A history of commerce

by Clive Day

See Sections 148-149.

149. Discovery of the Cape of Good Hope (1487) and of the sea route to India (1498).—Under the stimulus of Prince Henry the Portuguese passed Cape Bojador in 1434, and were rewarded on a more extended voyage about ten years afterward by the discovery of Cape Verde. The name, “Green Cape,” is significant; the explorers had passed the southern edge of the desert and found a watered country with waving palms. In this enterprise, as in most others, the first steps proved to be the hardest. Though progress was steady it was slow, and at the death of Prince Henry in 1460 the Portuguese had not passed beyond Sierra Leone. They had, however, accumulated valuable experience and gained confidence; the long period of preparation fitted them to advance more rapidly as time went on. In 1471 they passed the equator, without the scorching that some had feared; and in 1487, under Diaz, they turned the southern extremity of the Continent, named by the sailor the Cape of Storms, but renamed Cape of Good Hope by the King, as an augury for the future. The illness and death of the King prevented the Portuguese from utilizing their discovery immediately; but in July, 1497, Vasco da Gama was despatched with a fleet bound for India, which anchored at Calicut (southwest coast; not Calcutta), in May, 1498. Oceanic commerce with India had begun, and the tolls and charges which had hampered trade by the land routes were things of the past.

Map of the known world in the time of Columbus.

150. Belief that Asia could be reached by sailing westward.—While the Portuguese were pushing on down the west coast of Africa in their search for a route to India, the minds of some men were occupied with the thought that the same object could be attained more easily by sailing directly west from Europe. The earth was known to be round and was thought to be smaller than it actually is. Asia was known to be bounded by a sea on the East. Why not reach India by sailing around the globe? Perhaps, they thought, the east coast of Asia was but a little way from the west coast of Europe or Africa. Skippers who ventured to the Azores, the Canaries, and other islands not far from Europe, brought back stories of foreign objects washed up on the beaches, or of land dimly descried on their voyages.

The belief that land existed beyond the horizon was commonly held, and Columbus does not deserve the credit of originating the idea. Nor can his discovery of the New World in 1492 be regarded as one of those acts without which the history of the world would be very different. The Portuguese were certain to touch America sooner or later in circumnavigating Africa, for they planned to steer due south from Guinea to the latitude of the Cape, to avoid the calms and currents of the coast, and an equatorial current carried their ships westward. Under these conditions the Portuguese Cabral, on his way to India around the Cape, actually did land on the coast of what is now Brazil, in 1500.

151. Discovery of America (1492); partition of the world outside Europe between Spain and Portugal.—Columbus, however, certainly deserves the fame which has been given him, for the courage he showed in turning theory into action; and the consequences of the discovery, however we apportion the credit for it, make it one of the turning-points in the world’s history. Europe was disappointed, it is true, in the hope that a shorter route to India had been found. Balboa proved by the discovery of the “South Sea,” or Pacific Ocean (1513), that the new land was a continent by itself, and the great distance between America and Asia became known by the voyage of Magellan around the earth (1519-1522), “doubtless the greatest feat of navigation that has ever been performed.” Time was needed to prove that America offered more than Asia to build up European commerce, and the full measure of its possibilities was not realized until the nineteenth century. At the time Portugal seemed to have gained more than Spain. The non-Christian world was divided between these two powers, by a papal decree, which gave to Portugal Africa and Asia (except the Philippines) and to Spain the Americas (except Brazil). So long as other European states obeyed papal authority and feared the might of Spain and Portugal, they were bound to respect this division; and the first period of discoveries was followed by a series of voyages, carried on especially by English and Dutch, seeking a passage northeast or northwest through Arctic seas, that would enable them to evade the monopoly granted by the Pope.

152. Effect of the discoveries on the field of commerce; growth of a world commerce.—Contrasting medieval and modern commerce we find that the discoveries produced great changes both in the area and in the articles of trade. Maritime commerce in the Middle Ages was restricted in general to the seas of Europe (Baltic, North, Mediterranean, Black) and to the edge of the Atlantic; exchange was hindered not only by physical obstacles but also by the claims of various states to the exclusive control of inland waters (Hansa in the Baltic, Venice in the Adriatic). When once sailors had learned to leave the coast and steer boldly into the open ocean, secure in the consciousness that they were approaching not a “sea of darkness” but a land much like that which they had left behind them, the ocean became a means of uniting continents rather than of separating them. The principle that the sea is free to all was not accepted, it is true, for some time; states tried to extend to the open sea the same narrow principle of exclusion that had been practised with respect to interior waters. These claims led to bitter national conflicts in the sixteenth and seventeenth centuries, but they fell gradually into oblivion as the hopelessness of making them effective became apparent; and the European commerce of a former period expanded into a world commerce.

153. Effect of the discoveries on the wares of commerce.—Europe had become acquainted with Asiatic wares in the course of the Levant trade, so that the market for them was well established when the first Portuguese ships returned from India. Transportation by the sea route, however, with its diminished costs and with the greatly increased cargoes, caused such a decline in the price of eastern goods that the market for them expanded immensely. What had before been costly luxuries for the rich became now a part of their regular necessaries, and became for other classes luxuries or comforts which they could afford to purchase. It is in this period that tea, coffee, and sugar became common articles of consumption in some of the European countries. The part played by those three articles in the commerce of an advanced country can be seen from the fact that before the end of the eighteenth century they formed over one fourth of the total imports of England. Other wares, such as Indian textiles, which had been known to Europe before, but which were too bulky to pay for the import of cheaper grades, could now be placed on the market in large quantities, when protective duties did not exclude them.

154. Importance of the precious metals in the American trade; effect on prices in Europe.—The American continent offered at first only one class of wares of prime importance, namely, the precious metals. The Spanish secured great quantities of gold in the early years of their conquests, but about 1550 the output of gold was exceeded by that of silver, which reached enormous proportions, as a result of the discovery of new mines in Mexico and Peru, and by the use of the amalgamation process. Before 1550 the production of the precious metals in Europe and Africa exceeded the supply from the New World, but then the balance changed; and during the seventeenth century the American supply was more than five-fold that gained in the Old World. The result was an increase in the stock of money in Europe so great that a revolution in prices ensued; silver became so plentiful that a given weight of it would purchase only one half or one third, sometimes even one fourth or one fifth, of what it would have bought before the discovery of the American mines. The serious results of this price revolution on different classes in Europe must be left to the imagination of the reader, as they lie outside the scope of this manual. No other American product competed in importance with silver, in the early period, but as the North American continent and the West Indies were settled with whites and negroes some important staples were brought from those parts to Europe. The islands proved to be especially well suited to the production of sugar, while the mainland contributed in tobacco, a ware before unknown in Europe, but one which could soon rely on a large and increasing demand. Food staples like maize and potatoes continued unimportant, not only as wares of commerce but also as articles of European production, until comparatively recent times.