The Charter of 1600 granted the East India Company the exclusive privilege of trading East of the Cape of Good Hope for a period of 15 years.
The Charter provided for the management of the Company by a committee consisting of a Governor, a Deputy-Governor, and 24 members to be elected by a general body of the merchants forming the Company. This committee later on came to be known as the 'Court of Directors' and its members as 'Directors'.
The East Indian Company soon became the most important trading company of England. Between 1601 and 1612 its rate of profit recorded about 20 per cent per annum.
Profits of the East Indian Company were derived both from trade and from piracy, there was no clear dividing line between the two at the time.
In 1612, the Company made a profit of £ 1,000,000 on a capital of 200,000.
The Company was a strictly closed corporation or a monopoly. No non-member was allowed to trade with the East or to share in its high profits.
From the very beginning, the English manufacturers and those merchants who could not secure a place in the ranks of the monopoly companies carried on a vigorous campaign against royal monopolies like the Fast India Company. But the monarchs threw their influence behind the big companies who gave heavy bribes to them and to other influential political leaders.
From 1609 to 1676, the Company gave loans amounting to £ 170,000 to Charles II. In return, Charles II granted it a series of Charters confirming its previous privileges, empowering it to build forts, raise troops, make war and peace with the powers of the East, and authorizing its servants in India to administer justice to all Englishmen and others living in English settlements. Thus the Company occulted extensive military and judicial powers.
Many English merchants continued to trade in Asia in spite of the monopoly of the East India Company. They called themselves 'Free Merchants' while the Company called them Interlopers.'
The Interlopers in the end, compelled the Company to take them into partnership.
A change of fortunes occurred in 1688 when Parliament became supreme in England as a result of the Revolution of 1688, which overthrew the Stuart king James II and invited William III and his wife Mary to be the joint sovereign of Britain.
The "Free Merchants" now began to press their case on the public and the Parliament. But the Company defended itself by giving heavy bribes to the King, his ministers, and members of the Parliament. In one year alone it spent 80,000 on bribes, giving the King £ 10,000. In the end, they secured a new Charter in 1693.
The time was running against the Company; its success was short-lived. In 1694, the House of Commons passed a Resolution that "a subjects of England have equal rights to trade in the East Indies, unless prohibited by Act of Parliament."
