The Legal Debate Around the Ostend Company (1722-1731)
Introduction
The focus of this blog post will be on the Ostend Company which sought to expand its trade into the far corners of the world which brought a heated legal debate across the continent. This was no small feat given the fact that the Ostend Company only existed for a short period. Within a decade of its establishment in 1723, the Ostend Company was able to take a formidable presence in the global tea trade. (1)
Background
The 18th century is marked by shifting alliances and colonial rivalries. The two most important figures on the global market are the VOC (Vereenigde Oostindische Compagnie) and the EIC (East India Company). Both VOC and the EIC are chartered companies, granted exclusive trading privileges through a charter. They operated as hybrid entities, with both public authorities and private investors holding shares. Possessing quasi-governmental powers, they could enter into treaties and employ military forces. These companies had devised methods to accumulate capital for conducting long-distance voyages, essentially enabling the undertaking of significant expeditions.
The Barrier Treaty of 1715 (2) enabled Emperor Charles VI to assume effective control of the Southern Netherlands from the British and French, who had occupied it during the War of the Spanish Succession. (3) The treaty outlined the conditions under which Charles VI could exercise his sovereignty, and it was within this framework that the Ostend Company was able to be established. The emergence of the company was facilitated by the absence of direct military confrontation between the Emperor and the Dutch and the English. (4) These three powers had been allies during the war.
The Barrier Treaty conditioned the transfer of power to Charles VI, who would exercise the same powers as his predecessor, Charles II of Spain (1661-1700). (5) As Duke of Brabant, Count of Flanders and Holy Roman Emperor, Charles VI granted a charter to the Ostend Company in 1722 which marked its official establishment and the start of its official operations in 1723. The company was founded by a naturalized Irishman, Thomas Ray who had landed in Ostend in 1698, with a group of Irish merchants.(6) The main work to consult on the Company's history is a thorough study by Michel Huisman (ULB), who studied diplomatic, institutional and economic archives.
Even before the company was founded, individual private persons used to set sail to the Far East which resulted in huge profits. (7) The alliances between the investors and the local merchants boosted the Ostend Company’s expansion further whilst facilitating trade with Bengal directly through the company’s operations. (8) Following the end of the war of the Spanish Succession in 1714, Ostend quickly became a hotspot for merchants who were eager to capitalize on the changing dynamics in the Southern Netherlands. (9) This brought forth the idea of creating a company to execute trading activities on a larger scale.
Charles VI eventually granted a charter to the Ostend Company in 1722. (10) The charter gave the company privileges and protection under the emperor which was necessary during the 18th century considering the British ships roaming the high seas as well as pirates. Sailing under the protection of the emperor meant a lot more safety for the sailors which equaled bigger profit margins.
How did the Ostend Company become so successful?
The negative figures in the graphic can be explained by the fact that there was an influx of traders after it became known how lucrative the activities were. This resulted in much more supply, causing prices on the market to fall.
One of the key reasons that the Ostend Company became so successful was the ability of the ships to bring products such as tea much faster to the European market which made the quality of the tea better. This brought the Ostend Company into direct competition with the VOC and the EIC.
The ships of the Ostend Company were able to navigate much faster than the ships of the VOC. One of the main reasons was that the ships of the Ostend Company were forced to make their journey as short as possible due to political circumstances. This resulted in the limitation of the number of ports and routes where they could stop on provisions. What at first seemed to be a handicap turned out to be very advantageous.
Whoever arrived first in Canton was able to make the best deal with the Chinese middlemen.
The early European explorers were not only looking for new lands. They also had to discover the pattern of winds and currents that would carry them where they wanted to go. During the early years of sailing, winds and currents determined trade routes and therefore influenced European imperialism and modern political geography.
Central theme of the legal debate
The establishment of the Ostend Company posed a direct challenge to the existing order of colonial trade monopolies maintained by established European powers, particularly the Dutch and the English. (11) The Dutch Republic with its East India Company (VOC) was even prepared to use force to compel Charles VI. (12) In its argumentation, the Dutch turned away from Hugo Grotius' famous stand for free navigation on the high seas to safeguard its interests. (13) However, it was not merely the economic competition that sparked controversy; rather, it was the perceived violation of established legal norms and diplomatic agreements that fueled the debate. This and the following sections lean heavily on Prof. Dhondt's 2015 article "Delenda Est Haec Carthago: The Ostend Company as a Problem of European Great Power Politics".
Several grand jurists of the early modern period were involved in the legal debate of the Ostend Company. Legal perspectives were given by famous jurists such as Jean Barbeyrac (1674-1744, translator of Grotius and Pufendorf), Abraham Westerveen (advocate of the VOC), Patrick MacNeny (1676-1745, lawyer and high ranking official in the Austrian Low Countries), Jean Du Mont (1667-1727, compiler of famous treaty collection Corps Universel Diplomatique du Droit des Gens), and others.
Two important legal questions were at the center of the debate; (1) are the subjects of Charles VI bound by the treaty that was signed by Philips IV of Spain, 70 to 80 years prior? (2) Can parties to the treaty renounce their natural rights to navigate freely on the high seas?
Several legal arguments were made against the Ostend Company by the Dutch.
The Dutch argued that the Southern Netherlands were transferred in the same status as they had belonged to Charles II. (14) The exclusion of all Spanish subjects had to be continued under Austrian rule.
Another argument made by the Dutch was that the sea is free by nature but can be closed by treaties : mare liberum, pactis clausum. (15) With the Treaty of Münster, all subjects of Spain had renounced their rights of navigation in the high seas.
In defence
Jean Du Mont, also known for publishing the Corps universel Diplomatique du Droit des Gens, formed the basis of the defence: he argued that the free navigation of the high seas was a peremptory norm and could not be renounced by treaty. No private person could claim ownership or any exclusive right on the high seas. (16)
Patrice de Neny formed another argument in defense of the Ostend Company: he distinguished two aspects of the Spanish Habsburg rulers of the Netherlands. On the one hand, he saw them continuing the Burgundian heritage, on the other hand, they wore the crown of Spain. Consequently, treaties contracted into as head of the Burgundian territories, could not bind Spanish subjects and vice versa. (17) Neny also argued that the VOC could not acquire an exclusive right to the East Indies as the acquisition of full dominium was inappropriate. (18)
Jean Barbeyrac argued that the Ostend Company's establishment violated existing treaties and agreements, particularly the Treaty of Utrecht. Barbeyrac contended that the company's activities threatened the commercial interests of other European powers, especially the Dutch and English, who had already established trading monopolies in the region. He argued that the Southern Netherlands had forfeited their right of navigation by not exercising it for a long period of time and hereby implicitly acknowledging the limitations based on the Treaty of Münster. Additionally, Barbeyrac criticized the Ostend Company's actions as provocative.
Another argument by Neny was based on the alleged right of conquest based on which Charles VI had obtained the Southern Netherlands. With the right of conquest, a ruler was able to undo the existing limitations.
Barbeyrac on the other hand kept his argument that Charles VI had received the Spanish Netherlands in the same state as Charles II had enjoyed them. (19) The limitations contracted by Philip IV for the whole of his territories did not disappear at Charles VI’s accession.
League of Hanover
The arguments were well known in the European public sphere and the legal debate spread all over Europe. One thing was sure: the upcoming Ostend Company formed a clear competitor against the VOC and the EIC.
Although the British crown did not have a direct legal argument such as the Dutch to apprehend the trading activities of the Ostend Company, supporting the Dutch in their goal to exclude the Ostend Company from its trading activities was beneficial for the EIC. Britain saw the Ostend Company as a threat to existing trading monopolies. (20)
A third major party in the complicated affair was France. France viewed the Ostend Company as a potential threat to its own colonial and commercial interests, particularly in the Indian Ocean region. France also had forbidden its subjects from working for the Ostend Company.
As a result, the three major European powers cooperated with each other and aligned their diplomatic effort to influence the Ostend Company and to bring it to its end. The alliance signed in Hanover (King George I and George II's Summer residence in Germany, as they ruled the principality) between the three countries posed a significant geopolitical threat to the Ostend Company, with the risk of war if the Emperor did not revoke the company's charter. (21) The company found itself encircled by these three nations and thus met its end in 1731 when its charter was revoked.
Cessation of the Ostend Company and the Pragmatic sanction
The Dutch, France and England were successful in eliminating a rival that had proven himself as a serious competitor in the tea trade. Charles VI agreed to the cessation of the activities in return for recognition of the Pragmatic Sanction, which the Maritime Powers did in 1731/1732. (22)
On the domestic front, the Pragmatic Sanction allowed Maria Theresa to succeed her father as ruler of the Habsburg lands. Recognition of the Pragmatic Sanction by France would, however, only be established in 1735.
Conclusion
The emergence of the Ostend Company as a formidable player in global commerce stirred up a heated legal debate across Europe, drawing attention to the complex web of treaties, alliances, and power dynamics shaping the era. Its challenge to the established colonial trade monopolies maintained by the VOC and the EIC sparked controversy not only due to economic competition but also due to perceived violations of diplomatic agreements and legal norms.
The response from the League of Hanover, consisting of England, the Dutch Republic, and France, underscored the magnitude of the threat perceived by established colonial powers. Their concerted diplomatic efforts posed a significant geopolitical danger to the Ostend Company, with the looming risk of war if the Emperor did not retract the company's charter. The company ultimately succumbed to this united front, ending in 1731 when its charter was revoked.
The cessation of the Ostend Company marked the triumph of established colonial powers in safeguarding their trading monopolies and preserving the status quo. It portrayed the competition and zero-sum economic strategies characteristic of the early modern era.
In the end, the Ostend Company's demise paved the way for the consolidation of colonial trade under existing powers and set the stage for future developments in European imperialism. Its legacy serves as a poignant reminder of the complexities and rivalries that shaped the course of history, leaving behind a rich tapestry of economic, diplomatic, and legal narratives for us to explore and learn from.
Sultan Betelguiriev
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At the occasion of the Tercentenary, an exhibition and scientific conference were held at the City of Ostend, organised by dr. Michael-W Serruys. More information on the commemoration's website.
Footnotes
1: Frederik Dhondt, "Delenda est haec Carthago. The Ostend Company as a Problem of European Great Power Politics (1722-1727)", In: Revue belge de philologie et d'histoire/Belgisch Tijdschrift voor Filologie en Geschiedenis, CXIII (2015), nr 2, p. 397-437; (p. 432), DOI 10.3406/rbph.2015.8840.
2: Treaty of the Barrier between Charles VI, George I and the Estates-General, Antwerp, 15 November 1715, Corps Universel Diplomatique du Droit des Gens (Amsterdam/The Hague: Brunel & Wetstein/Husson & Levier, 1731) VIII/1, nr. CLXXX, p. 458-468. Dhondt, "Delenda Est Haec Carthago", p. 401.
3: Article VI, Treaty of Münster.
4: Frederik Dhondt, Balance of Power and Norm Hierarchy. Franco-British Diplomacy after the Peace of Utrecht [Studies in the History of International Law, ed. Randall Lesaffer, 7; Legal History Library, 17] (Leiden/Boston: Martinus Nijhoff/Brill, 2015) 383-390, DOI 10.1163/9789004293755_004.
6: Jan Parmentier, “The Irish Connection. The Irish Merchant Community in Ostend and Bruges during the late Seventeenth and Eighteenth Centuries”, in Eighteenth Century Ireland, vol. 20, 2005, p. 37. Dhondt, "Delenda Est Haec Carthago", p. 399.
7: Wim De Winter, 300 Jaar Oostendse Compagnie. De Oostendse Azië-expedities als verhaal van handel, immigratie, onderhandeling en conflict (Oostende: Vlaams Instituut voor de Zee (VLIZ), 2023), p. 14–18.
8: Parmentier, De Holle Compagnie: Smokkel en legale handel onder Zuidnederlandse vlag in Bengalen, ca. 1720-1744 (Hilversum: Verloren 1992), p. 11-17.
9: Parmentier, Oostende & Co: het verhaal van de Zuid-Nederlandse Oost-Indiëvaart, 1715-1735 (Gent/Amsterdam: Ludion, 2002) p. 15-17.
10: Lettres Patentes d’Octroi, accordées par l’Empereur Charles VI. pour le terme de trente années à la Compagnie des Indes dans les Païs-Bas Autrichiens, Vienna, 19 December 1722, CUD, VIII/2, nr. XIX, p. 44-51. Dhondt, "Delenda Est Haec Carthago", p. 404.
11: Dhondt, "Delenda Est Haec Carthago", p. 399.
12: Victor Enthoven, “Dan maar oorlog ! De reactie van de Republiek op de Oostendse Compagnie, 1715-1732”, in Jan Parmentier, ed., Noord-Zuid in Oost-Indisch perspectief, (Zutphen: Walburg Pers, 2005-, p. 131-148. Dhondt, "Delenda Est Haec Carthago", p. 404.
13: Robert Feenstra & Jeroen Vervliet, eds., Hugo Grotius’ Mare Liberum: 1609- 2009, (Leiden/Boston: Martinus Nijhoff/Brill, 2009). Dhondt, "Delenda Est Haec Carthago", p. 405.
14: Art. XIX Treaty of Peace between Louis XIV and Charles VI, Rasttatt, 6 March 1714, CUD VIII/1, nr. CLXX, 415-423 ; J. Barbeyrac, Défense du droit de la Compagnie Hollandoise des Indes Orientales, La Haye, Thomas Johnson, 1725, p. 13; art. I, Barrier Treaty; A. Westerveen, Vertoog van het regt, Dat de Vereenigde Nederlandsche Oost-Indische Maatschappye Heeft op de Vaart en Koophandel Naar Oost-Indiën; Tegen de Inwoonders van de Spaanse, nu de Oostenrykse Nederlanden, Amsterdam, Johannes de Ruyter, 1722, p. 8. Dhondt, "Delenda Est Haec Carthago", p. 406.
15: Theodor Graver, Dissertatio juridica inauguralis, de mari natura libero, pactis clauso, Utrecht, Willem vande Water, 1728. Dhondt, "Delenda est Haec Carthago", p. 406.
16: J. Du Mont, La Vérité du fait, du droit, et de l’intérêt de tout ce qui concerne le commerce des Indes établi aux Païs Bas Autrichiens par octroi de Sa Majesté Imper. et Catholique, s.l., s.n., 1726, p. 23. Dhondt, "Delenda est Haec Carthago", p. 414.
17: P. de Neny, Demonstration de l’injuste et chimerique pretention que les Directeurs de la Compagnie des Indes en Hollande forment afin de faire revoquer, ou du moins rendre inutile l’Octroy que Sa Majesté Imperiale & Catholique a accordé à ses Sujets des Païs-bas Autrichiens pour l’Etablissement d’une Compagnie de Commerce & de Navigation aux Indes Orientales & Occidentales, s.l., 1724, p. 5. Dhondt, "Delenda Est Haec Carthago", p. 415.
18: Ibid., p. 21. Dhondt, "Delenda Est Haec Carthago", p. 415.
19: Art. I, Barrier Treaty.
20: Hugh L.A. Dunthorne, The Maritime Powers 1721-1740. A Study of Anglo-Dutch Relations in the Age of Walpole (New York: Garland, 1986).
21: Dhondt, "Delenda Est Haec Carthago", p. 433.
22: Johannes Kunisch, Staatsverfassung und Mächtepolitik [Historische Forschungen, 15] (Berlin: Duncker & Humblot, 1979), p. 54. See as well Charles Ingrao, “The Pragmatic Sanction and the Theresian succession: A Re-evaluation”, in Études danubiennes, vol. 9, 1993, p. 145-161. Dhondt, "Delenda Est Haec Carthago", p. 398.
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