Elizabeth I, hoping to steal Spain’s status as the primary world power and to quell the Dutch monopoly on the spice trade, signed a charter that gave English merchants exclusive rights to trade in the East Indies. The conglomerate of merchant companies became the East India Company, which focused on trade in India after Elizabeth’s death and which eventually enabled the British Empire in India.
On December 31 1600, Elizabeth I of England signed a charter granting the organization called Governor and Company of Merchants of London Trading to the East Indies, later known as the British East India Company, exclusive trade rights in the east for the next fifteen years. In other words, only the English affiliated with the East India Company were permitted to trade in a region ranging from the Cape of Good Hope to the Straits of Magellan. This monopoly could be extended to the charter members’ heirs and employees, and there was no limit on potential renewals of the charter upon its expiration.
The petitioning group comprised 219 men, including George de Clifford, third earl of Cumberland, and Sir John Hart. They had formed their coalition in September of 1599 and then lobbied for a charter. Many were members of the Levant or Muscovy Companies, or both, and the East India charter was not dissimilar from the former two monopolies. The approximately fifty merchants who were involved in Levant trade recognized the declining value of their merchandise; for example, by 1599, pepper had dropped to one-quarter of its previous value. Several traders also had experience with the voyages to North America, so the East India Company was a group not of new, untrained explorers and merchants but of seasoned and worldly merchants who wanted to expand trade within a new, more ambitious, and wider sphere.
Elizabeth specified in the charter that the control of the company would rest in the hands of one governor and a council of twenty-four individuals. This group would control the voyages, the manners of shipping, and the process by which the goods retrieved from the voyages were sold. The first governor was Sir Thomas Smythe, the founder of the Virginia Colony in North America and member of the London Haberdashers’ and Skinners’ companies. Many council members also were involved in the Virginia voyages. Elizabeth did not name a deputy governor, but she stated that one could be selected through assembly. Governors, deputy governors, and members of the council would be elected to one-year terms, following the tenure of those whom Elizabeth empowered in the charter. The members of this governing body were entrusted with the responsibility of making laws that would limit the conduct of its members in trade with Asia. Essentially, Elizabeth structured the company in such a way that it would maintain itself without needing her constant involvement.
A number of factors motivated Elizabeth to charter the East India Company. Having defeated the Spanish Armada in 1588, Elizabeth was eager to destroy the reputation the Spanish had as the primary and dominant European empire. Additionally, she hoped to eliminate the Dutch monopoly on the East Indian spice trade. The focus of the company, however, later turned from Indonesia to India after the Dutch massacred the English in Ambon, Indonesia, in 1623, reportedly because of a history of treachery by the English. Nevertheless, in 1600, Elizabeth hoped that by superseding Spanish and Dutch interests, she could continue the development of England as a grand empire.
Even before she commenced rule, Elizabeth had exhibited a keen interest in the foreign world. Her delight at the reports and acquisitions of Sir Francis Drake and other explorers was encouragement enough to explore the East Indies, viewed as idyllic by the Elizabethans.
The company’s first voyage left six weeks after its charter, in February, 1601. Fleet general James Lancaster set sail with four ships and five hundred men for Indonesia, carrying a letter from Elizabeth to Sumatran sultan Ala՚ud՚din Riayat Syah. The letter signified her interest in and support for the East India Company. Lancaster’s journey was long and arduous; by the time he and his ships reached the Cape of Good Hope, only four hundred of the five hundred men remained. They reached Sumatra, delivered Elizabeth’s letter, and were received with joy by the sultan, who plied them with a liquor so strong that Lancaster’s men later expressed they would have preferred to dilute it with water. Eventually, in 1602, they landed at Bantam, where they set up a post with merchants.
This first voyage of the East India Company was not lucrative; in fact, shareholders lost money. Lancaster’s voyage, and the twelve ventures for the first ten years of the company’s chartered existence, was not a venture in which all shareholders were required to participate. The ships would return with their cargo, the cargo would be auctioned, and the shareholders would be paid. Lancaster did not return until 1605, after Elizabeth’s death in 1603. He brought with him a letter from Sultan Ala՚ud՚din Riayat Syah, but it was read by Elizabeth’s successor, King James I of England (r. 1603-1625). The company reached India by 1608, landing at the port of Surat in Gujarat, where it would establish a factory. By 1615, it had become clear that this independent organization functioned poorly, often failing to reward the shareholders. The East India Company then became a true joint-stock company, which paved the way for similar ventures.
The British East India Company originally was established to develop English interests in the Indonesian spice trade, but the English elected to leave the Spice Islands to the Dutch and to concentrate their ventures on the Indian subcontinent after the Ambon Massacre of 1623. From that time forward, the English developed an empire in India that would become the “jewel in the crown” of the British Empire.
Centers of power developed during the seventeenth century in Surat as well as Calcutta, Bombay, and Madras. In 1698, a rival company, the English Company Trading to the East Indies, was created, but it merged with the Governor and Company of Merchants Trading into the East Indies in 1702 to form the United Company of Merchants of England Trading to the East Indies.
The East India Company successfully fought local resistance in Bengal in 1757 at the Battle of Plassey, which established British supremacy over the French and British domination of India. The company soon established tea cultivation in Assam, Vietnam, as well, and instituted a center in Canton to trade tea and silver.
The trade monopoly begun by Elizabeth ended in 1813, and thus the company’s power declined. Yet it was not until after the Sepoy Mutiny of 1857, often considered the first rebellion against English colonial rule in India, that the East India Company started to dissolve, despite eloquent attempts by political philosopher John Stuart Mill to keep it intact as the center of British power in India. By this time, the East India Company controlled an area from Gujarat to Hong Kong, a region with one-fifth of the world’s population. England had become, as Elizabeth had dreamed, an empire on which the sun never set.
-
Andrews, Kenneth R. Trade, Plunder, and Settlement: Maritime Enterprise and the Genesis of the British Empire, 1480-1630. Cambridge, England: Cambridge University Press, 1984. Andrews develops a history of British trade, exploration, and colonization. -
Bowen, H. V., Margarette Lincoln, and Nigel Rigby. The Worlds of the East India Company. Rochester, N.Y.: Boydell & Brewer, 2003. A collection that deals with multiple aspects of the company’s history, including culture, politics, art, and trade. This edition covers the company from its origins to the end of its existence as an agent of territorial expansion in India. -
Chaudhuri, K. N. The English East India Company: The Study of an Early Joint-Stock Company, 1600-1640. London: Frank Cass, 1965. A superb study of the company from its origins to its period of neglect during the English Civil Wars. Describes the ways in which the charter was modified and carried out. -
Farrington, Anthony. Trading Places: The East India Company and Asia, 1600-1834. London: British Library, 2002. Farrington’s short discussion is a very good general overview of the company’s involvement in Asia after 1600. -
Scott, William R. The Constitution and Finance of English, Scottish, and Irish Joint Stock Companies to 1720. London, 1912. This three-volume set, while out of date, remains the best study of the structure and finance of British joint-stock companies.
Late 15th cent.: Mombasa, Malindi, and Kilwa Reach Their Height
Aug., 1487-Dec., 1488: Dias Rounds the Cape of Good Hope
1490’s: Decline of the Silk Road
Jan., 1498: Portuguese Reach the Swahili Coast
16th cent.: Evolution of the Galleon
16th century: Worldwide Inflation
1511-c. 1515: Melaka Falls to the Portuguese
1519-1522: Magellan Expedition Circumnavigates the Globe
Apr. 20, 1534-July, 1543: Cartier and Roberval Search for a Northwest Passage
1536: Turkish Capitulations Begin
1558-1603: Reign of Elizabeth I
1565: Spain Seizes the Philippines