The English and French Companies

UNIT 1 · PART 3 · ADVENT OF THE EUROPEANS

Two more companies now entered the same waters — one built by merchants who came to answer to a king, the other built by a king who came to need merchants. Within a century, only one of them would still be standing in India.

A slow start out of London

On the last day of the sixteenth century, 31 December 1600, Queen Elizabeth I granted a group of London merchants a royal charter: a fifteen-year monopoly on English trade east of the Cape of Good Hope. It was, on paper, no different from a dozen other trading privileges the Crown had handed out. Unlike the Dutch company that would form two years later, this one carried no state capital and no mandate to make war. It was simply merchants with a licence.

The first voyages made money, and money bought patience. In 1608 Captain William Hawkins reached the Mughal court at Agra seeking trading rights from Emperor Jahangir. He was received courteously and got nowhere — the Portuguese, still influential at court, saw to that. It took a more formal embassy to break the deadlock.

Sir Thomas Roe, sent by James I, arrived at the Mughal court in 1615 and stayed three years. His patience where Hawkins’s charm had failed, combined with an English naval victory over a Portuguese squadron off Swally in 1612, persuaded Jahangir that the English were a naval force worth accommodating. The firman that followed confirmed what a factory at Surat, already functioning informally since 1613, had been operating without: the right to trade and settle on Mughal terms.

Four footholds

Surat remained the Company’s headquarters for a generation, but the real estate that would matter later came piecemeal, and almost by accident.

Madras came in 1639, granted by a local Telugu chieftain in exchange for a promise to fortify and defend the coast; Fort St George rose on the site and the Company’s centre of gravity began drifting south and east. Bombay arrived by an even stranger route — handed to Charles II in 1661 as part of the dowry of his Portuguese bride, Catherine of Braganza, and then leased by an uninterested Crown to the Company in 1668 for a nominal rent. And in 1690, Job Charnock settled English traders at three villages on the Hooghly — Sutanuti, Kalikata and Govindpur — that would grow into Calcutta, with Fort William raised soon after.

One company, then two, then one again

Structurally, the English enterprise stayed loose for decades. Capital was raised afresh for each voyage as a “terminable” joint stock, not pooled permanently the way the Dutch had done from 1602; only in 1657 did the Company adopt a genuinely permanent joint stock.

Looseness bred rivals. Merchants shut out of the old Company’s monopoly lobbied Parliament, and in 1698 a competing body — the English Company Trading to the East Indies — was chartered directly by Act of Parliament, not merely by royal grant. For a decade the “Old Company” and the “New Company” bid against each other in Indian ports, driving up prices and undoing each other’s margins. Ruinous competition forced what neither had wanted: in 1708 the two merged into the United Company of Merchants of England Trading to the East Indies — the single body that would go on, half a century later, to fight for Bengal.

A company built the other way round

Across the Channel, the pattern inverted. The French East India Company was founded in 1664 not by merchants petitioning a monarch but by a monarch’s minister recruiting merchants. Jean-Baptiste Colbert, Louis XIV’s controller-general, designed it as an instrument of state policy, and the Crown held the dominant share of its capital — over 60 per cent, with the state effectively guaranteeing dividends against commercial risk. Where the English company began as private enterprise the state would later regulate, the French company began as a state project wearing a merchant’s coat.

Its first Indian factory opened at Surat in 1668, established by François Caron — a Frenchman who had spent three decades in the Dutch company’s service before switching flags. Masulipatnam followed a year later. But the settlement that mattered was Pondicherry, founded in 1673 by François Martin on land granted by a local governor; within a generation it had grown into a fortified port town and the Company’s headquarters in the East. Chandernagore, on the Hooghly in Bengal, gave the French a foothold in the same province the English were quietly building around Calcutta.

State parentage cut both ways. The wars of Louis XIV’s later reign drained the Company’s finances, and by the 1710s it was close to insolvent. It survived only by absorption — reorganised in 1719 by the financier John Law into the Compagnie des Indes, part of his sprawling Mississippi Company scheme. Law’s system collapsed spectacularly in 1720, but the Indian trading arm, unlike much of the rest of his edifice, held together and kept its factories.

The Company that wanted to be a kingdom

Joseph François Dupleix, who became Governor-General of French India in 1742, changed what a trading company could be. Rather than compete for cargo alone, he began inserting the Company into succession disputes at the courts of the Carnatic and Hyderabad — lending disciplined, European-drilled sepoy battalions to a local claimant in exchange for territory, revenue rights, and a permanent seat at the throne he had helped fill.

No earlier European venture in India had tried this. The Portuguese crown had fought for chokepoints; the Dutch company had fought for a spice monopoly; the English, so far, had fought mainly for factories and forts. Dupleix was the first to treat an Indian succession dispute as a commercial opportunity — political leverage sold on credit, repayable in land. Within a decade the method would be copied, refined, and turned back against the French by the very company it was meant to outmanoeuvre.

By the 1740s both companies held forts, treasuries and private armies on the same coastline, competing now for the same weavers, the same ports, and increasingly the same kings. Two companies had entered Indian waters the way the Portuguese, the Dutch and the Danes had before them. These two arrived believing that trade and conquest might be run as a single ledger.