The English East India Company
The English East India Company (EIC) was the most unique organisation in British colonial history. On 16 October 1599, Queen Elizabeth I of England granted a charter to the EIC, awarding a monopoly of the trade with the East. The EIC rose from a grouping of London merchants, ordinary city tradesmen and aldermen who were prepared to take a gamble in buying a few ships and filling them with cargo to sell in the East. At the end of the voyage, after the return cargo was sold, profits would be shared amongst the shareholders. This system was known as "joint-stock".
Huge profits were made from the initial and difficult voyages to Southeast Asia, mainly from the sale of pepper acquired from the Sumatran and Javanese trading ports and sold in London. Soon the EIC was building more and bigger ships and increasing the number of shareholders.
In the Malay archipelago, the EIC faced stiff opposition from the Dutch East India Company (VOC), found in 1602. The VOC’s policy was a monopoly on trade in spices, pepper and other commodities in the region. The VOC tried to keep out the EIC as a rival.
Rivalry and tension between the two companies increased to such an extent that in 1620; the Dutch massacred the personnel in the EIC depot at Amboyna.
After the massacre, and owing to the high costs of financing its voyages to the archipelago, the EIC turned its attention to India where it already had a factory at Surat. At that time, Surat was the main port of trade between India and Europe. Although the EIC turned to India, it did not completely withdraw from the Malay archipelago. It kept its factory at Bencoolen on the west coast of Sumatra.
At this time, the Indian market became more attractive for English goods. From the mid-1600’s onwards the EIC slowly began to acquire territory in India (Madras, Bombay and Calcutta). During this period also, the EIC was allowed to raise its own military force. In 1689, the EIC issued a formal declaration of its intention to be a territorial power in India, thus revising its earlier commercial aims. By the 1700’s, the French were becoming involved in India too.
The eighteenth century was a very important period in the EIC’s history. The EIC expanded into Northern India and was increasingly involved in the China Trade. In London, the Company’s office headquarters was improved to reflect its importance as a great company of the world.
Since the EIC found it difficult to pay in silver for increased imports of Chinese tea and silk, it turned to Southeast Asian produce as another form of payment. The EIC also hoped to attract Chinese junks to an entrepot in the archipelago where the terms of exchange would be more favourable to the EIC.