Early Origins of Business in India East India Company : 18th Century • The first, Clive and Warren Hastings made the East India company a great territorial power. • The second generation of Cornwallis and Wellesley, who made the Company the Supreme Power of India. • To the third generation should go to the credit for the establishment of peace and effective administrative reforms. • Clive also conquered the Northern Circars from the French, and made the East India company a great territorial power. • Pitt’s India Act was passed in 1784 and for the first time it placed the Company’s administration under the control of the Crown. Business History Early Origins of Business in India East India Company : 18th Century • Cornwallis was responsible for the Permanent Zamindari settlement of the land revenues of Bengal. • In the 18th century, the transit of goods by road and navigable rivers was subject to inland duties. East India company, engaged in the inland trade of Bengal on their own account, also claimed as private traders exemption from duties which had been granted earlier only for the Company’s import and export trade. • Clive, on his return in 1765, found that he had an arduous duty to perform. It had been the concession of the Dewani by the Mughal Emperor in 1765 which had given the East India company a legal and judicial status in India. Business History Early Origins of Business in India East India Company : 18th Century • Dr. Francis Buchanan (the first statistical enquirer employed by the British Govt.) travelled extensively in the Madras territory, Karnatic,Mysore, Coimbatore, Malabar and Canara. • In Conjeevaram, he found a large old reservoir which irrigated many fields which were covered with a thriving crop of rice. • The Jagir of Madras, which had been in the possession of the East India company for half a century, he discovered, was not in a flourishing condition. • On his way to Arcot itself, he found, was extensive, and produced coarse cotton fabrics. Business History Early Origins of Business in India East India Company : 18th Century • Dr.Buchanan then ascended the Eastern Ghats and reached Venkatgiri in Baramahal. He mentions that iron was smelted from ores and black sand, and common salt was found in many parts of the country. • Dr. Buchanan visited Waluri, a large town with a weekly fair, which manufactured coarse cotton cloth, much of which was exported. • Srirangapatnam which used to have a population of 150,000, he discovered. • The ryotwari system was preferred to the zamindari system because it brought more revenue. The Mophlas of Malabar had been rich traders from the middle of 18th century, and possessed vessels which sailed to Surat, Mocha and Madras Business History Early Origins of Business in India East India Company : 18th Century • Dr.Buchanan’s observations about the city of Patna and Bihar in general were : Rice was the most important crop. Wheat and Barley were the next important crops. • In Bhagalpur district, rice, wheat and barley were sown a great deal; they were mixed with field peas. Cotton was also cultivated. • Gorakhpur was one of those districts which formerly had flourished. Chintz was made in Nawabganj, and blankets were woven for local consumption. Carpenters worked in iron or made doors, windows, carts, agricultural implements, and sometimes boats. Sugar and salt were also manufactured. Business History Early Origins of Business in India East India Company : 18th Century • A large proportion of the Indian population was engaged in various industries upto the first decade of the 19 th century. Weaving was still the national industry of the people; millions of women eked out their family income and their earnings from spinning. • Indian cotton was short-stapled. Surat cotton was considered to be the best. Indian cotton was first imported into England in 1790. The total export of cotton from India in 1827 was valued at 1 million pounds sterling. • A cotton mill was originally started in Calcutta for spinning yarn. Although the initial start was made in Bengal, the modern cotton mill industry had its roots in Bombay, and later in Ahmedabad and in other centres like Kanpur, Nagpur, Sholapur, Delhi, Lahore, Indore and Gwalior. Business History Early Origins of Business in India East India Company : 18th Century • Silk was principally confined in Bengal. The Company had about 12 Residencies and extensive silk manufactories but did not carry on the manufacture beyond reeling. The manufacture of finer silks had much diminished, and English silks were being imported to a considerable extent. • In Indigo plantations, the celebrated writer, Ramsay, had stated that the condition of ryots of cultivators, who labored for European planters, was very bad. • Indigo exports began in 1790 and increased greatly in next 40 years. There were 300 or 400 indigo factories in Bengal, chiefly in Jessore Krishnaghar and Trihoot. The East India Company advanced money to European planters. • Sugar was cultivated in various parts of the Deccan. Europeans purchased it in the bazaars or from cultivators to whom advances were made. Tobacco was extensively cultivated in the norther districts of Bombay. Business History Early Origins of Business in India East India Company : 18th Century • A leading authority, Dr. Wallick, submitted in 1832 a valuable paper on the possibility of introducing the cultivation of tea into India (the cultivation of tea in Assam and north Bengal dates from the 1840s). • There were large coal mines in the Burdwan district of Bengal that were being worked in 1832 to the extent of 14,000 or 15,000 tons annually. The workings of the mines first began in about 1814, but extensive operations began only in about 1825. • In the early years of the 19th century while the Company’s trade averaged 1,882,718 pound sterlings per year, private trade averaged 5,451,452 pound sterlings per year. • In 1813, Calcutta exported to London 2 million pound sterlings worth of cotton goods, but in 1830 instead it was importing 2 million pound sterlings worth of British cotton manufactures. • An application to the British Government to reduce the duties on Indian cotton and silk fabrics, signed by a large body of noted Indians, was rejected. Business History Early Origins of Business in India East India Company : 18th Century • While the manufacture of Indigo by European planters increased, and the export of raw silk held its ground, that of silk and cotton piece goods the U.K. and other foreign markets showed a marked decline after 1820. The exports to America declined. • The exports to the Arabian and Persian Gulf, which rose to between 4000 and 7000 bales between 1810 and 1820, never exceeded 2000, after 1825. • Sir John Malcolm, the governor of Bombay in 1830, noted with consternation the ruin of Indian industries. Transit duties became more oppressive during the early days of the British Rule. • Sir Charles Trevelyan’s famous report exposed mercilessly the evils of the system. It stirred public opinion in India and Governor rose in Upper Provinces took upon himself to abolish the Inland Custom Houses within his jurisdiction. Business History Early Origins of Business in India East India Company : 18th Century • India did not yet possess a uniform currency. Steam communication between England and India through the Rea Sea had commenced, but was still enormously expensive. The “Hugh Lindsay” steamer reached Suez from Bombay in thirty three days. • The discussion about the comparative merits of canals and railways went on through the succeeding decades. • Preference was given to the railways, which facilitated British trade with India, but not to canals.