1. Expansion of world trade and acquisition of colonies in the eventeenth and eighteenth centuries created difficulties for the merchants in towns because the urban crafts and trade guild here was powerful. Additionally, there were associations of producers who regulated the chain and restricted the entry new people. 2. Rulers often granted a monopoly to the different guild in producing specific products. This further posed problems in setting up business in towns for the merchants. They, therefore, turned to the countryside wherein they began supplying money to the peasants and artisans, persuading them to produce for an international market. 3. In the countryside, poor peasants and artisans were given new opportunities, apart from the work they did on the common lands. They eagerly worked for the merchants as many had tiny plots which could not provide work for all members of the household, allowing them to make fuller use of their family resources. 4. By working for the merchants, they could remain in the countryside and also continue to cultivate their small plots simultaneously. Income from the work done for the merchants further supplemented their shrinking income from cultivation. 5. This system led to the development of a close relationship between the town and the countryside. Merchants were based in towns but the work was mostly done in the countryside. The countryside was the producer' and London became the finishing center after the cloth underwent various stages.