East India Company

East India Company, the name of eight incorporated companies for the exploitation of trade in India, the East Indies, and the Far East. They were formed in England, Holland, France, Denmark, Scotland, Spain, Austria, and Sweden, but only the first three were of any importance. They built magnificent ships, called East Indiamen, with which to trade and fight off competitors.

English East India Company.

The English organization, known as the Honourable East India Company but also colloquially as ‘John Company’, was founded towards the end of the 15th century and was incorporated by Elizabeth I by royal charter on 31 December 1600. It was formed with a capital of £72,000 subscribed by 125 shareholders, and was founded to share in the East Indies spice trade. This had been a Spanish and Portuguese monopoly until the defeat of the Spanish Armada in 1588 had weakened the hold of these countries on the lucrative commodities it produced. The first governor was Sir Thomas Smythe, and the early voyages, known as ‘separate’ voyages, were made by individual shareholders who bore the cost and took the profit from them, but from 1612 onwards all voyages were made by the company as a whole. During these years the company's ships reached as far as Japan, where friendly relations were established, and trading centres, or factories as they were called, were created on the coasts of India.

The company's early trading ventures were rigorously opposed by the Dutch East India Company, and a state of virtual war existed between the two. In 1619 an agreement was reached to stop these disputes, but it lasted for only one hour, recriminations and fighting breaking out as soon as the smoke from the saluting guns had cleared. This period of fighting reached its peak in 1623 with the massacre of Amboyna, where English merchants, though protected by a flag of truce, were tortured and killed by the Dutch governor. Despite this opposition the company was successful from the start, and it was given further impetus by Charles II, who enlarged its charter by giving it the right to acquire territory, exercise civil and criminal jurisdiction, make treaties, wage war, command armies, and issue its own money.

With the company already established in India after the defeat of the Portuguese there, it became only a matter of time before the whole country was subdued and the various native rulers brought under the company's control; and when Robert Clive's victory at Plassey in 1757 resulted in the takeover of Bengal, the British government began to intervene. Over the next decades it ensured that the top company appointments became subject to its approval, and gradually through this means political, financial, and military control passed to it.

In 1813 the trade with India was thrown open to public competition, though the company was allowed to retain its monopoly of trade with China, a situation which only lasted until 1833. At the start of the 19th century it had financed the tea trade by illegally exporting opium to China, and this eventually caused the Opium Wars (1839–42 and 1856–60) which China lost, and which led to Britain acquiring several treaty ports and favourable trading rights.

The opening of the eastern trade routes for ships of other companies spelt the end of the East India Company as a trading monopoly, though it was still allowed to govern India. This it continued to do until the outbreak of the Indian Mutiny at Meerut in 1857. This forced the British government to step in and take over the civil administration, and in 1873 the company was wound up. See also Adams, William.

Dutch East India Company.

The Verenigde Oostindische Compagnie (VOG) was founded by charter from the States-General in 1602 to regulate and amalgamate all the various Dutch trading ventures to the East Indies already in existence. It was directed in Holland by local boards for each province of the States-General acting under a main directorate of seventeen members elected by the local boards. It was granted a monopoly of the East Indian trade, exempted from import taxes, and authorized to maintain armed forces, erect forts, make war or peace, and coin its own money.

Its early history is mainly a history of warfare, driving out of the East Indies first the Portuguese and then the English. It established its main capital in Batavia (now Jakarta), with subsidiary capitals in the Malay Archipelago, Ceylon, Malacca, Amboyna, and Ternate, with a fortified post at the Cape of Good Hope to ensure the safety of the route to and from Holland.

At the height of its success, which lasted for most of the 17th century, the company possessed 40 warships, 150 merchant ships, and 10,000 soldiers. But it held in its own success the seeds of its ultimate decline. Its policy in the East Indies was total monopoly of trade, maintained by force of arms when required, and this inevitably led to rivalry and hostility with the English and French interests in the area. By the early 18th century it had been driven from the mainland of Asia and from Ceylon, and vanishing profits, combined with a big increase in military costs, brought eventual bankruptcy, and in 1799 the company was officially wound up after Holland was invaded by the French revolutionary armies.

The Dutch also founded a West India Company, in 1621, but this was more interested in its privateers, which attacked Spanish shipping, and the slave trade than in ordinary commercial activities. For a time it successfully attacked Spanish and Portuguese colonies in the New World, and it also established colonies of its own there. One of these, New Netherland, was established in 1624 at what is now Albany after Henry Hudson visited it in 1609 while employed by the Dutch East India Company. However, in 1664 it was captured by the British who renamed it New York State.

French East India Company.

Formed in 1664, the French East India Company, Compagnie des Indes Orientales, was established by Louis XIV's finance minister, Jean-Baptiste Colbert. It traded under several different names during its existence and was in constant confrontation with the Dutch and English. It founded the French colony of Mauritius in 1721, and that of Mahé in Malabar (India) three years later. Its ablest leader was Joseph-François Dupleix who in 1742 was appointed governor-general of French India, the capital of which was Pondicherry. Dupleix waged open war with the British in India but Pondicherry was eventually captured by the British during the Seven Years War (1756–63). It never had the same support from its government or merchants as the English company and its monopoly of trade with India was ended in 1769. It ceased to exist in 1789.