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HISTORY OF TRADE
 
 


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Portugal's eastern trade: 1508-1595

The profitable trade in eastern spices is cornered by the Portuguese in the 16th century to the detriment of Venice, which has previously had a virtual monopoly of these valuable commodities - until now brought overland through India and Arabia, and then across the Mediterranean by the Venetians for distribution in western Europe.

By establishing the sea route round the Cape, Portugal can undercut the Venetian trade with its profusion of middlemen. The new route is firmly secured for Portugal by the activities of Afonso de Albuquerque, who takes up his duties as the Portuguese viceroy of India in 1508.
 









The early explorers up the east Africa coast have left Portugal with bases in Mozambique and Zanzibar. Albuquerque extends this secure route eastwards by capturing and fortifying Hormuz at the mouth of the Persian Gulf in 1514, Goa on the west coast of India in 1510 (where he massacres the entire Muslim population for the effrontery of resisting him) and Malacca, guarding the narrowest channel of the route east, in 1511.

The island of Bombay is ceded to the Portuguese in 1534. An early Portuguese presence in Sri Lanka is steadily increased during the century. And in 1557 Portuguese merchants establish a colony on the island of Macao. Goa functions from the start as the capital of Portuguese India.
 






Rivals in the overseas trade: 1555-1595

With this chain of fortified ports of call, and with no vessels in the Indian Ocean capable of challenging her power at sea, Portugal has a monopoly of the eastern spice trade.

Indeed the English, now developing interests of their own in ocean commerce, consider that their only hope of trade with the far east is to find a route north of Russia. One of the first joint-stock enterprises, the Muscovy Company chartered in 1555, results from early efforts to find a northeast passage.
 









Of the other Atlantic maritime powers, Spain is mainly occupied with its American responsibilities. And the Dutch enjoy a direct benefit from Portugal's trade. Their ships have a monopoly in ferrying the precious eastern cargoes from Lisbon to northern Europe.

The situation changes suddenly in 1580, when the Spanish (perennial enemies of the Dutch) occupy Portugal.
 







The Spanish leave control of the Portuguese empire to Lisbon, but the political change in itself does damage to Portugal's trading interests. Deprived now of their share of the eastern trade, the Dutch resolve to build up a commerce of their own. Like the English, their first instinct is to look for a northeast passage (a task which takes Willem Barents into uncharted waters). But in 1595 they decide that their best course of action is to challenge the Portuguese on the southern route.

It is a decision which will lead to major changes in the eastern trade. But in the short term, the greater volume of trade is now being carried out by Spain across the Atlantic.
 






Trade winds: from the 16th century


The development of ocean travel in the 16th century brings with it an increasing knowledge of wind patterns. The phrase 'trade wind' is ancient. Deriving from an old use of 'trade' to mean a fixed track, it is applied to any wind which follows a predictable course. Since such winds can be of great value to merchant ships making long ocean voyages, the term becomes understood in the 18th century to mean winds which favour trade.

The best known trade winds are those in the Atlantic which blow from the northeast in the northern hemisphere and from the southeast south of the equator. This predictable pattern explains why ships sailing between Europe and the Cape take a wide curving course through the Atlantic.
 










Even more useful as trade winds are the monsoons which blow in the Indian Ocean. Their particular benefit to long-distance merchantmen is a change of direction at different seasons of the year. The northeast monsoon blows from October to March and the southwest monsoon from April to September.

East Indiamen therefore schedule their journeys to arrive at their eastern destination before the spring, and to depart for Europe again during the summer.
 






Spanish silver: 16th century

The wealth of Spain's new colonies in Latin America derives mainly from silver. In 1545 a prodigious source of the metal is discovered at Potosí, in modern Bolivia. This region, high in the Andes, is so rich in both silver and tin that it eventually has as many as 5000 working mines.

In 1546, a year after the discovery at Potosí, silver is found at Zacatecas in Mexico. Other major new sources of the metal are found in Mexico in the next few years. At the same time sources of gold are being tapped, though in much less quantity.
 









Convoys of Spanish caravels, after delivering to Portobelo the European goods needed in the colonies, carry back to Spain the precious bullion with which the colonists pay for it - together with the 20% of all gold and silver due to the Spanish crown.

These treasures attract privateers from northern Europe - meaning privately owned vessels operating, even if informally, on behalf of a government. Their captains are drawn to the Spanish Main (the mainland of Spanish America, where the ships dock) like wasps to a honey pot. Sailors from England, such as Francis Drake, prey on the Spanish fleets in what is effectively a programme of national piracy.
 







At the Spanish end, all trade has to be channelled through the official Casa de Contratación (House of Trade) established in Seville in 1503. This monopoly brings great wealth to Seville, and an increase in prosperity from this flow of bullion spreads outwards through Europe. The region of Seville, and indeed the whole of Spain, cannot provide all the goods required by the colonists. Raw materials and manufactured goods from far flung regions make their way to Seville for transport to America.

Europe in the 16th century is already experiencing, for other reasons, an inflationary pressure. The Spanish bullion has an added effect in pushing prices up.
 






The Atlantic cod trade: 1497-1583

The voyage of John Cabot in 1497 directs European attention to the rich stocks of fish in the waters around Newfoundland. Soon fishing fleets from the Atlantic nations of Europe are making annual visits to catch cod. They bring with them large supplies of salt. Summer settlements are established, on the coasts of Newfoundland, to process the fish before it is transported back to European markets in the autumn.

England plays a leading role in the trade, and in 1583 Humphrey Gilbert formally annexes Newfoundland on behalf of the English queen. It is a claim which does not go undisputed - particularly by France, whose fleets are the main rivals of the English in these waters.
 








Dutch trade in the east: 1595-1651

The first Dutch expedition round the Cape to the far east, in 1595, is captained by Jan Huyghen van Linschoten, a Netherlands merchant whose only knowledge of the orient comes from trading in Lisbon. The survivors of this journey get back to Holland two years later. They bring valuable cargo. And they have established a trading treaty with the sultan of Bantam, in Java.

Their return prompts great excitement. Soon about ten private vessels are setting off each year from the Netherlands to find their fortune in the east. The States General of the newly independent Dutch republic decide that this unlicensed trading activity, in distant and dangerous waters, needs both control and protection.
 









In 1602 the States General form a Dutch East India Company, with extensive privileges and powers. It is to have a tax-free monopoly of the eastern trade for twenty-one years. It is authorized to build forts, establish colonies, mint coins, and maintain a navy and army as required.

With these powers the company takes only a few decades to deprive Portugal of the spice trade. A capital is established at Batavia, in Java, in 1619. The Portuguese are driven out of Malacca by 1641 and from Sri Lanka by 1658. But the main focus of Dutch attention is the Moluccas - the Indonesian islands of which the alternative name, the Spice Islands, declares their central importance in the eastern trade.
 







The Moluccas are the source of the most valuable spice of all, the clove, coveted for many different purposes - as a flavour in food, as a preservative, as a mild anaesthetic, as an ingredient in perfume, even to mask stinking breath. In pursuit of Moluccan cloves, and also nutmegs, the Portuguese make local treaties as early as 1512.

In the early decades of the 17th century the Dutch East India Company gradually excludes the Portuguese from trade in the Moluccas. The Dutch also take on, and oust from the islands, another European nation attempting to get a foothold in the region - the English East India Company.
 







The Dutch control the trade in cloves with ruthless efficiency. During the 17th century clove trees are eradicated on all the Spice Islands except two - Amboina and Ternate - to limit production and keep prices high. Strict measures are taken to ensure that plants are not exported for propagation elsewhere (a restriction successfully maintained until the late 18th century).

The Portuguese never recover their trading strength in the east. But in expelling the English from the Moluccas, the Dutch unwittingly do them a favour. The English East India Company decides to concentrate its efforts on India.
 






English trade in the east: 17th century

On the last day of the year 1600 Elizabeth I grants a charter to a 'Company of Merchants trading into the East Indies'. Early voyages prove successful; by 1614 the East India Company owns twenty-four ships. But competition with the Dutch in the spice islands leads to violence, culminating in a massacre of English merchants at Amboina by their Dutch rivals in 1623.

This disaster causes the company to concentrate on its interests in India. In 1613 a factory (meaning a secure warehouse for the accumulation of Indian textiles, spices and indigo) has been formally established on the west coast, at Surat. The first English vessel with a cargo of these Indian goods sails from Surat in 1615.
 









Surat remains the English headquarters on the west coast until it is gradually replaced, between 1672 and 1687, by Bombay (given to Charles II in 1661 as part of the dowry of his Portuguese bride, Catherine of Braganza, and leased by him to the company in 1668).

Meanwhile the English are establishing secure footholds on the east coast. Fort St George is begun at Madras in 1640 and is completed in 1644. Calcutta is eventually selected, in 1690, as the best site for a trading station in the Ganges delta; it is fortified, as Fort William, in 1696. By the end of the 17th century the three English presidencies of Bombay, Madras and Calcutta are securely established.
 






Triangular trade: 18th century

The triangular trade has an economic elegance most attractive to the owners of the slave ships. Each of the three separate journeys making up an expedition is profitable in its own right, with only the 'middle voyage' across the Atlantic involving slaves as cargo.

Ships depart from Liverpool or Bristol with items in demand in west Africa - these include firearms, alcohol (particularly rum), cotton goods, metal trinkets and beads. The goods are eagerly awaited by traders in ports around the Gulf of Guinea. These traders have slaves on offer, captured in the African interior and now awaiting transport to America.
 









With the first exchange of merchandise completed, the slaves are packed into the vessels in appalling conditions for the Atlantic crossing. They are crammed below decks, shackled, badly fed and terrified. It is estimated that as many as twelve million Africans are embarked on this journey during the course of the Atlantic slave trade, and that one in six dies before reaching the West Indies - where the main slave markets on the American side of the ocean are located.

The most valuable product of the West Indies, molasses extracted from sugar cane, is purchased for the last leg of the triangle. Back in England the molasses can be transformed into rum. And so it goes on.
 







This History is as yet incomplete.
 






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