Download PDF | (Library of Ottoman Studies) Despina Vlami - Trading with the Ottomans_ The Levant Company in the Middle East-I.B.Tauris (2015).
363 Pages
Despina Vlami has a PhD in history and civilisation from the European University Institute in Florence. She is Senior Researcher at the Academy of Athens where she directs a research programme on trade and diplomacy in the eastern Mediterranean.
ACKNOWLEDGEMENTS
I feel deeply indebted to the Academy of Athens where for ten years I have found the most stimulating and accommodating environment in which to carry out my scientific objectives. This book is a tribute to Professor Michail Sakellariou, a praised and honoured academic in Greece and a member of the academy who passed away in August 2014, without having the pleasure of seeing the publication of a research project that was based on material he microfilmed in the Public Record Office in London in 1949. The microfilms he subsequently donated to the Academy of Athens were the first I consulted when starting work on a history of the Levant Company in 2003. My very special thanks go also to the members of the supervising committee of the Research Centre for Medieval and Modern Hellenism (KEMNE) of the Academy of Athens for having supported my work in every possible way. A special acknowledgment goes to Professor Chryssa Maltezou, an academy member, who as the new supervisor of the KEMNE has breathed an air of inspiration and assiduousness into our research. Without her help, this book might not have been possible.
Costas Lappas, the former director of the KEMNE, and Rodi Stamouli, now acting director, have offered me valuable assistance and support, and I am deeply indebted to them for all these years of peaceful and productive collaboration.
The book has benefited from the observations of a brilliant and meticulous historian, Professor Olga Katsiardi-Hering of the University of Athens. I am grateful to her for spending some of her valuable time reading the first draft and making crucial comments. Special thanks also go to the staff of the National Archives of the UK, in Kew, and the Gennadius Library of the American School of Classical Studies at Athens. Damian Mac Con Uladh edited the book and contributed immensely to the outcome with his knowledge and determination. I feel indebted to him.
As this book finally comes to fruition, I would like to express my deepest gratitude to my dear friends Argita Kanara and Gogo Varzelioti for the hours spent supporting me in moments of difficulty and doubt. The writing of the book coincided with a process of introspection and maturity; in getting wiser and older I had a severe and challenging fellow traveller, Nikos Simbouras, my love and friend. The last acknowledgment goes to my precious daughters, Stefania and Maria, for their unconditional love and faith; for following me in good and bad times, never asking why; for being my joy and my scruples. The book is dedicated to them.
INTRODUCTION
The Levant Company was an English chartered company that traded in the Levant from the late sixteenth century to the 1820s. A chartered company was a type of corporation that evolved in sixteenth-century Europe and operated under a charter granted by a sovereign authority. The charter conferred to a group of traders, or a number of shareholders, a trading monopoly in a specific geographical area or for a specific type of trade. Chartered companies have been generally considered concurrent and instrumental to the growth of long-distance trade in the early-modern period.’ The English, French and Dutch governments encouraged chartered companies to assist trade and promote overseas exploration, driving private resources to pursue foreign trade policies when treasury resources were limited.* Early trading companies founded in England under a royal charter were usually formed as joint-stock or regulated companies.
In the first case, the organisation itself engaged in business, operating with the joint capital invested by members, each of whom shared in the profits and_ losses proportionally. This was the case of the Muscovy (1555-1746), East India (1600-1858), Hudson’s Bay (1670) and Royal African (1672-1712) companies. In a regulated company — as was the case of the Levant Company and the Merchant Adventurers (founded in 1407) — each company member operated independently following his own strategy and using his own resources and capital. Members were nevertheless obliged under oath to comply with the company’s regulations and pay taxes.”
The Levant Company, initially commonly known as the Turkey Company, was a corporation of English merchants who, under a royal charter granted by Elizabeth I in 1581, enjoyed the trading monopoly with the Ottoman Empire and, after 1592, Venice. The company’s representative to the Ottoman Porte was given diplomatic authority as an ambassador. Subsequently, the company organised offices or ‘factories’ at strategic trading outposts in the eastern Mediterranean such as Aleppo, Smyrna, Patras, Cairo, Algiers, Larnaca and Salonica. Consuls, members of the company, were dispatched to defend the capitulation agreements — codifications of the privileges conferred on the English and other European merchants by the Ottoman Porte’ — signed between England and the Ottoman Empire from 1580, to enforce the company’s ordinances throughout the Levant, to maintain law and order, to levy consulage on imports and exports and to adjudicate in disputes.” The company’s London-based governing body represented the company before the English state authorities, while the ambassador and the consuls defended the property, business interests and personal security of English subjects before the Ottoman authorities. To support its administration, factories and employees financially, the company imposed taxes on English trade, levying consulage duties in London and the Levant; it was also partially financed by the English state.
Analytical interest in the early trading companies originated, in its first stages, from an awareness of their key role in the expansion of British overseas trade in the seventeenth century.° This interest triggered an in-depth study of the organisation and the operation of some of them, particularly those organised as joint-stock enterprises. The role of some of them in the colonisation of the New World and their recognition as some of the earliest and most important examples of global joint-stock businesses served to focus the attention of historians and produce very interesting case studies.’ These studies provided valuable information and became important references for many other historians and researchers who studied the expansion of English shipping and trade from the seventeenth to the nineteenth centuries, the emergence of British commercial enterprise, and the life and the activity of British merchant entrepreneurs in foreign lands.
Certain characteristics of these early trading companies — more precisely their joint-stock organisation, the way they conducted business to economise on a high number of recurrent transactions within distant and imperfect markets, and their innovative business administration — led to their comparison to modern business and ultimately to their integration into the evolution of the modern multinational enterprise.® The academic discussion stimulated by these approaches enriched the analysis of chartered companies providing, at the same time, interesting analytical and methodological tools that have been considered, utilised and sometimes criticised for projecting modern and contemporary models onto past phenomena.
In fact, despite their similarities, early chartered companies differed dramatically and every attempt to interpret their organisation and performance should first take into account the historical context within which each of them developed and operated. Another major weakness of the argument on the modern and multinational character of early trading companies is the fact that it has been based on clues referring mostly to joint-stock companies, excluding those chartered companies that were organised as regulated ones, most importantly the Levant Company.
The purpose of this book is to fill this analytical gap by positioning the Levant Company in the long process of the evolution of the modern commercial enterprise from the sixteenth to the nineteenth centuries. It follows the company’s contribution to the development of modern corporate and individual business organisation and techniques during a period of transition that saw free trade ideology and practices outshine mercantilist theories and chartered monopoly trade. The book captures this long moment of transition by examining the Levant Company’s organisation, strategy and performance in the last 30 years of its history. This period coincides with the period that Alfred C. Wood, author of an extensive account on the company’s history, identified as the company’s final act.'° It starts with the outbreak of war against France in 1793 and closes with the abdication of the company’s authority to the British state in 1825.
This was a period of crisis and change, contemplation and maturity for the company and — in comparison to previous years — a period of profit augmentation. A series of wars and conflicts created conditions of permanent insecurity in transport and commercial trade, augmented the risk of engaging in international business and favoured speculation. The long Franco—British conflict throughout the French (1792-1802) and the Napoleonic wars (1803-15), the encounters of the Ottoman Empire with Russia (1806-12) and Persia (1821-3), the brief wars of Britain against Russia (1807-12), the Ottoman Empire (1807-9) and the United States (1812-14) and finally the Greek war of independence (1821-8) disrupted trade in the Mediterranean region through blockades, ship sequestrations, piracy and contraband activities. Successive crises put merchants under strain and required flexible strategies and innovative spirit. New trade routes were traced and new partnerships forged. Business became more risky and opportunities for quick profits increased. As a considerable part of the old guard of Levantine merchants went bankrupt by failing to follow the new pace and methods of transactions, a new wave of bold and efficient merchant entrepreneurs took their place, transforming the business environment with their new tactics and ethos. After 1815, the structure and techniques of commercial enterprise changed immensely. " Britain had emerged as one of the most powerful victors of the European wars, becoming a colonial empire and the major industrial country in Europe whose manufactured products were exported all over the globe.
The book investigates how the Levant Company and its members performed in these new conditions, and how its business identity, organisation and strategy were affected at a corporate and individual level; it also examines how this process was related to the evolution of commercial enterprises and practices and the persistent demands of a considerable part of British society for the emancipation of British trade from the eighteenth century.
The first part of the book starts with an overview of the company’s early institutional history. Chapter 1 reviews the company’s main institutional attributes and their development until the late eighteenth century: the company’s relation with the English Crown and government, its regulated organisation and its exclusive membership by wealthy London merchants. Chapter 2 describes its administration, structured as a multileveled hierarchy of power, and looks at the foundation and organisation of its factories in various ports and commercial centres of the Ottoman Empire. The company’s bylaws, although not extensive and for this reason regularly revised, were important guidelines for the administration and members’ activity. The company’s official correspondence was an important managerial instrument and a powerful control mechanism, binding the whole company together and ensuring the dissemination of information between London and the Levant. In the last two sections of that chapter, the company’s bylaws and its official correspondence are examined and assessed for their symbolic and operational consequences. The concluding chapter of the first part examines the company’s reaction to the pressure of eighteenth-century liberal criticism and to the political, military and economic crisis of the period. The lifting of barriers on membership, a new distribution of power and authority in the Levant factories and the new economic conditions that rewarded flexible, bold and quick responses to business opportunities, affected the company’s corporate identity and strategy, imposed the resolution of new compliant rules and efficient procedures, and boosted individualism among the company members. The company’s bylaws had to be modified several times during this period to update procedures and consulage rates and regulate new business methods. More efficient, safe and quick methods for sending company correspondence were also contemplated. As the company’s membership grew, social power and wealth still determined a member’s position in the company’s hierarchy and ensured him a circle of equally powerful and trusting ‘friends’ among the membership. Within a competitive business environment, social power, authority and powerful connections counted for much, as they were related and could lead to new business opportunities. Hence, official positions in the Levant were much sought after, especially when they were salaried; competition caused disputes and controversies and led to awkward situations resulting from overlapping authority, nepotism and the evasion of rules.
The second part of the book presents the company’s operation as a trading enterprise during the final 30 years of its history. It examines how the corporate and individual strategies of its members conformed to a new system of business transactions and a new organisation of international trade; how they sometimes combined to allow for more flexible and efficient enterprise, overcoming — even temporarily — monopoly impediments and constraints. Finally, it looks at how the company and its members reacted to the gradual reduction of their privileges as new business methods and trade routes developed and as newcomers were allowed engage in British trade; the arbitrary claims of the Ottoman authorities and the trade policies of the British government sometimes seriously affected the company’s trade and necessitated the company’s constant intervention. From the late eighteenth century until its dissolution, the company operated within a new system of Mediterranean trade and navigation: in Chapter 5 the trade routes and itineraries of this new system are described. The system evolved around a new operational centre — Malta — and extended to adjacent seas and continents, the Atlantic and United States to the West, the Black Sea and the southern Russian ports in the northeast, and the Balkan routes leading to the Habsburg Empire, the Adriatic and the Ionian seas. A variety of newcomers — British, Maltese, American, Russian, Greek, German and Italian — participated in this interwoven fabric of commercial transactions. While most of them operated independently, sometimes they engaged in collaboration with Levant Company members. The suspension of the British navigation acts in the late eighteenth century, and a series of corresponding changes in the company’s regulations, created a breach in the company’s monopoly that marked the beginning of a long process through which Ottoman subjects trading in the Levant permeated the structures of British trade. Greeks, Armenians and Jews collaborated with the British merchants until they eventually structured their individual careers and competed with the company’s members. Chapter 6 shows how this long partnership, through a series of complications and predicaments, supported British trade when necessary but became a kind of Trojan horse as the company saw its monopoly rights eventually encroached on by its protégés. A number of incidents presented in the last section of Chapter 6 offer a close-up and fascinating view of the complex, and sometimes inconclusive and risky, aspects of the British—Ottoman partnership and transactions. The impositions charged in London and in the Levant on the goods traded by company members influenced their profits, thus determining business choices, strategy and _ partnerships. Chapter 7 presents how during this period the Ottoman and British authorities manipulated tariff policies on British trade in the Levant and how the company strove to protect its income and its members’ profits. The persistent demands of Ottoman governors and customs officers for the payment of higher and special tax duties on imports of British manufactured goods and exports of Ottoman products triggered corporate solidarity and brought the company’s administration up against the Ottoman authorities. The company’s negotiation with the British government, whenever tariff and navigation policies threatened its members’ interests, was an equally delicate procedure that often led to the company’s compromise with political expediencies. After 1815, the British government policies on foreign trade and navigation were often prejudicial for the company’s status, income and privileges; the Foreign Office and the Board of Trade gradually encroached on its authority, leading to its final dissolution in 1825.
In part three, attention shifts first to the individual entrepreneurial form and tactics adopted by the British merchants trading under the operational umbrella of the Levant Company from the late eighteenth century until its dissolution. In Chapter 8 the form and the structure of their enterprises comprising contacts from different operational and geographical areas is discussed. The strategy adopted by the British merchants during this transitional period is also addressed in Chapter 9, as new collaborations, business methods and transactions emerged offering opportunities to economise and achieve bigger profits within different business environments. Chapter 10 presents some individual cases of British merchants trading in the Levant during the period investigated.
In part four, aspects of the everyday life and sociability of a British merchant and member of the Levant Company are addressed through an investigation of his domestic environment. This section shows how life was closely connected with business activity and how relations of interdependence developing within local markets and cosmopolitan societies connected a variety of people, European and Ottomans, and brought them into contact with different cultures and everyday practices. For Bartholomew Edward Abbott, whose case is presented in this part of the book, this system of interaction functioned simultaneously with the one developed within the institutional and contractual environment of the Levant Company. Abbott, like many other company members, moved comfortably in both these systems, acquiring overlapping and sometimes contradictory identities, as he participated in a power game for status, profit and connections. His everyday life, habits and sociability, as depicted in his domestic environment and apparel, reflected these realities.
For the purpose of this study, the company is considered both as an institution and as a system of interacting entrepreneurs engaged in a variety of contractual and individual, intra- and extra-company relations. The book traces first the company’s institutional and structural attributes and their development over time, before reviewing its operation as an international trading enterprise, putting the emphasis on its contractual and operational quality. Finally, it looks into the individual activity and life of the company members and their agents (factors), who were bound to a corporate organisation by oath and membership, obliged to follow specific rules and protect the company’s monopoly privileges as they pursued their own business interests. The primary material utilised in this threelevelled approach has mostly been the Levant Company’s official correspondence exchanged between its administration and employees, political authorities in Britain and the Ottoman Empire, officers in the Levant and members in Britain and abroad. The material consists of letter-books and letters, minutes, memorials, reports, manifests and treasury accounts. The material is part of the records of the Levant Company that were inherited by the Foreign Office after the company’s dissolution in 1825 and are now kept in the National Archives of the United Kingdom (Kew). The systematic character of the company’s correspondence allows us to follow discussions and projects as they were materialised, events as they happened, and the settling of affairs and disputes until their final resolution. Being official, administrative and operational at the same time, the correspondence also facilitates an in-depth study of the company’s quality as a political/diplomatic authority representing Britain in the Ottoman Empire. It therefore depicts the ways in which war, international relations and economic developments affected foreign and trade relations between Britain and the Ottoman Empire during a turbulent period. It also documents the tumultuous rapport between the company and its political principals, the British Crown and the government. The highly descriptive and very often personal character of the letters exchanged brings to the surface not only the political and economic views of the corresponding parties, but also the personalities of Levant Company officials, British politicians and government members, and wealthy and socially distinguished British merchants. This represents another important aspect of the book as the historical context, as well as the social and economic developments and realities, are presented through the eyes of contemporaries, among them well-known personalities of the British political and economic establishment. Occasionally, the book also reveals instances from the life of individuals that played a secondary role in the company’s history but who nevertheless left their fascinating imprint in its correspondence: the widows, children and agents of British merchants, their foreign partners, British and native employees in the factories, travellers, Ottoman officials and members of the local communities in the various outposts of British trade in the Levant.
I have chosen to retain the names of the places and individuals as they appeared in the company’s correspondence. Therefore, Istanbul is referred to as Constantinople, Izmir as Smyrna, Edirne as Adrianople and so on. Given that the spelling of personal names could vary depending on the orthographical conventions followed by correspondents, I had to decide on one version to appear throughout the book. In all cases, I have sought to use the one that was most likely to be the original.
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