Business History

Business History
Early Origins of Business in India
East India Company : 18th Century
• The first, Clive and Warren Hastings made the East India
company a great territorial power.
• The second generation of Cornwallis and Wellesley, who
made the Company the Supreme Power of India.
• To the third generation should go to the credit for the
establishment of peace and effective administrative reforms.
• Clive also conquered the Northern Circars from the French,
and made the East India company a great territorial power.
• Pitt’s India Act was passed in 1784 and for the first time it
placed the Company’s administration under the control of
the Crown.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• Cornwallis was responsible for the Permanent Zamindari
settlement of the land revenues of Bengal.
• In the 18th century, the transit of goods by road and
navigable rivers was subject to inland duties. East India
company, engaged in the inland trade of Bengal on their
own account, also claimed as private traders exemption
from duties which had been granted earlier only for the
Company’s import and export trade.
• Clive, on his return in 1765, found that he had an arduous
duty to perform. It had been the concession of the Dewani
by the Mughal Emperor in 1765 which had given the East
India company a legal and judicial status in India.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• Dr. Francis Buchanan (the first statistical enquirer employed
by the British Govt.) travelled extensively in the Madras
territory, Karnatic,Mysore, Coimbatore, Malabar and
Canara.
• In Conjeevaram, he found a large old reservoir which
irrigated many fields which were covered with a thriving
crop of rice.
• The Jagir of Madras, which had been in the possession of
the East India company for half a century, he discovered,
was not in a flourishing condition.
• On his way to Arcot itself, he found, was extensive, and
produced coarse cotton fabrics.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• Dr.Buchanan then ascended the Eastern Ghats and reached
Venkatgiri in Baramahal. He mentions that iron was smelted
from ores and black sand, and common salt was found in
many parts of the country.
• Dr. Buchanan visited Waluri, a large town with a weekly fair,
which manufactured coarse cotton cloth, much of which was
exported.
• Srirangapatnam which used to have a population of 150,000,
he discovered.
• The ryotwari system was preferred to the zamindari system
because it brought more revenue. The Mophlas of Malabar
had been rich traders from the middle of 18th century, and
possessed vessels which sailed to Surat, Mocha and Madras
 Business History
Early Origins of Business in India
East India Company : 18th Century
• Dr.Buchanan’s observations about the city of Patna and
Bihar in general were : Rice was the most important crop.
Wheat and Barley were the next important crops.
• In Bhagalpur district, rice, wheat and barley were sown a
great deal; they were mixed with field peas. Cotton was also
cultivated.
• Gorakhpur was one of those districts which formerly had
flourished. Chintz was made in Nawabganj, and blankets
were woven for local consumption. Carpenters worked in
iron or made doors, windows, carts, agricultural implements,
and sometimes boats. Sugar and salt were also
manufactured.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• A large proportion of the Indian population was engaged in
various industries upto the first decade of the 19th century.
Weaving was still the national industry of the people; millions of
women eked out their family income and their earnings from
spinning.
• Indian cotton was short-stapled. Surat cotton was considered
to be the best. Indian cotton was first imported into England in
1790. The total export of cotton from India in 1827 was valued
at 1 million pounds sterling.
• A cotton mill was originally started in Calcutta for spinning yarn.
Although the initial start was made in Bengal, the modern cotton
mill industry had its roots in Bombay, and later in Ahmedabad
and in other centres like Kanpur, Nagpur, Sholapur, Delhi,
Lahore, Indore and Gwalior.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• Silk was principally confined in Bengal. The Company had about 12
Residencies and extensive silk manufactories but did not carry on the
manufacture beyond reeling. The manufacture of finer silks had much
diminished, and English silks were being imported to a considerable
extent.
• In Indigo plantations, the celebrated writer, Ramsay, had stated that
the condition of ryots of cultivators, who labored for European
planters, was very bad.
• Indigo exports began in 1790 and increased greatly in next 40 years.
There were 300 or 400 indigo factories in Bengal, chiefly in Jessore
Krishnaghar and Trihoot. The East India Company advanced money
to European planters.
• Sugar was cultivated in various parts of the Deccan. Europeans
purchased it in the bazaars or from cultivators to whom advances
were made. Tobacco was extensively cultivated in the norther
districts of Bombay.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• A leading authority, Dr. Wallick, submitted in 1832 a valuable paper on
the possibility of introducing the cultivation of tea into India (the
cultivation of tea in Assam and north Bengal dates from the 1840s).
• There were large coal mines in the Burdwan district of Bengal that
were being worked in 1832 to the extent of 14,000 or 15,000 tons
annually. The workings of the mines first began in about 1814, but
extensive operations began only in about 1825.
• In the early years of the 19th century while the Company’s trade
averaged 1,882,718 pound sterlings per year, private trade averaged
5,451,452 pound sterlings per year.
• In 1813, Calcutta exported to London 2 million pound sterlings worth
of cotton goods, but in 1830 instead it was importing 2 million pound
sterlings worth of British cotton manufactures.
• An application to the British Government to reduce the duties on
Indian cotton and silk fabrics, signed by a large body of noted Indians,
was rejected.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• While the manufacture of Indigo by European planters increased, and
the export of raw silk held its ground, that of silk and cotton piece
goods the U.K. and other foreign markets showed a marked decline
after 1820. The exports to America declined.
• The exports to the Arabian and Persian Gulf, which rose to between
4000 and 7000 bales between 1810 and 1820, never exceeded 2000,
after 1825.
• Sir John Malcolm, the governor of Bombay in 1830, noted with
consternation the ruin of Indian industries. Transit duties became
more oppressive during the early days of the British Rule.
• Sir Charles Trevelyan’s famous report exposed mercilessly the evils of
the system. It stirred public opinion in India and Governor rose in
Upper Provinces took upon himself to abolish the Inland Custom
Houses within his jurisdiction.
 Business History
Early Origins of Business in India
East India Company : 18th Century
• India did not yet possess a uniform currency. Steam communication
between England and India through the Rea Sea had commenced,
but was still enormously expensive. The “Hugh Lindsay” steamer
reached Suez from Bombay in thirty three days.
• The discussion about the comparative merits of canals and railways
went on through the succeeding decades.
• Preference was given to the railways, which facilitated British trade
with India, but not to canals.