Honourable East India Company
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Basic Information

Of all the Great Powers of the modern period, it has been said that Great Britain was the only one that acquired its Empire by accident. This is … not entirely true (nor, it must be said, entirely false), but as an example of how such a thing could come about, the story of the Honourable East India Company is as good as any.

Founded on December 31 in 1600, the HEIC was one of the first joint stock corporations in English law. It was originally founded to compete with the Dutch Vereenigde Oostindische Compagnie (United East India company) in the spice trade with South East Asia and to generally regulate and venture commercial trade in a part of the world that had heretofore only be visited by English privateers preying on enemy shipping. The charter granted by Elizabeth I was framed in extremely broad terms, granting the company a great deal of political and legal authority, including what were essentially diplomatic credentials within its sphere of influence … a latitude which seemed unexceptional at the time but would prove to have far reaching consequences. A few early successes were followed by comprehensive defeat by the Dutch and expulsion from "the Spice Islands" of Indonesia. Thus repelled, they sought a foothold in the far more challenging environment of India. At the time India was more or less united under the rule of the Mughal emperors, forming the world's second largest economy (after Imperial China) and was, on average, better developed and more technologically advanced that contemporary Europe. The company's agents sought, and eventually acquired permission to set up trading stations (known as factories, due to the presence of a factor or agent), with the first appearing in Surat in 1619. Given the nature of the trade at this time, these factories served primarily as places where English merchants paid cash for Indian product, there being little, if anything, made in Europe that could be usefully exported to India at the time. The main opposition to the continental trade came from Portugal - to whom the Mughal government preferred the English as being more polite and obedient to local laws - to the extent that the Portuguese suffered from several punitive expeditions as well as ongoing English privateering on the route home. By 1639 the company had acquired rights to build essentially a new free-port that would later become Madras and in 1662 peace with the Portuguese and a diplomatic marriage yielded the English Crown the Portuguese possession of "Bumbye" … which, after some confusion, was found to be their trading station in what would later become Bombay - much knocked about following a dispute with the locals. Control of Bombay only passed to the English in 1668. Meanwhile, the English had also been granted trading concessions in Bengal and, in 1690, purchased land on which Calcutta would be founded. Thus the factories proliferated, and European gold and silver flowed into India in return for opium, indigo (and other dyes), spices, cotton cloth and saltpetre - and these factories were also bases from which the China trade could stage out, buying silk, tea, porcelain and similar luxuries in exchange for cash and, in increasing quantities, opium. Whilst a one-sides sort of trade, this still proved eminently valuable to the company, turning immense profits and, by way of its high-yielding stocks, granting it considerable influence throughout the higher echelons of English society - not only that but the volume of trade actually reversed the traditional flow of eastern goods in Europe, with those landed in London trading south into the Mediterranean, rather than goods travelling North from the Levantine trade.

This situation might have continued indefinitely, largely to the benefit of the Indians, except that the Mughal Empire began to totter - various political crises (primarily revolving around sub-standard emperors and court politics) caused a slow but noticeable breakdown in law and order, exacerbated by losing wars against Persia and Afghanistan and culminating in the rise of the Maratha Confederacy, who, having essentially seceded from the Empire, responded to brutal attempts at reconquest with equally brutal chevauchee raids deep into Mughal India. By this stage the HEIC and their now main rivals the French Compaigne des Indes had their own private security forces, composed of small numbers to Europeans, backed by large numbers of locally enlisted sepoys, trained and equipped in the European manner. The Maratha raiders quickly learned that their aggressive light cavalry tactics were almost completely ineffective against modern heavy infantry and so learned to give Europeans a wide berth, concentrating their harassment on areas protected by Mughal troops. This lead to two significant factors - the influx of refugees to the English and French factories, and the Mughals noticing the potential of Europeans as mercenaries. Ironically it was, at least initially, the French, who were the leaders in this field, with the CdI being far more of a Royal perquisite and thus more political and militarised than the HEIC.

It was also the French who would initiate the militarisation of the HEIC operations in India - raiding and burning Madras and other English factories during the War of the Spanish Succession (1701-1714). During these raids, a young Robert Clive fled Madras rather than join his fellows in captivity and instead spent the duration of the conflict working as a mercenary as part of an Anglo-Indian company - this fuelled his already substantial propensity for violence and his dislike of India and the Indians, as well as giving him valuable skill and experience in Indian warfare. As the Seven Year's War loomed, a desire not to be caught off guard again lead to a substantial force - including regular Crown infantry - being dispatched to re-enforce the Indian factories at the first rumours of the French mounting an expedition. With them came Robert Clive, now an experienced and recognised - if still vicious - "India Hand". The desire to protect against the French also lead to operations to fortify Calcutta and its satellite factories - which was precisely against the terms of their tenure with the Indian government. This also occurred at an unfortunate juncture where the rulership of Bengal was in succession; the previous ruler (who had compared Europeans to bees - if dealt with properly they gave honey, if provoked, were liable to sting - and favoured the English) had died and been succeeded, against the hopes of many (not least the HEIC) by his brash and aggressive grandson rather than the more approachable son-in-law that had been his expected heir. The grandson disliked the English anyway and took the opportunity of the provocation to attack and loot Calcutta and its satellites. The French had not actually arrived in India, which left the English expedition at something of a loose end … and so rather than following their usual pattern of prostrating themselves before the Nawab and paying for the privilege of having their factories restored, they unleashed their army. The locals had never really faced European style army before, and despite significant effort on their part, were soundly defeated at the battle of Plassey. The Nawab was deposed, his treasury looted and his successor obliged to both restore the Company's rights and to pay compensation for the war. A frankly bewildering sequence of power plays then followed, with the HEIC changing sides repeatedly, fighting both for and against the Mughal Emperor and various nawabs, cynically replacing their client rulers with their deposed predecessors or distant relatives - each change of power strengthening the Company's position and weakening the native government economically, militarily and in both perceived and actual authority. Before long they had become de facto vassals of the Emperor, holding much of Bengal in direct fief with the titular Nawab controlling only a rump state serving as a buffer between company territory and less orderly areas towards Maratha occupied Delhi.

This marked a radical shift in the state of affairs in India - the settlement of refugees and the onset of agriculture and manufacturing had already started to reduce the influx of English gold to the subcontinent: where the HEIC had previously been obliged to pay cash, they were now making at least some of their stock in trade themselves, or buying at cost - not to mention that certain Indian exports could be traded up in value without shipping them all the way back to Europe: Bengal opium sold well in China (again, reducing the need to spend gold and silver on silk and tea) and brightly coloured cotton cloth was much in demand in Africa, and could be exchanged for slaves as an alternative to the outward passage of The Triangular Trade. De jure control over Bengal added massively to the local production available to the company, and taxation rights were virtually a licence to print money - as long as the appropriate payments were made to the Emperor and Nawab, the company, like tax farmers anywhere, were more or less free to squeeze the locals at will. This and extensive wartime looting allowed the company to retrieve a great deal of the money that had made its way to India … and far faster than it had gone out. Despite its great wealth, and extensive power and influence, the company presented a modest front at home - East India House, its London headquarters, was an unassuming building, only five windows across and with no external clue what purpose it served. Perhaps fittingly the site went a great deal further back than it appeared and had a footprint that could not be guessed at by looking at it from the street. (In fact the site went straight through the block to communicate with a substantial spread of warehouses on Lime Street. Later it was to construct the vast East India Dock complex, but that was out of town, and therefore out of mind.

The "drive it like you stole it" approach to governance could only last so long - coupled with a series of failed harvests it lead to an extensive famine in Bengal: whilst the Company had nothing to do with the droughts that actually caused the famine, its taxation policy and dismantling of the traditional infrastructure which would have engaged in relief activities made the results far, far worse. This lead to a devastating drop in revenues which unfortunately coincided with the unrelated failure of a small number of banks at home in England, requiring the liquidation of their HEIC shares. As a result the share price crashed, the company suffered a liquidity crisis and came as close as it would ever come to bankruptcy. News of the Bengal famine had reached England and poisoned the public mood against the HEIC1 and the resulting public inquiry was not pleasant for them - amongst other things, Clive was put on trial (although prosecutorial incompetence lead to him being fully acquitted) and when the government finally agreed to a bailout, it did so with a number of conditions, taking the first steps to removing the Company's extensive autonomy and sowing the seeds of Crown control over its Indian territories.

Amongst those seeds was Warren Hastings - a crown commissioner, although a former company man, known for his love of India and respect for its people and for a history of private good works. Once installed he began a program of reforms, curbing the worst excesses of Company rule and instituting functioning civil government. Sadly, he was given a deputy called Philip Francis who did a lot to sabotage his work, lost a duel to him and eventually had him impeached for many of the things he had spent his time in office working against, but all in all Hastings' reforms did a lot to set India as a whole, and Bengal in particular on its future course.

For the time being, the company had plenty more mistakes to make, including losing limited wars against the Marathas and the Sultan of Mysore - who had learned a great deal about modern warfare in the interim, but when Charles Cornwallis (otherwise mostly famous for losing the American War of Independence) arrived to take charge, the Bengal Presidency in particular was economically and militarily powerful and fit to rival any of the native states in India. The new looming threat was that of Revolutionary France, yet again at war with England, and once more the threat of a French attack led to a crown army being sent to India, including two of the Wellesley Brothers. The elder, Richard Wellesley, would make most of himself here in India, the younger, named Arthur, would achieve much in India, but would become better known elsewhere. Once again, the Indians would get the dirty end of a stick intended for the French as the French army, lead by a rising young general named Napoleon Bonaparte was trapped in Egypt following The Battle of the Nile and so the English army devoted itself to administering a savage beating to the Sultanate of Mysore. This was then followed by diplomatic disruption and military destruction of the Maratha Confederacy - and whilst Crown and Company forces alike were punished repeatedly for hubris, they succeeded in making the HEIC's Indian holdings the single largest power on the sub-continent by a wide margin. This further expedited their subjugation of various of the minor states in the region, some by intimidation, others by essentially buying the nation from the incumbent ruler, and all often under the figleaf of Mughal authority, the aging Emperor now being under English "protection" having been subject to degradation, penury and eventually blinding at the hands of his Indian and Afghan subjects. This hegemony lead, for a while, to a time of peace and prosperity - Indian poets and philosophers were wont to comment sarcastically on the character of both, but it did appear that the horrors that had begun with the collapse of Mughal rule had finally been brought to an end.

Peace in India did not necessarily mean that John Company was at peace everywhere - in 1839, for example, the attempts of the Chinese to prevent Indian opium from pouring into their markets lead to the first opium war - and there was the small matter of the Sikh Wars (albeit after more than twenty years of peace), but in general peace and prosperity were available after a fashion until 1857, when a toxic combination of islamic extremism, a drive for Mughal Restoration and concerns amongst the Hindu warrior caste lead to the Sepoy Mutiny and a general revolt that followed. This was the last time that the British Crown would step in to save the company - the price this time was direct Crown rule of India with the company first relegated to the role of a government contractor and then, in 1874, nationalised and wound up. Today the name is owned by an Indian delicatessens, East India Dock has been backfilled, the old headquarters building in Leadenhall has long disappeared and all that remains of its old pomp is a middle ranking Gentlemen' s Club in St. James'.

Sources

Bibliography
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