East India Company

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. 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.

Formation

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.

Early voyages to the East Indies

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.

Forming a monopoly

The prosperity that the officers of the company enjoyed allowed them to return to Britain and establish sprawling estates and businesses, and to obtain political power, such as seats in the House of Commons. Ship captains sold their appointments to successors for up to £500. As recruits aimed to return to Britain wealthy by securing Indian money, their loyalties to their homeland increased.

The company developed a lobby in the English parliament. Pressure from ambitious tradesmen and former company associates (pejoratively termed Interlopers by the company), who wanted to establish private trading firms in India, led to the passing of the deregulating act in 1694.

This act allowed any English firm to trade with India, unless specifically prohibited by an Act of Parliament, thereby annulling the charter that had been in force for almost 100 years. When the East India Company Act 1697 (9 Will. 3. c. 44) was passed in 1697, a new "parallel" East India Company (officially titled the English Company Trading to the East Indies) was floated under a state-backed indemnity of £2 million. The powerful stockholders of the old company quickly subscribed a sum of £315,000 in the new concern, and dominated the new body. The two companies wrestled with each other for some time, both in England and in India, for a dominant share of the trade.

It quickly became evident that, in practice, the original company faced scarcely any measurable competition. The companies merged in 1708, by a tripartite indenture involving both companies and the state, with the charter and agreement for the new United Company of Merchants of England Trading to the East Indies being awarded by Sidney Godolphin, 1st Earl of Godolphin. Under this arrangement, the merged company lent a sum of £3,200,000 to the Treasury, in return for exclusive privileges for the next three years, after which the situation was to be reviewed.

A constant battle between the company lobby and Parliament followed for decades. The company sought a permanent establishment, while Parliament would not willingly allow it greater autonomy and so relinquish the opportunity to exploit the company's profits. In 1712, the East India Company Act 1711 was passed, which renewed the status of the company, though the debts were repaid. By 1720, 15% of British imports were from India, almost all passing through the company, which reasserted the influence of the company lobby. The licence was prolonged until 1766 by yet another act in 1730.

Basis for the monopoly

The Seven Years' War (1756–1763) resulted in the defeat of the French forces, limited French imperial ambitions, and stunted the influence of the Industrial Revolution in French territories. Robert Clive, the Governor-General, led the company to a victory against Joseph François Dupleix, the commander of the French forces in India, and recaptured Fort St George from the French. The company took this respite to seize Manila in 1762.

By the Treaty of Paris, France regained the five establishments captured by the British during the war (Pondichéry, Mahe, Karaikal, Yanam and Chandernagar) but was prevented from erecting fortifications and keeping troops in Bengal (art. XI). Elsewhere in India, the French were to remain a military threat, particularly during the War of American Independence, and up to the capture of Pondichéry in 1793 at the outset of the French Revolutionary Wars without any military presence. Although these small outposts remained French possessions for the next two hundred years, French ambitions on Indian territories were effectively laid to rest, thus eliminating a major source of economic competition for the company.

In May 1772 the EIC stock price rose significantly. In June Alexander Fordyce lost £300,000 shorting EIC stock, leaving his partners liable for an estimated £243,000 in debts. As this information became public, 20–30 banks across Europe collapsed during the British credit crisis of 1772–1773. In India alone, the company had bill debts of £1.2 million. It seems that EIC directors James Cockburn and George Colebrooke were "bulling" the Amsterdam market during 1772. The root of this crisis in relation to the East India Company came from the prediction by Isaac de Pinto that "peace conditions plus an abundance of money would push East Indian shares to exorbitant heights".

In September the company took out a loan from the Bank of England, to be repaid from the sale of goods later that month. But with buyers scarce, most of the sale had to be postponed, and when the loan fell due, the company's coffers were empty. On October 29, the bank refused to renew the loan. That decision set in motion a chain of events that made the American Revolution inevitable. The East India Company had eighteen million pounds of tea sitting in British warehouses. A huge amount of tea as assets which were lying unsold. Selling it in a hurry would do wonders for its finances.

Disestablishment

In the aftermath of the Indian Rebellion of 1857 and under the provisions of the Government of India Act 1858, the British Government nationalised the company. The British government took over its Indian possessions, its administrative powers and machinery, and its armed forces.

The company had already divested itself of its commercial trading assets in India in favour of the UK government in 1833, with the latter assuming the debts and obligations of the company, which were to be serviced and paid from tax revenue raised in India. In return, the shareholders voted to accept an annual dividend of 10.5%, guaranteed for forty years, likewise to be funded from India, with a final pay-off to redeem outstanding shares. The debt obligations continued beyond dissolution and were only extinguished by the UK government during the Second World War.

The company remained in existence in vestigial form, continuing to manage the tea trade on behalf of the British Government (and the supply of Saint Helena) until the East India Stock Dividend Redemption Act 1873 came into effect, on 1 January 1874. This act provided for the formal dissolution of the company on 1 June 1874, after a final dividend payment and the commutation or redemption of its stock. The Times commented on 8 April 1873:

It accomplished a work such as in the whole history of the human race no other trading Company ever attempted, and such as none, surely, is likely to attempt in the years to come.

Establishments in the United Kingdom

The company's headquarters in London, from which much of India was governed, was East India House in Leadenhall Street. After occupying premises in Philpot Lane from 1600 to 1621; in Crosby House, Bishopsgate from 1621 to 1638; and in Leadenhall Street from 1638 to 1648, the company moved into Craven House, an Elizabethan mansion in Leadenhall Street. The building had become known as East India House by 1661. It was completely rebuilt and enlarged in 1726–1729 and further significantly remodelled and expanded in 1796–1800. It was finally vacated in 1860 and demolished in 1861–1862. The site is now occupied by the Lloyd's building.

In 1607, the company decided to build its own ships and leased a yard on the River Thames at Deptford. By 1614, the yard having become too small, an alternative site was acquired at Blackwall: the new yard was fully operational by 1617. It was sold in 1656, although for some years East India Company ships continued to be built and repaired there under the new owners. The East India Docks Act 1803 (43 Geo. 3. c. cxxvi), promoted by the East India Company, established the East India Dock Company to establish a new set of docks (the East India Docks) primarily for the use of ships trading with India. The existing Brunswick Dock, part of the Blackwall Yard site, became the Export Dock; while a new Import Dock was built to the north. In 1838 the East India Dock Company merged with the West India Dock Company. The docks were taken over by the Port of London Authority in 1909 and closed in 1967.

The East India College was founded in 1806 as a training establishment for "writers" (i.e. clerks) in the company's service. It was initially located in Hertford Castle, but moved in 1809 to purpose-built premises at Hertford Heath, Hertfordshire. In 1858 the college closed; but in 1862 the buildings reopened as a public school, now Haileybury and Imperial Service College.

The East India Company Military Seminary was founded in 1809 at Addiscombe, near Croydon, Surrey, to train young officers for service in the company's armies in India. It was based in Addiscombe Place, an early 18th-century mansion. The government took it over in 1858 and renamed it the Royal Indian Military College. In 1861 it was closed, and the site was subsequently redeveloped.

In 1818, the company entered into an agreement by which those of its servants who were certified insane in India might be cared for at Pembroke House, Hackney, London, a private lunatic asylum run by Dr George Rees until 1838, and thereafter by Dr William Williams. The arrangement outlasted the company itself, continuing until 1870, when the India Office opened its own asylum, the Royal India Asylum, at Hanwell, Middlesex.

Symbols

Flags

The English East India Company flag changed over time, with a canton based on the flag of the contemporary Kingdom, and a field of 9-to-13 alternating red and white stripes.

From 1600, the canton consisted of a St George's Cross representing the Kingdom of England. With the Acts of Union 1707, the canton was changed to the new Union Flag—consisting of an English St George's Cross combined with a Scottish St Andrew's cross—representing the Kingdom of Great Britain. After the Acts of Union 1800 that joined Ireland with Great Britain to form the United Kingdom of Great Britain and Ireland, the canton of the East India Company flag was altered accordingly to include a Saint Patrick's Saltire. There has been much debate about the number and order of stripes in the field of the flag. Historical documents and paintings show variations from 9-to-13 stripes, with some images showing the top stripe red and others showing it white. At the time of the American Revolution, the East India Company flag was nearly identical to the Continental Union Flag. Historian Charles Fawcett argued that the East India Company Flag inspired the Stars and Stripes of America.

Coat of arms

The East India Company's original coat of arms was granted in 1600. The blazon of the arms is as follows:

Arms: Azure, three ships with three masts, rigged and under full sail, the sails, pennants and ensigns Argent, each charged with a cross Gules; on a chief of the second a pale quarterly Azure and Gules, on the 1st and 4th a fleur-de-lis or, on the 2nd and 3rd a leopard or, between two roses Gules seeded Or barbed Vert.

Crest: A sphere without a frame, bounded with the Zodiac in bend Or, between two pennants flottant Argent, each charged with a cross Gules, over the sphere the words Deus indicat (Latin: God Indicates).

Supporters: Two sea lions Or, the tails proper.

Motto: Deo ducente nil nocet (Latin: Where God Leads, Nothing Harms)

The East India Company's later arms, granted in 1698, were:

Arms: Argent a cross Gules; in the dexter chief quarter an escutcheon of the arms of France and England quarterly, the shield ornamentally and regally crowned Or.

Crest: A lion rampant guardant Or holding between the forepaws a regal crown proper.

Supporters: Two lions rampant guardant Or, each supporting a banner erect Argent, charged with a cross Gules.

Motto: Auspicio regis et senatus angliæ (Latin: Under the auspices of the King and the Parliament of England).

Merchant mark

When the East India Company was chartered in 1600, it was still customary for individual merchants or members of companies such as the Company of Merchant Adventurers to have a distinguishing merchant's mark which often included the mystical Sign of Four and served as a trademark. The East India Company's merchant mark consisted of a Sign of Four atop a heart within which was a saltire between the lower arms of which were the initials "EIC". This mark was a central motif of the East India Company's coinage and forms the central emblem displayed on the Scinde Dawk postage stamps.

Ships

Ships of the East India Company were called East Indiamen or simply "Indiamen". Their names were sometimes prefixed with the initials "HCS", standing for "Honourable Company's Service" or "Honourable Company's Ship", such as HCS Vestal (1809) and HCS Intrepid (1780).

During the French Revolutionary and Napoleonic Wars, the East India Company arranged for letters of marque for its vessels such as Lord Nelson. This was not so that they could carry cannon to fend off warships, privateers, and pirates on their voyages to India and China (that they could do without permission) but so that, should they have the opportunity to take a prize, they could do so without being guilty of piracy. Similarly, Earl of Mornington, an East India Company packet ship of only six guns, also sailed under a letter of marque.

In addition, the company had its own navy, the Bombay Marine, equipped with warships such as Grappler. These vessels often accompanied vessels of the Royal Navy on expeditions, such as the Invasion of Java. At the Battle of Pulo Aura, which was probably the company's most notable naval victory, Nathaniel Dance, Commodore of a convoy of Indiamen and sailing aboard the Warley, led several Indiamen in a skirmish with a French squadron, driving them off. Some six years earlier, on 28 January 1797, five Indiamen, Woodford, under Captain Charles Lennox, Taunton-Castle, Captain Edward Studd, Canton, Captain Abel Vyvyan, Boddam, Captain George Palmer, and Ocean, Captain John Christian Lochner, had encountered Admiral de Sercey and his squadron of frigates. On this occasion the Indiamen succeeded in bluffing their way to safety, and without any shots even being fired. Lastly, on 15 June 1795, General Goddard played a large role in the capture of seven Dutch East Indiamen off St Helena. East Indiamen were large and strongly built, and when the Royal Navy was desperate for vessels to escort merchant convoys, it bought several of them to convert to warships. Earl of Mornington became HMS Drake. Other examples include:

Their design as merchant vessels meant that their performance in the warship role was underwhelming, and the Navy converted them to transports. The amount of trade and shipping between Britain and company ports in India was considerable. For instance, in 1844, 534 ships (247,087 tons) arrived in Britain, and 540 vessels (239,368 tons) left UK ports for British India.

Records

Unlike all other British Government records, the records from the East India Company (and its successor the India Office) are not in The National Archives at Kew, London, but are held by the British Library in London as part of the Asia, Pacific and Africa Collections. The catalogue is searchable online in the Access to Archives catalogues. Many of the East India Company records are freely available online under an agreement that the Families in British India Society has with the British Library. Published catalogues exist of East India Company ships' journals and logs, 1600–1834; accompanying catalogues also cover the company's daughter institutions, including the East India Company College, Haileybury, and Addiscombe Military Seminary.

The Asiatic Journal and Monthly Register for British India and its Dependencies, first issued in 1816, was sponsored by the East India Company, and includes much information relating to its work.

Early governors

1600–1601: Sir Thomas Smythe (first governor)

1601–1602: Sir John Watts

1602–1603: Sir John Hart

1603–1606: Sir Thomas Smythe (re-elected)

1606–1607: Sir William Romney

1607–1621: Sir Thomas Smythe (re-elected)

1621–1624: Sir William Halliday

1624–1638: Sir Maurice (Morris) Abbot

1638–1641: Sir Christopher Clitherow