East India Company till Regulating Act of 1773
On 31 December 1600, British East India Company was granted an English Royal Charter under the name “Governor and Company of Merchants of London Trading into the East Indies” by Queen Elizabeth I.
- British East India Company is the oldest among all the contemporary European East Indian Companies.
- British East India Company was founded in 1600.
- Dutch East India Company was founded in 1602
- Danish East India Company was founded in 1616
- Portuguese East India Company was founded in 1628
- French East India Company was founded in 1664
- Swedish East India Company was founded in 1731
The company was given right to do business for next 15 years and the charter needed to be renewed after that. This company operated till it was dissolved in 1874 by East India Stock Dividend Redemption Act 1873.
Initial purpose of the company was to provide a vehicle for the creation of exclusive trading privileges in the East Indies which included modern India, Pakistan, Bangladesh, China and Japan for London merchants. However, later in practice the commercial character of the company gradually underwent a complete change in the course of a century and half and it became an “agent of imperialism”, till it was forced to pass the direct rule of India to the British Government in 1858.
Initially the company was dependent upon the success of individual voyages, but by 1657 the company had achieved continuous investment through a joint stock arrangement.
The company had a monopoly and it was allowed to operate independently and unchecked, however, in the later parts of the 17th century, it had to bow to the forces of opposition in England and in 1694; the Government withdrew the East India Company’s trade monopoly. At that time, the English Parliament provided that all English subjects had the right to trade with the Indies.
As a sequel to this, Scottish East India Company was formed in 1695. This company soon failed because it had no backing from the English Parliament. In 1698, another English East India Company was established, but the second company, which was share, based lost majority control to the first East India Company and by 1702, it was clear that the First East India Company was stronger.
Negotiations facilitated by Sidney Godolphin, which continued till 1708 and, in 1708 the two companies were formally merged and the company formed now was known as “United Company of Merchants of England Trading to the East Indies”
- 23 June 1757 was a decisive day for British East India Company, when in Battle of Plassey, the British East India Company got victory over the Nawab of Bengal (Nawab was supported by the French) and this marked the firm establishment of Company rule in India for next 190 years.
The three presidencies, viz. Bombay, Madras and Bengal were each put under the control of the Governor and Council (or Governor-in-council) which was appointed by the Commission of the Company. All powers were lodged in the Governor and the Council jointly and the presidencies were independent of each other. Each had its own government independent from the others.
However, the financial matters of the company were mismanaged since 1757. The officers turned greedy and corrupt.
- In 1773, the company became almost insolvent and forced to apply to the British Government for a loan of One Million Pound Sterling.
- This led to the British government of Lord North to undertake a legislation to meet the situation and provide some form of legal government for the Indian possessions of the East India Company, which resulted in Regulating Act of 1773.