The East India Company

East India House in Leadenhall Street in the City of London. The Company had occupied the site since the mid-17th century but expanded several times. This building was designed by Henry Holland and work began in 1796. It included a museum housing the Company’s collection of exotic items. The building was demolished in 1862 following the Company’s demise and is now the site of the Lloyd’s insurance building. The drawing is by T.H. Shepherd and published in 1829.

In the 18th century the world’s greatest commercial business was based in London, with its grand headquarters in Leadenhall Street in the City. During its 270-year history the East India Company brought spices from the Far East that changed Britain’s cuisine, refashioned the nation’s use of fabrics from wool to cotton, then introduced tea as the favoured beverage. More significantly, it was in large part responsible for changing the world’s economy in favour of Britain but at great cost to the Indian sub-continent and China. Initially a trading company, its private army conquered a huge country, leading it to rule over a vast population.

For centuries Asia was the world’s greatest manufacturing area, with spices and exotic luxury goods sent overland from there to Europe via Istanbul and on to Venice. Thus, a camel was incorporated into the heraldic device of London’s medieval Grocers’ Company. Vasco da Gama was the first European to open a direct sea route with the Far East, first arriving in India in May 1498, and the Portuguese monopolised maritime routes with India and China for the next century, bringing valuable silks and spices to Europe.

Political conflict with Spain and Portugal in the second half of the 16th century disrupted supplies of Asian products from reaching England. A group of London merchants attempted to trade via the Baltic and Russia, forming the Muscovy Company. Another group, with overlapping membership to the Muscovy Company, went via the Mediterranean as the Levant Company. In April 1591 James Lancaster set out from Devon with three ships owned by Levant Company merchants to find a route to the Far East, reaching Ceylon (Sri Lanka). The mission was a disaster and few of the crews arrived back in England in 1594. Nevertheless, the voyage provided much useful information that would be used in the following years.

In the second half of the 16th century Spain, Portugal and the Netherlands were part of the Habsburg Empire but when the Dutch formed their own independent state in 1581 their supply of Asian products was severed. In 1595 a Dutch fleet sailed to Indonesia and thereby ended Portugal’s monopoly of trade with the Far East. That led to the formation of the Verenigde Oostindische Compagnie (VOC) in 1602. It established a dominant position during the following century and for a time the VOC accounted for half the world’s shipping.

Political differences between the various nations disrupted imports of spices to England, which caused the price of pepper to almost triple. That made London merchants determined to create their own monopoly of the trade. A meeting was chaired by the Mayor at Founders’ Hall and an association, dominated by Levant Company merchants, was formed in 1599. On New Year’s Eve 1600 a royal charter was granted to the ‘Company and Merchants trading to the East Indies’, or ‘East India Company’, giving them a monopoly on English trade between the Cape of Good Hope and Magellan’s Strait. The first chairman of the company was Sir Thomas Smythe, who was also governor of the Levant Company.

A small fleet of well-armed ships carrying around 500 crew, many of them Thames watermen and commanded by James Lancaster, sailed from Woolwich in 1601, backed by 218 subscribers. The Company was given the right to export silver – something that had previously been illegal – in order to purchase spices. A variety of goods, including metals, fabrics, lace and gifts for foreign officials, as well as bullion, were sent on the outbound voyage. Despite poor sailing conditions that made for slow progress and many of the crew succumbing to scurvy, they arrived at Achin on the Indonesian island of Sumatra in the spring of 1602. A trade agreement with the sultan was struck and a small settlement established as a base. Pepper, cloves, indigo, mace and silk were brought back, providing substantial returns for the investors. The eighth voyage alone provided subscribers with a 221% profit. Continuing voyages ensured that spices were thereafter widely available in Britain, changing the nation’s cuisine. A decade later a commercial treaty was concluded with the powerful Mughal emperor, who ruled much of the sub-continent, giving the East India Company exclusive trading rights with the Surat region. By 1620 the Company had established twelve factories in the Far East.

During the early decades of the 17th century the members of the East India Company were amongst the greatest merchants of the City of London, many of whom were also aldermen. Not only was it necessary to be wealthy to finance expensive voyages but also to have a close relationship with the King and his government to negotiate duties and privileges. There was overlapping membership of the East India and Levant Companies, as well as the Muscovy Company. The first chairman of the East India Company was Sir Thomas Smythe, who was also governor of the Levant Company.

Each of the early voyages was funded as an individual venture but in 1657 a permanent joint-stock corporation was formed, allowing the shares to be publicly traded. They could initially be purchased from the East India headquarters and later at the Royal Exchange. Two years later, following a charter to the Company from Oliver Cromwell, an important supply base was established on the island of St. Helena in the South Atlantic, en-route between England and the Far East. An additional supply base later became available when Cape Town became a British colony during the Napoleonic Wars.

The East India Company was expelled from the Spice Islands by the Dutch in 1682 and instead focussed its attention on India and its textiles.  One of the Company’s trading stations was established at Bombay on the west coast of the Indian sub-continent. It had originally been founded by the Portuguese but transferred to Charles II in 1661 as part of the dowry of Catherine of Braganza and rented to the East India Company for £10 per year. (Oddly, the letters patent that sealed the agreement placed Bombay “in the Manor of East Greenwich in the County of Kent”). In the 1690s another base was established at the commercial centre of Calcutta on the prosperous Bengali coast of India and the area was soon providing over half the Company’s imports from Asia.

By 1700 the East India Company was making twenty to thirty sailings per year to the Far East and was England’s largest corporation. The Indian subcontinent accounted for substantially more than 20 percent of the world’s gross domestic production, compared with less than two percent by Britain. The Bengal region in the north-east was the richest part of the Mughal empire. Its weavers had for centuries efficiently produced a vast range of the finest textiles in silk and cotton. These colourful products, such as muslin, calico, chintz, dungaree and gingham, became the East India’s primary imports into England. Business boomed and in the early 18th century East India-imported calico overtook native British wool as the most popular textile in English homes. This was to the great detriment of the local weaving industry, leading in 1697 to riots by London’s textile workers and assaults on the property of the Company and its directors. Two decades later there were attacks on London’s streets on women wearing calico. The government’s response was to restrict its importation and ban the use of powered looms in Bengal.

Between 1699 and 1774 the East India Company’s business increased to as much as 15 percent of total annual imports into Britain, its taxes and other payments often keeping the British government solvent. From its headquarters in London instructions were sent around the world regarding what goods should be purchased and the price to be paid. Local Company governors in India were given autonomy as to how those purchases could be achieved.