The East India Company
From 'A History of the British Nation' by AD Innes, 1912
The reign of Elizabeth saw the close of the long period of agricultural depression brought about largely by the conversion of tillage into pasture. That process ceased when the stage had been reached at which the profits of growing wool and of growing corn had become equalised. Something was contributed to this end by the introduction of convertible husbandry, which increased the profits of tillage. Otherwise, however, there were no great improvements in the methods of farming; enterprise on the part of the greater landholders was checked by the civil broils. But two features of the period had a specially favourable effect on the rural population. The Elizabethan Poor Law to a very great extent served the purpose with which it had been enacted, of providing relief for honest destitution and at the same time discouraging wilful idleness and vagabondage.
But besides this the substitution of the system of industrial regulation under the Statute of Apprentices for the old guild system made itself felt. It provided those whose substantive employment was agricultural labour with supplementary means of livelihood, because it allowed spinning to become a general cottage industry, while in many cases the farmer added weaving to his other employments. The Civil War was inevitably destructive, but its effects were hardly so injurious in England as those of' the partisan struggles in France, and were in no way comparable to the disastrous results produced in Germany by the Thirty Years' War.
The general prosperity, in short, compared favourably with that of other nations; and a further impulse was given to industrial development when the persecuting policy of Louis XIV drove the highly skilled industrial population out of France and to a very great extent into England. The employments in which the expelled Huguenots excelled were not such as in the main brought them into direct competition with the English trades; a colony of silk-weavers was established at Spitalfields without arousing native hostility. Coming immediately before the Revolution, at a moment when Englishmen were particularly ready to sympathise with persecuted Protestants, and when ideas of toleration were gaining ground, the French king's victims were sympathetically welcomed, and new industries were planted which soon became thoroughly acclimatised.
The great development of the period, however, was commercial rather than industrial, and the main agencies by means of which the commercial extension was effected were the chartered companies of merchants which began to multiply in the later years of Queen Elizabeth.
Merchant Company Charters
The general principle applied to these companies was one which had long been familiar in the cases of the Merchants of the Staple and the Merchant Adventurers. A charter was given to an association of merchants conveying to them exclusive rights of trading in particular fields, with jurisdiction over their own members and large powers of independent action. During the sixteenth century the members of such companies traded on their own account as individuals, but were bound to obey the company's regulations. In the seventeenth century there came a new development which was in effect initiated by the East India Company, which had first received Its charter on December 31st, 1600.
The East India Company
At a quite early stage of its career this association converted itself into a joint-stock company; that is to say, the members ceased to trade as individuals; the company traded as a unit, distributing the profits of the trade among its members. The actual trading was done by the agents or servants of the company. Thus in what were called the Regulated Companies the associates were actually individual traders, trading under the guarantees of the whole body and bound by its regulations. In the Joint-Stock Companies the associates became simply shareholders, participating in the profits of the trade carried on by the company as a whole, while they themselves only controlled that trade in so far as they could control the election of the Board of Directors.
Practically the whole of the trading with remote, barbarous, or semi-barbarous countries was appropriated to the companies, regulated or joint-stock; for, as we have seen, the permanent communities or colonies overseas were also planted in the first instance by chartered companies. The principle was obvious. In remote regions the Home Government could not undertake police business; the trader must be left to protect himself not only against avowed-pirates but against foreign rivals. He could not efficiently protect himself if his own countrymen were behaving in a lawless fashion. He could not make terms for himself and his countrymen with native potentates if others of his countrymen were not legally bound by those terms. Hence it was necessary to give to the company exclusive rights of trading and an indisputable authority over traders.
In the importance ultimately achieved by their operations none of the great associations can be compared with the East India Company. For a century after the company received its first charter the great Mogul Empire in India was at the height of its splendour and power. The Moguls ruled unchallenged over all Northern India, though they had not brought the great kingdoms of the South into actual subjection.
No one dreamed of a conquest of India like the Spanish conquests of Mexico and Peru. But, broadly speaking, the effect of the maritime rivalry now developing between Dutch and English - for the old Portuguese supremacy in the Eastern waters had already perishe - was to make the Spice Islands on the South-East the Dutch sphere, while the English devoted themselves rather to the Indian Peninsula itself. The first footing was gained in 1612 when the British company was permitted to set up a trading establishment (called a "factory") at Surat on the western coast.
A second factory was conceded on the south-east coast at Madras, where the English quarter was known as Fort St George. This was in 1639. The third, at Hugh on the Ganges delta, was granted in 1650; and this was afterwards shifted to Calcutta. The marriage of Charles II to Catherine of Braganza brought, as a portion of the dower, the Portuguese possession of Bombay, which was transferred by the Crown to the East India Company, and took the position formerly occupied by Surat. The three factories at Bombay, Madras, and Hugh were the centres from which the three British Presidencies ultimately expanded; but the company were merely tenants, not owners, except in the one case of Bombay.