An Introduction to the Industrial and Social History of England

by Edward Potts Cheyney

Principal English Trade Routes About 1700

The foreign lands with which these companies traded furnished at the beginning of this period the only places to which goods could be exported and from which goods could be brought; but very soon that series of settlements of English colonists was begun, one of the principal inducements for which was that they would furnish an outlet for English goods. The "Plantation of Ulster," or introduction of English and Scotch settlers into the north of Ireland between 1610 and 1620, was the beginning of a long process of immigration into that country. But far the most important plantations as an outlet for trade as in every respect were those made on the coast of North America and in the West Indies. The Virginia and the Plymouth Companies played a part in the early settlement of these colonies, but they were soon superseded by the crown, single proprietaries, or the settlers themselves. Virginia, New England, Maryland, the Carolinas, and ultimately New York, Pennsylvania, and Georgia on the mainland; the islands of Bermudas, Barbadoes, and Jamaica, and ultimately Canada, came to be populous colonies inhabited by Englishmen and demanding an ever increasing supply of English manufactured goods. These colonies were controlled by the English government largely for their commercial and other forms of economic value. The production of goods needed in England but not produced there, such as sugar, tobacco, tar, and lumber, was encouraged, but the manufacture of such goods as could be exported from England was prohibited. The purchase of slaves in Africa and their exportation to the West Indies was encouraged, partly because they were paid for in Africa by English manufactured goods, partly because their use in the colonies made the supply of sugar and some other products plentiful and cheap.

Closely connected with commerce and colonies as a means of disposing of England's manufactured goods and of obtaining those things which were needed from abroad was commerce for its own sake, for the profits which it brought to those engaged in it, and for the indirect value to the nation of having a large mercantile navy.

The most important provision for this end was the passage of the "Navigation Acts." We have seen that as early as 1485 certain kinds of goods could be imported only in English vessels. But in 1651 a law was passed, and in 1660 under a more regular government reënacted in still more vigorous form, which carried this policy to its fullest extent. By these laws all importation of goods into England from any ports of Asia, Africa, or America was forbidden, except in vessels belonging to English owners, built in England and manned by English seamen; and there was the same requirement for goods exported from England to those countries. From European ports goods could be brought to England only in English vessels or in vessels the property of merchants of the country in which the port lay; and similarly for export. These acts were directed especially against the Dutch merchants, who were fast getting control of the carrying trade. The result of the policy of the Navigation Acts was to secure to English merchants and to English shipbuilders a monopoly of all the trade with the East Indies and Africa and with the American colonies, and to prevent the Dutch from competing with English merchants for the greater part of the trade with the Continent of Europe.

The characteristics of English commerce in this period, therefore, were much the same as in the last. It was, however, still more completely controlled by English merchants and was vastly extended in amount. Moreover, this extension bid fair to be permanent, as it was largely brought about by the growth of populous English colonies in Ireland and America, and by the acquisition of great spheres of influence in India.

53. Finance.—The most characteristic changes of the period now being studied were in a field to which attention has been but slightly called before; that is, in finance. Capital had not existed in any large amounts in mediæval England, and even in the later centuries there had not been any considerable class of men whose principal interest was in the investment of saved-up capital which they had in their hands. Agriculture, manufacturing, and even commerce were carried on with very small capital and usually with such capital as each farmer, artisan, or merchant might have of his own; no use of credit to obtain money from individual men or from banks for industrial purposes being ordinarily possible. Questions connected with money, capital, borrowing, and other points of finance came into somewhat greater prominence with the sixteenth century, but they now attained an altogether new and more important notice.

Taxation, which had been looked upon as abnormal and occasional during earlier times, and only justifiable when some special need for large expenditure by the government arose, such as war, a royal marriage, or the entertainment of some foreign visitor, now, after long conflicts between King and Parliament, which are of still greater constitutional than financial importance, came to be looked upon as a regular normal custom. In 1660, at the Restoration, a whole system of excise duties, taxes on imports and exports, and a hearth tax were established as a permanency for paying the expenses of government, besides special taxes of various kinds for special demands.

Borrowing, by merchants and others for ordinary purposes of business, became much more usual. During most of the seventeenth century the goldsmiths were the only bankers. On account of the strong vaults of these merchants, their habitual possession of valuable material and articles, and perhaps of their reputation for probity, persons who had money beyond their immediate needs deposited it with the goldsmiths, receiving from them usually six per cent. The goldsmiths then loaned it to merchants or to the government, obtaining for it interest at the rate of eight per cent or more. This system gradually became better established and the high rates decreased. Payments came to be made by check, and promissory notes were regularly discounted by the goldsmiths.