2. The Rival Commercial Etnpires.—The period from 1500 to 1763 in world politics may be most intelligently viewed as the era of the rise and struggles of what has been called the 'rival commercial empires.' This period started with the rise of the Portuguese to commercial supremacy following the return of Vasco de Gama from India in 1499, and ended with the conquest of the French in North America by Great Britain in 1763. Taking advantage of ha priority in explorations in this region Portu gal occupied the Spice Islands and several of the East Indies and established a partial mo nopoly over this valuable trade. but her internal strength was not equal to the strain • by this over extensive and rapid e>tternal ex pansion. She lacked the naval power to defend her trading monopoly; she was unable to organize a systematic and competent distribming service for the Eastern commodities; she had few commodities to be taken East in excirair for materials purchased; and a comiPt aid& door made it impossible for her to mood un scrupulous traders. Her decline invited for eign aggression, and in 15110 Portugal was annexed to Spain and held in subjection far 60 years. Spain vied with Portugal as an ea* contender for colonial and commercial su premacy. occupying the greater part of the New World. especially South and Central America. and several groups of Pacific islands. The great wealth thereby controlled by Spain might have made that country the greatest of modern powers, had it been guided by a wise adminis trative and fiscal policy, but such wisdom was lacking and the Spanish decline was only slightly less rapid and complete than that of Portugal. The excessively strict regulation of the colonial :rade crippled commerce with the mother coun try and invited smuggling; a cruel and wasteful wstem of native labor lessened productivity in tilt colonies; the expulsion of Jews and Moors from Spain lost her the possession of her monied classes, while repudiation of debts forced the withdrawal of German credit; re ligious bigotry and fiscal exaction lost the rich province of the Netherlands; the Inquisition :rushed out all individual originality and initi ative ; and the loss of the Armada in 1588 meant the end of Spanish naval supremacy. At the beginning of the 17th century Spain sac becoming that second-rate power which she has since remained. Stirred to action by Spanish oppression, the Netherlands enjoyed the commercial supremacy of Europe for more than a half century following 1590, occupying most of the old Portuguese possessions in the kast, as well as valuable areas in North and South America. But the Dutch were not equal to the task of building up a permanent com mercial empire of great extent. Like ancient Athens the Netherlands were a loosely united gnu jealous city-states rather than a com pact mat unit; the *Spanish Fury' helped t'. n ntwerp and the closing of the Scheldt ende prosperity; the Dutch devoted their rater) lietly to commercial activity with little atteo to permanent colonial policy; and in the 4 MI st with England under Cromwell and &mit tile 'early years of the Restoration the Dote ' ere thoroughly worsted. France was from making an early entry into the commercial and colonial scramble through the religious divisions that led to the civil wars of the I part of the 16th century. Even when she ,i :nake some systematic attempt to con tend ,s , first-class commercial and colonizing sow. h,tr strength was sapped by the suicidal pcdic of Louis XIV, who at the critical mo ment waited the national energy of France in a fettle attempt to extend the eastern bound ary i th.it country. France was immensely more rich _Ind powerful than England in the 17th and sal centuries, but lost out in the final con flict •.T use of a corrupt administration, the failt r t,i devote her resources to the strength enin her colonies, and the adoption of a fata,.. .weak colonial policy—that of scattered unlit occupation. England. which emerged iron is first period of European expansion as tI ading colonial and commercial state of the ern world, was hut a small and weak tom after its loss of the Continental terri tory it the time of Elizabeth. Her rising sea- :r was based upon the naval training affo her sailors by buccaneering expeditions asrat the Spaniards and was proved by the dent on of the Spanish Armada in 154 The tch were vanquished in the the tiro century and the duel of years with France for colonial supremacy began. Aside from the fact that England took her colonial enterprise seriously and France Icoked upon it as a °side issue* as compared with the dynastic struggle on the continent of Europe, the chief significance of this century long contest was that it represented a struggle between two different colonial systems — the in tensive occupation and exploitation of a limited area versus the extremely meagre occupation of a vast territory by a few soldiers and traders. In 1688 there were about 300,000 English col onists in the narrow Piedmont region of the Atlantic Coast, while there were scarcely 20,000 Frenchmen in the vast regions of Canada and the Mississippi Valley. With the French handicapped by futile dissipation of energy elsewhere and infinitely weaker in colonial policy, there could he only one issue to the conflict, and by the Treaty of Paris of 1763 Great Britain took over the possession of the great majority of the French colonies in Amer tea. See COLONIAL WARS IN AMERICA; COL ONY ; EXPLORATION IN AMERICA.
But this very triumph of Great Britain over her traditional European enemy only involved her in a more serious struggle with her must important colonial domains, the English col onies of the Atlantic Coast. The occupation of the vast territory conquered from France west of the Alleghenies forced upon England a reconstruction of her hitherto loosely organ ized and indifferently enforced colonial policy. This imperial organization necessitated addi tional expenditures, which Great Britain pro posed to raise through direct taxation and through an enforcement of the long-dor mant navigation laws. But this fiscal policy aroused the opposition of the colonial merchants, long accustomed to unhampered smuggling, and they united with the debtor landlords of the southern colonies to give vitality to that as piration for independence which Mr. Sydney George Fisher has analyzed with such acumen. The revolution which ensued was in its essence a civil war within the British empire, in which British and American liberals made common cause against conservatives and imperialists in both countries, and the colonial cause prevailed chiefly on account of that defection of the British Whigs which Trevelyan. Fiske and Lecky have clearly recognited and described. The loss of the more important British col onies in America produced a marked tendency toward the granting of greater autonomy in the British colonies that remained. This changing attitude was reflected in the Quebec Acts of 1774 and 1791, the Irish Parliament Act of 1782, and the India Act of 1784, but the thor oughgoing revision of British imperial policy in a liberal direction did not take place until a half century later, following Lord Durham's famous Canada report of 1839. In this first
phase of European expansion Germany. Aus tria and Russia failed to participate. Germany because of the distracting religious, wars and Austria and Russia on account of inertia or propinquity to a vast amount of unoccupied districts in Asia_ Their remaining without the circle of the new commercial and colonial powers was most influential in de unning the lines of their later political and -manic evolution and possessed the greatest significance for their subsequent history and for that of the rest of the world. It should not be forgotten, however, that Russia was beginning that expansion eastward through Si beria which was to make her an important participant in the second great period of col onial expansion after 1870.
3. The Larger Aspects and Results of the Commercial Revolution.—The outstanding effect of the Commercial Revolution and the era of colonization in this first phase was the rude shock which it gave to the medieval order. It broke down the previous isolation, stability and repetition and gave Europeans a new and ever-varying and extending outlook; in other words, it first introduced the dynamic element and the world-wide viewpoint into western European civilization. It further brought a shifting of the centre of progressive civiliza tion from the Mediterranean Basin to northern and western Europe. The economic effects of the period were varied and profound. Com merce was greatly expanded through its be coming oceanic rather than thalassic and through the entry of many new commodities which had been discovered in the process of txploration. The centres of commerce shifted from Italy to western Europe. With the re sulting •intervention of capital' there de veloped the whole mechanism of capitalistic institutions, a greater supply of money, bank ing practices, credit instruments and insurance. Newof commercial organization up, such aschartered companies, joint-stock companies and commercial corporations. A definite type of economic theory emerged in what was variously known as Mercantilism, Cameralism and Colbertism, but which in all cases consisted in a strict state regulation of national industrial and commercial activities. Again, there emerged a new class of ever greater proportions, the new merchant group or bour geoisie, who were to play so important a part in the commerce and politics of the age. Finally, probably the most significant economic result of the Commercial Revolution was its preparation of Europe for the most far-reach ing transformation in human history, the In dustrial Revolution of the 18th and 19th cen turies. Through producing a greater supply of capital, introducing and improving the mech anism of credit and banking, developing more scientific and efficient methods of industrial and commercial organization, extending commercial relations and expanding the volume of com merce, opening up new markets, and increas ing the power of the business classes in the law-making bodies, with the resulting protection of business interests, the Commercial Revolution alone made possible the coming of the great industrial and social revolution associated with the growth of mechanical industry, the de velopment of the factory system and the rise of the urban age. England led in this new industrial era solely because of her more ex tensive and successful participation in the previous colonial and commercial activity. In the field of social results there were intro duced new standards of comfort; new food products; novel beverages with important social consequences, such as the rise of the coffee houses and the use of narcotics, especially tobacco. The stimulation of travel and emigra tion, and a general increase in the mobility of mankind ensued. In the political realm the Commercial Revolution produced the national dynastic states, which were built on the ruins of feudalism by, the monarchs through the increase in the royal income and by the aid of the new merchant classes. The new middle class at first supported the monarchs, but later rose against the old order, terminated despotism and established the beginnings of representative government. The rise of the national states and the usages and necessities of commerce led to the development of international Law. which was first systematized in the 'De jure belli et pacis' of Hugo Grotius (1625). In the realm of intellectual and cultural influences the effects of the Commercial Revolution were most significant. It gave an irreparable shock to the Patristic and Scholastic outlook and view of man and the world. The discoveries brought to Europe the most prolific and varied types of scientific data, stimulating general sci entific curiosity and giving a great specific pulse to the natural sciences, such as astronomy. geography, cart. Iftraphy and biology. The social and moral sciences were also affected, in turn. The discovery of the new types of man produced the origins of anthro pology, while the observation of diverse cus toms and institutions gave rise to the study of comparative jurisprudence, philology, religion and ethics and to the growth of descriptive world history. These combined to develop a philosophy of science, which appeared in the writings of Bacon and Descartes; a secular and human outlook..exemplified in the writings of Montaigne; a eulogy of the state of nature in the early works of Rousseau; and an applica tion of the new concepts to the problems of intellectual and social progress bthe English Deists and the French Philoeopbes. Further. artistic and decorative standards were pro foundly modified by the introduction of new designs from the Orient. In short, there were few of the novel trends in thought and culture in the late 17th and 18th centuries which were not in one way or another intimately related to the reaction of the European expansion upon Europe itself. See BANKS AND BANKING — ORIGIN AND DEVELOPMENT; COMMERCE. HLSTORY or; DEMOCRACY, HISTORY or; Harare. In Rise AND DEVELOPMENT; NATIONALLSEL IV. The Revolt Against Mercastaliam sad the Old Colonial Order. 1. The Backyraund of the Reaction.— The old colonial system was built up chiefly by the dynastic national states at a time when they were dominated by royal abso lutism, narrow chauvinism, and an extremely archaic and fallacious view of economic and commercial theory. It was constructed as much on the basis of a desire to promote an increase of wealth in royal hands as to make possible the maximum expansion of national trade It was a narrow political and class policy rather than a broad democratic or socialized ponce dure. Therefore, it naturally aroused the ani mosity of the merchant classes at home and im the colonies who desired a maximum derive of activity and business. Further, the attempt to enforce this unpopular policy proved "wpm $ive, especially in the face of colonial resistance. Finall the hit currents promoted by the Gcmmereiel Revd.