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.
Expansion
The
power of the English East India Company grew under King Charles II. Besides
giving them their first territory to control – Bombay - the King also expanded
the authority of the Company to include issuing money, raising armies, forming
local alliances, exercising judicial powers, and conducting diplomacy.
Expansion to India
By
the 18th century, the Company marked their footprints in Bombay, Madras, and
Calcutta with English settlements changing the cities’ landscape. Its
commercial operation continued to flourish, especially when Emperor Farrukhsiar
exempted the Company from paying customs duties in Bengal.
At
the same time, political situation changed among the Europeans in India. The
Portuguese and the Dutch declined in importance while the French Compagnie des
Indes rose to prominence. Founded in 1664, it established a factory in Surat in
1668, the city of Pondicherry in Madras in 1674, and another factory in
Calcutta in 1690.
In
local politics, the British and the French competed for influence leading up to
military conflict known as the Carnatic War (1744 – 1763). In 1748, both powers
supported their each claimants for the position of Nawab of Arcot and
Hyderabad. Robert Clive of the Company Army rose into prominence when he
successfully defended Arcot from its French-backed Nawab, thus securing the
city within the sphere of British influence.
With
the breaking out of the Seven Years’ War in Europe, hostilities worsened in
1757 as the French-supported Nawab of Bengal, Siraj-ud-Daula, took control of
British held Calcutta. Clive went to retake the city. Following Calcutta, he
fought against the Nawab’s forces in the Battle of Plassey which many dubbed as
the signal of the rise of the British Empire in India. Soon the Nawab fell and
the whole province of Bengal went to British hands. For his efforts Clive
became the first governor of Bengal.
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| Robert Clive after the Battle of Plassey by Francis Hayman |
As
the dominant power in the province and close relation with the Mughal Emperors,
Emperor Alamgir offered a concession to the Company to administer Bengal,
Bihar, and Orissa (later formed the Presidency of Bengal). With these, the British held 3 Presidencies in India - Bengal, Madras, and Bombay. The Concession granted
them the right to collect taxes so long as they send a fix share of tax revenue
to the Mughal Emperor. But along with powers to administer, they also took over
control of the local army, thus expanding its number of native troops serving
its armed forces.
Clive
saw the responsibility as too much for the Company to handle and offered Prime
Minister William Pitt for the Crown to accept the administration of the 3
provinces. Pitt, however, rejected the idea seeing the profit from the
provinces would be wasted in the hands of King George III. As a result, the Company
accepted the offer.
The
English used the existing local government apparatus in administering the
provinces, in effect continued the existing inefficiencies. Worst many Company
officials made names for themselves as shrewd businessmen but also as a corrupt
and inefficient government administrators. Their incapacity and corruption that
Clive himself decried led to a massive famine that took the lives of a third of
the populations in 1769. The devastation led to the Company’s depletion of
resources and brought it the brink of bankruptcy. Only with the Parliament in
London’s intervention did the company survived at the cost of reforms. The
Regulating Act formed the office of the Governor-General in Bengal which the
Parliament approved to govern the 3 Presidencies.
Among
the first Governor-Generals was Lord Charles Cornwallis, the disgraced General
of the Siege of Yorktown, who instituted the Permanent Settlement. Under the
Permanent Settlement, the Company would allow a landed gentry called Zamindar
to own lands in exchange for remittance of fixed amount land revenues. Soon
enough the Permanent Settlement made land revenue as part of the top list of
source of revenue of the Company.
Furthermore,
with the weakening of the Mughal Empire, Cornwallis felt that the power vacuum
must be taken by Britain. Soon the Company provided technical services and
commercial opportunities to various local princes who gave in British demand
for concessions on collection of taxes. As a result of this, the British East
India Company expanded its influence, thus building the foundation of the
British Raj.
Part
of the Company’s success came from its ability to conceal its true intentions.
They showed themselves not as conquerors but rather as source of technical and
commercial support. Henceforth, many Indian princes welcomed the Company in
exchange for allowance and tributes. Another was the capacity of the Company to
show itself as viable business partner convincing many influential royals,
businessmen, and financiers to welcome the British.
Resistance from
Indian Lords
But
not all local princes bowed to the British, in the 1790’s the Tipu Sultan of
Mysore warred against the British to resist their attempts to influence local
affairs. The Tipu Sultan marched west to capture the vital spice center of
Malabar to become his new economic center. Ultimately, his resistance failed in
1799 when he capitulated to the British and his territory Mysore taken over.
 |
| Lord Cornwallis receiving 2 of Tipu Sultan's sons as hostages, 1793 |
More
and more princely state fell to the British East India Company or at least to
its orbit becoming spheres of influence. In 1816 Nepal fell to the British and
found its foreign affairs handled by the Company. The Maratha Confederacy, the
successor to the might of the Mughal, fell in 1818. Sind followed in 1843 and
Punjab and the Sikh Empire resisted and fought in the 2 Sikh Wars (1845 – 1846
& 1848 – 1849), but they failed ultimately.
Expansion to
Southeast Asia
While
the Company concentrated much of their efforts to India, they did not lose
interest to Southeast Asia. After the Ambona Incident, the East India Company
backed off from the Spice Islands leaving only a single trading post in the
Bantam. Bantam served later as supply station for English ships heading to
China. But in a war in 1682, the island fell to the Dutch East India Company
and the English moved their post to Bengkulu in Sumatra.
But
with the decline of the power the Dutch East India Company and the rise of
England as the Mistress of the Sea in the 18th century, the Company
returned to Southeast Asia to establish new trading hubs. Along with the
growing importance of China trade, the Company covertly intensified its trade
in Southeast Asia. Using “country traders” or independent traders financed by
the Company, they bought valuable goods like pepper and tin from Dutch holdings
for the Company.
The
Company tried to expand openly to Southeast Asia in the 1760’s as the Seven
Years’ War also flared up in Europe between the English against the Spanish. In
1762, Company ships transported British and native Indian soldiers or Sepoys to
capture the Spanish-held Manila in hope of crushing the Spanish Empire in the
east and establish a station for its ship heading to China. When peace returned
to Europe, however, the British agreed to leave the Philippines and sought
another port elsewhere.
In
1784, Francis Light succeeded in giving the Company its most sought port in
Southeast Asia. He persuaded the Sultan of Kedah to give to the company Pulo
Pinang later known as Penang.
 |
| Eastern Side of the Penang Island, 1810 |
In
1819, Stamford Raffles, governor of Benkulen, convinced the Prince of Johor to hand
over an island in the tip of the Straits of Melaka named Singapore. Singapore
flourished amidst Dutch fury over the legality and the interloping of the
British. Finally in 1824, both sides agreed to settle their spheres of
influence with the British giving up Benkulen to the Dutch in exchange for
Singapore and Melaka, thus beginning British domination over the Malaya
Peninsula.
Economic Activities
Slave Trade
During
the 1620’s the Company started to ship slaves from Indonesia and Africa, mostly
from Mozambique and Madagascar, to their factories and facilities in India and
Indonesia. The trade continued to flourish but motions to stop it came up in
1833 during the Company’s renewal of Charter. Eventually, the abolition was
seen as a source of great loss of profit and the issue disappeared. Another
reason for slavery’s survival was local tradition. As the Company practiced
respect for local customs, it deemed it impractical to stop it. Virtual
abolition of slavery came in 1843 when the British administration stopped
selling slaves and recognize complaints of slave owners against their slaves.
Tea and Opium Trade
Following
slave and textile trade, from the middle of the 18th century the Company
expanded their tea trade, especially with China. But the Company faced a trade
deficit with the Chinese as they paid more silver to them than they received.
They then took measures to balance the trade with dubious and ruthless means by
exporting opium to China and addicting millions. It resulted to vast import
orders from the Chinese and huge silver inflow for the East India Company. In
1802 and 1803 exports of opium to China worth about £250,000. The evil trade
later resulted to the Opium War in 1839, where the Company fought and won a
victory and the legalization of the drug trade and the opening of the East
Asian country to international trade.
Reform, Decline, and
Demise
Reforms by London
The
East India Company underwent numerous scrutiny. Many challenged the Company’s
monopoly of Asian trade. Others questioned the capability of the Company to
manage its holdings, thus brought in waves of reform to its administration. But
as industrialization demanded freer flow of goods, the practicality of the
Company’s existence came ever more threatened. Changes also in the policies of
the Company eventually led to its downfall.
Not
yet a century old, the Company faced a threat to its monopoly. Many merchants
who failed to purchase the Company’s stocks wanted to continue their pursuit of
trade with India. But the Company’s Charter prevented them from doing so.
William Courteen challenged the Company’s dominance in 1635 when King Charles I
granted them a Charter giving them the same privileges as the existing. The
Company called Courteen Association later became known as the Assada Merchants.
Their business, however, took to a bad turn. Mismanaged and riddled by
accusation of piracy ruined their reputation with the Indians and the 2 East
India Companies decided to cooperate. Finally in 1657 under England’s Lord
Protector Oliver Cromwell, the 2 merged into a single company once again.
Few
decades later came another threat to the dominance of the English East India
Company. In 1691 another company, named The English Company Trading to the East
Indies or simply new East India Company, attempted to break the existing monopoly
of trade in India. A parliament act in 1694 allowed it to continue its
operation. Yet, the 2 companies ceased competition and under the Godolphin
Award of 1708 merged them to form the United Company of Merchants of England
Trading to the East Indies. The Charter awarded ordered the Company to pay the
country £3,200,000 and a clause stating 3 years prior notice of the revocation
of its privileges if it failed to remit to the England the mentioned amount.
In
management, shareholders held much power until 1773 when Parliament passed the
Regulating Act that led to government intervention to the affairs of the
company. The Act came as the cost of the Parliament saving the Company from
bankruptcy after the devastating 1769 famine.
It
ordered the appointment of a Governor-General to Fort William in Bengal with
the task of supervising the administration of Madras (Chennai) and Bombay
(Mumbai). A Council of 4 members ruled as well along with the Governor-General.
To administer justice, a Supreme Court of 4 English judges began to reside in
Calcutta (Kolkata). The Act, also replaced the annual election of 24 directors
with the election of 6 judges a year, with each serving 4 years. Prices of
shares, which meant also voting rights, increased from £500 to £1,000.
But
the Act, showed many defects such as vague definition of the powers of the
judges in Calcutta and the lack of veto power of the Governor-General.
Eventually, in 1784, the India Act tried to improve the Regulation Act. It gave
the company rights over trade and daily administrative affairs but reserved vital
political policies to a 3 director committee answerable only to the government.
Several
acts followed that weakened the absolute independence of the British East India
Company. In 1813, trade monopoly disappeared along with their ban of
missionaries from entering India. Its trading rights disappeared in 1833 becoming
only a managing body. The loss of its trading monopoly came as a result of
rising demands for opening India to exports of British made textile. And in
1853, it lose government patronage.
Indian Mutiny and
Abolition
In
1813, the Company relaxed its ban of missionaries from coming to India.
Churches and schools started appearing in British settlements gaining converts.
This changes, however, made Indians feel threatened by missionaries attempting to
change their culture and tradition. Other reforms followed like the banning of
sati (suttee) known as widow burning.
The
most known reformer in British India was the Marquess of Dalhousie who served
as Governor-General from 1848 to 1856. Under his rule, the Doctrine of Lapse
allowed the Company to take over Princely state by banning their adopted heirs
to assume their positions. As a result of this doctrine, many princes loss
their positions and wanted revenge, thus, it furthered threats of mutiny and
rebellion rose.
 |
| Lord Dalhousie, 1847 |
Mutinies
were not new. In 1806, Muslim Sepoys mutinied in Madras in sympathy to the
fallen Tipu Sultan of Mysore. Another mutiny broke out in Barackpur in Bengal
who refused to fight in the 1st Burmese War in 1824. Both mutinies, however,
ended with settlement and status quo remained. The events, nonetheless, showed
the possible threats of mutiny.
Eventually,
many of Dalhousie’s reforms and previous policies angered Indians, in
particular Sepoys serving in the Company’s army. It resulted to a mutiny that
threatened British control over India. Luckily for the British, the mutiny that
grew to a rebellion failed. But with the end of the mutiny came the end of the
Company as well. Parliament abolished the British East India Company for its
failure to prevent the mutiny and the whole of India fell to the crown’s
control under the Government of India Act ushering the British Raj. The Company
continued to be a legal entity until 1874 when it finally disappeared.
See also:
Bibliography:
Websites:
“East India Company.” In 1911 Encyclopedia Britannica. Wikisource. Accessed on April 30, 2017. URL: https://en.wikisource.org/wiki/1911_Encyclop%C3%A6dia_Britannica/East_India_Company
Editors of Encyclopedia Britannica. “East India Company.” In Encyclopedia Britannica. Accessed on April 23, 2017. URL: https://www.britannica.com/topic/East-India-Company
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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