Merchant communities often demonstrated considerable flexibility. They were prepared to move to new markets. Late in our period many Surat merchants moved to Mumbai; Coromandel merchants to Chennai; and merchants from many parts of India to Kolkata. Gujarati merchants also moved in to Zanzibar, and played a major role in its economy, being for example responsible for collecting customs. As another example of a change, the Parsi community in Surat had been of only minor importance in the trade of the town until late in the seventeenth century. They then acquired a larger role as agents of the increasingly dominant English. Members of this merchant community also moved to Mumbai and became major figures in the trade of this port in the eighteenth century. There were however dislocations, and new groups rose under the expanding influence of the Europeans. The Dutch attempt to monopolise the trade in fine spices from the Malukus was more or less achieved by the middle of the seventeenth century, and the traditional Malay traders were displaced. However, Indian merchants continued to trade to Indonesia, and were able to circumvent Dutch attempts to block their trade.
Local rulers responded in different ways to the activities of the northern Europeans. In the landed empires they were in a situation of subservience. In China they traded only on the sufferance of the port authorities, and were very closely supervised, not to say humiliated. In the Red Sea and Gulf they had to deal with less powerful states, especially once the Safavid empire unravelled in the early eighteenth century. Before this, their relative position is best shown by how the EIC helped the Iranians capture Hurmuz from the Portuguese. They got little credit or advantage from this.
In India there developed a standoff, but a different one from that which had confronted the Portuguese. It will be remembered that the Portuguese had power at sea, but very little on land, as they themselves well knew. In the case of the Dutch and English companies, they could not exercise the control over trade in, say, the Gulf of Cambay which the Portuguese had achieved, and more importantly they soon placed factories not only on the coast in the port cities but also inland at production centres. This made them very vulnerable indeed. Consequently, while the companies could, and did, seize Indian ships, including those belonging to the political elite, at sea, the Mughals retaliated by seizing European factors in the ports and inland. A stalemate resulted, which was broken only when Mughal power declined in the eighteenth century. One consequence of this, a fateful one, was that the English were able to take advantage of this to secure important concessions for themselves. In 1719 they paid money and were given freedom from internal customs duties in the Mughal empire. This gave them, at first potentially and later actually, an enormous advantage vis-à-vis their Indian competitors.
The response from the port city controllers was obviously different. As we noted, the Dutch took over many of those which the Portuguese had seized a century earlier. The independent ones, such as on the Coromandel coast, welcomed the northern Europeans as a counter to the Portuguese. Both here and on the west coast however the Europeans also set up their own ports, of which Chennai and Mumbai are the obvious examples. As European trade in the ocean increased, these ports flourished and slowly took over the trade of their contiguous Indian competitors.
This also happened in southeast Asia. Several of the controllers of port polities tried hard to compete. This often meant an increase in state control of the economy. Aceh engaged in state-directed pepper production, using slave labour, and also eliminated some pepper areas in order to deny them to the Dutch. The ruler of Banten forced the inhabitants to grow a certain number of vines, and in Makassar the ruler supervised trade, while in Ayutthaya much overseas trade was a royal monopoly. These efforts were in vain. Dutch effectiveness meant that from the mid seventeenth century many previously flourishing Malay ports were outcompeted.
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There was however another dimension to the work of the northern Europeans in the Indian Ocean. Both the English and Dutch companies traded extensively with Europe, and replaced the Portuguese in this sector. Here, then, we are writing a history
in
the ocean. Om Prakash has written the standard account of this.
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The first period, to about 1680, finds the VOC dominant. He stresses the success of their official engagement in the country trade. Its establishment in mid-century was crucial for Dutch success, and it was based on their continuing access to Japan, and their control of fine spices. Thus while the English by the end of this period were catching up in their share of the trade with Europe, the total Dutch trade was still far superior because of their huge inter-Asian trade. The second period goes from 1680 to 1740. During this time the VOC was successfully challenged by the EIC, and to an extent by other European companies. The decisive factor in this period was a vast increase in the European demand for fine cottons and raw silk. The English, by now well established in India, were able to take advantage of this, especially from their factories in Bengal. In the final period, to 1800, the English went ahead by leaps and bounds, though importantly Prakash stresses that the VOC did not really decline: rather it failed to match the rapid English expansion. We now see tea, a new product, entering the trade, again as a result of changes in European demand and English government policy, and a vast increase in the trade in opium, mostly to Indonesia and later to China. The China trade came to dominate. Imports to Guangzhou doubled and then trebled in the last quarter of the century, thanks especially to a vast rise in English tea consumption once import duties were reduced in 1784.
The main difference between these two companies was in their attitude to trade within Asia, that is a history
of
the ocean. The Dutch East India Company engaged massively in the 'country' trade, and did very well indeed from it. The great Dutch governor J.P. Coen well described the complexity of the trade which the Dutch East India Company hoped to enter:
Piece goods from Gujarat we can barter for pepper and gold on the coast of Sumatra, rials [silver currency] and cottons from the [Coromandel] coast for pepper in Bantam, sandalwood, pepper and rials we can barter for Chinese goods and Chinese gold; we can extract silver from Japan with Chinese goods, piece goods from the Coromandel coast in exchange for spices, other goods and rials, rials from Arabia for spices and various other trifles – one thing leads to the other.
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Private trade by its employees was actively discouraged, another sign of the rigidity which seems to characterise their total presence. The company opened up some new and long-distance routes, and were able to compete successfully with Asian traders. One of their main successes was a result of their being the only Europeans allowed to trade in Japan from the 1640s: their profits here were immense. In another niche they had an unusual success. The Maldives produced the best, because smallest, cowry shells, which we have noted being very widely used as an alternative currency (see pages 84–5). The VOC was able to centralise this trade on Sri Lanka. In 1763 fourteen ships came from the Maldives carrying 80,000 kgs of these shells, a total of 85,740,000 shells.
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Meanwhile, the English company concentrated on the trade to Europe, and allowed its own servants, called factors, to engage in local trade on their own behalf. Private English trade in the Indian Ocean had expanded greatly by the end of the seventeenth century, and even more during the eighteenth, especially once the swing to the east and China became apparent in the last quarter of the century. Many EIC ships, carrying both company and private goods, spent their lives chaffering around the littoral of the Indian Ocean, engaging in what was in many respects a peddling trade.
Despite this large and often successful engagement in the country trade, the Europeans still had to send out large quantities of bullion to the Indian Ocean area; few European products found a market in the area. As Furber noted, 'if silver had not been available to the Europeans in sufficient quantities, the East India trade could not have been carried on.'
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This in turn reinforces our view of a world beginning to be integrated, for the bullion came from south America, and much of it flowed on to the Indian Ocean, either via the Mediterranean and the Middle East and so to our ocean, or around the Cape in European ships. On average two-thirds of VOC exports from Europe were in bullion; in the seventeenth century Peruvian silver, in the eighteenth Brazilian gold. Between 1660 and 1720 Dutch imports into Bengal, one of their major trading areas, were only 12.5 per cent goods, the rest being bullion. So also with the EIC. Over the period 1660–1720 only 20.6 per cent of English imports to all of Asia were made up of goods: the rest was bullion.
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Most rulers at this time, whether English kings or Mughal emperors, were bullionists who believed, with prevailing economic thought, that a rich state was one which had huge stocks of precious metals. Despite this, the influence of both of the companies in domestic politics, and their contribution to home revenues, was so great that they were allowed to export huge amounts of bullion. It must be stressed
how fortuitous this all was. The consequences of the discovery of the Americas, and then of huge silver deposits there, generated the bullion without which Europeans could hardly have entered Indian Ocean trade. The ramifications of this are clearly enormous.
There was also a fluctuating, and ultimately unsuccessful, French effort in the ocean. The French seem never to have quite got it right. Several companies, usually undercapitalised, and often created
de novo
by the state as compared with the Dutch and English examples where the state recognised merchant pressure, had difficulty in competing with their European rivals. Often the French arrived too late, to find a trade, or a port city, already dominated by someone else. They did however attempt to plant colonies in Madagascar in the 1640s, and on the Ile de Bourbon (Réunion) in 1670. In 1710 they moved from there to Mauritius, now renamed the Ile de France. This island had been sighted by the Portuguese. In 1598 the Dutch named it and claimed it, but even in 1617 it was still uninhabited. Later the island was meant to serve as a way station between their other important territory, the Cape Colony, established in the 1640s, and Indonesia. They even tried to colonise it, but their settlements there failed, and they withdrew in 1710, having taken all the ebony and made the dodo extinct. Both these islands were captured by the British in 1810 during the Napoleonic Wars. The British at this time also acquired Rodrigues, which the French had settled in 1750, and the Seychelles, colonised in 1770.
The French were one of the European groups engaged in the slave trade in the Indian Ocean. This trade had a long history, and we have noted extensive trade from East Africa to the Middle East over many centuries. In the seventeenth century there was little demand for slaves in India, but there was a lot in southeast Asia, where various forms of bondage, right through to slavery, were common. This was especially so in Aceh, where expanding pepper plantations and tin mines needed slaves, as also did agriculture to feed a growing population. The Dutch entered this trade with some enthusiasm, doing especially well in buying people when there was famine in India. In famine years in Coromandel the Dutch shipped a thousand or so each year to Indonesia. The Dutch also took labour from Madagascar to work in their Cape colony, and even took some to the Americas.
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Later in the century the EIC took some hundreds of slaves from Africa, and especially from Madagascar, to Benkulen in Sumatra.
The French participated in this trade in the western part of the ocean. Indeed, the trade only became important when the French developed plantation agriculture, especially sugar, in the Mascarenhas islands. Again Madagascar was the first place to supply slaves, but later the East African coast was also exploited.
Europeans in the Indian Ocean were making important advances as the eighteenth century progressed. Even by 1750 the VOC and EIC were handling nearly 40 per cent of Bengal's silk exports, and this was a major export from the area.
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In global terms, Steensgaard worked out figures which show how important the Europeans were becoming. He claims that the total Indian overseas trade around 1600 was about 60,000 tons. The VOC alone by the 1620s had 10,000 tons, and
around 1700 had 30,000 tons. By the middle of the eighteenth century European demand for Indian Ocean products was probably bigger than the total internal trade in the ocean, though this takes no account of inland markets.
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Our schema concerning the degree of influence of port cities claims that the third stage is when a controller of a port city not only interferes in production, but actually seizes the land on which production was occurring. The Dutch did this early on in the Malukus, but this was atypical for the time. It was only when the British acquired revenue rights in Bengal in the 1760s that a seismic change occurred. Their political power was used ruthlessly to the advantage of the EIC and more particularly the English private traders. For the first time producers could be coerced, and new trade networks created. English private traders in Kolkata and Mumbai came to dominate the trade of the Indian Ocean and the South China sea, and the EIC rose to superiority in trade to Europe. Bullion for goods no longer applied, for the English could finance purchases in Bengal from land revenue collections, and could also borrow money from private European merchants in Bengal against bills of exchange payable in Europe.
Ashin Das Gupta linked the beginning of European dominance with Asian decline, and this he explained was caused by the decline of the great Islamic empires. He sees an important transition. Once European ships had carried Asian traders, and Asian goods, to Asian markets, European ships being preferred increasingly as they were less likely to be attacked by pirates. Now, in the eighteenth century, European ships carried European goods to European controlled ports. He also described how Europeans began to move inland. At first they merely protected their inland trade with small bodies of troops, but this soon moved on to interfering in actual supply. By mid century Surat's trade had been taken over by Mumbai; as Das Gupta put it, 'there can be no doubt that by the turn of the nineteenth century not only was the European ship dominant in the ocean but the Indian ship has sailed into oblivion.'
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But this story will be taken up again in the next chapter.