The role of trade and commerce in the initial establishment of the British Empire bore huge weight. With a financial agreement with another country comes natural relations, and from that blooms a possibility to extend those relations into the foundations of an impending empire. Both the East India and Royal African Companies acted as a stem for lasting European presence in native land and so are both significant factors in the development of empire. However, the other factors that occurred at home which reformed the world of money can be considered as the more significant factor as it aided the scale at which both companies were able to grow.
The other various factors that occurred amongst the home front had a huge impact in the development of the British Empire, possibly acting as the most significant. Although having been present before, trading companies really thrived during this period. This was due to a series of revolutionary changes, most notably the change from the medieval regulated trading concerns system to the ‘joint stock’. This now meant that instead of investors pooling their earnings into one single ship’s voyage, they would be investing money in a whole company. This resulted in lower risk investments and due to the notion that smaller investments could be made; more of the population possessed the means to be able to do so, increasing the company’s finances which subsequently improved the governments. Also the development of factors who were the men in charge of the actual trade with the native population became the beginning of permanent European bases overseas whilst factories became the hub of local trade, spreading European influence in native society and economy (as Wallerstein’s theory states). Also, as London was beginning to become a major trading port it began relying on raw materials from overseas trade. For example by 1720, 15% of all national import came from India alone. And so with this alarming dependency comes a natural conviction that this supply must be protected. This is significant because one way to protect something is to have control over it, and so it seemed like an almost convenient logic for the British to start thinking about gaining imperial power. These factors are the most significant in the development of the British Empire through trade and commerce. This is because if it weren’t for the ‘joint-stock’ system, both companies may not have had the means to be as successful as they were which would have dimmed a development of Empire. Also, the dependency they acquired on foreign materials was one of the main benefactors in their want for imperial control. However, it can be argued that this reliance was caused by the successes of the trade companies such as the EIC and without these, there would be no dependency and so no need for hegemony.
The East India Company is a definite factor in the development of the British Empire through trade and commerce. Starting off with simply the intention to trade comfortably with the promisingly lucrative East, through its various successes the East India Company did prove to be the starting foundations of English colonialism in India. After a long termed desire to establish a trade with the east, the East India Company was finally developed and launched with an official charter in 1600. As hoped, right from the very start, the company was seeing extremely healthy profits. This then encouraged a 1609 charter which gave the company permanent rights whilst a further charter in 1670 meant that the company could actually make its own laws with an army and the ability to print money. Both of these events contributed to the development of the British Empire as they became the first signs of actions which imitated the actions that may be expected of a colonial state. Another subtle indication of the company’s intended permanency came through the building of Fort William. However, possibly the most evident way in which the EIC aided the British Empire came in their seek to be granted firmum. Firmum was mainly needed so that the EIC would have the rights to set up permanent trading bases and factories, both of which would have been essential for effective trade. This meant that through negotiations, they became drawn into local power networks, which politically strengthened their position in India. Also, the prospect of trading bases would definitely intensify the sense of European permanence in the East. After a few violent naval battles with the Dutch, the Moguls saw the British as superior and decided to grant them the firmum they so desired. This had a couple significant effects. Firstly, it displayed a certain importance of military, but rather naval superiority in getting what is wanted. This was to become a huge factor in the actual development and sustain of the British Empire. The other significant effect of this was that it helped to integrate the British into the social and financial systems of India – solidifying their legitimacy and making them a key component in the economic fabric of India. By 1765, the EIC had to adapt to its unexpected responsibility over India and the high British influence it had induced was cemented with the Treaty of Allahbad, which acted as a formal acknowledgement for British dominance in the area. In addition to all of these factors, a more obvious way in which the EIC aided the development of the British Empire was through an obvious advantageous financial incline. By 1763, the Company’s annual income exceeded £1 million, which partly had to go to the government. Of course this would have helped in the building of the British Empire. Whilst the EIC is an extremely important factor, if it weren’t for new policies that boosted trading companies such as the newly introduced ‘joint-stock’ system, they perhaps would not have been so successful in establishing themselves as a permanent presence in the East.
The Royal African Company is another factor that contributed to the development of the British Empire. Formed in 1660, the Company found most of its assets in the seemingly moneymaking Slave Trade. There are a few subtle ways in which this company did assist the BE’s establishment. Firstly, similar to the EIC, the Royal African Company did fortify permanent trading posts along the coast along with establishing a factory at Ophra in 1674. This would have established a sense of durability whilst also making their trade more successful, thus consequently increasing the government’s finances. Also, there was the notion that trade in Africa was often managed through interaction with local tribes. The prisoners that would have been taken in various wars between tribes as well as criminals would have been the first to be traded with the Europeans to be sold as slaves. As a result of this, European traders such as the RAC found themselves involved in local conflicts which increased their relative hegemony. Although the Royal African Company did contribute to the development of the British Empire, it is not as much of a significant factor as the other two due to its various failures. These included a complete collapse at the loss of any monopoly and conflict with other nations.
Overall, trade and commerce definitely played a massive part in lodging up the beginnings of the British Empire. Whilst all three factors were important, the general developments made at home in the finance world heavily aided the growth and significance of the other two factors. Having said that, if it weren’t for the East India Company, Britain would not have been able to establish such a foothold in the East at such an early stage; so much so that colonizing it seemed almost natural. When India and the East in general became such a vital part in Britain’s Empire – the “jewel in the crown” – it would be criminal to not acknowledge the EIC as an extremely weighty factor. Also, the Royal African Company did the same but of course more in the African subcontinent. Africa too became one of the Empire’s greatest assets.