TYPICAL AMERICAN COLONIZING COMPANIES (1600-1628)
An exactly typical chartered commercial company, which combined all the
characteristics of such companies, of course did not exist. The
countries with which they expected to trade ranged all the way from
India to Canada; the political services which their governments imposed
upon them varied from the production of tar, pitch, and turpentine to
the weakening of naval rivals; while the personal qualities of the
founders of the companies, and the sovereigns or ministers who gave the
charters differed widely. Moreover, the later development of many of
these companies had but little to do with the settlement of America.
Nevertheless, three companies may be chosen which exerted a deep
influence on American colonization, and which, with the English East
India Company described in the last chapter, are fairly typical of the
general system. These are the English Virginia Company, the Dutch West
India Company, and the French Company of New France.
The charter of 1606 granted to the London and Plymouth companies was of
an incomplete and transitional character; [Footnote: H. L. Osgood, "The
Colonial Corporation" (Political Science Quarterly, XL, 264-268). This
charter is printed in Stith, Hist, of Virginia, App. I.; in Brown,
Genesis of the United States, and elsewhere.] the second Virginia
charter, [Footnote: Printed in full in Stith, Hist, of Virginia, App.
II., and, with a few omissions, in Brown, Genesis of the United States,
I., 208-237.] however, which was granted at the request of the company,
May 23, 1609, created a corporate trading and colonizing company
closely analogous to the East India Company, as will appear from the
following analysis: 1. The company was chartered under the name, "The
Treasurer and Company of Adventurers and Planters of the City of London
for the First Colony in Virginia." It was fully incorporated, with a
seal and all legal corporate powers and liabilities. In the charter
itself were named some twenty-one peers, ninety-six knights, eighty-six
of the lesser gentry, a large number of citizens, merchants, sea-
captains, and others, and fifty-six of the London companies--in all,
seven hundred and fifteen persons and organizations. They included a
large proportion of the enlightenment, enterprise, and wealth of the
capital, and, indeed, of all England. The grant was made to the company
in perpetuity, although, as will be seen, some of its special
exemptions and privileges were for a shorter term only.
2. The region to which the grant applied was the territory stretching
four hundred miles along the coast, north and south from Chesapeake
Bay, and "up into the land, from sea to sea westward and northward."
The possession of the soil was given to the company by the most
complete title known to the English law, but with the requirement that
it be distributed by the company to those who should have contributed
money, services, or their presence to the colony.
3. Its commercial powers extended to the exploitation of all the
resources of the country, including mines, fisheries, and forests, as
well as agricultural products; and to the requirement that all
Englishmen not members of the company should pay a subsidy of five per
cent, of the value of all goods brought into or taken out of the
company's territory, and all foreigners ten per cent, of the value of
the goojis. The company might send to Virginia all shipping, weapons,
victuals, articles of trade, and other equipment that might be
necessary, and also all such colonists as should be willing to go.
4. Powers of government in its territory were granted to the company
with considerable completeness, the charter declaring that it might
make all orders, laws, directions, and other provisions fit and
necessary for the government of the colony, and that the governor and
other officers might, "within the said precincts of Virginia or in the
way by sea thither and from thence, have full and absolute power and
authority to correct, punish, pardon, govern, and rule" all the
inhabitants of the colony, in accordance with its laws already made.
As to offensive and defensive powers, it had the right to repel or
expel by military force all persons attempting to force their way into
its territories and all persons attempting any hurt or annoyance to the
colony. The governor might exercise martial law in the colony, and was
provided with the general military powers of a lord-lieutenant of one
of the English counties. Thus the company and its colony were organized
not exactly as an imperium in imperio, but at least as an outlying
imperium.
5. As for special subsidies and privileges, the government of King
James was scarcely in a position to make money contributions for such
an enterprise, or to give to it ships such as the continental
governments might give to their companies; but for seven years the
company was allowed to take out all that was necessary for the support,
equipment, and defence of its colonists, and for trade with the
natives, free of all tax or duty; and for twenty years it should be
free from customs on goods imported into Virginia, and should forever
pay only five per cent import duty on goods brought from Virginia to
England. Among privileges of less material value, but long after
remembered for other reasons, the charter promised to the company that
all the king's subjects whom it should take to inhabit the colony, with
their children and their posterity, should have and enjoy all
liberties, franchises, and immunities of free-born Englishmen and
natural subjects of the king just as if they had remained or been born
in England itself.
6. The duties to be performed by the company as respects the government
were very few. In recognition of the socage tenure on which the land
was held, a payment of one-tenth of all gold and silver was required;
and the members of the council of the company were required to take an
oath of allegiance to the king in the name of the company. The main
requirement from the company was colonization. It was fully
anticipated, and in the preamble expressed, that the process of taking
out settlers should be a continuous one; and a failure to transport
colonists by the company's efforts would certainly have been a failure
to fulfil the conditions of its charter.
7. Although there was no requirement of absolute conformity with the
established church of England, yet on the ground of the desire to carry
only true religion to the natives it was made the duty of the officials
of the company to tender the oath of supremacy to every prospective
colonist before he sailed, and thus to insure the Protestantism of the
settlers.
8. The form of government of the company in England received much
attention in the charter, as well it might, after the failure of the
arrangements of the former charter. The membership, quarterly
assemblies of the general body of the members, more frequent meetings
of a governing council of fifty-three officers, and their duties, were
all minutely formulated; and the supremacy of this council, so
consonant with the ideas of King James, and so opposed to the needs and
the tendencies of the times, was carefully but, as it proved,
unsuccessfully provided for. [Footnote: Osgood, "The Colonial
Corporation" (Political Science Quarterly, XI., 369-273).] The charter
of the Dutch West India Company was granted by "The High and Mighty
Lords, the Lords States-General of the United Netherlands," June 3,
1621. It had already been under discussion in the various
representative bodies of the Netherlands for fifteen years, and had
been a fixed idea in the brain of its projector, William Usselinx, for
at least fourteen years before that, [Footnote: Jameson, Usselinx, 21,
28, 70.] advocated in a dozen pamphlets and a hundred memorials and
communications, written and oral, to the States-General; and it had the
advantage of the state's experience with the Dutch East India Company.
The shape given to the West India Company in its charter was not,
therefore, merely an outcome of the plans of an individual, but a
resultant also of the influence of the earlier commercial companies, of
the political conditions of the time, and of the ambitions, economic
and political, of the influential merchant-rulers of the Netherlands.
[Footnote: Ibid, 2-4.]
1. The company was given for twenty-four years, during which no
stockholders could withdraw and no new subscriptions would be received,
the monopoly of the Dutch trade on the west coast of Africa, from Cape
Verd to the Cape of Good Hope; in all the islands lying in the Atlantic
Ocean; on the east coast of America from Newfoundland to the Straits of
Magellan; and even beyond the straits on its west coast, and in the
southern lands which at that time were still believed to stretch from
Cape Horn across the South Pacific to New Guinea. All the non-European
regions of the globe were thus divided by the States-General, with even
greater boldness than by Pope Alexander, between the East and West
India Dutch chartered companies.
2. Its commercial privileges included a general monopoly and extended
to all forms of advancement of trade.
3. As to colonization, the charter provided that the company "may
advance the peopling of fruitful and unsettled parts." Usselinx, the
original author and the persistent advocate of the plan, would gladly
have made more adequate provision for the establishment of colonies,
the stimulation of agriculture and mining, good government in these
colonies, their religious life, and the conversion of the natives. He
had a picture in his mind of a great commercial dominion, settled from
Holland and other countries, forming a market for European
manufactures, and producing colonial goods for the use of the
Netherlands. [Footnote: Jameson, Usselinx, 43.] But the charter was
granted in war time, and by a body of aristocratic traders, who, as
Bacon says, "look ever to the present gain"; so that the capture of
Spanish plate-fleets and the sacking of West Indian settlements are
contemplated with as much assurance and interest as are colonization
and more legitimate commerce.
4. In view of later disputes between England and her colonies, it is
worthy of note that even such an enlightened advocate of a prosperous,
self-governing colonial empire as Usselinx should have insisted, in
1618, that the colonists were to pay taxes to the home government, to
trade with the Netherlands only, and to have no manufactures that would
compete with those of the mother-country. [Footnote: Ibid., 63]
5. The political or semi-public powers of the company, according to the
charter, were very extensive: it could form alliances and make war, so
long as the war was defensive or retaliatory, could build forts,
maintain troops, appoint officers, capture prizes, and arrest offenders
on the high seas.
6. By way of subsidy the company was given one million florins, the use
of sixteen government ships and four yachts, and exemption from all
tolls and license dues on its ships.
7. The duties required of the company were an oath of fidelity to
Prince Maurice, the stadtholder, and to the States-General, on the part
of its officers; the provision of a number of vessels equal at least to
those provided by the government; the return of its ships whenever
practicable to the ports from which they had set out; the preservation
for military purposes of all prizes captured from enemies of the
States-General; the periodical publishing of accounts; and the
division, after six years, of all surplus over ten per cent, in such a
way that, in addition to what the shareholders received, one-tenth
should go to the States-General and one-thirtieth to Count Maurice.
The government of the Dutch West India Company was very complicated,
reflecting the political arrangements of the Netherlands and the
jealousies of a merchant aristocracy distributed in provinces and
cities. There was a governor-in-chief of the company's colonial
possessions, but his powers were dependent on a general board of
nineteen directors, who were the supreme authority in the regulation of
the company's affairs. Below this central body were five territorial
chambers, with a combined membership of seventy-eight. The numbers,
powers, and influence on the policy of the company of these chambers
were in proportion to the wealth of the cities they represented and to
the amount of the stock subscribed from these cities. The Amsterdam
chamber, which was to subscribe one-half the capital stock, was far the
most influential and had the largest number of directors; after it in
order came the chambers of Zealand, of the cities on the Meuse, of the
cities of North Holland, and of the cities of Friesland and Groningen.
These local boards elected the general board, one-third of their
number, chosen by lot, retiring each year. [Footnote: Jameson,
Usselinx, 33, 34.]
When Richelieu became prime-minister of France in 1624, one of the
earliest definite lines of policy he initiated was the formation of
privileged commercial companies. [Footnote: Edict of Reformation of
1627, art. 429; Isambert, Recueil General des Anciennes Lois
Francaises, XVI., 329.] He saw with great clearness and formulated in a
state paper [Footnote: Michaud et Poujoulat, Memoires, I., chap,
xviii., 438.] the reasons for recognizing the superiority for distant
commerce, under the conditions of that period, of chartered companies
over individual traders. He was also much impressed with the power and
success of the great East India companies of England and Holland. His
first plan was a general French company of commerce, to include all the
outlying sections of the world, and at least two such companies were
chartered in succession. They came to nothing, and soon gave place to
companies authorized each to carry on commerce with a specified part of
America, Africa, Europe, or Asia.[Footnote: Pigeonneau, Hist. du
Commerce, II., 426-431.] The most important of these was the company of
Canada, chartered in 1628 on the plans of Champlain, and intended to
take the place of all earlier companies and individual grantees having
privileges in that region. The chartered powers and privileges of this
company may be analyzed as follows:
1. The region to which they extended was "the fort and settlement of
Quebec, with all the country of New France, called Canada." [Footnote:
Isambert, Recueil General, XVI., 216-222.] It was described as
extending along the Atlantic coast from Florida to the arctic circle,
and from Newfoundland westward to the sources of the farthest rivers
which fell into the St. Lawrence or the "Fresh Sea."
2. The power of the company over the soil was complete. It was allowed
to sell or dispose of it in such portions and on such terms as it
should see fit, except that if it should grant great fiefs such as
duchies or baronies, letters of confirmation to the grantees should be
sought from the crown.
3. The continuance of the company in its full form with all powers and
duties was to be for fifteen years, while for other purposes its life
was to be perpetual.
4. Its commercial privileges extended during this term of fifteen years
to the complete monopoly of all kinds of commerce by sea or land, all
former grants being withdrawn; and the company was empowered to
confiscate any French or other vessels coming to trade within its
dominions. The value of Canada as a source of supply for furs was
already known, and the fur trade was placed under the special control
of the company forever. The whale and seal fisheries, on the other
hand, were exempted from its control, even for the fifteen years, and
left free to all Frenchmen.
5. As a form of subsidy the king agreed to give the company two war-
vessels of two hundred to three hundred tons, armed and equipped for a
voyage; but they were to be victualled, supported, and, in case of
loss, replaced by the company. He also presented them with certain
cannon formerly the property of the East India Company. The nature of
these gifts seems to intimate the possibility of warlike expeditions of
the company against the king's enemies and its own, and prizes are
referred to repeatedly as a possible source of income.
6. All goods of all kinds brought from New France were to be exempted
for fifteen years from all duties and imposts; and all victuals,
munitions of war, and all other necessaries exported from France to the
colony should be likewise exempt. Other privileges were permission to
nobles, clergymen, and officers to join the company without derogation
from their rank, and an agreement to ennoble twelve prominent members
of the company; full naturalization as French citizens of all colonists
and converted natives; and the advancement of all artisans who should
pursue their trades in the colony for six years, to full mastership in
their respective occupations.
7. The duties the company was bound to fulfil in return for these
concessions were primarily those of colonization. The company engaged
to take over to New France two or three hundred colonists of both sexes
within the year 1628, and altogether four thousand within fifteen
years; to lodge, feed, and provide them with the necessaries of life
for three years after their emigration; and then to assign to them
enough cleared land for their support and enough grain to sow it and to
feed them till the first harvest. These provisions showed a clear
insight into the difficulties of settlement of a new country, but they
also imposed upon the company a crushing burden of expense which
required true Gallic optimism to contemplate with any assurance of
success.
8. Next to peopling of the colony came the conversion of the heathen.
Indeed, this object, with proper piety, was placed in the forefront of
the edict creating the company. In each settlement the company was
bound to provide at least three priests and give them support for
fifteen years, or else provide them with cleared land sufficient for
their support. After the expiration of the fifteen years, and for
further missionary efforts, the religious needs of the colony were
commended to the charity and devotion of the company and the colonists.
9. It was required that all colonists should be natural-born Frenchmen
and Catholics. The absolute orthodoxy of this colony from its inception
was in striking contrast with the freedom from religious restriction of
the colonies planned by Coligny before the civil wars had forced the
government to introduce rigorous conformity.
10. The company's rights over the colony were great: they could appoint
officers of sovereign justice, who should be commissioned by the crown;
and nominate military officials by sea and land over ships, troops, and
fortresses, the king agreeing to appoint their nominees. They were
empowered to build forts, forge cannon, make gunpowder, and do all
things necessary for the security of the colony and its commerce.
11. The charter contained no provisions for the internal government of
the company, simply recognizing the existing voluntary organization of
one hundred associates, whom it describes as a "strong company for the
establishment of a colony of native Frenchmen." As far as membership
extends, they were allowed to join to themselves any additional number
up to another hundred.
Thus was organized the company which, through the genius of Champlain
and with much tribulation, laid the foundations of the colony of
Canada.
Considering as types these four companies dating from 1600, 1609, 1621,
and 1628, and representing England, Holland, and France, a comparison
of their main characteristics leads to the following generalizations:
1. It is evident that there was in early modern times a movement for
the organization and chartering of companies for distant commerce,
closely dependent on their respective governments. These companies had
their period of rise in the sixteenth century; a rapid and wide-spread
development in the seventeenth; and a subsequent decline and discredit
in the eighteenth. The movement was European; every country whose
situation or ambitions would at all admit of distant trading, and whose
system of commerce was not, like that of Spain and Portugal, already
stereotyped under government control, adopted approximately the same
policy.
2. To each of these companies was secured by its charter the monopoly
of trade in a particular region. Its members alone had power or right
to carry on commerce with a specified people, over a specified extent
of coasts or lands, and during a definite period of years. This
monopoly might be only as against the fellow-countrymen of the members
of the company; but an effort, generally successful, was made to
exclude all other Europeans from each reserved field of commerce.
3. The companies were based on unions of the capital of many merchants
or other adventurers. An official Dutch letter on the trade with
America speaks of "knowing by experience that without the common
assistance of a general company navigation and commerce could not be
practised, maintained, and defended in the regions and quarters
designated above, because of the great risks from corsairs, pirates,
and other extortions which are met with upon such voyages." [Footnote:
Letters to the Dutch West India Company, June 9, 1621.] The preliminary
equipment of ships, the purchase of supplies and merchandise, the
acquisition of land, the building of forts and the supply of weapons
and military material; the payment of a military force to protect their
commerce against natives or interloping Europeans; the expenses, in
many cases, of transporting and supporting colonists; and, finally, the
long waiting before returns could be reasonably hoped for--some or all
of these expenses were inseparable from the whole plan of establishing
distant trade. It was no wonder that individual traders gave place to
great unions of the merchants of London, Amsterdam, or Dieppe, who
risked part of their means and united their resources to form companies
to trade with the East and West Indies, Africa, and other outlying
parts of the world.
4. Neither the possession of a monopoly nor the creation of a large,
joint capital was considered enough to launch an enterprise of this
kind. The grant of public or political powers by government was
necessary to make its economic objects attainable, and these were given
with a free hand. The companies very generally received, explicitly or
by implication, rights of peace and war, of supreme justice, of
administrative independence, and of legislation for their own
territory, members, and servants. A chartered company was in many cases
the holder from the crown of a wide fief in which it possessed more
than feudal powers. As a matter of fact, the companies generally
remained quite dependent on the home authorities, but this resulted
from the desire to save expense, from the supremacy of commercial
ideals, or from patriotism, rather than from deficiencies in their
charters.
5. In the grant of these extensive political powers the home
governments had ulterior motives. The seventeenth century was a period
of intense international rivalry, and the chartered commercial
companies were pieces in the game. It was not mere profit in pounds,
shillings, and pence which Elizabeth hoped to obtain from the voyages
of the ships of the East India Company, but a weakening of the power
and wealth and colonial dominion of Spain. Even in the more peaceful
times of James, the Spaniards saw, and were justified in seeing, in the
popular interest in Virginia another phase of the national hatred of
Spain. [Footnote: Letters from Zuniga to Philip III, in Brown, Genesis
of the United States, docs, xxviii.-xxxiii., etc.] It was at the close
of the twelve years' truce between the Netherlands and Spain, just when
the war was being resumed, that the Dutch West India Company was
formed, and its greatest activity was in a warlike rivalry with its
great opponent in South America. "The reputation of this crown" was
combined with "the glory of God" in the charter of the Canada Company;
and most of the commercial and colonizing projects of France in the
seventeenth as in the nineteenth century, had a large element of
political pride behind them. Sometimes it was warlike conquest,
sometimes the expulsion of a rival, sometimes the acquisition of a new
base of operations, sometimes the obtaining of a more favorable balance
of trade, sometimes mere international rivalry; but whatever the other
elements, there were always some political objects in addition to the
hope of obtaining dividends from trade.
6. For the history of America, the most important characteristic common
to the chartered companies of the seventeenth century is the
territorial foothold they obtained in the regions where they possessed
their monopolies. It might be only a few acres of ground used for a
fort, storehouses, and dwellings, which was all the English East India
Company possessed for the first century and a half of its existence; or
it might be the almost limitless domains of the Canada or Virginia
Company. There was no distinction between two kinds of companies, one
for commerce, the other for colonization, but simply one of relative
attention given to the two interests, according to the character of the
regions for which the companies had obtained their concessions. All the
companies expected to carry on commerce; all expected to plant some of
their fellow-countrymen on the soil of the country with which they
meant to trade. If the region of their activity was the ancient,
wealthy, thickly settled, and firmly governed coast of India, the
settlers were only a few servants of the company. If, on the other
hand, the region for which the monopoly of the company was granted was
a broad and temperate tract, occupied by a sparse population of
savages, and offering only such objects of trade or profit as could be
collected slowly or wrested by European labor from, the soil or the
forest, the quickest way to a commercial profit was the establishment
on the distant soil of a large body of colonists from the home land.
This necessity for colonization in order to carry out their other
objects makes the chartered commercial companies of the seventeenth
century fundamental factors in American history. The proprietary
companies of Virginia, Massachusetts, New Netherland, Canada, and other
colonies were primarily commercial bodies seeking dividends, and only
secondarily colonization societies sending over settlers. This
distinction, and the gradual pre-dominance of the latter over the
former, is the clew to much of the early history of settlement in
America. The commercial object could only be carried out by employing
the plan of colonization, but new motives were soon added. The
patriotic and religious conditions of the times created an interest in
the American settlements as places where men could begin life, anew
with new possibilities. Hence the company, the home government,
dissatisfied religious bodies, and many individuals, looked to the
settlements in America with other than a commercial interest. The
policy of the companies was modified and eventually transformed by the
influence of these non-commercial interests.
As financial enterprises, the chartered commercial companies were
subject to such great practical difficulties that few of them survived
for any great length of time or repaid their original investment to the
shareholders. Some were reorganized time and again, each time on a more
extensive scale, and each time to suffer heavier losses. [Footnote: W.
R. Scott, "The Royal African Company" (Am. Hist. Review, VIII., 2).]
They experienced much mismanagement and softie peculation and fraud on
the part of their directors; in some cases false dividends were
declared for the purpose of temporarily raising the value of the stock.
Their credit was bad, and they sometimes had to borrow money at fifty
and even seventy-five per cent, interest. [Footnote: Bonnassieux, Les
Grandes Compagnies de Commerce, 494, etc.]
They encountered other difficulties quite apart from the incompetency
or dishonesty of their directors. Parliaments and States-General were
opposed to monopolistic and privileged companies, and threw what
obstacles they could in their way; and political exigencies often
forced even the sovereigns who had given them their charters to disavow
and discourage them. [Footnote: Letter of October 8, 1607, from Zufiiga
to the king of Spain, in Brown, Genesis of the United States, I., 121.]
Their greatest difficulties, how-ever, arose from the very nature of
the problem which they were trying to solve. Distant commerce with
barbarous races, amid jealous rivals, carried on with insufficient
capital; the persuasion of reluctant emigrants to establish themselves
in the wilderness at a time when the mother-country was not yet
overcrowded; the long waiting for returns and the failure of one dream
after another--it was these difficulties in the very work itself that
led to the failure of most of the companies and the scanty success of
the others.
Nevertheless, the companies played a very important part in the
advancement of civilization during the period of their existence. They
enriched Europe with many products of the New World and the more
distant Old World, which could hardly have reached it, or reached it in
such abundance, except for the organized voyages of the chartered
companies. The formation of chartered companies relieved certain
nations of their dependence upon other nations for some of the
necessities and many of the luxuries of life. National independence was
furthered, at the same time that foreign products were made much
cheaper. Spices, sugar, coffee, tea, chocolate, tobacco, cotton, silk,
drugs, and other articles were made accessible to all. New shipping was
built by the companies and additional commercial intercourse created.
[Footnote: Bonnassieux, Les Grandes Compagnies de Commerce, 514.] New
territories were made valuable and new centres of activity created in
old and stagnant as well as in new and undeveloped countries. Above
all, the chartered companies were the actual instruments by which many
colonies were founded, and a strong impress given to the institutions
of these colonies through all their later history.