Page 2. British East India Company
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British East India Company
The (British) East India Company was a private company originally established under another name in the year 1600 CE for the purpose of trading with India and other Asian nations in the lucrative spice and textile trade.
The company's name at registration was 'Company of Merchants of London Trading into the East Indies'. The name went through various changes and we will use the name 'British East India Company' or simply 'the Company' here since the various name changes it went through are confusing.
The then English crown granted the Company a monopoly on all English (later British) trade east of the Cape of Good Hope. 218 subscribers to the new enterprise raised £68,373 - a sum perhaps worth a hundred times that amount today. The company needed ships in order to trade with the east and soon the company had built the largest private fleet in England. Between 1600-1833 the Company made about 4,600 sea voyages from London and grew to become England's (later Britain's) single largest commercial enterprise and a considerable political force.
The Company bought four ships for its first expedition to the Indonesian island of Sumatra. These were the Dragon, Hector, Ascension and Susan. Carrying 500 men and 110 guns the four ships set sail from London in February 1601 under the command of James Lancaster. The journey was hazardous and more than 100 men had died by the time the flotilla rounded the Cape of Good Hope.
It took 16 months for the expedition to reach Sumatra. Pepper was available in neighbouring Java and it was here, at Bantam, that Lancaster set up the Company's first trading post in 1602. Today, Bantam consists of a few ruins and a mosque, but in the 16th Century its kingdom covered most of western Java and Southern Sumatra. All four ships returned safely to England in 1603, their holds full of pepper.
|Dutch Factory at Surat as seen in April 1629. Plagerized / Reproduced by J.A. von Mandelso and labelled 'English factory'|
after an original etching by Pieter van den Broecke (1585-1640), a Dutch cloth merchant in the service of the Dutch East India
Company in Korte Historiael ende Journaelsche Aenteyckeninghe
published in Amsterdam, 1634. The only difference between the Mandelso & Broecke images is the distribution
of people passing in front of the building. Image credit: British Library: 10095.aaa.49, p. 121
|British East India Company Factory in Asia. Back view of a factory with high surrounding walls.|
In the foreground a tank, to the left the cemetery with large tombs. A sepoy sentry stands outside the wall
and an English man sheltered by an umbrella and accompanied by servants is approaching the entrance.
Painting 1790-1800. Image credit: The British Library
The Company called a trading post a 'factory' - a place where factors, or Company representatives lived and traded. Each factory was an enclosed self-contained compound with living quarters, public rooms, warehouses and open yards surrounded by a fence or wall as security. Most employees (called servants) lived communally, eating and living together. A few members of European senior staff were allowed to live in houses outside the enclosures with their wives.
At the time of the company's formation, Northern India was ruled by the Muslim Mughal dynasty. In 1608, a William Hawkins was dispatched to ask the Mughal Emperor Jahangir for permission to set up a trading post or 'factory' in Mughal India. Hawkins was not successful - perhaps because his status was not senior enough for the Mughal emperor. As a result, in 1615, King James I dispatched a royal ambassador, Sir Thomas Roe, to the Mughal court and this time the Company obtained permission to set up a base in Surat.
Surat was the Mughal Empire's most important centre for overseas trade, particularly for textiles. It was the first major Asian port city within reach of the ships rounding the Cape of Good Hope. And it was here that the Company's traders first settled after Sir Thomas Roe's successful diplomatic mission.
The Company's main Asian regional centres, called Presidencies, were at Bantam (Indonesia), Surat, Madras, Bombay and Calcutta. The Presidencies were headed and administered by a President who was often also called a Governor. Each President, supported by a council of experienced men, looked after a number of factories (the trading posts). Communication to and from the Company's headquarters in London was by letter sent by ship. Communication was therefore slow and the governors often acted independently. In India, the Company engaged Indian brokers who were paid a fixed percentage to negotiate and manage contracts with the local craftsmen such as textile weavers. Good brokers had the opportunity to grow quite wealthy. Rustom Maneck of Surat was one such broker.
Indian textiles were in high demand in Europe on account of their quality fabric, intricate designs and fast-dye colours that survived repeated washing without substantial fading. The three main Indian textile production centres were Gujarat, the Madras Coromandel Coast, and Bengal. The cloth or fabric pieces were called piece goods.
|A cloth merchant, seated in his shop, selling chintz|
to a customer, by a Tanjore artist, c.1800
Image credit: The British Library
A popular type of dress and furnishing fabric in England was called chintz, a glazed fabric made of cotton, sometimes called calico, and usually printed with a brightly coloured pattern. Chintz was relatively inexpensive and could be afforded by a growing British middle class. In 1620, the Company imported 50,000 pieces of chintz from India.
The English on their part wanted a market for their home manufactured broadcloth. In 1611 the English took thousands of pieces of Indian textiles by force from Gujarati vessels at the entrance to the Red Sea. Least they be branded as common pirates, the English unloaded their supply of broadcloth on the Gujarati vessels since in their contorted concept of ethics, 'exchange was no robbery' (sic).
The British East India Company grew to become more than a multinational trading and manufacturing company. By the end of the 1600s the Company sought to become independent of local rulers and it developed Bombay into a self administered territory - a corporate state with its own army. The Company's army was at first a defensive force, but it soon aided the Company in an expansion of its territorial possessions which the Company did whenever it sensed weakness on the part of a local ruler. In 1750, when the Mughal Empire was in a state of collapse, regional vassal kings asserted their independence given rise to numerous principalities. The Company successfully played one principality against the other. With each success, it strengthened its army and engaged in further warfare. In 1765, a weakened Mughal emperor Shah Alam II granted the Company the diwani, the provincial rule, of Bengal, Bihar and Orissa (Eastern India). A trading company from England was now responsible for the civil, judicial and revenue administration of India's richest province, Bengal, with some 20 million inhabitants.
It was was not long before that move led to English corporate rule of the entire Indian sub-continent. The British East India Company's political machinings have regrettably becoming the desired model for many multinational companies today.
The British establishment alarmed at the parallel government that now existed in their midst moved to limit the powers of the Company. In 1773, the British parliament passed a Regulating Act making Calcutta the seat of a colonial government under a Governor General. Then in 1784 it passed India Act of 1784 that set up a Parliamentary Board of Commissioners for the Affairs of India. By 1813 the Company's monopoly of Asian trade was limited to China. By 1833 even that was abolished. After the Indian Rebellion of 1857, Parliament passed the Government of India Act 1858, under which the British Crown assumed direct administration of India. The Company itself was finally dissolved on January 1, 1874. After 274 years, the Company's high-rolling days had come to an end.
|Panel 1 Panorama of Surat, a colored aquatint by Alfred Robert Freebairn, 1830|
|Panel 2 Panorama of Surat, a colored aquatint by Alfred Robert Freebairn, 1830|
|Panel 3 Panorama of Surat, a colored aquatint by Alfred Robert Freebairn, 1830|
Transfer of Premier Port Status from Surat to Bombay 1687 CE
The following is a synopsis and short chronology of events related to the early years of the British take-over of Bombay:
- In 1661, the British received the Bombay islands as part of Catherine of Braganza's dowry.
- However, until 1662, the local Portuguese governor do not give up the Bombay islands.
- The islands were administered by an officer of the British crown from 1662 to 1668.
- Since Bombay did not provide the British crown with revenue, it was handed over to the British East India Company, the Company, in 1668.
In 1669, a council of eight members was chosen to assist the Company's President, five of whom were to reside in Surat. While the President was to hold the position of Governor of Surat and Bombay, he would reside at Surat - a condition that would change with time. On the one hand, the Company's factory at Muslim ruled Surat was under constant threat of Maratha raids, and there was not much the British could do at that time to mitigate the threat. On the other hand, Bombay, was an island in the possession of the English. Ever since the English government had given the Company possession of Bombay in 1668, Bombay increasing became a preferred candidate for the Company's main base. Finally in 1684, the British East India Company decided to transfer the chief seat of the company's trade from Surat to Bombay.
However, because of a mutiny of its troops in Bombay between 1683 and 1684, as well as a war between the English and Mughals, the actual transfer did not take place until 1687.
In the meantime in 1685, the Company took steps to recover Salsette Island that had as part of the dowry been ceded by the Portuguese. Despite Portuguese reluctance to give up the island, the English sent in troops that succeeded to gaining control of Thana and Salsette Island. That in turn gave the Company the ability to act independently of the Mughals or local chiefs (or for that matter, the British Crown).
To secure its independence and security, the Company began to strengthen its fortifications in Bombay and surrounding possessions in 1687. The position of Bombay within the Company was elevated to that of capital of the Company's Indian possessions and the residence of its Governor-General. As a result of the transfer of the Company's headquarters from Surat to Bombay, its ships to and from Europe would now drop anchor at Bombay rather than Surat. The move quickly shifted the claim of being India's premier port from Surat to Bombay. Trade to and from Surat, Calicut and Karwar were routed via Bombay and transported there on coastal vessels. Bombay, therefore not only became a principal port, but a hub port for most of the Company's Indian Trade.
The Company Moves to Armed Trade. Child's War 1687-89 CE
|Magnificence of the Sultan (Governor) at Suratte, from 'Voyages Celebres et Remarquables faits de Perse etc.',|
by Jean Albert de Mandelslo, 1727
In 1682, Sir John Child was appointed president of the Company's operations in Surat and Bombay. In 1684, he was made a baronet and appointed Captain-General and Admiral of all the Company's North Indian forces - a rather grandiose title for the employee of a private company. Child's appointment to the position marked a change from unarmed to armed trade on the part of the Company. Armed trade in reality meant seizing territory so as to become independent of local rulers. This policy change was motivated by an aggressive move for greater profits - the severe cutting of expenses and the simultaneous push for increasing revenues. The move to reduce costs meant a cut in wages to company employees and that in turn caused a revolt in 1683 amongst the Company's Bombay garrison under the command of Richard Keigwin.
After matters had settled, Child moved from Surat to Bombay in 1687 and aggressively seized some Muslim Mughal ships in the process. In retaliation, the Muslim Governor of Gujarat seized and imprisoned the Company's factors (representatives) who had remained behind in Surat. Child sailed with a fleet to the mouth of the River Tapti and demanded the Sultan release the Company's employees - a demand that was refused and which Child could not enforce. Child was forced to retire to Bombay, but on his way back he seized some rich Mughal merchant ships for good measure.
In 1689, the Muslims backed by the Mughal emperor laid siege to Bombay. The English were compelled to beg for peace and forced to pay the Mughals a fine of $15,000. Part of the conditions of peace imposed by the Mughals was that the rambunctious and grand-title-laden Sir John Child should return home - an event precluded by his death in 1690 just as the negotiations were reaching a conclusion.
While the English were permitted to resume trading in Surat, English interest in Surat continued to decline. This decline in Surat's status must have negatively impacted Rustom Maneck's fortunes.
Transformation from London to English Company
After the death of an interim governor-president, the Company appointed Sir John Gayer as governor of Bombay and Surat in 1694. It was during his tenure that another development transpired that would hurt Rustom Maneck's interests. This was a struggle between two competing factions that resulted in the transformation of the Company from the 'Company of Merchants of London Trading into the East Indies' to the 'English Company Trading to the East Indies' - otherwise known as a change from the 'London Company' to the 'English Company'. Apparently what had transpired, was that the two competing corporate factions at the home office had come together to form yet another company in 1708 called 'United Company of Merchants of England Trading to the East Indies' or 'United Trade' for short.
In 1690, the new English Company appointed Sir Nicholas Waite as Governor for Bombay. The appointment caused much resentment between the officers of the old 'London' and new 'English' company. The fallout from the resulting internal conflict would not leave Rustom Maneck unscathed.