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What were the

of British rule in

The Company at the beginning of

the eighteenth century

Company Structure:

Approx. 3,000 shareholders subscribed to a stock of 3,200,000

20-30 ships sent to Asia each year
Annual sales in London worth up to 2 million
Run by 24 directors (elected annually by shareholders)

Key exports:
Saltpetre (for gunpowder)

Trading with Asia high-risk and high-cost.

Trading Companies could raise large sums of money on a
permanent basis, allowing them to spread risk among a corporate
body of investors and to pursue long-term commercial strategies.
The companies projected their huge outlays by maintaining close
links with their parent states. (P. J. Marshall. The Oxford History of
the British Empire p.488)

The structure of the English Company at

the beginning of the eighteenth century
By the 1750s the Company held 3 main trading
stations in India:

Independently managed through presidents and

councils, reporting separately to the British
Each responsible for its own internal management
and defence.
Average sailing time from England = 6 months. So
initiative left to men in India.

The structure of the French Company at

the beginning of the eighteenth century
French La Compagnie franaise des Indes
orientales held 2 main trading stations:

French Company (founded 1664) closely

connected with home government.
Deep in debt to the crown and so at its mercy.
French hoped to entrench Company within the
Indian political system.

The Companys relationship to

Indian politics and economy
Throughout the c.17th and c.18th the Company operated within
an Indian commercial and political system.
Only at sea or in dealing with small-scale Asian regimes could
Europeans hope to impose their own terms. (Marshall, p.489)
Company didnt have the power or inclination to challenge large
Indian powers few commercial rewards.
European merchants accommodated themselves with Indian
rulers and were offered protection in return for bringing trade to
the region.
The Company's trade was built on a sophisticated Indian
economy. During the seventeenth century the effective rule
maintained by the Mughal emperors provided a secure
framework for trade.
The British only started to intervene in Indian politics in the

British intervention in regional

Indian politics
Mughal empire disintegrating and replaced by regional
Earlier interpretations this produced a situation of anarchy and
More recent views no overall economic decline and some of
the regional states maintained stable rule

Conflicts within new states contestants for power

willing to seek European support.
Rivalry between British and French in India. Allied with
opposing regional political factions.
Private ambitions great personal rewards for European
King-makers. e.g. Robert Clive.

The shift from the Company as traders

to rulers

Amal Chatterjee identifies 3 parts in the period 1740-1840:

1740-1760 : the Company became involved in local politics, establishing Company
power in Bengal.
1760-1800 : a period of concerted military activity. Company run by soldiers who
then became administrators.
1800-1840 : power was transferred to civil administrators.

The Company controlled a large amount of land in India so had to submit to

increasingly close supervision by the British state. Periodical inquiries by
Regions where the Company had helped rulers gain their control, many of its
servants became administrators in the new British regimes.
Huge armies created, largely composed of Indian sepoys. Used to defend
Company territories, coerce neighbouring Indian states and crush potential
internal resistance.
Why change in British rule?
French aggression forced the peaceful British into action?
British as more assertive? New ambitions of the Company and its leading figures.
Hostilities between French and British exploiting weaknesses in the Indian political

Maps showing British territory in

the late eighteenth century


1756 relations between the Company and the Nawab of Bengal

turned violent when the Company rejected an ultimatum from the
new Nawab, who then took Calcutta.
British expedition from Madras (led by Robert Clive) recovered
Calcutta and defeated the Nawab, Siraj-ud-Daula at Plassey in
Bengal then effectively became a client state with a new Nawab
ruling under British protection.
Within a few years Bengal had become a province under actual
British rule.
Settlement arising from the Battle of Buxar (1764) gave the
Company the responsibility for the civil administration of Bengal and
its connected provinces.
Gave the British rule over 20m people in Bengal and access to a
revenue of about 3m, and taking British influence nearly up to Delhi.

The relationship between the Company

and the British Government
The Company depended on the state for its charter.
Parliament could insist on internal changes to the
Companys structure when its charter came to be
renewed, the charter could be withheld if the Company
refused to comply.
Dispute between Clive and Sulivan meant that the British
government got involved in the activities of the Company.
In the clash over Clives jagir (Mughal reward of territory
and its income), Sulivan enlisted the help of the
government and from then on the two were inseperable.
Inquiry into the management of the Company in 1760s.

Company Governments based on

Indian systems
New Company governments based on those of the
Indian states effective work of administration initially
done by Indians.
Collection of taxes = main function of government.
British judges supervised the courts but they applied
Hindu or Islamic rather than British law.
Little belief in the need for outright innovation.
Warren Hastings believed that Indian institutions were
well adapted to Indian needs and that the new British
governments should try to restore an 'ancient
constitution', which had been subverted during the
upheavals of the 18th century.

Shift to British systems at the end

of the eighteenth century
Changing opinions about British rule in India.
Belief that India suffered from deeply ingrained
backwardness which needed to be 'improved' by foreign
Property relations should be reformed to give greater security to
the ownership of land.
Laws should be codified on scientific principles.
All obstacles to free trade between Britain and India should be
Education should be remodelled.
Ignorance and superstition thought to be inculcated by Asian
religions should be challenged by Christian missionaries.

The Regulating Act of 1773

1773 dire financial situation of the Company, especially due
to loss of tea sales to America since 1768. The Company
owed money to Bank of England and the government.
Lord North wanted to overhaul the management of the East
India Company with the Regulating Act.
Company men not trained to govern so North's government
began moves towards government control.
Provisions of The Act:
Governor-General and Council of 4 required for the government of the
presidency of Fort William in Bengal.
Supreme court of judicature set up at Fort William, over all British
subjects in Bengal and their native servants.
British officials in India were prohibited from receiving any gifts,
presents, pecuniary advantages from the Indian princes or other

The India Act of 1784

This Act said that:

Trading in India had to be separated from the ruling of the country.
A Board of Control was to be appointed.
Ministerial board to review all Company papers and issue orders to the
The Company could still appoint offices in India, but was subject to the
king's over-riding power to veto or remove.
The Governor-General in Calcutta and his council had absolute power
with regard to foreign policy over the other presidencies in Bombay and
British subjects were made responsible to English courts for wrongs
done in India.
All returning "nabobs" were to declare their fortunes.

System of dual control between Company and Crown worked for the
next 75 years, until the Indian Mutiny. After that, parliament took
over complete responsibility for India.

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