The development of the joint-stock company was attended by increased activity in banking. In the early middle ages the lending of money for interest had been forbidden by the Catholic Church; in this as in other branches of business it was immoral to receive profit without giving work. The Jews, however, with no such scruples, had found money-lending very profitable, even though royal debtors occasionally refused to pay. As business developed in Italy, however, Christians lost their repugnance to interest-taking, and Italian (Lombard) and later French and German money-lenders and money-changers became famous. Since the coins minted by feudal lords and kings were hard to pass except in limited districts, and since the danger of counterfeit or light-weight coins was far greater than now, the "money-changers" who would buy and sell the coins of different countries did a thriving business at Antwerp in the early sixteenth century. Later, Amsterdam, London, Hamburg, and Frankfort took over the business of Antwerp and developed the institutions of finance to a higher degree. [Footnote: The gold of the New World and the larger scope of commercial enterprises had increased the scale of operations, as may be seen by comparing the fortunes of three great banking families: 1300—the Peruzzi's, $800,000; 1440—the Medici's, $7,500,000; 1546—the Fuggers', $40,000,000.] The money-lenders became bankers, paying interest on deposits and receiving higher interest on loans. Shares of the stock of commercial companies were bought and sold in exchanges, and as early as 1542 there were complaints about speculating on the rise and fall of stocks.
Within a comparatively short time the medieval merchants' gilds had given way to great stock-companies, and Jewish money-lenders to millionaire bankers and banking houses with many of our instruments of exchange such as the bill of exchange. Such was the revolution in business that attended, and that was partly caused, partly helped, by the changes in foreign trade, which we call the Commercial Revolution.
[Sidenote: New Commodities]
Not only was foreign trade changed from the south and east of Europe to the west, from the city-states to nations, from land-routes to ocean- routes; but the vessels which sailed the Atlantic were larger, stronger, and more numerous, and they sailed with amazing confidence and safety, as compared with the fragile caravels and galleys of a few centuries before. The cargoes they carried had changed too. The comparative cheapness of water-transportation had made it possible profitably to carry grain and meat, as well as costly luxuries of small bulk such as spices and silks. Manufactures were an important item. Moreover, new commodities came into commerce, such as tea and coffee. The Americas sent to Europe the potato, "Indian" corn, tobacco, cocoa, cane-sugar (hitherto scarce), molasses, rice, rum, fish, whale-oil and whalebone, dye-woods and timber and furs; Europe sent back manufactures, luxuries, and slaves.
[Sidenote: Slavery]
Slaves had been articles of commerce since time immemorial; at the end of the fifteenth century there were said to have been 3000 in Venice; and the Portuguese had enslaved some Africans before 1500. But the need for cheap labor in the mines and on the sugar and tobacco plantations of the New World gave the slave-trade a new and tremendous impetus. The Spaniards began early to enslave the natives of America, although the practice was opposed by the noble endeavors of the Dominican friar and bishop, Bartolomé de las Casas. But the native population was not sufficient,—or, as in the English colonies, the Indians were exterminated rather than enslaved,—and in the sixteenth century it was deemed necessary to import negroes from Africa. The trade in African negroes was fathered by the English captain Hawkins, and fostered alike by English and Dutch. It proved highly lucrative, and it was long before the trade yielded to the better judgment of civilized nations, and still longer before the institution of slavery could be eradicated.
[Sidenote: Effects on Industry and Agriculture]
The expansion of trade was the strongest possible stimulus to agriculture and industry. New industries—such as the silk and cotton manufacture—grew up outside of the antiquated gild system. The old industries, especially the English woolen industry, grew to new importance and often came under the control of the newer and more powerful merchants who conducted a wholesale business in a single commodity, such as cloth. Capitalists had their agents buy wool, dole it out to spinners and weavers who were paid so much for a given amount of work, and then sell the finished product. This was called the "domestic system," because the work was done at home, or "capitalistic," because raw material and finished product were owned not by the man who worked them, but by a "capitalist" or rich merchant. How these changing conditions were dealt with by mercantilist statesmen, we shall see in later chapters.
The effect on agriculture had been less direct but no less real. The land had to be tilled with greater care to produce grain sufficient to support populous cities and to ship to foreign ports. Countries were now more inclined to specialize—France in wine, England in wool—and so certain branches of production grew more important. The introduction of new crops produced no more remarkable results than in Ireland where the potato, transplanted from America, became a staple in the Irish diet: "Irish potatoes" in common parlance attest the completeness of domestication.
[Sidenote: General Significance of Commercial Revolution]