I | INTRODUCTION |
East India
Company, any of a number of commercial enterprises formed in western
Europe during the 17th and 18th centuries to further trade with the East Indies.
The companies, which had varying degrees of governmental support, grew out of
the associations of merchant adventurers who voyaged to the East Indies
following the discovery in 1497 of the Cape of Good Hope route by Portuguese
navigator Vasco da Gama. The most important of the companies were given charters
by their respective governments, authorizing them to acquire territory wherever
they could and to exercise in the acquired territory various functions of
government, including legislation, the issuance of currency, the negotiation of
treaties, the waging of war, and the administration of justice. The most notable
companies were the following.
II | DANISH EAST INDIA COMPANY |
Chartered in 1729 by King Frederick IV of
Denmark after unsuccessful attempts by Denmark to gain a share of the East India
trade in 1616 and 1634, it enjoyed great prosperity in India until the advance
of British power there in the late 18th century. As a consequence of the
destruction of Danish naval power in the war between Britain and Denmark in
1801, the power of the Danish company was broken. Its principal Indian
possessions, Tranquebar in Tamil Nādu and Serampore in Bengal, were purchased by
Britain in 1845.
III | DUTCH EAST INDIA COMPANY |
Incorporated from a number of smaller
companies by the States General of the Netherlands in 1602, its monopoly
extended from the Cape of Good Hope eastward to the Strait of Magellan, with
sovereign rights in whatever territory it might acquire. In 1619 Jan Pieterszoon
Coen, regarded as the founder of the Dutch colonial empire in the East Indies,
established the city of Batavia in Java (now Jakarta, Indonesia) as the
headquarters of the company. From Batavia, Dutch influence and activity spread
throughout the Malay Archipelago and to China, Japan, India, Iran, and the Cape
of Good Hope. During the course of the 60-year war between Spain and the
Netherlands (1605-1665), the Dutch company despoiled Portugal, which was united
with Spain from 1580 to 1640, of all its East Indian possessions. It supplanted
the Portuguese in most of present-day Indonesia and in the Malay Peninsula,
Ceylon (now Sri Lanka), the Malabar Coast of India, and Japan. During this
period it was also successful in driving English rivals from the Malay
Archipelago and the Moluccas. In 1632 the Dutch killed the English factors, or
agents, in Amboina, capital of the Dutch Moluccas; for this act the English
government later exacted compensation. In 1652 the company established the first
European settlement in South Africa on the Cape of Good Hope. At the peak of its
power, in 1669, the Dutch company had 40 warships, 150 merchant ships, and
10,000 soldiers.
Between 1602 and 1696 the annual dividends
that the company paid were never less than 12 percent and sometimes as high as
63 percent. The charter of the company was renewed every 20 years, in return for
financial concessions to the Dutch government. In the 18th century, internal
disorders, the growth of British and French power, and the consequences of a
harsh policy toward the native inhabitants caused the decline of the Dutch
company. It was unable to pay a dividend after 1724 and survived only by
exacting levies from native populations. It was powerless to resist a British
attack on its possessions in 1780, and in 1795 it was doomed by the ouster of
the States General at home by the French-controlled Batavian Republic. In 1798
the republic took over the possessions and debts of the company.
IV | ENGLISH EAST INDIA COMPANY |
The most important of the various East India
companies, this company was a major force in the history of India for more than
200 years. The original charter was granted by Queen Elizabeth I on December 31,
1600, under the title of “The Governor and Company of Merchants of London
Trading into the East Indies.” The company was granted a monopoly of trade in
the East Indies, 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.
In early 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.
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 East 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.
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. In 1773 the British
government established a governor-generalship in India, thereby greatly
decreasing administrative control by the company; however, its governor of
Bengal, Warren Hastings, became the first governor-general of India. 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.
V | FRENCH EAST INDIA COMPANY |
Established in 1664 by Jean-Baptiste Colbert,
finance minister of King Louis XIV, the company founded its first trading post
at Surat in Bombay in 1675. The following year it set up its principal Indian
base at Pondicherry, on the Coromandel Coast. The company prospered and extended
its operations to China and Iran. In 1719 the company was reorganized with the
American and African French colonial companies as the Compagnie des Indes. This
company, headed by Scottish financier John Law, suffered severely with the
collapse of the Mississippi Scheme. In 1730 it lost its slave trade with Africa,
in 1731 its general trade with Louisiana, and in 1736 its coffee trade with the
Americas. The company prospered in India, however, under governors Benoît Dumas,
from 1735 to 1741, and Joseph François Dupleix, from 1742 to 1754. Dupleix
directed the unsuccessful French struggles against the British control of India.
The capture of Arcot in 1751 by the British under Robert Clive limited French
control to southern India, where it remained supreme until 1761, when the
British captured Pondicherry. The operations of the company were finally
suspended by royal decree in 1769, and in the following year it turned over its
capital of more than 500 million livres to the Crown. In 1785 a new company
received commercial privileges, but this company was abolished in 1794 during
the time of the French Revolution.
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