A Relic of a Powerful and Controversial Business: The East India Company
The East India Arms, in Fenchurch Street in the City of London, is a lovely local pub that serves workers in the area as well as the occasional tourist.
However most of those socialising there will not know that its name is a last relic of one of the most extraordinary, powerful and controversial businesses London, or indeed the world, has ever seen.
A business that, at the beginning of the 19th century, was described by one of its directors as
“an empire within an empire”
With a private army that was twice the size of the British Army, that was officially authorised to make war and that ruled a civilian population three times that of the United Kingdom.
This was the British East India Company, and the pub is named after its London warehouses, that stretched all the way from Fenchurch Street down to its riverside docks on the Thames.
Its History Began In 1599,
the same year that Shakespeare wrote Hamlet, when Queen Elizabeth granted a monopoly to a group of City merchants on all trade to the East Indies.
Their target was the spice trade from Indonesia where merchants from Holland were making a fortune.
However, competition there was fierce, so they soon turned their attention to India, at the time the world’s richest country with, it is estimated, 40% of all global output and an economy 8 times the size of England’s.
The First Joint Stock Company
The Queen’s grant was not to individuals as had been the tradition in the past but to the new idea of a “joint stock company”, a corporate body independent of its investors that could therefore outlive them and it would go on for over 250 years.
The Company grew quickly, trading Indian goods with Britain and the rest of the world, mostly cloth, silks, tea and spices. Its headquarters were in London and its main centre in India was Calcutta.
It needed a continuous source of administrators and these came from a remarkable apprentice scheme where young men (the maximum age was 16) were recruited in the UK, sent to Calcutta and given training in accounting and local languages before being despatched to one of the Company’s outposts. Their lonely job was to administer the Company’s business for a small salary but their main aim, encouraged by the company, was to make a fortune trading for themselves. Only 1/3 survived the rigours and diseases but the lucky ones would retire at 30 and return to Britain rich men.
Here they would generally purchase a large country house and many, encouraged by the company, would also purchase a seat in the House of Commons as a member of parliament, there to join the Company’s “lobby”, influencing UK Government policy in favour of the employer that had made them rich.
The company’s headquarters, known as East India House, were always in the City of London, for a period in Crosby Hall (the building can still be seen having been moved from the City to the Chelsea Embankment) but for most of its long life in a grand building it built on Leadenhall Street on the site of what is now Lloyds of London.
The company faced fierce trading competition from the Dutch and the French, but the latter particularly challenged their dominance in India. This all changed during the Seven Years War between 1756 and 1763 when the French were defeated and the Company’s head in India at the time, later known as Clive of India, took advantage of the situation to defeat the local ruler in the fabulously wealthy Bengal area in the Battle of Plessy leading to the company becoming the effective ruler of the largest and richest area of India and 30 million people.
The Company was fortunate because the longstanding rule of the Mughal empire was collapsing, and it could take advantage of the country’s divisions. Ironically, the Company was funded during this period with loans from local Indian bankers and goldsmiths who wanted to see a return to a stable country.
The Company proved to be an excellent commercial company and profit engine, but in many respects a terrible ruler. An early and terrible example was the Great Bengal Famine of 1770, when the Company failed to maintain stocks of grain to be used in the event of a crop failure.
10 million people died, 1/3 of the entire population.
Of course the lack of local workers hit the Company’s profits and financial necessity ensured it did not make that particular mistake again.
Over the next 30 years the Company was able to take control of most of the Indian sub-continent, ruling it with its private army of over 200,000, again mostly local Indians.
This early painting is typical in showing examples of different ranks and regiments in the Bengal Army: a golandaz (artillery private), a sepoy (infantry private) and a subadar (a senior Indian officer). The style is designed to appeal to European taste with an exotic, picturesque background painted with thin watercolour washes.
Now almost all of India was ruled from a boardroom in Leadenhall Street. This was humiliating for a proud and successful country.
As a Mughal official said,
“What honour is left to us when we have to take orders from a handful of traders who have not yet learned to wash their bottoms?”.
The company expanded to be the ruler of around 60 million Indians but during the 19th century the company became influenced by other aspects of the British Empire, including evangelical Christians who wished to convert the Indian population.
The Indian Rebellion Of 1857
This led to the Indian Rebellion in 1857, (from 10 May 1857 to 1 November 1858)
and to the British Government’s changing views about private companies running its empire.
This also markedthe beginning of the decline of the Company. It was nationalised in 1858, and finally disolved in 1874.
The British empire in India was built not by the government or the people of Britain, but by a highly successful and ruthless private company. It was unchecked by regulation or control because it was operating in a foreign country, where the British Government had few concerns except to ensure that the company paid its British taxes.
Perhaps there are lessons to be learned as we look at the huge companies today that operate internationally, avoiding wherever possible the control of government, in the interest of financial returns for their shareholders.
But East India Arms remains a charming pub and inside there are many reminders of the Company’s past. And I can recommend the Spitfire ale
Mark
