East India Company (EIC

Taken from How Stuff works site
http://history.howstuffworks.com/european-history/east-india-company- influence.htm

What comes to mind when you hear the word “corporation?” Maybe a giant, faceless conglomerate? Ruthless captains of industry? Perhaps you think of corporate scandals like Enron and WorldCom. In fact, the unscrupulous plundering done by some modern-day corporations pales in comparison to the activities carried out by one of the world’s first corporations: the British East India Company (EIC). The concept of corporations was first established under ancient Roman law [source: University of Virginia]. But it wasn’t until England emerged from the Middle Ages that it created what we recognize as the modern corporate structure. It all began on Dec. 31, 1600, when Queen Elizabeth I granted a charter to the British East India Corporation, naming the corporation “The Governor and Company of Merchants of London, trading with the East Indies.” The corporation conducted business in the East Indies (land that we now consider India and the Middle East) at the behest of the queen. The company had its own private army and raised soldiers in the areas it subjugated. Among its many claims to fame (and notoriety), the EIC indirectly built Yale University, helped create two nations and was the world’s largest drug-dealing operation in the 18th century.The company was ruthless in its quest for profits. Parliament even called the EIC tyrannical. However, without the EIC, England may have never developed into the nation it is today. {Here is possibly where our original Council of 300 came in to oversee this vast financial geo political empire. Any entity that can found sovereign nations would need an oversight commitee all its own. Notice also the title she gave it “Govenor and Company of Merchants”. Because it was a geopolitical type entity the merchants might be seen in a dual role as tradesmen and ambassadors in the field.}

In the many bios on Elizabeth I it is said that greatful friends built all those palaces and places where the royals now escape to. Five will get you ten that it was EIC that funneled and laundered its drug money through building projects like that which got the job done. Then as now, catholic or protestant, man is best appealed to by GREED. The love of the money and the power and she was at their beck call and mercy by the end. She might also have come to understand the addiction nightmare of opium.

They had armed guards and a privatized military to deal with competition and a conscripted labor force.

As I had suspected this corporative move was on the heels of the Spanish Armada defeat. Thus she had her bough Sir Frances Drake whose tactic so ably defeated the Spanish, to head the English ships into new territories. Her story is a major tale of abuses neglects heritages tragedies and triumphs. Twelves year after to be exact. The defeat was in 1588 thus this EIC was formed by charter in 1600.

But they were not the only fish in the sea.

When the British East India Company (EIC) was formed in 1600, there were already other East India Companies operating on behalf of France, the Netherlands, Spain and Portugal. Thanks to the naval route that explorer Vasco da Gama discovered, riches from the Orient were pouring into Europe. With other nations importing fortunes in goods and plunder, Queen Elizabeth I decided England should get some, too. So she granted the charter for the East India Company.

Queen Elizabeth I used more than just royal decree and coffers (treasury funds) to help merchants and explorers establish trade on behalf of England in the East. The charter she issued created the first official joint-stock corporation. A joint-stock corporation is composed of investors who are granted shares in a company. In return for their initial investments, shareholders are given dividends, or percentages, of the company’s profits based on the number of shares the investor holds.

Shares and dividends were not new concepts in England. Twenty years prior to the EIC’s charter, Queen Elizabeth was already a major stakeholder in Sir Francis Drake’s ship, the Golden Hind. Although it’s not certain how much she made from Drake’s voyages to the New World, the captain himself made a 5,000 percent return on his initial investment [source: Hartmann].

So a joint-stock corporation like the one Queen Elizabeth formed in the East India Company wasn’t much of a financial leap. But it was the first of its kind, and following the establishment of the EIC, its Dutch, French and other competitors followed suit. But granting charter to the EIC wasn’t the only part of the prototype for modern corporations that Queen Elizabeth devised.

Under the auspices of her royal authority, Elizabeth also limited the liability of the EIC’s investors — including hers. This made the company the world’s first limited liability corporation (abbreviated as LLC in the United States and Ltd. in the United Kingdom). Under an LLC, the investors in a corporation are granted protection from losing any more money than their initial investments in the venture. If the company goes under, the investors only lose the amount of money they put into the LLC. The company’s outstanding debts aren’t divvied up among its investors [source: IRS].

Queen Elizabeth covered any losses or debts owed by the East India Company with the royal coffers; modern LLCs are subject to bankruptcy procedures, where creditors may be forced to take pennies on the dollar or nothing at all if a corporation goes under.

Although it took several decades for the East India Company to become truly profitable, once it did, the company rose to global domination — both in business and in government. In a symbiotic way, as the company grew in power, so, too, did England. So it’s no surprise that during its existence, the company was directly involved in major geopolitical changes: The EIC literally changed the course of history. Two nations, India and the United States, revolted against East India Company rule, which led to the establishment of their current political structures.

By 1750, the EIC had established control over India’s most prolific sites of opium cultivation. The British exported the opium to China, which eventually resulted in two opium wars between the countries over the drug’s importation. By 1793, Britain had a monopoly on opium, and no Indian grower was allowed to sell his crops to any other company [source: PBS].

The British colonialism carried out through the EIC was pretty brutal. It included the forceful seizure of land and deposing of rulers. Tribute, taxes and loyalty were extracted from average citizens through methods up to and including torture. [source: Emory University].

Needless to say then the mindset of the businessmen who ran the EIC were very desirous to do “more”.

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One thought on “East India Company (EIC

  1. […] is where Queen Elizabeth I got the idea for the EIC. When the order was disbanded they were the holders for outrageous sums of money. What monies they […]

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