Economic Expansion 169Spanish vessels from the Americas. This capital financed the production of
goods, storage, trade, and even credit across Europe and overseas. Moreover,
an increased credit supply was generated by investments and loans by
bankers and wealthy merchants to states and by joint-stock partnerships, an
English innovation (the first major company began in 1600). Unlike short
term financial cooperation between investors for a single commercial under
taking, joint-stock companies provided capital by drawing on the investments
of merchants and other investors who purchased shares in the company.
Amsterdam and then London emerged as the banking and trading cen
ters of Europe. (Not until the eighteenth century, however, did the Bank of
Amsterdam and the Bank of England begin to provide capital for business
investment.) Merchant towns in Castile, Catalonia, Italy, Holland, and
England, as well as the Hanseatic cities of northern Germany, each had
their own merchant dynasties.
The Global Economy
Trade with the Americas and Asia provided new outlets for European goods.
It also brought from the New World products such as tomatoes, corn, bell
peppers, rum, and spices to those who could afford them. The construction
of larger ships, weighing as much as eighty tons, a size that would not be sur
passed until the middle of the nineteenth century, facilitated oceangoing
trade. From seaports, trade followed the major rivers—principally the Rhine,
which flows from Switzerland to the North Sea; the Danube, which flows
from Central Europe to the Black Sea; the Seine, which links Paris to the
English Channel; and the Rhone, which carries boat traffic from Lyon to the
Mediterranean. The Scheldt River estuary led from the North Sea to
the powerful trading and manufacturing city of Antwerp, which already had
a population of more than 100,000 people. There, vast quantities of English
and Flemish goods and, increasingly, colonial products were traded for
goods from the German and Italian states. Land trade routes also remained
important—for example, the route from Marseille to northern France and
the Netherlands, that from Valencia on the Mediterranean to Madrid and
Toledo in the heart of Castile, and that from Piedmont to the western Ger
man states and the Netherlands.
Specially chartered East Indian trading companies helped mobilize
investment capital in England and the Netherlands and, enjoying monopo
lies issued to them by each state, set out to make money. When Hugo
Grotius published his treatise on the freedom of the seas in 1609, he subti
tled it The Right which Belongs to the Dutch to Take Part in the East India
Trade. Although officially independent of each government, trade companies
represented the interests of the state. Above all, in England colonial trade
played a major role in the development of the national economy, principally
because England’s manufactured goods increasingly found markets in its
developing settlement colonies in North America.