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. English merchants and privateers made exploratory trips to the Far East during the reign of Queen Elizabeth but little initially came of them other than gaining information that could be used on later voyages.
When the Protestant Dutch were denied access to spices by the Catholic Portuguese and Spanish they instead sent their own ships to the Far East. They reached Bantam in Java from where they returned with spice in 1599. 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. But the price of pepper almost tripled in England, which 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 was formed. 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.
A small fleet of well-armed ships carrying around 500 crew, many of them Thames watermen, 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. 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 Indian sub-continent, giving the East India Company exclusive trading rights with the Surat region.
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. After a further two years, 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 base was later available from when Cape Town became a British colony during the Napoleonic Wars.
When it was expelled from the Spice Islands by the Dutch in 1682 the East India Company 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 ten pounds 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 twenty 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, and two decades later attacks on London’s streets against 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 fifteen 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.