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MERCANTILE AGENCY. 329 MERCANTILISM. agency should be held lialile, ami such a decision was iiiade l>y the Sujirerne Court, of Pennsyl- vania. When a business man makes false state- ments about his financial condition to a mcr(?an- tiic agency, and this is comnumicated to a third party who acts upon it^to his injury, the third party bas as good cause of action in deceit (q.v. ) a"ainst the business man as though the state- ment had been made directly to him. Consult: Errant. The Late Relating to Mercantile Agencies (Philadelphia, 1889) ; Reinhard. .! Treatise cm the Laic of Ageney (Indianapolis, 1902). MERCANTILE AGENT. In the absence of a statutory definition, specifically one who acts as agent for another in important commercial transactions. It does not include a mere ser- vant, care-taker, or a merchant's clerk or sales- man, or a common carrier. The present Factors Act in England (52 and 53 Vict. c. 45 § 1) de- fines the term as an "agent having in the cus- tomary course of his business as such agent au- thority either to sell goods, or to consign goods for the purpose of sale, or to buy goods, or to raise money in the security of goods." This is the signification in which the term is most frequent- ly used in current law literature. MERCANTILE LAW. A term which, at present, covers a, rather indefinite domain in English law. It is ordinarily applied to a group of topics, more or less closely related, and having this element in common, that they have origi- nated in, or been greatly modified by, the usages and customs of merchants. The legal rules gov- erning these various topics do not form a sepa- rate and independent branch of jurisprudence: they cannot be called with accuracy a distinct and homogeneous body of law. In the leading English treatise on this subject mercantile law is viewed as comprising: partnership, joint-stock companies, agency, negotiable paper, contracts with carriers, insurance, sale, bottomry and re- spondentia, debt, guaranty, stoppage in transit, lien, and bankruptcy. JIuch nf tlie law upon these subjects is of an- cient origin, coming to us from the Roman civil law and later codes. For a discussion of this early development, see L.w ilERcn.^xT. For the law upon the various subjects included under the term mercantile law, such as partnership, lien, etc., see those titles in the vocabulary. Con- sult the authorities cited under Law JIeechant, and the titles Partnership; Llex ; etc. MERCANTILISM. The system of economic policy evolved by the European States after the decay of the feudal system. In essence it repre- sented a transition from local and territorial to national economy. In the earlier period each town had vcgiilatcd industry in the exclusive interest of its own inhabitants, treating the citi- zens of other towns as aliens wlio could trade in the town only after svibmitting to such re- strictions as the town government chose to im- pose. It was the purpose of the mercantilist statesmen to break down the barriers to internal intercourse, and to unite the State in a single economic organism in rivalry with other States. The practical measures by which the mercan- tilist statesmen sought to attain national power were: (1) the accumulation within the State of a large amount of the precious metals : (2) the encouragement of agriculture; (.■?) the develop- nieut of manufactures; and (4) the creation of a mercantile marine. In the writings of the ex- ponents of mercantilist doctrine especial emphasis was devoted to the acquisition of treasure. The European States were rajiidly i)assing from an economic order in which payments in kind pre- vailed to an economy b;ised upon money trans- actions, and as a consequence the great; impor- tance of a suflicient stock of the precious metals occupied a large share of the attention of states- men. In the earlier mercantile period an effort had been made to prevent the exportation of bul- lion altogether. Later it came to be i-eeognized that bullion sent abroad in the way of exchange might result in an ultimate increase in the stock of bullion at home. Statesmen then concentrated their attention upon securing a favorable balance of trade. One way of attaining this end was to encourage the exportation of finished com- modities and the importation of raw materials, since in this way a greater value would be ex- ported than imported. ilanufactures were encouraged because they furnished materials for commerce, lielping there- by to secure the so-called favorable balance of trade. Agriculture also took a subordinate posi- tion, and was encouraged as a source of abun- dance of raw material. The growth of popula- tion was desired in order to have an ample sup- ply of cheap labor power. Cheap agricultural products and cheap labor were aims, and herein we see a diflference between mercantilism and modern protectionism, the avowed claims of which are high prices for the products and high wages for labor. In England the earlier prohibi- tion of exportation of grain, which had been cal- cidated to favor the consumer, was succeeded by prohibition of importation when prices fell below a certain figure, in order that tillage might be uniforml.v profitable. Manufactures were stimu- lated by high duties, or even by prohibition of imports, and by numerous sumptuary laws favor- ing domestic manufactures. The aim here was twofold : to attain national economic indepen- dence and to prevent the export of bullion in pay- ment for foreign goods. Finally, the encourage- ment of shipping was naturally regarded as of the greatest consequence at the time, since the new trade with America and the Orient rapidly enriched the nations which controlled it. For the mercantilist navigation policy, see Navigatiox Laws. Mercantilism as a definite policy first appears in English history at the end of the fourteenth century : not much later it was also the settled policy of France. In England it reached its height under Elizabeth ; in France under Colbert in the seventeenth century. From that time pure mercantilism rapidly decayed, degenerating into a complicated system of discriminating duties designed to favor private interests instead of those of the State as a whole. It was mercan- tilism of this kind against which Adam Smith directed his criticisms. which prejudiced economic writers for a century against the system. Re- cent historical investigations have, however, dem- onstrated that at its best mercantilism repre- sented a great advance in economic policy, and that it was effective in bringing about national iniity and independence. See International Trade; Protection; Balance op Trade; Physi- ocrats; Navigation Laws. BiULiOGRAPiiY. Perhaps the best presentation of a moderate mercantilism bv an advocate is