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mainland only by boats, through river passes easily defended by practised sailors against barbarians who had never plied an oar, the Venetian refugees could look in peace on the desolation which swept over Italy; their warehouses, their markets, their treasures were safe from plunder; and stretching their hands over the sea, they found in it fish and salt, and in the rich possessions of trade and territory which it opened to them, more than compensation for the fat lands and inland towns which had long been their home. The Venetians traded with Constantinople, Greece, Syria, and Egypt. They became lords of the Morea, and of Candia, Cyprus, and other islands of the Levant. The trade of Venice with India, though spoken of, was probably never great. But the crusades of the 12th and 13th centuries against the Saracens in Palestine extended her repute more widely east and west, and increased both her naval and her commercial resources. It is enough, indeed, to account for the grandeur of Venice that in course of centuries, from the security of her position, the growth and energy of her population, and the regularity of her government at a period when these sources of prosperity were rare, she became the great emporium of the Mediterranean—all that Carthage, Corinth, and Athens had been in a former age on a scene the most remarkable in the world for its fertility and facilities of traffic,—and that as Italy and other parts of the Western empire became again more settled her commerce found always a wider range. The political history of the Venetian Republic is deeply interesting, were this the proper place to do more than glance at the fortune of commerce and the circumstances and conditions under which it attains its grandest success. The bridge built from the largest of the islands to the opposite bank became the “Rialto,” or famous exchange of Venice, whose transactions reached farther, and assumed a more consolidated form, than had been known before. There it was where the first public bank was organized; that bills of exchange were first negotiated, and funded debt became transferable; that finance became a science, and book-keeping an art. Nor must the effect of the example of Venice on other cities of Italy be left out of account. Genoa, following her steps, rose into great prosperity and power at the foot of the Maritime Alps, and became her rival, and finally her enemy. Naples, Gaeta, Florence, many other towns of Italy, and Rome herself, long after her fall, were encouraged to struggle for the preservation of their municipal freedom, and to foster trade, arts, and navigation, by the brilliant success set before them on the Adriatic; but Venice, from the early start she had made, and her command of the sea, had the commercial pre-eminence.

The state of things which arose on the collapse of the Roman empire presents two concurrent facts, deeply affecting the course of trade—(1) the ancient seats of industry and civilisation were undergoing constant decay, while (2) the energetic races of Europe were rising into more civilized forms and manifold vigour and copiousness of life. The fall of the Eastern division of the empire prolonged the effect of the fall of the Western empire; and the advance of the Saracens over Asia Minor, Syria, Greece, Egypt, over Cyprus and other possessions of Venice in the Mediterranean, over the richest provinces of Spain, and finally across the Hellespont into the Danubian provinces of Europe, was a new irruption of barbarians from another point of the compass, and revived the calamities and disorders inflicted by the successive invasions of Goths, Huns, and other Northern tribes. For more than ten centuries the naked power of the sword was vivid and terrible as flashes of lightning over all the seats of commerce, whether of ancient or more modern origin. The feudal system of Europe, in organizing the open country under military leaders and defenders subordinated in possession and service under a legal system to each other and to the sovereign power, must have been well adapted to the necessity of the times in which it spread so rapidly; but it would be impossible to say that the feudal system was favourable to trade, or the extension of trade. The commercial spirit in the feudal, as in preceding ages, had to find for itself places of security, and it could only find them in towns, armed with powers of self-regulation and defence, and prepared, like the feudal barons themselves, to resist violence from whatever quarter it might come. Rome, in her best days, had founded the municipal system, and when this system was more than ever necessary as the bulwark of arts and manufactures, its extension became an essential element of the whole European civilization. Towns formed themselves into leagues for mutual protection, and out of leagues not infrequently arose commercial republics. The Hanseatic League, founded as early as 1241, gave the first note of an increasing traffic between countries on the Baltic and in northern Germany, which a century or two before were sunk in isolated barbarism. From Lubeck and Hamburg, commanding the navigation of the Elbe, it gradually spread over 85 towns, including Amsterdam, Cologne, and Frankfort in the south, and Dantzic, Königsberg, and Riga in the north. The last trace of this league, long of much service in protecting trade, and as a means of political mediation, passed away the other year in the erection of the new German empire, but only from the same cause that had brought about its gradual dissolution—the formation of powerful and legal governments—which, while leaving to the free cities their municipal rights, were well capable of protecting their mercantile interests. The towns of Holland found lasting strength and security from other causes. Their foundations were laid as literally in the sea as those of Venice had been. They were not easily attacked whether by sea or land, and if attacked had formidable means of defence. The Zuyder Zee, which had been opened to the German Ocean in 1282, carried into the docks and canals of Amsterdam the traffic of the ports of the Baltic, of the English Channel, and of the south of Europe, and what the seas did for Amsterdam from without the Rhine and the Maese did for Dort and Rotterdam from the interior. By the Union of Utrecht in 1579 Holland became an independent republic, and for long after, as it had been for some time before, was the greatest centre of maritime traffic in Europe. The rise of the Dutch power in a low country, exposed to the most destructive inundations, difficult to cultivate or even to inhabit, affords a striking illustration of those conditions which in all times have been found specially favourable to commercial development, and which are not indistinctly reflected in the mercantile history of England, preserved by its insular position from hostile invasions, and capable by its fleets and arms to protect its goods on the seas and the rights of its subjects in foreign lands.

The progress of trade and productive arts in the Middle Ages, though not rising to much international exchange, was very considerable both in quality and extent. The republics of Italy, which had no claim to rival Venice or Genoa in maritime power or traffic, developed a degree of art, opulence, and refinement commanding the admiration of modern times; and if any historian of trans-Alpine Europe, when Venice had already attained some greatness, could have seen it 500 years afterwards, the many strong towns of France, Germany, and the Low Countries, the great number of their artizans, the products of their looms and anvils, and their various cunning workmanship might have added many a brilliant page to his annals. Two centuries before England had discovered any manufacturing quality, or knew even how to utilize her most valuable raw materials, and was importing goods from