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Updated February 11, 2023The EIC’s mixed-cargo slave trade was further distinctive in that not all of the slaves were purchased by the company; many were born into slavery at the company’s holdings and then moved to another fort. When EIC directors in London received a request for slaves from one of their agents, they would first look to the slaves they already owned and attempt to transfer them. The EIC’s slave trade strategy relied heavily on the transfer of slaves between holdings. According to the estimations of Richard Allen, as many as one-third of the slaves aboard EIC ships were transfers—a sizeable proportion given that transfer requests were consistently smaller than purchase requests. The company authorized at least 77 transfer voyages involving at least 1,040 slaves between 1639 and 1787.
Similar to the mixed-cargo slave trade, the company fused transfers onto its existing trading networks, making transfers both possible and efficient. If the directors deemed a transfer necessary, they would assign it to the next ship that would pass both ports, thereby reducing costs and voyage durations. The transfer of slaves rarely incurred any additional sunk costs, as the ships used needed to pass through both destinations to accomplish its primary objective. The only expense incurred by the company was the captain’s wages—typically four pounds per slave.
The EIC was able to reap additional benefits from the specialized skills and knowledge of English culture that its slaves acquired as a result of the reorganization of its non-free labor force that was made possible by slave transfers. At St. Helena, where the company frequently experimented with new crops and goods to maximize the island’s productivity and value, these reorganizations were particularly advantageous. During the first five years that the company possessed St. Helena, it sent multiple requests to its agents in Surat, requesting that they send indigo seeds and slaves who “knew how to sow it and then perfect it, and advised the Governor of St. Helena on the particulars.” Bencoolen, the company’s primary fort on the island of Sumatra, was a particularly dangerous location for EIC employees due to environmental and diplomatic factors, which increased the value of having experienced slaves.* The fort at Bencoolen is frequently described in company correspondence as a “sickly” and “fever-infested” location that sent Englishmen “to their eternal homes.” Despite the fact that slave transfers reduced the EIC’s overall trade volume, they demonstrate the crucial role slavery played in the company’s ability to control territory and maximize profits.
The South Sea Bubble describes a series of events surrounding the plan to convert a significant amount of British national debt into equity shares of the South Sea Company (SSC) in 1720. The rise and fall of the stock market during the South Sea Bubble is still one of the most heavily discussed events in history.
In 1711, the SSC was founded with a capital stock of more than £9M. It was established to purchase existing short-term government debt and help manage the national debt in a similar way to the Bank of England. The Company also intended to conduct business with the Spanish Empire.* Spanish America gained popularity as a more promising trading region than India and the Far East because the market was more accessible and traditional English exports like textile and iron items were more likely to be purchased. Following the conclusion of the Treaty of Utrecht (1712), the SSC was awarded exclusive rights to trade with Spanish America—the so-called South Seas—on behalf of the British government. The SSC also secured a 30-year contract as the sole supplier of slaves to the South Seas, known as the Asiento de Negros. Britain already had colonies in the Caribbean—and consequently, a significant share of the market for slave trading in the Western Hemisphere. The firm appeared to be well positioned in this lucrative new market.
In the autumn of 1719, however, a new war with Spain halted the SSC’s trade with the South Sea. Unlike the EIC with its robust Asian trade, the SSC had little room for maneuver. The company’s proposed solution to this dilemma was to again attempt to convert government debt into new equity shares. The scale of the proposed scheme was unprecedented, except insofar as it was inspired by the French legal system. By the end of 1719, John Law had successfully converted all French national debt into shares of the newly founded Compagnie des Indes, which monopolistically merged international trade, national banking, and tax collection. Some of Law’s system was evident in the SSC’s initial proposals, where the conversion of British national debt into South Sea shares was explored with the government, the EIC, and the Bank of England (BoE).* The EIC and the BoE, like the SSC, were both “big money” companies, meaning that both had made substantial loans to the government to justify their chartered existences. Exchanging all British national debt for South Sea shares would have posed an existential threat to these companies, so the plan evolved to excluding the debt already held by the EIC and the BoE and converting the remaining national debt into South Sea shares.