As the merchants crossed foreign boundaries, they would face resistance from local rulers. However, both the rulers and the merchants found a way out of this quagmire; the merchants would offer gifts to the local rulers or pay a fine. The local rulers would also tax the goods that merchants traded within their territory.
To be sure, merchants increasingly became not part of middle ages feudal community, but influencers of this society. It is through their trade initiatives that towns and entire cities were built and developed for example the city of Paris in France. The towns that were initially small and tied to the feudal system became self-sustaining and broke away from the feudal system to become independent states.
However, local lords did not take the independence of towns and cities lightly. Merchants, the lords and sometimes the king would fight over land issues because the merchants had become wealthy enough to purchase their own lands. The king and the local lords charged the merchants heftily for them to acquire land rights. The merchants and other town leaders sought to have towns that were independent from local lords and that were led by a mayor who was democratically elected.
Tensions also emerged between local merchants and those who came into the towns for brief commercial activities. The local merchants in the middle ages could not keep up with the competitive edge that was accorded the merchant guilds.
The merchant associations or guilds had more goods and could deliver their services more efficiently compared to a single local trader. More and more people forsook the local merchants and opted to do business with the new suppliers who offered cheaper goods and services. Even as some merchants grew richer, many commercial towns were ruined as local merchants ran out of business.
Although the commercial activities of merchants gave rise to commercial cities and towns, these towns began to face unprecedented problems. These problems are similar to those faced by modern day urban cities; they included contagious disease, overcrowding and crime.
The Medieval Merchant Guilds
Merchants in the middle ages began to form merchant guilds, what we now know as associations or co-operatives. These guilds not only regulated and streamlined trade by they also made negotiations between the traders and local rulers easier. The main areas of contention were the taxes and levies that the local rulers imposed on the traders and the goods they traded.
The merchant guilds developed and established the rules of trade. Members of these guilds became influential in medieval society. For example, the main spokesperson of the merchant guild would often be appointed as the city or town mayor. The chief delegates of the guild would be appointed as the town Aldermen and other guild members became city or town burghers.
Common rules that the merchant guild established included a total ban on illegal trade by those who were not members of the guild. This was intended to make every merchant a member of the guild so that traders would work within this system.
Members who went contrary to the guild rules or charter would pay a fine. The merchant guild offered assistance to their members and their families, in the event of sickness of death. Guild members also received protection against damages caused to their goods, and possessions as they travelled.