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The American Nation: A History — Volume 1: European Background of American History, 1300-1600 By Edward Potts Cheyney Characters: 30380

Updated: 2017-12-01 00:02

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 t

he 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.

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