East India Company

Summary

The British East India Company -East India Company (EIC), Honourable East India Company (HEIC), East India Trading Company, English East India Company, and sometimes British East India Company- was a privileged company formed in September 1599 by a group of English businessmen with the purpose of trading with the East Indies, thus ending the monopoly exercised by Dutch companies over the lucrative spice trade.

In the late 1600s it obtained from Queen Elizabeth I of England the Royal Charter granting it exclusive permission to trade with the East Indies for 15 years; it was the first company of its kind in Europe. For the first 22 years it operated as a regulated trading company in which each member risked his own capital and in which membership was unrestricted. Gradually, after 1612, it was transformed into a joint-stock company. Wealthy merchants and aristocrats held shares in the company. The English government had no shares, but exercised indirect control of it.

Originally chartered to trade with the East Indies, the company grew to account for half of the world”s trade, particularly in commodities including cotton, silk, indigo dye, salt, saltpeter, tea and opium. Eventually the company ended up trading mainly with the Indian subcontinent and with the Ching or Qing dynasty of China. It also guided the beginnings of the British Empire in India.

In 1698 the company”s enemies in England, with the consent of Parliament, formed a rival company known as the English East India Trading Company. After much discussion, in 1702, the two companies reached an agreement whereby they merged into the Unified Company of English Merchants Trading in the East Indies. This was the company that obtained territorial sovereignty in India and maintained its possession until the Crown assumed control in 1858.

Initially their voyages reached as far as Japan, but between 1610 and 1611 they settled with trading establishments called factories in the territory of India, where they came to govern large areas with their own armies, with which they exercised military power and assumed administrative functions. Company authority in India effectively began in 1757 after the Battle of Plassey and lasted until 1858, when, after the Indian Rebellion of 1857, the British crown, through the Government of India Act of 1858, assumed direct control of India in the form of a new British Raj.

Despite frequent intervention by the British government, the company had recurring problems with its finances. The company was dissolved in 1874 under the East India Stock Redemption Act enacted a year earlier as the 1858 Act had proved inefficient and obsolete. The official machinery of the British government took over governmental functions and absorbed the Indian armies.

Background

The defeat of the Invincible Armada in 1588 gave impetus to maritime enterprise in England. In the following years several enterprising merchants petitioned Queen Elizabeth I of England for permission to send a squadron directly to the East. The Queen authorized their request and in 1591 three ships made the first voyage around the Cape of Good Hope to the Indian Ocean. Commander George Raymond sank with his ship in a storm, but Captain James Lancaster with HMS Bonaventure reached Cape Comorin, at the southern tip of India and the Malay Peninsula, returning to England in 1594.

Another expedition of three ships was sent east under the command of Benjamin Wood and financed by Sir Robert Dudley, but all three ships were lost. The first Englishman to reach northern India in the 17th century was the merchant John Midnall or Mildenhall: he traveled overland with a passport granted by Queen Elizabeth and spent seven years in the East, from 1599 to 1606. He visited the Mughal emperor Akbar in Agra and obtained from him some gifts of little value that he tried to sell unsuccessfully to the East India Company that had already been founded.

Foundation

On September 24, 1599, a group of London merchants formed a company to trade directly with the East Indies, thus ceasing to depend on the monopoly exercised by the Dutch on the lucrative spice trade.

They subscribed a capital of 30,133 pounds and decided to seek the support of the Crown, this support was not granted initially but a year later Queen Elizabeth I of England, on December 31, 1600, by Royal Charter granted the “governor and the company of London merchants trading with the East Indies” a 15-year monopoly to trade, buy land, sue and be sued. The company was to be run by a governor and a committee of 24 persons to be appointed annually in July.

The charter secured for 15 years the exclusive privilege to trade with India and with all countries beyond the Cape of Good Hope to the Straits of Magellan, except those territories and ports now in the possession of Christian princes and friendly to the Crown. The company could make statutes and punish offenders with fines or imprisonment. All English subjects were forbidden to trade with any country within the limits assigned to the company, unless they had special permission from the Crown, under penalty of forfeiting their ships and cargo, imprisonment or other punishment.

These powers were supplemented with considerable privileges. Because of the uncertainty about the products that would be sold in India, they were exempted from export duties during the first four voyages and were given six to twelve months to cancel the customs duties on the goods they brought to England. For the first voyage the company could carry up to 30,000 pounds in Spanish silver coins or other foreign coins.

In its ships the company should carry explosive devices or other ammunition for its defense, as well as the seamen should be English. If the business was not profitable for the kingdom, it could be revoked with 2 years” notice. If it was profitable, the Charter should be renewed at the expiration of 15 years for another similar period. The juridical person, thus created, represented, both in the nature of the business and in the mechanism of managing it, the last stage of the maritime enterprises of the Elizabethan era.

The company was a ”regulated company”, regulated as to its general powers by Royal Charter and regulated on each particular voyage. Its internal management was controlled by a ”privy council”, a governor, a committee of 24 and by the Crown; the perfect type of regulated company. The company now had 217 subscribers and its capital was £68,373.

Epochs

From 1600 to 1612 was the era of the so-called ”separate voyages”, in which each voyage was theoretically complete in itself and was to be settled upon the return of the ships in order to share the profits. During this period the power of the central company was total over each group of voyage subscribers. The system was flawed because of the lengthy voyages and the slow settlement process to determine the profit. The independent voyages overlapped with each other, so that they sometimes competed with each other for spices and Indian goods, disputes that worked against themselves.

The second period, from 1612 to 1661, was characterized by efforts to remedy this state of affairs. It is known as the period of the “joint actions”. This time the subscription was not for a single voyage but for several or for a certain number of years. But as the trips lasted longer, the same problems of the previous period arose again.

A third stage began in 1661 when the central authority and the joint stock subscribers became convinced that disputes between them were fatal to the company. The practice of buying and selling the shares became common, indicating that the system was approaching the modern joint stock companies of the 20th century.

The first era of the company between 1601 and 1612 is known as that of the separate voyages, as each voyage was organized by a particular number of subscribers and was subject to the return of the ships to establish their profit. The voyages were mainly to the Moluccan archipelago rather than mainland India. These voyages proved very profitable. The ships returned bringing pepper and spices.

The weakness of the company”s constitution was felt from the beginning. Its capital was insufficient for the first voyage, so a supplement had to be requested from the subscribers. In addition, Governor Thomas Smythe fell under suspicion of participating in a rebellion and was sent to prison.

First voyage (1601)

Finally on April 22, 1601 four ships set sail from the port of Torbay under the command of Captain James Lancaster. The ships were the Red Dragon commanded by Lancaster, the Hector commanded by Captain John Middleton, the Ascension commanded by Captain William Brand and the Susan commanded by Captain John Heyward.

They were carrying a cargo of staple foodstuffs, cloth, lead, tin, cutlery, glass, etc. They arrived in Aceh in Sumatra on June 5, 1602. Lancaster presented the King of Aceh with a letter from Queen Elizabeth along with gifts, in return he received a warm welcome from the King. He continued on to Banten on the island of Java but unfortunately that season the pepper crop had failed so Lancaster had to look for other goods for his ships. As England was at war with Portugal he decided to capture a Portuguese galleon at anchor off Banten and then finished loading his ships with spices on other islands. He befriended the king of Banten, organized a factory and returned to England where he arrived in 1603.

Second voyage (1604)

The voyage was commanded by Captain Sir Henry Middleton and involved the same four ships as the previous voyage. They sailed from Gravesend in March 1604. For this voyage a capital of 11,000 pounds only was subscribed, which had to be supplemented later and even then they only had a total cargo of 12,302 pounds as against 28,602 pounds for the first voyage.

They called at Banten, Ternate, Tidore and Ambon Island. The Hector and the Susan loaded pepper at their factory at Banten and the Red Dragon and the Ascension loaded the same at Ambon harbor. They returned to England in 1606 having lost the Susan during the voyage. The profits from this voyage were added to those of the first and were not distributed until 1609.

The result of these two voyages was poor compared to the excellent operations carried out by the Dutch East India Company, which had a capital of 540,000 pounds and large annual fleets. English economists condemned the nature of the company”s trade, since the treasury of the kingdom was being exchanged for merchandise. In the first two voyages, merchandise worth 8002 pounds and silver bullion and coins of various values totaling 32,902 pounds had been shipped. The Crown was increasingly dissatisfied with the results.

After his accession to the throne, James I granted Edward Michelborne permission in June 1604 to trade in places where the company had not been established. Michelborne”s 18-month performance with acts of piracy in Banten against the Dutch and the sacking of a Chinese ship made the English name abhorred in the East. In 1606 he returned to England and never sailed again.

The actions of this first interpreter seriously compromised the company in the Malay Archipelago. Although James I had ended years of war with Spain and Portugal by the treaty of 1604, hostilities in the East continued and the Dutch years later, in retaliation for Michelborne”s attack on Banten, effected what ended in the tragedy of Ambon.

Third voyage (1607)

It consisted of three ships under Captain William Keeling commanding the Red Dragon, the Hector under Captain William Hawkins and the Consent under Captain David Middleton. The ships sailed from Tilbury on 17 March 1607 and anchored in St. Augustine Bay, southwest Madagascar, where the fleet dispersed. The Red Dragon and the Consent loaded pepper and cloves and returned to England, where the Red Dragon arrived in September 1609 and the Consent in May 1610.

The Hector called at Surat, located at the mouth of the Tapi or Tapti River in the state of Gujarat in western India. It was the company”s first ship to call at a port in western India. Hawkins traveled to Agra to meet with the ruler of the Mughal Empire Nuruddin Salim Jahangir to whom he brought a letter from King James I. He initially obtained the emperor”s authorization to set up a factory in Surat, but this authorization was later revoked due to the efforts of Portuguese merchants. After two and a half years of unsuccessful negotiations, Hawkins returned to England. In the following years most of the trade was with Banten, Aceh, Aden, Moka and Socotra.

Fourth voyage (1608)

The company was able to equip only two ships for this voyage as the subscribers contributed capital equal to half of that raised for the first voyage, plus they had the threat of new competition; the Crown had granted Richard Penkevel authorization to trade with China and the Spice Islands via a Northwest or Northeast passage.

The ships were the Ascension under the command of Captain Alexander Sharpeigh and the Union under Captain Richard Rowles. They sailed from England on March 14, 1608. They were separated by a storm off Saldanha Bay. The Ascension called at Comoros and Aden and then proceeded to Moka and Socotra and was wrecked in the Gulf of Khambhat.

The Union called at Aceh and once loaded began her return to England; unfortunately on her arrival she was wrecked at Audierne on the coast of France.

Fifth voyage (1609)

Only one ship was available for this voyage, which was equipped and loaded with a capital equal to 15 times the amount subscribed for the first voyage, demonstrating the low level of the company. The ship Expedition was under the command of Captain David Middleton.

In 1609 he issued a new and broader Royal Charter to the East India Company. It granted it a monopoly of trade with the East Indies and allowed the seizure of the ships and cargoes of violators. The grant was in perpetuity instead of 15 years and in case the business was not profitable it could be terminated with a three-year notice instead of the two years indicated in the previous charter.

Sixth voyage (1610)

The company caught on and by the sixth voyage the capital subscription reached the enormous sum, for the company, of £82,000. The voyage was under the command of Captain Sir Henry Middleton and consisted of three ships: the Trades Increase under Henry Middleton, the Peppercorn under Captain Nicholas Dowton and the Darling under Captain Robert Larkyn.

The company in 1607 had decided to build its own ships, for which it leased a shipyard at Deptfor, and in 1609 launched a huge 1100-ton vessel, the Trader Increase. The king and his family attended the christening of the ship, which despite royal patronage was unlucky, as will be seen later.

The ships sailed from London on April 1, 1610, and as one of the objectives of the voyage was to trade in the Red Sea, they headed for Aden, where they arrived on November 7. In this attempt Middleton was captured and imprisoned along with several crew members of his ship while at anchor at Moka in the Red Sea. They escaped and in retribution he made his way to the coast of India and at Dabul captured two ships coming from Cochin, from which he took their cargo. He returned to Aden in April 1612 where he seized several ships at Bab el Mandeb in the Red Sea. Middleton”s reprisals only resulted in Muslim opposition against the English, both in the Red Sea and in India from the Mughal emperor.

In April 1612, at the entrance to the Red Sea, Middleton met Captain John Saris who was in command of the eighth voyage with the Clove, Hector and Thomas. In May they sent the Darling and the Thomas to Tiku, off the coast of the island of West Sumatra, and three days later they were followed by the Trade Increase and the Peppercorn.

At Bantén the Trades Increase was taking a lot of water so it had to be beached and shortly thereafter was destroyed by fire. Captain Middleton died at Bantén on 24 May 1613. The Peppercorn sailed from Banten in December 1612 and called at Waterford, Ireland, in September of the following year. Captain Dowton was arrested for piracy but was soon released and arrived in London on 19 November 1613.

In March 1614 the Darling sailed from Banten, calling at ports on the coast of Borneo; however, she had to be abandoned due to her poor condition at Patani, Thailand. In spite of all these difficulties, the voyage brought good profits to the investors.

Seventh voyage (1611)

It consisted of four ships, one of which was The Globe under the command of Captain Anthony Hippon. In 1610 the directors had decided to establish trade relations with Siam, later called Thailand. The ships set sail with instructions to set up factories on the coast of Coromandel, the southeast coast of the Indian peninsula and then continue to Patani on the east coast of the Malay peninsula and to Ayuthia, the capital of Thailand. On board were two Dutch merchants named Peter Floris and Lucas Antheunis who were experienced on this route and both contributed 18 of the capital needed for the voyage. In planning this itinerary the directors also had in mind to start a trade route to Japan. The captains of the voyage had orders that one of these Dutch merchants be sent aboard one of the ships with a letter of introduction to the Japanese emperor.

They sailed from England in the first months of 1611. They arrived in Ceylon (later called Sri Lanka) in August of the same year, continued towards the coast of Coromandel calling at Pulicat, Pettapoli, then Nizampatam and Masulipatam, where they bought merchandise destined to be sold in Bantén and Thailand. In the port of Masulipatam they established a factory that would eventually become the company”s main station in the traffic with Burma, later called Myanmar. They continued on to Banten, on the island of Java, and then on to Thailand, anchoring in the port of Patani on June 23, 1612. From Patani 5 men were sent to Ayuthia, who were well received.

They stayed in Patani for more than a year, during which time Captain Hippon died, and Thomas Essington took command. They raided Bangkok and sailed in October 1613. They sailed through the Singapore Strait and arrived at Masulipatam in December of that year. There they stayed for almost a year, during which they regretted the death of Captain Essington and Thomas Skinner had to take command. The ship returned to England, anchoring in Lizard on August 20, 1615.

Eighth voyage (1612)

This voyage consisted of three ships under the command of Captain John Saris aboard the Clove, the Hector under James Foster and the Thomas under Captain Thomas Fuller. They sailed from England in 1611, sailed in good weather, called at the Comores Islands between Madagascar and the southeast coast of Africa, and continued to the Socotra Islands, off the Horn of Africa, where they arrived on February 17, 1612.

His instructions were to head for Surat but the wind prevented him from doing so for six months, a period he took advantage of to go to trade at Moka and helped free Captain Middleton who was imprisoned there. Finally he arrived at Surat where he captured some Indian ships but he could not disembark so he went with his ships to Bantén, port where he arrived in November 1612. According to correspondence with William Adams, the first Englishman to take up residence in Japan, he decided to continue eastward with the Clove and the Hector, and the Thomas sent them back to England with a cargo of spices.

Saris, after landing in the Moluccas, finally arrived in Hirado on June 12, 1613, where he received a friendly reception. Adams facilitated the relations of the English with the Japanese and Saris traveled to Yedo, later called Tokyo, where he met with the shogun Ieyasu, with whom he signed a trade agreement and set up a factory in Hirado with the idea of trading with Korea and China. Adams entered the service of the company and made many voyages until his death in 1620. Saris sailed from Hirado in December 1613, arriving at Plymouth on 27 September 1614.

Ninth voyage (1612)

Voyage made by the James under the command of Captain Edmund Marlow. It sailed from Downs on February 10, 1612. She anchored in St. Augustine Bay, St. Lawrence Island, on June 29, after a few days continued to Banten and on September 26 anchored in Priaman, where the Thomas was anchored.

On November 4 she sailed through the Sound towards the coast of Coromandel in India, but strong winds prevented her from doing so and she had to anchor at Pulo Panian. On February 10, 1613 she sailed again to Coromandel, anchoring on June 6 at Pullicate and then at Masulipatam.

On the coast of Coromandel he established a factory and remained in the area for six months until January 6, 1614, when he sailed to Putapilly, loaded merchandise and sailed to Bantén, where he arrived on April 20. On June 10 she sailed for Patane, remaining in the area until January 27, 1615, when she sailed back to England together with the Globe. On 29 April they anchored at Saldanha and on 3 June at Santa Elena Island. Finally on August 3 they arrived in England.

Settlement in India

The company”s profits made King James I a firm supporter of the company, so in 1609 he renewed for an indefinite period the Royal Decree granting them a monopoly on trade with the East Indies, but with the condition that this could be rescinded if the results of the company were not profitable for the kingdom during a period of three years.

For the first 12 years the company operated as a commercial enterprise in which each member risked his own capital and in which membership was not restricted. Gradually it was transformed into a joint stock company, which occurred after 1612. In 1610 the company set up its first factory at Machilipatnam in the Bay of Bengal.

Surat is located on the west coast of India at the mouth of the Tapti River in the Gulf of Cambay or Khambhat of the Arabian Sea. Company ships began to use the port as a trading and transit port as early as 1608. In 1615, after the Battle of Swally, they opened an office in the city and made it the site of the company”s Middle East headquarters until 1687 when it was moved to Bombay.

Naval battles in Surat

In 1611 the Portuguese prevented a company fleet under Henry Middleton from landing at Surat, but in 1612 Thomas Best defeated them in a hard-fought engagement at Swally (Suvali). Thanks to the prestige gained before the Mughal emperor by this battle, in 1613 they obtained the authorization of Jahangir to establish permanently a factory in Surat and the formal permission to trade in the Mughal Empire.

In 1615 Nicholas Dowton, in the same place, won an even more decisive victory over the Portuguese. Also in 1622 the company, together with Persian troops, took Hormuz in the Persian Gulf. Thereafter the company had little to fear from the Portuguese.

The Treaty of Madrid of 1630 proclaimed peace in the Indies, but it did not effectively materialize until the governor of the company in Surat and the viceroy of Goa signed a convention that was ratified in 1642.

Embassy. Treaty with the Mughal Emperor.

In September 1615 Thomas Roe arrived in India as the first English ambassador to the Mughal court. By 1619 shipping agencies and factories had been established at Surat, Agra, Ahmadabad and Broach. The Surat office controlled the others and was the headquarters of the company on that coast.

The good relations established with the Mughal emperor by Ambassador Roe bore fruit in the trade of cotton fabrics, indigo, raw cotton, silk, saltpeter and some spices. There was also trade with Persia. In England the company grew. In 1647, the British company had 23 factories and 90 employees in India. In 1634, the Mughal emperor extended his hospitality and allowed the British to trade in the Bengal region. Throughout the Company”s history its ships were known as East Indiaman (en) famous throughout the world and its development served as a stimulus to British shipping and shipbuilding.

Trade in Bantén. Massacre of Ambón.

Bantén in the 16th century was a kingdom encompassing most of West Java and southern Sumatra. Pepper made Banten rich, transforming it into one of the largest cities in Southeast Asia. The company established its first factory in Asia there and from here the English expanded to other parts of Asia.

The Dutch from the United Provinces arrived in Bantén six years before the English, who had arrived in 1602. They wanted to monopolize the spice trade. They continually tried to prevent the company from trading directly with the Spice Islands of the Bandas and Moluccas in eastern Indonesia, the source of the valuable cloves, nutmeg and pepper. Wars were fought for freedom of the seas and until the late 1600s the balance did not change. While the Dutch focused on Indonesia, the English saw that wealth lay elsewhere. The woolen cloth and silver carried by the company”s ships did not interest the Asian merchants, so they soon realized that they would do better business if they traded other products, such as Indian textiles.

The attempt to break the monopoly that the Dutch had over the Spice Islands proved unsuccessful. In 1613 the Dutch offered their cooperation but the company refused, which is why during the following years disputes broke out between the armed merchants of both nations, which ended in a truce, the Treaty of Defense of 1619. This treaty was not effective and the disputes continued until 1623 when several English merchants were massacred by the Dutch in Ambon, Moluccas. After this event the company decided to concentrate its efforts in Surat and the other posts it had in India.

Settlement in Bengal

In 1632 King Golkonda encouraged the members of the Masulipatam factory to send a party to the north, he would provide them with his own vessel, a farman, a boat native to the Bay of Bengal. In March 1633 eight Englishmen of the company set sail, arriving at the mouth of the Mahanadi River in Orissa on April 21 of the same year. There they were received by the representative of the raja at the Mughal station of Harishpur.

Ralph Cartwright, the chief trader of the group, went to greet the Persian-born Muslim governor of Orissa, Agha Muhammad Zaman, who was at the Cuttack station inside the mouth of the Mahanadi River. After some negotiations the governor, dated May 5, 1633, granted them a broad license to trade: freedom of traffic and duty-free export at any port in Orissa and they could also buy land and erect factories and build and repair ships.

In June 1633 Cartwright founded the Balasor factory further north. In July 1633 he received the Swan from England with a cargo of cloth and lead that had no buyers and remained unsold for nearly a year. Unfortunately, during the rainy season, deadly malaria ravaged the factory, killing five men out of a crew of six. In addition the Portuguese and the Dutch harassed them so that in 1641 they were on the verge of closing Balasore, but in the summer of 1642 the situation changed completely.

Francis Day, the founder of Madras, visited Balasor and reported that the factory should not be set aside and in 1650, now under the control of Parliament, the company resolved that, following the example of the Dutch, a factory should be erected in Bengal itself. The dangers of the then unraised and unmarked Hugli River made it unsafe for the navigation of large vessels, so it was decided to make Balasor a transshipment station for the cargo to be moved in smaller vessels down the Ganges delta to the Hugli factory some 100 miles from the sea.

From 1651 onwards the company established trade along the coast and inland of Bengal by setting up trading posts at Balasor, Pippli on the Orissa coast, at Hugli, Cossimbazar near Murshidabad and one or two stations in the Ganges delta and at Patna and Behar. This deployment was excessive, resulting in problems for effective control so that in 1656-1657 the company resolved to close its posts on the coastal edge. Fortunately, in October 1657, Cromwell reorganized the company on a broader basis. A commission traveled to Bengal and restored order at the posts and resumed trade at them; Hugli became the central agency in Bengal, controlling the Balasor and other agencies.

In 1596 the village of Calcutta had a small rent paid by Emperor Akbar to serve him for a census in Bengal. In 1686 ships of the company anchored at the mouth of the Hugli River took it up about 26 miles to the village of Sutanati, which later came within the boundaries of Calcutta. The company occupied Sutanati permanently from August 24, 1690, which is considered to be the date of the founding of Calcutta by Job Charnock, the company”s administrator. In 1696 the English, with the authorization of the Indian governor, built Fort William and in 1698 formally bought the villages of Sutanati, Kalikata and Govindpur from Prince Azim. In 1756 the city was sacked and Fort William captured by forces of the Indian governor Siraj-ud Daula. In January 1757 an expedition under the command of Admiral Charles Watson and Colonel Robert Clive retook possession of the city. After the battle of Plassey, on June 23, 1757, Mir Jafar was appointed governor of Bengal by the British.

Settlement in Madras

In 1639 Francis Day, a member of the Masulipatam council and director at Armagon proposed that to end the struggle with the Dutch they should erect a factory south of the Dutch settlement at Pulicat. He chose a place 30 miles from Pulicat that had a suitable roadstead and a friendly Portuguese colony on the coast. The local Hindu chief welcomed him and obtained from the inland rajah that for a fee he would grant them a strip of land on the coast and authorize them to build a fort. The local chief ordered the new site to be called Chennappa in homage to his father, the natives called the place Chennapatanam, but the English called it Madras.

Day, without waiting for the company”s authorization, built a fortified factory which he called Fort St. George. This location had the advantage of being halfway to the Java trade. In 1642 it was reported that the main settlement on the Coromandel coast had been moved from Masulipatam to Madras.

In 1657 the company resolved to make Madras the site of its headquarters in eastern India and in 1658 declared that all its settlements in Bengal and the Coromandel coast were subordinate to Fort St. George.

Settlement in Bombay

The islands of Bombay were part of the dowry that Catherine de Braganza gave when she married Charles II of England in 1661. On March 27, 1668, King Charles transferred these islands to the company by charging a tax of only £10 as a sign of sovereignty, a tax that remained in place until about 1730. Gerald Augier, governor of Bombay between 1670 and 1677, was the first to realize that Bombay was a much more suitable location than Surat for English projects on the west coast of India. In 1672 Augier transferred the company headquarters from Surat to Bombay and can be said to be the true founder of Bombay.

Bombay was then one of the most unhealthy places in the East. Augier began to fill in the canals that separated the islands, opened a hospital and established a court of justice. He proclaimed religious tolerance and fortified the place so effectively that they were later able to repel the attacks of the Janjira sidis and in 1673 the attack of a formidable Dutch fleet. For its defense he created the first European army in India, the Bombay Fusiliers. When he died in 1677 the city had a population of 60,000 and could proudly claim to be “the best city in India”.

In 1670, King Charles II granted the Company the right to captain armies and form alliances, declare war or establish peace, and exercise both civil and criminal jurisdiction in the areas in which it operated. Under constant attack from natives and other commercial competitors, it developed a significant military deployment. By 1689, the Company was almost a “state” within mainland India, independently administering the areas of Bombay, Madras and Bengal and possessing a tremendously intimidating military force known as the Redcoats.

For the company, the last years of the seventeenth century in India had been a period of transition that was not without its problems. From a purely commercial system it had moved to a system of self-government at the local level. Indeed, the weakening of the Mughal Empire doubled the risks and uncertainties of their commercial operations; there were constant fighting alerts near their factories, there was the possibility of looting, and they had to endure permanent overtaxes and permanent exposure to interference from interlopers, in addition to the danger of attack by their European rivals. In view of the above, the company decided to free itself from dependence on the native authorities and ordered its agents to spare no effort to improve its income and become a nation within India.

In 1687, having resolved to administer all his settlements in India under central control, he obtained from King James authorization for his governors to make peace and war in India and along with it sent John Child with orders to demand compensation from the Mughal government for damages and insults the company had suffered at the hands of native officials. The Mughal government responded by besieging the company”s governor in Bombay and blockading the port with the fleet of the Abyssinian Siddhi.

The Bengal and northeast coast factories were attacked and had to be temporarily abandoned. The emperor also ordered the British to be expelled from Madras. John Child died in 1690 and the situation ended when the emperor pardoned the company after the governors apologized for their audacity. For the next ten years the troubles continued and the decline of the Mughal Empire continued. Foreign troops invaded India from Persia. All this instability meant that the foreign settlements had to rely on their own resources for self-defense against the arbitrariness of officials, rebel leaders, bandits and finally rival companies.

The appearance in India of a second English company created serious internal problems. Each company did everything possible to ruin the other. Both flew the English flag and sent ambassadors to the Mughal court requesting the emperor”s patronage. This damaging action was finally terminated in the year 1700, just before the outbreak of the great war for the succession of Spain and after the accession of Queen Anne by the merger of the two companies into the Unified Company of English Merchants Trading in the East Indies. The aim of this measure was to concentrate all the capital and maritime expertise in a single large company, consolidating the English position in South Asia.

This change in the situation of the company, together with other factors, led to the enactment of the Acts of Parliament of 1813 and 1833, which opened British trade with the East Indies to all English companies, which meant the complete withdrawal of the company from its commercial functions, continuing only to exercise its responsibilities under the supervision of the Board of Control until 1858, when the Crown took over the government of India, according to the Act of 1858, by which it replaced the Company and the Board of Control by a new department of state, the India Office, which would function under the Secretary of State for India.

The death of King Charles II of Spain in 1700 was the trigger for a war that ended with the partition of the Spanish monarchy and a political reordering of Europe, just as the death of Aurangzeb in 1707 initiated the fall of the Mughal Empire followed by the alteration of the political system of Asia. The turmoil and territorial upheavals that occurred in the central regions of Asia were premonitory witnesses to the instability and subsequent fall of the two great dynasties that had ruled Persia and India since the mid-16th century.

The henchmen of the Maratha chiefs invaded the central and western regions of India. The viceroyalty of the southern provinces became an independent principality under the nizam Asif Jah. Wealthy Bengal fell under the power of an Afghan adventurer. Punjab, under the power of the Sikhs. Nadir Shah, a Persian soldier, sacked Delhi in March 1739, was killed and replaced by Amed Shah who conquered Afghanistan and then took all of Punjab between 1748 and 1751. In the meantime the Marathas expanded from the southwest over central India. During this confused period French and English companies appeared for the first time in the Indian political arena.

In 1715 the situation of the French East India Company improved rapidly. It had occupied the island of Mauritius, abandoned by the Dutch East India Company, and had established itself on the southeast coast of India or Coromandel Coast, where Pondicherry was the seat of the French governor general for all French factories in India.

The First Carnatic War (1744-1748)

This war was the consequence in the Indian subcontinent of the clashes in Europe between the British and the French during the War of the Austrian Succession.

Until the beginning of the War of the Austrian Succession the relations of the English and French companies on the Coromandel coast had been generally peaceful. The British captured some French ships, the French in retaliation captured Madras in September 1746 and the English laid siege to Pondicherry. The Treaty of Aachen (1748) put an end to the conflict in Europe and also stipulated that Madras be returned to the British. Since then both companies became strong political powers in India.

Second Carnatic War (1748-1754)

The French, under the influence of Joseph Francois Dupleix, tried to increase their influence in the Carnatic through alliances with one faction of the native princes, and the English supported the other.

Robert Clive became famous when in command of the English he attacked Arcot and won several victories over the French troops. After the Treaty of Pondicherry the nabob of Arcot became an ally of the English who gained supremacy in the Deccan at the expense of the French.

Third Carnatic War (1756-1763)

The nabob of Bengal took Calcutta with the purpose of expelling the English. Robert Clive, after a series of victorious battles that concluded with the battle of Plassey, definitively defeated the Bengal nabob.

Meanwhile in Europe the Seven Years” War had broken out, as a result of which hostilities between the French and the British resumed in the Carnatic. War broke out again in Bengal, but the British prevailed with victory at Buxat. The Treaty of Paris (1763) put a definitive end to French aspirations in India. England obtained all the French possessions with the exception of Mahé, Yanam, Pondicherry, Karaikal and Chandernagor, which it would keep until well into the 20th century.

The Seven Years” War marked the beginning of the end of the French colonial presence in India. The disappearance of this powerful commercial rival allowed the British East India Company to consolidate its monopoly of trade in the area. In 1765 the Mughal emperor granted them regency in the Bengal area, the most populous and most profitable province in the whole country. The company had, however, some problems with local resistance that culminated in the Third Anglo-Maratha War, which left the company in control of the vast majority of Indian territory.

The company”s efforts to administer India became a model for the civil service system in Britain, especially during the 19th century.

First Maratha War (1777-1782)

The First Maratha War started because the company presidencies in Bombay and Calcutta had different views on the dispute between the pretenders to the throne of the Maratha Empire.

The Maratha chief, Nana Phadnis, broke the terms of the Treaty of Calcutta, whereupon a company force under Colonel Cockburn was sent to Poona. The British were defeated at the Battle of Wargaum (Wadgaon), January 12-13, 1779, and forced to sign a treaty renouncing all territories acquired after 1775.

Warren Hastings rejected the treaty and sent a new force against the Marathas, this time under the command of Colonel Thomas Goddard who, after several victorious battles, imposed the Treaty of Salbai in 1782.

Second Maratha War (1803-1805)

The company became involved in the power struggle that existed within the Maratha government and in part to counter the growing French influence. The Marathas were defeated in a series of battles by Gerard Lake and Arthur Wellesley. The treaties of Deogaon and Anjangaon were signed, ceding large tracts of territory to the British.

Third Maratha War (1817-1818)

Also known as the Pindari War because the Pindaris were free tribes, protected by the Marathas, who dedicated themselves exclusively to looting.

Pindari marauders made violent incursions into areas controlled by the company, which in response pursued them into Maratha territory. The Maratha chiefs engaged the British but were defeated in a series of battles.

Warren Hastings commanded the Grand Army and Thomas Hislop commanded the Army of the Deccan. The Maratha Empire was dissolved; large parts of the territory were ceded to the British and other areas became princely states but under British control.

The Portuguese were the first European navigators to reach China. In 1557 they arrived in Macao and then went northward, calling at Amoy (present-day Xiamen), Fuchow (present-day Fuzhou), and Ningbo (present-day Ningpo).

In 1637 Captain John Wedell, sent to China by the interpreter William Courten, landed in Canton. He was poorly received by the authorities and had to return to England without merchandise; he was shipwrecked on his return voyage. In 1672 the company was finally able to establish a trading post on the island of Formosa, and was allowed to trade with the ports of Amoy, Chusan (present-day Zhoushan) and Canton. The company obtained a monopoly on trade between Britain and China, which lasted until 1834.

In 1684 the Kangxi Emperor allowed foreign merchants to trade directly with China. The Company was thus able to move the factory from Taiwan to the port of Canton. The Canton trade was quickly regulated by the imperial government, which set up a trading house and required the Company to trade through Chinese intermediaries in order to avoid smuggling and to ensure that it paid duties and tariffs. In 1753 the Company tried to move its business from Canton to the port of Ningbo, closer to the centers of tea and silk production and with better customs conditions. In order to avoid a drop in customs revenues, in 1757 the Qianlong Emperor restricted all trade with the West to the port of Canton, and imposed rigid measures to prevent Europeans from trading freely in China. The Company had to move to the thirteen-factory district of Canton, where its pursers resided during the commercial season (autumn and winter) to spend the off-season in Macao. The Company occupied two factories out of the 17 that made up the precinct, and traded mainly in tea and silks. It had to purchase its products from the Cohong, a guild of Chinese merchants who had a monopoly on trade with foreigners.

Despite being a monopoly in its own right, the Company protested bitterly, claiming that the Cohong was fixing abusive prices and restricting free trade. All these restrictions on free trade spurred the Company to sponsor diplomatic missions to the Imperial Court in Peking in order to obtain the opening of other commercial ports in China and to lift trade restrictions; however, both George Macartney”s mission (1796) and that of Lord Armherst (1816) ended in failure.

Opium trade

Trade with China flourished despite the failure of British government efforts to remove administrative restrictions. In the 18th century, the company traded British wool and Indian cottons for Chinese tea, porcelain and silk. Tea imports soon became the largest single commodity in Britain”s balance of trade. Conversely, exports to China of British and Indian goods began to decline and as a result the trade imbalance between Britain and China occurred.

However, the insatiable demand for tea in Great Britain created a shortage of silver to pay for tea imports. This forced the Company to look for other raw materials to export to China to offset the balance of payments between China and Britain. Thus, they began to deal in opium, a highly lucrative commodity mainly for its medicinal value and its use as a recreational drug, although highly addictive; the company was the largest opium producer in India, and during the Napoleonic wars they occupied the island of Java and took over the Dutch opium plantations on the island. Although not directly involved in the sale of opium, which was banned in China by an imperial edict of 1729, the Company sponsored its cultivation in India, and even created a regulatory body, the Calcutta Opium Board, which procured all local opium production, refined it, and was in charge of auctioning the resulting opium to private traders. As the trade between India and China was not subject to monopoly, these private agencies were in charge of trafficking opium with the explicit consent of the Company. The drug trade developed in parallel to the legal trade, and it boomed rapidly. It was so successful that by the 1820s, the balance of payments between China and Britain had shifted in favor of Britain, which began importing silver from China.

Coinciding with a growing opium addiction crisis and the imperial government”s increasing concern to abolish the drug trade, in 1834, the Company”s jealously guarded monopoly was abolished by Lord Melbourne”s government, and trade with China was opened to competition from dozens of British companies.

Soon after the end of the Company”s monopoly, it became apparent that the opium trade had become the only profitable business for some British companies in southern China. In 1830, opium flooded the black market in China and inevitably became one of the concerns for the Chinese government. Beginning in 1834, the imperial government began to establish repressive measures aimed at eradicating the drug trade. In order to culminate the efforts of Deng Tingzhen viceroy of Liangguang, in 1839 Emperor Daoguang appointed Lin Zexu, a Chinese mandarin of high reputation, as Imperial Commissioner with the mandate to eradicate the opium trade in China. Upon his arrival in Canton in March 1839, Lin Zexu ordered the confiscation of nearly 20,000 chests of opium from British ships, and refused to pay compensation to the British merchants. This incident outraged the British and triggered the first Opium War in 1840. The war lasted two years, during which the British ravaged the Chinese coast. When it looked like they were going to take Nanjing, the largest city in China, the imperial government agreed to negotiate with them and signed the 1842 Treaty of Nanjing. Under this treaty, Hong Kong was ceded to the British Crown for 150 years and five Chinese ports (Canton, Amoy, Fuchow, Ningbo and Shanghai) were opened to foreign trade.

First Opium War (1839-1842)

Opium addiction among the Chinese became a problem of enormous proportions that forced the Qing dynasty to prohibit its importation. To this end, the port of Canton was closed to this trade. The superintendent of Canton seized more than a million kilos of opium without compensation. Commander Charles Elliot of the Royal Navy, British superintendent of trade in China, tried to obtain some compensation for those who were requisitioned, but his requests were rejected. There were naval engagements on the Pearl River and the British sent a naval force from India and Singapore. The forts at Boca Tigris, at the mouth of the river and then Canton were captured by the British.

The Chinese were also defeated at the mouth of the Yangtze River and Shanghai was occupied. The First Opium War ended with the Treaty of Nanking, which opened five ports to trade: Shanghai, Canton (Guangzhou), Foochow (Fuzhou), Ningpo (Ningbo) and Amoy (Xiamen). In addition, China ceded Hong Kong and guaranteed a huge indemnity to Great Britain.

Second Opium War (1856-1860)

In the 1850s the Western powers sought to renegotiate their trade treaties with China. They wanted the opening of all Chinese ports to international trade, legalization of the opium trade and exemption from import duties. The Qing government refused and relations deteriorated. In Hong Kong a ship was boarded by the Chinese and there was an attempt to poison Europeans in Hong Kong. The French became involved in the execution of a missionary and the Russians and Americans also protested. In the first campaign of the Second Opium War, British and French forces captured Canton and then seized the Taku forts outside Tianjin. There was a temporary cessation of hostilities in June 1858 with the Treaty of Tianjin that gave the Western powers extensive rights.

The Qing government rejected the treaty, leading to a second campaign. In June 1859 Anglo-French forces tried unsuccessfully to take the Taku forts. In the summer of the following year a larger allied force from Shanghai captured Tianjin and finally in September 1860 defeated the Chinese at the Battle of Pa-li-chao. The Summer Palace in Peking was destroyed. The Peking Convention ratified the Treaty of Tianjin. The opium trade was legalized, China was opened to Western traders, and Britain and France obtained a huge indemnity.

It is also known as the Sepoy Uprising, the Indian Uprising or the Indian Rebellion of 1857. These were events that occurred in 1857 and 1858 in several regiments of the Bengal Army. The Bombay and Madras Armies remained oblivious to the conflict. This rebellion is considered to have ended with the fall of the kingdom of Gwalior on June 20, 1858.

The Bengal Army took the initiative with initial mutinies in the various regiments that made it up, but Indian nationalist elements quickly tried to politicize the conflict by calling for the Mughal emperor to reinstate his aspirations to re-establish the old Mughal Empire but the British were able to reorganize their forces and gradually re-established control.

There were several causes:

As a consequence of these mutinies, the British East India Company was dissolved in 1858 and the British had to reorganize their army, the financial system and the administration of India. The country then came under the direct rule of the British Crown under the name of the British Raj.

By the mid-19th century, the company”s control extended over most of India, Burma, Singapore and Hong Kong; one-fifth of the world”s population was under its authority. It solved some liquidity problems to buy tea in China by exporting Indian opium.

In 1813 it was deprived of its commercial monopoly and in 1833 it was left without the tea trade in China. Finally, in 1858, the company lost its administrative functions, which were withdrawn by the government after the Sepoy Revolt in 1857; India formally became a British colony. In the early 1860s, all of the company”s possessions passed into the hands of the Crown. The company continued to control the tea trade. It was finally dissolved on January 1, 1874.

In the Hollywood saga of “Pirates of the Caribbean”, the powerful and Machiavellian Lord Beckett, played by British actor Thomas Hollander, runs the East Indian Company. The company figures as one of the antagonists of the saga”s protagonist, Captain Jack Sparrow, played by American actor Johnny Depp. In reality, however, the company never established operations in the Caribbean Sea until the 19th century.

Sources

  1. Compañía Británica de las Indias Orientales
  2. East India Company