Introduction
The very names of Europe’s East India companies – the United Company of Merchants of England trading to the East Indies (BEIC), de Vereenigde Nederlandsche Geoctroyeerde Oost-Indische Compagnie (VOC), and det Danske Ostindiske Compagni, to name the first three – evoke their close ties to their sponsoring states, to great cities such as London that housed their headquarters, and even to prominent civil society constituencies such as religious and mercantile lobbies who sought to influence them. Collectively termed the metropole, these entities and institutions configure the companies’ place in the public mind and current historiography as ‘national’ enterprises.Footnote 1 These names rightly emphasize important state and company contributions to East Indies trade infrastructure.
They can also obscure an important fact: East India companies evolved in and fulfilled their capital, credit, and personnel needs in a diffuse, transnational space lacking in stability.Footnote 2 This space encompassed all societies of the North and Baltic Seas zone at its heart, and its international actors fostered new ventures, but also credit crises and high-flying bankruptcies as they sought to serve individual as well as state and company interests. The storied VOC had no sound footing until at least a decade into its life and sprang from conflicts between rival investor consortia and insider trading whose scale would bring even today’s bankers to blush.Footnote 3 With its uncertain beginnings and dependence on complex international – even globalized – credit and investment capital markets, the VOC was a harbinger.Footnote 4 During their founding eras more than a century later, the Austrian Netherlands’ Oostendse Compagnie (c.1715; also known as the Compagnie d’Ostende and, from 1723, as the Generale Indische Compagnie or GIC), Sweden’s Svenska Ostindiska Compagnie (1731; henceforth SOIC), and the Königlich-Preußische Asiatische Compagnie zu Emden auf Kanton in China (1750–51; henceforth KPAC) each confronted their own obstacles.Footnote 5 But speculative manoeuvres involving investment capital and credit remained constants. By the early eighteenth century, their intensifying transnational scope confirmed maritime northern Europe as the heartland of a distributed commercial space open to ever more participants and instability.Footnote 6
To address the impact of transnational forces on company and state plans in the long eighteenth century, historians have scrutinized merchant networks. The imperial historian Holden Furber actually described Europe’s East India companies as mere shells under whose legal guise traders (and investors) organized commercial ventures through their own transnational networks.Footnote 7 Since then, scholars of East Indies private trade have moderated Furber’s position of institutional anarchy. They stress the companies’ incorporation of private trade networks into their regular operations and institutional architecture.Footnote 8
But East Indies trade participants relied on ‘open-source’ commercial resources in and outside Europe to accomplish the collective tasks of obtaining capital and credit, and resolving bankruptcies. Accounting for this reality involves envisioning Europe’s ‘national’ metropoles as embedded in a single, transnational metropolitan space that interacted with freestanding metropolitan spaces across the Indian Ocean into the South China Sea c.1650–1760. The geographic concept of locale, in which norm-governed practices legitimate structured interactions across linked institutional milieux, captures this horizontality of East Indies trading spaces conceptually.Footnote 9 In East Indies trade, port communities of merchants and other commercial participants (for example, notaries or translators) interacted across middle seas such as the Bay of Bengal to structure what I call ‘metropolitan locales’ through their role, alongside local authorities, in determining and maintaining commercial norms.Footnote 10 Neither states nor companies could forbid competitors from accessing a metropolitan locale’s commercial resources; often they did not control or even sustain them. So metropolitan locales resembled Jeppe Mulich’s inter-imperial micro-regions, in which different combinations of company, state, and private actors could tackle problems together.Footnote 11 But within each metropolitan locale, customs and practices dictated that chiefly commercial actors provide capital and credit cooperatively through merchant-to-merchant agreements, even across embedded social structures such as trade diasporas.Footnote 12 Collectively comprising what I term a ‘commercial commons’, all comers typically had unfettered access to the means to raise capital and credit and clear market crises since shared local knowledge secured their agreements.
This article explores the impact of these vernacular economic practices on East Indies trade in the European and South China Sea metropolitan locales c.1680–1760.Footnote 13 I argue that East Indies trade participants in each of these freshly entangled but autonomous metropolitan locales relied on a commercial commons to acquire credit and capital and to resolve crises around their provision. With merchant-controlled practices of obligation drawing on appropriation of port-based urban law and flexibly configured information channels, these commons preceded, and sometimes superseded, state- or corporately defined institutions and sovereignty, projecting an alternative legitimacy that underwrote capital and credit for East Indies trade.
Typically, historians have seen East Indies commerce through the eyes of legacy companies and state authorities. By emphasizing state and company control over core East Indies economic architecture, however, historians have downplayed its fundamentally transnational quality.Footnote 14 Work revealing individual networks’ efforts to overcome or benefit from state and company monopoly has yielded glimpses of commercial commons. Yet framing these activities as unfolding between men on the make or across a shifting kaleidoscope of institutional and ethnic divides still overstates company and state control.Footnote 15 By contrast, this article demonstrates the dependence of East Indies commerce on cooperative commercial spaces.
Mobilizing metropolitan locales
Ironically, state and East India company efforts to order historic pan-regional skill and resource imbalances in the North and Baltic Seas region, and resource complementarity between silver and commodities (particularly tea) across the South China Sea, helped catalyse the metropolitan locales featured here.Footnote 16 In Europe, companies and states tried to centralize recruitment of skilled mercantile labour, as well as the commodity, capital, and credit webs that that labour managed through the economically privileged port (such as the staple port) or the merchant guild.Footnote 17 Around the South China Sea, companies and states attempted to control maritime space across European/indigenous divides for public order as well as economic reasons. However, substantial needs for mercantile expertise resulted in two port-based metropolitan locales, each with its own commercial commons.
In Europe these human capital demands pushed companies and states to create maritime hubs whose financial and judicial institutions and mercantile elites cooperated with, and even served, ‘outsider’ merchants, creditors, and investors. The Spanish state’s concentration of mainly northern European merchants in Cadiz c.1650–1720 through trade licencing afforded access to American silver, European draperies, and Mediterranean goods across the entire European metropolitan locale.Footnote 18 Internationalized North Sea and Baltic Sea staple ports such as Ostend, and financial centres such as London, eased state barriers to resource, capital, and credit flows, relaxing constraints on all East India concerns.Footnote 19 Inhabitants and judicial institutions in ports across this commercial commons managed those flows.
Around the South China Sea, Dutch cessation of ‘gunboat commerce’ along the South China coast and Qing commercial overtures from Canton enabled independent Batavia and Canton/Macau mercantile coalitions to push for a metropolitan locale and commercial commons c.1680–95.Footnote 20 Only Macau and Batavia shared institutional kinship with European practices.Footnote 21 In all three ports, though, governing authorities’ efforts to attract skilled mercantile migrants and to promote capital, credit, and commodity flows played into merchants’ hands.Footnote 22 Precisely how they and their counterparts in Europe repurposed company and state agendas to tailor metropolitan space to their own commercial purposes is the focus of the remainder of this article.
Commodity leveraging and the South China Sea metropolitan locale, c.1680–1760
Scholarship has established that, as Kerry Ward puts it, East Indies concerns operating outside of Europe had perforce to fit ‘into a regional grid of ancient and vibrant cultural, religious, and trading networks that had long eluded the domination of any one merchant enterprise, polity or empire’.Footnote 23 The sociological impact of their dependence on workable credit and capital operations abroad, however, has received less emphasis in the literature. Yet, insistent need for such services encouraged interactions between local merchants, independent traders (of European or non-European origin), and East India company personnel, enabling so-called private trade that benefited most from systematic evasion or co-optation of East India company and indigenous authorities. Far from just an interesting sideshow, private trade constituted the show that motivated everyone involved to carry on the supposedly legal trade.Footnote 24 Around the South China Sea it consolidated a metropolitan locale with its own commercial commons, c.1680–1760.
Officially, indigenous authorities and East India companies established keystone ports as sites for regulated exchange to maintain public order or ensure monopoly returns on investment in the transnational but managed market space that emerged. Those ports with the best connections to the most lucrative East Indies commodities – Canton, Macau, and Batavia between 1680 and 1750 – stood at the heart of this system.Footnote 25 However, intensifying the accumulation of profitable commodities in these ports demanded credit and capital. But Qing authorities forbade a public, finance-based market in credit and capital in Canton and Macau, and major companies did not want their employees filling the gap with credit or specie.Footnote 26 Similarly, in Batavia, legal private trade had to rely on limited capital and credit from Chinese merchant networks.Footnote 27 To attract additional funds, merchants used silver flows towards Asia and outward flows of silk, teas, porcelain, and spices to refashion Canton, Macau, and Batavia capital and credit markets as a commercial commons around the commodities in which they dealt.Footnote 28
Colin Campbell, who was active in the British country trade between South Asia and Canton in the 1720s, as well as in the Company trade and the European metropolitan locale as a supercargo and director of the SOIC from the 1730s, hinted that insider partnerships’ role in valuing commodities proved central to these emerging credit and capital markets.Footnote 29 In his well-known Diary, he makes clear that everyone pursued private trade while carrying on company business.Footnote 30 But while some sought open contracts in doing so, others fashioned theirs secretively to realize capital for private trade. Campbell contrasted company traders who, for a consideration, ‘could be impos’d upon … either in the price or in the Quality of the Goods’ they purchased for their company with those who ‘stood up … for the Interest of their owners’.Footnote 31 Nor did his views differ substantively from those of others.Footnote 32 Such accounts quickly lead to presuming that inefficiencies plagued Canton’s marketplace. Campbell certainly thought so.Footnote 33
By not insisting, as Campbell did, on a particular way to obtain capital and credit, however, it is easier to see that commodity-leveraged capital and credit provision animated this commercial commons.Footnote 34 Then what appears to be a messy, disruptive, and at times mutually exploitative competition, involving East India companies, indigenous authorities and traders, and unattached private traders, reveals itself as something else entirely. In this world, private trade motivated most actors (including Campbell) to raise the credit and capital needed for private and Company trade cooperatively, relying on the valuing of, and access to, commodities as their trust-building medium. In other words, Campbell’s critique concerned settled commercial practices in Canton and Macau, which was also the view of Chinese merchants in Canton who regularly used commodity leveraging to free up profit, capital, or credit.Footnote 35 Deals could go wrong, but most merchants accepted an array of commodity-leveraging practices in the commercial commons without fuss.
Institutionalizing capital, credit, and information culture in the South China Sea metropolitan locale, c.1670–1750
As credit and capital provision in Batavia, Canton, and Macau show, this commodity-leveraged commercial commons grafted itself onto distinct regulatory frameworks. In Canton and Macau both Qing officialdom and East India company directorates viewed company merchants as agents of their will, whose duty was to produce tax revenue or profit respectively. But since the merchants involved derived these gains from trade, those in authority had to grant a certain autonomy to them and to Qing regulatory officials in Canton and Macau.Footnote 36 With that autonomy, and with help from private merchants, they built a shadow market in credit and capital.Footnote 37
Paul A. van Dyke, George Bernard Souza, and others have reconstructed the core mechanisms of Canton and Macau’s robust capital and credit market. Reading their collective findings through the lens of commodity leveraging reveals three market segments, each engaged in varying degrees with private and official trade and interconnecting imbricated trade diasporas.Footnote 38 In line with Colin Campbell’s observations, one set of strategies relied on picking the pockets of metropolitan investors and company elites. Hong merchants (often Fujianese) and East India company personnel made spot deals to extract capital by inflating commodity prices or altering commodity quality. Alternatively, company personnel could import silver illicitly from a European-based investment syndicate to realize short-term profits by oversupplying the market with investment capital.Footnote 39
Another set of strategies depended on commodities or access to them as collateral for credit or capital. To cover ongoing expenses, hong merchants regularly asked for advances of credit or capital for goods to be delivered in a future trading season if they had a good relationship with a European ‘Company’ buyer. Canton and Macau’s ‘country traders’ (a combination of East India company personnel moonlighting in private capacity and unaffiliated or loosely affiliated private traders such as Armenians or Portuguese) also acted as investors and creditors in this market segment, as did hong merchants by making loans in cash or by allowing payment for goods to extend over multiple trading seasons.Footnote 40 Finally, bottomry loans used ships’ cargoes as collateral for credit and capital from private individuals and institutional sources such as the Portuguese Santa Casa da Misericordia in Macau.Footnote 41
The responses to regulations around hong merchants that built credit and capital markets in Canton and Macau had analogues in and links to the Dutch-governed enclave of Batavia, which was fed by a dual trade diaspora from China and Europe.Footnote 42 However, weaving together the results of Leonard Blussé, Jean Taylor Gelman, and Chris Nierstrasz. shows that Batavia’s spin on commodity-leveraged credit and capital arose from reactions to European suppliers of regional commodities. Theoretically, Batavia served as the VOC’s East Indies staple port. Benefiting from the VOC’s claimed monopoly of trade in all areas where it was active, it sought to become a catchment basin for products from the company’s many ‘tributary’ settlements.Footnote 43 One eighteenth-century East Indies observer claimed that its reach stretched from Japan to the Malabar Coast.Footnote 44 Turning Batavia into a watershed for East Indies wares required the exclusion of VOC employees and former employees (the so-called vrijburgers) from trading directly in key East Indies commodities, however.Footnote 45 But Batavia could not serve its staple port function without country traders giving it access to markets where the VOC had no presence. Likewise, those traders could not operate on a sufficient scale without commensurate capital and credit.
In the face of these hard realities and VOC employees’ and vrijburgers’ desire to partake in the East Indies trade, a marriage of convenience arose that fostered commodity-leveraged capital and credit provision in Batavia.Footnote 46 I would argue that the VOC effectively created its own country traders, first forcing and then attracting Chinese merchants to Batavia, and later adding Dutch and Portuguese country traders to their ranks to form a kind of direct trade with Canton.Footnote 47 Collectively, these trading networks formed a conduit to the commodities of the Indonesian archipelago and the rest of Southeast Asia, to Canton, and to places beyond, making Batavia the envy of many a rival European East Indies company official for a time. The presence of Chinese merchants in Batavia also attracted Chinese merchants from Amoy and its environs and from Canton.Footnote 48 The commercial ventures of these Chinese country traders also provided both VOC employees and vrijburgers with irresistible opportunities for profits through the provision of investment capital and credit, VOC strictures notwithstanding. Until at least 1740 the VOC’s more well-heeled officials freely – albeit illegally – lent to and invested in the Chinese junk trade, earning profits of up to 50%. Meanwhile, as ties to Canton intensified in the 1680s, the much-maligned vrijburgers became moneylenders to the Chinese tea merchants and likely to others.Footnote 49 Even attempts to modify the system after 1740 acknowledged the central role of commodities in credit and capital provision.Footnote 50
Unquestionably, official permissiveness towards commodity-leveraged credit and capital in Canton/Macau and Batavia benefited companies and states. But as port hierarchies the authorities did more than connive at ‘illegal’ trade.Footnote 51 They treated it as ordinary commerce through an information culture of petition that connected the commercial commons to the metropolitan locale, as petitioning practices in Canton and Batavia demonstrate.
In Batavia petitions shaping the metropolitan locale concerned VOC administration of trade. From the start, both the Chinese community and vrijburger elements sought to influence VOC trading policy regarding their privileges and the port’s strategic positioning.Footnote 52 The year 1693 offers a particularly striking example of petitioning’s effectiveness. In that year the Heeren XVII sought to impose stiff fees on VOC personnel bringing home tea. Petitions from the captain and lieutenant of the Chinese enclave, the nachodas (shipmasters of the Chinese junks), and Batavia’s Chinese tea merchants convinced the directorate to forego them and agree that Chinese junks and the port’s Chinese enclave would serve as Batavia’s commercial link to Canton.Footnote 53 Petitioners’ voices also had a number of representative bodies and offices to address everyday activities in the commercial commons. These ranged from the captain and lieutenant of the Chinese community to the municipal court system (the College van Schepenen, the primary municipal court, and the Commissarissen van Huwelyze en Kleene Zaaken, Batavia’s lower judicial instance), with both groups collaborating in the College van Boedelmeesters (the municipal board administering estates) to resolve problems over inheritance and debt.Footnote 54 Mediation in this last body may have received a boost around 1671, when the two communities ceased sharing seats on the College van Schepenen.Footnote 55
To frame Canton’s petitioning, the Qing authorities tapped into, but hardly controlled, a Qin dynasty practice of guaranteeing public order through collective responsibility.Footnote 56 By the 1720s Qing policy required a hong merchant to assume responsibility for each foreign merchant ship’s merchants and crew, a position eventually called a baoshangren (security merchant).Footnote 57 Petitioning happened in three ways. First, foreign ships arriving each trading season negotiated terms of trade. This could entail tough bargaining with officials such as the fuyuan (governor (of Guangdong)), the hubu or Hoppo (chief customs officer) and the zongdu (governor-general), which men such as Colin Campbell criticized despite its regularity.Footnote 58 Then, merchants could adjust the trading regime via memorials to or audiences with chief officials. In 1723, for example, the BEIC’s London and country ships, the GIC’s ships, and an Armenian trader jointly petitioned the zongdu and fuyuan for amendment of Canton trading policy.Footnote 59 This petitioning also demanded that foreign merchants observe mutual responsibility by using Chinese intermediaries.Footnote 60 Finally, foreign merchants in a dispute with a Chinese merchant could petition for an investigative committee with dispute-resolution and policy-making powers.Footnote 61 For their part, the baoshangren and the official translator could put pressure on a merchant seeking to wind up his transactions by blocking his efforts to obtain the Hoppo’s authorization to depart. These disputes over individual transactions resembled the business that Batavia’s College van Boedelmeesters handled.Footnote 62
The South China Sea metropolitan locale in practice, c.1710–1760
Credit and capital crises in this system concerned perceived unfair commodity-leveraging arrangements, not necessarily impecuniousness. Even massive bankruptcies in Canton and Macau, such as that of Beaukeequa (Chinese name Li Guanghua) in 1758, only prompted Qing authorities to permit major merchant houses to broker a new mutual security pact to protect one another and the marketplace.Footnote 63 Similarly, in Batavia, most VOC resolutions concerning Batavia’s courts involved the port’s Chinese and European inhabitants mediating inheritance-related agreements through the College van Boedelmeesters with the same intent as the 1758 resolution of Beaukeequa’s affairs.Footnote 64 When disagreement on the politically engineered arrangements led to crisis, the story of the hong merchant Tan Hunqua (Chinese name Chen Fangguan) suggests that injured parties desired to rearrange norms governing relationships between institutional and private actors.Footnote 65 Specifically, Tan Hunqua wanted to incorporate East India company directorates as petitioners and active market auditors in the commercial commons, acting with hong partners to counterbalance Qing officials within a more levelled, yet still locally inflected imperial legal framework.Footnote 66
Tan Hunqua’s tale begins with the chief supercargo of the 1729 BEIC voyage, one William Fazakerly (also spelled Fazakkerley). Fazakerly allegedly engaged in commodity-leveraged capital acquisition with the merchant Tan Suqua (Chinese name Chen Shouguan).Footnote 67 According to the second, detailed complaint brought by Tan Hunqua and his partner, Chinqua, on the matter, this deal first involved Tan Hunqua when Fazakerly and three of his fellow BEIC supercargoes (Waldo Du Bois, John Tucker, and Henry Talbot) asked him to claim falsely that he had sold them Bohea and green tea for 30% and 26.3% over the actual sale price. Fazakerly and the others claimed to have obtained a similar deal from those who had sold them porcelain and also wanted Tan Hunqua to sell them piece goods (textiles) at a lower price than they wanted recorded.Footnote 68
Deals like this happened often enough in the commercial commons, so why Tan Hunqua’s objection? Paul van Dyke’s suggestion that Tan Hunqua wanted a more open, fair and regulated market in Canton provides part of the answer.Footnote 69 True, financial losses partially explain his discontent. Refused by Tan Hunqua, Fazakerly and his fellow supercargoes bought instead from Tan Suqua, leaving Tan Hunqua with considerable unsold tea.Footnote 70 But according to Colin Campbell and the records Paul van Dyke has highlighted, Tan Hunqua penned the letter or memorial to which I have just referred after submitting an earlier complaint and writing the VOC’s directors.Footnote 71 This effort went beyond revenge.Footnote 72
If Tan Hunqua wanted to change Canton’s marketplace, it seems worth asking whether, as Paul van Dyke suggests, he acted alone and against local norms. According to H. B. Morse, Tan Hunqua had taken part in an alliance of Canton merchants that had been agitating against increases in import and export duties since 1728. He even endured twelve days’ house arrest for the cause from 24 September to 5 October, after which his fellow merchants, including Tan Suqua, effected his release. All agreed in opposing the efforts of the then zongdu, who was also serving as temporary Hoppo and fuyuan, to regularize a 10% tax on exports and imports.Footnote 73 Some merchants, however, such as Tan Suqua and his partner, Cudgin, preferred, if possible, to cut deals and accept the authority of Qing officialdom. On 12 August 1728 they had already offered to pay the 10% tax in exchange for receiving half of the BEIC London ships’ business, desiring Tan Hunqua and his partner take on the remainder. But this was not their only inclination.Footnote 74 So mercantile solidarity had perhaps frayed by 1729. However, when Tan Hunqua heard about Tan Suqua taking Fazakerly’s deal, allegedly colluding with the Hoppo Zu Binggui to do so, he probably judged that Tan Suqua had overtly abandoned the greater joint cause of opposing arbitrary Qing officials.Footnote 75
The witnesses to Tan Hunqua and Chinqua’s memorials suggest that the two men had support for their desired reforms among European merchants as well. Their first, shorter memorial of 22 November 1729 bears the signatures of Abraham Wessell (a BEIC supercargo), Reginald Kemeys (a BEIC captain), and one Richard Dyer as witnesses for 1 December 1729. Edward Elliston (another BEIC captain) and, intriguingly, William Fazakerly witnessed the same memorial on 29 December 1729.Footnote 76 Tan Hunqua and his partner apparently had few qualms about informing Fazakerly of their first complaint, and little compunction in penning a second, more damning one, bearing only Wessell’s, Dyer’s, and Elliston’s signatures.Footnote 77 The professional identity of these trusted signatories, at least two of whom had strong BEIC ties, reveals Tan Hunqua’s plan to use BEIC ties to challenge Fazakerly.
It was not just that, as Colin Campbell put it, one of the supercargoes, ‘more honest [than] the rest and who, for that reason, was not let in the [other supercargoes’] secret’, agreed to take Tan Hunqua and Chinqua’s memorial to the BEIC directorate.Footnote 78 Rather, the partners had won several BEIC employees over to their reform agenda, reflecting Tan Hunqua’s clout in 1729 as one of ‘the four [chief] Merchants’ of Canton with the say-so of ‘the Hoppo [Zu Binggui] & other Mandarins’.Footnote 79 Secure in his position in Canton, and with the Hoppo only recently in place, in 1730 Tan Hunqua convinced the BEIC supercargo George Arbuthnot to courier reports to the BEIC Court of Directors against the next BEIC chief supercargo, James Naish, in May 1731.Footnote 80 Even once Hoppo Zu Binggui learned about Tan Hunqua’s campaign, probably in 1731, and proceeded against him, the 1730–31 BEIC expedition continued to support him, as did the Dutch, who knew Tan Hunqua from his trading in Batavia.Footnote 81 Colin Campbell similarly supported Tan Hunqua by doing business with him once Hunqua found himself in hot water.Footnote 82 So, while the Hoppo effectively ostracized Tan Hunqua from trade up to 1732, even imprisoning him, Tan Hunqua could continue his campaign against the Hoppo and Tan Suqua to some effect as the BEIC refused to do business with Tan Suqua in 1732.Footnote 83
Ultimately, Tan Hunqua’s efforts produced reform, though not of Canton/Macau’s information culture in toto, as he had hoped. VOC personnel, for example, rejected his vision.Footnote 84 The BEIC’s Court of Directors, however, did not. It pursued Tan Hunqua’s complaints against Fazakerly and Naish, prosecuting both men in English courts, and offered compensation for the losses that Fazakerly’s actions caused.Footnote 85 Despite difficulties in verifying what its allegedly errant supercargoes had done, the Court also petitioned the Qing authorities for redress for itself and perhaps for Tan Hunqua. His success echoed the merchant-brokers Linqua and Anqua’s encouragement of BEIC in petitioning Beijing against a Hoppo in 1710.Footnote 86
Tan Hunqua’s opponents also faced embarrassing trials and incarceration meted out from Beijing in part owing to his imperial court connections.Footnote 87 His competitor Tan Suqua spent upwards of three years in confinement, only returning to trading around the time when the Hoppo who had jailed him died in office in April 1735. Nor is it certain that he was fully acquitted, and his trading activities remained under a cloud until 1740.Footnote 88 In 1736, Tan Hunqua had his greatest triumph, when he negotiated the rescinding of the 10% tax against which he had been agitating; this was also a year in which he served the BEIC as a security merchant. In achieving this, however, he appears to have lost his taste for the politics that came with being a prominent merchant, which Tan Suqua embraced.Footnote 89 In the end, Tan Hunqua had no substitute for substantial merchants such as Tan Suqua willing to mediate between tax-collecting Qing officials and non-hong traders in the precarious world of commodity-leveraged capital and credit. This would have to await the consoo fund’s establishment in the 1780s.Footnote 90 But his nearly ten-year effort to adapt the commercial commons in Canton/Macau places him inside, not outside, the metropolitan locale in which he had long worked, underscoring its resilience.
Public companies and transnational capital in the European metropolitan locale, 1700–1760
As in extra-European metropolitan locales, East India company directors such as Colin Campbell knew that a commercial commons supported the European metropolitan locale. Their companies drew investors and staff from its many transnational overlapping personal and professional networks.Footnote 91 If anything, the European commercial commons loomed larger in their calculations as publicly accessible credit and capital markets became increasingly financialized and shared across societies through equities and debt connected by instruments of obligation (such as bills of exchange). Debates surrounding the founding of the SOIC, KPAC, and GIC, in which participating in Europe’s credit and capital markets bulked large, confirm this greater prominence.
Most fundamentally, though, the role of port communities, not states, in maintaining companies’ access to credit and capital markets – channelling information flows and prompting institutional responses to problems – establishes the centrality of the commercial commons. Companies’ state sponsorship did create greater potential for profit, especially for those privileged to found or run a company, through their monopoly rights and the protection and expansion that state power offered. Nevertheless, the VOC’s bankrupting overreliance on its intra-Asian spice monopoly and BEIC’s successful accommodation of commercial commons ties through, for example, agency houses, suggest that state assistance weighed most heavily early on for credit and capital access.Footnote 92 And in attracting needed transnational capital and credit beyond what directors and core shareholders could supply, state-sponsored companies’ vulnerability to the reputational dynamics of the commercial commons increased. Finally, neither companies nor states could resolve commercial crises ‘in-house’; they needed the commercial commons here too.
The SOIC demonstrates just how important these credit and capital considerations could be in an East India company’s life. In the year before the company’s first charter commenced in 1731, two Swedish ministries debated its fate. The diplomatic corps of Sweden’s Kanslikollegium (Board of Chancery) represented one perspective. Its staff produced a lengthy memorial dated 3 July 1730 expressing concern over the reaction both of great powers (Britain, France, and the Dutch Republic) and of lesser ones (Denmark and Prussia) to any Swedish East Indies enterprise. Deep scepticism as to any such company’s economic potential, and a certain xenophobia regarding the foreigners who would come to Sweden to serve the company, also animated their memorandum.Footnote 93 Their counterparts at the Kommerskollegium (Board of Trade), however, touted the economic development that the company would foster. In its assessment of 29 May 1730, the Kommerskollegium projected that the new company’s imports of East Indies wares and Sweden’s exports of manufactured goods, steel, and iron would complement one another and that the capital inflows that the company attracted would strengthen Sweden’s credit markets.Footnote 94
In the era of Hat Party mercantilism, this memorial proves no surprise.Footnote 95 Its pragmatic appraisal of capital and information flows within Sweden and across Europe is, however, intriguing. Within Sweden, the Board of Trade observed, the crown should seek to ‘persuade foreigners who possess substantial fortunes to settle in the Kingdom’.Footnote 96 This capital would then circulate throughout the economy and increase through investment.Footnote 97 In one sense, the Board of Trade memorialists had merely argued for economic management consonant with cameralism.Footnote 98 But the clear-eyed invitation to foreigners to help create a dynamic and open capital market that the Swedish crown would protect also stamps this policy as one that did not envision management of all aspects of the Swedish economy. Taken together with the pronouncements of a memorial issued by the Secret Trade and Manufactures Deputation on 30 April 1731, their proposal acknowledged that no country could or should control credit markets or investment capital. In fact, this third memorial observed that Britain, the Dutch Republic, and France had all founded their East India companies with foreign capital, as all European societies did.Footnote 99
Just as the Swedish Board of Trade claimed, newcomer and legacy East India concerns alike relied on international capital and credit markets in the 1700s.Footnote 100 In its 1729–32 reorganization, the Danish Asiatic Company drew heavily on Dutch investors, despite an exclusive monopoly from the Danish crown that could easily have excluded foreigners. Dutch and German investors also featured prominently among purchasers of the 1744 issuing of an additional 1,200 company shares, which comprised 75% of company stock.Footnote 101 Foreign investors or participants similarly held some 55% of company shares in the nearby KPAC, with nearly 41% in the hands of Franz Emmanuel van Ertborn of Antwerp around 1752.Footnote 102 Indeed, the KPAC’s founders explicitly structured the company to attract foreign investment.Footnote 103 Once the GIC of the Austrian Netherlands became a reality in 1723, it too tapped transnational investors, albeit modestly.Footnote 104 Neither the Dutch nor the British wanted their nationals investing in the newer companies.Footnote 105 The BEIC nonetheless derived 15.9% of its operating capital from foreign sources in 1723. Meanwhile, the VOC had a strongly international contingent among its investors, who moved easily between their VOC and BEIC holdings.Footnote 106
Managing risk in the European metropolitan locale, c.1700–60
Every company, then, had some exposure to international financial markets, because they provided a means for overcoming structural constraints on growth.Footnote 107 Over time that exposure only increased. Through reputation a company faced the mobile pool of investment capital. The equally mobile (and related) funds that traders sent chasing after East Indies commodities tied a company to further reputational circuits. The SOIC’s entry into the tea trade, for example, bound it to a market in teas well beyond its control.Footnote 108 Speculation, volatility, and spectacular collapses, including several in the 1750s and 1760s, defined Europe’s eighteenth-century commercial commons, despite long-term trends towards stability.Footnote 109 Legacy companies and newcomers alike had to weather such periods, often relying on dynamically evolving, port-based, corporate institutions dressed in state clothing.
As with its British, Danish, and Dutch predecessors, a corporate and state nexus (in the form of Swedish crown’s ministries and the king himself, who sponsored favourable tax policies and, in 1739, a marine insurance society) provided the SOIC with its public face.Footnote 110 But also like its peers, the SOIC orchestrated day-to-day operations through a staple port or privileged port-cum-headquarters.Footnote 111 Sweden’s western port Gothenburg became the SOIC’s chief staple port, housing its main office and primary base of maritime operations and surrounding it with a crown-designated tax structure that placed duties on East Indies wares, but waived other import and export imposts.Footnote 112 The other East Indies newcomers, the GIC and KPAC, also depended on the infrastructure of their staple ports (Ostend and Emden) for key services such as provisioning, harbour accommodations, storage facilities, and sale of East Indies goods, and participants in city government could also have a hand in the companies.Footnote 113
East India company architects working through the staple or privileged ports were, like Canton’s Hoppos, adapting centuries-old organizational practices beyond their ambit, albeit for managing trade taxation, politics, and access.Footnote 114 An important consequence of this was that the emerging European metropolitan locale further augmented their number and incorporated them into a web of trade diasporas, as Gothenburg demonstrates.Footnote 115 There the Swedish crown forged the staple port into a tool to recruit mercantile talent. Gustav II Adolf gave seats on the city council to Scots, Dutch, and German as well as Swedish inhabitants.Footnote 116 The city’s initial organization reflected that of a guild merchant, with the council regulating trade as part of its duties and new migrants receiving merchant-friendly tax exemptions.Footnote 117 Outside merchants met real resistance from the founding of Gothenburg’s kiöp- och handels gille (Mercantile and Trade Guild) in 1661 through to 1741.Footnote 118 But, although these near-Hanseatic communitarian frictions had real impact, the city’s kiöp- och handels gille opened itself to outsiders who had ties to yet other outsider merchants.Footnote 119 Hostility had, in fact, abated to a large degree by the 1720s, in part owing to outsider institutions such as the British Factory; in 1723 the merchant-dominated Riksdag (Swedish diet or parliament) debated relaxing religious restrictions in order to recruit foreigners with skills that were in high demand.Footnote 120
Along with its directors’ international outlook, Gothenburg’s evolution into a conduit for human capital explains the SOIC’s capacity to tap transnational mercantile networks for investment capital and skilled personnel to tame it. Unsurprisingly, it fulfilled these needs through the similarly transformed staple port of Ostend. Some of the SOIC’s first directors (such as Charles Pike) and many of its skilled personnel and investors came from Ostend, the operational headquarters of the GIC, or from among people with GIC ties in Antwerp and Ghent. By doing this, the SOIC simply intended to profit from the expertise attracted to the GIC, including the BEIC country trader expertise of Colin and Hugh Campbell. But, given the GIC’s origins in the ventures of individual members of the merchant establishments of Ostend, Antwerp, and Ghent, the SOIC also looked to their legitimacy as corporate bodies in vetting these individuals.Footnote 121 The GIC and the KPAC recruited key personnel and investors through staple port linkages as well.Footnote 122 The well-established VOC counted recent migrants to its staple port of Amsterdam (such as Thomas Hope) and members of prominent Anglo-Dutch families like the Cliffords (who also served in city government) among its directors into the eighteenth century.Footnote 123 Even the insular BEIC appointed men such as John Boyd, of Irish-Huguenot parentage, to its directorate.Footnote 124
Once embedded in the trade-diaspora-transformed corporate institutions of the European metropolitan locale’s ports, state and company elites could not eliminate companies’ dependence on long-established trade practices operating across state boundaries involving credit and capital. Like other merchants in the North and Baltic Seas zone, company-affiliated merchants chiefly solved their problems within the framework of local urban law through its informal ties to the commercial commons. Most ports in the European metropolitan locale possessed small claims courts for debts and disputes; agents, notaries public (or their equivalent), and merchant consuls to assist foreign merchants; and higher municipal courts and city councils interested in maintaining their city’s commercial repute.Footnote 125 Port cities could also project legal resolutions regionally, both at their behest and at that of merchants.Footnote 126 Collectively, these port cities supported a reputation-oriented information culture in the commercial commons that allowed company-involved merchants to manage risk in the European metropolitan locale.
Policing bankruptcy in the European metropolitan locale, c.1750–1760
This system was embodied in action by the city authorities in Amsterdam, Gothenburg, Hamburg, and Stockholm, along with SOIC and VOC traders and directors and minor commercial functionaries who unwound the bankruptcy of Hising and Petersen of Stockholm in the fall of 1752. Since this was also a case of a fairly ordinary firm failing, it nicely illustrates how the commercial commons usually worked.
With strong ties to Swedish commercial, industrial, and government circles, Mikael Hising and Volter Petersen’s business had a promising start in 1750.Footnote 127 In short, their firm had every prospect of success. But shortly after the SOIC ship Götha Leyon arrived in Gothenburg in the summer of 1752, Hising proceeded to bid up the price of its teas. His outlays reached the point where the Amsterdam merchant house George Clifford and Sons, with close VOC ties, had agreed to accept bills of exchange from Hising to the tune of 31,500 Rijksdaalders (78,750 guilders).Footnote 128 This single transaction amounted to about 3.2% of the value of all East Indies exports from Sweden in 1752.Footnote 129 Major players in the tea market viewed Hising’s moves as threatening and ill-intentioned. The merchant house Pye and Cruikshank wrote that, ‘it is not too surprising that Hesing [& Co.] buys [teas] at any prises when they have such Villainous schemes In Viewe, as It appears from their malicious Intentions, which have happily for those concerned with him been prevented putting into execution’.Footnote 130
Hising also attempted to convince as many major market actors as possible to purchase teas from the Götha Leyon’s cargo at the SOIC auctions. One observer noted that Gothenburg’s merchant community needed to:
recover of the surprise occasioned by that consummat Villain Hising of Stockholm who had laid a deep plot to ruin half our town [Gothenburg], & severall with you [in Amsterdam] & at Hambg: Of six people that he prevaild on to buy for him (for Mr. Campbell and Sahlgren refused) None by great good luck, can suffer much by him but Bagge & Co. and Mr. [J. W.] Nilsen and they, We think, are at least able to stand their ground.Footnote 131
Had Hising persuaded all of those he approached, his play might have approached 10% of the Swedish East Indies export market’s value. Whether he planned to push auction prices for the Götha Leyon’s teas higher or profit from a rising market remains unclear.Footnote 132 With but two ships coming in, each with different cargo mixes, and Swedish tea exports experiencing an upward trend from the second half of 1750 until 1752, however, Hising probably judged the time right to seek substantial profits.Footnote 133
Many merchants might have praised Hising’s boldness, but not his methods. The commercial commons and its information culture quickly put his conduct on trial. Sharp reactions to Hising’s scheme entered the correspondence of important merchants in Amsterdam, Gothenburg, and Stockholm early in September.Footnote 134 With Hising’s arrest in Hamburg publicly known by 16 September, people began picking over the details of his plans.Footnote 135 According to Pierre Balguerie, the Swedish consul in Amsterdam, Hising did not keep honest company. One of his alleged accomplices, Gustav Gardtman, an officer in the Swedish army, had tapped military funds to participate in the Hising syndicate’s speculation. Another, a notary to the Stockholm orphanage, had peculated funds from the estates of orphanage wards. Balguerie described Hising as having fled from his ledgers with his mistress in tow, which is confirmed by the correspondence of the Grills, allies of the Hising family.Footnote 136
Fellow merchants, including Hising family associates, echoed Balguerie. Abraham Grill in Gothenburg sent word to Claes Grill in Stockholm, and more than likely to the family firm in Amsterdam, Anthony & Johannes Grill, of Hising’s misdeeds. Grill also commiserated with Hising’s father and his erstwhile partner, Volter Petersen, while Anthony & Johannes Grill reassured business associates such as Andrew & Charles Lindegren of London that Hising’s actions would not sink the Grill family fortunes.Footnote 137 Major merchants in Gothenburg’s tea market worked to ensure that accurate information emerged regarding tea prices and Hising’s actions. Charles Irvine, a central figure in the SOIC and a participant in that year’s SOIC tea auctions, for example, pursued two courses of action. First, he sold those teas he had purchased in the Götha Leyon sale after tea prices collapsed in the wake of Hising’s failure, and then bought heavily in the subsequent Prins Karl tea auction to maintain the market.Footnote 138 Second, he quashed damaging rumours. One that his friend Arthur Abercromby claimed was spreading on the London exchange spoke of Brabant-based investors driving the fluctuations in Swedish tea prices. Referring to Abercromby’s Rotterdam-based informant, Irvine asked acerbically whether he were ‘a knave, a fool, some credulous Idiot, or Embden [i.e. KPAC] emissary?’Footnote 139 Yet another Rotterdam merchant, the soon-to-be-bankrupt KPAC director John Forbes of Alford, also received Irvine’s advice.Footnote 140 Irvine’s detailed accounts of the merchant houses involved suggest that he made efforts to warn them off Hising’s plans too.Footnote 141
The observations of Balguerie’s and Hising’s fellow merchants chiefly highlighted Hising’s and his alleged accomplices’ misuse of their positions to increase their short-term access to buying power in the tea market. Surprisingly, Hising and his partners may not have thought all was lost. When caught, both Gardtman and Hising had detailed financial archives with them.Footnote 142 So perhaps they hoped to reclaim their former lives.
Even if true, however, Balguerie, J. F. König (the Swedish consul in Hamburg), the Amsterdam and Hamburg authorities, and Sweden’s Boards of Chancery and Trade adjudicated the Hising syndicate’s malfeasance without regard for their good intentions. They aimed their collaborative procedures at preventing reputational counterfeit to protect the commercial commons. For Balguerie, Hising and his associates had committed ‘a violation of the public trust and confidence, which was the soul of commerce that bound together all nations in a concourse without borders with those that one cannot know except by reputation’.Footnote 143 If people could safely counterfeit reputations, then they could counterfeit the information culture on which the commercial commons depended. Balguerie’s argument underscored the paradox that the transnational flow of commerce relied on the veracity of locally made reputations. This is why Balguerie also saw it as essential to protect the customs and privileges of Amsterdam’s citizens and the reputation of the city among foreigners who did business there with the port of Amsterdam’s local institutions. Describing the matter to the schepenen (judges) of Amsterdam, Balguerie noted that the crime was also ‘a matter concerning your citizens, Messrs. Clifford & Sons’, whose interests Balguerie saw himself as defending; that Balguerie’s actions also served VOC interests needed no mention.Footnote 144 If people like Gardtman and Hising could flout the rule stipulating incarceration of those not paying the profit on a bill of exchange transaction, they would destroy ‘the mainspring of the confidence and credit that this city [Amsterdam] enjoys among strangers’.Footnote 145 In making these statements to the Amsterdam authorities and the Swedish Boards of Chancery and of Trade, Balguerie both modelled and legitimized transnational circulation of local practices and reputations at the heart of the European metropolitan locale’s commercial commons.
From a procedural standpoint also, the transnational operation of local, port-based contexts predominated. The burgemeesters, schepenen, and hoofdofficier van justitie (sheriff and chief prosecutor) of Amsterdam handled Gustav Gardtman’s case, with the hoofdofficier assisting in a citizen’s arrest that George Clifford & Sons initiated.Footnote 146 Hising, his mistress, Mademoiselle Gråborg, and his servants all faced the Hamburg municipal court’s mercies, which Hising himself protested vehemently to the Swedish consul J. F. König (although weeks later he had no trouble asking König to falsify his account books for him).Footnote 147 The chief actors involved also faced extradition processes that took local jurisdictions and concerns into account. The Amsterdam high court and the hoofdofficier extradited Gardtman as a favour to the Swedish crown, and only after assurances that Gardtman would face justice. Here George Clifford’s profile within the VOC likely weighed in the balance too.Footnote 148 Hising, who initially ended up imprisoned in Stralsund after extradition, could not leave Hamburg until he had satisfied Hising & Petersen’s Hamburg creditors.Footnote 149 Finally, the city of Stockholm liquidated Hising & Petersen’s assets, cancelling the bills of exchange remaining there.Footnote 150 In the end, while he managed to find work briefly as a financial adviser to German principalities such as the Bishopric of Würzburg, Hising had to make a fresh start in Cahors, under the name d’Hillebard, although here he even became mayor. He never returned to the North and Baltic Seas zone in person nor to East Indies trade.Footnote 151 The commercial commons had punished him with more than a bad reputation.Footnote 152
Conclusion: open-sourcing metropolitan space?
The story I have told envisions East Indies trades c.1680–1760 as encompassing multiple, porous, and port-centred metropolitan spaces. In this decentred metropolitan world, companies and states influenced mercantile actors, but merchants also influenced them. Within metropolitan locales, institutional actors and individual traders and their networks created, contested, and carried into effect rules and practices by which all abided.
In order to satisfy increasing needs for credit and capital, however, rules and practices had to permit the greatest possible access to core commercial services. State and company desires to carve up metropolitan locales into spheres of influence restricted access. The merchants whose stories I have told saw themselves as part of a group with common needs, and so cooperated across these barriers through commercial commons. Although motivated by private gain, in East Indies commerce they also collaborated to shape the institutionalized practices underlying its marketplaces. Knowing that they could not achieve profit unless a metropolitan locale’s entire mercantile community could obtain core, trade-enabling services, they stressed merchant-to-merchant obligations. These had enforceability as individual agreements to achieve the transactional flexibility necessary to the credit and capital capacity they needed. But they also chained many actors together into a voluntary, transnational community of obligation that could push port institutions and law towards collective solutions of transnational crises. As the crises above show, merchants acquired this clout because they agreed that mutual enforceability of capital and credit arrangements constituted a common good. In developing practices, they invested port institutions and port law with this outlook, reshaping market spaces by embedding metropolitan locales in open-source commercial commons.
Legacy companies, their associated states, and merchant allies admittedly had an ambivalent relationship with commercial commons. Nonetheless, states and ‘national’ companies existed in creative tension with – and not strict opposition to – transnational(ized) actors, institutions, and practices. In any case, accounts of their prominent, but failed, efforts to restrain commercial commons are at best incomplete. Indeed, institutional latecomers to East Indies trade, such as the SOIC, the KPAC, and their affiliated states, actively worked within commercial commons, comfortable with their open-source idiosyncrasies. Perhaps they, not the BEIC and VOC, constituted the norm in the eighteenth-century European metropolitan locale. And in the South China Sea, even the more heavily bureaucratized Qing state acknowledged a commercial commons.
At the very least it seems crucial to recognize that mercantile successes or failures in East Indies endeavours could result from simple failures to mobilize capital, credit, information, or urban legal practices, outcomes lacking imperial valence. But in accommodating commercial commons, states and companies acknowledged them as transnational institutional spaces. After all, many actors and entities besides the BEIC, the SOIC, and the involved states addressed Tan Hunqua’s wish for reform or the Hising syndicate’s misconduct. Their stories suggest that, if East Indies enterprises were contingent endeavours, arising from states, companies, and individual networks disrupting one another, transnational institutionalization’s interaction spaces fostered mediation, and even coordination of conflicting interests, enabling the independent merchant coalitions they relied on to thrive.
Douglas Catterall is Professor of History at Cameron University. His work focuses on migration’s cultural impact, especially at it concerns diasporas. With Jodi Campbell he has edited Women in port: gendering communities, economies, and social networks in Atlantic port cities, 1500–1800 (2012), and he is also author of Community without borders: Scots migrants and the changing face of power in the Dutch Republic, 1600–1700 (2002).
