Just over 400 years ago, a group of London merchants arrived here on the Indian coast hoping to do some peaceful trading. Those early pioneers dreamt of making huge profits.
Over 200 years, the Company they formed grew, into a commercial titan. Its wealth rivalled that of the British State.
It had its own army. And eventually ruled over 400 million people.
Its trade was vital to Britain’s commercial success and it revolutionised the British lifestyle.
Dr Andrea Major:
The East India Company changed the way we dress… Um it changed the way we eat - it changed the way we socialise.
Dan:
And, by accident, created one of the most powerful empires in history.
But the company’s rise was followed by a dramatic descent into profiteering and corruption.
And eventually a chilling story of unchecked greed with devastating consequences.
This is where it all started. On December 31st 1600, the East India Company was established by royal charter in Londonand granted a monopoly on trade with the East by Queen Elizabeth the First.
It was the beginning of a new age in Britain’s history - an age of speculation and profit, enterprise and competition. An age that saw the beginnings of one of the most powerful empires in history capitalism would change forever the lives of its people and politics.
Trade would make Britain great and turn London into the richest city in the world.
Thanks to the East India Company, exotic goods like spices from Indonesia, tea and porcelain from China, became part of everydaylife.
Every year, huge merchant ships of the East India Company, known as East Indiamen, would leave from right here loaded down with silver bullion and British merchandise heading up the Thames and out to sea to trade with the East.
On board were young men filled with hope. In following their dreams these young men would inadvertently forge an empire. An empire that would create thousands of winners but millions of losers.
One country above all would play a major role and become the jewel in the Company’s crown - India.
The story begins in 639 at an unlikely spot on the east coast. A place that became known as Madraspatnam.
When the Company arrived here it wasn’t pursuing dreams of conquest or empire, but looking for a secure base from which to conduct trade. And one of its employees Francis Day was convinced that this was the right spot.
And with good reason. This is the Coromandel Coast – a name synonymous with diamonds, pearls and the finest cotton. In mid-seventeenth century Europe, Indian cotton was the height of fashion. It was cheap, colourful and hard wearing.
A fortune could be made exporting it.
Francis Day claimed a section of beach and set up shop.
Within a year 300 Bengali weavers were working here and a handful of Englishmen were busy exporting cloth and spices back home for sale in London.
Much to the delight of the company’s share holders.
They could, send their ships out here fill the holds with spices and hopefully return rich men. Now it was a very lucrative trade and it’s one that had been exploited by other European powers for quite a long time now. But by making a monopoly, they could ensure there’d be no domestic opposition to threaten the shareholders’ profits.
Even so, the Company’s investors were taking a huge gamble. Each voyage could take two years or more – a long and tense wait to see a return on investment.
Nick:
Along the way there would be potential loss of ships through, through storms, there could be piracy, there could be conquest by, by local rulers etc, etc, so this was a very high-risk venture.
But one that had paid dividends from the beginning. When Company ships first returned from the East Indies in 1607, investors had hit the jackpot.
Dan:
Ah that single voyage netted an absolutely vast amount of money because of these: cloves. A single cargo of this ensured that the investors made a 230% profit, bringing them £36,000, that’s tens of millions in today’s money. It’s hard to comprehend just how much of a revolution this was. Something that we now take for granted.
Used in medicine as a pain killer, cloves were so highly prized they were literally worth their weight in gold.
In Madras the company built a warehouse and several homes, along three miles of beach. Trade was valuable, so they protected their new settlement with a stockade and called it Fort St George.
The original Fort St George was built on this spot. Now it’s been massively strengthened and enlarged over the years. But it took 14 years to build and the East India Company directors bitterly complained about the cost.
But this was like a big security barrier for their warehouse.
Madras was the springboard for expansion. Within 50 years, the Company was building two further settlements – which they called Bombay and Calcutta.
By 1700 it was operating 22 trading posts across India - Calcutta was one of the biggest the Company’s star was rising fast. But investors were about to be handed a commercial opportunity beyond their wildest expectations.
For 200 years, India had been part of a vast empire ruled by a powerful dynasty.
The Mughals had imposed a centralised government, built imposing monuments and unified the country with a road system and a single currency.
Zareer:
The population was huge compared with Britain’s. It was about a hundred and forty million and Britain then had about four million. The economic position was it was the second largest economy in the world reputedly, with about twenty-five percent of the world’s GDP.
Dan:
For the first few decades, the mighty Mughals barely even noticed the East India Company. The British didn’t cause trouble. And besides, they paid good money.
Zareer:
The Mughal Empire had a tax on imports of bullion so they were doing quite well out of the company bringing in all this silver and gold. They were also selling the company trading concessions and where - wherever they were able to set up factories they had to pay for it. So it was quite a good sort of source of income for the Empire.
But, in 1707, the Mughal Empire began to disintegrate.
Dan:
When the last great Moghul Emperor Aurangzeb died, his successors were unable to hold his empire together and power devolved into a patchwork of competing regional states. Obsessed with its own problems therefore, the Empire didn’t have time to worry about the little old East India Company.
Amid the confusion, a deal was signed. In exchange for an annual fee, the East India Company was granted the right to trade – duty-free – across the state of Bengal. No gift could have been greater. Company merchants previously restricted to the coast could now do business across an entire province. And as the Mughal Empire weakened further, the Company expanded.
The East India Company was sucked into this vacuum. It would back one local claimant to a throne against another. And in return for its support it would be given little land holdings or trading concessions.
That meant within decades the East India Company was becoming a sovereign entity in its own right.: had the power to raise revenue, to make war and peace, to mint its own coins, to administer justice. The East India Company was becoming a state.
A state that was controlled by 159 civil servants in a London office, some 14,000 miles away.
Their Headquarters, East India House has long since disappeared under this towering structure, the Lloyds Building.
It was from here that the Company was run. As its ships scoured the world’s oceans, they were controlled by directors elected by shareholders, who were known collectively as The Court of Directors.
The East India Company helped to develop many modern business practices and turn London into the world’s commercial capitalBy 1800 the state that they had ministered from London would rule a 140 million people across 94 thousand square miles and command an army a quarter of a million strong.
This was the beginning of Britain’s empire.
Video summary
Dan Snow outlines the development of the East India Company, which grew from a trading enterprise to possess the powers of a small state.
At the time, India was a collection of provincial states ruled by different dynasties, with the most powerful being the Mughal Empire.
When it began to crumble in 1707, the Company stepped into the power vacuum and within decades this private company no longer had to ask permission to trade but was virtually a sovereign state in its own right – empowered to wage war, annex nations, forge foreign alliances, mint its own money and administer justice.
Teacher Notes
Before watching this short film, pupils could be asked to explain what they understand of the term 'empire' and provide reasons why countries create empires.
This short film could be used to introduce a task where pupils have to describe the main features of India at the start of the eighteenth century.
This short film will be relevant for teaching KS3 history in England, Wales and Northern Ireland and Third / Fourth level in Scotland.
History KS3: Conflict and Mutiny. video
The position of the Company comes under threat from forces at home and in India, resulting in India eventually being given to Queen Victoria.
History KS3: From Merchants to Rulers. video
After the crash, the British government took over the Company, expanded its territories and built an empire.
History KS3: The Seven Years War. video
A short film explaining how the East India Company overcame opposition from the French to gain control of India.
