the queen’s investments -- 8/15/23

Today's selection -- from Empire, Incorporated by Philip J. Stern. The year 1600 saw the start of the British East India Company, designed to compete with the more powerful Dutch East India Company. It gave a monopoly within Britain to some aspects of trade with the East Indies, and grew to be the largest and most powerful company in the world, though its troubles with tea 175 years later would help bring the American Revolution: 

“On the last day of 1600, The Fellowship or Governor and Company of Merchants of London, Trading to the East Indies was incorporated with all the trappings thereunto: a legal name and personality, succession, a seal, self-government, and, in this case, exclusive jurisdiction over all English trade, traffic, and travel ‘in the Countries and Parts of Asia and Africa, and into and from all the Islands, Ports, Havens, Cities, Creeks, Towns, and Places of Asia, and Africa, and America, or any of them, beyond the Cape of Bona Esperanze, to the Streights of Magellan.’  The East India Company, along with its Dutch doppelganger, established as a union of those regional voorcompagnieen in 1602, represented in a sense the culmination of centuries of efforts at long-distance European trade with Asia and the convergence of joint-stock and corporate traditions, united in single chartered company.’ Though closely tied with the Levant Company, this new company was enmeshed in the various global corporate and joint-stock projects for predation, commerce, and colonization launched across the globe in recent decades. Its first governor, Thomas Smythe, a well-connected London merchant, was a Merchant Adventurer, a Skinner, and a Haberdasher, and holder across his life of numerous franchises and offices, including, like his father, the lucrative and powerful position of royal ‘customer,’ or customs collector, for the port of London. He would sit in Parliament and as governor of most of the major overseas ventures, including the Levant Company and the Muscovy Company, which his maternal grandfather helped found and for which he soon also served as ambassador to Russia. What was true of its leadership was broadly true of its membership. As the East India Company's governing Court of Committees noted some two decades later, ‘we are a Company of merchants collected & contracted out of all sorts & ranks of men, Noble, and ignoble Merchant-Adventurers ... Turkey and Eastland Merchants…French Merchants ... Spanish Merchants ... Tradesmen ... [and] men of other Conditions.’

The original coat of arms of the East India Company (1600)

“The whole point of a joint-stock corporation was that it could be funded and directed by a wide base of individuals, regardless of whether they had experience--or even interest--in the mechanics of trade. And while the initial investors were largely merchants--there was only one peer among the original patentees--by the 1620s the Company counted among its ranks prominent courtiers, Privy Councilors, and other officeholders, as it served the Company well to ‘have some such their friends’ at Court. Moreover, even if prominent political officials had not been directly invested, they were connected to one another through the wider ecology of interlocking companies. Walsingham, Leicester, Burghley, Smith, Dee, not to mention Queen Elizabeth herself had not only backed but invested and even in some cases directed a number of ventures in the name of both public good and their own potential profit. The same was true under Elizabeth's successor, James VI of Scotland, who ascended to the English throne as James I in 1603. Prince Henry, his first son, was integral before his untimely death in encouraging a number of these early companies. The King was a bit more ambivalent about the uncertain impact overseas companies might have on foreign policy. He could, however, see advantages in working with them, including supporting the Russia Company's ultimately aborted project in 1612-1613 to seize Archangelsk and annex it as an English protectorate. Nearly all his Privy Councilors were members of at least one of Smythe's companies. The East India Company, as it turns out, only drew the line at admitting the King himself, fearing the loss of independence it would entail but offering as their rationale curious legal opinions that suggested it was impossible and beneath his ‘dignity’ for the King to enter into commercial partnerships with his subjects.

“As great as its ambitions were, at its origins the East India Company was, like its predecessors and contemporaries, essentially a tentative experiment fueled by a hesitant and hybrid institutional and financial structure. The ‘company’ did not have a single permanent stock. Rather, it was organized as a series of consecutive quasi-independent stock subscriptions, at first opened on a per venture basis and later established for set terms in years. In its early days, the limited number of shareholders could ‘take in men under them,’ in theory dividing any individual share into a subsidiary, shadow joint stock. As in many other ventures, the East India Company spent its early years chasing down under- and unpaid subscriptions. By April 1601, the first joint stock was £9,000 in debt to various suppliers, leading the governing Court of Committees to issue a further call on shareholders, take out a substantial loan, and ask the Privy Council for help in leaning on recalcitrant subscribers. Its initial corporate charter was similarly experimental. It was limited to a term of fifteen years, and Company leaders soon found it wanting many privileges and provisions necessary for doing their business. Over the next few decades, they solicited for numerous supplementary patents or warrants to provide the Company with rights of perpetual succession, to admit foreigners as members, to administer oaths, to execute martial law, and to arrest English interlopers abroad, among others."



Philip J. Stern


Empire, Incorporated


Belknap Press: An Imprint of Harvard University Press


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