Origins commanded the first East India Company voyage in 1601 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 percent. 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 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. 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. 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. Two days later, the "Adventurers" reconvened and resolved to apply to the Queen for support of the project. 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. 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
Early voyages to the East Indies Sir James Lancaster commanded the first East India Company voyage in 1601 aboard . 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. 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. in 1612, and made several voyages to the
East Indies investing a courtier with a robe of honour, watched by
Sir Thomas Roe, English ambassador to the court of Jahangir at Agra from 1615 to 1618, and others 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.
Foothold in India Company ships docked at
Surat in
Gujarat in 1608. The company's first Indian factory was established in 1611 at
Masulipatnam on the
Andhra Coast of the
Bay of Bengal, and its second in 1615 at Surat. independently attacking the Portuguese in the
Persian Gulf Residencies primarily for political reasons. The company established
trading posts in
Surat (1619) and
Madras (1639). By 1647, the company had 23 factories and settlements in India, and 90 employees. Many of the major factories became some of the most populated and commercially influential cities in Bengal, including the walled forts of
Fort William in Bengal,
Fort St George in Madras, and
Bombay Castle. The first century of the Company, despite its original profits coming primarily from piracy in the
Spice Islands between competing European powers and their companies, saw the East India Company change focus after suffering a major setback in 1623 when their factory in
Amboyna in the Moluccas was attacked by the Dutch. This compelled the company to formally abandon their efforts in the Spice Islands, and turn their attention to Bengal where, by this time, they were making steady, if less exciting, profits. and in 1717 customs duties were completely waived for the English in Bengal. By then, the Company's mainstay businesses were in cotton, silk, opium,
indigo dye,
saltpetre and tea. Meanwhile, the Dutch, the Company's most aggressive competitors, had expanded their monopoly of the spice trade in the
Straits of Malacca by ousting the Portuguese in 1640–1641. With reduced Portuguese and Spanish influence in the region, the EIC and VOC entered a period of intense competition, resulting in the
Anglo-Dutch wars of the 17th and 18th centuries. The British were also interested in trans-Himalayan trade routes, as they would create access to untapped markets for British manufactured goods in Tibet and China. This economic interest was showcased by the
Anglo-Nepalese war (1814–1816). Expansion throughout Asia Within the first two decades of the 17th century, the Dutch East India Company or
Vereenigde Oostindische Compagnie (VOC), was the wealthiest commercial operation in the world with 50,000 employees worldwide and a private fleet of 200 ships. It specialised in the spice trade and gave its shareholders 40% annual dividend. The British East India Company was fiercely competitive with the Dutch and French throughout the 17th and 18th centuries over spices from the
Spice Islands. Some spices, at the time, could only be found on these islands, such as nutmeg and cloves; and they could bring profits as high as 400 per cent from one voyage. The tension was so high between the Dutch and the British East Indies Trading Companies that it escalated into at least four Anglo-Dutch wars: In an act aimed at strengthening the power of the EIC, King Charles II granted the EIC (in a series of five acts around 1670) 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. In 1689, a Mughal fleet commanded by
Sidi Yaqub attacked Bombay. After a year of resistance the EIC surrendered in 1690, and the company sent envoys to
Aurangzeb's camp to plead for a pardon. The company's envoys had to prostrate themselves before the emperor, pay a large indemnity, and promise better behaviour in the future. The emperor withdrew his troops, and the company subsequently re-established itself in Bombay and set up a new base in Calcutta.
Slavery 1621–1834 The East India Company's archives suggest its involvement in the slave trade began in 1684, when a Captain Robert Knox was ordered to buy and transport 250 slaves from
Madagascar to
St. Helena. The East India Company began using and transporting slaves in Asia and the Atlantic in the early 1620s, according to the
Encyclopædia Britannica, or in 1621, according to Richard Allen. Eventually, the company ended the trade in 1834 after numerous legal threats from the British state and the
Royal Navy in the form of the
West Africa Squadron, which discovered various ships had contained evidence of the illegal trade.
Japan seal of
Tokugawa Ieyasu, granting trade privileges in Japan to the East India Company in 1613 In 1613, during the rule of
Tokugawa Hidetada of the
Tokugawa shogunate, the British ship , under the command of Captain
John Saris, was the first English ship to call on Japan. Saris was the chief factor of the EIC's trading post in Java, and with the assistance of
William Adams, an English sailor who had arrived in Japan in 1600, he was able to gain permission from the ruler to establish a commercial house in
Hirado on the Japanese island of
Kyushu: Unable to obtain Japanese
raw silk for export to China, and with their trading area reduced to Hirado and
Nagasaki from 1616 onwards, the company closed its factory in 1623.
Anglo-Mughal war illustration of
Sir Josiah Child requesting a pardon from the
Emperor Aurangzeb The first of the
Anglo-Indian wars occurred in 1686 when the company conducted naval operations against
Shaista Khan, the governor of
Mughal Bengal. This led to the siege of Bombay and the subsequent intervention of the Mughal Emperor,
Aurangzeb. Subsequently, the English company was defeated and fined.
Mughal convoy piracy incident of 1695 In September 1695, Captain
Henry Every, an English pirate on board the , reached the Straits of
Bab-el-Mandeb, where he teamed up with five other pirate captains to make an attack on the Indian fleet returning from the annual pilgrimage to
Mecca. The Mughal convoy included the treasure-laden
Ganj-i-Sawai, reported to be the greatest in the Mughal fleet and the largest ship operational in the Indian Ocean, and its escort, the
Fateh Muhammed. They were spotted passing the straits en route to
Surat. The pirates gave chase and caught up with the
Fateh Muhammed some days later, and meeting little resistance, took some £40,000 of silver. Every continued in pursuit and managed to overhaul
Ganj-i-Sawai, which resisted strongly before eventually
striking.
Ganj-i-Sawai carried enormous wealth and, according to contemporary East India Company sources, was carrying a relative of the
Grand Mughal, though there is no evidence to suggest that it was his daughter and her retinue. The loot from the
Ganj-i-Sawai had a total value between £325,000 and £600,000, including 500,000 gold and silver pieces, and has become known as the richest ship ever taken by pirates. When the news arrived in England it caused an outcry. To appease Aurangzeb, the East India Company promised to pay all financial reparations, while
Parliament declared the pirates
hostis humani generis ("the enemy of humanity"). In mid-1696 the government issued a £500 bounty on Every's head and offered a free pardon to any informer who disclosed his whereabouts. The first worldwide manhunt in recorded history was underway. File:Mocha Dapper 1680.jpg|English, Dutch and Danish factories at
Mocha File:Henry Every.gif|An 18th-century depiction of
Henry Every, with the
Fancy shown engaging its prey in the background File:Every engaging the Great Mogul's Ship.jpg|British pirates that fought during the
Child's War engaging the
Ganj-i-Sawai File:Captain Every (Works of Daniel Defoe).png|Depiction of
Captain Every's encounter with the Mughal Emperor's granddaughter after his September 1695 capture of the Mughal trader
Ganj-i-Sawai China The British began trading with China in 1699. This fact is recorded from the Chinese side in
The Draft History of the Qing under the year Kangxi 37 (1698). The apparent discrepancy between the British and Chinese sources can be explained by the fact that
Chinese New Year of 1699 did not fall until 31 January, so that any treaties entered into in January would have been logged under Kangxi 37 rather than Kangxi 38. In 1715 the Company established a permanent "
factory" in
Guangzhou (Canton). The company started selling opium to Chinese merchants in the 1770s in exchange for goods like
porcelain and tea, causing a series of
opioid addiction outbreaks across China in 1820. The ruling
Qing dynasty outlawed the opium trade in 1796 and 1800, but British merchants continued illegally nonetheless. The Qing took measures to prevent the East India Company from selling opium, and destroyed tens of thousands of chests of opium already in the country. This series of events led to the
First Opium War in 1839, which involved a succession of British naval attacks along the Chinese coast over the course of several months. As part of the
Treaty of Nanjing in 1842, the Qing were forced to give British merchants special treatment and the right to sell opium. The Chinese also ceded territory to the British, including the island of
Hong Kong.
Forming a complete monopoly Trade 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. This act allowed any English firm to trade with India, unless specifically prohibited by 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. 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. The amalgamated company became the
United Company of Merchants of England Trading to the East Indies. At this time, Britain and France became bitter rivals. Frequent skirmishes between them took place for control of colonial possessions. In 1742, fearing the monetary consequences of a war, the British government agreed to extend the deadline for the licensed exclusive trade by the company in India until 1783, in return for a further loan of £1 million. Between 1756 and 1763, the
Seven Years' War diverted the state's attention towards consolidation and
defence of its territorial possessions in Europe and its
colonies in North America. The war partly took place in the Indian theatre, between the company troops and the French forces. In 1757, the
Law Officers of the Crown delivered the
Pratt–Yorke opinion distinguishing overseas territories acquired by
right of conquest from those acquired by private
treaty. The opinion asserted that, while the Crown of Great Britain enjoyed sovereignty over both, only the property of the former was vested in the Crown. Outstanding debts were also agreed and the company permitted to export 250 tons of saltpetre. Again in 1673, Banks successfully negotiated another contract for 700 tons of saltpetre at £37,000 between the king and the company. So high was the demand from armed forces that the authorities sometimes turned a blind eye on the untaxed sales. One governor of the company was even reported as saying in 1864 that he would rather have the saltpetre made than the tax on salt.
Basis for the monopoly Colonial monopoly '' - Roma Spiridone, 1778 - BL Foster 245 , in
Leadenhall Street in the
City of London (1766) 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". On 14 January 1773 the directors of the EIC asked for a government loan and unlimited access to the tea market in the American colonies, both of which were granted. In August 1773 the
Bank of England assisted the EIC with a loan. The East India Company had also been granted competitive advantages over colonial American tea importers to sell tea from its colonies in Asia in American colonies. This led to the
Boston Tea Party of 1773 in which protesters boarded British ships and threw the tea overboard. When protesters successfully prevented the unloading of tea in three other colonies and in Boston, Governor
Thomas Hutchinson of the
Province of Massachusetts Bay refused to allow the tea to be returned to Britain. This was one of the incidents which led to the
American Revolution and independence of the American colonies. The company's trade monopoly with India was abolished in the
Charter Act 1813. The monopoly with China was ended in
1833, ending the trading activities of the company and rendering its activities purely administrative.
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: == Establishments in Britain ==