The English East India Company was essentially the child of the Elizabethan age. When the London merchants met together in Founders’ Hall on September 22, 1599, with the lord mayor presiding, they had before them three models of Indian trade: the Portuguese royal system, the semi-State pattern of the Dutch, and the English mixed method of armed private commerce, represented in its war aspects by Drake’s buccaneering adventures and in its more peaceful developments by the Levant Company.
The Portuguese system had been created by a dynasty; it was worked by, and for the benefit of, the crown. Its ships were the king’s ships, its cargoes were bought and stowed by the king’s people, the purser or financial superintendent of the voyage was nominated by the king’s secretary, and the officers were appointed by the Admiralty. Even when the king granted a license to private merchants, as in the case
of the Fuggers of Augsburg, their factors had cabins and a diet assigned to them on the royal ships. As we have seen, however, Portugal’s national achievement in the East was not traffic alone, but, in the patriotic vaunt of her historian, “cities, islands, and kingdoms first groaning under our feet, and then worshipping our Government.” Such a system of direct dynastic trade was alike alien to the genius of the English nation and to the caution of Queen Elizabeth.
The Dutch model came nearer to English ideas. During the long struggle with combined Spain and Portugal, the Dutch had to pay their armies and to feed themselves by sea-trade. How Holland, whose wind-swept fens did not yield crops to keep the people alive for much more than half the year, accomplished this feat, and turned her despairing land revolt into a triumphant oceanic war, forms a brilliant chapter in European history. Her national safety so vitally depended on maritime trade, that it became as clear a duty of the Dutch Government to promote private commerce as it was for private commerce to fight the battles of the republic. The States-General not only subsidized expeditions of discovery, but when the failure of such expeditions compelled them to withhold direct support from the public purse, they still offered a large reward to private adventure.
This semi-national character stamped itself almost, although not quite, from the first on the Dutch East India Company. The Dutch voyages “to the countries lying on the other side of the Cape of Good Hope,”
which we have seen inaugurated by Houtman in 1595, were at once recognized as attacks upon united Portugal and Spain. In September, 1598, great preparations against the Flemings in the Indian Archipelago were reported from Lisbon to Cecil. This was no mere “Portugal brag,” as the correspondent supposed. During the previous summer Philip II had ordered his Indian fleet to close in on the Hollanders at the Straits of Malacca, and to impress whatever private shipping might there be found to aid in their destruction. Portuguese influence with the native princes was to be vigorously directed to shut out the Dutch. No wonder the separate states of Holland felt that something more than their individual support to the various Dutch companies was demanded. In 1602 all the local groups of the East India adventurers in the United Provinces were amalgamated into one powerful company by the States-General with the enormous joint capital of 6,500,000 florins, say £540,000, if we take the florin at twenty pence at that time, and administered under the supervision of a central board of representatives from the subscribing states.
This nationalizing of the Dutch East Indian trade carries us three years beyond the meeting of the London merchants in September, 1599. But from Houtman’s first voyage in 1595, the influences which rendered such a centralization inevitable were at work in Holland. Before describing the feebler corporate system which the English adventurers worked out for themselves, it is needful to understand what a united
East India Company on the Dutch quasi-national basis really meant.
The States-General, in reorganizing the East India companies of the several States into one association in 1602, granted to the new body corporate the exclusive right of navigation to the east of the Cape of Good Hope and to the west of the Straits of Magellan for twenty-one years. The chief shareholders were the great merchants of Amsterdam and of the other subscribing States, but all inhabitants of the Low Countries were, on payment, entitled to join. The republic vested in the company the power to make war or peace, to seize foreign ships, to establish colonies, construct forts, and to coin money. On the other hand, the States-General enforced from the company not only an oath of fidelity and certain customs-dues, but also the right to call for and supervise its accounts. The whole charter reads like a Protestant counterpart of the privileges granted to Portugal by the Bull of 1493, except that religious proselytism drops out of view, a commercial company takes the place of the king, and instead of the poena excommunicationis latae against rivals or intruders, we have the direct arbitrament of the sword.
This strongly knit corporation had a governing body not unworthy of its national character. The board consisted of sixty directors, assigned to the several states in proportion to the subscriptions received from them. It was closely connected, both in the person of its directors and in its public policy, with the States-General. Hardly had it been established than it began to build
forts in the East, to appoint governors, and to make treaties with native princes in the name of the stadt-holder of Holland.
I have passed on three years beyond the English proposals of 1599, in order to give a connected view of the constitution of the great rival company with which the London adventurers were des-tined from the date of their first actual voyage (1601–1603) to contend.
The London merchants who met together under the lord mayor in Founders’ Hall in September, 1599, had no such ambitious scheme of an official organization in their minds. They sought a remedy for a block that had taken place in the Indian trade. Their Muscovy Company, dating from Queen Mary’s charter in 1554, had failed to establish a direct overland commerce with India, and even its dealings with Russia and north-eastern Europe had of late dwindled away. Sir Walter Raleigh lamented that formerly “we sent store of goodly ships to trade in those parts, and three
years past we set out but four, and this last year two or three.” The Dutch have gained all the foreign freight, “whilst our ships lie still and decay, or go to Newcastle for coals.”
The other English route to Asia, represented by the Turkey or Levant Company, had during the same period met with great difficulties. What the pirates of the Caspian and the Tartars of the Volga were to our Muscovy Company, the Barbary corsairs and the fleets of Philip II proved to the Levant corporation. The Barbary corsairs were bought off by large sums, amounting in one year to £2000. The gauntlet of the Spanish navy had also to be run, and in 1590 our homeward Levant squadron of ten vessels forced their way through the Straits of Gibraltar only after a pitched battle with twelve great Spanish ships. His Catholic Majesty could grip our Mediterranean trade by the throat in the passage between Spain and Africa, as he hoped to strangle the Dutch trade in the narrow seas of Malacca. So highly did the Dutch rate the difficulties of our Mediterranean route that in 1597–1599 they raised the price of pepper against us from 3s. to 6s. and 8s. per pound, and other spices in proportion.
Influential members of the Levant Company, thus finding that their extended charter of 1593 availed little for an overland trade to India, led the movement in September, 1599, for a voyage direct round the Cape. That movement, although it derived a patriotic impulse from the Dutch purchase of ships in London for their
Indian expeditions, seemed to spring out of the embarrassments of our Mediterranean trade. Among its most active promoters were Richard Staper and Thomas Smythe, two of the original founders of the Levant Company. Richard Staper is described in the first charter to the Levant Company in 1581 as having, with Sir Edward Osborn, “at their own great cost and charges found out and opened a trade to Turkey,” “whereby many good offices may be done for the peace of Christendom, relief of Christian slaves, and good vent for the commodities of the realm.” At the beginning of 1599, Richard Staper and his associates in the Levant Company “engaged Mr. Mildenhall, a merchant of London, to go to the court of the Great Mogul,” with a view to open up the Indian trade. In September of the same year Staper appears in the first list of subscribers to the East India voyage, in the first list of committees or directors, and as constant in his attendance at their meetings or “courts.”
Thomas Smythe, also named as a founder of the Levant Company in its charter of 1581, was appointed the first governor of the East India Company by its charter of 1600. Many other directors or servants of the East ,India Company were, or had been, engaged in the affairs of the Levant Company. Indeed it ap-pears that the new company at first entered its proceedings in one of the record books of the old, and “that the book originally belonged to the Levant Company, but was afterwards used by both companies in common.” If this statement goes a little too far, the evidence
tends to show that “the East India Company was partially an outgrowth of the Levant Company.”
It was an outgrowth that at first seemed destined to be nipped in the bud. The more ambitious of the 101 merchants and citizens who put down their names for £30,133 on September 22, 1599, contemplated a single voyage to begin with, but not a single voyage alone. Three days later they resolved to ask the queen to grant them “a privilege in succession and to incorporate them in a company, for that the trade of the Indias being so far remote from hence, cannot be traded but in a joint and a united stock.” They also prayed for her assurance that their ships, when ready, should not be detained on plea of the public service; for a privilege to export foreign coin or its equivalent from the realm; and for freedom from export-customs on the goods sent forth by their first six voyages.
Queen Elizabeth, ever the lady patroness of private adventure, signified her gracious assent to certain of the promoters “who have bene at ye Court.” But her Privy Council held back. In the previous year, 1598, France had made a separate peace with Spain by the Treaty of Vervins, and Elizabeth was by no means anxious to be left sole champion of the Netherlands’ cause. It seemed indeed as if the Anglo-Spanish war, which had dragged through the fourteen years since 1585, was at last about to close. Accordingly, the Privy Council threw over the East India adventurers, rather than risk a new grievance to Spain. On October 16, 1599, it refused the privileges they sought,
so as not “to forego the opportunity of the concluding of the peace. Whereupon the adventurers “resolved to postpone their voyage to more propitious times.
Meanwhile they set to work to make out a good case for a grant of privileges on a wider scale. This incapacity for knowing when it was beaten appears throughout the whole career of the company. If it succeeded or if it failed, it went on. The adventurers drew up an ingenious document intended to gain their point whether the peace was concluded or not. They asked the Privy Council to require from the Spanish com-missioners a list of all Spanish possessions east of the Cape of Good Hope. Foreseeing that Spain would not consent to this, they themselves set down the names of twenty-one places, from Sofala on the East African and Diu on the northwest Indian coast, to Macao in China and Manila in the Philippines, to which they admitted the Spaniards and Portuguese had a right. “Yet there remaineth,” they went on to say, as recorded in the State Papers, “that all the rest rich kingdoms and islands of the East, which are in number very many, are out of their power and jurisdiction, and free for any other princes or people of the world to repair unto.”
Of these they enumerated seventeen countries or kingdoms, from Madagascar off Africa to “the rich and golden island of Sumatra,” “the most mighty and wealthy empire of China,” “and the rich and innumerable isles of the Moluccas and the Spicerie.” Their list acknowledges the Spanish claim to the old
Portuguese settlements on the western coast of India, and to Tidore and Amboyna in the Moluccas. But it claims Bengal, Java, and the Eastern Archipelago in general as still open to the world. “In all these and infinite places more, abounding with great wealth and riches, the Portuguese and Spaniards have not any castle, fort, blockhouse or commandment.” The memorialists cite in support of their case twelve Portuguese, Spanish, and Italian authors of European repute, besides nine English and Dutch. Their most important piece of evidence was “the notable intercepted Register, or Matricola, of the whole government of the East-India, [captured] in the Madre de Deos, 1592.”
The document ignored the Papal partition of the world in 1493, together with the treaty settlements based upon it, and recognized only the title of effective occupation. It marked an earlier stage of the ideas which received their full development in Cromwell’s attack on San Domingo half a century later, on the ground “that the said island was not entirely occupied by Spain.” The “Bull must be trampled underfoot,” Sir John Seeley remarks of this development in 1654, “Protestant Englishmen must assert their right of settling and acquiring territory.” It is needless to say that Spain was not in 1600, nor for many years to come, prepared to accept this new departure in international law. What the memorialists then asked was that Spain should schedule her Indian settlements on the assumption that all the East that was not in her actual possession lay open to the world.
Queen Elizabeth, while perhaps smiling at the short cuts of merchant diplomacy, gravely referred the memorial to the learned Fulke Greville. His reply to Sir Francis Walsingham does not carry the case much further, but it forms the masterpiece of East Indian political geography in the Elizabethan age.
Taken along with the map of the world in 1600 – Shakespeare’s “new map with the augmentation of the Indies,” scored over by lines and curves like Malvolio’s fantastically smiling face in “Twelfth Night” – it marks the exact point which English knowledge of the Asiatic seas had reached, when the East India Company started on its independent career of maritime discovery.
Such academic dissertations, however interesting to posterity, little affected the policy of the moment. In 160,0 the Spanish negotiations came to nothing, and the English adventurers ceased writing minutes and began to buy ships. They had, as a body, remained in abeyance from October, 1599, to September, 1600, yet the prompt action which followed their next general meeting shows that their leaders had not been idle. The discussions of the intervening months had opened a grander vista of Eastern enterprise alike to the nation and the crown. It was no longer a question of a voyage or voyages, but of an armed and chartered monopoly for the permanent Indian trade.
Having at length received the queen’s assent, the adventurers reassembled in Founders’ Hall on September 23, 1600, exactly a year after their first abortive start in 1599. They at once appointed a committee of seventeen, including Alderman Thomas Smythe and Mr. Richard Staper of Levant Company fame, to ar-range for the voyage. Next day the committee proceeded to Deptford and bought the Susan, of 240 tons for £1600; and within a week the Ascension, of 260 and the Hector of 300 tons. A pinnace, the Guift of 130 tons, was afterwards purchased for £300 as a victualler to accompany the fleet, and to be cast off at sea at the discretion of the commander. But the adventurers wanted something more powerful than ordinary trading craft, and on October 7, 1600, after a good deal of haggling, they bought for £3700 the Mare Scurge, a warship of six hundred tons, from the Earl of Cumberland,
who had built her to prey upon the Spanish trade. This strongly armed cruiser, under her changed name of the Red Dragon, finally The Dragon, became the flagship of the company. Her refitment was pushed on with vigour, the committee providing a barrel of beer daily for the shipwrights, so that “they leave not their work to run to the alehouse.”
It soon appeared indeed, that, during its year of silent incubation, the enterprise had altogether outgrown its original scale. A much larger capital would be required for the voyage, and the £30,133 subscribed in September, 1599, had to be more than doubled to £68,373 before the expedition set forth. So great a sum could be raised only by the help of a royal charter wide in scope and continuous in character. The petition of 1599 to the queen for a warrant to fit but ships and to export bullion would not now suffice. It had developed into a scheme for incorporation somewhat on the model of the Levant Company, but with larger powers, a wider area of business, and a longer term of monopoly.
On December 31, 1600, Queen Elizabeth granted a charter in this sense, “for the Honour of our Nation, the Wealth of our People,” “the Increase of our Navigation, and the advancement of lawful Traffick to the benefit of our Common-wealth.” It constituted the petitioners into “one body corporate and politick, in deed and in name, by the name of the Governor and Company of Merchants of London trading into the East Indies,” with legal succession, the power to purchase
lands, to sue and be sued, and to have a common seal. It vested the management of the company in a governor and twenty-four committeemen, who were to be annually appointed in July, the first set being named in the charter, and including Thomas Smythe as governor and Richard Staper, the two original founders of the Levant Company who had most actively promoted the new East Indian enterprise.
The charter secured, for fifteen years from Christmas, 1600, the exclusive privilege of the Indian trade, that is with all countries beyond the Cape of Good Hope and the Straits of Magellan, except such territories or ports as were in the actual possession of any Christian prince in amity with the queen (unless by his consent), to the body corporate, and to their sons not being under twenty-one years, their apprentices, factors, and servants. It also empowered the Company to make by-laws, and to punish offenders against them by fine or imprisonment, as far as consistent with the laws of the realm. All the queen’s subjects were prohibited from trading within the geographical limits assigned to the company, unless under its express license, on pain of forfeiting ship and cargo, imprisonment, or other punishment.
So far the charter provides for the creation and management of the company, its continued existence for fifteen years, its powers to hold property, its right to trade to any country of the Indian seas not in actual possession of a friendly Christian prince, its exclusive privilege to do so as against all other subjects of the
queen, its power to grant licenses of internal trade to outsiders, and to discipline by fine or imprisonment its own members and servants for breaches of its by-laws. The charter ignores the Spanish claims, founded on the Bull of 1493, but respects rights derived from actual possession – the position taken by the adventurers in the previous year.
These powers, as against third parties, foreign or domestic, were supplemented by considerable privileges as against the crown. The queen, considering the hazards of an untried trade, and the company’s ignorance as to what English goods would be vendible in India, exempted from export duties the outward cargoes of the first four voyages, and allowed six to twelve months’ credit for the payment of the customs on their home-ward freights. Indian goods brought by the company might, after once paying the import duty, be re-exported without further dues. For the first voyage the company might export Spanish or other foreign silver coin and plate to the amount of £30,000, but in the case of subsequent voyages the company must reimport within six months the equivalent of the silver exported by it. As the nature of the voyage compelled the ships to start at a particular season of the year, the charter provided that, even “in any time of restraint,” the company should be empowered to send forth annually “six good ships and six good pinnaces well furnished with ordnance and other munition for their defence, and five hundred mariners, English men,” unless the queen required them for her own service. If the trade
proved unprofitable to the realm, it might be revoked on two years’ notice from the crown; if beneficial, the charter should be renewed on the expiry of the fifteen years for another like period.
The body corporate thus created represents both as to the nature of its business, and as to the mechanism for conducting it, the final stage of sea-enterprise in the Elizabethan age. As regards the nature of its business, Elizabethan maritime adventure had started with voyages mainly of discovery, but with an eye also to the Indian trade. Such voyages are summed up in
Frobisher’s north-western expeditions (1576–1578), beginning in exploration and ending in a gold mania. They developed into the voyages, partly of discovery though chiefly for plunder, of whose corsair-commanders Drake forms the heroic figure-head. But side by side with these buccaneering ventures grew up more peaceable yet armed enterprises whose chief, if not sole, object was trade. Of this last class the Levant or Turkey Company long survived as the type. The East India Company exemplifies that type of armed sea-trade on its largest scale, and with the fullest powers of expansion and of self-defence.
So also in regard to its working mechanism the East India Company stands to us as the final expression of the co-operative principle in the Elizabethan period. From the very first, as noted in the Court Minutes, September 25, 1599, the adventurers declared “that the trade of the Indias being so far remote from hence cannot be traded but in a joint and a united stock.” From the first also they insisted that the contributions of members should be in money, and not in kind; that neither ships nor goods should be accepted from any adventurer “as his stock” or in lieu of his subscription in cash. A corporation so constituted seems closely to resemble a modern joint stock company, but the resemblance is by no means complete. Its nature was rather that of a modern syndicate formed to obtain from the crown a concession of the East India trade for a certain number of years, and then to work the concession by means of successive .
new syndicates or groups of subscribers from among its own members for separate voyages, but under its corporate control.
In such latter-day comparisons, however convenient for illustration, there lurks a constant source of error. For the institutions of Elizabethan England were formed not on new patterns for the future but upon the models of the past. The East India Company, like the Levant or Turkey Company, was built on the deep foundations of medieval trade. It proceeded on the principle that the protection of trade formed a duty of the sovereign, that protection involved regulation, and that it was beneficial for the nation that each trade should be placed under a guild or corporation with powers of self-management and internal control. Such guilds, while generally deriving their authority from the crown, were chiefly composed of the members Of a specific trade, and were designed to defend its interests. No citizen could practise the incorporated trade or craft without being admitted a brother of the guild. But every member once admitted was free to set up business on his own account. A medimval town was thus honeycombed with a number of little coipora-tons, each having the monopoly and management of a separate trade, but whose members were all at liberty to trade for themselves under rules formed for their common good. These early attempts to combine the strength of co-operation with freedom of individual initiative survive, after many metamorphoses, in the London City companies. Their modern representatives,
in an active state, are “Lloyd’s” and the Stock Exchange.
As handicrafts grew into manufactures, and as trade expanded into commerce, the system developed into corporations for foreign enterprise, such as the Merchants of the Staple, the Fraternity of St. Thomas a Becket (afterwards the Merchant Adventurers), and the Muscovy Company. Each company held a charter from the sovereign creating it a corporate body and assigning to it the exclusive privilege of a certain class of business, with powers to regulate the conduct of the business in the common interest of the members. While the stability of corporate management was thus secured, the individual liberty of each member was generally maintained, down to the time of Queen Mary. But the sea-commerce of Elizabeth, especially during the long state of war with Spain from 1585 to her death in 1603, demanded the strength of a closer union. Her last great charter, that of the East India Company, marks the final stage of the process. It gave powers as ample as ever from the crown to the corporate body, but it further fortified those powers by curtailing the individual liberty of the members. The corporate body could alone send forth voyages, and could alone conduct them, the separate members could no longer trade on their own account. The loss of private initiative was the price paid for the increased strength of corporate action.
The East India Company may thus be regarded as the mercantile expression of those forces of union which
so profoundly modified our national growth under Elizabeth. Yet it was in no sense a national enterprise, or a semi-national association like the Dutch East India Company. The queen allowed a private group of her subjects to adventure their capital in the East India trade, and granted them such privileges as did not interfere with her own foreign policy. When their interests clashed with her foreign policy, she did not hesitate to withdraw her support, and the adventurers had to wait a year, after receiving her gracious assent, until the failure of the Spanish peace negotiations gave her once more a free hand.
While, however, the company was not a national one, it drew its very existence from the royal prerogative. Not only did its monopoly as against all other English subjects, its partial exemption from customs, and its right to export bullion depend on a grant from the crown, but it had to invoke the aid of the crown
in the daily conduct of its business. No single voyage could be equipped without a separate commission from the sovereign. Warrants from the lord treasurer for the passage of victuals from port to port, or for re-straining the sale of pepper until the king’s stock should be disposed of, and royal warrants for each separate voyage, occupy many pages of the records. Even in its internal management, the directors (or “Committees “) were constantly running to the Privy Council whenever a difficulty arose. Thus if defaulters would not pay up their subscriptions to a voyage, or if a further subscription were required, or if coercive powers were needed to float a northwest expedition, or if carpenters had to be pressed for fitting out the ships, or if an unsuccessful captain had to be dealt with, it was to the Lords of the Council or My Lord Treasurer that the company applied. It was also from their lordships, and My Lord Admiral and Mr. Secretary, that the company received rebuke for slackness in its duties.
The “Company of Merchants of London trading into the East Indies” was, therefore, in many senses a “Regulated Company:” regulated as to its general powers by royal charter; regulated as to each particular voyage and as to its internal management by the’ Privy Council and the crown; very strictly regulated as to its individual members by its own governing body, consisting, under the charter, of the governor and twenty-four committee-men. It thus stands as the perfected type of the Regulated Companies which formed
the intermediate link between the mediaeval trade guilds, and the modern commercial associations under the Companies’ Acts. The personal independence of members of the earlier Regulated Companies was transferred from the individual member to the group of subscribers to each voyage. Their liability was limited to their individual subscriptions. Yet the company, acting as a whole, could increase the amount of a separate subscription by a pro rata levy, to meet the requirements of the voyage. For the first voyage, for example, an extra call of 2s. in the pound was made, according to the Court Minutes of April 1, 1601; and in all a levy of 4s. in the pound above the subscribed sums was made, according to the Minutes of July 6, 1601. These levies required for their enforcement the aid of the Privy Council.
This early form of limited liability and joint stock has never, so far as I am aware, been examined from the actual records of a corporation. Adam Smith’s classical passage still forms the best account of the Regulated Company. But his reflections are biassed by a misconception as to the origin of such privileged bodies. “In the greater part of the commercial states of Europe,” he writes regarding the protection of trade by the ruling power, “particular companies of merchants have had the address to persuade the legislature to intrust to them the performance of this part of the duty of the sovereign, together with all the powers which are necessarily connected with it.” Such eighteenth-century philosophizing does not sufficiently allow
In the Madras District of Southern India is the city of Trichinopoli, a flourishing place of nearly one hundred thousand inhabitants. The Golden Rock on the south side of the town, capped by a shrine and having the central jail near its base, is one of the most conspicuous objects of the city.
for the natural development of the Regulated Company from the medieval trade guild, a development not due to the “address” of “particular companies of merchants,” but a necessary adaptation of old forms to the growing requirements of trade. Instructive as are Adam Smith’s historical sections on Regulated Companies, they are from an outsider’s point of view.
I intend, from the contemporary records of the East India Company, to show the actual working of the Regulated system in its mature Elizabethan growth. Admission’ to the “one body corporate and politic” of “the Governor and Company of Merchants of Lon-don trading to the East Indies,” might be obtained by purchase of a share in a voyage, or by redemption, or by presentation, or by patrimony, or by apprenticeship. The last four methods require few words. Admission by patrimony, that is of sons of members on reaching twenty-one years of age, and by apprenticeship, was provided for in the charter. Apprenticeship also came to include foreign employment, as in the case of Samuel Husbands, “in regard he had served the company ten years in India.” The apprentice or servant, on admission, paid a small sum, from ten to forty shillings, for the poor. In the case of sons born after their father had ceased to be a member, admission was “of grace, not of right,” and on payment of a fine say of £10. Admission by presentation or a faculty, “for the making of a free man,” was occasionally granted to some nobleman or powerful member. Admission by redemption became common when the company got into low
water, and grew anxious about keeping up its numbers. Under this system it admitted members for such cash payments as it could obtain. In 1619 the rate was confirmed at £100. During the distresses of the civil wars the price fell to £5, and in October, 1647, fifteen new members were admitted for that modest sum.
The usual method of admission was by purchase of a share in a voyage. The subscribers to the first voyage were practically the petitioners for the Charter of 1600, and they were included by name in the charter as forming the company, or were afterwards incorporated into it, “in as large and ample manner,” “as if their names had been contained in the patent.” The amount of contribution which entitled a subscriber to the freedom of the company (or one “share “) was originally £200. For the second Cape of Good Hope voyage in 1604 the minimum share was fixed at £100. But this arrangement threw undue power into the hands of small holders at meetings of the General Court of proprietors. Of the 205 subscribers to the third voyage in 1607, a majority of 108 were for sums under £200. The company resolved, therefore, to strengthen the hands of the leading members who had a serious stake in the business, and raised the minimum subscription to £500 in the fourth voyage of 1608. To induce small capitalists to come forward, however, they were allowed to join their subscriptions under the name of one person who had the right to vote for an aggregate stock of £500. The “share” or amount of capital which thus entitled a subscriber to the full privileges of a
Freeman, and therefore’ to a vote, varied at different periods. In 1619 it was £100.
In a certain sense, therefore, the company was identical with the subscribers to the first voyage, and it had a capital of £68,373 subscribed for the voyage. But as soon as it expended that capital on the first voyage, from which no return could be expected for several years, it ceased as a company to have any capital of its own for further voyages. Its business was, there-fore, to plan voyages, to obtain the royal sanction. for each voyage, and to recommend each voyage for subscription to its members, to receive the subscriptions as a separate fund applicable to the particular voyage, to buy ships and goods for the voyage, and finally to divide the profits among the individual group of sub-scribers who had found the capital for the separate voyage.
Putting all this in very modern terms, the company was, as I have said, a syndicate with a concession for the Indian trade during fifteen years, and it worked its concession by forming minor groups, theoretically among its own members, to find the capital for each separate voyage – the management of all the voyages remaining in the hands of the parent syndicate, and the liability of the minor groups being limited to the separate voyage to which they individually subscribed. Their liability might, however, be extended to a forced contribution to a further venture, if fresh capital could not be raised from a new group of subscribers.
To any one accustomed to work a limited liability
association under the Companies’ Acts this system bristles with divided interests. As a matter of fact, it in time developed a complexity which ultimately destroyed it. But to its Elizabethan founders it seemed simple enough. When the money subscribed for a particular voyage had been invested, and the ships sent out, the company usually rested awhile from its labours. Then the “Committees,” or some enterprising member, started a project for another voyage, and a general court was held to consider the proposal. If agreed upon, “a title or preface” to a new “book of contribution” was drawn up setting forth the objects of the voyage and the capital required for it. Members present who wished to join the fresh venture put down their names for various sums; and the book was then delivered to the beadle “to be carried to all the several freemen of this fellowship to set down their several adventures in” the “voyage.” The beadle went round with the book, and if he brought it back with a full subscription list, good and well. If not, certain influential brethren, practically the directors or committeemen, were appointed to take it round again to the members, and “to persuade and encourage them to proceed in the said adventure.” In some cases the contributors to one voyage were induced or compelled to provide the capital for another. Thus, the subscribers of the first voyage had to submit to a pro rata levy for the second; and the subscribers of the third voyage had to take up the fifth and share the profits of the two.
The capital for a further voyage having been provided,
the company bought the ships and goods for the voyage, drew up instructions for its conduct, and obtained the necessary powers from the crown for sending forth armed vessels, marines, and silver specie or coin from the realm.
This complicated business was mainly conducted by the governor and committee-men, whose “Court of Committees” resembled the board of a joint stock company at the present day-. As the arrangements advanced, they were laid before a general court of the company presided over by the governor and attended by the committee-men, “with the greatest [or greater] part of the generality.”
Very strict by-laws regulated these meetings. The beadle could be sent to summons any brother of the company (usually a defaulting subscriber), and the
meeting or “court” fined him a shilling for non-appearance, or sixpence should he come late. If he proved obstinate, a warrant for commitment from the Privy Council brought him to reason. No brother could speak above thrice’ on any matter “upon pain of forfeiture of 3s. 4d. for every such excess in speech.” The fine for interrupting another brother in his lawful discourse “by whispering speech or talk” was 2s. 6d., while “any uncivil or intemperate speeches or behaviour” were punished by a mulct of 10s. No brother could leave a meeting without permission before its close, under penalty of a shilling. Above all, “when Mr. Governor or his deputy commandeth silence by stroke of the hammer” let every one hold his peace “upon pain of forfeiture of sixpence.” These fines, the precautions of serious citizens for the orderly conduct of their business, were enforced by sending those who would not pay them to prison, “there to remain during the pleasure of the generality.”
The record for the equipment of each voyage may be reduced in most cases to four documents. In the first place, there was the Royal Commission of Queen Elizabeth authorizing the company to undertake the individual expedition, and vesting in its commanders powers for punishing offences during the voyage, and for the “quenching of all such mutiny, quarrels, or dissensions that shall or may” arise.
In the second place, the company issued a commission or code of instructions to the “General” or Admiral, and to the commanders of the ships, setting forth
in great detail the scope and objects of the voyage, together with minute regulations for its conduct and trade. In the third place, Royal Letters Patent authorized, when needful, the coinage of money or export of specie for the voyage. La the fourth place, Letters Missive were sought from the sovereign to the foreign kings, princes, and potentates at whose ports the ships were to trade. A curious circular letter of introduction from Elizabeth “to the Great and Mighty King of ____” leaves the address blank, to be filled up and delivered at the discretion of the commander of the expedition. The subsequent letters from King James are usually directed to specified princes in the East.
These four instruments stand out as landmarks of the separate voyages above a mass of correspondence and detail. The example of a single voyage must serve to illustrate the routine proceedings for its sanction and equipment. Three months after the first voyage round the Cape of Good Hope, set forth (as we shall see) from Torbay on the 22d of April, 1601, the company received a letter from “one George Waymouth, a navigator,” proposing a voyage for the discovery of the northwest passage to India. He asks whether the company will undertake it, or allow private men to do so, with a grant to them of the sole trade by that route for certain years if they discover the passage. After an adjournment a general court decided to undertake the venture, and to raise the money by a voluntary levy of five per cent. on the subscriptions of the first voyage, from such members as chose to embark on the venture.
A new subscription book was accordingly sent round to the brethren. In January, 1602, the court confirmed their proceedings by a “standing and unchangeable decree” for the expedition to discover “the northwest passage to the East Indies.”
Arrangements then proceed for the selection, survey, and purchase of two pinnaces with a total crew of thirty men at an estimated cost of £3000. Captain Waymouth agreed to conduct the voyage on payment of £100 for his instruments, with a promise of £500 if he discovered the passage, but without any remuneration if he failed. A question next arises as to whether the expedition will not infringe the chartered privileges of the Muscovy or Russia Company. The Muscovy Company take a high stand, yet offer to admit into their brotherhood such members of the East India Company as contribute to Captain Waymouth’s expedition. After a wrangle between the two bodies, the East India Company apply to the Privy Council, which directs the Muscovy Company either to agree to joint action with the East India adventurers or to bring their patent before the Council for a scrutiny of their claim. The Muscovy Company give way, and finally the East India Company, having fortified themselves by a legal opinion, draw up instructions for the voyage, having recorded each step of their proceedings in the Court Minutes of 1601 and 1602.
A mass of detail follows, appointments of officers to the vessels, warrants for pork, wages, “hides to make the mariners’ cassocks, breeches, and gowns.” The victualling is divided among three sub-committees,
and formal articles of agreement between Captain Waymouth and the company fill several pages. He is to pass through the Fretum Davies to the northwest to the “Kingdoms of Cataya or China,” and not to desist from his course “so long as he shall find those seas or any part thereof navigable.” This indenture was made in April, 1602.
The object of the expedition was, by means of a shorter northern route, to avoid “the long and tedious course” round the Cape of Good Hope, and the “many kinds of dangers offered therein.” It was also thought that a less export of treasure from the realm would be required in trading with the nations of north Asia. A journal of the voyage was to be kept and a day-book of barters with the natives. Observations or discoveries were to be faithfully disclosed by Waymouth on his return to the governor, deputy governor, and committee-men of the company, and kept secret from all else. By another agreement, “John Cartwright of London, Preacher,” was appointed chaplain to the expedition at £3 a month, only half of which was to be paid him unless one of the ships returned home by way of China.
Armed with a letter from Queen Elizabeth to the Emperor of China and Cathay, the expedition went forth and returned unsuccessful. Its failure was ascribed to the faint-hearted exhortations of Preacher Cartwright, and the directors demanded back from him “the gowne and apparell” in which he was to have figured at the Chinese court. The company also
proceeded against Captain Waymouth before the Privy Council, but being satisfied with his defence, agreed to employ him on another voyage. Into his further history I need not enter. The subscribers to the northwest expedition of 1602 lost their money, its separate business was wound up, and the company proceeded to form new groups of adventurers for voyages by way of the Cape.
I have dwelt on Waymouth’s expedition for two reasons. It illustrates the relations of the company to a particular voyage from the inception to the close of the venture; and it stands apart from the regular series of Cape voyages, so that I shall not have to refer to it again in my consecutive narrative of the Indian trade. The discovery of the northwest passage continued to be a dream of the East India adventurers, as it continued to be a dream of some of the most gallant seamen whom England has produced down to our day. In 1602 the company resolved to make “a final proof whether there be any passage or not,” by means of Waymouth and another captain. In 1606 it granted a license to John Knight to discover the passage on his own account – in vain. For years afterwards the project reappears, and in 1614 the company was again being urged to seek a northern passage to Asia, with the promise of aid from the Emperor of Japan.
The permanent machinery by which the company carried on its business consisted from the first of a governor, deputy governor, treasurer, and a board of twenty-four committee-men, elected annually in July.
The same men were frequently re-elected. They were assisted by a secretary and accountant, also subject to re-election, and a small staff of clerks. As long as the company’s business consisted in sending out separate voyages, this permanent board of management (represented by the Court of Committees) was much stronger than any of the separate bodies of subscribers, and kept the conduct of the separate voyages in its hands. But before the middle of the century, as we shall see, the separate bodies of subscribers overpowered the central body of management. The board of twenty-four committee-men became rather shadowy. The governor, deputy governor, and treasurer only retained their authority by acting as leading members of the separate ventures, in addition to their functions as permanent officials of the company. They thus exercised a unifying influence in the midst of conflicting and overlapping interests. For example, in 1647, when the adventurers of the Second General Voyage elected the committees who were to manage it, they expressly provided that “at every meeting Mr. Governor, Mr. Deputy, or Mr. Treasurer should be one.”
The central board, including the governor, deputy, treasurer, and twenty-four committee-men, submitted all important arrangements for approval to meetings or “General Courts” of the freemen of the company, and were sometimes, although very seldom, overruled by the voice “of the generality.” The capital which they managed consisted of the subscriptions for the separate voyages. Each new group of adventurers
usually took over (under the direction of the company) the factors and property of the preceding venture; and the company thus acted as a link between the new group and its predecessor. The confusion of interests which arose out of this system will hereafter appear.
In the earlier stages of its history, the company or central board of management not only invested the capital raised for each separate venture, and conducted its business, but also appointed its servants. It handed over the agents in the East from their original group of employers to succeeding groups. A permanent body of English factors and employees in India thus developed and gave rise to many questions, such as private trade, which the company strictly forbade from the outset, and licensed trade, by which it allowed its servants to take a share in the ventures of the separate voyages. In its attitude to its servants, the East India Company preserved the domestic responsibilities of the medieval master-craftsman to his apprentices and men under his roof. At each factory the staff lived In one house, ate at the same table, met together for daily prayers, and had to be in by a certain hour at night. The early records are full of pious maxims and instructions as to brotherly conduct, “no brabbles,” cleanliness of person, respect to superior officers and “the preacher,” the care of health, and penalties for blasphemy or breaches of family morals. Gaming and dicing are strictly forbidden; excessive drinking and banqueting are denounced.
A single quotation from a strictly business letter,
full of trade details, will illustrate this domestic aspect of the company. “And because there is no means more prevalent to strengthen and confirm the ways of the godly in righteousness than the spirit of God which is the guide into all good motions,” the company wrote in 1610, “and no aid more pregnant to support and uphold the sinner from falling into wickedness than the grace of God, we exhort you in the fear of God to be very careful to assemble together your whole family [i. e. all the employees] every morning and evening, and to join together in all humility with hearty prayer to Almighty God for his merciful protection.”
“Settle such modest and sober government in your household that neither amongst themselves there be contentious quarrels or other occasions of strife.” “Comport yourself both in your habit [apparel] and housekeeping in such comely and convenient manner as neither may disparage our business nor be accounted too excessive in expenses.”
Such instructions entered into every detail of the
common family life of the factory, or trade settlement. Unnecessary shooting of salutes when captains went on shore, and the undue discharge of cannon at the drinking of healths, were repressed. Nor without cause, as the Portuguese sometimes spent so much gunpowder in vain ceremonials as not to leave enough to work their guns. Instead of salutes, it was eventually ordained that the English might cheer. They were to take an example from the Dutch, “who are very careful, industrious, and diligent,” and to “trust none of the Indians, for their bodies and soules be wholly Treason.” The company always mingled business with piety, from the fitting out of ships at Deptford to evening prayers in the Spice Islands, or the relief of English prisoners at Lisbon – to whom it sent two hundred ducats with the admonition “to comfort yourselves in the Lord.”
“For the better comfort and recreation of such of our factors as are residing in the Indies,” runs another document, “we have sent the works of that worthy servant of Christ, Mr. William Perkins,” together with Foxe’s “Book of Martyrs,” and, one is glad to hear, “also Mr. Hackluit’s Voyages to recreate their spirits with variety of history.” Even their coat of arms, for which they paid “the King of Heralds” twenty marks in 1601, bears witness to the Puritanism of the city merchant of that day. It was not the well-known shield of 1698, with its lions for supporters, a lion holding a crown above, and the stately device of Auspicio Regis et Senatus Angliae. The earlier and almost forgotten
arms of the company displayed three ships in full sail, with a pious pun as motto, Deus Indicat, God points the way.
We are now in a position to understand the mechanism and the methods by which the first English East India Company was to make its bid for the Asiatic trade, as against the more powerful Dutch corporation, and the united forces of Portugal and Spain. To recapitulate, it was at once a company for regulating the English trade to the East, and also for conducting that trade by subscriptions raised from successive groups of adventurers, who were generally members of its own body, or were admitted to it as subscribers. In one respect it resembled the medieval trade guild now represented by the London City Companies and “Lloyd’s”; in another respect it resembled the modern limited liability company. From the first there was a tendency to divided interests between the successive groups of subscribers who found the capital and the permanent company who administered it. The conflict of these divergent forces determined the internal history of the company from its first charter of Elizabeth ‘in 1600 to its reconstitution by Charles II in 1661.
From 1600 to 1612 there was a period of so-called Separate Voyages, each of which was theoretically complete in itself, and was to be wound up on the return of the ships by a division of the profits. During this period the power of the central company was supreme over each separate group of subscribers – subject,
however, to the yearly election of its executive officers by the general body of members. But the sys-tem proved defective, as, owing to the length of the passage to India and the slow process of winding up, the separate voyages overlapped each other. It thus came about that the agents of several voyages were trading in India at the same time, and bidding against each other for spices and Indian products. Disputes and acts of ensued. Thus a ship of one voyage would refuse to carry home goods lying at Bantam for transport because they belonged to another group of adventurers.
The second period, from 1612 to 1661, was marked by efforts to remedy this state of things. It is known as the period of Joint Stocks. Each subscription was raised not for a single voyage, but for several, or to carry on the trade during a certain number of years. The central company still managed the business of each
successive Joint Stock, as it had managed the business of each Separate Voyage from 1600 to 1612. But as the Joint Stock group lasted over a longer period than the Separate Voyage, it tended to become stronger than the central company, and to take the management of its business into its own hands. The idea was still present, however, that each Joint Stock would be wound up after a time and its profits finally divided, as in the case of the Separate Voyages. But practically the Joint Stock ventures and “General Voyages” were found to overlap each other as the Separate Voyages had done, and a similar confusion resulted.
A third stage was reached in 1661, when long adversity had taught the central company and the Joint Stock groups alike that conflicting interests must be fatal to their existence in the East. The idea that the Joint Stock was in due time to be wound up gradually disappeared. After the .Restoration the practice of buying and selling shares became common. This indicates that the Joint Stock principle had passed the stage represented by the second period from 1612 to 1661, and that the system was approaching more closely to the Joint Stock companies of our own times.
This collection transcribed by Chris Gage