomas Gresham, the English financial agent in the Netherlands, brought architect and materials [Sidenote: 1568] and erected the Royal Exchange on the north side of Cornhill in London, where the same inst.i.tution stands today.

Built by Gresham at his own expense, it was lined by a hundred small shops rented by him. As the new was rung in, the old pa.s.sed away. The ancient restrictions on the fluidity of capital were almost broken down [Sidenote: 1542 and 1571] by the end of Elizabeth's reign. The statutes of bankruptcy, giving new and strong securities to creditors, marked the advent to power of the commercial cla.s.s. Capitalism took form in the chartering of large companies. The first of these, "the mistery and company of the Merchant Adventurers for the discovery of regions, dominions, islands and places unknown," [Sidenote: 1553]

commonly called the Russia Company, was a joint-stock corporation with 240 members, each with a share valued at $125. It traded princ.i.p.ally with Russia, but, before the century was out, was followed by the Levant Company, the East India Company, and others, for the exploitation of other regions.

To northern Spain England sent coa.r.s.e cloth, cottons, sheepskins, wheat, b.u.t.ter and cheese, and brought back wine, oranges, lemons and timber. To France went wax, tallow, b.u.t.ter, cheese, wheat, rye, "Manchester cloth," beans and biscuit in exchange for pitch, rosin, feathers, prunes and "great ynnions that be xii or xiiii ynches aboute," iron and wine. To the Russian Baltic ports, Riga, Reval and Narva went coa.r.s.e cloth, "corrupt" (_i.e._, adulterated) wine, cony-skins, {535} salt and brandy, and from the same came flax, hemp, pitch, tar, tallow, wax and furs. Salmon from Ireland and other fish from Scotland and Denmark were paid for by "corrupt" wines. To the Italian ports of Leghorn, Barcelona, Civita Vecchia and Venice, and to the Balearic Isles went lead, fine cloth, hides, Newfoundland fish and lime, and from them came oil, silk and fine porcelain. To Barbary went fine cloth, ordnance and artillery, armor and timber for oars, though, as a memorandum of 1580 says, "if the Spaniards catch you trading with them, you shall die for it." Probably what they objected to most was the sale of arms to the infidel. From Barbary came sugar, saltpetre, dates, mola.s.ses and carpets. Andalusia demanded fine cloth and cambric in return for wines called "seckes," sweet oil, raisins, salt, cochineal, indigo, sumac, silk and soap. Portugal took b.u.t.ter, cheese, fine cloth "light green or sad blue," lead, tin and hides in exchange for salt, oil, soap, cinnamon, cloves, nutmegs, pepper and all other Indian wares.

While the English drove practically no trade with the East Indies, to the West Indies they sent directly oil, looking-gla.s.ses, knives, shears, scissors, linen, and wine which, to be salable, must be "singular good." From thence came gold, pearls "very orient and big withall," sugar and mola.s.ses. To Syria went colored cloth of the finest quality, and for it currants and sweet oil were taken. The establishment of an English factor in Turkey [Sidenote: 1582] with the express purpose of furthering trade with that country is an interesting landmark in commercial history.

Even as late as the reign of Elizabeth England imported almost all "artificiality," as high-grade manufactures of a certain sort were called. A famous Elizabethan play turns on the scarcity of needles, [Sidenote: _Gammer Gurton's Needle_, c. 1559] the whole household being turned upside down to look for {536} the one lost by Gammer Gurton.

These articles, as well as knives, nails, pins, b.u.t.tons, dolls, tennis-b.a.l.l.s, tape, thread, gla.s.s, and laces, were imported from the Netherlands and Germany. From the same quarter came "small wares for grocers,"--by which may be meant cabbages, turnips and lettuce,--and also hops, copper and bra.s.s ware.

[Sidenote: Manufacture]

Having swept all before it in the domains of banking, mining and trade, capitalism, flushed with victory, sought for new worlds to conquer and found them in manufacture. Here also a great struggle was necessary.

Hitherto the opposition to the new companies had been mainly on the part of the consumer; now the hostility of the laborer was aroused.

The grapple of the two cla.s.ses, in which the wage-earner went down, partly before the arquebus of the mercenary, partly under the lash and branding-iron of pitiless laws, will be described in the next section.

Here it is not the strife of the cla.s.ses, but of the two economic systems, that is considered. Capitalism won economically before it imposed its yoke on the vanquished by the harsh means of soldier and police. It won, in the final a.n.a.lysis, not because of the inherent power of concentrated wealth, though it used and abused this recklessly, but because, in the struggle for existence, it proved itself the form of life better fitted to survive in the conditions of modern society. It called forth technical improvements, it stimulated individual effort, it put an immense premium on thrift and investment, it cheapened production by the application of initially expensive but ultimately repaying, apparatus, it effected enormous economies in wholesale production and distribution. Before the new methods of business the old gilds stood as helpless, as unready, as bowmen in the face of cannon.

{537} [Sidenote: Gilds]

Each medieval "craft" or "mistery" [1] was in the hands of a gild, all the members of which were theoretically equal. Each pa.s.sed through the ranks of apprentice and other lower grades until he normally became a master-workman and as such ent.i.tled to a full and equal share in the management. The gild managed its property almost like that of an endowment in the hands of trustees; it supervised the whole life of each member, took care of him when sick, buried him when dead and pensioned his widow. In these respects it was like some mutual benefit societies of our day. Almost inevitably in that age, it was under the protection of a patron saint and discharged various religious duties.

It acted as a corporate whole in the government of the city and marched and acted as one on festive occasions.

As typical of the organization of industry at the turning-point may be given the list of gilds at Antwerp drawn up by Albert Durer: [Sidenote: 1520] There were goldsmiths, painters, stone-cutters, embroiderers, sculptors, joiners, carpenters, sailors, fishermen, butchers, cloth-weavers, bakers, cobblers, "and all sorts of artisans and many laborers and merchants of provisions." The list is fully as significant for what it omits as for what it includes. Be it noted that there was no gild of printers, for that art had grown up since the crafts had begun to decline, and, though in some places found as a gild, was usually a combination of a learned profession and a capitalistic venture. Again, in this great banking and trading port, there is no mention of gilds of wholesale merchants (for the "merchants of provisions" were certainly not this) nor of bankers. These were two fully capitalized businesses. Finally, observe that there were many skilled and unskilled laborers {538} not included in a special gild.

Here we have the beginning of the proletariat. A century earlier there would have been no special cla.s.s of laborers, a century later no gilds worth mentioning.

The gilds were handicapped by their own petty regulations.

Notwithstanding the fact that their high standards of craftsmanship produced an excellent grade of goods, they were over-regulated and hide-bound, averse to new methods. There was as great a contrast between their meticulous traditions and the freer paths of the new capitalism as there was between scholasticism and science. They could neither raise nor administer the funds needed for foreign commerce and for export industries. Presently new technical methods were adopted by the capitalists, a finer way of smelting ores, and a new way of making bra.s.s, invented by Peter von Hoffberg, that saved 50 per cent. of the fuel previously used. In the textile industries came first the spinning-wheel, then the stocking-frame. So in other manufactures, new machinery required novel organization. Significant was the growth of new towns. The old cities were often so gild-ridden that they decayed, while places like Manchester sprang up suddenly at the call of employment. The constant effort of the gild had been to suppress compet.i.tion and to organize a completely stationary society. In a dynamic world that which refuses to change, perishes. So the gilds, while charging all their woes to the government, really choked themselves to death in their own bands.

[Sidenote: Capitalistic production]

There is perhaps some a.n.a.logy between the progress of capitalism in the sixteenth century and the process by which the trusts have come to dominate production in our own memory. The larger industries, and especially those connected with export trade, were seized and reorganized first; for a long time, indeed throughout {539} the century, the gilds kept their hold on small, local industries. For a long time both systems went on side by side; the encroachment was steady, but gradual. The exact method of the change was two-fold. In the first place the const.i.tution of the gild became more oligarchical.

The older members tended to restrict the administration more and more; they increased the number of apprentices by lengthening the years of apprenticeship and reduced the poorer members to the rank of journeymen who were expected to work, not as before for a limited term of years, but for life, as wage-earners. When the journeymen rebelled, they were put down. The English Clothworkers' Court Book, for example, enacted the rule in 1538 that journeymen who would not work on conditions imposed by the masters should be imprisoned for the first offence and whipped and branded for the second. Nevertheless, to some extent, the master's calling was kept open to the more enterprising and intelligent laborers. It is this opportunity to rise that has always broken up the solidarity of the working cla.s.s more than anything else.

[Sidenote: Great commercial companies]

But a second transforming influence worked faster from without than did the internal decay of the gild. This was the extension of the commercial system to manufacture. The gilds soon found themselves at the mercy of the great new companies that wanted wares in large quant.i.ties for export. Thus the commercial company came either to absorb or to dominate the industries that supplied it. An example of this is supplied by the Paris mercers, who, from being mainly dealers in foreign goods, gradually became employers of the crafts. Similarly the London haberdashers absorbed the crafts of the hatters and cappers.

The middle man, who commanded the market, soon found the strategic value of his position for controlling {540} the supply of articles.

Commercial capital rapidly became industrial. One by one the great gilds fell under the control of commercial companies. One of the last instances was the formation of the Stationers' Company by which the printers were reduced to the rank of an industry subordinate to that of booksellers.

[Sidenote: Legislation on gilds]

Finally came the legislative attack on the gilds, that broke what little power they had left. There is now a tendency to minimise the result of legislation in this field, but the impression that one gets by perusing the statutes not only of England but of Continental countries is that, while perhaps the governments would not have admitted any hostility to the gilds as such, they were strongly opposed to many features of them, and were determined to change them in accordance with the interests of the now dominant cla.s.s. The policy of the moneyed men was not to destroy the crafts, but to exploit them; indeed they often found their old franchises extremely useful in arrogating to themselves the powers that had once belonged to the gild as a whole. The town governments were elected by the wealthy burghers; Parliaments soon came to side with them, and the monarch had already been bribed into an ally.

To give specific examples of the new trend is easy. When the great tapestry manufacture of Brussels was reorganized [Sidenote: 1544] on a basis very favorable to the capitalists, the law sanctioning this step spoke contemptuously of the mutual benefit and religious functions of the gild as "petty details." [Sidenote: 1515] Brandenburg now regulated the terms on which entrance to a gild should be allowed instead of leaving the matter as of old to the members themselves.

[Sidenote: 1540] The Polish n.o.bility, jealous of the cities' monopoly of trade, demanded the total abolition of the gilds. [Sidenote: 1503 ff.] A series of measures in England weakened the power of the gilds; under Edward VI [Sidenote: 1547] their endowments for religious purposes were {541} attacked, and this hurt them far more than would appear on the surface. The important Act Touching Weavers [Sidenote: 1555] both witnessed the unhappy condition of the misteries and, without seeming to do so, still further put them in the power of their masters. The workmen, it seems, had complained "that the rich and wealthy clothiers oppress them" by building up factories, or workshops in which many looms were installed, instead of keeping to the old commission or sweat-shop system, by which piece work was given out and done by each man at home. The gild-workmen preferred this method, because their great rival was the newly developed proletariat, ma.s.ses of men who could only be accommodated in large buildings. The act, under the guise of redressing the grievance, in reality confirmed the powers of the capitalists, for, while forbidding the use of factories outside of cities, it allowed them within towns and in the four northern counties, thus fortifying the monopolists in those places where they were strong, and hitting their rivals elsewhere. Further legislation, like the Elizabethan Statute of Apprentices, [Sidenote: 1563] strengthened the hands of the masters at the expense of the journeymen. Such examples are only typical; similar laws were enacted throughout Europe. By act after act the employers were favored at the expense of the laborers.

[Sidenote: Agriculture]

There remained agriculture, at that time by far the largest and most important of all the means by which man wrings his sustenance from nature. Even now the greater part of the population in most civilized countries--and still more in semi-civilized--is rural, but four hundred years ago the proportion was much larger. England was a predominantly agricultural country until the eighteenth century,--England, the most commercial and industrial of nations! Though {542} the last field to be attacked by capital, agriculture was as thoroughly renovated in the sixteenth century by this irrigating force as the other manners of livelihood had been transformed before it.

Medieval agriculture was carried on by peasants holding small amounts of land which would correspond to the small shops and slender capital of the handicraftsman. Each local unit, whether free village or a manor, was made up of different kinds of land,--arable, commons for pasturing sheep and cattle, forests for gathering firewood and for herding swine and meadows for growing hay. The arable land was divided into three so-called "fields," or sections, each field part.i.tioned into smaller portions called in England "shots," and these in turn were subdivided into acre strips. Each peasant possessed a certain number of these tiny lots, generally about thirty, ten in each field.

Normally, one field would be left fallow each year in turn, one field would be sown with winter wheat or rye (the bread crop), and one field with barley for beer and oats for feeding the horses and cattle. Into this system it was impossible to introduce individualism. Each man had to plow and sow when the village decided it should be done. And the commons and woodlands were free for all, with certain regulations.[2]

[Sidenote: Medieval farming methods]

The art of farming was not quite primitive, but it had changed less since the dawn of history than it has changed since 1600. Instead of great steam-plows and all sorts of machinery for harrowing and harvesting, small plows were pulled by oxen, and hoes and rakes were plied by hand. Lime, marl and manure were used for fertilizing, but scantily. The cattle were {543} small and thin, and after a hard winter were sometimes so weak that they had to be dragged out to pasture. Sheep were more profitable, and in the summer season good returns were secured from chickens, geese, swine and bees. Diseases of cattle were rife and deadly. The principles of breeding were hardly understood. Fitzherbert, who wrote on husbandry in the early sixteenth century, along with some sensible advice makes remarks, on the influence of the moon on horse-breeding, worthy of Hesiod. Indeed, the matter was left almost to itself until a statute of Henry VIII provided that no stallions above two years old and under fifteen hands high be allowed to run loose on the commons, and no mares of less than thirteen hands, lest the breed of horses deteriorate. It was to meet the same situation that the habit of castrating horses arose and became common about 1580.

[Sidenote: Capitalistic change]