changes in business practice which it introduced, have led us far away from the rise of the Augsburg merchants in the fifteenth century. We should have to turn back to a very early time in order to trace the first beginnings of the influence which capital exercised on manufactures; indications of it can be found in the thirteenth century, but it was at that date quite exceptional. Medieval industrial organisation usually consisted of a number of separate gilds, each composed of independent craftsmen; these associations had the power of regulating the trades with which they were respectively connected, subject to the approval by municipal or royal authority of the manner in which they exercised their rights, and of the particular rules which they framed. If we are careful to remember that, while this was the ordinary state of affairs, it was not universal in all cities, that its origin was not the same in all places and that it did not hold good equally in all trades, we may look a little more closely at the economic features and conditions of this type of organisation.
The craft-gild was formed with reference to the requirements of a particular city, and looked to a very limited circle of the public for the demand for goods. Part of its function was to see that the quality of the goods was maintained; but its policy was chiefly determined by a desire to give each member his fair share of the available employment. Each master was to have his chance, and none was allowed, by unduly multiplying the number of apprentices or journeymen, to supplant other workmen. These restrictions told in favour of the good training of apprentices, and improved their chance of employment as journeymen after they had served their time, but the rules hampered any man who was trying to push his business and manufacture on a large scale.
The master workman would be in the habit of buying on his own account the material which he required, or he might have the advantage of purchasing wholesale in association with other members of the craft; he would also sell the finished article to the man who wished to use it-the consumer; in some crafts, such as the tailors', an even more primitive practice was long maintained, and the craftsman worked on materials furnished to him by the consumers. Hence we can see that there were two points at which the intervention of the capitalist would easily occur. In the case of goods exported to a distant market, when an exporting merchant was the customer, he might find it convenient to have them manufactured under his direction and at his time instead of procuring them from an independent craftsman; the transition was easy from the position of a constant purchaser to that of an employer. On the other hand, when good$ were made from imported materials, it was convenient for the merchant to retain his ownership in the materials and employ craftsmen to work them up. The effect of drawing any industry into the circle of distant trade with