East India Company

East India Company


East India Company

The East India Company, based in London, operated from 1600 to 1858, and was one of the richest and longest-lived trading companies in history. Its influence on British colonial policy indirectly influenced American history. At the time that the English colonies were becoming increasingly restive, the company was trying to strength its position in Canton, and as a result was purchasing greater and greater quantities of tea. The colonial response to the tea tax in 1767 resulted in a precipitous decline in consumption, from 900,000 pounds in 1769 to just 237,000 in 1772.

With warehouses overflowing with unsold tea, the company negotiated with Parliament for the right to sell tea directly to the colonies, which was granted in the Regulating Act of 1773. Instead of gaining a new market for the East India Company, the act produced more opposition. After the Revolution, the East India Company had little direct contact with America.

Far from disappearing from history, however, the East India Company gained greater control of the Indian subcontinent, which they managed as a virtual corporate colony until the Mutiny of 1857. At this point, the British decided that they needed to rule India directly and took over in 1858. The company was dissolved in 1874.


The East India Company: how a trading corporation became an imperial ruler

The East India Company was founded during the rule of Queen Elizabeth I and grew into a dominating global player with its own army, with huge influence and power. Writing for History Extra, Professor Andrea Major gives an insight into one of history's most powerful companies, and its rise to political power on the Indian subcontinent…

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Published: December 31, 2020 at 11:05 am

In 1600, a group of London merchants led by Sir Thomas Smythe petitioned Queen Elizabeth I to grant them a royal charter to trade with the countries of the eastern hemisphere. And so, the ‘Honourable Company of Merchants of London Trading with the East Indies’ – or East India Company, as it came to be known – was founded. Few could have predicted the seismic shifts in the dynamics of global trade that would follow, nor that 258 years later, the company would pass control of a subcontinent to the British crown. How did this company gain and consolidate its power and profit?

At the same time as Elizabeth I was signing the East India Company (EIC) into existence in 1600, her counterpart in India – the Mughal emperor Akbar – was ruling over an empire of 750,000 square miles, stretching from northern Afghanistan in the northwest, to central India’s Deccan plateau in in the south and the Assamese highlands in the northeast. By 1600, the Mughal empire (founded by Akbar’s grandfather, Babur, in 1526) had come of age and was embarking on a century of strong centralised power, military dominance and cultural productiveness that would mark the rule of the ‘Great Mughals’. The Mughal court possessed a wealth and magnificence to overshadow anything that Europe could produce at the time, while India’s natural produce and that of its artisans was coveted all over the world.

Listen: Historian Jon Wilson responds to listener queries and popular search enquiries about the English trading company that went on to become an agent of British imperialism in India during the 18th and 19th centuries.

When the East India Company first visited the Mughal court in the early 17th century, it was as supplicants attempting to negotiate favourable trading relations with Akbar’s successor, Emperor Jehangir. The company had initially planned to try and force their way into the lucrative spice markets of south-east Asia, but found this trade was already dominated by the Dutch. After EIC merchants were massacred at Amboyna (in present day Indonesia) in 1623, the company increasingly turned their attention to India.

With Emperor Jehangir’s permission, they began to build small bases, or factories, on India’s eastern and western coasts. From these coastal toeholds, they orchestrated the profitable trade in spices, textiles and luxury goods on which their commercial success was predicated, dealing with Indian artisans and producers primarily through Indian middlemen. Meanwhile, the ‘joint stock’ organisation of the company [in which ownership was shared between shareholders] spread the cost and risk of individual voyages between investors. The company grew in both size and influence across the 17th and 18th centuries. Although always volatile, EIC shares became an important bellwether of the British economy and the company emerged as one of London’s most powerful financial institutions.

Listen: William Dalrymple explains how a single London corporation took over the Mughal empire and became a major imperial power on this episode of the HistoryExtra podcast.

A player in politics

Initially a junior partner in the Mughal empire’s sophisticated commercial networks, in the 18th century, the EIC became increasingly involved in subcontinental politics. They grappled to maintain their trading privileges in the face of declining central Mughal authority and the emergence of dynamic individual successor states.

European competitors also began to have an increased presence on the subcontinent, with France emerging as a major national and imperial rival during the War of Austrian Succession and the Seven Years War. This particularly increased the strategic importance of the EIC’s Indian footholds, and the country’s coastline became crucial to further imperial expansion in Asia and Africa. As well as maintaining a large standing army consisting primarily of sepoys (Indian mercenary soldiers trained in European military techniques), the EIC was able to call on British naval power and crown troops garrisoned in India.

Such military advantages made the EIC a powerful player in local conflicts and disputes, as did the financial support offered by some local Indian merchants and bankers, who saw in the EIC’s increasing influence an unmissable commercial opportunity. After military victories at the battles of Plassey (1757) and Buxar (1764), the EIC was granted the diwani of Bengal – control over the administration of the region and the right to collect tax revenue. At the same time, the company expanded its influence over local rulers in the south, until by the 1770s the balance of power had fundamentally changed. Expansion continued and rivals such as the Maratha people in western India and Tipu Sultan of Mysore were defeated. By 1818, the EIC was the paramount political power in India, with direct control over two thirds of the subcontinent’s landmass and indirect control over the rest.

A ‘colony of exploitation’

The first years of EIC rule were notorious for their corruption and profiteering – the so-called ‘shaking of the pagoda tree’ or ‘rape of Bengal’. Individual nabobs (as EIC employers were derisively dubbed) amassed massive personal fortunes, often at the expense of their Indian subjects. Yet the late 18th century also saw the development of what would become the basis of the EIC state in India, as traders sought to become administrators and develop systems of rule compatible with both their Georgian ideas of political economy and the specific circumstances in India.

India’s large population and sophisticated social, political and economic institutions made imperialistic ideas of terra nullius (empty land) inapplicable in India, and as a result the EIC did not achieve the level of control over the resources of land and labour that characterised British settler communities in Canada, Australia, New Zealand, the Cape, and the Caribbean. India was a ‘colony of exploitation’, rather than one of settlement its value to the EIC lay primarily in the profits that could be made by controlling its internal markets and international trade, appropriating peasant production and, above all, collecting tax revenue. These taxes paid for both a large standing army, and a sizeable cadre of EIC employees and covenanted civil servants who worked in India, but did not ultimately settle there.

The EIC’s rise to political power in India was the subject of heated debate back in Britain. EIC activities in the wake of the 1757 battle of Plassey as a company with huge influence and power – and one which is unafraid to further its interests by nefarious means –were viewed with suspicion – as poet William Cowper put it, the EIC: “Build factories with blood, conducting trade / At the swords point, and dyeing the white robe / Of innocent commercial justice red”.

Against the backdrop of the loss of the American colonies, the emergence of the anti-slavery movement and the French Revolution, the ‘India Question’ took on considerable political importance in Britain. The perceived immorality of EIC actions in India, the fear of private and institutionalised corruption, and tensions between British and ‘Asiatic’ forms of governance resonated with wider concerns about what it meant to be an imperial power, and the responsibilities Britons had to their non-white subjects overseas. Metropolitan concern with EIC activities in the second half of the 18th century manifested itself in popular hostility to returning nabobs, and culminated with the impeachment and trial of former governor general Warren Hastings [for mismanagement and personal corruption] in 1788–95.

The ‘India Question’

Attempts to regulate EIC activities began in the 1770s, with North’s Regulating Act (1773) and Pitt’s India Act (1784), which both sought to bring the company under closer parliamentary supervision. Meanwhile a series of internal reforms under governor general Charles Cornwallis in the late 1780s and early 1790s saw the EIC’s administration radically restructured in order to eradicate private corruption. This was intended to improve both the lustre of its public image and the efficiency of its revenue-extracting machine. After the acquittal of Hastings and the implementation of the Cornwallis reforms, the company attempted to rehabilitate its reputation. It aimed to reposition itself as a benevolent and legitimate ruler that extended the limits of civil society and brought both security of property and impartiality of justice to India.

Reforms such as the remodelling of the judiciary and the 1793 Permanent Settlement agreement (which fixed the rate of land tax) took place under the rubric of ‘improving’ Indian society. The EIC increasingly justified its presence in India by using the rhetoric of a ‘civilising mission’, epitomised by the publicity given to showpiece social reform legislation such as the abolition of the rare but controversial practice of sati (widow-burning). However, the actual impact of its activities on local economies and societies was often very different. These reforms were primarily aimed at securing EIC control, facilitating Britain’s longstanding pursuit of wealth, and ensuring her strategic advantage by excluding European rivals from the subcontinent.

The first half of the 19th century was marked by economic depression in India. Excessive land tax demands and lack of investment stunted agricultural development, while traditional industries such as textiles were decimated by the import of cheap manufactured goods. Catastrophic famines, most notably in Bengal (1770) and in the Agra region (1837–8) were exacerbated by the EIC’s tax policies, its laissez faire attitudes towards the grain market, and failures of state relief.

While by the early 19th century British attitudes to India were characterised more by ‘pride and complacency’ than by ‘self-flagellation’ (to quote historian Peter Marshall), criticism of EIC’s activities and their consequences – both intended and unintended – did not disappear entirely. Rather, these issues remained close to the surface of British public debate. They found expression through a range of issues, sources and media – for example through the vocal, but short-lived activities of the British India Society (1839–43) [Established to ‘enlighten’ people about conditions in India].

Nor did the Indian population simply meekly acquiesce to East India Company dominance. Dispossessed Indian rulers sent numerous delegations to London to protest mistreatment and breach of treaties on the part of the EIC, while various forms of both direct and indirect resistance were endemic throughout the period. Indeed, as historian Sir Christopher Bayly noted, when the fighting that would ultimately bring about the end of the East India Company broke out in 1857, the event was “unique only in its scale”.

In the wake of the uprising of 1857 (often referred to in Britain as the ‘Indian Mutiny’, and in India as the ‘First War of Independence’), observers in Britain were quick to critique the mistakes of the East India Company. Yet the ship had already sailed: once the uprising had been suppressed – with great brutality and loss of life on both sides – control of India passed from the East India Company to the crown, ushering the period of high imperialism in India epitomised by the Raj.

Andrea Major is professor in British colonial history at the University of Leeds

This article was first published by HistoryExtra in January 2017


The East India Company and Natural History Collecting

Written by Rachel Petts, Curatorial Assistant Zoology (part time), Manchester Museum.

Manchester Museum is currently undergoing an exciting transformation, building two new galleries, a South Asia Gallery and the Lee Kai Hung Chinese Culture Gallery. This sparked interest and further research into our natural history collections from Asia.

Manchester Museum has a large collection of 18,000 bird skins including many specimens from the former British Empire. Further study of the collection has identified over 100 birds linked to the East India Company Museum.

Figure 1: B.2574 Psittacula alexandri fasciata (Statius Muller, 1776) Red-breasted Parakeet, Andaman Islands, South Asia. Presented by the India Museum, London. © Manchester Museum, The University of Manchester

A Brief History of the East India Company Museum

The East India Company was established in 1600 by a royal charter signed by Queen Elizabeth I. It gave the company the monopoly on trade in South Asia for over 250 years. The museum was established in 1798, as an ‘Oriental Repository’ to exhibit the returns of the East India Company’s commerce. It was known as the India Museum, and was housed in the company’s headquarters at India House, Leadenhall Street, London. Company servants were encouraged to expand their knowledge of South Asia in order to advance the company’s commercial and territorial ambitions.

Figure 2: East India House by Thomas Malton the Younger (1748-1804), Public domain, via Wikimedia Commons

Modelled on the Royal Society of London, the Asiatic Society of Bengal was formed in 1784 by a number of East India Company employees in Calcutta. The aim of the society was to carry out research into the history, arts, literature and Natural History of Asia. The Asiatic Society was closely associated with the India Museum in London. Charles Wilkins one of the founding members of the Asiatic Society would go on to propose the formation of the East India Company Museum in London and would become its first curator. The Indian Museum in Calcutta was established in 1814 with the founding collections from the Asiatic Society.

As the East India Company’s power grew, so did the museum’s collections. Natural history collecting became a key part of expanding knowledge about new territories. Many of the collections were acquired as a result of trade missions, military campaigns or administrative surveys. The collection at India House became one of the largest collections of natural history, arts and sciences of Asia, in Europe.

Some of the early natural history collections were donated by Sir Thomas Stamford Raffles and Thomas Horsfield. Both men were stationed in Java, Raffles was the Lieutenant Governor and Horsfield was an American naturalist and surgeon. Encouraged by Raffles, Horsfield studied and collected the islands wildlife at a time when there was little information available on the region in Britain. In 1819, Horsfield came to London, and worked on cataloguing and publishing on the extensive natural history collections, including a two volume catalogue describing the birds in the India Museum collections. Horsfield became the curator in 1836 and held the role until his death in 1859. Unfortunately, many of his specimens perished.

The Government of India Act (1858) called for the liquidation of the British East India Company, and led to the British Crown assuming direct control of India. In 1863 the company’s headquarters at India House were demolished and a new government department was formed: the India Office. In 1861 the museum temporarily moved to Fife House near Embankment.

Once the East India Company was disbanded, the museum relocated to inadequate space in the new India Office in Whitehall, reopening to the public in 1870. But there was not enough space for the extensive collections in 1875 rooms were rented from the South Kensington museum, now the Victoria and Albert Museum.

Dispersal of the India Museum’s collections

In 1879, the decision was made to close the museum and disperse the collections, as neither the Indian or British governments were willing to accept the costs of a purpose built museum. The botanical specimens were transferred to Kew Gardens and zoology specimens were taken by the British Museum of Natural History (BMNH). Other collections were shared between the British Museum and the South Kensington Museum. Some of the duplicate bird specimens were transferred to Manchester Museum in 1895.

It has been possible to identify more of the India Museum birds in the Manchester Museum collections by studying the specimen labels many still have the old British Museum registration numbers. More provenance information has been determined by searching for the registration numbers in the BMNH catalogue.

Figure 3: Bird specimen labels showing British Museum registration numbers.
© Manchester Museum, The University of Manchester

India Museum birds at Manchester Museum

So far a total of 121 bird specimens linked to the India Museum have been identified within the Manchester Museum collections (see figure 4).

Figure 4: A table showing the scope of the collection at Manchester Museum.


East India Company

The East India Company had the unusual distinction of ruling an entire country. Its origins were much humbler. On 31 December 1600, a group of merchants who had incorporated themselves into the East India Company were given monopoly privileges on all trade with the East Indies. The Company’s ships first arrived in India, at the port of Surat, in 1608. Sir Thomas Roe reached the court of the Mughal Emperor, Jahangir, as the emissary of King James I in 1615, and gained for the British the right to establish a factory at Surat. Gradually the British eclipsed the Portugese and over the years they saw a massive expansion of their trading operations in India. Numerous trading posts were established along the east and west coasts of India, and considerable English communities developed around the three presidency towns of Calcutta, Bombay, and Madras. In 1717, the Company achieved its hitherto most notable success when it received a firman or royal dictat from the Mughal Emperor exempting the Company from the payment of custom duties in Bengal.

The Company saw the rise of its fortunes, and its transformation from a trading venture to a ruling enterprise, when one of its military officials, Robert Clive, defeated the forces of the Nawab of Bengal, Siraj-ud-daulah , at the Battle of Plassey in 1757. A few years later the Company acquired the right to collect revenues on behalf of the Mughal Emperor, but the initial years of its administration were calamitous for the people of Bengal. The Company’s servants were largely a rapacious and self-aggrandizing lot, and the plunder of Bengal left the formerly rich province in a state of utter destitution. The famine of 1769-70, which the Company’s policies did nothing to alleviate, may have taken the lives of as many as a third of the population. The Company, despite the increase in trade and the revenues coming in from other sources, found itself burdened with massive military expenditures, and its destruction seemed imminent. State intervention put the ailing Company back on its feet, and Lord North’s India Bill, also known as the Regulating Act of 1773, provided for greater parliamentary control over the affairs of the Company, besides placing India under the rule of a Governor-General.

The first Governor-General of India was Warren Hastings. Under his dispensation, the expansion of British rule in India was pursued vigorously, and the British sought to master indigenous systems of knowledge. Hastings remained in India until 1784 and was succeeded by Cornwallis, who initiated the Permanent Settlement, whereby an agreement in perpetuity was reached with zamindars or landlords for the collection of revenue. For the next fifty years, the British were engaged in attempts to eliminate Indian rivals, and it is under the administration of Wellesley that British territorial expansion was achieved with ruthless efficiency. Major victories were achieved against Tipu Sultan of Mysore and the Marathas, and finally the subjugation and conquest of the Sikhs in a series of Anglo- Sikh Wars led to British occupation over the entirety of India. In some places, the British practiced indirect rule, placing a Resident at the court of the native ruler who was allowed sovereignty in domestic matters. Lord Dalhousie’s notorious doctrine of lapse, whereby a native state became part of British India if there was no male heir at the death of the ruler, was one of the principal means by which native states were annexed but often the annexation, such as that of Awadh [Oudh] in 1856, was justified on the grounds that the native prince was of evil disposition, indifferent to the welfare of his subjects. The annexation of native states, harsh revenue policies, and the plight of the Indian peasantry all contributed to the Rebellion of 1857-58, referred to previously as the Sepoy Mutiny. In 1858 the East India Company was dissolved, despite a valiant defense of its purported achievements by John Stuart Mill, and the administration of India became the responsibility of the Crown.


Chapters

For a century the India the East India Company was an unusual organisation. Primarily a London-based trading company that worked for the benefit of its shareholders, it governed vast areas of the Indian sub-continent and employed a large military. In order to provide a degree of accountability and combat corruption within the Company the government passed the India Act in 1784. The charters that provided the East India Company with its monopolies on business with India and China were renewed by the British government every 20 years. By the time the India charter came up for renewal in 1813 there were many calling for the liberalisation of trade and the monopoly of 200 years was finally ended. Thereafter the Company continued to govern in India as an agent of Parliament. The China monopoly similarly ended in 1833. The East India Docks were sold off and the City warehouses auctioned. East India House was demolished in 1861.

In 1857 the Company’s Bengal Army mutinied, leading to a general uprising in India. The savage war lasted for two years, after which Parliament decided it was time for a change in the governance of the sub-continent. The East India was stripped of its administrative powers and replaced by the British Raj, managed from the magnificent new India Office in Whitehall. Queen Victoria was given the title of Empress of India and the Company’s forces became the British Indian Army.

During its near 260-year existence the Honourable East India Company – often called ‘John Company’ – went through four phases. First it brought spices directly from the Far East. In its second phase it revolutionised the fabric industry, bringing cheap, quality cottons and silks to Britain. Next it changed the drinking habits of the nation, with tea from China. Finally, it ceased to be a commercial operation but continued as the administrator of large parts of the Indian sub-continent. At its best it was highly-efficient and the world’s largest trading organisation, directly employing 4,000 workers in London alone. Yet the large-scale corruption and its voracious appetite for excessive profits without accountability led to the plundering of the Indian economy and the near-enslavement of the native people, and opium addiction of huge numbers of Chinese. To this day, Bengal, once one of the wealthiest regions of the world, remains ones of its poorest.

Sources include: Nick Robins ‘The Corporation That Changed The World Roger Williams ‘London’s Lost Global Giant’ Sir Joseph Broodbank ‘History of the Port of London’ Fiona Rule ‘London’s Docklands’ Ian Friel ‘Maritime History of Britain and Ireland’ Samuel Pepys diaries Daniel Defoe ‘A Tour Through The Whole Island of Great Britain John Keay ‘A History of India’.


Powis Castle and Garden

Robert's eldest son, Edward Clive, inherited his father's fortune but was in want of status and a wife. Henrietta Herbert, eldest daughter of the Earl of Powis, had a prestigious name, however the family was in serious debt. Their marriage in 1784 was therefore a welcome occasion for both. The couple would travel to India together during Edward's posting as Governor of Madras, and return home with a large collection of Indian objects. These they installed at Powis Castle and now make up the core collection of the Clive Museum.


The victory of the British in the Battle of Plassey laid the foundations of the British Empire in India and tied them in slavery for nearly 200 years. The significance of this war in the history of India is due to the events that followed it. Therefore, this war is also considered as a decisive battle.

The battle resulted in the 1765 Treaty of Allahabad, in which the Mughal Emperor surrendered sovereignty of Bengal to the British. Lord Robert Clive, the victor at the Plassey, became the first governor of Bengal. Losses: British East India Company, fewer than 1,000 casualties of 8,000 Indian states, 6,000 of 35,000.


East India Company , The A History

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