When we talk about 18th Century trade monopolies, the big three (British East India Company, Hudson Bay Company, and the Dutch East India Company). The era of Spanish hegemony in trade was well in the decline by 1700 but what about the other imperial powers. Let’s not forget that France, Austria, Demark, Sweden, and Portugal were key competitors in this war of commerce.
Portuguese East India Company
In its widest sense, the Estado da India included all Portuguese colonies east of the Cape of Good Hope and so, at its height in the 16th century, the Estado da India stretched from Africa to Japan. It was an administrative apparatus established in 1505 to govern the empire and its trade network from its capital at Portuguese Goa in India where the viceroy of the Indies was resident. The Portuguese Empire was largely a string of interconnected ports linked by regular trading fleets. Individual governors took their orders from the viceroy while the Casa da India in Lisbon coordinated all colonial trade and communications. Hugely successful in its maritime and trade objectives in the 16th century, the Estado da India faced intense competition from Muslim and Hindu merchants, local inland rulers, and other European powers from the 17th century. Ultimately, the difficulty in holding on to ports spread across the globe, a preoccupation with Portuguese Brazil, and a chronic lack of manpower and investment, meant that the Estado da India crumbled away, even if some colonies like Portuguese Macao and Goa remained under Portuguese rule into the 20th century.
The Portuguese were not interested in colonizing territory or peoples for their own sake, an ambition that later imperial powers certainly did have. Two significant consequences of this policy were that, firstly, most Portuguese colonies did not have enough agricultural land to feed the population and so they were reliant on imports. Secondly, there was no buffer zone protecting the colony from local inland rulers always eager to regain control of them. Put simply, the Portuguese were in perpetual danger of being pushed back into the sea from where they came. Consequently, the Estado da India was very much a string of perpetually volatile military frontiers linked by fleets like the carreira da India, which made regular round trips from Lisbon to Goa.
The next phase of Portuguese expansion relied on finding a sea route from Europe to Asia not by sailing around Africa but sailing west. Christopher Columbus had tried this and found the Americas blocking his way. Ferdinand Magellan (c. 1480-1521), instead, sailed south and round the southern tip of the American continent to reach the Pacific Ocean. From there, his expedition sailed to Indonesia, round the Cape of Good Hope, and back to Europe. This voyage of 1519-1522, was the first
The Portuguese made tremendous efforts to establish a monopoly both of trade between Asia and Europe and within Asia itself. The Crown issued all kinds of decrees that resulted in any private trader – European or otherwise – caught with a cargo of spices and not holding a license or a Portuguese passport (cartaz) being arrested. Their ship and cargo were impounded; many Muslim traders were simply executed. Customs duties were imposed at Portuguese ports and to limit illegal trade, ships were often obliged to travel in Portuguese-controlled convoys (cafilas) and only to sail to selected Portuguese ports. Consequently, customs duties made up around 60% of the entire Portuguese revenue in the East.
The Portuguese also focused much of their empire’s resources on the spread of Roman Catholicism. Franciscans, Dominicans, Jesuits, Augustinians, and other orders set up monasteries and nunneries everywhere. Christian missionaries and organizations, particularly the Jesuits, built churches and tried to convert local peoples. Religious movements like the Inquisition found their way to the colonies and were just as ruthless, unpopular, and socially damaging as they were in Europe.
The Portuguese struggled to control their vast empire, and many forts suffered from a lack of upkeep, making them relatively easy targets. The Portuguese Crown was overspending back home, and corruption was rife in the colonies. While much of the dilapidated Portuguese Empire had fallen away like a collapsing house of cards, some colonies did persist, largely thanks to the empire now becoming more manageable in scope and the late-18th-century boom in demand for Asian goods in Europe. The final withdrawal came as the process of decolonization gathered pace after the Second World War. Goa was conceded to India after an invasion in 1961 and so the last serving viceroy retired. Macao remained under Portuguese rule until the handover to China in 1999. The Portuguese may have often left their colonies suffering from a chronic lack of care and investment, but their cultural legacy goes on today with the continued use of the Portuguese language, the presence of well-preserved colonial architecture, and the continued importance of Catholicism in many outposts across what was the Estado da India.
The Ostend Company
The success of the Dutch, British and French East India Companies led the merchants and shipowners of Ostend in the Austrian Netherlands to want to establish direct commercial relations with the Indies. Private merchants from Antwerp, Ghent and Ostend were granted charters for the East India trade by the Habsburg government of the Austrian Netherlands, which had recently gained control of the territory from Spain. Between 1715 and 1723, 34 ships sailed from Ostend to China, the Malabar or Coromandel Coasts, Surat, Bengal or Mocha. Those expeditions were financed by different international syndicates composed of Flemish, British, Dutch and French merchants and bankers.
Rivalry among these syndicates and the huge profits from these voyages lead to the royal chartering of the Ostend Company by Charles VI, in December 1722. Between 1724 and 1732, 21 company vessels were sent out, mainly to Canton in China and to Bengal. The Ostend Company transported 7 million pounds of tea from China (roughly half of the total amount brought to western Europe), which would be about the same as British East India Company during the same period.
From the outset, the new company provoked the open hostility of the other established East India companies which feared its formidable imperial patronage and the fact that many of the new company’s employees in the East were former employees of the British, Dutch or French companies, who brought with them their experience in the Eastern trade. Furthermore, in order to attract foreigners with experience, the Ostend company allowed them generous allowances in terms of cargo space for private trade, something that was anathema to the existing monopolistic companies. Treaties condemning the
However, in May 1727, the Emperor, under diplomatic pressure from the British and Dutch, suspended its charter for seven years and, in March 1731, the Second Treaty of Vienna ordered its final abolition. The flourishing Ostend Company had been sacrificed by Charles VI in order to secure the recognition of his daughter, Maria Theresa. Although officially disbanded, the shareholders secretly maintained the company as a vehicle for pooling investment until 1774 and many of the company’s investors also became involved in the Swedish East India Company.
The Ostindisk Kompagni or Danish East India Company was two separate Danish-Norwegian chartered companies. The first company operated between 1616 and 1650 and the second company existed between 1670 and 1729. The first Danish East India Company was chartered in 1616 under King Christian IV and focused on trade with India. The first expedition, under Admiral Gjedde, took two years to reach Ceylon, losing more than half their crew. After landing on the Indian mainland, a treaty was concluded with the ruler of the Tanjore Kingdom, Raghunatha Nayak, who gave the Danes possession of the town of Tranquebar, and permission to trade in the kingdom.
Swedish East India Company
The Svenska Ostindiska Companiet or Swedish East India Company was founded in Gothenburg, Sweden, in 1731 for the purpose of conducting trade with China and the Far East. The venture was inspired by the success of the Dutch East India Company and the British East India Company. They focused on imports of silk, tea, furniture, porcelain, precious stones and other distinctive luxury items. It grew to become the largest trading company in Sweden during the 18th century: a total of 132 expeditions were carried out with 37 different ships. The company folded in 1813.
During their heyday, the Danish East India Company and Swedish East India Company imported more tea than the British East India Company, smuggling 90% of it into England, where it could be sold at a huge profit. Between 1624-36, Danish trade extended to Surat, Bengal, Java, and Borneo, with factories in Masulipatam, Surat, Balasore and at Java, but subsequent European wars in which Denmark participated ruined the Company, and trade in India ceased entirely between 1643–69, during which time all previous acquisitions were lost except Tranquebar, which held out until aid from Denmark arrived in 1669.
The French East India Company
The Compagnie française pour le commerce des Indes orientales or French East India Company was founded in September 1664 to compete with the English and Dutch trading companies in the East Indies. It resulted from the fusion of three earlier companies, the 1660 Compagnie de Chine, the Compagnie d’Orient and Compagnie de Madagascar. French king Henry IV authorized the first Compagnie des Indes Orientales, granting the firm a 15-year monopoly of the Indies trade. Unlike its British and Dutch competitors, this company was not a joint-stock corporation but rather was funded by the Crown. The French monarch also granted the Company a concession in perpetuity for the island of Madagascar, as well as any other territories it could conquer. One of France’s main aims was to establish a French entrepôt in Madagascar to rival the Dutch colony of Batavia and corner the vanilla trade. The Company failed to found a successful colony on Madagascar, but was able to establish ports on the nearby islands of Bourbon and Île-de-France (today’s Réunion and Mauritius).
France’s main rivalry came from the British. As a result of constant wars in Europe, notably the War of the Austrian Succession and the Seven Years’ War the British were able to exert control over French territories in India. With the Treaty of Paris in 1763, the territories were returned to France. The Company was not able to maintain itself financially, and it was abolished in 1769. The company was reconstituted in 1785 and was given monopoly on all trade with countries beyond the Cape of Good Hope. This agreement, however, did not anticipate the French Revolution, and on 3 April 1790 the monopoly was abolished by an act of the new French Assembly which enthusiastically declared that the lucrative Far Eastern trade would henceforth be “thrown open to all Frenchmen.” The company, accustomed neither to competition nor official disfavor, fell into steady decline and was finally liquidated in 1794.
The Emden Company
The Königlich Preußische Asiatische Compagnie in Emden nach Canton und China or Royal Prussian Asiatic Company in Emden to Canton and China was a Prussian trading company which was established on 24 May 1751 to trade primarily with the city of Canton in China. It was generally known by the shorter name The Emden Company.
The company was made possible by the Prussian annexation of the port of Emden in 1744. This gave the Prussians a North Sea port. Frederick the Great established the company hoping to give Prussia a share of the valuable Asian trade similar to the British East India Company or the Dutch East India Company. Although the small company was very successful, never losing any of its four ships, the business was destroyed by the outbreak of the Seven Years’ War and the occupation of Emden by French troops in 1757. After the war, Frederick formally dissolved the company in 1765.
All of these trading companies were only possible by usurping the state apparatus and capacity for military warfare to serve the interests of select investors. In the 18th Century it was assumed that level of world trade was as fixed and the only way to increase a nation’s trade was to take it from another. This mercantilism fueled the imperialism of this era lead nations to expend significant effort in conquering new colonies that would be sources of raw materials and select commodities (like gold, tea and sugar) as well as exclusive markets. These chartered companies (all with government-guaranteed monopolies) establishment of colonies, controlled trade, waged war, created institutional slavery (in America, India, China, and other parts of the world) and generally undermined the political institutions (namely monarchy) that created them.
Adam Smith, David Hume, Edward Gibbon, Voltaire and Jean-Jacques Rousseau were the founding fathers of anti-mercantilist thought. These men argued that Mercantilists failed to understand the notions of absolute advantage and comparative advantage and the benefits of free trade. Trade monopolies were steadily removed over the course of the 18th century and early 19th century, through military defeats, treaties, and internal deregulation of trade. But the legacy of these imperial corporations plagues us today in the guise of “most favored nation” agreements, limits on immigration, military interventions to “protect national interests,” and government bail-outs of failing corporations.