Front Page Titles (by Subject) CHAPTER 8: THE EIGHTEENTH CENTURY: INDUSTRIAL REVOLUTION - A Concise History of the Common Law
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
CHAPTER 8: THE EIGHTEENTH CENTURY: INDUSTRIAL REVOLUTION - Theodore Frank Thomas Plucknett, A Concise History of the Common Law 
A Concise History of the Common Law (Indianapolis: Liberty Fund, 2010).
About Liberty Fund:
The copyright to this edition, in both print and electronic forms, is held by Liberty Fund, Inc.
Fair use statement:
THE EIGHTEENTH CENTURY: INDUSTRIAL REVOLUTION
The eighteenth century is the great dividing line in English economic development between mediaeval and modern times. The central point in its history is usually referred to as the industrial revolution, which was rather, in point of fact, a long and slow process which began to accelerate towards the middle of the century. Its results were to change the face of England completely; its mode of life, its source of wealth, even its colonial possessions were all radically changed as an outcome of this movement. So far the structure of the nation had been essentially mediaeval; so, too, had been its law. If we are to seek the fundamental notes of this mediaeval policy we shall find that they were based upon the fact that the normal occupation of the bulk of the inhabitants was agriculture. The great source of wealth was the land, and such capitalism as existed looked mainly to the land for its profits. The social structure of society was built upon this idea. The legal aspect of all this is clearly visible. Land was the principal form of wealth, and therefore the principal source of power, and the law had to take account of this situation. First of all the King’s Court assumed complete control over the land—and thereby over the landowners. The law of land was rapidly developed to an astonishing degree, and every means was adopted of protecting landed property to the fullest extent. It was only natural that the land should therefore be the symbol of economic and social permanence, and that efforts should be made to perpetuate the social system founded upon it.
Even in the middle ages, however, there were the beginnings of other forms of wealth, and as time proceeds commerce takes an increasing place in national life. Nevertheless for a long time it was the policy of the law to separate the two; it is curious to observe that merchants very nearly became an estate of the realm and occasionally we find what looks like a parliament of merchants;1 there was a chance that in England as in some other countries there might have grown up a House of Merchants in Parliament. The separation of commerce from the normal occupation of the nation was further emphasised by the fact that the merchants had their own organisation and their own law.2 It is only as a result of many centuries of history culminating in the industrial revolution that these barriers were broken down; it is familiar knowledge that such bodies of mercantile law as those relating to bankruptcy and negotiable instruments for a long time pertained exclusively to merchants; indeed, a separate organisation was set up to supervise the affairs of insolvent debtors who were not merchants and therefore outside of the law of bankruptcy. It was only as late as 1690 that the law considered the possibility of a non-merchant being a party to a bill of exchange.3
MERCHANTS AND FINANCE
Although the middle ages were so predominantly agricultural, it is still possible and indeed very necessary to trace in them the beginnings of commerce. In English history two commodities are of particular significance, wool and wine. Wool-growing was the great source of England’s position in international politics during the middle ages. The wool which was grown in England was exported to Flanders, and there in the great Flemish fairs it was distributed throughout Europe. England’s monopoly of wool was so effective that the Crown could afford to leavy heavy taxes upon its export, and upon occasion could bring powerful pressure to bear on foreign nations by diverting the wool trade from one port to another, or even by suspending it altogether. Financially, the wool trade was conducted on a capitalistic basis. In its early days, the leaders of the industry were the Cistercian monks whose mode of life was to build their abbeys in remote places among the hills and occupy themselves with sheep farming. As for the smaller growers of wool, it seems that arrangements were made to buy up their crops in advance, the sale being effected through the assistance of foreign capital. It is significant that credit took the form principally of advanced payments to the growers for future delivery.4 Middlemen were a prominent feature of the trade and behind them stood great foreign capitalists. The same was true of the important import trade in wine. It is obvious that we have here complicated relationships involving very important interests, and we may be certain that the result must have been the development of a good deal of commercial law. It is typical of the middle ages, however, that this law should be not the law of the land but the law of a particular class of people, developed through their custom and enforced through their own organisation. As for the capitalists whom we have mentioned, their place becomes increasingly important through the middle ages. In England a large part was played by the Jews until they were expelled by Edward I. Their place was then taken by various groups of bankers from the cities of northern Italy—the financial centre of London is still called Lombard Street. A considerable place too was occupied by certain religious orders whose international organisation was a convenient machinery ready-made for large-scale banking.1 Their considerable wealth also enabled them at one time to undertake capitalistic operations (although by the close of the middle ages many monasteries were in financial difficulties as a result of heavy royal and papal taxation). Indeed, this tendency of large religious organisations being deeply involved in finance persisted into modern times; in more than one country the principal cause for the expulsion of the Jesuits in the eighteenth and nineteenth centuries was a fear of their financial activities.
As for manufacturers, development was at first most rapid in Flanders where English wool was made up on a large scale. It was to Edward III that credit is largely due for the establishment of the textile industry in England. His Queen was Flemish, and it may be her connection with Flanders which led him to invite some Flemish weavers to settle in England.2 Nevertheless, the English textile industry was still purely domestic, that is to say, carried on in the home of the worker, and not in a factory.
THE INDUSTRIAL REVOLUTION
The transition from this state of things to conditions which are familiar to-day was effected principally in the eighteenth century. Wool-growing had increased enormously and was conducted on a very large scale. This became possible through the great enclosure movements of the sixteenth and eighteenth centuries whereby a great deal of common land, together with land which once had been arable, was turned over to sheep farming. Besides this great change from crop-raising to sheep-rearing (which was the cause incidentally of a great deal of unemployment and agrarian unrest), the textile industry also underwent a great change. The already existing tendency for a number of textile workers to become dependent upon one employer was immensely increased by the introduction of machinery, and here we reach the greatest single cause of the industrial revolution. By means of machinery more work could be done at less expense and with less labour. Soon it became clear that the price also was reduced, and the great movement began whereby trade gathered an ever-increasing momentum. The more there was produced the more the demand increased, and in the end the manufacturers were able to some extent to set the pace of industrial development. The introduction of water power, and very soon afterwards of steam power, gave England a tremendous advantage, for ample supplies of coal were easily accessible. Consequently the industrial revolution pursued a much more rapid course in England than in the rest of Europe.
The task which faced the law was to meet these new requirements. Land was no longer to be its principal concern; other forms of wealth were demanding protection. As the growth of machinery proceeded, the cost of equipping a factory became considerable and usually exceeded the resources of a single manufacturer. Various forms of co-operative effort had been inherited from the middle ages which had long been familiar, at least on the continent, where there was a developed law of partnership in several varieties. Such forms of joint enterprise in seventeenth-century England were usually employed in colonial expansion or distant foreign trade. The law had now to consider some means of placing these advantages within the reach of smaller men who did not require the elaborate organisation of such bodies as the East India Company, or the Bank of England. It was also a growing necessity that banking should be developed, and out of the practice of the London goldsmiths who would receive deposits and issue against them interest-bearing notes,1 there arose, first of all, the Bank of England (1691), and soon a large number of private banks in different parts of the country. The law had, therefore, to consider all the complicated relationships which were being created through the machinery of credit and joint enterprise. It is to the eighteenth century, therefore, that we must look for the rise of most of the law which is of a distinctly modern character, that is to say, of personal property in general (and especially of stock, shares and the like), of companies and their stock, partnerships, of negotiable instruments, contract, bankruptcy, and master and servant. In effecting these developments the eighteenth century achieved the transition from mediaeval to modern times.
Politics had its part in the history of this development. The fall of James II had been due, in some measure at least, to the fact that the City of London and the financial interests thoroughly distrusted his policy. Although his opponents were, of course, drawn largely from the nobility, nevertheless City interests played a considerable part. One of the most significant results of the Revolution of 1689 was the foundation of the Bank of England, which was designed primarily to finance the French War, the founders lending a considerable sum of money to the government and using this government debt as part of their capital. In consequence the bank was closely connected with the Revolution settlement; it was generally felt through the country that any restoration of the Stuarts would imperil the bank, and as the bank’s activities grew wider the country was less and less inclined to take this risk. The Whig party had, therefore, a marked commercial character, while the Tories were still apt to be representative of the landed interest.
The legal consequences of the industrial revolution were effected, partly through legislation, but more largely through the development of case law, and a little group of judges who were far-sighted enough to divine the direction in which events were moving were able quietly and without commotion to perform the great work of taking over the existing mercantile law and custom, and incorporating it into the law of the land. Of this we shall speak more in treating of the history of the law merchant.
One other great result of the industrial revolution has been to produce a new internationalism. Internal commerce in many different nations was to develop along parallel lines, and the basis of the new commercial law was in every case to be the old custom of merchants, and one of the features of this custom had been its growing international character. There was, therefore, a tendency for commercial law in different countries to proceed broadly upon parallel lines. Local diversities there were inevitably; they had been even more serious in the middle ages. But in spite of this some general features remained constant. At the same time international trade was taking a much greater place. More and more commodities passed from country to country and an increasing number of merchants were engaged in foreign business. This also emphasised the tendency for commercial problems to be considered from an international standpoint. The movement is one of the most striking features of our own day; international trade and finance are having their effect upon commercial law, and the time seems not far distant when commercial law will regain its mediaeval aspect of internationalism. This progressive feature of our eighteenth-century law is admirably shown in the life of Lord Mansfield,1 who tried to treat some of the ancient portions of the common law in the same liberal spirit as the newer commercial law which he was so instrumental in developing.
His contemporary, Sir William Blackstone,2 although an admirer of Mansfield, and at times a critic of the law as it then existed, was not a reformer by temperament, and his Commentaries (1776) then, as now, leave the impression of almost indiscriminate praise for the great bulk of the old law which the courts had been accustomed to administer. The law of real property, notably, was undergoing immense elaboration with results which were by no means satisfactory. If the landed interests were to retain their dominant place in national affairs, then agriculture would have to compete with the newer forms of commercialism. Great improvements were made during the eighteenth century in scientific farming, and agriculture made rapid strides as a source of wealth. The effective output, both in crops and herds, was increased and improved enormously, until it became clear that agriculture afforded opportunities for commercial enterprise. This development, however, could only be achieved by considerable capital outlay upon improvement, and was seriously hampered by the law of real property. Land could not take its place in a commercial scheme of things as long as it was so difficult to deal with it. The seventeenth- and eighteenth-century lawyers had developed elaborate methods of placing land beyond the control of the tenant in possession, and when they tried to retrace their steps in an endeavour to give the great landlord powers to charge and to sell, their remedies were equally cumbersome, uncertain and expensive. It is not until the close of the eighteenth century that any substantial progress was made towards providing a simpler law of land, and to this day the process is still going on.
At the same time there was a movement, not fully effective until the early years of the nineteenth century, for radically reforming the whole of the procedural side of law.
The most tremendous event in the eighteenth century was the French Revolution with which it closed, and a few words must be said here of its implications in legal and political science. These can best be illustrated by considering two great thinkers, Montesquieu who just preceded it, and Burke who was contemporary with it. In 1748 Montesquieu published his Esprit des Lois, which, like his earlier essays, was an attempt to give a political interpretation to history. The sources he used were Roman and more particularly English history. He classified the different forms of government and assigned to each its characteristic principle: thus despotism depends upon fear, monarchy upon honour, aristocracy upon moderation, and democracy upon virtue (in the Roman sense of the word). The corruption and fall of a government whereby it changes into another form he attributes to the corruption of its fundamental principle; but as long as the principle remains fairly pure he sees little to choose between the different possible forms. The really vicious situation is when institutions which are fitted for one principle of government are still forced to work although that principle has been replaced by another. Montesquieu tells us little about sovereignty, although he has a good deal to say about liberty. He regards liberty as best assured by the supremacy of law rather than of men, and to achieve this the best way, in his opinion, was the separation of powers. This part of his work is greatly indebted to John Locke. The aspect which he develops at most length is not the mere administrative convenience of specialising the functions of government, but rather the constitutional safeguards which result when each power operates as a check upon the others. It is this system of “checks and balances” which Montesquieu regards as particularly important, and as the secret of constitutional monarchy in England. It was he who had the romantic notion that English constitutionalism was directly derived from the ancient Germans of Tacitus.1 “Ce beau système a été trouvé dans les bois.” He even went so far as to develop a theory of the influence of geography upon politics. He is essentially modern in the emphasis which he places upon legislation, but it is his theory of the separation of powers and his insistence upon its value as affording constitutional safeguards which are most important for our purposes, for he was read by influential men in America and has had a marked influence upon constitutional development in that country.
Into the causes and character of the French Revolution we cannot enter; but some of its results upon English political thought may well be mentioned. The greatest political thinker at this time in England was Edmund Burke, and anyone who wishes to have a summary of English political wisdom by an experienced statesman who could adopt a philosophical attitude without losing touch with practical events must read the writings and speeches of Burke. They are likely to remain for a long time an authoritative statement of the results which had been achieved by parliamentary government in the seventeenth and eighteenth centuries. At the present day his words are constantly upon the lips of the best English statesmen. His thought is characterised by its intimate contact with practical politics; rarely does he allow a theory to divert his attention from the practical problems of everyday government. A noteworthy portion of his work is in answer to Rousseau and to the theories of the rights of man. With a natural tendency to admire aristocracy, he felt that an extreme democracy as suggested by some theorists contained great dangers, and insisted that it was hazardous to abandon those sentiments for aristocracy which in his day seemed natural to mankind. He observes that a democracy is not affected by the fear which besets a monarch; when shameless acts are done the moral responsibility vanishes when spread among numerous persons, while the alleged liberty of a democracy is more often a delusion. The horrors with which the Revolution began made an increasing impression upon Burke as upon his countrymen, and had the practical effect of delaying reform for over a generation. Typical measures of this period were the Treasonable Practices Act1 and the Seditious Meetings Act2 of 1795, the suspension of the Habeas Corpus Act on several occasions, and the imposition of heavy stamp duties with the object of checking the circulation of cheap newspapers. Numerous State trials took place.3 Even purely private law fell under the influence of the extreme conservative reaction of which Lord Ellenborough was the personification in the King’s Bench (1802-1818) and Lord Eldon in Chancery (1801-1806, 1807-1827). To this result Burke largely contributed, nor must he be blamed overmuch for his caution at a moment when the wildest theories were being proclaimed in all seriousness. His speeches on America4 are the best expression of his philosophy, for they were made before the French Revolution came to strike terror throughout the rest of Europe. There in particular the political realism of Burke is apparent; he almost alone of British statesmen at the moment was prepared to face the facts, and having done so, to advocate a frank acknowledgment of the situation as it actually existed. He poured ridicule upon the government for their weak attempts to compel recognition of a principle which had no relation to the existing state of affairs; he was the embodiment of the spirit of compromise, and appreciated fully the fact that situations slowly change, and that the change must be recognised frankly. He was prepared to state that the American colonies had entered upon the stage of adult political life, and to counsel the government to treat them accordingly. Perhaps the most interesting passages in his speeches on America are those where he shows that the demands of the colonists were the very same which Englishmen at home had made in a more heroic age, and where he stresses the deep respect for legality which characterised English political development, urging that this very spirit lay at the root of the American case.
For a list of these “Assemblies of Merchants”, see Interim Report of the Committee on House of Commons Personnel and Politics (1932, Cmd. 4130), 109. More than a score of such assemblies were summoned in the forty years between 1316 and 1356.
It had long been recognised, however, that a merchant was not excluded from using common law remedies when they were available: Y.B. 21 & 22 Edward I (Rolls Series), 456-458 (1294).
Witherley v. Sarsfield (1690), Show. 125.
M. Postan, Credit in Mediaeval Trade, Economic History Review, i. 234-261 (with which compare Bulletin of the Institute of Historical Research, v. 176-178). For an interesting indenture date 12 Sept. 1478, for the sale of wool to be delivered by 2 Feb. 1479, the purchaser paying £81: 17s. down, and a further £58: 3s. on delivery, see Supplementary Stoner Letters (ed. Kingsford), 12 (in Camden Miscellany, xiii).
R. Génestal, Le Rôle des monastères comme établissements de crédit.
For earlier efforts in the same direction, see Cunningham, Growth of English Industry and Commerce, i. 648.
See Richards, Early English Banking Schemes, Journal of Economic and Business History (1928), i. 36-76. See p. 58 above.
For Mansfield, see below, p. 248.
For Blackstone, see below, p. 285.
These famous chapters from the Germania of Tacitus will be found in Stubbs, Charters.p.c.l.—4
36 Geo. III, c. 7.
36 Geo. III, c. 8.
Many details will be found in T. Erskine May, Constitutional History of England (ed. Francis Holland, 1912), chapters ix-xiv.
There are numerous cheap editions of Burke’s principal speeches and books.