Trade with West Indies

The beginning of the 16th century saw a turnover in world commerce. Due to geographical discoveries the world’s commerce was shifted from old trade routes to new ones. New discoveries and routs also meant new leaders. Old economic powers such as Italian states in the South, and Hanseatic League in the North, were replaced by the states with direct access to Atlantic Ocean – Spain, Portugal, France, England and Dutch Republic. Overland Silk Road route that stretched throughout Asia and brought Asian goods to European waters was now replaced with ocean trade. European desire for eastern goods led them west.

In hope of reaching India by traveling west, Columbus discovered new lands. Although he discovered new continents, he died in belief that he discovered a western route to India, as was his intention. Because of his beliefs the Caribbean Sea area came to be known as the West Indies.

Foreign trade also became a focal point of national trade policy, of course until it did not inflicted damage to domestic industry. Governments assisted the foreign trade primarily by the creation of state monopolies for commercial traffic and navigation between the metropolis and its colonies as well as monopolies for coastal sailing. One way of stimulating the trade were benefits for shipbuilding and shipping, such as rewards for building ships in domestic ports or higher taxes for foreign ships and merchandise. Some of the countries such as England, France, Spain and Sweden even forbade imports except on domestic ships or on the ships from the country where the goods were produced. In later periods colonies were not established just for the exploitation of natural resources but were now looked as a market for selling the good from the governing country.

Christopher Columbus discovers The Americas for Spain ( 12 October 1492), painting by John Vanderlyn.

The period from 16th to 18th century in the world commerce can be divided to two sub-periods: the first is the 16th century when Spain and Portugal are the powers holding oceans and trade, and the second from early 17th to late 18th century when the dominant powers are England and Dutch Republic. By the end of the 18th century England was undisputed ruler of oceans and trade.

As most of the early discoveries were funded by Spain and Portugal it was only natural that these states were the first colonial and trading powers in the early modern age. Portugal was more attracted to trade with south and southeast Asia (East Indies) then to focus on the West Indies.

During the 16th century they were masters of colonial goods such as spices and exotic fabric but in the 17th century they were almost entirely expelled from East Indian trade by the Dutch and the English. This made them to turn to their West Indies possessions, namely Brazil.

The Cantino planisphere world map is the earliest surviving map showing Portuguese geographic discoveries in the east and west. It is named after Alberto Cantino, an agent for the Duke of Ferrara, who successfully smuggled the map from Portugal to Italy in 1502

There they erected plantations of sugar, coffee and tobacco, and in later period they started to exploit Brazil’s gold. Just how important was Brazil to Portugal can be seen from the fact that by the end of the 17th century quarter of Portugal’s income derived from Brazil and the amount of trade with it was equal to the amount of trade with all other countries.

Spain was the first country that started to trade with West Indies, although they were mainly interested in exploiting the country’s gold and silver. Their obsession with precious metals started already with Christopher Columbus (1451-1506). On the first island he came, San Salvador, he noticed that natives wear gold jewelry and he traded them for worthless things. Spaniards sacked and destroyed old civilizations in their lust for gold but they also tried to monopolize the whole trade with new territories. They even divided the word by half. According to Treaty of Tordesillas, signed on June 7, 1494, Spain had the exclusive right to all the territories west of the demarcation line in the Atlantic Ocean, and Portugal east of the line. The Treaty was even sanctioned by the pope Julius II in 1506.

The Spaniards tried to impose monopoly to West Indies trade without any exception. All the products from the colonies were to be sent to Spain, the goods needed in colonies could only be imported from Spain and only the Spanish merchants were allowed to engage in commerce with their colonies.

The monopoly that Spain tried to impose was already broken by the middle of 16th century. Spanish merchants gave all of their attention to precious metals and other commodities from colonies, and the commodities the colonies needed, were not in their sphere of interest. This kind of attitude inevitably led to smuggling by merchants of other nations. French, English, and Dutch merchants in Spain had agreements with Spanish merchants to sign theirs bills of lading and to present it as theirs (Spanish) with the officials. The wealth imported from Spanish colonies eventually ruined Spain’s economy, since industry and trade, both foreign and domestic, were neglected.

Map of the New Netherland published by Nicolaes Visscher II (1649-1702).

One of the companies created to trade with West Indies was the Dutch West India Company, “Geoctroyeerde Westindische Compagnie” (WIC). On June 3, 1621, it was granted a charter for a trade monopoly in the West Indies – territories consisted of the west coast of Africa, North and South America and the islands in the Pacific east of New Guinea.

New Netherland (Latin: Nova Hollandica or Novum Hollandium) was a 17th-century colonial province of the Seven United Netherlands that was located on the East Coast of North America. The claimed territories extended from the Delmarva Peninsula to extreme southwestern Cape Cod, while the more limited settled areas are now part of the Mid-Atlantic States of New York, New Jersey, Delaware, and Connecticut, with small outposts in Pennsylvania and Rhode Island.

It was organized similarly to the much more successful Dutch East India Company (VOC). It had five chambers: in Amsterdam, Rotterdam, Hoorn, Middelburg and Groningen, of which the chambers in Amsterdam and Middelburg contributed most to the company. The board consisted of 19 members, known as the Heeren XIX (the Lords Nineteen). The original charter was set at 24 years. Although the principal activity of the company was trade, it established colonies, mostly on the expense of the Portugal, and was engaged in privateering.

Colonies managed by the WIC included the New Netherland area from 1623, which included New Amsterdam (present-day New York), Connecticut, Delaware, and New Jersey. A combination of low Dutch immigration, autocratic administration, and under-investment, however, damaged the ability of New Netherland to compete with the neighboring English colonies, and it was ceded to the English in 1667. The Company established and managed several settlements on Caribbean islands, and Suriname and Guyana at Caribbean coast. In Africa, posts were established on the Gold Coast (now Ghana), the Slave Coast (now Benin), and briefly in Angola. Company’s ports on the west African coast served mostly to supply slaves for plantations in the West Indies and South America.

Privateering was another well-developed activity of the WIC. The main target of privateering activities were Spanish treasure fleets, loaded with American silver and gold bound for Europe. The biggest success on that field was achieved in 1628 when the WIC’s fleet under the command of the admiral Piet Hein captured 12,000,000 guilders of booty in gold, silver, and other expensive trade goods. Due to the Peace of Westphalia (1648) that ended the Eighty Years' War (1568–1648) between Spain and the Dutch Republic the hijacking of Spanish ships was no longer allowed.

The original city map of New Amsterdam called Castello Plan from 1660. New Amsterdam was a 17th-century Dutch settlement established at the southern tip of Manhattan Island, which served as the seat of the colonial government in New Netherland territory. It was renamed New York on September 8, 1664, in honor of the then Duke of York (later James II of England) after it was traded to the English along with the rest of the Dutch colony in exchange for control of the Spice Islands.

From then on company was in decline and was dissolved in 1674. Because there was still demand for trade with West Indies (mostly slave trade) and the existence of Dutch colonies it was decided to establish the Second Chartered West India Company (also called New West India Company) in 1675. The new WIC had the same trade area as the first, and it took over all ships, fortresses, etc. of the previous WIC. The final blow to the WIC was inflicted during the Fourth Anglo-Dutch War (1780-1784). The company was not capable of defending its own colonies and many were lost. In 1791, the company's stock was bought by the Dutch government, and on January 1, 1792, all territories previously held by the WIC reverted to the rule of the States General of the Dutch Republic.

The Swedish company for trade with West Indies was in close, although informal, connection with the WIC. The strong supporters and advocates with the Swedish government to found the company were former high officials of the WIC, Peter Minuit and Samuel Blommaert

The charter began in 1637 with the principal aim of establishing trading posts and colonies in North America. The territories claimed by the company were known as New Sweden and were located in the Delaware region. However the history of New Sweden was relatively short since it was conquered by the Dutch in 1655.

Danes were also active in trade with West Indies and in 1671 the Royal Chartered Danish West India and Guinea Company was founded. The Company was given a royal charter, granting it a national monopoly as well as several other favors. The company traded between Europe, Africa and the Danish West Indies that included islands St. Thomas, St. John, and St. Croix.

It was involved in triangular trade: European manufactured goods were traded in Africa for slaves and in the Danish West Indies for colonial goods; slaves were traded in West Indies, and the colonial goods, mostly sugar, were sold in Europe. Eventually sugar plantation owners became dissatisfied with the Company’s monopoly and they appealed directly to the King, after which the Company was dissolved in 1754.

In the 17th century France also decided to take her share of profit from international trade by establishing chartered companies. Especially Jean-Baptiste Colbert, Minister of Finances of France, devoted much of his energy to the reorganization of industry and commerce. With this in mind he founded several trading companies in 1664. One of them was The French West India Company or “Compagnie française des Indes occidentales”. It was established on May 28, 1664, and its seat was in La Havre.

Its charter gave it the exclusive right of exploitation of Africa between Cabo Verde and Cape of Good Hope, property of Louisiana, Acadia, the Antilles, Cayenne, and of South America, from the Amazon to the Orinoco. The exclusive privilege of commerce in those places was granted for forty years.

The stock of the company was 6 million livres and in less than 6 months it equipped 45 vessels. The company took possession of all the places granted to it by its grant but was unsuccessful. The French in America were so dissatisfied with the company’s policy that they favored Dutch contraband. In 1674, the grant was revoked and the various countries were reunited to the King's dominions, as before.

Thanks to its trade and colonialism England became the leading maritime power. Although it had one of the most successful companies in the world, the English East India Company (EIC), it newer chartered a sister company, or the West India Company. The EIC had a monopoly on huge area in Indian Ocean and east part of the Pacific.

Trade with the West Indies was never under the state granted monopoly of specific company with such a huge area. It was conducted by individual traders and chartered companies with much more smaller area of operations. Among these companies were Virginia Company and Plymouth Company, both chartered by the English crown in 1606 to colonize the eastern coast of North America. The companies even had overlapping territory.

In 1615 the Somers Isles Company was formed to operate the English colony of the Somers Isles, also known as Bermuda, as a commercial venture. Some of the other companies were the Hudson's Bay Company founded in 1670 with a monopoly over the region drained by all rivers and streams flowing into Hudson Bay in northern Canada and the South Sea Company founded in 1711 with the trade monopoly to South America.