by Jean Gogolin, WordWright
Elizabeth I of England is remembered for a lot of things – her virginity and defeating the Spanish Armada to name two – but not many people think of her as the backer of an early experiment in capitalism called the joint stock company.
But by granting a royal charter to a bunch of London businessmen intent on beating the Dutch at the spice trade, she set the stage for a business deal that shaped a nation – one that could teach Wall Street and the U.S. Congress a few lessons.
On December 31, 1600, the Queen granted a Royal Charter to “George, Earl of Cumberland and 215 Knights, Aldermen, and Burgesses” to form what eventually became the East India Company. Shortly thereafter their ships set sail for the Indian Ocean, and the rest is quite literally history.
Initially, the company stuck to trading cotton, silk, indigo dye, saltpetre (for gunpowder), tea, and that big profit maker, opium. Back home, various acts of Parliament renewed the company’s charter, in return for which the company made large loans to the government. Over time, the Company acquired Indian territory, minted money, collected revenues, maintained forts and armies, made war and peace, made treaties, and administered justice – of its own kind. Eventually, it ruled virtually all of India.
Of course, all that power corrupted. Despite its revenues from trade and other sources, the Company found itself burdened with massive military expenditures, and its future seemed bleak. Desperate, the directors tried to avert bankruptcy by appealing to Parliament for financial help.
State intervention put the Company back on its feet, Parliament took greater control over the Company’s affairs, and placed India under the rule of a Governor-General in an arrangement called the Raj. [See “A Passage to India,” available through http://www.Netflix.com]
For the next 50 years, the British tried to eliminate Indian rivals, beating back Tipu Sultan of Mysore and the Marathas, and subjugating the Sikhs.
Finally, of course, India rebelled and eventually won independence.
British histories of the Raj tend to focus on the regimes of law and order installed by the British, the bringing of the railways, roads, and telegraph to the natives, the institution of formal education, the introduction of British political traditions and institutions. Not to mention cricket and gin. To hear them tell the story, relationships between the Brits and the people of Indian were cordial.
But according to one source, at the same time that near-sainted Winston Churchill was waging a valiant struggle against the Nazis and Japanese, he complained to Leo Amery, Secretary of State for India, “I hate Indians. They are a beastly people with a beastly religion.” Churchill, you remember, spent considerable time in India.
No wonder Indian historians describe the Raj, and the reign of the East India Company, somewhat differently than the British do.
The East India Company was finally dissolved in 1874 – though interestingly, it still has a 1-page website leading nowhere: http://www.theeastindiacompany.com/
Two small remnants of its existence remain. One is the East India Club in London, now a private gentlemen’s club in St. James Square. The other, surprisingly, is the design of the American stars and stripes, which was influenced by one of the East India Company’s flags.
But the real legacy of the Company, for good and ill, is India itself, forever shaped by those 16th Century businessmen after the wealth of the East.
writes about writing, the news, and the business of words in an intelligent, strategic and slightly edgy way.
Her twitter name is @jgogolin