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The Rise of New Sea Powers

(Baltic Sea Trade, part 3)

In the first decades of the sixteenth century, Lübeck and its Wend allies clearly recognised that Holland's skippers and merchants posed a major threat to their dominium in the Baltic. Within 150 years, Holland's and Zeeland's seafaring towns had changed from loyal partners offering naval support in the League's war against Denmark of 1368-1370, into dogged competitors that effectively undermined the traditional Hanseatic monopolies. This shift caused the division of the northern Low Countries into two economic regions, with the towns east of the Zuiderzee integrated into the Hanseatic League, and the County of Holland, with Amsterdam as its emerging zenith, into the territories of the Burgundian and Habsburg princes.

Growing distance from the Hanse was the inevitable result of Holland's increasing engagement in the intertwined salt and grain trade along the east-west axis through the Sound. Already engaged as the carriers for mostly Hanseatic merchants in the fourteenth century, skippers and merchants from sucg towns as Veere, Zierikzee and Middelburg in Zeeland, and from Amsterdam and the "Water Cities" (i.e. Hoorn, Enkhuizen, Edam, Monnikendam and Medemblik) situated north of it, set sail to the many make-shift harbours along the northern German, Livonian and Prussian coasts. Instead of calling at the Hanseatic staple markets, they purchased wheat and rye directly from the local large-scale producers in order to reduce prices to the lowest possible level. With the population growing and the traditional markets in the Somme region disappearing, the grain trade was the prime mover behind Holland's breakthrough in the Baltic. It is estimated that the loading capacity of the merchant fleet grew from 19,000 lasts around 1500 to 80,000 lasts in 1567. In the same period, imports of Baltic grain increased from 10,000 lasts to about 60,000 lasts. In the last quarter of the fifteenth century, grain imports attained a regular pattern with exports from Danzig, Riga and Reval increasing. Transports of Baltic grain and French bay salt interlocked about 1440 and led to the emergence of Holland's profitable triangle trade between the eastern Baltic, the Zuiderzee and Zeelandic ports, and the French Atlantic coast. In its wake, exports to the Baltic of Dutch herring, high-quality cloth and French wines developed, whilst Holland's booming shipbuilding industry was the main consumer of the traditional Baltic raw materials like timber, hemp, flax and tar. The competitive effect of low transaction costs, already realised through the elimination of Hanseatic middlemen and investments in the direct Baltic-Atlantic trade, were maximized as a result of large cuts in shipbuilding costs and innovations in ship design. The increased speed of new, full-rigged Dutch ships, combined with adaptations that facilitated the carrying of bulky goods, allowed smaller crews, giving the ships a considerable advantage over the heavy, well-manned Hanseatic vessels. Also a high degree of rationalisation of both trade and transport provided Holland with an advantage over the Hanseatic League.

By 1530, Holland's reliance on the Baltic trade and on imports of Prussian and Livonian grain had become so great that the Habsburg political leaders realised that any interruption of the Sound trade would bring the County to the verge of famine and social disruption as a result of widespread unemployment in the booming maritime sector and exporting industries. Such a dependence was already visible in the second half of the fifteenth century, and it had obliged the Burgundian and Habsburg princes — be it initially with reluctance — to offer their formidable state support against the League's attempts to bring Holland's Sound trade to a standstill. They intervened in favour of the abolition of the League's staple policies and activated their diplomatic apparatus in order to secure Holland's free access to the Baltic against Lübeck's blockading policies. It was due to the intervention of Charles V that Holland was exempted from the Sound tolls in 1544, which constituted a major step towards Holland's domination of the Baltic trading system for the next two centuries. Free access to the Baltic markets, combined with low transactions costs and a still increasing share of the combined salt and grain trade, paved the way for the establishment of Amsterdam as a major repository linking the Baltic to the western and southern European markets. Dutch factors settled in many Baltic ports to organise their business. They did their best to circumvent the local middlemen, who were eating into their profits, and advanced credits in order to stimulate trade and local shipbuilding to the benefit of their enterprises. Especially Danzig shipwrights profited from the inflow of Dutch orders. The Dutch omnipresence on the Scandinavian, Livonian and Prussian markets in the sixteenth century reflects the state of disintegration of the traditional Hanseatic system, which slowly gave way to the current principles of free trade, shared by the Dutch and the rising sovereign powers in the Baltic. Persistent views, however, that the Dutch were already the undisputed masters of the Baltic around 1500, are no longer tenable. A comparison of the passages of Hanseatic and Dutch ships on the basis of the Sound Toll registers reveals that the two powers remained competitors, with the volume of their shipping through the Sound still rather balanced around the middle of the sixteenth century.

The dominance of Lübeck and its Wend allies further crumbled as the Danish kings gradually succeeded in loosening the Hanseatic grip on their domestic markets. Sweden, Denmark and Norway — which had been brought under one crown by the Kalmar Union of 1397 — had virtually been degraded to a natural hinterland of the Hanse. Since the early fifteenth century, the Danish kings had occasionally favoured Dutch and English trading at the expense of Wend dominance. Tension with Lübeck rose in 1429 when the Sound Toll was imposed. Denmark's strategic position on the Sound posed a clear threat to Hanseatic traffic and provoked an open sea war. The conflict ended in the military humiliation of the Danes and the exemption of the Wend towns from the Sound levies. This reduced the Danish king's role to that of a mediator during the Holland-Wend War of 1438-1441, and attempts to encourage Dutch trade on the Baltic in the following decades were foiled by the overwhelming power of the northern German towns. The succession to the throne of Christian II (1514-1523), who was allied through marriage with the Habsburg emperor and sovereign in the Low Countries, brought about a dramatic shift in relations with the League. War between Denmark and Lübeck had broken out already in 1509-1512 as a result of the anti-Hanseatic policies of King Hans (1481-1513). But Christian II's visions of the establishment of a Northern Trading Company that was to control the entire Sound trade, combined with a liberal trading policy favouring the Dutch, provoked unprecedented resentment within the Hanse's leading circles. Carefully exploiting opposition in Denmark against Christian's domestic policies and a Swedish uprising under Gustav Wasa, the combined Wend forces chased the Danish king into exile. Two new kings — Frederick I (1524-1533) in Denmark and Gustav I Wasa (1523-1560) in Sweden — gained their thrones thanks to Lübeck's interventions. Hopes that the League's supremacy was now firmly re-established vanished as both kings immediately decided to allow all foreign powers free access to the Baltic markets. Anti-Dutch feelings flared up again during the stormy but conservative regime of the Lübeck Protestant burgomaster Jurgen Wullenwever in the early 1530s. A blockade of the Sound entirely directed against the Low Countries and attempts to revive the traditional Hanseatic staple system aroused deep suspicions even among Lübeck's closest allies. Danzig and the Livonian towns refused to provide military support and Hamburg secretly came to terms with the Dutch in 1534. With the League's cohesion now fully eroded, Lübeck and the Wend towns grudgingly accepted the conditions of the Peace of Speyer in 1544, which concluded a two-year war between Habsburg and Denmark and stipulated free access for the Dutch to the Sound and the Baltic markets.

The containment of the League's influence in the Baltic proceeded as Gustav I Wasa and his successors in now independent Sweden adopted an aggressive policy in order to secure the supply lines from the east. Notably, the Swedish historian Attman spent almost his entire career showing that Sweden's eastward expansion served complete control over the eastern Baltic trading routes and staple harbours in Livonia (Riga, Reval, Narva) and eastern Finland (Viborg). In its struggle for the Baltic markets, Sweden provoked prolonged rivalry not only with Lübeck, but also — and primarily — with Russia and Poland, which had emerged as new seaborne powers on the Baltic coasts. The kingdom of Poland emerged from the ruins of the Teutonic Order, which after the military defeat at the battle of Tannenberg in 1411 had lost much of its political and economic impact in the region. The incorporation of the east Prussian territories into Poland in 1466 liberated the Hanseatic towns of Danzig and Elbing from competition with the Teutonic Order. The formation of a Polish corridor along the Baltic coast implied the elimination of the Order's control over the communication lines into the extended Lithuanian and Prussian hinterlands on which the Baltic grain trade largely depended. Supported by the Polish suzerain, Danzig's trade towards the west rapidly gained importance. Rye exports accounted for 10,000 lasts in the 1490s and quintupled in the course of the sixteenth century. Although Elbing's economic development was much more modest, the town benefited from the declining influence of the Hanse and the benevolence of the Polish crown, as evidenced in 1585 by the establishment of the English Eastland Company within its walls.

Further north, the emergence of the Muscovite empire of Grand Duke Ivan III (1462-1505) represented another threat to the German Hanse. The closure of the Hanse Kontor in Novgorod by the Russian prince in 1494 was much more of a symbolic nadir than an outright catastrophe for the League's trading interests. Hanseatic trade with Russia itself was now directed towards Reval and Riga, which benefited greatly from the shift as, besides the Germans, also Dutch and English merchants increasingly focused their activities on these towns. Tension built up among the League's members, however, as a consequence of increasing protectionism in the eastern Baltic towns. In order to strengthen their grip on direct trade with Russia, they imposed measures that were intended to prevent all foreign traders, including merchants from Lübeck and the Wend towns, from circumventing the staples of Riga and Reval. However, such policies only widened the already existing fissures within the League, as they emphasised the Baltic towns' desire to escape Lübeck's tutelage. Pressure from outside increased as the Russians reached the Baltic coasts in 1558, occupying Livonia and the Hanseactic towns of Dorpat and Narva. With the former destroyed and the latter developed into a Russian alternative for the harbours of Riga and Reval, three independent new states had made significant inroads into the Hanseatic supremacy in the eastern Baltic waters.

Since Poland, Russia and Sweden shared the same goal — namely control over the communication routes between the Baltic shores and the Russian hinterlands — the economic climate in the region was determined by the outcomes of military conflicts. The Swedish King Eric XIV (1560-1568) attempted to thwart direct trade with Narva and proceeded to establish staples for Russian trade in both Viborg and Reval. The Swedish occupation of Reval in 1561 and the following blockade of the Narva staple provoked the First Nordic War (1563-1569), in which Lübeck, Denmark and Poland combined their forces to combat Swedish aggression. Though a peace treaty was signed shortly after Lübeck's bombardment of Reval in 1569, the main issues remained unresolved. With Reval firmly in Swedish hands and the struggle over the Narva staple continuing, this was the beginning of a long period of wars between Russia and Sweden. The conflicts led to the seizure of Narva by Sweden's King John III (1568-1592) in 1581 and, fourteen years later, the Russian approval of the establishment of staples at Viborg and Reval. As in 1621 Riga also fell into the hands of King Gustav II Adolph, the Russians were sealed off from the Baltic, leaving the remains of the Hanseatic trade in the region to the mercy of the Swedish kingdom.

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