East India Company
East India Company, any of a number of commercial enterprises formed in western Europe during the 17th and 18th centuries to further trade with the East Indies. The companies, which had varying degrees of governmental support, grew out of the associations of merchant adventurers who voyaged to the East Indies following the discovery in 1497 of the Cape of Good Hope route by Portuguese navigator Vasco da Gama. The most important of the companies were given charters by their respective governments, authorizing them to acquire territory wherever they could and to exercise in the acquired territory various functions of government, including legislation, the issuance of currency, the negotiation of treaties, the waging of war, and the administration of justice. The most notable companies were the following.
II -DANISH EAST INDIA COMPANY
Chartered in 1729 by King Frederick IV of Denmark after unsuccessful attempts by Denmark to gain a share of the East India trade in 1616 and 1634, it enjoyed great prosperity in India until the advance of British power there in the late 18th century. As a consequence of the destruction of Danish naval power in the war between Britain and Denmark in 1801, the power of the Danish company was broken. Its principal Indian possessions, Tranquebar in Tamil Nādu and Serampore in Bengal, were purchased by Britain in 1845.
III -DUTCH EAST INDIA COMPANY
Incorporated from a number of smaller companies by the States General of the Netherlands in 1602, its monopoly extended from the Cape of Good Hope eastward to the Strait of Magellan, with sovereign rights in whatever territory it might acquire. In 1619 Jan Pieterszoon Coen, regarded as the founder of the Dutch colonial empire in the East Indies, established the city of Batavia in Java (now Jakarta, Indonesia) as the headquarters of the company. From Batavia, Dutch influence and activity spread throughout the Malay Archipelago and to China, Japan, India, Iran, and the Cape of Good Hope. During the course of the 60-year war between Spain and the Netherlands (1605-1665), the Dutch company despoiled Portugal, which was united with Spain from 1580 to 1640, of all its East Indian possessions. It supplanted the Portuguese in most of present-day Indonesia and in the Malay Peninsula, Ceylon (now Sri Lanka), the Malabar Coast of India, and Japan.
During this period it was also successful in driving English rivals from the Malay Archipelago and the Moluccas. In 1632 the Dutch killed the English factors, or agents, in Amboina, capital of the Dutch Moluccas; for this act the English government later exacted compensation. In 1652 the company established the first European settlement in South Africa on the Cape of Good Hope. At the peak of its power, in 1669, the Dutch company had 40 warships, 150 merchant ships, and 10,000 soldiers.
Between 1602 and 1696 the annual dividends that the company paid were never less than 12 percent and sometimes as high as 63 percent. The charter of the company was renewed every 20 years, in return for financial concessions to the Dutch government. In the 18th century, internal disorders, the growth of British and French power, and the consequences of a harsh policy toward the native inhabitants caused the decline of the Dutch company. It was unable to pay a dividend after 1724 and survived only by exacting levies from native populations. It was powerless to resist a British attack on its possessions in 1780, and in 1795 it was doomed by the ouster of the States General at home by the French-controlled Batavian Republic. In 1798 the republic took over the possessions and debts of the company.
IV -ENGLISH EAST INDIA COMPANY
The most important of the various East India companies, this company was a major force in the history of India for more than 200 years. The original charter was granted by Queen Elizabeth I on December 31, 1600, under the title of “The Governor and Company of Merchants of London Trading into the East Indies.” The company was granted a monopoly of trade in the East Indies, with the formal restriction that it might not contest the prior trading rights of “any Christian prince.” The company was managed by a governor and 24 directors chosen from its stockholders.
In early voyages the company penetrated as far as Japan, and in 1610 and 1611 its first factories, or trading posts, were established in India in the provinces of Madras and Bombay. Under a perpetual charter granted in 1609 by King James I, the company began to compete with the Dutch trading monopoly in the Malay Archipelago, but after the massacre of Amboina the company conceded to the Dutch the area that became known as the Netherlands East Indies. Its armed merchantmen, however, continued sea warfare with Dutch, French, and Portuguese competitors.
In 1650 and 1655 the company absorbed rival companies that had been incorporated under the Commonwealth and Protectorate by Lord Protector Oliver Cromwell. In 1657 Cromwell ordered it reorganized as the sole joint-stock company with rights to the Indian trade. During the reign of Charles II the company acquired sovereign rights in addition to its trading privileges. In 1689, with the establishment of administrative districts called presidencies in the Indian provinces of Bengal, Madras, and Bombay, the company began its long rule in India. It was continually harassed by traders who were not members of the company and were not licensed by the Crown to trade.
In 1698, under a parliamentary ruling in favor of free trade, these private newcomers were able to set up a new company, called the New Company or English Company. The East India Company, however, bought control of this new company, and in 1702 an act of Parliament amalgamated the two as “The United Company of Merchants of England Trading to the East Indies.” The charter was renewed several times in the 18th century, each time with financial concessions to the Crown.
The victories of Robert Clive, a company official, over the French at Arcot in 1751 and at Plassey in 1757 made the company the dominant power in India. All formidable European rivalry vanished with the defeat of the French at Pondicherry in 1761. In 1773 the British government established a governor-generalship in India, thereby greatly decreasing administrative control by the company; however, its governor of Bengal, Warren Hastings, became the first governor-general of India. In 1784 the India Act created a department of the British government to exercise political, military, and financial control over the Indian affairs of the company, and during the next half century British control was extended over most of the subcontinent.
In 1813 the company's monopoly of the Indian trade was abolished, and in 1833 it lost its China trade monopoly. Its annual dividends of 10.5 percent were made a fixed charge on Indian revenues. The company continued its administrative functions until the Sepoy Rebellion (1857-1859). In 1858, by the Act for the Better Government of India, the Crown assumed all governmental responsibilities held by the company, and its 24,000-man military force was incorporated into the British army. The company was dissolved on January 1, 1874, when the East India Stock Dividend Redemption Act came into effect.
V - FRENCH EAST INDIA COMPANY
Established in 1664 by Jean-Baptiste Colbert, finance minister of King Louis XIV, the company founded its first trading post at Surat in Bombay in 1675. The following year it set up its principal Indian base at Pondicherry, on the Coromandel Coast. The company prospered and extended its operations to China and Iran. In 1719 the company was reorganized with the American and African French colonial companies as the Compagnie des Indes. This company, headed by Scottish financier John Law, suffered severely with the collapse of the Mississippi Scheme. In 1730 it lost its slave trade with Africa, in 1731 its general trade with Louisiana, and in 1736 its coffee trade with the Americas. The company prospered in India, however, under governors Benoît Dumas, from 1735 to 1741, and Joseph François Dupleix, from 1742 to 1754.
Dupleix directed the unsuccessful French struggles against the British control of India. The capture of Arcot in 1751 by the British under Robert Clive limited French control to southern India, where it remained supreme until 1761, when the British captured Pondicherry. The operations of the company were finally suspended by royal decree in 1769, and in the following year it turned over its capital of more than 500 million livres to the Crown. In 1785 a new company received commercial privileges, but this company was abolished in 1794 during the time of the French Revolution.