British East India Company

1600-1858, company chartered by the Crown for trade with Asia. It acquired unequaled trade privileges from the Mogul emperors in India, and began to reap large profits by exporting textiles and tea. As Mogul power declined, the company intervened in Indian political affairs. Its agent, Robert CLIVE, defeated (1751-60) the rival French East India Company, and Warren HASTINGS, the first governor general of British India, assumed more control of the company.

Incorporated by royal charter on Dec. 31, 1600 and known alternately as the Governor And Company Of Merchants Of London Trading Into The East Indies(1600-1708), or United Company Of Merchants Of England Trading To The East Indies (1708-1873), the company was formed to ensure British commerce with China, Southeast Asia and India, first and foremost to share in the East Indian spice trade. Spain and Portugal had dominated the fabulously profitable spice market until the defeat of the Spanish Armada (1588). This massive overthrow finally enabled the English to escape their little island and break into markets and exploration which had long been denied them.

The first Company ships, modest clippers and frigates which hugged the coast for want of proper maps, first arrived at Surat in 1608. Sir Thomas Roe reached the court of the Mughal Emperor, Jahangir, as the emissary of King James I in 1615, and gained for the British the right to establish a factories on the Indian coastline and within her port cities. Quickly established, the prime centers of Company trade became the complexes of offices, warehouses and armories established in Calcutta, Bombay, and Madras.

Trade on the high seas in the 17th century was ruthlessly savage, and the distinction between piracy, warfare and mercantilism was frequently blurred. Britain’s main threat came from the Dutch in the Dutch East Indies (now Indonesia) and the Portuguese. Particularly brutal was the Dutch Amboina Massacre in 1623 (dozens of English, Japanese, and Portuguese traders were arrested, tortured and executed by Dutch West India Company agents for trying to traffic goods through their waters).¹ One Company captain, Gerald Aungier, wrote "the general character of the times Require you to Manage your General Commerce with your Sword in hand]." However, the British outfit recovered from these dramatic setbacks, and eventually pushed the Portuguese out of India in 1612², at the same time negotiating merchant rights with the still powerful Mughal Empire. Cotton and silk, indigo, and salt-peter, along with pepper, salt, cloves, nutmeg, cinnamon and other spices from South India soon formed the backbone of the Company’s trade.

By 1717, the Company power in the region grew exponentially when its officials received a firman or royal dictat from the Mughal Emperor exempting the Company from the payment of customs duties, effectively creating a vastly profitable free trade zone for the British Empire.³ By 1720, 15% of Britain's imports came from India. The international headquarters for the company was established at East India House in Leadenhall Street, London, and it was here company officials met with shareholders and government ministers. In 1657, the Company had officially become joint stock venture, and very soon the financial primacy of the outfit’s fortune were central to the fortunes of most English merchant families.

Spices and cotton were soon not enough for British markets, and by the mid-18th century, tea had become the vital import for the English traders⁴, mainly black tea harvested exclusively from China and within fifty years the company was backing the tea trade with illegal (but highly sought after) opium exports to China. Troop build ups of Company soldiers began to creep out of control and by 1805 there were 64, 000 soldiers employed in Bengal, as many again in Madras and 27, 000 in Bombay. China and all the English trade nations became increasingly apprehensive and hostile. In 1820, there were 300, 000 infantry and 40,000 British officers in the region. Negotiations with the Chinese over an agreeable price for tea were bogged down in logistical tangles, miscommunication and suspicion. The Chinese deeply resented the foreign opium flooding into their nation, and this led invariably to British bombardment of Peking and the first Opium War (1839-42), as the British Empire effectively shelled their way into the Chinese marketplace.

However, by this time, the Company’s power over the Indian sub-continent had already begun to wane and the English gradually lost commercial and political control as they became evermore entwined in regional political negotiations, religious sectarianism, wanton corruption, reformist social policy and creeping military expeditions. Horace Walpole wrote during the period that the Company officials in London were trying to govern ‘nations to which it takes a year to send orders'. The official monopoly was broken by an Act of Parliament in 1813, and from 1834 the company became nothing more than a managing agency for the British government of India. Finally, the Indian Mutiny of 1857 effectively deprived the local officials of their policing powers, and in 1873 the Company was dissolved.

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Notes:
¹ At the same time as the Dutch were pummeling just about every other nation of the world on the high seas, and were plying a cut-throat strategy to protecting their dominance of global commerce, they were also doing those nice still life Dutch Master renderings everyone was so fond of ?essentially overturning centuries of aesthetic romanticism in painting. The 16th-17th c. Dutchman, be he painter or trader, just seemed to interpret the world with a reasoned clarity and precision which would not set into the minds of Europe’s other cultures for decades, if not centuries.
² The Portuguese, on the other hand, were pretty much wasted as an imperial power by 1600, after nearly a century of fierce competition with the Dutch, during which time Portugal often had the upper hand. However, the amalgamation of the Spanish and Portuguese crowns in 1580, dwindling population growth, lack of local capital (largely due to brutal treatment of Jews and Moslems) and resources spread far too thin meant Portugal’s sun as a military power was seriously on the decline.
³ The Moghuls (originally known as the Mongols), had invaded the region after sweeping though China in the 16th century and by 1600 they had placed 75% of India, the Sind and Punjab regions and parts of Central Asia directly under their control, dominated from the capital of the Empire at Agra. However, in the two centuries which followed, the Mughals fared poorly with the British Company, and their power steadily declined in the face of the powerful ethnic groups exerting their power in Peshawar, Lahore and Kabul.
⁴ In the early 18th c., it was not unknown for a London lady to take up to 50 cups of tea in the course of a day, and doctors were prescribing its consumption as a treatment for just about every ailment imaginable. From 1711-17, 200, 000 lbs. of black tea was imported per annum into England by the Company, and by 1757, the figure reached 3 million lbs. annually. Wherever the British and their people went in fact, tea would follow, and interestingly enough, only the American colonists managed to consume more tea than the English in the 18th century, which goes a long way to explaining the roots of the Boston Tea Party.

Suggested Reading: Philip Lawson, The East India Company (NY: Longman, 1993)

Trading Up - The Rise Of East India Company

It’s not often you hear of a business with a prosperous history in the order of 250 years.

Rarer still is it to find one that has ruled a subcontinent!

The East India Company is one such beast. It grew from a being small group of intrepid investors and traders to become the guiding hand behind the polished jewel of the crown.

The Company was formed, fittingly, on New Year’s Day of 1601 (although it had officially received its royal warrant the previous day/year) and was given the English monopoly on all trade with the East Indies. The Company's stated intention, in the sonorous terms of the charter, was that:

“...they, of their own Adventures, costs and charges as well as for the honour of this our realm of England as for the increase of our navigation and advancement of trade of merchandise...might adventure and set forth one or more voyage, with convenient number of Ships and Pinnaces, by way of traffic and merchandise to the East Indies...”

A PASSAGE TO INDIA

At this point in history, traders dealing with the East were caught between a rock and a hard place. The safest and most direct route was, of course, overland. But Venetians, among others, were monopolising the Oriental caravan trade routes.

Maritime access was freely available but far more treacherous, requiring the navigation of the perilous waters of the African horn, known for centuries by fearful sailors as the Cape of Storms.

FIRST STEPS

The first of the Company’s vessels landed on the west coast of India at Surat in 1608. Later, Sir Thomas Roe, as the accredited representative of King James I to the Moghul empire, established a ‘factory’ in 1615.

The term “factory” is something a misnomer; it did not, then, signify a manufacturing base as it doestoday but more of a warehouse, built primarily to store goods for ships to pick up.

The English were not alone in India. Those indefatigable explorers, the Portuguese, were already well established and not only in India in general (they had a major centre on the island of Goa) but also in the court of the emperor (at this time, Jahangir Khan).

The result was, perhaps predictably, a great deal of conflict - particulary given the recently-rancorous relations between England and Spain (of which Portugal became a part in 1580 and remained so until 1640).

This included at least one major sea battle off the east coast, in which the Portuguese were soundly trounced – showing Moghuls and Indians, for the first time, that the English could fight.

From these humble and somewhat-inauspicious beginnings, then, the Company – and the English in India – burgeoned explosively. By the turn of the century, three sizeable ‘presidencies’ had been established - at Calcutta, Bombay and Madras (now re-named Kolkata, Mumbai and Chennai respectively). Around these nuclei, the English clustered in a number of thriving communities.

In 1717, the Company achieved a notable coup, securing an exemption from the emperor from paying custom duties in the eastern state of Bengal.

TRADING PLACES

Then came the titanic shift from a trading hegemony to a ruling empire. One the Company, Robert Clive, proved, in a series of moves and engagements, to be their most militarily-gifted servant.

In the Battle of Plassey of 1757, he resoundingly defeated the numerically-superior force of the Anglophobic Nawab of Bengal becoming, in effect, the Nawab himself.

This success was followed by the imperial grant of revenue-collection rights in the state. The grant eventually turned out to be something of a mixed blessing. Initially, Bengal was pillaged to the point of destitution and famine by the rapacious greed of many Company employees.

As a result of the famine - for which the English were largely and perhaps not unfairly held responsible - as many as a third of the population lost their lives through starvation. This, quite naturally, not only lessened trade but also increased hostility, requiring a state of constant military alertness.

Faced with ruinous expenses, the Company required a parliamentary injection of cash to keep it afloat and, as with all such aid, there were sticky strings attached. The Regulating Act of 1773 gave Parliament increased control over Company affairs and instituted the office of Governor-General.

APEX OF EMPIRE

From here, things proceeded apace. Begiining with the investiture of Warren Hastings as the first Governor-General in 1784 through to the ruthless territorial aggrandisement of Arthur Wellesley (later the Duke of Wellington) and culminating in the Mutiny of 1858, the English wiped out any opposition and annexed territories until they were masters of all India.

The Mutiny, caused primarily by exactly the acts mentioned, resulted in the dissolution of the company; its massive holdings becoming a Crown responsibility. The Governor-General became the Viceroy, second in power and stature only to the Secretary of State for India and, in 1877, Queen Victoria became Empress of India.