To What Extent Did The East India Company (eic) Transform From A "mere Merchant" Into A Sovereign Power In India In The Period 1680-1764?

The period 1680-1764 saw a marked transformation in the nature of the English East India Company (EIC) in which it developed from a trading company into a sovereign power. A dominant trend in the historiography of the early EIC has been its characterisation as a mere trader when it was founded by royal charter in 1600. Over time, this mere trader `evolved into a powerful imperial agency, and by 1800 its imprint on the east was quite profoundly different from that envisaged by its founding fathers in 1600.` While there is a cogent argument that from its outset the Company was granted rights and powers beyond that of a business organisation, which this essay will address, by the latter half of the eighteenth century the EIC had become a sovereign power in India, a claim that could not be made in the seventeenth. This was not for lack of sovereignty, but rather due to the EIC s weakness as a land power relative to the might of the Mughal Empire. As a mere merchant , the early EIC was principally concerned with trade, holding small coastal settlements and factories from which it could conduct commerce. The term sovereign power is defined thus: a land polity that enjoys recognition from the states with which it does business, exercises at least some autonomy (although EIC Governors in Asia were nominally answerable to directors, the Crown, shareholders and later Parliament they were mostly free to make their own decisions) and is able to defend itself from foreign attack. This essay will argue that the series of events that led up to the Battle of Plassey in 1757 from the late-seventeenth century were of vital importance in the EIC s transformation into a sovereign power in India, and that victory in the battle led to its eclipsing French and Nawab power, with its subsequent supremacy over Bengal cementing its hegemonic position. Plassey therefore was the culmination of an evolution for the Company rather than a revolution. The EIC s transformation from mere merchant to sovereign power was a gradual development spanning around the course of a century. As a chartered trading company, the EIC enjoyed official recognition from both British and Indian rulers and was permitted to exercise powers associated with seventeenth-century nation-states. Child s War and the Glorious Revolution were both disruptive events, but their long-term effects were the beginning of a British strategy to counter Mughal power, as well as increased co-operation between the British and Dutch Crowns and their respective Companies, which worked in the EIC s favour. The fall of the Mughals was also exploited by the EIC through its capitalising on the piracy issue and the factionalism of post-Mughal India. Co-operation with local merchants, brokers and leaders was also essential for the EIC s rise by providing it with the military and financial might to become a sovereign power. The culmination of these factors was Plassey, which saw the destruction of French and Nawab power in India and British domination of Bengal, India s richest province.

The period 1650-1750 has traditionally been portrayed as an age of partnership between Europeans and Asians. In this view, the British victory at the 1757 Battle of Plassey transformed the Company from a trading organisation into a territorial power. Commercial enterprises, which had been under attack at home and were increasingly unprofitable, had no future and colonial government in India provided the EIC with a soft landing. Much of the source material used to inform these views derives from nineteenth-century historians describing the aftermath of Plassey India was colonised entirely accidentally through a fit of absence of mind by mere traders, ignorant of general politics, ignorant of the general peculiarities of the Empire which had strangely become subject to them. Such notions also pervade the recent work of Jon Wilson: In India the British Empire was never a project or system. It was something far more anxious and chaotic. While Wilson s view is useful in undermining the traditional account of the Plassey watershed of the British presence in India, it does little to challenge the postcolonial melancholia of the present, nor does it provide a perspective from the colonised, a history from below to challenge top-down narratives. The most significant innovation in the historiography of the EIC in recent years has been made by Philip Stern, who, drawing on the notion of Frederick Cooper s empire-state, characterises the EIC as a company-state. He emphasises the autonomy of the seventeenth-century EIC, that settlements did not allow formal appeals to authorities in England. The early-modern EIC was a commercial, political, and diplomatic intermediary between England and India, legitimised by both an exclusive English royal charter and a series of agreements with local rulers. The company-state had both commercial and territorial ambitions and pioneered governmental techniques. While not a major land power prior to 1757, it enjoyed recognition as a sovereign entity and held significant regional sway due to its commercial importance, naval power and fortified coastal settlements. His account is not perfect Ilya Vinkovetsky highlights that Stern hardly addresses commercial concerns in his work. This gap is filled by Nick Robins, who argues that Plassey constituted an extreme form of corporate takeover. It was not a sudden surge of expansionism but rather the success of a strategy attempted by Governor Robert Clive s predecessor, Josiah Child. The EIC, sovereign from its inception thanks to its royal charter and autonomous representatives in India, had under both Child and Clive attempted to become a territorial land power. Plassey therefore was a watershed moment because Clive allowed the British to take control of Bengal and for the first time had the resources to dominate the other players in the continuing contests among India s regional states.

Prior to 1688, the EIC was endowed with quintessentially sovereign prerogatives, namely its Mughal farman (trading rights) and English royal charter. Niall Ferguson argues that the trading companies, as state-licensed monopolies, allowed governments to privatize overseas expansion. It was its alliance with the Crown that was most critical to its legitimacy. The early modern state, which had emerged conceptually from the 1648 Peace of Westphalia, was itself a form of corporation its duties were to administer a group of people as one common entity. The Company s internal structure was reminiscent of both a corporation and a state it was governed by a system of councils and was accountable to its shareholders and investors. However, due to the vast distance between metropole and Company, which meant that communication between the two could take over a year, both the Crown and Company directors had little option but to imbue EIC agents in India with a degree of autonomy the early EIC in India was sovereign in that it could make its own independent decisions. There was however little focus on territorial expansion, serving to undermine arguments that the early modern military revolution was the driving force behind European power in Asia. Jason Sharman also highlights that Europeans did not enjoy any significant military superiority vis- -vis non-Western opponents. Instead, fundamental to the Europeans success and survival was a maritime strategy that avoided challenging the land-based priorities of local polities. They were therefore forced to act as peaceful traders. The rise of the EIC allowed for a new relationship with India in which the state was fully committed to providing the public infrastructure and military protection necessary for the unlimited flow of English trade, shipping, and investment across the globe.` The EIC before Child s War was recognised as sovereign by rulers in both India and England alike. However, it was yet to become a land power.

The late seventeenth century was crucial for the development of the EIC into a sovereign power. In the 1670s and 1680s there was a growing movement towards militarisation. The EIC was committed to maintaining a dominant, preferably fortified presence in every Princes Dominion with whose Subjects we trade. It also took a far more aggressive approach to dealing with its enemies. The company s new-found militarism was portrayed by eighteenth-century writer Robert Orme as defensive imperialism , an inevitable response to Mughal encroachment on its trade. Douglass North argues that it was not military superiority but the sovereign state that was the primary motivation behind Western expansion in this period. The first major policy change was the EIC s new full-scale strategy of extra-economic coercion , Child s War of 1686-9, which was evidence of real aggressive intent on the Company s part to exploit a distracted Mughal power for commercial gain. While this resulted in a crushing defeat for the British at the Siege of Bombay in 1689, it also constituted the first serious effort by the British to assert their authority on land, a clear policy transformation. The second major change to the EIC, after its new-found propensity to resort to armed force, was the 1688 Glorious Revolution, in which Dutch Stadtholder William of Orange deposed James II. In the medium term, this new state of affairs would benefit the EIC at the expense of the Dutch East India Company (Vereenigde Oostindische Compagnie or VOC). The EIC s long-standing association with the monarchy led the English and Scottish Houses of Parliament to consider replacing it. Fortunately for the EIC, the House of Commons was keen to increase its domestic and foreign power and decided to form a new united Company closely linked with both monarch and Parliament. This new relationship to the British state laid the groundwork for the Company s slow incorporation into the British state and Empire in the eighteenth century and was critical to the growth of the British military-fiscal state. For the first time, Company sovereignty was viewed as integral to the British state and with this increased legitimacy came greater domestic support, investment and access to resources with which it could expand its operations in India. The Company also stood to benefit from increased co-operation with the VOC because the un ion of the Crowns constituted a consolidation of interests in Europe and the trading world of Asia. Although Child s War and the Glorious Revolution were tumultuous events, their lasting effect was a closer alliance between the EIC and the British and Dutch states, which led to greater collaboration and the means to exact control over mainland India.

For the EIC, the most important competitor for Asian trade in the seventeenth century was the VOC. Although the Companies were granted national monopolies, they were never true monopolies as the European companies were always in conflict with one another. As a result, Company profitability was perpetually stressed with the solution being the pursuit of an aggressive market conduct to acquire monopoly-monopsony power in its markets both at home and overseas respectively. Anthony Read has argued that trade with South-East Asia contracted sharply in the mid-seventeenth century and the main beneficiary of this was the VOC, which won market share from its European and Asian rivals through its selective use of power to establish monopoly conditions. However, the period of reconciliation with the EIC which followed the Glorious Revolution did not benefit the VOC, which was accustomed to defending their trade with military force. One of the reasons for this was a major shift in consumption in Europe. The costly efforts of the VOC to monopolise their trade in pepper and spices were undermined by a burgeoning demand for cotton, silks, tea and coffee. Furthermore, the VOC s structure would eventually work against it. While state patrimonialism had initially been an advantage for the Dutch, it also made private trade concessions unnecessary for an organisation of its size. This led to a loss of economic dynamism and stagnation by the early eighteenth century. By contrast, the EIC had free rein to remodel its trade, and as the Dutch monopolised spices, the English moved to other goods. The EIC s other great economic advantage was its incorporation of the private trade into its business practices. This was facilitated by its unique relationship to the state: The government delegated certain sovereign rights to the Company as a corporation, while at the same time a number of private citizens delegated the right to dispose of part of their property to the same body. In the Dutch system this was not possible private trade was seen as undermining the Company s monopoly. Although both Companies exercised powers traditionally associated with nationhood, the EIC s firm affiliation with the state after the Glorious Revolution furnished it with more resources to assert military power. By contrast, the VOC was unable to obtain military support from its government, which made territorial competition with other powers an impossibility and was a major factor in its decline. The period following the Glorious Revolution, which saw increased investment and personnel provision from the state, Anglo-Dutch co-operation and subsequent reduced Dutch aggression and the diversification of European demand for Asian goods, allowed the EIC to expand its trade with and jurisdiction in Asia at the expense of the once-dominant VOC, facilitating its progression towards sovereign power status.

The British were presented with an opportunity to fill the power vacuum caused by the death of Aurangzeb in 1707, after which Mughal lands sank into chaos and violent feuds. The British were able to play one state off against another while also offering their own soldiers in conflicts in return for money and privileges. One of these was a new Mughal farman in 1717 which allowed the EIC duty-free trade throughout Bengal. The ailing Mughal regime became ever more like a puppet state for the ascendant British many edicts that worked in their favour were passed through the Emperor s authority. This egregious commercialization of sovereignty was condemned by Edmund Burke in 1783, who argued that the Emperor was sold. The significance of the decline of the Mughals in Britain s transformation into a sovereign land power in India were twofold: it facilitated both the British achievement of political power in India and the conditions necessary for monopolistic control of Indian trade. The EIC s power vis- -vis the Mughals also grew at sea. Although the EIC was unsuccessful in imposing its own definition of piracy on the Indian Ocean world, it was keen to profit from the Mughal naval weakness made clear by Child s War. When British pirate Henry Avery captured two Mughal vessels in 1695 Aurangzeb demanded compensation and policing of the seas by the British. Far from seeing this as a burden, EIC representative Samuel Annesley declared that this new state of affairs would bring the Company special immunities, privileges and revenue, sovereignty over Mughal ships and subjects and transform it into both a sovereign sea power and a corporate tributary of the Mughal Empire. In 1698, the EIC persuaded the English Board of Trade and the Admiralty to send a number of ships to hunt down pirates. Philip Stern writes that it was a move that invited the English state, in the form of its growing naval power, into Asia. The waning centralising power of the Mughal Empire led to internal factionalism and external threat while all were struggling against all, the Briton could rush in and subdue all. The EIC was able to gain greater trading privileges and political power through a series of strategic alliances and its adept handling of the piracy issue won it sovereignty at sea and support for naval expansion from both the Mughal and British states.

The Company did not become a sovereign power in India purely through its own efforts, nor did it operate in a vacuum scholars such as Nicholas Canny have emphasised the need for an integrated world history. Within India itself the EIC relied on both its own agents and also local representatives, particularly brokers and merchants. This partnership could be used against a common enemy Indian traders often worked with the British to undermine Mughal hegemony. The Mughal administration of Surat was unpopular and around the turn of the eighteenth century the conscious decisions of traders to establish themselves in rival British-controlled Bombay led to Surat s decline. One of the main reasons for this was Aurangzeb s religious intolerance influential trader Bhimji Parikh had led a Hindu and Jain boycott of Surat in 1669 as a response to persecution. In the various regions of India trade was often controlled by just a few incredibly powerful men like Parikh `Abdul Ghafur alone could conduct trade equal to that of the British East India Company. Many also enjoyed a degree of political independence. While the British often set up white towns in cities to house Englishmen in Company service, Kasi Viranna controlled the black town of Madras and exercised a near-monopoly on local textile production. Viranna also facilitated the private trade of senior EIC officials in Madras, which allowed them to return home with much greater wealth than what they could have earnt solely from their modest salaries. The Nawabs were aware of this `abuse of the Company s dastaks, rights to duty-free commerce which were illegally applied to private trade, but felt compelled to tolerate it because they recognised that the European merchants provided a major stimulus to Bengal s monetised economy and therefore to its revenue yield. At this stage, the British did not seem in a position to challenge the political authority of local rulers by building up any significant military power. This was to change by the Battle of Plassey in 1757, especially with the help of Indian conscri pts and the defection of Mir Jafar. Indian co-operation and aid were essential in the transformation of the EIC into a sovereign power in India, often allowing it great economic privileges and political and military authority.

The decline of the VOC and the Mughal Empire had shifted the balance of power in India so that now the greatest obstacle to British mastery was the French East India Company allied with the Nawab of Bengal. In the 1750s the new Nawab, Siraj-ud-Daula, was a reactionary, highly suspicious of the EIC s abuse of the dastaks as well as the growing militarisation of the EIC s settlement in Calcutta. He successfully captured the Company s Calcutta settlement however, it was the EIC s response that would be most pivotal. The British victory at Plassey in 1757, although not by design, led to British military and economic hegemony over Bengal due to its appropriation of diwani taxation rights and destruction of French and Nawab power. There has been a recent trend in the historiography to prove that the Plassey Conspiracy was engineered and encouraged by the British and was not a result of political crisis in Bengal. Peter Marshall has argued however that most Englishmen did not see themselves as the agents of an imperial drive but had fought Siraj-ud-daula to restore the status quo. It is certainly credible that most men in East India service knew little of the underlying aims and motivations of their directors, but it is also true that Plassey was little more than a spontaneous attempt to unseat an obstructive ruler. However, its long-term effect was the realisation of Child s vision for the Company transforming itself from a parcel of mere trading merchants into a formidable martial government in India. It was a watershed moment precisely because that victory, followed by the defeat of Mir Kasim and his allies at Buxar in 1764, made the position of the British unassailable and transformed the Company into a sovereign imperial power in all but name. The first momentous change stemming from the effective conquest of Bengal was that Britain had changed from being a country that supported colonies of its own migr s to becoming a domain that ruled other peoples. What made the transition so seamless was that EIC officials were able to hijack Bengal s existing state structures. The Mughal Emperor at the 1765 Treaty of Allahabad granted the EIC the diwani of Bengal the right to tax over 20 million people. The EIC was able to use these revenues to maintain a larger army to intervene in the politics of other Indian states and counter the Maratha and Mysore threats. British naval and financial superiority also destroyed French power on the east coast. Clive wasted no time in turning Britain s newly won advantages into a lasting supremacy, hastily fortifying Calcutta and militarising its surrounding trading outposts. Although Clive told Mir Jafar that the British must attend only to commerce, Clive strengthened the EIC s control over him by supervising his ministerial appointments and making him militarily dependent on British forces. Far from being a fit of absence of mind, Clive s actions as the chief representative of a corporate machine that worked with remorseless logic to achieve its ends were entirely consistent with long-standing instructions from London to secure its possessions overseas. While the destruction of the Nawabs and a new proto-imperial British regime in Bengal were more unforeseen side effects of Plassey than anticipated consequences, its importance in securing Bengali commerce and tax revenues financed a subsequent growth in military power which rendered the French and other Indian kingdoms unable to mount an effective challenge to the sovereign power of the EIC.

This essay has shown that in the period 1680-1764 the EIC transformed from a mere merchant into a sovereign power in India. Allied with the Crown and Parliament, by 1764 the EIC had developed far beyond being a mere merchant it was a sovereign power in that it was recognised by other states, while exercising autonomy and sporting the ability to defend itself militarily. Aside from the autonomy afforded it by its directors and the royal charter, the same could not be said of the EIC in 1680. This essay has demonstrated that the transformation was not a case of India conquered , but rather the result of a gradual evolution over time. The victory at Plassey allowed the EIC to exact its will through military force, which, when pioneered by Josiah Child in the 1680s, had been complete madness. However, its success in the 1750s arose from a fortuitous series of events at home, in Europe and within India. British mastery came about from its careful management and exploitation of these events, rather than being the result of a sudden triumphant military campaign. From the outset the EIC s status as a chartered trading company had given it sovereign powers traditionally associated with the monarchy which allowed it recognition and legitimacy in Asia. The 1680s were the beginning of a new-found militarism undertaken by the Company, which, while unsuccessful, showed that it was able to use war as a means of coercion. The Glorious Revolution led to a closer relationship between Crown, Parliament and Company and afforded it the resources needed to create an Indian empire. While the VOC had been the dominant Company in Asia in the seventeenth century, its power ebbed as it was unable to adapt and incorporate lucrative new goods and the private trade into its rigid structure. Its military power contracted alongside its relationship with the Dutch state. Concurrent with expanding British power in India was the decline of the Mughal Empire the once monolithic entity dissolved into feuding successor states and faced attacks from the Marathas and Mysore. It was through exploiting these conflicts and creating a series of alliances and treaties that the EIC could expand its military and economic power. Indigenous co-operation, fundamental to the economic growth of the EIC, was also essential in its bid for military superiority. By the time Siraj-ud-Daula challenged the EIC in 1756, its power had grown too great and with the defection of Mir Jafar the Nawab s fate was sealed. The conquest of Bengal and cession of diwani rights granted the British hegemonic power in India. This essay has determined that the period 1680-1764 was critical in the establishment of British power in India as it saw the transformation from a mercantile to an imperial relationship. This is important in contextualising later developments such as the 1777 Regulating Act and Crown rule in 1858.