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Agents and Managers

Source:
The Oxford Encyclopedia of Maritime History
Author(s):

Yrjö Kaukiainen

Agents and Managers 

In principle, the profession of agent is as old as that of the foreign-trading merchant. After itinerant traders were replaced by resident burghers, who did not travel anymore with their merchandise, good and reliable contacts abroad became necessary. Such contacts were needed not only in the actual transactions of selling the exports and buying the imports, but also for information on trading prospects and, for maritime transport, in the increasingly complicated processes of clearing customs, paying port dues, and obtaining the necessary permissions and legal documents required by the local and state authorities.

Quite often, such a contact person was a member of the family or a compatriot temporarily or permanently staying abroad, but it could also be a foreign merchant with whom a more or less permanent business relationship had been established. In early modern times, a successful export or import business required a real network of such business friends, and the wider the scope of trade, the wider the network needed. Merchants within a network typically acted reciprocally as agents for each other. Accordingly, there was seldom any real division of labor between merchants and agents, at least not before the early nineteenth century. Very few merchants made agents’ services their principal occupation, and still fewer specialized as shipping agents—clearing, chartering, and purchasing ships. This was only natural, because there was no real division of labor between foreign trading and shipping: most merchants were also shipowners, and even if that was not the case, a shipowner (or the manager of a ship-owning company) usually relied on the same mercantile networks as the merchant who charted the ship. The only division of labor was that different merchants specialized in trading with different countries (this was because reliable networks required time and effort to develop).

In practice, it was not the merchant or shipowner (or manager) who did the actual business with the agent. Rather, it was the master of the ship, who was also a kind of agent to the shipowner. Thus, for example, in the late eighteenth century, when a Scandinavian ship arrived in Marseille or Genoa, the master contacted the local business friend of his principal, who then not only acted as a customs and port agent and a selling agent for the cargo of timber or tar but also helped the master find a new freight or to buy a cargo of salt, if that was required. Moreover, the business friend drew bills of exchange to settle the accounts for sold or bought commodities or freight.

In some cases when normal merchant networks were difficult to maintain, special agent arrangements were established. One example of such special agents was the Far East compradors, native traders who specialized in acting as middlemen between European and local merchants. As the word “comprador” suggests, this system dates back to the time of the Portuguese invasion of India and China. Another case was the consuls that the Dutch, British, and French governments sent in the sixteenth and seventeenth century to the Ottoman Empire to watch the mercantile interests of their citizens. Gradually these countries also established such consular services in other European countries, as did other governments as well. In spite of their diplomatic status, these consuls, at least the eighteenth-century Scandinavian consuls in the Mediterranean, often also acted as ordinary mercantile agents.

Early examples of specialized shipping agents can be found in Elsinore, Denmark, where The Sound toll was paid by ships entering or leaving the Baltic. As paying the toll involved either measuring the ship and/or estimating the volume or value of the cargo, and as there were different exemptions from time to time, it became increasingly common to hire a local agent to take care of the complicated process. Examples of such eighteenth-century agents were the houses of Holm and Glöerfelt, which cleared many Finnish and Swedish ships. The former, at least, was also a ship chandler—a most natural business combination, as many ships also replenished their stores in Elsinore. Indeed, it seems that in many undeveloped markets, ships chandlers also acted as chartering agents. As their premises typically included parlors or coffee rooms in which shipmasters used to meet (as vividly recorded for the Far East by Joseph Conrad in Lord Jim), they were able to collect and supply information on potential freight opportunities.

The growth of competitive freight markets was connected with the development of commodity exchanges. In the seventeenth century the most important institution of this sort was the Amsterdam Exchange, not the least because Dutch shipping at that time was so important, especially in the Baltic trade. This trade also formed the background of the Baltic Exchange in London, which claims that it began from commodity dealers’ and shipowners’ meetings in the Virginia and Baltic Coffee House from 1744 onwards; indeed, it seems that it became a real freight chartering exchange only in the beginning of the nineteenth century. Gradually it developed into the foremost hub of information for the shipping world and a central institution for chartering agents.

Ocean shipping started to grow rapidly in the second quarter of the nineteenth century, and with the gradual removal of the old mercantilist navigation acts and other restrictions, freight markets became more international than ever before. At the same time, the division of labor between shipping and foreign trade increased. Both developments greatly increased the demand for specialized shipping agents (in particular, for chartering agents). Indeed, this seems to be the period when this profession was actually born, or at least became visible. That first happened, of course, in big ports like London, Liverpool, Amsterdam, and Hamburg, but already in the late 1830s, specialized freight agents were also to be found in the Mediterranean ports of Marseille and Trieste. That the business took off during this period is also indicated by the fact that many well-known and important firms in this branch were established then. Thus John Good moved to Hull in 1833 and started a ship-chandler and ship-broking business; roughly at the same time August Bolten in Hamburg joined an agency firm started by William Miller, a Scot; Angier Brothers in London started its activities in the 1840s; and Clarksons of London date its history back to 1852.

The electric telegraph became a splendid tool for chartering agents: it not only made the collection of freight data go much more quickly than before, but in the beginning, when charges were high, it was a special asset for agents, who could distribute the costs between a good number of customers. The new communication technology also changed the connections between the main actors of shipping in one important respect: it enabled direct communication between chartering agent and shipowner or manager, thus reducing the role of the shipmaster in the decision making. Another development that widened the business of shipping agents was the beginning of regular shipping-line traffic: liner companies needed reliable, competent agents to represent them in all the ports their ships were visiting.

In modern shipping, the spectrum of agents was widened also by shipping newspapers and periodicals, as well as information and research firms, who remit to their customers data on, for example, recent chartering, new building, and shipping sales, plus analyses of the outlook for the shipping business. In a way, these players can be regarded as a superstratum of agents, because their customers, to a great degree, consist of ordinary shipping agents.

[See also Shipping Companies, subentries on Coastwise Cargo Companies, Ocean Cargo Companies, and Sea Passenger Companies; and Trade, subentry on Integration in Shipping Industries.]

Bibliography

Very little systematic research on shipping agents exists to date. A remarkable example is Lewis R. Fischer and Helge Nordvik, Economic Theory, Information, and Management in Shipbroking: Fearnley and Eger as a Case Study, 1869–1972, in Management, Finance, and Industrial Relations in Maritime Industries: Essays in International Maritime and Business History, eds. Simon P. Ville and David M. Williams, Research in Maritime History, no. 6 (St. John’s, Newfoundland: International Maritime Economic History Association, 1994). See also Hugh Barty-King, The Baltic Exchange: The History of a Unique Market (London: Hutchinson, 1977); Gordon Boyce, Information, Mediation, and Institutional Development: The Rise of Large-Scale Enterprise in British Shipping, 1870–1919 (Manchester: Manchester University Press, 1995); and Yrjö Kaukiainen, International Freight Markets in the 1830s and 1840s: The Experience of a Major Finnish Shipowner, in Global Markets: The Internationalization of the Sea Transport Industries since 1850, eds. Gelina Harlaftis and David J. Starkey, Research in Maritime History, no. 14 (St. John’s, Newfoundland: International Maritime Economic History Association, 1998).

Studies on mercantile networks have proliferated in recent times. See, for example, Olaf U. Janzen, ed., Merchant Organization and Maritime Trade in the North Atlantic, 1660–1815, Research in Maritime History, no. 15 (St. John’s, Newfoundland: International Maritime Economic History Association, 1998); Sanjay Subrahmayam, ed., Merchant Networks in the Early Modern World (Aldershot, U.K.: Variorum, 1996); Leos Muller, The Merchant Houses of Stockholm, c. 1640–1800 (Uppsala, Sweden: S. Academiae Ubsaliensis, 1998); Jari Ojala, Approaching Europe: The Merchant Networks between Finland and Europe during the Eighteenth and Nineteenth Centuries, European Review of Economic History 1 (1997): 323–352.

Articles on different countries’ consular systems were published in Business History 23 (1981). Early histories of modern shipping-agent firms can often be found on their Web sites, for example, John Good (http://johngood.co.uk/history/), Clarksons (http://clarksons.co.uk/history.html), and August Bolten (http://aug-bolten.com/company/). For the background of Angier Brothers, see Fifty Years’ Freights, Fairplay, January 8, 1920, 225.

Yrjö Kaukiainen