East India Company

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.

East India Company shipping.

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 BurkeSpeech on Mr. Fox’s East India Bill, Dec. 1, 1783

Against misgovernment such as then afflicted Bengal it was impossible to struggle. The superior intelligence and energy of the dominant class made their power irresistible. A war of Bengalees against Englishmen was like a war of sheep against wolves, of men against demons. The only protection which the conquered could find was in the moderation, the clemency, the enlarged policy of the conquerors. That protection, at a later period, they found. But at first English power came among them unaccompanied by English morality. There was an interval between the time at which they became our subjects and the time at which we began to reflect that we were bound to discharge towards them the duties of rulers. During that interval the business of a servant of the Company was simply to wring out of the natives a hundred or two hundred thousand pounds as speedily as possible, that he might return home before his constitution had suffered from the heat, to marry a peer’s daughter, to buy rotten boroughs in Cornwall, and to give balls in St. James’s Square.
Lord Thomas Babington MacaulayWarren Hastings, Oct. 1841.
One of the reasons for this cataclysmic change of destinies was the inherent weakness of a decaying agricultural empire of the Mughals which after more than two hundred years of rule over vast areas of India, was at its terminal stage and needed a small push to crumble like a house of cards.That push was given by six East India Companies of different European countries which had extracted rights to trade with India from the Mughals but transformed themselves as the arbiters and protectors of several Indian states. In this process they not only became rich but also militarily strong because in the twilight years of the Mughal empire, deteriorating security environment necessitated to arm themselves to protect their economic interests. Because of their inherent superiority as representatives of rising industrial powers, they had access to modern techniques and technology of warfare, which turned out to be the decisive factor in capturing vast territories in India.
Shahid Hussain Raja1857 Indian War of Independence:1857 Indian Sepoys’ Mutiny

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..

Matthew Stewart

East India Company were a huge multinational that had the added impetus that they felt they were spreading Christian civilization around the world – so they were pretty free to do anything they wanted.
Steven Knight
In 1772, Adam Smith’s friend William Pulteney recommended him to the directors of the EIC, as a member of a commission of inquiry in their administration to be sent to India. Adam Smith, in a letter, dated September 5, 1772, accepted the appointment. Adam Smith highlighted the government-granted monopoly of the EIC and its abuses and inefficiencies. He argued that the Bengal drought was turned into a famine due to the EIC’s incompetence.
N Janardhan Rao Business Economist

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.

The National Trust have several collections linked to the East India Company. They provide an overview of these locations and a brief history of the company on this page.

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