Contemporary with the decline of the Hanseatic commerce in the north was that of the Italian cities, especially Venice, in the south. They had prospered by their commerce with the Levant until Vasco de Gama discovered the sea route to East India in 1497. His countrymen, the Portuguese, soon utilized this discovery. They took possession of the coast of India and of the islands to the south of it. They also succeeded in excluding the Arabs from the commerce with that country, of which up to that time they had had exclusive control. For this purpose they built fortresses and factories on the west coast of Hindostan, took possession of the island of Socotra in the Arabian, and of Ormus in the Persian Gulf, and forced the Indian princes to grant them the exclusive privilege of trading with their subjects. They also captured the city of Malacca, where the trade between China, Japan, the Philippine Islands, the Moluccas and India had concentrated itself. In this way they got in a comparatively short time control of the commerce of India, Arabia, and even Egypt. By forcing the Venetians and their commercial allies out of those markets, they secured for themselves a monopoly of the commerce between Europe and the east. The political ascendancy of the Turks in the islands situated in, and in the countries bordering on, the Eastern Mediterranean, caused the loss of Cyprus, Crete (Candia) and Morea to the Venetians and greatly aided the Portuguese in establishing their commercial supremacy. Less profitable for the latter was the possession of their American colonies. They, as well as the Spaniards, adopted here a policy which ultimately brought commercial and industrial ruin upon both. Entirely neglecting agriculture and relying on the mineral resources of their transatlantic colonies, which were believed to be inexhaustible, they strove to amass riches by reserving for themselves the exclusive privilege of supplying them with the manufactures of Europe in exchange for American gold. Neglecting home industries, they bought their supplies as well as those of their colonies in France, Holland and England. A spirit of speculation and adventure enervated their people, and led in time to commercial bankruptcy and political disaster.
Spain also drained her treasury by her wars with her Dutch dependencies, and the loss of her northern provinces was a serious blow to her commerce. Antwerp, which had become the successor of Bruges as the commercial emporium of the north, began to decline, and Amsterdam, the metropolis of the new Dutch republic, became heir to its glory and its riches. The young republic at once commenced to compete in the carrying trade with Spain and Portugal, and to make inroads into the eastern commerce of the latter.
The Dutch East India Company, which was organized in 1602, sent a fleet of fourteen vessels into the Indian Archipelago to found colonies in Java, Sumatra and the Moluccas. In a short time they had monopolized the entire spice trade, which immediately became a source of great wealth. A cargo of five vessels, which returned to Amsterdam in 1603, consisted of over two million pounds of spices. This cargo was purchased for 588,874 florins and was sold for 2,000,000 florins. It is under these circumstances not surprising that the dividends of the company's stockholders often amounted to 75 per cent., and never went below 12-1/2 per cent. previous to 1720. Holland's colonial trade made Amsterdam the commercial metropolis of Europe. It became the grain market from which Spain, Italy and other countries drew their supplies. All the products of the world found purchasers here, and a well-developed banking system greatly facilitated the exchange. The rapid accumulation of fortunes by the Dutch merchants and bankers was without precedent in Europe. Besides this, the progress which Holland made in ship-building and navigation and the advantages which she derived from her colonial trade placed her in a position to outstrip all other nations in the carrying trade of Europe. During the first half of the seventeenth century the Dutch were justly called the freighters of Europe. But the injury which their policy did to the commercial and manufacturing interests of other European nations led both England and France to adopt measures well calculated to accomplish, in a short time, their commercial emancipation. Louis XIV., in order to build up French shipping, collected a tonnage from every foreign ship which entered a French harbor. England went still further. In 1651 Oliver Cromwell promulgated the Navigation Act, by which foreign ships were prohibited from importing into England any goods except such as were produced or manufactured in their own countries. This was a heavy blow at the Dutch, who were thus deprived of the privilege of effecting the exchange of commercial commodities between England and her colonies as well as the continent. The war which the Dutch Republic waged against England, to force her to revoke this act, resulted in favor of the latter and ended the commercial supremacy of the Dutch in Europe.
England, which before this time had played but a secondary role as a commercial power, rose fast to prominence after her successful struggle with the Dutch. She commenced to strengthen her industries by the adoption of a high tariff policy, and her merchants were encouraged to enter into commercial relations with colonists and foreigners. The privileges which had been given to foreign tradesmen were revoked, while ship-building and navigation were greatly favored by the government. As England gained greater strength as a naval power, her foreign policy became more aggressive.
In 1600 the "Company of Merchants of London Trading to the East Indies" obtained a charter, and, in spite of Dutch and Portuguese opposition, soon gained a foothold on the Moluccas and the coast of Malabar, whence it extended in time its dominion to Surat, Bombay, Madras and Calcutta. Here they built forts and established their commerce. From these places the company pushed into the interior, until finally, after repeated struggles with the natives and European rivals, the whole of Hindostan came under English dominion. As its power increased, the company commenced to abuse shamefully the monopoly which it had been granted, by inaugurating a system of plunder and oppression which is perhaps without its equal in the annals of history. These growing abuses led to frequent revolts and seriously imperiled England's dominion in these territories.
To remedy these evils, Parliament at the close of the seventeenth century annulled the charter of the company and declared the commerce with the East Indies open to all of the King's subjects. A number of small companies were formed, but in 1702 they all combined and organized the East India Company. Monopoly was again established, but the patience of the natives was exhausted, and England's interests in Hindostan were in a critical condition. At this juncture the East India Company adopted a policy of moderation, and this, together with the aid which the government gave to the company, enabled it to strengthen again its weakened commercial relations and to further enlarge its territory. But the temptation to abuse its power was too great for this strong corporation to be long resisted. Abuses again crept into its management and continued to grow until its charter was finally repealed.
The policy adopted by Great Britain for the government of her American colonies during the eighteenth century was less rapacious, but scarcely more just than that pursued in her eastern possessions. To retain those colonies as commercial no less than as political dependencies, Parliament enacted laws compelling their people to trade with the mother country exclusively and laying restraint on their manufactures. But the American pioneers felt that they had brought with them across the ocean the rights of Englishmen; they objected to taxation without representation, and the men who for opinion's sake had left comfortable homes to brave upon a distant shore the dangers of frontier life were prepared, if necessary, to emphasize their objection by armed resistance. England, intent upon maintaining her barbaric system of discriminative duties and commercial monopolies, blindly attempted coercion, but the war which resulted wrested from the English crown its brightest jewel, and the War of 1812 established upon American soil the principle of industrial and commercial liberty.
It must not be supposed, however, that America and the United States in particular have been free from monopolies growing out of the transportation business. Nothing would be farther from the truth. There is no law so stringent but that it will be violated; there is no government so vigilant but that it will at times be imposed upon. It is true, our government sanctions no monopoly, but the very liberty of action which exists here among corporations as well as individuals offers to organized wealth and power a wide field for abuses.
We have seen in the foregoing that almost from time immemorial efforts have been made to monopolize transportation and trade, and that these efforts were successful whenever either from ignorance or weakness the masses fell into political apathy. There is a natural tendency among men to utilize commercial advantages to the detriment of others. In modern times the opportunities for building up large monopolies have greatly increased and have been turned to the most profitable account by designing men. Great and even unbearable abuses have always followed where the greed and ambition of such men have not been checked by governmental agencies. In this respect the people of the United States have had about the same experience as the rest of mankind. Ever since the introduction of railroads into this country there has been a well-marked drift toward monopolizing the transportation business.
As long as the dangers of monopoly remained unknown to the American people, legislation for the control of railroads and other public carriers was both scarce and crude, and shrewd railroad men were not slow in taking advantage of the situation. It is foreign to the design of this treatise to give a complete history of railroad monopoly in the United States. The author will therefore confine himself to showing that transportation companies will, like the great commercial organizations of the past, when left to follow their instincts, invariably use their power to oppress the public by exacting excessive charges for their services, or to discriminate against the many by extending special privileges to the few. Hundreds of cases might be given to illustrate the above rule, but a history of two of these corporations will suffice to show to what extent corporate abuses can be carried, and to serve as a warning against the adoption of any "laissez faire" policy in the railroad legislation of the future. The corporations selected for this purpose are the Camden and Amboy Railroad and the Standard Oil Companies, both typical representatives of the Rob Roy policy which organized wealth has pursued since the dawn of civilization, when not prevented by the wisdom and strength of a good government.