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FROM INDIA to the BOSTON TEA PARTY D. Morgan Pierce FROM INDIA TO THE BOSTON TEA PARTY D. Morgan Pierce ESTABLISHMENT OF INDIAN TRADE ........................................................................... 317 THE EAST INDIA COMPANY IN BRITISH POLITICS .................................................... 325 INDIAN LAND REVENUE .................................................................................................. 328 TOWNSHEND ACTS ........................................................................................................... 348 PARTIAL REPEAL OF THE TOWNSHEND ACTS 1771.................................................. 356 THE REGULATING ACT OF 1773 ..................................................................................... 359 THE TEA ACT OF 1773 ....................................................................................................... 373 THE THIRD BOYCOTT ....................................................................................................... 402 BOSTON TEA PARTY .......................................................................................................... 413 THE COERCIVE ACTS ........................................................................................................ 420 BIBLIOGRAPHY .................................................................................................................. 433 ESTABLISHMENT OF INDIAN TRADE Initially the British had no further interest in India beyond trade; there was no intention to establish sovereignty. In the mid 17th century the Dutch East India Company enjoyed predominance over its English counterpart. Indian trade required fi nancial organization that could not be privately sustained, and England did not nationally finance such adventures. The six-month, six thousand mile voyage around the Cape of South Africa immobilized the investment capital in the voyage from diversion to alternate enterprise, and thereby discouraged investment. Indian trade required ships of the largest scale, and permanent － 317 － D. Morgan Pierce trading settlements for marketing the ship’s cargo and arranging for return cargo to Europe. Finally, both Portugal and Holland had advanced their hold in India far ahead of England, and both would capture English ships that were found in those waters. Merely the size of capital investment gave the East India Company an informal monopoly in the English Indian trade from the 17th century. Capital was organized by distribution of stock to a multiplicity of investors for each voyage. Investment and profi t were distributed separately for each voyage, thereby attempting to defray the hesitation over long term investment. However, within a small amount of time it had become impractical to terminate stock capital at the closure of each voyage. Some overhead could not be calculated for single voyages; war, diplomatic efforts, and permanent trading posts constituted expense that had to be spread across single voyages. These insecurities dissuaded the English Crown from direct action in the Indian trade, although England was worried at missing opportunity and eager to have some other entity undertake the risk; Queen Elizabeth chartered the English East India Company in 1600.1 The charter entitled the Company to enact all functions that normally belong only to a national government; the Company continued to exercise its own policies, judiciary, military and administrative preferences, without interference from the Crown, for the following 250 years. Interestingly, the Crown awarded exactly the same independent panoply of powers to private companies that established the Atlantic colonies. Although the delegation of national power was exactly the same, in the Atlantic colonies the constitution of the colonies as independent, chartered corporations did not function well for as long as a generation. The identical approach did function for India. Precipitous capital investment for Indian trade, however, necessitated intimate collaboration with the national government; in return for large loans to the State, the monarchy formalized the East India Company monopoly over the Asian trade. This should have forestalled the liability that compounded cost would overwhelm the Company before it could draw profi ts.2 Though the Company survived such liabilities, the cost of the remedy nevertheless spawned chronic corporate debilities and forced the Company to project its break-even point far into the future. 1 Cf. Draper, Theodore; A Struggle for Power, Vintage Books, 1997, p. 29. － 318 － FROM INDIA TO THE BOSTON TEA PARTY Between 1660 and the Glorious Revolution the English Asian trade caught up with that of Holland. The much increased expenditure in military operations, diplomacy, fortifi cation and fi xed capital retarded the Dutch from further expansion. Political breakdown throughout the Indian continent induced the same obstruction for England that Holland had gone through in the previous generation. Whereas the English had gained on the Dutch until 1688, the War of the League of Augsburg (1689-97) with France pursuant to the Glorious Revolution, plus the abortive Mogul War, suppressed investment in the East India Company; between 1692 and 1700 the Company paid no dividends, its shipping volume fell, and the Dutch retained the ascendant position. Although the East India Company paid its ordinary agents risible salaries, location in India enabled the employee to scheme; the Company did not forbid collateral profit-seeking by pursuit of private trade. This was not anomalous. British government traditionally allowed government agents to exploit official positions by charging piecemeal fees or by other pecuniary stratagems; this shifted the cost of government employment from government to the supplicant. Furthermore, by paying minimal wages to its agents in India, the Company could present a public image of frugality and incorruptibility. During the 17th century the Company had been active in the “country trade," i.e. trade between Indian and neighboring Asian ports, but from the 1670’s the Company conceded local trade to the private enterprise of its employees. This consisted mostly in coastal trade. The employees could either transport British and Indian goods for profi t, or Indians would pay them to transport their own goods.3 Though the East India Company reduced corporate costs by permitting trade on private account, it was perhaps short-sighted; incubation of this illicit and nefarious mentality might have been what eventually brought the East India Company to bankruptcy. This distortion 2 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 488. 3 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 493. － 319 － D. Morgan Pierce of English activity in India was cognate with primogeniture. Second sons & c. were sent out through patronage as agents of the East India Company because of the restriction of inheritance to the oldest son; such agents could remain in the higher social class in which they were brought up only if they could make a killing in India.4 The British insistence on trade without war was not a false profession, although the creeping British proclivity for war was never successfully arrested. In 1682 the Dutch expelled the English from Bantam; in 1685 the Nawab invested the English factories in Bengal with troops. Over the eighty years since the English East India Company had started, its offi cial Indian trade policy had been confi nement to commercial exchange; the Company had envisioned that trade would be more profitable if it presented itself in India as non- belligerent. However, repeatedly various Nawabs had sold to the Company, then captured the purchasers, and resold the cargo plus Company employees held in ransom. The Company ports were vulnerable to collateral damage in war between competing Nawabs, etc. Under the guidance of Sir Josiah Child (company president five times 1681-1689) and Sir John Child (president of Surat, governor of Bombay 1682-1690), it was resolved that Indian commerce needed to be conducted “with a drawn sword.” After expulsion of the English from Bantam, the 1684 fortifi cation of Benkulen, a factory in Sumatra, formed the initial manifestation of the new attitude.5 The later Stuarts awarded the English East India Company a right to fortify Indian settlements, holding substantial English populations, a right to press coinage, a right to command English and Indian armies, and authority to declare war and make peace treaties with non-European powers. The Company could not go to war with French, Dutch, or other interests in India out of fear that a small action in India might instigate a national war in Europe. Rather than to aggravate belligerence with native Indians, however, the British eagerly submitted themselves to the Mogul governments. Eventually they came into participation with the Indian tax farms and fi nancial organizations, but they conducted such activities according to the native Indian procedures.6 4 Cf. Basil Williams, F.B.A., The Whig Supremacy 1714-1760, Oxford, 1962, p. 331. 5 Cf. Carsten, F.L., editor: The Ascendancy of France 1648-1688, The New Modern Cambridge History, Volume 5, p. 425. － 320 － FROM INDIA TO THE BOSTON TEA PARTY It remains
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