History C1 : The origins of the British empire

Part 1 : How trade became linked with the empire

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How trade became linked with the empire

Commercial expansion (the growth of overseas trade) and imperial expansion (the territorial expansion of an empire), strictly speaking, are not the same thing. However, they were often linked in the seventeenth, eighteenth and nineteenth centuries as European nations increased their domination around the world.

Commercial expansion was carried out by investors, traders and merchants (often in joint-stock companies run on the Dutch model) to all parts of the globe. Territorial expansion was usually – though not always – the decision of the government to directly acquire territory and to assume the burden and costs of administrating it. This would involve employing governors, customs officials, tax collectors, soldiers and sailors. During time of war, the numbers of the latter would rapidly increase and it was only a financial revolution alongside the ‘commercial revolution’ that made these projects feasible. Indirectly, private companies or individuals acquired royal charters from the English/British government to set up colonies. Once they had their charters, many of these became autonomous, the most famous example being the English East India Company (EEIC) which not only traded with India but also built forts at Bombay, Madras and Calcutta, recruited its own private armies and ultimately conquered the whole of Bengal.

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Reasons why empire often followed trade (PT1)

 If trade was expanding (both imports and exports) and the whole economy growing, the British government could expect a commensurate increase in its tax revenues. This revenue would come both from customs (tariffs levied on goods imported into the country) and excise (indirect taxes levied on goods bought and sold in Britain). The ever-present threat was that such trade could be undermined by either cheaper foreign competition (for example the French sugar-producing islands of the Caribbean) or that assets such as the newly-acquired plantation colonies were also at risk of capture. Such an event would deprive the country’s subjects of their fortunes and livelihoods and deny the government much needed revenue. Declaring sovereignty over a territory and establishing a protectionist trading system between it, Britain and/or her other colonies were a means of deterring and excluding foreign interlopers: they were also the building blocks of imperialism.


The English East India Company enjoyed a great deal of autonomy from the British government (at least up until 1784), but the principals under which it operated remained the same; it fought wars and annexed territory to secure its trading networks against both the local princes in India and French competition, then raised taxes from the inhabitants of these territories to pay for its private armies which would often largely be made up of native ‘sepoys’ (Indian mercenaries).    

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Reasons why empire often followed trade (PT2)

 These imperial developments were also designed to bring about an interdependence of trade throughout the English-speaking world; Britain would sell manufactured goods to the colonies (furniture, furnishings, clocks, textiles, clothes, crockery, firearms and metal products such as pots, pans, cutlery, nails, tools) and in exchange would import the cash-crops (sugar, tobacco, indigo dye and rice) of the plantation economies of Virginia, the Carolinas and Caribbean, or the calicoes, chintz, tea, spices and jewels of India. As an incentive to co-operate with this system, the planters in these colonies were often given a monopoly (for example, British farmers were forbidden from growing tobacco). New England did not quite fit this model because it did not have plantations but thriving manufacturing industries. Nevertheless, the province benefited from the demand for ships which were required in increasing numbers for this ever-expanding Atlantic trading network. As long as such an arrangement was seen as being mutually beneficial to all involved, this imperial ideology seemed to provide an economic rationale for the colonists to remain loyal to Britain (although it did not prevent illicit smuggling or trading on a large scale).

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Reasons why empire often followed trade (PT3)

Governments in the seventeenth and eighteenth centuries were generally governments by the few for the few. For example, the Members of Parliament who sat in the Houses of Lords and Commons in London would generally be wealthy aristocrats, landowners or property owners representing their peers who would have had the same kinds of interests. Only a tiny fraction of the (male) population would have had the right to vote as the franchise would also have been based on land ownership. Some – though by no means all - wealthy members of the political classes may have made their fortunes through overseas trade too (for example the Beckford family and their plantations in Jamaica) and bought land and estates in Britain in order to gain the prestige, social status and political power that this often conferred. Together with other members of the political elite who may well have had investments and shares in trading companies, Parliament was likely to make laws or declare wars which protected these interests. However, as England/Britain was one of the first nation states in Europe, an emotional attachment to sentiments of patriotism (national pride) and loyalty to the monarch undoubtedly played their part too.

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Reasons why empire often followed trade (PT4)

Furthermore, governments only had a limited role in this period: to protect property, maintain law and order and to defend the country from foreign invasion. As many of the King’s subjects and their property were now living overseas in the colonies of North America, the Caribbean and India as well as in Britain, this role had to expand accordingly and ‘defending the realm’ took on an ever more expansive meaning. Although the individual parliaments which had developed in each of the American provinces since 1619 basically ran their own affairs, the presence of the royal governors in most of them retained this imperial link to the British Crown and generally the colonies accepted the British government’s right to regulate the terms of their trade within the empire (i.e. the Navigation Acts and the mercantile system which these entailed).

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Reasons why empire often followed trade (PT5)

In an age of intense European rivalry, protection of overseas resources, either through war or monopolistic trading systems was seen as a matter of national survival: an imperial approach was seen as a means of ensuring a country’s survival and success, whilst denying their competitors or enemies the same advantages. In short, imperialism and mercantilism were designed to keep Britain strong and her competitors weak.

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Reasons why empire often followed trade (PT6)


The problem was - as the Romans had found much earlier - that the bigger an empire grew, the larger the amount of resources (manpower, raw materials and money) needed to defend it would become. Armies and navies were needed not only to win wars but to defend conquests afterwards and they could be ruinously expensive to maintain. Conflicts on the scale of the Seven Years’ War would not have been possible had it not been for the establishment of the Bank of England. Its governors were willing to bankroll the huge expenses involved in colonial conflict confident that the government would be able to service its debts from the anticipated receipt of future tax revenues which were likely to accrue from an expanded empire and its growing trade. This takes us back to paragraph 1…  


(France, on the other hand, which lacked such sources of credit, descended into state bankruptcy and eventually revolution.)   





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Slavery and the Slave Trade (PT1)

Slavery is a form of service imposed and maintained by force: no more, no less. It treats people as things, as pieces of property: to define it is to condemn it. So much is clear to us; but it has only become clear during the past 250 years. The historical problem is that of deciding why slavery was abolished, not why it arose, for it seems to have existed continuously since the dawn of history. In some societies it was mild or limited in scope, or eventually died out. The English in England, for example, had lost all the medieval forms of servitude by 1600 at the latest but they did not hesitate to introduce slavery into their new empire a few years later. In spite of their Christianity and growing civilisation, the English were still ceaselessly cruel in their social relations.

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Slavery and the Slave Trade (PT2)

The old British Empire (like that of its Dutch, French, Portuguese and Spanish rivals), was built on slavery. This meant not only that the Atlantic slave-trade, centring on the Guinea Coast of West Africa, was a large part of the world trade which the Empire was designed to capture, but that most of the Empire’s commerce was in the produce of slavery: sugar was the chief imperial commodity and the sugar plantations of the Caribbean were worked by slaves. Part of the sugar went to England, to enrich the merchants there, and part in the form of molasses to New England, to be made into rum. The sugar islands grew very little of their own food, so merchants found ready markets there for the produce of Ireland, Pennsylvania, New York and New England. The significance of this trade is unmistakeable: without it, the sugar colonies could not have existed and the North American colonies could not have developed. Exposed to new diseases, overworked and underfed, a slave on a sugar plantation had a life-expectancy of only seven years; this, and the shortage of women (which implied a shortage of children), meant that the planters had to replenish their labour force by regularly importing new slaves, which of course was good business for the slave-traders. The British East India Company and the English manufacturers got a share of the profit by producing iron, cloth, beads and other items with which to tempt the native African traders with victims to sell. This triangular trade was in fact the symbol of the Empire. The countryside around Bristol soon gleamed with country palaces for the merchants; Glasgow became a great city; Liverpool added to its indirect profits by operating a small slave-market of its own. The guilt of living off the misery and oppression of fellow human beings spread throughout prosperous British society. Between 1662 and 1807, nearly 3.5 million Africans were transported to the Americas in British ships; 95% went to the West Indies.

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Slavery and the Slave Trade (PT3)

 Nor was any part of the North American colonies free of guilt: by 1720, one-sixth of Boston’s population were black domestic servants. Pennsylvania, New Jersey and Delaware thrived on their exports to the slave-islands and the southern colonies; Maryland, Virginia, the Carolinas and Georgia all had slave-based, agrarian economies. If slaves were ‘lucky’ they would find themselves shipped to the North American mainland (only 5% of the total were carried there) rather than the sugar islands of the Caribbean or Latin America, where conditions were generally even worse and life expectancy even shorter. From 1619 the African population in the colonies steadily grew and became the largest ethnic group after the English. The total number of slaves imported to the thirteen colonies (or later states) before 1790 is thought to have been between 250,000 and 300,000, but very early (outside South Carolina) the African population began to show a natural increase which, by the end of the century, was approaching that of the Europeans. By 1775, there were approximately half a million African-Americans, many of whom had had first-hand experience of the horrors of the Middle Passage. 

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Slavery and the Slave Trade (PT4)

The whole system was one of forced labour and depended on the most brutal sanctions. Everywhere the codes regulating slavery as a social institution authorised the harshest punishments (including whipping or even being burnt to death) and gave their masters a free hand up to and including the power of life and death over their slaves. The feelings of fathers, mothers and children were not respected as families were often broken up when their master wanted to sell, and slaves were outside the protection of the common law: even in liberal Pennsylvania they were denied trial by jury. Above all, Africans were employed ruthlessly and incessantly to perform the heavy labour that the Europeans would not do. To be a great tobacco planter in Virginia two things were required: firstly, plenty of cheap land to replace the acres wasted by soil exhaustion and erosion and secondly, cheap labour. Oppression of the Indians provided the first, oppression of the Africans the second.

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Companies ,Commerce and Colonisation 1650-1763(1)

In the 1730s the term ‘commercial revolution’ was coined to describe the changes in Britain’s overseas trade which had occurred since the mid-seventeenth century. By 1700 the nature of English overseas trade had been transformed as commodities which had been traded in tiny amounts before 1650 leapt to importance. Although English trade to Europe continued to be important, it was overshadowed by the growth of that to the Caribbean, North America, West Africa and the Far East. English provincial ports like Bristol, Whitehaven, Liverpool and Glasgow began to challenge (but not overtake) London’s grip on the country’s overseas trade and all grew considerably. As a result, the English merchant navy trebled in size and the shipbuilding, banking and insurance industries which accompanied this growth all expanded considerably. In short, in this period England (after 1707 Britain) emerged as both a major commercial and imperial power, supreme over the Dutch and with France as its only serious competitor for the major share of world trade.


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Companies ,Commerce and Colonisation 1650-1763(2)

Elsewhere, the volume of the trade of the English East India Company (EEIC) increased enormously in the late seventeenth century: whereas between 1600 and 1640 the total value of its exports rarely exceeded £100,000 a year, by the 1680s it sometimes reached over £600,000. The Company’s imports from India to Europe, worth some £360,000 in 1670, tripled in value over the next thirty years, and then doubled again to reach nearly £2 million by 1740. These imports of calicoes (printed cotton cloth) and, increasingly tea, emphasised that by the late seventeenth century, English merchants were concentrating on the Indian subcontinent and trade to China rather than the East Indies and had secured Bombay (present-day Mumbai), Madras and Calcutta as major trading bases.

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Companies ,Commerce and Colonisation 1650-1763(3)

Across the Atlantic, the English empire developed much more quickly on the eastern seaboard of North America, providing both materials and markets. Although between 1660 and 1714 only four new colonies were established (New York, New Jersey, the Carolinas and Pennsylvania), their populations (and of the settlements already established after 1607) grew rapidly in this period. In 1640, the free population of the English colonies in America and the Caribbean was about 48,000; by 1700, it had risen nearly tenfold to about 440,000 and on the eve of the Revolution it stood at 2,000,000. This had come about by natural population increase and also by immigration from Britain and Europe. European immigrants were a mixed bunch with varied motives but included three types of religious migrants; Quakers who went to Pennsylvania in the 1680s; Huguenots to South Carolina in the same period and refugees from Germany to New York in 1708-9.

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Companies ,Commerce and Colonisation 1650-1763(4)

Further north, French-Canadian explorers in North America had established a vast interior network of trading posts covering the whole region of the Great Lakes and the Mississippi valley, with tentacles reaching the Ohio valley, westward to the edge of the plains and northward to Hudson Bay. This system, slightly secured though it was, was bound to bring conflict with the slowly but solidly expanding English interests in North America. Already as a result of the defection of two French-Canadian traders who had resisted the demands of a governor for a heavy share in their profits, the English had learned of the wealth in furs to be had by penetration of Hudson Bay. In 1670, Charles II granted a monopoly charter to a newly formed Hudson’s Bay Company (HBC) headed by Prince Rupert (Charles I’s nephew and Charles II’s cousin) and subscribed by court favourites. The HBC was given not only a trade monopoly but also the right to govern all the land draining into the great Bay (constituting one third of present-day Canada) and it at once established posts to compete with the French for the western trade. Supplied by sea, the English posts were economical and located within reach of the finest fur territory. To the south of the St Lawrence, the English successors to the Dutch in the Hudson valley had taken over their predecessors’ alliance with the Iroquois (an Amerindian federation) and were pressing hard for control of the Ohio valley fur trade and even threatening the French-Indian system to the west and north of the Ohio country. The Treaty of Utrecht (1713) resulted in the relinquishing of French claims to mainland Acadia, Hudson Bay and Newfoundland, leaving them firmly in British hands.

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Companies ,Commerce and Colonisation 1650-1763(5)

In addition to their free inhabitants, the American colonies included another major new element in the late seventeenth century: in 1640 there were hardly any slaves in the English colonies; by 1700 there were about 118,000 mainly in the Caribbean colonies of Jamaica, Barbados and the islands of the Lesser Antilles. By about 1660, the planters on Barbados, Antigua, St Christopher and Montserrat were already experiencing severe problems of labour shortage. The indentured labour system, which continued to attract British migrants to the mainland colonies and which had ample supplies of land to offer, could not be operated any longer in these small island colonies. The trade in slaves from West Africa, carried on at first mainly by the Dutch and then increasingly by the English merchants of the Company of Royal Adventurers to Africa (otherwise known as the Royal Africa Company), became the solution to the Caribbean labour problem, and between 1660 and 1700 the sugar plantation economy which developed in the West Indies was based entirely on African slave labour. However, in 1689 the Royal African Company lost its monopoly and this considerably widened the opportunities for other English merchants, particularly those from Bristol, who had hitherto been excluded from the trade. Its consequent expansion meant that by 1715 it had become a major axis of England’s new overseas trading pattern. The Atlantic colonies produced sugar and tobacco for import to England (and also for re-export to Europe) and also provided an expanding market for English manufactured goods.

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Companies ,Commerce and Colonisation 1650-1763(6)

The South Sea Company was also formed in 1711 for two reasons; firstly to compete with the East India Company in terms of attracting investment and secondly, to consolidate some £9,000,000 of national debt which was not secured against the proceeds of taxation, this unfunded debt being changed into South Sea stock. The South Sea Company from the start was thus principally a financial corporation, and was only marginally concerned with trading activities, which had originally been set up with the hope of receiving substantial trading concessions from the Spanish government. As a financial corporation, however, it was modestly successful and the debt conversion exercise of 1711 worked until 1720 when its share prices crashed in the bursting of the so-called ‘South Sea Bubble’. However, unlike the East India Company, trade was less significant than finance. The terms obtained from the Spanish government in the negotiations connected with the Treaty of Utrecht had been disappointing to those who had hoped that the South Sea Company would be permitted to play a major role in trading with Spain’s overseas possessions. In fact the Company had been allowed to share in the ‘Asiento’, or slave trade, and to send one ship a year directly to the Spanish colonies in South America. However, even these limited concessions were not fully exploited under George I, while the Asiento contract was surrendered in 1750. The East India Company, on the other hand, continued to expand its trading interests with the Far East throughout the period. It was also one of the few monopoly trading companies which was able to hold on to its privileges, when others like the Royal African (1689) and Royal Levant (involved with trade to Turkey) lost theirs. The pressure on the London-based chartered companies came to a large extent from merchants in other ports. Significantly, the growing trade with the American colonies, which in these years benefited western ports such as Bristol, Liverpool, Whitehaven and Glasgow much more than London, was handled by individual traders rather than by joint-stock companies, the Hudson’s Bay Company being the only one of its kind to operate in North America.

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Companies ,Commerce and Colonisation 1650-1763(7)

Whereas in the early seventeenth century, however, between eighty and ninety per cent of all exports had been textiles, by the beginning of the eighteenth century cloth had dropped to forty-eight per cent, and by 1750 was down to thirty-three per cent. During the seventeenth century the share of exports held by cloth had lost ground to the re-export of products which had originally come from outside Europe, especially sugar, tobacco and calicoes, most of which were bound for Europe. The ratio of re-exports to exports, however, did not continue to expand during the eighteenth century, remaining static at around thirty per cent. Sugar re-exports actually declined as the French developed their own sources of supply in the West Indies. London remained far and away the most important commercial centre in England. In 1760 the port of London was still handling over seventy-two per cent of English imports, seventy-three per cent of her exports and seventy-five per cent of her re-exports. Foreign trade took ships from London to every part of the known world. Their cargoes varied according to their destinations. Woollen cloth destined for northern, western and, increasingly, southern Europe filled the holds of many vessels, for cloth still dominated the export market.  

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Companies ,Commerce and Colonisation 1650-1763(8)

The truly remarkable growth in exports was that manufactured goods (e.g. metal-ware, cotton and linen) whose share rose from eight per cent in 1700 to twenty per cent by 1750. Of the 120,000 clocks and watches made in London each year, some 70,000 were exported, mainly to Europe. Most other manufactures found their way to markets outside Europe, to colonies in the West Indies and above all to the North American mainland and to Africa where they were exchanged for slaves. Manufactured goods were increasingly exported to the Far East, though the main demand from India, China and the Spice Islands was for metals, and especially for precious metals, which meant a drain of gold and silver from Britain to pay for the tea, calicoes, spices and luxuries of the East. Extra-European produce such as sugar, tobacco, tea, coffee, rice, spices, silks and raw cotton loomed increasingly large in Britain’s imports, though as late 1750 over half of all imported wares came from Europe.  

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Companies ,Commerce and Colonisation 1650-1763(9)

Did the Navigation Acts and the wars of the late seventeenth and early eighteenth century stimulate or disrupt English trade overseas? Both questions have produced varying answers from historians. What is certain is that the period of English neutrality from 1674 to 1689, when the Dutch remained at war with France, was a vital one in the progress of English overseas trade. This is probably the point at which English merchants overtook the Dutch in the colonial slave trade and the European carrying trade. By 1714, unlike 1650, London not Amsterdam, was well on the way to becoming the centre of the commercial world. Trade also expanded between 1714 and 1760. Exports rose by eighty per cent, re-exports by nearly fifty per cent and imports by forty per cent (most of this expansion occurred after 1740). The shift from trade based primarily on the exchange of cloth for European produce to trade in which the re-export of extra-European products and the export of manufactured articles is often described as a ‘commercial revolution’.       

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Companies ,Commerce and Colonisation 1650-1763(10)

Nevertheless, it must not be assumed that the volume of English trade to Europe decreased. The import of flax, hemp (plants whose fibres were used to make a variety of products such as textiles, rope, fishing nets, dye, paper, medicines, and soap), iron and timber from the Baltic, Scandinavia and Russia to London and other east coast ports grew very quickly too. The same can also be said of southern Europe, where wine, fine wool, iron, dyestuffs and fruit were exchanged for cloth, grain and fish. In 1711-15, Britain exported £942,000 worth of goods to the East Indies, the British West Indies, North America and Africa; exports to Europe were worth £5,520,000 – more than five times as much. These proportions remained more or less unchanged for the first half of the century. Even in 1736-40, at the height of the public enthusiasm for colonial war and expansion, exports to the colonies amounted to £1,819,000; those to Europe (including re-exports from the colonies), were valued at £6,838,000, more than three times as much. At mid century, trade with Europe was still twice as important as that with the colonies: £8,557,000 as opposed to £3,086,000. This had not changed much by 1771-5, on the eve of the American War of Independence and at the height of Britain’s disengagement from Europe, her trade with Europe at £7,725,000 was still double that with the colonies (£3,939,000). It was only after the loss of the American colonies, in 1786-90, that the colonial trade drew level with that of Europe.

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Companies ,Commerce and Colonisation 1650-1763(11)

However, it was true that by 1750 colonial trade made up a slightly larger share of Britain’s commerce than it had fifty years earlier: just over 20 per cent rather than 15 per cent. It was also the case that the thirteen North American colonies were now becoming more valuable than the West Indies, that the re-export of colonial goods to Europe through Britain tended to mask the true extent of this trade and that this upward trend was set to continue. All the same, more than three-quarters of British commerce was still with Europe. It could be argued that the preoccupation with colonial trade therefore reflected strategic rather than just economic concerns: colonial expansion was not just seen as an end in itself but designed to provide the resources necessary to maintain Britain’s naval supremacy and position as one of Europe’s great powers and to deny those overseas resources to potential or actual enemies. 

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Companies ,Commerce and Colonisation 1650-1763(12)

By the 1760s, a considerable proportion of the population of Great Britain derived a livelihood directly or indirectly from overseas trade which added to the country’s resources, provided essential raw materials and enhanced the general standard of living. As mentioned above, this commerce was conducted on protectionist lines. British shipping interests functioned behind the shelter of the Navigation Acts, which excluded the merchant marine of any foreign nation from the coastal trade or from the role of common carrier, and the ‘long haul’ was totally reserved by the provision that goods of Asian, African or American origin could only be imported in British ships. The preoccupation with colonies as parts of a controlled economic system, providing raw materials and furnishing an exclusive market for manufacturers, was never more intense than in the years following the Seven Years’ War, and was to contribute to crisis and revolution within the Empire in less than 20 years.

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Companies ,Commerce and Colonisation 1650-1763(13)

The West Indies (i.e. the Caribbean sugar islands) – still regarded as the most prized part of the Empire – supplied sugar, molasses and rum, which were either consumed in Britain or re-exported at considerable profit to northern parts of Europe, and also most of the raw cotton forming the basis of the fustian (thick cotton cloth) and cotton-linen manufactures in Britain. In return, they took a wide range of manufactured goods, a part of which found their way to the Spanish colonists in the Caribbean. Trade with the Caribbean dwarfed that with America throughout the period 1650-1770. As late as 1773, the value of British imports from Jamaica was five times greater than those from all the American colonies combined: sugar, not tobacco, was the biggest business of the eighteenth-century colonial empire. In 1775, total sugar imports accounted for nearly 20% of all British imports and for most of the eighteenth century, the American colonies were little more than economic subsidiaries of the sugar islands, supplying them with the basic foodstuffs their monoculture could not produce. But this commerce had reached the limits of expansion and was now being overshadowed by the opportunities offered by the American mainland.

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Companies ,Commerce and Colonisation 1650-1763(14)

The North American colonies, with their rapidly increasing population, provided a large and growing market for British manufactures of every description, and in return made contributions to the economic life of the home island which more often than not were indirect. The tobacco planters of Virginia and Maryland, and the indigo farmers of North Carolina stood in the most simple and direct economic relationship, exchanging for their wants their staple products, which under the Acts of Trade they could export only to Britain, and which were then consumed or processed for export. The northern colonies sustained their economies by means of yet more complicated patterns of trade and their ships acted as common carriers within the Empire. They shared in the slave trade between the West African coast and the Caribbean, carrying fish from the Newfoundland Banks, timber and draught animals to markets in the West Indies.

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The English East India Company (EEIC) 1600-1763

At the beginning of the seventeenth century (early 1600s), India was a wealthy and sophisticated subcontinent of 100 million people. Britain on the other hand, was a poor and illiterate country of 2.5 million!

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The English East India Company (EEIC) 1600-1763(2)

The English East India Company (EEIC) was formed in 1600 with the idea of entering the spice trade in the “Spice Islands” (Indonesia) and Asia in general but also to assume control of territory where possible. However, because the Dutch East India Company was much stronger in its organisation, size and ability to defend its possessions in Indonesia, the EEIC could not compete in the spice trade and therefore tried to concentrate on possible opportunities in India instead.

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The English East India Company (EEIC) 1600-1763(3)

The Indian sub-continent was ruled by the Mughal Emperor in Delhi; under him were a number of princes, known as maharajahs or nawabs. They were under the Emperor’s overall rule and paid taxes to him, but they were autonomous in their own separate provinces, collecting their own taxes and maintaining law and order. In 1614 Emperor Jahangir granted the EEIC an Indian royal charter, giving it protection and the right to trade in his empire and by 1650 the Company had established itself in Calcutta, Madras and Bombay. Its trade began to flourish and by 1675 the EEIC was sending £800,000 worth of Indian cloth to Britain in exchange for manufactured goods. The materials from India created a revolution in English fashions; cotton, muslin, taffeta, chintz, calico and silks provided the materials for British clothing and interior decorations until the development of synthetic fibres in the twentieth century.

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The English East India Company (EEIC) 1600-1763(4)

The EEIC’s existence in India was always dependent upon the goodwill of the Emperor and the princes who allowed it to continue to trade in return for substantial payments of tax. Important though the Company was in the growth of Britain’s overseas trade and empire, its activities made up only a relatively small part of India’s business: India had 24 per cent of the world’s trade compared to Britain’s 3 per cent!

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The English East India Company (EEIC) 1600-1763(5)

By the 1660s, the Mughal emperor was losing overall control over India and his princes. The EEIC now found that its warehouses and forts were increasingly vulnerable to attack by these newly independent maharajahs and nawabs, who sometimes resented its presence in their local kingdoms. The Company’s settlements in India had always been fortified but now, in these dangerous times, they had to be strengthened. Unable to gain enough manpower from its own English staff, the EEIC began to raise troops from amongst the Indians, equipping them with European weapons but subordinating them under their officers (these soldiers became known as ‘sepoys’). In theory, this was simply the Company’s ‘security division’, intended to protect its assets. In practice it became the company’s own private army, crucial in defending its business from the both the Indian princes and the French East India Company. Having begun as a trading operation, the EEIC now had its own settlements, territories, administrators and army: it was beginning to look more like a new British ‘Indian kingdom’ (or empire) in its own right. 

6] Britain and France went to war four times in the eighteenth century and fought each other in Europe, the Caribbean, America and India. Both countries and their East India companies attempted to win support   from the native Indian princes as they tried to protect their trading interests. The maharajahs and nawabs were competing and fighting amongst themselves anyway so they were more than willing to form temporary alliances with the British or French if they felt it would them an advantage against their rivals (for example by getting European soldiers and weapons). Consequently, military conflict in India took the form of joint Anglo-Indian armies facing joint Franco-Indian ones. Ultimately, it was the fragmentation of the Mughal Empire into smaller, independent states that enabled the French and, ultimately, the British to divide and rule the sub- continent, starting with Bengal (the province around Calcutta).



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Mercantilism and the Navigation Acts (PT1)

The pattern of economic relations linking the colonial economies to the mother country was defined by a loose policy, later described as “mercantilism” (at the time it was referred to as the ‘mercantile system’). According to mercantilist principles, a nation’s prosperity depended upon the creation of a self-sufficient economy, free from foreign competition. In theory, colonies were sources of raw materials and markets for the finished goods produced in Britain.

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Mercantilism and the Navigation Acts (PT2)

Ultimately, it was the mother country which would benefit most by this arrangement, but the mercantilist theory held that the colonists too would prosper proportionately. In imperial affairs, these attitudes led to the formulation of a series of Navigation Acts enacted by the English and later British Parliaments to regulate the flow of commerce. First passed in the mid-seventeenth century, the Navigation Acts protected English shippers from foreign competitors by requiring the use of English vessels in all colonial trade. Additional legislation enumerated specific commodities – tobacco, sugar, cotton and indigo, for example – which could only be sold in England; eventually the list included rice, furs, lumber, iron, and naval stores as well.


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Mercantilism and the Navigation Acts (PT3)

This monopoly of trade was intended to assure the mother country of a cheap and reliable flow of natural resources, protected from foreign competition. The Navigation Acts functioned not just to raise taxes, but to direct the flow of trade. In theory, such direction protected all members of the British Empire, regardless of their geographic position.

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Mercantilism and the Navigation Acts (PT4)

The Navigation Acts were seldom as exploitative in reality as they appeared in theory. Though the mercantile laws required the colonies to trade certain goods exclusively with Britain, most colonial commerce would have sailed in that direction anyway as colonial Americans since trade networks usually depended upon loyal agents and family connections. English manufactures, moreover, exceeded European goods in quality, availability and cheapness: a logical reason for the development of trade with America. More specifically, the Navigation Acts encouraged a thriving shipbuilding industry in New England, and by 1776, one-third of Britain’s commerce moved in American-made ships. The mother country also subsidized certain staples, especially indigo, thus artificially bolstering an otherwise marginal industry.

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Mercantilism and the Navigation Acts (PT5)

Relations between the North American colonies and Britain became in many ways closer rather than more distant in the decades before the Revolution as the Atlantic economy was becoming more integrated and more important for both. By the eve of independence, not only was 30% - 40% of trade between the colonies and Britain carried in American-built ships, over a third of British exports went to North America. The British goods purchased by colonial Americans (e.g. the Virginian planters) were the same consumer products as were sold in Britain, leading to further integration on the cultural level. The city of Philadelphia (in Pennsylvania) was the most important commercial centre in the British Empire after London and Liverpool

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Mercantilism and the Navigation Acts (PT6)

Colonial Americans recognised these advantages and ascribed them to the peculiar blessings of all British people. Yet they knew too that the system did not always function efficiently or wisely. The Molasses Act of 1733 for example, which was passed through the influence of the West India sugar lobby (i.e. those MPs with plantations or commercial interests in the Caribbean) in the British Parliament, established a prohibitive duty on sugar imported into North America from French or other islands, a rate so high as to threaten the manufacture of rum in New England (Boston exported 600,000 gallons of it per year by the mid-eighteenth century). Colonial merchants responded by ignoring the law and shipped their goods with impunity for three decades. However, this disobedience was not always possible in other areas of the economy, and the Navigation Acts bore heavily on tobacco and rice planters, creating sporadic depressions in both industries.  


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Mercantilism and the Navigation Acts (PT7)


Mercantilism was a political as well as an economic doctrine. It reflected the realities of a world in which competition between different nations, in all fields, was deadly and continuous. It also intensified that competition: a large part of a mercantilist ruler’s purpose was to deny to his rivals, and secure to himself, as big a piece as possible of what was thought to be a largely static quantity: the wealth of the world. It was in part a system of defensive commercial regulation; but was also the continuing, institutionalised expression of the ambitious, aggressive, outward-looking spirit which had inspired the first American settlements, the first quest for the world’s trade. Wealthy and influential men demanded wars, colonies and Acts of Parliament to help them on the quest for riches; the rulers of England (in the seventeenth century) and later Britain (in the eighteenth), looking to military strength, prosperity and quiet of the realm, were happy to co-operate; and so mercantilism was born, to put its stamp indelibly on the Atlantic Empire, both in its creation and government.

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Mercantilism and the Navigation Acts (PT8)

By the late seventeenth century, the English overseas possessions had come to play an essential part in mercantilist thought. Economic self-sufficiency was, as always, the aim, but now it was conceived on an imperial, not merely a national scale. All members of the Empire – colonies and mother country – would contribute to the prosperity of all; outside supply, of skills or produce, would not be needed. From this basis the trade of the world would be captured and thus the wealth and glory of England would be strengthened. The colonies were not supposed to have any purposes of their own: they existed for the sake of the mother country which had founded, nourished and now protected them. The colonists’ interests could never be allowed to take precedence over England’s: their role was simply to provide, cheaply, those things – chiefly crops such as sugar, rice and tobacco – which the English could not or would not grow at home. They would thus free England from dependence on foreigners and furnish the English merchant with a market which he could profitably monopolise, once effective laws had been passed excluding foreign competitors; and such laws, the celebrated Navigation Acts, were passed between 1651 and 1696, to be administered by the Board of Trade. Their purpose was to restrict the colonies to the production of raw materials and to monopolise the profits of the carrying trade: no foreigner should grow rich as a result of activities carried on within the English realm or colonies. Under penalty of forfeiture of ships, it was laid down that all vessels importing or exporting goods to or from an any English ‘lands, islands, plantations or territories’ in Asia, Africa or America, or carrying goods from such possessions to the English realm, or carrying exports out of the realm, must be ‘truly and without fraud’ English, with English masters, and crews three-quarters English. Foreign goods might come to the realm in such vessels, otherwise a foreign ship would pay double the normal customs duty. Furthermore, certain American products such as sugar, tobacco, cotton, indigo and other dyes could only be exported to other colonies or England.

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Mercantilism and the Navigation Acts (PT9)

Despite these restrictions (which were often undermined by a large number of smugglers), the American colonies did benefit from this system in many ways too. Great Britain wanted her plantations to be contented and prosperous, and took steps to make them so. The tobacco colonies of the southern mainland (Virginia, Maryland and North Carolina) were only allowed to trade with Britain but they were given a monopoly of the British market, heavy duties being placed on foreign leaf and British farmers being forbidden to grow any. Similar advantages were given to South Carolina, which grew rice and indigo, and of course to the British sugar islands in the Caribbean, which would otherwise have suffered from the competition of cheaper French sugar. The colonies of the northern mainland, from Pennsylvania to New Hampshire, had their own profitable place in the system as the British West Indies became dependent on them for provisions. New Englanders were encouraged by the imperial government to build and sail ships and eventually they supplied around a third of all British bottoms, owning half of the 3,000 vessels involved in the colonial trade.

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Mercantilism and the Navigation Acts (PT10)


On the whole then, the mercantilist system must be reckoned to have fulfilled the purposes for which it was designed: it made the prosperity of all parts of the Empire possible. Its drawbacks were its inefficiency and incompleteness: the Board of Trade could never induce Parliament to make it watertight and the customs officers were too few, too ill-paid and too corrupt to plug the gaps.

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Imperial wars The Nine Years' War (1688–97)(1)

also known as The War of the League of Augsburg

In the autumn of 1687, the Netherlands’ Prince William of Orange was watching events across the Channel with increasing disquiet. England’s king, James II, was openly Catholic and his policies were alienating his Protestant subjects. Having destroyed his credibility at home, the danger was that James might turn to another Roman Catholic monarch for support, Louis XIV of France – the king whose army and navy was poised like a dagger at the Dutch Republic’s heart. Louis and his ambassador had encouraged such an alliance ever since James had come to the throne in 1685. James’s brother, Charles II, had taken up a similar offer in 1670 and that alliance had nearly crushed Holland out of existence. If it happened again, the consequences could be even worse. France not only had the largest army in the world, but now the largest navy. England had the second largest. The two together could control the Channel from the western tip of Brittany to the North Sea; they would put the Dutch Republic in a permanent stranglehold that it could never hope to break. As Prince of the Dutch Republic, Prince William could not let that happen. William understood little of English politics, still less of its navy. But he did understand power, so to prevent a union of the French and English fleets, and to keep Louis XIV at bay, he began to conceive a plan so audacious and daring that he dared not mention it even to his closest political allies. He would launch a pre-emptive invasion of England itself, in order to knock James out of the French orbit and bring the country on board as Holland’s ally, not its enemy, as it had been in the last three wars.

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Imperial wars The Nine Years' War (1688–97)(2)

In November 1688, one hundred years after the Spanish Armada, William of Orange launched another invasion of the British Isles. However, this invasion was aimed not at crushing England, but forcing it to assume the leadership of Europe. It would trigger the so-called ‘Glorious Revolution’ and lay the political foundations of modern Britain. The Dutch Republic would also need allies on land: William turned to the German princes in the League of Augsburg, who had organised themselves to prevent Louis XIV’s aggression along the Rhine frontier. The reality of modern sea power was beginning to sink in. Even without leaving port, a large powerful fleet like that of France posed a potential threat to its neighbours’ sea routes and access to markets. The Dutch navy had declined to barely half the tonnage of the French navy, but the Royal Navy, with more than one hundred and seventy ships, including almost as many first-rates as the French, could make up the difference. Only England could exert enough control over the Channel to offset Louis’s massive advantage in land forces.

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Imperial wars The Nine Years' War (1688–97)(3)

William was also heir to the throne of England, since James had no sons and William was married to his eldest daughter, Mary. He was a Stuart himself on his mother’s side. He kept close tabs on English politics and kept a network of influential contacts and supporters in the kingdom. They too feared Louis: given a choice between submitting to a Dutch invasion or France and the Roman Catholic Church, they would not hesitate. William was already a hero for having stood up to Louis XIV and was widely seen as the champion of international Protestantism. All he would need was a valid excuse for putting his plans into high gear, and he would find plenty of collaborators once he reached the shores of England. In the event it was a bloodless victory as the leaders of the English armed forces decided to back William’s bid for power and James was forced to flee to France, to begin life as an exile under the personal protection of Louis XIV. The ‘Glorious Revolution’, as it became known, had accomplished what William most feared, although only after he had won: James was now Louis XIV’s committed ally. However, Dutch and English interests were now firmly one, which had, among many other things, important consequences for the English East India Company (EEIC) and its former competitor, the Dutch East India Company.  A number of Dutchmen joined the board of the EEIC and this amounted to a merger between the two companies, from which Britain gained greatly since she could now call upon the more advanced banking and financial skills which the Dutch had developed. One example of this was the creation of the Bank of England in 1694, which became an indispensable asset to all British governments as it enabled them to fund the colonial wars of the eighteenth century through long-term credit rather than by short-term parliamentary grants of taxation.

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Imperial wars The Nine Years' War (1688–97)(4)

William declared war on France in April 1689: as Britain had no standing army with which to fight on the continent, this became a naval war by default. The series of wars which the Royal Navy had fought against the Dutch between 1652 and 1674 did nothing to prepare it for the long, bitter conflict ahead, which would drag on for more than two decades and on three continents – its first experience of world war. The constant threat of invasion, the need to support land operations in Ireland and Europe and the necessity of protecting convoys in the Atlantic and Mediterranean, would demand a full-time and professional service. The Nine Years' War (1688–97), or the War of the League of Augsburg, which William joined against France had already been raging for a year as Louis XIV’s armies marched into the Rhineland of Germany. A coalition including some German states, England, Holland and Spain attempted to prevent Louis XIV’s expansionist aims. Although the war was fought primarily in Europe, it also became a major naval and colonial war for England and France as they both had substantial empires overseas.

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Imperial wars : The Nine Years' War (1688–97)(5)

For the Royal Navy, it faced an enemy unlike any other. The Dutch, like the Spanish before them, had fought primarily defensive wars, struggling to keep their seaborne empires from the encroaching English. The new French enemy was tough, aggressive, and more organised, with a centralised bureaucracy and powerful economy. In 1689, the French navy had more, better-armed and faster ships, and for the first and only time in its century-long conflict with its British rival, better and more experienced admirals. However, although a French naval victory might make them masters of the Channel, they could not stay there. There was not a single deep-water harbour between Brest and Dunkirk which they could use as a base for major fleet operations. The English coast, by contrast, offered a series of well-protected ports and harbours: Plymouth, Exeter, Torbay, Southampton, Portsmouth and Spithead, from which the navy could regroup, outfit and maintain its vessels and strike at its enemies from any direction. Geography had given the English a permanent advantage in war for control of its seaways; French sea power would struggle against it for the next century, to no avail. Geography deterred the French, but so did the presence of the main royal fleet, even in defeat. A new concept in naval strategy was born, that of a ‘fleet in being’ whose simple existence would be enough to deter an opponent from acting offensively. It would become a hallmark of the British navy for more than two hundred years, and the justification for maintaining a large and powerful battle fleet in peacetime as well as at war. As the new navy had doubled in size, cost two million pounds a year and had to fight constantly on three fronts at once – the Channel, the Irish Sea, the Atlantic and the Mediterranean – how could the government pay for it? Bills (bonds) were issued, secured by future tax revenues from the Exchequer and paying interest. Since customs and excise taxes paid the bulk of the bills over the long haul, creditors (those lending the government money) could see that a growing economy from overseas trade meant growing tax revenues too, which was precisely what a strong navy guaranteed. From this point of view, the navy was more than paying for itself. The modern English state had arrived, with powerful fiscal [tax-raising] and military tools at its disposal. Because of this, the government was able to spend more than £42 million on the wars of the League of Augsburg; expand its army to 75,000 men and the navy from 109 ships in 1690 to 176 ten years later.

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Imperial wars :The War of the Spanish Succession(1

By 1697 Louis XIV’s ambitions had been blunted but not beaten as neither side had won a decisive victory. But just as one major European war was coming to a close, a new one was brewing. Spain’s last Habsburg king, Carlos II, was dying and, since he had no children, the issue of what would happen to Spain and its still-valuable overseas possessions, especially in Central and South America, perplexed European diplomats. Unfortunately for the rest of Europe, the best claim belonged to a grandson of Louis XIV, Prince Philip of Bourbon and, from his deathbed, Carlos named him as his heir. By gaining indirect control over the Spanish empire, Louis would gain a more sweeping victory than the one he had just been denied and the allies of the Nine Years’ War reunited to prevent this happening. This War of the Spanish Succession would last almost twelve years and again would constitute a demanding test for the Royal Navy all over the world. Eventually, mounting debts would cripple the French state and its economy as Louis’ enemies encircled France and forced him to accept a peace settlement.

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Imperial wars :The War of the Spanish Succession(2

The peace treaty signed at Utrecht in 1713 (see diagram) confirmed Louis’ grandson Philip as king of Spain, but with the proviso that he could never be king of France as well. Britain gained Gibraltar (and Minorca) which would become the linchpin of the British Empire in the western Mediterranean and of the British navy’s presence in the region right down to the present day. Possession of Gibraltar meant that the European continent was surrounded by British sea power on two sides. The Royal Navy could now divide its enemies and their forces, while Britain’s supremacy at sea gave it unprecedented opportunities for manoeuvre on land. The pattern of the future was fixed, with the British enjoying a geographical advantage that no other European power could match. By keeping the French fleet split between its Mediterranean and Atlantic bases, which thanks to Gibraltar and Minorca the Royal Navy could now do, the British home fleet held a permanent numerical advantage over its archival. Never again would the French navy come as close to challenging that supremacy as they did in 1690-2. Furthermore, by the Treaty of Utrecht Britain also secured its possessions in Canada (Hudson Bay and Newfoundland), which constituted a third of the modern-day country. Together with its other colonies in North America and the Caribbean, and the East India Company’s growing base at Bombay, this seaborne British empire was about to become the centrifuge of a new world economic system centring in the Atlantic, and on a single product: sugar. 

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Imperial wars :The War of the Austrian Succession(

By the 1730s, France’s economy was growing even faster than Britain’s. French merchants plunged into the new markets in sugar, rum, and slaves in America, benefiting, like everyone else, from the British navy’s suppression of piracy in the region. The same was true of the textile trade in Asia. By 1735 France’s East India Company was outstripping both the Dutch and English in value of sales. France’s army remained the best in the world and its navy steadily rebuilt itself. By 1740 France had more than fifty-three ships of the line, including the impressive new seventy-four gun, two-deck battleship, the best and most modern warship afloat at this time. Fifty-three was still less than half of the total British strength, but once it joined up with Spain’s fifty battleships, Britain’s naval supremacy looked very precarious indeed and overconfidence gave way to pessimism and panic.

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Imperial wars :The War of the Austrian Succession(

However, by the conclusion of the war in 1748, Britain’s position was more secure: the Royal Navy dominated the seas surrounding Western Europe and held the reigns of power in America and the Atlantic. Furthermore, in India, the army of the French East India Company, seeking to challenge the EEIC’s influence, attacked and seized Madras. In the five years from 1746 when the French had the larger numbers and held the upper hand, Robert Clive of the EEIC, proved himself to be a successful military leader when it came to outmanoeuvring the enemy. Both the French and the British attempted to win support from the native princes, among whom there was intense rivalry. Consequently, the military conflicts took the form of joint Anglo-Indian armies facing joint Franco-Indian ones. In the forming of these alliances, intrigue, subversion and double-dealing prevailed and it was a world which Clive excelled in: by 1754, the French had entirely abandoned their attempt to oust the British from India.     

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The Seven Years’ War (or the French and Indian War

The Seven Years’ War was a large-scale conflict which took place all over the world - in Europe, North America and India – and was really the first ‘world war’. It was fought between Britain, Prussia (and later Portugal) on one side, and France, Austria, Russia, Saxony (and later Spain) on the other. Because countries like Britain, France, Spain and Portugal were imperial as well as European powers, this became both a large-scale naval conflict and a war for overseas empire, particularly for Britain and France who continued to compete with each other for the possession of North America and India.

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Imperial wars: The Seven Years’ War (or the French

At the beginning of the war, France was in control of a huge swathe of North America which ran from the port of New Orleans on the Mississippi Delta, up through the interior through the region they had named Louisiana, all the way to the Great Lakes and the Province of Quebec to the St Lawrence River and the cities of Montreal and Quebec (present-day Canada). The British had also established an extensive arc of territory (encompassing 18 different colonies), but whereas the French had followed the great rivers of the interior, the British Empire, as we have seen, was mainly on the eastern seaboard of the continent. Both nations also possessed many of the sugar producing islands in the West Indies such as St Kitts, Antigua, Jamaica [British] and Martinique, Guadeloupe and Haiti (French) which depended on slavery and the slave trade. Considering its vast implications (nothing less than control of the North American continent) the war itself had obscure origins on the western frontier. French fur traders had moved into the Ohio River valley and established a network of trading posts and forts, hoping to contain British expansion from the east coast. Meanwhile, colonial land speculators from Virginia and fur traders from Pennsylvania had also entered the area. Gunshots were exchanged, provisions stolen and soon the entire frontier was at war.

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Imperial wars: The Seven Years’ War (or the French

Britain’s early military strategy proved dismally ineffective. In 1755, General Edward Braddock led the pride of the British army into an ambush set by French soldiers and their Indian allies from Canada. Braddock’s defeat – soon enshrined in American folklore to sum up and stereotype British arrogance – shocked colonials everywhere and was followed by French victories in New York and Pennsylvania. However, when William Pitt was appointed by the British government to manage the conduct of the war in 1756, his energy, drive and organisational skills transformed its fortunes. Pitt was determined to eliminate France from North America and began rushing men and supplies to the colonies. He also won friends in the American assemblies (or parliaments) by promising to repay the colonials for any expenses laid out for equipment and pay. (Over £1 million would be earmarked for this: a huge sum in the eighteenth century.) The American colonists responded much more enthusiastically than previously: Massachusetts, for example, voted for the supply of 7,000 volunteer troops (a militia). The French in North America could probably put together no more than some 16,000 of their own soldiers together with whatever Native American Indians they could get to support them, but those could now be counterbalanced by Mohawks and other tribes among the Iroquois nation who, seeing the writing on the wall, gravitated towards the British. By the end of 1757, there were nearly 50,000 British imperial troops committed to the war in Canada: almost two-thirds of the entire population of New France, the French colony in Canada. (In comparison, Britain sent 45,000 troops into Iraq in 2003.)

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Imperial wars: The Seven Years’ War (or the French

Around £5.5 million was spent on the North American campaign alone; £1 million on the Royal Navy and another £1 million on fulfilling the promise to pay for colonial troops. Pitt had succeeded in persuading the country that this time the war had to be all or nothing. He also recalled or demoted incompetent generals like Braddock and Loudoun and appointed younger, more promising ones such as James Wolfe and William Howe. Overall command was given to the more capable Jeffrey Amherst and he was provided with unprecedented troop strength: 14,000 alone for the attack on the French fort of Louisbourg. British troops responded with enthusiasm, winning victory after victory until the famous encounter between General Wolfe and the French General Montcalm, resulted in the conquest of Quebec in 1759. That triumph effectively ended French resistance in Canada.


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Imperial wars: The Seven Years’ War (or the French

In India all the French bases, including the main one at Pondicherry, had also been captured and British gains and French losses were formalised in the Treaty of Paris in 1763. The East India Company gained control of Bengal, the richest province in the subcontinent and the size of France and the French accepted that in future they would not attempt to encroach on the EEIC’s established trading rights in India. Taken together, Robert Clive’s triumphs and the Peace of Paris marked a critical stage in the growth of Britain’s eastern empire. British military and commercial supremacy in India was recognised and the EEIC had extended its authority over a further 50 million Indians.

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Imperial wars: The Seven Years’ War (or the French

Britain’s victory in the Seven Years’ War was based on naval superiority. But this in turn was possible only because it had one crucial advantage over France: the ability to borrow money. More than a third of all Britain’s war expenditure was financed by loans. The institutions copied from the Dutch in the time of William III had now come into their own, allowing Pitt’s government to spread the cost of war by selling low-interest bonds to the investing public. Behind every British naval victory stood the National Debt; its growth from £74 million to £133 million during the Seven Years’ War was a measure of Britain’s financial might.

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