(A) THE ALIEN TRADER

Commerce by sea is everywhere originally conjoined with piracy; the warship, pirate ship, and merchant ship are to begin with not distinguished from each other. The differentiation came about through the warship developing away from the merchant ship and not conversely, the warship being brought to such a technical development by the increase in the number of banks of oars and other innovations, that, in view of the costs and limited usefulness of the room left available for cargo, it was no longer available as a merchant ship. In antiquity the Pharaohs and the Egyptian temples are the first ship owners, so that we find in Egypt no privately owned shipping whatever. On the other hand private shipping is characteristic of the Greeks in Homeric times, and of the Phenicians. Among the Greeks the city king originally held possession of the ships both for trade and for piracy. But he could not prevent the growth of great families which shared in ship owning and finally tolerated him only as a primus inter pares.

Among the Romans in the earliest times, overseas trade was one of the main sources of the significance of the city. We do not know certainly how great was the ownership of tonnage, or the export trade; apparently, however, the Romans did not come to equal the Carthaginians in this field. Later they went over to a purely import or debit commerce. After the Punic Wars private shipping rose from a zero level in Rome. But the Roman policy was so strongly continental in character that the possession of shipping was originally regarded as unbecoming for a senator; under the Republic and even in the imperial period he was forbidden to have more ships than were necessary to market his own surplus products.

We do not know how the operation of shipping in antiquity was organized from an economic point of view. The only certainty is the increasing use of slaves as a means of propulsion. The officers of the ships were skilled craftsmen. We find on Roman and Greek ships, the captain, helmsman, and a flutist who gives the rhythm to the rowers. Again, we have no clear idea of the relation between ship owners and merchants. Originally the former were merchants themselves, but a special class of traders by sea in connection with foreign commerce is soon met with, the μπoρoι of the Greek cities. This foreign trade must have been very slight in extent, for as regards goods for the masses, especially the grain requirements of the large cities of antiquity, provision must have been on a basis of communal self-sufficiency. In Athens the ship owners were obliged to bring back grain to the city as return cargo, while in Rome the state took in hand the provision of ships and supply of grain and regulated both far down into the imperial period. This arrangement did indeed assure peace and security to the sea traffic and was very favorable to the foreign commerce, but it was not permanent. The financial needs of the emperors, arising out of the necessity for a standing army on the frontier, forced upon them a leiturgical or compulsory service organization of state functions. To an increasing degree these were taken care of not through taxation but leiturgically, the fisc organizing the various occupations along guild lines and laying upon them the labor burdens of the state. In consideration of this duty they received a monopoly of their respective branches of industry. This system led to a leiturgical organization of shipping also and consequently to an early retrograde development. In the third century the private marine disappeared, as did the navy at the same time, giving piracy a chance for a new and strong development.

For knowledge of the arrangements brought about in antiquity by the requirement of legal forms for trade, we are restricted to very few remains. We possess for one thing the lex Rhodia de iactu concerning shipping hazards. It shows that a number of merchants were generally carried on a ship. If goods had to be thrown overboard in a time of distress, the loss was borne equally by the participants. Another institution, the sea loan (foenus nauticum), which was taken over by the middle ages from antiquity, is a consequence of the fact that trade by sea was affected by extraordinarily high risks. If a loan was made on goods to go overseas, neither the lender nor the borrower reckoned upon repayment in case of loss of the ship. The danger which both incurred was shared in such a way that the creditor received exceptionally high interest, —probably 30%—in exchange for which he bore the entire risk, and in the case of a partial loss his payment was also reduced. From the court pleas of the Attic orators, Demosthenes and others, we know that sea loans resulted in affording to the lenders the possibility of getting sea commerce in their power to a large extent. They prescribed to the ship owner the course and duration of the voyage and where he should market the goods. The extensive dependence of the sea merchants upon the capitalists which finds expression in this arrangement leads us to infer that the former were weak in capital. In order to distribute the risk a number of lenders usually participated in the loan upon a single ship. Furthermore, it often happened that a slave of the creditor accompanied the cargo overseas, another indication of the dependence in which his trade stood in relation to the money power. The sea loan dominated the whole period of antiquity until Justinian forbade it as usurious. This prohibition had no permanent effect, resulting mainly in a change in the form of shipping credit.

Conditions in the middle ages are obscure. In harmony with pre-capitalistie institutions the shipyards belonged to the cities and were leased to the ship building guilds. Sea trade bore a less capitalistic character than in antiquity. The common form under which it was carried on was that of the association of all those interested in the same trading enterprise. During the whole medieval period a ship almost never went out on the account of a single individual, because of the risk, but was always built for a number of share holders; that is, partnership possession dominated. On the other hand, the various partners would be concerned in the ownership of several vessels. Like ship building and ownership, the individual venture was usually the occasion for an association. This included the ship owner, the officers, the crew, and finally the merchants. They were all brought together in a company and took goods with them, although the merchants often sent a representative or factor, an employee, instead of going themselves. The danger was borne in common and gain or loss distributed according to a fixed rule.

Alongside this organized community of risk existed the sea loan of the capitalists. The latter was preferred by the traveling merchants of the middle ages because it was advantageous for them to buy goods by means of loans and shift the risk to the creditors. According to the constituum usus of the maritime law of Pisa, the rate of interest was 35% ; it fluctuated around this level but varied according to a tariff of grades of risk. Originally, all the merchants included in the risk community themselves went on the voyage and took the goods with them; those involved were small merchants who peddled their wares. This custom declined gradually and in its place appeared the commenda, and apparently the societas maris was of contemporary growth. The commenda is found in Babylonian and Arabian as well as Italian law and in a modified form in the Hanseatic. The essence of it is that in the same organization two types of associates are included, one of which stays in the home port while the other takes the goods overseas. The relation originally represented only personal convenience, certain ones out of a number of merchants, chosen in rotation, marketing the goods of the others. Later it became an arrangement for the investment of capital. Those who furnished the money were in part professional traders but in part, especially in the south, money capitalists, such as nobles who wished to employ their surplus wealth for gain in commerce. The organization was carried out according to the plan that to the traveling socius was given money or goods estimated in money; this investment formed the trading capital and was called by the technical name commenda. The goods were sold overseas and others bought with the proceeds, which again on the return to the home port were appraised and sold. The mode of dividing the gain was as follows: if the socius who remained at home furnished all the capital he received three-fourths; if, however, the investment was provided by him and the traveling socius jointly—generally in the ratio of two-thirds to one-third—the sharing was by halves. The characteristic feature of this business was that capitalistic accounting was employed for the first time; the capital at the end of the operation was compared with that at the beginning, and the excess determined and distributed as gain. As to form, however, there was no permanent capitalistic enterprise but only an individual venture, the accounts being closed after each expedition. This arrangement dominated sea trade throughout the middle ages and after the transition to permanent capitalistic business had taken place it remained the accounting form for the individual venture.

The turnover of medieval commerce as measured by modern standards was extremely small. It was carried on by mere small dealers who worked with trifling quantities. In 1277 the English exports of wool amounted to 30,000 double cwt. In this quantity 250 merchants shared, so that 120 double cwt. fell to each in a single year. The average amount of a commenda in Genoa in the 12th century was about 250 American dollars or 50 pounds sterling in silver. In the 14th century in the domain of the Hanseatic League, it was forbidden to take up more than one commenda and the amount was not higher than that given above. The total trade between England and the Hanseatic League at the time of its highest development came to less than 4,000 dollars or 800 pounds. For Reval the conditions can be followed in the customs registers; in 1369 there were 178 merchants concerned in 12 ships leaving the port, each of whom was involved for some 400 dollars on the average. In Venice the typical cargo amounted to $1,500, in the Hanseatic League in the 14th century to $1,250. The number of ships annually entering the port of Reval in the 15th century was 32 and for Luebeck, the most important Hanseatic port, in 1368, it is 430—against which are 870 departures. It was a crew of petty capitalistic traders who traveled themselves or got others to travel for them, and this fact explains the organization into companies.

On account of the danger from pirates, a single ship was not in a position to determine independently its time of sailing. Ships formed themselves into caravans and were either convoyed by armed vessels or were themselves armed. The average duration of the voyage of a marine caravan in the Mediterranean varied from a half year to a year. In Genoa only one caravan a year went to the Orient, in Venice two. The voyage in caravans resulted in an extremely slow turnover of the capital.

In spite of these conditions the significance of the commerce as a source of income must not be underestimated. In 1368 the turnover in all the Baltic ports together amounted to nearly $4,000,000 measured in silver—three times as much as the king of England received as the total revenue of the state.

In land commerce the risk was less, as the only danger came from robbers and not from natural catastrophes in addition; but in compensation the expenses were incomparably higher. Corresponding to the limited risk the company organization was absent; likewise any land loan analogous to the sea loan. Attempts were made to establish such an institution, but the Curia interposed against it as a notoriously usurious business.

In land commerce also it was the rule for the merchant to accompany his goods. Not until the 13th century were transport conditions secure enough that the merchant was released from regularly accompanying his goods, making instead the victuarius responsible for them, a condition which presupposed established business relations between consignor and consignee. Land commerce suffered under technical difficulties as a result of the condition of the roads. The Roman roads have been a subject of much talk but conditions were far from ideal on these also. Cato and Varro warned against using them on account of the low persons who frequented them and also the vermin, and counseled against putting up in any tavern near the road on account of the excessive charges imposed on travelers. In the outer provinces the Roman roads may have served for commerce also, but they were not primarily intended for this purpose and their straight line courses had no regard for its needs. In addition, in the Roman period, protection was given only to those roads which were important for the provisioning of the capital or for military and political purposes. Their upkeep was imposed on peasants as a governmental function, on consideration of exemption from taxation.

In the middle ages the feudal lords were interested in the maintenance of commercial routes from a fiscal standpoint. They cared for the roads through their scararii —peasants upon whom the maintenance of roads and bridges was imposed as one of the most oppressive burdens which the feudal organization knows at all—and tolls were collected in return. There was no agreement among the lords establishing a rational layout of the roads; each located the road in a way to make sure of recouping its cost in duties and toll. A systematic planning of roads is first found in Lombardy in the days of the Lombard League.

In consequence of all these facts the volume of land trade in the middle ages was much smaller even than that of trade by sea. As late as the 16th century the factor of a large commercial house traveled from Augsburg to Venice to get 16 bags of cotton. It has been computed that the goods which went over the St. Gothard pass in one year at the end of the middle ages would have filled only from one to one and a half freight trains. Considering the smallness of the volume the profit must have been correspondingly high to cover the duties and the costs of subsistence during the journey. In view of the condition of the roads the duration of the journey was also long. Even on land the merchant could not choose at will the time of the trip. The insecurity of the roads made it necessary to secure an escort, and the latter would wait until a considerable number of travelers came together.

Thus land trade, like that by sea, was bound to a caravan system. This is a primitive phenomenon and is found in Babylon as well as in the middle ages. In antiquity and in the orient there were officially designated caravan leaders. In the middle ages these were provided by the towns. Not until the peaceful conditions of the 14th and 15th centuries had established tolerable security could one begin to travel as an individual. On the technical side this was made possible through an organization of land transport in the form of the so-called pack train (Rottfuhr). The train system developed out of feudal arrangements, in which again the monasteries took the lead. The lord of the land placed horses, pack animals, carts, etc., at the disposal of the public for hire. The carts were provided in rotation by the possessors of certain peasant holdings upon which this burden was imposed. The feudal organization gradually gave place to a professional class, but a systematized industry only developed after the towns took the business of the trains in hand. The train workers organized themselves into a guild within the town, placing themselves under the strict discipline of the elected “forwarder” (Aufgeber) who dealt with the merchants and distributed the vehicles among the various members of the guild. Responsibility of the train leader was a principle generally recognized.

For inland shipping various forms of organization came into existence. The use of feudal or monastic ships and rafts often rested on the compulsion of a banalité, so that the lords actually had a monopoly over the movement of goods. In general, however, they were not able to exploit it themselves but transferred it to the union (Einung) of transport workers. Then this union of highly specialized workers secured possession of the monopoly and the lord was expropriated. In addition there arose rather early, though in general after the development of towns, free shipping guilds who regularly practised a system of rotation of the work. They transported goods in their own small vessels, the opportunities for gain being distributed according to rigorous rule by the guild. It also happened that the urban community took in hand the organization of shipping. On the Iser the burghers of Mittenwald had a monopoly of the rafting, the right to transport cargoes rotating among them in serial order. From the agricultural establishments at higher elevations heavy goods were rafted down stream, while goods of high value were hauled back to the higher regions. Finally, closed associations arose which took the shipping in hand, developing out of the feudal or guild organization—out of the former, for example, on the Salzach and the Inn. Originally the archbishop of Salzburg held the shipping monopoly as a fief; then arose a union of the ship operators who constituted themselves an inland merchant marine. The organization owned the ships, hired the transport workers, and took over the monopoly from the archbishop. In the 15th century he repurchased the privilege and granted it as a fief. On the Murg also, shipping rested on an industrial association of the forest shipping men, which grew out of the monopoly of wood and hence pertained to the owners of forest land. The large supply of wood in the Black Forest resulted in the Murg shipping organization extending its field of operations to the Rhine, and it became divided into a Forest organization and a Rhine organization. Finally, the company took up the transportation of foreign goods with a view to the freight earnings. The Danube shipping organization in Austria and the Upper Rhine shipping organization developed out of guilds; thus in a way analogous to the situation of the mining community, shipping came into the hands of associations of workers.

The requirements to which these relations gave rise among the merchants, looked first in the direction of personal protection. Occasionally this provision took on a sacerdotal character, the foreign merchant being placed under the protection of the gods or of the chieftain. Another form was the conclusion of safe conduct agreements with the political powers of the region, as in upper Italy during the middle ages. Here later the burghers, by capturing their fortified places, forced the knights who threatened the trade to move into the towns and in part themselves took over the protection of the merchants. The fees for conduct were at one time the leading source of income for those living along the roads, as for example in Switzerland.

The second great requirement of commerce was legal protection. The merchant was an alien and would not have the same legal opportunities as a member of the nation or tribe, and therefore required special legal arrangements. One institution which served the purpose is that of reprisal. If a debtor of Genoa or Pisa, for example, could not or would not pay a debt in Florence or in Frankfort, pressure was brought to bear on his compatriots. This was unfair and in the long run intolerable, and the oldest commercial treaties aim at preventing such reprisals. Beginning with this primitive rule of retaliation the need of the merchant for legal protection gave rise to various institutions. Since the merchant as a foreigner could not appear before the court, he had to provide a patron who represented him; hence arose in antiquity the phenomenon of the proxenia, which manifests a combination of hospitality and representation of an interest. To it corresponds the law of hostage in the middle ages; the foreign merchant was authorized and required to place himself under the protection of a citizen, with whom he had to store his goods, and the host in turn was obliged to guard them on behalf of the community.

In contrast with these arrangements it constituted a great step in progress when with the increase in number of the merchants a hanse was organized. This was ordinarily a guild of foreign merchants carrying on trade in a distant city, who organized for mutual protection. It goes without saying that the organization pre-supposed a permit from the ruler of the city. With this organization of the merchants in a foreign country was regularly associated the establishment of special merchant settlements, which relieved the merchants of the necessity of immediately selling their goods. This purpose was served the world over by the caravansaries of the land trade and factories for sea commerce of the middle ages—the fondachi, warehouses and sales rooms. In this connection there were two alternatives. First, the sales rooms might be set up by the foreign merchants in their own interests, as was possible when their activity made them indispensable to the place where they settled. In this case they became autonomous, choosing their own governor, as for example the merchants of the German hanse in London. On the other hand, the home merchants might set up institutions for the foreigners, to control their access to the market and hold them in leash. An example is the fondaco of the German merchants in Venice.

Finally, it became necessary to establish fixed times for trading; the buyer and seller must be able to find one another. This requirement was met by the fixed markets and gave rise to the market concessions. Markets were everywhere established for the foreign traders by concession from the princes,—in Egypt, India, and European antiquity, and in the middle ages. The object of such a concession was on the one hand the provision for the needs of the authority granting the concession, and on the other the promotion of fiscal aims; the prince wished to profit by the trade in the market. As a result the regulation of transport, for a consideration, was regularly associated with the market concession, as was also the establishment of a market court, partly in the interest of the prince who drew from it the court fees, and partly in the interest of the foreign traders who could not come before the regular domestic courts. There were also regulations affecting measures, weights and coinage and the time and method of trading. As compensation for these services the prince collected the market dues.

Out of this original relation between the merchants visiting the market and the authority granting the concession, evolved still other institutions. The merchants needed large quarters for having their goods tested, weighed and stored. An early development was a banalité involving compulsory use of the crane belonging to the prince, imposed as a method of taxation. Primarily, however, the fiscal interest was promoted by compulsory brokerage. The merchants also had to be checked in regard to the amount of their dealings, as payments were to be made on the basis of these. Accordingly brokers were established, an institution taken over by the west from the orient (simsarius, sensarius, hence Italian sensal). In addition to these requirements was that of compulsory routing. Since the prince had to guarantee the safety of the merchant the latter must utilize the roads belonging to the prince. Finally, there was the compulsion of the market, requiring that, with a view to control, the trade of the foreign merchants must take place publicly, in the market or the warehouse.

(B) THE RESIDENT TRADER

The conditions pictured in the preceding section apply not only to the trade of the early middle ages but also to Arabia and the world in general, so long as the foreign trader predominates. Totally different conditions arose when the class of resident merchants developed.

Typically, the phenomenon of the resident trader is a product of the development of towns, although undoubtedly there were resident merchants previously, in the market settlements in the neighborhood of fortresses. The resident merchant was technically designated mercator. By this term the middle ages understood a trader who had acquired the privilege of settlement in the town, and primarily a retailer, whether he sold his own products or those of foreigners. In certain legal sources the term is used as equivalent to merchant in modern commercial law; a mercator is one who buys and sells, lucri causa. But this usage, which appears especially in Rhenish documents, cannot be taken as the common one for the middle ages. In the population structure of the medieval towns the mercator was not a wholesaler but rather anyone who brought something to market, the craftsman as well as the professional trader.

The professional trading class of the towns developed in the following way. The resident merchant is to begin with an itinerant trader. He travels periodically in order to market products at a distance or to secure products from a distance and is a peddler who has acquired a fixed residence. The next stage is that in which he has the traveling done for him, either by an employee or servant or by a partner; the one arrangement goes over into the other. The third stage is formed by the system of factories. The trader has increased in capital power to a point where he founds independent settlements at distant points, or at least maintains employees there, and so establishes an interlocal system of relations. Finally, the resident trader becomes completely fixed in his location and deals with distant regions by correspondence only. This condition did not become possible until the late middle ages because there was not suffeient interterritorial legal security.

The center of gravity in medieval trade lies in retailing. Even the merchant who brought in goods from a distance, as from the orient, centered his interest in selling directly to the consumers. The risk was less, the gain more steady and secure, and in general higher than would have been the case with wholesale trade, and the business possessed in a degree a monopolistic character. Even the Hansards were not merchants in the present sense, but emphasized chiefly the control of retail trade in foreign lands, seeking to exclude foreign competition in retailing in Russia, Sweden, Norway, and England. Even in the 16th century the Merchant Adventurers in England, to whom Elizabeth granted privileges, pursued this policy. Wholesalers in the proper sense perhaps did not exist at all in the early middle ages, and toward the end of the period only in small and slowly increasing numbers, in the large commercial centers of southern Europe; in the north they were still exceptional.¹

The resident traders as a class had to contend against other groups.² One series of such struggles were external, such as the struggle to maintain the monopoly of the urban market. This was contested by the non-resident tribal and clan trade, especially in distant commerce connected with tribal industry, and the trade of non-resident foreign trading peoples. Out of the wish to suppress such competition grew the conflict with the Jews. In the early middle ages no hostility to them can be found in Germany. Even in the 11th century the bishop of Speyer invited Jews to the town in order, as he expressed it, to increase the glory of his city. It was in the time of the crusades that the first wave of anti-semitism broke over Europe, under the two-fold influence of the war between the faiths and the competition of the Jews, although we find anti-semitic movements even in antiquity. Tacitus condemned the Jews on the ground of “superstition,” and as a Roman despised all oriental “extasis” as contemptible. This struggle against the Jews and other foreign peoples—Caursines, Lombards, and Syrians—is a symptom of the development of a national commercial class.

The resident trader also contended with the merchants settled in the country, on the land. This struggle ended in the 15th century with the complete victory of the urban merchants; Duke Louis the Rich of Bavaria for example, (1450–1479), prided himself especially on having in the interest of control forced the rural merchants in his territory into the towns. Again, there was a struggle against retailing by other merchants, a struggle which took various forms. In part, the urban merchants established the requirement that foreign merchants could offer their wares for sale only on certain days. Sale direct to consumers was forbidden to them, and likewise, in the interest of control, all trade with each other, and finally compulsory disposal was imposed upon them; that is, the requirement of selling at a given time and place whatever goods they had brought to that place at that time, whether to consumers or to local merchants.

The resident merchants succeeded in still further intensifying their control over the foreigners. They imposed the compulsion of hosting, the obligation of taking up residence with particular citizens who should watch over their activities (see above, page 213). Since this gave rise to the danger of forbidden dealings between guest and host, they devised public warehouses with compulsory occupation of these. Frequently, though not always, the two arrangements were combined, as in the case of the fondaco dei tedeschi in Venice. Every German merchant must live in this fondaco and store all his goods there. The fondaco had almost no power of self-government; its officers were imposed on the German merchants by the city, which itself controlled them through brokers. Compulsory brokerage, which was one of the most effective of all these measures, prevented trading between the foreigners and local persons. The rise of the brokerage system was due to the monopolistic tendencies of the resident trade and to the wish of the city to control every single transaction of the foreigners. The broker could not transact any business of his own or enter into any partnership relation; he was officially dependent upon the fees which came to him in connection with the business under his supervision.

The second great object of contention in the merchant class was in regard to internal equality of opportunity. One of the members protected by the group must not have better chances than another, and this applied especially to retailing. This purpose was served by the prohibition of pre-sale or “forestalling,” and the right of sharing. The first of these rules prohibited dealers from selling goods before they had been brought into the town. On the other hand, if one merchant, due to superior capital power, had bought more goods than another, the right of sharing became operative; it specified that any member of the association could demand that a part of the goods in question be given up to him on payment of their actual cost. This provision was endurable only in the case of retailers; wholesale trade, insofar as it affected goods from a distance, could not be subjected to such stipulations without being prevented from developing altogether. As a result a bitter struggle set in as the wholesale trade succeeded in winning greater freedom.

A third conflict which had to be fought out by the resident trading class was the conflict over the field of action as such. This related to the endeavor to exploit the opportunities of the town to the greatest possible extent. It gave rise to the struggle over the staple compulsion and restriction as to streets, that is, the right to compel all merchants to use a specified street at a specified place and to market goods at a specified point or port. This requirement was to begin with rather favorable for the development of the trade; without the monopoly which it created with reference to specific places and streets it would have been impossible in view of the small volume of the trade, to provide the technical requirements and meet the costs of the necessary port and street development. But this does not alter the fact that for those who secured the monopoly, especially the town lords and the princes, purely fiscal considerations ruled. Every territorial lord attempted by war to gain possession of staple and street rights. The conflicts which arose were very violent in Germany, especially during the 14th and 15th centuries. The staple and street rights formed both an objective and a resource in the struggle. If the right was once attached to a certain place the lord in control could inflict serious damage by obstructing and barricading the streets, and also by political means. The history of English-French relations in the later centuries of the middle ages is full of examples.

Finally, the resident merchant class was in conflict with the consumer’s interests, and was divided internally according as it was interested in the local market or in distant trade. The consumers wished as far as possible to buy at first hand from the foreign traders, while the interest of the great majority of the local merchants was opposed, looking toward regulating the market from the point of view of the retailer, while keeping open the possibility of securing supplies. In the long run it proved impossible to secure both interests. With the recognition of this fact began the splitting off of a wholesale trading interest and an opposition of interest within the mercantile group, while the interests of the retailer and the consumer began to draw together.

(C) THE TRADE OF THE FAIRS

The regular activities of both the foreign and the resident merchant looked toward the consumers. In contrast, the first form of trade between merchant and merchant is met with at the fairs. Since in the middle ages the retailer with purely local interest predominated, the fair developed as the most important form of interlocal trade organization. It is characterisic, in the first place, that the fair is visited not by local men but by traveling merchants who come for the purpose, and second, that the trade is concerned with goods in hand. The latter point distinguishes it from the exchange of the present day, on which goods not present and often not yet produced are dealt in.

The typical fair is exemplified by those of Champagne. In the four principal cities of Champagne six fairs were held, each of which lasted for 50 days, including the business of arranging and opening the fair, the payment of exchange, etc., so that with exception of holidays the year was filled by the six fairs. They were organized from above; there was a court of the fair, the custodes nundinarum, composed of a civis and, in view of the question of safe conduct, a miles. The fairs are first mentioned in 1174 and reached their highest development in the 13th and 14th centuries. They had police and financial power over those who attended them and as the extreme penalty could impose exclusion. This measure was adopted by other powers, notably the church; not infrequently was excommunication threatened on political or fiscal grounds in order to exclude an offender from the fair, and entire communes have met this fate. Champagne derived its commercial significance from the fact that it lay between the English wool producing region and the wool manufacturing region of Flanders on the one side, and Italy, the great importer of oriental goods, on the other. Consequently, among the goods which were dealt in, the first, place was taken by wool and wool manufactures, especially cheap cloth. In exchange for these the south brought articles of high value, fine tanned sheepskins, spices, alum, fine wood for the inlaying of furniture, dies for coloring cloth, wax, saffron, camphor, gum, lace—a mixture of the products of southern climes and of the east. The cloth fair was the most important of all the fairs of Champagne and had the largest turnover. All the coinages of the world met there. In consequence Champagne was the first home of the money changing business and the classical point for the settlement of debts, especially for the repayment of the debts of the Church. The man of power in the worldly sense who did not pay his debts was in fact invulnerable to the merchant in his “Burg.” Quite different the prelate who must expect to be excommunicated by his spiritual superior if he broke his word. The special credit reliability of the high spiritual orders thus established came to expression in the fact that a considerable portion of the bills of exchange were drawn upon prelates and were payable, on pain of excommunication, at the latest four days before the beginning of the general settlement. The purpose of this rule was to secure to the merchant hard cash for the business of the fair; it was mitigated by the fact that the obligation of the prelate enforceable by church action corresponded to an increased security of remittances to him, which were similarly guaranteed by ecclesiastical penalties.

No other fair of the period achieved so great significance. In Germany there was an attempt to establish a fair at Frankfort; it did develop gradually but never achieved the rank of the Champagne fairs or even that of Lyons. In Eastern Europe Novgorod, later Nijni-Novgorod, was a point of exchange between the Hanseatic merchants and the fur traders and peasant producers of Russia. In England, ³ there were numerous fair towns ⁴ but none was the equal of the fairs of Champagne.