Trading companies – The British Empire
Apart from just trading companies, other causes in the early years allowed the British Empire to be succesful. Some of this included the Royal Navy, the Wars and the Government. Trading companies played a vital role in the growth of the British Empire. In whole, trading companies helped create footholds and settlements on various different colonies they owned. These factories and industies were the bases of the goods – which was the source of most profits. They were settled in countries which seemed like they would become major producers and trading in commodities which buyers thought of as new luxuries.
There were two key companies that were highly dominant and proved to be succesful in expanding the empire. The Royal African Company began after the failure of The Royal Adventurers of Africa due to interlopers and not rising up to its expected standards. A few months later, the RAC was created and it intended to make a huge amount of profit by using slaves from Africa on their plantations. Slave labour was seen as the best form of labour in those days and their demand was very high. It turned out that this type of trade was highly profitable and the RAC transported a great deal of these slaves around.
The RAC didn’t think it was suitable to settle in Africa so forts were built all down the west coastline where they used that as their trading ports. The RAC became a monopoly and its profits and fortunes rose immensly from the other goods (like sugar) they imported too. It wasn’t until twenty six years later, which the RAC realised they had come to the end of their trading ideas. Just like The Royal Adventurers, the company’s profits had been interefered by interlopers and they were put of their business. Although, the RAC had finally ended, it put an end to foreign monoply.
By stopping the Dutch and the French trading, it had helped this British company maintain its dominance. The British had supremacy over Africa which simulated exploration for new raw materials and food articles. This dominance helped bring a vast amount of profits in and therefore help the growth of the British Empire. The other key company was The East India Company which was set up in 1600. This company was mainly interested in the spices, the textiles and other Asian commodities and they thought they would be able to make a lot of profit from importing this.
They created three trading posts in three main cities (Bombay, Madras and Calcutta). However, the EIC had a major rival who were the Dutch and because of this, it increased the competition for these goods. This competition meant that the British needed to offer India articles they wanted and needed excluding the wool. They also needed to see whether travelling 12,000 miles to India was worth taking the risk. This was major competition until a significant event – ‘The Glorious Revolution’ occurred. The Glorious Revolution was a time when James II was put down from the throne.
In his position, he was replaced by the Dutch king, William III (also known as William of Orange). This event ended the disagreement between Dutch and Britain and formed a merger between these two countries. In the end, Britain received the Indian textiles trade which left the Dutch with the spice trade. Soon later, the British trade started to grow with the importing and exporting of materials and fabrics to overtake its Dutch rivals. It had its own stock exchange that was set up and futhermore, it was able to lend from the bank at a low interest rate.
The EIC began to develop immensly and grow to ‘have its own settlements, its own diplomats, even its own army’. 1 Apart from just trading companies, there were other reasons responsible for the British Empire. One of them was the Royal Navy. It had Oliver Cromwell as its leader and became more involved in European affairs. Still having the Dutch as rivals, England fought three wars against them. They ended up destroying the Dutch trade and shipping and replaced them as the most dominant of the seas. As well as the Dutch, France was also interefering with English trade.
The Royal Navy wiped them out from the seas clearing them for just the British to trade. Because they had no rivals at sea, the navy guarded this and charged traders taxes for crossing. This was also another way of getting more money and all this together was known to be ‘the source of Britain’s wealth and defence’. 2 The previous three reasons show how Britain managed to build stepping stones for its success and the Royal Navy also went to a very high extent to keep the Empire growing. The British government was another helping hand towards the British Empire.
It introduced privateering which was enabling merchants to steal goods out of foreign ships. By taking goods from foreigners like the French and the Spanish, it allowed them to increase their wealth. In contrast, this decreased the fortune of the foreigners which also helped clear seas of British rivals. The government also introduced Navigation Acts. These were laws that ‘forbade goods being imported into England if they were not carried in English or colonial ships’3. It also stopped the importing and exporting of goods if it wasn’t in the correct ships.
These laws helped increase dominance; shipping and it restricted the Dutch to increase theirs. Finally, the wars that took place were also of great imporatance. The War of Spanish Succesion was an important war which lasted eleven years. It was the French and the Spanish against British and their allies. It happened separate and eventually the war drained out the French’s resources even though it cost British a lot too. The French decreased in power and because they did, the British Empire received a number of colonies previously owned by the French.
This was effective because it helped them import and export on a bigger scale. The war was also a stepping stone to the Treaty of Utrect. This treaty allowed the British to gain the Asiento. This allowed them to trade over the seas whenever they wanted – increasing sales and profits. The Asiento was known to ‘help British wealth creation considerably and too boost British power’4. All in all, there were many other factors that contributed towards the expansion of the British Empire. Even though these other points led towards this development, I think trading companies were highly responsible.
I think this because: trading companies were the primary source of beginning an Empire. Without these companies being succesful, there would not be a chance to keep improving and updating the Empire. These trading companies created the footholds which was basically the industries/factories holding the products/materials which increased their profit rates. The settlements were also a starting point for the British Empire as they continuosly traded there and turned them into foremost manufacturers.
The Royal African Company and The East India Company helped the British keep accelerating and get larger in size. To further back my argument of trading companies, the South Sea Company also was linked in the development of the empire. This company did this to help towards the British Empire. Therefore, trading companies were greatly involved in the development towards the British Empire. They started the phase of making the Empire the most successful of that time and by finally turning ‘merchants into multinationals’. 5