Sunday, April 30, 2017

What was the British East India Company? - Part 1

East India House by Thomas Malton, 1800
It was one of the most powerful and influential company in the world. An agent of commerce and imperialism of the British Empire, explore the history of the British East India Company.

Origins and Early Years

In the 16th century, trade with Asia was dominated by the Iberian countries of Spain and Portugal whose explorations brought them enormous wealth and lands. Europeans paid large amount of money for goods coming from the Far East, mostly spices which give taste and preservation to food. The rise of the Ottoman Turks prevented the use of the traditional Silk Route to deliver these expensive spices to Europe. With the existing religious hostility between Christian Europe and Muslim Turks, the pious and brave Spanish and Portuguese explored new routes and stumbled upon the New World, a westward passage to Asia, and Cape of Good Hope. Spain and Portugal rose to prominence divided the spoils of their projects with the Pope-mediated Treaty of Tordesillas giving Spain lands to the west and Portugal lands to the east.

In all of this development, England stood as a mere second rate country until the reign of Queen Elizabeth. War between England and Spain characterized her reign with the defeat of the Spanish armada by the English as the zenith. As a Protestant and as an adversary of Spain, she disregarded the Treaty of Tordesillas and challenged Spain and Portugal (then joint ruled by a same monarch) in the Far East Trade. Instead of relying to hostile countries for exotic goods and cashing in to the hugely profitable trade came the English East India Company.
Queen Elizabeth Portrait Commemorating
the 1588 Defeat of the Spanish Armada

On December 31, 1600 Queen Elizabeth signed the charter of the Governor and Company of Merchants of London Trading into the East Indies giving them the sole right over trade of goods coming from east of the Cape of Good Hope and the west of the Straits of Magellan. The Charter provided a capital of £ 72,000 for a 15-year term to 125 shareholders.
Initially, shareholders financed separate voyages, but after 1612 the need of maintaining factories in India led to its transformation to a joint-stock company.

Starting from scratch, it took years before the Company’s ships reach India in 1608 and landed in Surat. In 1611 it established its first trading post in Machlipattanam creating a commercial foothold in the wealthy subcontinent. In 1612, it established a trading post in Surat, amidst Portuguese opposition, followed by another in Madras in 1641 and Calcutta in 1699. The Company then started to send cotton, silk, indigo, and saltpeter back to England.

Emperor Jahangir
It also established relations with the powerful Princes, especially the powerful Mughal Empire. In 1615, Sir Thomas Roe visited the Mughal Court and granted an audience with then Emperor Jahangir. The audience went well and gave the Company approval to establish a textile manufactory in Surat. From this first concession more followed that expanded the Company’s wealth and influence.

The Company’s army first began in 1662 as security personnel for its facilities. In 1668 it began to recruit native Indians as soldiers becoming known as Sepoys to supplement its mercenaries. Later on, the might of its army grew along with it.

Management and Organization

The 1600 Charter stipulated that the company to be managed by a court of 24 directors. The 24 directors formed different committees that tackled different aspects of the Company’s operations. The directors were annually elected by the Court of Proprietors or Shareholders, an early version of shareholders’ meeting. Later with Parliament’s intervention, the management of the company changed.

Relation with Portuguese and the Dutch

King Charles II
By engaging in trade in the East Indies, the English Company faced serious competition and suspicion from the Portuguese and the Dutch East Indies Company (VOC). Relations with the Portuguese initially started with hostility as the English fought for a foothold in India. In fact, in 1612 the English had to fight the Portuguese to secure a factory in the commercial center of Surat. Eventually the Portuguese wealth and power weakened due to financial mishandling and so was their position in India. When Charles II of England married Princess Catherine of Braganza of Portugal, part of the dowry of the Portuguese to the English was Bombay, which in a Royal Charter on March 27, 1668 was transferred to the English East India Company - its first territory to rule over. Portuguese influence in India continued to diminish until its presence became small to be deemed marginal, mostly centered in the city of Goa.

Tenuous relations also developed with the Dutch East India Company, but both of their respective governments hoped for cooperation in the Far East. The English wanted a share of the spice trade in the Indonesian Archipelago to which the Dutch refused to share. Skirmishes between the 2 companies flared up.

Worst any hope of cooperation, however, died with the news of Amboyna Massacre in 1623 that infuriated London. The massacre came as a result of the Dutch Governor’s suspicion of English, Japanese, and Portuguese plotting to kill him and seize his fort. He ordered the arrest and torture of the foreigners until they confessed to the alleged plot and finally sentenced them to death. Tensions only settled when Oliver Cromwell, Lord Protector of England, exacted compensation from the Dutch.

The incident made the English realize that the Spice Islands and surrounding archipelago belonged to the Dutch and decided to concentrate their efforts to India. 

See also:

“East India Company.” In 1911 Encyclopedia Britannica. Wikisource. Accessed on April 30, 2017. URL:

Editors of Encyclopedia Britannica. “East India Company.” In Encyclopedia Britannica. Accessed on April 23, 2017. URL:

Encyclopedia and Books:

“East India Company.” In The Victorians at War, 1815-1914: An Encyclopedia of British Military History. Edited by Harold Raugh. Santa Barbara, California: ABC-CLIO, 2004.

“East India Company.” In Encyclopedia of The Enlightenement. By Ellen Judy Wilson and Peter Hanns Reill. New York, New York: Facts On File, Inc., 2004.

Lewis, Dianne. “East India Company, English.” In Southeast Asia: A Historical Encyclopedia, From Angkor Wat to East Timor. Edited by Ooi Keat Gin. Santa Barbara, California: ABC-CLIO, 2004.

Kulke, Hermann & Dietmar Rothermund. A History of India. New York, New York: Routledge, 2004.

Murphy, John Jr. “British East India Company.” In Encyclopedia of World History v. 4. Edited by Marsha Ackermann et. al. New York, New York: Facts On File, Inc., 2008.

Stein, Burton. A History of India. Chichester, West Sussex: John Wiley & Sons, Ltd., 2010.

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