Honourable Company: A History of The English East India Company (29 page)

Any explanation for this sudden growth would have to include a wide range of contributory factors – the Company’s favourable treatment by the later Stuarts, the comparative stability in India during the early years of Aurangzeb’s long reign, the buoyancy of European markets, the importance of Bengal as a new trading arena, the comparative safety of the sea lanes, and so on. Given the general profitability of Eastern trade, it would be essentially a list of restrictions which for once did not apply. With a free hand and a clear run, the Company could only prosper. But of far greater significance for its future was the suddenness with which this expansion had taken place. Such an impressive turn-round could not pass unnoticed. It prompted unease, envy, and hostility. Was it right, it was asked, that a single company should account for what now amounted to ‘above half the trade of the nation’? And was it right that that Company should operate behind the closed doors of a monopoly which excluded even its own servants, never mind outsiders, from a share of its profits?

Profits apart, there was also the question of regulation. Was it constitutional for a consortium of London businessmen to govern overseas territories, construct forts, dispense justice, raise revenues, coin money, and wage war and yet be outside the control of Parliament and answerable only and indirectly (through the royal charter) to the Crown? The Company’s cosy relationship with the later Stuarts was fine while it
lasted but was bound to be challenged the moment the Company lost the confidence of the City or the Crown the confidence of Parliament. In the event both these crisis would occur almost simultaneously in the late 1680s. They were anticipated, though, both by some within the Company who had serious doubts about its monopoly and by many outside it who were already mounting a direct challenge.

During his brief but pained sojourn in Bengal, Agent William Hedges had been one of the first to recommend the seizure of a fortifiable position at the mouth of the Hughli which might become the Bengal equivalent of Madras or Bombay. A fort provided the necessary base whence to menace with impunity the Moghul’s shipping and, just as important, ‘it is also the only remedy to prevent the interlopers infesting us’. On 26 September 1683, as Hedges sat drafting his recommendation in the Company’s Hughli factory, interlopers – or private traders – were much on his mind. On the river outside his window a certain Captain Alley was even then reclining in a stately barge. A musical quartet played for the Captain’s delight and ten stalwart English seamen in a livery of ‘blew capps and coats edged with red’ rowed him ashore. There, above the landing steps, ‘a splendid equipage’ waited; it was trimmed with scarlet and lace, attended by eighty servants, and preceded by two flags. Alley was conducting himself ‘like an Agent’. Hedges fumed with indignation. But he had to admit that Alley was no fool. ‘A gawdy show and great noise adds much to a public person’s credit in this country.’

For two decades the Company had been little troubled by interlopers. But once eastern profits had again become the talk of London town, new syndicates formed, new ships sailed, and interlopers reappeared in Indian waters. Alley was one of the first of this new breed. Well financed and protected by powerful interests, he was now on his second if not his third voyage. ‘The interlopers must be suppressed in England’, insisted Hedges, tis impossible to be done here.’ And the Company had of course secured a royal commission for Alley’s arrest. But Alley saw to it that he rarely called at any English port where it could be executed. To avoid suspicion he had originally sailed to Cadiz and it was from there and other European ports that he traded to India.

According to the Company’s directors, suppressing the interlopers in England was not therefore so simple. Better by far to cut off their trade in India. To this end, valiantly did Hedges endeavour to persuade the Nawab and his governor at Hughli to have nothing to do with Alley. Interlopers, he implied, were little better than pirates, answerable to no
one and quite capable of taking by force what they were denied by law. If the Moghul’s representatives continued to encourage them, the Company could not be held responsible for the consequences. (Hedges was not to know that European pirates, like interlopers, were also about to reappear in Indian waters, and that equating the two would only confuse the issue.)

But while politely sympathetic to all these arguments, the Nawab did nothing. On the Coromandel Coast Alley had apparently secured some sort of trading permit. From an Indian point of view competition was good. It weakened the English Company’s intractable stance over that question of customs duties and it obliged the Company to boost its Indian investment in an effort to outbid its rivals (another reason for that dramatic increase in trade). Without all the overheads of permanent establishments, the interlopers could afford to pay well and bribe handsomely. They were welcome.

In spite of vigorous statements to the contrary, it is clear that they were also welcomed by many of the Company’s own factors. No words were too strong, when addressing the Court of Directors, for the ‘naughty, huffing’ interlopers; but it was a very different story when the same naughty gentlemen came calling round the Company’s scattered trading posts with their ships riding high in expectation of cargoes that need never appear in the Company’s records and with pocket books open for confidential commissions and private correspondence. Because of the Company’s strict monopoly of all trade between England and India it could be extremely difficult to transfer either private funds to India or private cargoes back to England. Yet the temptations to private trade were now so great that the Company had been forced to give its grudging permission in respect of its employees engaging in ‘the country trade’ (port-to-port in the East). Retired or, more commonly, dismissed servants were also allowed to stay on in the Company’s settlements to pursue their own commercial ventures. And as this activity grew, so did the difficulty of distinguishing between legitimate private traders and interlopers. Even some of the Company’s men overstepped the mark, like the Reverend John Evans, the ‘merchant-parson’, who eventually absconded; others merely threatened to do so like Captain Lake who ‘if he did not like the Company’s employment this voyage, would turn interlopers the next’.

On his own voyage out to India in 1682 Agent Hedges had been hailed in mid Atlantic by the
Crown,
an interloper which had just evaded arrest
in England. Her captain was a certain Dorrill and her supercargo (or chief factor) one Thomas Pitt. They too were heading for Bengal and the
Crown
‘sailing best, was almost out of sight next morning’. By the time Hedges reached the Hughli, Pitt and Dorrill were comfortably installed in a Balasore mansion, claiming protection from the Dutch and ‘very busy in buying goods’. This was Pitt’s third or fourth visit to Bengal and the Company’s suspicions that he was hand in glove with their Chief Factor were soon confirmed. Indeed Hedges suspected that every one of the Company’s factors had an interest in Pitt’s ventures. ‘He being a desperate fellow of a haughty, huffying and daring temper’ the Company had instructed Hedges to ‘secure his person whatever it cost [in bribes] to the government or other natives’. Accordingly Hedges applied to the Nawab during his diplomatic interlude in Dhaka and was duly assured that Pitt and Dorrill would be detained.

In the event, of course, nothing of the sort happened. In Bengal Pitt was a valued customer whose trade was almost as dependable as that of the Company and whose bribes were even more generous. He duly sailed back to England in 1683 with a fortune in the making and another career beckoning. For just as Company servants sometimes took to interloping so interlopers sometimes preferred legitimate employment. Dorrill would become second in command in Bengal under Sir John Goldsborough and Pitt would eventually resurface as the Company’s long-serving and influential President at Madras. Ironically he was also the great-grandfather of the prime minister who would one day curtail for good the Company’s monopoly.

Whilst lording it in Balasore, Pitt had made a point of ‘bespattering’ his rivals by putting it about that the East India Company was on its last legs and about to be replaced by a ‘new English East India Company’ for which he himself was Agent in Bengal. This may have been a ploy to impress the Nawab; but it was also an amazingly faithful, if premature, representation of events. Already the interloping interests in London had found sympathetic allies within the Company who resented the large holdings and the consequent influence accumulated by a group of the directors. Cromwell’s charter had ended the monopoly of office; but the creation of a permanent stock and the substantial dividends which it paid had enabled existing investors to keep out new blood and to buy up any stock that came on the market. Very substantial accumulations resulted, a process that was assisted by the Company’s growing practice of borrowing at comparatively low rates of interest rather than float new stock.
Thus, though the offices of governor (or chairman) and deputy continued to rotate, they did so amongst an ever dwindling circle of immensely wealthy stock holders.

Perceiving this development as being neither in the nation’s nor the Company’s interest, Sir Thomas Papillon, MP for Dover and himself a director of the Company since 1663, championed the idea of opening the trade to a wider public. He was opposed by the redoubtable Sir Josiah Child. Child had made his first fortune as victualler to the fleet at Portsmouth. In the 1680s the diarist John Evelyn estimated his wealth at £200,000. Also an MP and director of the Company since 1677, he had once been Papillon’s protege. But while the latter’s Parliamentary sympathies disposed him towards a freer system of trade, Child’s influence at Court (he had been made a baronet in 1678) and his Tory ideals made him a staunch upholder both of the Company’s monopoly of eastern trade and of his own growing monopoly of the Company.

Papillon’s first challenge was mounted within the Company when in 1681 he proposed that the joint stock launched under Cromwell’s charter of 1657 be wound up and replaced with a new stock to which any might subscribe. Thus the Company’s monopoly would be retained by in effect offering to accommodate those who were challenging it. But this move was defeated. An appeal was then made to the Crown in the form of an application by the old Levant Company that the ships of its adventurers might use the sea route by the Cape of Good Hope to reach those parts of the Ottoman Empire (its exclusive trading zone) which bordered on the Red and Arabian Seas. This too was rejected and at about the same time Papillon was removed from the Company’s Court of Directors. (It was doubtless in anticipation of one of these challenges succeeding that Pitt confidently announced the foundation of a rival East India Company.)

Having failed in the boardroom and at Court, the opponents of the existing monopoly now turned to the law courts. In 1683 Child, acting on new powers conferred by the King, had seized the ship and cargo of an interloper named Sandys. Some twenty-four other interloping vessels were also seized but it was Sandys’s plight which provided the test case. With encouragement from Papillon’s lobby, an appeal was made to the King’s Bench as the supreme court of common law and a ruling was obtained which obliged Child and the Company to substantiate their action by proving damages against Sandys. Each side engaged the ablest counsel of the day and thus began ‘The Great Case of Monopolies
between the East India Company, plaintiffs, and Thomas Sandys, defendant’.

Although it was a year before judgement was given, there seems to have been little doubt about whom it would favour. As Lord Chief Justice, the sanguinary Judge Jeffreys could be expected to find for the Crown and the Company; Child was crowing with victory after the first few hearings. But at least the case brought the issues into the public domain. On the one hand there was the sovereign’s prerogative to regulate all trade with infidels, a right based on the assumption that an unbeliever was automatically an enemy of the realm. On the other hand there was the merchant’s established right to the freedom of the seas plus the nation’s legitimate concern for access to a trade now ‘the greatest that England ever knew’. Significantly, there also surfaced the interesting question of whether this was not a matter which should really be decided by Parliament. Jeffreys exploded with indignation at this last suggestion and in an extraordinarily partisan judgement compared the interlopers to regicides. He also denounced the very idea of anyone presuming to question a royal prerogative thus inadvertently issuing a challenge to Parliament which, come more propitious times, would be remembered.

Outvoted in the Company and outbribed at Court, Papillon was himself dragged through the courts and obliged to flee to Holland. Sandys was duly fined, and in 1684 some forty-eight interlopers were restrained, amongst them the returning Thomas Pitt. After further litigation Pitt was eventually fined £1000 and retired to Wiltshire. There he bought the rotten borough of Old Sarum and in 1687 sat as a Member of Parliament. So effectually had Child stifled the interlopers that those who failed to restrict their activities to the East now had only two possibilities – to turn Parliamentarian or to turn pirate. Pitt chose the former, John Hand of the
Bristol
chose the latter.

In 1683 Hand sailed from England supposedly for Brazil. Some months later he turned up at Surat, then the Maldive Islands where he fired on the principal town, then Sumatra where he attacked a Dutch vessel. ‘Captain, you must consider what you do’, cautioned his mate as they boarded yet another disabled ship. But the Captain, ‘being a mighty passionate man’ devoid of scruple and no lover of small talk, ‘kicked him off the quarter deck and several others for the same reason’. It was only poetic justice that, soon after, he accidentally shot himself in the leg and died of the wound. Next year, 1685, his ship was surprised in the Comoro islands off the coast of East Africa by HMS
Phoenix.

The
Phoenix
had been sent out to carry Sir Josiah Child’s crusade against the interlopers to all the havens and high seas east of the Cape. On the face of it, this was a sensible move; for in 1686 more pirates, supposedly belonging to Denmark’s new East India company but widely tipped as English interlopers, seized a vessel belonging to Abdul Ghafar, a wealthy Surat merchant. By the Moghul authorities the English Company was held responsible and its trade at Surat stopped. Clearly some policing of the sea lanes was necessary and indeed the
Phoenix
duly caught up with the culprits, ascertained that they were in fact Danes, and so to some extent cleared the air.