The Hanseatic League in the Eastern Baltic
By Jennifer Mills
SCAND 344, May 1998
The Hanseatic League (Hansa) was formed around the middle of the 12th century by German and Scandinavian seafaring merchants. Since there were no navies to protect their cargoes, no international bodies to regulate tariffs and trade, and few ports had regulatory authorities to manage their use, the merchants banded together to establish tariff agreements, provide for common defense and to make sure ports were safely maintained.
The original network linked Lübeck, Westfalia, Saxony and Gotland, but it quickly spread east with the conquest of Livonia in the early 13th century. The league became so profitable and so powerful that it lasted over three centuries. At its peak, the Hanseatic League covered the entire North Sea and Baltic Sea Regions and it stretched hundreds of miles inland along rivers from the Rhine to the Daugava.
Though Hansa relations were primarily economic in nature, the League became a formidable political and military power in the 14th Century. The Baltic Region that is known today as Estonia, Latvia and Lithuania became a viable economic unit in the world market and participant in European politics via the relationships fostered by the Hansa.
The Rise of the Hanseatic League
The Hanseatic League followed the Livonian conquest into the eastern Baltic in search of Russian goods, agricultural products and raw materials for shipbuilding. The Daugava (Düna), Dnepr and Volga rivers were important trade routes into Russia and connecting Europe to Asia as early as the eighth and ninth centuries. For this reason, the first and most important of the eastern Baltic trading cities, Riga, was established in 1201 at the mouth of the Daugava.
German Hansa merchants quickly established trade routes into the interior of Livonia and along the Baltic coast. To the north, the Danish crown claimed Tallinn (Reval), which was to become the second most important Hansa town in Livonia, in 1219. The town of Tartu (Dorpat) was situated on the Russian border along the route to Pskov. It played an important role as entry point for the majority of the Russian goods from the north bound for Riga. Viljandi (Fellin) became the largest city along the land routes from Riga to Tallinn, Tartu and Narva. Pärnu (Pernau) was a port city at the mouth of the river of the same name, but as the second city on the Gulf of Riga, played a lesser role in trade than any of the aforementioned cities. Narva would become the sixth of the major Hansa trading towns in Livonia, but because of its proximity to Novgorod, it remained relatively unimportant until the 16th Century.
Novgorod was the largest Russian town on the Gulf of Finland, beyond the ports of Narva and Tallinn. It never fully joined the Hanseatic League, but in 1259, the League established a Kontor, a trading post, which enjoyed most of the Baltic trade for Russian goods for at least a century and eliminated the need for ships to sail the dangerous northern route around Scandinavia. The Merchant Hansa
Throughout the 13th century, the Hanseatic League remained an organization of merchants. To be more exact, it was an organization of German merchants. Merchants who were not German and did not belong to the Hansa (so-called non-Germans were forbidden from joining the League) faced severe trade restrictions in the Baltic. The Livonian towns refused to permit direct trading between foreign merchants within their walls. This irritated the Wendish members of the League, who were thereby prevented from negotiating directly with Russian merchants.
The local population of Livonia slowly became subject to German feudal lords during this period. The lords demanded rents from peasant tenants in the form of agricultural products and/or money rents. The lords then sold their surpluses to merchants in the cities for profit, creating a profit-seeking landed upper class linked to a profit-seeking merchant middle class in the cities. In order to keep their profits high, the landlords forbid peasants from trading with the merchants in the cities and kept peasant land tracts small. At times, this led to conflict between the merchants and landowning classes because the merchants could draw higher profits if they bought directly from peasants.
In Lithuania, local merchants were subject to the laws of the grand Duchy of Lithuania and were free to conduct trade with Hansa merchants, but the Hansa merchants found it difficult to secure a monopoly on Lithuanian trade. The Grand Duchy of Lithuania was hostile to the Germans after attempts at conquest. Tariffs were exacted at the Lithuanian borders with Poland and Livonia. Hansa merchants were tolerated, if they paid their tariffs, and developed trade routes through Lithuania all the way down to the Bug river where the Ukraine is today.The "Städtehanse" League of Hanseatic Cities
The Hanseatic League began to evolve into a network of towns around the turn of the 14th Century. It became a "powerful compact of cities" in the 14th Century, "with far-reaching trade agreements and almost total control of North European trade." In 1280, Lübeck and Visby united to secure peace along the trade routes to Gotland (Sweden) and Novgorod (Russia). This was the beginning of the city Hansa. Two years later, Riga joined them, and become the first Hanseatic City in Livonia. Tallinn was the next Livonian city to join the group.
One by one, the cities in Livonia joined the Hanseatic League. Estonian cities which belonged to the Hanseatic League at some point in the history of the League include: Tallinn, Pärnu (Pernau), Tartu (Dorpat), Viljandi (Fellin), Narva, Haapsalu, Rakvere, and Paide. Latvian cities belonging to the Hansa included Riga, Cêsis (Wenden), Ventspils (Windau), Kuldiga (Goldingen), Valka (Walk), Valmiera (Wolmar), Limbazi (Lemsal), Koknese (Kokenhusen), and Straupe. One post was established in Lithuania at Kaunas (Kowno) and Vilnius (Wilno) was an important trading point for products destined for Hanseatic markets.
In 1346 the Hanseatic League granted the right of emporium to Riga, Tallinn and Pärnu. The right of emporium entitled the city to demand that all goods destined for Russia be unloaded, weighed and reloaded when passing through the city. The idea behind this law was that merchants would be encouraged to sell their lasts in Riga rather than bothering to reload them. As a result, only one sixth of the goods that went into Riga as late as the 18th Century went on to other cities.
A similar law was passed in Tartu, requiring merchants to unload their goods and offer them for sale for a minimum of four days before they could move on.Political Structures and Influence of the Hanseatic League
A Hanseatic Diet was established in 1284, but did not begin meeting regularly until 1356. The Diet concerned itself with negotiations with foreign towns or rulers, ratification of trading agreements or privileges, trade and commercial blockades, financial matters, military issues, membership expansion or exclusion of member towns, conflicts within the members, conflicts with feudal nobility, and competition policy
The League could be broken down into 3 Hanseats: the Wendish-Saxon Hansa (the most powerful group), the Westphalian-Prussian Hansa and the Livonian-Gotlandic Hansa. A Livonian Hanseatic Diet was established in the late 13th Century, which concerned itself primarily with trade negotiations with Russian cities. Riga was the chair of this Diet, and Riga and Tartu had sole jurisdiction over the port of Novgorod, such that either could call the Diet to order.
Politically, the Livonian metropols also exercised a certain amount of power over cities in which the Hansa had branch posts. Riga oversaw the posts in Smolensk and Polozk, Tallinn oversaw Rasborg and Viborg in Finland, and Dorpat oversaw Pleskau (Pskov). The post at Kaunas in Lithuania was overseen by Danzig (Gdansk), although the nobility of rural Livland, Kurland and Lithuania were loyal trade partners with Riga merchants into the 17th century.
It is important to note that Hansa organs did not replace city organs, and some scholars consider the Diet nothing more than a "meeting". The Hanseatic League had "no executive officials of their own" and "no common council," according to one scholar, and the League deliberately evaded classification as a society or corporation, in part to avoid legal action against the League.
Guilds and production in the Livonian cities
The Hanseatic League’s effect on production in the eastern Baltic was not entirely positive. The import of west European products limited the need for a wide range of artisans and professions in the Baltic cities. The primary professionals in the trading towns were merchants. The merchants drew their profits from the sale of raw materials for shipbuilding and agricultural products. The other artisans in Livonia from the 13th – 17th centuries were engaged in simple production, and were not profit oriented.
The artisans in the cities were organized by guilds. In the large cities, guilds were organized by trade (for example, the shoemakers, blacksmiths and butchers each had their own guild). In some cities there was a "Great Guild", similar to a generalized labor union, that admitted many different types of artisans and functioned as an umbrella organization for the smaller guilds. These guilds helped to raise social values for work, secured education for artisans, ensured product quality and consolidated the various trades. On the negative side, however, guilds set limits on competition, limited the number of artisans who could be involved in a trade and stifled innovation in the trades.
In addition, most guilds excluded non-German artisans and often sought to force them out of the cities. At the end of the 14th Century, Estonians were prohibited from obtaining membership in the guilds. Tartu’s guilds were exclusively open to German residents. This was accomplished by limiting the membership in a guild to citizens of the city, and the Estonian and Russian minorities were excluded from citizenship until 1787 . Smaller guilds for local and Russian artisans developed in some cities, but their clientele was limited to other non-Germans.
Most cities did not have guilds for millers, brewers or shipbuilders, so the wealthy merchants often chose to invest their capital in such enterprises. Merchant capital was also used for investments in raw materials and in loans to artisans. Merchants were quick to turn lending into profiteering and many artisans and peasants became indebted to city merchants beyond their means.Relations between Hanseatic Cities and the Hinterland
The Eastern Baltic provided large quantities of grain to European merchants, but the majority of the products coming out of Riga were shipbuilding materials such as flax for sailmaking, hemp for ropes, timber from the Daugava Basin and the upper course of the Dnepr and wax. From Russia, furs, leather, wax and rye were exported through the Livonian cities.
The Vorstädte (suburbs, smaller towns neighboring big cities) in Lithuania became popular places for business transactions in the 15th century. In these marketplaces newcomers were welcome (nobility and farmers leaving the countryside), there was more space than in the cities to build big mills and citizenship was easier to obtain, and there was more socio-economic mobility than in the large cities of Livonia.
There is very little research on the role of the Livonian countryside in the 13th-17th centuries, partly because fires in the 17th and 18th Centuries destroyed Riga and Pärnu’s records and also because the peasantry was still illiterate at the time. We do know that the city merchants played the role of price-setter and the farmers were price takers in the medieval towns. Otherwise, the relations between city and hinterland played an underemphasized role in the writing of Baltic economic history.
Merchants usually traveled to marketplaces spread throughout the countryside to collect grain and products for sale in the cities in the middle ages. Each merchant was responsible for a particular area and dealt regularly with the same peasants. Often, the merchants would provide peasants with loans for products and tools. There were only a few peasants who had land of their own in the 15th and 16th Century. The city merchants liked to take advantage of poorer Germans or Lithuanian peasants who were not restricted from owning land like the Livonian peasants. Landowning peasants frequently became indebted to merchants, and debt was tied to the land such that the succeeding landowner would inherit the debts of the previous landowner, regardless of familial ties.
During the Swedish period (18th Century), some peasants managed to escape their manors and develop landholdings of their own. Others turned to profiteering themselves and would leave their land fallow for a season, then buy the surpluses of their indebted neighbors who feared the city merchants. The peasant would then bring several loads of crops into the city and sell them for profit. In this way, some peasants were able to escape their debts for a season or two, but many were caught and brought to court for illegal trade practices.
Beyond the city walls in Livonia, most of the peasants belonged to feudal manors governed by landlords of German descent. From the 14th Century to the 16th Century, the feudal lords demanded payment of tenant rents in the form of product or money rents. In the 17th Century, this shifted to labor rents. The system of labor rents was harder on the peasants than the previous methods. Peasants would be forced to work long days on the manor during the harvest and could not harvest their own crops to provide for their families. This became an additional incentive to engage in illegal surplus sales.
Competition and the demise of the Hanseatic League
The heyday of the Hanseatic League lasted from the rise of the Städtehanse through the 15th Century. The Baltic cities, however, did not suffer from the decline as did the Wendish cities. Instead, they profited from increased competition between the Hansa, the Nordic Union (Scandinavian merchants) and Dutch traders on the Baltic Sea. The Age of Exploration finally drew world trade away from the Baltic in the 17th and 18th Centuries.
In 1494, Ivan III, the Grand Duke of Muscovy closed the Peterhof and the Hansa Kontor (Post) in Novgorod, but by this time, trade in Russian goods had already shifted to the Livonian towns. Several years later, Ivan IV reopened the Peterhof, but it was too late to recover the trade in Russian goods from outlets at Narva and Riga..
Distribution of Hanseatic Trade Throughout the Baltic Region
Estonian and Latvian cities reaped huge profits from Hanseatic trade. Their connections to the Hansa were stronger than Lithuanian contacts because there were a large proportion of Germans in Livonia. Lithuania, on the other hand, retained its independence as the Grand Duchy of Lithuania and eventually came under Polish rule. German settlers were unwelcome in Lithuania and local peasants had more control over their own lands and product than in Livonia, where higher profits could be made by Hansa merchants. Nonetheless, the Grand Duchy of Lithuania was an important supplier of agricultural products and forest products from the banks of the Daugava to the Hansa through the Livonian Hansa port at Riga.