East India Companies, associations formed to conduct trade between Europe and the Indies. The overland trade, in which the Italian republics were foremost, was terminated by the Turkish conquest of Constantinople and Egypt. The necessity of a new route to India then became the problem of western Europe, and Vasco da Gama rounded the Cape of Good Hope and reached the Malabar coast in 1498. The Portuguese then established themselves in India, and for nearly a century monopolized its trade. Portugal being united with Spain in 1580 and its ports closed to British vessels, the English bought their Indian supplies of the Dutch. But when on the revolt of the Netherlands Dutch vessels also were excluded from the port of Lisbon, both Dutch and English established direct trade with the Indies. In 1587 a charter was granted to a Portuguese company, in consideration of an annual tribute. On the breaking out of the war between England, Holland, and Spain, which struck a disastrous blow at the India trade, the Portuguese company became unable to pay its annual tribute to the government, and was abolished in 1640. In 1595 a "Company for Remote Parts" was formed at Amsterdam, which in 1602, having been united with other companies, received a charter from the states general conferring on them the exclusive privilege of trade to the East Indies for 21 years, with the necessary civil and military powers.
They began with a capital of 6,500,000 guilders, and in 20 years their dividends amounted to 30,000,000 guilders, besides vast amounts of property in colonies, fortifications, and vessels. The charter was extended to 4644; Ba-tavia was founded; the commerce with Japan, which returned silver and copper for commodities, was extended; in 1641 Malacca, capital of the then neglected Portuguese East India possessions, was acquired by the Dutch; and from 34 to 41 freighted vessels were sent out annually, of which from 25 to 34 returned loaded. Yet so rapidly did the English and French commerce increase during these years, that in 1644 the Dutch East India company could scarcely command the 1,600,000 guilders required as a subsidy to the government, on again renewing its charter for 21 years. The peace of Westphalia, which secured the independence of the republic of the United Provinces, once more gave the company life. In 1665 the charter was with much opposition renewed till 1700. At this time the company held the principal seats of commerce in Ceylon, Sumatra, Java, Borneo, and in fact throughout the Indian archipelago, and had large colonies in South Africa. They commanded the trade with Pegu, Siain, Tonquin, Japan, the Banda and Molucca isles, Amboyna, etc.
Ba-tavia was then in all its glory, and the straits of Sunda on which it is situated had become, instead of those of Malacca, the channel to the further Indies. The charter was renewed in 1701, in 1741, and in 1776, the last time for 30 years, and on condition of paying down 2,000,-000 guilders, with 360,000 annually. Turning their hands against every one in the East, and seeking, by oppression of natives, exclusion of Europeans, and the forced production of some spices with prohibition of the cultivation of others, to rule the markets of the world and to extend and consolidate their dominion and wealth, the company was yet so exhausted by war with England and political expenses, that in 1781 the states general were obliged to assist it with a loan. In the first French revolution it lost nearly all its possessions. The establishment of the Batavian republic in 1795 terminated its existence, and the affairs of the company passed into the hands of the government. A new company was established in 1824, called the Handel Maatschapij or trading association.
This company became the agent for the sale of the government produce in Europe, and the carrier of this produce, and farmed some branches of the public revenue of Java and the other Dutch East India colonies. - A French East India company, founded in 1664 by Colbert, was broken up in 1770. - A Danish East India company, founded in 1618, was dissolved in 1634; it was reconstituted in 1670, and again dissolved in 1729. A new company, formed in 1732 under the name of the Danish Asiatic company, was prosperous during the 18th century, but afterward declined. - The English endeavored to open commercial intercourse with India as early as 1553, during the reign of Edward VI., but without success. In 1599 a company of London merchants was formed, representing a capital of £30,133, which received a charter from Queen Elizabeth, Dec. 31, 1600, under the title of "The Governor and Company of Merchants of London trading with the East Indies." The charter was for 15 years, and granted the exclusive right of trading to all countries from the cape of Good Hope eastward to the straits of Magellan, excepting those which were possessed by friendly European powers.
The first governor was Thomas Smythe, who was assisted by 24 directors named in the charter, which empowered them to elect a governor and directors and other office-bearers; to make by-laws for their government; to inflict punishments, corporal or pecuniary, on those in their employ, provided such punishments be within the laws of Great Britain; to export all goods duty free for four years, and to export foreign coins as bullion to the amount of £30,000 a year, £6,000 of the same being previously recoined at the mint; with the proviso that they must import within six months from the conclusion of every voyage after the first an amount of specie equal to that before exported. It was also provided that should the company not be found to the public advantage, its charter might be cancelled after two years' notice. The first expedition to India sailed under command of Capt. Lancaster, Feb. 15, 1601, from Torbay. It consisted of five ships, varying in size from 130 to 600 tons, having cargoes of bullion, iron, tin, broadcloths, cutlery, glass, etc. The entire venture, ships and all, was valued, at £69,091. It arrived at Acheen, Sumatra, Juno 5, 1602. Lancaster made treaties with the kings of Acheen and Bantam, and returned to the Downs Sept. 11, 1603, with cargoes of pepper and other produce.
For several years the expeditions were not increased in size or value, but were generally fortunate in their results. In 1607 Capt. Hawkins was sent out to establish commercial intercourse with the dominions of the Great Mogul, but his mission proved of no avail. In 1612 Capt. Beal obtained from the court at Delhi several important privileges, among which was that of establishing a factory at Surat, which city continued to be the chief British station in India until the organization of Bombay. Factories were depots for goods, fortified, to protect the lives and property of resident representatives of the company. In 1613 the capital of the company was united; the largest stockholders took the management of affairs, and these were so prosperous that in four years the shares of the company rose to the value of 203 per cent.,-while its factories were extended to Java, Sumatra, Borneo, the Banda islands, Celebes, Malacca, Siam, the Coromandel and Malabar coasts, but chiefly to the dominions of the Great Mogul, whose favor the company had finally secured.
From the beginning of the company's trade to July, 1620, it had sent 79 ships to India, of which 34 had come safely home richly laden, 4 had been worn out in India, and 20 had been lost - 2 by careening, 6 by sea perils, and 1.2 captured by the Dutch. At that time (1620) the capital of the company in ships, goods in India, etc, amounted to £400,000; it had exported from England to India the value of £840,376; had imported what cost £356,288 in India, which brought £1,914,600 in England; and finally quarrels with the Dutch, their most energetic rivals, had occasioned losses to the amount of £84,-088. In 1616 a new stock subscription had been opened, and £1,629,040 were raised. But in 1627 complaints were made of abuses and bad management; during the reign of the Stuarts there was much murmuring against the monopoly, and Charles I. in 1635 gave to Sir William Courten and several private individuals the right to trade to India. In 1645 permission was given by the natives to the company to build Fort St. George at Madras. In 1655 Cromwell vainly attempted to make the East India trade free.
In 1657 he renewed the company's charter, which was confirmed by Charles II. in 1661, who at the same time conferred on it authority to make peace or war with any power not of the Christian religion; to establish fortifications, garrisons, and colonies; to export ammunition and stores to its settlements duty free; to exercise civil and criminal jurisdiction in its settlements according to English law; and to seize and send to England all Englishmen found trading on their private account. In 1667-'8 the tea trade was begun, a branch of commerce which in a few years proved to be of vast importance to the company. In 1669 the island of Bombay was granted to the company by Charles II., who had received it as part of the marriage portion of the princess Catharine of Portugal. In 1676 a factory was established on the Hoogly in Bengal, which led to the foundation of Calcutta; and other factories were shortly started in that region. In 1677 the company received a renewal of its charter, with indemnity for past misuses, and permission to establish a mint at Bombay. In 1681, by a report of the governor, the company had 35 ships, of from 100 to 700 tons, trading between India and England, or coastwise in India; and the exports from England of lead, tin, cloth, stuffs, etc, amounted to from £60,000 to £70,000 a year.
The trade was astonishingly small; the affairs of the company were not prosperous, and in 1688 the validity of its charter was questioned, but in 1693, after a heavy struggle, it was renewed. In 1694 a vote of the house of commons threw open the trade to all England. In 1698 a new company received a charter, conferring much the same privileges as those of the old one, for the consideration of a loan of £2,000,000 to the state. The two companies were united in 1702 under the title of " The United Company of Merchants trading to the East Indies." They advanced a further sum to the state, making in all a loan of £3,200,000, at 3 per cent., in consideration of which their charter was extended until the expiration of a notice of three years, which could not be given sooner than March, 1726, nor until the money bor-rowed by government should be repaid. The act ratifying this was passed in 1708. By it the local affairs of the company were intrusted to the three councils of Madras, Bombay, and Calcutta, while the general direction was retained in England. Meanwhile, in 1698, a grant of Calcutta and two adjoining villages had been acquired, with the right of jurisdiction over the inhabitants, and leave to erect fortifications, which was immediately done; and in 1715 this jurisdiction was largely extended by grant from the emperor Ferokshere. In 1701 an act prohibited the importation into England of manufactured Indian goods.
In 1732 the renewal of the charter was obtained with much difficulty; and in 1744 the company bought its extension to 1780 by a loan of £1,000,000 at 3 per cent. The territorial conquests of the company were inaugurated by the expulsion, in 1749, and ultimate protection of the rajah of Tanjore, he making some concessions of territory on each occasion of the British exercise of protection. In 1757 they deposed Surajah Dowlah, nabob of Bengal, gaining thereby several large and rich provinces. In 1761 the defeat of the French left the English free to pursue their schemes of aggrandizement in India. In 1792 Tippoo Sahib was compelled by Cornwallis to give up half his dominions, and £3,500,000 in bullion. In 1799 Seringapatam was taken, Tippoo slain, and some more territory annexed. Subsequently, by war with the Pindarees, with Burmah, Nepaul, and the Afghans, and by judicious protection, interference, and annexation, the company mastered the whole of Hindostan, with small exceptions. The sudden increase of territory and power in India threw everything into confusion. Corruption reigned everywhere.
The revenues fell short of expenses, and in 1772 the company, notwithstanding its immense possessions and privileges, was obliged to raise a loan of £6,000,000 from the bank of England, and of £1,400,000 from government for current expenses. In 1773 reform was called for, but was only incompletely effected. In 1781 the privileges of the company were extended to 1791, with three years' notice; the dividend on its stock was fixed at 8 per cent.; £400,000 was to be paid as an annual subsidy to the government, and three fourths of the surplus revenue was to go to the government, one fourth to the company's use. Yet in 1780 the East India trade formed only 1/32 part of the entire foreign trade of the empire. In 1783 the company was again so involved, on account of wars, etc, as to be unable to pay the subsidy. In the following year, on the proposition of Mr. Pitt, a board of control was appointed, consisting of such members of the British privy council as the sovereign of England chose to appoint, the two principal secretaries of state and the chancellor of the exchequer being three of the members. The president was usually a cabinet minister.
In 1793 the* charter was prolonged to 1814. From that date the charter was again prolonged 20 years, but the trade to India was substantially- thrown open, though the monopoly of the trade to China was continued, and did not cease till 1834. Parliament in 1833 granted a new charter, by which - 1, the company ceased to be a trading association; 2, it was continued in the government of India until 1854, subject to the authority of the board of control; 3, India was thrown open to the independent enterprise of British subjects; 4, all the property, real and personal, in possession of the company on April 22, 1834, was vested in the crown, and was to be held and managed by the company in trust for the crown, the stockholders being assured by government an annual dividend of 10 1/2 per cent. on the stock; 5, of the treasure of the company, valued in 1834 at £21,103,000, £2,000,000 were formed into a sinking fund, with the proceeds of which, in or after 1874, to buy out the stockholders at 200 per cent. valuation, £8,423,000 were consumed in the payment of the company's debts, and the balance was appropriated to various improvements in India; 6, the stock might be bought in by parliament at the rate of £200 for £100 at any time after 1874, with the further condition that if at any time after 1854 the company were deprived by parliament of the government of India, stockholders might demand of parliament to purchase their stock, after three years' notice given.
When in 1854 the last charter of the company expired, it was determined by act of parliament to renew it, but not for any given time. - The capital stock, originally £2,000,000, had been increased at various times, till in 1793 it amounted to £6,000,000. At this it remained by law. This stock was owned in 1835 by 3,579 persons. As it was marketable, of course the number of stockholders continually changed. The ownership of stock to the amount of £1,000 (worth in 1835 £2,540) gave the privilege of one vote at the stockholders' meetings. The owner of £3,000 had two votes, of £6,000 three, of £10,000 and over, four. Women as well as men, and foreigners as well as Britons, if owning the requisite amount of stock, and present in London in person or by proxy, had the privilege of debating and voting. Stock must, however, have been held 12 months before the owner was entitled to a vote. In 1852 there were 2,583 voters, of whom 372 -were women, 20 were peers of the realm, 10 members of parliament, 50 ex-directors, 86 clergymen, 19 physicians, 222 army officers, and 28 naval officers. Before 1836 the majority of the stockholders were merchants and bankers, but the changes in the constitution, which extinguished the company as a trading association, caused a material decrease of this class.
The court of directors was originally composed of 24 stockholders, qualified by the ownership of at least £2,000 of stock. By the act of 1853 the court consisted of 18 members, of whom 12 were elected by the stockholders, and 6 were chosen by the crown from men who had served in India. For expediting business, the members were annually divided into three committees: one on finance, and interior and marine interests connected therewith; the second on politics and war; and the third on the judicial and legislative interests. The most important part of the court of directors, however, was the secret committee. To this, composed of the chairman, deputy chairman, and the senior director, were referred all confidential communications between the board of control and the court. The despatches of the board as to political matters were transmitted through the secret committee, and might be sent on by them without being submitted to the court. The chief privilege of directorship was that of making appointments; the directors filled all vacancies, not only in the English branch of the company's service, but in all the subordinate functions in India. The board of control, the governing power in the company, consisted at first of six members, but afterward the sovereign had the privilege of appointing a suitable number, of whom the lord president of the council, the lord privy seal, the first lord of the treasury, the two principal secretaries of state, and the chancellor of the exchequer must form part.
The powers of the board increased until long before its abolition in 1858 it had become a court from whose decisions there was no appeal. - The expense of the company's military force in the East Indies in 1856 was £10,229,584. The debts of the Indian government in England on May 1, 1857, amounted to £9,377,401, and the credits to £5,488,467, leaving a surplus of debts of £3,888,934. The Indian revolt of 1857-'8 called public attention more forcibly than at any previous period to the management of Indian affairs by the company, and led to the passing (Aug. 2, 1858) of the act " for the better government of India," by which "all the territories heretofore under the government of the East India company are vested in the British queen, and all its powers are to be exercised in her name, one of the principal secretaries of state to have all the powers hitherto exercised by the company or by the board of control. The military and naval forces of the East India company are to be deemed the forces of the queen, and all persons holding any office, employment, or commission in India are transferred to the service of the crown.
All functions and powers of the courts of directors and proprietors are to cease, together with the salaries paid, and the board of control is likewise abolished." This act, although depriving the East India company of all its power and importance, did not abolish it, and provided for the manner in which the directors should thereafter be appointed; but its functions are by it almost exclusively confined to the administration of the stock and the distribution of the fixed interest or dividends upon the old share capital of the company.