The origin and early development of towns, the emergence of gild merchant and craft gild, the mutual relationship of the two types of gild, and the part played by each in the evolution of municipal self-government, present problems to which there is no simple solution. The undoubtedly military object of many of the Saxon boroughs fails to explain their economic development; while the possession of a market did not lead of necessity to self-government. Often, indeed, there is little economic difference between a large manor and a small town; the towns pursued agriculture, and the manors engaged in industry. None the less the early borough, with its court co-ordinate with the hundred court, its special peace, and its market, stands out at the time of the Conquest as a distinct variety of _communitas_, and easily became a centre of specialised industry and privileged association. Constitutional and economic growth proceed side by side; a measure of liberty encourages commercial progress, and the profits of trade purchase a larger measure of liberty. In this section an attempt has been made to illustrate the gradual expansion of the economic life of the town from the twelfth century onwards. The twelfth and thirteenth centuries witnessed a great and growing activity; craft gilds and gilds merchant were arising everywhere, and whether licensed or unlicensed, were paying considerable sums to the crown for privileges bought or usurped, (No. 1). The more important boroughs were securing charters from their lords (Nos. 2 and 3), while smaller towns were struggling to win economic freedom, that is to say, local monopoly, against serious obstacles (No. 5). The fate of a town depended much on the lord; the king's boroughs were more favoured than those of an earl or lesser baron, while the latter fared better than towns in the hands of a prelate (Nos. 11 and 12). The exaction of tolls and the claim to exemption from tolls, which prove the existence of considerable intermunicipal trade, were a common cause of litigation. The grant of incompatible privileges to rival communities was a source of profit to the mediæval monarchy; the crown secured payment in hand for the charters, and reaped the benefit of the inevitable dispute that followed (Nos. 4 and 8). The growth of intercourse is further shown by that curious feature of early borough development, the affiliation of distinct groups of towns (No. 6). Nos. 7 and 10 illustrate the coveted privileges of the freedom of a city or borough, and No. 9 the machinery by which a citizen protected himself if his liberty were infringed in another town. The character of tolls imposed by a town for municipal purposes and the possibility of corrupt collectors are shown in Nos. 13 and 14. The specialisation of industry is naturally followed by a differentiation of function, a process which develops normally in the fourteenth century and attains a certain rigidity in the fifteenth.