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East India Company

(1600 - 1874)

Great Britain was the last of the three great sea-faring nations to break into the Chinese and East Indian trade routes. This was due in part to the unsteady ascension to the throne of the Stuarts and the Cromwellian Civil War. The first samples of tea reached England between 1652 and 1654. Tea quickly proved popular enough to replace ale as the national drink of England. R. L. Wickham, in charge of the English East India company's agency at Firando, Japan, achieved the distinction of supplying the first reference to tea by an Englishman. In a letter, dated June 27, 1615, to the company's agent at Macao, Wickham said: "I pray you to buy for me a pot of the best chaw." This is probably the earliest pidgin English for the Chinese ch'a. King Charles II had married, while in exile, the Portuguese Infanta Catherine de Braganza (1662). Charles himself had grown up in the Dutch capital. As a result, both he and his Portuguese bride were confirmed tea drinkers. When the monarchy was re-established, the two rulers brought this foreign tea tradition to England with them.

East India CompanyOn December 31, 1600 Elizabeth I had founded the John company for the purpose of promoting Asian trade. When Catherine de Braganza married Charles she brought as part of her dowry the territories of Tangier and Bombay. Suddenly, the John Company had a base of operations. The John Company was granted the unbelievably wide monopoly of all trade east of the Cape of Good Hope and west of Cape Horn with the formal restriction that it might not contest the prior trading rights of "any Christian prince." The company was managed by a governor and 24 directors chosen from its stockholders. And its power was based on the importation of tea.
In 1601, the first voyage of the East India Company set out under Captain James Lancaster and the ships the Dragon, the Hector, the Susan, and the Ascension. The fleet arrived in Aceh, in Sumatra, in 1602. Since the Dutch had already formed exclusive trading alliances, Lancaster resorted to piracy to bring back pepper, trading South India cottons and textiles in Java and Sumatra. The lack of success in the first EIC company expedition indicates that more funds were sorely needed to contest the Dutch dominance, and the East India Company would remain unsuccessful for the next twenty years because of the Dutch. In next voyages the company penetrated as far as Japan, and in 1610 and 1611 its first factories, or trading posts, were established in India in the provinces of Madras and Bombay. Under a perpetual charter granted in 1609 by King James I, the company began to compete with the Dutch trading monopoly in the Malay Archipelago, but after the massacre of Amboina the company conceded to the Dutch the area that became known as the Netherlands East Indies. Its armed merchantmen, however, continued sea warfare with Dutch, French, and Portuguese competitors.
England's first visit to China was made by John Weddell in 1637: like almost all of the EIC attempts, it was relatively unsuccessful. The Manchu Emperor opened his ports to foreign trade in 1685. The first trade base was Amoy, but later Guangzhou (Canton) became the center of commerce, especially the acquisition of tea. Although silk and chinaware factories were located many miles from Canton, it was the only place where foreign contact was permitted. Foreign merchants were allowed to establish factories along the Canton waterfronts. The main imports from China were tea, silk, and, initially, porcelain.
In 1650 and 1655 the company absorbed rival companies that had been incorporated under the Commonwealth and Protectorate by Lord Protector Oliver Cromwell. In 1657 Cromwell ordered it reorganized as the sole joint-stock company with rights to the Indian trade. During the reign of Charles II the company acquired sovereign rights in addition to its trading privileges. In 1689, with the establishment of administrative districts called presidencies in the Indian provinces of Bengal, Madras, and Bombay, the company began its long rule in India. It was continually harassed by traders who were not members of the company and were not licensed by the Crown to trade. In 1698, under a parliamentary ruling in favor of free trade, these private newcomers were able to set up a new company, called the New Company or English Company. The John India Company, however, bought control of this new company, and in 1702 an act of Parliament amalgamated the two as "The United Company of Merchants of England Trading to the East Indies." The charter was renewed several times in the 18th century, each time with financial concessions to the Crown. Their re-drafted charts gave the new East India Company a complete and total trade monopoly on all commerce in China and India. As a result, the price of tea was kept artificially high, leading to later global difficulties for the British crown. This company was organized into a court of 24 directors who worked through committees. The shareholders, dubbed the Court of Proprietors, annually elected these directors. When the company acquired control of Bengal in 1757, Indian policy was until 1773 influenced by shareholders' meetings, where votes could be bought by the purchase of shares. This led to government intervention. The Regulating Act of 1773 and Pitt's India Act of 1784 established government control of political policy through a regulatory board responsible to Parliament. Thereafter, the company gradually lost both commercial and political control, and its commercial monopoly was broken in 1813. From 1834 it was merely a managing agency for the British government of India. After the Indian Mutiny in 1857 it ceased to exist all together in 1873.
The victories of Robert Clive, a company official, over the French at Arcot in 1751 and at Plassey in 1757 made the company the dominant power in India. All formidable European rivalry vanished with the defeat of the French at Pondicherry in 1761.he 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. In 1784 the India Act created a department of the British government to exercise political, military, and financial control over the Indian affairs of the company, and during the next half century British control was extended over most of the subcontinent.

In 1813 the company's monopoly of the Indian trade was abolished, and in 1833 it lost its China trade monopoly. Its annual dividends of 10.5 percent were made a fixed charge on Indian revenues. The company continued its administrative functions until the Sepoy Rebellion (1857-1859). In 1858, by the Act for the Better Government of India, the Crown assumed all governmental responsibilities held by the company, and its 24,000-man military force was incorporated into the British army. The company was dissolved on January 1, 1874, when the East India Stock Dividend Redemption Act came into effect.

 



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