INDIA: BUSINESS LEGENDS - THE EMPIRE'S MOST PECULIAR PLC BRITISH PLC.

INDIA: BUSINESS LEGENDS - THE EMPIRE'S MOST PECULIAR PLC BRITISH PLC. - The clout of today's big business is nothing compared with that of the East India Company in the 18th and 19th centuries. Rhymer Rigby charts its rise to virtually unlimited power.

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Last Updated: 31 Aug 2010

The clout of today's big business is nothing compared with that of the East India Company in the 18th and 19th centuries. Rhymer Rigby charts its rise to virtually unlimited power.

Like Queen Victoria and Land of Hope and Glory, the very mention of the East India Company is enough to conjure up images of empires upon which the sun never set, gunboat diplomacy - and everything, in fact, that put the 'Great' in Great Britain. And, for once, the reputation is justified - the company, in one of its later guises, more or less ruled the Indian subcontinent.

At the close of the 16th century the prodigiously mercantile Dutch, through the Dutch East India Company, had more or less cornered the lucrative spice trade. Eyeing the profits flowing into foreign coffers, a group of British merchants set up their own East India Company. The business was granted its Royal charter in 1600, which gave it a trading monopoly among British firms between the Straits of Magellan and the Cape of Good Hope - providing it furthered the Crown's interests. The company's first few years were promising and such was the demand for the spices in which it dealt that spectacular profits were soon forthcoming.

Such a golden scenario seemed too good to last and, sure enough, the company's Dutch counterpart declared war (businesses didn't mess around in those days). Over the course of 1618/19 the Dutch booted the Brits out of the Far East. Its nose bloodied, the British version turned its attentions to India itself, where the Portuguese were trading. Here the company was the beneficiary of a propitious coincidence - the Indian emperor was wearying of the Portuguese way of doing things, while on India's west coast four British ships had sent the entire Portuguese navy packing.

The British modus operandi was more to the emperor's liking and soon he and the East India Company were getting along famously. Indian fabrics quickly replaced spices as the company's raison d'etre and by its 50th year the company had built up a respectable trade.

The English Civil War represented something of a hiccup, though Cromwell knew as well as the next man that economic and political strength went hand in hand. He merely converted East India into a joint stock company.

After the Restoration, Charles II like-wise favoured the company, and from 1660 until his death it flourished, flooding Britain with exotic eastern prints, chintzes and silks. Upon William III's ascension to the throne the monopoly ended and a second company was set up, though, after a period of intense rivalry which benefited neither, they were unified under an act of Parliament in 1708.

It was the 18th century that saw the company metamorphose from a normal business into a sort of 'virtual' Indian government. It was India's turn to be the object of one of Britain and France's interminable squabbles and the company, which was increasingly in cahoots with the government, saw its trading posts grow into fair-sized cities. By the end of the century much of the Indian subcontinent found itself in the curious position of being governed by a plc - moreover, one whose board operated as an unaccountable cabal. To curb the company's power, the British government began placing constraints on it, first in 1773, with the Regulatory Act; then, more forcefully, in 1784 with Pitt's India Act; and finally when India was opened up to competition in 1813. The company was unconcerned; its core business now lay in the Cantonese tea trade. Its 'other business' was far more interesting: it had become a puppet government in India and both East India's revenue from its possessions and the troops it maintained to defend them now exceeded Britain's.

In 1834, the company's charter came up for renewal. This was granted, allowing this 'strangest of all governments designed for the strangest of all empires' to continue for another 20 years, providing the company ceased trading. At this point, the shareholders interests were effectively divorced from the rest of the company and they were guaranteed a decent rate of interest. The company was now in its final incarnation - a front for the British government's activities in India. And Britain certainly made use of it, committing outrageous acts of imperialism, while hiding behind the company's name.

Although it seemed the company could get away with almost anything externally, internal problems were a different matter. Thus, when its troops rebelled in the famous Indian Mutiny of 1857, the British government stepped in and thereafter India was governed from Whitehall. In 1861, the imposing East India House in London was demolished and only a remnant of the company's original staff continued until 1874 - when its charter expired. On 6 June of that year the company finally ceased to exist and one of the world's most peculiar - and peculiarly British - institutions passed into history.

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