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The Company at the beginning of the eighteenth century • Company Structure: • Approx. 3,000 shareholders subscribed to a stock of £3,200,000 • 20-30 ships sent to Asia each year • Annual sales in London worth up to £2 million • Run by 24 directors (elected annually by shareholders) • Key exports: • Spice • Textiles • Saltpetre (for gunpowder) • Trading with Asia high-risk and high-cost. • Trading Companies could raise large sums of money on a permanent basis, “allowing them to spread risk among a corporate body of investors and to pursue long-term commercial strategies. The companies projected their huge outlays by maintaining close links with their parent states.” (P. J. Marshall. The Oxford History of the British Empire p.488)
The structure of the English Company at the beginning of the eighteenth century • By the 1750’s the Company held 3 main trading stations in India: • Calcutta • Madras • Bombay • Independently managed through presidents and councils, reporting separately to the British directors. • Each responsible for its own internal management and defence. • Average sailing time from England = 6 months. So initiative left to men in India.
The structure of the French Company at the beginning of the eighteenth century • French La Compagnie française des Indes orientales held 2 main trading stations: • Pondicherry • Chandernagore • French Company (founded 1664) closely connected with home government. • Deep in debt to the crown and so at it’s mercy. • French hoped to entrench Company within the Indian political system.
The Company’s relationship to Indian politics and economy • Throughout the c.17th and c.18th the Company operated within an Indian commercial and political system. • “Only at sea or in dealing with small-scale Asian regimes could Europeans hope to impose their own terms.” (Marshall, p.489) • Company didn’t have the power or inclination to challenge large Indian powers – few commercial rewards. • European merchants accommodated themselves with Indian rulers and were offered protection in return for bringing trade to the region. • The Company's trade was built on a sophisticated Indian economy. During the seventeenth century the effective rule maintained by the Mughal emperors provided a secure framework for trade. • The British only started to intervene in Indian politics in the 1750’s
British intervention in regional Indian politics • Mughal empire disintegrating and replaced by regional states. • Earlier interpretations – this produced a situation of anarchy and chaos • More recent views – no overall economic decline and some of the regional states maintained stable rule • Conflicts within new states – contestants for power willing to seek European support. • Rivalry between British and French in India. Allied with opposing regional political factions. • Private ambitions – great personal rewards for European ‘King-makers.’ e.g. Robert Clive.
The shift from the Company as traders to rulers • Amal Chatterjee identifies 3 parts in the period 1740-1840: • 1740-1760 : the Company became involved in local politics, establishing Company power in Bengal. • 1760-1800 : a period of concerted military activity. Company run by soldiers who then became administrators. • 1800-1840 : power was transferred to civil administrators. • The Company controlled a large amount of land in India so had to submit to increasingly close supervision by the British state. Periodical inquiries by parliament. • Regions where the Company had helped rulers gain their control, many of its servants became administrators in the new British regimes. • Huge armies created, largely composed of Indian sepoys. Used to defend Company territories, coerce neighbouring Indian states and crush potential internal resistance. • Why change in British rule? • French aggression forced the peaceful British into action? • British as more assertive? New ambitions of the Company and its leading figures. Hostilities between French and British exploiting weaknesses in the Indian political system.
Calcutta • 1756 – relations between the Company and the Nawab of Bengal turned violent when the Company rejected an ultimatum from the new Nawab, who then took Calcutta. • British expedition from Madras (led by Robert Clive) recovered Calcutta and defeated the Nawab, Siraj-ud-Daula at Plassey in 1757. • Bengal then effectively became a client state with a new Nawab ruling under British protection. • Within a few years Bengal had become a province under actual British rule. • Settlement arising from the Battle of Buxar (1764) gave the Company the responsibility for the civil administration of Bengal and its connected provinces. • Gave the British rule over 20m people in Bengal and access to a revenue of about £3m, and taking British influence nearly up to Delhi.
The relationship between the Company and the British Government • The Company depended on the state for its charter. • Parliament could insist on internal changes to the Company’s structure when its charter came to be renewed, the charter could be withheld if the Company refused to comply. • Dispute between Clive and Sulivan meant that the British government got involved in the activities of the Company. In the clash over Clive’s jagir (Mughal reward of territory and its income), Sulivan enlisted the help of the government and from then on the two were inseperable. • Inquiry into the management of the Company in 1760’s.
Company Governments based on Indian systems • New Company governments based on those of the Indian states – effective work of administration initially done by Indians. • Collection of taxes = main function of government. • British judges supervised the courts but they applied Hindu or Islamic rather than British law. • Little belief in the need for outright innovation. • Warren Hastings believed that Indian institutions were well adapted to Indian needs and that the new British governments should try to restore an 'ancient constitution', which had been subverted during the upheavals of the 18th century.
Shift to British systems at the end of the eighteenth century • Changing opinions about British rule in India. • Belief that India suffered from deeply ingrained backwardness which needed to be 'improved' by foreign rule: • Property relations should be reformed to give greater security to the ownership of land. • Laws should be codified on scientific principles. • All obstacles to free trade between Britain and India should be removed. • Education should be remodelled. • Ignorance and superstition thought to be inculcated by Asian religions should be challenged by Christian missionaries.
The Regulating Act of 1773 • 1773 – dire financial situation of the Company, especially due to loss of tea sales to America since 1768. The Company owed money to Bank of England and the government. • Lord North wanted to overhaul the management of the East India Company with the Regulating Act. • Company men not trained to govern so North's government began moves towards government control. • Provisions of The Act: • Governor-General and Council of 4 required for the government of the presidency of Fort William in Bengal. • Supreme court of judicature set up at Fort William, over all British subjects in Bengal and their native servants. • British officials in India were prohibited from receiving any gifts, presents, pecuniary advantages from the Indian princes or other powers
The India Act of 1784 • This Act said that: • Trading in India had to be separated from the ruling of the country. • A Board of Control was to be appointed. • Ministerial board to review all Company papers and issue orders to the directors. • The Company could still appoint offices in India, but was subject to the king's over-riding power to veto or remove. • The Governor-General in Calcutta and his council had absolute power with regard to foreign policy over the other presidencies in Bombay and Madras. • British subjects were made responsible to English courts for wrongs done in India. • All returning "nabobs" were to declare their fortunes. • System of dual control between Company and Crown worked for the next 75 years, until the Indian Mutiny. After that, parliament took over complete responsibility for India.