For these reasons the maritime State, even when most developed, always remains centralized, one is tempted to say centered, on its trading harbor; while the territorial State, strongly decentralized from the start, for a long time continues to develop as it expands a still more pronounced decentralization. Later, we shall see how this is affected by the adoption of those forms of government and of economic achievement which first were perfected in the “city-state,” and which thus obtained the strength to counteract the centrifugal forces, and to build up the central organization which is characteristic of our modern states. This is the first great contrast between the two forms of the State.
No less decisive is the second point of contrast, whereby the territorial State remains tied up to natural economies as opposed to money economies, toward which the maritime State quickly turns. This contrast grows also out of the basic conditions of their existence.
Wherever a State lives in natural economy, money is a superfluous luxury--so superfluous that an economy developed to the use of money retrogrades again into a system of payments in kind as soon as the community drops back into the primitive form. Thus after Charlemagne had issued good coins, the economic situation expelled them. Neustria--not to mention Austrasia--under the stress of the migration of the peoples reverted to payment in kind. Such a system can well do without money as a standard of values, since it is without any developed intercourse and traffic. The lord’s tenants furnish as tribute those things that the lord and his followers consume immediately; while his ornaments, fine fabrics, damascened arms, or rare horses, salt, etc., are procured in exchange with wandering merchants for slaves, wax, furs and other products of a warlike economic system of exchange in kind.
In city life, at any advanced stage of development, it is impossible to exist without a common measure of values. The free mechanic in a city can not, except in rare cases, find some other craftsman in need of the special thing which he produces, prepared to consume it immediately. Then, too, in cities the inevitable retail trade in food products, where every one must purchase nearly everything required, makes the use of coined money quite inevitable. It is impossible to conduct trade in its more limited sense, not between merchant and customers, but between merchant and merchant, without having a common measure of value. Imagine the case of a trader entering a port with a cargo of slaves, wishing to take cloth as a return cargo, and finding a cloth merchant who at the time may not want slaves but iron, or cattle, or furs. To accomplish this exchange, at least a dozen intermediate trades would have to take place before the object could be achieved. That can be avoided only if there exists some one commodity desired by all. In the system of payment in kind of the territorial states this may be taken by cattle or horses, since they may be used by any one at some time; but the ship owner can not load with cattle as a means of payment, and thus gold and silver become recognized as “money.”