Trading with the Ottomans

The Levant Company in the Middle East

Despina Vlami

• Publisher: I.B. Tauris
• Year: 2014
• Print ISBN: 9781780768892
• eBook ISBN: 9780857736802
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Middle Eastern History
• Index: Politics & International Relations

Arguably, trade is the engine of history, and the acceleration in what you mightcall 'globalism' from the beginning of the last millennium has been driven by communities interacting with each other through commerce and exchange. The Ottoman empire was a trading partner for the rest of the world, and therefore the key link between the west and the middle east in the fifteenth to nineteenth centuries. much academic attention has been given to the east india Company, but less well known is the Levant Company, which had the exclusive right to trade with the Ottoman empire from 1581 to 1825. The Levant Company exported British manufacturing, colonial goods and raw materials, and imported silk, cotton, spices, currants and other Levantine goods. it set up 'factories' (trading establishments) across Ottoman lands and hired consuls, company employees and agents from among its members, as well as foreign tradesmen and locals. here, despina vlami outlines the relationship between the Ottoman empire and the Levant Company, and traces the company's last glimpses of prosperity combined with slump periods and tension, as both the Ottoman and the British empire faced significant change and war. she points out that the growth of 'free' trade and the end of protectionism coincided with modernisation and reforms, and while doing so, provides a new lens through which to view the decline of the Ottoman world.

PART I

FOUNDATION – ORGANISATION – DISSOLUTION

CHAPTER 1

THE FOUNDATION OF A CHARTERED COMPANY

‘Under the Favour and Protection’ of the State

In 1575 Edward Osborne and Richard Staper, distinguished members of London's merchant community, sent their agents to Constantinople to explore the possibility of establishing commercial relations with the Ottoman Empire. The representatives of the two merchants obtained permission to reside and the commitment of the Ottoman authorities to allow and protect English trade within their dominion.¹ A few years later, in 1580, the concessions granted to the English merchants were confirmed in an official document signed by Queen Elizabeth I and Sultan Murad III. The document, known as the ‘capitulations’,² comprised 22 articles outlining the privileged status, rights and obligations of the English who would operate within the Ottoman Empire.³ Within a year, a group of 12 London wholesale merchants received from the Queen the exclusive right to trade in the Ottoman Empire for seven years: this was the nucleus of a chartered trading company named the Company of English Merchants trading into the Levant Seas or, simply, the Levant Company.⁴

In its early days, the company was organised as a joint-stock corporation and even Queen Elizabeth is known to have contributed £40,000 to the stock. At the same time, it was entrusted with representing England at the Ottoman court.⁵ In 1581 William Harborne, a company member and distinguished merchant, was appointed by the Queen as ‘our true and undoubted orator, messenger, deputie and agent’ in the Ottoman Empire.⁶ Harborne took up residence in Constantinople and was soon delegated to organise the company's representation in the Middle East and North Africa.⁷ Harvey Millers was appointed British consul in Cairo, Alexandria and other areas in Egypt, Richard Forster in Aleppo, Damascus, Amman, Tripoli, Jerusalem and other areas in Syria and Palestine, and John Tipton in Algiers, Tunis and Tripoli.⁸ When the company's charter lapsed in 1588, it was not renewed for a couple of years amid arguments about the company's accessibility to new members and the geographical extent of its jurisdiction. This tension was not unrelated with the granting, during this period, to another body of merchants an exclusive license to trade in Venice and its dominions. The establishment of a ‘Venice Company’ caused reactions and fuelled antagonism. The Levant Company was accused of placing severe restrictions on membership and impeding the participation in the Levantine trade of merchants who were willing to invest in it. Proposals were also made by members and non-members for an extension of the company's jurisdiction to encompass Venice and its territories, which it considered an essential part of the Levant.⁹

When a new charter was finally issued in 1592, those who supported the opening of the company to a wider circle of merchants were vindicated, as membership grew to 53 persons and with space for 20 more. In addition, the new charter merged the ‘Turkey’ and the ‘Venice’ companies into one. The new company was granted the privilege of trading for 12 years in the dominions of the Ottoman Empire and Venice ‘and also by land into the dominions of the Grand Signor into and from East India’.¹⁰ When the 12 years passed, the company was granted the right to operate exclusively in the Levant forever and turned from a joint-stock to a regulated corporation. A new charter issued in 1605 pronounced that the company was ‘not to appropriate the trade to any limited number of merchants, nor to any one city, nor to suffer the same to be used in any degree of monopoly, but to lay open the same to all’.¹¹

This new, more liberal approach towards the company's rights and rules was the outcome of a long political and social debate on the freedom and methods of trade that led to the passing of a new free trade law during the same period.¹² And yet, despite the liberal intentions of its architects, the 1605 charter imposed conditions on membership that annulled in practice any attempt to make the company more accessible to the merchant community: membership was opened up to ‘mere merchants’ – but not retailers – through patrimony or apprenticeship or by paying a considerable admission fee.¹³

The 1661 charter, signed by King Charles II, permanently settled all the issues concerning the company's jurisdiction, organisation and membership and remained in force until the company's dissolution in 1825.¹⁴ It endorsed the company's organisation as a regulated corporation (each member could trade individually as long as he complied with the company's rules), its exclusive membership and international reach. It also confirmed the company's special relation with the English state authorities.

The charters, conferred to the merchants directly by the English Crown, were the documents that all at once recorded, described and sanctioned the company's special privileges and status; they thus remained a highly controversial issue, giving rise to arguments and protests until the company's dissolution. Entrusting England's foreign trade in a vast area of great economic and geopolitical importance to a group of wealthy, socially well-connected and powerful merchants had ideological and practical motives, both political and economic. It was also a political and economic manoeuvre bound to provoke severe and conflicting reactions.

For the state authorities and part of society in England, the company was the only way to organise, finance and coordinate commercial enterprise in a vast, unknown and unpredictable country. The mercantilist economic theory of the Elizabethan era advocated national economic self-sufficiency and was inclined towards practices that supported economic nationalism. The exploitation of national resources promoted national security and influence within an antagonistic international arena. Foreign trade was for England a national resource of the utmost value that could contribute to national strength and wealth if it followed state regulations detailing specific standards: the realisation of a favourable balance of trade, with exports exceeding imports, was considered the benchmark of a successful foreign trade policy.¹⁵ Of equal importance was the organisation of trade according to the principal of ‘order and government’, an ideal that dated from medieval times when economic activities were structured on a corporate basis.¹⁶

The granting of exclusive rights to chartered companies of merchants to operate worldwide was in tune with these ideas. A chartered company promoted ‘well-ordered and ruled trade’, under the state's supervision, in contrast to the ‘loose, distracted and disorderly trade’ of ‘struggling and unskillful’ merchants who observed ‘no rule’ in the sale of their commodities.¹⁷ This ideal influenced economic policies on foreign trade throughout the sixteenth and the seventeenth centuries. The organisation of commerce was based on some basic principles concerning the mercantile profession, prices and production policy. The intention was that foreign trade should be in the hands of knowledgeable, trained and experienced persons, commodity prices should be kept high and production controlled, while quality standards should be maintained.¹⁸ All these standards could be attained effectively by chartered trade companies, at least seven of which were representing English commercial interests abroad by the end of the seventeenth century: the Merchant Adventurers, Eastland Company, Muscovy Company, Levant Company, East India Company, Hudson's Bay Company and African Company.¹⁹

Commercial expansion in the Levant in the sixteenth century was also in response to political and economic concerns. The formation of the Levant Company was also interpreted as a political manoeuvre on the part of the Queen to establish an alliance with the Ottoman Empire against Spain, a long-standing rival.²⁰ Throughout its existence, the company remained a powerful political and diplomatic instrument in the Levant; it represented the nation to the Ottoman authorities, protected the capitulation agreements, bore the expense and the responsibility of organising and maintaining an embassy, consulates and vice-consulates. Another important reason for its creation was a growing awareness among state officers and the merchant community that if England was to preserve its economic independence, new channels of direct commercial intercourse with the East would be necessary. By that time, England relied on Spanish and Portuguese trade networks to supply its markets with Eastern goods while the Dutch, Venetian and French had already established trading relations with the Ottomans.²¹ The London wholesale merchants had the means, energy and drive to finance and organise the establishment of new trade routes and networks that would permit the development of direct trade between England and the Levant.²²

The company's privileged status and extensive powers were given an additional interpretation in 1825 by Robert Walsh, onetime chaplain to the Constantinople embassy, who argued that the peculiarities of the Levantine trade necessitated the foundation of a chartered company.²³ ‘The Turkish Government being essentially different from any other in Europe, perfectly despotic in its nature, and approached only like that of all Oriental people, ancient and modern, through the medium of presents and particular influence, no intercourse can be carried on with the natives, with any security with the Franks, unless under certain regulations called Capitulations, agreed upon by the respective courts.’²⁴ Walsh maintained that an ambassador and consuls were necessary to oversee the implementation of the capitulations; it had been government policy to ‘throw the whole weight of paying those officers and establishments on the Levant Company’. It was therefore reasonable ‘to confer on them the appointment and management of those whom they had to support; and it is clear that this power would be nugatory, unless the British subjects resident in Turkey were made amenable, in a certain degree, to their authority’. This was, according to Walsh, the underlying principle of the company's charter, which restricted the Levant trade to its members and allowed it to regulate trade, levy duties on British trade, and have the ultimate authority over British subjects on Ottoman soil. Walsh insisted that the company was not a monopoly. Returning to the sixteenth-century ideal of well-governed and regulated trade, he argued that the company's activity was ‘merely a trade, under certain regulations for its better management’.²⁵ Walsh's arguments represented the company's official line of defence against those who accused it of serving the personal interests of the few; of being an economic elite of socially distinguished London wholesale merchants who were closely connected with the Crown and the political establishment of the day.

The charters were the footing upon which lay the company's close connection with the Crown and the government. Since its beginnings, the Company of Merchants trading in the Levant Seas had a special relation with the state authorities: the Crown that had granted it a charter, the government and the parliament that oversaw and monitored its strategy and performance. Even though it was an association of merchants, the company was entrusted with the representation of the state to the Ottoman authorities, and its officers in the Levant operated both as company representatives advancing the business interests of its members (freemen) and as diplomats performing a variety of political, economic and bureaucratic duties. The authority vested in it by the Crown and the government enhanced the company's activity on Ottoman soil with a ‘national’ quality that validated its resolutions, practices and transactions and empowered its officials to administrate and protect the local English communities, negotiate with local authorities and government officials, and protest when the interests of England and its subjects were at stake. Both Levant Company officials and members were recognised by the Ottoman state as enjoying diplomatic and other immunities agreed bilaterally in the capitulations.²⁶

The company was bound to respect English foreign and commercial policies, the laws of the state, international and bilateral agreements and treaties. Its governors communicated with the Privy Council,²⁷ the government and its committees on issues of common interest. The company was often invited by state officials to take a position in political debates that concerned it directly or indirectly: trade, navigation, transport, commerce and manufacture. It was also informed about crucial international events, wars and bilateral agreements affecting the areas under its jurisdiction. When its own financial resources were low, the company received occasional government subsidies.²⁸ This money was usually spent on salaries, the rent of the embassy and consulates and representation expenses. The 1661 charter specified various other forms of assistance that the company received from state officials and public officers. According to these provisions, the state bureaucracy, special committees and public officers were directed to take any action in order to protect the company whenever necessary. The lord treasurer of England, chancellor and barons of the exchequer ‘should direct a writ under the seal of that court to any customer […] commanding them not to take entry of any goods to be carried into the Places aforesaid […] or make any agreement for the same goods but only of such as should be free of the Company’.²⁹ Admirals, vice-admirals, justices, majors, sheriffs, constables, and bailiffs should also ‘aid, favour, help and assist the governor, the Company and its officers and agents to execute and enjoy their premises by land and sea, execute all ordinances and punish offenders’.³⁰

The entanglement of the Crown and the government in the company's affairs was multifaceted and responded to political and economic expediencies. It also varied according to the priorities and tactics of the Crown and the government at different periods. Sometimes the State took a more pronounced role in the administration and the decision-making of the company, a circumstance that usually agitated the merchant community.³¹ The close relation of some of the company's governors with the political establishment and the fact that some of them had previously held a distinguished government position provided the State with an effective means of getting inside information from the company and interfering with its affairs.³² In fact, two of the longest-serving British foreign ministers, Francis Osborne, 5th duke of Leeds, and William Lord Grenville served for many years as governors of the company.³³ One area in which the Crown had a direct role since the company's earliest days was the selection of the English ambassador to the Porte. From 1691, the royal court prepared a list of candidates which was presented to the company's administration for an initial assessment. The monarch had the final say and the new ambassador was presented to the company and its members. He was then admitted to the company as a freeman/member and took his mandate from the company's general court.³⁴ The ambassador was hired as a company employee to oversee and protect the company's interests; he was also the main vehicle of English sovereignty on Ottoman soil. His two-fold duties sometimes became a source of friction between the company and state officials.³⁵ The political background and connections of the ambassadors were sometimes viewed with suspicion and distrust by members (freemen) and their agents in the Levant (factors), who considered their intervention in their life and activity arbitrary. At the same time, some ambassadors felt uncomfortable in their role as representatives of a trading company and were much more committed to their political and diplomatic duties. In periods of international crisis, war and diplomatic turmoil, diplomatic responsibilities weighed heavily on an ambassador's agenda, taking priority over other undertakings relating to commercial and trading activities. The fact that ...

Table of contents

• Front Cover
• Title
• Copyright
• Dedication
• Contents
• List of Tables
• Acknowledgements
• Introduction
• Part 1 Foundation – Organisation – Dissolution
• Part 2 Corporate and Individual Strategies: The Transition from Monopoly to Free Trade
• Part 3 Entrepreneurial form and Strategy
• Part 4 Business, Social Identity and Everyday Life
• Epilogue
• Notes
• Bibliography