SECTION V
THE ENCOURAGEMENT OF INDUSTRY AND COMMERCE
1. Letters Patent granted to the Cabots by Henry VII, 1496—2. The Merchant Adventurers' Case for Allowing the Export of Undressed Cloth, 1514-36—3. The Rise in Prices, the Encouragement of Corn growing, and the Protection of Manufactures, c. 1549—4. Sir Thomas Gresham on the Fall of the Exchanges, 1558—5. The Reasons why Bullion is Exported [temp. Eliz.]—6. The Italian Merchants Explain the Foreign Exchanges, 1576—7. An Act Avoiding divers Foreign Wares made by Handicraftsmen Beyond the Seas, 1562—8. An Act Touching Cloth Workers and Cloth Ready Wrought to be Shipped over the Sea, 1566—9. Incorporation of a Joint Stock Mining Company, 1568.—10. An Act for the Increase of Tillage, 1571—11. Instructions for an English Factor in Turkey, 1582—12. The Advantages of Colonies, 1583—13. Lord Burghley to Sir Christopher Hatton on the State of Trade, 1587—14. A List of Patents and Monopolies, 1603—15. Instructions Touching the Bill for Free Trade, 1604—16. The Establishment of a Company to Export Dyed and Dressed Cloth in Place of the Merchant Adventurers, 1616—17. Sir Julius Cæsar's proposals for Reviving the Trade in Cloths, 1616—18. The Grant of a Monopoly for the Manufacture of Soap, 1623—19. The Statute of Monopolies, 1623-4—20. An Act for the Free Trade of Welsh Cloths, 1623-4—21. The Economic Policy of Strafford in Ireland, 1636—22. Revocation of Commissions, Patents, and Monopolies Granted by the Crown, 1639—23. Ordinance Establishing an Excise, 1643.
The attempts made between 1405 and 1660 to develop industry and commerce are usually known as "the Mercantile System." But the name is an unfortunate one. The mercantile system was not specially mercantile; for, as preceding sections have shown, government interference was not confined to matters of commerce; nor was it a system, but a collection of opportunist expedients, nearly all of which had been tried in preceding centuries. It is true, however, that after the accession of Elizabeth, the efforts already made under Henry VII and Henry VIII to foster commerce (see Schanz, Englische Handelspolitik gegen Ende des Mittelalters) were carried on with greater persistency and deliberation. It is from this period, therefore, that the documents in this section are principally drawn.
The most pressing economic problem in the middle of the sixteenth century was the fall in the value of money, caused, principally, by the influx of silver from America, but to a less extent by the debasement of the currency, which led to a rise in prices (No. 3), and a disturbance of the foreign exchanges (Nos. 4 and 5), and which could be met to some small extent by calling in the base coin (Nos. 4 and 5). This the government did in 1560. In 1570, in its anxiety to prevent the efflux of bullion, it took steps to impose a special tax on all exchange transactions, but such a tax was really a tax on banking, and its consequences, according to the business houses concerned, were disastrous (No. 6). The most certain way, however, of securing adequate supplies of bullion was thought to consist in checking imports and encouraging exports (Nos. 3 and 5); and the policy was strengthened by other considerations (No. 3). The general policy under Elizabeth was to discourage imports in order to prevent unemployment at home (Nos. 3 and 7), to encourage corn-growing by allowing the export of wheat, except in times of scarcity, on payment of a small duty (Nos. 3 and 10), and to encourage the export of manufactured articles rather than of raw materials, especially the export of dyed and finished cloth (Nos. 3, 8, 11 and 12), any interruption of which caused distress (No. 13). The policy which had been pursued under Henry VIII threatened the vested interests of the Merchants Adventurers, who complained that they could not find markets for finished cloth (No. 2). In the reign of James I a more ambitious attempt was made in the same direction, and in 1614, when the abrupt dissolution of Parliament had left the government in financial difficulties, a plan was initiated for preventing the exportation of cloths not dyed and dressed in England. As the Merchant Adventurers refused to be a party to it, a new company was established to carry on the desired trade, and was granted a charter in 1616 (No. 16). The result of this policy was a tariff war with the Netherlands and acute distress at home, and, after various suggestions for reviving trade had been made (No. 17), the abandonment of the undertaking. The political motives of mercantilism, as well as its economic aims, are illustrated by Strafford's account of his policy in Ireland (No. 21). Of more enduring importance, perhaps, than mercantilist schemes were the development of Joint-Stock Companies (No. 9), the expansion of commercial enterprize (No. 11), and the attempts to establish colonies (No. 12).
Among the methods for fostering industry, and incidentally for raising an unparliamentary revenue, the granting of patents and monopolies holds an important place. These patents ranged from grants of the sole conduct of important industries (Nos. 14 and 18) to grants of trifling offices of profit and pensions (Nos. 14 and 22). The reaction against the interference of the Crown with trade is excellently expressed in the report of the Committee on "the Bill for Free Trade" (No. 15), a document which, in spite of the fact that the Bill was dropped, is of the highest economic and constitutional importance (see Gardiner, Vol. I, pp. 188-190). It is concerned primarily with monopolies enjoyed by trading companies, such as the Company of Merchant Adventurers, the Eastland Company, and the Russia Company. But its arguments apply a fortiori to patents granted to individuals, and throw much light on the nature of the economic opposition to the Stuarts. The effect of the attitude of Parliament was seen later in the Act abolishing internal and local restrictions on the trade in woollen cloths (No. 20), in the Statute of Monopolies (No. 19), and in the revocation by Charles in 1639 of patents granted during the period of personal government (No. 22). The place occupied by monopolies in the Stuarts' fiscal system was later, when the Civil War began, partially filled by the Excise (No. 23).
AUTHORITIES
There is no book covering the commercial history of the whole period. The most useful works are:—Schanz, Englische Handelspolitik gegen Ende des Mittelalters; Cunningham, English Industry and Commerce, Modern Times, Part I; Scott, Constitution and Finance of English Joint Stock Companies; Busch, England Under the Tudors; Gardiner, History of England 1603-1642; Unwin, Industrial Organization in the Sixteenth and Seventeenth Centuries; Rogers, English Industrial and Commercial Supremacy, and The Economic Interpretation of History; Ehrenberg, Das Zeitalter der Fugger; Price, The English Patents of Monopoly; Hewins, English Trade and Finance in the Seventeenth Century; Kennedy, English Taxation, 1640-1799; Schmoller, Mercantilism (translated by Ashley); Keith, Commercial Relations Between England and Scotland; Murray, Commercial Relations Between England and Ireland; Beer, The Old Colonial System; Durham, Relations of the Crown to Trade under James I (Trans. R.H.S., New Series, Vol. XIII).
The student may also consult the following:—