The East India Company

“Journey of an International Organization to a Colonial Power”

The Politics and Business of EIC
“There is no doubt that our grievances against the British Empire had a sound basis.
As the painstaking statistical work of the Cambridge historian Angus Maddison has
shown, India's share of world income collapsed from 22.6% in 1700, almost equal
to Europe's share of 23.3% at that time, to as low as 3.8% in 1952. Indeed, at the
beginning of the 20th century, "the brightest jewel in the British Crown" was the
poorest country in the world in terms of per capita income.”
Manmohan Singh
 Loot and Plunder
 1600’s
 Annual revenue of Emperor Akbar’s treasury is £17.5 million
 GDP of Mughal India is estimated at about 24.3% the world
economy, the second largest in the world.
 Mughal Empire has expanded to include almost 90 per cent of South
Asia, and enforced a uniform customs and tax administration
system.

 1700’s
 Exchequer of the Emperor Aurangzeb reports an annual revenue of
more than £100 million.
 After gaining the right to collect revenue in Bengal in 1765, the East
India Company largely ceases importing gold and silver.

 1800’s
 Entire treasury of Great Britain is £16 million.
 1780–1860, India changed from being an exporter of processed
goods for which it received payment in bullion, to being an exporter
of raw materials and a buyer of manufactured goods.
Loot and Plunder

Powis Castle, Wales UK

Loot and Plunder

Interior of Powis Castle, Wales UK

Loot and Plunder

Interior of Powis Castle, Wales UK

Loot and Plunder

Interior of Powis Castle, Wales UK

Loot and Plunder

Interior of Powis Castle, Wales UK

Loot and Plunder

Interior of Powis Castle, Wales UK

EAST INDIA COMPANY -
ORIGINS
 1599 - Origin of East India Company
 24th Sep 1599 – 80 merchants and
adventurers met at the Founder’s Hall in
London.
 Petitioned to Queen Elizabeth I to start up
a joint stock company.
 1600 – EIC, a group of 218 men, received
a royal charter, giving them monopoly for
15 years over trade to the East.
 EIC was a radical new type of business;
not a family partnership but a company
that could issue tradable stock on the
open market.
 Mechanism that could raise large amounts
of capital.
 Muscovy – the only other such company –
received its charter in 1555.
 EIC had the right to wage war.
 1608 - Willaim Hawkins was the first to set The Last Tudor - Elizabeth 1
foot in Surat.
 1614 –Thomas Roe meets Jahangir
 James I sends Sir Thomas Roe to Mughal
Court.
 Jahangir inherited from Akbar one of the
wealthiest and most powerful empire in
the world.
 He ruled over a population five times the
size of the Ottoman empire i.e. 100 million
people.
 Agra, population over 700,000 individuals,
was a mega city of its time. Lahore was
larger than London, Paris, Lisbon, Madrid
and Rome combined.
 India contributed to 25% of the world
GDP. Britain only 2% to global GDP.
 EIC – permanent staff of six operated
from the house of the governor, however it
possessed 30 merchant ships.
Roe meets Jahangir
Mural in House of Commons
EAST INDIA COMPANY - RISE
 1739 – Nadir Shah’s Terror
 Decline of Mughals started by the invasion
of Nadir Shah.

 1739 – Nadir Shah descended the Khyber

Pass with 150,000 men and cavalry.

 February 24, - Mughal Emperor

Muhammad and his 1.5 million army was
defeated at the Battle of Karnal.

 Three months later he left with the Shah

Jehan’s peacock throne, the Kohinoor, the
Duryanoor, 700 elephants, 4000 camels
and 12000 horses.

 The loot was worth £87.5 million.

Nadir Shah, The Persian King
 1757 – Battle of Plassey
 Siraj-ud-Daula believed that the EIC did not
receive any permission from the Mughal
Emperor Alamgir II to fortify their positions in
the territories of the Nawab of Bengal.
 British-controlled Calcutta was attacked by the
Nawab.
 The British sent reinforcements under Colonel
Robert Clive and Admiral Charles Watson from
Madras to Bengal and recaptured Calcutta.
 Clive then seized the initiative to capture the
French fort of Chandernagar.
 23 June 1757 - Siraj-ud-Daulah had a
numerically superior force and made his stand
at Plassey. T
 he British, worried about being outnumbered,
formed a conspiracy with Siraj-ud-Daulah's
demoted army chief Mir Jafar.
Lord Clive and Mir Jaffer in Battle of Plassey
 The battle established the Company rule in
Bengal which expanded over much of India for
the next hundred years.
1755-1767 – Governor Lord Clive
 Foundations of the British empire in India were, it is
said, laid by Robert Clive, known to his admirers as
the "conqueror of India".
 In his first governorship (1755–60) he won the Battle
of Plassey and became master of Bengal. In his
second governorship (1764–67) he re organized the
British colony.
 He received £234,000 in cash, a Mughal title of
nobility, and a jagir, or estate, with an annual rental of
about £30,000. This example opened the way to a
flood of corruption that nearly ruined both Bengal and
EIC.
 He became member of Parliament for Shrewsbury,
purchased an estate, and tried to use his Indian
wealth to carve out an English political career.
 Had to reckon with the current jealousy toward any
upstart, however brilliant, the unpopularity of returned
Indian “nabobs” .
 In 1765 - The emperor was solaced with an annual
tribute, and in return he conferred the revenue
administration of Bengal.
 November 1774, he died by his own hand at his
Lord Clive house in London.
 1765 – Revenue Collection in Bengal

The Mughal emperor Shah Alam hands a scroll to Robert Clive, the governor of Bengal, which transferred tax collecting rights in Bengal, Bihar
and Orissa to the East India Company. Illustration: Benjamin West (1738–1820) / British Library
 1772 - Almost Bankrupt
 The province, already devastated by war, was
struck down by the famine of 1769, then further
ruined by high taxation.
 EIC proved at once hugely powerful and oddly
vulnerable to economic uncertainty.
 Plunder and famine in Bengal led to massive
shortfalls in expected land revenues. The EIC
was left with debts of £1.5m and a bill of £1m
unpaid tax owed to the Crown.
 30 banks collapsed like dominoes across
Europe, bringing trade to a standstill.
 15 July 1772, EIC applied to the Bank of
England for a loan of £400,000. A fortnight later
additional £300,000. The bank raised only
£200,000.
 In 1773, the world’s first aggressive
multinational corporation was saved by
EIC at Cossim Bazar
history’s first mega-bailout .
 The first example of a nation state extracting,
as its price for saving a failing corporation, the
right to regulate and severely rein it in.
EAST INDIA COMPANY -
DEATH
 1788-1857 – Victorian England Scoffs
 EIC had become synonymous with ostentatious
wealth and political corruption.
 “What is England now?” fumed the Whig litterateur
Horace Walpole, “A sink of Indian wealth.”
 In 1767 the company bought off parliamentary
opposition by donating £400,000 to the Crown in
return for its continued right to govern Bengal.
 But the anger against it finally reached ignition point
on 13 February 1788, at the impeachment, for looting
and corruption, of Clive’s successor as governor of
Bengal, Warren Hastings. He survived the
impeachment.
 In 1857 the employees rose against its employer.
 The Parliament tamed the company for its corruption
and excesses by removing the EIC from power after
the mutiny in 1857.
 The assets were nationalized and passed on to the
crown.
 Queen Victoria became the Empress of India.
 “Tomorrow these delinquents of India may be the
Commons of Great Britain.”
 1874 – Shut down and brand name now is owned by
a Gujrati businessman.
Nabobs of EIC
CONCLUSION
 Intimate Dance of State and Firm
 From Corporation to Armed Sovereign
 By 1803, 250 company clerks backed by 260,000 locally
recruited Indian soldiers

 From Finished Goods to Raw Materials

 In the 1750s, mostly fine cotton and silk was exported from
India to markets in Europe, Asia, and Africa.
 By 19th century, raw materials, which chiefly consisted of raw
cotton, opium, and indigo, accounted for most of India's
exports.

 From Exports to Imports

 Starting in the 1830s, British textiles began to appear in the
Indian markets, with the value of the textile imports growing
manifold.

“What honor is left to us? When we have to take orders

from a handful of traders who have not yet learned to
wash their bottoms?”
Narayan Singh, 1765
Intimate Dance of State and Firm
 Intimate Dance of State and Firm

 Myth of British conquering India

 Legal Form and Structure EIC

 Wealth draining from east to west served

the firm and state.