the Rhine came under French, Dutch, and Spanish suzerainty, the Weser under Swedish, the Elbe under Danish, the Oder under Swedish, the Vistula under Polish control. The tolls imposed by these foreign masters at the mouths of the streams gave the river trade, in many cases intentionally, its last blow. While the Dutch destroyed the Hanseatic trade in their own markets by differential duties; while they and the English made the direct trade of Germans with Spain and Portugal impossible, by violence and the confiscation of ships; the Dutch misused, with increasing dexterity, their growing preponderance on the Rhine and in the Baltic to put Germany itself into a position of unworthy dependence in all matters of business. As the only or most important purchasers of German raw products and the only suppliers of Indian spices, they secured an almost intolerable monopoly, which reached its climax through the unconditional dependence of Germany on the Dutch money market during the period 1600-1750. And what Holland was with regard to Indian wares, France was with regard to manufactures and objets d'art. Those Hanseatic towns that were not ruled by Dutch business managers (Lieger) were in slavery to English creditors. Denmark sought to destroy German navigation, fisheries, and trade by its tolls on the Sound and the Elbe, and by its commercial companies. And all these conditions affected Germany most severely, not in the Thirty Years' War, but one, two, or three generations later; when the western Powers had firmly established their new politico-economic institutions. With naive pleasure in their maritime and commercial strength, with the support of a brutal international law, and a diplomacy which forced upon weaker and less experienced peoples, by every art of intrigue, unprofitable and perfidious commercial treaties, they openly adopted the half-true, half-false doctrine that the trade advantage of one state always was and always must be the disadvantage of another.
In the period from 1670 to 1750 the bitterest lamentations were heard in Germany about this commercial dependence, about French manufactures, about the traders from every prince's land that overran the country: the torrent of complaint touching the pitiable condition of the imperial government, which was unable to give any assistance, increased like an avalanche. The state of commerce in Germany, cried the most distinguished economic writer of the time, depends upon the interest taken in it in the Reichstag at Ratisbon. At last all the voices, alike of scholars and of the people, came together in unison: There is but one way out of it; we must do what Holland, France, and England have done before us; we must exclude the foreign wares; we must once more become masters in our own house. Facts had taught them, with inexorable clearness, that, - at a time when the most advanced nations were carrying on the collective struggle for existence with the harshest national egoism, with all the weapons of finance, of legislation, and of force, with navigation laWS and prohibition laws, with fleets and admiralties, with companies, and with a trade under state guidance and discipline,- those who would not be hammer would assuredly be anvil.
The question in Germany in 1680-1780 was not whether a mercantilist policy was necessary and desirable; about that there was agreement, and properly so. The ideals of Mercantilism, though they may have been presented in an exaggerated form, and too sharply expressed in one-sided economic theories, meant, practically, nothing but the energetic struggle for the creation of a sound state and a sound national economy, and for the overthrow of local and provincial economic institutions; they meant the belief of Germany in its own future, the- shaking off of a commercial dependence on foreigners which was continually becoming more oppressive, and the education of the country in the direction of economic autarchy. The victories of the Prussian army served the same end as the financial and commercial policy of the state; between them they raised Prussia to a place among the Great Powers of Europe.
The difficulties in the internal economic policy of the country consisted in this: that the Prussian state, instead of being a nation, included only a limited number of provinces; and that, at the same time as it adopted a protective system against France, Holland, and England, it also excluded its German neighbours. The real explanation is that the Prussian state was still but half-way out of the period of territorial development;was still, so to speak, in the earlier century of commercial disputes with Hamburg, Leipzig, and Danzig, with Poland, Saxony, and other neighbouring territories; and it could make use of its natural superiority, as compared with neighbours like these, only by binding its provinces together in an enclosed and exclusive combination.
We have reached the end of these general considerations as to the historical significance of the mercantile system. Our argument rested on the proposition that, in spite of the fact that it is the individual and the family that labour, produce, trade, and consume, it is the larger social bodies which, by their common attitude and action, intellectual as well as practical, create all those economic arrangements of society, in relation both to those within and those without, upon which depend the economic policy of every age in general and its commercial policy in particular. We saw that the feeling and recognition of economic solidarity, in regard alike to those within and those without, necessarily created at the same time a corporate egoism. From this egoism the commercial policy of every age receives its impulse.
