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The English East India Company
The English East India Company
The English East India Company
COMPANY
Overview
• The East India Company (also the English East India Company, and sometimes the British East India
Company), was an early English joint-stock company that was formed initially for pursuing trade with the
East Indies, but that ended up trading with India and China.
• The oldest among several similarly formed European East India Companies, the Company was granted
an English Royal Charter, under the name Governor and Company of Merchants of London Trading into
the East Indies, by Elizabeth I on 31 December 1600.
• A New East Indian Company was given a Charter by Act of Parliament in 1698 in return for a loan of
2milion to the government. The Old Company had a partial renewal of its charter in 1693, but due to its
finances and its personal links with James II which gave it political opponents, the Old Company was
criticised as an oligarchy for its own benefit and opposed.
• In practice it proved impossible to eliminate the Old Company as it had bought part of the New
Company’s stock, and the expertise and facilities built up by its servants in Asia proved to be
indispensable for successful trade.
• The two companies were merged in 1708 to form the United Company of Merchants of England Trading
to the East Indies, commonly styled the Honourable East India Company, and abbreviated, HEIC; the
Company was colloquially referred to as John Company, and in India as Company Bahadur ("bahādur":
Hindustani, lit. "brave")
• The East India Company traded mainly in cotton, silk, indigo dye, saltpetre, tea, and opium. However, it
also came to rule large swathes of India, exercising military power and assuming administrative functions,
to the exclusion, gradually, of its commercial pursuits.
• Company rule in India lasted until 1858, when, following the events of the Indian Rebellion of 1857, and
under the Government of India Act 1858, the British Crown assumed direct administration of India in the
new British Raj.
• The Company itself was finally dissolved on 1 January 1874, as a result of the East India Stock Dividend
Redemption Act.
Structure
• The Court of Committees performed the role of an independent administrative unit responsible for
managerial direction in the Company. In 1709 its name was changed to the Court of Directors. It
composed of 24 stock-holding members who were elected annually. All decisions relating to the
raising and management of trading capital, the determination of the volume of trade, and the
introduction of new ideas on the administrative running of the Company were strictly reserved for
the Directorate and its subcommittees.
• The decision-making of the Company fell into 2 parts: a superior body in London, the Court of
Directors, and a subordinate one in Asia.
• The Court of Directors had the supreme authority to set, modify or change the goals of the
Company even to the point of suspending trading activities, the Presidencies in Asia could only
vary their action within certain prescribed limits.
• There were regular weekly meetings of the full Court and the subcommittees which provided an
opportunity for reviewing the Company’s problems.
• The two most important components of the Company’s administrative machinery: the Court of
Committees, with 24 members, and the General Court comprising all shareholders.
• Court of Committees consisted of the Governor, the Deputy and ordinary members, was the
main executive organ, while the General Court supervised it by exercising final control.
• The Court of Committees initiated policy which was either ratified or altered by the General
Court according to majority votes.
• The Court of Committees also had specific admin duties and was generally grouped into
subcommittees.
• The General Court seldom interfered with this day-to-day work.
• The General Court elected the Governor, Deputy, and members of the Court of Committees.
• What methods allowed it to preserve its vital interests and thus survive as an organisation? The
organisation of the Company as a joint stock, implying supposed separation between ownership and
utilisation of capital, enabled the Court of Directors to develop a collective managerial personality. Also, the
existence of a regular procedure for dealing with everyday problems of trade contributed to its survival, and
here the subcommittees played a leading role.
EIC ship
Key Ideas
• The English EIC was a state within a state for the greater part of its history as an
active commercial enterprise. Its total trading capital after 1709 was permanently
lent to the Crown and the interest on the loan was secured by assigning to the
Company the duties on salt and paper. - Chaudhuri
• The Company was the embodiment of mercantilism with its policy of harnessing
political power and privileges for commercial ends - Chaudhuri.
• By 1620 the policy of expansion had reached its limit and the dominant theme
from then on was retrenchment and greater efficiency.