THE EAST INDIA COMPANIES

THE EAST INDIA COMPANIES

1. ECONOMIC TRANSFORMATION

   • the Dutch and English quickly overtook and displaced the Portuguese, often by force, even as they competed against each other as well
   • during the 16th century, the Dutch had become a highly commercialized and urbanized society, and their business skills and maritime shipping operations were the envy of Europe
   • around 1600, both the British and Dutch began to raise money and share risks among a substantial number of merchant investors
     • both the British East India Company and the Dutch East India Company received charters from their governments, granting them trading monopolies and the power to make war and to govern conquered people
       • they established their own trading post empires, with the Dutch focused on the islands of Indonesia and the English on India
       • a similar French company also appeared in the Indian Ocean basin, in the beginning of 1664
   • the Dutch acted to control the production and shipping of cloves, cinnamon, nutmeg, and mace
     • with much bloodshed, the Dutch took control of a number of small, spice-producing islands, forcing their people to see only to the Dutch and destroying the crops of those who refused
       • on the Banda islands, the Dutch killed, enslaved, or left to starve almost the entire population of some 15,000 people
         • they then replaced them with Dutch farmers, using a slave labor force
   • during the 17th century, the Dutch were able to monopolize the trade in nutmeg, mace, and cloves, and to sell these spices in Europe and India at 14 to 17 times the price they paid in Indonesia
     • while Dutch profits flourished, the economy of the Spice Islands was shattered, and their people were impoverished
   • the British were less well financed and less commercially sophisticated, the British were excluded from the spice islands by the Dutch monopoly
     • therefore they fell back on India where they established three major trading settlement
       • Bombay, on India's west coast, and Calcutta and Madras, on the east coast
         • here they focused on Indian cotton textiles
           • hundreds of villagers in India became specialized producers for this British market
     • British naval forces soon gained control over the Arabian Sea and the Persian Gulf, on land they were no match for the Mughal Empire
       • the British were unable to practice trade by warfare like the Dutch
       • they built these bases by negotiation with the Mughal Empire
   • eventually the Dutch and English began to deal in bulk goods for a mass market
     • these goods included pepper, textiles, and later, tea and coffee, rather than just luxury goods for an elite market
     • in the 18th century both the Dutch and British empire slowly evolved into a more conventional form of colonial domination, in which the British came to rule India and then Dutch controlled Indonesia