English East India Company (EIC)
English East India Company (EIC)
The English East India Company, formally known as the Governor and Company of Merchants of London Trading into the East-Indies, was first incorporated by a charter from Queen Elizabeth I (1533–1603) on December 31, 1600. The charter gave the company exclusive rights to all "Traffic and Merchandize to the East-Indies … beyond the Cape of Bona Esperanza [Good Hope], to the Streights of Magellan." While this initial charter was experimental, limited to fifteen years, the East India Company was soon rechartered as a permanent body politic (1609) and over time became the most successful, most significant, and certainly the most famous of English joint-stock companies organized for overseas trade.
The English East India Company became a crucial pillar of the London financial and stock market, a key creditor to the English state, and an important player in English politics. As a joint-stock company, it, along with its rival Dutch East India Company, was the forerunner of the modern multinational corporation.
Headquartered at the India House in London's Leadenhall Street, the English East India Company was directed by twenty-four individuals known as committees (after 1709, directors), headed by a governor and deputy governor and elected by a general court of stockholders. Collectively known as the Court of Committees, these men governed an independent political system, a network of ships, soldiers, and "servants" (as its employees were known) in Europe and Asia. As a corporate body politic, the company set the institutional and ideological foundations for the British Empire in Asia.
Its beginnings, of course, were much more humble. While occasional English traders and adventurers made their way to the East Indies through the sixteenth century, no English monarch had been willing to challenge Portugal's claims to exclusive rights to the route around southern Africa. Sporadic attempts to search for a northwest or northeast passage had benefits, such as the discovery of Newfoundland and the founding of the Russia (Muscovy) Company, but yielded no route to rival either the Portuguese or the overland caravan trade.
By the end of the century, groups of merchants, including leaders of the English Levant (Turkey) Company, began to press fervently for a chartered company to pursue the southern maritime route. Their arguments were made stronger with the capture in the West Indies of the Madre de Dios, a Portuguese ship laden with a vast amount of East India goods and spices, as well as the Matricola, a confidential Portuguese register and inventory of its Estado da India. These investors, aided by a brief that was likely authored by the geographer, explorer, and imperial theorist Richard Hakluyt (1552–1616), used this prize to demonstrate the vast fortunes to be had in East India trade. The administrative documents also seemed to prove that Portugal neither occupied nor used the hemispheric jurisdiction it claimed. Many, including Hakluyt, also interpreted the capture as a providential endorsement for an English entry into the East India trade. In 1599 Queen Elizabeth and her privy councilors relented.
The company's first voyage, four ships commanded by Captain James Lancaster (ca. 1554–1618), set sail in February 1601. These early expeditions were intended not for South Asia, but for Indonesia and its rich spice and pepper entrepôt of Banten. These English ships also sought to attack and plunder Portuguese shipping. The meteoric rise in power in Indonesia of the newly created Dutch East India Company, however, forced the British company to look for other markets.
Pepper remained the East India Company's largest import for its first several decades, but the English East India Company soon diversified into silk, indigo, saltpeter, and textiles. In addition, its servants began to develop a complex and lucrative trade to and from points within Asia, later known as the country trade. The company also began to turn its attention towards South Asia.
Sir Thomas Roe (1581–1644) was sent as ambassador from King James I (1566–1625) and the English East India Company to the court of the Mughal emperor Jahangir (1569–1627). In 1616 Roe secured company rights to land for its first factory, to include a trading post, warehouse, and residence, at Mughal India's busiest and most lucrative overseas commercial port, the western Gujarati town of Surat. In the following year, the company further expanded its operations in Western Asia, with a farman (an imperial command) from the Persian emperor permitting a factory to be established at Isfahan (a city in present-day Iran).
The English East India Company experienced great initial success. It sent twelve expeditions in its first decade and a half, and returned more than 100 percent profit over its original capital investment. By the 1630s, though, a depressed market in Europe and overextension in Asia began to take its toll on company fortunes. Meanwhile, the company faced more rivalry in England, including an antimonopoly sentiment that grew with hostility towards the king. In 1639 Charles I (1600–1649) allowed a patent for William Courteen and a consortium of traders to do business in the East Indies in places where the East India Company did not. The so-called Courteen Association did a great deal to sully the company's reputation and credit, both in London and Asia, forcing the company to spend great sums both to combat the association and to recover the company's standing in Indian markets.
Competition with European powers had also begun to intensify. By 1615, English East India Company ships had repelled two major Portuguese assaults near Surat, India, and in 1622 the Company's alliance with the Persian emperor led to the expulsion of the Portuguese from their valuable Persian Gulf outpost of Hormuz. In exchange, the company was given an outpost at Gombroon (Bandar 'Abbas) in Persia and a share of the customs receipts of the port.
Despite this success against the Portuguese, the English East India Company continued to lose ground to the Dutch in Indonesia. Perhaps most famously, in 1623 Dutch officials arrested, tortured, and executed, under the charge of treason, ten English company officials living at Amboina (present-day Ambon, Indonesia). The Amboina "massacre" became a rallying cry against the Dutch for the better part of the century. Making matters worse, in the same year company officials were also forced by the Japanese to abandon their factory at Hirado, an island near Nagasaki.
The execution of King Charles I in 1649 and the republic under Oliver Cromwell (1599–1658) in the 1650s marked the nadir of the English East India Company's fortunes in seventeenth-century England. In 1653 Cromwell declared the company's royal charter invalid, and opened the East India trade to all takers, including Courteen. Though the rival traders were never successful, their competition and sabotage of the company allowed states and merchants in Asia to drive up the expense of goods as well as diplomatic transactions. Prices of East India goods in England began to rise, while profit, customs receipts, and the financial stability of the company fell proportionally.
Eager to recover England's advantages in the East, Cromwell offered the English East India Company a new charter in October 1657, putting the company on much more solid footing than it had been on previously. Most importantly, the joint-stock, now totaling almost £50,000, was made permanent. Though technically forfeited with the restoration to the throne of King Charles II (1630–1685) in 1660, the charter was reissued with almost identical terms in 1661. Over the next several decades, Charles II and his successor, James II (1633–1701), issued further patents, expanding the company's powers to enforce law (including martial law) on English subjects in Asia, to make war and peace, to mint coins, and to "erect and build Castles, Fortifications, Forts, Garrisons, Colonies or Plantations" as the company saw fit.
Given this new financial and political foundation in Europe, the English East India Company began to enhance its network in Asia. At the core of this system were fortified sovereign cities, settlement colonies, and military outposts, as well as trading factories central to company administration. Here, company officials tended to much more than trade; they governed a growing cosmopolitan Eurasian population, which in turn demanded attention to law and justice and a civic administration requiring such infrastructure as churches, prisons, schools, hospitals, mints, courts, and, of course, systems of taxation, customs, and revenue collection.
Madras, on the southeastern Indian coast, had been in East India Company possession since 1639, when the company's representative Francis Day initially leased the land from the nayak (provincial governor or local sovereign) Damarla Venkatappa. At its center was Fort Saint George and the surrounding "White" or "Christian" town, but its jurisdiction also encompassed the surrounding so-called "Black" or "Gentue" town. By the 1680s, its leaders boasted (perhaps exaggeratedly) of a cosmopolitan Eurasian population of over 100,000. In 1687 the East India Company incorporated the town, giving it an urban administrative apparatus similar to English corporate cities, including a locally elected mayor, aldermen, and burgesses.
In 1668 Charles II also transferred to the English East India Company, for an annual rent of £10, the Western Indian archipelago of Bombay, given to the English Crown from Portugal seven years earlier as part of the dowry of Catherine of Braganza (1638–1705) when she married Charles. By the 1680s, Bombay had become the center of the company's commercial and political administration in India. The company also controlled the South Atlantic island of Saint Helena, where it attempted to create a plantation society, as well as a watering station for its ships. In 1696 the company was given a zamindari (the right to collect revenue and to administrate) over three villages in eastern India, as well as permission to fortify in the city that would soon be known as Calcutta, with Fort William at its center.
The English East India Company also reclaimed its position outside of India. It recovered from its expulsion by a Dutch-backed coup from Banten in 1684 with the construction of a factory and fortified city at the Sumatran port of Bengkulu in the 1690s. Additionally, its early unsuccessful factories in Siam (Thailand), Malaysia, and Japan were replaced by stations at Taiwan, Amoy (Xiamen, China), and ultimately Canton (Guangzhou, China), from which it began its large-scale eighteenth-century trade in tea and porcelain.
In this period, company leaders in London and their subordinates in Asia, particularly company committee and sometime governor Josia Child (1630–1699) and company general in Asia John Child (d. 1690, no relation), had also become much more vigilant and hawkish in the protection of the company's rights and political position in Asia. From 1686 to 1690, the company fought wars with Siam and the Mughal Empire, one in Bengal and another in Bombay. Though the latter resulted in the occupation of the island by the Mughal Sidi tributary for two years, in the long run these experiences only reinforced the company leadership's belief in the need for military strength to defend its establishment in Asia.
The English East India Company's recovery from these wars was also hindered by events in Europe. A decade of war following England's Glorious Revolution of 1688 to 1689, which brought Mary II (1662–1694) and William III (1650–1702) to the throne, made it extremely difficult to get shipping out of the Thames, leaving the English East India Company in Asia short of money and ships. The wartime financial needs of the English state and the efforts of the House of Commons to assert its prominence also prompted the Parliament to accept the offer of a group of well-funded interlopers and disaffected former company servants for an East India charter in exchange for a loan of two million pounds. The so-called "£2 million Act" (1698) created a "new" East India Company that immediately sent ships to India, along with William Norris (ca. 1657–1702), the first ambassador from an English king since Sir Thomas Roe.
In 1695 the Scottish Parliament also chartered its own "Company of Scotland trading to Africa and the Indies," which was perhaps most infamous for its shortlived attempt to establish a colony on the isthmus of Panama. This, along with a spate of assaults on Mughal shipping in the Red Sea and Persian Gulf from English and American pirates like Henry Avery (d. 1728) and William Kidd (ca 1645–1701), greatly jeopardized the "old" company's position in Asia and Europe.
Under pressure from both English companies, the terms of the legislative union of England and Scotland of 1707 included the abolition of the Scottish company. Meanwhile, Queen Anne (1665–1714) and her lord treasurer Sidney Godolphin (1645–1712) arbitrated an agreement for a merger of the two English companies, completed in 1709. This new "United Company of Merchants of England Trading to the East Indies" inherited the old company's established commercial and political system and the new company's fiscal might. Through the early eighteenth century, it built up its western Indian naval force, the Bombay Marine, and grew in prominence in eastern India as well.
In 1717 the Mughal emperor Farrukhsiyar (d. 1719) recognized the English East India Company's growing prominence with a farman that granted the company customs-free trading and other privileges throughout Bengal. In Britain, the company also recovered its commercial success as Indian goods began to dominate the English market. Tea, in particular, though mostly trivial for much of the seventeenth century, became the company's most important and profitable commodity, bringing in over £12 million annually by 1770.
Anglo-French conflict, particularly the War of the Austrian Succession (1738–1742) and the Seven Years' War (1757–1765), also contributed to the buildup of British military forces in South Asia in the mid-eighteenth century. Hoping to arrest the expansion of English East India Company power, in 1756 Siraj-uddaulah (d. 1757), nawab (provincial ruler) of Bengal, invaded and occupied Calcutta. In response, the company dispatched an expeditionary force, led by Captain Robert Clive (1725–1774), from Madras, which defeated the nawab at the Battle of Plassey in June 1757. Another company victory at Buxar in 1764 sealed its preeminence in the province, prompting the Mughal emperor to make the company diwan, or revenue collector and de facto administrator, in the provinces of Bengal, Bihar, and Orissa.
The diwani effectively gave the English East India Company sovereign power in Bengal, causing a political crisis back in Britain. In 1767 Parliament formed an ad hoc committee to hold inquiries into company actions. The House of Commons also began to pass a series of acts designed to limit company power and increase oversight of its affairs. The Regulating Act of 1773 instituted the position of governor-general to centralize company governance in India, as well as a supreme court in Calcutta to check his power.
A decade later, the India Act (1784) created a parliamentary-appointed Board of Control to supervise the company and its directors. The introduction by Edmund Burke (1729–1797), a prominent member of the British Parliament, of articles of impeachment in 1786 of the first governor-general, Warren Hastings (1732–1818), was also part of this rapid attempt by the British state to assume power over the company and thus its expanding empire in India. In its charter renewal of 1813, the company lost most of its monopoly rights, and in 1833 was shorn of its commercial functions altogether.
Despite this assault in Britain, the English East India Company continued to grow in India through the mid-nineteenth century. As its law reached further into the Bengali countryside, including the institution of a permanent settlement of revenue with zamindars, or landholders, in 1793 under Governor-General Charles Cornwallis (1738–1805), the company also solidified its power in southern and western India with the defeat of Tipu Sultan (1750–1799) of Mysore in 1799 and of the Maratha Confederacy in 1818. The company's bureaucracy and army, which consisted mostly of South Asian soldiers known as sepoys, grew proportionally. The company also expanded through the establishment of "subsidiary alliances," which though recognizing the sovereignty of South Asian princely states rendered them de facto company dependencies.
Such expansion eventually reached its limit. The mutiny of sepoys from the Third Native Cavalry at Mirath in 1857, followed by rebellion amongst soldiers, peasants, and landlords throughout northern India that lasted the better part of a year, shook the foundations of the so-called Company Raj. Parliament, the press, and the British public held the English East India Company responsible, and in 1858, after the rebellion had been suppressed, the British Crown assumed direct formal control of British India from the company, which was ultimately dissolved in 1873.
see also English East India Company, in China; Sepoy.
Andrews, Kenneth R. Trade, Plunder, and Settlement: Maritime Enterprise and the Genesis of the British Empire, 1480–1630. Cambridge, U.K.: Cambridge University Press, 1984.
Bowen, H. V. Revenue and Reform: The Indian Problem in British Politics, 1757–1773. Cambridge, U.K.: Cambridge University Press, 1991.
Bowen, H. V., Margarette Lincoln, and Nigel Rigby, eds. The Worlds of the East India Company. Rochester, NY: Brewer, 2002.
Brenner, Robert. Merchants and Revolution: Commercial Change, Political Conflict, and London's Overseas Traders, 1550–1653. Princeton, NJ: Princeton University Press, 1993.
Carruthers, Bruce G. City of Capital: Politics and Markets in the English Financial Revolution. Princeton, NJ: Princeton University Press, 1996.
Chaudhuri, K. N. The English East India Company: The Study of an Early Joint-Stock Company, 1600–1640. London: Cass, 1965.
Chaudhuri, K. N. The Trading World of Asia and the English East India Company, 1660–1760. Cambridge, U.K.: Cambridge University Press, 1978.
Farrington, Anthony. Trading Places: The East India Company and Asia, 1600–1834. London: British Library, 2002.
Furber, Holden. Rival Empires of Trade in the Orient, 1600–1800. Minneapolis: University of Minnesota Press, 1976.
Khan, Shafaat Ahmad. The East India Trade in the XVIIth Century in its Political and Economic Aspects. London: Oxford University Press, 1923.
Lawson, Philip. The East India Company: A History. London: Longman, 1993.
Marshall, P. J. "The English in Asia to 1700." In The Oxford History of the British Empire, edited by William Roger Louis; Vol. 1: The Origins of Empire, edited by Nicholas Canny. Oxford, U.K.: Oxford University Press, 1998.
Scott, William Robert. The Constitution and Finance of English, Scottish, and Irish Joint-Stock Companies to 1720. 3 vols. London: Cambridge University Press, 1910–1912. Reprint, Gloucester, MA: Peter Smith, 1968.
Sen, Sudipta. Empire of Free Trade: The East India Company and the Making of the Colonial Marketplace. Philadelphia: University of Pennsylvania Press, 1998.
Steensgaard, Niels. The Asian Trade Revolution of the Seventeenth Century: The East India Companies and the Decline of the Caravan Trade. Chicago: University of Chicago Press, 1974.