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 strengthened national sentiment by affording an unlimited field for national rivalries; and the religious differences, which accentuated the divisions of Christendom, rendered the sense of national religion a convenient badge in warfare. These positive elements in the growth of national life were strengthened in any country where a territorial economic policy was adopted, so as to bring out a community of interest among the citizens, and to give solidarity to the whole social system. Definite schemes for the development of material resources, with a view to one supreme object, involved the suppression of local privileges and the increase of commercial intercourse; and this tended in its turn to give the opportunity for the healthy interaction of rural, urban, and commercial life upon each other. As the economic life of a country adapted itself to these new conditions, and as appropriate institutions were organised, the body economic came to be reconstituted on a national, not as of old, on a civic basis. The recognition of ties of common interest throughout a large territory gave definite shape to the groups which were pervaded by similar sentiments of race and religion. The sense of economic welfare as something common to the whole of a country strengthened the bonds which united each rising nationality in a common economic life, that was of importance to all citizens alike.

In the earlier sections of this chapter it has seemed convenient to deal chiefly with the rise of capital and the influence of its growing power over the economic institutions of medieval cities. The city was the type of economic organisation which had flourished in the ancient and in the medieval world; but it was not adequate to the requirements of modern life, and the old associations were disintegrated and destroyed. In the sixteenth century we see the signs of real reconstruction, and the growth of economic institutions and regulations which were compatible with capitalistic enterprise both in industry and commerce; even though this was still restricted within limits that we regard as narrow. One nation after another adopted a territorial economic policy, which implied the conscious subordination of certain private interests to the welfare of the realm, the conscious development of the resources of the country, and the conscious building up of the sinews of national power. The main feature of this territorial economic policy was similar in the case of all nations; all the rivals desired to accumulate treasure, as the means of equipping 'or of hiring armies; but there were different methods by which this aim could be attained, and different subordinate objects to be pursued, according to the circumstances of each particular country. To these we must now turn; for by briefly tracing the special schemes of territorial development which were adopted in Spain, England, and France respectively, we shall see most clearly the nature of the enlarged body economic which has come into prominence in modern times.