Long sea voyages were among the largest privately undertaken ventures in the early modern world. Financing them led to the creation of some of the first joint stock companies and the task of insuring them made marine insurance one of the first modern insurance products available. Yet the sailors involved are easily overlooked, but they were not mere cogs in the wheels of larger commercial ventures. Indeed, they were often entrepreneurs themselves, engaging in their own trade while abroad as a means of supplementing their wages, sometimes earning multiples more from private trading than they earned for their day-to-day work while at sea.
Monopolies and Privileges
In 1600, London merchants formed an East India Company which was given an official monopoly on English trade with the entire world east of the Cape of Good Hope, most notably with India and China. This was just one of many European trading companies given monopolies by their respective governments in the 17th and 18th centuries. After this English company was formed, a Dutch East India Company was founded in 1602, the French Compagnie des Indes Orientales in 1684, the Ostend Company of the Austrian Netherlands in 1722, followed by a Swedish trading company in 1731 and Danish companies were founded 1668 and 1732.
Their monopolies were rarely complete. In the case of the English East India Company, some trade occurred outside of the company’s account by its own captains and sailors, who were essentially autonomous while months’ travels away from authorities in London. Captains traded for themselves to supplement their pay of £120 a year which, though extraordinary compared to the wages of ordinary people, was meager compared to the amounts that could be made in trade once overseas in Asia.
To compromise with its entrepreneurial crews, the Company gave employees the privilege to use portions of their ships’ cargo space for private use. On large enough vessels, this could amount to many tons of cargo capacity under the control of individual sailors and, most of all, for the ship’s commander. This was intended to discourage abuses while aligning incentives; captains would now benefit if ships and cargos were handled safely and efficiently.
In 1768 alone, the value of this private ‘privilege’ trade, as it was known, amounted to £129,011 across 32 ships. The proportion belonging to commanders alone made up 63% of this total or just over £2,500 per ship captain, an amount twenty times the typical salary. Encouraged by the profitability of such activity, private trading by ship crews and their captains became a noteworthy feature of the marine economy in 17th and 18th century British trade.
Sailors
Data on the wages of British mariners abounds in lawsuit records and depositions from the High Court of Admiralty, which had jurisdiction over pay disputes and other legal issues in marine trade. To generalize, a common mariners’ wages rose from 17-18 shillings per month in the early 17th century to 24-25 shillings by the 18th century. While somewhat low given the perils involved, this amount was supplemented by the food and lodging expenses paid for by their employer. This could easy equal the value paid in wages.
Specialists and captains could make far more. A shipmaster would have earned over £5 (or 100 shillings) per month by the late 17th century and a master’s mate could earn half that, still a sum twice that of an ordinary mariner. These amounts were generally quite similar for different routes and destinations but could vary by experience and whether it was a period of peace or war. The one exception in peacetime would be voyages into the Indian Ocean. These would have required paying a premium wage, at least for higher ranking crew, in order to convince prospects to join these more difficult and longer journeys.
Other pay arrangements existed besides regular monthly wages. Sometimes, mariners were paid in a lump sum at the end of a voyage, an approach more common for shorter trips, with a bonus for a particularly successful journey. Crews would also be paid separately by freighters for loading and unloading cargo once at the port, supplementing other pay. These structures aligned the pay of sailors to the actual receipt of payment by the shipmaster for freight delivered.
Sailors’ incomes were not limited by their wages alone, regardless of the form they took. Some were paid a share of voyage profits, a form of compensation most common in the crews of privateers and fishing voyages. Sailors bound for fishing expeditions off of Newfoundland could receive between a fifth and a third of the catch for themselves on top of some regular wages. Though perhaps somewhat less common in the freight industry, this profit sharing was utilized by at least some freighters. Complementing all this was private trade, which provided a further source of income.
Ventures
In 1642, the ship Fame set sail from London, eventually travelling to the Caribbean from Cadiz in Spain. On board was Michael Johnson, a mariner. He took with him at least £5 for the journey, likely the equivalent of several months’ wages for someone of his rank. He deployed this money in trade while at sea. Johnson bought wine and linen in Spain to transport to the Caribbean, rented his cabin to Spanish passengers on the way to and from the West Indies, and once at Veracruz in Spanish Mexico, he used his wages to purchase dyes and silk to sell once back in Europe. From this activity, he may have returned with nearly £50 in cash and silk.
Johnson’s entrepreneurship was not peculiar and it appears to have been common for sailors to engage in private trade regardless of where they travelled. In 1647, a certain George Robinson lost the use of his arm due to being accidentally shot by the ship Pilgrime. He sued for damages as a result of his injury. Robinson insisted that he made between £60 and £100 annually from his post as quartermaster, a job that would normally see average pay of around 23-26 shillings per month in that era, amounting to just £15 per year. A witness suggested this was in fact roughly the going rate.
Perhaps Robinson was counting other compensation in his earnings but he clarified that his £60 to £100 figure was excluding any provisions of food he received. Rather, the source of the difference between the normal wage income and his ‘all-in’ earnings was the result of exactly the same sort of trading Michael Johnson engaged in. Robinson admitted that he made so much “by carrying some small venture” along the way.
With such profits possible, sailors would sometimes borrow money to fund their trading. In 1659, one Edward Coxere, a master’s mate, borrowed “ten pounds for a venture, which [he] laid out in several sorts of commodities, which [he] thought would turn best to account”. Perhaps in India especially, borrowing was a necessary part of the financial equation for those who looked to secure riches while abroad. This was because employees of the East India Company often had to buy their positions.
Some turned to family, friends, and associates. Other commanders in the East used ‘respondentia bonds’ to fund their trading; these were loans secured by the borrower’s cargo on a ship. This borrower might have been a captain in India looking to purchase cargo to send to Britain for profit. Meanwhile, common lenders were the already enriched Company employees looking to export their wealth back home by lending in India on terms to be repaid in Britain. In another arrangement, captains would engage in a ‘conditional purchase’ whereby they would essentially borrow commodities in return for an obligation to either return the cargo, if it could not be successfully sold, or pay an agreed upon sum once the captain returned to port.
The High Court of Admiralty has ample records of sailors engaging in private trade while at sea. What they traded in was of course dependent on the route. In the eastern Mediterranean, sailors might have traded in currants and oils. In North America, they bought tobacco, in Brazil they bought sugar, and in Africa, they acquired gold, ivory, and slaves.
British authorities permitted crews to transport personal effects free of customs duties, within some limits. For ships bound to and from the eastern Mediterranean, the limits on duty free portage were set in 1621 at £100 for the shipmaster, £10 for officers, and £5 for other seamen. Some sailors carried goods more valuable than the amount excluded from customs duties, thus paying taxes and sometimes regular freight costs as well. They acted like any other merchant while underway.
India
In the case of India and the rest of Asia, the East India Company’s monopoly gave the company’s captains an extra incentive to engage in private trading for their own account. They too could benefit from the abnormal profits enabled by the absence of competing merchant firms. Merchant sailors benefited from the Company’s larger ships, its exemption from certain customs duties, its network of local agents, and the security of the seas it enforced. Company employees were given the right to conduct intra-Asia trade for their own account while the Company focused on trade between Europe and Asia.
Because taking command of a Company vessel usually required buying one’s way in, often by paying thousands of pounds, aspiring captains found investors who would receive a share of the profits from this private trade. To make good to their investors and to secure as much riches as they could during the limited span of their career, captains would often purposely divert from their official routes to spend more time in the East, trading for themselves.
Captains would also often intentionally miss the proper season for sailing back to England, causing the ships to remain in Asia for over a year, and forcing the company to expend more on maintaining its fleets abroad. Demurrage charges, a kind of late fee for failing to deliver leased vessels back to their owners on time, consumed up to 36% of profits during sailing seasons. Some employees even engaged in private trade that illegally skirted the East India Company’s monopoly, trafficking goods in vessels under different countries’ flags.
It wasn’t only rouge newcomers who were eager to engage in this activity. More experienced captains, with the best knowledge of local trading patterns, were most likely to engage in private trading whether within or outside the boundaries of proper conduct. Though providing for private gain at Company expense, private trading may have helped reduce the economic cost of the monopoly, increasing trade capacity between markets less favored by the Company. Only after 1813, when the East India Company’s monopoly was abolished, would private trading by Company captains and mariners no longer benefit from the Company’s distinct advantages.
Risks and Losses
Whatever the rewards that could be had, the sea presented a myriad of risks. Michael Johnson of Fame encountered some of these risks just as he was returning to England with the £50 he made abroad. As it approached England, the ship sprang a leak, forcing Fame to dock at Dartmouth, which was under royalist control during the English Civil War then underway.
As a London ship, a jurisdiction under opposition control, its cargos were confiscated. Johnson somehow made off with his money without the authorities noticing. Nonetheless, he went on to lose the money anyway; it was taken by the commander of the seaside Hurst Castle in Hampshire on the way around the coast and it is from his lawsuit to recover his losses that we hear of his entrepreneurship.
While the civil war in England ended in 1651, the dangers at sea continued. High Court of Admiralty depositions on lost ships reveal the amounts that could be lost by merchant sailors when their ships were sunk or captured. The vessel Eastland Merchant was captured by a Spanish ship off of Alexandria in 1657. In a deposition at the Admiralty, the ship’s owners declared that the crew had lost around £600 in goods. The shipmaster had lost £89 alone but several other members of the crew also lost goods valued at what must have been the equivalent of several months’ wages.
Despite these risks, a career at sea was appealing and the profits that could come from individual entrepreneurship were a large part of the reason why. The potential returns offset the risks in the minds of many sailors. They, and especially those holding the most lucrative posts, like captains for the East India Company, used their earnings abroad as a springboard for future enterprises, including capital intensive ones like ship-owning and insurance. Though a career in the East India Company was the most sought after, private trading existed everywhere merchant fleets travelled.
Lesson
It is difficult to understand why someone would be drawn to a career at sea in early modern Britain when wages for mariners did not seem any better than those earned by many other sorts of common laborers. That is until one considers the other earnings sailors could receive while at sea, specifically profits from private trading. Because sailors often played the part of merchant while underway, their role in one of the engines of financial development in the 17th and 18th centuries is even larger than commonly realized.
More from the Tontine Coffee-House
Read about the men who earned riches in India only to find scorn and resentment when they brought their money back home. Learn about the East India Company’s role in triggering a financial crisis in 1772. Also, consider subscribing to this blog’s newsletter here.
Further Reading
1. Berg, Maxine, et al. “Private Trade and Monopoly Structures: The East India Companies and the Commodity Trade to Europe in the Eighteenth Century.” Political Power and Social Theory Chartering Capitalism: Organizing Markets, States, and Publics, Aug. 2015, pp. 123–145.
2. Blakemore, Richard J. “Pieces of Eight, Pieces of Eight: Seamens Earnings and the Venture Economy of Early Modern Seafaring.” The Economic History Review, vol. 70, no. 4, 2017, pp. 1153–1184.
3. Bowen, H.V. “Privilege and Profit: Commanders of East Indiamen as Private Traders, Entrepreneurs and Smugglers, 1760–1813.” International Journal of Maritime History, vol. 19, no. 2, Dec. 2007, pp. 43–88.
4. Erikson, Emily, and Peter Bearman. “Malfeasance and the Foundations for Global Trade: The Structure of English Trade in the East Indies, 1601–1833.” American Journal of Sociology, vol. 112, no. 1, July 2006, pp. 195–230.
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