On December 31, 1600, the British East India Company (EIC) received a Royal Charter from Queen Elizabeth making it the oldest among several similarly formed European East India Companies pursuing trade with the East Indies.
Already 12 years before, the Spanish Armada was defeated and merchants turned to the Queen, asking for permission to sail to the Indian Ocean, which was granted. Some smaller companies formed, but several ships got lost on the sea. On 31 December 1600, Queen Elizabeth I granted a Royal Charter to ‘Governor and Company of Merchants of London trading with the East Indies‘ and the first voyages took place one year after.
|Pirate Henry Every|
The first factory in India was established by 1610 and the company faced pretty high profits for the first time. To succeed against the Dutch and Portuguese on the market, the British realized, that they needed to gain territorial foothold at India’s mainland. Also, James I instructed Sir Thomas Roe to meet Mughal Emperor Nuruddin Salim Jahangir in order to arrange exclusive trading rights and the possibility of building factories in Surat and the surrounding area, which was successful.
As the company expanded, they were able to establish several trading posts and numerous factories in India. In the 1630s, the Mughal emperor extended his hospitality to the company, but competition with the Dutch grew as well, which resulted in the Anglo-Dutch Wars. King Charles II was motivated to strengthen the power of the EIC and provisioned the EIC with the rights to autonomous territorial acquisitions, to mint money, to command fortresses and troops and form alliances, to make war and peace, and to exercise both civil and criminal jurisdiction over the acquired areas.
But not only the Dutch were a danger to the EIC, in 1695, the English pirate Henry Every was able to raid the treasure-laden Ganj-i-Sawai, which became known as the richest ship ever taken by pirates. It is assumed that the loot totals between £325,000 and £600,000, including 500,000 gold and silver pieces. The English government and the Indian emperor were furious about the loss and angry Mughals threatened to put an end to all English trading in India.
|East India House in London|
Meanwhile, the company started to develop a lobby in the English parliament and the company’s power grew. By 1720, 15% of British imports were from India, almost all passing through the company. With the ‘arrival’ of the Industrial Revolution, the EIC became the single largest player in the British global market and the British culture, economy and high living standards had a profound influence on overseas trade.
Through the years, the company had to fight and compete in order to expand its trade positions and military power in India. But even though the company became increasingly bold and ambitious in putting down resisting states, it faced financial troubles as well. In 1773, the Tea Act was passed, which gave the Company greater autonomy in running its trade in the American colonies, and allowed it an exemption from tea import duties which its colonial competitors were required to pay. The arrival of tax-exempt Company tea, triggered the Boston Tea Party in the Province of Massachusetts Bay, one of the major events leading up to the American Revolution.
Because of the Indian Revolution in 1857, the company lost all of its administrative powers and on 1 January, 1874 an Act came into effect dissolving the company in the summer of the same year. However, the EIC had a large effect on the Indian culture and global trade. The East India Company was the first company to record the Chinese usage of orange-flavoured tea in which it led to the development of Earl Grey tea and the British trade with India played a key role in introducing English as an official language in India.
At yovisto, you may be interested in a video lecture by John McAlleer about Britains global trade in the Great Days of Sail at Gresham College.
References and Further Reading:
- East India Company at BBC
- Baladouni, Vahe (1983). Accounting in the Early Years of the East India Company
- History and Politics: East India Company
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