Commercial Revolution

The Commercial Revolution lasted from (approximately) 1520-1650. This was a period of European economic expansion, colonialism, and mercantilism. This period was marked by the fortunes, and misfortunes, of Spain, which amassed (and lost) ~200 tons of gold and 16,000 tons of silver. In 1580, Spain would take control of Portugal.

118.England gained influence by sending out probes. John Cabot sailed during the reign of Henry IV and discovered (1497) Cape Breton Island off the coast of Novascotia. Also, John Hawkins and Francis Drake sailed around the Earth (1558-1603) and raided the Spanish gold ships. They established England's future maritime operations. England began establishing colonies in the New World. Their first attempt was the colony of Roanoke Island (1585: 17th), which failed miserably and all of the settlers died of starvation and freezing. The English then settled in Jamestown (1607: 17th), which succeeded and became the first permanent North American English settlement. The English eventually acquired (1636) Madras (17th) on the Southeastern coast of India, and took over (1682) Portugal's naval bases.

119.John Cabot (1461-98: 15th) was an English explorer, born in Genoa, Italy. He moved to Venice in 1476 and became involved in Eastern trade. Like Columbus he came to believe that the riches of East Asia might be more easily reached by sailing west. He went to Bristol, England in the 1480s, a reputable base for discovery. Cabot sailed from Bristol in 1497 and discovered the North American coast, touching at Cape Breton Island (17th) or Newfoundland, off the coast of Novascotia. In 1498 he again sailed for America to explore the coast but the fate of the journey is unknown. The English claims in North America were based on his discovery.

120.John Hawkins (1532-95: 16th) was an English admiral. He led extremely profitable expeditions on the African coast to capture slaves. Hawkins pretended to betray Queen Elizabeth I in 1571 by offering his services to the Spanish, in order to obtain the release of prisoners and to discover plans for the proposed Spanish invasion of England. In 1571 he entered Parliament and became treasurer and comptroller of the navy. He made important improvements in ship construction and rigging. In the great defeat of the Spanish Armada (1588: 16th), Hawkins commanded the Victory and was knighted for his services. He died at and was buried at sea.

121.Francis Drake (1540-96: 16th) was an English navigator and admiral and the first Englishman to circumnavigate the world (1577-80). 1572 he set out on his first famous expedition raiding along the Isthmus of Panama and bringing back 30 tons of silver. For the next few years he commanded the sea forces against a rebelling Ireland. He was the first Englishman to make the passage through the Straits of Magellan. He discovered San Francisco Bay regions for Queen Elizabeth I. She in turn, knighted him aboard the Golden Hind. He was a vice admiral in the fleet that defeated the Spanish Armada (1588). Drake died of dysentery and was buried at sea.

122.The French followed the English to the New World, and settled (1608) the Quebec Champlain (17th). They did not populate North America as much as the English did, because they did not allow the Huguenots to travel to the New World and the heavy governmental regulations placed on trading there were keeping people from settling there. The French also created (1664) the French East India Company that was a joint-stock company.

123. England restricted colonies in their trading with Europe. When they did ship goods, they had to ship them on only British ships.The colonies had to pay a tax on some of the the goods that they shipped directly to Europe. Those included naval stores (17th), which were anything that had to do with ships. Thus, the colonies had to pay taxes when directly shipping things such as turpentine (17th) and resin (17th) (both used for varnish on ships), pitch (17th) and tar (17th) (both used for waterproofing), and varnish (17th) (preserved the life of the wood on sea vessels).

124.Capitalism, or the making of profits and reinvestment of those profits into new and larger business ventures, was the economic philosophy that replaced mercantilism.

125.Queen Elizabeth I did not have a lot of money to fling around, so she (the administration) encouraged rich people to each invest a little in what was called a joint-stock company. These companies amassed a lot of capital to fund business ventures, and they fully realized the idea of limited liability (17th). Initially, these joint-stock companies were only formed to fund one specific venture that once completed was finished and determined the final profits. Eventually, they developed into the modern-day corporations that are self-perpetuating, meaning they continue through constant reinvestment and organization and they do not end after a certain task has been accomplished. The first such join-stock company was formed in 1600 and called the British East India Company that pushed into the Persian Gulf (and actually took control of it later).

126.The abundance of money caused inflation, or the decrease in the value of money and an increase in the value of goods. This inflation widened the gap between the rich and the poor. The inflation was worsened by a growing population but a static production level, low employee salaries and a rising cost of living.

127.Inflation and “overpopulation” affected agriculture. The landholding aristocracy suffered under the inflation, since they depended on fixed rents payed by peasant tenants that were becoming poorer and unable to pay their lords (the aristocracy tried to counteract this by making short term leases of their lands in order to reevaluate the rent often, but it didn't work). 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. This attracted the rich bourgeois (burghers/city-dwelling middle class), who wanted to by land (to move up in social status, since land was a symbol of status). The bourgeois landholders broke the rules of allowing the peasants to have free access to the “common lands” (public lands) by buying them and enclosing them with fences (therefore driving peasants off of the land) in a process known as “enclosure” that allowed for a more efficient way of raising cattle (mainly sheep's wool for the textile industry). This “enclosure” forced the peasants out of the rural lands and into the cities, which made the cities' populations swell, and this growth led to the later industrial revolution.

128.During this period (1450-1600s), the economic focus shifted from the Mediterranean to the West (Spain, France, the Netherlands, and to some extent England); this shift occurred after Portugal's Vasco Da Gama (see 2.13) rounded the Cape of Good Hope and landed in Calicut, India, which destroyed the Italian city-states' monopoly on eastern trade with the Ottoman Turks. Antwerp (17th), a territory in the Netherlands, became the leading economic state in capitalism (1485-1576) until it was sacked in 1576 by the looting soldiers of the “Spanish Fury” (see 2.161). Antwerp had one of the first money exchanges in the New World where people could exchange one type of currency for another; such a money exchange was called a Bourse (17th).

129.Later, the Bank of Amsterdam issued paper money (not the first to do so) to cope with the hassle of metal money.