The British East India Company received its charter from the British crown in 1600 to trade in India and Southeast Asia, yet its greed and mishandling of its operation had the unexpected and seemingly unrelated effect to influence the American colonists to declare their independence in 1776
The East India Company expanded exponentially during the 17th and 18th centuries and, by 1803, enjoyed a monopoly in trade supported by a private army of 260,000 soldiers. The company administered India’s economy and oversaw much of the farming sector. Its administrators did not understand as the locals did that occasionally draughts occurred, and it was important to store rice for those emergencies. The trading company simply ignored establishing reserves and sold rice for a profit which left the Bengalis no food to eat when a draught in 1769 and 1770 occurred. Ten million people died due to starvation — 33% of the Bengal population.
Due to loss of the labor, reduced sales, and massive graft, the East Indian Company’s coffers became depleted, and the British government had to bail the company out hurting their own finances. Parliament decided to augment revenues through higher taxes from other colonies. Increasing taxes of its American colony seemed a reasonable proposition since Americans paid lower taxes than British citizens.
Parliament started with the Stamp Act and then passed The Tea Act in May 1773 which granted the British East India Company a monopoly over tea sales and authority to set higher taxes. This tea tax did not sit well with Americans, so on December 16, 1773, a group of colonists, disguised as Mohawk Indians, boarded three British ships moored in Boston Harbor and dumped 340 chests of tea into the water.
Massachusetts leaders concluded that if Britain, through its corruption and mismanagement, could cause the deaths of millions in India, why would they care about the colonists, so they rebelled and chose not rely on Britain’s heavy-handed taxation without representation. Their actions culminated with the Declaration of Independence in 1776 which eventually led to America’s victory for self rule in 1781 at Yorktown.
