there was no usury in such a transaction: the lender went shares in a lawful calling and reaped a lawful gain from his ventures. Thus merchants were not prevented by the usury laws from making use of other people's capital, as well as their own; it was not necessary for the man who was not a merchant to let his money lie idle, he might still join in the ventures of others or he might locate his money and secure a permanent or terminable annuity from rents. Thus it is that these regulations may be regarded as a support rather than as a restraint to the development of our industrial life, when the circumstances of England in the thirteenth and fourteenth centuries are taken into account but these circumstances altered. In the old days a merchant was the owner of a ship or two, who undertook special voyages, and counted up his profit on each separately: but when a carrying trade was developed and intercourse became more frequent, the merchant came to be a great dealer who made his shipments as occasion served. What he then required was the command of capital for general purposes, not a series of partnerships in separate undertakings. When trade began to take this new form, the usury laws came to be a real hindrance to the development of commerce. The accommodation to the merchant was similar in both cases-whether you joined him in a venture which he could not have undertaken alone, and shared his profits whatever they might be, or whether you deposited money with him at a definite rate for him to use as best he could in the general conduct of his business: the latter kind of arrangement was the one the enterprising merchant preferred, but it fell under the definition of usury while the former transaction did not. But it was not till the beginning of the sixteenth century that English trade had developed to such an extent that the usury laws put our merchants to inconvenience. It is unnecessary to trace the changes which rendered craft gilds a restriction rather than a support to the growth of industry. Many of them were badly managed, their resources squandered in display, and the real business of maintaining a good tradition of work and skill neglected. But when the circumstances of society had so far changed that new markets could be opened up by fresh enterprise, above all when the greater division of labour and gradual introduction of machinery rendered capital the more important element in production, the period when they could exercise a beneficial influence had passed away for ever. CHAPTER III ECONOMIC PRINCIPLES AS DIRECTED BY NATIONAL POLICY. 1. Modern Civilisation. 14. WE must pass over a considerable period in our hasty survey before we come to a time when the acknowledged principles in commercial affairs were clearly distinct from those already delineated. The decay of the medieval industrial system was long and gradual, and the new political opinions and commercial habits were formed silently and without attracting much attention. The Reformation marked a breach with the past in many ways, and the religious changes were synchronous with an important social revolution in England: but it was only in the succeeding age that men could look back on the throes through which the nation had passed, and formulate new views of political duty, and justify new industrial habits. These had of course considerable importance while they were growing, and helping to sap the foundations of the old social order: but we do not care so much at present to follow their history, as to trace the influence they exercised on economic life when they were full grown. It is of less importance to notice how they helped to destroy old institutions than to figure to ourselves the new form into which industrial life was moulded. All this we shall understand most clearly if we fix our attention on the period which succeeded the union of the crowns of England and Scotland. The consolidation of England and Wales was the work of a monarch who relinquished foreign conquest that he might give his undivided attention to the government of his realm: the union of the crowns of England and Scotland served indirectly to give questions of domestic policy a much greater importance than formerly, as well as to turn men's minds to the principles on which all rule rests, rather than to the traditions which had held good in one particular realm. Thus the reign of James the First, as a time of keen political discussion and great commercial advance, gives abundant materials for observing the characteristics of the economic doctrines which were consonant with the new political life. 15. There are three broad differences which sever mediæval from Jacobean England,--one purely political, one intellectual, and one of a social character. The rise of separate nationalities had completely broken the unity of Christendom; the whole conception of a divine law had fallen into the background; and the care of industry and commerce had become a matter for national, not merely for local regulation. At the first glance there seems to be some absurdity in talking of a break-up of the unity of Christendom, for the history of Europe in every century has been one of jealousies and wars. At long intervals and by careful manipulation one Pope or another succeeded in summoning several princes together who presented a fairly united front against the followers of the False Prophet; but these coalitions of ill-assorted : materials could not be held together and at no other period can Christendom be regarded as having much semblance of unity. But there may be frequent discords within a family circle, and the fact that there were constant quarrels in Europe does not show that the divisions were deep indeed many of the struggles of the middle. ages were more like civil wars than struggles between nations, for they were contests between the ruler of one province and that of another. But at length some power came to the front through whom one set of provinces after another was consolidated into a single kingdom and through this internal consolidation the differences between one country and another came to be more deeply marked. The Norman and Plantagenet wars in France show us a perfect kaleidoscope of duchies and kingdoms no one could have then foreseen that the eventual consolidation would take shape without adopting the areas of race and language, and severing from us the Channel Islands, and without following the physical outlines and gratifying the ambition of France by securing the Rhine for her boundary. The consolidation of England occurred at a very early period, but centuries after the Heptarchy had been absorbed in Wessex, chronic disorder kept the French provinces asunder and Moors held the richest kingdom of Spain; while it has been only in our own day that the great German people have been consolidated under the leadership of Prussia, and that we once more see a united Italy. The formation of nationalities has been going on slowly if not steadily for centuries; but at the time of the Reformation it had proceeded so far that the broad lines of division in Western Europe were deeply drawn; a trivial quarrel would not serve to make provinces recombine in new |