Global Financial Data is completing its collection of data for the English stock market. The UK stocks database includes data on 25,000 companies from 1657 when the East India Company started trading in London to 1985.
GFD has written two other articles, “Four Centuries of Global Leadership” and “Two Centuries of American Leadership” which analyze how leadership in the global and American economies, with leadership defined as the largest listed company by market capitalization, has changed over the past several centuries. This article focuses on England.
London has a long history of creating companies that explored the world. As William R. Scott described in his three-volume set, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720, there were dozens of joint stock companies that were established in England before the South Sea Bubble in 1720 and the passage of the Bubble Act. The Virginia Company was established to create its colony in Jamestown. Dozens of other companies were founded, but ownership of the companies was so limited and concentrated that there is very little record of trades in their shares. When the Bubble Act was repealed in 1825, the number of companies in England exploded.
Although there is very little data on the trade in shares before 1694, we have been able to piece together some data on shares outstanding and trades from 1657 to 2017 to create 360 years of data on the largest companies in the United Kingdom every ten years from 1657 to 2017. GFD’s capitalization tool allows you to find out the size of the largest company and its competitors every year from the 1650s to the 1980s, if you want this information in detail.
What is fascinating about this history is not only what it tells us about capitalism, the financial market and technological change, but the politics of the market. Two companies that dominated the London Stock Exchange in the 1700s and 1800s were nationalized after World War II. The period between World War I and the Big Bang impacted the companies that were listed in London and their size, as did the merger and acquisition activity after the Big Bang. Politics, markets, technology and finance are all intertwined and developed over time in reaction to each other.
For a history of the London Stock Exchange, you need to look no further.
East India Company.
In some ways, the largest company in England up until the 1720s wasn’t really an English company, but a company dedicated to foreign trade in India and the Far East. Actually, there were three companies, the East India Company, the New East India Company and the South Sea Company that dominated both foreign trade and the stock market in England until 1720. The British East India Company was actually established in 1600, a year before its Dutch cousin, but the Dutch East India Company was more successful than its English counterpart in the 1600s, taking over Indonesia and defeating the British East India Company in open battle to maintain its control over the Far East. Nevertheless, the British East India Company was successful enough that other private firms wanted a cut of the action. In 1694, the East India Co. lost its British monopoly over trade with India and in 1698 a new company, the English Company Trading to the East Indies was established to compete with the Governor and Company of Merchants trading with the East Indies. But competition meant fewer profits, and in 1708, the two companies merged into the United Company of Merchants of England trading to the East Indies after providing £3.2 million to the British government for the exclusive right to trade in India and the Far East. Those were the good old days when companies paid for their monopoly directly. As the table at the end of the article reveals, the original East India Company was the largest corporation in England in the 1600s. The New East India Company gained that prominence in 1698 and remained the largest company until 1708 when the conjoined company took over from its two predecessors. 1720 was the year of the South Sea Bubble when England followed in France’s footsteps and got holders of the bountiful British government debt to convert their bonds into equity in the South Sea Co. in the hopes of making a fortune. In 1720, there were 100,000 shares of South Sea stock outstanding and when the company’s shares hit £1045 on June 29, 1720, the market cap of the company was over £100 million. No other English company reached the £100 million mark for the next 200 years when Shell Transport and Trading broke through the £100 million barrier. Even at this summit, the South Sea Co. was half the size of the Compagnie des Indes which reached 210 Million Pounds in 1719 (6,302 Million Livres Tournois). This sum was slightly less than $1 billion, a size no company reached until Standard Oil became the first billion-dollar company in 1913.The Bank of England.
The South Sea Bubble brought an end to the dominance of foreign trading companies over the British stock market. From the 1720s to the 1860s, the Bank of England was not only the largest company in England, but in the world. Central banks dominated global stock markets in the 1800s. Whether it was England, France, the United States, Ireland or any other country, the largest company was usually the central bank. This remained true until the rise of the railroads during the 1800s. Central bank stocks were safe and provided a higher return than government bonds. Unlike the Bank of the United States, the Bank of England had a perpetual charter and faced virtually no competition. In fact, during the 1700s, the Bank of England was the stock market in England since it represented about 90% of the stock market capitalization of the British Isles. Between 1730 and 1860, depending upon market conditions, the Bank of England ranged in size from £12 million to £32 million ($60 million to $150 million). However, the Bank of England was only able to maintain its reign for so long. The railroad bubble of 1845 laid the foundations for the industry which would dominate the stock market during the rest of the nineteenth century.
The London and Northwestern Railway
After the collapse of the railroad bubble of 1845, railroad companies in England merged with one another to control costs and raise prices. The largest railroad agglomeration was the London and North Western Railway which included the Grand Junction Railway, the London and Birmingham Railway and the Manchester and Birmingham Railway. The railroad continued to acquire other railroads in Lancashire and the Midlands making it the largest company in the world in 1865. The core of the line connected London to Birmingham, Liverpool and Manchester. At its peak, the company employed over 100,000 people. After 1900, the profitability of all the railroads in England declined. In 1923, the British government amalgamated all the British Railways into four main lines with the London and North Western Railway becoming a component of the London, Midland and Scottish railway. After World War II, the Bank of England and all the English railways were nationalized, and the two companies that had dominated the global economy from 1720 to 1900 became the property of the British government.Oil and Tobacco
In 1890, Standard Oil became the largest company in the world and since then, with the exception of the Japanese stock market bubble in 1989, the largest company in the world has always been an American company. Just as an oil company succeeded railroads as being the largest company in the United States, the same was true in England. Shell Transport and Trading took away the title from the London and Northwestern Railway in 1918.
From World War II to the Big Bang
After World War II, the London stock market faced a new reality. The Bank of England, the railroads, and other key industries were nationalized by the Labour government, replacing the company’s shares with bonds. The Labour party felt they could manage the economy better than the private sector, but failed to prove it. As Atlee put it, “I cannot see why the motive of service to the community should not operate in peace as it did in war.” Obviously, Atlee did not understand human nature. Until Margaret Thatcher was elected in the 1980s, the British stock market faced battles between the Labour and Conservative governments with Labour governments nationalizing and Conservative governments privatizing. Labour often treated the stock market as an evil competitor, not as an engine for economic growth. If Labour could have closed down the stock exchange, they probably would have. The fear of government intervention and nationalization kept stock prices low during most of the 1950s and 1960s. Nevertheless, there were a few large companies that dominated the British market after the war. Notably, the dominant companies were international corporations, not purely British firms since many of the domestic companies were either nationalized or under threat of nationalization. Consequently, Shell Transport and British Petroleum were the largest companies on the London Stock Exchange between 1951 and 1959, handing off the title to each other over the years. Imperial Chemical took the top spot in 1960 and 1961 and Shell Transport took back its leadership in 1962. With the exception of 1966 when British Petroleum was the largest company, Shell held the title until 1985. The only dent in its rule was 1982 when General Electric plc was briefly the largest company in Britain.
After the Big Bang
Margaret Thatcher wanted to bring free markets back to the United Kingdom. From July 31, 1914 when the London Stock Exchange closed because of World War I until October 27, 1986 when the Big Bang was launched, the London Stock Exchange operated under a set of restrictions which kept it from dominating the global economy the way London had before World War I. During World War I, Britain restricted new companies from listing in London, and the country went from being a net creditor to being a net debtor. The government directed capital toward its debt which grew to twice the size of GDP by the end of World War II. Exchange controls were in place until the 1970s and the London Stock Exchange lacked the freedom to operate as an open capital market the way it had before World War I. The goal of the Big Bang was to bring capitalism back to the United Kingdom in a big way by deregulating the market and allowing anyone to trade in a free market, not just the members of the old boy networks of brokers and jobbers that dominated London’s open outcry market. Computers replaced open outcry and foreign firms were free to buy up English firms and compete in an open market. The Big Bang was a huge success and London soon became the European center for financial markets. Denationalization also impacted London, creating new firms and new technologies. With the deregulation of telecommunications, the 1990s were dominated by British Telecommunications (BT Group plc) and Vodaphone. British Telecommunications was privatized in 1984 and quickly became one of the largest companies in the UK. Racal Telecom was spun off from Racal Electronics plc in 1991 and was renamed Vodaphone Group. After Vodaphone acquired Airtouch Communications and became Vodaphone Airtouch, it became the largest UK listed company in London, larger than BP Amoco or GlaxoSmithKline. In 2000, the top three companies were all conglomerates. Vodaphone had acquired Airtouch, British Petroleum had acquired Amoco (formerly Standard Oil of Indiana) and SmithKline Beecham had merged with Glaxo. Global capitalism was back. Just as ExxonMobil, formerly Standard Oil, took back the top spot in the United States in the 2000s, British Petroleum (BP plc) and Royal Dutch Shell (Shell Transport and Royal Dutch were unified into a single Netherlands based and British incorporated company in 2005) have dominated the London Stock Exchange in the 2000s and 2010s. As a result of the Big Bang, finance companies grew in size as well. HSBC Holdings (the Hong Kong and Shanghai Bank) was the largest UK-listed company in London in 2015. In 2017, however, Royal Dutch Shell was the largest company listed on the London Stock Exchange.After Brexit?
The London Stock Exchange is the third largest stock exchange in the world by capitalization, falling behind the NYSE and NASDAQ. The London Stock Exchange will probably never regain its title as the largest stock exchange in the world, which it held in the 1700s and 1800s, but now even its role as the largest stock exchange in Europe is in question. How Brexit will impact the London Stock Exchange is an open question. Will European companies continue to trade in London or will Euronext take away London’s role as the central stock exchange for Europe? It is hard to believe that Britain could give up such a prize, but it has happened before. Politics determined the fate of the London Stock Exchange in the 70 years between World War I and the Big Bang in 1986. Will the London Stock Exchange face another 70 years of domestic politics determining its fate? With computers taking over trading, the London Stock Exchange probably won’t even exist in 70 years, but only time will tell. 350 Years of English Leadership| Year | Company | Market Cap in GBP |
|---|---|---|
| 1657 | East India Company | 0.756 |
| 1670 | East India Company | 0.84 |
| 1680 | East India Company | 2.06 |
| 1690 | East India Compay | 2.27 |
| 1700 | New East India Company | 4.33 |
| 1710 | East India Company | 3.78 |
| 1720 | South Sea Co. | 22.00 |
| 1730 | Bank of England Stock | 14.54 |
| 1740 | Bank of England Stock | 14.01 |
| 1750 | Bank of England Stock | 15.95 |
| 1760 | Bank of England Stock | 12.48 |
| 1770 | Bank of England Stock | 15.40 |
| 1780 | Bank of England Stock | 12.71 |
| 1790 | Bank of England Stock | 21.78 |
| 1800 | Bank of England Stock | 18.79 |
| 1810 | Bank of England Stock | 28.40 |
| 1820 | Bank of England Stock | 32.46 |
| 1830 | Bank of England Stock | 28.97 |
| 1840 | Bank of England Stock | 22.92 |
| 1850 | Bank of England Stock | 31.00 |
| 1860 | Bank of England Stock | 33.91 |
| 1870 | London & North-Western Railway | 38.40 |
| 1880 | London & North-Western Railway | 53.66 |
| 1890 | London & North-Western Railway | 67.74 |
| 1900 | London & North-Western Railway | 76.26 |
| 1910 | London & North-Western Railway | 59.19 |
| 1920 | Shell Transport and Trading Co. | 114.43 |
| 1930 | Imperial Tobacco Co. (Imperial Group plc) | 177.25 |
| 1940 | Imperial Tobacco Co. (Imperial Group plc) | 188.99 |
| 1950 | Imperial Tobacco Co. (Imperial Group plc) | 197.21 |
| 1960 | Imperial Chemical Industries Ltd. | 844.38 |
| 1970 | British Petroleum (BP plc) | 1,596.78 |
| 1980 | British Petroleum (BP plc) | 6,637.91 |
| 1990 | BT Group plc (British Telecommunications) | 69,391.95 |
| 2000 | Vodaphone Group plc | 158,679.67 |
| 2005 | British Petroleum (BP plc) | 128,497.27 |
| 2010 | Royal Dutch Shell plc | 133,713.21 |
| 2015 | HSBC Holdings (Hong Kong & Shanghai Bank) | 103,344.96 |
| 2017 | Royal Dutch Shell plc | 207,964.51 |
The article Four Centuries of Global Leadership tracked the largest company in the world from 1602 to 2018. This article focuses on the United States, detailing how leadership, in terms of the company with the largest market cap, has changed over the past two centuries.
The table which accompanies this article provides a unique history of the United States stock market. We have calculated the number companies in the market at five-year intervals, the value of the capitalization of the United States stock market and what was the largest company in the U.S. stock market. We have data for every year from 1782 to 2018, but we thought five-year intervals would be sufficient to show the general trends.
The data covers every stock exchange and over-the-counter stock for which GFD was able to collect data. GFD is still adding data to the United States stock database so the totals a year from now will be even larger than they are today. Using this table, you can break the history of the U.S. stock market down into several eras.
The Era of the First and Second Bank of the United States
The Bank of North America was established in the United States in 1781 by Robert Morris with $1 million in capital. The first Bank of the United States (see the blog, “Alexander Hamilton and the First Bank of the United States”) was established in 1791 by Alexander Hamilton with a capital of $10 million, $2 million of which was subscribed to by the United States government. The bank failed to gain enough votes for its renewal in 1811 and was finally liquidated in 1815. A second Bank of the United States was established in 1816 with $35 million in capital. Andrew Jackson fought the renewal of the second Bank’s charter in 1836 and the bank died, leaving the United States with no central bank until 1913 when the Federal Reserve was established. As you can see by the numbers, when the first Bank was established in 1791, the Bank was the stock market, representing 86% of the capitalization of the four firms that existed. Over the next 20 years, the number of companies listed in the U.S. grew from 4 to 79 and the first Bank’s share of total market cap fell from 86% to 13%. The bank’s charter ended in 1811, but it took four years to liquidate the bank. The second Bank of the United States (see the blog, “The Bank War”) was established in 1816 with $35 million in capital, and in 1820 it represented 39% of the total capitalization of the United States stock market, but over time, its share declined as well, to 15% the year before its charter expired in 1836 when Congress failed to override President Jackson’s veto. During its existence, however, the number of listed companies in the U.S. grew from 95 in 1820 to 299 in 1835 and the capitalization of the U.S. stock market grew to over one-quarter of a billion dollars.
The Era of Chicago Railroads
The Bank of the United States collapsed soon after 1840, ultimately going bankrupt, and in 1845, the transportation era began. Railroads were built in every state, and in 1845, three railroads were neck and neck for the top position, the Vermont Central, the South Carolina Railroad Co. and the Western Railroad Co. of Massachusetts, each with around $4.5 million in market cap. In 1850, the Delaware and Hudson Canal, which stretched from the upper portion of the Hudson River in New York to the coal valleys of Pennsylvania was the largest company in the United States. The canal transported anthracite coal from northeastern Pennsylvania through 108 locks to the Hudson whence the coal could be brought to New York City and the rest of the country. Over the next three decades, the largest company in the United States was a railroad that connected Chicago to the rest of the country. Leadership passed between several different railroads, including the New York Central which went from New York City to Chicago, and three Chicago-based railroads, the “Rock Island” which served the areas to the west of the Mississippi, the Illinois Central, which served the Mississippi Valley from Chicago to New Orleans and the Chicago, Burlington and Quincy, which connected Chicago to the grain growing states of the Midwest. There is no reason why the second-half of the nineteenth century shouldn’t be called the Era of Chicago Railroads. The windy city was at the heart of the nation and connected all points to the west and south of Chicago to the east where the nation’s goods were sold. In fact, the Northern Pacific stock corner (see the article “Northern Pacific – The Greatest Stock Squeeze in History”) occurred because two railroads which were not connected to Chicago battled over controlling a railroad which went into Chicago. However, by the time the Columbian Exposition took place in Chicago in 1893, the railroads had lost their crown to a new sector of the economy: oil.The Era of Standard Oil
Standard Oil became not only the largest company in the United States, but the largest company in the world by 1900. Before 1900, the London & Northwestern Railway of the UK was the largest railroad and the largest company in the world, having succeeded the Bank of England in the 1860s. The London & Northwestern Railway employed over 100,000 people connecting London with Birmingham and the surrounding cities. The interesting fact about Standard Oil, however, was that even though it was the largest company in the world, it wasn’t listed on any exchange in the United States and was only traded over-the-counter! Until Standard Oil was broken up by the U.S. government in 1913, it remained the largest company in the United States between 1888 and 1913. From 1890 until today, with the exception of the Japanese stock market bubble in 1989, the largest company in the world has always been an American company. After Standard Oil was divided into 32 companies, it lost the blue ribbon for largest company to Penn Central, which connected New York City to Chicago. Standard Oil regained the crown in 1920 as the Standard Oil Co. of New Jersey and for several years in the 21st century, Standard Oil regained the title as ExxonMobil. It should be noted here that the largest company inevitably comes under the scrutiny of the government. Both the Bank of England and the London and Northwestern Railway were nationalized by the British government after World War II. Standard Oil was broken up in 1913 as was AT&T in 1983. IBM and Microsoft were both threatened to be broken up by the application of American Antitrust laws and the tech giants of 2018 are currently under the scrutiny of politicians in Washington.The Era of AT&T
Before the American government intervened, Ma Bell was the largest company in the world, keeping the title consistently from 1923 until 1965 except for 1927, 1928 and 1954 to 1956 when General Motors took the title away from AT&T. AT&T had a 40-year stretch in which it ruled the United States stock market as the largest and one of the safest stocks to invest in. One of the odd stories about AT&T is that in 1938, Dow Jones reorganized its indices, reducing the Utilities index from 20 stocks to 15 and restricting the index to electric utilities. Until then, the Dow Jones Utilities Index had included AT&T and Wells Fargo since telecommunications companies were considered utilities. AT&T was moved to the Dow Jones Industrials and IBM was removed from the index until 1979. If IBM had stayed in the index between 1938 and 1979 and AT&T had been left in the Utilities, the Dow Jones Industrials would be 22,000 points higher than it is today (see the blog “Dow Jones Industrial Average’s 22,000 Point Mistake”).The Era of IBM
In 1967, IBM became the largest company in the world, replacing AT&T. It held the top spot until 1989 when it was replaced by ExxonMobil (formerly Standard Oil of New Jersey). During that period of time AT&T was broken up into Ma Bell and the Baby Bells and IBM was under constant threat of being broken up by the United States government. But it wasn’t the government that was ultimately the downfall of IBM, it was the personal computer that replaced the mainframes and their huge computing power that created a new market IBM could not dominate. Nevertheless, IBM defined the go-go era of the 1960s and 1970s and gave notice that tech stocks were the dominant industry in the United States. Large companies could not operate without the use of computers, in fact, the stock market itself could not operate without computers. IBM computerized the stock market, made the daily calculation of the S&P 500 possible, enabled electronic orders to replace paper orders and brought the time of trades from minutes to nanoseconds.
The Big Four
Although General Electric was the largest company in 1995, 2000 and 2005, there were actually three companies that traded the title between them between 1991 and 2011, General Electric, ExxonMobil and Microsoft. Each of them was the largest in their sector and according to the economic conditions of the year, one of those three was on top with the other two close behind. General Electric wasn’t just an electricity and manufacturing company anymore, but was a finance company that provided funding to corporations and consumers. As the finance sector began to take over the stock market in the 2000s, this helped General Electric to stay on top. Microsoft was the reason for IBM’s downfall since it played a central role in the replacement of the mainframe with the personal computer, but just like IBM, Microsoft felt the ire of the government when the company was sued under the antitrust laws and also came close to being broken up. ExxonMobil, the descendent of Standard Oil benefitted from the price of oil surpassing $100 a barrel to become the biggest company in the world between 2006 and 2011. But when the price of oil went down, so did ExxonMobil and with iTunes and the iPhone beginning to take over the world, Apple moved up to the top spot.Growth in the American Stock Market
In addition to keeping track of the largest company in the United States, the table also provides information on the size of the U.S. stock market, both in terms of the number of companies listed on U.S. exchanges and their total capitalization. All data are based upon companies included in the US Stocks Database and are available to subscribers. The number of companies grew from 1 in 1782 to 100 in 1823, to 500 in 1871, to 1000 in 1888 and 2,000 in 1895. The number of companies peaked at 9,850 in 1999 and has declined since then to around 5,400 in 2017. At this rate, one wonders whether there will even be 3,000 companies to put into the Russell 3000 in the near future. The total capitalization of the U.S. market has also grown dramatically, starting off at $1 million in 1782, reaching $100 million in 1823, and $1 billion in 1869. In 1898, the United States surpassed Great Britain as the country with the largest market cap in the world at over $6 billion. The total market cap reached $10 billion in 1901, $100 billion in 1950 and $1 trillion in 1971. Today the market cap exceeds $30 trillion.Conclusion
Who will be the biggest company five or ten years from now? A tech company like Apple, Alphabet, Facebook, Microsoft or Amazon? A former leader like ExxonMobil, a bank like JPMorgan Chase or a conglomerate like Berkshire Hathaway? Or some company we haven’t even heard about? Or will America cede the top spot to a Chinese company like Tencent or Alibaba? Only time will tell. Two Centuries of American Leadership| Year | Firm | Top Firm Market Cap | Companies Listed | Total US Market Cap | Average Firm Size | Top Firm Share Total Market Cap |
|---|---|---|---|---|---|---|
| 1782 | Bank of North America | 1 | 1 | 1 | 1 | 100 |
| 1791 | Bank of the United States (First) | 14.80 | 4 | 17.18 | 4.30 | 86.15 |
| 1795 | Bank of the United States (First) | 13.00 | 9 | 26.93 | 2.99 | 48.28 |
| 1800 | Bank of the United States (First) | 13.75 | 13 | 28.31 | 2.18 | 48.57 |
| 1805 | Bank of the United States (First) | 13.00 | 43 | 44.70 | 1.04 | 29.08 |
| 1810 | Bank of the United States (First) | 10.90 | 68 | 61.51 | 0.90 | 17.72 |
| 1815 | Bank of the United States (First) | 9.00 | 79 | 68.64 | 0.87 | 13.11 |
| 1820 | Bank of the United States (Second) | 36.58 | 95 | 94.63 | 1.00 | 38.65 |
| 1825 | Bank of the United States (Second) | 42.35 | 161 | 136.13 | 0.85 | 31.11 |
| 1830 | Bank of the United States (Second) | 45.50 | 174 | 136.13 | 0.86 | 30.29 |
| 1835 | Bank of the United States (Second) | 39.59 | 299 | 262.42 | 0.88 | 15.09 |
| 1840 | Bank of the United States (Second) | 22.88 | 337 | 254.25 | 0.75 | 9.00 |
| 1845 | Vermont Central Railroad Co. | 4.60 | 310 | 234.48 | 0.76 | 1.96 |
| 1850 | Champlain National Corp. (Delaware & Hudson Canal) | 7.92 | 365 | 346.48 | 0.95 | 2.29 |
| 1855 | Chicago Rock Island & Pacific Railway Co. (1847) | 26.70 | 422 | 464.45 | 1.10 | 5.75 |
| 1860 | New York Central Railroad (1853) | 18.06 | 405 | 463.20 | 1.14 | 3.90 |
| 1865 | Illinois Central Railroad Co. | 28.15 | 420 | 796.16 | 1.90 | 3.54 |
| 1870 | New York Central Railroad (1869) | 78.69 | 444 | 1.105.71 | 2.49 | 7.12 |
| 1875 | New York Central Railroad (1869) | 93.56 | 612 | 1,528.32 | 2.50 | 6.12 |
| 1880 | New York Central Railroad (1869) | 138.09 | 886 | 2,590.69 | 2.92 | 5.33 |
| 1885 | Chicago Burlington and Quincy Railroad Co. | 105.12 | 946 | 2,904.07 | 3.07 | 3.62 |
| 1890 | Standard Oil of New Jersey (ExxonMobil) | 149.78 | 1,016 | 3,477.83 | 3.42 | 4.31 |
| 1895 | Standard Oil of New Jersey (ExxonMobil) | 191.10 | 2,560 | 4,760.85 | 2.32 | 4.01 |
| 1900 | Standard Oil of New Jersey (ExxonMobil) | 803.00 | 2,199 | 8,899.22 | 4.05 | 9.02 |
| 1905 | Standard Oil of New Jersey (ExxonMobil) | 687.88 | 2,470 | 13,929.24 | 5.64 | 4.94 |
| 1910 | Standard Oil of New Jersey (ExxonMobil) | 608.71 | 2,594 | 16,046.06 | 6.19 | 3.79 |
| 1915 | Penn Central Corp. ($50 Par) | 591.63 | 2,560 | 20,459.19 | 8.01 | 2.89 |
| 1920 | Standard Oil of New Jersey (ExxonMobil) | 613.63 | 2,649 | 21,873.22 | 8.26 | 2.81 |
| 1925 | American Telephone & Telegraph Co. | 1,319.00 | 3,317 | 47,567.64 | 14.34 | 2.77 |
| 1930 | American Telephone & Telegraph Co. | 3,152.55 | 3,041 | 63,251.49 | 20.80 | 4.98 |
| 1935 | American Telephone & Telegraph Co. | 2,802.11 | 2,229 | 51,644.92 | 23.17 | 5.43 |
| 1940 | American Telephone & Telegraph Co. | 3,143.24 | 2,279 | 44,966.63 | 19.73 | 6.97 |
| 1945 | American Telephone & Telegraph Co. | 3,851.71 | 2,189 | 75,945.28 | 34.69 | 5.07 |
| 1950 | American Telephone & Telegraph Co. | 4,320.87 | 2,315 | 111,597.30 | 48.21 | 3.87 |
| 1955 | General Motors Corp. (Old) | 12,768.78 | 2,205 | 251,419.80 | 114.02 | 5.08 |
| 1960 | American Telephone & Telegraph Co. | 23,944.37 | 2,281 | 380,328.20 | 166.74 | 6.30 |
| 1965 | American Telephone & Telegraph Co. | 32,072.60 | 2,932 | 607,877.10 | 207.33 | 5.28 |
| 1970 | International Business Machines Corp. | 36,218.42 | 4,031 | 694,247.80 | 172.23 | 5.22 |
| 1975 | International Business Machines Corp. | 33,378.94 | 5,270 | 736,652.30 | 139.78 | 4.53 |
| 1980 | International Business Machines Corp. | 39,606.90 | 5,191 | 1,337,999.00 | 257.75 | 2.96 |
| 1985 | International Business Machines Corp. | 95,299.74 | 6,379 | 2,222,049.00 | 348.34 | 4.29 |
| 1990 | International Business Machines Corp. | 64,528.99 | 6,680 | 2,911,041.00 | 435.78 | 2.22 |
| 1995 | General Electric Co. | 120,259.80 | 8,030 | 6,546,687.00 | 815.28 | 1.84 |
| 2000 | General Electric Co. | 475,003.24 | 7,946 | 15,181,594.00 | 1,910.60 | 3.13 |
| 2005 | General Electric Co. | 367,473.66 | 6,820 | 16,393,740.00 | 2,403.77 | 2.24 |
| 2010 | ExxonMobil Corp. (Standard Oil of New Jersey) | 368,711.99 | 7,835 | 18,368,258.00 | 2,344.39 | 2.01 |
| 2015 | Apple Inc. | 586,859.24 | 6,269 | 26,524,419.00 | 4,231.04 | 2.21 |
| 2017 | Apple Inc. | 874,111.87 | 5,224 | 33,541,682.00 | 6,420.69 | 2.61 |
Global Financial Data has collected data on the London Stock Exchange and the United States stock exchanges as well as data on individual companies over the past 400 years. This data covers all the major companies that have listed in London, New York, Paris and Amsterdam during the past four centuries. This data provides us with a fascinating glimpse into how global leadership has changed over the past 400 years. GFD has put together a table that provides information on what was the largest company in the world in each decade since 1602 and the total capitalization of that company. The results tell us a lot about how the global economy has evolved over time.
Four Centuries in Four Paragraphs
Between 1600 and 1850, two companies dominated global stock markets, the Dutch East India Company during the seventeenth century and the Bank of England from 1730 to 1860. After that global leadership rotated from one company to another every few decades, first to the London and North Western Railway, then to Standard Oil, then to AT&T, then to IBM. During the past 30 years, no company has dominated the top spot for more than a few years. The domicile of the largest company has changed along with global leadership. The Netherlands dominated the seventeenth century, England the eighteenth and nineteenth centuries, and the United States the twentieth century. All market cap values have been converted into US Dollars. Before 1792, the US Dollar didn’t exist, so values were calculated in British Pounds and converted into US Dollars at the rate of 4.60 US Dollars to the British Pound. In 1602 the market cap of the Dutch East India Company was less than $3 million, but it grew to $10 million by 1640. During the brief bubble of 1720, the Compagnie des Indes grew to $220 million in market cap, making it twice the size of the South Sea Co. which grew to $101 million in 1720. No company was to breach $200 million until 1880 when the London and North Western railway reached a market cap of $260 million. The first billion-dollar company was Standard Oil, which was briefly worth $1 billion in 1913 before the U.S. government split it up into over 30 separate companies (see the article, “The First Billion Dollar Company”). General Motors became the first company to be worth $10 billion in 1955 (along with E. I. du Pont de Nemours & Co. while Standard Oil and AT&T followed in 1956). Nippon Telegraph and Telephone became the first $100 billion company in 1990 during the Japanese stock bubble, and in 2018, Apple and Amazon are reaching for $1 trillion. Who will win?The Dutch East India Company
The Dutch East India Company enabled the Dutch to dominate world trade in the seventeenth and eighteenth centuries. The article, “The First and the Greatest: The Rise and Fall of the Vereenigde Oost-Indische Compagnie (VOC)” detailed their rise and fall between 1602 and 1800 when the company went bankrupt and was nationalized. Originally, investors pooled money to fund maritime journeys to the Far East and back, but the innovation of the Dutch East India Company was to make the investment permanent and not refund investors’ money after each trip, but to allow them to share in the profits of each voyage. Over the years, investors in the company reaped huge returns, though often the dividends were paid in kind, in the spices brought back from the far east, rather than in cash. During the 1700s, the Dutch East India Co. faced competition from the British and French, but it wasn’t the competition that did in the Dutch East India Co., but the fact that the VOC did not expand its share capital. Instead, the company borrowed money so the existing shareholders could preserve their share of ownership. By the end of the 1700s, the debt load was so large that the company collapsed into bankruptcy, ending the reign of the Dutch East India Company.
The Interregnum
The success of the Dutch in trading with the Far East encouraged the English and the French to try and repeat the success of the Dutch. The British East India Company had actually been founded in 1600, prior to the establishment of the Dutch East India Company. Though not as large as the Dutch East India Company, the British East India Company’s success bred resentment in England and in 1694 the company lost its monopoly of trade with India. A new East India Company was established in 1698 which obtained more funding than the old East India Company. The fact that competition lowers prices and profits soon became obvious and in 1708 the two East India Companies agreed to merge into a single entity. In 1700, the New British East India Company was the largest company in the world and in 1710 the conjoined East India Company was the largest. The East India Company was the ruler of India from 1757 until 1858 when the British government seized the company’s assets and began its rule over India. Although most people associate 1720 with the South Sea Bubble in London, the explosion of the Compagnie des Indes (see the article “The Mississippi Bubble, or How the French Eliminated All Their Government Debt”) made it the largest company in the world in 1720. Although the market cap of the South Sea Co. reached 22 million British Pounds ($100 million), the market cap of the Compagnie des Indes hit 48 million British Pounds ($220 million) making it over twice the size of its English cousin. Both France and Britain had piled up large debts in the War of the Spanish Succession and the bubbles were attempts to convert their government debt into equity in companies that traded in the Far East. These schemes eliminated the government debt, but at the expense of investors who lost their fortunes.The Bank of England
The Compagnie des Indes was reorganized after the bursting of the bubble and continued to operate successfully until the end of the 1700s. The South Sea Co. never found any profitable ventures and invested its assets in British government bonds (see the article “The South Sea Company – the Forgotten ETF”). The British East India Co. began running India after the Carnatic Wars with France. The true beneficiary of the bursting of the bubble was the Bank of England (see the article “The Bank of England – Safe for Widows and Orphans”), which reigned supreme in London for the next 150 years. Central banks of other countries, such as the Banque de France and Bank of Ireland were the largest companies in their countries, but all were smaller than the Bank of England. Between 1730 and 1860, Depending upon market conditions, the Bank of England ranged in size from 12 million British Pounds to 32 million British Pounds ($60 million to $150 million). However, the Bank of England was only able to maintain its reign for so long. The railroad bubble of 1845 laid the foundations for the industry which would dominate the stock market during the rest of the nineteenth century.
The London and North Western Railway
After the collapse of the railroad bubble of 1845, railroad companies in England merged with one another to control costs and raise prices. The largest railroad agglomeration was the London and North Western Railway which comprised the Grand Junction Railway, the London and Birmingham Railway and the Manchester and Birmingham Railway. The railroad continued to acquire other railroads in Lancashire and the Midlands making it the largest company in the world in 1865. The core of the line connected London to Birmingham, Liverpool and Manchester. At its peak before World War I, the company employed over 100,000 people. After 1900, the profitability of all the railroads in England started to decline. In 1923, the British government amalgamated all the British Railways into four main lines with the London and North Western Railway becoming a component of the London, Midland and Scottish railway. In 1945 and 1946, the Bank of England and all the English railways were nationalized, and the two companies that had dominated the global economy from 1720 to 1900 became the property of the British government.The Rise of Standard Oil
In 1900, global leadership moved to America. In 1898, for the first time, the market cap of American companies exceeded the market cap of British companies. American railroads listed not only in New York, but in London, Paris, Berlin and Amsterdam. But it wasn’t a railroad which became the largest company in the world in 1900, but an oil company, Standard Oil. The interesting thing about Standard Oil is that until 1920, it wasn’t even traded on the New York Stock Exchange, but the company and all the subsidiaries that were spun off from Standard Oil in 1913 were traded over-the-counter. Rockefeller and others owned a large portion of the shares and until the company had to raise more capital in 1920 by issuing Preferred shares, Standard Oil found no need to list on the New York Stock Exchange. Standard Oil became the first billion-dollar company in 1913 before it was broken up into Standard Oil of New Jersey and over 30 constituent companies. Nevertheless, in 1920, Standard Oil of New Jersey was still the largest company in the world.
The American Century
During the twentieth century, with the exception of the Japanese bubble, the largest company in the world was an American company. American Telephone and Telegraph became the largest company in the world in 1922 and held the title most years between then and 1967 when IBM took over the top spot. Companies other than AT&T or IBM periodically held the top spot for a few years. The Penn Central Railroad was the largest company after Standard Oil was broken up, reigning from 1912 to 1915. Standard Oil of New Jersey regained the title in 1916. National City Bank (later renamed Citicorp) was the largest company in the world in 1925, 1927 and 1928 before the bank collapsed in price during the Great Depression. General Motors was the largest company in the world between 1954 and 1956, and although AT&T held the top spot in the remaining years, General Motors was usually second. In 1967, IBM became the biggest company in the world and held that title for the next 20 years. AT&T was the biggest company in 1981, but in 1983, AT&T was broken up into Ma Bell and the seven Baby Bells forever losing any claim to be the world’s largest company.The Era of Musical Chairs
Since the 1980s, the top spot has been taken by a number of different companies. The surge in the price of oil in the 1980s brought ExxonMobil (formerly Standard Oil of New Jersey) back to the top spot, making it the largest company in 1989 and 1991 to 1992. General Electric took the top spot from 1993 to 1997 and again in 2000, 2001 and from 2003 to 2005. Microsoft was the largest company in 1998 and 1999 and again in 2002. ExxonMobil reigned supreme from 2006 to 2011. The only time when America lost the title of having the largest company in the world was during the Japanese stock market bubble of 1989. Nippon Telephone and Telegraph went public in 1987 and by 1989 it was the largest company in the world, larger than the entire German stock market and almost twice the size of the next largest firm, IBM. At $119 billion, NT&T became the first $100 billion company. In 1990, six of the top ten global spots were held by Japanese companies and 333 Japanese companies (vs. 329 for the United States) were in the Fortune Global 1000. After the Japanese bubble burst in 1990, American companies took back their global leadership. Since 2012, Apple has been the largest company in the world and is now approaching $1 trillion in market cap. As long as the iPhone dominates the market, it will probably continue to hold the top spot, but for how long? Since 2012, Apple has been the largest company in the world and is now approaching $1 trillion in market cap. As long as the iPhone dominates the market, it will probably continue to hold the top spot, but for how long?Global Leadership in the Twenty-First Century
What will the largest companies be in the twenty-first century? Two companies dominated the top spot in the nineteenth century, the Bank of England and the London and North Western Railway. During the twentieth century, a small number of American companies traded off the top spot between each other with Standard Oil/ExxonMobil, AT&T and IBM dominating the field. During the past few decades, however, leadership has constantly shifted and in 2018, Apple’s reign is being threatened by Amazon which some time in the near future may gain the top spot. Will America be able to dominate the global stock market for the rest of the century? Will Tencent, Alibaba or another Chinese firm become the biggest company by market cap? Will a new bubble propel companies past the $1 trillion mark? Only time will tell. 400 Years of Global Leadership| Year | Largest Company In The World | Market Cap In USD |
|---|---|---|
| 1602 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 2.77 |
| 1610 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 4.71 |
| 1620 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 5.08 |
| 1630 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 4.63 |
| 1640 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 10.12 |
| 1650 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 13.49 |
| 1660 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 10.70 |
| 1670 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 13.55 |
| 1680 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 11.96 |
| 1690 | Vereenigde Oost-Indische Compagnie (Dutch East India Company) | 12.36 |
| 1700 | East India Company Stock (New Company) | 19.92 |
| 1710 | East India Company Stock | 17.37 |
| 1720 | Compagnie des Indes (Mississippi Co.) | 221.30 |
| 1730 | Bank of England Stock | 66.90 |
| 1740 | Bank of England Stock | 64.46 |
| 1750 | Bank of England Stock | 73.38 |
| 1760 | Bank of England Stock | 57.39 |
| 1770 | Bank of England Stock | 70.83 |
| 1780 | Bank of England Stock | 58.46 |
| 1790 | Bank of England Stock | 100.19 |
| 1800 | Bank of England Stock | 83.83 |
| 1810 | Bank of England Stock | 116.63 |
| 1820 | Bank of England Stock | 150.06 |
| 1830 | Bank of England Stock | 136.33 |
| 1840 | Bank of England Stock | 110.57 |
| 1850 | Bank of England Stock | 150.69 |
| 1860 | Bank of England Stock | 164.46 |
| 1870 | London & North-Western Railway | 188.39 |
| 1880 | London & North-Western Railway | 26.25 |
| 1890 | London & North-Western Railway | 328.56 |
| 1900 | Standard Oil Co. | 803.00 |
| 1910 | Standard Oil Co. | 608.71 |
| 1920 | Standard Oil of New Jersey | 613.63 |
| 1930 | American Telephone & Telegraph Co. | 3,152.55 |
| 1940 | American Telephone & Telegraph Co. | 3,134.24 |
| 1950 | American Telephone & Telegraph Co. | 4,320.87 |
| 1960 | American Telephone & Telegraph Co. | 23,944.37 |
| 1970 | International Business Machines Corp | 36,218.42 |
| 1980 | International Business Machines Corp | 39,606.90 |
| 1990 | Nippon Telegraph and Telephone Co. | 119,000.00 |
| 2000 | General Electric Co. | 475,003.24 |
| 2010 | ExxonMobil Corp. | 368,771.99 |
| 2017 | Apple Inc. | 874,111.87 |
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The 1960s were the period when hundreds of computer companies went public hoping to transform the world. Many of them, such as Intel, became household names or eventually moved to the American or New York Stock Exchange. Moreover, in 1968, most banks were listed over-the-counter, but since many have moved to the New York Stock Exchange.
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