Name | East India Company |
---|---|
Logo | |
Caption | Company flag after 1801 |
Type | Public |
Foundation | 1600 |
Defunct | 1 January 1874 |
Location city | London |
Location country | England |
Industry | International trade |
The East India Company (also known as the East India Trading Company, English East India Company, and, after the Treaty of Union, the British East India Company) was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China. The Company was granted an English Royal Charter, under the name Governor and Company of Merchants of London Trading into the East Indies, by Elizabeth I on 31 December 1600, making it the oldest among several similarly formed European East India Companies, the largest of which was the Dutch East India Company. After a rival English company challenged its monopoly in the late 17th century, the two companies were merged in 1708 to form the United Company of Merchants of England Trading to the East Indies, commonly styled the Honourable East India Company, and abbreviated, HEIC; the Company was colloquially referred to as John Company, and in India as Company Bahadur (Hindustani bahādur, "brave"/"authority").
The East India Company traded mainly in cotton, silk, indigo dye, saltpetre, tea, and opium. The Company also came to rule large areas of India, exercising military power and assuming administrative functions, to the exclusion, gradually, of its commercial pursuits; it effectively functioned as a megacorporation. Company rule in India, which effectively began in 1757 after the Battle of Plassey, lasted until 1858, when, following the events of the Indian Rebellion of 1857, and under the Government of India Act 1858, the British Crown assumed direct administration of India in the new British Raj. The Company itself was finally dissolved on 1 January 1874, as a result of the East India Stock Dividend Redemption Act. The East India Company often issued coinage bearing its stamp in the regions it had control over.
The Company long held a privileged position in relation to the British Government. As a result, it was frequently granted special rights and privileges, including trade monopolies and exemptions. These caused resentment among its competitors, who saw unfair advantage in the Company's position. Despite this resentment, the Company remained a powerful force for over 250 years.
Initially, the Company struggled in the spice trade due to the competition from the already well established Dutch East India Company. The Company opened a factory (trading post) in Bantam on the first voyage and imports of pepper from Java were an important part of the Company's trade for twenty years. The factory in Bantam was closed in 1683. During this time ships belonging to the company arriving in India docked at Surat, which was established as a trade transit point in 1608. In the next two years, the Company built its first factory in south India in the town of Machilipatnam on the Coromandel Coast of the Bay of Bengal. The high profits reported by the Company after landing in India initially prompted King James I to grant subsidiary licenses to other trading companies in England. But in 1609 he renewed the charter given to the Company for an indefinite period, including a clause which specified that the charter would cease to be in force if the trade turned unprofitable for three consecutive years.
The Company was led by one Governor and 24 directors who made up the Court of Directors. They were appointed by, and reported to, the Court of Proprietors. The Court of Directors had ten committees reporting to it.
In 1634, the Mughal emperor extended his hospitality to the English traders to the region of Bengal, and in 1717 completely waived customs duties for the trade. The company's mainstay businesses were by then in cotton, silk, indigo dye, saltpetre and tea. All the while in 1650-56, it was making inroads into the Dutch monopoly of the spice trade in the Malaccan straits, which the Dutch had acquired by ousting the Portuguese in 1640-41. In 1657, Oliver Cromwell renewed the charter of 1609, and brought about minor changes in the holding of the Company. The status of the Company was further enhanced by the restoration of monarchy in England. By a series of five acts around 1670, King Charles II provisioned it with the rights to autonomous territorial acquisitions, to mint money, to command fortresses and troops and form alliances, to make war and peace, and to exercise both civil and criminal jurisdiction over the acquired areas. In 1711, the Company established a trading post in Canton (Guangzhou), China, to trade tea for silver.
In the following decades there was a constant see-saw battle between the Company lobby and the Parliament. The Company sought a permanent establishment, while the Parliament would not willingly allow it greater autonomy and so relinquish the opportunity to exploit the Company's profits. In 1712, another act renewed the status of the Company, though the debts were repaid. By 1720, 15% of British imports were from India, almost all passing through the Company, which reasserted the influence of the Company lobby. The license was prolonged until 1766 by yet another act in 1730.
At this time, Britain and France became bitter rivals. Frequent skirmishes between them took place for control of colonial possessions. In 1742, fearing the monetary consequences of a war, the British government agreed to extend the deadline for the licensed exclusive trade by the Company in India until 1783, in return for a further loan of £1 million. Between 1756 and 1763, the Seven Years' War diverted the state's attention towards consolidation and defence of its territorial possessions in Europe and its colonies in North America. The war took place on Indian soil, between the Company troops and the French forces. In 1757, the Law Officers of the Crown delivered the Pratt-Yorke opinion distinguishing overseas territories acquired by right of conquest from those acquired by private treaty. The opinion asserted that, while the Crown of Great Britain enjoyed sovereignty over both, only the property of the former was vested in the Crown.
With the advent of the Industrial Revolution, Britain surged ahead of its European rivals. Demand for Indian commodities was boosted by the need to sustain the troops and the economy during the war, and by the increased availability of raw materials and efficient methods of production. As home to the revolution, Britain experienced higher standards of living. Its spiralling cycle of prosperity, demand, and production had a profound influence on overseas trade. The Company became the single largest player in the British global market. It reserved for itself an unassailable position in the decision-making process of the Government.
William Pyne notes in his book The Microcosm of London (1808) that :"On the 1 March 1801, the debts of the East India Company to £5,393,989 their effects to £15,404,736 and their sales increased since February 1793, from £4,988,300 to £7,602,041."
The Company continued to experience resistance from local rulers during its expansion. Robert Clive led company forces against Siraj Ud Daulah, the last independent Nawab of Bengal, Bihar, and Midnapore district in Orissa to victory at the Battle of Plassey in 1757, resulting in the conquest of Bengal. This victory estranged the British and the Mughals, since Siraj Ud Daulah was a Mughal feudatory ally. But the Mughal empire was already on the wane after the demise of Aurangzeb, and was breaking up into pieces and enclaves. After the Battle of Buxar, Shah Alam II, the ruling emperor, gave up the administrative rights over Bengal, Bihar, and Midnapore District. Clive became the first British Governor of Bengal.
Haidar Ali and Tipu Sultan, the rulers of the Kingdom of Mysore, offered much resistance to the British forces. Having sided with the French during the war, the rulers of Mysore continued their struggle against the Company with the four Anglo-Mysore Wars. Mysore finally fell to the Company forces in 1799, with the death of Tipu Sultan.
With the gradual weakening of the Maratha empire in the aftermath of the three Anglo-Maratha wars, the British also secured Bombay (Mumbai) and the surrounding areas. It was during these campaigns, both against Mysore and the Marathas, that Arthur Wellesley, later Duke of Wellington, first showed the abilities which would lead to victory in the Peninsular War and at the Battle of Waterloo. A particularly notable engagement involving forces under his command was the Battle of Assaye (1803). Thus, the British had secured the entire region of Southern India (with the exception of small enclaves of French and local rulers), Western India and Eastern India.
The last vestiges of local administration were restricted to the northern regions of Delhi, Oudh, Rajputana, and Punjab, where the Company's presence was ever increasing amidst infighting and offers of protection among the remaining princes. Coercive action, threats, and diplomacy aided the Company in preventing the local rulers from putting up a united struggle. The hundred years from the Battle of Plassey in 1757 to the Indian Rebellion of 1857 were a period of consolidation for the Company, which began to function more as a nation and less as a trading concern.
A cholera pandemic began in Bengal, then spread across India by 1820. 10,000 British troops and countless Indians died during this pandemic. Between 1736 and 1834 only some 10% of East India Company's officers survived to take the final voyage home.
In the 18th century, Britain had a huge trade deficit with Qing Dynasty China and so in 1773, the Company created a British monopoly on opium buying in Bengal. As the opium trade was illegal in China, Company ships could not carry opium to China. So the opium produced in Bengal was sold in Calcutta on condition that it be sent to China.
Despite the Chinese ban on opium imports, reaffirmed in 1799 by the Jiaqing Emperor, the drug was smuggled into China from Bengal by traffickers and agency houses (such as Jardine, Matheson and Company, Ltd. and Dent & Co.) in amounts averaging 900 tons a year. The proceeds from drug-runners at Lintin Island were paid into the Company's factory at Canton and by 1825, most of the money needed to buy tea in China was raised by the illegal opium trade. In 1838, with the amount of smuggled opium entering China approaching 1,400 tons a year, the Chinese imposed a death penalty for opium smuggling and sent a Special Imperial Commissioner, Lin Zexu, to curb smuggling. This resulted in the First Opium War (1839–1842). After the war the British seized Hong Kong and opened the Chinese market to the opium traders of Britain and other nations.
Despite stiff resistance from the East India lobby in parliament and from the Company's shareholders the Act was passed. It introduced substantial governmental control and allowed the land to be formally under the control of the Crown, but leased to the Company at £40,000 for two years. Under this provision governor of Bengal Warren Hastings became the first Governor-General of Bengal, and had administrative powers over all of British India. It provided that his nomination, though made by a court of directors, should in future be subject to the approval of a Council of Four appointed by the Crown - namely Lt. General Sir John Clavering, The Honourable Sir George Monson, Sir Richard Barwell, and Sir Philip Francis. Hastings was entrusted with the power of peace and war. British judicial personnel would also be sent to India to administer the British legal system. The Governor General and the council would have complete legislative powers. The company was allowed to maintain its virtual monopoly over trade in exchange for the biennial sum and was obligated to export a minimum quantity of goods yearly to Britain. The costs of administration were to be met by the company. These provisions were initially welcomed by the Company, but with the annual burden of the payment to be met, its finances continued steadily to decline.
, Leadenhall Street, London, as rebuilt 1799-1800, Richard Jupp, architect (as seen c. 1817; demolished in 1929)]] Pitt's Act was deemed a failure because it quickly became apparent that the boundaries between government control and the company's powers were nebulous and highly subjective. The government felt obliged to respond to humanitarian calls for better treatment of local peoples in British-occupied territories. Edmund Burke, a former East India Company shareholder and diplomat, was moved to address the situation and introduced a new Regulating Bill in 1783. The bill was defeated amid lobbying by company loyalists and accusations of nepotism in the bill's recommendations for the appointment of councillors.
This Act clearly demarcated borders between the Crown and the Company. After this point, the Company functioned as a regularised subsidiary of the Crown, with greater accountability for its actions and reached a stable stage of expansion and consolidation. Having temporarily achieved a state of truce with the Crown, the Company continued to expand its influence to nearby territories through threats and coercive actions. By the middle of the 19th century, the Company's rule extended across most of India, Burma, Malaya, Singapore, and British Hong Kong, and a fifth of the world's population was under its trading influence.
British influence continued to expand; in 1845, the Danish colony of Tranquebar was sold to Great Britain. The Company had at various stages extended its influence to China, the Philippines, and Java. It had solved its critical lack of cash needed to buy tea by exporting Indian-grown opium to China. China's efforts to end the trade led to the First Opium War (1839–1842).
The Indian Mutiny of 1857 resulted in widespread devastation in India and condemnation of the East India Company for permitting the events to occur. One of the consequences of the Indian Mutiny was that the British Government nationalised the Company. The Company lost all its administrative powers; its Indian possessions, including its armed forces, were taken over by the Crown pursuant to the provisions of the Government of India Act 1858.
The Company continued to manage the tea trade on behalf of the British Government (and the supply of Saint Helena) until the East India Stock Dividend Redemption Act came into effect, on 1 January 1874, under the terms of which the Company was dissolved.
At the time of the American Revolution the East India Company flag was identical to the Grand Union Flag. The flag probably inspired the Stars and Stripes (as argued by Sir Charles Fawcett in 1937).
It is argued that the stripes were inspired by local Malay flags, which were inspired by the Indonesian Majapahit Empire's flag (as is arguably the Indonesian flag today). Both the Majapahit and early EIC flags had 9 stripes of red and white.
During the period of the French Revolutionary and Napoleonic Wars, the East India Company arranged for letters of marque for its vessels such as the Lord Nelson, not so that they could carry cannons to fend off warships, privateers and pirates on their voyages to India and China, that they could do without permission, but so that should they have the opportunity to take a prize they could do so without being guilty of piracy. Similarly, the Earl of Mornington, an East India Company packet ship of only six guns too sailed under a letter of marque.
The company also had its own navy, the Bombay Marine, equipped with warships such as the Grappler.
At the Battle of Pulo Aura, which was probably the company's most notable naval victory, Nathaniel Dance, Commodore of a convoy of Indiamen and sailing aboard the Warley, lead several Indiamen in a skirmish with a French squadron, driving them off.
Lastly, the Royal Navy bought several Company ships to convert to warships and transports. The Earl of Mornington became HMS Drake. Other examples Include:
Category:British rule in India Category:British rule in Singapore Category:British Malaya Category:Colonial Indian companies Category:Colonialism Category:History of the United Kingdom Category:History of the British Isles Category:History of Singapore Category:Monopolies Category:Chartered companies Category:1600 establishments in England Category:1858 disestablishments Category:Trading companies Category:Mysore invasion of Kerala Category:History of foreign trade in China Category:British Indian history Category:Companies disestablished in the 19th century Category:Companies of England
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