100. Position of Venice; early history.—The course of the eastern trade can best be followed in connection with the fortunes of the city of Venice which still shows, in the splendid palaces lining its canals, the evidence of its former greatness.

The beginnings of the city are traced back to the period of barbarian invasions when fugitives from the mainland sought shelter on the islands a short distance from shore. The inhabitants, thus protected from the unending wars of the feudal period, were at the same time forced to seek their living on the sea, first as fishermen but more and more as merchants. The Italian conquests of the Emperor Justinian (about 500 A.D.), brought them into relations with Constantinople which were maintained by trade and frequent embassies. Even before the year 1000 the Venetians had won a secure position in Constantinople by an imperial charter which granted them, among other privileges, freedom from the vexatious tolls and delays imposed by subordinate customs officers. Still more important was a charter of 1082, which granted lands and buildings in Constantinople for a special Venetian quarter, which freed the Venetians from all taxes and at the same time required their trade rivals, the Amalfitani, to pay taxes to them for the right to trade.

101. Expansion of Venetian empire during the crusades.—Before the crusades, therefore, Venice had a commanding position in the eastern trade. It confirmed this position by a series of bitter struggles with its rivals, especially the cities of Genoa and Pisa which were rising to great prominence. These cities imperiled for a time Venetian control of the Black Sea trade at Constantinople; but the outcome of the fourth crusade (1204), was a victory for Venice which left her supremacy for the time unquestioned.

In the share taken by them in the partition of the Eastern Empire the Venetians showed that common sense which is always found at the bottom of all their actions. They left to the crusaders the inland provinces and took for themselves the coast-towns and islands which promised the best commercial returns and were easiest to defend. In Constantinople itself they took a large part of the city, in which their podestat ruled almost as an independent sovereign. At places commanding the all-important sea route to the East, in the Peloponnesus or Morea, in Crete and in Eubœa, naval stations were established under the control of officers sent out by the home government. The strict rules by which these officers were governed gives an insight into the discipline which existed in the Venetian foreign service. In every place in which the Venetians founded a principality their capital was surrounded by Italian colonies; there where one found formerly only nests of pirates, the terror of Venetian commerce, one found now friendly ports, refuges fortified and secure, where Venetian captains and merchants, certain of a good reception, could ask asylum and protection.

102. Extent of Venetian commerce.—Thanks to the colonial empire which they established the Venetians controlled the trade of the eastern Mediterranean more efficiently than Great Britain has controlled the world commerce of the nineteenth century; the field of operations was narrower, and “trade followed the flag” in those early times as it has never done since. Foreigners might trade if they would pay sufficiently for the privilege; without this recognition of their inferiority they were public enemies to be given short shrift.

Venice established her colonies or trading factories not only along the shore of the eastern Mediterranean and the Black Sea; Venetian merchants penetrated deep into Russia, and into Central Asia through the Crimea. So bold were their enterprises that the home government, fearful for its interests, passed a law to limit their extent. “Dalmatia, Albania, Romania, Greece, Trebizond, Syria, Armenia, Egypt, Cyprus, Candia, Apulia, Sicily and other countries, kingdoms and islands were the fruitful gardens, the proud castles of our people, where they found again profit, pleasure, security.” The old chronicler names but one side of the equation of trade; the products from all these countries and from the far East behind them were brought to Venice to be exchanged for the products of the West. Martino da Canale says of an earlier period what must at any rate have been true of his own (thirteenth century): “The Venetians went about the sea here and there, and across the sea and in all places, and bought merchandise and brought it to Venice from every side. Then there came to Venice Germans and Bavarians, French and Lombards, Tuscans and Hungarians, and every people that lives by merchandise, and they took it to their countries.”

103. Development of the institutions of commerce in Venice.—Reference has been made in an earlier chapter to the Venetian regulations on the building, rigging, and manning of ships, which anticipated by many centuries similar legislation in the countries of northern Europe. The extent of her commercial relations led Venice to a development of book-keeping and banking which made her in these important branches the instructor of Europe, to whom the sons of wealthy merchants in other countries were sent to school. The reader will appreciate how great is the debt of other countries to Italy when he reflects on the number of Italian words having to do with commerce and banking which have become current in general commercial use; among them are conto, conto corrente, porto, risico, disconto, brutto, netto, deposito, folio, bilanza, etc.

104. Venetian commercial policy.—The Venetian commercial policy may be described briefly as the maintenance of as strict a monopoly as possible in the trade east of Italy, and the regulation of trade between Venice and the North or West which would give the Venetians the greatest advantage when they sold their Oriental wares to other Europeans. This policy, as well as the material character of the commerce, can be studied in connection with the two great branches of Venetian trade in Europe, the overland commerce with Germany, and the sea commerce with northwestern Europe.

105. Overland trade with Germany.—As the Venetians were essentially a sea-faring people, and as it was easier to reach the large cities of central and southern Germany by land than by sea, they took the passive part in their German trade, staying at home and allowing the Germans to come to them for wares. The trip overland from central Germany took roughly two weeks or a little less; trade letters of the fifteenth century were a month or more on the way between Venice and Bruges. Different routes were chosen according to the starting-point of the journey. The chief route was that leading over the Brenner, one of the lowest of the great Alpine passes, lying between Augsburg in Germany and Verona in Italy; but very often the merchant struck off to the East before reaching Verona into the valley of the Drave or the Brenta. Coming from the East, from Vienna, for instance, the Semmering pass was commonly chosen.

106. Strict control over German merchants in Venice.—On reaching Venice the merchant was put at once under strict supervision. He could not choose his own lodgings, but must stay at the “Fondaco dei Tedeschi” (German factory, using that word in its earlier sense of a trading post). This was a building (in its later form a handsome palace now used as a government office) which belonged to the city, and which served at once as a hotel, a warehouse, and an office for controlling the trade. When a merchant arrived he was disarmed and given a room; a careful list was made of all his wares, which served as a basis for the government dues; and an inspector was assigned to him. This inspector acted as an interpreter and as a broker, helping the merchant make his bargains, but it would be a great mistake to suppose that he was appointed mainly to serve the merchant’s convenience; his main business was to “shadow” the merchant constantly, to see that he broke none of the numerous regulations designed to assure to the government its dues and to the Venetian people their profits. Germans could bring to Venice only the wares of their own country and of northeastern Europe, because the Venetians wanted to carry on themselves the trade with Flanders; Germans could trade with no other foreigners in Venice, and could not trade even among themselves, in order that the Venetians might have the sole market; they must sell out their whole stock in Venice, without the option of withdrawing part of it and carrying it further. One is tempted to ask why the Germans came to Venice at all, to submit to such severe restrictions. The answer is easy; they had no other place to go to, for the wares they wanted. Thanks to her position and to her skill in trade and war Venice had a monopoly of Oriental wares which enabled her for some time to make what regulations she pleased without fear of losing her customers.

107. Importance of the trade between Venice and Germany.—The German trade in Venice amounted, according to an estimate of the fifteenth century, to a million ducats a year, and the ducat of this period was worth considerably more than the modern dollar. It supplied Germany with the coveted eastern wares which we have already enumerated, and, moreover, with some of the products of Venetian manufactures, which were then highly developed and which were stimulated by protective tariffs. These manufactures included glass, which is even now a specialty of the city, fine textiles, weapons, paper, etc. The Venetian trade, on the other hand, furnished to Germany a market for her metals (gold, silver, iron, copper, lead, tin), furs, twine, rosaries, and manufactures of leather and horn, and the coarser textiles.

108. Commerce by sea with northwestern Europe.—With the countries west of Germany Venice carried on an “active” commerce; that is, instead of waiting for foreigners to come to her she brought the wares to them, as she could well do by the sea route. The crusade of 1204, to which we have already referred as a turning-point in Venetian development, was composed in large part of knights from northwestern Europe, and the relations established then with Flanders, Champagne, and neighboring districts, were continued by trade. The first reference to Venice discovered in English documents is dated 1201, but before the close of the thirteenth century a brisk commerce with England had grown up; at one time in the reign of Edward I over 2,000 sacks of wool were found in the possession of Italian trading companies. The trade followed at first the land route across France, but soon took to the sea, and though the land traffic was never wholly abandoned it became less important and was discouraged by special dues.

109. Regulation of this commerce; the Flanders galleys.—Soon after 1300 the government took charge of this trade and regulated it on principles which were followed for the two hundred years during which it remained important. Separate voyages were, as a rule, prevented, and Venetian merchants who wished to participate in the trade must join in the fleet of “Flanders galleys” which sailed at intervals (usually once a year), as the opportunity for trade seemed favorable. On these occasions the Venetian senate voted a certain number of galleys for the voyage, and auctioned off the right to freight them. Each galley was propelled by 180 oarsmen, and carried for its protection a force of archers commanded by four young patricians who were sent out that in this way they might see the world and learn to serve their native city. The cargo was carried on the account of private merchants, but the supreme control of the fleet was vested in a captain appointed by the Venetian government, and bound to follow its instructions. The voyage to Flanders and back occupied the greater part of a year, as the galleys touched and traded at many ports along the way. The route generally taken included the following stopping-places: Capo d’Istria (Pola), Corfu, Otranto, Syracuse, Messina, Naples, Majorca, the principal ports of Spain and Morocco, and Lisbon. In the English Channel the fleet divided, some galleys going to Southampton or London, others to Sluys (the port of Bruges, connected with it by a short canal), Middelburg, and Antwerp. The chief objective was the city of Bruges, the great market where the trade of northern Europe, in the hands of the Hanseatic merchants, and the trade of southern Europe in the hands of the Venetians, came together.

110. Development of other cities in Italy; freedom and vigor of their policy.—Space forbids the consideration in detail of the history and policy of other Italian cities, of which some rose to the first rank in commerce, though none attained to the greatness of Venice. The lack of a central government in the peninsula enabled each city to frame its policy solely with an eye to its own interests. The Italian cities were able to free themselves from the laws and customs that had been necessary in an earlier time, but which lay like fetters on developing trade and industry. The city of Florence, for instance, showed a liberality in its policy regarding land tenure, industry, domestic and foreign commerce, which was strikingly modern. The result was an extraordinarily rapid development in commerce, manufacture and finance, but also, unfortunately, a jealous rivalry between the cities, which expressed itself not only in commercial competition but also in destructive wars.

111. Genoa.—Genoa, situated in a position corresponding to that of Venice on the other side of the Italian peninsula, grew great like her in the course of the crusades. In conflict with Pisa, which had become a threatening commercial rival, Genoa was a complete victor by the naval victory of Maloria in 1284. Against Venice the city was not so fortunate. Genoa recovered in part from the blow dealt her by Venice in the fourth crusade, when the Greek empire was re-established at Constantinople (1261), and won some important naval victories in the constant succession of wars culminating in the battle of Chioggia in 1380. The Genoese managed always to secure a share of the Oriental trade; they helped to establish the system of joint stock companies; and contributed to the development of banking and public finance. They lacked, however, the advantages of the Venetian situation, both as regarded their opportunity for trade and their capacity for defence. They were drawn into the net of continental politics, and as at home they had never shown the ability of the Venetians to pacify or to crush rival factions, their force was wasted in useless political conflicts.

112. Inland cities; Florence.—Besides the two great seaports of Venice and Genoa other cities of northern Italy grew rich by industry and commerce at this period, notably Milan. The chief commercial city in the interior, however, was Florence in central Italy. Though Florence had no seaport of its own until after 1400, when it overpowered Pisa and Leghorn, it carried on an extensive commerce in its chief product, wool and silk textiles. Great trading houses bought up the raw material through agents settled in markets like Bruges, or traveling for years at a time, and sold the finished product through a similar network of agencies. The amount of manufacturing and commerce in the city stimulated the development of banking institutions, and Florentine bankers gained not only a regal position at home, but also a commanding voice in international politics.

113. Other Mediterranean cities; Marseilles, Barcelona.—On the Mediterranean coast of France the only great port at this period was Marseilles, which had developed rapidly in the course of the crusades. It exported to Italy and the East French textiles (woolen and linen), wood, metals, wine, oil, soap, etc.

In Spain the Arabs had developed the arts of civilization to a point which was far above that of the contemporary Christian states. Toward the close of the Middle Ages, however, the contest between them and the Christian kings for the supremacy of the peninsula absorbed the best energies of both parties, and caused an actual decline in material civilization. One city, however, Barcelona, carried on a very extensive commerce, and was one of the most important ports of the Mediterranean. Its inhabitants enjoyed unusual freedom under the kings of Aragon and were reputed to be among the best sailors of their time; they had trading stations along the coast of the Mediterranean as far as Egypt and Syria, and as merchants or pirates frequented the Grecian archipelago.

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