English import and export trade had for centuries been largely with the western ports of France, northern Spain, Flanders and the Baltic area. Yet until the late-medieval period the world’s most significant long-distance trade routes were around the Mediterranean and eastwards from there, with ports such as Venice and Genoa being the most important. The advances in shipbuilding in the 15th century made it possible for longer sea journeys and voyages of exploration. In the following century Atlantic ports in Spain, Portugal and England grew in importance, including London, Bristol and Plymouth.
Henry VIII’s disagreements with the Catholic Church diminished trade with France, Spain and Italy, and English merchants sought new trading routes. A group of London traders known as the Merchant Adventurers had emerged in the 15th century, dominating the booming business in English cloth to Antwerp, and Letters Patent were drawn up in 1505 to bring them together as a single joint-stock company. England’s trade with the Baltic area was blocked by the Hanse’s monopolies and Edward VI was petitioned to support the English merchants. In February 1552 he revoked the League’s rights in England and the Steelyard was seized. Two years later the Hanse’s rights were restored once more by Queen Mary. Much trade also passed though Calais, England’s last remaining territory on the Continent but that was lost to the French in 1558 during the reign of Queen Mary. When the Hanse attempted to block English grain exports to the Low Countries English merchants petitioned Queen Elizabeth. In 1598 the Hanseatic League were given two weeks to vacate the Steelyard that they had occupied for several centuries and it was closed, becoming a naval storehouse.
Trade with China and the East Indies via the southern coast of Africa was under the control of Dutch and Portuguese ships. In 1548 Sebastian Cabot persuaded members of the Merchant Adventurers Company to raise finance in order to look for a new north east passage to the Far East. London’s merchants and courtiers subscribed £6,000 for the venture. In May 1553 Sir Hugh Willoughby and Richard Chancellor sailed from Ratcliff but their three ships were separated in a storm. That winter the one carrying Willoughby became trapped in Arctic ice and he and his crew perished in the cold. Chancellor and his crew reached the harbour of Nikolo-Korelsky from where he was invited to Moscow by the Tsar, Ivan IV (Ivan the Terrible). Chancellor and the Tsar struck up a trade agreement that took English wool and other goods to Russia in return for Russian furs. In 1555 Chancellor returned to London and the Company of Merchant Adventurers was renamed the Muscovy Company. Queen Elizabeth became one of its shareholders and it was given a monopoly on English trade with Russia. It was the first English long-distance joint-stock company and its influence on the future of London as a trade centre was enormous.
In 1551 a group of London investors sponsored Captain Thomas Wyndham to sail to Morocco on his ship the Lion of London. He returned the following summer with sugar, dates, almonds, and molasses. This initiated a regular trade with Morocco. England exported cloth and weapons. One of the most important goods brought back in return was saltpetre, a key ingredient for gunpowder.
International shipping and trading was a lucrative but risky business and merchants needed to share that uncertainty rather than the danger of losing everything. Syndicates began to be formed in order to share the risk and these were formalised as joint-stock companies. As a reward for their investment in the voyages of discovery and in forming new trading posts and colonies each company was given a monopoly on dealings with their particular area of the world. This led to the formation of a number of other English joint-stock companies, including: the Eastern Company (1579) around the eastern Baltic sea; Morocco Company (1585) in northern Africa; the Guinea Company (1588) in western Africa; and the Levant Company (1592) in the eastern Mediterranean. The first voyage by the East India Company was made in 1601.
The merchants who formed the joint-stock companies needed convenient places to meet and undertake this complex business together so the first steps were made that were to turn London into a major financial centre. Until the late 16th century one of Europe’s main money markets was in Antwerp and it was there that the London merchant Thomas Gresham acted as Crown Agent to raise finance for the English monarchs. Having first-hand experience of the bourse in Antwerp he decided to open such an institution in London, where merchants could meet to transact business. The first building was opened in the City in 1567 at the junction of Cornhill and Threadneedle Street. In 1571 Queen Elizabeth visited and thereafter it was known as the Royal Exchange. Antwerp’s golden period as the cultural and financial centre of northern Europe ended in 1585 when a large part of the Protestant population fled following a siege by the Catholic Spanish. Some bankers emigrated to London and thus enhanced the City as a major European finance centre.
The Anglo-Spanish wars during Elizabeth’s reign caused disruption to England’s overseas trade. Many of London’s merchant ships and crews either joined hostilities or sailed as privateers – licensed pirates – during that time. Privateering was a lucrative business for England and London’s merchants invested vast amount of money sponsoring voyages. When Francis Drake sailed to Cadiz in 1587 his fleet included seven London ships. Around 30 London ships sailed in the fleet that set out to meet the Spanish Armada in 1588. Many of the crewmen of those vessels would have been Thames watermen who had been press-ganged into service.