The East India Company was formed by John Watts on 31st December 1600. It was established to exploit trade from India and South East Asia. The company went on to become the largest commercial venture in the world. It traded independently until its nationalisation in 1858. The company ceased operations in 1874. As the East India Company’s trade grew it came to dominate large areas of India and South East Asia. The companies actions are the subject of debate among historians. The East India Company is seen by some as a ruthless exploitative force who plundered India in particular. Others note the benefits for Great Britain and the role the East India Company had in creating the Jewel in the Crown and the enormous wealth gained from British trade across the region.
In the 16th century european nations expanded their trading networks into the east. Spain and Portugal dominated the trade and began to explore opportunities for spaces and other goods to be brought into Europe. The defeat of the Spanish Armada in 1588 enabled their domination to be challenged. In 1600 Elizabeth I granted a charter that allowed traders to form the Governor and Company of Merchants of London Trading into the East Indies.
The first venture of this company was a flotilla of four merchant vessels captained by James Lancaster. It set sail in 1601 and returned two years later with a combined cargo of some 500 tons of pepper. This and other early ventures proved to be highly successful and profitable. However, the Dutch dominated the market for Spices and the journey was long and dangerous. To minimise risk and maximise profit a decision was made to not challenge the Dutch East Indies Company in the space trade. Instead markets for Silk and Cotton in which there was less direct competition were chosen.
Around centres in Bengal, Bombay and Madras the company developed large commercial stations. To protect these the company raised a private army. This was needed due to the threat of piracy and uprisings against both the company and local political leaders. The size of this army grew and effectively controlled areas in which the company traded.
The company expanded its commercial interests inland from these centres. This was achieved through conquest and agreements with local maharajas. The expansion led to the Company taking over administrative control of many areas. They levied taxes and imposed their system of governance. This was not always easy. In 1757 Robert Clive put down an uprising led by Siraj ud-Daula. The Battle of Plassey marked a change in the company role. Previously it had only used its private army to protect the companies resources and interests, here it made a direct intervention into local affairs.
The East India Company was fuelling consumerism and helping to transform fashion in Britain. Colourful materials were produced and hand woven in India. Garments for the top end of the fashion market were being produced by hand in India and shipped to Great Britain for finishing and sale. It made the most of the cheap labour and resulted in large profits.
The company soon became involved in other trades. A trend for drinking tea was emerging as a result of the Asian trade. The East India Company expanded into the South China Sea in order to procure Chinese tea. These were then cross bred with Indian varieties and the result was the the types of tea still in use today. The market for these teas was, and remains, extensive.
Another crop of interest to the East India Company was Opium. Opium was grown in India and sold to merchants trading in China. The profit acquired from this trade in drugs were used to make the Chinese Tea trade highly profitable. The ethics behind this would raise many eyebrows today. The reason Opium was crucial to the Chinese Tea trade was the currency of exchange in China being Silver. The British economy was tied to the Gold Standard. Silver was expensive for British merchants, selling and taxing opium made the trading cycle highly successful. It led to the East India Company establishing bases and forts around the South China Sea and the Indian Ocean. The most famous of these bases was at Hong Kong.
The trade in Opium in China was lucrative. It was also illegal. After 50 years of tolerating British activities of this type the Chinese government intervened. It demanded all Opium be handed over for destruction. The East India Company was not willing to see such a large part of its operation stopped. It launched into the Opium Wars in 1839.
As the company had expanded its operations in China it had also increased its domination of India with most of the country now under company rule. Many Indians despised the company, its rules and its methods. In 1857 this led to the Indian Rebellion. Many of the soldiers in the companies army were Indians. In 1857 a large number of them, out of an overall army size of 200000, rise in mutiny. The company response was controversial. Its men put the Indian Rebellion down with great force. Mutineers were killed. Civilians thought to sympathise were killed. What amounted to a purge took place with little mercy shown. The Indian Mutiny led to the East India Company being taken into government control.
East India Company Source Material
With regard, therefore, to the abuse of the external federal trust, I engage myself to you to make good these three positions. First, I say, that from Mount Imaus (or whatever else you call that large range of mountains that walls the northern frontier of India), where it touches us in the latitude of twenty-nine, to Cape Comorin, in the latitude of eight, that there is not a single prince, state, or potentate, great or small, in India, with whom they have come into contact, whom they have not sold: I say sold, though sometimes they have not been able to deliver according to their bargain. Secondly, I say, that there is not a single treaty they have ever made which they have not broken. Thirdly, I say, that there is not a single prince or state, who ever put any trust in the Company, who is not utterly ruined; and that none are in any degree secure or flourishing, but in the exact proportion to their settled distrust and irreconcilable enmity to this nation.
Edmund Burke: Speech on Mr. Fox’s East India Bill, Dec. 1, 1783
At the decisive Boston town meeting of Nov. 29, 1773, while ships loaded with cargo from the East India Company idled in the harbor, Thomas Young was the first and only speaker to propose that the best way to protest the new Tea Act was to dump the tea into the water..
East India Company Links
E Erikson. Between Monopoly and Free Trade: The English East India Company, 1600–1757
Online Book: The Trading World of Asia and the English East India Company: 1660-1760.
The Guardian have an article entitled: The East India Company, the original corporate raiders.
Qatar Digital Library provide a good introduction to the East India Company. It covers merchant activity and the military power that the company acquired.
The Economist have an article on the Company that ruled the Waves.
Irish Times. A book review of Inglorious Empire. The review highlights the main criticisms of the British and East India Company’s role in the Indian sub-continent.
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