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Name: _______________________________________________________
Homework: the Commercial Revolution
“original”
When you think of the
C
DUE: TUE. 2 DEC. 2014
Global History 2
Commercial Revolution
C C
$$$
… think of the
as standing for the
in
ash …
… Words that go with it … banking … trade
[ exchange of goods ] … the Crusades … remember the Crusades started out as religious … became militaristic
& wound up economic … inadvertently leading to trade between Europe and the Middle East …
The goal tonight … talk about this thing called the Commercial Revolution … what preceded it … yes we’re
going all the way back in time [ Ancient Egypt ] … but also forward in time … through the Middle Ages …
post Spanish Armada [ Queen Elizabeth I and the Royal Stock Exchange ] to the Industrial Revolution …
Question … During the Neolithic Revolution … you know back around say 3000 BC .. in a land called Ancient
Egypt … well how did people get goods … clay pots, tools, weapons …or for that matter .. how did they obtain
food to eat?
In Ancient Egypt, a society where most of the population made a living from agriculture and surpluses were
small, trade was limited. The needs of the farming population were basic: grain for baking bread and brewing
beer, dried fish, vegetables, some linen for a simple loincloth and mud bricks for a hut. Food and flax they could
grow themselves. Mud was found at the nearby river bank. And sometimes there was a surplus which could be
exchanged for little luxuries. much of the economy was centrally organized and strictly controlled.
Trade was done by barter, a reasonably efficient method when mostly basic necessities were exchanged.
Even after coined money was introduced in the second half of the first millennium BCE, barter continued to be
widespread among the farming population for centuries.
Grain and oil often served as a kind of coinage . This use of basic storable food stuffs had both advantages and
drawbacks. If all one earned was expended on food anyway and there was practically no choice about the kind
of food one could get, then eating one's wages was a system less cumbersome than being remunerated in specie
and having to acquire the food afterwards. During famines which were quite frequent, one did not starve if one
had savings; and many a peasant rose on the social ladder by exchanging hoarded corn for land during times of
dearth.
[17]
On the other hand storing grain required facilities. Wastage because of groundwater, fire and pests such as rats
and insects was high. Stores could not be hidden, neither from robbers nor from tax-collectors. Bulky
commodities were more difficult to transport than precious metals. If your needs were out of the ordinary, you
might have to use middlemen to get what you wanted. The question of measuring arose as well, as jars were not
exactly of standardized size and weights and scales not easy to come by. Then, as today, business went
smoothly as long as there was goodwill and both parties were honest:
Although the ancient Egyptians did not use coinage until the Late period, they did use a type of money-barter
system,[82] with standard sacks of grain and the deben, a weight of roughly 91 grams (3 oz) of copper or silver,
forming a common denominator.[83] Workers were paid in grain; a simple laborer might earn 5½ sacks (200 kg
or 400 lb) of grain per month, while a foreman might earn 7½ sacks (250 kg or 550 lb). Prices were fixed across
the country and recorded in lists to facilitate trading; for example a shirt cost five copper deben, while a cow
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cost 140 deben.[83] Grain could be traded for other goods, according to the fixed price list.[83] During the 5th
century BC coined money was introduced into Egypt from abroad. At first the coins were used as standardized
pieces of precious metal rather than true money, but in the following centuries international traders came to rely
on coinage.[84]
In the fifth century BCE, foreign coins were introduced. At first these imported gold and silver pieces were used
by the Egyptians as precious metal of standardized weight rather than true money. From the middle of the 4th
century BCE onwards, as Mediterranean traders came to rely more and more on coined metal as means of
exchange, and as the Greek mercenaries who had been content until then with being given land for services
rendered, demanded payment in specie, the Egyptian mint produced coins similar to Athenian tetradrachms .
Under the Ptolemies coins were struck bearing the effigies of the Hellenist rulers.
While silver and gold coins were occasionally used, everyday goods were generally paid in bronze , just as in
earlier times exchange values had been calculated based on the copper standard.
[14]
[18]
The Hellenistic period was characterized by the spread of Greek culture across a large part of the known world.
Greek-speaking kingdoms were established in Egypt and Syria, and for a time also in Iran and as far east as
what is now Afghanistan and northwestern India. Greek traders spread Greek coins across this vast area, and the
new kingdoms soon began to produce their own coins. Because these kingdoms were much larger and wealthier
than the Greek city states of the classical period, their coins tended to be more mass-produced, as well as larger,
and more frequently in gold. They often lacked the aesthetic delicacy of coins of the earlier period.
Still, some of the Greco-Bactrian coins, and those of their successors in India, the Indo-Greeks, are considered
the finest examples of Greek numismatic art with "a nice blend of realism and idealization", including the
largest coins to be minted in the Hellenistic world: the largest gold coin was minted by Eucratides (reigned 171–
145 BC), the largest silver coin by the Indo-Greek king Amyntas (reigned c. 95–90 BC). The portraits "show a
degree of individuality never matched by the often bland depictions of their royal contemporaries further West"
(Roger Ling, "Greece and the Hellenistic World").
The most striking new feature of Hellenistic coins was the use of portraits of living people, namely of the kings
themselves. This practice had begun in Sicily, but was disapproved of by other Greeks as showing hubris
(arrogance). But the kings of Ptolemaic Egypt and Seleucid Syria had no such scruples: having already awarded
themselves with "divine" status, they issued magnificent gold coins adorned with their own portraits, with the
symbols of their state on the reverse. The names of the kings were frequently inscribed on the coin as well. This
established a pattern for coins which has persisted ever since: a portrait of the king, usually in profile and
striking a heroic pose, on the obverse, with his name beside him, and a coat of arms or other symbol of state on
the reverse.
Granting credit to one another was probably quite widespread. Perhaps one of the parties did not
have what the other wanted at the time of the exchange. Maybe the amount of one single transaction was too
small and a number of outstanding payments were settled together, or one party put off delivering his wares
until it was more convenient - and too late as it seems to have been in the case of the scribe Amennakht who
died without having paid for a coffin:
Most daily transactions were based on oral agreements, given the fact that the sums involved were often small,
people could neither read nor write and scribes were not always available. But when the amount was significant,
the wise lender had it put in writing.
enough to be written on
IOU's were written on pot sherds or any other piece of matter flat
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During the Hellenistic period this banking system became a countrywide and not just a local phenomenon.
Accounts were kept at a central bank at Alexandria and the granaries formed a giro network.
Making sure of the identity of a borrower was of some consequence to the bank who recorded his ancestry, age,
physical characteristics, profession and the like.
Coinage was introduced by the Roman Republican government in
circa 300 BC, "surprisingly late" in southern European terms; the Greek world had already been using
coinage over the previous three centuries. The Greek colonies in southern Italy had been using coins for most of
this time, and this technology had also been adopted by a number of other Italian cities, such as Naples,
Taranto, Velia, Heraclea, Metapontum, Thurii and Croton, who produced them in large quantities during the 4th
century BC to pay for their wars against the inland Italian groups encroaching on their territory. For these
reasons, the Romans would have certainly known about coinage systems long before their government actually
introduced them.[2] By the time that they introduced a system of coinage, the Roman state had become a
dominant force in the western Mediterranean, having defeated Carthage during the Second Punic War of 218–
201 BC.[3] The government's reasons behind adopting coins might have been cultural, in that they wanted to
adopt a Greek institution at a time when Roman society was increasingly coming under the cultural influence of
the Hellenic world.[4]
The type of coinage that Rome introduced was unlike that found elsewhere in the ancient Mediterranean,
combining a number of "unusual elements".[5] One of these early types of Roman coinage was the large bronze
bars that are now known as aes signatum or 'struck bronze'. These bars measured about 160 by 90 millimetres
(6.3 by 3.5 in) and weighed around 1,500 to 1,600 grams (53 to 56 oz), being made out of a highly leaded tin
bronze. Although similar metal currency bars had been produced in Italy, and in particular in northern Etruscan
areas, these had been made of an unrefined metal with a high iron content, known as aes graves[5]
The imagery on coins took an important step when Julius Caesar issued coins bearing his own portrait. While
moneyers had earlier issued coins with portraits of ancestors, Caesar’s was the first Roman coinage to feature
the portrait of a living individual. The tradition continued following Caesar's assassination, although the
imperators from time to time also produced coins featuring the traditional deities and personifications found on
earlier coins. The image of the Roman emperor took on a special importance in the centuries that followed,
because during the empire, the emperor embodied the state and its policies. The names of moneyers continued
to appear on the coins until the middle of Augustus’ reign. Although the duty of moneyers during the Empire is
not known, since the position was not abolished, it is believed that they still had some influence over the
imagery of the coins.
The main focus of the imagery during the empire was on the portrait of the emperor. Coins were an important
means of disseminating this image throughout the empire. Coins often attempted to make the emperor appear
god-like through associating the emperor with attributes normally seen in divinities, or emphasizing the special
relationship between the emperor and a particular deity by producing a preponderance of coins depicting that
deity. During his campaign against Pompey, Caesar issued a variety of types that featured images of either
Venus or Aeneas, attempting to associate himself with his divine ancestors. An example of an emperor who
went to an extreme in proclaiming divine status was Commodus. In 192, he issued a series of coins depicting
his bust clad in a lion-skin (the usual depiction of Hercules) on the obverse, and an inscription proclaiming that
he was the Roman incarnation of Hercules on the reverse. Although Commodus was excessive in his depiction
of his image, this extreme case is indicative of the objective of many emperors in the exploitation of their
portraits. While the emperor is by far the most frequent portrait on the obverse of coins, heirs apparent,
predecessors, and other family members, such as empresses, were also featured. To aid in succession, the
legitimacy of an heir was affirmed by producing coins for that successor. This was done from the time of
Augustus till the end of the empire.
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Featuring the portrait of an individual on a coin, which became legal in 44 BC, caused the coin to embody the
attributes of the individual portrayed.
Practices established during the times of Ancient Egypt, Greece & Rome continued during the Middle Ages.
Of course the problem with coins … just like today, especially with pennies … is their weight. One coin … no
problem … however 100 pennies … the weight & size increases tremendously.
During the medieval times, money consisted of metal coins. Paper currency was
unknown at the time. The value of the coin depended on which type of metal it was made from. The most
valuable coins were gold then silver, and then copper. This was widely recognized as the 'standard' of currency
throughout the medieval world. There were many different coins, each of which had different designs, weights,
inscriptions, and the purity of the metals varied greatly. In the Byzantine Empire, gold, silver, and copper coins
were minted and used throughout the medieval period. The most important Byzantine coined was the gold
nomisma. This is because it was the standard of exchange in the Mediterranean trade.
TRADE eventually led to a thing called … the Commercial
Revolution … which was a period of European economic expansion, colonialism, and mercantilism
which lasted from approximately the 16th century until the early 18th century. It was succeeded in the mid-18th
century by the Industrial Revolution. Beginning with the Crusades, Europeans rediscovered spices, silks, and
other commodities rare in Europe. This development created a new desire for trade, and trade expanded in the
second half of the Middle Ages. European nations, through voyages of discovery, were looking for new trade
routes in the 15th and 16th centuries, which allowed the European powers to build vast, new international trade
networks. Nations also sought new sources of wealth. To deal with this new-found wealth, new economic
theories and practices were created. Because of competing national interest, nations had the desire for increased
world power through their colonial empires. The Commercial Revolution is marked by an increase in general
commerce, and in the growth of financial services such as banking, insurance, and investing.
The commercial revolution ran from approximately the late 14th century, through the 18th century,
A combination of factors drove the Age of Discovery. Among these were geopolitical, monetary, and
technological factors. The Europeans involved in the Age of Discovery were mainly from Britain, France, the
Netherlands, Spain, and Portugal. During this period (1450-17th century), the European economic center shifted
from the Islamic Mediterranean to Western Europe (Portugal, Spain, France, the Netherlands, and to some
extent England). This shift was caused by the successful circumnavigation of Africa opening up sea-trade with
the east: after Portugal's Vasco da Gama rounded the Cape of Good Hope and landed in Calicut, India in May
1498, a new path of eastern trade was possible ending the monopoly of the Ottoman Turks and their European
allies, the Italian city-states.[5] The wealth of the Indies was now open for the Europeans to explore; the
Portuguese Empire was one of the early European empires to grow from spice trade.[5] Following this, Portugal
became the controlling state for trade between east and west, followed later by the Dutch city of Antwerp.
Direct maritime trade between Europe and China started in the 16th century, after the Portuguese established
the settlement of Goa, India in December 1510, and thereafter that of Macau in southern China in 1557. Since
the English came late to the transatlantic trade,[6] their commercial revolution was later as well.
In 1453, the Ottoman Turks took over Constantinople, which cut off (or significantly increased the cost of)
overland trade routes to the Far East,[7] so alternate routes had to be found. English laws were changed to
benefit the navy, but had commercial implications in terms of farming. These laws also contributed to the
demise of the Hanseatic League, which traded in northern Europe.[8] Because of the Reconquista, the Spanish
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had a warrior culture ready to conquer still more people and places, so Spain was perfectly positioned to
develop their vast overseas empire.[9] Rivalry between the European powers produced intense competition for
the creation of colonial empires, and fueled the rush to sail out of Europe.[10]
The need for silver coinage also had an impact on the desire for expanded exploration as silver and gold were
spent for trade to the Middle and Far East. The Europeans had a constant deficit in that silver and gold coin only
went one way: out of Europe, spent on the very type of trade that they were now cut off from by the Ottomans.
Another issue was that European mines were exhausted of silver and gold ore. What ore remained was too deep
to recover, as water would fill the mine, and technology was not sufficiently advanced enough to successfully
remove the water to get to the ore.
Significant contributors to European exploration include Prince Henry the Navigator of Portugal, who was the
first of the Europeans to venture out into the Atlantic Ocean, in 1420. Others are Bartolomeu Dias, who first
rounded the Cape of Good Hope; Vasco da Gama, who sailed directly to India from Portugal; Ferdinand
Magellan, the first to circumnavigate the Earth; Christopher Columbus, who significantly encountered the
Americas; Jacques Cartier, who sailed for France, looking for the Northwest Passage;[15] and others.
The economy of the Roman Empire had been based on money, but after the Empire's fall, money became
scarce; power and wealth became strictly land based, and local fiefs were self-sufficient. Because trade was
dangerous and expensive, there were not many traders, and not much trade. The scarcity of money did not
help;[16] however, the European economic system had begun to change in the 14th century, partially as a result
of the Black Death, and the Crusades.[17]
Banks, stock exchanges, and insurance became ways to manage the
risk involved in the renewed trade. New laws came into being. Travel
became safer as nations developed. Economic theories began to develop in light of all of the new trading
activity. The increase in the availability of money led to the emergence of a new economic system, and new
problems to go with it.
The English / British Royal Stock Exchange had been founded by Thomas Gresham
on the model of the Antwerp Bourse, as a stock exchange. It was opened by Elizabeth I in 1571. The Royal
Exchange not only housed brokers but also merchants and merchandise. This was the birth of a regulated stock
market, which had teething problems in the shape of unlicensed brokers. In order to regulate these, Parliament
brought out an act in 1697 that levied heavy penalties, both financial and physical to those brokering without a
license. It also set a fixed number of brokers (at 100), which was later increased as the size of the trade grew.
The Commercial Revolution is also marked by the formalization of
pre-existing, informal methods of dealing with trade and commerce.
Spain legally amassed approximately 180 tons of gold and 8200 tons of silver through its endeavors in the New
World, and another unknown amount through smuggling,[18] spending this money to finance wars and the arts.
The spent silver, suddenly being spread throughout a previously cash starved Europe, caused widespread
inflation.[19] The inflation was worsened by a growing population but a static production level, low employee
salaries and a rising cost of living. This problem, combined with under population (caused by the Black Death),
affected the system of agriculture. The landholding aristocracy suffered under the inflation, since they depended
on paying small, fixed wages to peasant tenants that were becoming able to demand higher wages.[20] The
aristocracy made failed attempts to counteract this situation by creating short-term leases of their lands to allow
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periodic revaluation of rent. The manorial system (manor system of lord and peasant tenant) eventually
vanished, and the landholding aristocrats were forced to sell pieces of their land in order to maintain their style
of living.[21] Such sales attracted the rich bourgeois (from the French word referring to this dominant class,
emerging with commerce), who wanted to buy land and thereby increase their social status. Former "common
lands" were fenced by the landed bourgeois, a process known as "enclosure" which increased the efficiency of
raising livestock (mainly sheep's wool for the textile industry). This "enclosure" forced the peasants out of rural
areas and into the cities, resulting in urbanization and eventually the industrial revolution.
On the other hand, the increase in the availability of silver coin allowed for commerce to expand in numerous
ways. Inflation was not all bad.[22]
Banks
Various legal and religious developments in the late Middle Ages allowed for development of the modern
banking system at the beginning of the 16th century. Interest was allowed to be charged, and profits generated
from holding other people's money.
Banks in the Italian Peninsula had great difficulty operating at the end of the 14th century, for lack of silver and
gold coin.[23] Nevertheless, by the later 16th century, enough bullion was available that many more people could
keep a small amount hoarded and used as capital.[24]
In response to this extra available money, northern European banking interests came along; among them was
the Fugger family. The Fuggers were originally mine owners, but soon became involved in banking, charging
interest, and other financial activities. They dealt with everyone, from small time individuals, to the highest
nobility. Their banks even loaned to the emperors and kings, eventually going bankrupt when their clients
defaulted.[25] This family, and other individuals, used Italian methods which outpaced the Hanseatic League's
ability to keep up with the changes occurring in northern Europe.[26]
Antwerp had one of the first money exchanges in Europe, a Bourse, where people could change currency. After
the Siege of Antwerp (1584-1585), the majority of business transactions were moved to Amsterdam. The Bank
of Amsterdam, following the example of a private Stockholm corporation, began issuing paper money to lessen
the difficulty of trade, replacing metal (coin and bullion) in exchanges. In 1609 the Amsterdamsche Wisselbank
(Amsterdam Exchange Bank) was founded which made Amsterdam the financial center of the world until the
Industrial Revolution. In a notable example of crossover between stock companies and banks, the Bank of
England, which opened in 1694, was a joint-stock company.[27]
Banking offices were usually located near centers of trade, and in the late 17th century, the largest centers for
commerce were the ports of Amsterdam, London, and Hamburg. Individuals could participate in the lucrative
East India trade by purchasing bills of credit from these banks, but the price they received for commodities was
dependent on the ships returning (which often did not happen on time) and on the cargo they carried (which
often was not according to plan). The commodities market was very volatile for this reason, and also because of
the many wars that led to cargo seizures and loss of ships.
Managing risk
Trade in this period was a risky business: war, weather, and other uncertainties often kept merchants from
making a profit, and frequently an entire cargo would disappear all together. To mitigate this risk, the wealthy
got together to share the risk through stock: people would own shares of a venture, so that if there was a loss, it
would not be an all consuming loss costing the individual investor everything in one transaction.[28]
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Other ways of dealing with the risk and expense associated with all of the new trade activity include insurance
and joint stock companies which were created as formal institutions. People had been informally sharing risk
for hundreds of years, but the formal ways they were now sharing risk was new.[29]
Even though the ruling classes would not often directly assist in trade endeavors, and individuals were unequal
to the task,[30] rulers such as Henry VIII of England established a permanent Royal Navy, with the intention of
reducing piracy, and protecting English shipping.[31]
Joint stock companies and stock exchanges
Stock exchanges were developed as the volume of stock transactions increased. The London Royal Exchange
established in 1565 (remember this was around the time of Queen Elizabeth I … late 1500s … England’s
“Golden Age”.
"In the middle of the 13th century Venetian bankers began to trade in government securities. In 1351 the
Venetian government outlawed spreading rumors intended to lower the price of government funds."[32] Bankers
in Pisa, Verona, Genoa and Florence also began trading in government securities during the 14th century. This
practice was only possible, because these independent city states were not ruled by a duke but a council of
influential citizens. The Dutch later started joint stock companies, which let shareholders invest in business
ventures and get a share of their profits - or losses. In 1602, the Dutch East India Company issued the first
shares on the Amsterdam Stock Exchange. It was the first company to issue stocks and bonds.[33]
The Amsterdam Stock Exchange (or Amsterdam Beurs) is also said to have been the first stock exchange to
introduce continuous trade in the early 17th century. The Dutch "pioneered short selling, option trading, debtequity swaps, merchant banking, unit trusts and other speculative instruments, much as we know them."[34]
Insurance companies
A sample insurance contract. Documents such as this helped traders survive losses.
Insurance companies were another way to mitigate risk. Insurance in one form or another has been around as far
back as there are records. What differed about insurance going into the 16th and 17th centuries was that these
informal mechanisms became formalized.
Lloyd's of London came into being in 1688 in English coffee shops that catered to sailors, traders, and others
involved in trade. Interestingly, Lloyd's coffeehouse published a newspaper, which gave news from various
parts of the world, and helped the underwriters of the insurance at the coffeehouse to determine the risk.[35] This
innovation was one of many that allowed for the categorization of risk. Another innovation was the use of ship
catalogs and classifications.
Other forms of insurance began to appear as well. After the Great Fire of London, Nicholas Barbon began to
sell fire insurance in 1667.[36]
Laws were changed to deal with insurance issues.
Economic theory
As the economy grew through the Commercial Revolution, so did attempts to understand and influence it.
Economic theory as a separate subject of its own came into being as the stresses of the new global order brought
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about two opposing theories of how a nation accumulates wealth: mercantilistic and free-trade policies.
Mercantilism inflamed the growing hostilities between the increasingly centralized European powers as the
accumulation of precious metals by governments was seen as important to the prestige and power of a modern
nation. This involvement in accumulating gold and silver (among other things) became important in the
development of the nation-state. Governments' involvement in trade had an impact on the nobility of western
European nations, because increased wealth by non-nobles threatened the nobility's place in society.
Mercantilism
Mercantilism is an economic policy that emphasizes the goal of each nation was to gain as much money
as possible by whatever means. The belief was that the richer the nation the more powerful it was. The idea
the guild system,
behind it was an outgrowth of
as guilds were monopolistic enterprises: they
regulated trade within towns by controlling the creation of goods, regulated themselves through their system of
apprenticeship, kept outside traders from selling goods in the town, and forced outsiders to pay tolls and other
types of payments for the privilege of doing business in that town.[16] Laws were passed to enforce this concept,
such as the English Navigation Acts, and edicts issued by French Minister of Finance Jean-Baptiste Colbert.
Free trade
Capitalism as a theory developed toward the end of the Commercial Revolution, supplanting mercantilism
as the prevailing economic theory. Briefly, capitalism can be described as the private ownership of the means of
production and distribution. Capital is invested in order to produce more capital. The accumulation of capital in
the hands of the entrepreneur made possible the purchase of raw material in greater bulk. The capitalist
entrepreneur could now operate without the restrictions imposed by the urban guilds. This change became
significant with the introduction of the Domestic System, which increased specialization of skills within a more
efficient system of overall production, and allowed farm families to supplement their incomes. This system
challenged the guild system directly, because these home based businesses were located on farms, away from
urban centers.
Colonialism
Mercantilism was a significant driver of Colonialism, as, according to the theory, the colony existed for
the benefit of the mother country. This assumption meant that colonies were prohibited from engaging in their
own independent commerce, and therefore competing with the mother country. Colonies were established to
provide customers, raw materials, and investment opportunities. Other important goals of colonialism were
European political considerations, and religious fervor.[16] The administration of the colonies established by the
Europeans mirrored in some part the mother country. Spain's encomienda system of forced labor in Latin
America and the Philippines was an extension of the Spanish feudal system, with the granting of territory as
part of a royal extension of power. After the Spanish acquisition of the Philippines, the pace of exchange
between China and the West accelerated dramatically. Manila galleons brought in far more silver to China than
the Silk Road. The Qing government attempted to limit contact with the outside world to a minimum.[38] The
Qing only allowed trade through the port of Canton,[39] what is now Guangzhou. Severe red-tape and licensed
monopolies were set up to restrict the flow of trade, resulting in high retail prices for imported goods and
limited demand. Spain began to sell opium, along with New World products such as tobacco and maize, to the
Chinese in order to prevent a trade deficit.
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The English, for their part, used the British East India Company as an
agent of the crown, which was expected to govern and protect the people and commerce of the colony.[16] The
English also developed a commercial empire in North America, India, and Australia, creating colonies, with the
intention of making a profit.[40]
As a result of high demand for tea, silk, and porcelain in Britain and the low demand for British commodities in
China, Britain had a large trade deficit with China and had to pay for these goods with silver. Britain began
illegally exporting opium to China from British India in the 18th century to counter its deficit. The opium trade
took off rapidly, and the flow of silver began to reverse. The Yongzheng Emperor prohibited the sale and
smoking of opium in 1729 because of the large number of addicts.
The French followed the English to the New World, and settled Quebec in 1608. They did not populate North
America as much as the English did, as they did not allow the Huguenots to travel to the New World. In
addition, the heavy governmental regulations placed on trade in France discouraged settlement.
The Portuguese Empire was created through commerce bases in South America, Africa, India, and across
southeast Asia.
Trade monopolies
Governments became involved in trade directly through the granting of royal trade monopolies. For example,
Walter Raleigh had been granted a trade monopoly by Queen Elizabeth, for the export of broadcloth and
wine.[41] Ironically, competition between colonial powers led to their granting of trade monopolies to the East
India Companies.
Triangular trade
A triangular trade occurred in this period: between Africa, North America, and England; and it worked in the
following way: Slaves came from Africa, and went to the Americas; raw materials came from the Americas and
went to Europe; from there, finished goods came from Europe and were sold back to the Americas at a much
higher price.
Because of the massive die-off of the indigenous people, the Atlantic Slave Trade was established to import the
labor required for the extraction of resources (such as gold and silver) and farming.
Law
Laws began to change to deal with commerce, both internationally, and locally within individual countries.
In France, for example, the Ordinance of Marine of Louis XIV was published under the auspices of Colbert in
1691, and was the first complete code of maritime and commercial law; and "when we consider the originality
and extent of the design and the ability with which it is executed, we shall not hesitate to admit that it deserves
to be ranked among the noblest works that legislative genius and learning have ever accomplished." [42]
In England, the Navigation Acts were among the British effort to regulate trade.
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Effects
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The Commercial Revolution, coupled with other changes in the Early Modern Period, had
dramatic effects on the globe. Christopher Columbus and the conquistadors, through their travels, were
indirectly responsible for the massive depopulation of South America. They were directly responsible for
destroying the civilizations of the Inca, Aztec, and Maya in their quest to build the Spanish Empire. Other
Europeans similarly impacted the peoples of North America as well.
An equally important consequence of the Commercial Revolution was the Columbian Exchange. Plants and
animals moved throughout the world due to human movements. For example, Yellow fever, previously
unknown in North and South America, was imported through water that ships took on in Africa.[43] Cocoa
(chocolate), coffee, maize, cassava, and potatoes moved from one hemisphere to the other.
For more than 2000 years, the Mediterranean Sea had been the focus of European trade with other parts of the
world. After 1492, this focus shifted to the Atlantic Ocean by routes south around the Cape of Good Hope, and
by trans-Atlantic trade.
Another important
change was the increase in population. Better food
and more wealth allowed for larger families. [Population growth was
the subject of your reading in the 2nd Agricultural Revolution] The
migration of peoples from Europe to the Americas allowed for European populations to increase as well.
Population growth provided the expanding labor force needed for industrialization.
Another important outcome of Europe's commercial
revolution was a foundation of wealth needed for the
Industrial revolution. Economic prosperity financed new forms of cultural expression
[3]
during this period.
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H05
- 02
the Commercial Revolution
6/28/2017
QUESTIONS:
1. State one word which summarizes the Commercial Revolution.
2. What was “the barter system” … and how and why was it used?
3. When did coins develop … and why … State 2 civilizations which spread / developed them.
4. Which historical event gave rise to trade in the Mediterranean Sea area?
5. What was the problem with coins during Medieval times?
6. What event would increase wealth in European nations during the late 1400s and 1500s?
7. When did the London Stock Exchange exist … what historical event helped its growth?
8. What is the goal and purpose of a bank?
9. What is meant by the term “risk” .. and how does it involve trade?
10. What is a “guild” ?
11. What is an “entrepreneur” ?
12. How did “mercantilism” … and “colonialism” … affect trade … and nation’s wealth?
13. What was “the English East India Company”?
14. What is a “monopoly” … and does it exist today … 21st century … the year 2014?
15. State two (2) changes brought about the Commercial Revolution.
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