East India Co
Achievements: Had a monopoly on trade between London and the East Indies, and became the administrator for British India.
Time: 1600-1873
Location: London; India; East Indies
Field & Discipline: Business; Government
Language: English
Details:
On December 31, 1600, Queen Elizabeth granted a monopoly Charter for "The Governor and Company of Merchants of London, Trading into the East-Indies". Her action was the result of lobbying on the part of a group of London merchants, with the assistance of geographer [established with help of] Hakylut*.
The goal was trade with "The East", which, at that time, embraced the Indies, India, and Asia. What triggered the rush to form this Company was the return from the East Indian islands in 1599 of six Dutch ships laden with exotic goods, including spices. Interest had also been spurred throughout the 16th century by reports of trade opportunities from Dutch cartographer, [triggered by activities of] Linschoten*, who had lived in India for six years.
London was now a great port and in the city there was enough capital and confidence to fund the risk-laden voyages the new Company planned, and there was a huge market and distribution centre waiting for imported goods.
As well as granting the Company a monopoly and the right to enforce the monopoly, it also granted the right to export bullion to the East.
The Company's headquarters were in the City of London, convenient for investors and for carrying out financial transactions speedily. It was near enough to the river for personal contact with ships and their captains, and within reach of wharves and warehouses. It was a joint-stock company, with many shareholders who financed ventures individually or in small groups. The Company Governor, his deputy and a committee were elected annually by the shareholders at a general assembly known as the Court. Twenty-four directors, each with his own committee, reported directly to the governor and his deputy.
The most attractive trade was in spices (cloves, nutmeg, and especially pepper) from the Moluccas (now Indonesia). However, the Portuguese and the Dutch already had made deals with the local rulers. To get around this, the British took their bullion, along with products such as lead, tin and wool, to several ports of the Indian ocean and bought goods which they then used to barter for spices in the islands of Java and Sumatra.
In India, the British displaced the Portuguese as the dominant traders. They gained the favor of the Mogul ruler and were granted permission to build warehouses on the mainland, where they stored Indian goods such as saltpetre, calico, silk and indigo. These products increasingly supplemented the cargoes of pepper on the voyages home.
At the end of the 17th century, the Company entered a period of expansion and its profits soared. Textiles, both manufactured and raw, were now a prime import, and by 1709, tea from China was much in demand. By now, many British politicians were shareholders and anxious to protect the monopoly. The company's holdings had now become large settlements, with three major sites on the Indian mainland: Bombay, Madras, and Calcutta.
These fortified bases were now directing trade strategy and becoming centers of power in themselves. The Bombay settlement was leased to the company by Charles II in 1668 and under the leadership of Gerald Aungier, the company set up courts of law, a militia, a stable currency, and structures for dealing with local landowners over taxation, petty crime and trade practises.
By the beginning of 18th century, the settlements of Bombay, Calcutta and Madras had evolved from being trade enclaves to centers of administration which affected, and often dictated, Indian politics. Stories began to circulate of the huge bribes being paid Indian rulers for trade concessions.
Writers such as [investigated by] Defoe* joined the debate about how much restraint, if any, should Parliament impose on Company practises. The general population, particularly in London, was frequently reminded of the Company's existence and stature. Company ships, the East Indiamen, were prominent on the river (with their red and white flags; the Union Jack was added in the corner later).
The Company headquarters, India House, had a facade decorated with sailing ships, the Company's coat of arms and a statue of a mariner flanked by two dolphins.. And the goods brought back by the Indiamen were seen in every aspiring household. "Nabobs," the name given to returning Company employees who had made their fortunes in India, became part of English society.
In India, challenges to the British presence by the French led to the military exploits of [company megastar was] Clive of India*, a Company employee who had been given rank in the British army for this mission, and was seen as the only man with the ability and authority to defeat the French. His military successes and expansionist policies resulted in the complete dominance of the British over their European rivals and, in Bengal at least, over the Indian ruler.
When the British acquired the territory of Bengal in 1757, it was administered by the Company. The structure of the Company, with employees dealing directly with the local population, led to wide-scale corruption.
In 1773, the British government passed acts making political policy in India subject to a board that was responsible to Parliament. The government also appointed [employee was] Hastings*, a Company employee, as the first Governor-General in India.
The government was now encouraging military enterprises and territorial expansion which ate into Company profits and affected relations between British and Indians. In India, the army was under Company control in the British territories. Its function was to keep the administrative peace, but by the mid-1800s, the territories were surrounded by princely states, some hostile, and the Indian army was protecting the borders of the territories. The original aims of the Company had been eroded, and when the Company lost its tea trade monopoly with China, its commercial viability was also lost. In 1857, an Indian mutiny, long feared by the Company, signaled the end of the East India Company. Its rule was transferred to the crown in 1858. In 1873 the Company ceased to exist in law.
Extra Connections: [an employee was] Dampier* also worked for the Company:
[investigated by] Burke* headed investigation into it.
[reform attempted by] Cornwallis* attempted its reform.
Boston Tea Party protest against EIC, supported by Benjamin Rush and Sam Adams.
Rival ofDutch East India Co. (Hudson)
Assessment: An association of London merchants given a monopoly to trade directly with the East Indies. The Company then became the administrative body for British India. Helped spark American Revolution.
Oneliner: East India Company, British trading company
Bibliography:
- Lawson, Philip, The East India Company, Longman, London, 1987.