London
August 1694
The “Every Verses” had originally been intended as an amusement, designed to delight London consumers with the ballad of “Bold Captain Every.” But by the end of the summer of 1694, they would become evidence in a legal dispute. In June, just as the “Every Verses” were beginning to be sung on the street corners of London, the aggrieved wives of the remaining Spanish Expedition crew petitioned the Crown to intervene in their dispute with James Houblon. The Spanish Expedition investors—led by Houblon himself—had behaved “traitorously,” they claimed, leaving their husbands “in to the King of Spaines Service to Serve him, as far as [we] know all the dates of their lives.” Before long, the Privy Council had opened an investigation, inviting Houblon to submit evidence in his defense. Houblon produced three documents: a list of the Spanish Expedition investors, presumably designed to impress the council with the investors’ social stature; the employment contracts signed by the crew; and a broadside copy of “Verses, composed by Captain Henry Every, lately gone to Sea to seek his Fortune.”
While it seems unlikely that Every himself composed the ballad, Houblon took the document at its word. In his submission to the Privy Council, he observed that the Every Verses were a “Declaration of their intentions of Pyrating, Greatly to the Dishonour of this Nation and damage to the Owners’ that the mutineers had left behind them at La Coruna.”
On August 16, the Privy Council reviewed the original complaint and Houblon’s defense. They referred the case to the Committee on Trade and Plantations, who then heard additional testimony in early September. Houblon’s defensive strategy appeared to pay off: the Committee seems to have ignored the complaints of the wives and focused on the theft of the Charles II instead. The committee issued a formal proclamation: “Orders maybe be given that the Ship with all the Ship’s Company be Stopt and Seiz’d into Safe Custody in the Plantations of where soever she shall be met with.” For the first time, Henry Every and his crew were officially on the run from the law.
Houblon would continue to be plagued by legal actions into the spring of 1695, after the long-suffering remaining crew of the Spanish Expedition returned from A Coruña. Led by William Dampier, the non-mutineers appealed to the High Court of Admiralty in an attempt to extract their wages from Houblon and his fellow investors. Dampier claimed that he had been contractually promised £82 for his services and had been paid only £4. Using the most circumstantial of evidence, the expedition’s sponsors successfully argued that Dampier and the other officers had resisted orders and assisted Every and the other mutineers in escaping with the Charles II. (This accusation is the most plausible explanation for Dampier’s subsequent reticence about the entire affair—he had his eye on potential government benefactors and couldn’t risk being branded a mutineer.) The case was finally dismissed in January 1696. Dampier never recovered his back pay, but by that point, he was putting the finishing touches on his maritime memoirs, a book that would ultimately prove to be far more lucrative to him than the Spanish Expedition had promised to be.
The financial scandal of the Spanish Expedition received little attention from the London press during its initial stages. Disputes over unpaid wages were common in the shipping business; the High Court of Admiralty would usually hear more than a hundred such complaints a year. But the Spanish Expedition’s legal imbroglio was also overshadowed by a far more dramatic financial crisis: the cratering stock price of the East India Company.
Boosted by the insatiable demand for calico and chintz among London’s elite, the company had enjoyed a historic run of profits in the second half of the 1600s. The company transitioned to a modern-style corporation in 1657, when it began issuing general shares that gave investors a piece of the overall enterprise and just not specific voyages, and in the three decades that followed, the company completed over four hundred expeditions to India, increasingly focused on textiles. In 1670, slightly more than half its imports were cotton-based products, with pepper and other spices lagging behind for the first time. By the mid-1680s, calico and chintz constituted 86 percent of the company’s trade with India. The insatiable demand for Indian cotton generated historic returns for the company’s investors. Shares worth £100 in the middle of the 1660s were worth more than £500 by 1680. And the company’s dividends were far more generous than those of modern corporations. For much of the second half of the century, the company returned a 20 percent dividend annually to investors, but in the boom years of the calico trade in the 1680s, the dividend reached as high as 50 percent. An investor buying £100 of shares in the company in 1657 would have received £840 in dividends by 1691, on top of the increase in the value of the shares themselves. The wealth creation was not quite as dramatic as the IPOs of the modern digital age—$100 invested in Apple’s public offering in 1980 would be worth roughly $40,000 today—but in the seventeenth century, that level of return on investment was unprecedented.
Starting in the late 1680s, however, a series of political and financial scandals began to undermine the company’s economic prospects. The company’s pioneering shareholder structure was accompanied by other, shadier innovations that would also become commonplace in modern-day financial markets. Josiah Child, the company’s aggressive governor (the equivalent of a modern CEO), developed a keen skill at manipulating the market with selectively released information—with varying shades of truth and falsity—regarding the company’s fortunes in India. Years later, in his Anatomy of Exchange-Alley, Daniel Defoe would describe Child’s influence over the investor class:
The East India Stock was the main point, every Man’s Eye, when he came to Market, was upon the Brokers, who acted for Sir Josiah, enquiring ‘does Sir Josiah Sell or Buy?’ If Sir Josiah had a mind to buy, the first thing he did was to commission his brokers to look sower, shake their heads, suggest bad news from India; and at the bottom if followed, ‘I have a commission from Sir Josiah to sell out whatever I can,’ and perhaps they would actually sell ten, perhaps twenty thousand pound. Immediately, the Exchange . . . was full of sellers; nobody would buy a shilling, ’till perhaps the stock would fall six, seven, eight, ten percent, sometimes more; then the cunning jobber had another set of men employed on purpose to buy, but with privacy and caution, all the stock they could lay their hands on.
Today, of course, such blatant manipulations might prompt a visit from the SEC, but in the 1680s, all the now familiar conventions of publicly traded exchanges were in the process of being invented, and the distinction between outright fraud and shrewd investing had not yet been codified into law. Part of Child’s cunning came from the way he exploited the imperfect flow of information from India itself. The company’s trading monopoly with India gave it an additional quasi-monopoly on news from the subcontinent, which enabled it to invent entire narratives for the purposes of manipulating the share price, with very little risk of fact-checking from a journalistic entity or a rival firm. As Defoe wrote:
There are those who tell us, letters had been order’d by private management to be written from the East Indies with an account of the loss of ships which have been arrived there, and the arrival of ships lost; of war with the Great Mughal, when they have been in perfect tranquillity, and of peace with the Great Mughal when he has come down against the factory of Bengal with 100,000 men, just as it was thought proper to call those rumours for raising and falling of the stock and when it was for this purpose to buy cheap or sell dear.
The growing power of the company—coupled with these shady financial practices—led to increasingly strident calls for Parliament to rescind the exclusive charter it had granted the company for trade with India. Josiah Child had managed to maintain support for his enterprise by making substantial kickbacks to members of King James II’s extended court, but when William of Orange ousted James in the Glorious Revolution of 1688, all those years of bribery became worthless overnight. Shortly after William’s coronation, Parliament opened a series of investigations into the corrupt practices of Child and his fellow executives; a proposal emerged for a New East India Company that would compete with the original and offer shares to a wider slice of the British merchant class.
The attacks on the company in London during this period were matched by commensurate attacks in India itself. The East India Company factory at Surat—where William Hawkins had landed in 1608—had been the site of increasingly hostile disputes with representatives of Aurangzeb. Seeking more autonomy over its trading practices, the company relocated its headquarters to an archipelago of seven islands on the Konkan Coast, almost 200 miles south of Surat. The islands had once belonged to Portugal, but they had been ceded to the British as part of the dowry of the Portuguese princess Catherine of Braganza in her marriage to Charles II in 1661. Seven years later, they were leased to the East India Company, and by 1687, the company had made the archipelago its primary base in India. The Portuguese had called the islands Bombaim, which was eventually anglicized into the name they would retain until the twentieth century: Bombay.
As part of the charter granted by Charles II, the company was authorized to construct a mint in its Bombay headquarters, in part to create a more stable currency for trading than the chaotic mix of private and state-sponsored coins that the existing Indian market utilized. The company recruited a well-connected nineteen-year-old named Samuel Annesley to oversee the mint operations. Annesley was the son of a prominent dissenting minister, a member of an extended family with a rich intellectual and theological history. His father was friends with Daniel Defoe, who wrote an elegy on the occasion of his death. His nephew was John Wesley, the founder of Methodism. Annesley appears to have had more commercial than spiritual interests, however. Whatever entrepreneurial talents he might have brought to the job, Annesley arrived in Bombay to find that the mint operation had been effectively suspended. “The mint was there, and it was working after a fashion,” his biographer Arnold Wright observed, “but there was no call for additional coinage. The problem indeed was how to get rid of the money that was already minted. There was no scope for its circulation outside the island, and on the island itself the needs of the bazaar were day by day undergoing greater restriction.” Before long, he had been dispatched to Surat to help oversee the factory there.
In Surat, Annesley found a more established settlement than the nascent headquarters on the Bombay archipelago. The East India Company factory had grown into a collection of warehouses and residential halls, surrounded by a wall, overlooking the muddy estuary of the Tapti River. The town itself contained as many as two hundred thousand residents, and the commercial activity it attracted as the hub of Red Sea trade generated enough wealth to support numerous mansions on its finer streets, along with “marble seraglios, beautiful scented gardens and plashing fountains, and a general exuberance of costly adornment.” Annesley integrated himself quickly into the broader trading community. Within a few years, according to Wright, “he had a profound knowledge of all the ramifications of the Company’s business at Surat; he was intimately associated with the native trading community; and he was acquainted with all the network of intrigue which enmeshed the official life of the place.” His primary complaint with his existence in Surat lay in the deep-rooted association in the minds of the local trading community—and the Mughal authorities—connecting the East India Company with the pirates of the Red Sea. “Was it not on account of the piracies,” Annesley wrote in one letter back to the Bombay headquarters, “we should live here in as great, or greater honour, credit and respect than ever.”
The association with the Red Sea pirates also bedeviled the company representatives—known as “factors”—back in Bombay, though they had other threats to contend with as well. By shifting its operations to Bombay Castle, the company had hoped to enjoy far greater freedom from the whims of Aurangzeb. (“Though our business is only trade and security, not conquest,” the company directors declared, “yet we dare not trade boldly or leave great stocks where we have not the security of a fort.”) But their locus in a subtropical marshland made them vulnerable to a different kind of local hazard: disease. One visitor in 1690 found the British merchants overwhelmed with “pestilential vapours that seized their vitals and speeded their hasty passage to the other world.” By some reports, more than half the settlement died during the epidemics that swept across the archipelago. Aurangzeb, meanwhile, continued to challenge the company’s trading authority. He briefly imprisoned the company representatives in Surat, and laid siege to Bombay Castle, ransacking its warehouses situated outside the castle’s walls. Negotiations ultimately secured a truce, with the company compelled to pay a fine of 150,000 rupees and to promise to “behave themselves for the future no more in such a shameful manner.”
The fragile détente with Aurangzeb was immediately followed by more hostilities back home. In 1693, the House of Commons voted to dissolve the original corporation and start anew with a more open approach to Indian trade. But just as the company seemed to be on death’s door, William reversed course and renewed the charter while Parliament was on leave. Enraged by the betrayal, Parliament quickly passed a resolution that declared “all subjects of England should have equal right to trade to the East-Indies.” In May 1695, as the Spanish Expedition Shipping case was winding to its close, Parliament began another investigation into corruption at the highest levels of the East India Company. “Even by the lax standards of the day,” Nick Robins writes in his history of the East India Company, “politicians were genuinely shocked by what they found. A team of MPs pored through the company’s accounts and uncovered a complex web of bribes, all emanating from the Governor Sir Thomas Cooke, Child’s son-in-law. In the six years since the Revolution, £107,013 had been paid out for ‘the special Service of the Company,’ including a massive £80,468 in 1693 to win a new charter.”
Understandably, the constant turmoil and uncertainty had a catastrophic effect on the company’s share price, which dropped 35 percent over the course of 1695. It would decline almost as much the following year.
All these developments—the corruption investigations, the still fragile relationship with Aurangzeb, the threat of losing the company’s exclusive charter, the cratering stock valuation—weighed heavily on the mind of Samuel Annesley, now thirty-seven years old and recently appointed president of the Surat factory. The news from back home rolled in with a lag of a month or two, but by midsummer 1695, he would have been able to detect the broad strokes of the story: the hordes were coming after the East India Company back in London.
They would be coming for Surat soon enough.