BARGAINING for SHELTER an Entrepreneurial Analysis of the Ostend Company, 1714-1740
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BARGAINING FOR SHELTER An entrepreneurial analysis of the Ostend Company, 1714-1740 Gijs Dreijer, s1035142 [email protected] Research MA Thesis History: Cities, Migration and Global Interdependence Leiden University First thesis supervisor: C.A.P. Antunes Second reader: B.M. Hoonhout Word count: 44.459 Table of contents Acknowledgements ................................................................................................................................................. 2 Introduction ............................................................................................................................................................ 3 Chapter 1: Historiographical overview on the Ostend Company – the current narrative .................................... 15 The three strands of literature: colonial, commercial and revisionist .............................................................. 15 The first years (1714-1720): private ventures to the East and the Guinea slave trade .................................... 20 Financial aspects and investments ................................................................................................................... 23 Foreign merchants in the GIC and issue of smuggling ...................................................................................... 26 Competition and cooperation with other European powers in Asia ................................................................ 30 The importance of the tea trade and the effects on the organization of the GIC ............................................ 32 After 1727: the break-up of the GIC and the ‘Scandinavian epilogue’ ............................................................. 36 Chapter 2 The political, legal and diplomatic rise and fall of the GIC ................................................................... 40 The situation at the beginning of the eighteenth century: the War of Spanish Succession and its aftermath 42 The legal arguments on the GIC case ............................................................................................................... 46 The Dutch reaction to the GIC 1717-1725 ........................................................................................................ 48 The English opposition to the GIC, 1723-1727 ................................................................................................. 52 After 1725: Continuing legal discussion and suspension .................................................................................. 54 Conclusion: The influence on the business organization of the GIC ................................................................. 57 Chapter 3 The view from Vienna: the institutional playing field for the GIC ........................................................ 59 Chapter 4: Merchants and the need for sheltering .............................................................................................. 84 Savoie and his relations to the Ostend merchants ........................................................................................... 86 Negotiating for the ‘institutional shelter’ (1): setting the stage in the Asia trade ........................................... 94 Bargaining for the ‘institutional shelter’ (2): why a Company, and how? ........................................................ 98 Conclusion: the importance of the Bengal trade and the need for shelling ................................................... 104 Chapter 5: Other forms of sheltering after 1727 ................................................................................................ 108 The push south: the Habsburg companies in Triëste and Fiume during the eighteenth century .................. 108 The Scandinavian investments of 1728-1740 ................................................................................................. 114 Meanwhile in Asia: private initiatives for protecting the GIC interests? ........................................................ 119 Private initiatives for institutional protection in Europe: Hamburg, Cádiz, Poland and Prussia .................... 122 Conclusion ...................................................................................................................................................... 126 Conclusion ........................................................................................................................................................... 129 Archival sources .................................................................................................................................................. 137 Bibliography ........................................................................................................................................................ 138 Unpublished sources ........................................................................................................................................... 144 1 Acknowledgements This thesis has been written over the course of more than a year, starting in April 2016. Despite various ideas for research on the VOC case, in the end I settled on the fascinating subject of the Ostend Company, of which this is the final product. I want to thank, first of all, Cátia Antunes, for her fantastic supervision of this thesis: for coming up with the idea of writing about the Ostend Company, but also for writing cover letters for grant applications, giving very detailed and valuable feedback and supporting me throughout the process. Of course, the thesis is only the last step in a long process: so Cátia, also thank you very much for supporting me throughout my BA and Research MA, and for the help in my PhD applications at the time of writing (early June 2017). Hopefully, when I will defend this thesis, there is more good news regarding the PhD applications. You have certainly helped to form me as an academic! There are also many other academics that have helped shape the ideas for this thesis and that I would like to thank very much. In a random order, thank you to: Kaarle Wirta for the various fascinating discussions (mostly over a beer or two) about the concepts of the ‘institutional shelter’ and the ‘shell company’; Jelten Baguet for his valuable comments on the introduction and first chapter of this thesis, while also helping me navigating through the archives in Belgium; Klaas van Gelder for pointing to the importance of Patrice MacNeny in the process of the formation of the Ostend Company and help with navigating through the Austrian archives; Erik Odegard for the last- minute comments at the Research MA symposium, which have also helped to accentuate various aspects of entrepreneurial behavior; and the participants in the Research MA Symposium, especially Bram Hoonhout and Mark Hugen, for their sharp questions about my presentation. Bram, thank you very much also for willing to act as the second reader of this thesis, and Mark, thank you very much for staying with you in Schoten during my Belgian quest in the various archives. Besides the academics, I also want to thank the helpful employees of the archives that I have visited: the Dutch National Archives, the Belgian Rijksarchief, the Antwerp City Archive, the Ghent City Archive, the Ghent University Library and the Austrian State Archives. In all the archives I visited, helpful employees showed me the way and helped me navigate through the (quite often) impossible archival catalogues. Finally, a great thanks to friends and family who have supported me during the thesis and my BA and Research MA. Sorry Jerome, for having put fifty books all over the place! Of course, I want to thank my parents, Emily and Suzanne most of all, for their invaluable support over the years. Hopefully, many more years of doing research will follow! Gijs Dreijer Leiden, June 2017 2 Introduction Following the publication of the ‘Panama Papers’, much controversy has surrounded the use of so- called ‘shell companies’ for laundering money offshore. The business magazine The Economist in response listed the uses and misuses of these companies.1 “Pooling investors’ money from different countries” was named by the magazine as a fairly legitimate use of the ‘shell company’. Although the use of this kind of business structures have been treated by journalists as a recent development, the use of offshore companies goes back further in history. The Ostend Company (1722-1727/1732), also known as the Generale Keijzerlijcke Indische Compagnie (GIC), was an early eighteenth century example. In 1732, after ten years of existence, the GIC was definitively suspended from taking part in the Asian trade. Although the company (formed in the port city of Ostend) did only conduct trade with the East for a rather short period, the GIC certainly deserves attention because it clustered an international network of merchants that created new opportunities to participate successfully in the European-Asian trade, especially in the tea trade.2 In 1722, Charles VI of Austria chartered the GIC for the duration of twenty years, after pleas from merchants based in Ostend for the issuing of a charter. The trading networks of merchants who were based in Ostend, including the Scottish, the Irish, the French and the Dutch, had already set up a profitable trade with the East between 1715 and 1721, but sought to enjoy military protection from the Habsburg Emperor to lower protection costs, stemming from threats from the Dutch East India Company (VOC) and its English counterpart