Posted in Reference
I should admit that I rather enjoy history, and so thankfully the European West and East India Companies have been good to me over the months, providing a wealth of interesting subject matter to delve into regarding the rise of tea and coffee. It truly is the gift that keeps on giving, as today I have yet another little history lesson I can share, thanks to the British East India Company(B.E.I.C.) and the London Tea Auction.
In 1679, the B.E.I.C. began holding auctions for the glut of monopolised goods they brought in from India and China. Amongst these goods was tea, and by the early eighteenth century it had become the main commodity sold during the auctions due to its rising popularity in British society. The auctions were held in their company headquarters, a grandiose building known as the East India House.
The quarterly auctions were infamous for the cacophony generated by the massed traders bidding against one another- as described by this anonymous tea dealer: “To the uninitiated a Tea sale appears to be a mere arena in which the comparative strength of the lungs of a portion of his Majesty's subjects are to be tried. No one could for an instant suspect the real nature of the business for which the assemblage was congregated...”- it sounds an awful lot like the typical image of the stock exchange trading floor.
The auctions were also “by the candle”, which meant that as the a candle burnt down to a certain level the trading on a particular lot would end. No doubt this added to the frantic nature of the bidding. It wasn't a sure fire method for deterring certain savvy traders however. Samuel Pepys wrote in his diary a hint gleaned from a successful bidder who had noticed that the candle always flared just before expiring, thus signalling when to place the winning bid!
In 1833, the Government of India Act saw the B.E.I.C. stripped of its commercial functions, which included the long held monopolies. Finally, tea became a free trade commodity. The London Tea Auction moved from the East India House to the London Commercial Salerooms on Mincing Lane, which became known as the Street of Tea as numerous tea merchants established themselves in the vicinity of the auction house. The ever rising popularity of tea saw the auctions move from quarterly, to monthly, to weekly and eventually even daily, as tea imported from different countries was scheduled to be sold on separate days of the week.
Business slowed following WW2, as countries like India and Kenya became independent states. Tea estate owners were reluctant to ship off their tea to London for auction, and a number of more local auctions were established in order to speed up the process. Finally, on 29th June 1998, the last London Tea Auction was held, after three centuries of tradition.