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EAST INDIA COMPANY

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Originally appearing in Volume V08, Page 835 of the 1911 Encyclopedia Britannica.
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EAST See also:INDIA See also:COMPANY , an incorporated company for exploiting the See also:trade with India and the Far East. In the 17th and 18th centuries East India companies were established by See also:England, See also:Holland, See also:France, See also:Denmark, See also:Scotland, See also:Spain, See also:Austria and See also:Sweden. By far the most important of these was the See also:English East India Company, which became the dominant See also:power in India, and only handed over its functions to the See also:British See also:Government in 1858 (see also DUTCH EAST INDIA COMPANY, See also:OSTEND COMPANY). The English East India Company was founded at the end of the 16th See also:century in See also:order to compete with the Dutch merchants, who had obtained a See also:practical See also:monopoly of the trade English with the Spice Islands, and had raised the See also:price of East Indio Co. See also:pepper from 3S. to 8s. Per lb. See also:Queen See also:Elizabeth incor- porated it by royal See also:charter, dated See also:December 31, 1600, under the See also:title of " The See also:Governor and Company of Merchants of See also:London, trading into the East Indies." This charter conferred the See also:sole right of trading with the East Indies, i.e. with all countries lying beyond the Cape of See also:Good See also:Hope or the Straits of See also:Magellan, upon the company for a See also:term of 15 years. Unauthorized interlopers were liable to See also:forfeiture of See also:ships and See also:cargo. There were 125 shareholders in the See also:original East India Company, with a See also:capital of £72,000: the first governor was See also:Sir See also:Thomas Smythe. The See also:early voyages of the company, from 160I to 1612, are distinguished as the " See also:separate voyages," because the subscribers individually See also:bore the cost of each voyage and reaped the whole profits, which seldom See also:fell below l00%. After 1612 the voyages were conducted on the See also:joint stock See also:system for the benefit of the company as a whole. These early voyages, whose own narratives may be read in See also:Purchas, pushed as far as See also:Japan, and established friendly relations at the See also:court of the See also:Great See also:Mogul. In 1610-1611 See also:Captain Hippon planted the first English factories on the mainland of India, at Masiilipatam and at Pettapoli in the See also:Bay of See also:Bengal.

The profitable nature of the company's trade had induced See also:

James I. to See also:grant subsidiary licences to private traders; but in 1609 he renewed the company's charter " for ever," though with a proviso that it might be revoked on three years' See also:notice if the trade should not prove profitable to the See also:realm. Meanwhile See also:friction was arising between the English and Dutch East India Companies. The Dutch traders considered that they had See also:prior rights in the Far East, and their English ascendancy in the See also:Indian See also:Archipelago was indeed and Dutch firmly established on the basis of territorial dominion Disputes. and authority. In 1613 they made advances to the English company with a See also:suggestion for co-operation, but the offer was declined, and the next few years were fertile in disputes between the armed traders of both nations. In 1619 was ratified COMPANY a " treaty of See also:defence " to prevent disputes between the English and Dutch companies. When it was proclaimed in the East, hostilities solemnly ceased for the space of an See also:hour, while the Dutch and English fleets, dressed out in all their flags and with yards manned, saluted each other; but the treaty ended in the See also:smoke of that stately salutation, and perpetual and fruitless contentions between the Dutch and English companies went on just as before. In 1623 these disputes culminated in the " See also:massacre of See also:Amboyna," where the Dutch governor tortured and executed the English residents on a See also:charge of conspiring to seize the fort. Great and lasting indignation was aroused in England, but it was not until the See also:time of See also:Cromwell that some pecuniary reparation was exacted for the heirs of the victims. The immediate result was that the English company tacitly admitted the Dutch claims to a monopoly of the trade in the Far East, and confined their operations to the mainland of India and the adjoining countries. The See also:necessity of good ships for the East Indian trade had led the company in 1609 to construct their dockyard at See also:Deptford, from which, as See also:Monson observes, See also:dates " the increase of great ships in England." Down to the See also:middle of the The dta East n. 19th century, the famous " East Indiamen " held unquestioned pre-See also:eminence among the See also:merchant vessels of the See also:world. Throughout the 17th century they had to be prepared at any moment to fight not merely See also:Malay pirates, but the armed trading vessels of their Dutch, See also:French and Portuguese rivals.

Many such battles are recorded in the See also:

history of the East India Company, and usually with successful results. It was not until it had been in existence for more than a century that the English East India Company obtained a practical monopoly of the Indian trade. In 1635, a See also:year after The ac. the Great Mogul had granted it the See also:liberty of trading quisithroughout Bengal, See also:Charles I. issued a See also:licence to tion of Courten's See also:rival association, known as " the Assada territory. Merchants," on the ground that the company had neglected English interests. The piratical methods of their rivals disgraced the company with the Mogul officials, and a modus vivendi was only reached in 1649. In 1657 Cromwell renewed the charter of 1609, providing that the Indian trade should be in the hands of a single joint stock company. The new company thus formed bought up the factories, forts and privileges of the old one. It was further consolidated by the fostering care of Charles II., who granted it five important charters. From a See also:simple trading company, it See also:grew under his reign into a great chartered company —to use the See also:modern term—with the right to acquire territory, See also:coin See also:money, command fortresses and troops, See also:form alliances, make See also:war and See also:peace, and exercise both See also:civil and criminal See also:jurisdiction. It is accordingly in 1689, when the three presidencies of Bengal, See also:Madras and Bombay had lately been established, that the ruling career of the East India Company begins, with the passing by its See also:directors of the following See also:resolution for the guidance of the See also:local governments in India:—" The increase of our See also:revenue is the subject of our care, as much as our trade; 'tis that must maintain our force when twenty accidents may interrupt our trade; 'tis that must make us a nation in India; without that we are but a great number of interlopers, See also:united by His See also:Majesty's royal charter, See also:fit only to trade where nobody of power thinks it their See also:interest to prevent us; and upon this See also:account it is that the See also:wise Dutch, in all their See also:general advices that we have seen, write ten paragraphs concerning their government, their civil and military policy, warfare, and the increase of their revenue, for one See also:paragraph they write concerning trade." From this moment the history of the transactions of the East India Company becomes the history of British India (see INDIA: History). Here we shall only trace the later changes in the constitution and See also:powers of the ruling See also:body itself. The great prosperity of the company under the Restoration. and the immense profits of the Indian trade, attracted a number of private traders, both outside merchants and dis- missed or retired servants of the company, who came The inter to be known as " interlopers." In 1683 the See also:case of !'pers.

Thomas See also:

Sandys, an interloper, raised the whole question of the royal See also:prerogative to create a monopoly of the Indian trade. The case was tried by See also:Judge See also:Jeffreys, who upheld the royal prerogative; but in spite of his decision the See also:custom of inter-loping continued and laid the See also:foundation of many great fortunes. By 1691 the interlopers had formed themselves into a new society, See also:meeting at Dowgate, and rivalling the old company; the case was carried before the See also:House of See also:Commons, which declared in 1694 that " all the subjects of England have equal right to trade to the East Indies unless prohibited by See also:act of See also:parliament." This decision led up to the act of 1698, which created a new East India Company in See also:consideration of a See also:loan of two millions to the See also:state. The old company subscribed £315,000 and became the dominant See also:factor in the new body; while at the same time it retained its charter for three years, its factories, forts and assured position in India. The rivalry between the two companies continued both in England and in India, until they were finally amalgamated by a tripartite in-denture between the companies and Queen See also:Anne (1702), which was ratified under the See also:Godolphin See also:Award (1708). Under this award the company was to lend the nation £3,200,000, and its exclusive privileges were to cease at three years' notice after this amount had been repaid. But by this time the need for permanence in the Indian See also:establishment began to be See also:felt, while parliament would not relinquish its See also:privilege of " milking ". the company from time to time. In 1712 an act was passed continuing the privileges of the company even after their fund should be redeemed; in 1730 the charter was prolonged until 1766, and in 1742 the term was extended until 1783 in return for the loan of a million. This million was required for the war with France, which extended to India and involved the English and French companies there in See also:long-See also:drawn hostilities, in which the names of See also:Dupleix and See also:Clive became prominent. So long as the company's See also:chief business was that of trade, it was See also:left to See also:manage its own affairs. The original charter of The Elizabeth had placed its See also:control iii the hands of a company governor and a See also:committee of twenty-four, and this and the arrangement subsisted in essence down to the time of See also:crown. See also:George III.

The chairman and court of directors in London exercised unchecked control over their servants in India. But after Clive's brilliant victory at See also:

Plassey (1757) had made the company a ruling power in India, it was felt to be necessary that the British government should have some control over the territories thus acquired. See also:Lord See also:North's Regulating Act (1773) raised the governor of Bengal—Warren Hastings—to the See also:rank of governor-general, and provided that his nomination, though made by a court of directors, should in future be subject to the approval of the crown; in See also:conjunction with a See also:council of four, he was entrusted with the power of peace and war; a supreme court of judicature was established, to which the See also:judges were appointed by the crown; and legislative power was conferred on the governor-general and his council. Next followed See also:Pitt's India See also:Bill (1784), which created the See also:board of control, as a See also:department of the English government, to exercise See also:political, military and See also:financial superintendence over the British possessions in India. This bill first authorized the historic phrase " governor-general in council." From this date the direction of Indian policy passed definitely from the company to the governor-general in India and the See also:ministry in London. In 1813 Lord See also:Liverpool passed a bill which further gave the board of control authority over the company's commercial transactions, and abolished its monopoly of Indian trade, whilst leaving it the monopoly of the valuable trade with See also:China, chiefly in See also:tea. 'Finally, under See also:Earl See also:Grey's act of 1833, the company was deprived of this monopoly also. Its See also:property was then secured on the Indian possessions, and its See also:annual dividends of ten guineas per See also:ioo stock were made a charge upon the Indian revenue. Hence-forward the East India Company ceased to be a trading concern and exercised only administrative functions. Such a position could not, in the nature of things, be permanent, and the great See also:cataclysm of the Indian See also:Mutiny was followed by the entire transference of Indian See also:administration from the company to the crown, on the 2nd of See also:August 1858. See Purchas his Pilgrimes (ed. 1905), vols.

2, 3, 4, 5, for the charter of Elizabeth and the early voyages; Sir W. W. See also:

Hunter, History of British India (1899); Deckles Willson, See also:Ledger and See also:Sword (1903); Sir George See also:Birdwood, See also:Report on the Old Records of the India See also:Office (1879); The East India Company's First See also:Letter See also:Book (1895) ; Letters Received by the East India Company from its Servants in the East, ed. See also:Foster, (1896 ff.). See also the interesting memorial See also:volume See also:Relics of the See also:Honourable East India Company (ed. Griggs, 1909), letterpress by Sir G. Birdwood and W. Foster.

End of Article: EAST INDIA COMPANY

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