Entrepreneurs, families, and companies

CHARLES H. PARKER

“Production, exchange, and consumption,” observed Fernand Braudel, “are elementary obligations for all populations.” Because of these basic human needs, buying and selling goods have constituted one of the enduring structures of everyday life in all societies, regardless of culture, religion, technological sophistication, or political organization.

In this age of international trade, the long-distance enterprises of heavily capitalized and state-supported European trade operations have tended to monopolize scholarly attention. Yet the ongoing vitality of family-based operations also remained integral to commerce in all parts of the world.

Not only did individual merchants and firms from around the world encounter comparable complications and obstacles, but successful traders large and small also possessed a similar dynamism and versatility. Stephen Dale has shown that Multani traders resident in Isfahan and Astrakhan exhibited an “entrepreneurial spirit” typically identified as unique to “the great merchant” of the Italian Renaissance.

Merchants and trade circuits

Merchants who moved staples and luxury items across long distances in the early modern period utilized routes within distinct commercial zones that had endured for many centuries. The most active theater of long-distance com­merce in the world was the port-city trading network along the coastline of the Indian Ocean basin. Following the annual rhythm of the monsoons, vessels stopped at ports from southern China, the Malay peninsula and Indonesian archipelago, to the Malabar and Coromandel shorelines of South Asia, and cities on the Persian Gulf, Red Sea, and along east Africa. Traders rarely navigated the entire circuit, but operated within specific routes that linked regions, such as from China's Fujian province to Sumatra or from maritime Southeast Asia to Bengal or Surat. The port cities served as points of distribu­tion for products from the interior of these territories to other lands, linking various cities and regions to others.

Belonging to the ancient Silk Roads, the caravan routes of central Asia formed a well-defined trading zone that complemented the maritime trade

Entrepreneurs, families, and companies along the Indian Ocean littoral. Caravans of camels or horses transported merchandise typically consisting of lighter luxury items, such as silks, pre­cious stones and metals, musks, dyes, woolen and cotton cloth, candles, and other small finished goods. Diasporas of Armenians, Persians, as well as a variety of Indian and Afghan ethnic groups (Punjabis, Khattris, Pushtuns, Mariwaris, Multanis) fanned out across the expansive territory from northern India, Pakistan, and Afghanistan, across Iran, Iraq, and Armenia, to southern Russia.^[177] Central Asia experienced vigorous commercial activity until the decline and collapse of the Mughal and Savafid empires in the early eight­eenth century. Close family and personal connections between Indian, Armenian, and Persian merchant groups generated trade in this region. Merchant firms from these areas made contact with one another in a number of vital cities, such as Isfahan, Kandahar, Tabriz, Multan, Astrakhan, and Baghdad.

The Mediterranean Sea served as a commercial zone that linked the movement of goods from three continents - Africa, Asia, and Europe.

Unlike the continuities between long-standing routes in Eurasia and early modern networks, the rise of a transnational commercial structure in the Atlantic was a new and revolutionary event. European exploration and expansion in the Atlantic basin initiated the development of commer­cial networks that absorbed large portions of sub-Saharan Africa and America. In the so-called Triangular Trade, Europeans extracted gold

and silver - much of which ultimately found its way to China and India - cultivated commodities, exploited natural resources on an unprecedented scale, and populated the Americas with millions of enslaved Africans. Genuinely global economic networks emerged in this period.

In these matrices of trade, it was the relentless ambition of merchants that formed the driving force behind commercial growth in the early modern period. Expanded prospects for economic gain stoked the entre­preneurial initiative of merchants across Afro-Eurasia from Multani traders in northern India, to Hokkien dealers in Southeast Asia, to Wangara vendors in the Sudan, to Venetian cloth importers in northern Italy.

Merchants or their representatives traveled widely to buy and sell at fairs and markets, to gain inroads into mercantile communities in strategic locations, such as Venice, Amsterdam, Aleppo, Surat, Astrakhan, and Kandahar. Cities within all the trading circuits of the early modern world, whether in the Mediterranean, along the Silk Roads, in the Indian Ocean, across the Sahara Desert, or in northern Europe, were filled with com­mercial spaces that connected local production of spices, metals, slaves, cotton, silk, and other goods to the wider world.^[179] Within the trans- regional commercial zones, cities concentrated buyers and sellers in

“primary nodal markets” that connected local and regional producers to the wider world of international markets.^[180]

Merchants and family networks

Though merchants often acted as independent contractors, they did not conduct trade alone. At the local operational level and even across the diffuse circuits of trade, the most elemental and enduring form of a mercantile partnership was the family. Usually combining both the nuclear household and extended relatives, family networks formed the traditional basis of general partnerships and helped forge an age of commerce across all trading zones, routes, and hubs. General partnerships based on informal, unwritten contracts that extended indefinitely allowed all members to share in decision­making and reap similar rewards, but also share common liabilities.^[181] A family business encompassed more than simply members of a household and blood relatives, but usually functioned as a coalition of overlapping partnerships that involved non-related parties as well. As commercial operations expanded and became more complex, family businesses took on additional partners and investors outside the bonds of kinship. Thus family members worked together but mixed easily with outsiders.

Two examples of family networks provide tangible detail of the versatility and opportunism of the most successfully run operations. In the early 1500s, the Stroganov family of Russia made a fortune by exporting salt from the lake of Solvychegodsk in the extreme north. When Ivan the Terrible began to open up Kazan in the Volga River basin in the 1550s, he granted Anika Stroganov large tracts of land in the region. The Stroganov family financed military operations and the construction of fortified settlements in eastern Siberia in return for a monopoly on most revenues. In the late 1500s and early 1600s, the Stroganovs became the richest family in Russia.^[182]

The Sceriman/Shahriman family prospered in the new Julfa community under Safavid shahs in the seventeenth century. They established branch houses, staffed by family agents, in Astrakhan and Venice, trading in dia­monds, precious stones, and silk. After a number of the family members converted to Roman Catholicism, their operations began to gravitate toward Italy and the Mediterranean at the end of the seventeenth century. Sebouh Aslanian describes the clan as “a shrewd and strategizing band of brothers and male cousins who seem always to have not only the future of their family's commercial interests in mind but also its survival and staying power in new lands... while still being bound... to their original home in Iran.” Even though business organization tended toward limited and more non- familial partnerships in the seventeenth and eighteenth centuries, smaller firms still worked within the framework of a domestic economy just as large corporations also exhibited familial characteristics. The timeless association of trade with family remained central to early modern commerce.¹⁰

The household, which shaped most aspects of production and consump­tion in all pre-modern societies, also gave commerce its administrative and functional structure. Since goods in pre-modern societies were produced within the spatial confines of a household, the administration of family affairs overlay the management of business dealings. In scholarship on European societies, a number of historians have shown that the domestic and public spheres blurred especially in the world of production and commerce. The household was not so much a refuge from the hustle and bustle of buying, selling, and trading, as it was a vital part of the production and exchange that coursed through societies.11 Despite the wide-ranging diversity of Asian and African societies, the household functioned in similar capacities. A stronger division between private household and public domain prevailed in some Muslim lands, however, because of religious strictures against social mixing between women and men outside their families.

Even though public trade organizations, such as guilds, generally excluded women in the early modern period, the domestic organization of production placed women firmly within the orbit of commerce despite formal con­straints. Legal documents in a number of urban areas in the Ottoman Empire have recorded the activity of women acting as owners of property or proprietors of workshops, and even overseeing tax-farming operations. Many affluent widows designated male agents, often younger family members, to conduct business and make investments in the market place for their female

¹⁰ Sebouh David Aslanian, From the Indian Ocean to the Atlantic: The Global Trade Networks of Armenian Merchants from New Julfa (Berkeley, CA: University of California Press, 2011), pp. 149-68, quote on 158; Trivellato, Familiarity of Strangers, p. 132.

¹¹ Richard Grassby, Kinship and Capitalism: Marriage, Family, and Business in the English­Speaking World, 1580-1740 (Cambridge University Press, 2001); Maria Agren and Amy Louise Erickson (eds.), The Marital Economy in Scandinavia and Britain, 1400-1900 (Burlington, VT: Ashgate, 2005); Julie Hardwick, Family Business Litigation and the Political Economies of Daily Life in Early Modern France (Oxford University Press, 2009). employers. Women loaned not only to family, but also to non-relatives. In Istanbul, Cairo, Aleppo, Damascus, Kayseri, and Cyprus, courts registered women buying, selling, and lending in these cities. In Kayseri, the court regularly upheld the security and integrity of property owned by women. Wealthy women demonstrated their piety, as well as their financial practical­ity, by endowing charitable foundations (waqfs). Women's involvement in business, of course, varied widely according to local contexts. In areas where households possessed a significant measure of autonomy and there were traditions of female inheritance, women tended to exert considerable influ­ence in trade and commerce. In Southeast Asia, although men dominated long-distance overland and maritime trade, women were prominent in domestic markets and small-scale trading because they were generally regarded as financially astute and the management of the household econ­omy rested in their hands. Foreign traders recognized indigenous women in the East Indies, Malaysia, and South Asia as an entree into local market networks. It was not unusual for emigre merchants trying to infiltrate local trading complexes or make local connections to cohabit with or marry native women for their expertise and their connections. European, and possibly Hokkien, merchants in the seventeenth and eighteenth centuries married Balinese, Malay, Javanese, and Filipina women, sometimes temporarily, to establish business contacts and to navigate indigenous cultures.¹²

Within households, collaboration among all family members, certainly husbands and wives, was crucial to financial success. In Europe, women often assumed leading roles in managing the affairs of the household, including its mercantile enterprises especially when their husbands were away. Even when husbands and sons were present, women kept accounts and responded to changing market conditions (Figure 8.1). Widows fre­quently took over sole control of family businesses after the death of their husbands in Christian and Muslim lands. The correspondence between the

Figure 8.ι: Nicolas Maes (1634-93), The Account Keeper, 1656 (oil on canvas)

Nuremberg merchant, Balthasar Paumgartner, and his wife Magdalena Behaim in the sixteenth century highlights the mixture of marital affection with hard-headed pragmatism of working relationships between spouses engaged in commerce. In April 1594, Magdalena wrote to him while he was away on a business trip, “I have given your brother Jorg the money that belongs to Bartel Albrecht to deliver to him. Brother-in-law Jorg tells me

Entrepreneurs, families, and companies that someone has already written to you about your estimated payments in Frankfurt... Kind, dear treasure, I have nothing more to write at this time...”¹³

Among merchant families, women brought much needed resources into businesses, as dowries formed important sources of capital, particularly when they took the form of cash payments. A significant degree of family capital came from dowries that women brought to a marriage. For example, Thomas Jeffereys, a merchant in Exeter, acquired a dowry of £1,600 and supplementary amount of £4,000 from his father-in-law, sums that allowed him to underwrite a number of business ventures. Dowries provided a particularly valuable capital resource for Sephardic merchant families. Two factors made this possible. Jewish marriage customs, unlike Christian trad­ition, permitted marriage among relatives within the third and fourth degrees of consanguinity. Consequently, marital unions between cousins, as well as uncles and nieces, were not uncommon. Consanguineous matri­mony allowed extended families to keep capital within the lineage or to shift it from one branch to another. Just as significantly, in Jewish marriages both the groom's and the bride's family contributed payments to the union, which came under the direction of the husband. He retained control of his wife's dowry if he survived her and likewise the wife regained her dowry upon her husband's death plus at least a sizeable portion of his contribution. Since dowry payments usually took the form of liquid assets, the financial dimen­sion of marriage infused and transferred capital into family commercial initiatives.1⁴

Extended kinship groups shared fully in local and long-distance trade. Commercial initiatives were in many instances part of a larger network of kin, an affiliation that remained invaluable in making connections, securing financing, penetrating new markets, absorbing losses, and extending oppor­tunities. Relatives regularly served as foreign agents for family firms across Europe and Asia, according to commenda (in which one partner supplied the capital and a second acted as the foreign agent) or other general partnership arrangements. Despite variations, the typical arrangement paired an

investing party that advanced the bulk of the capital with a traveling party that transacted business on location. The partners split any profits or losses according to the proportion of investment. If the traveling partner supplied none of the capital, then he derived his share either from the value of his labor or from a percentage of the profits as specified in the contract between parties. Sephardic and Christian merchants in Italy and northern Europe dispatched relatives to markets in the Middle East, North Africa, and Central Asia. Extensive ethnic-based trading networks frequently originated out of the initial migration of relatives from a family business. As they became settled in a new land, developed contacts, and established a presence, other kinsfolk and people from the point of origin joined them. The large migra­tion of Wangara merchants into the Hausa and Bariba states of North Africa, Chinese merchants venturing into the East Indies, and Indian merchants moving into the Volga Region represent clear instances of this process. In China under both the Ming and Qing dynasties, mercantile kinship groups formed thick complexes along the coast, major rivers, and Grand Canal. In all areas of intensive trading activity, merchant associations overlapped with leading local families. Within Indian, Arab, and Turkish merchant commu­nities in Surat, for example, powerful clans, such as those headed by Muhammad Saleh Chellaby and Mulla Abdul Ghafar, directed commercial traffic among their own social and ethnic groups. Likewise, Fujian merchants who migrated throughout maritime Southeast Asia organized themselves around kinship groups, as well as home territory.¹⁵

Family partnerships drew on the benefits of blood ties that fostered trust, provided access to capital and credit, and increased the reach of commercial ventures. Families could possibly provide stronger bonds of trust than rela­tions with non-family members; they could pool resources and keep profits within the domestic corporation. Relations served as agents, investors, brokers, and employees that enabled entrepreneurs to initiate or expand projects beyond their initial capacities. Yet, the connections of kith and kin

1 ⁵ Janet L. Abu-Lughod, Before European Hegemony: The World System A.D. 1250-1350 (New York: Oxford University Press, 1989), pp. 117, 217, and 220; Trivellato, Familiarity of Strangers, p. 132; Lockard, “‘Sea Common to All'”: 225; Grassby, Kinship and Capitalism, p. 413; Das Gupta, Indian Merchants, pp. 75-7; Scott C. Levi, The Indian Diaspora in Central Asia and its Trade, 1550-1900 (Leiden: Brill, 2002), p. 221; Sevket Pamuk, A Monetary History of the Ottoman Empire (Cambridge University Press, 2000), pp. 77-8; Dale, Indian Merchants, pp. 67 and 69; Jean-Laurent Rosenthal and R. Bin Wong, Before and Beyond Divergence: The Politics of Economic Change in China and Europe (Cambridge, MA: Harvard University Press, 2011), p. 152; and Paul E. Lovejoy, “The Role of Wangara in the Economic Transformation of the Central Sudan in the Fifteenth and Sixteenth Centuries,” Journal of African History 19 (1978): 185. could also derail commercial associations, as nepotism and other sorts of favoritism acted against economic rationality and efficiency. The extent to which family firms incorporated outsiders and remained flexible to market conditions and internal inefficiencies improved their odds of financial buoy­ancy. Nevertheless, family partnerships remained a permanent fixture in the commercial circuits of the early modern period.¹⁶

Merchants and companies

Kinship networks overlapped and interacted with several types of partner­ships that grew out of long-standing practices, but also began to evolve into new forms with the uptick in trans-regional commerce. The commenda, utilized in central Asia and the Mediterranean for centuries, continued to provide an influential model for business associations involved in long­distance trade. Commenda arrangements came in different shapes and sizes based on the needs of business partners. In China, merchant houses located in a certain region, such as those in Huizhou and Fujian, established semi- autonomous branch offices at strategic sites, like Jiangnan, in this case to take advantage of its thriving textile market. Another organizational form, known as shirka, remained significant along the overland Asian routes. The distinct­ive feature of the shirka was its collective partnership in which members combined capital and shared equal standing, even though they usually had invested different sums in the business. Islamic law sanctioned commercial partnerships, promoting the cooperative use of capital and a shared stake in profits and debts. Provided they recovered their investments, partners allo­cated profits proportionately; all shouldered losses evenly. From the general framework of the commenda, partnerships in the early modern period, by and large general, family-based firms, remained the dominant mode of business organization in most areas outside Europe.¹⁷

In the sixteenth century, European merchant companies increasingly gravitated toward the pattern of limited liability partnerships and employed salaried agents. Formed out of written contracts for a specific tenure, limited partnerships greatly reduced the agent's liability or eliminated it entirely. These contracts did not typically involve family members. In Tuscany, Christian merchants adopted an organizational structure known as the

1 ⁶ Grassby, Kinship and Capitalism, pp. 389-93, 408, 410, and 413-16.

1 ⁷ Rosenthal and Wong, Before and Beyond Divergence, p. 71; and Dale, Indian Merchants, pp. 118-20. accomandita, which stipulated the length of the contract and defined the liability of each investor. Later, some Sephardic Jewish firms embraced these principles. Another arrangement rooted in the medieval Mediterranean, the compagnia, spread across Europe in some of the major commercial enter­prises, such as the Fuggers in Germany and the Ruizes in Spain. In this corporate design, different commercial operations came under the manage­ment of one executive officer, not unlike a modern holding company. As larger firms emerged across central Asia, the Mediterranean, and Europe, they dispatched agents to foreign markets on a permanent or semi­permanent basis. Some agents worked off of commission (and are conveni­ently referred to as commission agents), whereas other agents or factors simply drew salaries from their employers, rather than getting a cut of the profits. It was not uncommon for resident agents to conduct their own business on the side or eventually to develop into independent brokers.¹⁸

Regardless of their form, business partnerships took place within the framework of larger trade networks that served to regulate most aspects of commerce, either formally by statute or informally by social custom or informal mechanism. Like many features of trade discussed thus far, these networks were not new, but became transformed over the course of the early modern period by the increasing volume and changing dynamics of commercial exchange. Some organizations became outmoded and met their demise in the sixteenth to eighteenth centuries. Perhaps the best example of obsolescence because of new trading conditions was the European merchant guild of the Middle Ages. In the twelfth and thirteenth centuries, merchant guilds functioned as formidable organizations that established controls over the movement of specific goods, protected merchants from predatory lords, and settled disputes among members. By the sixteenth century, however, merchant guilds had ossified into conservative institutions rendered ineffec­tual by the political power of city and regional governments, as well as the influx of foreign traders and overseas goods. The Hanseatic League, a cooperative association of merchant firms, guilds, and cities on the Baltic that flourished during the Middle Ages, disintegrated in the sixteenth century with the rising mercantile power of northern European states.

In the arena of long-distance trade, mercantile networks remained fluid, adapting to the needs of traders, markets, and the fluctuating political circumstances that encased commercial zones. Scholarship on these networks

1 ⁸ Trivellato, Familiarity of Strangers, pp. 132, 142-4, and 153, and Abu-Lughod, Before European Hegemony, p. 117. has undergone considerable revision since Philip Curtin expanded the con­cept of trade diasporas to analyze and compare merchant communities that bought and sold goods over long distances. According to Curtin's model, merchants from the same ethnic background and national affinity formed tightly knit societies in common foreign locations for the purpose of reducing risks and penetrating markets. Essential to trans-regional trade before corpor­ations and state-directed enterprises, trade diasporas were apolitical, cohesive enclaves that served as cross-cultural brokers between a host society and alien agents. While historians still recognize the descriptive value of trade diasporas, recent critiques have stressed the political negotiations between foreign merchants and territorial powers, the competitive tensions among those within the merchant community, and the porous boundaries between all people engaged in commerce in a given region.¹⁹

The most nuanced and multi-dimensional analyses of long-distance trade networks have depicted them as circulating commercial societies. These were circuits flowing around nodal points of trade, along which flowed “merchants and things,” that is, people, goods, credit, and information. Traders from interrelated ethnic and national groups (e.g. Indians, Euro­peans, Armenians, Jews, and Chinese) reinforced their ties through endog­amous marriage and common religious affiliation. In northern Africa, the migration of Wangara traders into the Songhay Empire and later Hausa states in the Sudan opened up commercial expansion in this region. Aslanian has distinguished two basic types of circulating networks. One was a mono­centric association connected to a central hub that “defines and regulates the identity and economic vitality of the network as a whole.” The clearest example of this matrix was the Armenian diaspora centered on the New Julfa district in Safavid Iran.²⁰

The Armenian diaspora of the 1600s and 1700s stemmed in part from the military conflict between the Ottomans and Safavids. In the early 1600s, Shah Abbas i forcibly resettled a large number of Armenians in a suburb of Isfahan. Named New Julfa, this settlement formed the basis of an extensive Armenian commercial matrix centered in Iran with the political support of the Safavid rulers. Christian Armenians enjoyed political patronage. In Iran, Shi'ite rulers gave them protection throughout the 1600s and, in most areas

1 ⁹ Sanjay Subrahmanyam, “Introduction,” in Sanjay Subrahmanyam (ed.), Merchant Net­works in the Early Modern World (Aldershot: Variorum, 1996), pp. xiii-xxvi; and Aslanian, From the Indian Ocean to the Atlantic, pp. 8-12.

²⁰ Aslanian, From the Indian Ocean to the Atlantic, pp. 13-15; and Lovejoy, “The Role of Wangara”: 32. in Europe and Asia, Armenian merchants moved with relative ease in their host societies. From NewJulfa, and later Bandar Abbas in the Persian Gulf, Armenians established far-flung merchant communities throughout Europe and Asia, sending out tens of thousands to settle in commercial centers such as Amsterdam, London, Marseilles, Venice, Astrakhan, Gujarat, Aleppo, Cairo, as well as many other places. Armenian fortunes turned sour in the mid-1700s as the Safavid dynasty deteriorated. They scattered into south Asia to connect with the British Indian trade. Armenians could also be found in almost any commercial venue in Eurasia, from Amsterdam to Melaka, brokering Persian silks, Indian spices and cloths, Russian furs, and European textiles.²¹

The other form was a polycentric model, exhibited best by communities of Sephardic Jews, which had scattered across the Mediterranean, Atlantic, and Asia. These groups did not have a single, central home base, but functioned independently within their particular theaters of trade. Expelled from Spain in 1492 and forced to convert to Christianity in Portugal in 1497, Sephardic Jews immigrated into North Africa, Italy, and the eastern Mediter­ranean, the Spanish and Portuguese empires, Amsterdam, and throughout Ottoman realms. As a result, Sephardic Jews and New Christians (Jews who had officially converted to Christianity) positioned themselves at key geo­graphical points to take advantage of the growing global networks in silver and sugar. Jews and New Christians were eventually forced to flee to safer environments, as Iberian inquisitions intensified their efforts against Jewish converts whom they regarded as Judaizing backsliders in the American colonies in the first half of the seventeenth century. Sephardim also emerged in the major northern European commercial metropoles (London, Amster­dam, and Hamburg), and in the Mediterranean, New Christians formed a significant commercial presence along the Dalmatian coast, in Venice, Livorno, and Ancona. Sephardic Jews found the most welcome refuge in Ottoman Muslim lands because of the relatively accommodating social pol­icies towards religious minorities. Allowed to organize their own semi- autonomous communities, Sephardic Jews were able to utilize their skills and extensive networks in the eastern Mediterranean and in Arab lands. They served as intermediaries between European Christian and Muslim merchants in the overland routes across western and central Asia and in the port cities of south Asia. Because of the nature of commerce, Sephardic Jews interacted

²¹ Charles H. Parker, Global Interactions in the Early Modern Age, 1400-1800 (Cambridge University Press, 2010), p. 85.

Entrepreneurs, families, and companies closely with peoples in host societies, though in most cases they lived in distinct precincts, followed their own customs, and practiced their own religious observances.^[183]

As these examples indicate, relations with political authorities varied considerably for foreign merchant communities and demarcated the bound­aries of commercial opportunity. Local and regional governments in Euro­pean and Chinese port cities heavily regulated markets, fairs, and the business activities of all merchants, including foreign and non-resident ones. Averse to trade and foreign intrusion, the Qing dynasty labored to limit European commercial contact with Chinese merchants to the port cities of Macau and Canton (Guangzhou) by the late seventeenth and early eight­eenth centuries. Conversely, management of commerce in European cities, such as London, Amsterdam, Antwerp, Lyons, and Florence, grew out of an interest in promoting trade. Cities opened their gates to merchants from other cities and territories, finding a place for them in urban marketplaces. Welcome from a ruler, however, often produced howls of protest from local merchants and residents, fearing a drain of native wealth to foreigners. In response to outcries from Russian merchants, tsars from the 1640s to 1680s issued edicts curtailing the privileges of foreign merchants, prohibiting them from doing business in Moscow, and restricting them to the port cities of Archangel and Astrakhan. Tsars balanced these acts of appeasement with special exemptions for Indian and Armenian agents in Astrakhan that were similar to the capitulations that Ottoman sultans offered Jews and Europeans in their domains. As a general rule, Safavid and Mughal emperors allowed a much greater degree of autonomy for commercial exchange among both local and foreign traders.^[184]

Within all trading networks, but most especially in those in which traders enjoyed a freer hand, merchant communities established their own regula­tions and customs to protect against fraud. In European cities, merchant guilds, and later organizations such as the Company of Merchant Adven­turers in London, played a central role in formulating trading policies and protocols. Armenian merchants had developed a body of commercial law and created a court of arbitration (the Assembly of Merchants) to mediate disputes and to ensure the stability of the marketplace. In New Julfa, a

kalantar served as mayor of the trading community, collecting customs duties and serving as a judge in the court. Even though Chinese authorities worked to regulate trade with foreigners in port cities, Chinese merchants within the empire often found themselves in environments beyond the range of the state's capacity to enforce contracts. In these situations, business districts developed their own institutions to monitor trade relations. Even more importantly, in all merchant communities a horizontal means of policing emerged that ostracized those who violated communal norms, providing ample motivation for merchants to conduct themselves in an honorable fashion. The example of the Fujian diaspora into maritime Southeast Asia indicates that reputations followed merchants overseas. The social capital of Fujian-based traders provided them an entree into local communities of Chinese sojourners, a prized commodity that merchants dared not jeopardize by underhanded dealings.^[185]

Entrepreneurs, partners, and business firms depended on many sundry institutions, instruments, and agents to mediate exchanges in the growing commercial environment of the early modern period. A heterogeneous collection of agents performed very similar tasks necessary to the conduct of trade across significant expanses, from providing cash and credit, exchan­ging currencies, introducing buyers and sellers, and transporting material goods over sprawling and treacherous routes. These ancillary functions, referred to by economic historians as mediating trades, were integral elem­ents of commercial networks, especially since those who engaged in these activities also pursued mercantile opportunities themselves whenever pos­sible. In Western Europe, private banking houses, most famously the Fuggers in Augsburg and the Medicis in Florence, made money available to businesses, as well as to princes, large and small. The rise of big banking in Europe started with Italian firms that expanded the use of bills of exchange (promissory notes redeemable at remote sites) in the late Middle Ages. With the rise of maritime commerce in the Atlantic and Indian Oceans, the center of international banking moved north to public institutions in the sixteenth and seventeenth centuries. The banks of Antwerp, Amsterdam, and London created bills of exchange that transferred capital more easily and safely, which ultimately attracted the business of merchants and firms. Amsterdam

and London became the hubs of international banking in the seventeenth and eighteenth centuries.^[186]

Lending and credit proliferated in other areas as well, even though documentation is sparser than that available for those in Europe. The meager documentation in many regions does not mean that financial markets and credit institutions did not exist, but rather that they were carried out infor­mally and privately among kin and neighbors. Recent scholarship on early modern China, for example, has uncovered a small sample of written contracts that suggest an extremely wide and active market for credit and capital. These credit exchanges spread across northern China from the seventeenth to the nineteenth centuries, as several distinct financial establish­ments (zhangju, piaohao, and qinzhuang) made loans to merchants and accepted deposits from investors. Commercial organizations in Huizhou, Shanxi, and later in Jiangnan instituted banks and facilitated rising networks of exchange. In India, the Banian caste had issued bills of exchange, offered credit, and sold insurance similar in function to European banks for centur­ies. Banian networks continued to prosper and expand their influence in South and Central Asia throughout most of the early modern period. In addition, sarafs exchanged currencies and set the value of coins, enabling merchants from different regions to transact business. Banks as depository and credit institutions did not appear in Muslim lands until the eighteenth century largely because of the persistence of traditional lending practices and the Islamic prohibitions against usury. Just as merchants found ways to circumvent these strictures in Christian societies, Muslim entrepreneurs did so as well. In Ottoman lands, family partnerships and commenda arrange­ments facilitated the financing of trade and the transfer of debt that fell within Muslim orthodoxy and precluded banks.^[187]

Beyond the specialized domain of finance, an assortment of middlemen in more commonplace professions also brought together people and goods for commercial exchange. In many different regions across Eurasia and the African coastlines, merchants and their agents relied on brokers of various types. Before their own migration into the Sudan, Wangara businessmen had originally worked in Jenna and Timbuktu as brokers for traveling Songhay merchants. These mediators introduced buyers and sellers of particular commodities, including textiles, dyes, spices, and finished goods. The most well-connected and prominent brokers retained large numbers of individual clients or commercial groups. European trade companies dealt with power­ful local brokers in Asian port cities in order to locate quality goods and reputable vendors, as well as to navigate the idiosyncrasies of local markets. Guides, shippers, and other agents of transportation also united merchan­disers and consumers, and thus played important mediating roles. Nomadic tribesmen, like the Afghan powindah, served as natural transit carriers, hauling goods via caravan along the hazardous routes that linked India, Iran, and the Middle East. Mariners in the Mediterranean, Atlantic, and Indian Oceans carried freight along ports of call, connecting rural agricultural production to urban nodes of exchange across different parts of the world.^[188]

The joint-stock companies chartered by the English and Dutch govern­ments in the early 1600s (and later Swedish and Danish corporations) were more abundantly capitalized and elaborately organized forms of limited partnerships. Traditionally, historians have hailed the overseas joint-stock companies as the first modern corporations. Given the previous forms of partnership, however, it is perhaps more appropriate to regard them as transitional organizations, bridging earlier forms of business organization and modern corporate structures. In the 1400s and 1500s, European firms interested in gaining direct access to Asian spices and silks, African gold, and later American silver suffered from the disadvantages of geography. In an effort to muster all the resources needed to launch long-distance trading expeditions, English and Dutch companies began to draw from Italian practices of raising capital by dividing ships into shares that merchants offered to investors. In France and the Holy Roman Empire, mines and mills sold shares that could be resold on secondary markets. Offering stock shares to public and private investors consequently emerged as a means for com­panies to raise large amounts of assets and spread risk among a wide group of shareholders. The record-keeping that these transactions required contrib­uted to a growing bureaucratization in European business practices. For merchants with aspirations of importing goods from Africa, America, and Asia, a joint-stock configuration satisfied the demands inherent in such enterprises. English merchants first put this model to the long-distance trade test by forming the Muscovy Company in 1555 for trade to Russia and the Levant Company in 1581 for trade to the eastern Mediterranean. The largest joint-stock corporations, the English East India Company and the Dutch East India Company, arose in England in 1600 and the Netherlands in 1602, respectively.^[189]

The Dutch East India Company emerged as the most well-endowed and powerful joint-stock company involved in long-distance trade in the seven­teenth century. In order to end competition among Dutch companies vying for trade in Asia, the States General forced them to merge into a united corporation, known as the VOC (Verenigde Oostindische Compagnie). The leaders of the previous companies became directors of the new organization, divided into six “chambers” that assumed responsibilities for offering shares, shouldering costs, outfitting trading posts, and selling imports. Gaining control over strategic routes and outposts in the East Indies, the VOC achieved remarkable prosperity derived from its leverage over nutmeg, cloves, and mace, as well as its substantial share in pepper and cinnamon. In order to address trade imbalances in Asia, the company inserted itself into the extremely profitable intra-Asian trade between Japan (silver), India (tex­tiles), and East Indies (spices). Over the course of the seventeenth century, the English East India Company asserted itself in the Indian Ocean and developed into a formidable competitor from its base in India. The success of these operations inspired the formation of a number of other joint-stock companies from France, Scandinavia, Scotland, and the empire for trade in Asia, Africa, the Americas, and the Mediterranean.^[190] (See Map 7.1, p. 184.)

The prosperity of joint-stock companies depended heavily on the almost unqualified support of European states. British, Dutch, French, and other governments granted the companies national monopolies over commerce in a designated region, and gave them authority to arm and conduct military operations with little or no intrusion from state authorities. The close identification of state authority with corporate enterprise rendered joint­stock companies as quasi-states themselves. Directors and local governors gained legal jurisdiction over their employees, possessed jurisdiction over ships and subjects within territorial outposts, and had the ability to wage war.

Since other countries did not universally recognize the monopolistic rights of others, companies had to defend them militarily, giving rise to a host of naval wars and engagements in sites of contention around the world. The Seven Years' War (1756-1763), for instance, was fought in India, America, and Europe between the major European commercial and imperial powers.

Trade in Asia, Africa, and North America largely remained in the hands of indigenous merchants until the second half of the eighteenth century when most maritime commercial outposts began to come under colonial rule. Nevertheless, joint-stock companies occasionally used armed trading to secure leverage over indigenous merchants and political leaders or to control the production of local goods. The VOC in particular earned the reputation for the unflinching use of military force to dislodge their military rivals, as they did against the Portuguese and the English, and to control indigenous markets. When the rulers of Banda did not abide by monopolistic contracts with the company, the Governor-GeneralJan Pieterszoon Coen in 1621 waged a ferocious punitive campaign, destroying crops and massacring local popu­lations. Empire-building served the interests of commerce.

States ceded authority to private enterprises in the northern European joint-stock companies, whereas in the Portuguese and Spanish overseas ventures that got under way earlier in the 1400s and 1500s trade fell under the direct control of the states. The Casa da India, a government office, oversaw Portuguese trade in Asia, and the Casa de Contratacidn attempted to monitor Spanish commerce in America. Since officers in the pay of the crown conducted business operations on behalf of their employers, profits came directly to royal coffers. Attempts at regulation, however, proved largely ineffective, as rampant informal, private trading by opportunistic merchants and parties drained profits away from the Spanish and Portuguese monarchs. The state-sponsored operations of European countries, whether through monopolistic corporations or government-managed organizations, incorpor­ated West Africa, the Caribbean, and large swaths of territories in the Americas into the first global networks of exchange.^[191]

Conclusion

The accelerated tempo of commerce in the early modern period drew from long-established structures and processes in expanding the reach of mercantile activity across great distances. As a result, families and kinship networks remained vital to commerce and provided a bridge to new forms of organization. With the growth of commercial operations in the seventeenth and eighteenth centuries, credit and capital markets developed increasingly complex instruments. The trajectory of early modern mercantile organiza­tion in the long term tended away from the generalist entrepreneur to more complex organizations and more depersonalized markets. Transitions from general to limited liability partnerships, from kin-based to non-familial organizations, from bi-lateral to more segmented contractual agreements occurred, albeit unevenly, during the age of commerce.³¹

FURTHER READING

Abu-Lughod, Janet L., Before European Hegemony: The World System A.D. 1250-1350 (New York: Oxford University Press, 1989).

Aslanian, Sebouh David, From the Indian Ocean to the Atlantic: The Global Trade Networks of Armenian Merchants from New Julfa (Berkeley, CA: University of California Press, 2011).

“Social Capital, ‘Trust' and the Role of Networks in Julfa Trade: Informal and Semi- Informal Institutions at Work,” Journal of Global History 1 (2006): 383-402.

Braudel, Fernand, Civilization and Capitalism 15th-18th Century, Sian Reynolds (trans.) (New York: Harper & Row Publishers, 1982), vol. ii.

Chaudhuri, Kirti N., The Trading World of Asia and the English East India Company, 1660-1760 (Cambridge University Press, 1978).

Dale, Stephen Frederic, Indian Merchants and Eurasian Trade, 1600-1750 (Cambridge Uni­versity Press, 1994).

Das Gupta, Ashin, Indian Merchants and the Decline of Surat c.1700-1750 (New Delhi: Manohar, 1994).

Emmer, Pieter C., and Femme S. Gaastra (eds.), The Organization of Interoceanic Trade in European Expansion, 1450-1800 (Aldershot: Variorum, 1996).

Gordon, Stewart, When Asia was the World: Traveling Merchants, Scholars, Warriors, and Monks who Created the “Riches of the East” (Philadelphia, PA: Da Capo Press, 2008).

Grassby, Richard, Kinship and Capitalism: Marriage, Family, and Business in the English­Speaking World, 1580-1740 (Cambridge University Press, 2001).

HoweU, Martha C., Commerce before Capitalism in Europe, 1300-1600 (Cambridge University Press, 2010).

Israel, Jonathan, European Jewry in the Age of Mercantilism, 1550-1750 (Portland, OR: Littman Library of Jewish Civilization, 1998).

Jennings, Ronald, “Women in Early 17th Century Ottoman Judicial Records: The Sharia Court of Anatolian Kayseri,” Journal of the Economic and Social History of the Orient 18 (1975): 53-114.

³¹Howell, Commerce before Capitalism, p. 23; and Trivellato, Familiarity of Strangers, p. 35.

Levi, Scott C., The Indian Diaspora in Central Asia and its Trade, 1550-1900 (Leiden: Brill, 2002).

Lockard, Craig A., “‘The Sea Common to All': Maritime Frontiers, Port Cities, and Chinese Traders in the Southeast Asian Age of Commerce, c.1400-1750,” The Journal of World History 21 (2010): 219-47.

Lovejoy, Paul E., “The Role of Wangara in the Economic Transformation of the Central Sudan in the Fifteenth and Sixteenth Centuries,” Journal of African History 19 (1978): 173-93.

Ozment, Steven, Magdalena and Balthasar: An Intimate Portrait of Life in 16th-Century Europe Revealed in the Letters of a Nuremberg Husband and Wife (New York: Simon and Schuster, 1986).

Pamuk, Sevket, A Monetary History of the Ottoman Empire (Cambridge University Press, 2000).

Pomeranz, Kenneth, and Steven Topik, The World that Trade Created: Society, Culture, and the World Economy, 1400 to the Present (New York: M. E. Sharpe, 1999).

Rosenthal, Jean-Laurent, and R. Bin Wong, Before and Beyond Divergence: The Politics of Economic Change in China and Europe (Cambridge, MA: Harvard University Press, 2011).

Subrahmanyam, Sanjay (ed.), Merchant Networks in the Early Modern World (Aldershot: Variorum, 1996).

Tracy, James D. (ed.), The Rise of Merchant Empires: Long Distance Trade in the Early Modern World 1350-1750 (Cambridge University Press, 1990).

Trivellato, Francesca, The Familiarity of Strangers: The Sephardic Diaspora, Livorno, and Cross-Cultural Trade in the Early Modern Period (New Haven, CT: Yale University Press, 2009).

Vries, Jan de, and Ad van der Woude, The First Modern Economy: Success, Failure, and Perseverance of the Dutch Economy, 1500-1815 (Cambridge University Press, 1997).

Wiesner-Hanks, Merry E., Early Modern Europe, 1450-1789 (Cambridge University Press, 2013).

Wong, R. Bin, “The Search for European Differences and Domination in the Early Modern World: A View from Asia,” American Historical Review 107 (2002): 447-69.

Zarinebaf-Shahr, Fariba, “The Role of Women in the Urban Economy of Istanbul, 1700-1850,” International Labor and Working Class History 60 (2001): 141-52.