The East India Company: The World's Most Powerful Corporation (The Story of Indian Business) (6 page)

It was Edward Connock, an appointee of the Company, who achieved in Persia what Roe had achieved in India two years earlier, the grant of a royal license. Connock was well-received in the court, the treaty was celebrated with copious amounts of wine, and in this merry atmosphere the Shah made a deal with Connock to supply 3000 bales of silk annually to England at an agreed price. Some of this bonhomie owed to the Shah’s hope of forming a joint front to oust the Portuguese from the Gulf. The moment of reckoning came in December 1620. A Surat fleet under Andrew Shilling encountered a fleet sent from Lisbon led by Ruy Freire de Andrade. In the bloody engagements that followed, the English commander died and honours were almost equally shared, but Freire de Andrade surrendered. Hormuz fell in April 1621. Thereafter, the Company could envisage its commercial operations in terms of Hormuz (horses for cloth), Surat (cloth for spices), and Bantam (spices) together. In this three-cornered system, the Company’s interests in Southeast Asia prevailed over those in India, but the India trade was growing at the same time.

Until about 1640, all of the Company’s operations in India were placed under the administration of Surat. The relationship with the Mughal authorities was stable, if not one of warm friendship. Much was achieved
towards securing the Company’s position on the west coast of India by two individuals, William Methwold and John Weddell. Methwold, the first ‘president’ of Surat, arrived on the western coast when the region had been devastated by a famine and piracy. A little before his arrival, the Company ships had established contacts with the Zamorin, the ruler of Calicut, to enable them to purchase spices from Kerala, and conduct joint missions to harass the Portuguese in Goa. But these moves exposed them to attacks by Malabar pirates. Not very successful in curbing piracy, Methwold was more successful in negotiating peace with the Portuguese. He was also the first influential officer to broach the idea of creating a harbour in Bombay. Methwold returned to England to become a full-time director of the Company. John Weddell helped in making the Surat-Persia connection stronger. He was a sea captain, a hero of the battle of Hormuz, and had been sent on a number of trading-cum-naval missions by the Company in the early 1630s before he was indicted for private trade.

From the 1640s, this three-cornered system began to fail. Too many Englishmen died in Persia from disease. And Dutch machinations weakened the English position further. On the death of William Gibson, the agent in Isfahan, examination of his account books revealed that Gibson was trading on his own in collaboration with
the Dutch merchants. Treachery had joined with interloping. In interior Persia, Armenian merchants reigned supreme, and who ruled the seaboard depended on who were friendlier with the Armenians. On this point too, the Dutch proved smarter. Lastly, the English Civil War (1642–51) reduced the market for a luxury item like silk, the chief article of merchandise from Persia. The decline of Persia as a factor in the three-cornered trade meant that the English needed to find other means of payments for Indian textiles than horses. Silver was to grow in importance as the principal means of payment.

Weddell’s infamy as a private trader symbolized a growing problem. From very early on, the Company had had to deal with resourceful individuals who defied its monopoly. In the first thirty years, the problem had grown, as Company employees who completed their periods of indenture and did not return to England, routinely took part in private trade. Other merchants, called voluntaries, paid money to the court to buy the right to trade in the eastern waters. A cash-strapped Charles I, committed to expensive warfare at home and abroad, was ready to grant such privileges for a consideration.

Realizing that there was little that it could do to suppress and punish so many rebels, the Company settled on a compromise. It allowed private business except in a few goods reserved for exclusive trade, on the condition that the traders would take a licence. It was also more tolerant of private transactions between ports within the same territory, as opposed to overseas trade.

In 1635, a leading silk and linen merchant of London, William Courten, along with an influential courtier Endymion Porter, approached the king to obtain a charter for a new East India Company. The mission of the new company was to conduct trade in the Portuguese spheres of influence, Goa, Malabar, China and Japan, establish trading stations in Australia, and start a colony in Madagascar. The new partnership, financed by a leading merchant of the city Paul Pindar, received permission to carry gold and was justified as an enterprise that operated in areas neglected by the old company. The old company was furious at the commission, but could not do anything to stop it. Funded by a massive investment of £120,000, the first voyage of the new company set out under the captaincy of John Weddell.

This voyage included Peter Mundy, whose account of the expedition remains an important source on Weddell and the regions that he went to. The first
expedition went to a number of places, the most important of which was Canton. It was a mixed success, which Courten did not live to see. Pirate raids and shipwrecks led to huge loss of cargo. Yet, what was brought home was sufficient to alarm the directors of the old company. The first voyage was also significant for being one of the first English visits to coastal China. When returning from the next voyage to Goa and Masulipatnam, Weddell mysteriously disappeared. An ‘eyewitness’ stated that he had been invited to a Dutch ship, and after being entertained there, was thrown overboard. The Dutch might have wanted to do this to him, but the more likely explanation of the disappearance was a shipwreck off the Cape of Good Hope in the winter of 1639.

The story of the new company was disastrous from this point onward. Saddled with inherited debt, the second son of Courten, also called William, continued his father’s mission. But the son’s personal fortunes plummeted despite sympathetic assistance from the king. The old company left nothing undone to obstruct the new company’s enterprise. He petitioned the Parliament against these actions without success. In 1643, the Dutch captured some of his ships off the Straits of Malacca. Courten fled from his creditors to Italy, where he died bankrupt in 1655. By then the new company had been merged into the old.

Major maritime and overland trade routes in the Indian Ocean, c. 1700.

HORMUZ HAD BEEN a dubious prize from a trading point of view. Already in decline, English victory over the Portuguese more or less sealed its fate. On the other hand, the conquest of Hormuz escalated hostility in the Konkan. In 1626, after several years of uneasy truce, the Dutch and the English conducted a joint operation to raid Bassein, located on ‘the Bay of Bumbaye’. A well-situated but almost unused port in Portuguese possession, Bumbaye contained no more than a poorly defended fort and a settlement of fishermen. The Portuguese command escaped to Goa before the forces arrived, and the invaders had to be happy with a few bags of rice they left behind. The intensity of Anglo-Portuguese conflicts in the Indian waters died down
from then onward. A truce was signed between the English and the Portuguese in 1634, ushering in an unusually long-lasting peace.

As a result of these conflicts, the Company’s officers had already started discussing among themselves the need to build forts in their trading stations. The idea was not a new one. The Portuguese had shown the way. Although the Indian Ocean ceased to be a battleground in the 1630s, the Dutch maintained a larger military presence than the English. The death of Shah Jahan and the wars of succession in the 1660s added further to the growing feeling of insecurity. Between 1632 and 1690, three fortified settlements came up in India, in Madras, Bombay and Calcutta, in that order. These three sites embodied a whole new package of trade, naval defence, and politics, which would become the focal point of Company trade and territorial expansion in the eighteenth century.

The Company’s seventh voyage of 1611 under Anthony Hippon had attempted to set up a factory on the Coromandel at Pulicat, in the hope of sharing the coast-to-coast trade with the Dutch who were already stationed there. The move failed due to Dutch protestation in the
court of the queen who ruled that part of the coast. Hippon then sailed north towards the mouth of the river Krishna. Although a coast well known for cyclonic storms, the spot where he chose to land was reasonably sheltered from the sea. Nothing further came of this trip, even though a settlement of some sort continued here until 1687, when, repeatedly ravaged by fevers, it was dismantled. Three years after Hippon, another expedition to Pulicat was thwarted. After hosting the English to a lavish banquet, the Dutch forbade them to trade.

Hippon and his companions carried on and landed at Masulipatnam where a more permanent but small station was set up. This port was ruled by the agents of Golconda, who wanted it to become a free port rather than a monopoly of any single European power. It was not until 1632 that Golconda’s own authority over Masulipatnam was secure enough for the English to trade freely. For some time, therefore, the English also tried a ‘miserable’ shelter called Armagaon. When they returned to Masulipatnam in 1632, they found that the weavers and dyers who had earlier supplied them cloth had all died in the 1630 famine.

Nevertheless, the importance of Coromandel grew as a partner in trade with Bantam. Coromandel supplied the cotton cloth used as payment for pepper.
Coromandel, in addition, was the source of hand-painted cotton in great demand in Europe and Asia alike. Another big attraction of Coromandel was the trade in diamonds from Golconda, which formed both a lucrative commodity as also a means of remitting money from India to Europe.

In 1632, Francis Day (1605–70) arrived in the nearly ruined factory at Armagaon as a Company factor. Surrounded by hostile powers, Day began to look for a safer place for a factory. On a journey from Masulipatnam to Pondicherry, he settled on a spot between two villages, Madrasipatnam and Chinnapatnam. Located close to a Portuguese church and settlement, the site was purchased from the local ruler Damarla Venkatadri. Day described many advantages of the site to his colleagues at Masulipatnam. Cloth was cheaper to obtain, the coast was good for landing, the settlement was nearer the sources of painted cloth, and above all, the friendly local ruler had offered to construct the fort there before Day moved in, on the promise that he would be reimbursed in the form of Persian horses.

When Day arrived in 1640, he discovered to his horror that the king had in mind a fort made of palmyra leaves. Taking matters into his own hands, he began constructing a fort with sturdier raw materials, possibly
on St George’s Day. The move did not make London happy, so Day had to start construction with his own money. The powers in London left any decision to prevent the coming up of the fort or punishment of Day to the Surat authorities. Officials in Surat, in turn, ‘hoped’ that the factors in Coromandel had considered all possible angles before building a fort there. In this way, the Fort St George in Madras became possible because Surat and Masulipatnam joined Day in quietly ignoring the Company headquarters in London.

What saved the settlement from a damaging disciplinary action was its immediate success as a commercial centre. Within months, dozens of weavers’ families came to Madras and started living there. Families of merchants and artisans residing in the Portuguese colony San Thome shifted residence to the English area. Although the Portuguese grudgingly accepted the English fort, and the Dutch watched in alarm from Pulicat, neither of them chose to act. Madras did not fail to supply sufficient cloth to Bantam. A French Capuchin monk, Father Ephraim de Nevers, built a place of worship for the spiritual benefit of Catholics and others alike. And, what might surprise the present-day visitor to the city, a Spanish traveller in the 1630s described the climate of Madras as ‘excellent’.

Day was summoned to England for punitive action in
the summer of 1841. At the end of an enquiry he was sent back with a bundle of letters authorizing the decision. However, as a face saver for the Company, he and other decision-makers were chastised for needless extravagance. In 1642, the head office of the Coromandel operations shifted from Masulipatnam to Madras. For this decision, Day received the support of the agent of Masulipatnam, Andrew Cogan. The support made a difference, for Cogan was both influential and forceful. In 1657, Fort St George ceased to be subordinate to Bantam, as it had been until then, and was elevated to the position of an independent trading station. Day returned to England in 1645. Not much is known about his life and career after this.

Unlike Surat or Masulipatnam, where the English merely had the right to reside and conduct trade, in the Fort St George they were landlords. It was a precarious title, but nonetheless did make the Company a territorial power on a small scale. In order to hold on to that power without the help of local rulers, the Madras authorities built a wall around the six square miles over which they had proprietary rights and protected it with a garrison. The wall and the garrison were again expenses considered ill-advised by London. The first colonial city in India came up inside these walls. Just outside the walls, a large colony of artisans and service providers
came to live. Later designated ‘white’ and ‘black’ towns respectively, in the 1670s, these two areas, already sharply demarcated, were described by John Fryer as the Christian Town and the Heathen Town. Thomas Bowrey, a private merchant who left a record of the place in the 1670s, reckoned that the two settlements together had a population of 40,000, which was a good size for a purely commercial town of this time. Many amongst the wealthier Indians of the town were Tamil artisans and Telugu merchants.

European settlements in the Coromandel were periodically exposed to territorial disputes. The Chandragiri kings who had granted the English the title to Madras were caught up in succession wars in the 1640s. Golconda, Bijapur and the Nayakas of Madura, Tanjore and Gingee became embroiled in a struggle for mastery over southern Deccan. The Dutch and the English settlements were alternately protected and threatened by these rivals. In 1646, a new threat materialized from the north, a combined Mughal army under Mir Jumla which defeated the rebellious Nayakas and came within two days’ march from Madras. Mir Jumla returned after confirming the English right to continue trading. The fact that his own army depended heavily on European gunners and generals may have played a part in this decision. More important to the
survival of the Europeans settlements was the strength of their own military power, which could withstand attacks by the armies that the local states were able to put up.

A difficult problem was raised when the shadow of English politics fell on Madras in 1665. Edward Winter, one of the more capable of the Company’s local officers, was the president of Fort St George then. Winter’s plans to build up the navy and pose an effective deterrent to the Dutch alarmed the directors at home, who sent the cautious George Foxcroft to replace him. Foxcroft arrived in Madras with his son Nathaniel to a frosty reception from Winter and his retinue. The ensuing dispute between the two factions carried shades of a conflict between the royalists, to which camp Winter belonged, and the ‘levellers’, which Nathaniel revealed himself to be. A mutiny broke out, and the Foxcrofts were thrown in prison. For the next three years, Winter reigned in Madras despite warnings from the Company bosses in London, and stepped aside only when the Company sent a fleet in 1668. To a royal commission of enquiry, the whole affair was more complicated than insubordination. The Winter faction claimed to be working for the Crown in using the Company’s resources to defend Madras. And yet, it had defied the orders of its employer. In 1672, when the two
protagonists, Winter and Foxcroft senior sailed for England, the matter was closed. But Winter received no punishment for causing the dispute.

In 1661, the Anglo-Portuguese peace efforts secured its supreme success, in the marriage between Charles II and the Infanta Catherine. The diplomatic missions discussed a number of matrimonial deals and concluded one. The processing leading to it had much to do with the insecurity in south Asia. The Portuguese felt more threatened by the Dutch, who had shown no intention of following the English in ending hostilities. In 1656, Ceylon, where Portuguese settlement and rule had lasted 170 years, was lost to the Dutch. Could Goa be far behind? On their part, the Company was acutely aware that, with or without Mughal licenses, its position in Surat, and the east coast settlements of Balasore and Hooghly, was precariously dependent on local kings. A new well defended factory away from the Indian territories was the only solution. A factory did come up in Rajapur in Konkan, then in the sphere of influence of the Siddis, but it was never seriously in contention to become the centre of activity. Bombay, on the other hand, because of its natural advantages of a good bay
and harbour had many backers within the council in Surat. Charles II led the way to acquiring Bombay, by accepting it as dowry for his bride Catherine of Braganza from the Portuguese Crown. The king gifted it in turn to the Company seven years later. The important consequence of rising English power in the Konkan, therefore, was the acquisition of a new port.

The transfer of Bombay to the Company did not have any immediate impact. Taking possession of the island was a challenge because the Portuguese settlement in Bombay resisted the English, and the royalists resisted the Company’s representatives. The locally settled Portuguese communities already possessed a system of governance, including land tenure and taxation. They opposed British occupation from the fear that these interests would be lost. Bombay’s coastal waters were unsafe for the English due to pirate attacks from bases in Malabar and Diu, both beyond the reach of the English. The Dutch were upset with the transaction because they wanted Bombay for themselves, and so were the Mughal authorities who claimed a tenuous property right in the area. Neither possessed sufficient military power to force the issue. But the threat of an invasion was never far away.

Complicating matters further, there materialized the prospect of a move upon Bombay by Shivaji’s army. A
state of war then existed in the Deccan between the Mughals and Shivaji. Surat, being a Mughal city, was exposed to raids by Shivaji’s forces. The richest merchants of both Bombay and Surat were employed by the Company or worked under its protection, and they felt deeply insecure. In the course of the ensuing skirmishes, a few Englishmen had in fact been imprisoned by the Marathas.

In a large measure, it was the leadership of two able visionaries—Geoge Oxenden (1620–69) and Gerald Aungier (1635–77)—that saw the Company through these difficulties. Oxenden hailed from a wealthy family of Kent and came to India in 1632 at the age of twelve as an attendant to a priest. His fluency in Hindustani was quickly noticed, and he was offered a job of part-time interpreter in Surat and Ahmedabad. In 1641, he joined as a factor in Surat at a small salary. The greater part of the next twenty years was spent in India on trading missions and constant negotiations with the local rulers and rival companies. His commercial success and political experience made him suitable for the most important job in India, president in Surat, in 1661.

The first two years of his tenure were devoted to settling the problems of Bombay. In January 1664, he faced the most important military challenge of his career, protecting Surat’s interests from Shivaji’s army. The Company’s warehouse was one of the main targets of
the Maratha raid, which intended to raise funds for war rather than conquer the city. The Company’s employees and traders fought a determined battle and managed to save the property. The defence was led by Oxenden and conducted by civilians. After it ended, the episode brought the Mughal governor and the Company even closer with a marked role reversal—for the first time in the Company’s history the Mughals were dependent on the English. In the last years of his office, Oxenden oversaw the end of the royalist-versus-Company dispute over the possession of Bombay by means of letters of patent granting the Company full authority over the island (1668). Oxenden died in Surat the following year.

Aungier came from a family of Irish clergy, and joined the Company’s service in 1661 at the age of twenty-six. He too was a factor in Surat, and worked in this capacity for the next seven years. He rose quickly to the second most important position in the Surat council, owing to a deep understanding of the geopolitics of the western coast. On the death of Oxenden in 1669, he succeeded him as president in Surat and as the governor of Bombay. He laid the initial foundations of a form of European government in India. He set up courts, made laws, built a town administration that had representation of the major communities and installed a land tenure and
taxation system. The first town plan, land reclamation and fortifications were started. Aungier urged his superiors to relocate the centre of the Company’s activities in India from Surat to Bombay. The wisdom of this move was recognized in 1684, seven years after Aungier died in Surat.