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East India Company, The


East India Company, The British maritime organisation chartered by Queen Elizabeth I in December 31, 1600 AD with rights of monopoly trading in the eastern waters and later founding a colonial state in India. The opening of Trans-oceanic communication in the fifteenth and sixteenth centuries was closely accompanied by overseas colonial expansionism of the Maritime nations of Western Europe.

The original name of the company, according to the Charter granted by the queen, was 'the Governor and company of Merchants of London trading into the East Indies'. For many years individual financiers fit out the voyages to the east. One of such voyages reached Surat in 1608, but without any transaction. The portuguese had driven them out of the area. The company got the right from the Mughal government to trade in Surat in 1612 when the Portuguese force could be met with force. In 1615 King James I sent Sir Thomas Roe as his ambassador to the court of Emperor jahangir. The gifts that Roe gave on behalf of the King and his personal manners pleased the emperor and he granted the company trading rights as pleaded by the ambassador. Thus the company began to set up trading stations what they called 'factories' in the western and eastern coasts of southern India. In 1639 the local chief of Wandiwash by a grant empowered the English company to build a fortress at Madras and govern it as their own territory. Fort St. George was built at Madras, which became the headquarters of the company's business in India.

The East India Company set its foot in Bengal in 1633 when a factory was established at Hariharpur on the Mahanadi delta. On 2 February, the English obtained a farman from Emperor shahjahan permitting them to pursue trade and commerce in Bengal. The most important privilege was obtained from the Bengal governor shah shuja who permitted the English to have trade in Bengal without any customs duties in lieu of an annual lump sum of Rs. 3000 only. It was this unique privilege that led the company to assert political domination of Bengal in course of time. In the same year the English founded their factory at hughli. Another factory was opened at kasimbazar in 1658. In 1668, a new factory was opened at dhaka, the capital of Bengal. The founding of Calcutta by job charnock in 1690 completed the process of factory settlement and from that time onward began the processes of establishing political dominance of the company in Bengal.

The company saw to it that its claims on the subah always rest on legal grounds. The company thus obtained a fresh farman from the emperor permitting it to trade in Bengal customs-free in lieu of an annual payment of Rs. 3,000. The rebellion of shobha singh in 1696 offered the company an opportunity to obtain permission to fortify the Calcutta settlement and thus arrange its own defence. The subahdar gave the permission without weighing its military significance. The next step was to extend the company's influence by purchasing the zamindari of Calcutta, Sutanuti and Govindapur, thus quietly laying the foundation of political power. In 1698 a rival company was formed and it got parliamentary incorporation under the name of 'General Society Trading to the East Indies'. The establishment of fort william in Calcutta and turning it into an independent Presidency in 1700 followed these events. The two rivals 'East India Companies' were amalgamated in 1702 with a new charter and a new name - 'The United Company of Merchants of England Trading to the East Indies'. Though the popular name 'East India Company' remained till the last days of the company.

From the beginning of the eighteenth century, the company was having ever-increasing trade in Bengal. The number of ships coming to Bengal was increasing every year. This was also the time when Bengal had a great administrator in the person of murshid quli khan. Under him the Bengal trade and commerce had witnessed remarkable development, particularly its foreign trade. The company tried to take advantage of the weakness of the centre after the death of aurangzeb in 1707, but Murshid Quli Khan was resolutely opposed to giving new advantages to the company while severely restricting the old privileges.

The company was particularly indignant about the harassment that its officials suffered at the chowkis or customhouses. The tendency of the officers to have their private trade made duty free in the name of the company's dastak led to frequent conflicts. Quite often company's boats were halted for proper check of their goods. Murshid Quli Khan never yielded to the demands of the company for more privileges. The Calcutta Council then sent an embassy under John Surman to Emperor Farrukhsiyar with lavish presents. The Surman Embassy was warmly received by the emperor who was pleased to issue a farman, popularly known as farrukh siyar’s farman of 1717 (December 30, 1716) which directed the Bengal Subahdar to give the following main privileges to the company:

that in addition to the existing privileges the company was to be given zamindari right over the thirty eight mouzas adjoining the Calcutta settlement;

that in case the goods belonging to the company and other English were stolen, attempts must be made to recover the goods failing which proper compensation must be given;

that Madras rupees of Surat quality must pass in Bengal without any discount;

that the original sanads must not be demanded;

that all persons who might be indebted or accountable to the company should be delivered up to the Chief of the Factory.

that a dastak given by the chief of the factory should exempt the goods from being stopped or examined by the chowkis.

that the subah should allow the company to coin money at the Murshidabad Mint.

The company knew it very well that the Subah, as they knew him, would not be agreeable to abide by this charter of rights which was actually purchased from the needy emperor and which had undermined seriously the sovereign status of the kingdom. But they also knew that he had given them some legal basis of their extortionate trade and commerce in Bengal and fight for the realisation of the privileges on 'legal' grounds. The farman did not enumerate the articles to be covered by dastak. So the nawab's chowkis and the company officials were in confusion and the situation resulted in frequent conflicts, sometimes skirmishes. While the company officials saw that the nawab himself gave many orders to arrest and confine the violators of law, the company even threatened reprisal. But Murshid Quli Khan avoided the direct confrontation.

The death of Murshid Quli Khan in 1727 and subsequent capture of power by shujahuddin khan was an opportunity for the company to get their demands realised, especially the zamindari rights over thirty eight villages. Shujauddin more or less followed the footstep of his predecessor and very cautiously followed a policy of keeping the continuation of export trade undisturbed and at the same time avoid any confrontation with the company. But on the trade item of salt, which was claimed to have been duty free by the company but not so by the nawab, the relation between the company and the Subah got embittered to the point of a war which was somehow avoided at the mediation of Fatehchand, the jagat sheth. The private trade under the cover of dastak was a major breach of trust between the company and the government. The private trade of company officials was widely carried under the privilege of dastak. The company would not allow the chowkis to examine the cargo of boats on the legal ground that the imperial farman of 1717 exempted them of such examination.

During Shujauddin Khan's period (1727- 1739) East India Company's trade increased phenomenally in spite of very cold relation between the nawab and the English. With the expansion of trade and commerce grew the company's political interest in Bengal. It became the company's policy to see a nawab at Murshidabad favourably disposed to it. Such a favourable disposition the company got, by default, during the regime of Alivardi Khan (1740-1756). Being constantly harassed by the Maratha raiders, Alivardi found it prudent not to create another front of harassment by taking strict measures against abuses and excesses of the East India Company. But Maratha incursions withered away at the accession of sirajuddaula to the masnad. Sirajuddaulah directed the English to observe three conditions if they were inclined to continue trade and commerce in Bengal: (i) they must demolish the unauthorised fortification of Calcutta forthwith, (ii) they must stop abuses of dastak and (iii) they must abide by the law of the land. The Fort William Council disregarded the nawab's orders at which the exasperated nawab attacked Calcutta and the English fled away to downstream of the Hughli river. In celebrating the victory Sirajuddaulah renamed Calcutta as Alinagar after his grandfather. In his act against the English, Sirajuddaulah had received moral support from the french.

It was the period of Seven Years War (1756-63) in Europe. To the British, the Alinagar action of Sirajuddaulah was interpreted as a double defeat - defeat with the nawab and also with the French who supported him. Soon reinforcement came from Madras under the command of Robert Clive. Clive recaptured Calcutta (January 2, 1757) and stormed the Mughal port of Hughli in reprisal. A dialogue was soon opened with the Murshidabad Darbar faction secretly opposed to the young nawab. Jagath Seth was its leader. There followed a secret treaty with the conspirators confirming all the privileges and compensations claimed by the English. Mir Jafar, the recently sacked bakhxi of the nawab, was chosen by the conspirators to be the next nawab of Bengal. According to the terms of the treaty a sham battle took place at Palashi on June 23, 1757. Most of the nawab's army remained firmly still at the instance of Mir Jafar and other conspirators. Sirajuddaulah was defeated and later slain by Mir Jafar's son, Miran.

The battle of palashi has been correctly interpreted in the eighteenth century European history as a British victory at one important front on the world theatre of battles fought overseas in the Seven Years' War by the two great rival powers- England and France. It was a defeat for Sirajuddaulah and for his ally France at the same time. The East India company's success in installing a puppet nawab on the Murshidabad masnad and ousting the French presence in Bengal had inaugurated informally the establishment of British political dominance in Bengal. In realising their goal the company proceeded step by step. The 24-Parganas were obtained from the new nawab as a gift to the company immediately after Palashi. In1760, three large and resourceful districts of Bengal (Burdwan, Midnapur and Chittagong) were acquired. The diwani or revenue administration of Bengal, Bihar and Orissa was acquired in 1765. From 1765 to 1772, the company shared revenue of Bengal but took no responsibility in administering it. On behalf of the company, Syed Muhammad Reza Khan managed Diwani administration. This was the period when the company and its servants plundered the country's resources wantonly. The consequence was the collapse of the economy and also the law and order of the country. The famine of 1769/70, which decimated one-third of the Bengal population, was the consequence of the great ravage.

The Bengal conquest by the company proved to be not only ruinous for Bengal, but also for the company itself. In a plundering mood the company and its servants became busier in enriching themselves. Consequently, ever since the Bengal conquest, the company, which used to declare hitherto attractive dividend every year, was running at a loss. The chronic losses forced the company in the end to pray for a 'rescue loan' from government in 1771. The political considerations led parliament to grant the loan and at the same time interfere into the affairs of the company by enacting the regulating act, 1773.

The Regulating Act of 1773 hinted at two parallel developments - gradual encroachment of government control on the company affairs and corresponding curtailment of power of the company until its complete abolition in 1858. The Regulating Act had defined how the affairs of the company including the governance of the new state had to be managed. Government reserved the right to interfere into the affairs of the company any time it felt necessary. It felt to interfere in 1784 by enacting a more elaborate law controlling the Indian affairs of the company. A permanent parliamentary committee called Board of Control was set up to oversee the affairs of the company. The members of the court of directors were barred from receiving gifts and presents from cadets whom they nominated to become members of the Civil Service in Bengal. A governor general, Cornwallis, was directly appointed by parliament with specific instructions to execute. Cornwallis, to the great disadvantage of the company, had formulated the mode of administration of the colonial state. Having private trade and receiving gifts and presents by officers were strictly banned.

Under the pressure of the British private traders, the monopoly right of the company was greatly relaxed under the Charter Act of 1793. A definite amount of tonnage in the company's ships was kept reserved for the private traders. The Act redefined the company's status by declaring that the company's state in India belonged to the Crown and henceforth they would have to rule India on behalf of the Crown and the Board of Control was vested with the power of appointing the Governor General. The Board of Control appointed Lord Wellesly, Who Turned The Company's Bengal State Into An Indian Empire. The colonial state became such an unwieldy affair and the Free Trade pressure groups became so influential that parliament took several decisions affecting the interests of the company. The most crucial of them was the abolition of the monopoly right of the East India company by the Charter Act of 1813. India was thrown open to free trade. The company, as a commercial organisation, was now required to operate under the market forces.

Never used to compete within the Indian market, the East India Company now became a sick organisation commercially. Under the circumstances, the company's commercial activities were abolished under the Charter Act of 1833. Only its China trade was still preserved.

Henceforth the company was purely an administrative body on behalf of the Crown. Its the only privilege was to nominate cadets for the enrollment in the company's Covenanted Civil Service. This also was circumscribed by many limitations set by the Board of Control. Under the Charter Act of 1853, the company was shorn of the last vestige of its power and privilege. The Director's privilege to nominate cadets for company's Civil Service was abolished and the system of competitive examination for recruiting civilians on the basis of merit was introduced, instead. The East India Company, the builder of the British Empire in India and the largest corporate organisation in Britain for two hundred years, was thus left with its shell only. For all practical purposes, the company became an irrelevant and burdensome body. The sepoy revolt of 1857 came as an opportunity for parliament to get rid of this nominal body. By the Queen's Declaration of 1858, the East India Company was formally abolished. [Sirajul Islam]