If you drink a hot beverage it is likely to be either tea or coffee, most of us drink it but have you ever thought about the source of the tea or coffee. In the book Darjeeling – The colorful history and precarious fate of the World’s Greatest Tea by Jeff Koehler published by Bloomsbury, London, 2015, the author did and does. Mr. Koehler describes the tea world from a perspective of an Englishman.

In the 1600’s food made in England was not the most satisfying and to enhance the flavors spices were needed, There had been long established routes from India to Arabia across the Suez, into Italy then goods and services were distributed around Europe. Eventually the Portuguese sent a ship to India and Java (Indonesia) and when the ship arrived  – the investors made a fortune. Soon the Dutch and the British were sending ships for spices. The world was discovered on ships looking for cloves, pepper and other spices which lead to the term Spice Islands. For 150 years – the countries battle each other for the spices, peace was normal and steady dividends was the result.

In the 1750s, the Indian Raj did not like the British building a fort (military presence) and a battle was eventually fought. The leader of the British force was Robert Clive and with opposition Indian troops ought the battle of Plassey which is located outside of Calcutta. The English won and installed a new ruler who gave the East India Company a windfall of $2.5 million lbs. When Robert Clive left in 1759 with 300,000 lbs he was one of England’s richest men. The significance of the treaty originally for self defense lead the East India Company to have a private army which grew from 18,000 to over 154,000 by 1805. As the Mughal Empire declined the East India Company moved into its place to administer India which included growing to become the most powerful commercial company ever to exist. Cities such as Calcutta, Bombay, Singapore, Hong Kong became global cities. At one time a third of the British workforce was employed by the East India Company, the company controlled half of the world trade, and had the largest merchant navy in the world.

The company started with spices but eventually tea became the focus of its financial success and the cornerstone of the company’s trade strategies. Tea was originally imported from China and as time went on the tea market grew from the first order of 143 lbs to over 6 million pounds in 1766 which was over 60% of the trade and tea was profitable to the company. Naturally, similar to all organizations, they seek alternatives as the British drank more and more tea, there was the cost of buying Chinese teas with Spanish silver bars from Mexico. Eventually the East India Company started importing opium to China which besides causing many opium dens but reversed the balance of trade and China was soon short silver.

In terms of tea, the Company wanted to grow tea somewhere it controlled and found an ideal place where tea plants were growing at the foot of the Himalayan Mountains in an area between Nepal and Bhutan called West Bengal, India. The Mountains provided the rain and mist coupled with the organic soil to enhance the flavor of a quality tea. The Mountains also provide difficulty in growing because the area is hilly, took time to get to; during the Monsoon rains is very difficult to travel, but the micro climate is ideal for tea plants. The original tea plants in India were cross bred with plants from China and the early days – how to bring out the flavor – the masters were Chinese. Over the last couple of hundred years, the people of India own most of the gardens and have become tea masters.

Linking to dividend paying stocks, it is very rare to be able to buy a stock which essentially controls the government operations, for most of those conglomerates have been broken up to enhance shareholder value. For the East India Company importing profitable tea and the mechanisms to keep it going year after year was admirable. The East India Company has long disappeared particularly after India’s breakaway from England but it was a long run.

There are more questions than answers, till the next time – to raising questions.