CHAPTER XVIII

COMMERCE AND WAR IN THE SEVENTEENTH AND

EIGHTEENTH CENTURIES

§ 172. 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 to religious causes. The opening up of the New World had made a struggle for power in the West now almost inevitable among European nations; the new route to India round the Cape of Good Hope, discovered by Vasco di Gama, made another struggle for commercial supremacy as inevitable in the far East. But England was certainly slow in entering the field. As a matter of fact, she was hardly yet ready either in industry, commerce, or political power. In the reign of Henry VIII. English seamen had not yet ventured far into the Mediterranean,1 and even in the last years of Queen Elizabeth England had absolutely no possessions outside Europe, for every scheme of colonial settlement had failed. For a century or more after the discoveries of Columbus and di 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, and entered into rivalry with Holland, till their descendants finally made England the supreme commercial power of the modern world. history of the seventeenth and eighteenth centuries is a continuous record of their struggles to attain this object. War is, in fact, their characteristic feature, and it had everywhere the same purpose.3

The

1 Cf. above, p. 225. Rogers, Hist. Agric., iv. 146, says they had not ventured further than Malaga, quoting a Statute of Henry VIII. (32 Hen. VIII., c. 14).

* Seeley, Expansion of England, p. 9.

3 Ib., pp. 20, 21.

§ 173. The Beginnings of the Struggle with Spain.

In the last quarter of the sixteenth century Elizabeth had entered (1577) into an alliance, offensive and defensive, with Holland against Spain.1 The motive of the alliance was partly religious, but the shrewd queen and her equally shrewd statesmen doubtless foresaw more than spiritual advantages to be gained thereby. After the alliance, Drake and the other great sea-captains of that day began a system of buccaneering annoyances to Spanish commerce.2 The Spanish and Portuguese trade and factories in the East were considered the lawful prizes of the English and of 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 (1581),3 and its far greater off-shoot, the East India Company (1600). 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. 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 (1668). Then the Company gained from Charles II. the important 1 Green, History, ii. 410.

6

2 Green, History, ii. 424, 425; Froude, History, viii. 440, ix. 337.

3 Craik, History of British Commerce, i. 251, ii. 19.

4 Ib., i. 253, ii. 13 sqq.

'Hakluyt, iii. 243, 263, 280.

6 The first charter given by James I. was in 1606, but the chief settlement was made in 1609. Cf. Cunningham, Growth of Industry, ii. 144.

7 Ib., ii. 146.

8 Cf. Craik, British Commerce, ii. 16.

• Annals of England, p. 473.

privilege of making peace or war on its own account.1 It had a good many foes to contend with, both among natives and European nations, among whom the French 2 were as powerful as the Portuguese. But it is curious to note how in every part of the colonial world England has been the last to come to the front. In the New World Spain and France, in the East the Portuguese and Dutch, and later in Africa and Australia the Dutch again—all were before her. For a great colonising power it is remarkable how invariably she has let others lead the way.

§ 174. Cromwell's Commercial Wars and the Navigation Acts.

The monopoly of Spain was first definitely attacked as a matter of policy by Cromwell, for the deeds of the Elizabethan seamen were not always recognised by the State. 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 by 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. Thereupon he seized Jamaica (1655), though he failed to secure Cuba; and at any rate succeeded in giving the English a secure footing in the West Indies. He seized Dunkirk also (1658) from Spain (then at war with France),5 with a view to securing for England a monopoly of the Channel to the exclusion of her former 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

1 Craik, British Commerce, ii. 101.

6

2 Seeley, Expansion of England, p. 284.

3

* Seeley, Expansion, p. 32; Cunningham, ii. 150.

4

Thurloe, State Papers, iv. 40; Annals of England, p. 452. "Annals of England, p. 453.

"In 1662, October 27th, for five million livres.

Dutch, who were now 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 therefore they thought the Dutch ought to be crushed. The method adopted was shown in the famous Navigation Act of 1651, which forbade the import or export of any goods between Asia, Africa, America, and England, unless these were carried in English ships manned by English crews. This Act was confirmed by another 2 of 1661, which not only laid down the above conditions, but added that the ships must be English built and owned by Englishmen ; and these Acts continued in operation till early in the nineteenth century. As to their effect, there has been great diversity of opinion; and speaking solely from the point of view of theoretical economics, there would seem no doubt that they were decidedly harmful, as being an attempt to maintain for a single country a monopoly that would naturally be shared by others. A monopoly generally implies an unnecessary tax upon some portion of the community for the benefit of another portion, and it has been complained that these Navigation Laws benefited the shipping interest at the expense of the rest of the nation. It has further been pointed out (even by writers of that time) that our general commerce was injuriously affected by "lessening the resort of strangers to our ports,' and also that after all it did not really increase English trade, but that the Eastland and Baltic trade had actually diminished. Other objections are that the Colonies and also English producers were restricted in their dealings and unable to obtain the best market for some of their products; and again that, however beneficial their ultimate results may have been, the enormous expenses incurred

6

4

1 Act c. 22 of 1651 (Commonwealth).

3 Craik, British Commerce, ii. 91.

4 Roger Coke, Treatise on Trade (1671).

7

2 Act 12 Charles II., c. 18.

Sir Josiah Child, Treatise on Trade (1698).

6 Child, New Discourse, p. 115.

7 Alluded to by Cunningham, Growth of Industry, ii. 110.

by the wars with the Dutch which followed them counterbalanced for a long time any advantages which they procured.

But it has been truly urged that the legislators who made these celebrated laws were perfectly aware of all the disadvantages they entailed, but considered1 that the growth of national power would be on the whole fostered, the reserve for the navy strengthened, and the rivalry of the Dutch in course of time annihilated. And, as a matter of fact, all these things came to pass. More especially it has been contended that they helped to defend the country against foreign foes, although they might hamper trade. For this reason Adam Smith,2 speaking as a politician and not as an economist, eulogises these Acts in the concise remark: "As defence is much more important than opulence, the Act of Navigation is perhaps the wisest of all the commercial regulations of England." This dictum of so great an

economist is worthy of the utmost consideration, for it shows us that there are occasions when economics must give way to politics, and that political economy best bears out its title as a science when it remembers that it is qualified by the attribute "political."

On the whole, then, with all their evils, the Navigation Acts were perhaps not so great a mistake as the nineteenth century economist is at first inclined to suppose. At any rate, Cromwell succeeded in his immediate object. The Dutch were provoked into a war in which their prestige was broken and their trade greatly injured; and before long the contest between them and the English for the mastery of the seas was practically decided. By the end of the seventeenth century Holland had to own her defeat, and England began distinctly to take the lead in commerce.3

§ 175. The Wars of William III. and of Anne. But the wars with Holland were only the beginnings of a larger struggle in which England contended against all 1 Alluded to by Cunningham, Growth of Industry, ii. 112.

2 Wealth of Nations, Bk. IV. ch. ii. (ii. 38, Clarendon Press edn.). His whole discussion of them should be read.

3 Cf. Seeley, Expansion of England, 86.