During the sixteenth century, English merchants became increasingly interested in the possibility of capturing some of the lucrative ocean-going spice trade in the Indian Ocean, which Dutch and Portuguese companies were finding very profitable.
The British East India Company (also known as Governor and Company of Merchants of London Trading into the East-Indies) was formed to share in the East Indian spice trade. The company serve as a trading body for English merchants, specifically to participate in the East Indian spice trade. It later added such items as cotton, silk, indigo, saltpeter, tea, and opium to its wares and also participated in the slave trade.
This trade had been a near monopoly of Spain and Portugal until the Dutch moved into the region in the 1600s; after which they maintained the same control by trying to keep out other nations.
The East India Company (EIC) was incorporated by royal charter on December 31, 1600. 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.
Starting as a monopolistic trading body, 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.
The East India 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.
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.
From the late 18th century it gradually lost both commercial and political control. In 1873 it ceased to exist as a legal entity.
Governor and Company of Merchants of London Trading into the East-Indies
