SOAS Research Online

Abstract

The main emphasis of this study is on the economic activities of the English East India Company in Bengal from about 1650 to 1720. The Company's trade in Bengal at the beginning of this period was not very important quantitatively. But the main significance of the Bengal trade in the commercial complex of the Company was that it was an expanding trade which soon exceeded the Company's trade either in Madras or Surat. This development was a natural outcome of the growing demand in England and on the Continent for cheap Bengal products. The Company's trade in Bengal was plagued throughout the period by several factors, of which the two most important were the chronic shortage of liquid capital, and the exactions by local potentates who often challenged the Company's alleged freedom of customs-free trade. The problem of inadequate capital was further accentuated by the poor demand for the English manufactures in Bengal. However, the enormous increase in the export, trade of the Company during the period indicates that it was successful in dealing with all these three problems. The internal organisation of the Company's trade in Bengal depended on the indigenous merchants, and inspite of the close connection between these merchants and the Company, the former succeeded in maintaining their independent credit and influence. The specialised activities of a class of merchants, and the refinement and development of the existing machinery for credit and exchange indicate that merchant capital and commercial organisations were capable of quite sophisticated operations in Bengal. In the internal economy of Bengal, the activities of the European Companies gave an impetus to production and led to certain commercial and industrial innovations. But despite the increase in the production of export commodities, the condition of the actual producers, weavers in particular, probably remained unchanged and poor. The only class which profited from the increasing trade, it seems, was the merchant-middlemen. Though the expanding export, trade brought in its train a large import of bullion and specie to Bengal, it had hardly any impact on the price level. Most of this treasure was drained towards upcountry by the local potentates and the big merchants.