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personality was intrinsic to the constitution of the Company. The individuals could trade too much and step into the Company’s preserves. They often built subsidiary partnerships with merchants, artisans and powerful individuals at the trade sites, which could overstep limits of social or political engagement set by their employers and principals. The Company directors ordinarily had a set of incentive and punishment systems in place to make the employees desist from crossing the boundaries. On some occasions, however, the Company directors were either powerless to prevent them, or preferred to wait and watch, nervously stepping in when things had gone too far.
    The backing of the Crown drove the wedge between the head office and the branches even further. Theoverseas branch could claim to be acting in the interest of the monarch, when some of its decisions were disputed by the head office. The royal charter was indirectly an endorsement of mercantile law or regulation. Another aspect of the charter, which gained significance over time due to European warfare in the late seventeenth and eighteenth century, was the offer of arms for the use of maritime trade. Such support was not always used or available when necessary, but its presence, even in theory, changed the character of the trading firm. A part of the sovereign authority to wage war, make laws, and police subjects, was delivered to the chartered companies to enable them to withstand attacks by competitors and predatory states. The historian Julia Adams uses the term ‘patrimonial’ state to explain this dimension of multinational firms in the early modern world.
    Interestingly, the backing of the monarch empowered the overseas branches relatively more than it did the head office, for after all, it was the branch office that had to fight the wars. At times, it may have been easy to convince the head office that warfare and politics were necessary for commerce. But even when the principals thought warfare was unnecessary and unprofitable, the semi-autonomous position in which the agents found themselves, coupled with their own private interestsand ambitions, could still spur them on to military engagements.
    The bigger problem with sovereign interference was that the Indians also followed a similar political paradigm. With numerous mini-kings, fiefs and vassals, disagreements escalated quickly into battles, especially since there was neither a law book, nor a supreme authority to settle such quarrels.
From merchants to kingmakers
    Adam Smith rightly observed that the big difference between the Spanish conquest of the Americas and the English conquest of India was that, in the latter territories, the Europeans encountered powerful states reliant on the support of merchants and landlords. The local officers and tax collectors functioned as law-makers, especially near the coasts. A trade license taken from the imperial court in Agra did not necessarily provide immunity from meddlesome local lords in Surat, Patna or Kasimbazar. If the foreign traders saw themselves as mini-sovereigns, so did the local kings, as did even some of their merchant allies. More fundamentally, the monopoly charter may have been of advantage to the Company, but it was an embarrassment for an Indian king, who received requests of accommodation, andmoney, from competing merchant bodies all the time and often did not know who to please. In such a situation, disputes over trade licenses, taxation, territorial control and profit-sharing could go out of control, unless settled by means of bribes. In the course of dealing with the local situation, which the London employers did not fully understand, the employees stationed overseas realized that it was too dangerous to behave like obedient servants of London. But if they were not servants of London, they were not subjects of the Indian kings either. Who were their masters, then? It was partly in this ambiguity that the prospect of an empire lay