The Most Valuable Company of All Time
On the 2nd of August, 2018, APPL stock price hit $206.36 creating the world’s ‘first’ trillion-dollar company. So what?
The East India Company (EIC), also known as the Honourable East India Company (HEIC) or the British East India Company and informally as John Company, was an English and later British joint-stock company, which was formed to pursue trade with the “East Indies” (in present-day terms, Maritime Southeast Asia), but ended up trading mainly with Qing China and seizing control of the Indian subcontinent (two economies that are rapidly ramping up again in this century).
Originally chartered as the “Governor and Company of Merchants of London trading into the East Indies”, the world’s most valuable company rose to account for half of global trade, particularly in basic commodities including cotton, silk, indigo dye, salt, saltpetre, tea, and opium. The company also ruled the beginnings of the British Empire in India.
The company received a Royal Charter from Queen Elizabeth I on 31 December 1600, making it the oldest among several similarly formed European East India Companies. Initially, the British government owned no shares and had only indirect control. Instead, the institutional investors of the Golden Age, namely wealthy merchants and aristocrats owned the company’s shares.
The Dutch East India Company (Dutch: Vereenigde Oostindische Compagnie; VOC) was another European multinational corporation founded in 1602 from a government-directed roll-up of several rival Dutch trading companies. It was originally established as a chartered company to trade with India and Indianized Southeast Asian countries when the Dutch government granted it a 21-year monopoly on the Dutch spice trade. The VOC was a truly multinational corporation in its modern sense. In the early 1600s, by widely issuing bonds and shares of stock to the general public, the VOC became the world’s first formally listed public company. In other words, it was the first corporation to be ever actually listed on an official stock exchange. The VOC was influential in the rise of corporate-led globalization in the early modern period. With its pioneering institutional innovations and powerful roles in world history, the company is considered by many to be the first major modern global corporation, and at its height was the most valuable corporation in history at an inflation-adjusted market cap of almost $8 trillion. Go guilders!
Now back to the bloody British.
During its first century of operation, the focus of the company was trade, not the building of an empire in India. Company interests turned from trade to territory during the 18th century as the Mughal Empire declined in power and the East India Company struggled with its French counterpart, the French East India Company (Compagnie française des Indes Orientales) during the Carnatic Wars of the 1740s and 1750s. The company even had its own private army and engaged in multiple battles such as the Battle of Plassey and Battle of Buxar, in which the British defeated the Indian powers, leaving the company in control of the entire Bengal region and a major military and political power in India. In the following decades, it gradually increased the extent of the territories under its control, ruling the whole Indian subcontinent either directly or indirectly via local puppet rulers under the threat of force by its Presidency armies, much of which was composed of native Indian sepoys. The company’s rule in India effectively began in 1757. Yes, a company that controls a country!
By 1803, at the height of its rule in India, the British East India Company had a private army of about 260,000 — twice the size of the British Army and more than twice the number of employees (123,000) employed by Apple. The company eventually came to rule large areas of India with its private armies, exercising military power and assuming administrative functions. Can you imagine an Apple Genius Bar Army led by General Tim Cook?