Until comparatively recently, the Mercantile Theory was regarded as a sinister device to give play to the selfish profiteering of the English merchant-class. It is, however, coming more and more to be recognized as a necessary step in the evolution of the modern state. “What was at stake,” writes Schmoller, who was the leader in these newer views, “was the creation of real _political_ economies as unified organisms, the centre of which should be, not merely a state policy reaching out in all directions, but rather the living heart-beat of a united sentiment. Only he who thus conceives of mercantilism will understand it; in its innermost kernel it is nothing but state-making, not state-making in a narrow sense, but state-making and national-economy-making at the same time; state-making in the modern sense, which creates out of the political community an economic community, and so gives it a heightened meaning. The essence of the system,” he adds, “lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws; but in something far greater, namely, in the total transformation of society and its organization, as well as of the state and its institutions; in the replacing of a local and territorial economic policy by that of the national state.”[736] Footnote 736: G. Schmoller, _The Mercantile System and its Historical Significance_ (New York, 1896), pp. 49 _ff._ Modern critics of the theory have been prone to lay stress upon the obvious defects and shortcomings which appear in the workings of the enactments designed to translate it into practice. As a matter of fact, the policy proved successful, in spite of the eventual loss to England, a century later, of a portion of her colonies; while in a different and higher form, that of an imperial federated _Zollverein_, it is still regarded by many as the solution of the possibly insoluble problem of imperial government. In a speech at the Savoy, in London, in 1917, the Premier of Newfoundland, England's oldest colony, gave notable expression to such a return to the policy of an earlier day. “This Empire,” he said, “cannot live as a political empire unless it is developed as an economic empire. All the raw material produced in the Empire should be manufactured in the Empire before it leaves the Empire, and nothing should be admitted into the Empire that could be produced in the Empire.”[737] Let us not condemn too hastily the economic theories of the seventeenth century until we are quite sure whither those of the twentieth are to lead us. Footnote 737: Sir Edward Morris, Speech at the Savoy, March 14, 1917. Given in London _Times_, March 15, p. 6, col. 3.