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Sir Josiah Child, 1630-1699.
English Mercantiist, East India Company merchant and probably the wealthiest man in Great Britain at the time.
Descended from a prominent London merchant family, Sir Josiah Child built his principal fortune in victualling for Cromwell's navy in Portsmouth, accumulating a tiny fortune which he then, in the 1660s, invested into a London brewery and other enterprises to assist in the effort.
In 1668, Josiah Child published his first significant tract, Brief Observations, essentially addressing the "Dutch threat" and attempting to decipher the secret of their success. He proceeds to itemize fifteen reasons for it - thriftiness, the absorption of talented immigrants, etc. - but the "causa causans", Child argues, was a low rate of interest. He argued that England should also adopt measures to lower the rate of interest, and promoted legal restrictions to maintain low interest rates to make financing of British trade easier (and thus more competitive with the cheap-financed Dutch). It was Child's propositions on interest rates spurred John Locke into economics.
Child gradually translated his fortune into East India Company stock. By 1673, Child became the single largest shareholder of the East India Company. He also had large investments in the Royal Africa Company.
In 1677, Child was made director of the EIC, and was subsequently elected governor of the company from 1681 to 1687. Simultaneously, his brother, John Child, already in India, was made president of Surat and governor of Bombay in 1682. Following the expulsion of English traders from Bantam (Indonesia) by the Dutch in 1682, the Child brothers set the EIC on a more aggressive, armed course. In 1686, the Child brothers launched a blockade Indian shipping with a view to force the Moghul Emperor Araungzeb to concede more favorable terms of trade the EIC (including the right to fortify their factories). This was accompanied by a hare-brained scheme to establish by force a fortified EIC stronghold in Chittagong (Bengal), and harass the Ganges delta. They greatly underestimated the reaction of the Moghul Emperor and the Nawab of Bengal, who easily swept up the EIC factories in Surat and the Coromandel coast. By 1689, the EIC was forced to sue for peace, magnanimously granted by the Emperor on the condition of John Child's departure in 1690.
In the meantime, Josiah Child encouraged the EIC to solidify the company's position in England and preserve its monopoly, then being assailed by Bullionists and rivals, by turning prominent government officials, including the royal family, into shareholders. In 1681, he forwarded a plan to expand the capital base of the EIC with new shares, which he intended to distribute to the powerful, but the plan was promptly derailed by a group of shareholders led by deputy governor Thomas Papillon, who was peddling an alternative scheme to wind up the joint stock established in 1657 and start anew. Child managed to oust Papillon and his clique from leadership prompting them to sell their stock, provoking a brief run on the company shares and forcing Child to spend much of his tenure focusing on restoring the EIC's position. He secured the renewal of its charter in 1683, essentially purchased with soft loans to the royal family.
During this time, Josiah Child published a couple more tracts, resurrecting some of his 1668 arguments. Abandoning the old saw of a favorable balance of trade, and seeing the value of free trade, even if it led to an outflow of precious metal, thus setting him down as the progenitor of the "liberal" English Mercantilism. However, Child promoted the maintenance of monopolies on colonial trade and vigorously defended EIC policy. He also promoted a large population, free immigration and the employment of the poor.
The Glorious Revolution of 1688 did not bode well for Child, as he was too closely associated with the deposed Stuarts. From the outside, Papillon led the opposition to Child, who still wielded the dominant influence in the company, and set in motion the movement to repeal the EIC's monopoly and open the East Indies trade to competition. Child fought back, having the EIC distribute nearly £90,000 in bribes to sympathetic politicians, in an effort to preserve the monopoly. Child's efforts exploded in a scandal and parliamentary inquiry in 1693, that led to the eventual repeal of the EIC monopoly and establishment of a rival company in 1698.
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Major Works of Sir Josiah Child
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All rights reserved, Gonçalo L. Fonseca