CHAPTER 1: Initial Struggle of East India Company
Foundation of East India Companies
The first East India Company was the British East India Company that was founded in 1600. The term East India Company refers to the following entities.
- British East India Company, founded in 1600
- Dutch East India Company, founded in 1602
- Danish East India Company, founded in 1616
- Portuguese East India Company, founded in 1628
- French East India Company, founded in 1664
- Swedish East India Company, founded in 1731
Why all of them were companies?
The voyages at that time involved higher investments, huge risks of piracy and shipwreck and there was a large fluctuation in not only in the supply (of spices) but also demand (due to competition). So, in Europe, even a single voyage was preceded by formation of a company, which was liquidated when the voyage was over and the shareholders shared the profits or losses as the case was. For the first time, it was British East India Company that was formed by bundling all the forces into monopoly enterprises.
The Netherlands government took was a step ahead of their British Counterparts and gave all the powers to the company which were required to rule a colony just like a sovereign country.
Dutch East India Company
- Dutch East India Company is considered to be the First Multinational Corporation of the World. It was also the first company to issue stock.
- It was the first company which was given power to engage itself in colonial activities including waging a war and execute the convicts, mint the coins and establish the colonies
- This company did wonders in India and Indonesia for 2 centuries but later the pompous acronym of VOC became Vergaan Onder Corruptie meaning “marred by the Corruption”.
- The Dutch East India Company was created in 1602 as “United East India Company” and its first permanent trading post was in Indonesia.
- In India, they established the first factory in Masulipattanam in 1605, followed by Pulicat in 1610, Surat in 1616, Bimilipatam in 1641 and Chinsura in 1653.
- In Bengal they established a factory in Pipli, but it was abandoned by the, The main objective of the Dutch remained aggressive in eliminating the Portuguese and British merchandise powers from India and South East Asia, and they were successful in abandoning the Portuguese as most dominant power in the European Trade.
- When the established a factory in Pulicat, in 1610, it became their main center of activities. It was later known as Fort Geldria.
- While the Portuguese suffered because of the bad successors of Albuquerque and their severity and intolerance, the Dutch failed due to the rising English and French powers and their corruption. The Government of Netherlands also interfered a lot which ultimately caused the Dutch to get extinct from India.
- From 1638-1658, the Dutch were able to expel the Portuguese from the Ceylon. In 1641, they occupied Malacca. In 1652, they were able to capture the Cape of Good Hope. The climax of the Dutch East India Company was in 1669, when it was the richest private company of the world with 150 merchant ships, 40 warships and 50 thousand employees and an army of 10 thousand soldiers.
- In India, the most important event was the Battle of Colachel in 1741, which was fought between the Dutch East India Company and State of Travancore army. This was a major defeat of a European power in India and marked beginning of the end of the Dutch Influence. Following the corruption and bankruptcy, the Dutch East India Company was formally dissolved in 1800. The Dutch influence from India had finished long ago but they were dominant in Indonesia. The government of the Netherlands established the Dutch East Indies as a nationalized colony later which was more or less the within the boundaries of the modern Indonesia.
Arrival of John Mildenhall in India
- In 1498, the Portuguese Vasco Da Gama arrived to the Coast of Malabar via the sea route.
- A century later, in 1599, the first British John Mildenhall came to India via land route and styled himself as the ambassador of the East India Company. But he was actually sent by the company to sell its goods in the eastern Mediterranean. He deceived his hirers and fled to Persia; and from there he came to India where he was later arrested with the help of the Ajmer Governors, handed over to company people but later released.
- He again came to India later and reached the court of Mughal Emperor Akbar and had discussions with him. But since, John Mildenhall was not sponsored by the east India Company, his achievement is considered low profile.
- It was William Hawkins who later came in the court of Jahangir and declared all his dealings null and void.
- John Mildenhall is the first Englishman whose burial is recorded in India at Agra. John Mildenhall was able to interview with the Mughal emperor Akbar.
Formation of East India Company
- The oldest among all the similarly formed European East India Companies, the East India Company was granted an English Royal Charter, under the name “Governor and Company of Merchants of London Trading into the East Indies” by Queen Elizabeth-I on 31 December 1600.
- It was a joint stock company and was also known as John Company.
- The name “Company Bahadur” in India echoed its authority.
- When the company was founded the cradle of commercial activities had already been removed from Mediterranean to Atlantics by Vasco Da Gama et al.
- 1603, Elizabeth I died and James I succeeded this last Tudor monarch of England and Ireland.
- During his time, William Hawkins was sent to the Court of Great Mughal Jahangir. William Hawkins was the first Englishman ever received by the Emperor of India as the official representative of the King of England.
- William Hawkins obtained first distinct acknowledgement of the rights of British Commerce in India.
Arrival of William Hawkins in court of Jahangir
- In 1607, William Hawkins commanded the ship “Hector” for East India Company on a voyage to Surat and Aden loaded with letters & presents from King of England James I.
- He arrived in Surat in August 1608, but the road ahead was not a cakewalk. As soon as Hector sailed in, it was captured by the Portuguese. William Hawkins was told that all the ports belong to the “King of Portugal” and none ought to come here without his license.
- But, he was later let leave and receive a pass for his journey to Agra. He was helped by the Viceroy of the Burhanpur midway and after much labor, toil and many dangers; he was able to reach Agra on April 16, 1609.
- Akbar who was contemporary of queen Elizabeth-I was little known in England, but when Hawkins arrived, there was a different personality sitting on the throne who was not at all known in England. But Captain Hawkins was received by this new emperor Jahangir with all Indian hospitality and warmth. His letter was read in the court with the help of a Portuguese Jesuit. Then he was taken to the private audience chamber and they had a conversation for some 3 hours.
- Hawkins was well versed in Turkish and Jahangir and some of his ministers also knew Turkish, the native tongue of Babur. So the discussions took place in Turkish.
- Hawkins was able to acquire a footing in the court of Jahangir and in due course of time he got so intimacy with the “talented drunkard” emperor that no Europeans had ever afterwards. Jahangir called him “English Khan”.
- This English Khan was able to persuade the emperor to grant a commission for an English factory at Surat but under the Pressure of the Portuguese Viceroy, the grant was withdrawn. Hawkins lived in the court of Mughal emperor till 1611, tried to reverse the orders, but the Portuguese influence over the King was impregnable. He returned in disgust on November 2, 1611. He died a couple of years later.
Captain Middleton and the First English Factory at Surat (1611)
- William Hawkins after leaving the court of Mughals at joined Captain Middleton at Bantam. In one of his homeward journey he died, but in 1611 Captain Henry Middleton landed at Swally near Surat and tried to get some recognition to the British Business.
- At that time, English were in humiliating situation in India, subject to all kinds of indignities and insults. They had no valid rights to do any business in India and were obliged to pay bribes for any facility they could get here. They were gibed, robbed, arrested and beaten in the streets. There Portuguese influence was not allowing them to do something over here.
- When Henry Middleton entered India, there was an opposition from the Portuguese, but the British defeated the Portuguese in the Battle of Bombay in 1611. But he was able to get a permission from the local Mughal governors to open a factory in India, so in 1611 the first English Factory was established in Surat.
Arrival of Sir Thomas Roe
- In January 1615, Sir Thomas Roe presented his credentials to the emperor Jahangir as the Ambassador of the King of England. The objective of Thomas Roe was to finish what was left unfinished by Captain Hawkins.
- Sir Thomas Roe was an experienced, firm, courageous, combined with management skills and clever person, who lived as a resident of Agra till 1619 and during this time, due to his manly qualities, dogged persistence and natural dignity was able to swipe out the Portuguese Influence from the Mughals despite of some opposition from Prince Khurram and Nur Jahan.
- He moved about the jovial ruler, sharing his pleasures, marveling at the wealth of Indians. This great ambassador of King James tried in vain to obtain a general “treaty” enshrining the articles from the King, but it was not appropriate time as the great Mughals were too ignorant for any such comparisons between Hindustan and any of the country of rest of the world. There could not be any terms of equality, but what he could go for the “Firmans” or Royal orders to the local authorities sanctioning the English Trade at Surat at reasonable terms.
- The English factory at Surat was set on a permanent basis with the Firman, officially recognized by the Emperor as well as the Prince-Governor Khurram.
- Now, the factory was set forth with a higher degree of reputation. Some subordinate factories were started. This was the beginning of the British stronghold in India. We know about the Mughal Empire as seen by Sir Thomas Roe, from his work- titled as “Journal of the mission to the Mogul Empire”. It is a valuable contribution to the history of India in the early 17th century.
Breaking of Portuguese Monopoly
- The Netherlands is considered to be the first European nation which broke through the Portuguese monopoly in the east. The Dutch got independence on 26 July 1581 through the Eighty Years’ War from the Spanish Empire.
- This Dutch war for independence closed the ports of Spain to the Dutch, and forced them into the direct trade with East Indies.
- The war with Spain and the closing of Lisbon and Antwerp ports also compelled the English to enter directly into the Indian trade.
- During the entire 16th century, the ports of Bruges, Antwerp, and Amsterdam became successively the great emporiums where Indian produce, imported by the Portuguese, was sold to Germany and even to England.
- In the beginning both Dutch and English, attempted to find their way to India by sailing around the northern coast of Europe and Asia.
Jan Huyghen van Linschoten
- Jan Huyghen van Linschoten was a Dutch merchant and traveler. He dwelt at Goa from 1583 to 1589 in the train of the Portuguese archbishop and copied the top secret Portuguese nautical maps and published them in 1595-1596. This narrative enabled the passage of the elusive East Indies to be opened to the English and the Dutch. This valuable guide was translated into English in 1598 and later in other languages. Jan Huyghen van Linschoten is credited for enabling the British East India Company as well as the Dutch East India company to break the 16th century monopoly of the Portuguese in trade with the East Indies.
- During the 17th century, the Dutch became the foremost maritime power of the world. In February, 1605 Steven van der Hagen, admiral of the Dutch East India Company (VOC), conquered the Portuguese fortress of Victoria at Amboyna, (present-day Maluku, Indonesia). The Dutch started taking over all the foreign trading interests at Victoria.
- They tried to obtain a local monopsony in the spice trade and tried to keep the other European factors out by use of force. This was strife for the British East India Company. The bitterness of the trading companies was turned into the bitterness between the James I of England and the Dutch States-General.
- The two governments had signed a Treaty of Defense in London in 1619 which enshrined the cooperation between the two companies in East Indies. Accordingly the market of spices was divided between the two in fixed proportions. Despite this treaty, the relations between the two companies remained tense.
- In 1623 one of the soldiers of British (who was Japanese) was caught spying which led to arrest of the British, their torture and a massacre by the officials of the Dutch East India Company. Out of the 20 men killed 10 were the servants of the British East India Company. The result of this massacre was that British were forced to retire from the eastern archipelago and focus on continent of India. This massacre changed the fate of India as well Indonesia.
- In Indonesia, Dutch remained a power for long but in India, the event indirectly led to the foundation of British Empire. In Indonesia, the Dutch ruled without a rival, and expelled the Portuguese from almost all their territorial possessions. Only relics of the Portuguese empire were left in Island of Timor.
Climax of Dutch East India Company
Elimination of Portuguese
- In the 17th century, the Dutch also expelled the Portuguese from most parts of India. By 1647, they started trading on the Coromandel Coast. In 1652 they founded a colony at the Cape of Good Hope and in the same year built a factory at Palakollu.
- In 1658 they captured Jaffnapatam, which was the last stronghold of the Portuguese in Ceylon.
- Between 1661 and 1664 the Dutch wrested from the Portuguese all their earlier settlements south of Goa on the pepper-bearing coast of Malabar.
- In 1669 they expelled the Portuguese from St. Thome in Madras.
Downfall of Dutch
- Despite of the outstanding progress in the Indies, the Dutch colonial empire fell shortly because of the short-sighted commercial policy which was deliberately based upon a monopoly of the trade in spices.
- The Dutch were given a death blow by Robert Clive when in 1759 he attacked the Dutch both by land and water at Chinsura on the Hugli River, near Kolkata (discussed in this document as Battle of Chinsura)
East India Company
- On December 31, 1600, the English East India Company was incorporated by royal charter under the title of “the Governor and Company of Merchants of London trading to the East Indies.”
- Thomas Smith was the first governor of the newly founded East India Company.
- James Lancaster was the commander of the first Voyage of the East India Company which sailed from Torbay towards the end of April 1601.
- The name of the Ship was Red Dragon.
- The early voyages of the Company from 1600 to 1612 were the “separate voyages,” twelve in number. In these voyages the subscribers individually bore the expenses of each voyage, and reaped the whole profits.
- After 1612, the voyages were conducted on the joint-stock account.
- Initial Ventures After the first factory at Surat in 1612, they established its branch factory in Masulipattanam (Machhalipatnama).
- The Amboyna Tragedy had driven them out of the eastern archipelago and now British were almost cut off from the lucrative spice trade of the Indonesia.
- In 1625-1626 they established a factory at Armagaon near Madras on the Coromandel coast, subordinate to Masulipattanam ; but in 1628 Masulipattanam was, in consequence of the oppressions of the native governors, for a while abandoned in favor of Armagaon.
- In 1632 under a grant, the “golden firman,” from the king of Golconda, the British obtained rights to trade in Golconda. In 1633, they establish a branch factory at Hariharpur, near Balasore in Orissa.
- In 1634, by a firman dated February 2, the Company obtained from the Great Mogul, they got liberty to trade in Bengal, but their ships were to resort only to Pipli in Orissa. Around the same time, the Portuguese were expelled for a time from Bengal.
East India Company- Foundation of Madras
- In 1638 the British abandoned the Armagaon as unsuited for commerce and next year i.e. in 1639 they founded Fort Saint George, or Madraspatnam or Chennapatam.
- The fort was completed on April 23, coinciding with St. George’s Day, celebrated in honour of St. George, the patron saint of England.
- The inhabitated area around it was called St. George Town.
- Meanwhile in 1633-24 they had been able to create new establishment in Bantam in Java.
- The Saint Fort George was made subordinate to the Bantam establishment till 1653, when it was raised to the rank of a presidency. This site was purchased from the raja of Chandragiri, a descendant of the Vijayanagar dynasty and is known as first territorial possession of the English in India.
East India Company – Transfer of Bombay and ventures in Bengal
- The English factory at Hugli in Bengal was established in 1650.
- Due to the services provided by one Gabriel Boughton, surgeon of the Hopewell to the Mughal Governor, the company got some better terms to trade such as payment of fixed terms.
- In 1655 the east India Company established a factory at Kasimbazar adjacent to Murshidabad. The establishments in Bengal were made subordinate to Fort Saint George or Madras.
- In 1661, Bombay was given to the British crown as part of the dowry of Catharine Braganza to Prince Charles II of England. However it was not delivered till 1665.
- In 1664 when Surat was raided by the Maratha swarms under Shivaji, the English factory was defended by George Oxenden. The Mughals granted them exemption from the customs for 1 year for this “brave act”.
- In 1665, Bombay was transferred to East India Company for an annual payment of 10 Pounds to the government. In 1667 Mughal Emperor gave them a Firman to carry out trade in Bengal.
- In the same year 1687, the headquarters of the British East India Company was replaced from Surat to Bombay.
East India Company-Foundation of Calcutta
- Till 1681, the Company’s commercial interests in Bengal were managed from Fort St George in Madras, more than 800 miles down the coast. For a number of reasons, this arrangement was proving inadequate.
- Business in Bengal was expanding steadily, but at the same time the Company’s interests were increasingly under threat from native rulers and rival companies.
- There were rumblings against the management in Madras and accusations of dishonesty against the Company’s own officials.
- In 1681, Sir William Hedges came to Hugli as agent and governor of the Company’s affairs in the Bay of Bengal,” and of the factories subordinate to it, at Kasimbazar, Patna, Balasore, Maldah, and Dhaka. He separated the Company’s affairs in Bengal from Madras.
- But in 1684, the tenure of Hedges ended and Bengal reverted to the control of Madras until 1700, when it finally became an independent presidency.
- In 1686, the factory at Kasim Bazar and some other factories were confiscated by the Nawab Shaista Khan who presumed upon his relationships with the Mughals to act as a sovereign. The agent of the company was forced to quit Hugli and retire to Sutnati, which was the site of Kolkata. The company had to abandon the factories in Bengal. The officers sailed down to Balasore on Orissa coast.
- 4 years later the company made terms with the Mughals and secured an imperial firman renewing all their rights of trade. But this time, instead of Hugli, they established Company’s “Capital” at Sutnati, where he had tarried in 1686, and on
- August 24, 1690, Job Charnock, an administrator with the Company founded the City of Calcutta as new capital of the English in Bengal. Job Charnock, after a labor and toil of two more years died but his work of foundation of India’s largest Metro was done. Job Charnock placed the English interests upon a secure foundation and prospered continuously from that time onwards. Now the foundation of Calcutta as a fortified factory of the Company gave the British an opportunity to closely study the political , social and economic condition of the country.
- They could make out from the wars of the Aurangzeb in Deccan and frequent raids of Marathas that the disintegration of the Mughal Empire is close. To guard against the “Political Risks” of the business, the East India Company had to take measures to consolidate its interests in places which could be fortified to advantage and which should be fully accessible to the Company’s ships at all times. The first right decision was the determination of location of Calcutta and second was already done, the foundation of Madras.
- From 1687 till 1692, Elihu Yale remained the governor of the British East India Company at Madras.
- He was instrumental in the development of the Government General Hospital, housed at Fort St. George, but he was a corrupt and amassed a lot of wealth due to his secret contacts. He was removed later. But he put the money of his corruption to good use and established the Yale College, in England, which on April 5, 1999 celebrated its 350th anniversary.
East India Company- Foundation of Bombay
- However, the growing powers of Marathas became a headache for the company. Surat was open to constant raids by the Marathas and was beyond the protection of the guns of the Company’s ships, and the other factories were no better placed, while Bombay was not safe from Mogul and Maratha fleets.
- Sir George Oxenden, who had been president at Surat since 1662 and defended the factory from the Maratha raids became the First Governor of Bombay on its acquisition by the Company in 1668 with power to nominate a deputy-governor to reside on the island, but he was placed under the control of the president and council of Surat.
- English officers and privates were invited to enter the company’s service, and thus the first military establishment of the East India Company at Bombay was created.
- On 14 July 1669 Oxenden died at Surat and he was succeeded by Gerald Aungier, the second Governor of Bombay.
- Gerald Aungier laid the foundations of Bombay’s importance. He took possession of Colaba and Old Woman’s Island from the Portuguese and thus completing the transfer of power to the British.
- In his time, the first mint was started at Bombay and also first printing press was set up in Bombay which was imported. He died in 1677 and was followed by John Child, who assumed the duties of governor and general in October 1681. However, John Child never had the official title of governor-general.