Merchants, mariners and the European wholesale trade in Chinese export wares,
c.1720-c.1760
Meike Fellinger (University of Warwick)
This paper discusses the informal networks and commercial activities of British mariners in
the service of different European East India Companies in the first half of the 18th century. At
that time, only few merchants and mariners enjoyed direct access to the profitable trade in
Canton. Those who did, however, developed sophisticated trade schemes that allowed them to
profit enormously from their private trade allowances, insider knowledge and patronage
networks within Company hierarchies. An aspect that has hitherto been ignored is the way in
which China traders were also deeply involved in the profitable intra-European trade in
Chinese consumer wares. I will argue in this paper that through the scrutiny of private
correspondence and account books of merchant seamen we can learn a great deal about the
missing link between the arrival of goods from the East in the different Company
headquarters and the eventual re-distribution to all parts of Europe.
[opening remarks]
In my paper today I hope to discuss an important aspect of my PhD research, which explores
the private trade activities and informal networks of British captains and supercargoes
engaged in the long-distance trade to China in the period between c.1720 to 1760. I shall
argue that merchant seamen acted as essential linchpins in a profitable re-export and
commission trade by means of which large parts of Europe became integrated into a single
market for fine manufactures goods from Asia. This paper grows out of a chapter that I am
writing at the moment about the transnational and, at first sight, bewildering links between
British mariners (in Company service) and a group of powerful wholesale dealers on the
continent – especially in places like Amsterdam, Rotterdam, Hamburg, and Cadiz.
Although there are a number of studies by now that discuss the private trade ventures of
merchant seamen in the China seas as well as in the Indian Ocean (Erikson/Bearman, Bowen,
Tomlinson and a few others), there is very little work done on these men’s trading careers in
Europe – especially with regard to the question what they did between voyages! 1 As you
might guess, I hope to contribute with my PhD research to closing this gap in the literature by
writing about the maritime elite in Europe; which includes an analysis of the nitty-gritty of
their business activities and contacts in Europe.
The evidence presented today throws light on a number of important issues that have so far
escaped the attention of Company historians and scholars of the European luxury trades alike.
1
One exception is a book by Conrad Gill from the early 1960’s. See idem, Merchants and Mariners
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Firstly, wholesalers exercised direct influence on what was to be supplied from China by
placing large-scale orders with supercargoes and captains of East Indiamen who managed to
get an appointment for one of the ‘plum voyages’ to Canton. Thus, private trade (which is
usually very much marginalised in the Company literature) – became the loophole through
which individual merchants could experiment with changing consumer demands. Agreements
between members of the maritime elite and one or more merchant houses usually grew out of
an already close business relationship between both parties, and has to be seen in the context
of the frequent exchange of favours and commitments between them. In this particular
constellation, mariners played the role of the mediator or commission agent (who charged a
service fee or claimed a share in the sale of the goods). This kind of business partnership will
be explored in some depth in this paper by using material from one of my case studies on a
Scottish network of Company servants and city-merchants active in Gothenburg, Amsterdam
& London.
Secondly, the Companies’ maritime elite was far more than carriers of private trade goods
that were then sold of at the Companies’ public auctions on their behalf. I maintain that they
were substantial merchants in their own right, who developed a highly sophisticated trade in
both bulk and fine luxury goods across Europe – including Britain. It is already well-known
that private traders catered for niche markets; that is, they brought in goods in which the
Company never traded such as wallpaper, lacquerware, porcelain for the top end of the
market, fans and heavily embroidered silks. But it is also true that they diversified their
interests from early on and always kept a foot in the lucrative but risky trade in cheaper
Company goods (such as Bohea & Singlo tea and cheap but fashionable cotton texiles). For
instance, one of the findings of my research so far is that captains and supercargoes
consistently bought up large parcels of tea and textiles at various Company auctions for their
own account. This points, of course, to their double-role as mariners and as merchants, a fact
that has escaped even those scholars who have worked specifically on their entrepreneurial
activities (Huw Bowen). Their connection to merchant houses on the continent was again
vital, since the latter would be used to store and sell the goods on behalf of the more mobile
maritime elite. A supercargo turned wholesaler could thus profit from retailing (of speciality
goods), but also from re-export of semi-luxuries and more importantly from the smuggling of
bulkier goods (such as tea and porcelain) across national boundaries in Europe. Unfortunately,
I will not have time to go into any detail here about their illicit activities, even though these
were substantial and fill the pages of another chapter of this project.
2
Thirdly, another important pillar of the European trade in Chinese consumer goods for
captains and supercargoes alike was that of ‘speculation’, an activity that typically involved
the hoarding of particular goods (such as cheap green teas) in order to control supplies and
thus retail prices in specific markets (called today: buy-and-hold). Some members of the
maritime elite did also engage in short-term speculation, in buying up certain goods in
convenient moments when the market was glutted in one place and undersupplied in another
(swing trading). This aspect, too, has not yet been discussed in the secondary literature –
which makes me very much the slave of my primary sources to piece together information
from many different cases in order to get a coherent picture. A key component of speculation
is, of course, the trade in information. What becomes clear through the letters between
merchants is that the maritime elite often enjoyed first-hand knowledge of what was
otherwise kept long secret by the different Companies. This privileged access to commercial
information was beneficial for their business and good for their position in mercantile
networks, e.g. in London or Amsterdam. Facts like the number of ships that were expected
back from the Far East, their envisaged time of arrival and the kind of cargo they had loaded,
were ‘hot topics’ among the merchant communities involved in that trade, since such
‘intelligence’ always caused excitement for some and anxiety to others.
Writing from Hamburg in July 1759, Charles Metcalfe, a Scot and retired captain who seemed
to suffer from his landsman existence, informed his principal Charles Irvine (himself a
supercargo) that ‘The Arrival of your Ships [that belonged to the SEIC fleet] has cast a great
Damp on the Spirits of our Speculative Chaps’. From Metcalfe, we learn that following the
news, most merchants in Hamburg tried to dispose off their old teas immediately, which in
turn caused the prices to drop ‘from mouth to mouth’. He advises Irvine about the reasons for
this herd behaviour amongst Hamburg tea dealers: as he knows that there is still ‘a good many
old Teas in Town & tho they are mostly in fast Hands [that is in the hand of brokers], yet it
must be from an Apprehension of the new Teas maybe of a superior Quality’. This might be
why his neighbours ‘seem determined to clear their warehouses’ despite seeing their profits
melting away. Metcalfe, who had been previously informed by his friend of the actual
qualities that would come in via Gothenburgh, wisely waited a little longer before disposing
his fine teas – still being able to report a handsome profit for Irvine’s account. This sort of
gambling, and the crucial gathering of rumours and facts, was part of a merchants’ business.
And I should not forget to mention – the reason for some dramatic cases of bancruptcy! But in
general, the maritime elite (and with them their close associates) profited from having reliable
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information and often superior knowledge about the qualities of goods to be had, and the
exact timing of Company auctions. This became and continued to be a distinct advantage for
the European leg of their trade. The ways in which such information was pooled and shared
within a more intimate circle of merchants thus helps to illuminate the crucial position that the
maritime elite held within different merchant communities.
Informal networks and ‘insider knowledge’
Intelligence, as a crucial component of speculative trading was a the central concerns in
letters that were send back and forth between city merchants and the Companies’ maritime
elite. Crucially, details on Company and private cargoes (of different nations) were often send
back to Europe whilst supercargoes and ships’ officers still dwelled in Canton and then again
when they reached a port where they took on provisions on the return-leg of their voyage.
Since voyages by sea bore considerable risks, regular reports on the state of the ship, its
passengers and weather conditions were communicated as soon possibilities arose. The
Companies directors knew about the chatty character of their seafaring crowd and wisely kept
in touch with powerful merchants on the continent who were able to pool information from
employees of different East India Companies. George Clifford & Sons, Thomas Wilkinson
and Pye & Cruikshank in Amsterdam – were all at times correspondents of the Court of
Directors in London and at the same time important players in the wholesale trade. Charles
and James Gough, merchant bankers in Cadiz readily reported back to Gothenburgh about
incoming and outgoing ships and their investments. The role of Company agents still lacks
more research – but seems to have been a tool used by all chartered Companies. Clifford, who
sends every now and then a cask of dried fish to the EIC headquarter most have gained some
kind of renumeration
Intelligence was extremely important when a ship lost its passage (for instance, due to the
Monsoon winds) and had to stay in India for a season. In addition, warfare, piracy, shipwreck
and other hazards of the sea added considerably to the chance of loosing one’s ships and
entire cargo – a possibility that had tangible effects on supplies in Europe. In fact, markets in
the eighteenth century sufferent considerably from supply variations – a condition that
probably helped generate a pan-European arena of trade, rich opportunities for speculation as
well as a need for individual merchants to find ways for reducing the uncertainties of the
market through commercial strategies and efficient networking. What concrete strategies of
risk reduction were applied by private traders will be discussed after this excursion into the
role of information networks between city merchants and mariners. What is clear, however, is
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that access to ‘insider knowledge’ was vital for merchants dealing in Chinese consumer
goods.
In fact, every little piece of information that was to be had through private correspondence,
but also via newspaper announcements, rumours and meetings at the local coffeehouses was
judged, discussed and widely shared through transnational trading networks, a fact that makes
it difficult to see the neatly isolated markets that mercantilist ideals suggest to have existed. In
reality, wholesale prices in the Amsterdam market were usually affected by information about
the cargoes that were thought to arrive in Lorient, Copenhagen and London in the same
season. This is equally true for other entrepôts on the continent and the British Isles. This
interconnectedness of markets is partly to be explained by the ‘unbounded behaviour’ of early
modern merchants – the countless ways in which merchants and mariners operated across
national boundaries and beneath the mercantilist system.
The uncertainties of the market
The intra-European trade in tea and drugs from China can be usefully compared with the
nature of the cowry market of that period (a product that came almost exclusively from the
Maldives and was used as currency in some societies on the west coast of Africa). The
dynamics behind this trade has been well described by economists Jan Hogendorn and Marion
Johnson in their interdisciplinary study entitled The Shell Money of the Slave Trade.
Similar to the case of tea and other products such as rhubarb and raw silk, the authors noted
the great supply variations in the cowrie trade. Yearly shifts in supplies from the East Indies
often forced merchants to travel overland to several European company auctions in order to
buy up stocks in secret to fulfill their orders. Thomas Wilkinson, a Scottish merchant who
was based in Amsterdam acted as one of the principal agents of the Royal African Company
in the 1720’s when a sudden shortage of cowries put him into distress. In 1723, his principals
in London asked him to purchase at least 70 tonnes of cowries for shipment to the Guinea
Coast where they would be exchanged for slaves for the New World plantation economies.
But as it turned out, there were very little cowries brought back by the Dutch and English East
India Companies that year. The authors describe in detail how Wilkinson ended up buying
chest by chest from suppliers across Europe and having to travel to different auctions to get
hold of larger lots – always followed by competitors who sought to assemble a similar parcell
of cowries for the Dutch West India Company, the Portuguese and French trading ventures.
Wilkinson, desperate to assemble the quantity needed wrote back to London about his plans
to look on the private market where I ‘shall go on picking up quietly what [I] can find’.2
2
Thomas Wilkieson to ??? quoted by Jan Hogendorn and Marion Johnson, p.95.
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Similar scenarios happened in the re-export trade of tea and other goods which had to be
imported from China - a branch of business with which Thomas Wilkieson was very familiar.
He sold large parcels of tea on commission basis for Captain Thomas Hall (former Ostend
trader and later one of the leading contractors of English East India Company ships), the
brothers Alexander and Abraham Hume (ship-owners in London) as well as some Scottish
supercargoes who operated under Swedish flag. His suppliers and clients were mostly
German, Dutch, French, Flemish and British and his portfolio was typically varied with
interests in the East Indies, Atlantic and European coastal trade in addition to his role as a
banker. To make this point clear, it would be deeply misleading to think that British Company
servants and city-merchants bought tea, porcelain and textiles only for domestic consumers.
Quite the opposite is true. As we have seen, China traders made extensive use of commercial
agents abroad who sold goods on their behalf and provided often precise information about
local market conditions. In turn, the maritime elite acted as agents as well – buying on order –
for ciy-merchants with particular markets in mind. In sum, the two groups described here
became ever more entangled in the course of the eigheenth century and clearly relied upon
each others’ information networks and different trading expertises.
As far as I can tell from the analysis of Company sales records and private correspondence,
the trade in Chinese consumer goods was in the first half of the eighteenth century in the hand
of a relatively small group of big players to which mariners and city-merchants both
belonged. I would even argue that this mutual dependency of both groups in terms of capital,
intelligence and the making of markets for new commodities or qualities is crucial for
understanding the nature of private trade in this period. Wholesellers always kept an eye on
the remaining stock of particular goods in town and reported on every little shift in taste and
responded accordingly in chosing the right way of selling. Mariners provided timely
information about the cargoes and even marked particular lots/ or chests of Company and
private trade goods well in adance of the public auctions. Their privilege buying right allowed
them to ‘cherry pick’ for their own account and a number of intimate trading partners who
had their premises scattered across Europe. Through this little introduction to some of the key
topics discussed in my chapter I have tried to demonstrate that supercargoes and captains
were active in all branches of the wholesale trade, a fact that should led us to rethink their
better role as mariners and Company servants.
In the minutes remaining I would like to discuss some of the mechanisms that were in place
through which wholesalers could exercise an influence on what was brought in via the private
trade. I will be looking at large-scale commissions as an instrument for reducing risks, in
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creating an advantage over competitors and in shaping fashions for certain goods. I will be
focusing on silk textiles.
Until here…
In my paper today, I will focus on the relationship between the Companies’ own maritime
elite and a group of city-merchants (who are sometimes described as wholesalers, sometimes
as financiers, since they fulfilled both functions) by using material from one of my case
studies. The exchange between these two groups has to be imagined as an ongoing ‘dialogue’
of experts that does not lack frictions or misunderstandings. Clearly, China traders felt that
they were the arbiters in matters of taste. At the same time, also wholesalers claimed expertise
with regard to the quality, packaging and pricing of goods for specific markets. These written
conversations that were upheld by the exchange of letters (sometimes on a weekly basis)
provide clues to the points I have mentioned in the introduction. Consider one case, Charles
Irvine, a Scotsmen and Jacobite, who learnt his trade in Rouen as apprentice of a Scottish
wine merchant (Arbuthnot&Co) with links to the English East India Company. He went to the
Far East in his early twenties when working as a petty officer for the Ostend Company –
which was then a newly established East India Company who sailed under the protection of
the Habsburg dynasty from the Austrian Netherlands. This interloper had attracted the capital,
expertise and workforce from both English and Dutch East India Company circles, and was
hugely successful in the short time of its existence. After the definite dissolution of the
Company after the Treaty of Vienna in 1731, its successor was swiftly put in place, this time
under the Swedish flag. Operating from Gothenburg, the Swedish East India Company was
founded in the same year in which Ostend stopped to send ships for good by Colin Campbell,
Hendrik König and Nicholas Sahlgren – (a Scot, a Swede and a German) and had a noticeable
group of British and most conspicuously Scottish merchant seamen working for them.
(Unclear sentence) Irvine was made supercargo and later chief-supercargo (Q: what’s the
difference?) of at least six voyages. His close friend and business associate Colin Campbell
was (as I mentioned) one of the directors of the Company until his death in 1757.
These partnerships between merchants and mariners took the form of large-scale commissions
by means of which capital for the purchase was provided beforehand by the city-merchant. In
turn, Company servants promised that they would use their privileged buying right at
Company auctions in order to secure the commissioned lot at previously arranged terms.
These kind of transactions were one of the mechanisms used by merchants and mariners to
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complement eachothers expertise and privileges. The commission trade usually grew out of
long-lasting business relationship between merchants and mariners and has thus to be seen in
the context of a range of other committments and favours regularly exchanged by both
parties.
Wholesalers provided insider knowledge on potential markets, price elasticity and local taste
– an expertise that very few merchant seamen had because of their great mobility. These
market insights were transmitted in written form, often with material artefacts such as fabric
samples attached to them. lists with the goods needed for specific markets that they new well
– i.e the detailed the assortment of silk fabrics with regard to their physical properties such as
colour, quality and patterns and provided patterns on paper to ease the communication with
Chinese merchants and painters.
Hitherto ignored by Company historians and historians of early modern European trade alike,
this I argue that city merchants on the continent sought to influence the market and thus the
supply of specific goods and qualities from China by entering in business (and personal)
relationships with the highly mobile class of ships’ officers and supercargoes of East
Indiamen. This partnership had distinct advantages for all parties. Both groups could rely on
(sometimes overlapping) but vital information networks and brought to this marriage a
distinct set of experiences, trading expertise and practical were extremely well-positioned to
become substantial traders in their own right in Europe – profiting from a curious mix of
personal experience, superior intelligence and substantial private trade privileges granted by
the Company in order to secure their ‘loyalty’. By analysing the European trading activities of
Company supercargoes and captains we gain a more nuanced picture of the relationship
between Company and private trade, the mechnisms of re-distribution intended to answer
what actually happened with the goods (belonging to the Companies’ or their servants) that
were sold publicly at Company auctions after the fleets returned to the Company headquarters
after roughly two years of voyage.
The actual trading season in Canton the only Chinese ports where Europeans were allowed to
establish their factories was limited to five months of the year by the changing monsoon
winds. The European ships arrived negotiated with a small group of privileged Chinese
merchants (known as hong-merchants) with whom they placed their orders of all the goods
and qualities that the Company had a particular interest. Furthermore, they contracted for
goods that
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Merchants and mariners who plied the Eastern seas in the service of various European East
India Companies conducted extensive private trade using Company ressources and
infrastructure to accumulate goods that could later be sold at considerable profit in different
markets in Asia and Europe. Their commercial activities were known and largely tolerated by
their employers – knowing that only relative freedom of trade would prevent these fortuneseekers from any steps that would harm the Company’s performance.
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