6.2) the asian trade

Question 1

when, how and why was the EIC founded?

Answer 1

• the east india company was founded in 1600
• by a royal charter granted by elizabeth I
• india was a major power at the time - far wealthier and more developed
• the EIC’s intention was to carry out trade with south and southeast asia (concentrating on india and china) on the shipping routes between them and england
• the aim was to rival the portuguese, who controlled trade at the time

Question 2

what was the structure of the EIC?

Answer 2

• it was a private joint stock company with shareholders and no direct gov involvement
• initially it was a small scale venture that dealt in spices and textiles and setting up factories where goods could be made and sold
• the dutch and portuguese rivals were far more powerful than them

Question 3

what did the EIC’s monopoly of english trade in asia mean for the company?

Answer 3

• it could mint its own money, wage war and have its own justice system
• it had its own army and navy and could therefore fight the dutch and portuguese and take control of trade from them in parts of india

Question 4

where were the EIC bases?

Answer 4

1688
- surat (gujarat)
- madras (now chennai)
- bombay

Question 5

what challenges did the EIC face with indian government?

Answer 5

• at the time, india was a major power ruled by muslim mughal emperors and it had a far larger economy than britain
• at the time, india had no need for the resoruces that england had to offer but indian goods - like spices, teas and textiles - were in hugh demand in england
• later, thanks to the asiento and slave trade, the english got access to gold and silver bullion from america which england had an interest in

Question 6

what is a firman?

Answer 6

a directive from the emperor that would grant special trading rights across india

Question 7

how/why did english relations with emperor aurangzeb collapse?

Answer 7

• 1686 the EIC wanted to establish a firman but josiah child (the company’s governor in london) interfered and the emperor cut off talks
• in response, child sent an army and warships -> started the anglo-mughal war
• the large mughal military easily defeated the english and at the end of the war, the EIC surrendered and were forced to pay the english a huge fine in return for trading rights

Question 8

what did the EIC gain from the anglo-mughal war?

Answer 8

• the company was able to set up a new base in bengal (1690) around calcutta
• this set up the foundation and britain ruled india from there for the next 200 years

Question 9

why did some people want to end the EIC’s monopoly?

Answer 9

• the merchants and businessmen who had been excluded from trade by james II after the glorious revolution wanted their share

Question 10

why did parliament vote to close down the EIC? how did the EIC battle this?

Answer 10

• the EIC resisted change so the parliament voted to close it down but before that could happen, the granted a new charter for 21 years
• then parliament passed a resolution that ‘all should have equal right to trade’ -> this meant the EIC monopoly had been broken

Question 11

what did the EIC gain between 1702-30?

Answer 11

• directors used the three years to buy up shares in the new company and it carried on like it did before
• 1702 - the EIC and the new companies decided to merge making the united company of merchants trading to the west indies (basically the EIC all over again)

Question 12

when did parliament set up a new company to trade with asia?

Answer 12

• 1698
• the EIC was given three years to close down

Question 13

how did the EIC benefit from the 1702 merger?

Answer 13

• growing trade network -> as the demand for commodities grew in england, their share prices and profits increased
• military force centred on its expanding base in calcutta
• the company expanded across asia and employed large numbers of asian seamen, especially lascars from bengal (formed a quarter of the EIC seamen by 1700)
• offered work for british men to come to india and work -> many of these english men married indian women and returned to england with them starting some anglo-indian heritage

Question 14

how did the opium trade start?

Answer 14

• the EIC grew poppies in north eastern india and exported the opium to china
• this had a widespread effect on chinese society and created a serious addiction
• the EIC benefitted from opium addiction in the east and tea addiction in the west

Question 15

how did the EIC benefit from the problems within the mughal empire?

Answer 15

• after aurangzeb died in 1707, wars between nobles and peasant uprisings weakened the mughal rule + bengal and hyderabad chose to rule themselves
• the central mughal army became weaker and the EIC took advantage of this
• 1717 - the new mughal emperor granted a firman to the EIC allowing it to trade, duty free all over the empire for a small annual payment
• by the end of 18th century, the EIC ruled india and and controlled half the world’s trade