II.
                       Seventeenth-Century European Economic Growth
      In the late sixteenth century and into the seventeenth, Europe continued the growth that
had lifted it out of the relatively less prosperous medieval period (from the mid 400s to the
late 1400s). Among the key factors behind this growth were increased agricultural
productivity and an expansion of trade.
      Populations cannot grow unless the rural economy can produce enough additional food
to feed more people. During the sixteenth century, farmers brought more land into cultivation
at the expense of forests and fens (low-lying wetlands). Dutch land reclamation in the
Netherlands in the sixteenth and seventeenth centuries provides the most spectacular example
of the expansion of farmland: the Dutch reclaimed more than 36.000 acres from 1590 to 1615
alone.
      Much of the potential for European economic development lay in what at first glance
would seem to have been only sleepy villages. Such villages, however, generally lay in
regions of relatively advanced agricultural production, permitting not only the survival of
peasants but also the accumulation of an agricultural surplus for investment. They had access
to urban merchants, markets, and trade routes.
      Increased agricultural production in turn facilitated rural industry, an intrinsic part of the
expansion of industry. Woolens and textile manufacturers, in particular, utilized rural cottage
(in-home) production, which took advantage of cheap and plentiful rural labor. In the German
states, the ravages of the Thirty Years’ War (1618-1648) further moved textile production into
the countryside. Members of poor peasant families spun or wove cloth and linens at home for
scant remuneration in an attempt to supplement meager family income.
      More extended trading networks also helped develop Europe’s economy in this period.
 English and Dutch ships carrying rye from the Baltic states reached Spain and Portugal. 
Population growth generated an expansion of small-scale manufacturing, particularly of
handicrafts, textiles, and metal production in England, Flanders, parts of northern Italy, the
southwestern German states, and parts of Spain. Only iron smelting and mining required
marshaling a significant amount of capital (wealth invested to create more wealth).
      The development of banking and other financial services contributed to the expansion of
trade. By the middle of the sixteenth century, financiers and traders commonly accepted bills
of exchange in place of gold or silver for other goods. Bills of exchange, which had their
origins in medieval Italy, were promissory notes (written promises to pay a specified amount
of money by a certain date) that could be sold to third parties. In this way, they provided
credit. –[1]– At mid-century, an Antwerp financier only slightly exaggerated when he claimed,
“One can no more trade without bills of exchange than sail without water.” –[2]– Merchants
no longer had to carry gold and silver over long, dangerous journeys. –[3]– An Amsterdam
merchant purchasing soap from a merchant in Marseille could go to an exchanger and pay the
exchanger the equivalent sum in guilders, the Dutch currency. –[4]– The exchanger would
then send a bill of exchange to a colleague in Marseille, authorizing the colleague to pay the
Marseille merchant in the merchant's own currency after the actual exchange of goods had
taken place.
      Bills of exchange contributed to the development of banks, as exchangers began to
provide loans. Not until the eighteenth century, however, did such banks as the Bank of
Amsterdam and the Bank of England begin to provide capital for business investment. Their
principal function was to provide funds for the state.
      The rapid expansion in international trade also benefitted from an infusion of capital,
stemming largely from gold and silver brought by Spanish 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 undertaking, joint-stock companies provided
permanent funding of capital by drawing on the investments of merchants and other investors
who purchased shares in the company.
【題組】35. What was true of Europe during the medieval period?
(A) Agricultural productivity declined.
(B) The general level of prosperity declined.
(C) There was relatively little economic growth.
(D) Foreign trade began to play an important role in the economy.[!--empirenews.page--]