CHAPTER I BALANCE OF INTERNATIONAL PAYMENTS DEVELOPMENT OF MODERN BUSINESS IN WESTERN EUROPE The fundamental activity of man, is to obtain a living or to engage in what is known as "business." He has certain economic wants which he seeks to satisfy by means of material commodities and personal services. The evolution of these wants and the consequent development in goods, that is, commodities and services, form a study as fascinating as the purely political struggles which usually fill the pages of the histories of human activities. A brief review of the economic history of Europe and the United States is needed as a background for a full understanding of modern business activities which give rise to international payments between nations. The political and economic characteristics of present day life had their origin in Western Europe at the close of the Middle Ages. By this time most people found that they could best satisfy their wants for food, shelter and clothing by working together in agricultural communities known as "manors." Towns were developed by those persons who preferred to gain their living not by tilling the soil but by domestic manufacturing or by trading. Thus the manorial system and the craft and merchant guilds developed side by side. The economic wants of the people were thus satisfied largely within their own communities, and so both town and country life in the Middle Ages were forms of purely local economy. This stage of industrial organization disappeared about the end of the Sixteenth Century which marked the rise of the modern political state and the coming of national economy. Men no longer thought themselves part of a manor or a town but of a nation, and their economic interests widened correspondingly. International economy did not make its appearance until about the middle of the Eighteenth Century. True, foreign trade can be retraced to the early Phoenicians, Carthaginians, Greeks and Romans, but after the collapse of the Roman Empire international commerce was almost non-existent, until the Crusades stirred all Europe and opened trade lines with the East. The discovery of America changed the entire course of this commerce. The cities of Genoa and Venice declined in importance as commercial centers, with the rise of Lisbon, Antwerp, Amsterdam and London. Thus for several centuries international commerce flourished in a few business centers but exerted relatively little influence on the economic structure of society until well into the |