Honourable Company: A History of The English East India Company

by John Keay

  Something similar now awaited Methwold. For two days he was closely guarded at the English factory then, along with his principal assistants, transferred to an airless dungeon where ‘we found ourselves almost eaten up with chinches, a vermine well-known to swarme about nasty rooms’. At last the unhappy Taufiqui sailed into port. Her skipper was absolutely positive his attackers were English; one of them ‘wore a gold ring in his ear’ – and no doubt a red bandana round his head – and was called Simon. Methwold was still unconvinced. But this Simon had thoughtfully issued the Taufiqui with a certificate of having been robbed (presumably to be shown to any other would-be pirates). It was this document, written in English, which finally convinced Methwold that he had been mistaken and that there was indeed an English ship in the area carrying the royal commission and yet engaging in piracy. He was almost too embarrassed to spell out the enormity of it.

  Admittedly it was not the first such scare. A trickle of ships, some with a royal commission, some without, had ventured to infringe the Company’s monopoly ever since Michelborne’s voyage in 1602. But it was much the most serious. For it transpired that the Roebuck, the offender in question, was financed by a man in the employ of Sir William Courteen, one of the richest merchant adventurers of the age. And even as Methwold lay mouldering in his Surat dungeon, Courteen was dispatching another and a far more formidable fleet to challenge and embarrass the Company.

  ii

  Over the years the Governor and Company of London Merchants trading to the East Indies had stirred up a good deal of controversy. A recurrent criticism, already noticed, was that the Company must be impoverishing the nation since it exported treasures and imported only luxury consumer items. In the case of Indian cottons these were manufactured goods which must be killing off English manufactures. Sir Thomas Roe was one of many who sympathized with this point of view which was why he took such a gloomy view of the Surat trade. It was also one of his reasons for the reopening of the Mocha trade, Mocha being the one place in Asia where spices and cottons could be sold for specie.

  But in 1620 Thomas Mun, a director of the Company, met these and other objections in his Discourse of Trade unto the East Indies. Mun argued convincingly that there was nothing inherently wrong with exporting precious metals provided that the value of such exports was less than the value of the imported goods. ‘For let noe man doubt that money doth attend merchandise, for money is the price of wares and wares are the proper use of money, so that coherence is inseparable.’

  This in itself was a considerable advance on the economic theories of the day. But, more important, he drew attention to the idea that the nation’s wealth could never be assessed purely in terms of one particular exchange. The trade of specie for spices and cottons, he argued, was but a small segment in a much larger and more complex trading cycle. It began with the importation of silver rials from Europe (originally, of course, from Mexico). The rials were invested in eastern trade and eventually came back in the form of cottons and pepper, most of which was then re-exported to Europe (and America and Africa). The re-export trade, although not handled by the Company itself, was particularly important since it was this which completed the trading cycle by financing the purchase of more rials. Hence, declared Mun, ‘the East India Company alone is the meanes to bring more treasure unto this realme than all the other trades of this kingdome being put together’. Home consumption accounted for only a small percentage of the Company’s imports. Moreover, without the Company’s pepper it would be necessary to import expensive Dutch pepper and without India’s cottons it would be necessary to import expensive continental linens.

  Mun evaded the vexed question of English woollens and he said nothing about another common objection: that if the trade was so valuable and extensive how could it be in the national interest to make it the exclusive monopoly of one commercial organization? After all, those whose criticisms of the Company’s trade derived from viewing it as an isolated and distinct activity could hardly have done so had the Company not enjoyed a monopoly of it. Both the monopoly and their line of criticism were in fact based on traditional commercial logic.

  But the Company could of course advance other and excellent reasons for its monopoly. It was how both the Dutch and the Portuguese operated; without it, investors would shy away, the concerted and continuous activity necessary for such a long term and expensive adventure would be impossible, and the management of factories, of purchasing, and of local relations would be chaotic. Furthermore, it appeared that a monopoly was the arrangement favoured by the Crown. In a good year the Company’s imports were yielding some £20,000 per annum in customs duties. Together with other exactions (like the £10,000 demanded by James I for ignoring diplomatic protests over the capture of Hormuz) they made the Company an important source of revenue to the embattled monarchy.

  But if the Crown looked to the Company, so did the Company look to the Crown. The periodical need for a revision or confirmation of its charter, plus diplomatic and political support in its differences with the Dutch and the Portuguese, rendered it dependent on royal support. So did the need for various financial concessions like the authority to import Spanish rials. Although not a state venture like the V.O.C., the Company never enjoyed all the freedoms usually associated with a private sector enterprise. It could, and often did, threaten to cease operations when, as in the aftermath of Amboina, royal support seemed in doubt. But such a threat would have been difficult to put into practice and neither Crown nor Company relished the idea of seeing hard-won markets abandoned to continental rivals.

  So the monopoly had advantages for both parties and James I seemed generally to have accepted its logic; after remonstrations and douceurs, he had usually discountenanced those who infringed it. And perhaps Charles I intended to follow his example. The commission he had granted to the adventurers in the Roebuck made no mention of trade, their licence being only to ‘range the seas all the world over…[and] to make prize of all such treasures, merchandise, goods and commodities which they shall be able to take of infidels or anye other prince, potentate or state not in league or amitie with us beyond the line equinoctiall’. In other words it was purely an invitation to piracy and, however scandalous and provocative, was not intended to test the Company’s trading monopoly. When, after ships of the Company had eventually run the Roebuck to ground, protests were lodged in London, Charles I was persuaded to disown the miscreants and to write a letter of apology to Shah Jehan.

  And there the matter might have ended had the sudden news of Methwold’s treaty with the Portuguese not appeared to throw a whole new light on Eastern trade. Methwold, a cautious man, had spoken of ‘certaine benefitt’. But Charles I was easily persuaded that it was in fact a sensational breakthrough. With no further danger of Portuguese attack and with entry to all of Portugal’s cherished markets, the English had the chance of doubling their trading empire. What more natural than that the king should accede to the suggestion of a second, separate, trading empire? And that a second trading empire justified a second chartered company? Behind the idea was once again the ambitious Courteen; but this time Courteen’s influence and cash were nicely matched by the reputation and experience of others in his consortium. For the new association’s first fleet was to be commanded by Captain Weddell, the victor of Hormuz, and staffed by a bunch of the ablest factors of whom nearly all had lately served the London Company.

  Dissatisfaction amongst the Company’s employees was nothing new. It had been well expressed by George Ball while President at Bantam in 1618.

  At home men are famous for doing nothing [wrote Ball]; here they are infamous for their honest endeavours. At home is respect and reward; abroad disrespect and heart-breaking. At home is augmentation of wages; abroad nothing so much as grief, cares and displeasure. At home is safety; abroad the best is bondage. And in a word at home all things are as a man might wish, and here nothing answerable to merit.

  Such home thoughts from abroad were prompted not by homes
ickness but by the ever suspicious and badgering tone of the Company’s correspondence. For the Company, in the persons of its directors, was not yet an impersonal business entity; in its attitudes even more than in its constitution it harked back to the age of the guilds. In the sub-committee which handled correspondence with overseas factories the emphasis was ever on collegiate discipline, like that of the universities, which presumed a high degree of subordination in its representatives. Hence the respectful modes of address – ‘Your Worships’, ‘the Most Honourable and Worshipful company’, etc. – and hence the presumed right to regulate the personal conduct of its factors. But at such an impossible remove London’s exhortations commonly became paranoid suspicions. It was assumed that every factor once clear of the Thames would, like Hawkins, live as an oriental courtier and set about feathering his ‘neast’.

  In the case of Ball this assumption proved well founded. He was eventually recalled in disgrace, arraigned for embezzlement, and fined £2000; all things were not always ‘as a man might wish’. But better men than Ball – ‘the honest Mr Cocks’, for example – would also take umbrage at the relentless barrage of criticism from London. Even in an age of strong language it was no encouragement to be constantly lambasted for incompetence. Goods, it seemed, were always badly packed, of inferior quality, or too expensive; accounts were either faulty or late; living expenses were far too lavish. Rarely indeed was honest endeavour acknowledged or rewarded. And just as an energetic factor was presumed to be expending as much energy on his personal trade as on the Company’s, so a successful commander was presumed to be recompensing himself from whatever booty came his way.

  Such was certainly the attitude to Weddell whose services against the Portuguese had won him nothing but complaints about the cost of the operation plus ‘fines, and undeserved public reproaches’. When therefore it fell to the same Weddell to convey to London the good tidings of Methwold’s Goa Convention, his thoughts and those of most of the factors in his fleet turned to revenge. The scheme to apply for a charter to open trade at all the Portugese ports in the East seems to have been hatched during this voyage. In London Courteen immediately lent his support and through Endymion Porter, one of the King’s favourites, secured the necessary charter. £120,000 were quickly raised and in 1636 Weddell put back to sea at the head of an impressive fleet of four vessels.

  The directors of the Company protested in the most vigorous language at this blatant infringement of their own charter; and they would continue to do so for the next twenty years. It was to no avail. For, according to the preamble to Courteen’s charter, the Company had forfeited its exclusive monopoly by having ‘neglected to establish fortified factories or seats of trade to which the King’s servants could resort with safety…[having] consulted their own interests only without any regard to the King’s revenue…and in general [having] broken the conditions on which their charter and exclusive privileges had been granted to them’. It was further argued that the new association need not constitute a rival since it would be trading only at places within the Portuguese sphere of influence – places whose trade the London Company had signally failed to exploit and whose potential in such difficult times it could not be expected to realize. The Company retaliated by ordering its factors to have nothing to do with those of the new association and to report any prejudicial activity immediately. But thereafter, and for the next twenty years, it would have to reckon with rivals who competed for finance and favour at home and for trade and concessions abroad and whose activities were a constant source of embarrassment and conflict.

  And all this in spite of the fact that Courteen’s Association scarcely prospered. Weddell’s fleet spent three months at Goa but received no cargo and little encouragement, ‘just delaies, faire wordes, and breach of promisses’ according to Peter Mundy who had also gone over to the competition. They sailed on for Aceh, Malacca, Macao and Canton where Weddell was the first Englishman to have direct dealings with the Chinese – if, that is, an exchange of fire, several skirmishes and a blunt refusal by the Chinese to countenance any future trade may be termed ‘dealings’. After six frustrating months the fleet put back to sea and, disavowing the original plan of sailing home by way of the still elusive north-west passage, headed back to Aceh. A quantity of pepper was obtained and a profitable outcome seemed at last possible. But of the four original ships, two had already departed for London. That left only the Sun, which called at Mauritius (where Peter Mundy duly noted the still extant dodo) and was then wrecked on the coast of Madagascar, and the Dragon, Weddell’s flagship, which joined the growing list of ships that simply disappeared without trace somewhere in the Indian Ocean. Weddell, ‘the stormy petrel’, had paid the price of what Lancaster had called a ‘devotion to the wind and seas’.

  The Association never really recovered from this crushing blow. With its finances in a desperate plight its greatest asset proved to be its charter, under which a variety of adventurers would continue to make speculative voyages throughout the 1640s and 1650s. An attempt promoted by the Association to form a settlement in Madagascar proved a dismal failure, as did a second attempt along the same lines. The latter was promoted by an association headed by Lord Fairfax but largely consisting of Courteen’s former associates. The same group also planned a settlement on Pulo Run, the half-forgotten legacy of earlier English endeavours in the Banda Islands. Like most English attempts to reach the place it never materialized.

  But Courteen’s Association and its successors did leave their mark on two of India’s trading coasts, Malabar and Bengal. Weddell settled factors at three of the Malabar ports who, though soon reduced to pleading for assistance from the Company’s factory at Surat, inaugurated the export of Malabar pepper to London. Access to this new source of pepper and to the area’s production of cinnamon and cardamom would soon occasion a further downgrading of the Company’s investment at Bantam. Similarly, future trends were anticipated by the establishment of an English factory at Hughli just a few miles from the marshes that would one day become Calcutta. This was settled in 1650 under the auspices of the ‘United Joint Stock’ so called because it was supposed to finance both the original Company and the remnants of the Association. In fact it was a temporary expedient of inadequate means and unsatisfactory duration designed simply to keep the eastern trade alive in what the directors now tactfully called ‘these frowning times’.

  iii

  The English Civil War was not physically contested in the Company’s far flung establishments. To the belated news of military manoeuvres by Royalists and Parliamentarians and of theological squabbles between Presbyterians and Independents, distance lent a certain unreality. If the Company’s factors felt any urge to take up arms it was more likely to be against competitors, like the Dutch or Courteen’s men, than against one another. Only one ship was actually lost – seized by mutineers of Royalist sympathies in the Comoro Islands. For the most part anxiety over the constitutional crisis at home centred on its likely effect on the English reputation abroad. Thus the Company’s factors at Isfahan saw ‘this tragicall storie of our King’s beheading’ simply as dangerous propaganda which could be ‘deemed so haynos a matter’ by the Shah that he might see fit to deprive them of that share of the Gombroon customs granted as a result of the capture of Hormuz. To reassure his Majesty that not all Englishmen were regicides, presents of plate and then a couple of mastiffs were forwarded to the Court. When the Shah let it be known that some rosy-cheeked additions to his harem would be more acceptable, the Isfahan factors lamely responded with a consignment of beaver hats. Their trade was already declining and Dutch ships now outnumbered those of the Company in Persian waters by four to one.

  It was this dearth of shipping and of investment capital, the result of the political and commercial instability at home, which really crippled the Company. Hoping to secure a restitution of their monopoly, the directors were willing to treat with whoever held the reins of power. In 1641 they ‘sold’ £60,000 worth of peppe
r to the king; in effect it was a loan and was never repaid. Similarly, after the conclusion of Cromwell’s Dutch War, £50,000 was advanced to the Protector from the Dutch indemnity (for Amboina and other losses in the archipelago). This too was never repaid. Acceptance of such gifts was seen as constituting an important acknowledgement by the sovereign power of the Company’s role in the country’s financial welfare and therefore as the basis for reinstating its charter. In both instances the Company further regarded the financial risk as acceptable since the debts could theoretically be recouped by withholding future customs duties.

  But these were vast sums in the depressed circumstances of the day and, needless to say, Cromwell would no more assume the financial obligations incurred by Charles I than would Charles II those incurred by Cromwell. The Company lost out right along the line. As the size and frequency of its Eastern sailings declined, and as the Dutch stepped up their commercial rivalry in the Arabian Sea, the English factors found themselves left to their own devices. For three or four years at a time Bantam received no shipping at all and no investment capital. Matters were only slightly better at Masulipatnam and Madras where further famines, plus a power struggle between Golconda and its neighbours, precipitated the search for new markets in Bengal and the renewal of trade with Burma.

  In order to show a modest profit the Company’s factors turned increasingly to the ‘country trade’. From this period dates the freighting and even building of small local vessels suited to the inter-port trade of the Arabian Sea and the Bay of Bengal. Thanks to the failure of Courteen’s Malabar factories and of his Madagascan settlements, there was now in the ports of the East a fair number of footloose Englishmen willing to accept employment wherever it offered. The garrison of Fort St George (Madras) was recruited from such people and so were the officers of this new class of shipping. Circumstance necessitated a spirit of improvization and although the despatch of homeward cargoes was still the priority, consideration was now given to the preservation of an English presence in the East that could withstand the fluctuations of both European politics and oriental patronage. On ‘the Coast’ the fortified settlement at Madras seemed to be paying off. With the idea of finding a similar base in the west of India to which Englishmen could ‘resort with safety’ the factors at Surat began to float the idea of obtaining from the Portuguese a secure and fortifiable harbour. Diu or Bassein, where most of the Company’s local vessels were built, were suggested; alternatively there was Bombay.