East India Company

Founded in 1600, dissolved in 1874. Traded in cotton, silk, tea and spices and, over time, came to rule over large parts of the Indian subcontinent and was known for exploitation of trade.

The East India Company started when Queen Elizabeth I granted 218 merchants a monopoly in trading goods to the east of the Cape of Good Hope. Back then, the company established new ways of trading such as offering limited liabilities to shareholders meaning that each shareholder in the company has a financial liability which is limited to a fixed sum. Therefore the person is not liable for debts the company has but only for the amount which has been invested in the business. The Company had been established to share spice trade which had a long time been the monopoly of Spain and Portugal; but after the Spanish Armada has been defeated in 1588, the English were finally able to break the monopoly.

From the early 18th century until the 19th century, the company was an agent of British imperialism in India. Their expansion also reached China in the 19th century and the influence also spread.

In 1608 the first ship finally arrived in Surat and in 1615 Sir Thomas Roe asserted the right for the British to establish a trading post in that city. Over the years, the British expanded trade in India. As a result more and more branches were established along the east and west coast of India with British pepople settling in Calcutta, Madras and Bombay. The company's competitors were the Dutch who were involved in trading in Indonesia, formerly called the Dutch East Indies, and the Portuguese. After the Amboina Massacre in 1623, which was about the Dutch executing their competitors, the company won back concessions which allowed them trading throughout the Mughal Empire. After that there was not only a trade in spices but in cotton, silk, indigo and saltpetre. The trading expansion went on to the Persian Gulf and other parts of Asia.

The greatest success was recorded in 1717 when a decree from the Mughal Emperor stated that the Company was exempted from the payment of custom duties in Bengal. When the demand for cotton decreased and tea played an important part in importing from China, the trading of tea was financed with the illegal exports of opium to China, that made the commercial relations even more important and difficult. Two wars resulted from it: The first Opium War in 1839, which went on for three years, and the second conflict, the so called Arrow War, from 1856-1860. Both concluding in better trading rights for the European commerce.

Slowly the company lost its control in commerce and politics, just as the monopoly was broken in 1813 and after that the British government defined the rules for India. The legal entity itself ceased to exist in 1873.

Sources:

http://www.britannica.com/EBchecked/topic/176643/East-India-Company [11.06.2013]

http://www.sscnet.ucla.edu/southasia/History/British/EAco.html [11.06.2013]