Friday, October 10, 2014

The Reign of the British East India Company

In 1600, Queen Elizabeth I chartered the East India Company for trade with Asia. Its original aim was to enter the spice market. Wealthy merchants and aristocrats owned it and the government had only indirect control of it. Over the next few hundred years, the British East India Company (EIC) established a gigantic trade empire based on cotton, tea and opium.

The coat of arms of the EIC
http://bhoffert.faculty.noctrl.edu/HST165/09.Qianlong.html


It all started when the EIC defeated the Portuguese in the Battle of Swally in 1612.This led to the EIC’s gradual hold of India creating new trading ports and obtaining a monopoly of trade. As the EIC acquired more Indian territory, it established cotton factories in the mainland for a cheap price and then imported the products back to England. In 1625, the EIC was importing more than 220,000 pieces of cotton. The Indian cotton and calicoes had immediate success and no competition until the end of the 18th century, therefore allowing the EIC to make very large profits and grow as a powerful organization.

The EIC in India
http://history.howstuffworks.com/asian-history/east-india-company.htm


The EIC had been very successful with calicoes in Europe and started to build another branch of its trade empire in the 1600s based on tea whose demand was rapidly increasing. It eventually replaced cotton as calicoes trade started to decline during the second half of the 18th century. In 1644, the EIC was given permission to establish a trading base in Amoy in China. However the Chinese would only trade tea for silver. Finding such big amounts of silver was very difficult for the EIC that consequently decided to indirectly trade opium for silver.

Unloading tea ships in the EIC's docks in London
http://www.maritimeheritage.org/newtale/opium.html


In 1772, Hastings, the first governor general of India, established a monopoly, which gave an exclusive right to the EIC to purchase opium from the Bengal. The EIC would then sell it to private merchants even though the company knew that those merchants would illegally sell the opium to the Chinese. This trade however granted enough money for the EIC to buy silver. It lasted for a few decades until China whose population was getting more and more addicted to opium, got alarmed and started to restrict tea imports. The EIC however wanted to legalize the opium trade. This led to the two opium wars, which eventually allowed the legalization of the opium trade in 1860.

The British destroying the Chinese ships during the first Opium War
http://ocw.mit.edu/ans7870/21f/21f.027/opium_wars_01/ow1_essay03.html



During this time, the EIC sent the plant hunter Robert Fortune to China to obtain tea and other plants. In 1851, he successfully brought back tea seeds to India as well as the equipment necessary to manufacture it. As a result, the EIC did not need to rely on China anymore. Soon after however, in 1874, the East India Stock Dividend Redemption Act of 1873 dissolved the company, after a long, unique and prosperous reign.

Relevant sites
http://www.bbc.co.uk/history/british/empire_seapower/east_india_01.shtml
http://ocw.mit.edu/ans7870/21f/21f.027/opium_wars_01/ow1_essay03.html

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