THE MERCHANT.
1. The word merchant, in its most extended application, signifies, a person who deals in merchandise. This definition, with some exceptions, agrees very well with general usage in this country; although, in England, the term is principally restricted to those dealers who export and import goods on their own account, either in their own or in chartered vessels. In the United States, dealers of this class are denominated importing and exporting merchants; or simply, importers and exporters.
2. Such merchants, both here and in Europe, are distinguished from each other by the kind of goods in which they traffic, or by the foreign country in which they have their chief correspondence; thus, one who deals in tobacco is called a tobacco-merchant; a wholesale dealer in wines is called a wine-merchant; a West India, East India, or Turkey merchant, exports goods to, and imports goods from, those respective countries.
3. The business of merchants, in foreign countries, is usually transacted by agents, called factors, or commission merchants, to whom goods are consigned to be sold, and by whom other articles of merchandise are purchased and returned according to order. Sometimes an agent, called a supercargo, accompanies the vessel; or the captain may act in this capacity. Goods, however, are often obtained by order, without the intervention of an agency of any kind.
4. Almost every sort of foreign merchandise is subject to the imposition of duties by the government of the country in which it is received. These duties are paid at the Custom-House, to persons appointed by the constituted authorities to collect them. As soon as a vessel from abroad has entered the harbor, it is visited by a custom-house officer, called a Tide-Waiter, whose business it is to see that no part of the cargo is removed, until measures have been taken to secure the customs.
5. Goods brought into the country by importers, are frequently sold, in succession, to several merchants of different grades, before they come to the hands of the consumers. Cloths or stuffs of different kinds, for instance, may be first sold by the bale to one merchant, who, in turn, may dispose of them by the package to another, and this last may retail them in small quantities to a greater number of customers.
6. Dealers in a small way, in cities and large towns, are frequently denominated shop-keepers; but those who do an extensive retail business, are usually called merchants or grocers, according as they deal in dry goods or groceries. In cities, the extensive demand for goods enables retailers to confine their attention to particular classes of articles; such as groceries, hardware, crockery, a few kinds of dry goods, or some articles of domestic manufacture; but in other places, where trade is more limited, the merchant is obliged to keep a more general assortment.
7. The general retail merchant is compelled to transact business with a great number of wholesale dealers, to whom he pays cash in hand, or agrees to pay it at some future period, say, in four, six, nine, or twelve months. The people in his vicinity, in turn, purchase his goods on similar conditions, with this difference, that they often substitute for cash agricultural and other productions, which the merchant, at length, turns into ready money.
8. Barter, or the exchange of commodities, prevails to a great extent, in country places, in almost every part of the United States. In such exchanges, the currency of the country is made the standard of reference: for example; a merchant receiving from a customer twenty bushels of wheat, estimated at one dollar per bushel, gives in return twenty dollars' worth of goods, at his marked prices; or, in other words, he gives credit for the wheat, and charges the goods. On the same principle, merchants of the first class often exchange the productions of their own country for those of another.
9. Merchants, or store-keepers, as they are indifferently called in some places, whose location is distant from the seaboard, visit the city in which they deal once or twice a year, for the purpose of laying in their stock of goods; but, in order to keep up their assortment, they sometimes order small lots in the interim. Retailers more conveniently situated, purchase a smaller amount of goods at a time, and replenish their stores more frequently.
10. Commerce, on the principles of barter, or a simple exchange of one commodity for another, must have been practised in the early days of Adam himself; although we have no positive record of the fact; for it cannot be imagined that the arts, which are stated in the Scripture to have flourished long before the flood, could have existed without commercial transactions. The period at which the precious metals began to be employed as a standard of value, or as a medium of commercial intercourse, is not known. They were used for this purpose in the time of Abraham, and probably many centuries before his day.
11. The earliest hint respecting the existence of trade between different nations, is to be found in the book of Genesis, where the transaction regarding the sale of Joseph to the Ishmaelites, or Midianites, is mentioned. These merchants, it appears, were travelling in a caravan to Egypt, then the most cultivated and refined part of the world. Their camels were loaded with balm, myrrh, and spices. The first of these articles was the production of Gilead; the second, of Arabia; and the last was probably from India; as in that country the finer spices are produced. If this were really the case, commerce, in its widest sense, was carried on much earlier than is generally supposed.
12. The fertility of Egypt, and its central position, made it an emporium of commerce; and there it flourished, in an eminent degree, long before it was cultivated in Europe and in Western Asia. For several ages, however, the Egyptians, on account of their superstitious prejudices against the sea, carried on no maritime commerce.
13. The Phœnicians were the first people who used the Mediterranean Sea, as a highway for the transportation of merchandise. Tyre and Sidon were their chief cities; and the latter was called a great, and the former a strong city, even in the time of Joshua, fifteen hundred years before the advent of Christ. These people, in their original association as a nation, possessed but a small territory; and, being surrounded by many powerful nations, they never attempted its enlargement on the land side.
14. The settlement of the Israelites in the "Promised Land," circumscribed their limits to a very small territory, and compelled them to colonize a great number of their inhabitants. The colonies which they formed in the various countries bordering upon the Mediterranean and on the islands, enlarged the boundaries of civilization, and greatly extended their trade.
15. The Phœnicians continued their colonial system for many centuries after the period just mentioned, and even extended it to the Atlantic coasts of Europe. But the most distinguished of all their colonies was the one which founded the city of Carthage, on the northern coast of Africa, about the year 869 before Christ. Elissa, or, as she is otherwise called, Dido, the reputed leader of this colony, makes a conspicuous figure in one of the books of Virgil's Æneid.
16. Carthage, adopting the same system which had so long been pursued by the great cities of Phœnicia, rose, in a few centuries, to wealth and splendor. But, changing, at length, her mercantile for a military character, she ruled her dependent colonies with a rod of despotism. This produced a spirit of resistance on the part of her distant subjects, who applied to Rome for aid to resist her tyranny. The consequence of this application was the three "Punic wars," so renowned in history, and which terminated in the destruction of Carthage, in the year 146 before the Christian era. During the first Punic war, Carthage contained seven hundred thousand inhabitants; but at its destruction, scarcely five thousand were found within its walls.
17. The period of the greatest prosperity of Tyre, may be placed 588 years before Christ, at which time the remarkable prophecies of Ezekiel concerning it were delivered. Soon after this, it was greatly injured by Nebuchadnezzar; and was finally destroyed by Alexander the Great, about the year 332 before Christ.
18. A new channel was opened to commerce by the monarch just mentioned, he having founded a city in Egypt, to which he gave the name of Alexandria. His object seems to have been, to render this city the centre of the commercial world; and its commanding position, at the mouth of the Nile, was well calculated to make it so; since it was easy of access from the west by the Mediterranean, from the east by the Red Sea, and from the central countries of Asia by the Isthmus of Suez.
19. The plans of Alexander were carried out with vigor by Ptolemy, who received Egypt as his portion of the Macedonian empire, after the death of his master; and, by his liberality, he induced great numbers of people to settle in the new metropolis for the purposes of trade. Far south, on the Red Sea, he also founded a city, which he called Berenice, and which he designed as a depôt for the precious commodities brought into his kingdom from India. From this city, goods were transported on camels across the country, to a port on the Nile; and thence they were taken down the river to Alexandria.
20. Ptolemy also kept large fleets both on the Mediterranean and on the Red Sea, for the protection of commerce, and the defence of his dominions; yet, the Egyptians, even under the Ptolemies, never attempted a direct trade to India. They, as the Phœnicians and their own progenitors had done for ages, depended upon the Arabian merchants for the productions of that country.
21. The Greeks, before their subjugation to the Roman power, had paid much attention to nautical affairs; but this had been chiefly for warlike dominion, rather than for commercial purposes. The city of Corinth, however, had become wealthy by the attention of its inhabitants to manufactures and trade; but it was destroyed by the same barbarian people who, about this time, annihilated Carthage. Both of these cities were afterwards favored by Julius Cæsar; but they never regained anything like their former importance.
22. Rome having, at length, obtained the complete dominion of the Mediterranean Sea, and the countries bordering upon it, as well as that of many others more distant, and less easy of access, became the great mart for the sale of merchandise of every description, from all parts of the known world. For the various commodities brought to the city, the Romans paid gold and silver; as they had nothing else to export in return. The money which they had exacted as tribute, or which they had obtained by plunder, was thus returned to the nations from which it had been taken.
23. The subjected provinces continued to pour their choicest productions into Rome, as long as she retained the control of the empire; and thus they contributed to enervate, by the many luxuries they afforded, the power by which they had been subdued. The eternal city, as she is sometimes called, in the days of her extensive dominion, contained about three millions of inhabitants; and, although this immense population was chiefly supplied by importations, the Romans never esteemed the character of a merchant. They despised the peaceful pursuits of industry, whilst they regarded it honorable to attack without provocation, and plunder without remorse, the weaker nations of the earth.
24. In the year 328 of the Christian era, Byzantium was made the seat of government of the Roman empire by Constantine, who, with a view of perpetuating his own name, called his new capital Constantinople. However necessary this removal may have been, to keep in subjugation the eastern provinces, it was fatal to the security of the western division. The rivalry between the two cities produced frequent contests for dominion; and these, together with the general corruption and effeminacy of the people themselves, rendered it impossible to resist the repeated and fierce invasions of the barbarous people from the northern parts of Europe.
25. These invasions commenced in the latter part of the fourth century; and, in less than two hundred years, a great portion of the inhabitants was destroyed, and the whole Western empire was completely subverted. The conquerors were too barbarous to encourage or protect commerce; and, like the arts of peace and civilization generally, it sunk, with few exceptions, amid the general ruin.
26. The empire of Constantinople, or, as it is usually called, the Eastern empire, continued in existence several centuries after the Western empire had been overrun; and commerce continued to flow, for a considerable time, through some of its former channels to the capital. At length, the Indian trade, which had so long been carried on chiefly through Egypt by the Red Sea, was changed to a more northern route, through Persia.
27. Soon after the commencement of the pretended mission of Mohammed, or Mahomet, in 609 of the Christian era, the power of the Arabians, since called Saracens, began to rise. The followers of the Prophet, impelled by religious zeal, and allured by plunder, in less than 150 years extended their dominion almost to the borders of China on the one side, and to the Mediterranean and Atlantic on the other. The trade of the East, of course, fell into their hands; and they continued to enjoy it, until they, in turn, were subdued by the Turks.
28. So great was the prejudice of the Christians against the followers of Mohammed, that, for a long time, it was considered heretical for the former to trade with the latter; but the Saracens having a vast extent of territory, and having control of the Mediterranean and Red Seas, as well as of the Persian Gulf, carried on an extensive trade among themselves.
29. The first European power which rose to commercial eminence, after the destruction of the Western empire, was the republic of Venice. This important city owed its origin to some fugitives, who fled for their lives to a number of small islands in the Adriatic Sea, during the invasion of Italy by the Huns, under Attila, in the year 452.
30. The houses first built by the refugees, were constructed of mud and seagrass; and, so insignificant were they in their appearance, that a writer of that period compares them to a collection of the nests of water-fowls. The number of these islands, on which so splendid a city was afterwards built, was, according to some, seventy-two; but, according to others, ninety, or even one hundred and fifty. For a considerable time, the distinction of rich and poor was not known; for all lived upon the same fish-diet, and in houses of similar form and materials.
31. In less than a century, the inhabitants of these islands had established a regular government; and, in the year 732, we find them venturing beyond the Adriatic into the Mediterranean, even as far as Constantinople, trading in silks, purple draperies, and Indian commodities. In 813, the French commenced trading to Alexandria, and, in a few years, the Venetians followed their example, in despite of the ecclesiastical prohibitions against intercourse with the followers of Mohammed. In the tenth century, Amalfi, Pisa, Genoa, and Florence, began to rival Venice in trade.
32. The crusades, which, for two centuries from the year 1095, engaged so much of the attention of the Christian nations of Europe, greatly promoted the interests of the commercial cities of Italy; as the armies in these expeditions were dependent on them for provisions, and for the means of crossing the sea, which lay between them and the Holy Land. They also gave a new and powerful impulse to commerce in general, by giving the people, in the unrefined parts of Europe, a knowledge of the elegances and luxuries of the East.
33. In the thirteenth century, commerce and manufactures began to command considerable attention in Germany and the adjacent states; but as the seas and rivers were infested with pirates, and the roads with banditti, it became necessary for those engaged in commerce to adopt measures to protect their commodities, while on the way from one place to another. The citizens of Hamburg and Lubeck first united for this purpose; and the advantages of such a union of strength becoming apparent, many other cities soon entered into the confederation.
34. This association was denominated the Hanse, or league, and the cities thus united were called Hanse Towns. Most of the commercial towns in the northern parts of the continent of Europe, at length, became parties to the Hanseatic league. The number of these cities varied, at different periods; but in the days of the greatest prosperity of the association, it amounted to eighty-five.
35. Representatives from the different cities met triennially at Lubeck, where their common treasury and archives were kept. By this assembly, which was called a diet, rules for the regulation of commercial intercourse were made, and other business transacted, which related to the general welfare of the confederation.
36. In the fourteenth century, the league, in all parts of Europe, attained a high degree of political importance, and developed that commercial policy which it had originated, and which has since been adopted by all civilized nations. The objects of the allied cities were now declared to be—to protect their commerce against pillage, to guard and extend their foreign trade, and, as far as possible, to monopolize it, to maintain and extend the privileges obtained from the princes of different nations, and to make rules or laws for the regulation of trade, as well as to establish the necessary tribunals for their due execution. The decisions of their courts were respected by the civil authorities of the countries to which their trade extended.
37. The treasury was chiefly supplied by duties on merchandise; and the great wealth thus acquired enabled the allied cities to obtain commercial privileges from needy princes, for pecuniary accommodations. The league, in defending its commerce, even carried on wars against kingdoms; and, at length, by its wealth and naval power, became mistress of the Northern seas, and rendered the different cities of the confederation in a great measure independent of the sovereigns of the countries in which they were situated.
38. The conduct of the Hanse Towns, at length, excited the jealousies of those sovereigns who had, for a long time, favored their union; and the princes of Europe generally, becoming acquainted with the value of commerce, both as means of enriching their people, and of filling their own coffers, combined against the association. In 1518, the governments of several states commanded all their cities to withdraw from the league, which soon after voluntarily excluded some others. After this the Hanse gradually sunk in importance, and finally ceased to exist in 1630.
39. The trade to the East Indies continued to be carried on through Persia and Egypt, subject to the extortions of the Saracens, and the still severer exactions of the merchants of the Italian cities, until the route to those countries, by the Cape of Good Hope, was discovered.
40. The use of this new pathway of commerce, combined with the discovery of America, caused an entire change in both the political and commercial state of Europe. A strong desire of visiting the remote parts of the world, thus laid open to the people of Europe, immediately arose, not only among the Portuguese and Spaniards, but also among other nations. Colonies were soon planted in the East and in the West; and the whole world may be said to have been inspired with new energy.
41. The Portuguese, being considerably in advance of the other Atlantic nations in the art of navigation, soon gained the entire control of the East India trade, and were thus raised to great eminence, prosperity, and power. Their dominions became extensive in Africa and Asia, and their navy superior to any that had been seen for several ages before.
42. In 1580, or eighty-three years after Vasco de Gama found his way, by the Cape, to Calicut, Portugal was subdued by Philip II., king of Spain. The Spaniards, however, were not enriched by the conquest; since their commercial energy and enterprise had been destroyed, by the vast quantities of the precious metals obtained from their American possessions.
43. In 1579, the people of Holland, with those of six neighboring provinces, being then subject to Spain, united, under the Prince of Orange, for the purpose of regaining their liberties. This produced a sanguinary war, which continued for thirty years, during which time the Dutch wrested from the Spaniards most of their Portuguese possessions in India, and, in addition to this, formed many other settlements in various places from the River Tigris even to Japan. Batavia, on the Island of Java, was made the grand emporium of trade, and the seat of the government of their East India possessions.
44. The prosperity of the United Provinces increased with great rapidity; and, as they were but little interfered with by other nations in their Eastern dominions, they enjoyed, for half a century or more, almost the whole of the trade of the East. Besides this, they shared largely with the rest of the world in almost every other branch of trade. After the year 1660, other nations, by great exertions, succeeded in obtaining considerable shares of the commerce of the East; yet the Dutch still retain valuable possessions there.
45. The chief articles exported from Britain, in ancient times, were tin, lead, copper, iron, wool, and cattle; for which they received in return, gold, silver, and manufactured articles. But the commerce of the British Islands was inconsiderable, when compared with that of many kingdoms on the Continent, until the beginning of the eighteenth century.
46. When Elizabeth ascended the throne of England, in 1558, the circumstances of the nation required an extensive navy for its protection; and the great attention which the queen paid to this means of defence, gave animation to all maritime concerns. Under her patronage, several companies for trading in foreign countries were formed, which, at that time, and for a long period afterwards, were very beneficial to trade in general. In her reign, also, the colonial system of England had its origin, which contributed eventually, more than any thing else, to the commercial prosperity of that nation. Since the reign of this wise and judicious princess, the commerce and manufactures of Great Britain have been, with a few interruptions, steadily advancing; and, in these two particulars, she surpasses every other nation.
47. The United States possess superior local advantages for trade, and embrace a population unsurpassed for enterprise and energy. Since the Revolution, the resources of our country have been rapidly developing. Our exports and imports are already next in amount to those of Great Britain and France and the extensive improvements which have been made by the different states, to facilitate internal intercourse, are increasing with great rapidity.
48. The banking system is very intimately interwoven with commercial affairs in general. Banks are of three kinds, viz., of discount, of deposit, and of circulation. The term bank, in its original application, signified a place of common deposit for money, and where, in commercial transactions, individuals could have the amount, or any part of the amount, of their deposits transferred to each other's accounts.
49. The term bank is derived from the Italian word banco, which signified a kind of bench, or table, on which the Jews were accustomed to place the money which they proposed to lend in the markets of the principal towns. The first bank was established in Venice, about the middle of the twelfth century; the Bank of Genoa, in 1345; the Bank of Amsterdam, in 1607; the Bank of Hamburg, in 1619; the Bank of Rotterdam, in 1635. These were all banks of mere deposit and transfer.
50. Lending-houses may be traced to a very ancient origin. They were, at first, supported by humane persons, with a view of lending money to the poor, on pledges, without interest. Augustus Cæsar appropriated a part of the confiscated effects of criminals to this purpose; and Tiberias, also, advanced a large capital, to be lent for three years, without interest, to those who could give security in lands equal to twice the value of the sum borrowed.
51. In the early ages of Christianity, free gifts were collected and preserved by ecclesiastics, partly to defray the expenses of divine service, and partly to relieve the poor of the church; and the funds thus provided came, at length, to be called montes pietatis—mountains of piety. This appellation was afterwards applied to the loaning-houses, established in modern Italy in imitation of those of antiquity.
52. In course of time, the loaning-houses were permitted by the Roman pontiff to charge a moderate interest on a part of their capital, and, finally, upon the whole of it; still, they retained, for a long period, the original denomination of montes pietatis. The receiving of interest on loans was declared lawful by the Pope, about the middle of the fifteenth century. Soon after this period, all the cities of Italy hastened to establish these institutions; and their example was, at length, followed in other parts of Europe.
53. But long before the Pope had granted this privilege, individuals were in the habit of loaning money at an exorbitant usury. These were principally Jews and merchants from Lombardy; hence, all persons in those countries, who dealt in money, came to be called Lombard merchants. The prohibitions of the Church against receiving interest were eluded, when necessary, by causing it to be paid in advance, by way of present or premium.
54. In the twelfth century, many of the dealers in money were expelled from England, France, and the Netherlands, for usurious practices; and, in order to regain possession of their effects, which they had, in their haste, left in the hands of confidential friends, they adopted the method of writing concise orders or drafts. Hence originated bills of exchange, so convenient in commercial transactions.
55. The Bank of England was established in the year 1694. Hitherto, the banks of deposit, and loaning-houses, were entirely distinct; but, in this institution, these two branches of pecuniary operations were united. It seems, also, that this was the first bank that issued notes, to serve as a medium of circulation, and to supply, in part, the place of gold and silver.
56. In the United States, banking institutions are very numerous. They are all established by companies, incorporated by the legislatures of the different states, or by the congress of the United States. The act which grants the privileges of banking, also fixes the amount of the capital stock, and divides it into equal shares. The holders of the stock choose the officers to transact the business of the corporation.
57. Our banks receive deposits from individual customers, loan money on notes of hand, acceptances, and drafts, issue notes of circulation, and purchase and sell bills of exchange. They are usually authorized, by their charters, to loan three times the amount, and to issue bank-notes to twice the amount, of the capital stock paid in. Few banking companies, however, exercise these privileges to the full extent, lest the bank be embarrassed by too great a demand for specie. As soon as a bank ceases to pay specie for its notes, it is said to be broken, and its operations must cease.
58. The Bank of North America was the first institution of this kind, established in the United States. It was incorporated by Congress, in 1781, at the suggestion of Robert Morris. In 1791, after the union of the states had been effected under the present constitution, the first Bank of the United States was incorporated, with a capital of ten millions of dollars. Most of the states soon followed this example; and, before the beginning of the present century, the whole banking capital amounted to near thirty millions of dollars.
59. The charter of the first Bank of the United States expired, by its own limitation, in 1811; and a new one, with a capital of thirty-five millions of dollars, was established in 1816, which also closed its concerns, as a national bank, in 1836, President Jackson having vetoed the bill for its recharter. In that year the number of banks was 567, and the bank capital $251,875,292. In the year 1840, the number of banks had increased to 722, and their capital to $358,442,692.
