East India Company

The East India Company (EIC), also known as the Honourable East India Company (HEIC), East India Trading Company (EITC), the English East India Company or (after 1707) the British East India Company, and informally known as John Company, Company Bahadur, or simply The Company was an English and later British joint-stock company founded in 1600. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southeast Asia), and later with Qing China. The company seized control of large parts of the Indian subcontinent, colonised parts of Southeast Asia and Hong Kong after the First Opium War, and maintained trading posts and colonies in the Persian Gulf Residencies.

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, and opium. The company also ruled the beginnings of the British Empire in India.

The company eventually came to rule large areas of India, exercising military power and assuming administrative functions. Company rule in India effectively began in 1757 after the Battle of Plassey and lasted until 1858 when, following the Indian Rebellion of 1857, the Government of India Act 1858 led to the British Crown assuming direct control of India in the form of the new British Raj.

Despite frequent government intervention, the company had recurring problems with its finances. The company was dissolved in 1874 as a result of the East India Stock Dividend Redemption Act passed one year earlier, as the Government of India Act had by then rendered it vestigial, powerless, and obsolete. The official government machinery of British Raj had assumed its governmental functions and absorbed its armies.

History

Origins

In 1577 Francis Drake set out on an expedition from England to plunder Spanish settlements in South America in search of gold and silver. In the Golden Hind he achieved this but also 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 with Sultan Babullah. In return for linen, gold and silver, a large haul of exotic spices including cloves and Nutmeg were traded – the English initially not knowing of their huge value. Drake returned to England in 1580 and became a celebrated hero; his eventual circumnavigation raised an enormous amount of money for England’s coffers, and investors received a return of some 5000 per cent. Thus started what was an important element in the eastern design during the late sixteenth century.

Soon after the defeat of the Spanish Armada in 1588, the captured Spanish and Portuguese ships with their cargoes enabled English voyagers to potentially travel the globe in search of riches. London merchants presented a petition to Queen Elizabeth I for permission to sail to the Indian Ocean. The aim was to deliver a decisive blow to the Spanish and Portuguese monopoly of Far Eastern Trade. Elizabeth granted her permission and on 10 April 1591 James Lancaster in the Bonaventure with two other ships sailed from Torbay around the Cape of Good Hope to the Arabian Sea on one of the earliest English overseas Indian expeditions. 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 capture that galvanised English trade was the seizure of a large Portuguese carrack, the Madre de Deus by Sir 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 that had been seen in England and her cargo consisted of chests filled with jewels, pearls, gold, silver coins, ambergris, cloth, tapestries, pepper, cloves, cinnamon, nutmeg, benjamin (a tree that produces frankincense), red dye, cochineal and ebony. Equally valuable was the ship’s rutter (mariner’s handbook) containing vital information on the China, India, and Japan trades. These riches aroused the English to engage in this opulent commerce.

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, along with his companions, had made a remarkable fifteen-year overland journey to Mesopotamia, the Persian Gulf, the Indian Ocean, India and Southeast Asia. Fitch was then consulted on the Indian affairs and gave even more valuable information to Lancaster.

Formation

On 22 September 1599, a group of merchants met and stated their intention “to venture in the pretended voyage to the East Indies (the which it may please the Lord to prosper), and the sums that they will adventure”, committing £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 nonetheless sought the Queen’s unofficial approval to continue. They bought ships for their venture and increased their capital to £68,373.

The Adventurers convened again a year later, on 31 December, and this time they succeeded; the Queen granted a Royal Charter to “George, Earl of Cumberland, and 215 Knights, Aldermen, and Burgesses” under the name, Governor and Company of Merchants of London trading into the East Indies. For a period of fifteen years, the charter awarded the newly formed 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 in breach of the charter without a licence from the company were liable to forfeiture of their ships and cargo (half of which went to the Crown and the other half to the company), as well as imprisonment at the “royal pleasure”.

The governance of the company was in the hands of one governor and 24 directors or “committees”, who made up the Court of Directors. They, in turn, reported to the Court of Proprietors, which appointed them. Ten committees reported to the Court of Directors. According to tradition, business was initially transacted at the Nags Head Inn, opposite St Botolph’s church in Bishopsgate, before moving to India House in Leadenhall Street.

Early voyages to the East Indies

Sir James Lancaster commanded the first East India Company voyage in 1601 aboard the Red Dragon. After capturing a rich 1,200 ton Portuguese carrack in the Malacca Straits the trade from the booty enabled the voyagers to set up two “factories” – one at Bantam on Java and another in the Moluccas (Spice Islands) before leaving. They returned to England in 1603 to learn of Elizabeth’s death but Lancaster was Knighted by the new King James I. By this time, the war with Spain had ended but the company had successfully and profitably breached the Spanish and Portuguese duopoly, with new horizons opened for the English.

In March 1604, Sir Henry Middleton commanded the second voyage. General William Keeling, a captain during the second voyage, led the third voyage aboard the Red Dragon from 1607 to 1610 along with the Hector under Captain William Hawkins and the Consent under Captain David Middleton.

Early in 1608 Alexander Sharpeigh was appointed 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 would be lost.