On December 31, 1600, Queen Elizabeth I granted a royal charter to the “Governor and Company of Merchants of London trading with the East Indies,” soon thereafter known as the East India Company (EIC), which gave the merchants a monopoly on all trade east of the Cape of Good Hope for 15 years.
The charter listed the aims of the Company as the “pursuit of mercantile profit” and the “advancement of trade”.
The charter granted a monopoly of all English trade in all lands washed by the Indian Ocean (from the southern tip of Africa, to Indonesia in the South Pacific). Unauthorized (British) interlopers were liable to forfeiture of ships and cargo. The company was managed by a governor and 24 directors chosen from its stockholders.
The East India Company was a monopoly trading company that linked the Eastern and Western worlds. The company far outpaced its rivals by acquiring extraordinary wealth and power. In particular, in its pursuit of resources and goods in the Indian subcontinent, it preceded the British government as the ruler of large parts of India.
As its trade with the East grew, the EIC became the largest employer in London, with its own dockyards in London along the Thames River, as well as warehouses, foundries, rope works, sawmills, and even slaughterhouses where cattle were butchered to feed the EIC’s growing fleet of East Indiamen.
Trading with the East Indies not only allowed England to gain needed products, but also allowed them to learn how to manufacture these goods for themselves. In the beginning, the British were paying a lot of money for these products, because they did not have a choice. As time went on though, they were able to manufacture some of the products for a fraction of the cost at home.
In August 1765, the Company’s supremacy was formally recognised by the impoverished Mughal Emperor Shah Alam II with the grant of Bengal’s diwani. This office of state gave the Company control over tax collection for more than 10 million people. For a stock market-listed company with profit as its primary motive, this acquisition of a country’s public finances was truly revolutionary.
The company became involved in politics and acted as an agent of British imperialism in India from the early 18th century to the mid-19th century. In addition, the activities of the company in China in the 19th century served as a catalyst for the expansion of British influence there.
From the late 18th century, it gradually lost both commercial and political control. In 1873 it ceased to exist as a legal entity.
English East India Company
