Another line of carrier activity pushed by the trading classes was the postal service. The early English post office had a political and military origin, but the carriage of mail for private parties was used to help defray the expense of the royal mail. In 1638 Thomas Withering laid the basis of modern postal systems; his reforms were to provide for the carriage of private letters at fixed rates, to increase the speed of the posts, and to put the post office on a successful financial footing.

The tradesmen found several particular uses for the mails besides their regular correspondence. One was the carriage of certain light goods by post, such as laces, diamonds, etc. Another was the device introduced by the Bank of England in 1738 to facilitate the transmission of large sums of money by post called "Bank Post Bills"; the notes were payable at seven days' sight so that in case the mail was robbed the parties might have time to stop payment of the bills. Still another use was the transmission of mercantile papers and bills receivable and payable. Special forms of assignation or indorsement were invented to insure against robberies or loss of the mails. Lastly, a very important usage was the sending of patterns and samples by mail. It is probable that the franking privilege as it was abused in the eighteenth century was of itself a considerable inducement for a merchant to enter public life.

A final method of mercantile communication must be mentioned, viz., the newspaper. The first Weekly Newes appeared in 1621. The first business advertisement in a newspaper dates from 1658. The average number of newspapers sold annually in England 1751-1753 was 7,411,757, and in 1760 it was 9,464,790. This was surely a prodigious increase in the circulation of news over what it was a century earlier.

The commercial and business uses of newspapers consisted in diffusing the political events of the day at home and abroad; in communicating consular letters and essays on trade, as well as reports. of the markets and the movement of ships; and, lastly, in advertising. Advertising in newspapers after its start in 1658 made rapid progress. In 1675 a mercury was devoted to "Advertisements Concerning Trade," and was followed in 1679 by a gratuitous sheet of advertisements for "promoting Trade," trusting for profit to the payment for insertions only. The increase in the number and influence of the newspapers improved their value as means of advertising. The advertisements lacked the attractive qualities of the modern type, but related to a wide range of subjects and interests. By the middle

of the century advertising in newspapers had become quite the universal practice of the merchant, trading and moneyed classes.

Summary and conclusions.-In the foregoing paragraphs effort has been made to demonstrate that between 1660 and 1760 in particular, extensive developments were made in the means of communication and transport; that these means were of increasing service to the trading class; and that they were fostered by this class.

One result of this general progress in communication and transport was to widen the market area. The transport of goods, people, and news was the basal and causal element in the expansion of business before 1760. The means of production in workshop and farm were practically unchanged. The increase in the volume of products was in response to the larger market, made possible by better communication, and stimulated by lower prices, larger variety, and suggestive advertisements. But the larger volume of goods passing from producer to consumer wrought not only a greater occasion for the middleman, but also effected a further differentiation of the middleman: branches of the trade which hitherto could not support a specialized agent could now afford a profitable employment for him.

A second result was to concentrate trade in the most convenient ports and inland markets and cause a decline in the local market town and fair. London, Bristol, Liverpool, and Leeds became wholesale centers, discharging goods to provincial retailers. They also became centers of a more general trade, places of mutual exchange of goods from all parts of the kingdom. The mechanism of trade became most complex at these points, and the larger volume of wares that came thither furthered the complexity by enabling the middlemen to differentiate. Warehouses became a necessary complement to these wholesaling centers, and the capitalistic, speculative middleman played a larger rôle. Factors became a common class seated in the Exchanges of these cities.

A third result was to render commerce more sensitive and more responsive to local or individual needs. Local dearths and surpluses were more readily equalized. Differences in prices were reduced by the fall in the price of carriage. Business arose where none heretofore could exist. More rapid and reliable information about methods of production, markets, changes in price and trade reduced distances practically. Sectionalism and local jealousies and customary self

sufficiency were supplanted by commercial unity. The nation became metropolitan. The business men of the cities controlled the pulse of a trade that flowed to and from all parts of the kingdom.

78. METHODS OF MARKETING ABROAD1

Five methods of marketing abroad were devised by the merchant: (a) travelling merchant, (b) supercargo, (c) factor, (d) foreign resident commission house, and (e) branch house. This is roughly the historical order by which they rose to importance.

Supercargo. The earliest merchants either were captains and masters of ships or were merchants who accompanied their goods, the cargo of another's ships. As such they attended and did their own buying and selling abroad. The differentiation of the merchant function and the ship-master function, and, further, the ship-owner function was in process during the seventeenth and eighteenth centuries. So long as the practice was for the merchants to accompany their cargoes very strait limitations were thus put to the volume of business that could be done; few voyages could be made in a year; foreign connections had to be made each time; few markets could be reached; business abroad was spasmodic; business at home was interrupted by their going away; and so forth. By reason of such inconveniences a recourse was had to the supercargo.

"Supercargo" is defined as an agent "confined to the sale of goods under direction on some voyage, and it may be the purchase of others, in conformity with the orders his employer may give him." The merchant prepared and shipped the cargo in his own or another's ship and sent a supercargo to conduct the sales abroad; the return cargo was bought, prepared, shipped, and accompanied by the supercargo. This system of agency was necessitated in the period before international bills and machinery of exchange had been instituted between the countries trading.

Factor. A factor is a merchant's agent, residing abroad, constituted by letter of attorney, to transact the business of purchasing, selling, transporting, and exchanging, that shall be committed to his care by his principal.

The chief functions of the factor were stated in the definition of the term: he cared for the commercial interests of his principal in the port where he resided. The sale of the cargoes consigned to him and

'Adapted by permission from R. B. Westerfield, "Middlemen in English Business," Transactions of the Connecticut Academy of Arts and Sciences, XIX, 351-61. (Yale University Press, 1915.)

the purchase of return cargoes were his prime business; but scarcely less important were the accessory business of insurance, exchange, packing and lading, paying customs, etc., collecting debts due his principal, securing and maintaining the favor of foreign princes and mercantile houses, and the various other business attendant upon foreign negotiation. A factor was free to serve several merchants, principals simultaneously, in which case the risk of his actions was joint. By means of factors the merchants were enabled to negotiate with the whole world without leaving their stores or accounts; by correspondence they learned the relative dearth and abundance of goods in its different parts, and by correspondence the principal directed a consignment of goods from one of his factors to another. The settled residence of the factor in the section in which he operated was a distinct advantage over the supercargo system; he had opportunity for furthering his principal's interests without interruption; his residence gave him credit and clientele as well as better insight into the needs of the people and methods of dealing with them, and in many places he was able to effect political changes in his district. highly beneficial to his business.

Commission house. The line of demarcation between factor and commission house cannot be absolutely drawn, because a commission merchant is a factor. A commission house buys and sells in foreign trade, in its own name, for a number of principals a variety of goods, on commission. It receives the goods by consignment from a merchant or manufacturer. It is entrusted with the possessions, control, management, and disposal of the goods sold. It does business in its own name but on the account and at the risk of the principal.

These houses are houses of reputation, capital and credit. They allow the consignor to draw on them for a large per cent of the value of the goods consigned, immediately upon receipt. Such advances require large capital on the part of the consignee. They store the goods, sell them in their own name, and guarantee payments of the accounts to the consignor. They carry out the shipping details, caring for lading, shipping, insurance, commercial papers, etc. They also buy goods upon order from foreign houses, and finance and ship the order, collecting their outlay from the consignee. Their profits arise from the commission paid, interest on their outlay, insurance, profits, etc.

Branch house. A merchant firm may conduct other houses of like kind abroad and use these as means of carrying on their foreign

business. Such branch houses have distinct advantages which recommend them to modern business. A branch house permits foreign customers to fill orders without delay or the formalities connected with long distance ordering, and to order small quantities; it impresses the customer with a feeling of security in the responsibility of the distant firm; by it mistakes and disputes are easily adjusted and redress effected without delay which a long tedious correspondence entails; and it may carry a limited stock of goods, and quote two prices, one for prompt shipment from the branch, the other for shipment from the home office.

79. THE EARLY HISTORY OF INSURANCE IN ENGLAND'

Just as production was at first carried on under the domestic system, so insurance at a very early period in England had reference to the provision against the various adverse conditions that might befall a family or any one of its members. This characteristic was of equal importance with the social one in the organization of the Saxon and Anglo-Norman gilds. These bodies provided against losses from fire, besides securing gildsmen an income during sickness, arranging for their burial, and, in some cases, making loans to members or their children, either without interest or at a low rate. On the decay of the original undifferentiated gild, some of its functions were continued by its successors the gild merchant, the craft gild, the city company, and even to a small extent by the regulated and joint-stock companies. Between the fourteenth and seventeenth centuries social conditions had been changing. On the whole although death by violence was still only too common, life risks had become less. The more permanent style of domestic architecture should have tended to diminish losses by fire; so that, great as were the risks to life and property from a modern standpoint, it may have appeared that the need for insurance was not so great; and, at the same time, the decline of the gilds had removed the organization through which hitherto the provision had been made.

While the practice of something resembling fire and life insurance seems to have diminished, the principle of assurance was being developed in quite a new direction, namely in securing against marine risks. The method by which this was effected introduces the new element of the substitution of a proprietary for a mutual insurance.

'Adapted by permission from W. R. Scott, Joint Stock Companies to 1720, III, 363-74. (The Cambridge University Press, 1911.)