The Governor and Company of Merchants of England trading into the Levant Seas—usually referred to as the Levant Company, or Turkey Company—was founded by royal charter in 1581. Its powers in the seventeenth and eighteenth centuries were derived from fresh charters in 1606 and 1661 that gave to its members the sole right to trade between England and the Ottoman Empire.
The company was not itself a trading organization; instead, its members traded individually as independent merchants, subjecting themselves to the restrictions imposed on Levant Company members. Royal charter granted monopoly rights to the company. Although it was not forbidden for nonmembers to trade in the Levant, the company imposed on their goods an extra duty of 20 percent, which was prohibitive. It was not particularly difficult for a (London) merchant to become a member of the company, but admittance to an apprenticeship was more expensive than with any other company.
Ottoman political culture was so different from that of early modern Europe that Westerners were reluctant to risk their businesses unless they were assured of some special protection. This took the form of the so-called capitulations, charters of privilege granted by the Ottoman government that conceded special rights and favors. The Levant Company's original capitulation, of 1580, was renewed nine times and definitively confirmed with the capitulations of 1675, which remained in force until the end of the Ottoman Empire in 1923. The main provisions reduced customs tariffs and other taxes on imports and exports and transits. Freedom of travel and residence within the Ottoman domains and a limited degree of judicial extraterritoriality were among the privileges granted to foreign traders.
The Levant Company was an expensive establishment to run. The levies the company imposed were meant mainly for its upkeep, and were moderate in times of peace. For example, 1.5 to 4 percent of the value of every exported cloth and 3.5 percent per pound white silk imported was paid in London; in the Levant ports the charges collected by the consuls varied. During wars, when trade was reduced, the lasting expenses of the permanent establishment became a heavy burden.
During the reign of Queen Elizabeth I (1558–1603) English trade with the Levant was resumed after the old established connection via Antwerp had been cut definitively because of the occupation of this commercial metropolis by Spain. The Ottomans promised safe passage for William Harborne, a factor for the London merchant Richard Staper, to open trade under French protection, and in 1580 they granted him a charter of privileges (capitulations). In 1581 Osborne, and his associates, all London merchants, acquired an English royal patent for seven years. The resulting Levant Company opened English consulates all over the Ottoman lands, including in Egypt, Syria, Algiers, Barbary, Patras, Morea, and Chios. In its early days the company's profits were up to 300 percent. Exports to the Levant consisted mainly of cloth and tin; imports included raw silk, mohair, wool, yarn, carpets, drugs, spices, indigo, currants, and cotton. Shipping touched at ten ports using nineteen ships, including the largest ones then known in the merchant service. When its charter expired in September 1588 the company was rechartered as part of a merger with the Venice Company.
In 1600 the English Crown cancelled the royal charter when the company resisted government demands to share its profits accruing from the lucrative levy imposed on nonmembers for currants produced in the Venetian possessions in Morea and Crete. A renewal eventually was issued on December 31, 1600, confirming the 1592 charter but demanding that the company make an annual treasury contribution of £4,000 (the equivalent of the currant monopoly levy). Conflict and renegotiation continued, but the basics of the charter remained in force until 1825.
During the first half of the seventeenth century exports to the Levant were mainly English cloth, tin, lead, furs, and pepper. The English were able to balance their trade with the Levant. The Dutch wars (1652–1654) led to a breakdown of control of the company in London, and loss of Istanbul abassador's authority led to dissension in the Levant factories. Regulations were ignored, local treasurers became corrupt, consulage fees were not paid regularly, private debts were charged upon the company's funds, and factors conducted unlawful private trading. Deficits in the factories of Izmir and Aleppo were large, and the Istanbul factory was closed. English trade dwindled to nothing in contrast with the Dutch rivals.
But the anti-Dutch policy of Oliver Cromwell's parliamentary regime (1653–1658) and cooperation with France brought a new, definitive supremacy of English over Dutch Levant trade, but the English remained second to the French in Mediterranean trade. The policies of England's King William III (r. 1689–1702) further reduced the Dutch position, and English Levant trade reached its apex in the 1670s and 1680s. But competition arrived from the East India Company, and from the French government of Jean-Baptiste Colbert, which established Levant companies at Paris and Marseilles in 1685 and 1689. In what was the greatest disaster in the history of the Levant Company and of Dutch navigation into the Mediterranean and Levant, the Anglo-Dutch Smyrna Fleet of 400 heavily loaded merchantmen sailing in convoy under heavy escort was attacked on May 30,1693 by the French fleet in Lagos Bay off the coast of Portugal.
The following years proved the remarkable resilience of the Levant Company's organization. Trade went on profitably, with imports exceeding exports (though they were small compared to France's Levant trade). During the reigns of William III and Anne (1689–1702; 1702–1714) England gained control of the main areas of overseas trade and made safe its Levant shipping routes. During the first half of the eighteenth century, in spite of an enlarged membership, the competition with the East India Company and changes in demand in the Ottoman and English markets brought the company's decline. By 1767 the company could no longer meet its deficits, and until 1802 it relied on an annual government subsidy of £5,000. But Bonaparte's Egyptian expedition (1798–1799) caused the total collapse of the French Levant trade, and once again the British possessed a virtual monopoly on trade in the Mediterranean. By 1809 all the old rivals had disappeared, mainly because of the enormous expansion of industry in England, especially cotton manufactures. British exports to the Levant increased from £311,029 in 1812 to £806,530 in 1818. Membership increased to 816 new names in 1820, as compared to 400 in 1797.
Finally, though, the expanding power of the state was the decisive factor in the demise of the company. All of the company's consular establishments taken over by the British Board of Trade in 1825, and special court surrendered the charter. An act of Parliament repealed all statutes relating to the Levant Company, and all its possessions and liabilities were transferred to the government.
SEE ALSO Accounting and Accounting Practices; Bengal; Board of Trade, British; Bonaparte, Napoleon; Caravan Trade; East India Company, British; Coffee; Cotton; Egypt; Elizabeth I; Empire, British; Empire, Dutch; Empire French; Empire Ottoman; Empire, Portuguese; EntrepÔt System; Gold and Silver; Mediterranean; Mercantilism; Millets and Capitulations; Monopoly and Oligopoly; Partnerships; Piracy; Protection Costs; Silk; Smuggling; Spices and the Spice Trade; Textiles; Venice.
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Alexander H. De Groot