Trading Companies

monopolistic mercantile associations, engaging primarily in foreign trade, that flourished during the period when disintegrating feudalism gave rise to an early system of capitalist relations in Europe. Although most trading companies retained many traits of feudal corporate organizations, such as a privileged status in the area of trade and an oligarchic type of administration, they were essentially private enterprises formed by agreement of their joint stockholders. As owners of the capital, the stockholders determined the conduct of the trading companies’ business and the proportional division of the profits. As the trading companies developed, however, they tended to enlarge their capital and decrease the number of their principal stockholders. They often combined their extensive wholesale trade, conducted mostly overseas and constituting their principal sphere of activity, with other commercial operations, such as credit banking, usurious moneylending, and various enterpreneurial ventures, especially in textiles, mining, and metallurgy.

The most famous and influential of the early trading companies were the Florentine companies of the Bardi, Peruzzi, and other families, which played an important role during the 13th and 14th centuries; the wide-flung Augsburg companies of the 15th and 16th centuries, including those of the Welsers, Fuggers, Baum-gartners, Hochstetters, and others; the German Great Ravens-burg Trading Company (1380–1530), which was engaged only in trade; and the British Merchant Adventures Company (1406–1808) and Muscovy Company (1554–1649). In the 16th and 17th centuries other large-scale overseas trading companies were formed, the most prominent of which were the British East India Company (1600–1858), Guinea Company (founded in 1588 and trading in Africa), and Plymouth Adventurers (founded in 1606); the Dutch East India Company (1602–1798) and West India Company (1621–1791); and the French East India Company (1664–1719) and West India Company (1664–74).

These companies, which traded with remote, mostly poor and backward countries, became an important instrument for colonial enslavement and exploitation overseas. The most powerful of them, which were granted, among other privileges, the right to wage war, conclude peace, conduct court trials, and raise their own troops, used methods of indiscriminate economic plunder and engaged in slave trade. They played a significant role in the primitive accumulation of capital.

Trading companies also existed in Russia from the second half of the 17th century to the 19th century. They endured briefly, however, and their activities produced little success. The longest lasting was the Russian-American Company, which flourished from 1799 to 1868.