Cloth manufacture dramatically changed in fifteenth-century Europe. Production was moving out of urban workshops and into the countryside. In many Italian cities, masters of the wool guild(the wool trade association )controlled workers, salaries, and techniques, ensuring that quality, prices, and profit margins remained high. Industries in rural areas tended to be free of controls on quality or techniques. As a result, the production of light, cheap woolens, for which there was a significant demand, moved out of the cities and into the countryside. Rural production became the most dynamic part of the industry.Especially in southwest Germany and parts of England production was organized through the putting-out system. In this system, merchants who owned the raw wool contracted with various artisans in the city, suburbs, or countryside-wherever the work could be done most cheaply-to process the wool into cloth. Rural manufacture was least expensive because it could be done as occasional or part-time labor by farmers, their wives, or children during slack times of the day or season. Because production was likely to be finished in the countryside(beyond guild supervision) the merchant was free to move the cloth to wherever it could be sold most easily and profitably; guild masters had no control over price or quality.Two other developments also changed the fifteenth-century woolen trade: the transformation of Spain into an exporter of unprocessed wool and the emergence of England, long recognized as a source of prime wool, as a significant producer of finished cloth. Spain was an ideal region for the pasturing of livestock Flocks of sheep regularly moved from mountainous summer pastures onto the plain in the late fall and winter. By the fifteenth century, highly prized Spanish wool from merino sheep was regularly exported to Italy and England. By 1500 there were over 3 million sheep in Castile alone, and revenues from duties on wool formed the backbone of royal finance.In England. in contrast. economic transformation was tied to cloth production. Over the course of the late fourteenth and fifteenth centuries, unprocessed wool exports declined as cloth exports rose. A key to the growth of the English cloth industry was the availability of waterpower, which allowed manufacturers to take advantage of new mechanical fulling mills for processing cloth. A water-driven mill mechanically pounded a mixture of earth, alum, and even urine into the cloth to soften it and increase its weight. Using the mechanical mill allowed a single artisan to full much more cloth than the olde methods of working by hand.The growth of cloth exports furthered the expansion of London located on the Thames River and easily reached by sea, the city was ideally placed to serve as a political and economic capital. During the fourteenth and fifteenth centuries, English commerce was increasingly concentrated in the hands of the London merchant investors. Although manufacturing continued to thrive in rural areas soon after 1500, over 80 percent of the cloth for export was in the hands of Londoners. This development, coupled with the growth of London as a center of administration and consumption, laid the foundation for the economic and demographic growth that would make London the largest and the most prosperous city in western Europe by the eighteenth century.Industrial changes in the fifteenth century challenged customs and institutions by allowing new entrepreneurs into the marketplace. The ruling classes in many European towns, however, acted to dampen competition and preserve traditional values. In northern Europe, governments in towns like Leiden restricted the concentration of resources in the hands of the towns leading cloth merchants to ensure full employment for the towns laborers political power for the guild masters, and social stability in the town. These efforts to ensure stability by restricting competition made it more difficult for younger craftspeople to complete the transition from apprentice to master and open their own shops.