PRIOR to the middle of the seventeenth century the commerce of Europe and therefore of the world, apart from the local trade of the Mediterranean states, was divided between the English, the Dutch, and the enterprising burghers of the Hanse towns. On the continent the preponderance of trade was with the Dutch. Their small territory, so situated as to form a gateway or point of embarkation for the whole of Europe, with harbors improved by extraordinary perseverance and art; the character of their population, fond of the sea, skilled in nautical pursuits, and destitute of a territorial area sufficient to invite their efforts or yield them a support in agriculture; and, finally, the possession of distant colonies in the East, whose products were peculiarly rich -- all contributed to place them in advance of their competitors. The jealousy and alarm produced among English shipowners by this great and growing commerce of Holland led to the passage, in 1651, of the celebrated Navigation Acts, substantially a revival of the half-forgotten restrictions of the Middle Ages, and destined for the next two centuries to determine the maritime policy of Great Britain. A preliminary measure had been adopted the year before, excluding foreigners from trade with the colonies. In 1651 the scope of the law was extended and broadened, and upon the Restoration, in 1660, it was confirmed by the Parliament of Charles II.
The essential principles embodied in the English navigation laws were as follows: First, trade generally with England was allowed to foreigners only when trading from their own ports; second, exportation from English colonies was allowed only to England; third, all trade with English colonies was reserved exclusively to vessels English both in nationality and in construction, with a crew three fourths of which must be composed of Englishmen; and, fourth, the coast trade was reserved to national vessels.
Before the passage of these acts Dutch commerce had flour-