and　the　Poles；　Germany；　encouraged　by　the　example　of　Prussia；
  began　to　regain　self…confidence。　And　this　was　the　work　of
  the　little　old　man；　with　his　hook…nose　and　his　old　uniforms　covered
  with　snuff；　who　said　very　funny　but　very　unpleasant　things
  about　his　neighbours；　and　who　played　the　scandalous　game　of
  eighteenth　century　diplomacy　without　any　regard　for　the　truth；
  provided　he　could　gain　something　by　his　lies。　This　in　spite　of
  his　book；　‘‘Anti…Macchiavelli。''　In　the　year　1786　the　end
  came。　His　friends　were　all　gone。　Children　he　had　never　had。
  He　died　alone；　tended　by　a　single　servant　and　his　faithful
  dogs；　whom　he　loved　better　than　human　beings　because；　as　he
  said；　they　were　never　ungrateful　and　remained　true　to　their
  friends。
  THE　MERCANTILE　SYSTEM
  HOW　THE　NEWLY　FOUNDED　NATIONAL　OR
  DYNASTIC　STATES　OF　EUROPE　TRIED　TO
  MAKE　THEMSELVES　RICH　AND　WHAT　WAS
  MEANT　BY　THE　MERCANTILE　SYSTEM
  WE　have　seen　how；　during　the　sixteenth　and　the　seventeenth
  centuries；　the　states　of　our　modern　world　began　to　take　shape。
  Their　origins　were　different　in　almost　every　case。　Some　had
  been　the　result　of　the　deliberate　effort　of　a　single　king。　Others
  had　happened　by　chance。　Still　others　had　been　the　result　of
  favourable　natural　geographic　boundaries。　But　once　they　had
  been　founded；　they　had　all　of　them　tried　to　strengthen　their
  internal　administration　and　to　exert　the　greatest　possible　influence
  upon　foreign　affairs。　All　this　of　course　had　cost　a　great
  deal　of　money。　The　mediaeval　state　with　its　lack　of　centralised
  power　did　not　depend　upon　a　rich　treasury。　The　king　got　his
  revenues　from　the　crown　domains　and　his　civil　service　paid　for
  itself。　The　modern　centralised　state　was　a　more　complicated
  affair。　The　old　knights　disappeared　and　hired　government
  officials　or　bureaucrats　took　their　place。　Army；　navy；　and
  internal　administration　demanded　millions。　The　question　then
  became　where　was　this　money　to　be　found？
  Gold　and　silver　had　been　a　rare　commodity　in　the　middle
  ages。　The　average　man；　as　I　have　told　you；　never　saw　a　gold
  piece　as　long　as　he　lived。　Only　the　inhabitants　of　the　large
  cities　were　familiar　with　silver　coin。　The　discovery　of　America
  and　the　exploitation　of　the　Peruvian　mines　changed　all　this。
  The　centre　of　trade　was　transferred　from　the　Mediterranean　to
  the　Atlantic　seaboard。　The　old　‘‘commercial　cities''　of　Italy　lost
  their　financial　importance。　New　‘‘commercial　nations''　took
  their　place　and　gold　and　silver　were　no　longer　a　curiosity。
  Through　Spain　and　Portugal　and　Holland　and　England；
  precious　metals　began　to　find　their　way　to　Europe　The　sixteenth
  century　had　its　own　writers　on　the　subject　of　political
  economy　and　they　evolved　a　theory　of　national　wealth　which
  seemed　to　them　entirely　sound　and　of　the　greatest　possible
  benefit　to　their　respective　countries。　They　reasoned　that　both
  gold　and　silver　were　actual　wealth。　Therefore　they　believed
  that　the　country　with　the　largest　supply　of　actual　cash　in　the
  vaults　of　its　treasury　and　its　banks　was　at　the　same　time　the
  richest　country。　And　since　money　meant　armies；　it　followed
  that　the　richest　country　was　also　the　most　powerful　and　could
  rule　the　rest　of　the　world。
  We　call　this　system　the　‘‘mercantile　system；''　and　it　was
  accepted　with　the　same　unquestioning　faith　with　which　the
  early　Christians　believed　in　Miracles　and　many　of　the　present…
  day　American　business　men　believe　in　the　Tariff。　In　practice；
  the　Mercantile　system　worked　out　as　follows：　To　get　the
  largest　surplus　of　precious　metals　a　country　must　have　a
  favourable　balance　of　export　trade。　If　you　can　export　more　to
  your　neighbour　than　he　exports　to　your　own　country；　he　will
  owe　you　money　and　will　be　obliged　to　send　you　some　of　his
  gold。　Hence　you　gain　and　he　loses。　As　a　result　of　this　creed；
  the　economic　program　of　almost　every　seventeenth　century
  state　was　as　follows：
  1。　Try　to　get　possession　of　as　many　precious　metals
  as　you　can。
  2。　Encourage　foreign　trade　in　preference　to　domestic
  trade。
  3。　Encourage　those　industries　which　change　raw　materials
  into　exportable　finished　products。
  4。　Encourage　a　large　population；　for　you　will　need　workmen
  for　your　factories　and　an　agricultural　community
  does　not　raise　enough　workmen。
  5。　Let　the　State　watch　this　process　and　interfere　whenever
  it　is　necessary　to　do　so。
  Instead　of　regarding　International　Trade　as　something
  akin　to　a　force　of　nature　which　would　always　obey　certain　natural
  laws　regardless　of　man's　interference；　the　people　of　the
  sixteenth　and　seventeenth　centuries　tried　to　regulate　their
  commerce　by　the　help　of　official　decrees　and　royal　laws　and　financial
  help　on　the　part　of　the　government。
  In　the　sixteenth　century　Charles　V　adopted　this　Mercantile
  System　（which　was　then　something　entirely　new）　and　introduced
  it　into　his　many　possessions。　Elizabeth　of　England
  flattered　him　by　her　imitation。　The　Bourbons；　especially　King
  Louis　XIV；　were　fanatical　adherents　of　this　doctrine　and　Colbert；
  his　great　minister　of　finance；　became　the　prophet　of　Mercantilism
  to　whom　all　Europe　looked　for　guidance。
  The　entire　foreign　policy　of　Cromwell　was　a　practical
  application　of　the　Mercantile　System。　It　was　invariably　directed
  against　the　rich　rival　Republic　of　Holland。　For　the　Dutch
  shippers；　as　the　common…carriers　of　the　merchandise　of　Europe；
  had　certain　leanings　towards　free…trade　and　therefore　had
  to　be　destroyed　at　all　cost。
  It　will　be　easily　understood　how　such　a　system　must　affect
  the　colonies。　A　colony　under　the　Mercantile　System　became
  merely　a　reservoir　of　gold　and　silver　and　spices；　which　was
  to　be　tapped　for　the　benefit　of　the　home　country。　The　Asiatic；
  American　and　African　supply　of　precious　metals　and　the　raw
  materials　of　these　tropical　countries　became　a　monopoly　of
  the　state　which　happened　to　own　that　particular　colony。　No
  outsider　was　ever　allowed　within　the　precincts　and　no　native
  was　permitted　to　trade　with　a　merchant　whose　ship　flew　a
  foreign　flag。
  Undoubtedly　the　Mercantile　System　encouraged　the　development
  of　young　industries　in　certain　countries　where　there
  never　had　been　any　manufacturing　before。　It　built　roads
  and　dug　canals　and　made　for　better　means　of　transportation。
  It　demanded　greater　skill　among　the　workmen　and　gave　the
  merchant　a　better　social　position；　while　it　weakened　the　power
  of　the　landed　aristocracy。
  On　the　other　hand；　it　caused　very　great　misery。　It　made
  the　natives　in　the　colonies　the　victims　of　a　most　shameless
  exploitation。　It　exposed　the　citizens　of　the　home　country　to　an
  even　more　terrible　fate。　It　helped　in　a　great　measure　to　turn
  every　land　into　an　armed　camp　and　divided　the　world　into　little
  bits　of　territory；　each　working　for　its　own　direct　benefit；
  while　striving　at　all　times　to　destroy　the　power　of　its　neighbours
  and　get　hold　of　their　treasures。　It　laid　so　much　stress
  upon　the　importance　of　owning　wealth　that　‘‘being　rich''　came
  to　be　regarded　as　the　sole　virtue　of　the　average　citizen。　Economic
  systems　come　and　go　like　the　fashions　in　surgery　and
  in　the　clothes　of　women；　and　during　the　nineteenth　century　the
  Mercantile　System　was　discarded　in　favor　of　a　system　of　free
  and　open　competition。　At　least；　so　I　have　been　told。
  THE　AMERICAN　REVOLUTION
  AT　THE　END　OF　THE　EIGHTEENTH　CENTURY
  EUROPE　HEARD　STRANGE　REPORTS　OF
  SOMETHING　WHICH　HAD　HAPPENED　IN
  THE　WILDERNESS；　OF　THE　NORTH　AMERICAN
  CONTINENT。　THE　DESCENDANTS
  OF　THE　MEN　WHO　HAD　PUNISHED　KING
  CHARLES　FOR　HIS　INSISTENCE　UPON　HIS
  ‘‘DIVINE　RIGHTS''　ADDED　A　NEW　CHAPTER
  TO　THE　OLD　STORY　OF　THE　STRUGGLE
  FOR　SELF…GOVERNMENT
  FOR　the　sake　of　convenience；　we　ought　to　go　back　a
  few　centuries　and　repeat　the　early　history　of　the　great
  struggle　for　colonial　possessions。
  As　soon　as　a　number　of　European　nations　had　been
  created　upon　the　new　basis　of　national　or　dynastic　interests；
  that　is　to　say；　during　and　immediately　after　the　Thirty
  Years　War；　their　rulers；　backed　up　by　the　capital　of
  their　merchants　and　the　ships　of　their　trading　companies；
  continued　the　fight　for　more　territory　in　Asia；　Africa　and　America。
  The　Spaniards　and　the　Portuguese　had　been　exploring　the
  Indian　Sea　and　the　Pacific　Ocean　for　more　than　a　century　ere
  Holland　and　England　appeared　upon　the　stage。　This　proved
  an　advantage　to　the　latter。　The　first　rough　work　had　already
  been　done。　What　is　more；　the　earliest　navigators　had　so　often
  made　themselves　unpopular　with　the　Asiatic　and　American　and
  African　natives　that　both　the　English　and　the　Dutch　were
  welcomed　as　friends　and　deliverers。　We　cannot　claim　any
  superior　virtues　for　either　of　these　two　races。　But　they　were
  merchants　before　everything　else。　They　never　allowed　religious
  considerations　to　interfere　with　their　practical　common　sense。
  During　their　first　relations　with　weaker　races；　all　European
  nations　have　behaved　with　shocking　brut