The Hanseatic League was the first free trade organization in Europe. The German Hanse merchants founded industrious, prosperous cities throughout northern Europe and the Baltics - storied towns like Lubeck, Bremen, Tallinn, Riga, Reval, Danzig, Rostock and Visby. Their counting houses - or beurs - in London, Bruges, Bergen, and Novogorod are the forerunners to today's stock exchanges, or bourses. The towns of Friesland only ever played a fairly minor role in the League,but their sea captains were legendary, and Frisian towns like Hindeloopen grew prosperous.

Hanseatic League, early European free trade alliance

by Andrea Buma

In the mid-1100s the north German city of Lubeck became the base for trade with Swedish Visby and Novogorod in Russia. The Lubeck merchants acquired a coveted monoploy on trade of the rich herring stocks off the banks of Sweden. Fish was a vital part of the medieval European diet because the Catholic church prohibited the consumption of meat on the frequent fast days and during the season of Lent. But in times before refrigeration fish was extremely difficult to preserve and transport. The Hamburg merchants, who had easy access to the Kiel salt mines, became natural allies of the Lubeck merchants, supplying salt for preserving fish.

Around the same time Cologne and an alliance of towns along the Rhine acquired a monopoly on trade in Flanders and England. In 1265 the Rhenish towns and the Lubeck alliance agreed on a common legislation for the defense of merchants and their goods. This alliance created a powerful trading bloc that controlled the shipping of grain, fur, timber, honey, fish, and flax from Russia and the Baltics to the west, and cloth and guild-manufactured goods from Flanders and England to the east.

Travel in medieval times was a risky business and cargoes were threatened by brigands on the roads and pirates at sea. As tax revenues started to flow from the free towns in the Hanseatic alliance to emperors and dukes, the merchants were in a position to influence the lords to pass laws to protect the Hansa cargoes.

The dukes and kings of the Baltic region saw the riches that resulted from allowing a free Hansa town in their kingdoms and invited German merchants to build towns, granting them independent charters - creating Reichsfree Stadts - so long as activities weren't directed against the empire and taxes were paid regularly. The Germans built numerous Hanse towns in the Baltics - towns like Tallinn in Lithuania and Riga in Latvia are still filled with original buildings and character from their Hanseatic days.

The handsome Hanse towns were often constructed of red brick, with the first public hospitals and Gothic churches in medieval Europe. Germanic guildsmen, or craftspeople, settled in the region and introduced traditional German craftsmanship. The entire town bustled with well-organized enterprise. Surrounded by stone walls, narrow, winding streets led to the central market-place which teemed with trade: merchants flogging spices and expensive cloths; craftsmen selling tools, furniture, or jewellry; and peasants vending poultry, eggs, honey, grains, pigs and sheep. Town festivities were held here, and criminals were publicly humiliated. Watching over all was the Guild-hall in the centre of the square, symbol of the Hanse merchants' administration and the town's independence. The Hanseatic merchants introduced mayors, magistrates' courts and tradesman's associations called guilds into their town structures.

Towns outside the league were at a serious disadvantage. In 1280 the Frisian town of Staveren wanted to join, but because Friesland was governed as a type of republic, there was no lord to give them a city law to establish a free city. The leaders of Staveren approached the Count of Holland, paid homage to him, and were granted a city charter. Eventually the Friesland cities of Bolsward, Deventer, Hasselt, and Hindeloopen also became Hanseatic towns. None ever became large players in the Hanseatic League, but did enjoy great prosperity, mostly involved in producing ships' captains and also building the distinctive Baltic cog used for shipping cargoes.

Hanseatic merchants established counting houses - or beurs - in four different cities: Novogorod in Russia, Bergen in Norway, the Steel Yard in London, and Bremen in Flanders. These were the forerunners of today's bourses, or stock exchanges. Merchants that wanted to serve in the counting-houses agreed to live there for at least a year. They had to be of good character and unmarried and their terms of service were very strict - at night they were locked up behind bolted doors watched over by guard dogs.

At the height of its power in the thirteenth and fourteenth centuries the Hanseatic League consisted of around 160 cities who met infrequently in a parliament of sorts called a Diet. Regional diets also took place in the four districts: Westphalia, Wendia, Prussia and Livonia. Larger cities would often speak on behalf of the smaller who didn't send a representative.

In 1360 Danish king Valdemar IV challenged the monopoly of the the Hanseatic merchants over the herring banks by attacking Visby. The merchants grouped together and hired an army to roundly defeat the Danes. The league never had a navy of its own nor soldiers, no executive or budget but they became everywhere respected.

However by the middle of the 1400s the league was already entering a long period of decline. The Dutch had started to challenge their monopoly on trade in the Baltics and by the start of the next century Amsterdam had replaced Lubeck as the premier port in Europe. Another blow was when the herring suddenly and inexplicably moved to the coast of The Netherlands. Nation-states began to increase in importance and compete to protect their own interests. And, finally, with the discovery of the New World, Atlantic shipping increased in importance and England also became an important rival.

The last Diet was held in 1669 although the Hanseatic League was never officially dissolved. Indeed the cities of Hamburg, Lubeck, and Bremen continued to be known as Hanseatic cities until the end of the 19th century.