East India House

'What is England now? A sink of Indian wealth, filled by nabobs'
Horace Walpole, 1773 (1717–1797)

Standing on Leadenhall Street facing the site of East India House, it is difficult to appreciate the raw energy, envy and horror that the Company generated in 18th-century England. Today, Richard Rogers' sleek Lloyds insurance building stands on the site, but on auction days in the 18th century, the noise of 'howling and yelling' from the Sale Room could be heard through the stone walls on the street outside.

For 30 years after Robert Clive's victory at Plassey, East India House lay at the heart of both the economy and governance of Britain, a monstrous combination of trader, banker, conqueror and power broker. It was from here that the 24 Directors guided the Company's commercial and increasingly political affairs, always with an eye to the share price; when Clive captured the French outpost of Chandernagore in Bengal in 1757, stocks rose by 12%. The share price moved higher still in the 1760s as investors fed hungrily on news of the apparently endless source of wealth that Bengal would provide. The Company was rapidly extending its reach from trade to the governance of whole provinces, using the taxes raised to pay for the imports of cloth and tea back to England.

In the wake of Enron and other scandals of the dot.com 1990s, the malpractice of many of the Company's key executives is sadly familiar: embedded corruption, insider trading and appalling corporate governance. In the process, a new class of 'nabobs' was created (a corruption of the Hindi word nawab). Clive obtained almost a quarter of a million pounds in the wake of Plassey, and told a House of Commons enquiry into suspected corruption that he was 'astounded' at his own moderation at not taking more. Thomas Pitt, Governor of Madras earlier in the century, used his fortune to sustain the political careers of his grandson and great-grandson, both of whom became Prime Minister. By the 1780s, about a tenth of the seats in Parliament were held by 'nabobs'. They inspired deep bitterness among aristocrats angry at the way they bought their way into high society. A few lone voices – such as the Quaker William Tuke – also pointed to the humanitarian disaster that the Company had wrought in India.

All these forces converged to create a new movement to regulate the Company's affairs. But so powerful was the Company's grip on British politics that attempts to control its affairs could bring down governments. In the early 1780s, a Whig alliance of Charles James Fox and Edmund Burke sought to place the Company's Indian possessions under Parliamentary rule. But their efforts were crushed by an unholy pact of Crown and Company. George III first dismissed the government and then forced a general election, which the Company funded to the hilt, securing a compliant Parliament.

Yet the case for reform was overwhelming, and the new Prime Minister, William Pitt the Younger – that beneficiary of his great-grandfather's time in Madras – pushed through the landmark India Act of 1784. This transferred executive management of the Company's Indian affairs to a Board of Control, answerable to Parliament. In the final 70 years of its life, the Company would become less and less an independent commercial venture and more a sub-contracted administrator for the British state, a Georgian example of a 'public–private partnership'

Even in good times the Company's exactions proved ruinous. The Company became feared for its brutal enforcement of its monopoly interests, particularly in the textile trade. Savage reprisals would be exacted against any weavers found selling cloth to other traders, and the Company was infamous for cutting off their thumbs to prevent them ever working again. In rural areas, almost two-thirds of a peasant's income would be devoured by land tax under the Company – compared with some 40% under the Mughals. In addition, punitive rates of tax were levied on essentials such as salt, cutting consumption in Bengal by half. The health impacts were cruel, increasing vulnerability to heat exhaustion and lowered resistance to cholera and other diseases, particularly amongst the poorest sections.
The Company's monopoly control over the production of opium had equally devastating consequences. Grown under Company eyes in Bengal, the opium was auctioned and then privately smuggled into China in increasing volumes. By 1828, opium sales in China were enough to pay for the entire purchase of tea, but at the cost of mass addiction, ruining millions of lives. When the Chinese tried to enforce its import ban, the British sent in the gunboats.

Taken from opendemocracy.net

East India Company

Although it started out as a speculative vehicle to import precious spices from the East Indies – modern-day Indonesia – the Company grew to fame and fortune by trading with and then conquering India. And for many Indians, it was the Company's plunder that first de-industrialised their country and then provided the finance that fuelled Britain's own industrial revolution. In essence, the Honourable East India Company found India rich and left it poor.

this was not just any corporation. Not only was it the first major shareholder owned company, but it was also a pivot that changed the course of economic history. During its lifetime, the Company first reversed the ancient flow of wealth from West to East, and then put in place new systems of exchange and exploitation. From Roman times, Europe had always been Asia's commercial supplicant, shipping out gold and silver in return for spices, textiles and luxury goods. And for the first 150 years after its establishment by Queen Elizabeth I in 1600, the Company had to repeat this practice; there was simply nothing that England could export that the East wanted to buy.

The situation changed dramatically in the middle of the 18th century, as the Company's officials took advantage of the decline of the Mughal Empire and began to acquire the hinterland beyond its vulnerable coastal trading posts. Territorial control enabled the Company both to manipulate the terms of trade in its favour and gouge taxes from the lands it ruled. Within a few years of Clive's freak victory over the Nawab of Bengal at Plassey in 1757, the Company had managed to halt the export of bullion eastwards, creating what has poetically been called the 'unrequited trade' – using the East's own resources to pay for exports back to Europe. The impacts of this huge siphoning of wealth were immense, creating a 'misery' of 'an essentially different and infinitely more intensive kind than all Hindustan had to suffer before', in the words of a columnist writing for the New York Tribune in 1853, one Karl Marx.

Established as a means to capture control of the pepper trade from the Dutch, the East India Company prospered as an importer of luxury goods, first textiles and then tea. From the middle of the 17th century on, the growing influx of cottons radically improved hygiene and comfort, while tea transformed the customs and daily calendar of the people. And it was in the huge five-acre warehouse complex at Cutlers Gardens that these goods were stored prior to auction at East India House. Here, over 4,000 workers sorted and guarded the Company's stocks of wondrous Indian textiles: calicoes, muslins and dungarees, ginghams, chintzes and seersuckers, taffetas, alliballlies and hum hums. Today, the Company's past at Cutlers Gardens is marked with ceramic tiles that bear a ring of words: 'silks, skins, tea, ivory, carpets, spices, feathers, cottons', but still no mention of the company itself.