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39-456: The Company of Merchant Adventurers of London was a trading company founded in the City of London in the early 15th century. It brought together leading merchants in a regulated company in the nature of a guild . Its members’ main business was exporting cloth, especially white (undyed) broadcloth , in exchange for a large range of foreign goods. It traded in northern European ports, competing with

78-424: A natural monopoly . This may explain why in the field of entrepôts certain markets ( Antwerp , Amsterdam) gained a dominant position for some time, while others ( London , Hamburg ) were left behind and only came into their own when the special circumstances favoring the others came to an end. In the case of Amsterdam, those circumstances changed when the technological possibilities of direct trade improved, obviating

117-459: A central reservoir of commodities, a regulating mechanism smoothing out fluctuations in supply and demand over time and minimizing the effects of interruptions and bottlenecks. The entrepôt performed an additional function, a derivative of its primary market-function: the physical proximity of merchants promoted the exchange of information about market forces, prices, and developments in the factors underlying supply and demand. This not only lowered

156-521: A primary effect, and of the development of sophisticated financial markets as a secondary effect. Such financial markets also profited from the phenomenon of decreasing marginal information cost; this soon helped make Amsterdam an important financial center also. The physical proximity of a strong financial sector partially explains why after 1590 Amsterdam also became a center for the low-volume, high-value "rich trades" (i.e., commodities like spices , silk , and high-quality textiles ). In such trades

195-513: A putative London entrepôt. However, as the Acts only regulated English and colonial trade (and imperfectly so) and England only managed to dominate a few commodities markets for which it formed the main customer, these attempts were never successful. England would only achieve primacy in world trade after other factors had undermined the Dutch entrepôt. French protectionism was eventually more successful, because

234-411: A single commodity, though at first Baltic grain dominated it. It came into being because the economic and technological conditions of the time required a trade-network, based on what is known in economic terms as an entrepôt , a central point (for a given geographic area) where goods are brought together and physically traded, before they are re-exported to their final destinations. This need followed from

273-490: A special class of "general trading companies" ( sogo shosha ), large and highly diversified businesses that trade in a wide range of goods and services. Amsterdam Entrep%C3%B4t The Amsterdam Entrepôt is the shorthand term that English-language economic historiographers use to refer to the trade system that helped the Dutch Republic achieve primacy in world trade during the 17th century. The Dutch prefer

312-542: A stock and deliver products to shops or large end customers. They work in a large geographical area, while their customers, the shops, work in smaller areas and often in just a small neighborhood. Today "trading company" mainly refers to global B2B traders, highly specialized in one goods category and with a strong logistic organization. Changes in practical conditions such as faster distribution , computing and modern marketing have led to changes in their business models. The Winding-up and Restructuring Act , an act of

351-635: The Duke of Alva , governor of the Netherlands . Although trade was resumed at Antwerp from 1573 to 1582, its declining fortunes ceased with the fall of the city and the subsequent development of the Amsterdam Entrepôt , and the Dutch Golden Age . Under the charter of 1564, the company's court consisted of a governor (elected annually by members beyond the seas), his deputies, and 24 Assistants. Admission

390-699: The Hamburg Company . The Merchant Adventurers of London still existed at the beginning of the 19th century. In the early seventeenth century, similar groups of investors, referred to as "adventurers", were formed to develop overseas trade and colonies in the New World: the Virginia Company of Adventurers of 1609 (which later split into the London Company settling Jamestown and the Chesapeake Bay area, and

429-624: The Hanseatic League . It came to focus on Hamburg . The company received its royal charter from King Henry IV in 1407, but its roots may go back to the Fraternity of St. Thomas of Canterbury . It claimed to have liberties existing as early as 1216. The Duke of Brabant granted privileges and in return promised no fees to trading merchants. The company was chiefly chartered to the English merchants at Antwerp in 1305. This body may have included

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468-665: The Merchants of the Staple , who sought to diversify from exporting wool through Calais into exporting cloth to Flanders without having to become freemen of the Company of Merchant Adventurers. The Merchant Adventurers kept control of their trade and Flanders as their port. Foreign merchants of the Hanseatic League had considerable privileges in English trade and competed with the Merchant Adventurers, but these privileges were revoked by

507-675: The Parliament of Canada , uses the following definition: "trading company" means any company, except a railway or telegraph company, carrying on business similar to that carried on by apothecaries, auctioneers, bankers, brokers, brickmakers, builders, carpenters, carriers, cattle or sheep salesmen, coach proprietors, dyers, fullers, keepers of inns, taverns, hotels, saloons or coffee houses, lime burners, livery stable keepers, market gardeners, millers, miners, packers, printers, quarrymen, sharebrokers, ship-owners, shipwrights, stockbrokers, stock-jobbers, victuallers, warehousemen, wharfingers, persons using

546-647: The Plymouth Company , which settled New England). In addition, the Company of Adventurers in Canada sent forces during the Thirty Years War that achieved the surrender of Quebec in 1629, and colonized the island of Newfoundland . The arms of the various companies were as follows: Trading company Different kinds of practical conditions make for many kinds of business. Usually two kinds of businesses are defined in trading. Importers or wholesalers maintain

585-511: The Senate of Hamburg invited the Merchant Adventurers to return there, but negotiations over this broke down. The merchants who had frequented Middelburg since 1582 were invited to return in 1587 to the (now independent) United Provinces (later part of the Netherlands). Due to impositions by Holland and Zeeland , this was an unpopular choice with company members. In 1611 the company's staple

624-639: The Staplers , who exported raw wool, as well as the Merchant Adventurers. Henry IV's charter was in favor of the English merchants dwelling in Holland , Zeeland , Brabant , and Flanders . Other groups of merchants traded to different parts of northern Europe, including merchants dwelling in Prussia , Scania , the Sound , and the Hanseatic League (whose election of a governor was approved by Richard II of England in 1391), and

663-591: The intermediating function of the entrepôt. The mechanism underlying the entrepôt trading-system does not explain the peculiar success of the Dutch Republic and Amsterdam in particular. Other merchant cities might have gained this prize and as a matter of fact, Antwerp for a time did. But the Antwerp entrepôt was destroyed with the Fall of Antwerp (1584–1585) and the subsequent expulsion of its Calvinist inhabitants (half of

702-562: The price-inelasticity of their demand ) prone to large price fluctuations (as a little over-supply would bring about a large fall in prices). The readiness of the Dutch government to regulate markets and to provide legal monopolies to chartered companies like the Dutch East India Company helped to lessen the risk of investment in such enterprises. All these factors conspired to concentrate trade at entrepôts (in view of their trade advantages as described above) and in particular at

741-576: The trade embargoes imposed by Spain on Dutch commerce during the Eighty Years' War had been lifted. The resurgence of Dutch trade on Spain and Portugal and other Mediterranean countries after 1647 overwhelmed the Republic's competitors. To remedy this situation, first England and later France took to coercion in the form of economic and military warfare. The English Navigation Acts of 1651 and 1660-1663 restricted free trade in an attempt to divert trade to

780-454: The Amsterdam entrepôt (once Antwerp had been eliminated as a competitor) because of the time-window (1590-1620) in which they came to exert their influence. The rise of the Amsterdam entrepôt was therefore to some extent also a matter of being in the right place at the right time. But once the entrepôt had been established, its growth-promoting peculiarities helped Amsterdam (and the port cities in

819-522: The Dutch low shipping rates did not necessarily provide a competitive advantage. What did attract the specialists in this type of trade (apart from the favorable financing possibilities) was the influx of skilled workers and entrepreneurs from the southern Netherlands in the 1580s that helped transfer the sophisticated Flemish textile industry to the Republic. This gave her an industrial base for her export trade. The "rich trades" were also stimulated by government intervention, as they were by nature (because of

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858-631: The English Merchants in Norway, Sweden and Denmark (who received a charter in 1408). Under Henry VII 's charter of 1505, the company had a governor and 24 assistants. The members were trading investors, and most of them were probably mercers of the City of London . However, the company also had members from York , Norwich , Exeter , Ipswich , Newcastle , Hull , and other places. The merchant adventurers of these towns were separate but affiliated bodies. The Society of Merchant Venturers of Bristol

897-561: The English government in the mid-16th century. The Merchant Adventurers decided to use other ports. Emden in East Friesland and Hamburg competed to serve the Merchant Adventurers of England, who chose Emden. They soon found, however, that the port failed to attract sufficient merchants to buy the English merchants' wares, so they left abruptly and returned to Antwerp . Operations there were interrupted by Queen Elizabeth 's seizing Spanish treasure ships, which were conveying money to

936-470: The French and Dutch economies were complementary, rather than competitive like the Dutch and English economies. Restricting trade between France and the Republic therefore resulted in the roll-back of the specialization that Comparative advantage had engendered in both economies (though at great cost to the French consumer also) and helped throttle the once-flourishing Dutch industries. In the 17th century,

975-504: The city population), followed by the centuries-long blockade of the Scheldt trade. To explain the Dutch success we have to take account of a number of factors that in isolation still do not explain the Dutch primacy in world trade, but whose interplay may go far in doing that. The Dutch had gained an important role in the Baltic trade (grain especially) in the 15th and 16th century because of

1014-488: The company' (i.e. members), but who nevertheless traded within its privileged area. When the Company of London lost its exclusive privileges following the Glorious Revolution of 1689, the admission fees were reduced to £2. After Parliament threw the trade open, the company continued to exist as a fellowship of merchants trading to Hamburg . Because they drove a considerable trade there, members were sometimes called

1053-446: The cost of information-gathering but even led to decreasing marginal information costs . Other things being equal, this externality would lower the total marginal cost of goods trading through the entrepôt. It is a well-known economic fact that in circumstances of decreasing marginal costs, economies of scale occur, which can give an advantage to early entrants that permits them to outgrow their competitors, sometimes even leading to

1092-442: The economic elite of Amsterdam moved with William of Orange to England, where they helped to restart the English international trade, leaving behind in Amsterdam the more religious, and less competitive, burghers. During the 18th century this combination of adverse economic and technological developments (promoting disintermediation ) and foreign protectionism led to a relative decline of Dutch preeminence in world trade and of

1131-587: The fact that, in those days, transportation of goods was slow, expensive, irregular, and prone to disruption; and that supply and demand for goods fluctuated wildly and unpredictably. The risks entailed by these circumstances put a premium on the creation of such a fixed base, where commodities could be stockpiled prior to marketing and final distribution . Furthermore, concentrating storage, transport, and insurance facilities in one place helped reduce transaction costs and keep long-term prices more stable than they otherwise would have been. The entrepôt functioned thus as

1170-677: The latter had the same rights in England as native merchants and better privileges abroad, enabling them to undersell English merchants. Hamburg was a member of the League. When the English merchants left Emden , they tried to settle in Hamburg, but the League forced the city to expel them. Emden was tried again in 1579. The Emperor ordered the Count of East Friesland to expel the merchants, but he declined. The English merchants remained there until 1587. In 1586,

1209-474: The maritime zone of the Netherlands, interlinked to Amsterdam by the area's inland waterways ) achieve its position of economic preeminence. Eventually this preeminence would be undermined by technological and economic changes that would eliminate the advantages of the entrepôt and promote disintermediation . However, these developments were not to occur until the 18th century. During the 17th century,

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1248-503: The nature of commodities exchanged (herring for grain, a low-value, high-volume bulk trade) and the dominance of the Dutch in the herring fisheries . These factors became dominant in this trade because Dutch shippers experienced a structural fall in shipping costs due to revolutionary innovations in shipbuilding (the wind-driven sawmill ) — which brought down construction costs — and in ship-design (the Fluyt ship that required smaller crews) at

1287-453: The need for intermediation in commodities and financial markets still reigned supreme. The Amsterdam entrepôt provided great advantages to European consumers and producers (inherent in its operation) and to the merchants that used it. But there also were losers in the process. Competitors, like the Hanseatic and English merchants, lost appreciable market share and hence income, especially after

1326-463: The term stapelmarkt , which has less currency in the English language. In the Middle Ages , local rulers sometimes gave the right to establish staple ports to certain cities. Amsterdam had never received such formal rights (unlike e.g.,  Dordrecht and Veere ), but in practice, the city established a staple-market economy in the 15th and 16th centuries. This economy was not limited to

1365-403: The trade of merchandise by way of bargaining, exchange, bartering, commission, consignment or otherwise, in gross or by retail, or by persons who, either for themselves, or as agents or factors for others, seek their living by buying and selling or buying and letting for hire goods or commodities, or by the manufacture, workmanship or the conversion of goods or commodities or trees ; Japan has

1404-524: The turn of the 17th century. This so improved their competitive position that they soon dominated the European bulk trades, not only the Baltic trade, but also the salt trade of the Iberian Peninsula . High profitability of the bulk trade resulted in the possibility of large savings, and the reservoir of savings looking for profitable investment eventually resulted in a lowering of interest rates as

1443-485: Was a separate group of investors, chartered by Edward VI in 1552. Under Henry VII, the merchants who were not of London complained about restraint of trade. They had once traded freely with Spain, Portugal, France, Italy, and the Netherlands, but the London company was imposing a fine of £20, which was driving them out of their markets. Henry VII required the fine to be reduced to 10 marks (£3, 6s and 8d). Conflict arose with

1482-401: Was by patrimony (being the son of a merchant who was free of the company at the time of the son's birth), service (apprenticeship to a member), redemption (purchase) or 'free gift'. By the time of the accession of James I in 1603, there were at least 200 members. They gradually increased the fees for admission. The conflict of the Merchant Adventurers with the Hanseatic League continued as

1521-543: Was permanently fixed at Hamburg . The designated Dutch staple port was moved during the early 17th century from Middelburg to Delft in 1621, then to Rotterdam in 1635, then to Dordrecht in 1655. The years between 1615 and 1689 were marked by periods, starting with the ill-fated Cockayne Project (1614 - 1617), when the company lost and then regained its monopolistic privileges. It moved its staple port from Delft to Rotterdam in 1635. The company suffered from trouble with interlopers, traders who were not 'free of

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