Accounting in the early years of the East India Company

              The Accounting Historians Journal Vol. 10, No. 2 Fall 1983
Vahé
Baladouni UNIVERSITY OF NEW ORLEANS
ACCOUNTING IN THE EARLY YEARS OF THE EAST INDIA COMPANY
Abstract: Although the account-books of the East India Company for the period 1600-1657 are lost, an almost complete series of minutes and other documents make the exploration of accounting in this great mercantile company possible. The present study provides a brief historical note on the rise of the English joint-stock company and then proceeds to examine (1) the general state of accounting affairs; (2) the functional organization of the accounting activity; and (3) the order and method of accounting in the East India Company.
The original charter of the East India Company was granted by Queen Elizabeth on December 31, 1600. It gave some two hundred and twenty adventurers the legal right to be "one body corporate" under the name of the Governor and Company of Merchants of London trading into the East Indies. It also gave them the right to corporate succession with power to admit and expel members, to receive, hold and grant property, to sue and be sued in the corpo-rate name and use a common seal.1 This select, corporately organ-ized group of merchants was given monopoly rights to trade in the seas east of the Cape of Good Hope and west of the straits of Magellan. At the same time that it served as the British govern-ment's long arm in colonial activity, this great mercantile company carried on a highly profitable trade for its shareholders for over two and a half centuries.
Although the corporate enterprise—namely, the joint-stock com-pany—emerged in England in the second half of the sixteenth century, it was not until the foundation of the East India Company that this type of organization assumed a definitive form and nomen-clature. From its inception to the present—a period of nearly four centures—the corporation has, through its many developmental changes, constituted a most challenging environment for the field of accounting. This article is limited to the exploration of account-
The study was made possible by a grant from the American Philosophical Society.
I acknowledge with thanks the assistance of Lydia Guydan, graduate assistant.