CHAPTER V. Commerce and War in the Seventeenth and Eighteenth Centuries

COMMERCE AND WAR IN THE SEVENTEENTH AND EIGHTEENTH CENTURIES

§ 1. ENGLAND A COMMERCIAL POWER—In glancing over the progress of foreign trade in the time of Elizabeth, we noticed that our war with Spain was due to commercial as well as religious causes. The opening up of the New World made a struggle for power in the West almost inevitable among European nations; the new route to India viâ the Cape of Good Hope, discovered by Vasco da Gama, made another struggle for commercial supremacy as inevitable in the far East. In the reign of Henry VIII. we find, from one of his Statutes, that Malaga had been {122} the farthest port to which at this time English seamen yet ventured. For a century or more after the discoveries of Columbus and da Gama, Spain and Portugal, and a little later on Holland, had practically a monopoly both of the Eastern and Western trade. But now a change had come. The Englishmen of the Elizabethan age cast off their fear of Spain, entered into rivalry with Holland, and finally made England the supreme commercial power of the modern world. The history of the seventeenth and eighteenth centuries is a continuous record of their struggles to attain this object.

§ 2. THE BEGINNINGS OF THE STRUGGLE WITH SPAIN—In the last quarter of the sixteenth century Elizabeth had entered (1579) into an alliance, offensive and defensive, with Holland against Spain. The motive of the alliance was partly religious, but the shrewdness of the queen and her statesmen no doubt foresaw more than spiritual advantages to be gained thereby. After the alliance, Drake and the other great naval captains of that day began a system of buccaneering annoyances to Spanish commerce. The Spanish and Portuguese trade and factories in the East were considered the lawful prizes of the English and their allies the Dutch. The latter, as all know, were more successful at first than we were, and soon established an Oriental Empire in the Indian Archipelago. But at the very end of her reign England had prospered sufficiently for Elizabeth to grant charters to the Levant Company, and its far greater companion the East India Company. Then, when a fresh war with Spain was imminent, England wisely began to plant colonies in North America, at the suggestion of Sir Walter Raleigh; and after one or two other abortive attempts, Virginia was successfully founded by the London Company in 1609, and became a Crown colony in 1624. {123} After this, as every one knows, colonies grew rapidly on the strip of coast between the Alleghany Mountains and the Atlantic. Meanwhile, on the other side of the world the East India Company was slowly gaining ground, and founding English agencies or “factories,” that of Surat (in 1612) being the most important. As yet we had not come into open conflict with Spain or Portugal; and indeed we owed the possession of Bombay to the marriage of Charles II. with Katherine of Braganza (1661). Then the company gained from Charles II. the important privilege of making peace or war on their own account. It had a good many foes to contend with, both among natives and European nations, among whom the French were as powerful as the Portuguese.

§ 3. CROMWELL’S COMMERCIAL WARS—The monopoly of Spain was first really attacked by Cromwell. James I. had been too timid to declare war, and Charles I. was too much in danger himself to think of trusting his subjects to support him if he did so. But Cromwell was supported both by the religious views of the Puritans and the desires of the merchants when he declared war against England’s great foe. He demanded trade with the Spanish colonies, and religious freedom for English settlers in such colonies. Of course his demands were refused, as he well knew that they would be. Whereupon he seized Jamaica (1655) and intended to secure Cuba; and at any rate succeeded in giving the English a secure footing in the West Indies. He seized Dunkirk also from Spain (then at war with France), with a view to securing England a monopoly of the Channel to the exclusion of our old friends the Dutch. Dunkirk, however, was a useless acquisition, and was sold again by Charles II. Not content with victory in the West, Cromwell with the full consent of mercantile England declared war against the Dutch, who were now {124} more our rivals than our friends. It would have been perfectly possible for the English and the Dutch to have remained upon good terms; but the great idea of the statesmen and merchants of the seventeenth and eighteenth centuries was to gain a sole market and a monopoly of trade, and so the Dutch had to be crushed. It was a mistake, but mistakes have frequently been made, owing to a lack of that indispensable concomitant of statesmanship, accurate economic knowledge. Cromwell succeeded in his object. He defeated the Dutch and broke their prestige in the two years’ war of 1652–54, and designed to ruin their trade by the Navigation Acts of 1651 (p. 130). The contest between the Dutch and English for the mastery of the seas was already practically decided, and the capture of New Amsterdam (New York as we called it afterwards) in 1664, and the subsequent wars of Charles II.’s reign, completed the discomfiture of Holland.

§ 4. THE WARS OF WILLIAM III. AND OF ANNE—The continental wars in which England was engaged after the deposition of James II. were rendered necessary to some extent by the tremendous power of France under Louis XIV. William III. saw it was inevitable for the interest of England that Louis XIV. should be checked, and the war of the Spanish Succession (1702–13) was carried on with the object of preventing that king from joining the resources of Spain to those of his own kingdom. For had he done so two disastrous results would have happened. The Stuarts would by his help have been restored to the English throne, and the struggle against absolute monarchy and religious tyranny would unfortunately have been fought over again. Secondly, the growth of English commerce would have been checked if not utterly annihilated. As it was we were preserved from the {125} Stuarts; and when the war was finally over in 1713, found ourselves in possession of Gibraltar, now one of the keys of our Indian Empire, and of the Hudson’s Bay Territory, Newfoundland and Nova Scotia (then called Acadia)—the foundations of our present Canadian dominion. England was also allowed by Spain to trade—in negroes—with Spanish colonies, and to send one ship a year to the South Seas. The war, as far as we were concerned, was a commercial success, though we had to pay rather heavily for it, and were involved in further difficulties in America thereby.

§ 5. EXPANSION OF ENGLISH TRADE AFTER THESE WARS—Even during the above wars English trade had been spreading. English merchants now did business in the Mediterranean with Turkey and Italy, in the North with Holland, Germany, Russia and Norway, in the East with India, Arabia and Africa, in the West with America and the Spanish colonies. Many companies were started, too numerous to mention here, for those who had hoarded their money during the war were now anxious to make profitable use of it. Of these new companies the most famous was the South Sea Company, formed in 1711 to trade with South America. The directors anticipated enormous profits, and offered to advance the Government £7,500,000 to pay off part of the National Debt. Everyone knows the story of their collapse (1721), and the ruin it brought upon thousands of worthy but credulous shareholders. It was a time when all the accumulated capital of the country seemed to run riot in hopes of gaining profits. Hundreds of smaller companies were started every day, and an unhealthy excitement prevailed. One company, with a capital of £3,000,000, was {126} started “for insuring to all masters and mistresses the losses they may sustain by servants”; another “for making salt-water fresh”; a third for “planting mulberry trees and breeding silk-worms in Chelsea Park.” One in particular was designed for importing “a number of large jackasses from Spain in order to propagate a larger kind of mule in England,” as if, remarks a later writer with some severity, there were not already jackasses enough in London alone.

All this mania for investing capital, however, shows how prosperous England had now become, and how great a quantity of wealth had been accumulated, partly by trade, but also by the growth of manufactures and improvements in agriculture. Englishmen now felt strong enough to have another struggle for the monopoly of trade, with the result that fresh wars were undertaken, and the country was heavily burdened with debt. But the wars were on the whole a success, though the wish for a monopoly was a mistake.

§ 6. FURTHER WARS WITH FRANCE AND SPAIN—All the wars in which England now engaged had some commercial object in view. People had yet to learn that the best way to extend a nation’s trade is to promote general peace. In default of that, however, it seemed well to provoke a general war. Mistaken as England’s policy was, it was no more so than that of her neighbours, for all believed, as many do still, in the sole market theory. Moreover, England was provoked into war by the secret “Family Compact” between the related rulers of France and Spain, by which Philip V. of Spain agreed to take away the South American trade from England, and give it to his nephew, Louis XV. of France. The result was a system of annoyance to English vessels trading in the South Seas, culminating in the mutilation of an English {127} captain, one Jenkins, and war was declared openly in 1739. This war merged into the war of the Austrian Succession, which lasted for eight years (1740–48), a matter with which England was in no way concerned, but which afforded a good excuse to renew the struggle against the commercial growth of France as well as Spain. We gained nothing by it except the final annihilation of the hopes of the Stuarts, and a small increase of British power upon the high seas.

After a few years, however, we entered upon another war, the Seven Years’ War (1756–63), in which England and Prussia fought side by side against the rest of Europe, and attacked France in particular in all parts of the world. The war was largely caused by the quarrels of the French and English colonists in America, and of rival traders in India. We cannot here go into the details of it. It is sufficient to say that, after a bad beginning, we won various victories by sea and land, and at the close (1763) found ourselves in possession of Canada, Florida, and all the French possessions east of the Mississippi except New Orleans, and had gained the upper hand in India. We held almost undisputed sway over the seas, and our trade grew by leaps and bounds. Unfortunately we afterwards engaged in other wars of a less necessary character, and wasted a great deal of our wealth before the end of the century. But the short peace which ensued after 1763 gave us an opportunity which we did not neglect of increasing our national industries, and practically gave us the great start in manufactures to which we owe our present wealth. In this war, too, we gained our Indian Empire and Canada, to which we must devote a few short remarks.

§ 7. THE STRUGGLE FOR INDIA—Since the founding of Surat and the acquisition of Bombay, the East India {128} Company had also founded two forts or stations, which have since become most important cities, namely, Fort St George in 1640 (now Madras), and Fort William in 1698 (now Calcutta). They had become powerful, and each of the three chief stations had a governor and a small army. The French, however, had also an East India Company, whose chief station was Pondicherry, south of Madras; and the two companies were by no means on friendly terms. When their respective nations were at war in 1746–48, they too had some sharp fighting, but it was only when Dupleix, the French Governor of Pondicherry, had gained almost absolute power over Southern India after the death of the Great Mogul and the Nizam of the Dekkan in 1748, that matters became serious. The English traders feared with justice the loss both of their lives and commerce, and open war broke out. The magnificent exertions of Clive and Lawrence defeated the French, and finally Dupleix was recalled in 1754 and quiet was restored. But two years afterwards the Seven Years’ War broke out, and India was disturbed again. Suraj-ud-Daula, the ally of the French, took Calcutta and committed the Black Hole atrocity (1757), and he and his allies did their best to drive the English out of Bengal. This province, however, was saved by Clive at the battle of Plassey; Coote defeated the French at Wondiwash (1760); and Pondicherry was captured by the English in 1761. Finally in 1765 the East India Company became the collector of the revenues for Bengal, Behar, and Orissa, and thus the English power was acknowledged and consolidated. Our future struggles in India were not with the French but with native princes.

§ 8. THE CONQUEST OF CANADA—There was, however, a great struggle for commercial supremacy to be waged against the French in America. It began in 1754. The {129} English had now thirteen flourishing colonies between the Alleghany Mountains and the sea. Behind them, above them, and below them, all was claimed by France as French territory. It was inevitable that the growth of our colonies should lead to war, and such was the case. The French began by driving out English settlers from land west of the Alleghany Mountains; the English retorted by driving French settlers out of Nova Scotia, and tried to make a colony in the Ohio valley. In this latter object they were foiled by Duquesne, the French Governor of Canada, who built Fort Duquesne there in 1754. Shortly afterwards, the next Governor, Montcalm, conceived the idea of linking together Forts Duquesne, Niagara, and Ticonderoga by lesser forts, so as to keep the English in their narrow strip of eastern coast-line. Then the English Government at home took up the matter, and sent out General Braddock and 2000 men to help the colonists. Braddock was defeated and killed (1755), but when the Seven Years’ War broke out in the next year, Pitt sent ammunition, men, and money to help the colonists to attack Quebec and Montreal. The war was renewed in Canada with fresh vigour; Fort Duquesne was captured in 1758, Quebec in 1759, and Montreal in 1760; and when peace was made in Europe in 1763, England had gained all the French possessions in America, and her colonies were enabled to extend as far as they desired. We foolishly lost them by a mistaken policy a few years afterwards.

§ 9. SURVEY OF COMMERCIAL PROGRESS DURING THESE WARS—The reign of James I. was noticeable for the rapid growth of the foreign trade which had developed from the somewhat piratical excursions of the Elizabethan sailors. Trading companies were formed in considerable numbers, and among them the Levant Company may be noticed, {130} as having made “great gains” in the East in 1605. The mercantile class was now growing both numerous and powerful, and a proof of their advance in social position and influence is furnished by the new title of nobility, that of baronet, conferred by James I. upon such merchant princes as were able and willing to pay the needy king a good round sum for the honour. It is interesting, by the way, to notice the figures of trade in his reign. In 1613 the exports and imports both together were about £4,628,586 in value, and a sign of a quickly developing Eastern trade is also seen in the fact that James made attempts to check the increasing export of silver from the kingdom. At this time English merchants traded with most of the Mediterranean ports, with Portugal, Spain, France, Hamburg, and the Baltic coasts. Ships from the north and west of Europe used in return to visit the Newcastle collieries, which were rapidly growing in value. The English ships were also very active in the new cod fisheries of Newfoundland, and the Greenland whale fisheries. Commerce was further aided by the Navigation Acts of 1651, which provided that no merchandise of Asia, Africa, or America should be imported in any but English ships. Previously, the carrying trade had been in the hands of the Dutch, but Holland had now entered upon the period of its decline, and the short war with England which followed these Acts contributed to hasten it. The development of English trade is signalized in this century by the appearance of numerous books and essays on commercial questions, of which the works of Mun, Malynes, Misselden, Roberts, Sir Josiah Child, Worth, and Davenant may be mentioned as among the most important. The increase in the wealth of the country is shown by the rapid rebuilding of London after the Great {131} Fire, when the loss was estimated at £12,000,000; and Sir Josiah Child, writing in 1670, speaks of the great development of the commerce and trade of England in the previous twenty years. We know from Gregory King that rents had been doubled in this period, and that is always a sure sign of prosperity. The East India Company was so flourishing that in 1676 their stock was quoted at 245 per cent. Trade with America was equally prosperous. New Amsterdam, now New York, was taken from the Dutch in 1664, and in 1670 the Hudson’s Bay Company received their charter. But the main commercial fact of the latter half of the seventeenth century, and of the eighteenth, was the development of the Eastern trade, and, as a consequence, of the home production of articles to be exchanged for Eastern goods. The cloth trade especially was greatly increased, and imports of cloth from Spain were quite superseded. This improvement in English manufactures led to increased trade with our colonial possessions, especially in the West Indies. It was partly, perhaps, this great development of English trade with both the Western and the Eastern markets that stimulated the genius of the great inventors to supply our manufacturers with machinery that would enable them to meet the huge demands upon their powers of production, for, by 1760, the export trade had grown to many times its value in the days of James I. Then, as we saw, it was only £2,000,000 per annum; in 1703, nearly a hundred years later, it was, according to a MS. of Davenant’s, £6,552,019; by 1760 it reached £14,500,000. The markets, too, had undergone a change. We no longer exported so largely to Holland, Portugal, and France, as in the seventeenth century, but instead one-third of our exports went to our colonies. In 1770, {132} for example, America took three-fourths of the manufactures of Manchester, and Jamaica alone took almost as much of our manufactures as all our plantations together had done in the beginning of the century. The prosperity and development of modern English commerce, as we know it, had now begun. It was due, of course, not to the great wars we had waged for the right of a sole market, but to the fact that we were able to supply the markets of the world with manufactured goods that no other country could then produce. How we were able to do so will shortly be seen when we come to speak of the Industrial Revolution of the last half of the eighteenth century.