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In December 1600, in what would prove to be one of the most influential acts in the economic history of Europe, Queen Elizabeth I granted a royal charter to a group of London businessmen. The charter was effectively a license, granting them monopoly control of any kind of trading between England and all the lands from the Cape of Good Hope as far east as Cape Horn. What may strike us now in the early twenty- first century is the enormity of the monopoly they were granted. But early modern merchants saw their enterprise quite differently. They had pressed for such a monopoly because they saw that their own fortunes (as well as England’s financial future as, of necessity, an island of traders) lay in setting up and supporting orderly international trade practices. Their goal in pressing for a charter was not monopoly but government oversight. Government authority meant in essence the right to license, which is to say, the right to continuing decisions about who could lay claim to being officially involved in the trade as a “representative” of the Company and what the rules of that representation were. The idea behind the charter was simple. In terms of international trading practices in the sixteenth century, there had been little profit for the English. In the new markets opening up for Europeans in the East, the English merchants were being shut out. One reason they were failing to compete was that they had been sailing in the wrong direction, and walking in the wrong direction as well, as they repeatedly tried to go east overland. They had wasted their resources for several decades in what turned out to be the geographically foolish commitment to finding a northern land and sea route to China. By 1600, the Portuguese, the Spanish, and the Dutch, who 225 appendix one The Magnificent Charter: How the British Got to India A Company which carries a sword in one hand, and a ledger in the other, which maintains armies and retails tea, is a contradiction, . . . if it traded with success, would be a prodigy. Quoted by Peers,18 would have their own government-chartered company in 1602, were successfully sending ships to the East, while the English had yet to figure out how to navigate the route. The English were losing the race for the riches of the Eastern trade. The Londoners had tried, of course. Two trading companies, the Muscovy in the 1550s and the Levant in the 1580s, both committed to combining land and sea routes to bring goods from the East, had been established but had not proved profitable. At least twice British merchants sent small private fleets, wisely attempting to copy the routes of the Dutch. Both ventures ended in disaster, with the ships arriving in the East but never returning. They just vanished, with all their cargoes (Lawson, 14). It was very discouraging to potential investors as well as to merchants. There had been one sterling success. In the 1570s, Sir Francis Drake had sailed the globe for three years in his ship, Golden Hind, attacking Spanish galleons and taking their cargoes. He collected such a phenomenal amount of booty that he made fortunes for his backers, which included the Crown. John Maynard Keynes noted that Queen Elizabeth made so much profit that she “paid off out of the proceeds the whole of her foreign debt” and still had more left for new projects (Schweinitz, 43). But delightful as Drake’s success was to his private London backers, to the British government, and to the admiring British public, it remained a limited option . The future of trade could hardly be based on one adventurous captain or on a trading method that was somewhere between nationalistic privateering and plain robbery. Not everyone could just turn pirate. What was needed was a steadier and more predictable approach, one that might actually involve trade. Many London merchants came to believe that what they had not been able to accomplish individually or even in small groups they could do as a differently combined force. Educated as well as galled by Dutch successes, they accepted at last that what they also needed was an all-water route south around the Cape. Instead of each business having to fund its own few ships, a larger group effort supported by the Crown could increase fleet size and would-be investors’ confidence. The merchants would be able to finance larger, and therefore...

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