The East India Company

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The East India Company (EIC)[a] was an English, and later British, joint-stock company founded in 1600[b] and dissolved in 1874.[4] It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southeast Asia), and later with East Asia. The company seized control of large parts of the Indian subcontinent, colonised parts of Southeast Asia and Hong Kong. At its peak, the company was the largest corporation in the world.[vague] The EIC had its own armed forces in the form of the company's three Presidency armies, totalling about 260,000 soldiers, twice the size of the British army at the time.[5][6] The operations of the company had a profound effect on the global balance of trade, almost single-handedly[7] reversing the trend of eastward drain of Western bullion, seen since Roman times.[8]

Originally chartered as the "Governor and Company of Merchants of London Trading into the East-Indies",[9][10] the company rose to account for half of the world's trade during the mid-1700s and early 1800s,[11] particularly in basic commodities including cotton, silk, indigo dye, sugar, salt, spices, saltpetre, tea, and opium. The company also ruled the beginnings of the British Empire in India.[11][12]

The company eventually came to rule large areas of India, exercising military power and assuming administrative functions. Company rule in India effectively began in 1757 after the Battle of Plassey and lasted until 1858. Following the Indian Rebellion of 1857, the Government of India Act 1858 led to the British Crown assuming direct control of India in the form of the new British Raj.

Despite frequent government intervention, the company had recurring problems with its finances. The company was dissolved in 1874 as a result of the East India Stock Dividend Redemption Act enacted one year earlier, as the Government of India Act had by then rendered it vestigial, powerless, and obsolete. The official government machinery of the British Raj had assumed its governmental functions and absorbed its armies.

In 1596, three more English ships sailed east but all were lost at sea.[16] A year later however saw the arrival of Ralph Fitch, an adventurer merchant who, with his companions, had made a remarkable fifteen-year overland journey to Mesopotamia, the Persian Gulf, the Indian Ocean, India and Southeast Asia.[21] Fitch was consulted on Indian affairs and gave even more valuable information to Lancaster.[22]

They convened again a year later, on 31 December 1600, and this time they succeeded; the Queen, responded favourably to a petition by "George, Earl of Cumberland and 218 others,[25] including James Lancaster, Sir John Harte, Sir John Spencer (both of whom had been Lord Mayor of London), the adventurer Edward Michelborne, the nobleman William Cavendish and other Aldermen and citizens.[26] She granted her charter to their corporation named Governor and Company of Merchants of London trading into the East Indies.[16] For a period of fifteen years, the charter awarded the company a monopoly[27] on English trade with all countries east of the Cape of Good Hope and west of the Straits of Magellan.[28] Any traders there without a licence from the company were liable to forfeiture of their ships and cargo (half of which would go to the Crown and half to the company), as well as imprisonment at the "royal pleasure".[29]

Early in 1608 Alexander Sharpeigh was made captain of the company's Ascension, and general or commander of the fourth voyage. Thereafter two ships, Ascension and Union (captained by Richard Rowles) sailed from Woolwich on 14 March 1608.[34] This expedition would be lost.[35]

Initially, the company struggled in the spice trade because of competition from the well-established Dutch East India Company. The English company opened a factory in Bantam on Java on its first voyage, and imports of pepper from Java remained an important part of the company's trade for twenty years. The Bantam factory closed in 1683.

English traders frequently fought their Dutch and Portuguese counterparts in the Indian Ocean. The company achieved a major victory over the Portuguese in the Battle of Swally in 1612, at Suvali in Surat. The company decided to explore the feasibility of a foothold in mainland India, with official sanction from both Britain and the Mughal Empire, and requested that the Crown launch a diplomatic mission.[36]

Company ships docked at Surat in Gujarat in 1608.[37] The company established its first Indian factory in 1615 at Surat,[37] and its second in 1616 at Masulipatnam on the Andhra Coast of the Bay of Bengal. The high profits reported by the company after landing in India initially prompted James I to grant subsidiary licences to other trading companies in England. However, in 1609 he renewed the East India Company's charter for an indefinite period, with the proviso that its privileges would be annulled if trade was unprofitable for three consecutive years.

Competition arose in 1635 when Charles I granted a trading licence to Sir William Courteen, which permitted the rival Courteen association to trade with the east at any location in which the EIC had no presence.[45]

In 1689, a Mughal fleet commanded by Sidi Yaqub attacked Bombay. After a year of resistance the EIC surrendered in 1690, and the company sent envoys to Aurangzeb's camp to plead for a pardon. The company's envoys had to prostrate themselves before the emperor, pay a large indemnity, and promise better behaviour in the future. The emperor withdrew his troops, and the company subsequently re-established itself in Bombay and set up a new base in Calcutta.[47]

The East India Company's archives suggest its involvement in the slave trade began in 1684, when a Captain Robert Knox was ordered to buy and transport 250 slaves from Madagascar to St. Helena.[49] The East India Company began using and transporting slaves in Asia and the Atlantic in the early 1620s, according to the Encyclopædia Britannica,[50] or in 1621, according to Richard Allen.[51] Eventually, the company ended the trade in 1834 after numerous legal threats from the British state and the Royal Navy in the form of the West Africa Squadron, which discovered various ships had contained evidence of the illegal trade.[52]

The first of the Anglo-Indian Wars occurred in 1686 when the company conducted naval operations against Shaista Khan, the governor of Mughal Bengal. This led to the siege of Bombay and the subsequent intervention of the Mughal Emperor, Aurangzeb. Subsequently, the English company was defeated and fined.[55][56]

The prosperity that the officers of the company enjoyed allowed them to return to Britain and establish sprawling estates and businesses, and to obtain political power. The company developed a lobby in the English parliament. Under pressure from ambitious tradesmen and former associates of the company (pejoratively termed Interlopers by the company), who wanted to establish private trading firms in India, a deregulating act was passed in 1694.[61]

This allowed any English firm to trade with India, unless specifically prohibited by act of parliament, thereby annulling the charter that had been in force for almost 100 years. When the East India Company Act 1697 (9 Will. c. 44) was passed in 1697, a new "parallel" East India Company (officially titled the English Company Trading to the East Indies) was floated under a state-backed indemnity of £2 million.[62] The powerful stockholders of the old company quickly subscribed a sum of £315,000 in the new concern, and dominated the new body. The two companies wrestled with each other for some time, both in England and in India, for a dominant share of the trade.[61]

It quickly became evident that, in practice, the original company faced scarcely any measurable competition. The companies merged in 1708, by a tripartite indenture involving both companies and the state, with the charter and agreement for the new United Company of Merchants of England Trading to the East Indies being awarded by Sidney Godolphin, 1st Earl of Godolphin.[63] Under this arrangement, the merged company lent to the Treasury a sum of £3,200,000, in return for exclusive privileges for the next three years, after which the situation was to be reviewed. The amalgamated company became the United Company of Merchants of England Trading to the East Indies.[61]

In the following decades there was a constant battle between the company lobby and Parliament. The company sought a permanent establishment, while 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 licence was prolonged until 1766 by yet another act in 1730.[citation needed]

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.[64]

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. In 1801 Henry Dundas reported to the House of Commons that 781b155fdc