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federal government locked in the invested equity capital for 10 years VOC Charter (1602). As it turned out, during these years, the passive investors did not receive financial accounts and even at the end of the first joint stock, accounts were partial and un-audited ((den Heijer 2005) pp. 66-68). They took no part in corporate management. They were paid dividends for the first time only in 1610 and then, in spices.

Based on the current literature. it is impossible to determine which of the factors discussed above were more important in facilitating the raising of initial capital. It is likely that a combination of factors – the pre-existing bond market, government support, social networks, and the gradual transformation from pre-companies, all contributed to the successful raising of capital.

English East India Company

The EIC could not rely on a preexisting bond market, on significant State support or on a gradual transformation from earlier business entities, as could the Dutch. As we saw, the government bond market developed in England only around the Glorious Revolution of 1688.

As a result of the expanding Portuguese oceanic trade between Asia and Europe, the overland caravan routes of Central Asia and the Middle East, notably the Silk Road, and the Red Sea route that supplied the English Levant and Russia companies with Asian goods became outmoded. The success of the Dutch pre-companies served as a final warning to English merchants with established interests in Asian goods ((Scott 1910-12; Chaudhuri 1965; Chaudhury and Morineau 1999) (Furber 1976)). In September 1599, a group of London merchants, dominated by members of the Levant Company who felt it was crucial for them to enter the oceanic trade with Asia, held a number of meetings that in retrospect turned out to be the founding meetings of the EIC. The promoters negotiated with the Privy Council for a Charter of Incorporation, customs privileges, license to export specie, monopoly, and possible political and military support. The Crown was not highly supportive. In 1599, Elizabeth refused the promoters' request because she thought that the presence of English merchants in the Indian Ocean could damage improving relations with Spain. The following year, because relations with Spain worsened, she changed her mind and on December 31, 1600, the EIC was formally chartered (Harris 2005) pp. 224-234). But Elizabeth promised no investment or naval support. The company was on its own.

The first recorded meeting of the EIC promoters was devoted primarily to raising capital. Potential external investors were invited and asked to invest in joint stock of the company in return for a proportional share of the profits. By the time the Charter was granted, there were 219 charter members, presumably all subscribers. By the time of the departure of the first voyage, total invested capital had reached £68,937.(Scott 1910-12; Harris 2005)

The charter of incorporation defined the basic governance structure of the EIC. This included a Governor, a Deputy Governor, a Committee of 24 – also called the ‘Court of Committees’ (and after 1709, the ‘Court of Directors’) and a General Court (For the Governance Structure of EIC, see Figure 4). The General Court was composed of all members of the company. Every member, of whatever status and however large a share in joint stock, had one vote in the General Court. The Court was to convene at least once a year, in the first week of July, and elect the Governor, the Deputy and the Committees. The General Court was empowered by the charter to remove from office the Governor or any of the members of the Committees on the grounds of “not demanding themselves well in their said office” (EIC Charter (1600)). Committees (Directors) of the EIC, unlike those of the VOC, could come from among all shareholders, were nominated for only one year, and could be removed from office. There was only one class of shares. Voting in the General Court, for Committees and on other issues, was

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