EAST INDIA COMPANY (THE BRITISH), a trading company incorporated on 31 December 1600 for fifteen years with the primary purpose of exporting the staple production of English woolen cloths and importing the products of the East Indies.
The East India Company initially had 125 shareholders and was capitalized at ć72,000 for separate trading voyages to the East Indies. While Portugal was politically united with Spain, from 1580 to 1640, the company encountered opposition from Portuguese trading interests, which were already established on the Indian mainland, islands in the Indian Ocean, and particularly in the Persian Gulf area. There the Portuguese controlled the small island Hormoz, off the southwest coast of Persia. Dutch merchants joined together in 1602 to form a powerful national United East India Company (see DUTCH-PERSIAN RELATIONS) on behalf of the States General and achieved early commercial success from their main base at Batavia on Java. Another international, commercial competitor on the Persian scene was the French Compagnie des Indes Orientales (French East India Company; q.v.), founded in 1664.
The East India Company established its first base at the port of Surat in Gujarat in 1612, but its factors soon realized that sale of cloth was disappointing and resolved to expand its market possibilities in Persia, where an indirect trade was already carried on by the (British) Levant Company, established on 11 September 1581 by its agents through Aleppo. Inevitably, this trade caused friction between the companies, and some questioned whether it was worthwhile offending the Ottomans for a hypothetical advantage with the Persians, arguing that the overland routes from northern Persia to the eastern Mediterranean ports would not be diverted for economic or political reasons (Roe, The Embassy to the Moghul, pp. 313-14).
Nevertheless, desire for a Persian outlet prevailed, and a small consignment was dispatched to Jāsk on the ship James, carrying goods to the value of ć6,333 15s 11d, which arrived on 4 December 1616 under agent Edward Connock, who had previously served as a merchant in Turkey. It was not an auspicious beginning, for the port was a paltry place and the reception unwelcoming, but Connock was optimistic. In the course of a year he laid the foundations of a trade and negotiated a treaty for exports of silk and imports of cloth on satisfactory terms, without recourse to a great outlay of ready money, and with the possibility of supplanting Portuguese trade there. Shah ʿAbbās I (q.v.), in conflict with the Ottomans, welcomed the opportunity to divert silk exports away from Turkey, thereby depriving the Ottomans of silk supplies and transit dues, and to acquire a potential ally against the Portuguese. He resented the Portuguese occupation of Hormoz, against whom he had no shipping leverage to enable him to expel them. This cooperation appeared mutually advantageous, but neither side could fulfill its part of the bargain.
Shah ʿAbbās I was never strong enough to dispense with the interdependent economic and political ties between the Ottomans and the Persians. Although he aspired to control Persian trade, which he did much to encourage and in which he greatly assisted Armenian enterprise, he did not completely succeed. The company never had the financial resources nor the goods in exchange to become the prominent supplier in the Persian market, and could not rival the superior organization and greater range of products that the Dutch possessed after their settlement at Bandar(-e) ʿAbbās (then Gombroon) in 1623. By detaining the company’s silk purchase in 1622, Shah ʿAbbās I forced it to assist him with its fleet in the taking of Hormoz and rewarded it with an agreement for a half share of the customs revenue, but this revenue was seldom properly paid (Lockhart, pp. 361-63).
With the death of Shah ʿAbbās I and the accession of Shah Ṣafī, royal influence over trade diminished. Armenian control increased, and Persian-Ottoman relations improved. This proved a mixed blessing for the company. Apart from its general Asian trade, it sponsored three separately financed voyages to Persia with large deliveries of cloth and other English commodities in exchange for silk, for which demand was growing. The results were disappointing. In the 1630s, as the state of India improved, the growth in local trade between India and Persia, some of it carried on company ships, the share of customs’ revenue, and rivalry with the Dutch kept the factors in Persia.
However, the constitutional troubles in England, competition from illegal interlopers, and the outbreak of the first Anglo-Dutch war made the mid-century period one of declining value for the company, although the area trade continued and the Dutch prospered. Following the restoration of the monarchy in England, the termination of the Anglo-Dutch wars, and the revival of trade and the economy, the company’s prospects improved. Although the company, unlike its Dutch rival, had not hitherto undertaken territorial acquisition, this changed in 1668 when Bombay, ceded in 1665 to Charles II as part of a marriage settlement from the Portuguese crown, became the seat of the company’s western presidency in place of Surat. These events were followed by the dominance of Sir Josiah Child in the councils of the company and by a more energetic direction of its activities in the face of growing rivalry at home. Correspondingly, the Dutch company was faltering in its competitiveness, and local merchants were becoming more active. Thus, to some extent, while Asian commerce was increasing, the volume traded by the two major European companies was proportionally declining, although the local freightage carried by their shipping rose, as did the personal participation of their factors in it (Ferrier, 1970, pp. 189-98).
After a period of severe retrenchment in supplies, expenses, and staff in Persia, in the mid-1660s the company made efforts to improve the standing and trading of its Persian agency. Unsettled conditions in Mughal India, as much as the company’s need to increase its sales of British goods, necessitated diversification. The agency of Thomas Rolt, 1670-77, reflected both the determination to implement a more forward approach to Persia and the acknowledg-ment that royal trade had lessened while “the young King [Solaymān] spends his time wholly in pleasure,” leaving the chief minister “governing all these kingdoms as he pleases” (India Office [IO] G/36/106, 27 January 1671/72). Meanwhile, Rolt recommended more aggressive action to enforce the payment of the customs share; the company’s president, Aungier, sensibly advocated caution. Moderation, not force, was the policy. Nevertheless, the incentive to expand trade to Persia was powerful; Armenian interests were entrenched in the overland trade to Aleppo (Chardin, IV, p. 165).
In spite of disappointments, the company resolved “to find a good vent for our English manufactures in Persia” (IO E/3/89 Company to Persia, 20 May 1681), so that “the trade of Persia shall not be fallow to the English nation, as it hath done too long” (IO E/3/90 Company to Persia, 6 September 1682). The factors were instructed to obtain Persian goods in exchange, even to purchase them and to provide a comprehensive freightage service to and from India to compete with Portuguese and Dutch vessels. Unfortunately, success was not commensurate with the effort, and the company believed the poor results were due to the failure of their servants, but also partly to “the miserable condition” of Persia, which was suffering from insecurity, intolerance, corruption, and a collapsing currency (IO G/40/4, Surat to Company, 21 January 1677/78). The Dutch company experienced the same adverse conditions, but took more forceful measures to assert itself.
In the last decade or so of the 17th century the objectives of the company in Persia remained the same, but the approach changed. Failing by itself to penetrate the market sufficiently or to obtain royal support, the company proposed in June 1688 to form a close association with members of the Armenian community in Isfahan (see ARMENIANS OF MODERN IRAN) for “carrying on a great part of the Armenian trade to India and Persia and from thence to Europe by way of England” (IO, Courts Minutes, 22 June 1688). This agreement had been negotiated by Sir Josiah Child; Jean Chardin (q.v.), the Huguenot jeweler and traveler to Persia; and Ḵᵛāja Pānūs Kalendar, an Armenian merchant of Isfahan. The company hoped by this commercial coup to secure the professional expertise and market knowledge of the Armenians, and thereby reverse the flow of Persian trade and enhance the company’s exports. Such an agreement would fulfill the earlier expectations for complementary silk and cloth commerce en-visaged during the reign of Shah ʿAbbās I.
Five particular Armenian merchants to whom another proposal was addressed were unwilling to jeopardize their existing interests for the sake of anticipated attractions. The large cargoes dispatched by the Nassau and Mary were disregarded by them, as was another consignment carried on the Charles II in 1697 (IO, Company to Persia, 3 January, 1693/4). The Armenian community in Isfahan had become desperately factionalized as a result of persecution during the reign of Shah Solaymān, and the merchants felt menaced by the offer of cooperation. They were unimpressed by the agency’s suggestion, had no confidence in its staff, and were unfavorably influenced by the company’s detractors. Although Shah Solṭān Ḥosayn confirmed the company’s privileges in 1704, Persia was thought “to be in a very tottering condition” (IO G/36/10/A, Isfahan to Surat, 14 February 1703). In this deteriorating situation the company was ill-served by its servants and suffered attacks from Muscat coastal raiders and incursions from eastern regions against its factory in Bandar(-e) ʿAbbās, though it was still hoping to revive its trade. The freight trade made a reasonable return, and goat wool from the Kermān area made acceptable merchandise, although this trade partly revived in the Zand period.
See also GREAT BRITAIN.
Bibliography: (For cited works not given in detail, see “Short References.”)
A. A. Amin, British Interests in the Persian Gulf, Leiden, 1967.
K. N. Chaudhuri, The English East India Company. The Study of an Early Joint-Stock Company, 1600-1640, London, 1965.
Idem, The Trading World of Asia and the English East India Company, 1660-1760, Cambridge, 1973.
K. N. Chaudhuri and A. Dasgupta, “Foreign Trade,” in T. Raychaudhuri and Irfan Habib, eds., The Cambridge Economic History of India, 2 vols., Cambridge, 1981-1983, I, pp. 382-433.
N. Falsafī, Zendagānī-e Šāh ʿAbbās …, 4 vols., Tehran, 1346 Š./1967, IV, pp. 251-69.
R. W. Ferrier, “The Agreement of the East India Company with the Armenian Nation, 22 June 1688,” REA, n.s., 7, 1970, pp. 427-43.
Idem, “The Trade between India and the Persian Gulf and the East India Company in the 17th Century,” Bengal: Past and Present LXXXIX, July-December 1970, pt. II.
Idem, “The Armenians and the East India Company in Persia in the Seventeenth and Early Eighteenth Century,” Economic History Review, 2nd ser., 26/1, 1973, pp. 38-61.
Idem, “An English View of Persian Trade in 1618,” JESHO XIX, 1976, pp. 182-214.
Idem, “The Terms and Conditions under which English Trade Was Transacted with Safavid Persia,” BSAOS XLIX, pt. 1, 1986, pp. 48-66.
Idem, “Trade from the Mid-14th Century to the End of the Safavid Period,” in Camb. Hist. Iran VI, pp. 412-90.
W. Foster, England’s Quest of Eastern Trade, London, 1933.
L. Lockhart, The Fall of the Safavid Dynasty and the Afghan Occupation of Persia, Cambridge, 1958.
Sir Thomas Roe, The Embassy to the Moghul, ed. Sir William Foster, London, 1926.
W. R. Scott, The Constitution and Finance of English, Scottish, and Irish Joint-Stock Companies to 1720, Cambridge, 1912.
N. Steensgaard, Carracks, Caravans and Companies. The Structural Crisis in the European-Asian Trade in the Early 17th Century, Copenhagen, 1973.
A. T. Wilson, The Persian Gulf, London, 1928.
A. C. Wood, A History of the Levant Company, Oxford, 1935.
See also M. Zarnegār in Rahāvard 9/35, 1373 Š./1994, pp. 77-84.
The fall of the Safavid Dynasty in 1722, the Afghan occupation, and subsequent anarchy naturally depressed trade throughout Persia. With the accession of Nāder Shah in 1736, attempts were made by agents of the British “Russia Company” to expand their trade across the Caspian Sea to northern Persia with Nāder’s support, but Russian opposition forced the end of this venture by 1746 (see ELTON). The East India Company maintained its factories in Kermān and Isfahan throughout Nāder’s reign, but a renewal of civil war after his assassination in 1747—and lack of encouragement by Nāder’s immediate successors—persuaded them to withdraw from Isfahan to Bandar(-e) ʿAbbās (q.v.) in 1750. A representative stayed at Kermān until 1758, and an Armenian interpreter into the 1760s. In 1763 their last outpost in Persia, at Bandar(-e) ʿAbbās, was evacuated (after a bloody skirmish with the khan of Lār) to Baṣra, in the Ottoman domains, where the company was already represented. Within a few months, however, Shaikh Nāṣer b. Maḏkūr of Būšehr invited them to set up an agency at his port, strategically located in respect of Shiraz, which was now in effect the capital of the new ruler of western Persia, Karīm Khan Zand. In July a commercial treaty was concluded with Karīm’s brother and viceroy Ṣādeq, and trade initially prospered: during 1763-67 more than half of the company’s sale of woolens in the Persian Gulf (annually averaging 1,407 bales) went through Būšehr (Amin, pp. 50, 73-75, 79, 82, 151, 155; Perry, pp. 256-60).
The Zand ruler, however, expected in the bargain that the company’s ships would aid him in operations against rival Arab polities on the Persian coast, which the Bombay presidency, concerned for the company’s neutrality, refused to sanction. The new agent at Baṣra, Henry Moore, was resolutely opposed to negotiating with Karīm Khan, and within three years relations with Shiraz were at a breaking point. There are garbled allusions to these events in the Persian chronicles: in the Golšan-e morād, the company’s envoy George Skipp is misidentified as a Russian ambassador (Ḡaffāri, pp. 286-87 and note 143; Perry, pp. 261-62, 305) and in the Rostam al-tawārikò, Skipp’s visits to Shiraz in 1767 and 1768 are conflated with the episode of the expulsion of the Dutch from Ḵārg island in 1766 (Rostam-al-Ḥokamāʾ, pp. 386-90, tr. Hoffmann, pt. 2, pp. 236ff.; Perry, p. 267 note 96). In 1769 Moore attempted to seize Ḵārg island, but was forestalled by a landing by Karīm Khan’s troops; fearing reprisals, the factors at Būšehr hastily withdrew to Baṣra. Despite misgivings by the presidency and repeated feelers from Shaikh Nāṣer, they were not to return until 1775.
An epidemic that struck Baṣra in 1773, and the siege and occupation by Zand forces in 1775-76, crippled the city economically and twice forced the temporary evacuation of the agency to Bombay. A company ship was captured by boats from Bandar(-e) Rīg, and two company employees on board were sent to Shiraz to serve for two years as hostages for the resumption of trade at Būšehr. This Moore refused to countenance, but was finally overridden by the presidency; in April 1775 the company’s ship and personnel were restored by Karīm Khan, and its flag was once more hoisted at Būšehr (Perry, pp. 261-67).
However, trade had slumped considerably since the occupation of Baṣra, and with the anarchy that ensued on the death of Karīm Khan in 1779 it was not to revive for decades. Both Baṣra and Būšehr were downgraded to the status of company residencies and, with the threat of renewed war with France, were maintained more as communications links with India than for their waning commercial value. As the company’s fortunes elevated it to the very government of India, involving it in a closer relationship with the British government, so its interest in Persia and the Persian Gulf declined. In 1789 Bombay sent a Persian, Mahdī-Qolī Khan, as resident at Būšehr, as much for political as for commercial advantages, i. e., to incline Fatḥ-ʿAlī Shah to the British, rather than the French, cause. In 1800 and again in 1810, the governor general at Bombay dispatched Sir John Malcolm with a flotilla to the Persian Gulf as envoy to the Qajar monarch; but Whitehall’s appointment of Sir Harford Jones as ambassador formalized direct diplomatic relations between London and Tehran, and the company’s role in Persia was virtually ended (see BRYDGES).
Even in India, the company’s trading monopoly was abolished in 1813, and by the 1850s it was little more than a managing agency for the British government’s administration of India. After the Indian mutiny in 1857, for which the company was held partly to blame, it was liquidated and its assets transferred to the crown on 2 August 1858.
The meticulous records and letters of the company’s employees provide a valuable source for the history of Persia during the 17th and 18th centuries. They are preserved in the India Office Library in London, under the headings Persia and the Persian Gulf Records and Bombay Public Consultations (or Proceedings); in the National Archives of India at New Delhi; and in the Maharashtra State Archives, Bombay (Basra and Gombroon factory diaries). Particulars are to be found in Abdullah Thabit, Amin, and Perry.
A. A. Amin, British Interests in the Persian Gulf, Leiden, 1967.
Abu’l-Ḥasan Ḡaffārī Kāšānī, Golšan-e morād, ed. by Ḡ.-R. Ṭabāṭabāʾī Majd, Tehran, 1369 Š./1990.
John R. Perry, Karim Khan Zand. A History of Iran 1747-1779, Chicago, 1979.
Moḥammad-Hāšem Āṣaf Rostam-al-Ḥokamāʾ, Rostam al-tawāriḵ, ed. by M. Mošīīrī, Tehran, 1348 Š./1969, tr. and annotated by Birgitt Hoffmann as Persische Geschichte 1694-1835 erlebt, erinnert und erfunden. Das Rustam at-tawārīḫ in deutscher Bearbeitung, 2 pts., Bamberg, 1986.
Abdullah Thabit, The Political Economy of Merchants and Trade in Basra, 1722-1795, unpubl. doctoral dissertation, Department of History, Georgetown University, 1992.
(R. W. Ferrier, John R. Perry)
Originally Published: December 15, 1996
Last Updated: December 2, 2011
This article is available in print.
Vol. VII, Fasc. 6, pp. 644-647