Trade route
English East Indiamen sailed from London round the Cape to the Company's factories at Surat and Bombay, Madras and Calcutta, and from 1699 on to Canton for tea. Homeward ships watered at the Company's island of St Helena. Cotton cloth, silk, saltpetre, indigo and tea filled the holds, much of it bought with silver.
The East India Company (EIC) was an English, and later British, joint-stock company that was founded in 1600 and dissolved in 1874. It was formed for Indian Ocean trade, initially with the East Indies (which included the Indian subcontinent and Southeast Asia), and later with East Asia. The company gained control of large parts of the Indian subcontinent and Saint Helena prior to 1834. At its peak, the company was the largest corporation in the world by various measures and had its own armed forces in the form of the company's three presidency armies, totalling about 260,000 soldiers, twice the size of the British Army at certain times.
Originally chartered as the "Governor and Company of Merchants of London Trading into the East-Indies", the company rose to account for half of the world's trade during the mid-1700s and early 1800s, particularly in basic commodities including cotton, silk, indigo dye, sugar, salt, spices, saltpetre, tea, gemstones, and later opium. The company also initiated the beginnings of the British Raj in the Indian subcontinent.
The company eventually came to rule large areas of the Indian subcontinent, exercising military power and assuming administrative functions. Under this government-like rule, the company used torture to extract taxes, reduced much of the population to poverty and enacted policies that resulted in the Great Bengal famine of 1770, during which an estimated amount of 10 million people starved to death.
Company-ruled areas in the region gradually expanded after the Battle of Plassey in 1757, and by 1858 most of modern India, Pakistan and Bangladesh, along with Lower Burma, was either ruled by the company or princely states closely tied to the company by treaties. Following the Indian Rebellion of 1857, the Government of India Act 1858 led to the British Crown assuming direct control of present-day Bangladesh, India, Pakistan, and Myanmar in the form of the new British Raj. The company subsequently experienced recurring problems with its finances, despite frequent government intervention. The company was dissolved in 1874 under the terms of the East India Stock Dividend Redemption Act enacted one year earlier, as the Government of India Act had by then rendered it vestigial, powerless, and obsolete. The official government machinery of the British Empire had assumed its governmental functions and absorbed its armies.
In 1577, Francis Drake set out on an expedition from England to plunder Spanish settlements in South America in search of gold and silver. Sailing in the Golden Hind, he achieved this, and then sailed across the Pacific Ocean in 1579, known then only to the Spanish and Portuguese. Drake eventually sailed into the East Indies and came across the Moluccas, also known as the Spice Islands, and met Sultan Babullah. In exchange for linen, gold, and silver, the English obtained a large haul of exotic spices, including cloves and nutmeg. Drake returned to England in 1580 and became a hero; his circumnavigation raised an enormous amount of money for England's coffers, and investors received a return of some 5,000 per cent. Thus started an important element in the eastern design during the late sixteenth century.
With England at war with Spain and Portugal in 1585, trade was now cut off, and Queen Elizabeth I resorted to privateering. Soon after Thomas Cavendish's circumnavigation in 1587 and the Spanish Armada's defeat the following year, the captured Spanish and Portuguese ships and cargoes laid the foundation for further privateering to even more distant zones of the conflict. London merchants presented a petition to Elizabeth I for permission to sail to the Indian Ocean, and beyond with the Spice Islands of particular interest. The aim was to deliver a decisive blow to the Spanish and Portuguese monopoly of far-eastern trade. Elizabeth granted her permission and in 1591, James Lancaster in the Bonaventure with two other ships, financed by the Levant Company, sailed from England around the Cape of Good Hope to the Arabian Sea, becoming the first English expedition to reach India that way. Having sailed around Cape Comorin to the Malay Peninsula, they preyed on Spanish and Portuguese ships there before returning to England in 1594.
The biggest prize that galvanised English trade was the seizure of a large Portuguese carrack, the Madre de Deus, by Walter Raleigh and the Earl of Cumberland at the Battle of Flores on 13 August 1592. When she was brought in to Dartmouth she was the largest vessel ever seen in England and she carried chests of jewels, pearls, gold, silver coins, ambergris, cloth, tapestries, pepper, cloves, cinnamon, nutmeg, benjamin (a highly aromatic balsamic resin used for perfumes and medicines), red dye, cochineal and ebony. Equally valuable was the ship's rutter (mariner's handbook) containing vital information on the China, India, and Japan trade routes.
In 1596, three more English ships sailed east but all were lost at sea. A year later however saw the arrival of Ralph Fitch, an adventurer merchant who, with his companions, had made a remarkable nine year overland journey to Mesopotamia, the Persian Gulf, the Indian Ocean, India and Southeast Asia. Fitch was consulted on Indian affairs and gave even more valuable information to Lancaster.
In 1599, a group of prominent merchants and explorers met to discuss a potential East Indies venture under a royal charter. Besides Fitch the group included Stephen Soame, then Lord Mayor of London; Thomas Smythe, a powerful London politician and administrator; Richard Hakluyt, writer and proponent of English colonisation of the Americas; and several other sea-farers who had served with Drake and Raleigh.
On 22 September, the group stated their intention "to venture in the pretended voyage to the East Indies (the which it may please the Lord to prosper)" and to themselves invest £30,133 (over £4,000,000 in today's money). Two days later, the "Adventurers" reconvened and resolved to apply to the Queen for support of the project. Although their first attempt had not been completely successful, they sought the Queen's unofficial approval to continue. They bought ships for the venture and increased their investment to £68,373.
They convened again a year later, on 31 December 1600, and this time they succeeded; the Queen responded favourably to a petition by George, Earl of Cumberland and 218 others, including James Lancaster, Sir John Harte, Sir John Spencer (both of whom had been Lord Mayor of London), the adventurer Edward Michelborne, the nobleman William Cavendish and other aldermen and citizens. She granted her charter to their corporation named Governor and Company of Merchants of London trading into the East Indies. For a period of fifteen years, the charter awarded the company a monopoly on English trade with all countries east of the Cape of Good Hope and west of the Straits of Magellan. Any traders there without a licence from the company were liable to forfeiture of their ships and cargo (half of which would go to the Crown and half to the company), as well as imprisonment at the "royal pleasure".
The charter named Thomas Smythe as the first governor of the company, and 24 directors (including James Lancaster) or "committees", who made up a Court of Directors. They, in turn, reported to a Court of Proprietors, who appointed them. Ten committees reported to the Court of Directors. By tradition, business was initially transacted at the Nags Head Inn, opposite St Botolph's church in Bishopsgate, before moving to East India House on Leadenhall Street.
Sir James Lancaster commanded the first East India Company voyage in 1601 aboard Red Dragon. The following year, whilst sailing in the Malacca Straits, Lancaster took the rich 1,200 ton Portuguese carrack Sao Thome carrying pepper and spices. The booty enabled the voyagers to set up two "factories" (trading posts) – one at Bantam on Java and another in the Moluccas (Spice Islands) before leaving. On return to England in 1603, they learned of Elizabeth's death, but Lancaster was knighted by the new king, James I, on account of the voyage's success. By this time, the war with Spain had ended but the company had profitably breached the Spanish-Portuguese duopoly; new horizons opened for the English.
In March 1604, Sir Henry Middleton commanded the company's second voyage. General William Keeling, a captain during the second voyage, led the third voyage aboard Red Dragon from 1607 to 1610 along with Hector under Captain William Hawkins and Consent under Captain David Middleton.
Early in 1608, Alexander Sharpeigh was made captain of the company's Ascension, and general or commander of the fourth voyage. Thereafter, two ships, Ascension and Union (captained by Richard Rowles), sailed from Woolwich on 14 March 1608. This expedition was lost.
Initially, the company struggled in the spice trade because of competition from the Dutch East India Company. This rivalry led to military skirmishes, with each company establishing fortified trading posts, fleets, and alliances with local rulers. The Dutch, better financed and supported by their government, gained the upper hand by establishing a stronghold in the spice islands (now Indonesia), enforcing a near-monopoly through aggressive policies that eventually drove the EIC to seek trade opportunities in India instead. The English company opened a factory (trading post) in Bantam on Java on its first voyage, and imports of pepper from Java remained an important part of the company's trade for twenty years.
English traders frequently fought their Dutch and Portuguese counterparts in the Indian Ocean. The company achieved a major victory over the Portuguese in the Battle of Swally in 1612, at Suvali in Surat. The company decided to explore the feasibility of a foothold in mainland India, with official sanction from both Britain and the Mughal Empire, and requested that the Crown launch a diplomatic mission.
Company ships docked at Surat in Gujarat in 1608. The company's first temporary factory on Indian soil was established in 1605 at Masulipatnam on the Andhra Coast of the Bay of Bengal, and its First Permanent Factory was established in 1613 at Surat . The high profits reported by the company after landing in India initially prompted James I to grant subsidiary licences to other trading companies in England. However, in 1609, he renewed the East India Company's charter for an indefinite period, with the proviso that its privileges would be annulled if trade was unprofitable for three consecutive years.
In 1615, James I instructed Sir Thomas Roe to visit the Mughal Emperor Nur-ud-din Salim Jahangir (r. 1605–1627) to arrange for a commercial treaty that would give the company exclusive rights to reside and establish factories in Surat and other areas. In return, the company offered to provide the Emperor with goods and rarities from the European market. This mission was highly successful, and Jahangir sent a letter to James through Sir Thomas Roe:
Upon which assurance of your royal love I have given my general command to all the kingdoms and ports of my dominions to receive all the merchants of the English nation as the subjects of my friend; that in what place soever they choose to live, they may have free liberty without any restraint; and at what port soever they shall arrive, that neither Portugal nor any other shall dare to molest their quiet; and in what city soever they shall have residence, I have commanded all my governors and captains to give them freedom answerable to their own desires; to sell, buy, and to transport into their country at their pleasure. For confirmation of our love and friendship, I desire your Majesty to command your merchants to bring in their ships of all sorts of rarities and rich goods fit for my palace; and that you be pleased to send me your royal letters by every opportunity, that I may rejoice in your health and prosperous affairs; that our friendship may be interchanged and eternal.
— Nuruddin Salim Jahangir, Letter to James I.
The company, which benefited from imperial patronage, soon expanded its commercial trading operations. It eclipsed the Portuguese Estado da Índia, which had established bases in Goa, Chittagong, and Bombay; Portugal later ceded Bombay to England as part of the dowry of Catherine of Braganza on her marriage to King Charles II. The East India Company also launched a joint attack with the Dutch United East India Company (VOC) on Portuguese and Spanish ships off the coast of China that helped secure EIC ports in China, independently attacking the Portuguese in the Persian Gulf Residencies primarily for political reasons. The company established trading posts in Surat (1619) and Madras (1639). By 1647, the company had 23 factories and settlements in India, and 90 employees. Many of the major factories became some of the most populated and commercially influential cities in Bengal, including the walled forts of Fort William in Bengal, Fort St George in Madras, and Bombay Castle.
The first century of the Company, despite its original profits coming primarily from piracy in the Spice Islands between competing European powers and their companies, saw the East India Company change focus after suffering a major setback in 1623 when their factory in Amboyna in the Moluccas was attacked by the Dutch. This compelled the company to formally abandon their efforts in the Spice Islands, and turn their attention to Bengal where, by this time, they were making steady, if less exciting, profits. After gaining the indifferent patronage of the Mughal Empire, whose cities were "the megacities of their time" and whose wealth was unrivalled outside of Asia in the 17th century, the Company's first century in the Mughal-ruled areas was spent cultivating their relationship with the Mughal Dynasty, and conducting peaceful trade at great profit. At first, it should be said the EIC was drawn into the Mughal system, acting as a kind of vassal to Mughal authority in present-day Bangladesh: it was from this position that the Company would ultimately outplay and outmanoeuvre all competing powers in the region, to eventually use that very system to hold power itself.
Text from the Wikipedia article “East India Company”, available under CC BY-SA 4.0.