Encyclopaedia Britannica > Volume 21, ROT-Siam

828 SHIP
buys raw products from Portugal and Portugal buys manufactured
cloth from England, then the operation of trade between them is
such that Portugal stimulates English industry and sets English
labour in motion to a far larger extent than English consumption
stimulates that of Portugal ; it was believed that this relative
stimulus might be detected by examining the balance of trade,
and that, if by an ingenious adjustment of duties the balance could
be kept in her favour, the trade would be benefiting England more
than it stimulated the progress of her possible rivals. In the
present day we look at the volume of trade and trust that both are
gainers ; in those centuries they looked at the kind of gain that
accrued and tried to ensure that England gained more than her
possible enemies. Thus it was generally held that by commercial
intercourse between England and France the French gained rela¬
tively more than the English; to the legislators of the time it seemed
desirable to impose such conditions as should alter this state of
affairs, or, if no agreement could be come to on the terms of a
treaty, the trade should be stopped altogether, lest by continuing
to overbalance England in trade the French should be enabled to
overbalance her in power. These ideas of commercial policy
dominated the whole of British legislation for shipping1 from the
beginning of the 17th century till after the Napoleonic wars ; the
preference which was given to English ships, English built and
English manned, was enforced in a manner that was prejudicial to
the development of the colonies by the Navigation Act of 1651,
and was subsequently embodied in the orders in council. But
these ideas are expressed most clearly in such discussions as those
regarding the Methven treaty with Portugal. Without attempting
to advocate a system of which the unwisdom has become patent in
our own day, it may yet be worth while to note that it was during
this regime that England acquired her position as the great ship¬
ping nation of the world, and passed the Dutch and French in the
struggle for naval supremacy. Napoleon gave unconscious testi¬
mony to the effectiveness of the commercial policy for building
up the strength of the nation when he sought to humble England,
not by direct attack, but by destroying the trade and shipping by
means of which she had raised herself to power.
This policy of subordinating the interests of shipping as a trade
and means by which merchants acquired wealth to the policy and
power of the nation as a whole had another side. Revenue for
war expenses was furnished almost entirely by the mother country;
neither Ireland nor the colonies contributed at all largely to the
burden of maintaining the national struggle with Continental
rivals. Hence it was undesirable that these dependencies should
develop at the expense of the mother country, as by so doing they
would reduce the fund from which parliament drew for the
expenses of the realm. Hence, while England was always willing
to develop resources or industries—like the linen trade in Ireland
—which did not compete with and could not undersell existing
English manufactures, her politicians were unwilling to allow her
dependencies to become her competitors in trade so long as they
did not co-operate in maintaining power. Hence the galling
restrictions to which the Irish and the colonists were subjected,
both with regard to the development of some of their resources and
the carrying on of profitable trade with other colonies or foreign
countries. But it must not be forgotten that English merchants
suffered in the same sort of way, as changes of political relations
at once brought about changes in the conditions of trade, and that
in at least one case the interests of enterprising farmers at home
were set aside in favour of protecting an established industry in
the colonies. The subordination of the craftsman and trader
interest to the public policy of the realm brought about a system
of galling regulations which pressed hardly on many persons,
though they were most obviously baneful to Ireland and the
colonists, who had not so much interest in the political objects for
which their wealth was sacrificed.
It is unnecessary to attempt to illustrate in detail the applica¬
tion of these principles; it only remains to add that, whether in
spite of these regulations or because of them, the shipping of
England increased vastly during the 18th century. This was
partly due to the greater facilities which were granted for procur¬
ing capital for trading ventures. In mediseval times a merchant
could hardly obtain the command of additional capital, unless by
means of a temporary partnership, or loans on bottomry ; but the
objection to usury was fast giving way, and the public were willing
to lend capital and to share in the profits of trading. The practice
of trading on borrowed capital, and of obtaining temporary loans
from goldsmiths, was common enough all through the 17th century,
but the development of the banking system and the new forms of
credit which thus became available gave still greater scope to the
enterprising shipper. The full fruits of the new power were only
shown, however, in the beginning of the 18th century, when the
rivalry of the Old and New East India Companies and the story of
1 It was pursued, but less systematically, all through the Tudor
teigns or even earlier. Compare 1 H. VI I. c. 8, 32 H. VIII. c. 14,
1 El. c. 13, also the Assize of Arms in 1181.
PING
the Darien expedition and the South Sea Bubble show how willing
the British public were to pour their capital into trading under¬
takings. Among the companies which were started about this
period there were two which have exercised a most salutary
influence on British shipping. The. Royal Exchange Assurance
(6 Geo. I. c. 18) and the London Assurance revolutionized the whole
system of marine assurance, and did so much to relieve skippers
from the losses they suffered through the risks of commerce as to
give considerable encouragement to the business. The plantations
were developing into important settlements; the British merchant
had outdone his Dutch rivals; and the East India Company was
pursuing its course of progress in the East. There can be no
wonder that, with so many opportunities for trading, and such
new facilities for obtaining capital and assuring against risk, the
shipping of the country developed during the 18th century. It is
unnecessary to dwell on the shocks it received at the time when
the American colonies asserted their independence (27 and 28 Geo.
III.) or in the life and death struggle of the Napoleonic wars.
The difficulty of recasting the restrictive system under which
English merchants plied their trade was very great, and when it
broke down in regard to America and Ireland (20 Geo. III. cc. 6,
10) it was becoming apparent that its days were numbered. The
doctrines preached by Adam Smith soon began to bear fruit; the
practical difficulty of regulating commerce rendered politicians
more willing to let it regulate itself; and the controversy between
the exclusive companies and the interlopers or independent mer¬
chants once more came to the front. It was during the reign of
George IV. that the old system was practically abandoned and that
the greater part of the old companies were dissolved, and trade to
all parts of Africa, to the Levant, and to China became open to all
British subjects. The East India Company maintained its posi¬
tion in part despite its many critics for another half century,
and the peculiar conditions of the trade of the Hudson’s Bay
Company have made it desirable to maintain that privileged cor¬
poration till the present time.
It became still more obvious that the old policy of regulating
the commerce of the country in the supposed interests of its
power was being abandoned when Huskisson reformed the tariff
in 1825. The measure he succeeded in carrying w^as not so
thoroughgoing as the one he proposed, but its principle was that
the customs duties should bo levied for revenue objects only, and
not with the view of maintaining British merchants in one parti¬
cular employment of their capital. Later the repeal of the corn laws
(1846) and navigation laws (1849) removed the last vestiges of the
old commercial policy which had ruled over the development of
British shipping almost from the earliest times, but which had been
steadily and systematically pursued for three hundred years.
It was thus that Adam Smith’s criticisms worked so effectively
as to realize his dreams at no great interval of time. His deeper
reasons for objecting to the commercial system of the 18th century
lay in the fact that the colonial trade and shipping altogether
seemed to him to have received an unhealthy stimulus, and that
the country would be in a sounder economic position if capital
were employed at home in developing native resources, and foreign
trade built upon a foundation of highly developed native industry.
But the removal of the stimulus did not have the effect he antici¬
pated, or restore the “balance” between industry and shipping.
England is far more dependent than ever before on her relations
with foreign countries, and therefore on her shipping, for the
materials of her manufacture and her food, as well as for markets
for her products. She is further removed than ever from that
condition of “opulence” which has, according to Adam Smith,
the greatest promise of stability and progress.
This has undoubtedly been due to the immense developments in
manufacturing in which England, with her wealth of coal and iron,
led the way. This reacted on shipping in many ways. England
came to be the workshop of the world, and her shipping was
freighted with soft goods from Lancashire and Yorkshire, and
witli hardware and machinery, to be conveyed to the most distant
parts of the globe. But not only were the opportunities for trading
immensely increased; the application of the steam engine to
transit by water has accelerated communication, and rendered it
so regular and certain as to give an extraordinary stimulus to
foreign trade. The first steamboat that was more than a mere
toy made its trial in 1807, and since that time steam shipping
has been more and more substituted for the old sailing vessels.
Still more recently there has been a considerable change in the
construction of ships, from the success which has attended iron
shipbuilding. The first experiment, which was generally deemed
exceedingly rash, was made in 1851.
It is impossible to get satisfactory data for a comparison of the
relative importance of English and foreign shipping for a long
period; but it may be assumed that the shipping of the Italian
republics and of the Hanse League excelled that of England during
the Middle Ages, that in the 16th century Spain was far ahead of
her when she could send such fleets to the West and fit out a
Spanish Armada, and that in the 17th and 18th centuries respect-