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CHAPTER SIX These Frowning Times

RECESSION, FAMINE AND WAR

Overseas the growth of the East India Company during the first two decades of its existence had been decidedly impressive. By 1620 the Presidencies of Bantam and Surat – ‘Presidencies’ because from about that time their Chief Factors were designated ‘Presidents’ – controlled nearly 200 factors scattered over more than a dozen trading centres. In the case of Bantam these stretched from Macassar to Masulipatnam and in the case of Surat from the Malabar Coast to the Red Sea.

But to the stay-at-home Englishman, dodging the sewers of his timbered metropolis and worrying about the next outbreak of plague, these exotic claims meant little. Masulipatnam could have been Mars – and to the lazy-tongued it probably was. For a peck of pepper and a bolt of brocade why, he might have asked, so much fuss? Or to so much fuss, why so little substance?

To remedy such unenlightened comment the loyal Company servant would have recommended a trip down the Thames. As yet the Company boasted no prestigious offices and until 1621 it still operated from the home of Sir Thomas Smythe, its governor. Built by his father, ‘Customer Smythe’ (because he had belonged to a syndicate which farmed the realm’s customs), this establishment was in Philpot Lane off Fenchurch Street. It was evidently of some size for it included a hall large enough for meetings of the General Court and could sleep 120 people. But with a permanent staff of half a dozen, the Company occupied only two or three rooms. For a warehouse it leased a disused section of Cosby House, a much grander edifice in Bishopsgate. In 1617, with subscriptions for the Second Joint Stock pouring in, the optimistic directors rented the whole of Cosby House. Here Sir Morris Abbot presided over the Court of Committees as they fulminated over the Amboina affair or greeted the news of Methwold’s Anglo-Portuguese truce. But in 1638 the Cosby House lease expired and once again the Company became a live-in tenant, this time in the Lime Street home of its new governor, Sir Christopher Clitherow. Although destined to remain on this site, colonizing abutting buildings and eventually acquiring a frontage on adjacent Leadenhall Street, the Company’s initial occupancy extended only to a few small and badly lit apartments.

But downriver from the City’s cramped thoroughfares, anytime during the winter months, the launch-pad of Eastern enterprise provided a sight to savour. Here, attended by a host of lighters, seven or eight of the tall ships later known as Indiamen might be viewed riding at anchor while final preparations were made for their dispatch. From every masthead and yard-arm there flapped flags and pennants of disproportionate size; all bore the red on white cross of St George. Seamen swarmed through the rigging; crates of livestock cluttered the decks. It was a sight, according to one traveller, rivalled only by that of ‘St Paul’s great church’.

Larger than most merchantmen of their day and as heavily armed as warships, the Indiamen were a source of national pride. Maritime artists generally preferred a low-angle half-profile from astern which would reveal the architectural character of a high blunt poop. Here arabesques in red and gold framed a deep veranda with, stacked above it, a row of leaded Tudor casements and perhaps a bow window. Lace curtains hinted at luxury within, for this was the roundhouse, the most sought-after accommodation on board; the captain’s apartments were on the next timbered storey. But amidships the ‘tea-shoppe’ aspect disappeared. From a row of square ports cannon and culverin of brass gleamed brightly between the scuppers and the waterline.

By 1620 the Company operated thirty to forty ‘tall ships’. Most belonged to the Company and many had been built in its own dockyards at Deptford and Blackwall. The latter, commissioned in 1614, was the first yard to be constructed on the left bank of the Thames and was the genesis of the later East India Dock. To anyone curious about technological advance, it was another of the capital’s sights ‘daily visited and viewed by strangers as well [as] Embassadours’. Here, besides wet and dry docks, there were timber yards, a foundry and cordage works for supplying the ships’ hardware and a bakery and saltings for their provisioning. More than 200 craftsmen were directly employed in the yard. Added to the ships’ crewing requirements they made the Company one of London’s largest employers.

An industrial as well as a mercantile enterprise, the Company had also become a financial giant. The First Joint Stock (1613-16) raised £418,000 and the Second (1617-22) a colossal £1.6 million. Part of these sums had somehow to be converted into Spanish silver rials, the most acceptable currency in the East. Thus the procurement of rials – like that of ships, ships’ supplies, armaments, provisions, and export cargoes – became a major preoccupation which absorbed the attentions of an important sub-committee drawn from the members of the Court of Committees. It also spawned a network of financiers and overseas agents. In conjunction with the Company’s other financial requirements, particularly borrowing facilities, it is no exaggeration to say that East India business generated the London money market just as it did the London docks.

But expansion so fast and so furious had not gone unnoticed. Abroad it had attracted enemies, notably the Dutch in the East Indies and the Portuguese in the Arabian Sea; at home it stimulated outspoken critics both outside the Company and within it plus, eventually, determined rivals. Extraneous factors – like famine in India and civil war in England – would prove catastrophic. Yet so dramatic had been the rise in the Company’s fixed charges for ships, dockyards, factories, and office staff (whose number had risen to eighteen in the spacious surroundings of Cosby House) that even in ideal trading conditions the pace of expansion must have faltered.

In the event it was dramatically reversed. If histories of the Company in the seventeenth century tend to dwell at length on its first few decades this is simply because so much of its business was concentrated in that period.

Statistics tell one side of the story. Whereas between 1611 and 1620 the Company despatched fifty-five ships to the east, during the 1620s the total fell to forty-six, during the 1630s to thirty-five, and during the 1640s and 1650s to around twenty. On the twelve separate voyages prior to 1613 profits had often been sensational; an average figure of 155 per cent has been suggested. And on the First Joint Stock a respectable 87 per cent was recorded. But on the Second Joint Stock the figure was down to 12 per cent and the period of investment was the longest yet; on an annual basis it appreciated less than 1 per cent. Not surprisingly a Third Joint Stock, launched in 1631, raised only a comparatively modest £420,000 much of which proved difficult to call in. And four successive stocks between 1636 and 1656 raised just £600,000 in aggregate.

As in 1602-6, the crisis of confidence provoked bitter disagreements between the directors, or Committees, and the shareholders, or General Court. The latter, primarily interested in a quick return on their investment and now including factions representing both court and government, saw their declining dividends as evidence of mismanagement. They vigorously attacked the conduct of the directors and of Sir Morris Abbot in particular, demanding greater access to the Company’s accounts, a secret ballot for the election of directors, and regular quarterly meetings of the General Court. The directors, most of whom were still wealthy city merchants and aldermen, fought back. They conceded the ballot and conciliated their more influential opponents; but Abbot, supported by the King, insisted that the Company’s constitution could only be changed by altering its charter. In 1628 Abbot also managed to push through a resolution that in future only those with holdings worth £2000 or more could stand for election as directors. Far from undermining the directors’ authority, these early quarrels therefore tended to entrench it. Between them just three men (Smythe, Abbot and William Cockayne, governor from 1643 till 1657) monopolized the governorship for forty-seven of the Company’s first fifty-seven years; and it was much the same story with the deputy-governorship. Continuity of management made up for the discontinuity inevitable with a system of short-term stocks. Boardroom dissent was not therefore the cause of the financial crisis, merely a symptom of it.