Valois were building up strong national monarchies, Germany was divided, so far as political and practical control is concerned, amongst a multitude of territorial princes, lay or ecclesiastical, whose lands were seldom geographically contiguous, nobles, knights, and imperial cities. Industrial activity was centred chiefly in the towns, which maintained themselves as independent exclusive economic units, concerned only for the interests of their own citizens and residents, and defended themselves by taxes, tolls, and restrictions from the encroachments and competition of other towns and their inhabitants, though sometimes, as notably in the case of the Hansa League, common interests in external trade drew them together in a federal union. In conflict with these independent town economies was the attempt of the territorial princes to extend their power over all the area within which their possessions lay, and establish therein a territorial economy which should regulate town and village economies alike ; but this process had as yet made little headway. It was, however, in accordance with the tendency which contemporaneously prevailed in other countries towards the control of the economic life of the people by the prince. 1

As previously remarked, the teaching of the humanists, who harked back to pagan ideals, favoured the increase of the power of the prince on paternal lines. The Institute of a Christian Prince, by Erasmus, which was dedicated to the Emperor Charles V, was essentially of this character, and some of his counsel, as when he advises that a sovereign

who is in need of supplies should levy them on the goods of foreign merchants, is eminently mercantilist in spirit. It is said that this recommendation had some influence in ·producing a scheme which if it had been carried would have been a definite step towards the welding together of the German peoples. It was proposed in rszz, in order to provide for the maintenance of the imperial chamber and government and the general expenses of administration, to raise a toll along the whole imperial frontier on the whole foreign trade of Germany. The object of this proposal, as indicated, was primarily fiscal, but it fell in with an opinion which obtained widely amongst the nonmercantile classes that the country was a loser by the money which went to pay for imports, and that the tax would operate as a check upon this loss, though it failed to satisfy the logical corollary that the export trade was correspondingly gainful, for it was to be levied on imports and exports alike. The scheme, however, was vigorously opposed by the towns, whose representatives urged that a tax of this sort would utterly ruin German industry and commerce and lead to the emigration of artisans and mercantile people to foreign lands. In view of the multitude of custom houses already in existence, they did not desire to see a fresh series along the whole frontier of the Empire. The other estates retorted that the proposed tax would not affect necessaries of life. Other nations had imposed similar taxes for the common good without ruining trade and commerce, and in any case the profit of a few tradespeople must not be rated above the common welfare, which would undoubtedly be

The Reformation helped to confirm the movement towards princely independence. The leading German reformers, wishing to win the support of the secular arm in the various parts of Germany, tended to emphasize the power of the prince, and their teaching, in its general purport, favoured a sort of territorial Mercantilism in which all departments of the social and economic life of a people should be under the paternal control of the prince. It thus also encouraged the movement in the direction of territorial13overeignty. In the financial and economic sphere this movement found expression in an assertion, in which Hapsburg Austria and Hohenzollern Brandenburg led the way, of absolute independence of the empire and of other princes in the matter of taxation, and an extension of princely control at the expense of the town economies. There was nothing of national spirit . in all this. Rather we are called upon to witness, during the sixteenth and seventeenth centuries, what has been described, from the German standpoint, as a civil war of all against all, 3 in which one territory set

up tariff obstructions against another territory, and territorial and town economies fought for the mastery, greatly to the detriment of German industry and trade.