From exporting her wool and importing her manufactures as England had done during the Middle Ages, she had in the seventeenth century risen to the position of a manufacturing nation, sending large quantities of cloth, metals and eastern products brought first to England, to her colonies and to the lands along the Baltic and Mediterranean. Thus we see her importing the products of Turkey and India or the fish of New Foundland and re-shipping them to France, Russia, Spain and Italy. Her trade in woolens with the Netherlands continued in a prosperous condition while her colonial trade developed rapidly. The carrying trade was yet largely in the hands of the Dutch, and in order to stimulate English ship-building so as to handle this trade herself, and cripple the Dutch, Cromwell in 1651 had laws enacted, called the Navigation Acts, by which vessels built in England or a British colony alone could be employed in the importation of goods into England from the three continents of Asia, Africa and America, while European merchantmen could introduce into British ports only the produce of the nations to which they belonged. English ownership of vessels engaged in foreign trade thus became a necessity, and the officers and at least two-thirds the crew were required to be native born. These laws continued in force until 1825 and no doubt gave a great impetus to shipping, enabling England to gradually obtain control of much of the carrying trade of the world, an acquisition which she has continued to hold up to the present time.

England as a Manufacturing Nation. Navigation Acts

Under Cromwell's wonderful energy affairs improved. War ceased and prosperity for a time became more general than it had been for two generations before. Agriculture continued to improve and manufactures advanced. The manufacture of cotton goods had its inception about this time. A cheap and efficient postal service was established under government control and security, thus greatly facilitating trade and industry. Prior to this time many modes of conveying letters had been in vogue, but Cromwell, by the Act of 1656, organized a postal department of the government, appointed a postmaster-general and established a system of post-roads throughout the realm. Thereafter the occupation of carrying the mails was forbidden to private individuals. One object of the act was to discover and prevent wicked and dangerous designs against the government, by exercising a censorship over the mails. Home and foreign commerce steadily advanced. As manufacturing and ship building increased, foreign markets were sought and found for English products. The commerce of the Netherlands was now on the decline, partly owing to' the persecutions of the Spanish king and partly as the effect of the Navigation Acts. Germany, another competitor of England, was severely injured by the Thirty-years' war (1619-1648), and with these two competitors practically out of the race, English commerce went forward with increasing vigor and facility. Immigration from the Flemish manufacturing centers was encouraged, and thousands of weavers and dyers came to England bringing their skill and sober habits, as an addition to the wealth of the realm. At about this time also, Louis XIV of France committed his egregious mistake - which cost his country so much and benefited England accordingly - of expelling the Huguenots or French Protestants, by the revocation of the Edict of Nantes (1685) and 50,000 of his most skillful artisans went over to England, carrying with them an accumulated capital of not less than £3,000,000. These gave a new impetus to the manufacturing interests of Britain, and greatly benefited, especially the silk, glass, paper and hardware trades. From the teaching of these exiles the quality of English manufactures showed a marked improvement, and tissues of silk, wool and linen soon attained a high degree of perfection. Irish linen from home grown flax attained a world wide renown from this period.

It had been customary for London merchants to deposit their funds with the mint for safe-keeping, but Charles I seized their funds, as a forced loan, and thus not only destroyed the government credit but, by the same act, put an end to the custom. City goldsmiths of high repute were next entrusted with valuable deposits, and they paid the merchants interest and issued a form of negotiable receipt, similar in effect to our bank notes. These goldsmiths were money lenders and made advances to the government in times of need, taking as security mortgages on future revenues. They advanced to Charles II the sum of £1,300,000, at eight or ten per cent, interest, upon the security of the taxes. Charles in 1672 refused to repay the loan, saying they must be content with the interest, and this caused widespread panic and financial disaster. William Paterson, a Scotchman, then came forward and offered to provide the government with £12,000,000, to be repaid by taxes on beer and other liquors. The outgrowth of the whole matter was the establishment in 1694 of the Bank of England, an institution which has been a powerful element in the commercial progress and greatness of England, as well as a balance-wheel to the world of finance. After the great bank was established the business of banking became an avowed practice, and men who could inspire confidence by their character and wealth became bankers and found the pursuit lucrative.

At about the time John Law was promoting his Mississippi scheme of reckless speculation in France the English were launching a similar wild project of the most visionary character, now known as the South Sea Bubble. By this scheme they proposed to pay off the national debt and all grow rich at a stroke. The shares of the East India Company were at a high premium and the Bank of England promised wonders, why not all get rich in stocks? John Blount, director of an insolvent company trading in the South Seas, from which not a penny of a dividend had been collected in ten years, persuaded an easy ministry that he could wipe out the national debt if granted an exclusive charter to the rich gold mines yet undiscovered in the lands of the South Seas and all the teeming fisheries which might exist there. Parliament made the grant, and the directors began selling stock. The premium went higher and higher until it reached more than 1,000 per cent. Rich and poor alike embarked their means in the confident assurance of making a fortune. Shrewd bankers accepted the stock as collateral for loans which ordinarily they would not have considered. Hundreds of visionary companies were formed and worthless stocks were floated to the amount of over £500,-000,000-more than all the gold and silver in the world, and exceeding several times the value of the landed property of England. The bubble burst in 1720.* Bankers and goldsmiths failed, dragging down thousands with them. Many opulent families were brought to beggary and untold misery resulted among the poor. Like every other scheme the object of which is the making of something out of nothing, the South Sea Bubble exploded and left widespread ruin. So clamorous were the people for some satisfaction for their losses that Parliament was obliged to interfere, and not only distribute the meager assets of the company among its victims but punish the offenders. Several of the directors were imprisoned, and all were fined to an amount aggregating several million pounds.