A new capital city and a new structure of authority in Bengal were direct consequences of
British rule. British trade created some new employment opportunities and offered
potentially more profitable uses for some of their land. The British had a great effect on
the Indians. The reaction the Indians had to the British conquest proves this. In turn, the
British benefited highly from Bengal. For instance, Bengal financed a large part of British
naval and military operations and important parts of British trade beyond its own frontiers.
The British empire in India was established by a private trading firm, the East India
Company, which governed with the consent of Parliament until 1858. The company
bought a strip of sandy beach at Madras in 1639, acquired a lease to the port of Bombay
from King Charles II in 1668, and in 1690 secured from the Mogul empire permission to
build a settlement on a muddy flatland that eventually became Calcutta.
At each of these
three so-called presidency cities the company erected a fort, known as a factory, from
which the British conducted their trading activities.
The British East India Company was chartered by Queen Elizabeth I in 1600 for
trade in the Eastern Hemisphere.1 The British East India Company was initially formed to
break into the Indonesian spice trade, which was dominated by the Dutch. After the
Dutch massacre of English traders at Ammonia in 1623, the company concentrated on the
Indian subcontinent where it inaugurated a lucrative trade in calicoes, indigo, raw cotton
silk, and spices.2
In 1640, after a post was founded at Madras, the East India Company was
rechartered in 1657. A while later it was given the right to coin money as well as the right
to exercise jurisdiction over British subjects in its posts.