London was anciently the resort of 'foreign' merchants. It was rich because 'foreign' merchants brought and exchanged their goods at this port. There were no ships built in England until the reign of King Alfred. When the kingdom became tranquil he is said to have hired out his ships to foreign merchants. A list of tolls paid by foreign ships in the reign of King Ethelred II. shows that the imports were considerable. The foreign merchants, however, were not to 'forestall their markets from the burghers of London,' so that the retail trade was kept in native hands. When retail trade was separated from wholesale trade all that the London merchants had was the collection, the warehousing, and the sale of the exports. It is reasonable to suppose that foreign merchants coming to the City year after year would find it useful to have a permanent settlement—a wharf with officers and servants of their own. Such a settlement was, no doubt, permitted from very early times. But in the year 1169 was founded a trade association which, for wealth, success, and importance, might compare with our East India Company. This was the Hanseatic League (so called from the word Hansa, a convention). In the League were confederated: first, twelve towns in the Baltic, LÜbeck at the head; next, sixty-four—and even eighty—German towns. They were first associated for protection against pirates: they speedily became the greatest trading company of the period. In the reign of Henry III. the League obtained a Royal Charter granting them liberty of constant residence at a place in London. They were permitted to have a permanent establishment at a place called the Steelyard—i.e. the place where the Steelyard or Scales had formerly been kept—under certain conditions, including the payment of custom dues. They were called the Merchants of the Steelyard: they at once drew to themselves the whole trade of England with the northern ports: and they remained there for nearly 400 years.

There was another association of foreigners called the Merchants of the Staple. That is to say, they dealed in what was called the 'staples' of England—in the raw produce, as lead, tin, wool, &c. Gradually, however, the word Staple came to be applied solely to wool as the most important export. The Lord Chancellor, to this day, is seated on a Woolsack. The Merchants of the Staple became merged in the Merchants of the Steelyard.

These foreign merchants were at all times extremely unpopular with the Londoners, who envied their wealth, which they thought was made at the expense of the City, not understanding, for a long time, that the same way of wealth was open to themselves. When they began to put forth merchant ships on their own account, they at first sought the southern ports, sailing to Dunquerque, Sluys, Rouen, Havre, Bordeaux, Lisbon, and even to the Mediterranean ports. Whittington's trade was entirely with the South. It was not at LÜbeck or on the shores of the Baltic that he found his cloth of gold, his rich velvets, his silks, his gold embroidery, his scented wood, his wines, his precious stones. And the reason why he sent his ships to the South was that the trade of the North was in the hands of the Steelyard.

Edward III. seems first of our kings to have understood the value of manufactures and of foreign trade. He first passed laws for the repair of the highways: under his reign the Merchant Adventurers were encouraged and assisted: he first stimulated the making of English cloth instead of selling our wool: under him the shipping of the London merchants began to increase and to develop. Still the foreign merchants continued to occupy the Steelyard: still our merchants were shut out of the northern ports: still other foreigners received permission to settle: even craftsmen came over from Germany and the Low Countries and followed their trade in London. Richard III., in order to please the citizens, ordered their expulsion, but it does not appear that the order was obeyed. Henry VII., on the other hand, persuaded many Flemish woollen manufacturers to come over to this country.

Early in the sixteenth century the exports of English cloth by the foreign merchants amounted to 44,000 pieces, while the English ships took away no more than 1,000 pieces. When our own merchants were prepared with ships and had what may be called the machinery of trade; as a market, wharves, permission to buy and sell; it is obvious that the old state of things could no longer continue. It was not, however, until the reign of Edward VI. that the foreign merchants were finally deprived of all their privileges and charters.

These rivals, with their powerful organisations and their hold over all the northern ports, once out of the way the English merchants began to push out their enterprises in all directions. You shall see immediately how they prospered.

Meantime there remains a monument erected in memory of the Hanseatic League. In the reign of Queen Anne the merchants of Hamburg presented to the church where the merchants of the Steelyard had worshipped for 400 years, a splendid screen of carved wood. Unless the church, which is already threatened with destruction, is pulled down, you should go to see that screen, and remember all that it means and commemorates.