East India Company: Its 1600 Charter Set a 15-Year Term

What did the 1600 charter grant?

Reported: The charter made the named merchants one body corporate, The Governor and Company of Merchants of London, Trading into the East-Indies. It named Thomas Smith, Alderman of London, as the first Governor, and 24 Committees to direct the voyages, the ships and the sale of goods. The company was to elect its Governor and Committees each year on 1 July or within six days after [1].

Reported: The trade itself was granted for a term. Members, their sons aged 21 or more, and their apprentices, factors and servants “shall and may, by the Space of Fifteen Years, from the Feast of the Birth of our Lord GOD last past,” trade beyond the Cape of Good Hope as far as the Straits of Magellan. The volume's index dates the start to 25 December 1600, six days before the charter [1].

The clauses as text

• Trade granted for 15 years from Christmas 1600 [1].
• No other English subjects may trade there without the company's licence, during the 15 years [1].
• Customs on goods brought home may be paid half after six months and half after another six, during the 15 years [1].
• Six ships, six pinnaces and 500 mariners may sail even in a time of restraint, during the 15 years [1].
• Exports on the first four voyages go out free of custom; each voyage may carry up to £30,000 in foreign coin or silver [1].
• The Crown may end the grant on two years' warning if it is not profitable to the Crown or the realm [1].
• On petition, the Crown will grant a further 15 years if it finds that profitable [1].

Reported: Inside the term, the privileges were wide. No other subject could trade to the East Indies without the company's licence, on pain of losing ships and goods, and the Crown promised not to license anyone else without the company's consent. Exports on the first four voyages went out free of custom. The first voyage could carry up to £30,000 in foreign coin or silver, and so could each later voyage, which the clause expects to be “set forth yearly” [1].

Reported: Two clauses set the limits. If the grant “shall not be profitable” to the Crown or the realm, then “upon and after Two Years Warning” under the Privy Seal or sign manual, “this present Grant shall cease.” If the company asked for the grant to go on and the Crown found the trade profitable, new letters patent would follow for a further fifteen years [1].

The 1600 charter, clause by clause (CSV) · Source and license notes (JSON) Data: Charters relating to the East India Company from 1600 to 1761 (Madras, 1887), pp. 1–31, accessed 2026-11-02, public domain

Assessed: The record does not support the picture of a permanent monopoly handed over in 1600. The grant was exclusive, but it was temporary and revocable, and the merchants knew both facts on the day it was sealed.

Why did the merchants want a charter?

Reported: The company's own minute book opens on 22 September 1599 with the names of those who wrote “withe there owne handes” the sums they would venture in “the pretended voiage to the Easte Indias.” Two days later the assembly chose directors to seek a sole privilege from the Queen “for soe manie yeres as can be obteyned.” The next day the directors resolved to petition the Privy Council [2].

Reported: The petition, as the minutes record it, said that merchants had been stirred by the success of the voyage made by the Dutch, who were preparing a new voyage and had bought ships in England. They asked to be incorporated with a privilege in succession, because a trade so far away “cannot be traded but in a Joint and a vnyted stock.” They also asked for freedom of custom on goods carried out in 6 voyages, noting that Dutch merchants were freed of custom for divers years [2]. Many experiments would have to be made, the petition said, before the merchants knew which goods would sell in the East [2].

The petition and the charter compared, with sources (CSV) · Source and license notes (JSON) Data: Henry Stevens (ed.), The Dawn of British Trade to the East Indies as Recorded in the Court Minutes of the East India Company, 1599–1603 (London, 1886), accessed 2026-11-02, public domain; Charters relating to the East India Company from 1600 to 1761 (Madras, 1887), pp. 1–31, accessed 2026-11-02, public domain

Reported: The first answer was delay. An undated memorandum in the minutes records that the Privy Council refused a warrant that would protect the voyage while a treaty of peace with Spain was in hand, and that the adventurers, fearing they would be ordered to stop after they had spent money, went no further that year. On 23 September 1600, at Founders' Hall, they heard that it was the Queen's pleasure that they proceed, and they voted by show of hands to go forward. The charter came 99 days later [2].

Assessed: The merchants asked for a privilege in succession and a longer customs holiday, and their directors were sent to get as many years as they could. They got 15 years, fewer free voyages and a clause that let the Crown walk away.

How did investors put up money?

Reported: The sums in the 1599 book ran from £100, written by Nicholas Ling among others, to £3,000 from Richard Cockayne and company. Sir John Spencer wrote £800 and Alderman Paul Banning £1,000. The printed total is £30,133 6s 8d [2].

Reported, with our check: The sums we could read in the printed list add up exactly to that total; one entry is unclear in the copy we read and adds nothing to the sum [2]. On 24 September 1599 the assembly ruled that no new adventurer would be taken for less than £200, payable in two instalments in November and December [2]. The same assembly ruled that every share had to be paid in money: no adventurer could bring in a ship or goods as his part, and all ships were to be bought for ready money by those appointed [2].

Reported: The charter tied membership to payment. Anyone named in it who did not pay in the sum he had written in the company's book before the first voyage sailed could be removed [1]. On 10 February 1601, a date the minutes give as 1600 in the old reckoning, the general court ordered that everything prepared for the voyage, and everything it brought back, be handled as one entire joint and common stock of adventure, with no private trade [2].

Reported: Paying in proved slow. The introduction to the printed minutes, by Sir George Birdwood, says that in April 1601 the company was £7,000 in default and asked the Privy Council for powers against members who were “remisse & vnwillinge” to pay [2].

For a scale from the time, we converted the 1599 sums into days of a London building worker's wage. Robert C. Allen's London series gives 18 pence a day for a building craftsman and 12 pence for a building labourer in both 1599 and 1600 [3]. The subscribers named in the book were aldermen, grocers, drapers and other London tradesmen, so the craftsman's rate is the main column and the labourer's stands beside it [2][3].

Reported, with our conversion: The £200 minimum equalled about 2,667 days of a London craftsman's wage, or 4,000 days of a labourer's. Paul Banning's £1,000 came to about 13,333 craftsman days, and the whole book of £30,133 6s 8d to about 401,778 [2][3].

Assessed: These were large commitments for a single voyage with no fixed return date. The record shows the company enforcing them by threat of removal. Wage-days show what a sum meant to a London building worker then, not a modern value or a standard of living.

Who led it?

Reported: The charter named “the said Thomas Smith, Alderman of London” as “the First and present Governor,” to hold office until another was chosen [1]. The preface to the 1887 volume says that a meeting on 30 October 1600 resolved on a Governor and 24 Committees, with Alderman Thomas Smith as the first Governor [1].

Reported: Several of the 24 Committees named in the charter appear in the 1599 book, among them Paul Banning, Nicholas Ling, Oliver Style and Richard Wiseman [1][2]. James Lancaster, who commanded the first voyage, is also named as a Committee [1][2].

Reported: The introduction to the printed minutes says the Court made Lancaster captain of the largest ship and admiral of the squadron, and refused the Lord Treasurer's request to employ Sir Edward Michelborne, asking leave to work with “men of ther owne quality” [2].

What ships did it use?

Reported: Birdwood's introduction lists the first ships the committees bought: the Susan, the Hector and the Ascension, then the Mare Scurge (usually called the Malice Scourge), bought from the Earl of Cumberland and renamed the Red Dragon as the admiral's ship. A smaller vessel, the Guift (usually the Guest), carried supplies and was to be cast adrift when the commander chose [2].

Reported: A memorandum on the end leaves of the minute book gives the Red Dragon 600 tons and 180 men, the Hector 300 tons and 100 men, the Ascension 260 tons and the Susan 240 tons, with 80 men each. It puts the stock of the venture at £68,373, besides the cost of the northwest voyage [2]. Birdwood's introduction gives the same ship 200 men, so the two counts in the same volume differ [2].

Illustration

Assessed: The first fleet was bought second-hand. The charter's figure of six ships and six pinnaces was a cap on what could sail in a time of restraint, not a description of a fleet the company owned.

What changed in 1609?

Reported: On 31 May 1609 James I granted a new charter. It recited that the 1600 grant had been limited to “the space of Fifteen Years,” with the two-year warning clause, and it granted that members “shall and may from henceforth for ever, from the Day of the Date of these Presents,” trade to the East Indies [1].

Reported: The Crown kept a way out. If the grant did not prove profitable to the Crown or the realm, it would cease “upon and after Three Years Warning” [1]. The first term had about six and a half years left to run when the new charter replaced it [1].

Reported: The Dutch East India Company came later than the London charter. The States General granted its charter on 20 March 1602, or 10 March in the English calendar. In the eighteenth-century Dutch text read here, its seventh article ran the company for 21 years from 1602, with a general account every 10 years, and left each member free to withdraw his money at the end of those years [4].

Assessed: The two companies were not built the same way at the start, and neither was permanent by charter. The London merchants financed one voyage at a time inside a royal grant with an end date. The Dutch charter, as written, framed the members' capital for a set term instead. On the record read here, the 1609 change ended the London company's clock, but it did not end the Crown's right to call the grant back.

The card at the top of this page applies what we call the known-then test: score the choice only on what its makers could know at the time, with each piece of that knowledge tied to a source. The same test is run on a modern board in the Kodak replay, which begins with a dividend decision of September 2003.

Assessed: On 31 December 1600 the company held a grant that could vanish on two years' notice and a venture that had already lost a year to diplomacy. Raising money voyage by voyage fitted those facts. Reading the company's later size back into its first charter adds what we call the hindsight premium, the share of a decision's apparent wisdom or folly that is added only after the outcome is known.

A royal grant of exclusive trade was one way to shape a market; a court reading a statute three centuries later was another, as in the Standard Oil case.