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East India Company

English joint-stock company formed for pursuing trade with the East Indies

Top 10 East India Company related articles

  (Redirected from British East India Company)
East India Company
TypePublic
IndustryInternational trade, drug trafficking (mainly opium)[1]
Founded31 December 1600; 420 years ago (1600-12-31)
FoundersJohn Watts, George White
Defunct1 June 1874; 146 years ago (1874-06-01)
FateNationalised:
Headquarters,
ProductsCotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium
Colonial India
Imperial entities of India
Dutch India1605–1825
Danish India1620–1869
French India1668–1954

Portuguese India
(1505–1961)
Casa da Índia1434–1833
Portuguese East India Company1628–1633

British India
(1612–1947)
East India Company1612–1757
Company rule in India1757–1858
British Raj1858–1947
British rule in Burma1824–1948
Princely states1721–1949
Partition of India
1947

The East India Company (EIC), also known as the Honourable East India Company (HEIC), East India Trading Company (EITC), the English East India Company or (after 1707) the British East India Company, and informally known as John Company,[2] Company Bahadur,[3] or simply The Company was an English and later British joint-stock company founded in 1600.[4] It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southeast Asia), and later with Qing China. The company seized control of large parts of the Indian subcontinent, colonised parts of Southeast Asia and Hong Kong after the First Opium War, and maintained trading posts and colonies in the Persian Gulf Residencies.[5]

Originally chartered as the "Governor and Company of Merchants of London Trading into the East-Indies",[6][7] the company rose to account for half of the world's trade during the mid-1700s and early 1800s,[8] particularly in basic commodities including cotton, silk, indigo dye, salt, spices, saltpetre, tea, and opium. The company also ruled the beginnings of the British Empire in India.[8][9]

The company eventually came to rule large areas of India, exercising military power and assuming administrative functions. Company rule in India effectively began in 1757 after the Battle of Plassey and lasted until 1858 when, following the Indian Rebellion of 1857, the Government of India Act 1858 led to the British Crown assuming direct control of India in the form of the new British Raj.

Despite frequent government intervention, the company had recurring problems with its finances. The company was dissolved in 1874 as a result of the East India Stock Dividend Redemption Act passed one year earlier, as the Government of India Act had by then rendered it vestigial, powerless, and obsolete. The official government machinery of British Raj had assumed its governmental functions and absorbed its armies.

East India Company Intro articles: 19

History

Origins

James Lancaster 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. In the Golden Hind he achieved this but also 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 with Sultan Babullah. In return for linen, gold and silver, a large haul of exotic spices including cloves and Nutmeg were traded – the English initially not knowing of their huge value.[10] Drake returned to England in 1580 and became a celebrated hero; his eventual circumnavigation raised an enormous amount of money for England's coffers, and investors received a return of some 5000 per cent. Thus started what was an important element in the eastern design during the late sixteenth century.[11]

Soon after the defeat of the Spanish Armada in 1588, the captured Spanish and Portuguese ships with their cargoes enabled English voyagers to potentially travel the globe in search of riches.[12] London merchants presented a petition to Queen Elizabeth I for permission to sail to the Indian Ocean.[13] The aim was to deliver a decisive blow to the Spanish and Portuguese monopoly of Far Eastern Trade.[14] Elizabeth granted her permission and on 10 April 1591 James Lancaster in the Bonaventure with two other ships sailed from Torbay around the Cape of Good Hope to the Arabian Sea on one of the earliest English overseas Indian expeditions. Having sailed around Cape Comorin to the Malay Peninsula, they preyed on Spanish and Portuguese ships there before returning to England in 1594.[13]

The biggest capture that galvanised English trade was the seizure of a large Portuguese carrack, the Madre de Deus by Sir Walter Raleigh and the Earl of Cumberland at the Battle of Flores on 13 August 1592.[15] When she was brought in to Dartmouth she was the largest vessel that had been seen in England and her cargo consisted of chests filled with jewels, pearls, gold, silver coins, ambergris, cloth, tapestries, pepper, cloves, cinnamon, nutmeg, benjamin (a tree that produces frankincense), red dye, cochineal and ebony.[16] Equally valuable was the ship's rutter (mariner's handbook) containing vital information on the China, India, and Japan trades. These riches aroused the English to engage in this opulent commerce.[15]

In 1596, three more English ships sailed east but all were lost at sea.[13] A year later however saw the arrival of Ralph Fitch, an adventurer merchant who, along with his companions, had made a remarkable fifteen-year overland journey to Mesopotamia, the Persian Gulf, the Indian Ocean, India and Southeast Asia.[17] Fitch was then consulted on the Indian affairs and gave even more valuable information to Lancaster.[18]

Formation

On 22 September 1599, a group of merchants met and stated their intention "to venture in the pretended voyage to the East Indies (the which it may please the Lord to prosper), and the sums that they will adventure", committing £30,133 (over £4,000,000 in today's money).[19][20] Two days later, "the Adventurers" reconvened and resolved to apply to the Queen for support of the project.[20] Although their first attempt had not been completely successful, they nonetheless sought the Queen's unofficial approval to continue. They bought ships for their venture and increased their capital to £68,373.

The Adventurers convened again a year later, on 31 December, and this time they succeeded; the Queen granted a Royal Charter[13] to "George, Earl of Cumberland, and 215 Knights, Aldermen, and Burgesses" under the name, Governor and Company of Merchants of London trading into the East Indies.[13] For a period of fifteen years, the charter awarded the newly formed company a monopoly[21] on English trade with all countries east of the Cape of Good Hope and west of the Straits of Magellan. Any traders in breach of the charter without a licence from the company were liable to forfeiture of their ships and cargo (half of which went to the Crown and the other half to the company), as well as imprisonment at the "royal pleasure".[22]

The governance of the company was in the hands of one governor and 24 directors or "committees", who made up the Court of Directors. They, in turn, reported to the Court of Proprietors, which appointed them. Ten committees reported to the Court of Directors. According to tradition, business was initially transacted at the Nags Head Inn, opposite St Botolph's church in Bishopsgate, before moving to India House in Leadenhall Street.[23]

East India Company History articles: 47

Early voyages to the East Indies

Sir James Lancaster commanded the first East India Company voyage in 1601 aboard the Red Dragon.[24] After capturing a rich 1,200 ton Portuguese carrack in the Malacca Straits the trade from the booty enabled the voyagers to set up two "factories" – one at Bantam on Java and another in the Moluccas (Spice Islands) before leaving.[25] They returned to England in 1603 to learn of Elizabeth's death but Lancaster was Knighted by the new King James I.[26] By this time, the war with Spain had ended but the company had successfully and profitably breached the Spanish and Portuguese duopoly, with new horizons opened for the English.[14]

In March 1604, Sir Henry Middleton commanded the second voyage. General William Keeling, a captain during the second voyage, led the third voyage aboard the Red Dragon from 1607 to 1610 along with the Hector under Captain William Hawkins and the Consent under Captain David Middleton.[27]

Early in 1608 Alexander Sharpeigh was appointed 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.[27] This expedition would be lost.[28]

East India Company Initial expeditions[28]
Year Vessels Total Invested £ Bullion sent £ Goods sent £ Ships & Provisions £ Notes
1603 3 60,450 11,160 1,142 48,140
1606 3 58,500 17,600 7,280 28,620
1607 2 38,000 15,000 3,400 14,600 Vessels lost
1608 1 13,700 6,000 1,700 6,000
1609 3 82,000 28,500 21,300 32,000
1610 4 71,581 19,200 10,081 42,500
1611 4 76,355 17,675 10,000 48,700
1612 1 7,200 1,250 650 5,300
1613 8 272,544 18,810 12,446
1614 8 13,942 23,000
1615 6 26,660 26,065
1616 7 52,087 16,506

Initially, the company struggled in the spice trade because of the competition from the already well-established Dutch East India Company. The English company opened a factory in Bantam on Java on its first voyage, and imports of pepper from Java remained an important part of the company's trade for twenty years. The Bantam factory closed in 1683.

Company ships docked at Surat in Gujarat in 1608. The company established its first Indian factory in 1611 at Masulipatnam on the Andhra Coast of the Bay of Bengal; and a second at Surat in 1612. The high profits reported by the company after landing in India initially prompted James I to grant subsidiary licences to other trading companies in England. However, in 1609 he renewed the East India Company's charter for an indefinite period, with the proviso that its privileges would be annulled if trade was unprofitable for three consecutive years.

East India Company Early voyages to the East Indies articles: 22

Foothold in India

Red Dragon fought the Portuguese at the Battle of Swally in 1612, and made several voyages to the East Indies
The emperor Jahangir 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 engaged in hostilities with 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 gaining a territorial foothold in mainland India, with official sanction from both Britain and the Mughal Empire, and requested that the Crown launch a diplomatic mission.[29]

In 1612, James I instructed Sir Thomas Roe to visit the Mughal Emperor Nur-ud-din Salim Jahangir (r. 1605–1627) to arrange for a commercial treaty that would give the company exclusive rights to reside and establish factories in Surat and other areas. In return, the company offered to provide the Emperor with goods and rarities from the European market. This mission was highly successful, and Jahangir sent a letter to James through Sir Thomas Roe:[29]

Upon which assurance of your royal love I have given my general command to all the kingdoms and ports of my dominions to receive all the merchants of the English nation as the subjects of my friend; that in what place soever they choose to live, they may have free liberty without any restraint; and at what port soever they shall arrive, that neither Portugal nor any other shall dare to molest their quiet; and in what city soever they shall have residence, I have commanded all my governors and captains to give them freedom answerable to their own desires; to sell, buy, and to transport into their country at their pleasure. For confirmation of our love and friendship, I desire your Majesty to command your merchants to bring in their ships of all sorts of rarities and rich goods fit for my palace; and that you be pleased to send me your royal letters by every opportunity, that I may rejoice in your health and prosperous affairs; that our friendship may be interchanged and eternal.

— Nuruddin Salim Jahangir, Letter to James I.

East India Company Foothold in India articles: 5

Expansion

The company, which benefited from the imperial patronage, soon expanded its commercial trading operations. It eclipsed the Portuguese Estado da Índia, which had established bases in Goa, Chittagong, and Bombay – Portugal later ceded Bombay to England as part of the dowry of Catherine of Braganza on her marriage to King Charles II. The East India Company also launched a joint attack with the Dutch United East India Company (VOC) on Portuguese and Spanish ships off the coast of China, which helped secure EIC ports in China.[30] The company established trading posts in Surat (1619), Madras (1639), Bombay (1668), and Calcutta (1690). By 1647, the company had 23 factories, each under the command of a factor or master merchant and governor, and 90 employees in India. The major factories became the walled forts of Fort William in Bengal, Fort St George in Madras, and Bombay Castle.

In 1634, the Mughal emperor Jahangir extended his hospitality to the English traders to the region of Bengal,[31] and in 1717 completely waived customs duties for their trade. The company's mainstay businesses were by then cotton, silk, indigo dye, saltpetre, and tea. The Dutch were aggressive competitors and had meanwhile 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.

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.[32]

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. Spices, at the time, could only be found on these islands, such as pepper, ginger, nutmeg, cloves and cinnamon; and they could bring profits as high as 400 percent from one voyage.[33]

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 between them:[33] 1652–1654, 1665–1667, 1672–1674 and 1780–1784.

The Dutch Company maintained that profit must support the cost of war which came from trade which produced profit.[34]

Competition arose in 1635 when Charles I granted a trading licence to Sir William Courteen, which permitted the rival Courteen association to trade with the east at any location in which the EIC had no presence.[35]

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.[36]

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.[37]

Indian exports of textiles to Europe (pieces per year)[38]
Years EIC VOC France EdI Denmark Total
Bengal Madras Bombay Surat EIC (total) VOC (total)
1665–1669 7,041 37,078 95,558 139,677 126,572 266,249
1670–1674 46,510 169,052 294,959 510,521 257,918 768,439
1675–1679 66,764 193,303 309,480 569,547 127,459 697,006
1680–1684 107,669 408,032 452,083 967,784 283,456 1,251,240
1685–1689 169,595 244,065 200,766 614,426 316,167 930,593
1690–1694 59,390 23,011 89,486 171,887 156,891 328,778
1695–1699 130,910 107,909 148,704 387,523 364,613 752,136
1700–1704 197,012 104,939 296,027 597,978 310,611 908,589
1705–1709 70,594 99,038 34,382 204,014 294,886 498,900
1710–1714 260,318 150,042 164,742 575,102 372,601 947,703
1715–1719 251,585 20,049 582,108 534,188 435,923 970,111
1720–1724 341,925 269,653 184,715 796,293 475,752 1,272,045
1725–1729 558,850 142,500 119,962 821,312 399,477 1,220,789
1730–1734 583,707 86,606 57,503 727,816 241,070 968,886
1735–1739 580,458 137,233 66,981 784,672 315,543 1,100,215
1740–1744 619,309 98,252 295,139 812,700 288,050 1,100,750
1745–1749 479,593 144,553 60,042 684,188 262,261 946,449
1750–1754 406,706 169,892 55,576 632,174 532,865 1,165,039
1755–1759 307,776 106,646 55,770 470,192 321,251 791,443

Slavery 1621–1757

The East India Company's own archives suggest that its involvement in the slave trade began in 1684, when a Captain Robert Knox was tasked with purchasing 250 slaves from Madagascar to be transported to St. Helena.[39] However, according to the Encyclopædia Britannica, it was the early 1620s when the East India Company began transporting slave labour to and using it in its facilities across Asia and the Atlantic.[40] Richard Allen suggests that it was 1621.[41]

Japan

Document with the original vermilion 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 Clove, under the command of Captain John Saris, was the first British 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, a British 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:

We give free license to the subjects of the King of Great Britaine, Sir Thomas Smythe, Governor and Company of the East Indian Merchants and Adventurers forever safely come into any of our ports of our Empire of Japan with their shippes and merchandise, without any hindrance to them or their goods, and to abide, buy, sell and barter according to their own manner with all nations, to tarry here as long as they think good, and to depart at their pleasure.[42]

However, unable to obtain Japanese raw silk for import to China and with their trading area reduced to Hirado and Nagasaki from 1616 onwards, the company closed its factory in 1623.[43]

Anglo Mughal War

An English soldier apologising to Emperor Aurangzeb.

The first of the Anglo-Indian Wars occurred in 1686 when the company conducted naval code against Shaista Khan, the governor of Mughal Bengal. This later caused the Siege of Mumbai and led the intervention of Mughal Emperor Aurangzeb, and ultimately the English company was defeated and fined.[44][45]

Mughal convoy piracy incident of 1695

In September 1695, Captain Henry Every, an English pirate on board the Fancy, reached the Straits of Bab-el-Mandeb, where he teamed up with five other pirate captains to make an attack on the Indian fleet on return 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 Fateh Muhammed some days later, and meeting little resistance, took some £50,000 to £60,000 worth of treasure.[46]

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.[47]

In a letter sent to the Privy Council by Sir John Gayer, then governor of Bombay and head of the East India Company, Gayer claims that "it is certain the Pirates ... did do very barbarously by the People of the Ganj-i-Sawai and Abdul Ghaffar's ship, to make them confess where their money was." The pirates set free the survivors who were left aboard their emptied ships, to continue their voyage back to India.

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 ("enemies of the human race"). 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. When the East India Company later doubled that reward, the first worldwide manhunt in recorded history was underway.[48]

The plunder of Aurangzeb's treasure ship had serious consequences for the English East India Company. The furious Mughal Emperor Aurangzeb ordered Sidi Yaqub and Nawab Daud Khan to attack and close four of the company's factories in India and imprison their officers, who were almost lynched by a mob of angry Mughals, blaming them for their countryman's depredations, and threatened to put an end to all English trading in India. To appease Emperor Aurangzeb and particularly his Grand Vizier Asad Khan, Parliament exempted Every from all of the Acts of Grace (pardons) and amnesties it would subsequently issue to other pirates.[49]

East India Company Expansion articles: 53

Forming a complete monopoly

Trade monopoly

Rear view of the East India Company's Factory at Cossimbazar

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. The company developed a lobby in the English parliament. Under pressure from ambitious tradesmen and former associates of the company (pejoratively termed Interlopers by the company), who wanted to establish private trading firms in India, a deregulating act was passed in 1694.[50]

This 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. 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.[51] 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.[50]

It quickly became evident that, in practice, the original company faced scarcely any measurable competition. The companies merged in 1708, by a tripartite indenture involving both companies and the state, with the charter and agreement for the new United Company of Merchants of England Trading to the East Indies being awarded by Sidney Godolphin, 1st Earl of Godolphin.[52] Under this arrangement, the merged company lent to the Treasury a sum of £3,200,000, 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.[50]

Company painting depicting an official of the East India Company, c. 1760

In the following decades there was a constant battle between the company lobby and Parliament. The company sought a permanent establishment, while Parliament would not willingly allow it greater autonomy and so relinquish the opportunity to exploit the company's profits. In 1712, another act renewed the status of the company, though the debts were repaid. By 1720, 15% of British imports were from India, almost all passing through the company, which reasserted the influence of the company lobby. The licence was prolonged until 1766 by yet another act in 1730.

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.[53]

The war took place on Indian soil, 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.[53]

With the advent of the Industrial Revolution, Britain surged ahead of its European rivals. Demand for Indian commodities was boosted by the need to sustain the troops and the economy during the war, and by the increased availability of raw materials and efficient methods of production. As home to the revolution, Britain experienced higher standards of living. Its spiralling cycle of prosperity, demand and production had a profound influence on overseas trade. The company became the single largest player in the British global market. In 1801 Henry Dundas reported to the House of Commons that

... on the 1st March, 1801, the debts of the East India Company amounted to 5,393,989l. their effects to 15,404,736l. and that their sales had increased since February 1793, from 4,988,300l. to 7,602,041l.[54]

Saltpetre trade

Saltpetre used for gunpowder was one of the major trade goods of the company

Sir John Banks, a businessman from Kent who negotiated an agreement between the king and the company, began his career in a syndicate arranging contracts for victualling the navy, an interest he kept up for most of his life. He knew that Samuel Pepys and John Evelyn had amassed a substantial fortune from the Levant and Indian trades.

He became a director and later, as governor of the East India Company in 1672, he arranged a contract which included a loan of £20,000 and £30,000 worth of saltpetre—also known as potassium nitrate, a primary ingredient in gunpowder—for the King "at the price it shall sell by the candle"—that is by auction—where bidding could continue as long as an inch-long candle remained alight.[55]

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.[56]

East India Company Forming a complete monopoly articles: 23

Basis for the monopoly

Colonial monopoly

An East India Company coin, struck in 1835
Robert Clive became the first British Governor of Bengal after he had instated Mir Jafar as the Nawab of Bengal

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.[57]

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.

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.[58]

The Company's trade monopoly with India was abolished in the Charter Act of 1813. The monopoly with China was ended in 1833, ending the trading activities of the company and rendering its activities purely administrative.

East India Company Army and Navy

In its first century and half, the EIC used a few hundred soldiers as guards. The great expansion came after 1750, when it had 3,000 regular troops. By 1763, it had 26,000; by 1778, it had 67,000. It recruited largely Indian troops and trained them along European lines.[59] The military arm of the East India Company quickly developed into a private corporate armed force used as an instrument of geo-political power and expansion instead of its original purpose as a guard force. Because of this, the EIC became the most powerful military force in the Indian subcontinent. As it increased in size, the army was divided into the Presidency Armies of Bengal, Madras and Bombay, each of which recruited its own infantry, cavalry, and artillery units. The company's merchant ships, called East Indiaman were usually well armed to defend against pirates. The EIC also maintained a naval arm called the Bombay Marine; in 1830 this was renamed the Indian Navy.

East India Company Basis for the monopoly articles: 25

Opium trade

The Nemesis destroying Chinese war junks during the Second Battle of Chuenpi, 7 January 1841, by Edward Duncan

In the 18th century, Britain had a huge trade deficit with China. Therefore, in 1773, the company created a British monopoly on opium buying in Bengal, India, by prohibiting the licensing of opium farmers and private cultivation. The monopoly system established in 1799 continued with minimal changes until 1947.[60] As the opium trade was illegal in China, Company ships could not carry opium to China. So the opium produced in Bengal was sold in Calcutta on condition that it be sent to China.[61]

Despite the Chinese ban on opium imports, reaffirmed in 1799 by the Jiaqing Emperor, the drug was smuggled into China from Bengal by traffickers and agency houses such as Jardine, Matheson & Co, David Sassoon & Co., and Dent & Co. in amounts averaging 900 tons a year. The proceeds of the drug-smugglers landing their cargoes at Lintin Island were paid into the company's factory at Canton and by 1825, most of the money needed to buy tea in China was raised by the illegal opium trade.

The company established a group of trading settlements centred on the Straits of Malacca called the Straits Settlements in 1826 to protect its trade route to China and to combat local piracy. The settlements were also used as penal settlements for Indian civilian and military prisoners.

An opium factory in Patna, India from c. 1850.

In 1838 with the amount of smuggled opium entering China approaching 1,400 tons a year, the Chinese imposed a death penalty for opium smuggling and sent a Special Imperial Commissioner, Lin Zexu, to curb smuggling. This resulted in the First Opium War (1839–42). After the war Hong Kong island was ceded to Britain under the Treaty of Nanking and the Chinese market opened to the opium traders of Britain and other nations.[60] The Jardines and Apcar and Company dominated the trade, although P&O also tried to take a share.[62] A Second Opium War fought by Britain and France against China lasted from 1856 until 1860 and led to the Treaty of Tientsin, which legalised the importation of opium. Legalisation stimulated domestic Chinese opium production and increased the importation of opium from Turkey and Persia. This increased competition for the Chinese market led to India's reducing its opium output and diversifying its exports.[60]

East India Company Opium trade articles: 15