A Corporate Business With A Real Army.
The British East India Company Virtually Remade the Indian Subcontinent. It also helped make free market capitalism the force we know today.
Many years ago, before cars had power steering, turn signals or seat belts, before color TV, before personal computers or cell phones, even before the schools were air-conditioned, my wonderful aunt, Titter, took me to see a rerun of the old black and white movie “Gunga Din”. It was a rousing adventure film, loosely based on the poem of the same name by the English poet and author, Rudyard Kipling and starring Douglas Fairbanks and Cary Grant. It made me intrigued of The Raj and I became a 9-year old admirer of Kipling.
Raj
That word comes from the sanskrit term, “rajya”, meaning “empire” or “rule” and was applied to the British governing administration in India beginning in the 17th Century. Think Maharaja.
It may be hard for us today to think of spices being a cause of human combat but it was more the rule than the exception in Europe from 1600 to 1800. Back then you had several seagoing nations competing with each other to capture the spice trade, chief among them being Portugal, Spain and the Netherlands. People went out and actually killed each other for cinnamon, black pepper, nutmeg, cloves and ginger. A lot of others got very rich. The English were not about to ignore the possibilities for gaining wealth in that trade. Spices were as good as good as money and Britain was not rich in silver.
How it Started
Queen Elizabeth’s favorite pirate was Francis Drake. He was real good at bloodying the noses of kings by sinking their ships and, as he put it, “singeing the beard” of the Spanish Monarch. In 1577, he sailed around Cape Horn, crossed the Pacific Ocean and loaded his ship in the Spice Islands (Moluccas) with a huge haul of nutmeg, cloves and other valuable spices. The queen knighted him and made him a hero when he got back. All of the people who put up money for that voyage got a return on their investment of 5,000 percent! The Spice trade got a tidal wave of followers after that.
On the last day of 1600, Queen Elizabeth granted a charter to a group of London merchants, giving them exclusive trading rights within what was known at the time as the East Indies. This charter stated that no other British subjects could legally trade in that huge swath of the globe. This was the birth of the East India Company. And then, as expected, the Company set up shop in India. They had their work cut out.
Voyages to that part of the world then made for risky business because of armed clashes with other traders as well as deadly, tropical diseases. As an employee of the East India Company in 1601, your chances of surviving were only 70 percent! But if you made a killing in the market you got to keep it all so there was plenty of incentive to accept the risks.
The Company eventually accounted for HALF the world’s trade during the mid-1700’s and early 1800’s and dominated commodities such as cotton, silk, indigo dye, sugar, salt, tea and opium. And, of course, spices. This required an armed force to protect and advance the purposes of what soon became the largest corporation in the world. Its army totaled about 260,000 soldiers, twice the size of the regular British Army at the time.
India was too far away for people in England to host day-to-day oversight and direction (two-way written correspondence required three months) so the Company had to run itself remotely. Bigwig Indian rulers and kings got rich by taxing the Company until the day 3,000 Company soldiers defeated 50,000 Indian and French combatants under the Nawab of Bengal at the Battle of Plassey on June 23, 1757.
(I know, I know, your eyelids are getting heavy but you need to realize that none of this stuff happened yesterday).
Robert Clive’s victory gave the East India Company the power to tax the Province of Bengal. This was a seismic shift in the Company’s direction, from trading spices, fine woven fabrics and raw cotton to taxing provincial wealth and it soon expanded to other provinces in India.
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