East India Company
East India Company (EIC)
The East India Company (EIC), also known as the Honourable
East India Company (HEIC) or the British East India Company and informally as
John Company,[1] was an English and later British joint-stock company,[2] which
was formed to pursue trade with the East Indies but ended up trading mainly
with the Indian subcontinent and Qing China.
Originally chartered as the "Governor and Company of
Merchants of London trading into the East Indies", the company rose to
account for half of the world's trade, particularly in basic commodities
including cotton, silk, indigo dye, salt, saltpetre, tea and opium. The company
also ruled the beginnings of the British Empire in India.[3]
The company received a Royal Charter from Queen Elizabeth I
on 31 December 1600,[4] making it the oldest among several similarly formed
European East India Companies. Wealthy merchants and aristocrats owned the
Company's shares.[5] Initially the government owned no shares and had only
indirect control.
The company eventually came to rule large areas of India
with its own private armies, exercising military power and assuming
administrative functions.[6] Company rule in India effectively began in 1757
after the Battle of Plassey and lasted until 1858 when, 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. It was dissolved in 1874 as a result of
the East India Stock Dividend Redemption Act passed one year earlier, as the
Government of India Act had by then rendered it vestigial, powerless, and
obsolete. The official government machinery of British India had assumed its
governmental functions and absorbed its armies.
Founding
James Lancaster commanded the first East India Company voyage
in 1601.
Soon after the defeat of the Spanish Armada in 1588, London
merchants presented a petition to Queen Elizabeth I for permission to sail to
the Indian Ocean.[7] Permission was granted, and despite the defeat of the
English Armada in 1589, on 10 April 1591 three ships sailed from Torbay around
the Cape of Good Hope to the Arabian Sea on one of the earliest English
overseas Indian expeditions. One of them, Edward Bonventure, then sailed around
Cape Comorin to the Malay Peninsula and returned to England in 1594.[7]
In 1596, three more ships sailed east; however, these were
all lost at sea.[7] Three years later, on 22 September 1599,[8] another group
of merchants met and stated their intention "to venture in the pretended
voyage to the East Indies (the which it may please the Lord to prosper), and
the sums that they will adventure", committing £30,133.[9] Two days later,
on 24 September, "the Adventurers" reconvened and resolved to apply
to the Queen for support of the project.[9]
Although their first attempt had not been completely
successful, they nonetheless sought the Queen's unofficial approval to
continue, bought ships for their venture and increased their capital to
£68,373. The Adventurers convened again a year later.[7]
This time they succeeded, and on 31 December 1600, the Queen
granted a Royal Charter to "George, Earl of Cumberland, and 215 Knights,
Aldermen, and Burgesses" under the name, Governor and Company of Merchants
of London trading with the East Indies.[10] For a period of fifteen years the
charter awarded the newly formed company a monopoly on trade with all countries
east of the Cape of Good Hope and west of the Straits of Magellan.[10] Anybody
who traded in breach of the charter without a licence from the Company was
liable to forfeiture of their ships and cargo (half of which went to the Crown
and the other half to the Company), as well as imprisonment at the "royal
pleasure".[11]
The governance of the company was in the hands of one
governor and 24 directors or "committees", who made up the Court of
Directors. They, in turn, reported to the Court of Proprietors, which appointed
them. Ten committees reported to the Court of Directors. According to
tradition, business was initially transacted at the Nags Head Inn, opposite St
Botolph's church in Bishopsgate, before moving to India House in Leadenhall
Street.[12]
Early voyages to the East Indies
Sir James Lancaster commanded the first East India Company
voyage in 1601[13] and returned in 1603.[14] In March 1604 Sir Henry Middleton
commanded the second voyage. General William Keeling, a captain during the
second voyage, led the third voyage aboard the Red Dragon from 1607 to 1610 along
with the Hector under Captain William Hawkins and the Consent under Captain
David Middleton.[15]
Early in 1608 Alexander Sharpeigh was appointed 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 1607–8.[15]
Initially, the company struggled in the spice trade because
of the competition from the already well-established Dutch East India Company.
The company opened a factory 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 established 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 licences to other
trading companies in England. But in 1609 he renewed the charter given to the
company for an indefinite period, including a clause that specified that the
charter would cease to be in force if the trade turned unprofitable for three
consecutive years.
Foothold in India
English traders frequently engaged in hostilities with 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 gaining a territorial
foothold in mainland India, with official sanction from both Britain and the
Mughal Empire, and requested that the Crown launch a diplomatic mission.[16]
Jahangir investing a courtier with a robe of honour, watched
by Sir Thomas Roe, English ambassador to the court of Jahangir at Agra from
1615–18, and others.
In 1612, James I instructed Sir Thomas Roe to visit the
Mughal Emperor Nuruddin Salim Jahangir (r. 1605–1627) to arrange for a
commercial treaty that would give the company exclusive rights to reside and
establish factories in Surat and other areas. In return, the company offered to
provide the Emperor with goods and rarities from the European market. This
mission was highly successful, and Jahangir sent a letter to James through Sir
Thomas Roe:[16]
Upon which assurance of your royal love I have given my
general command to all the kingdoms and ports of my dominions to receive all
the merchants of the English nation as the subjects of my friend; that in what
place soever they choose to live, they may have free liberty without any
restraint; and at what port soever they shall arrive, that neither Portugal nor
any other shall dare to molest their quiet; and in what city soever they shall
have residence, I have commanded all my governors and captains to give them
freedom answerable to their own desires; to sell, buy, and to transport into
their country at their pleasure. For confirmation of our love and friendship, I
desire your Majesty to command your merchants to bring in their ships of all
sorts of rarities and rich goods fit for my palace; and that you be pleased to
send me your royal letters by every opportunity, that I may rejoice in your
health and prosperous affairs; that our friendship may be interchanged and
eternal.
— Nuruddin Salim Jahangir, Letter to James I.
Expansion
The company, which benefited from the imperial patronage,
soon expanded its commercial trading operations. It eclipsed the Portuguese
Estado da Índia, which had established bases in Goa, Chittagong, and Bombay,
which Portugal later ceded to England as part of the dowry of Catherine of
Braganza. The East India Company also launched a joint attack with the Dutch
United East India Company (VOC) on Portuguese and Spanish ships off the coast
of China, which helped secure EIC ports in China.[17] The company established
trading posts in Surat (1619), Madras (1639), Bombay (1668), and Calcutta (1690).
By 1647, the company had 23 factories, each under the command of a factor or
master merchant and governor, and 90 employees[clarification needed] in India.
The major factories became the walled forts of Fort William in Bengal, Fort St
George in Madras, and Bombay Castle.
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 their trade. The company's mainstay businesses were by then cotton,
silk, indigo dye, saltpetre, and tea. The Dutch were aggressive competitors and
had meanwhile expanded their monopoly of the spice trade in the Straits of
Malacca by ousting the Portuguese in 1640–41. With reduced Portuguese and
Spanish influence in the region, the EIC and VOC entered a period of intense
competition, resulting in the Anglo-Dutch Wars of the 17th and 18th centuries.
In 1657, Oliver Cromwell renewed the charter of 1609, and
brought about minor changes in the holding of the company. The restoration of
monarchy in England further enhanced the EIC's status.
In an act aimed at strengthening the power of the EIC, King
Charles II granted the EIC (in a series of five acts around 1670) 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.[18]
William Hedges was sent in 1682 to Shaista Khan, the Mughal
governor of Bengal, in order to obtain a firman, an imperial directive that
would grant England regular trading privileges throughout the Mughal Empire.
However, the company's governor in London, Sir Josiah Child, interfered with
Hedges's mission, causing Mughal Emperor Aurangzeb to break off the
negotiations.
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.[19]
Japan
In 1613, during the rule of Tokugawa Hidetada of the
Tokugawa shogunate, the British ship Clove, under the command of Captain John
Saris, was the first British ship to call on Japan. Saris was the chief factor
of the EIC's trading post in Java, and with the assistance of William Adams, a
British sailor who had arrived in Japan in 1600, was able to gain permission
from the ruler to establish a commercial house in Hirado on the Japanese island
of Kyushu:
We give free license to the subjects of the King of Great
Britaine, Sir Thomas Smythe, Governor and Company of the East Indian Merchants
and Adventurers forever safely come into any of our ports of our Empire of
Japan with their shippes and merchandise, without any hindrance to them or
their goods, and to abide, buy, sell and barter according to their own manner
with all nations, to tarry here as long as they think good, and to depart at
their pleasure.[20]
However, unable to obtain Japanese raw silk for import to
China and with their trading area reduced to Hirado and Nagasaki from 1616
onwards, in 1623 the Company closed their factory.[21]
Mughal convoy piracy incident of 1695
In September 1695, Captain Henry Every, an English pirate on
board the Fancy, reached the Straits of Bab-el-Mandeb, where he teamed up with
five other pirate captains to make an attack on the Indian fleet making the
annual voyage to Mocha. The Mughal convoy included the treasure-laden
Ganj-i-Sawai, reported to be the greatest in the Mughal fleet and the largest
ship operational in the Indian Ocean, and its escort, the Fateh Muhammed. They
were spotted passing the straits en route to Surat. The pirates gave chase and
caught up with Fateh Muhammed some days later, and meeting little resistance,
took some £50,000 to £60,000 worth of treasure.[22]
English, Dutch and Danish factories at Mocha
Every continued in pursuit and managed to overhaul
Ganj-i-Sawai, which resisted strongly before eventually striking. Ganj-i-Sawai
carried enormous wealth and, according to contemporary East India Company
sources, was carrying a relative of the Grand Mughal, though there is no
evidence to suggest that it was his daughter and her retinue. The loot from the
Ganj-i-Sawai had a total value between £325,000 and £600,000, including 500,000
gold and silver pieces, and has become known as the richest ship ever taken by
pirates.
In a letter sent to the Privy Council by Sir John Gayer,
then governor of Bombay and head of the East India Company, Gayer claims that
"it is certain the Pirates ... did do very barbarously by the People of
the Ganj-i-Sawai and Abdul Ghaffar's ship, to make them confess where their
money was." The pirates set free the survivors who were left aboard their
emptied ships, to continue their voyage back to India.
When the news arrived in England it caused an outcry. In
response, a combined bounty of £1,000 was offered for Every's capture by the
Privy Council and East India Company, leading to the first worldwide manhunt in
recorded history. The plunder of Aurangzeb's treasure ship had serious
consequences for the English East India Company. The furious Mughal Emperor
Aurangzeb ordered Sidi Yaqub and Nawab Daud Khan to attack and close four of
the company's factories in India and imprison their officers, who were almost
lynched by a mob of angry Mughals, blaming them for their countryman's
depredations, and threatened to put an end to all English trading in India. To
appease Emperor Aurangzeb and particularly his Grand Vizier Asad Khan,
Parliament exempted Every from all of the Acts of Grace (pardons) and amnesties
it would subsequently issue to other pirates.[23]
Forming a complete monopoly
Trade monopoly
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.[24]
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. By an act that was passed in 1698,
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. 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.[24]
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. 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.[24]
In the following decades there was a constant 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
licence 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.[25]
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.[25]
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. William Henry 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.
Saltpetre trade
Saltpetre used for gunpowder was one of the major trade
goods of the company.
Sir John Banks, a businessman from Kent who negotiated an
agreement between the king and the company, began his career in a syndicate
arranging contracts for victualling the navy, an interest he kept up for most
of his life. He knew that Samuel Pepys and John Evelyn had amassed a
substantial fortune from the Levant and Indian trades.
He became a Director and later, as Governor of the East
India Company in 1672, he arranged a contract which included a loan of £20,000
and £30,000 worth of saltpetre—also known as potassium nitrate, a primary
ingredient in gunpowder—for the King "at the price it shall sell by the
candle"—that is by auction—where bidding could continue as long as an inch-long
candle remained alight.[26]
Outstanding debts were also agreed and the company permitted
to export 250 tons of saltpetre. Again in 1673, Banks successfully negotiated
another contract for 700 tons of saltpetre at £37,000 between the king and the
company. So urgent was the need to supply the armed forces in the United
Kingdom, America and elsewhere that the authorities sometimes turned a blind
eye on the untaxed sales. One governor of the company was even reported as
saying in 1864 that he would rather have the saltpetre made than the tax on
salt.[27]
Basis for the monopoly
Robert Clive became the first British Governor of Bengal
after he had instated Mir Jafar as the Nawab of Bengal.
The Seven Years' War (1756–63) resulted in the defeat of the
French forces, limited French imperial ambitions, and stunted the influence of
the Industrial Revolution in French territories. Robert Clive, the Governor
General, led the company to a victory against Joseph François Dupleix, the
commander of the French forces in India, and recaptured Fort St George from the
French. The company took this respite to seize Manila in 1762.
By the Treaty of Paris (1763), France regained the five
establishments captured by the British during the war (Pondichéry, Mahe,
Karikal, Yanam and Chandernagar) but was prevented from erecting fortifications
and keeping troops in Bengal (art. XI). Elsewhere in India, the French were to
remain a military threat, particularly during the War of American Independence,
and up to the capture of Pondichéry in 1793 at the outset of the French
Revolutionary Wars without any military presence. Although these small outposts
remained French possessions for the next two hundred years, French ambitions on
Indian territories were effectively laid to rest, thus eliminating a major
source of economic competition for the company.
East India Company Army and Navy
In its first century and half, the EIC used a few hundred soldiers
as guards. The great expansion came after 1750, when it had 3000 regular
troops. By 1763, it had 26,000; by 1778, it had 67,000. It recruited largely
Indian troops, and trained them along European lines.[29] The military arm of
the East India Company quickly developed to become a private corporate armed
force, and was used as an instrument of geo-political power and expansion,
rather than its original purpose as a guard force, and became the most powerful
military force in the Indian sub-continent. As it increased in size the army
was broken into the Presidency Armies of Bengal, Madras and Bombay each
recruiting their own integral infantry, cavalry, artillery and horse artillery
units. The navy also grew significantly, vastly expanding its fleet and although
made up predominantly of heavily armed merchant vessels, called East Indiamen,
it also included warships.
Expansion and Conquest
The company, fresh from a colossal victory, and with the
backing of its own private well-disciplined and experienced army, was able to
assert its interests in the Carnatic region from its base at Madras and in
Bengal from Calcutta, without facing any further obstacles from other colonial
powers.[30]
The Mughal Emperor Shah Alam II, who with his allies fought
against the East India Company during his early years (1760–64), only accepting
the protection of the British in the year 1803, after he had been blinded by
his enemies and deserted by his subjects
It 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 Odisha
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.
With the gradual weakening of the Marathas in the aftermath
of the three Anglo-Maratha wars, the British also secured the Ganges-Jumna
Doab, the Delhi-Agra region, parts of Bundelkhand, Broach, some districts of
Gujarat, the fort of Ahmmadnagar, province of Cuttack (which included
Mughalbandi/the coastal part of Odisha, Garjat/the princely states of Odisha,
Balasore Port, parts of Midnapore district of West Bengal), Bombay (Mumbai) and
the surrounding areas, leading to a formal end of the Maratha empire and firm
establishment of the British East India Company in India.
Hyder 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 Revolutionary 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.
The fall of Tipu Sultan and the Sultanate of Mysore, during
the Battle of Seringapatam in 1799.
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. 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 an administrator 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.[32] Between 1760 and 1834 only some 10% of the East India Company's
officers survived to take the final voyage home.[33]
In the early 19th century the Indian question of
geopolitical dominance and empire holding remained with the East India
Company.[34] The three independent armies of the company's Presidencies, with
some locally raised irregular forces, expanded to a total of 280,000 men by
1857.[35] First recruited from mercenaries and low-caste volunteers, the Bengal
Army especially eventually became composed largely of high-caste Hindus and
landowning Muslims.
Within the Army, British officers who initially trained at
the company's own academy at the Addiscombe Military Seminary, always outranked
Indians, no matter how long their service. The highest rank to which an Indian
soldier could aspire was Subadar-Major (or Rissaldar-Major in cavalry units),
effectively a senior subaltern equivalent. Promotion for both British and
Indian soldiers was strictly by seniority, so Indian soldiers rarely reached
the commissioned ranks of Jamadar or Subadar before they were middle aged at
best. They received no training in administration or leadership to make them
independent of their British officers.
During the wars against the French and their allies in the
late eighteenth and early nineteenth centuries, the East India Company's armies
were used to seize the colonial possessions of other European nations,
including the islands of Réunion and Mauritius.
There was a systemic disrespect in the company for the
spreading of Protestantism although it fostered respect for Hindu and Muslim,
castes and ethnic groups. The growth of tensions between the EIC and the local
religious and cultural groups grew in the 19th century as the Protestant
revival grew in Great Britain. These tensions erupted at the Indian Rebellion
of 1857 and the company ceased to exist when the company dissolved through the
East India Stock Dividend Redemption Act 1873.[36]
Opium Trade
The Nemesis destroying Chinese war junks during the Second
Battle of Chuenpi, 7 January 1841, by Edward Duncan.
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, India by prohibiting the licensing of opium farmers and
private cultivation. The monopoly system established in 1799 continued with
minimal changes until 1947.[37] 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.[38]
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 & Co and Dent &
Co. in amounts averaging 900 tons a year. The proceeds of the drug-smugglers
landing their cargoes 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.
The Company established a group of trading settlements
centred on the Straits of Malacca called the Straits Settlements in 1826 to
protect its trade route to China and to combat local piracy. The Settlements
were also used as penal settlements for Indian civilian and military prisoners.
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 (1839–42). After the war Hong
Kong island was ceded to Britain under the Treaty of Nanking and the Chinese
market opened to the opium traders of Britain and other nations.[37] The
Jardines and Apcar and Company dominated the trade, although P&O also tried
to take a share.[39] A Second Opium War fought by Britain and France against
China lasted from 1856 until 1860 and led to the Treaty of Tientsin, which
legalised the importation of opium. Legalisation stimulated domestic Chinese
opium production and increased the importation of opium from Turkey and Persia.
This increased competition for the Chinese market led to India reducing its
opium output and diversifying its exports.[37]
Regulation of the company's affairs
Writers
Two ships in a harbour, one in the distance. On board, men
stripped to the waist and wearing feathers in their hair are throwing crates
overboard. A large crowd, mostly men, is standing on the dock, waving hats and
cheering. A few people wave their hats from windows in a nearby building.
Monopolistic activity by the company triggered the Boston Tea Party.
The Destruction of Tea at Boston Harbor, 1773
The Company employed many junior clerks, known as
"writers", to record the details of accounting, managerial decisions,
and activities related to the Company, such as minutes of meetings, copies of
Company orders and contracts, and filings of reports and copies of ship's logs.
Several well-known British scholars and literary men had Company writerships,
such as Henry Thomas Colebrooke in India and Charles Lamb in England.
Financial troubles
Though the Company was becoming increasingly bold and
ambitious in putting down resisting states, it was becoming clearer that the
Company was incapable of governing the vast expanse of the captured
territories. The Bengal famine of 1770, in which one-third of the local
population died, caused distress in Britain. Military and administrative costs
mounted beyond control in British-administered regions in Bengal because of the
ensuing drop in labour productivity.
At the same time, there was commercial stagnation and trade
depression throughout Europe. The directors of the company attempted to avert
bankruptcy by appealing to Parliament for financial help. This led to the
passing of the Tea Act in 1773, which gave the Company greater autonomy in
running its trade in the American colonies, and allowed it an exemption from
tea import duties which its colonial competitors were required to pay.
When the American colonists and tea merchants were told of
this Act, they boycotted the Company tea. Although the price of tea had dropped
because of the Act, it also validated the Townshend Acts, setting the precedent
for the king to impose additional taxes in the future. The arrival of
tax-exempt Company tea, undercutting the local merchants, triggered the Boston
Tea Party in the Province of Massachusetts Bay, one of the major events leading
up to the American Revolution.
Regulating Acts of Parliament
East India Company Act 1773
By the Regulating Act of 1773 (later known as the East India
Company Act 1773), the Parliament of Great Britain imposed a series of
administrative and economic reforms; this clearly established Parliament's
sovereignty and ultimate control over the Company. The Act recognised the
Company's political functions and clearly established that the
"acquisition of sovereignty by the subjects of the Crown is on behalf of
the Crown and not in its own right".
Despite stiff resistance from the East India lobby in
parliament and from the Company's shareholders, the Act passed. It introduced
substantial governmental control and allowed British India to be formally under
the control of the Crown, but leased back to the Company at £40,000 for two
years. Under the Act's most important provision, a governing Council composed
of five members was created in Calcutta. The three members nominated by
Parliament and representing the Government's interest could, and invariably
would, outvote the two Company members. The Council was headed by Warren
Hastings, the incumbent Governor, who became the first Governor-General of
Bengal, with an ill-defined authority over the Bombay and Madras
Presidencies.[40] His nomination, made by the Court of Directors, would in
future be subject to the approval of a Council of Four appointed by the Crown.
Initially, the Council consisted of Lt. General Sir John Clavering, The
Honourable Sir George Monson, Sir Richard Barwell, and Sir Philip Francis.[41]
Hastings was entrusted with the power of peace and war.
British judges and magistrates would also be sent to India to administer the
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. The Company initially welcomed these provisions, but
the annual burden of the payment contributed to the steady decline of its
finances.[41]
East India Company Act 1784 (Pitt's India Act)
The East India Company Act 1784 (Pitt's India Act) had two
key aspects:
Relationship to the British government: the bill
differentiated the East India Company's political functions from its commercial
activities. In political matters the East India Company was subordinated to the
British government directly. To accomplish this, the Act created a Board of Commissioners
for the Affairs of India, usually referred to as the Board of Control. The
members of the Board were the Chancellor of the Exchequer, the Secretary of
State, and four Privy Councillors, nominated by the King. The act specified
that the Secretary of State "shall preside at, and be President of the
said Board".
Internal Administration of British India: the bill laid the
foundation for the centralised and bureaucratic British administration of India
which would reach its peak at the beginning of the 20th century during the
governor-generalship of George Nathaniel Curzon, 1st Baron Curzon.
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.
Act of 1786
General Lord Cornwallis, receiving two of Tipu Sultan's sons
as hostages in the year 1793
The Act of 1786 (26 Geo. 3 c. 16) enacted the demand of Earl
Cornwallis that the powers of the Governor-General be enlarged to empower him,
in special cases, to override the majority of his Council and act on his own
special responsibility. The Act enabled the offices of the Governor-General and
the Commander-in-Chief to be jointly held by the same official.
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. In addition, Penang, one of the
states in Malaya, became the fourth most important settlement, a presidency, of
the Company's Indian territories.[42]
East India Company Act 1793 (Charter Act)
The Company's charter was renewed for a further 20 years by
the Charter Act of 1793. In contrast with the legislative proposals of the
previous two decades, the 1793 Act was not a particularly controversial
measure, and made only minimal changes to the system of government in India and
to British oversight of the Company's activities.
The aggressive policies of Lord Wellesley and the Marquis of
Hastings led to the Company gaining control of all India (except for the Punjab
and Sindh), and some part of the then kingdom of Nepal under the Sugauli
Treaty. The Indian Princes had become vassals of the Company. But the expense
of wars leading to the total control of India strained the Company's finances.
The Company was forced to petition Parliament for assistance. This was the
background to the Charter Act of 1813 which, among other things:
asserted the sovereignty of the British Crown over the
Indian territories held by the Company;
renewed the charter of the company for a further twenty
years, but
deprived the company of its Indian trade monopoly except for
trade in tea and the trade with China
required the company to maintain separate and distinct its
commercial and territorial accounts
opened India to missionaries
Government of India Act 1833
The Industrial Revolution in Britain, the consequent search
for markets, and the rise of laissez-faire economic ideology form the
background to the Government of India Act 1833 (3 & 4 Will. 4 c. 85). The
Act:
removed the Company's remaining trade monopolies and
divested it of all its commercial functions
renewed for another twenty years the Company's political and
administrative authority
invested the Board of Control with full power and authority
over the Company.
As stated by Professor Sri Ram Sharma, "The
President of the Board of Control now became Minister for Indian Affairs."
carried further the ongoing process of administrative
centralisation through investing the Governor-General in Council with, full
power and authority to superintend and, control the Presidency Governments in
all civil and military matters
initiated a machinery for the codification of laws
provided that no Indian subject of the Company would be
debarred from holding any office under the Company by reason of his religion,
place of birth, descent or colour
vested the Island of St Helena in the Crown[44]
British influence continued to expand; in 1845, Great
Britain purchased the Danish colony of Tranquebar. 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).
English Education Act 1835
The English Education Act by the Council of India in 1835
reallocated funds from the East India Company to spend on education and
literature in India.
Government of India Act 1853
This Act (16 & 17 Vict. c. 95) provided that British
India would remain under the administration of the Company in trust for the
Crown until Parliament should decide otherwise. It also introduced a system of
open competition as the basis of recruitment for civil servants of the company
and thus deprived the Directors of their patronage system.[45]
Under the act, for the first time the legislative and
executive powers of the governor general's council were separated. It also
added six additional members to the governor general's executive committee.[46]
Indian Rebellion and disestablishment
The Indian Rebellion of 1857 (also known as the Indian
Mutiny) resulted in widespread devastation in India: many condemned the East
India Company for permitting the events to occur.[47] In the aftermath of the
Rebellion, under the provisions of the Government of India Act 1858, the
British Government nationalised the Company. The Crown took over its Indian
possessions, its administrative powers and machinery, and its armed forces.
The Company remained in existence in vestigial form,
continuing 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 1873
came into effect, on 1 January 1874. This Act provided for the formal
dissolution of the company on 1 June 1874, after a final dividend payment and
the commutation or redemption of its stock.[48] The Times commented on 8 April
1873:[49]
It accomplished a work such as in the whole history of the
human race no other trading Company ever attempted, and such as none, surely, is
likely to attempt in the years to come.
Establishments in Britain
The Company's headquarters in London, from which much of
India was governed, was East India House in Leadenhall Street. After occupying
premises in Philpot Lane from 1600 to 1621; in Crosby House, Bishopsgate, from
1621 to 1638; and in Leadenhall Street from 1638 to 1648, the Company moved
into Craven House, an Elizabethan mansion in Leadenhall Street. The building
had become known as East India House by 1661. It was completely rebuilt and
enlarged in 1726–9; and further significantly remodelled and expanded in
1796–1800. It was finally vacated in 1860 and demolished in 1861–62. The site
is now occupied by the Lloyd's building.
In 1607, the Company decided to build its own ships and
leased a yard on the River Thames at Deptford. By 1614, the yard having become
too small, an alternative site was acquired at Blackwall: the new yard was
fully operational by 1617. It was sold in 1656, although for some years East
India Company ships continued to be built and repaired there under the new
owners.
In 1803, an Act of Parliament, promoted by the East India Company,
established the East India Dock Company, with the aim of establishing a new set
of docks (the East India Docks) primarily for the use of ships trading with
India. The existing Brunswick Dock, part of the Blackwall Yard site, became the
Export Dock; while a new Import Dock was built to the north. In 1838 the East
India Dock Company merged with the West India Dock Company. The docks were
taken over by the Port of London Authority in 1909, and closed in 1967.
The East India College was founded in 1806 as a training
establishment for "writers" (i.e. clerks) in the Company's service.
It was initially located in Hertford Castle, but moved in 1809 to purpose-built
premises at Hertford Heath, Hertfordshire. In 1858 the college closed; but in
1862 the buildings reopened as a public school, now Haileybury and Imperial
Service College.
The East India Company Military Seminary was founded in 1809
at Addiscombe, near Croydon, Surrey, to train young officers for service in the
Company's armies in India. It was based in Addiscombe Place, an early
18th-century mansion. The government took it over in 1858, and renamed it the
Royal Indian Military College. In 1861 it was closed, and the site was
subsequently redeveloped.
In 1818, the Company entered into an agreement by which
those of its servants who were certified insane in India might be cared for at
Pembroke House, Hackney, London, a private lunatic asylum run by Dr George Rees
until 1838, and thereafter by Dr William Williams. The arrangement outlasted
the Company itself, continuing until 1870, when the India Office opened its own
asylum, the Royal India Asylum, at Hanwell, Middlesex.[50]
The East India Club in London was formed in 1849 for
officers of the Company. The Club still exists today as a private gentlemen's
club with its club house situated at 16 St. James's Square, London.[51]
Legacy and criticisms
The East India Company had a long lasting impact on the
Indian Subcontinent, with both positive and harmful effects. Although dissolved
following the rebellion of 1857, it stimulated the growth of the British
Empire. Its armies were to become the armies of British India after 1857, and
it played a key role in introducing English as an official language in India.
The East India Company was the first company to record the
Chinese usage of orange-flavoured tea, which led to the development of Earl
Grey tea.[52]
The East India Company introduced a system of merit-based
appointments that provided a model for the British and Indian civil
service.[53]
Widespread corruption and looting of Bengal resources and
treasures during its rule resulted in poverty.[54] Famines, such as the Great
Bengal famine of 1770 and subsequent famines during the 18th and 19th
centuries, became more widespread, chiefly because of exploitative agriculture
promulgated by the policies of the East India company and the forced
cultivation of opium in place of grain.[55][56]
Flags
Historical depictions
The English East India Company flag changed with history,
with a canton based on the current flag of the Kingdom, and a field of 9 to 13
alternating red and white stripes.
From the period of 1600, the canton consisted of a St
George's Cross representing the Kingdom of England. With the Acts of Union
1707, the canton was updated to be the new Union Flag—consisting of an English
St George's Cross combined with a Scottish St Andrew's cross—representing the
Kingdom of Great Britain. After the Acts of Union 1800 that joined Ireland with
Great Britain to form the United Kingdom, the canton of the East India Company
flag was altered accordingly to include a Saint Patrick's Saltire replicating
the updated Union Flag representing the United Kingdom of Great Britain and
Ireland.
Regarding the field of the flag, there has been much debate
and discussion regarding the number and order of the stripes. Historical
documents and paintings show many variations from 9 to 13 stripes, with some
images showing the top stripe being red and others showing the top stripe being
white.
At the time of the American Revolution the East India
Company flag was nearly identical to the Grand Union Flag. Historian Charles
Fawcett argued that the East India Company Flag inspired the Stars and
Stripes.[57]
Coat of Arms
The later coat of arms of the East India Company
The East India Company's original coat of arms was granted
in 1600. The arms was as follows:
"Azure, three ships with three masts, rigged and under
full sail, the sails, pennants and ensigns Argent, each charged with a cross
Gules; on a chief of the second a pale quarterly Azure and Gules, on the 1st
and 4th a fleur-de-lis or, on the 2nd and 3rd a leopard or, between two roses
Gules seeded Or barbed Vert." The shield had as a crest: "A sphere
without a frame, bounded with the Zodiac in bend Or, between two pennants
flottant Argent, each charged with a cross Gules, over the sphere the words
DEUS INDICAT" (Latin: God Indicates). The supporters were two sea lions (lions
with fishes' tails) and the motto was DEO DUCENTE NIL NOCET (Latin: Where God
Leads, Nothing Hurts).[58]
The East India Company's arms, granted in 1698, were:
"Argent a cross Gules; in the dexter chief quarter an escutcheon of the
arms of France and England quarterly, the shield ornamentally and regally
crowned Or." The crest was: "A lion rampant guardant Or holding
between the forepaws a regal crown proper." The supporters were: "Two
lions rampant guardant Or, each supporting a banner erect Argent, charged with
a cross Gules." The motto was AUSPICIO REGIS ET SENATUS ANGLIÆ (Latin: By
right of the King and the Senate of England).[58]
Merchant Mark
When the East India Company was chartered in 1600 it was
still customary for individual merchants or members of Companies such as the
Company of Merchant Adventurers to have a distinguishing merchant's mark which
often included the mystical "Sign of Four" and served as a trademark.
The East India Company's merchant mark consisted of a "Sign of Four"
atop a heart within which was a saltire between the lower arms of which were
the initials "EIC". This mark was a central motif of the East India
Company's coinage[59] and forms the central emblem displayed on the Scinde Dawk
postage stamps.[60]
Ships
Ships of the East India Company were called East Indiamen or
simply "Indiamen".[61] Some examples include:
Red Dragon (1595)
Doddington (East Indiaman) Lost 1755
Royal Captain (Lost on her maiden voyage in 1773)
Grosvenor Lost 1782
General Goddard (1782)
Earl of Abergavenny (1796)
Earl of Mornington (1799); packet ship
Lord Nelson (1799)
David Clark (1816)
Kent (1820): Lost on her third voyage
Nemesis (1839): first British-built ocean-going iron warship
Agamemnon (1855)
The East Indiaman Royal George, 1779. Royal George was one
of the five East Indiamen the Spanish fleet captured in 1780.
During the period of the Napoleonic Wars, the East India
Company arranged for letters of marque for its vessels such as the Lord Nelson.
This was not so that they could carry cannon 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, also sailed under a letter
of marque.
In addition, the company had its own navy, the Bombay
Marine, equipped with warships such as Grappler. These vessels often
accompanied vessels of the Royal Navy on expeditions, such as the Invasion of
Java (1811).
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, led several Indiamen in a skirmish with a French
squadron, driving them off. Some six years earlier, on 28 January 1797, five
Indiamen, the Woodford, under Captain Charles Lennox, the Taunton-Castle,
Captain Edward Studd, Canton, Captain Abel Vyvyan, and Boddam, Captain George
Palmer, and Ocean, Captain John Christian Lochner, had encountered Admiral de
Sercey and his squadron of frigates. On this occasion the Indiamen also
succeeded in bluffing their way to safety, and without any shots even being
fired. Lastly, on 15 June 1795, the General Goddard played a large role in the
capture of seven Dutch East Indiamen off St Helena.
East India Company (EIC)'s ships were well built, with the
result that the Royal Navy bought several Company ships to convert to warships
and transports. The Earl of Mornington became HMS Drake. Other examples
include:
HMS Calcutta (1795)
HMS Glatton (1795)
HMS Hindostan (1795)
HMS Hindostan (1804)
HMS Malabar (1804)
HMS Buffalo (1813)
The company had many ports of call, some of which have seen
their names changed over time.
Records
Unlike all other British Government records, the records
from the East India Company (and its successor the India Office) are not in The
National Archives at Kew, London, but are held by the British Library in London
as part of the Asia, Pacific and Africa Collections. The catalogue is
searchable online in the Access to Archives catalogues.[62] Many of the East
India Company records are freely available online under an agreement that the
Families in British India Society has with the British Library. Published
catalogues exist of East India Company ships' journals and logs, 1600–1834;[63]
and of some of the Company's daughter institutions, including the East India
Company College, Haileybury, and Addiscombe Military Seminary.[64]
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