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British East India Company

British East India Company – Governor And Company Of Merchants Of London Trading Into The East Indies

British east India Company 1600-1874, was a trading company chartered by queen Elizabeth 1 on December 31 1600 to develop trade and commerce with Asia. Though its original name was Governor and Company of Merchants of London Trading into the East Indies was the enterprise of London businessmen who joined hands to make money by importing spices from India. It was one of the oldest joint stock companies in the world. For centuries the important spice trade with the Indian subcontinent was dependent on land routes across Asia and the Middle East. But by the sixteenth century the Portuguese discovered the sea route to India by their advanced navigational technologies and skills.

The British then eliminated the intermediaries and they set out to reach India via sea. The main cause of setting up the East India Company was to break the monopoly of the Spain and Portugal in the spice trade with East Indies. After the destruction of Spanish Armada in 1588 by Britishers, gave them a chance to break the monopoly. The company established its first factor in Machilipatnam in 1611 which proved to be very profitable. It defeated the Portuguese in India in 1612 and gained the patronage of the Mughal emperor. The Dutch in Dutch East Indies (presently Indonesia) and the Portuguese opposed the Company. The Company was then defeated by the Dutch in 1623 and English traders were massacred in Ambonia. But after this defeat the Britishers concentrated on their activities in India only.

The company entered the spice trade in the form of an old fashioned capitalist venture by conducting each voyage as a separate business venture with its own stock holders. It continued like this for couple of year until 1612 when the company switched to temporary joint stock’s and then finally to permanent joint stock’s company in 1657. The company’s main trading commodities were silk, indigo dye, saltpetre, cotton and spices. The company reaped heavy profits and prospered from the exports of these commodities. The company faced rivalry from a group of English merchants and investors who wanted to share the fortunes and finally the two companies merged in 1708 as the United Company of Merchants of England Trading to the East Indies.

By that time the company had founded in India the three major areas of their hold; Madras (Chennai) Bombay (Mumbai) and Calcutta (Kolkata).The harassment from local princes increased after the decline of the Mughal Empire. In order to protect itself the company started dominating in the Indian political affairs. The victory of the Company over the French made it a dominant in India. Its transition from a trading company to a ruling endeavor came into light after they won the Battle of Plassey against Siraj –ud- daulah, the ruler of Bengal in 1757.By a treaty in 1765, it assumed control of the administration of Bengal which gave them rights to collect taxes and revenues from the people. But after their disastrous administration, the people of Bengal turned against them. The English started using the revenues from Bengal for trade and personal benefits. The Regulating Act 1773 was passed by the British government to check the exploitative activities of the company and to gain the share in revenues.

After the mid 18th century the tea imports from China became an important trade after the cotton goods exports declined. The company in order to gain huge profits started financing the tea trade with illegal opium exports to China during early 19th century. As a result of opposition from China the first Opium War from 1839 to 1842 took place between China and the English. The English defeated the Chinese and seized Hong Kong and opening routes to China. The second war called the Arrow war brought the English many trading rights.

The Regulation Acts of 1773 and East India Act of 1784 gave the government of Britain direct responsibilities for activities in India. It led to setting up a board of control in India. Subsequently, the East India Company lost commercial and political control in India. The British government took away the company’s monopoly in 1813 and it’s worked as a government’s agency after 1834. The real blow to the Company came in 1857 with the advent of the First War of Independence, the government took full control of the company and it went out of existence in 1873.

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