A Licence to Trade
The History of English Chartered Companies
Preface
A comprehensive history of the English Chartered Companies would fill several volumes and from the point of view of writer and reader alike would be almost unmanageable. Our aim in this book is the more modest one of describing the principal companies chartered for the purpose of overseas trade, colonization, or administration. Companies solely concerned with industry or commerce within the United Kingdom are excluded, as also are Banks and other financial institutions. The temptation to tell the spectacular story of the South Sea Company was great, but its trading activities were unimportant and as a mainly financial institution it is outside the scope of this book.
In a study of the kind proposed here, use has to be made of original authorities not readily available to the general reader. In some of the footnotes it has therefore seemed convenient to refer to secondary works, but in nearly all cases the statements and quotations in those works have been checked against the originals.
This has only been possible because of the facilities offered by the indispensable London Library and the equally valuable library of the Foreign and Commonwealth Office. The writer is grateful to the staffs of those libraries and is also indebted to Mrs. Craig, the archivist of the Hudson’s Bay Company. Thanks are also due to Dr. P. N. Davies of the Liverpool University for information regarding the African Steamship Company and the trade on the West Coast of Africa.
Daphne Hammond continues to give what is conventionally described as secretarial help, but which really means rescuing the author from many pitfalls.
As for my wife, it is only her patience that makes it possible for me to write, while she keeps the domestic wheels turning, but spares time to make illuminating comments on my ideas.
Wentworth, Surrey
February 1974
P. J. Griffiths
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Introductory
Before the Norman Conquest trade was not a significant element in the English economy. In the succeeding one or two centuries, closer contact with Europe and the steady increase in the production of wool and other commodities in England led to the growth of an important export trade. This necessitated organization and official sponsorship, since the nineteenth-century idea that a man might join with whom he pleased and trade wherever he wished had no place in medieval English thought. The right---and the duty---of the Crown to control the economy was taken for granted and according to Coke ‘the royal prerogative had an ancient and special force in the government of trade’.* The Merchants of the Staple and the Merchant Adventurers thus had to be authorized by the Crown to form trading establishments abroad.* Overseas trade was encouraged by that sound economist Henry VII, while the remarkable growth of English industry in the Tudor period resulted in a surplus of production over and above what England could consume or the Staplers and Adventurers could sell in the traditional markets of Western Europe. In the middle of the sixteenth century Englishmen were beginning to look outward and it was natural that merchants should seek for new channels for the sale of this surplus. Strange and fascinating reports of rich countries remote from Western Europe seized hold of the minds of enterprising business men. It was nevertheless clear that no individual could embark on ventures to these countries of fabulous wealth. Returns on investment would obviously be long delayed and the risk would be too great for a single merchant to accept. Antonio, a Merchant of Venice, might boast that his ventures ‘were not in one bottom trusted’, but when a ship of his was ‘wracked on the narrow seas’, he fell into grave peril.
A sharing of risks was clearly necessary but there was no right to combine without the sanction of the Crown. At the same time it was not the policy of the Crown to interfere in the day to day running of trade or industry, or in ordinary circumstances to participate in such trade itself. The overall control of the Crown had to be combined with practical self-government in each industry and fortunately the gilds and boroughs provided a pattern which could be followed. As Carr puts it ‘the early gildsmen . . . had handed down an immemorial tradition of autonomy. Into the framework which contained gilds and boroughs, mercers and merchant venturers, it was a simple matter to fit the charter companies’.* The Staplers and the Merchant Adventurers were based on an extension to foreign trade of principles well established for domestic industry and they in their turn led to the concepts underlying the companies chartered for foreign trade.
Those concepts require further examination. A charter was necessary in the first place because associations of individuals had no inherent right of meeting or electing officers or framing regulations. Without royal sanction the members of such an association would have been in continual risk of being punished as an unlawful assembly. Even the administration of oaths, or the export of goods, or the departure of an individual from England might require royal permission and as a modem writer has observed, charters sanctioned something ‘which the Crown would otherwise have regarded with suspicion’.*
This consideration was of special force in the case of companies proposing to trade abroad since, as J. W. Gordon points out, it was generally accepted that ‘foreign trade was prohibited to the King’s subjects except in so far as it was “opened” by Act of Parliament or licensed by the King’.*
There were also more postive aspects of the need for a charter. No general procedure for incorporation existed---and yet without some form of incorporateness an association could neither sue nor be sued, or enforce contracts or hold property. When Sir Humphrey Gilbert obtained a patent for exploration and the acquisition of territory the lack of corporateness was a serious handicap and he had to adopt a clumsy and not very effective method of overcoming it by agreement with his partners. In later patents or charters some form of incorporateness was normally granted and all the grants to the early chartered companies provided for this need.
Incorporation, however, was not enough. If the Adventurers were to send their employees overseas, and to be responsible to the foreign government for their behaviour, they must have some jurisdiction over them, and since English legal theory at that time maintained that the Crown had authority over its subjects abroad, a delegation of some of the authority of the Crown was necessary. Such delegation was in fact included in all company charters in this period.
There was an even more cogent reason which made a charter for associations of traders abroad essential. The charter was the outward sign to the foreign government that the company operated under the aegis of the English Crown and that injuries to its members would be resented by the Crown and might provoke retaliation. Without such a sign the association could not have secured recognition by the government of the country in which it wished to trade and would have had no chance of fair treatment. It was not only the English who felt this need. The Merchants of the Hanse, for example, were only able to survive in England for several centuries because the influence and authority of the Hanseatic League secured for them the protection---and at times the encouragement---of the English Crown. France and other European countries also found it necessary to adopt the principle of the charter in one form or other, but in some countries the State played a more direct part than it did in England. The essence of the English system was that it preserved the principle of private enterprise, while it provided the necessary backing and control.
Monopoly was also an important element in the establishment of the chartered companies. No body of individuals would have been prepared to accept all the risks then attendant on opening up overseas ventures without some assurance that others would not enjoy the fruits of its labours and all the early charters, therefore, conferred exclusive trading rights against all other Englishmen. Monopolies were indeed commonly granted even in domestic trades or industries and these grants were in many cases a useful source of revenue to the Crown. Elizabeth made very free use of her power to issue such grants, but towards the end of her reign the practice was widely resented. With her unique gift of managing men, Elizabeth was able to keep that resentment within bounds, but it expressed itself freely when James I ascended the throne. Early in his reign, James, perhaps unwisely, produced a Book of Bounty setting forth the principles on which he proposed to act, and in it he is said to have disclaimed the right of granting monopolies within the realm.* James, however, did not live up to his promises and granted many monopolies in domestic trade and industry. A suspicious Parliament was anxious to bind James to the policy laid down in the Book of Bounty without unnecessarily provoking a quarrel, and in the Statute of Monopolies 1624 it adopted the tactful expedient of referring obliquely to the King’s own book in the Act. Monopolies in the realm were thus prohibited, but an exception was made in favour of Companies and, moreover, the prohibition* did not apply to monopolies overseas. The right of the Crown to make such grants was not seriously attacked until after the Revolution. In 1690 the Hudson’s Bay Company, apprehensive that the validity of its grant from the Crown might be impugned, took steps to obtain from Parliament confirmation of its charter for a period of seven years. At the end of that period it was unable to obtain a renewal of the parliamentary grant and had to rely again on its charter from the Crown. The attack on the validity of this charter was not immediately renewed, but at a later stage the Company’s legal advisers opined that though the Crown might probably grant territorial rights, it was not entitled to make a grant of a trade monopoly. By that time, however, the matter had become largely academic and during most of the period when the great chartered trading companies came into existence, the prerogative of the Crown in this matter was not seriously questioned.
The royal grant could take either of two forms---letters patent issued by the King alone, or charters emanating from the King and Privy Council. The distinction was technical and at times political. It did not affect the grantees and in the following pages we shall not distinguish between the two forms of grant. The charter granted to the Russian Company in 1555 set the pattern for later grants. A charter normally included detailed rules for the constitution and governance of the Company; a definition of its functions and area of operation; authority over all under it; and, of course, exclusive rights as against other Englishmen. In some cases it also conferred territorial jurisdiction over lands not belonging to any Christian power of which the Company might take possession. It did not deal with the methods according to which the business of a Company chartered for trade was to be conducted, and there were in fact two possibilities. The Company might be either a body of individual traders---a ‘regulated’ company in which each member bought and sold on his own account under the general aegis of the Company and in accordance with its rules---or a ‘joint stock’ company in which transactions were conducted on behalf of the Company. There was no rigid demarcation between these two types and indeed some companies were at times ‘regulated’ and at times ‘joint stock’. It must be emphasized that in the sixteenth or seventeenth century the term joint stock did not have its modern connotation. The stock might be joint for a particular voyage---that is to say members might subscribe for the expenses and share in the profits of that voyage, after which the accounts would be closed, fresh subscriptions being taken for the next voyage. Or the stock might be joint for a period of years, accounts being made up at the end of that period for all voyages included in it. An obvious difficulty under these arrangements was that the Company’s agents abroad might be selling simultaneously and in competition with each other, goods belonging to different sets of owners. The period was indeed one of experiment and nothing approaching the definite principles of modern company law had been achieved. Even what today would be called balance sheets and profit and loss accounts were produced in whatever form the Governor and his Committee decided or could persuade the members to accept.
In dealing with organization in this period, rigid classification is nearly always misleading, but the chartered companies of the sixteenth and seventeenth centuries can be roughly divided into two groups---those concerned primarily with trade and those set up with the object of establishing plantations or colonies. There was some overlapping and the charter of each group might cover matters of more direct interest to the other group. Nevertheless, it is clear that the real trading companies, such as the Russia Company or the Levant Company, were different in character from such companies as the Virginia Company, while the Hudson’s Bay Company occupied a half-way position.
A third type of company, chartered largely for what may be called purposes of administration, was established in the nineteenth century. It resembled both classes of its predecessors in that it was interested alike in trade and settlement, but the main purpose of its charter was to enable it to make treaties or administer territories which it had acquired, or which were covered by its arrangements with local chiefs. It was in fact chartered to do what the British Government would otherwise have had to do.
It will be convenient to follow this rough and ready threefold classification in this book, and separate sections will therefore deal with what may loosely be called trading companies, plantation companies and administrative companies. Each class played an important part in the expansion of England. The trading companies laid the foundation of the prosperity and commercial influence of modern England; the plantation companies helped to call the New World into existence; while the administrative companies established the British Empire in large areas of Asia and Africa.
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Part 1 — The Historical Background
Chapter 1
Early Monopolies
The English chartered companies of the sixteenth century were the logical extension to overseas trade of a form of organization which had become well established in domestic trade. The underlying concepts were those of monopolies, collective trading or regulation of trade and the right of the Crown to control the economy. Those concepts expressed themselves first in the gilds, and then, as overseas trade developed, in the organization of the Staplers and the Merchant Adventurers.
Although English towns and villages were perhaps never as self-sufficient as historians once considered, the early medieval idea of trade was of the simplest kind in which goods passed direct from a local producer to a local consumer. The middleman had no place in the economic theories of the early middle ages and the idea that a man might profit by selling goods which someone else had made was anathema to the schoolmen, since every article had its just price ‘for which it was right that the owner of the ware should exchange it’.*
This approach was clearly untenable when men’s needs and the means of supplying them multiplied, but its moral foundations were not wholly rejected, and when the class of merchants became important they did not at first claim the degree of freedom enjoyed by traders in later ages. Forestalling, for example---which meant cornering goods before they reached the market---and engrossing or holding out for a better price, were still regarded as wrong and to control these and other malpractices, regulating authorities were required. Since the economy was still regional rather than national and since towns were very jealous of their own independence, it would have been impossible for the Crown to exercise this kind of detailed control. There had to be local bodies to which the authority of the Crown could be delegated and which would enable the townsmen not only to regulate trade in accordance with accepted principles, but also to preserve their own rights against outsiders. Soon after the Norman Conquest the Gilds Merchant came into existence to fulfil this function. They so obviously met a real need that they spread rapidly until gilds were established in almost every borough.
It is not necessary for us to consider the complicated question of the relations between the gilds and the boroughs. It is enough for us that in most boroughs there came to exist a body of townsmen chartered directly or indirectly by the Crown to control trade and to collect tolls. Salzman suggests that in some towns there may have been more than one trading gild, since objection was taken to attempts of traders in one class of merchandise to encroach on the business of other classes of traders.* This, however, was a transient phase, and before long in most towns there was one Gilds Merchant. Salzman also tells us that ‘originally the Gild Merchant cast its net very wide’, and in some towns ‘included not only merchants and mercers, but butchers, bakers, coopers, dyers, carters, miners, carpenters, masons and all kinds of craftsmen’.* Before long, however, the merchants became conscious of their own superiority. ‘The smaller shopkeepers and craftsmen seem to have been squeezed out of the Gild Merchant and joined the craft gilds.’* The Gilds Merchant became in fact somewhat exclusive bodies of well to do traders.
Even before this kind of social exclusiveness had developed, one of the main objects of the gildsmen was to keep trade in their own hands. There was no uniformity about these matters but in general the right to buy and sell within the borough without payment of tolls was limited to gildsmen. In some cases non-gildsmen were allowed to buy and sell wholesale but in many more cases they were only allowed to have transactions with gildsmen, they were not permitted to deal in certain important commodities and they were required to pay tolls.*
Although the gilds were exclusive in their attitude to outsiders, within the gild the early medieval idea of fair sharing still prevailed and Lipson quotes a Southampton ordinance to the effect that ‘a gildsman shall have a share in all the merchandise which another gildsman buys, if he is on the spot when the merchandise was bought’.* Communal trading on behalf of the gild was also not uncommon, so that gild practice was creating precedents alike for the regulated and the joint stock companies of later times. There were other ways too in which the gilds were providing a pattern for the future---collective responsibility for a gildsman’s debts and collective assistance to a gildsman to enforce a debt due to him, were elements which would be of importance in building up the idea of corporate trading.
The exclusiveness of the gilds was by no means allowed to remain unchallenged. Patronage is important under all systems of government and in the middle ages it frequently took the form of the grant of immunity from tolls or dues throughout the country. Such grants, which might be made to individuals or institutions, often involved curtailment of rights already granted to gilds or boroughs by charter. Exemption from all tolls throughout the realm was at times given by the Crown to men of a particular borough or even to the inhabitants of a foreign town, and there were also cases where partial exemption was enjoyed by classes of individuals. Lipson, for example, points out that Tenants of Ancient Demesne were free of tolls on ‘such things bought by them as necessary for their own household or for such corn or other things sold by them as groweth or else is brought up of the same ground so holden’.* In other cases immunities were granted by feudal lords and in all these ways freedom of trade was expanded at the cost of the gilds or other privileged institutions.
We need not pursue this subject further. We have seen that the habit of collective trading or corporate action for the control of trade was well established in England and that there was a constant struggle between parochial restrictions and the demands of those who sought greater freedom of trade. By this time English exports were becoming important and the problem which had been solved in respect of domestic trade now arose in regard to foreign trade. In the early stages English exports consisted of tin, leather, corn---when harvests were good and supply exceeded home demand---and above all wool.
The Merchants of the Staple
Exports of wool had indeed begun well before the Norman Conquest, but for some two centuries or so they were largely in the hands of alien merchants. In a brilliant study of this subject, Eileen Power points out that over-population compelled the inhabitants of Flanders and the Low Countries to take to manufactures and that they were geographically well placed for it. In the thirteenth century, Bruges became a great entrepôt and Walloon merchants bought wool extensively from English monasteries, which not only reared their own sheep but bought wool from other great landlords for sale to the foreign merchants. Italian merchants also bought English wool for the manufacture of fine cloth in Florence.*
The supply of wool became so vital to the Low Countries that it provided English kings with a useful political lever, while the customs duties on export became an important source of revenue. From the time of Henry II onwards, English monarchs had encouraged foreign merchants and they had been allowed to form their own Hanses or communities for their own governance and the regulation of their trade. In 1283 the Statute of Merchants, passed for their express benefit, furnished foreign merchants with a satisfactory means of recovering their debts. In 1303, by the Carta Mercatoria, Edward I granted foreign merchants exemption from a number of local tolls and exactions in return for their agreement to pay a rate of customs dues higher than that imposed on English merchants.* During the fourteenth century these concessions were extended even at the cost of infringements on the franchise of English boroughs.
By this time, however, English merchants had begun to acquire a large share in the export of wool and they not only resented these concessions to aliens but also sought similar privileges for themselves abroad. We shall return later to the struggle of English merchants and boroughs against the Hanseatic League and other foreign communities. Here we are concerned with the growth of English trading organizations abroad. The first of those organizations was that of the Merchants of the Staple. The Staple was a specific place through which the export of wool was directed and its advantages have been classified by Eileen Power as providing a diplomatic lever for the Crown, facilitating the taxing of wool exporters, assisting English merchants to oust foreigners from the export trade, and helping the fixation of prices.* There were, however, very divergent views as to where the Staple should be and there were often differences of opinion between the growers and the buyers as to the advantages or disadvantages of the system.
In 1297, Edward I established what has been called a voluntary Staple, first at Dordrecht and then at Antwerp. That is to say he despatched to the Staple wool which he had bought himself, and to some extent he influenced merchants to sell their wool there too. When the Staple was at Antwerp, English merchants there received a charter from the Duke of Brabant authorizing them to regulate their own activities.*
In 1313 the system became compulsory. A Mayor and Council of the Merchants of the Staple were established and directed to choose the Staple Town. They chose St. Omer and obtained considerable privileges from the French King. For the next half century the policy of the English Kings in regard to the Staple fluctuated considerably. For the first ten years it moved from year to year between St. Omer, Antwerp and Bruges at the choice of the Mayor and Council. Then followed a period during which either there was no Staple at all or it was in a continental town, or it was in England. In 1353, by the Ordinance of the Staple, Edward III withdrew the Staple to England and fixed it in fifteen English towns, each with its own Mayor of the Staple and two Constables. Wool was only allowed to be exported from those towns or the ports linked with them, and a levy on the export of wool was raised to cover the expenses of administration.* We are not concerned here with the disputes as to the relative merits of home and overseas Staples, but only with the fact that organizations for foreign trade were being built up on an experimental basis. In 1363 the Staple was fixed in Calais, and with two or three interruptions it remained there until the middle of the sixteenth century. Wool was still only allowed to be exported from the English towns which had previously been designated at Staples.
Since the Merchants of the Staple to some extent provided the pattern for the chartered companies much later, we must glance at their organization. Calais was then an English town and there was therefore no problem of jurisdiction. Twenty-four merchants were to have the keeping of the town and the Staple---though the Municipality was separated from their jurisdiction two years later---and were to elect their own mayor and officers and to levy fees. As the authors of Studies in English Trade in the Fifteenth Century* put it, it was a legislative body within its own sphere, a judicial body administering the law merchant, an inspecting body, a financial body and a political body. It had a monopoly of all English exports of wool, except that the coarse wool of the Northern English counties was allowed to be shipped to the Netherlands, while Italian merchants were permitted to buy wool in England and to ship it in the Flanders galleys to Italy.
At first the Staplers bought wool direct from the growers, but during the fourteenth century a class of ‘woolmen’ emerged. They were big local dealers or London merchants, some of whom were interested in grazing, dyeing or processing---and the Staplers tended increasingly to buy more and more from the woolmen rather than from the growers. By this time the industry was mainly organized on a credit basis and was largely in English hands. At one time foreign merchants had been in the habit of paying in advance for their wool and what would in modern terms be known as forward contracts began to be common. Now, however, the process was reversed. The grower gave credit to the dealer or woolman, who in turn sold on credit to the merchant, who then gave credit either to the English clothier or to the foreigner who bought at the Staple. Credits to foreign buyers were often arranged on an artificial rate of exchange, thus, as Salzman remarks, enabling the sellers to charge interest ‘without flaunting that sinful transaction before the eyes of the Church’.* Before long, however, the open charging of interest for deferred payment became the usual practice. The Crown, which attached importance to the prompt import of bullion, disliked these transactions, but various attempts from 1364 onwards, to stop the giving of credit to foreigners, consistently failed.
Up to 1429 the Merchants of the Staple were like the regulated companies of later times, in that each member sold his wool individually, but from that date the character of the organization was changed by the Partition Ordinance. Thereafter, the sale price was fixed by the Staple, all sales were made in cash and the sale proceeds of all wool at the Staple were distributed to the Staplers pro rata to the quantity of wool they had brought to the Staple irrespective of the sales of particular merchants. The Staplers were in fact becoming like a joint stock company of later days. This system led to many disputes between rich and poor Staplers and the Ordinance was annulled in 1446.
The Crown at a very early stage discovered that the Staplers could be made to pay handsomely for their privileges. English kings at this time were in great need of foreign exchange for their adventures abroad, and one third of the sale proceeds was required to be deposited in the Mint in Calais or in England.* In the fifteenth century the Staplers could almost be described as financiers to the Crown. They gave the Crown loans and they often had to advance money on the security of the Customs. Indeed at one time they actually administered the Customs. When the Calais garrison mutinied over non-payment of wages in 1449, the Staplers had perforce to pay them and from 1471 onwards they were made regularly responsible for paying that garrison. The demands of the Crown pressed heavily on the Staplers, but at the beginning of the sixteenth century the Merchants of the Staple were nevertheless a wealthy company and it was not until cloth began to replace wool as the principal English export, that their position began to decline.
The Staple system had, according to most modern authorities, enabled the English merchant to sell profitably to foreigners and yet had kept down the price of wool to the growers, thus facilitating the growth of the export of cloth in the fourteenth century. The system had indeed provided a pattern which, together with that of the Merchant Adventurers, was to be imitated by the Chartered Companies in the sixteenth century.
The Merchant Adventurers
The English export trade in cloth differed from that in wool in two important respects. In the first place it was mainly in English hands from the outset, and, secondly, it was developed at a time when considerable differentiation had taken place between the different branches of trade. A class of merchant exporters, who were not necessarily either producers or dealers concerned in domestic trade, had come into existence. These merchant exporters soon realized the need for collective action. Those primarily concerned with the wool trade formed as we have seen, the Merchant Staplers, while the others, who were mainly traders in cloth or in other commodities rather than wool gradually organized themselves as the Merchant Adventurers. It is not clear how far the two groups were distinct in the early stages, but they soon became so and relations between them were not always good.
Early in the thirteenth century a number of English merchants trading in Antwerp grouped themselves together under the name of the Fraternity of St. Thomas of Canterbury, and it appears that in 1248 they obtained certain privileges from the Duke of Brabant.* By the end of the century their organization had taken a more definite shape and in 1296 the Duke granted a more formal charter to ‘the merchants of the realm of England’ trading in Antwerp.*The Merchants already had a Mayor and a Court, elected by themselves in Antwerp, but they had as yet no definite organization in England. It was not indeed until late in the fourteenth century that their existence was acknowledged and their privileges confirmed by Edward III, while in 1409 the Crown gave a charter to what was presumably a wider group of English merchants trading to Holland, Zeeland, Brabant and Flanders. In the meantime, two other groups had begun to trade in Scandinavia and Germany and they, too, were granted charters by Henry IV, while English merchants trading in Danzig received a grant from the Grand Master of the Teutonic Order recognizing them as ‘a community of the English nation’ and authorizing them to elect their own Governor.*
In so far as these merchants were yet organized in England at all, they seem to have formed an inner group in the Mercers Company. That Company supplied what would today be called secretariat arrangements, but by the middle of the fifteenth century the merchant exporters were beginning to meet separately and in 1485 in a petition to the Crown, they designated themselves ‘Merchant Adventurers, Citizens of the City of London, into the parts of Holland, Zeeland, Brabant and Flanders’.*
Rivalry between the Merchant Adventurers and the Staplers soon made itself felt. The wool trade was now declining and the Staplers hoped to participate in the export of cloth, but their claim was strongly resisted and although the Staplers at first seemed likely to win the struggle, in 1504 the Star Chamber drew a clear line of demarcation between the two bodies. The effect of this decree was that Staplers who wished to export cloth, or to carry on foreign trade elsewhere than in Calais, must pay the appropriate entrance fee and join the Merchant Adventurers.*
Henry VII took a balanced view of the rights of the Merchant Adventurers and their rivals. On the one hand he firmly supported the Adventurers in the suppression of interlopers, who sought to trade abroad without joining the Fellowship, and on the other hand he compelled the Merchant Adventurers to reduce the fees for the admission of new members---and it must be borne in mind that at this time any Englishman who chose to pay the fees could join the Adventurers and enjoy their privileges. Henry VII also gave the Adventurers a charter which put their organization on a more formal basis. The Company, which was given a monopoly of trade, was to have its headquarters on the Continent and to be governed by a Governor and twenty-four assistants elected by the merchants overseas. Members were forbidden to engage in retail trade.
Although the Mercers Company could be regarded as the hard core of the Merchant Adventurers, the Fellowship soon came to include members of other City Companies. As early as 1486 it had been laid down that the Mayor and Aldermen of the Merchant Adventurers were every year to choose two lieutenants, one of whom was to be a member of the Mercers Company, while the other was to be chosen from some trade other than that of the Mercers. The Mercers Company in fact dominated the London organization, but as merchants of other English cities began to be interested in foreign trade, there was considerable rivalry between them and the Londoners. Branches of the Merchant Adventurers were formed in a number of the provincial cities and the position was somewhat complicated by the fact that some of those branches received separate charters from the Crown. For a time some of them struggled for complete independence of London, but when that proved impracticable they fought inside the Company, rather unrealistically, for an equal share of trade. Henry VII, however, soon made it clear that the seat of authority was the London Governor in the Netherlands who was to be ‘the ruler of you all of the hole ffelyshipp’.* Nevertheless, the struggle continued for a time and Lipson quotes an account from the Newcastle Merchant Venturers of an occasion as late as 1548 when the Merchants of Newcastle were enjoined ‘to let no house or cellar to any Londoner for warehousing of his goods’.* These provincial attempts ultimately failed and the charter granted by Elizabeth in 1564 to the Merchant Adventurers left no room for doubt as to where authority lay. That charter laid down the constitution and organization of the Merchant Adventurers in greater detail than had been done previously. Its headquarters was to be abroad, where the Governor, his deputy and twenty-four assistants were to be elected, though according to Lipson it was found necessary at a later stage to stipulate that the concurrence of the London merchants of the fellowship should be required to any by-law or assessment.* The Governor and his colleagues were to exercise jurisdiction over Englishmen in places where the Merchant Adventurers operated and it was not long before they laid down strict rules of behaviour for members of the Company in the mart towns---and still stricter rules for their apprentices. In this respect they set a pattern imitated by the chartered companies later. Apprentices had to be in by an early hour at night, they were liable to fines for immorality or drunkenness, or for playing cards for excessive stakes; and it is amusing to note that the offences described and penalized included ‘knocking and ringing at men’s doors, beating at windows and consuming the master’s goods’. Any member or apprentice who shall ‘unreverently or undewtifully behave himself in woord or deed . . . or shal be contentious and undecently holde argument against the Govemour’,* was to be fined forty shillings. Admission to the Company was limited to sons of members or those who went through an eight years’ apprenticeship to a member, or persons who paid an entrance fine. From time to time the fine was increased and it was the growing exclusiveness of the Company---which only acquired the formal title of Merchant Adventurers of England in 1579---that gave rise to the hostility which eventually led to the deprivation of its privileges.
Although each member traded individually, a limit known as a stint was placed on the quantity of trade permitted to each merchant, discrimination being allowed in favour of those who had traded for a long period. The theory of the stint was that it made for fairness and prevented rich merchants from ousting their poorer competitors, but perhaps a more practical consideration---and one which attracted criticism---was that it limited the volume of trade and so kept up prices. Members were only allowed to trade in the Company’s mart towns and newcomers after 1497 had to trade personally and not through factors or servants.*
In return for these restrictions the Merchant Adventurers enjoyed substantial privileges. They were granted by the foreign ruler the right to hold Court in the mart towns; they paid little in the way of tolls or duties; and free houses or quarters at low rents were made available to them. Above all, to a great extent they ruled themselves under what might be called a kind of extra territorial jurisdiction. As Lipson points out their real strength lay in the bargaining power arising from the fact that if they chose they could move away and in this respect they were better placed than the Staplers. When the Merchant Adventurers left Antwerp rents fell by one half.*
These privileges naturally gave rise to jealousy both in England and abroad and the Adventurers had to struggle first with the Hanseatic League and other foreign traders and then with the rising tide of free trade thought in England.
The Hanseatic League
The Hanseatic League was in origin merely a loose commercial alliance of a number of the great trading cities of Germany and the Baltic Seas. It consisted of three wings whose policies did not always coincide. In the west the Rhine towns were under the leadership of Cologne; in the centre of the League, Lübeck became dominant at an early stage; while in the east, Danzig and Novgorod were the centres of the East Prussian trade. The Hansards established residence and obtained franchises in many countries of Europe and as early as 1157 the Cologne group secured privileges in England from Henry II. Their position was strengthened when they contributed towards the ransom of Richard I.* A few decades later Henry III granted them permission to buy and sell freely anywhere in England and to continue exempt from all tolls and customs in the City of London.* Similar privileges were extended in the middle of the thirteenth century to merchants from Lübeck, Hamburg and other Hanse towns. They were allowed to form corporate organizations, to elect their own aiderman and assistants for jurisdiction over their members and they also had the privilege of electing one of the City aidermen to be their magistrate, concerned with disputes between them and Englishmen. Their headquarters was known as their Guildhall, but it is not clear whether or not in the early stages the Hanses from the different groups shared a common organization and office. In 1320 they were able to rent the house known as the Steelyard, on the site of the present Cannon Street station.* They also established---and were indeed required by the Crown to establish---Hanses in other English towns where they traded.
The privileges and preferences enjoyed in England by foreigners were increasingly resented by English merchants and Edward III therefore found it necessary to impose limitations or to enforce long-standing restrictions and he directed that aliens must reside with denizen hosts---though this apparently did not apply to the Hansards---and must dispose of their wares within forty days of their arrival in England.
In the middle of the fourteenth century the attack of the Hanseatic towns on Scandinavia resulted in a new sense of solidarity in the League, and the League was transformed from a mere commercial alliance into a powerful political and military entity. English merchants were now trying to establish direct trade with Danzig and other Baltic ports and to demand reciprocity in the Hanseatic towns and in 1380 the League recognized the right of the English to trade in the Hanseatic towns. Unfortunately, relations were then strained first by the insistence of Edward III on imposing on the Hansards a ‘subsidy’ or increased charge of tonnage and poundage---contrary it was alleged to the provisions of Magna Carta---and secondly by the piratical attacks on Hanseatic fleets which were a characteristic of English activities for the next hundred years.
On the other hand there were many allegations of ill-treatment of English merchants in Hanseatic towns. In Danzig the dominant position of the English in the cloth trade led to many unfriendly acts against them and in Lübeck too they were undoubtedly oppressed. These factors, together with the chaos and the spirit of lawlessness engendered by the dynastic struggles in England, led to an almost continual unofficial war between English seamen and the Hanseatic fleet. Reprisals and counter reprisals followed and the privileges of English and Hanseatic merchants in their respective spheres of trade were alternately cancelled and restored.
In the last half of the fifteenth century two factors temporarily lessened the tension. First, the defeat of the Teutonic Knights---who could be regarded in a sense as the power behind the League---weakened the Hansards, and secondly, the help given by the League to Edward IV in regaining his throne, gave them a strong claim on the good will of the English crown.* This resulted in 1474 in the Treaty of Utrecht which provided for a vague kind of reciprocity between the privileges of the Hansards in England and those of the Merchant Adventurers in the Hanseatic towns.
The better feeling did not last long. Almost at once there were complaints on the one hand of trading malpractices by the Hansards in England and on the other hand of fraud and profiteering by English merchants abroad. Salzman tells us of a case where Thomas Wallis
had bought eight pieces of cloth from Richard Packe of Colchester for £32 and had taken them to Lisbon. There he sold them to a merchant, who after he had examined them refused to keep them. Two were publicly burned by the City officials to the shame of the poor English merchants and the other two were so shrunk and full of holes that the only thing he could do with them was to cut them up into garments for work people.*
This particular case did not affect the Hanseatic League, but it typified the unsatisfactory quality of many of the goods sold abroad by English traders at this time. The English in fact acquired a bad reputation and their presence in the towns of Germany was resented. At the same time trade disputes led to the interruption of trade between England and the Netherlands and this seriously interfered with the business of the Hanseatic towns as well as of the Merchant Adventurers. The Magnus Intercursus of 1495 between England and the Netherlands ended this particular series of disputes, but did not long allay the ill-feeling between the Hansards and the English. Public irritation in England mounted until, in 1552, a Privy Council decree put an end to the Hanseatic privileges on the ground that the admission of all and sundry to the merchants of the Hanse resulted in serious loss to the English customs revenue and that Hanseatic merchants ‘coloured’ the goods of non-merchants---that is to say passed them off as their own. The Privy Council also found that the Hanseatic towns did not grant English merchants the reciprocal rights provided for by the Treaty of Utrecht.* The Hanseatics regained their privileges in Queen Mary’s reign but finally lost them under Elizabeth.
Free Trade and Monopolies
The Merchant Adventurers, who at this time were energetically pushing their trade in Northern Europe, had thus triumphed over the Staplers and the Hanseatic League, but they now had a greater danger to face. As the years passed they had become more and more exclusive, and foreign trade was passing into a relatively small number of hands. This exclusiveness, together with the success of the Adventurers in restraining interlopers from participating in foreign trade, had given rise to much resentment and at the beginning of the seventeenth century a great attack was launched against them in the House of Commons. In terms the debate on the Free Trade Bill was on the issue of free trade versus monopoly, but in reality it was an attempt on the part of outsiders to force their way into the charmed circle and in that attempt they were supported by provincial merchants who objected to the dominance of the Londoners. The arguments on both sides were much the same as those which have been used ever since, whenever a similar issue has arisen. The Merchant Adventurers contended that they had provided training and experience; that their monopoly enabled them to get the best prices for English goods and so benefited the producer; that their existence prevented the growth of ‘a loose and straggling trade’ and ensured the maintenance of a high quality of English goods; that they advanced the arts of navigation and shipping; and that they gave valuable financial and diplomatic support to the Crown. The opponents of the Company alleged that the monopoly enjoyed by the Merchant Adventurers had enabled them to cut down their price to the clothiers; that at the same time the Adventurers sold abroad at high prices and so stimulated Dutch competition; that there could be no justification for the monopoly now that trade was well-established and therefore free from undue hazards; and that it was an unreasonable restriction on the natural right of non-members;* because ‘all free subjects are born inheritable . . . to the free exercise of their industry’. It was further argued that an open trade was ‘the breeder and maintainer of ships and mariners’, and that the trade was in practice in the hands of a small côterie.*
In spite of this formidable indictment the Free Trade Bill was rejected and the Company’s charter was renewed, but the free traders returned to the attack in 1624 with a charge that the Merchant Adventurers levied unlawful impositions on cloth. The charge was supported by a resolution of the House of Commons, but here again it is clear that the motive behind the attack was not a belief in anything which could genuinely be regarded as free trade, but jealousy on the part of provincial merchants led by the men of Newcastle. ‘God had no sons to whom he gave the benefits of the earth but in London.’* It was said that the Merchant Adventurers insisted on free trade at home, that is, on the right to trade in the provinces and outbid local merchants, but nevertheless defended monopolies abroad.
The attacks continued and gathered intensity as the century wore on. In 1689 the so-called Free Traders finally triumphed and an Act of Parliament threw the cloth trade open to all persons, except that the monopolies of the Russia, Eastland, Levant and Africa Companies in their respective areas were maintained.
It is not necessary for us to pronounce on the debatable issue of the advantages and disadvantages of monopolies. The point relevant to our purpose is that the Staplers and the Merchant Adventurers set the pattern which was to a great extent followed by the Chartered Companies of the sixteenth and seventeenth centuries---monopoly, a constitution in accordance with a royal charter or Act of Parliament, and the right to exercise jurisdiction over its members or over other Englishmen in the foreign marts were its main characteristics. It was possible to justify this specially protected position while trade was being pioneered, but when sufficient time had been given for the sponsors to enjoy profits commensurable with their risks, there was no need to continue their privileges and the monopolies came to an end. We must now turn to a detailed study of the Chartered Companies formed according to the models we have described.
⁎ ⁎ ⁎
Part 2 — The Trading Companies
Chapter 2
The Russia Company
Introduction
The minute books of the Russia Company for the period up to 1660 were destroyed in the Great Fire and other documents of the Company were also destroyed in a fire in 1838. Fortunately, accounts of some of the most important expeditions to Russia and Persia have been preserved in Hakluyt’s Voyages or in two volumes published by the Hakluyt Society,* while much other relevant information is scattered throughout a large number of State papers. From these sources it is possible to make a fairly comprehensive review of the history of the Company from its commencement until the end of the seventeenth century, after which it ceases to be of much importance for our purpose in this book.
The First Voyage to Russia
A distinguished modern historian has observed that the Tudor Englishman ‘was not by nature or tradition an explorer or a conquistador . . . He had no desire to search out the distant spaces of the earth or to found a new England beyond the seas.’*On this view, the spirit of adventure which characterized the Elizabethan Age was not the result of any thirst for knowledge but of the desire for trade, together with an instinctive fondness for buccaneering or the more respectable forms of piracy. Whether this theory be correct or not, it is clear that the driving force behind the pioneers of the Russia venture was the need to find markets for the newly created surplus production of England. The trade with neighbouring countries was either in foreign hands or was fully exploited by the Staplers and the Merchant Adventurers. It was necessary to go further afield and the techniques which would make this possible had now been developed. England still lagged behind in the science of navigation, but was well advanced in the arts of shipbuilding and seamanship, and her people had had ample experience of the various forms of business co-operation which made it possible to embark on ventures beyond the resources of individuals. Moreover, a persistent adverse balance of payments during the middle of the sixteenth century gave the Crown a powerful motive for encouraging the expansion of overseas trade. Since the routes to the East and West were mainly in Spanish and Portuguese hands, the thoughts of Englishmen turned first to the North.
Circumstances were thus propitious when, in 1553, two hundred and forty ‘grave Citizens of London and men of great wisedome, and carefull for the good of their Countrey’* banded themselves together under the governorship of Sebastian Cabot to promote a voyage for the discovery of a North East passage to Cathay and for the establishment of trade wherever possible. The voyage was licensed by the Crown and three ships---the Edward Bonaventure, the Bona Esperanza and the Bona Confidentia, of 160, 120 and 90 tons respectively, were built for the purpose. Sir Hugh Willoughby was appointed Captain General, with Richard Chancellor as Pilot General. Willoughby was not a seaman but ‘a most valiant Gentleman, . . . with singular skill in the services of warre’,* while Chancellor was a skilled navigator---‘a man of great estimation for many good partes of wit in him’.* The most meticulous instructions were given by Cabot for the equipment of the vessels and the conduct of the merchants and crew. They were ‘not to credit the faire words of the strange people’;* they were to note carefully what commodities existed or were desired in their ports of call; they were not to be unduly afraid of strangers wearing the skins of lions or bears---‘for such be wome oftentimes more to feare strangers, then for any other cause’, and above all there was ‘to be no blasphemy or detestable swearing or ungodly talk’. Perhaps more important than these injunctions was the care taken in providing an adequate store of provisions for eighteen months since ‘it was doubtfull whether there were any passage yea or not’.*
Thus equipped and furnished with letters from Edward VI ‘to the Kings, Princes and other Potentates, inhabiting the Northeast partes of the worlde, towards the mighty Empire of Cathay’* the expedition left Gravesend in May 1553 for a destination vaguely described as northwards.
A few months later violent storms off the coast of Norway scattered the little fleet. The Bona Esperanza and the Bona Confidentia endured much evil weather, but ultimately reached Arzina in Lapland where, some time in 1554, Willoughby and the entire crew were frozen to death. Chancellor, in the Edward Bonaventure, ‘becoming very pensive, heavie and sorowfull, by this dispersion of the Fleete . . . shapeth his course for Wardhouse in Norway, there to abide the arrivall of the rest of the shippes’.* After a seven days stay in Wardhouse (Vardö)* he abandoned hope of seeing them and proceeded to Finland and thence to St. Nicholas in the neighbourhood of the modern Archangel. Here he learnt that the country was called Russia or Muscovie and with the help of the local Governor he embarked on a journey ‘which was very long and most troublesome’, by sled to Moscow.
Chancellor’s descriptions of Moscow and of the ceremonies at dinner at the Tsar’s palace are fascinating indeed.
The Mosco it selfe is great: I take the whole towne to bee greater than London with the suburbes: but it is very rude, and standeth without all order. Their houses are all of timber very dangerous for fire. There is a faire Castle the walles whereof are of bricke, and very high: they say they are eighteene foote thicke, but I doe not belieeve, it, it doeth not so seeme, notwithstanding I doe not certainely know it: for no stranger may come to view it.* At dinner by the cupborde stoode two gentlemen with napkins on their shoulders, and in their handes each of them had a cuppe of golde set with pearles and precious stones, which were the Duke’s owne drinking cups; when he was disposed, he drunke them off at a draught. And for his service at meate it came in without order, yet it was very rich service. The number that dined there that day were two hundred persons and all were served in golden vessell.*
Then comes a delightful touch.
Before dinner hee changed his crowne, and in dinner time two crownes; so that I saw three severall crownes upon his head in one day. And thus when his service was all come in hee gave to every one of his gentlemen waiters meate with his owne hand, and so likewise drinke . . . When dinner is done hee calleth his nobles before him name by name, that it is wonder to heare how he could name them, having so many as he hath.
Chancellor was a natural diplomat. His mission was a success and in 1554 the Tsar, Ivan the Terrible, despatched him back to England with a letter to Edward VI, whose death was not yet known to Chancellor. The Tsar declared his willingness to receive English ships and merchants and asked for an ambassador from England who could negotiate a treaty ‘whereby your countrey marchants may with all kinds of wares, and where they will . . . have their free Marte with all free liberties through my whole dominions’.*
Chancellor, who obviously had an observant eye, had been much impressed with the possibilities of trade with Russia. Flax, wax, hides, fish and furs could be bought and England could hope to sell cloth---this opportunity being particularly favourable since the Dutch had lost what trading privileges they had enjoyed.
The Charter
This report was sufficiently encouraging to justify further attempts at opening up trade, but it was first necessary to put the affairs of the licensees on a more regular basis and to ensure that they would be granted the monopoly against all other Englishmen. The charter granted on 5 February 1555 by King Philip and Queen Mary to the ‘Marchants Adventurers of England for the discovery of lands, territories, Iles, Dominions and Seigniories unknowen, and not before that late adventure or enterprise by sea or Navigation, commonly frequented’* met all these needs. The preamble made it clear that it referred to the countries to the Northward, North East and North Westwards, thus covering all search for the North East or North West passage. The original members of the Company consisted of two women and 199 men, including the Lord High Treasurer and several other Privy Councillors.
The charter itself is of particular interest as the first of its kind. It provided that the Company was to be administered by one or two governors, four consuls and twenty-four assistants all of whom must be members of the Company and who would be elected annually by the Company---except that the names of the first incumbents were specified in the charter. The Company was granted ‘perpetuall succession and a common Seale’ and was to be ‘capax in lawe’, competent to acquire property, ‘to implead and be impleaded, to answere, and to be answered, to defende and be defended’, and in short to exercise the legal rights of a corporation. It was authorized to sail freely within the regions described above, ‘to subdue, possesse and occupie, all maner cities, townes, Isles and maine lands of infidelitie’, and to plant the ‘banners, standards, flags and Ensignes of the Crown’ in newly found lands. Most important of all, persons other than members of the Company were forbidden to seek trade in the areas covered by the charter and the Company’s officers were authorized to defend themselves against interlopers. These prohibitions, of course, only applied to subjects of the Crown. The Company was also empowered to fine or publish its members ‘for any offence touching the same fellowship and commonaltie’ and for this purpose a serjeant was to be appointed.
Early Expeditions to Russia
The charter did not specify whether the Company was to be of the regulated or joint stock type, but the nature of the enterprise clearly indicated that it should be the latter, and in 1555, since the initial capital had been partially dissipated by the loss of two ships, a further call on the members was made. A second expedition, consisting of the Edward Bonaventure and the Philip and Mary, with Chancellor at its head, left England in May 1555 with a letter to the Tsar, in which Chancellor, George Killingworth, and Richard Gray were authorized to negotiate with the Tsar as to the privileges to be granted to the Company in Russia.
Hakluyt reproduces a vivid description by Killingworth* of the gracious reception of the party by the Tsar and provides many human touches---as when Killingworth records ‘We be all in good health save onely William our cooke who fell into the river out of the boate and was drowned’, or when he states that it was exceptionally warm for the time of year. The mission was successful and although some doubt has been cast on the accuracy of Hakluyt’s record of the privileges obtained, it seems that the Company did in fact obtain the right to trade free of all duties, and to appoint a chief factor with full jurisdiction over Englishmen in Russia, together with the right to demand assistance from Russian officials in enforcing that authority. The Company was also promised speedy justice in disputes between the Company or its officers and subjects of the Tsar. The considerations which led the Tsar to grant the Company this exceptionally favourable treatment were the desire to open up contact with the West without interference from the Baltic Powers and the possibility of obtaining from England arms, artisans and goods for the imperial household.*
In April 1556 the Company sent a third expedition to Russia. It again consisted of two ships, the Edward Bonaventure and the Philip and Mary, and on its return voyage it was accompanied by the first Russian ambassador to England, Osep Napea. It was then under the command of Chancellor and included not only the two ships of the outward voyage, but also the Bona Esperanza and the Bona Confidentia whose crews the 1555 expedition found frozen to death. Those two ill-fated vessels were lost on the voyage to England and the Edward Bonaventure was wrecked ‘within the Scottish coast in a Bay named Pettislego’.* Chancellor, using all carefulnesse for the safetie of the bodie of the sayde Ambassadour and his trayne,. . . taking the boat of the said ship,. . . the same boat by rigorous waves of the seas was by darke night overwhelmed and drowned.
Chancellor and most of the crew were lost but ‘the noble personage of the saide Ambassadour. . . was with much difficultie saved’. He then fell a prey to the
rude and ravenous people of the Countrey thereto adjoyning . . . who rifled, spoyled and caried away . . . apparell, ordinance and furniture belonging to the Companie, in value of one thousand pounds.*
The Ambassador was well received at Court and during his stay in England was treated as the honoured guest of the Company, but nothing concrete appears to have emerged from his discussions except an apparently generous but somewhat meaningless declaration by King Philip, that Russian merchants could trade in England on payment of the same customs duties as any other foreigners.
From now onwards the Company sent regular expeditions to Russia. The voyages were of necessity governed by the seasons and the normal time table seems to have involved departure from London in May for St. Nicholas---where the goods for sale were taken up the Dwina, and then by land to Vologda, Yoroslave and Moscow---and return to England by September. Cloth and miscellaneous products were sold and in return the Company brought to England tallow, wax, flax, furs, cables and cordage.* The Tsar honoured his promises to the Company and in 1567 its privileges were extended to include a complete monopoly of the trade through St. Nicholas, even against merchants of other nations.
In the meantime, some important developments had taken place. First, in 1558, Russia captured the port of Narva on the Baltic and the Company naturally claimed that trade there was covered by its monopoly. In fact the Company does not appear to have been at all anxious to open up this channel of trade, but when English interlopers began to do so, it challenged their right on principle. After prolonged legal arguments, in 1566 an Act of Parliament extended the Company’s monopoly to include Narva. The matter was not destined to be of much practical importance since in 1581 Russia lost Narva to the Swedes. The Act also provided that outsiders could join the Company by contributing to its capital.
Expeditions to Persia
The second important development in this period was the attempt to extend the trade through Russia to Persia. In 1557 Anthony Jenkinson, an experienced traveller who had already secured trading privileges for English merchants from the Sultan of Turkey,* accompanied Osep Napea back to Moscow for the express purpose of obtaining the Tsar’s permission to take a trading expedition to the Caspian and on to Bokhara. The Tsar at this time was at the zenith of his power; he had conquered Livonia and secured an outlet to the Baltic; he had defeated the Swedish army; and of greater importance for our purpose, he had defeated the Tartars and made himself master of the Volga right down to the Caspian. He granted the necessary permission and in April 1558, with two English servants of the Company and a Tartar interpreter and fortified with a letter from the Tsar, Jenkinson embarked on an arduous and hazardous journey of which he wrote a vivid description.* His journey through Kazan and Astrakhan took him through a strange land of nomads, of whose way of life he thus writes.
They eate much flesh, and especially the horse, and they drinke mares milke, wherewith they be often times drunke; they are seditious and inclined to theft and murther. Corne they sowe not, neither do eate any bread, mocking the Christians for the same, and disabling our strengths, saying we live by eating the top of a weede, and drinke a drinke made of the same.* He that will travel those wayes must carye with him an hatchet, a tinder box and a kettle to make fire---for there is small succour in these parts.*
He tells a tale of grinding poverty and says
I could have bought many goodly Tartars children,. . . of their owne fathers and mothers, to say, a boy or a wench for a loafe of bread woorth sixepence in England,. . . but we had more need of victuals at that time then of any such other merchandise.*
After a journey of some months during which the party was first storm-tossed on the Caspian, then befriended by the Khan of Urgence, then engaged in bitter struggles with a large band of armed robbers---and at one stage only saved from Christian-hating Tartars by a Tartar holy man who swore that the party contained no Christians---they arrived on 23 December at the city of Bokhara in the land of Bactria. There they were well received by the King who nevertheless went away to the wars, owing Jenkinson money for goods he had bought. Bokhara was a great trading centre, but trade from China was sadly dislocated by the Tartar wars and at that time Persian trade was directed to Syria rather than to the Caspian. Altogether Jenkinson reported that there was ‘no hope of any good trade to be had there worthy the following’. Jenkinson therefore planned to go on to Persia, but his journey was
let by divers occasions: the one was, the great wars that did newly begin betwixt the Sophie, and the kings of Tartaria, whereby the waies were destroyed: . . . also all such wares as I had received in barter for cloth, and as I tooke perforce of the king, & other his Nobles, in paiment of money due unto me, were not vendible in Persia: for which causes, and divers others, I was constrained to come backe againe to Mare Caspium the same way I went.*
On 8 March 1559 Jenkinson therefore
departed out of the said Citie of Boghar, being a Caravan of 600 Camels; and if we had not departed when we did, I and my company had bene in danger to have lost life and goods. For ten daies after our departure, the king of Samarcand came with an armie, and besieged the said Citie of Boghar.*
In spite of the dislocation of trade, the expedition appears to have been commercially profitable and presumably for this reason the Company decided to persevere in exploring the possibilities of trade with Persia via Russia. In May 1561 the indefatigable Jenkinson again set out on his travels from England. He took with him a somewhat fulsome letter to the Tsar from Queen Elizabeth, together with instructions from the Company to present wine, or cloth of gold, scarlet, or plate to the Tsar before seeking his blessing for the journey to Persia. Jenkinson also took with him jewels and precious stones for sale in Moscow, and kerseys to be sold in Persia---though the Company was ‘uncertaine what vent or sale you shall finde in Persia or other places where you will come’.* When Jenkinson arrived in Moscow an amusing struggle over protocol took place. The Tsar’s secretary demanded delivery of the Queen’s letter, while Jenkinson insisted on handing it personally to the Tsar. Jenkinson’s persistence was successful and he was not only permitted to proceed to Persia, but was furnished with letters of recommendation to various potentates. In November 1562 he arrived at the Persian court of Kazan. His hope of persuading the Shah to grant permission to the English to trade in Persia was based largely on the enmity between Persia and Turkey---since the latter country, in conjunction with Venice, was the most important trading nation in that area---but unfortunately for Jenkinson, Turkey and Persia had just made peace. No agreement could therefore be reached, but Jenkinson satisfied himself during his stay there that ‘great abundance’ of spices could be bought from Indian merchants there.
In the following year the Company sent another expedition from Russia into Persia. The leader, Thomas Alcock, was murdered, but a fair amount of trade appears to have been done and Richard Cheinie, who reported on the voyage, considered the prospects good. He had experienced many difficulties and seemed to think, for reasons which are not quite clear---though they may have been connected with illicit private trade by the Company’s servants--- that he was not getting a fair deal.
I had sowen the seede, and other men have gathered the harvest: I have travailed both by lande and by water full many a time with a sorrowfull heart, as well for the safegarde of their goods as yours, how to frame all things to the best, and they have reaped the fruites of my travaile.*
In the record of the next expedition to Persia, in 1565, natural human jealousy appears very prominently. Arthur Edwards, one of the Company’s factors in Russia, was obviously disappointed at not being put in charge of the expedition and writes rather pathetically, ‘For my part I am willing, as also have bene and shalbe content to submit my selfe under him, whom the Agent shall appoint, although he were such a one as you should thinke in some respects unmeete.’* The leader, Richard Johnson, carried out his mission successfully and in January 1566 he obtained a grant of valuable privileges from the Shah. The Company was to be entitled to trade anywhere in Persia free of all customs duty and to receive help in the matter of transport. In return the Shah prepared a list of the commodities which he particularly desired the Company to bring to his domains. They were in fact luxury goods from which Edwards considered little profit would be derived, but they must be supplied ‘to satisfy the prince’s mind’. As regards the more ordinary articles of trade Edwards reported that kerseys, other kinds of cloth, tin and copper, could be sold, while silk, spices and yew for bow staves could usefully be bought for consumption in England.
Difficulties in Russia
So far, the Company had done well at the courts of both Russia and Persia, but in Russia a more difficult period was about to begin. In return for the privileges he had granted to the Company, the Tsar was looking for some return other than trade and was much influenced by the hope of securing arms from England. It soon began to be believed in Europe that England was in fact supplying his military requirements and in the sixties protests were made to Elizabeth by Denmark, the Emperor, Poland and some of the Hanseatic towns. The usual diplomatic denial carried little conviction and even when Elizabeth specifically prohibited the export of arms in 1561, there was still the possibility of evasion of the order. The facts are not altogether clear but a reasonable conclusion is that Elizabeth herself was in such serious need of arms and military stores that it was unlikely that export can have been on any significant scale.*
The Tsar also wanted artificers and professional men from England. Elizabeth was able to comply with this request to a limited extent, and this was apparently one of the reasons for the confirmation and extension by the Tsar in 1567 of the Company’s privileges. Before long, however, more embarrassing demands were made. The Tsar asked for an offensive and defensive alliance in which England ‘would be ffrend to his ffrends and enemy to his enemyes and so p. contra.’* Such an alliance was clearly out of the question in the state of international affairs and English foreign policy at that time, yet an unfavourable answer might result in the termination of the privileges of the Muscovy Company. Elizabeth therefore temporized and in 1568 sent as Ambassador one Thomas Randolfe who was instructed to do whatever was possible to strengthen the Company’s position, but to say nothing at all about a political alliance. Although he was well treated, he suffered at first from the same kind of isolation from contact with the Russian people with which we have become familiar in modern times.
Two gentlemen were appointed to attend upon me, the one to see us furnished of victuals, and that we lacked nothing of the Emperors allowance: the other to see that we should not goe out of the house, nor suffer any man to come unto us, in which they left nothing undone that belonged to their charge.*
After waiting seventeen weeks he was received graciously by the Tsar who showed goodwill by saying ‘I dine not this day openly for great affaires I have, but I will send thee my dinner’. Randolfe was granted two more interviews and obtained some useful extensions of the Company’s privileges---perhaps the fullest and most favourable that the Company had ever received,* including even the right to smelt and export the iron which the Company’s servants apparently hoped to discover. Its previous monopoly was strengthened against all outsiders, English or otherwise. When he returned to England in 1569, he was accompanied by a Russian Ambassador, Andrew, the Savin, who was to press the Tsar’s request for a political alliance. Once again Elizabeth temporized and sent a friendly but meaningless reply. The Tsar was now enraged and he not only withdrew the Company’s privileges but sequestered its goods. There may, however, have been other reasons for the suspension of the Company’s privileges apart from Elizabeth’s answer and there is some ground for thinking that the Company’s servants had developed the habit of charging excessive prices and were therefore less welcome than before.
For two years trade was at a standstill, but in 1571 once again the superb diplomacy of Jenkinson was again called into action. His task was far from easy. On his arrival from St. Nicholas he was warned that ‘the princes displeasure was such against me, that if ever I came into his countrey againe, I should loose my head, with other words of discouragement’.* He nevertheless sought an interview with the Tsar but thanks first to an outbreak of the plague and then to the absence of the Tsar at war, had to wait eight months during much of which time he was ‘so straitly kept, that none of our nation or other might come or sende unto me, nor I to them’.* His interview must have been most harassing, for the Tsar complained bitterly that Randolfe and other messengers from the Queen had talked only of ‘merchants affaires’ and had ignored ‘princely affaires’---and said the Tsar, ‘first Princes affaires are to be established, and then Merchants’.* The Tsar was nevertheless mollified by the Queen’s action in sending Jenkinson again and declared roundly that ‘if the Queene our sister had not sent thee Anthony unto us at this present, God knoweth what we should have done to the said merchants’.* The Company’s privileges were partially restored, though instead of their previous exemption from customs duties it was laid down that they would have to pay half the normal rate. A number of particular grievances were also redressed. For the time being the Tsar appeared willing to let the matter of a political alliance remain in abeyance.
We doe now leave all these matters and set them aside for the time, because our minde is nowe otherwise changed, but hereafter when occasion shall moove us to the like, wee will then talke of those matters againe.*
Jenkinson’s long years of service were now at an end. He writes :
And thus being weairie and growing old I am content to take my rest in mine owne house, chiefly comforting myselfe in that my service have been honourably accepted and rewarded by her Maiestie and the rest by whom I have been ernploied?*
The Company had some difficulty in raising the necessary capital to resume its Russian ventures, but once that had been done it continued to trade under fairly satisfactory conditions for the next ten years. It is true that the honeymoon period of relations with the Tsar was at an end and that for some time Ivan Vasilovich returned frequently to his three main complaints. He alleged that the Company’s merchants had behaved badly, in particular by selling retail and by importing the goods of other nations contrary to the agreement---and what was perhaps worse they ‘had spoke contemptuously of the Orthodox Church’. He went on to complain that English soldiers were fighting in the army of the King of Sweden, and, finally, he reverted to Elizabeth’s failure to respond to his request for an alliance. Nevertheless, the matters of contention seem to have been allowed to drop and the Company was allowed to continue as before.
A new channel of trade to Russia was now opened up by English merchants, not members of the Company, who traded at Vardo in Lapland and so indirectly with Russia. The trade was the subject of interesting litigation between the promoters and the Company, but it is doubtful if it made inroads in the Company’s trade as serious as those resulting from the private trade of the Company’s servants or the competition of interlopers and foreigners.
Discontinuance of the Persian Trade
On the credit side of the account the Company had been able to negotiate favourable conditions for the trade to Persia via Russia and the Shah had appointed an agent who was to collect and pay debts due to the Company. The trade was, however, attended with considerable difficulties, well illustrated by the experience of a mission to Persia, under the charge of Thomas Bannister and Richard Duckett, which included also twelve other Englishmen and forty Russians. The mission, which lasted from 1569 to 1573, successfully repelled Tartar attacks, but was delayed in Astrakhan by wars between the Turks and the Tartars. It nevertheless did profitable business in Tabriz in spite of competition from Armenia and of dishonesty on the part of some of the Company’s servants. In 1571 Bannister and four others of the party died, apparently from some water-borne disease and Duckett had great difficulty in obtaining possession of the Company’s goods after Bannister’s death. On the return journey in 1573, the party was again attacked by Tartars and the bulk of the merchandise was looted. The Tsar pitied ‘the mightie losse that they had sustained by his owne rebellious people and subjects’, but his pity did not lead him to heed Elizabeth’s request for compensation.*
For the next five years the Company discontinued its attempts to trade with Persia through Russia, but by 1578 the Company was anxious to reopen the trade and was considering the possibility of sending experts to learn the secrets of making Persian armour or carpets. Trade was in fact resumed in 1579 but in 1581 it was finally discontinued, on account of the disturbed condition of the area, and the difficulty of securing payment of debts.
The two leading authorities on the subject, Willan and Scott, have arrived at different conclusions as to the profitability of the Persian trade. Scott considers that during the best years of the Persian expeditions dividends of 300 and 400 per cent may have been paid and he states that even the last expedition, in which two-thirds of the cargo was lost in shipwreck, was profitable.* Willan maintains that this view is a misinterpretation of the evidence.* Be this as it may, at the time of the discontinuance of the Persian trade the Company was in financial difficulties.
Further Difficulties in Russia
In the eighties, the Company’s relations with the Tsar again became difficult, chiefly because he returned to his proposal for a political alliance with England and sent an ambassador to propose that it should be cemented by a marriage with a relative of the Queen. Elizabeth again evaded the issue but sent Sir Jerome Bowes to discuss the whole matter with the Tsar. Fortunately for our purpose Hakluyt has recorded an account of this mission. His party was impressive and consisted of ‘forty persons at the least, very honourably furnished, whereof many were gentlemen, and one Mr. Humfrey Cole a learned preacher’.* Bowes soon discovered that Dutch competitors had been at work before him and had gained the ear of ‘three of the chiefest counsellors to the Emperour’. Here another amusing struggle over protocol took place, the matter of controversy being as to whether Bowes’ party or the Tsar’s representatives should dismount first.
Two miles on this side Mosco there met the ambassador foure gentlemen of good account, accompanied with two hundred horse: who after a litle salutation not familiar, without imbracing, tolde him that they had to say to him from the Emperor, and would have had him light on foot to have heard it, notwithstanding themselves would still have sit on horse-backe: which the ambassador soone refused to doe, and so they stood long upon termes, whether both parties should light or not: which afterwards agreed upon, there was yet great nicenesse whose foot should not be first on ground.*
In due course Bowes was granted an audience and was given an extremely uncomfortable time by the Tsar who, ‘with a Sterne and angry countenance tolde him that he did not reckon the Queene of England to be his fellow’.* Bowes took great offence and defended the honour of the Queen to such purpose that the Emperor ‘tolde the ambassadour, that were he not an ambassador, he would throw him out of the doores’. Bowes has been criticized by Willan and others as being irascible, but his blunt talk seems to have had a considerable effect on the Tsar, who soon sent for Bowes again and became altogether more conciliatory. This new mood was illustrated by the fact that the Tsar now
caused to be set downe in his owne presence, a new and much larger allowance of diet for the ambassador then he had had before . . . This diet was so great, as the ambassadour often times sought to have it lessened, but the Emperour would not by any meanes.*
Bowes was successful in securing the redress of some of the Company’s grievances, but he was not able to hold out any hope of a suitable marriage for the Tsar. In March 1584, the Tsar, Ivan Vasilovitch, died, and was succeeded by his son, Theodor, but the real power was wielded by Boris Godunov. The new Tsar considerably curtailed the privileges of the Company, but in 1586 the Company’s freedom from customs duties was restored, though its monopoly was not confirmed. Jerome Horsey was sent from Moscow to bear the news of these ameliorations to Queen Elizabeth and an amusing mistake connected with his mission is related by Bond.* The Tsarina was childless and had asked for the despatch from England of ‘some doctoritza that had skill in women’s matters, to make them conceive’, but by mistake Elizabeth sent a midwife. The privileges granted were not in fact honoured and in 1588 Giles Fletcher was sent to negotiate with the Tsar again. At the outset Fletcher was badly received and ‘his allowance for vittails’ was ‘so bare and base’, that he only accepted it to ‘avoid cavillation’.* Fletcher was not daunted and frankly pointed out that if the English stopped trading at St. Nicholas and if Sweden blocked the exit from Narva, the Russians would have no channel for sale of their most important commodities. He secured the confirmation of some of the Company’s former privileges, but no monopoly of trade at St. Nicholas was granted, either against Englishmen or others and the Company was required to pay customs duty at half the standard rate. Fortunately, Boris was well disposed to the Company and the Company did not in fact pay the duty, though its legal liability to do so was not abolished until 1596, when Boris was Tsar.
Danish Complications
The Company also had some difficulty, in this period, over its relations with Denmark. Ships passing through the Sound into the Baltic had for long been required to pay tolls to Denmark---and clearly the opening up of a northern route to Russia in the fifties was bound to interfere with this source of Danish revenue. Denmark therefore made representations to Elizabeth asking her to forbid the trade to St. Nicholas, but this was obviously out of the question and the matter was dropped. There are various unreliable reports of interference by Danish warships with the English ships bound for St. Nicholas, but the issue did not become serious until the trade with Narva came to an end in 1581. The Danes then returned to the charge and international considerations led Elizabeth to recognize Denmark's claim to sovereignty over the northern seas and to pay 100 Rose Nobles to the King of Denmark for the right to use the route to St. Nicholas. In spite of occasional interference by the Danes with English shipping, on the whole the arrangement worked well. The Company was naturally required to reimburse the Crown for the sum concerned.
Organization and Finance
We must now retrace our steps and consider the organization and finance of the Company from its commencement. A difficulty here is that all important papers of the Company up to 1666 were destroyed in the Fire of London. Fortunately, evidence based largely on the Calendar of State Papers and other sources, together with scattered reference in Hakluyt's Voyages enables us to reconstruct at least part of the picture.^4^'
In 1555, as we have seen, Richard Gray and George Killingworth were appointed \'Agents, factors and attorneys general' for the Company's operations in Russia. Other agents were soon appointed at different stations, but in 1557 Henry Lane seems to have been given a vague kind of overriding authority with regard to the commercial transactions of the agents and at the same time the accounts were centralized in his hands. Nevertheless, the Company did not doubt that Killingworth, Gray and Lane would confer together, and made it clear that Henry Lane was given this special charge since 'he, being the younger man may best take paines'. A letter from the Company went on to express to Killingworth and Gray
^48^ The evidence has been examined carefully by Scott in English, Scottish and Irish Joint Stock Companies and by Willan in Early History of the Russia Company.
the belief that 'your wisedome is such, that you will not take it in evill part'.^50^ One of the Agent's most important duties was to estimate what shipping would be required for exports from Russia during the ensuing season. The Company sent a timber expert to advise the Agents on the selection and cutting of yew trees; and a cooper to make casks for 'traine oyle' and tallow. It was strictly enjoined on Henry Lane that the accounts of each voyage must be kept quite separate, while all the Agents were instructed to allow no interlopers and to see that no goods other than those of the Company or the Tsar were shipped in the Company's vessels.^51^ As far as can be seen from the meagre evidence available, the Agents were reasonably well remunerated either in cash or in kind, but the subordinates were badly paid, and as in the parallel case of seventeenth-century India, carried on illicit trade on their own accord.
The central control of the Company was of course exercised in London and it is unfortunate that for much of the period we do not know where the Company's London offices were located, except that from 1564 to 1580 they were in Seething Lane. In its early days the organization of the Company was quite democratic and even such details as the expense accounts of an ambassador were scrutinized in the General Court. As the years passed, authority began to be concentrated more in a few hands and this became a matter of complaint towards the end of the century.
We have already seen that the original capital was £6000, divided into 240 shares of £25 each, but much of that must have been lost in the two ill-fated ships, Bona Esperanza and Bona
Confidentia, and in the course of the next ten years further calls to the extent of £175 were made on each member.^52^ It is not clear that there was any legal obligation on a member to respond to these new calls, but the prospects of the Company appeared good and it is probable that most members did in fact pay up. Further calls were made in the next few years and according to Page,^53^
the Secretary of the Company in the twentieth century, the capital of the Company in 1564 was as follows:
£6,000 Amount originally subscribed 1553
240 Shares at £25 per share
£27,600 240 Shares at £115 per share 1553 to 1563
£14,400 240 Shares at £60 per share 1564
" Hakluyt, I, p. 385.
\"ibid., I, pp. 380-91.
\" Willan, p. 42.
\"W. S. Page, The Russia Company from 1553-1666, p. 161.
o Finance was indeed a considerable problem of the early days for not only had voyages to be financed, but the Company also had to give considerable credit to the Crown. The obligation placed on the merchant adventurers in general to pay part of their overseas earnings to the foreign creditors of the Crown,^04^ does not seem to have been applied to the Russia Company. That Company was, however, required to supply the wax required for the Royal Household and the cordage needed for the navy, and it was not allowed to sell any of these commodities until the needs of the Crown had been met. It was thus completely in the hands of the authorities in the matter of price and conditions of sale. The Company argued that English merchants trading to Hamburg and Lübeck did not bring their wax to England, but sold it to France and Spain and thus had an unfair advantage over the Russian Company.^00^ Not only was the Company often beaten down by the Crown in the matter of price, but it also had to wait a long time for payment, and for all practical purposes it became a permanent money lender to the Crown. This was perhaps not an unreasonable return for the monopoly enjoyed by the Company.
Scott maintains with much force that at this time the profit of the Company must have exceeded 12 per cent---the rate which Elizabeth would have been glad to pay for a loan.^00^ Had this not been so the new capital brought in by the outsiders now allowed to join, would not have been forthcoming.
Company accounting at this stage was in its infancy and some of the troubles of the Company arose from the fact that it kept no reserves, any profits earned on a particular voyage being paid out to the shareholders. This gave rise to particular difficulties when the Company restarted the Russian trade after its suspension at the beginning of the seventies, but, fortunately, some years of reasonable prosperity followed. The complications involved in following the financial fortunes of the Company are even greater from about
1585 onwards and here we cannot do better than quote from Willan, who has laid all subsequent students under heavy obligation by his careful study of these matters. He tells us that from some date before
1585 the Company's capital was permanent, that is to say it was not related to a particular voyage, but that after that date 'the capital was apparently subscribed for a short period . . . and at the end of the period the capital and any profits were distributed to the shareholders and a new stock was raised . . .' Each of these new stocks
^01^ Gresham artificially manipulated the exchange in such a way that the Companies were only reimbursed at a heavy discount.
"Willan, p. 184.
" Scott, I, p. 36.
was distinguished by a different letter of the alphabet, so that when the capital and profits were distributed the shareholders were said to make 'sale of theire adventure by passing it over from one letter to another'.^57^
Fiet chefs Report
In 1588 consideration was given to the possible reorganization of the Company's trade on the basis of a report entitled Means of
Decay of the Russia Trade. The report has been reproduced by Morgan and Coote^58^ who attribute it to one Christopher Brough, though Willan^50^ gives cogent reasons for concluding that it was written by Fletcher. Whoever the writer of the report may have been, he pin-pointed three main obstacles to the Company's further progress. In the first place its trade was on too small a scale and the report hints that this was something engineered deliberately by a few influential people. It was therefore recommended that the Company should be turned into a 'regulate' company in which every member would have an incentive to develop trade to the utmost possible extent. Secondly, Moscow was not a good place for the headquarters of the trade. It was expensive and geographically inconvenient and too accessible to the rapacity of the Emperor and his nobles since 'the Russians could not forbear to spoile and fleece strangers now and then'. Thirdly, there was the old problem of how to check the dishonesty and private trade of the Company's own servants. The writer of the report considered that the difficulty would be obviated by the establishment of a regulated company in which individuals would supervise their own officers, but if this recommendation was not acceptable, the Company should pay its employees satisfactory wages. It should also provide them with a preacher, who would presumably inculcate principles of morality.
The Company did not accept Fletcher's recommendations and matters went on much as before.
The Attack on the Company
Towards the end of the century, control of the Company was drawn more and more into the hands of a kind of inner cabal of twelve merchants who perhaps also financed the trade. Many years later John Merick, who had been the Company's chief agent in Russia
^fiT^ Willan, p. 212.
^58^ Morgan and Coote, I, p. cviii.
^58^ Willan, p. 205.
in the last decade of the sixteenth century, stated that the Company was governed 'chiefly by the tradinge company, whoe have used to make orders, sett mulks and fines on the bretheren and members of the said Company'.^00^
In the seventeenth century an attack on monopolies was launched in the House of Commons by Sir Edwin Sandys, who argued that they were an infringement of the natural right of individuals to trade, that other nations did not find monopolies necessary and that joint stock companies for foreign trade should in effect be turned into regulated companies, so that all who wished might participate. These views did not prevent Sandys from becoming Treasurer of the Virginia Company some years later.^01^ On the whole the Company was able to defend itself satisfactorily and its privileges were not curtailed.
The Company paid an average dividend of over 42 per cent per annum in the period from 1608 to 1615, but in an interesting analysis of these figures, Scott shews that they were to some extent the result of faulty accounting. Many of the assets were subsequently found to be bad and members were reassessed in such a way that the real dividend was not 42 per cent but 25 per cent. Nevertheless, the Company's position had now become sound and in 1617
it was able to borrow at a rate of interest below that paid by the Crown or the East India Company.^02^
The Greenland Trade
Mention must now be made of one other development which took place in this period. From the beginning of the century the Company had been interested in the possibilities of whaling and in 1613
it was granted a monopoly of the right to capture whales or import whale fins. The enterprise was not well managed and suffered also from armed attack by the Dutch. Although good profits were made, fresh capital was needed for the purchase of equipment and the Company had recourse to loans from the East India Company.
A more formidable difficulty now arose. Taking advantage of the dual role of King of England and of Scotland, James I licensed another Company to operate not only in the East Indies but also in Greenland, in the whaling areas. In 1615 the East India Company and the Russia Company took concerted action. They bought out the new Company and themselves set up a joint undertaking for the Greenland trade for the period of eight years. The undertaking was a failure and was wound up within two years.^08^
\" Willan, p. 269. '* Scott, I, p. 120.
" ibid., I, p. 146. " ibid., II, pp. 55-6,
Reorganization
In the following year a new joint stock---which might really be called a new company---was formed to take over the assets of the old company and a little later the whaling side of the undertaking was sold to a new company, the Greenland Adventurers, whose members were in fact members of the Russia Company. The adjustment of assets and liabilities between the old company and the new company and the Greenland Adventurers led to much litigation. At least one of the companies was accused of 'gross juggling to defraud the creditors', and as late as 1638 the Governor of the new Russia Company was imprisoned for failure to pay the portion of the Company's debt assessed on him.^04^
On the trading side the first decade of the new Company's existence was reasonably satisfactory. In 1623 a mission to Moscow under the leadership of Sir John Merick secured confirmation of the former Company's privileges, including exemption from customs duties. The Tsar appears to have insisted that each member of the Company should trade separately, but as the Company was not of the regulated type it is not clear what this meant. He also stipulated that the goods imported must be of good quality 'not such as the Englishmen began of late to import'.^05^ The Tsar also insisted on the right to pre-empt goods for his own use at the English price with no profit to the Company.^00^
In the late thirties the Company fell once again into difficulties.
Dutch competition had now become serious and there is some ground for thinking that the Company's prices were too high. At the same time, for reasons which are somewhat obscure---though Dutch intrigues perhaps played a part---the Company again incurred the disfavour of the Tsar. Whatever the cause may have been, in
1646 the Company's concessions were cancelled and its servants were expelled from Russia.
The Dutch now agreed to pay 15 per cent customs dues on all imports into Russia, and when Lord Carlisle was sent to Moscow as an ambassador in 1669, he was unable to secure exemption from a similar customs duty, though he did succeed in obtaining permission to resume trade.
Before the Company resumed trade, the joint stock was wound up and the Company became a regulated company. So far, however, from resulting in liberalization of trade, this change had exactly the opposite effect, since the Company became more and more exclusive. Admission was confined at first to persons who had
\" Scott, II, pp. 60-6,
" ibid., II, p. 133.
" ibid, II, p. 65.
been apprenticed in the trade and even they were required to pay
£50 on admission. The policy of exclusiveness was carried out so consistently that by 1694 the Company consisted of only a dozen or so members. This development gave rise to trenchant criticism in Parliament and in 1698 an Act was passed which entitled any person to admission on payment of £5. The importance of the Company seems to have declined gradually from this point and by the end of the eighteenth century it had ceased to trade. Its subsequent life 'for social purposes' does not concern us in this book.
Chapter 3
The Levant Company
In the eighth decade of the sixteenth century steps were taken for the organization of no less than four chartered companies for foreign trade. With two of those companies---the Eastland Company and the Kathai Company---we need only deal briefly. The Eastland Company had no real justification for its existence, since it merely secured, in 1579, a monopoly of the trade to the Baltic region which had long been satisfactorily conducted by private traders. It might have been of use as a counter to the Hanseatic League, but within a few years the Hanse towns had withdrawn from their operations in England. The Company was therefore gradually shorn of its privileges. In 1629 it was excluded from the trade in grain and corn; in 1672 Scandinavia was removed from its charter and membership was thrown open to all Englishmen who cared to pay £2; and in 1689 it came to an end.^1^
The Kathai Company, formed in 1576, mainly as a result of Martin Frobisher's desire to search for a North West passage to China, turned almost at once to prospecting for gold in Baffin Land, and when that operation failed, the Company was wound up. It is of interest chiefly because it made it possible for Frobisher to undertake three great voyages and it is not relevant to our purpose in this book.
The Turkey and Venice Companies
Of far greater importance was the Levant Company, which was formed by the fusion of the short-lived but successful Venice and Turkey Companies. The objects with which those Companies were chartered differed considerably from the purpose which had led to
^1^ Cawston and Keane, The Early Chartered Companies, pp. 60-6.
the incorporation of the Muscovy Company. The latter Company was formed to seek out new trade, to make discoveries in the little known parts of northern Europe and to find the route to Cathay.
The purpose of the founders of the Venice and Turkey Companies on the other hand, was to wrest from the Venetians the existing trade between England and the Levant. Until late in the fifteenth century English merchants had had little direct contact with Turkey or her neighbours, though Hakluyt tells us that in the twelfth century English halberdiers acted as guards to the Byzantine Emperor at Constantinople 'clashing their halberds together to make a terrible sound' at the Emperor's approach.^2^
The English trade with Turkey was conducted by Italian middlemen and was merely part of a considerable trade between England and Italy in the Middle Ages. This trade was almost entirely in the hands, first of the Florentines, then of the Genoese and then of the Venetians, whose Flanders galleys, carrying goods from the Levant as well as from Italy, called regularly at Southampton from the end of the fourteenth century. The Venetians imported three kinds of commodities into England---'gross spice'
which meant ginger, cinnamon, cloves and the like---'small spice'
which included such commodities as\'dates, sugar and currants---
and general articles of which silk was the most important.^3^
English economists of the day disapproved of the import of luxury goods which had to be paid for by the export of wool and cloth,^1^ but standards of living were rising and the demand for such goods was too great to be abandoned at the behest of theorists.
On the other hand English merchants resented the many privileges enjoyed by the Venetians in England and it was natural, therefore, that an attempt should be made to break into this trade. In 1446
the 'ful notable worshipful marchaunt' Robert Sturmy of Bristol sent the Cog Ann with wool and tin to Joppa, but the ship was sunk on the way home.^5^ In 1457 Sturmy himself took a ship to 'divers parts of the Levant' to sell lead, tin, wool and cloth, and to buy pepper and spice, but he was waylaid by the Genoese on the return journey." No further attempt to trade direct with the Levant was made for some decades, but spices were badly needed and when, early in the sixteenth century, Venice became involved in wars which interrupted the sailing of the Flanders galleys, fresh channels of trade had to be found. English merchants were encouraged to
\'■ Hakluyt, II, p. 419.
^1^ M. Epstein, The Early History of the Levant Company, pp. 2-3.
* Cunningham, The Growth of English Industry and Commerce, I, pp.
426-8.
" A. C. Wood, History of the Levant Company, p. 1.
^1^ ibid., p. 2.
look for such channels by the desire of Henry VII to promote shipping and commerce and for a time the English became active in the Mediterranean Sea. Thus it came about that in the yeeres of our Lord 1511, 1512, etc., and till the yeere
1534 divers tall ships of London . . . with certaine other ships of Southampton and Bristow, had an ordinarie and usuall trade to Sicilia, Candie, Chio and somewhiles also to Cyprus, as also to Tripolis and Barutti in Syria . . . Besides, the naturall inhabitants of the foresayd places, they had, even in those dayes, traffique with Jewes, Turkes and other Forreiners. Neither did our merchants onely employ their owne English shipping but sundry strangers also.1
The trade in currants with Zante in the Ionian Sea and with Chios in the Aegean Sea appears to have been particularly important and it led in 1513 to the appointment by Henry VIII of a consul at Chios. In 1520 an Italian merchant, Comio de Balthazari, was given a patent to be 'for life, governor, master, protector or consult of the English nation there'.2 3 The voyages to those parts were nevertheless hazardous, for as the men of Chios said, 'the Turke, where he commeth, taketh what he will and leaveth what he list'.^0^
At this time, indeed, the Turks dominated the Eastern Mediterranean and after the Flanders galleys disappeared in 1533, the only practicable trade route between England and the Levant lay through Antwerp. No further attempt to run the Turkish gauntlet was made until 1553.
In that year, that remarkable traveller, Anthony Jenkinson, whose diplomatic successes in Russia we have already discussed,4 5
secured from Sultan Suleyman the Magnificent permission to trade anywhere in the Turkish dominions on the same terms as the French and the Venetians, that is to say on payment of the ordinary tolls and other dues.^11^ Lawlessness and piracy in the Mediterranean were, however, still strong deterrents and even the suspension of trade between England and the Netherlands in 1564 did not lead immediately to a resumption of direct trade with Italy or the Levant.
After the defeat of the Turks in the naval battle of Lepanto in 1571, conditions in the Mediterranean to some extent improved.
In about 1575, the first step towards the revival of that trade was taken by Sir Edward Osborne---who had followed the traditional path to success by marrying his master's daughter and had become one of the most important of the London merchants---and another merchant, Richard Staper, described in his epitaph as 'the greatest merchant of his time'.^12^ Here we must turn for information to the indispensable Hakluyt, who tells us that these two merchants at their charges and expenses sent John Wight and Joseph Clements by way of Poland to Constantinople, where the said Joseph remained eighteen monethes to procure a safe conduct from the Grand Signior for M. William Harbourne, then factor for Sir Edward Osborne, to have free accesse into his Highness dominion.^13^
In 1578, Harborne, with Clements as his guide, travelled to Poland where he struck up a friendship with the Turkish Ambassador to Poland, in whose company and dressed in Turkish fashion he proceeded to Constantinople. There, he behaved himself so wisely and discreetely that within few monethes after he obtained not onely the great Turkes large and ample priviledge for himselfe and the two worshipful persons aforesaid, but also procured his honourable and friendly letters to her Majestie.
The Sultan's letter, written in 1579 and embellished with the flattery then demanded by diplomatic usage, gave permission to Harborne and his associates to trade in Turkey 'without let or disturbance of any' and requested that Turkish subjects should receive similar treatment in England. Although the letter did appear to cover Englishmen generally and not only Harborne and his colleagues, Elizabeth was at great pains in her reply to insist on this wide application, and she went on to preach a homily on the gain which would accrue to Turkey by trade with England.
The bestowing of which, so singular a benefit your highnesse shall so much the lesse repent you of, by howe much the more fit and necessary for the use of man those commodities are, wherewith our kingdomes doe abound, and the kingdomes of other princes doe want, so y^l^ there is no nation can be without them, but are glad to come by them, although by very long and difficult travels.^14^
This interchange of letters was followed in 1580 by the grant by the Sultan of twenty two 'capitulations', which not only per-
^13^ Wood, p. 7.
^a^ Hakluyt, III, p. 51.
"ibid., HI, p. 55.
mitted English merchants to trade and granted them freedom from molestation, but also authorized them to appoint consuls who would govern them according to 'the customs and orders of their owne country'.
One article in the capitulations throws an interesting light both on the prevalence of piracy and on the strong Islamic feeling of the Turk.
18 Item, if after the time and date of this privilege, any pirate or other free governours of ships trading the Sea shall take any Englishman, and shall make sale of him, either beyonde the Sea, or on this side of the Sea, the matter shalbe examined acording to justice, and if the partie shalbe found to be English, and shall receive the holy religion, then let him be freely be discharged, but if he wil still remaine a Christian, let him then be restored to the Englishmen, and the buyers shall demaund their money againe of them who solde the man.^1^'
It will be noted that there was no question of an exemption from the normal dues and tolls. What the English had secured so far was the right to trade on the same terms as the French and the Venetians. After Harborne's departure from Constantinople, the French managed to secure a cancellation of the capitulations and it was not until 1583 that Harborne, who had returned to Turkey in 1582 as Elizabeth's Ambassador, was able to effect their renewal.
In the meantime Osborne and Staper had applied for a charter and the great importance attached by Elizabeth and her Ministers to economic affairs is shewn by the care with which this application was examined. Mr. Secretary Walsingham wrote what today would be called a careful secretariat note entitled A Consideration
of the Trade into Turkey 1580, in which he mentioned as possible advantages, the employment of a great number of ships, the strengthening of the Navy, the sale of English commodities \'with most profit which before did fall into strangers hands', and the enrichment of the realm by the trade with Europe in goods from Turkey. He went on like a good secretariat officer to consider the difficulties and dwelt on the opposition to be expected from the French and the Venetians, as well as from the King of Spain, 'who can never be long without war with the Turks'. This opposition would take the forms both of diplomacy and of force. To deal with the diplomatic obstruction it would be necessary, wrote Walsingham, to 'make choice of some apt man' to reside at the Turkish Court---
but at the charge of the Company. As regards force, the Company's ibid., Ill, p. 61. ships must be well furnished with men and munitions and should sail in fleets of not less than twenty.^10^
Burghley also applied his mind to the problem and the upshot of the deliberations was that in September 1581 letters patent were granted by Elizabeth to Osborne, Staper, Thomas Smith and William Garrett---all of them London merchants---and not more than twelve other Englishmen to be nominated by Osborne and Staper. The grant gave the Turkey Company^17^ the monopoly of the English trade in 'the dominions of the Grand Signior', and authorized them to make laws and ordinances for the government of the Company, and prohibited English subjects from even visiting Turkey without permission of the Company. The period of the grant was fixed at seven years, but thereafter it could be renewed if 'the continuance thereof shall not be prejudicial! or hurtful to this our Realm'. Osborne was to be the first Governor and Staper was to succeed him, but thereafter the Company would elect its own Governor. There was an important condition attached to the grant.
The Company was required to import and export annually 'so much goods and marchandize as the custome and subsidie inward and outward, shall amount in the whole to the summe of 500 li yeerely'.6
The first of the Company's ships to trade with the Levant was sent out in 1582. It was called the Great Susan and carried Harborne as the first English Ambassador to Turkey.7 Within a few months of Harborne's arrival he had appointed consuls and established trading posts in Egypt, Syria and Palestine, and a year or so later a similar organization was set up in Algiers, Tunis and the Greek islands. A little later he even secured from the Sultan preferential treaties over other European nations in the matter of customs duties.
All this was done in the face of strong opposition from the French, who sought to have the English expelled. Harborne was quietly confident and is reported to have said of the French Ambassador,
'I think that he wont be quite strong enough to turn me out'.8
In this period trade was on a joint stock basis, that is to say the members of the Company did not trade individually. The main exports to the Levant were kerseys, coloured cloths, tin and coneyskins, while the principal imports into England were spices, silks, drugs, cotton-wool and currants. Meticulous instructions were sent by the Company to its factors as to what to buy and sell, and they were kept well informed as to prices in England. Markets had to be watched as carefully then as now. The problem of fluctuations of supply and demand was the subject of much correspondence. In
1586, for example, we find the Company's factor at Chios writing thus,
It is requisite that heare yf we trade the country be furnished with money and goods in such sort that we may waite as well the time of imployment as for sailes. For heare, by reason of navigation on the Redd Sea, as also by continuall messengers goinge to and fro betw(e)ne this place and the Mecca, that have continuall advise from all places of the India. . . accordingly they seek to sell their commodities and buye others. . .
For always at the comminge of shipps in Alexandria, spices rise. . . And havinge commodities they ar not at all tims in request, and to sell them at under price to make imployment, findinge the commoditie of the time as aforesaid, that which is saved in the one is lost in the other.9
In spite of these difficulties, the Company seems to have prospered. Profits were good and it is reported that the goods imported into England sold for about three times as much as those exchanged for them in Turkey.10 The Company therefore had no difficulty in complying with Elizabeth's condition as to a minimum payment of customs duties and in 1590 the Company stated that in five years it had in fact paid £11,359.
The Turkey Company was not the only English Company operating in the Mediterranean. It had to face the competition of the Venice Company which had come into existence as a result of economic disputes between England and Italy. In 1575 Elizabeth.
had conferred on a Florentine, Acerbo Velutelli, a monopoly of the import of currants, oil and wine. The real owner of the patent appears to have been the Earl of Leicester,11 and either he or Velutelli interpreted it to mean that they could license and levy duty upon other importers, English or otherwise. English importers soon obtained an exemption, but the duties continued to be levied on Venetian and other foreign importers. Venice retaliated not only with an export duty on currants, oil and wine, but also with an import duty on all English goods imported into Venetian territory.12 In 1583, Elizabeth rescinded Velutelli's patent^28^ and granted a charter to certain English merchants, giving them the monopoly of the trade with Venice for a period of six years. Since Venice was an entrepot for many of the commodities of the Levant, the patents of the Venice and Turkey Companies brought them into direct conflict with each other.
The charters of the two Companies expired in 1588 and 1589
respectively, and in 1589 the Turkey Company asked that its charter should not only be renewed, but should be extended to include Candia and other areas which had been within the Venice Company's sphere of operation. The Venice Company countered by seeking the right to participate in the Turkey trade. Each Company had laboured under peculiar disadvantages which it expounded at some length. The Turkey Company was not harassed by extraordinary exactions, but had to bear the cost of the English Embassy at Constantinople, while the Venice Company on the other hand suffered from heavy impositions in the Venetian dominions. Eventually, the two sets of merchants came to the conclusion that a merger would be in both their interests and they petitioned for the grant of a charter to a joint company, whose members should, they claimed, be limited to nineteen members of the two parent companies.
The Levant Company
Burghley made a characteristically exhaustive enquiry into the whole question of the Levant trade and the Companies had to face strenuous opposition from outsiders who wished to share in what was obviously a lucrative business. The arguments followed the usual lines. The Companies pleaded that they had spent £40,000 in maintaining ambassadors and developing the trade and were entitled to enjoy the fruits of their expenditure. They also argued less convincingly that the trade was not extensive enough to accommodate a larger number of merchants. They even went so far as to threaten to withdraw from the trade if others were admitted 'who had no regard as to what a weighty matter it is to overcharge a trade'.^20^
Their opponents, on the other hand, saw no reason why a handful of men should enjoy a monopoly of this lucrative business, particularly as many of the Turkey merchants were also 'such as least need freedom themselves, being also free of the Dantzig and Muscovy Companies, very rich and few in number'.^27^
"According to Wood the English merchants bought Acerbo's rights, pp.
14-18.
" State Papers Domestic 1591-4, quoted in Lipson, II, p. 338.
" State Papers Domestic Eliz. CGXXXIX, No. 41, quoted in Epstein, p. 32.
An official enquiry by the treasurer and clerk of the Navy resulted in a report in favour of a broad based company, which would require the employment of many ships---and this view prevailed. In January 1592 letters patent were issued to 'the Governor and Company of merchants of the Levant'. The document13 begins with the recital of how the applicants with their great cost and charges . . . have travelled . . . aswell by secrete and good meanes, as by daungerous wayes and passages'. . . to finde out and set open a trade of marchandize.
The merchants of the Venice Company were particularly praised because they 'doe make and continually maintaine divers good shippes with mariners skilfull and fitte for our service'. In spite of these services the benefit of the new charter was not confined to the members of the two Companies. Fifty-three merchants were named as original members and twenty others were given an option to join on payment of £130 each. Provision was also made for the admission of factors and agents as members at the discretion of the Company. Osborne was appointed the first Governor but future Governors, together with twelve assistants were to be elected by the Company. Osborne apparently died within a few weeks of the grant of the charter.14 The Company was given the monopoly of the English trade, not only in the dominions of the grand signior of Turkey and the signiories and State of Venice, but also 'by lande through the countries of the sayde grand signior into and from East India, lately discovered by John Newberie, Ralph Fitch,
William Leech and James Storie'.15 The usual provisions were made for the Company to make laws and orders for its own government.
Two special privileges were granted in relation to customs dues.
First, those dues could be paid in instalments and, secondly, the Company might carry on a re-export business from England free of duty. Finally, except in time of war, the Company was to have full freedom to maintain four ships furnished with ordinance and manned by two hundred mariners, and those ships were to be allowed to sail at any time without the special permission of the authorities.
At the time of the application for the united charter, the petitioners stated that trade would, as hitherto, be conducted on a joint stock basis, but at some indeterminate date in the following decade, individual members began to trade on their own account. Scott contends, on the basis of letters to the factors in the East, that goods were consigned on account of the Company and not of individuals as late as 1599,^31^ but Wood cites the Travels of John Sanderson
as authority for the statement that individuals were trading as early as 1595.^32^ It seems possible that there was some conflict between the claim of the Company to continue on a joint stock basis and the determination of certain members to convert it to a regulated company, but there is no conclusive evidence on this point and the only certain fact is that by the beginning of the seventeenth century it had become a regulated company.
In spite of wars and piracy---in which the English played a notable part---the Company made excellent profits in its early years and thereby stirred up much jealousy. In 1600 its enemies found an effective weapon with which to attack it. The charter of 1592
had laid down that no person other than a member of the Company, or his agent, 'should bring or cause to be brought into this our Realme of England . . . any manner of small fruit called currants
. . . unless it be by and with the licence consent and agreement of the sayde Governour and companie'.^33^
The Company, following the practice of the former Venice Company, had interpreted this to mean that it was entitled to levy a fee on import by non-members, and it did in fact charge 5s. 6d.
per hundred-weight on all such imports of currants.^34^ This became a valuable source of income but it was undoubtedly an infringement of the charter, and in 1600 a zealous official challenged the Company on this point. After a certain amount of haggling, in December 1600 Elizabeth condoned the irregularity and the Company received a new charter^36^ empowering it to levy charges on imports by non-members, but requiring it in return to pay the Crown £4,000
per annum. At the accession of James I in 1603, £2,000 was owing to the Grown on this account and the Company now seems to have indulged in a certain amount of play acting. It professed to be unable to continue paying the agreed sum and stated that it would prefer to surrender the charter. When, however, James took the Company at its word and himself began to collect the dues on the import of currants, the Company changed its tune and begged for a renewal of its charter.^80^ James and his advisers then embarked on an exhaustive enquiry into the trade and its profitability and eventually decided to 'lay the same open to all our loving subjects within the realm of England trading merchandize'.^37^
^31^ Scott, II, p. 85.
^n^ Wood, p. 22.
^33^ Hakluyt, III, p. 379.
^34^ Epstein, p. 42.
^M^ The charter is reproduced in Cecil T. Carr, Selected Charters of Trading
Companies, pp. 30-43.
^M^ Wood, p. 38.
^37^ Epstein, p. 58.
In 1605 a new charter was issued in the name of \'the Governor and company of marchants of England trading into the Levant Seas'.^38^ One hundred and nineteen persons were named in the charter, but it was provided that any English subject might join the Company on payment of £50, or in some cases a lesser sum. The charter was permanent and it gave the Company not only a monopoly, but also the specific right to levy duties on imports from or exports to the Levant.
Prosperity and Problems
The period between the grant of the new charter and the Civil War was one of considerable prosperity, during which the organization was steadily improved both at home and abroad. Merchants of considerable standing, some of whom were also prominent in the Merchant Adventurers or other Chartered Companies, were at the head of affairs and the fact that the span of office of the first three Governors extended over thirty years meant that there was remarkable continuity in the administration. The Company's affairs began to absorb much of the time of the Governor and before long it was therefore necessary to pay him a fee. Meetings began to be held regularly and fines were imposed for non-attendance. Some extracts from the Minutes of the Company throw interesting light on procedure.^39^ No member was to speak more than three times at any one Court or to depart without obtaining leave, while anybody not keeping silence after the Governor had struck his hammer, was fined sixpence---a procedure which many a modern Chairman would be glad to see reintroduced. As for the wretch who opened letters not addressed to him, he was to be expelled from the Company.
Strangely enough the Company acquired no permanent meeting place of its own until shortly before its demise. It met at first in the Governor's house, but a little later its meetings were held first in the East India House, then in Crosby House and then in Drapers Hall.^40^ The next meeting place was the Ironmongers' Hall, followed a few years later by the Fishmongers' Hall, while from 1651 to
1671 it moved about between the Ironmongers' Hall, the Fishmongers' Hall and the Governor's house. For the next forty-six years the Company regularly rented the Ironmongers' Hall, but in 1718
it moved to the Salters' Hall. In 1801 when impending dissolution could almost be foreseen, it acquired a house in Little St. Helen's,
\" The charter is reproduced in Epstein, pp. 152-210.
''Epstein, pp. 102-4.
\"ibid., pp. 103---4.
Bishopsgate, but again it moved in 1816 to the South Sea House in Threadneedle Street.^11^
A number of matters of interest in the period before the Civil War deserve comment. First amongst them is the need which was found from time to time to limit the quantity of currants imported into England, and this apparently was done not with the intention of forcing up prices at home, but to prevent the unlimited competition between English buyers in Greece which was producing a seller's market. Each member was allotted a 'stint', but this method was not always effective and in some periods buying was taken out of the hands of individual members and conducted on a collective basis.^12^
A second cause of anxiety was the illegal competition of English interlopers in the import of currants. It might have been thought that since anybody could join the Company on payment of a moderate fee, the risks of interloping were not worth running. The explanation would appear to be that some of the interlopers were mainly concerned with evading payment of customs duties. When the offenders were detected, the customary procedure was to make them send the currants back to the place where they were bought and on at least one occasion the naval authorities were asked to hold up a ship until the owner appeared to claim his property. Nevertheless the Company was no more successful than any of the other Chartered Companies in suppressing interlopers or in preventing its own factors from trading at the expense and often with the money of the Company. Not even the grant to factors of commission on sales put an end to this abuse.^13^
The appointment and payment of Ambassadors also proved far from simple. Under its charter the Company was entitled to appoint the Ambassador to Turkey, who had the dual role of representing both the Crown and the Company. Charles I sought right at the beginning of his reign to ignore this right and to force his nominee on the Company. The attempt was at first resisted and the Company even petitioned the Privy Council against it, but the Company soon had to yield and before the end of the century the right of the Crown to make this appointment was well established. It is difficult to regard this development as unreasonable, since the monarch could hardly acquiesce for long in a position under which his representative was appointed by a subject.
Even more difficult than this issue was the question of the payment of the Ambassador. It was clear that the Company had to pay him---but how much was he to get and how was the money to be raised ? This led to a dispute about what was called 'strangers
^11^ Wood, p. 208.
\"ibid., p. 71.
\" Epstein, p. 147,-
consulage', which was a duty levied by the Company on the goods of non-members carried by them. The matter is very obscure, but since Englishmen outside the membership of the Company had no right to trade with the Levant at all, this presumably referred to the carriage of goods of foreigners. Be this as it may, it was a source of revenue and ambassadors from time to time claimed it as remuneration. No general rule was laid down either for the Ambassador or for the consuls---who were appointed by the Company---and the remuneration and method of payment of ambassadors and consuls seems to have been a matter of haggling. At the beginning of the nineteenth century the Crown formally took over the responsibility for the appointment and payment of the Ambassador, since by that time the political importance of the Levant had made it anomalous that Ambassadors should be regarded even partly as the servants of the Company.
The Declining Years
The merchants thus had their troubles, but they will not seem very formidable to those who try to do business overseas today.
The Civil War, however, ushered in a very difficult era. The general dislocation of trade and finance which characterized this period in England is too well known to require description here, but from the Company's point of view, perhaps an even more adverse factor was the temporary ascendancy of the Dutch. Apart from the damage done to the Company's ships by Dutch and Spanish fleets, the Dutch laid themselves out systematically, and with a good deal of success, to capture English trade. Moreover, the strife at home relaxed the bonds of authority over the Company's agents abroad and Wood goes so far as to say that the resulting corrupt and mutinous spirit in the Levant did more harm to the country than foreign hostility.
'Trade was virtually suspended for long periods, and the factors were compelled to shift for themselves to earn a livelihood; communications with England were so precarious that the controlling hand from London was robbed of its power; while at Constantinople rival payments to the embassy and open disobedience to the home authorities rendered nugatory the efforts of the ambassador to preserve order.'^44^ The Company was forced to curtail its activities and embarked on a rigorous campaign of retrenchment. At one stage it even sold its jewels for £76.
The Restoration and the end of civil strife in England enabled the Company to reassert its authority over its servants abroad and to resume normal trade---a process which was helped by the gradual Wood, p 56. transference of Dutch interest from the Levant to the Far East.
The Company's prospects revived for a time, but before the end of the century the signs of a permanent decline were visible, though it was not until the beginning of the second quarter of the next century that the decline became rapid. Amongst the external causes of this change, the first to appear was competition from the East India Company. By 1680 that Company had done much to develop the export from India of raw silk and calicoes and it even began to export raw silk from Persia to England. The effect on the Levant Company's trade was serious and in 1681 that Company submitted a petition to the Privy Council bitterly attacking the East India Company. The dispute was heard by the Grand Committee for Trade of the House of Commons,^45^ and the Levant Company made great play with the argument that whereas the East India Company exported bullion to pay for its imports, the Levant Company financed its purchases by the sale of English woollen goods and so gave employment to large numbers of English people. Thus, claimed the Levant Company,
We afford bread to the poor of the kingdom; whereas the East India Company export immense quantities of gold and silver with but little cloth, bringing back callicoes, peppers, wrought silks and a deceitful sort of raw silk . . .
and the raw silks, the Levant Company declared, were an 'infallible -
destruction to the Turky trade'.16 17 Sir Josiah Child, on behalf of the East India Company, answered bluntly :
The importation of better and cheaper raw silk from India may probably touch some Turkey merchants' profit at present . . . What then? Must one trade be interrupted because it works upon another? At that rate there would be nothing but confusion in a nation ad infinitum.*^1^
The attack on the East India Company failed and serious inroads were made on the Levant Company's trade.
Even more serious were the effects of French competition in the eighteenth century. As early as 1670 Colbert had laid himself out to capture for France the English trade with the Levant and for this purpose he had founded the French Levant Company with State backing. At the same time he cultivated close political relations with Turkey and in 1683 instructions were sent to the French Ambassador in Turkey that 'nothing could be of greater importance than to secure a diminution in the trade which the English and Dutch carried on in the Levant'.^48^ It was, however, not until the eighteenth century that this policy produced any marked effect. It appears that the French then manufactured a lighter cloth more suited to the requirements of the Levant than that supplied from England, but perhaps of greater importance was the fact that it was also cheaper---a complete reversal of the position which had prevailed a few decades earlier. The price advantage was increased when in 1740 the French secured a tariff preference from the Sultan.^49^ The volume of French trade grew in a spectacular manner and according to James Porter, the English ambassador in Turkey, in the twenty-five years preceding 1749 French imports to Turkey had increased ninefold, while as regards English trade, it 'is so decreased that there is scarce a currency for our cloth'.^50^
The decline of the Company's trade, however, was not due solely to external causes. In some respects the Company had itself to blame. In the first place, the charges levied by the Levant Company were so high that at times a Dutch merchant could export goods from Turkey to Holland and thence to England, where he could undersell the Company. Then again, the fact that in the first half of the eighteenth century members were not allowed to send their goods by private ships, but were compelled to use 'general shipping^5^, often seems to have resulted in delays and restrictions of trade. It was indeed alleged that 'general shipping' was what in modem colloquial terms would be called a racket---that it enabled the rich merchants who controlled the Company to hamper their smaller competitors in the despatch of goods. It is, indeed, clear that in spite of the terms of the Charter, the Company was becoming more exclusive and in 1744 a Bill was introduced in the House of Commons not only to prohibit 'general shipping^1^, but also to enlarge the membership of the Company. It was rejected in the House of Lords, but a Bill on similar lines was passed in 1753.
At this stage the Company's financial position was parlous. It was still required to pay the Ambassador in Turkey and the consuls under him, but in 1767 it found itself unable to meet this expenditure. It was rescued by a grant of £5,000 from the British Government, but this was only the beginning and on numerous occasions during the next two decades the Company would have failed but for a government subsidy. During this period its overseas establishments were considerably curtailed and some of its outposts were closed.
After a few years of prosperity in the late eighteenth century,
"Wood, p. 107.
\"ibid., p. 1142.
^M^ ibid., p. 143.
the Napoleonic Wars resulted in a further interruption of trade and from 1794 to 1802 the Company again had to be subsidized by government every year.^51^ Thereafter, the Company enjoyed an Indian Summer for two decades. French trade in the Levant had been ruined by the wars, while the Industrial Revolution not only enabled Britain to supply the world and the Levant in particular with cheap goods and textiles, but also created a considerable demand in England for raw materials. Between 1812 and 1825, exports from Britain to Turkey were more than doubled, while imports from Turkey---made up largely of cotton-wool and madder
---rose still more rapidly.^52^
If political factors had not operated to the contrary, the Company might have enjoyed a long period of prosperity. The Napoleonic Wars, however, had given Turkey, Egypt and other Levantine countries a new importance. The representation of Britain could no longer be left in commercial hands. In 1804 the Ambassador was dissociated from the activities of the Company altogether. The Company was allowed to appoint a consul-general to look after its interests, but in the course of the next few years the offices of consul-general in a number of important stations were taken out of the hands of the Company. In 1825 this process was completed and all the Company's consular establishments were transferred to the Crown. Nothing remained to the Company except the right to trade, and it was given a strong hint by George Canning, then Foreign Secretary, to surrender its charter. The feeling against monopolies was now very strong and in 1825 the Company took the unavoidable decision of giving up its charter.
Throughout many vicissitudes it had served England well and as its historian rightly observes :
It was one of the tributaries which fed the main stream of English economic development in the seventeenth and eighteenth centuries, helping to transform the primitive, narrow commercial organization of pre-Tudor England into the great mercantile community of later days.^53^
"Wood, p. 180.
^02^ Customs tables reproduced in Wood, p. 194.
" Wood, p. 202.
Chapter 4
The African Companies
Of the great charter companies established in the sixteenth and seventeenth centuries, the African companies alone can be regarded as, on the whole, unsuccessful. From 1588 to 1672 a succession of companies chartered to trade to the Guinea Coast went out of business, and even the Royal African Company, chartered in 1672 to exploit what was thought to be the very lucrative slave trade, enjoyed only a brief spell of prosperity and eventually found itself unable to compete with private traders. The history of the English ventures to West Africa falls naturally into three phases. For the first few decades the trade was carried on by private individuals, with or without the approval of the Crown;
next came the period of chartered companies formed with the object of promoting general trade, particularly that in gold; while from
1660 onwards companies were chartered partly or mainly for the purpose of conducting the slave trade.
Individual Ventures
Although the credit for the first English commercial voyage to the Guinea coast goes to William Hawkins---'a man for his wisdome, valure, experience and skill in sea causes much esteemed and beloved of King Henry the 8'.^1^---the primary purpose of this expedition was directed towards Brazil. His three voyages in 1530 and the two following years, resulted in profitable purchases of ivory from West Africa for Brazil and it was presumably for this reason that in 1540
some Southampton merchants made a similar venture. Thereafter the French wars put an end to the trade and it was not until 1553
that a syndicate of London merchants who had began to trade to
'Hakluyt, VIII, p. 13.
the Barbary coast extended their operations to the Guinea coast. In that year 'two goodly ships the Primerose and the Lion, with a pinnas called the Moone, being all well furnished as well with men of the lustiest sort to the number of seven score',^2^ sailed from Portsmouth under the command of Thomas Windham, with a Portuguese,
Anthonie Anes Pinteado, as chief pilot. The Captain and the chief pilot soon fell out, and Windham abused Pinteado shamefully, 'taking from Pinteado the service of the boies and certain mariners that were assigned to him by the orders and discretion of the worshipful merchants and leaving him as a common mariner'.^3^ In spite of this quarrel the expedition reached the Gold Coast and traded very profitably for gold with native chiefs, very close to the Portuguese headquarters at El Mina. Windham and Pinteado were still at loggerheads, and the irascible Windham 'brake open Pinteado's cabin, brake open his chestes, spoiled such provisions of cold stilled water and suckets as he had provided for his health'.^1^ Shortly after this, Windham died. Sickness struck the entire company and Hakluyt tells us that, of the company that left Portsmouth, scarcely forty returned there.
The voyage was, nevertheless, highly profitable and was followed in 1554 by another expedition financed by a new syndicate.
This venture too was successful, gold and ivory being the main commodities purchased. The profitability of these voyages encouraged other adventurers to follow suit and Hakluyt gives a graphic description of three voyages to the Gold Coast led by a London merchant, William Towrson, in 1555 and the following two years.'
At this period the Adventurers had to sail surreptitiously, since Philip had accepted the protests of the Portuguese---who claimed a monopoly over the Guinea coast---and prohibited further expeditions. At the outset of her reign Elizabeth had no such inhibitions and placed no limitation on the Adventurers, except that she forbade them to visit the few places in the actual occupation of the Portuguese. She herself, indeed, provided ships, on a profit sharing basis,^3^ for some of the expeditions. Having failed to secure redress from Elizabeth the Portuguese sought to enforce their claims by attacks on British shipping. Reprisals followed and some of the Adventurers were furnished with lettres de marque, authorizing them to seize Portuguese ships or goods by way of compensation.
' Hakluyt, IV, p. 39.
' ibid., IV, p. 40.
^1^ ibid., IV, p. 44.
^B^ ibid., IV, pp. 66-128.
" Cambridge History of the British Empire, I, p. 45.
A considerable number of voyages were made and it is to be noted that they were financed by individuals or by ad hoc syndicates and not by companies. This was indeed a period of abounding energy and enterprise, and J. A. Williamson justly observes that the Guinea traffic of this period is one of the fundamental transactions of British expansion . . . it produced an oceanic war with. Portugal. . . and it occasioned the formulation of a British doctrine which was never afterwards abandoned, the doctrine that prescriptive rights to colonial territory are of no avail unless backed by effective occupation.^7^
Up to this time the objects of the English trade to Guinea had been commodities, not slaves, but a new departure was taken in
1562 when John Hawkins---son of William Hawkins whom we have already mentioned---carried out the first English slave raid on the Guinea coast. Hawkins 'being assured that Negros were very good merchandise in Hispaniola and that store of Negroes might easily be had upon the coast of Guinea', communicated with certain London merchants who 'liked so well his intention that they became liberall contributors and adventurers in the action'.^8^ Three ships, the
Saloman, the Swallow and the Jonas, of 120, 100 and 40 tons respectively were equipped and manned 'with not above 100 men, for fear of sickenesses and other inconveniences, whereunto men in long voyages are commonly subject'.^0^ Hawkins was in command and after touching at Teneriffe he proceeded to Sierra Leone, where he 'got into his possession, partly by the sword and partly by other meanes to the number of three hundred negros at the least, besides other merchandise.'^10^ He then sailed to Hispaniola, where he sold the slaves to such good purpose that he had to charter two extra ships to carry back the commodities bought in exchange.
The Spanish authorities then issued strict instructions prohibiting the English from trading in their West Indian colonies, but this did not prevent Hawkins from conducting a second expedition in 1564 and from selling his cargo of slaves with the connivance of Spanish colonial officials. It is somewhat sad to reflect that one of the ships in Hawkins's fleet engaged in this infamous trade should have been named the Jesus.
Protests by Spain led to an order by Elizabeth forbidding
' ibid., I, p. 44.
^8^ Hakluyt, VII, p. 5.
•ibid., VII, p. 5.
^10^ ibid., VII, p. 6.
English subjects to pursue the trade in the West Indies, but her seamen knew only too well when she wanted to be disobeyed.
Hawkins' third voyage in 1567 was disastrous and his attempts to secure slaves met with considerable resistance. At Cape Verde his men were driven off by poisonous arrows from which 'there hardly escaped any, that had blood drawen of them some tenne days, but died in strange sorte, with their mouths shutte' some ten days before they died.18 On the Guinea coast, prospects at first seemed poor, but Hawkins was approached by a King 'oppressed by other Kings his neighbours',^12^ and assisted in the assault of a fort belonging to that King's enemies. Four or five hundred negroes were then captured and in February 1568 Hawkins set sail for the West Indies. In spite of the prohibitions of the Spanish Government, Hawkins was able to break into a town called Rio de la Hacha, and after his entry the Spanish inhabitants resorted to him by night and bought 200
negroes. Trade was good, but unfavourable weather and the need for repairs compelled the fleet to put in at St. John de Ulloa in New Spain. Here an enthusiastic newly-arrived Spanish Viceroy attacked the fleet and seized the cargo and Hawkins and Drake were fortunate to escape with two of their ships, the Minion and the Judith.
After a voyage of incredible hardships, the little company was forced by hunger to seek land again, since their plight was such that 'hides were thought very good meat, rats, cats, mice and dogs, none escaped that might be gotten'.^13^ They landed in Mexico and half the crew elected to stay there rather than face the uncertainties of the journey home. They had bitter cause to regret their choice, since they suffered great cruelties at the hands of the Inquisition, while the rest of the company, though greatly depleted by deaths from want and sickness, arrived in Mount Bay in January 1569.
It had now become clear that the Spanish were in a position to prevent the import of slaves by Englishmen into Spanish West Indian territories. Moreover, around 1569 Elizabeth was pursuing a policy of friendship with Portugal and prohibited any further Guinea expeditions---and this time English seamen knew that she meant what she said. The triangular trade therefore came to an end for nearly twenty years.
In 1580 Portgual came under Spanish rule and shortly thereafter Elizabeth's policy towards Spain became one of open hostility. There was therefore no objection to the resumption of the Guinea trade and in 1588 that trade was revived by 'certain marchants of Exeter and others of the West parts, and of London'.^14^ These merchants were not incorporated, but were granted a patent which not only authorized them to assemble and to make laws and regulations for the governance of all concerned in the trade, but also gave them a ten years' monopoly of trade between the Senegal and Gambia rivers.^15^
Little is known about the operation of these merchants, but their monopoly left the coast south of the Gambia river open to all comers and Hakluyt has preserved for us the record of two profitable voyages to the Gulf of Benin. In 1588, two London merchants, John Newton and John Bird, set out from Plymouth in a ship called the
Richard of Arundell, accompanied by a pinnace. After a relatively uneventful two months' journey, they arrived at the haven of Benin where they 'found not water enough to carry the ship over the barre'.^10^ The two merchants went up the river in the pinnace and after a courteous reception by the local King, they were successful in buying pepper, elephants teeth and palm oil. The Chief Master records that they were at first terrified of the 'wonderful great lightening and thunder insomuch as I never heard the like in no countrey, for it would make the decke or hatches tremble under our feete'.^17^ He also notes that they found the people 'very gentle and loving'.^18^
Unfortunately, sickness took such a heavy toll of the crew that they could not bring the pinnace back to the ship and indeed.
the common sickness so increased and continued amongst us all, that by the time our men which remained were come aboard, we had so many sicke and dead of our companie, that we looked all for the same happe.^10^
Ten months after their departure from England, a remnant of the company reached home. In 1589 the two merchants once again took the Richard of Arundell and a pinnace to Benin. The experience of the first voyage stood them in good stead and the Chief Master records that 'this voyage was more comfortable unto us than the first because we had good store of fresh water and that very sweet'.^20^ Trade too was good and in December 1589 the merchants arrived at Limehouse and discharged 589 sacks of pepper, 150
elephants teeth and 32 barrels of palm oil. They had sold broadcloth, wrought iron, copper bracelets, hats and other commodities.
Other voyages to West Africa were made in the next decade or so, but little is known about them.
^M^ ibid., IV, p. 285. " ibid., IV, p. 286.
^18^ ibid., IV, p. 298. " ibid., IV, p. 297.
^18^ ibid., IV, p. 297. " ibid., IV, p. 299.
^20^ ibid., IV, p. 305.
Chartered Trading Companies
London merchants interested in this trade soon began to feel the need for a more stable and permanent organization. In 1618, Sir William St. John and some thirty members were incorporated by charter under the name of 'The Governor and Company of Adventurers of London trading into the ports of Africa'.^21^ The charter granted them the right of perpetual succession and a common seal, which in effect made them a legal entity, and laid down their constitution and organisation on lines similar to those which had been followed in the case of the Muscovy and Levant Companies. It also granted the Company a monopoly of the trade on the west coast of Africa, in Guinea and Benin, and for this reason the Company was known as the Gynney and Bynney Company. The Company sought to import from West Africa hides, elephants' teeth and wax, but it was singularly unsuccessful and the account preserved in the Calendar of State Papers and reproduced by Scott, tells a dismal tale.^22^
The Company was now unable to raise fresh capital and had to confine its activities to granting private traders licences to trade, in return for a fee. Interlopers, however, soon found that they could dispense with this formality. Moreover, all charters granted by the King were at this time looked on with suspicion, and in 1624 the Committee of Grievances found that the monopoly was a
'grievance'.^23^ This did not automatically entail cancellation of the charter, but for all practical purposes the Company petered out.
Prominent amongst the interlopers had been Sir Nicholas Crispe, who is said to have built the first permanent English settlement in West Africa, at Kormantin^24^ on the Gold Coast about ten miles east of Cape Coast. In 1631 he and his partners were issued with a patent giving them a monopoly,^2^" for thirty-one years, of trade on the entire west coast of Africa and prohibiting all other persons from importing African produce into England. The partnership was not incorporated but was empowered to possess land. It was required by its charter to bring in gold to the value of £10,000.
The early years were far from prosperous and in 1635 special levies on the commodities imported had to be made to clear off the
"The Charter is contained in the Patent Rolls 16 Jac. I, VI, and is reproduced in C. T. Carr, Selected Charter of Trading Companies, pp.
99-106.
" Scott, II, p. 12.
^23^ Calendar of State Papers (Col.) 1574---1660, p. 62.
^M^ G. F. Zook, The Company of Royal Adventurers Trading into Africa,
p. 6.
™ Calendar of State Papers (Col.) 1574---1660, p. 135.
{width="2.1930555555555555in"
height="4.973611111111111in"}
accumulated debt. In 1636 one voyage produced gold to the value of £30,000/° but this was a flash in the pan. Interlopers could not be kept out, losses were commoner than gains and during the Commonwealth period the association, which was unpopular because it had been sponsored by courtiers, soon came under heavy fire. In
1649 a formal protest against the Company's monopoly was lodged with the Council of State. The Company replied to the effect that they were the pioneer discoverers and traders on the Guinea coast;
that they had not, as alleged, obtained their grant by 'procurement of courtiers', but by undertaking to bring in £10,000 in gold; and that they had spent considerable sums on establishing factories.^27^
The Company's affairs were investigated by the Committee of Trade.
The need for the construction of forts on the West African coast was a powerful argument in favour of the patentees. In the end the monopoly was renewed for fourteen years from 1651, but limited to an area round about Sierra Leone and Kormantin, and round about any new posts fortified by the patentees. The patentees had thus survived the attack of the Puritans, but as a result of the hostility of the Dutch, the Swedes and the Royalists, the financial position of the Adventurers went from bad to worse. They were unable to maintain the forts on the coast and in 1657 they sold the remaining period of the grant to the East India Company, which was glad to have calling points on the way to India.
After this long series of failures it may seem surprising that yet another group of merchants were anxious to succeed to the rights of Crispe's English Africa Company. There were, however, two tempting possibilities. In the first place it was believed that the gold which the Dutch bought on the Gold Coast came from the Gambia, and the prospects of digging for gold in that area were therefore attractive. Secondly, there was good reason to think that the slave trade might be profitable. The first of these factors led in 1660 to the chartering of the Company of Royal Adventurers into Africa.^28^
Prince Rupert, whose attention had been drawn to the possibilities of goldmining during his Royalist naval expeditions was the first Governor of the Gompany and 'several nobles and merchants of good standing'^29^ were amongst the thirty six assistants. There was apparently some doubt as to whether Crispe's patent was still valid or not and the charter conferring the monopoly of the West African
" Scott, II, p. 15.
\" Calendar of Slate Papers (Col.) 1574---1660, p. 339.
^28^ The Charter is in the Patent Rolls 12 Car II pt. XXI and is reproduced in Carr, pp. 172-7. In this section we have drawn heavily on G. F. Zook,
The Company of Royal Adventurers Trading into Africa.
" Scott, II, p. 17.
trade on the new Company therefore contains the qualifying phrase,
'if the . . . grant (made to Crispe's company in 1631) be void and determined'. The limitation was disregarded in practice and after an ineffectual attempt to enforce his rights, Crispe transferred them to the Company and apparently received nothing in exchange, though he became a substantial shareholder in it.^30^ The King not only agreed to take a two thirds share in the expenses and profits of any gold mining which the Company might undertake but also lent five ships of the navy for the first expedition.
In 1660 that expedition sailed to the Gambia, under the command of Captain (later Sir) Robert Holmes, fully equipped for gold mining. Holmes did not find gold but he seized two islands in the Gambia river, named them Charles Island and James Island respectively,^31^ and boldly served the Dutch with notice to quit the coast. Protests were lodged by the Dutch to Charles II, who went through the formality of listening but took no action. The expedition did not neglect trade and returned home in 1661 with a cargo of elephants' teeth and hides. The cost of this expedition and of fitting out several ships to the Gold Coast far exceeded the receipts from the sale of these commodities and the Company soon found itself short of capital. This is indeed not surprising, since up to this stage the capital arrangements were quite informal and each subscriber had been allowed to put in as much or as little as he liked.
By September 1662, £17,400 had been subscribed---of which £800
came from the King and £3,600 from the Duke of York---but the only trade receipts had been £1,567.^32^ Matters were now put on a more formal basis and stock terminable at the end of seven years was issued in units of £400. At the end of each seven year period there was to be a valuation and stock holders were to be entitled, if they chose, to receive the cash equivalent of their share.
By the end of the year, £17,000 had been subscribed to the new issue.
The Slave Trade
Almost at once, changes in the organization of the Company were found necessary, partly because many new investors had now joined it. The Company therefore surrendered its charter in 1663 and a new charter, issued in the name of The Company of Royal Adventurers of England Trading into Africa. The charter provided for the organization of the Company on what may be called the standard
^30^ Scott says that the Company agreed to pay Crispe £20,000 but the evidence for this statement is decisively rejected by Zook. Zook, p. 15.
^81^ Zook, p. 10.
" ibid., p. 12.
Chartered Company pattern and extended the area of the monopoly to include part of Morocco. It specifically granted a monopoly of 'the whole, entire and only trade for the buying and selling, bartering and exchanging of for or with any Negroes, slaves, goods, wares and merchandises whatsoever to be vented or found at or within any of the Cities' on the west coast of Africa.^33^ This was the first charter in which the slave trade was formally recognized and 'from this time onwards until the Abolition Act of 1807, it was ranked as a valuable national asset, essential to the progress of the commercial empire'.^84^
The new Company took over the forts at Kormantin and Cape Corse^36^ on the Gold Coast which had been established by Crispe's Company, but it soon ran into trouble with the Dutch, who had replaced the Portuguese as the dominant European influence in West Africa. The Dutch instituted an effective naval patrol system off the West Africa coast, captured at least six English ships in the first two years of the new Company's existence, and destroyed the Company's factory at Cape Corse. Acrimonious representations at the Hague by the irascible English Ambassador, Sir George Downing---who told his royal master that the Dutch 'love nor honour none but them that they thinck both can and dare bite them'^30^---produced no results.
A fleet commanded by Holmes had many successes at sea and seized most of the Dutch forts, but in 1664 the Dutch Admiral de Ruyter turned the tables on the English---a fact graphically recorded by Pepys in his Diary on the night of the great comet.
At noon to the 'Change, to the Coffe-house; and then heard Sir Richard Ford tell the whole story of our defeat at Guinny.
Wherein our men are guilty of the most horrid cowardice and perfidiousness, as he says and tells it, that ever Englishmen were.
Captain Raynolds, that was the only commander of any of the Kings' ships there, was shot at by De Ruyter, with a bloody flag flying. He, instead of opposing (which, indeed, had been to no purpose but only for the maintenance of honour) did poorly go on board himself to ask what De Ruyter would have and so yielded to whatever De Ruyter would desire. The King and Queen are highly vexed, it seems, and the business deserves it.
Then home to dinner.^37^
" The Charter is in the Patent Rolls 14 Car. II, pt. XXVII, and is reproduced in Carr, pp. 177-180.
^38^ Evelyn C. Martin, Cambridge History of the British Empire, I, p. 441.
^38^ Afterwards named Cape Coast.
^38^ Quoted in Zook, p. 40.
^81^ Pepys^1^ Diary. Edited H. B. Wheatley 1894, IV, p. 315.
At this stage a general war between the English and the Dutch broke out and at its end in 1667 the Treaty of Breda restored the status quo in all territories which had been seized during the war.
The conflict with the Dutch was by no means the only trouble which the Company had to face. The slave trade, the profitability of which had been taken for granted, was beset with many difficulties. Some of those difficulties will be discussed in greater detail when we deal with the Company which succeeded to the Royal Adventurers. Here we need only refer to the great trouble which the Company had in obtaining payment for the slaves which it had had to supply on credit to West Indian planters. In spite of fresh issues, the Company's capital was quite inadequate to finance this credit and its financial condition was parlous even before the onset of the main Dutch war. From 1667 it partially abandoned the attempt to trade directly either in commodities or slaves, and concentrated on issuing licences to individual traders on payment of a fee---including a general licence to a body known as the Gambia Adventurers, who paid £1,000 per annum for the sole right to trade in the Gambia region and also undertook to maintain the forts.^38^ The Company, which was by now heavily indebted, also suffered considerably from the operation of interlopers, many of whom seem to have been stockholders of the Company itself.
The Royal African Company
Before the end of the decade it was obvious that the Company must be wound up. Prudence might have deterred business men from trying to form a fresh Company to replace the Royal Adventurers, but the belief in the great profits to be earned from the slave trade was still very strong. In 1672 a charter was issued to a new company the Royal African Company of England---but before this Company could be formed to take over the rights of the Royal Adventurers, complicated negotiations with creditors and with shareholders in the old Company had been necessary. After prolonged argument it was agreed that the stockholders of the Royal Adventurers should receive
2s. in the £1 on their stock, that creditors should be paid 8s. in the
£1 by the Adventurers and that to cover these payments the new Royal African Company should pay the Adventurers £34,000. The new Company then issued stock to the value of £110,000, all of which was fully paid by instalments within two years. As with the Company of the Royal Adventurers, the grant of the monopoly Zook, p. 23. was for a thousand years and it extended all along the coast of West Africa up to the south of Morocco.^80^ The Company was by its Charter given a privilege of a new kind---it was allowed to establish a court on the African coast to deal with property seized from interlopers and to adjudicate in mercantile suits. Davies rightly comments on the unique character of this institution as an illustration of the King's determination to help the Company. In effect the Crown was sanctioning a court with power over the property of English subjects and leaving its composition to be determined by a body which would be an interested party in every important matter that came before it.'^40^ The object of the Company was stated to be trade in gold, silver and negroes.
In 1674 the Treaty of Westminster ended the war between the English and the Dutch and while the French and the Dutch continued to fight, the English enjoyed a short spell of uninterrupted trade. The next fifteen years were a period of superficial prosperity for the Company. No fresh capital issues were made, dividends of ten guineas per cent were paid in every year from 1676 to 1691
and the Company's stock sold at a considerable premium.^41^ Beneath the surface, however, all was not well. The Company's capital was never sufficient to finance the credit it had to give to West Indian plantation owners, to maintain the forts and factories in West Africa and to pay for the goods which were sold in West Africa in exchange for slaves. Before the end of this period of apparent prosperity, the Company was owed £170,000 in Barbados, Jamaica and the Leeward Islands and had had to borrow more than this sum.
Some of the assets against which it borrowed were unreal or at least unrealizable and 'by modern accounting canons the Company cannot be regarded as having made real profits large enough to justify the dividends it had distributed',^42^ At times indeed lack of capital to buy goods for West Africa compelled the company to sell licences to private traders instead of trading itself. When to these financial difficulties is added the Company's inability to keep out interlopers in spite of the backing it received from the Crown, it will be realized that its prosperity was more apparent than real.
In this weak state, the Company now had to face an attack on its monopoly. The Company's charter had been granted by the Crown and not by Parliament and after the Revolution all such grants were suspect. For ten years the Company sought to obtain a
''The Company's Charter is in the Patent Rolls 24 Car. II, pt. Ill, and is reproduced in Carr, pp. 186-92.
^40^ K. G. Davies, The Royal African Company, p. 99.
\" ibid., p. 73.
^42^ ibid., p. 78.
fresh grant from Parliament, but in the meantime it was unable to take action against interlopers and even had to pay compensation in some cases where it had seized their ships.^43^ The attack on the Company's monopoly position came from several quarters. Woollen and other manufacturers who wished to export fought for free trade; individual merchants demanded the right to enter the African trade;
and planters in the West Indies complained, perhaps unreasonably, that monopoly meant excessive prices for the slaves imported. The Company could justifiably argue that the maintenance of the forts on the West African coast was essential and that only its monopoly made it possible to support the expense involved. Its opponents countered, with equal force, that the very system of licensing shewed the impracticability of monopoly and that if the Company were to be continued in existence at all, it must be a regulated company to which any individual could gain admission. After long and wearisome discussions in and out of Parliament, in 1698 an Act of Parliament threw the trade open to all English subjects, but continued the responsibility of the Company for the maintenance of the forts. In order to provide finance for tills purpose, the Act required all separate traders to pay to the Company a duty of 10 per cent on all exports to West Africa, as well as an import duty on imports into England of all commodities, except slaves, from the neighbourhood of Gambia.^44^
The Company made a valiant effort to recover its position and for a few years at the beginning of the eighteenth century considerably increased its exports, but it failed either to maintain the forts against the French or to compete with private traders. From 1702
onwards the French wars created even greater difficulties. French naval ships and privateers inflicted heavy losses and of the thirty-two ships despatched by the Company in 1703 and the first half of
1704, only ten are known to have returned.^45^
The Company's finances were now in a desperate condition.
By 1709 it was almost bankrupt and only retrieved the position by a scheme under which, in 1712, a fresh call on capital was made and creditors were persuaded to accept stock in lieu of cash. Davies gives an interesting summary of all the Company's financial transactions between its foundation and 1712, from the point of view of the investor who had taken up new issues as they were made.^40^
The total dividends paid during this period amounted to £214
"ibid., p. 124.
^44^ Cambridge History of the British Empire, I, p. 447.
^45^ Davies, p. 207.
" ibid., p. 95.
Date Cash Paid\" Stock Credited
December 1671 --- £100
1672-4 £100 £100
1676-91 £100 £100
August 1691 £100 £400
1692 £100 £400
1693 £180 £600
1697 £252 £1,200
1702, 1st call £324 £1,200
1704, 2nd call £408 £1,200
1707, 3rd call £456 £1,200
1708, 4th call £504 £1,200
1712 £540 £120
on £100 worth of stock. Davies thus shews that for an investment of
£540 the investor would have received £214, together with stock valued in 1713 at £72.^13^
In 1712 the Act of 1698 expired and the payment to the Company of export and import duties for the maintenance of the forts was discontinued. At the same time the Company obtained the contract for the Asiento---i.e. for the delivery of slaves to the Spanish colonies---but its lack of financial resources prevented it, except in a very brief period, from delivering a substantial number of slaves.
By 1730 it was quite unable to maintain the West Africa forts from its own resources and from that date it had to be subsidized by the Government for this purpose.
In 1747 the subsidy, which had come to be regarded as an annual grant, was discontinued, and on a petition of the Company for relief, the whole question of the African trade was considered.
The arguments between the Company and the advocates of free-trade followed the usual lines and the free-traders argued that the trade should be thrown open to all and that the Government should maintain the forts through a committee of merchants. The freetraders won and an Act passed in 1750 provided for freedom of trade in any place in Africa between South Barbary and the Cape of Good Hope and for this purpose 'the Company of Merchants Trading to Africa' was formed as a regulated Company, open to all.
The Company in its corporate capacity was prohibited from trading, nor might any members of the Committee trade to Africa jointly.
Traders were to pay 40 shillings for the freedom of the Company
*^T^ Cumulative totals.
" Davies, pp. 95-6.
and the Company was to use its revenue for the upkeep of the nine African forts. An anomalous position existed for two years, since the Royal African Company still existed and controlled the forts. The anomaly ended in 1752 when the Royal African Company was dissolved. Thereafter the Company of Merchants received a grant of
£10,000 per annum for the maintenance of the forts. The new Company was not chartered, nor did it carry out any of the functions for which the chartered companies had been formed. It does not, therefore, concern us in this book and we need only add that it continued until 1821 when it was abolished. The Government then assumed direct responsibility for the upkeep of the forts.
The Causes of Failure
We have seen that the story of the African chartered companies is one of failure, but it is worthwhile considering briefly why they failed and what they nevertheless contributed to English economic expansion. The main causes of failure were fourfold. First and foremost was insufficiency of capital from start to finish. Secondly, faulty accounting during the relatively prosperous first fifteen years of the Royal African Company was an important contributory cause.
Accounting had not then developed the technique necessary for dealing with large scale operations overseas, which might extend over a considerable accounting period. Allowance was not made for depreciation and the balance sheet on which dividends were based included assets whose book value had no relation to reality. Dividends were thus paid without real justification.
Thirdly, the Company had to assume much of the responsibility for defence of the forts and of her ships which in later times would have been discharged by the Government.
Fourthly, the nature of the trade in slaves to the West Indies was an important factor in the decline of the Company as well as of its predecessors. The ability of the planters to pay depended on the state of the sugar industry and when sugar prices fell, as they did in the seventies and eighties of the seventeenth century, the planter had no means of paying his debts except in sugar. On a falling market this method of payment involved the Company in heavy losses. Moreover, the mechanism for the recovery of debts in the West Indian colonies was clumsy and slow and often the local officials were more anxious to protect the planter-debtors than to help the Company recover its dues. It is true that the separate trader also experienced difficulties in these respects, but whereas he could regulate his consignment of slaves according to his receipts of payments for past deliveries---and could also direct despatches to the most reliable planters---the Company had no such freedom. It sold its slaves in general by 'inch of candle'---that is, by auction---
and moreover, it incurred great political hostility if it failed to deliver as many slaves as the planters required, and at a price which they, sometimes unreasonably, considered fair.
There was no inherent unprofitability in the slave trade. As late as 1749 a pamphleteer wrote that The most approved Judges of the commercial Interests of the Kingdomes have been of opinion that our West Indian and African trades are the most nationally beneficial of any we carry on.19 20
They were manageable in the hands of individuals, but not of an under-capitalized Company, responsible for the maintenance of the forts and politically vulnerable in England.
This, however, does not mean that the long succession of African Companies served no national purpose. They provided a valuable channel for the export of English manufactured goods---
some new industries being even called into existence because of the African trade; they enabled the English to replace Dutch influence in Africa; they brought England valuable imports such as gold, redwood, and ivory; and they stimulated the interest of the English in shipping and trade overseas. Indeed they justified Williamson's statement that the Guinea trade of the seventeenth century was one of the fundamental transactions of British expansion.^80^
Chapter 5
The East India Company: I - Before Plassey
A. The First Phase, 1600-1660
In the fourteenth and fifteenth centuries, the advance of the Mongols and Turks blocked the ancient trade routes from India and the Far East to Europe and for a time it looked as if Europe would have to forego the much needed spices and the highly prized oriental silks. At this juncture, under the inspiration of Prince Henry the Navigator---a grandson of John of Gaunt---the Portuguese explored the sea route down the west coast of Africa and in 1498 Vasco da Gama made his historic voyage to India. Before long, Portugal had established a lucrative eastern trade, and in the expansionist mood of England in the latter part of the sixteenth century, it was natural that her merchants should seek to share in it.
The Papal Bull, which had allotted the East to the sphere of Portugal, no longer commanded respect in England and after the union of Portugal with Spain in 1580 there was no political obstacle to the attempt to break into Portugal's eastern trade.
In 1589 a group of English merchants obtained a licence from the Queen for the despatch of three ships, the Royal Merchant, the
Susan and the Edward, to the East in 1591.^1^ One ship was wrecked in a storm, and one abandoned the voyage on account of a serious outbreak of scurvy amongst the crew, but the Edward, under Captain James Lancaster, reached Malaya and brought back a rich cargo of pepper and other commodities, some of which had been obtained by plundering Portuguese vessels.^2^ At about the time of Lancaster's departure for the East, Ralph Fitch arrived back in England after an amazing journey, during which he had been impris-
^1^ Bruce, Annals of the East India Company, I, p. 109.
^2^ Hakluyt, IV, p. 251.
oned by the Portuguese in Goa, had visited the Court of the Moghul Emperor at Agra, had gone on to Burma and the Far East and had returned home via Cochin and Goa. His description of 'the exceeding rich trade and commodities of those countries,'^8^ together with Lancaster's success, fired the imagination of Englishmen and in 1599 a group of merchants, some of whom had been persons of importance in the Levant Company, raised a capital of
£30,133 6s. 8d. and in 1600 they were authorized by the Queen to prepare three ships. The promoters were astonishingly quick off the mark. They purchased the Susan on 25 September 1600, on a prudent arrangement under which the vendors agreed to repurchase her on her return from her first voyage, and by 8 October they had the following ships :^4^
*Men* *Tons*The Malice Scourge 200 600
(renamed the Red Dragon)
The Hector 100 300
The Ascension 80 260
The Susan 80 240
A pinnace 40 100
500 1,500The initial capital was found to be insufficient and it was raised to £68,373, of which £39,771 was spent in the purchase and equipment of ships, £6,860 on goods for sale in the East, and bullion to the value of £28,742 was provided for eastern purchases.^5^
On 31 December 1600, a Charter was granted in the name of
'the Governor and Company of Merchants of London Trading into the East Indies'. The Charter, which was for a period of fifteen years, followed what had now become the customary pattern. It appointed Sir Thomas Smythe as the first Governor, but authorized the Company to elect future Governors; it established rule by Committees;' and it gave to the Company a monopoly of English trade in all places in Africa, Asia or America, 'from beyond the Cape of Bona Esperanza to the Straits of Magellan', though it excepted
'Hakluyt, III, pp. 281---315.
' Bruce, I, p. 129.
" ibid., I, p. 146. The figures add up to more than the capital, so presumably there was some borrowing.
' The word Committee at this time denoted individual members of the Governing Body later known as Directors---and in the rest of this chapter we shall use the word Directors.
countries in the actual possession of Christian princes in amity with the Queen. The Company was authorized to send forth annually,
'even in any time of restraint', six ships and six pinnaces, with munitions and ordnance and carrying 500 marines. The Company was also granted valuable customs concessions. For the first four voyages, goods exported would be exempt from duties and for the whole period of the grant, six to twelve months credit would be allowed for the payment of import duties. On its first voyage the Company would be allowed to export coins and silver to the value of £30,000, but in subsequent voyages it would be required to import the equivalent of any silver taken out by it.^7^
Early Voyages
The Company at this time may be regarded as a compromise between the systems which we have described in an earlier chapter as
'Regulated' and 'Joint Stock'.^8^ Members were not allowed to trade individually, but on the other hand the Company did not trade as a whole. Separate syndicates, each consisting of some, but not necessarily all, the members of the Company, were formed for each of the first nine voyages. The Syndicates raised the capital and reaped the profit, the accounts for each voyage being kept quite separate from those for other voyages. The factors and agents of the Company were as a rule kept on after the conclusion of each separate enterprise, and might thus be buying and selling on behalf of more than one syndicate at the same time, each competing with the others.
On 22 April 1601, the Company's first fleet left Torbay, under the command of Lancaster and proceeded direct to Sumatra, where Lancaster gave the customary presents to the King at Achin and obtained permission to establish a factory and to trade free of customs duty. It was also agreed by the King that the factor and his servants, in their private concerns, might conform to the laws of England, but, in their transactions with natives, to the usages and laws of the country.^9^ The pepper season had been a poor one and Lancaster was unable to acquire enough of this commodity to make the voyage profitable. He made up for this deficiency by capturing a richly laden Portuguese carrack, and went on to Bantam, where he achieved results similar to those at Achin. On Lancaster's return to the Thames, the Company 'ordered six suits of canvas doublets
' Vide the untitled volume of Charters of the East India Company in the London Library.
"Vide Supra, ch. Introductory.
'Bruce, I, p. 15.
and hose without pockets for six porters to land the precious spices'
---which included pepper, cloves and cinnamon.^10^
The Adventurers at once planned a second voyage, under the command of Captain Middleton, who was able to buy the finer spices from Amboyna, 'at the time when the Dutch were endeavouring to establish themselves, as monopolists, at that island'.^11^ On the occasion of the third voyage, William Hawkins, the second-in-command, was directed, in view of his experience as a Levant merchant, to open up a trade at Aden and Surat. Hawkins' vessel reached Surat in August 1608 and 'although the Company had directed him to call himself a messenger merely, he boldly announced himself as an ambassador from the King of England'^12^ and proceeded to the capital. He was well received by the Emperor, but the Portuguese soon managed to secure the exclusion of the English and the Company's attempts to start trade in Surat were abortive.
On the fifth voyage in 1609, Middleton---now Sir Henry---was instructed to make a fresh attempt to establish trade on the west coast of India. Once again the Portuguese, in collaboration with the local Governor, were able to frustrate this purpose.
Until 1609 the Company had considerable difficulty in raising the capital for each voyage, but in 1609 a new charter was granted extending its privileges for an indefinte period, and a number of men of rank, as distinct from merchants, became connected with it.
As a result, in 1610, no difficulty was experienced in raising £82,000
for the sixth voyage. The Company had already begun to build its own ships and in 1609 the launching of the Trades Increase, a ship of 1,100 tons, was made the occasion for a great celebration at which the King and Queen were entertained 'at a great banquet, all served on dishes and plates of China ware and His Majesty placed a great chain of gold and a medal round Sir Thomas Smythe's neck with his own hand'.^13^
The separate voyages of the Company were profitable and Mill indeed states that the profit was hardly ever below 100 per cent.^14^
A sounder view is perhaps that, since seven or eight years generally elapsed after each voyage before accounts could be rendered and payment made, the real profit was less than 20 per cent per annum
---a figure in line with normal rates at the time.^15^
In 1612, a different method of financing the expeditions was
^30^ Hunter, I, p. 279.
^11^ Bruce, I, p. 153.
^M^ Sir William Foster, The Embassy of Sir Thomas Roe to India, pp. xv-xvi.
™ Calender of State Papers, East Indies, 1513---1616, para 476, quoted in Hunter, I, p. 288.
^14^ James Mill, The History of British India, I, p. 25.
^35^ Hunter, I, p. 293.
adopted. Subscriptions were now received, not for a particular voyage, but for all the voyages that might be carried out during a particular period. All expenditure during any such period was met from the Joint Stock and at the end of the period accounts were rendered and payments made and a second Joint Stock was then opened for a separate period.
Relations with the Moghuls
The Company now had to establish its footing in India, at a time when the Moghul Empire was at its zenith, and when the Portuguese and Dutch were determined to exclude a fresh European rival. The Company's position was greatly strengthened by a dramatic episode in 1612, when the Company's fleet, under Captain Best, decisively defeated a much larger Portuguese squadron which had attacked it off Swally. The battle took place off-shore in view of a vast crowd of the Moghul subjects and officials, and the psychological effect of this victory was so great that the Company was able to obtain permission from the Governor of Surat to establish factories at Surat,
Ahmedabad, Cambaya and Goga, and on agreeing to pay a duty of
3| per cent, received an assurance that this should be the only exaction to which their merchandise should be subject.^10^
In 1615 James I sent Sir Thomas Roe, 'a man of discernment and temper', as his Ambassador to Agra. Fie was well received, but the Emperor 'shewed his personal esteem and liking for the Ambassador combined . .. with a total indifference to the objects of his mission'.^17^ Roe was nevertheless successful in obtaining from the Emperor's son, who at this time was Viceroy of Gujerat, much of what he wanted. Before he left India in 1619 the Company had permanent factories at Surat, Agra, Ahmedabad and Broach, all under the control of the Company's chief factor at Surat. The Company was allowed to govern its own members and to hire houses for trade, but 'liberty to buy or build a permanent dwelling was however, obstinately refused'.^18^
Perhaps Roe's greatest service to the Company was his wise advice against the erection of forts and the upkeep of a large military establishment. 'If he (the Emperor) would offer me ten (forts) I
would not accept one . . . A war and traffique are incompatible.'^19^
This was indeed to be the keynote of the Company's policy with respect to the 'country powers' for many years, until the decline of the Moghul Empire suggested other thoughts. Relations with
'^c^ Mill, I, p. 26.
" Foster, p. xxxii.
-
ibid., p. liv.
-
ibid., p. 303.
Emperor or Viceroys continued to be friendly through most of the next half century, though there were occasions when things went wrong. In 1622, for example, the Dutch took a number of Moghul ships as prizes and the Moghul Governor 'not having the sufficient opportunity to distinguish the different flags of the Europeans. . .
considered the whole to have been acting in concert', and only presents or bribes to the Governor's principal officers secured the release of the factors from imprisonment and the return of their goods which had been sequestered. This antagonism, however, did not last for long and, on the whole, the Company stood fairly well with the Emperor and his officials during this period.
European Rivals
It was more difficult to deal with the commercial exclusiveness and the enmity of the Portuguese and the Dutch, than to get on good terms with the Moghuls. The struggle which had begun at the battle of Swally in 1612 was resumed in January 1615, when the Portuguese Viceroy launched an attack, clearly intended to put an end once for all to the English nuisance. The Company's fleet under Captain Downton, consisting of four vessels, 400 men and 80 guns, appeared to be no match for an armada of six great galleons, many smaller ships, 2,600 Europeans, 6,000 native crew and 234 guns,21
but Downton displayed superb seamanship and completely outmanoeuvred the unwieldy galleons. In the middle of February, the Portuguese gave up the struggle and sailed away.
A worse disaster befell the Portuguese in 1622, when the combined fleets of the Company and the Persian Governor of Jask destroyed the Portuguese fleet and captured Ormuz, which the Portuguese had long occupied as the key to the Persian Gulf. For all practical purposes this was the end of Portuguese power in the East, and in 1635 a commercial convention,22 put an end to the trade war between the two countries in the East.
As far back as 1609, the Dutch United East India Company, with the firm backing of the Home Government, had declared that
'no other nation in the world should have the least part' in the commerce of the Moluccas, Amboyna and Bantam.23 The exclusive treaties which the Dutch made with princes and chiefs in Malaya and in what was to become the Netherlands East Indies, resulted in frequent clashes with the English and though the quarrel was at times patched up, it has been rightly said that relations between the two Companies consisted of 'continuous negotiation in Europe and continuous contests in the East'.^23^
The struggle culminated in 1623 in the trial and execution of ten Englishmen, nine Japanese and one Indonesian on charges of conspiring to overthrow the Dutch. It is impossible to pronounce dogmatically as to whether these charges had any justification, but it was clear that there had been grave judicial irregularities on the part of the Dutch and that torture had been used to extort confessions. English passions were roused to fever heat by what has ever since been known as the massacre of Amboyna, and there was a loud clamour for reprisals. James I was at this time in the process of negotiating an alliance with Holland against Spain, and was therefore anxious to let the matter drop. From time to time, both in his reign and that of his successor, Dutch ships were detained in order to force Holland to pay compensation, but the Dutch discovered that James I would not, and Charles I could not fight.^24^
In 1654 Cromwell's firmness brought the matter to a head, and the States-General agreed to pay £85,000 to the East India Company and £3,615 to the heirs of the victims.
After 1623 the East India Company withdrew from most of its Far Eastern stations, though it continued to trade at Bantam under great difficulties, until its factory there was destroyed by the Dutch in 1682. In India the odds were now in favour of the English, but the struggle continued for several decades. From the middle of the century it was clear that the English would not be ousted by the Dutch from the Indian trade, though they might suffer a good deal of harassment.
Developments on the East Coast
While these transactions were taking place the East India Company was beginning to establish factories on the East Coast of India. South India at this time was in a state of chaos. Moghul rule had not yet been extended to that region and although the King of Golconda exercised a vague kind of overlordship over the numerous Hindu principalities, the effectiveness of his authority varied from place to place. In their attempts to found settlements or start trade, the Company thus had to deal with several different Hindu rajas and at the same time to cope with the determination of the Dutch to keep them out. Its first attempt at establishing a factory was at Masulipatam and here it met with opposition from the Dutch as well as from the local Governor. In 1637 Francis Day, a member of the Council of Masulipatam, obtained from the Raja of Chandragiri a grant of territory some three miles in extent from north to south, stretching one mile inland, at Madraspatam.
In Day's view this was a situation where the best Coast goods could be procured.^2^®
The Company was authorized 'to governe and dispose of the government of Madraspatam for the terme and space of two years', to remain in possession thereafter on payment of half the customs revenue of the Port; to mint its own coinage, and to construct a fort for which the Raja agreed to advance the money.^20^ The Raja did not keep his promise to advance the money, but in 1640 the Company began the construction of the fort, which was named Fort St. George. In 1646 the King of Golconda, who had now overrun the Carnatic, confirmed the Company's privileges and in 1657 his General, Mir Jumla, who had become virtually independent of him, agreed to leave the Company in possession on condition of an annual payment of 380 Pagodas.24 25 26 27 28 By this time Madras, which had been an agency subordinate to Bantam, had become an independent presidency, although under the general control of the Council at Surat.
Even before the establishment of a factory at Madras, the Company's agents had begun to trade in Orissa, chiefly because the supply of cloth in Masulipatam was proving inadequate. The story of the first English venture to Bengal29 30 is typical of the methods by which the Company's position was established. In 1630 the Company had obtained from the King of Golconda a document, with the King's seal impressed upon a leaf of gold, in which 'of his great love to the valiant and honourable Captain Joyce and all the English' he granted to the English that 'under the shadow of me the King they shall set down at rest and in safety'.^20^ In 1633, on the strength of the Golden Farman, a party of eight Englishmen set sail in a primitive native junk 'with a high poop like a thatched house built in it for a cabin' and made their slow and hazardous way to the coast of Orissa. They were well received by the Raja, but soon a Portuguese frigate appeared on the scene---and but for the protection of the Raja that would have been the end of the adventure. Thereafter Ralph Cartwright, the Chief Merchant, so impressed the Governor of Orissa by his confidence and fearless speech that he secured a full licence to trade, with the right to bring disputes personally to the Governor 'because the English may have no wrong'.
The factories now established in Orissa soon fell on evil days.
The Company's goods were not saleable in that locality; malaria took a terrible toll of the factors and sailors; and 'neither the merchants nor the sailors understood the necessity for severe self-restraint and temperance in these eastern regions'.31 The Company almost abandoned these factories, but second thoughts prevailed and it was from Balasore that in 1642 four of the Company's merchants were sent to Hugli to buy silk, saltpetre and sugar and 'to procure a licence to trade which may outstrip the Dutch in point of privilege and freedom'.32 Thanks to the influence of Gabriel Broughton, a Company surgeon who at this time was in the service of the Moghul Viceroy of Bengal, the factors were successful 'having for three thousand rupees, obtained a Phirmaund for free trade, without payment of customs'.33 The fine silks and cottons of Bengal were in great demand and factories were therefore established at Hugli,
Kasimbazar, one or two places in the Delta and also at Patna in Bihar. All these factories were then placed under the orders of Madras, which at this time was still subordinate to Surat.
Rivals from Home
The East India Company suffered a good deal in the time of the first two Stuarts from what has been described as 'royal injustice'.
It was not altogether unreasonable that the monarch should occasionally demand loans or other financial accommodation from the Company, but there can be no justification for the action of the Crown in allowing or encouraging rival individuals or associations to encroach on the Company's Charter privileges.
In the reign of James I, these encroachments were of a minor character and we need only refer to Sir Edward Michelborne,34
who in 1604 obtained from James I a licence to trade to Gathaia,
China, Japan, Corea and Cambaya and other countries,35 'notwithstanding any grant or charter to the contrary'. Michelborne indulged in eighteen months of piracy which gave the English a bad name, but his ventures were presumably not profitable and in 1606 he abandoned the enterprise.
It was probably because the Company feared that other individuals might obtain licences from the Crown that it applied to James I for a renewal of its privileges in terms which would 'preclude all future pretexts for questioning their authority, or infringing their privileges of trade'.^35^ In 1609 a new charter granted to the Company, 'the whole entire and only trade and traffic to the East Indies', and prohibited all other persons from trading within the Company's limits without licence from the Company.
In 1635 Sir William Courten, together with an influential courtier and another merchant who at times lent money to the King, put forward a scheme for opening up trade with the Portuguese settlements in India. The applicants justified their proposal by alleging that the 'East India Company had neglected to establish fortified factories or seats of trade, to which the King's subjects could resort with safety'.^30^ In 1635 Charles issued letters patent to the Courten Association for a voyage to the East, which he assured the East India Company would not involve trade within its jurisdiction. The Association 'equipped four vessels, and engaged the Company's naval and mercantile servants, as officers and supercargoes'^37^
and despatched them to the East under the command of Captain Wendell.
Two vessels of the expedition plundered a dhow in the Red Sea and since the Moghul authorities made no distinction between the different groups of English traders, the President and Council at Surat were imprisoned. They were only released on payment of a fine of Rs. 1,70,000 and were required to take an oath not to molest Moghul shipping.^38^ When Courten died in 1636, Charles issued a more comprehensive licence to Sir William Courten's son and his associates, but he promised to revoke the licence if the East India Company could raise a new and substantial stock. This the Company was unable to do. Fortunately for the Company, in 1648 Courten found himself short of money and gave up the struggle, but in 1649
some of his associates formed a group which proposed to trade from a headquarters at Assada---an island off the coast of Madagascar.
This group's operations were to be extended to India and would clearly have encroached on the sphere of the East India Company.
A long wrangle ensued, but eventually the Council of State intervened and on 31 January 1650 on the basis of a joint petition, the House of Commons decided that there should be a United Joint Stock which would take over the factories in India, leaving Courten's associates to retain their Assada factory. The Assada enter
^85^ Bruce, I, p. 156.
\"ibid., I, p. 331.
"Bruce, I, p, 331.
" Bruce, I, p. 34L
prise was soon abandoned and for the time being the Company had no English rival. Its position was nevertheless far from satisfactory.
The response of subscribers to the new Joint Stock was disappointing and the Company appeared to be in its last gasp. When officers were elected in June 1651, the Court observed that 'hereafter there will be little use of any Governour, in regard they are to sett noe ships out nor much other business but to pay their debts'
At the end of the five years for which the United Stock was raised, it was found impossible to raise fresh capital. The Company's operations were much reduced in scale and it issued licences to private individuals to trade. Some of its members demanded that the Company should become a Regulated rather than a Joint Stock Company. There was at this time much independent trading and restrictions on it were not enforced. Before long, however, it was found that competition merely meant paying higher prices for the purchase of goods in India and receiving low prices when they were sold in England. Opinion amongst merchants, therefore, swung back in favour of the old Joint Stock system and when in 1657 the Directors seriously considered selling the Company's factories and rights, they were overruled by the General Court.
Cromwell now took decisive action and came down in favour of the continuance of the East India Company as a monopolistic enterprise. No copy of the Charter issued by Cromwell in 1657
exists, as far as is known, but it appears from the Company's records that it generally reproduced the Charter of 1609 with a few additions in the Company's favour.^40^ The Company, as required by the new Charter, threw open its freedom to any member of the public who chose to pay £5. It was decided that the separate periodical Joint Stocks should be replaced by a continuing capital. The capital was issued at £739,782 and the minimum subscription was £100, with £500 as the minimum share qualifying for a vote. The Company, thus re-formed, bought up the properties of the old Company and it was agreed that all dividends should be paid in cash, and not, as had often been the case previously, in commodities. In spite of its change of form, the East India Company had in fact survived and although Cromwell's Charter had no force after the Restoration, an ample Charter was issued by Charles II in 1661.
Trade and Finance
The East India Company's servants had a great advantage over some of the other Chartered Companies, in that commerce and the
^19^ Court Minutes 1650-4, p. 110.
- Foster's Introduction to the Court Minutes, 1655-9, p. xvii.
G
ancillary services were well organized in India long before the English arrived. There were also in India commodities of great demand in Europe, foremost amongst them being indigo, pepper and other spices, saltpetre and cotton goods. Raw silk was also an important item in the early shipments home, but until the Bengal trade was well established this came mainly from Persia and provided indeed an important reason for the Company's desire to establish trade with that country.36 The Company's main exports to India were broadcloth, lead, ivory from Africa, and miscellaneous English manufactures, but the demand for these commodities was never enough to provide finance for the purchase of Indian goods for the home market. The Company thus had to be a net exporter of bullion, though to a limited extent it was able to finance its expenditure by earnings on freight between India and Persia, or by port to port trade. Up to 1629 the Company had been required to obtain an annual licence to export silver, bullion or coin, but in that year it received standing permission to export £80,000 in silver and
£40,000 in gold every year.37
It is, unfortunately, difficult to give a satisfactory account of the Company's financial transactions in the early period. In an interesting note on this subject, Hunter refers to the accounting secrecy resulting from jealousy between successive groups of adventurers, to the confusion of accounts consequent on the overlapping of ventures---which continued even when Joint Stocks for a period were raised---and to the rudimentary condition of the science of accountancy. For the First Joint Stock which lasted from 1613 to
1616, the facts are relatively clear. The total capital for the four years was £429,000, of which £272,544 was spent on the cost of equipping or acquiring twenty-nine ships, while £78,017 was spent on goods. The average profit amounted to 87| per cent38 but in assessing the real return, allowance must be made for the long delay in making up accounts and distributing dividends. The Second Joint Stock was intended to last from 1617---1620, but was in fact extended to 1628. It was well subscribed, but the figures showing results are very incomplete. In 1628 it was found difficult to raise a fresh Joint Stock and for a time the Company had to trade on the strength of the private credit of the Directors. A little later, about 'thirty members came forward with a subscription just sufficient for a separate Persian voyage'.39
In 1631 a Third Joint Stock was formed and a new Subscription which amounted to £420,700 was raised.^40^ 'The third Joint Stock ran a course similar to its predecessor---large gains on individual cargoes, heavy losses from the Dutch, and an inability to get itself wound up and distribute its profit'.^40^ In 1640 the Company made an unsuccessful attempt to raise a Fourth Joint Stock, and so,
Hunter wrote, 'The Third Joint Stock, whose shares fell to 60 per cent drifted on to the welter of the Civil War'.40 41 42 We have already discussed the difficulty of raising capital in the fifties, but Cromwell's Charter, followed by that of Charles II, gave the Company a new lease of life and capital was once more forthcoming.
B. THE SECOND PHASE, 1660-1700
During the reign of Charles II the Company's servants in the East must have been mainly conscious of the aggressiveness of the Dutch, the impossibility of staying aloof from the struggle between the Marathas and the Moghuls, and the difficulty of doing business in a country which was beginning to disintegrate. From the London point of view, however, the period was one of prosperity and expanding trade, during which the Company enjoyed the steady support of the King. Cromwell had indeed rescued it from the doldrums, but Charles took the process further. His charter of 1661 was the most favourable grant yet made to the Company. It raised to
£50 million the limit on the bullion which might be exported in a single voyage; it gave the Company criminal and civil jurisdiction
'over all persons belonging to the said Governor and Company or that shall live under them'; it empowered the Company to make war or peace with non-Christian princes or people; and it authorised the Company to erect fortifications and to export munitions from England. Four other charters were issued during this reign, each intended to meet some special difficulty.43
Developments in the East
It will be convenient to consider developments in the East regionally and we must begin with Bombay.
Although Bombay in the seventeenth century was not particularly attractive from the business point of view, 'Its potential as a naval base was obvious, and the East India Company .. . had given thought to acquiring it from the Portuguese'.^40^
In 1661 Bombay was transferred to Charles II by Portugal as part of the marriage dowry of the Infanta, but Charles soon discovered that 'the fortifications on the Island were in a ruinous condition, that stores, of every description, would be required . . . and it would be necessary to embark four hundred men as a garrison'.^80^
He decided to get rid of this apparently unprofitable acquisition and in September 1668 Bombay was transferred to the Company at an annual rent of £10. A Charter issued in 1669 conferred on the Company 'the direct, full and absolute dominion and sovreignty' of Bombay and its dependencies.
The President of Surat became ex officio Governor of Bombay, but a Deputy Governor was appointed to do the day to day work.
The administration of the Portuguese had been rudimentary and a proper system of government now had to be organized. The first two Governors were men of outstanding quality. Unfortunately, Sir George Oxenden only lived a few months after taking on this dual responsibility, but his successor, Gerald Aungier, established a judiciary, promulgated a code of civil and criminal law and organized a rudimentary military police force. During the earlier years of his regime, the threat from the Dutch was ever present, but this came to an end in 1674, when Commissioners were appointed to settle Anglo-Dutch disputes in the East. A greater difficulty then arose from the Company's cross-fire position between the Moghuls and the Marathas under Sivaji, since each side expected help from the English. The Company soon found itself helpless against the Marathas on land, while they on the other hand, needed to use the Bombay port and to exclude the Moghuls from it. In 1674 the Company made a treaty with Sivaji and thereby incurred the wrath of the Moghuls. Aungier then laid himself out to placate the Emperor and sent him a present of two mermaid's teeth and two petrified crabs, which he described as 'rareties precured with much trouble'.^81^
In spite of his treaty with Sivaji, Aungier had to allow the Griffiths, To Guard My People, p. 38.
"Bruce, II, p. 169.
^01^ The English Factories in India, 1670-71,1, p. 86.
Moghul Admiral---The Sidi^62^---to winter in Bombay harbour, to the harassment of the inhabitants.
In addition to these external dangers, in 1673 Aungier had to cope with a rebellion led by Richard Keigwin, the Commandant of Bombay, 'brought on mainly by the Company's parsimonious attitude towards its factors and soldiers'.^63^ This rebellion was not quelled until in 1674 a naval force appeared off Bombay with orders from the King.
Throughout these proceedings Aungier had shown remarkable tact and patience, but towards the end of his term of office he came to the conclusion that the English must be more aggressive. In 1682, two men, inclined by temperament to prefer militant methods to diplomacy, were at the head of the Company affairs---Sir Josiah Child as Governor of the Company at home and his brother, John Child
(later Sir John), as President at Surat and Governor of Bombay.^64^
In 1688 the Directors announced 'In unmistakeable terms the determination of the Company to guard their commercial supremacy on the basis of their territorial sovereignty'---in other words they intended to teach the country powers a lesson. The Company strengthened the defences of Bombay, stationed armed vessels in the harbour, interfered with Moghul shipping and treated the Moghul Governor of Surat with contumely. This policy proved disastrous and retribution soon came. The Company's factories at Surat and elsewhere were seized, two of the factors at Surat were imprisoned, and the Sidi's fleet attacked Bombay. Before long, Child was compelled to sue for peace---which was granted on humiliating terms.
A farman was issued, accepting the apologies of the English, imposing a fine of Rs. 150,000 on the Company and permitting the Company to resume its former trade.^63^
Madras
The Company's affairs in Madras in the second half of the seventeenth century require only brief mention. As we have seen, South India had been in a state of chaos since the break-up of the old Hindu kingdom of Vijayanagar and the temptation to be drawn into the resulting struggles for power was considerable. One Governor, Sir Edward Winter, did indeed contemplate an offensive and defensive alliance with the King of Golconda, but the Directors wisely removed him. For a time the Dutch war interrupted trade
^02^ The Sidis were Abyssinians who had settled on the Malabar Coast and provided the mercenary fleets of the Moghuls. The Admiral was generally referred to as the Sidi.
^63^ Griffiths, To Guard My People, p. 41.
^M^ A modern authority considers that they were not brothers or even related to each other.
"Bruce, II, p. 640.
and in 1673 the Dutch captured three East Indiamen in an engagement off Petapoli,^55^ but as we have seen the quarrel with the Dutch was brought to an end in 1674. The difficulty of avoiding entanglement in the local wars at this time was so great that at one stage the Madras Council even considered abandoning Madras." Wiser thoughts prevailed and the Council remained steady under the threat of Sivaji's invasion of South East India. In spite of this anxiety, the President, Streynsham Master, introduced important judicial reforms and toned up the administration. In 1687 Aurangzeb conquered Golconda and a measure of order was restored in South India. The Company now benefited from its refusal to be drawn into local struggles and from the fact that in spite of Child's strong-arm policy, the Madras Council had remained strictly nonbelligerent. It was now able to make steady progress in its commercial transactions.
Bengal
We must now turn our attention to the more spectacular events in Bengal and the drama begins with the action taken by the Moghul Viceroy, Shaista Khan, to exact from the Company dues not provided for in its grant. It was easy to enforce these demands by stopping the saltpetre boats on their way down the Ganges, or by preventing the native merchants from dealing with the English."
The Company's trade came almost to a standstill, but in 1677 a threat by the Madras Council^59^ to withdraw from Bengal brought about some improvement.^50^ Another factor in the improvement was the recall of Shaista Khan to the Moghul Court. In 1680 the Company obtained another farman from the Emperor exempting it from all dues, but by this time Shaista Khan had returned to Bengal and he paid little attention to the jarman. Matters went from bad to worse and in 1686 when Job Charnock took over as the Company's Agent at Hugli, he was at once faced with a full scale attack on the factory.^01^
Charnock was forced to retire to Sutanati---on the site of the modern Calcutta. A temporary truce was patched up, but in February 1687 the attack was renewed and Charnock was compelled to retreat further down the river to Hijli. Here Charnock and a few hundred men were again besieged by a force of 10,000, but after half Charnock's little force had been killed and a quarter wounded
English Factories in India 1670-77, pp. ix and 70.
\" Hunter, II, p. 223.
Cambridge History of India, V, p. 107.
" The Bengal factories were still subordinate to Madras.
" Hunter, II, p, 239.
\"'ibid., II, p. 253.
or sick, he deceived the Moghul General into believing that a large relieving force had arrived, and achieved an honourable capitulation. A few months later he again settled in Sutanati by permission of the Viceroy.
The Company now claimed that losses on account of oppression and extortion in Bengal amounted to £700,000,^02^ and although this was probably an exaggeration, it may have been one of the factors which led to the adoption of the 'strong-arm policy'. That policy was even more disastrous in Bengal than on the West Coast, for the Directors now entertained the fantastic notion of going to war with the Moghul Empire. A naval expedition consisting of nineteen ships and carrying 100,000 infantrymen, was to take possession of Chittagong, to lay hold of Moghul ships at sea, and to advance to Dacca and force the Viceroy to negotiate terms. In 1688 a ship under the command of Captain Heath arrived in Bengal, with orders to take away all the Company's servants and join in the attack on Chittagong. Charnock pleaded in vain against this stupidity, but Heath had his way only to find that Chittagong was far too strong to attack. He returned to Madras, taking with him an unwilling Charnock and practically all of the Company's employees. The grand design had ended in failure and humiliation.
At this stage, events in Bombay led, as we have seen, to a reconciliation between the Company and the Emperor. This was followed by an invitation to Charnock from the new Viceroy of Bengal to return and resume trade. On 24 August 1690, Charnock, 'with a poor guard of thirty soldiers all told, scrambled up the steep, mud bank which was thenceforward, without a break, to grow into the British capital of India'.^03^ In 1696 the factory at Sutanati was fortified and in 1698 the three villages of Sutanati, Calcutta and Gobindpur were rented for Rs. 1200 a year, with the permission of the Viceroy. In 1700 Fort William was made the seat of a Presidency.
The Company had now learned that the Moghul Emperor was still far too powerful to be attacked with impunity, and for the next fifty years the Company avoided trying conclusions with him.
C. THE UNITED COMPANY BEFORE PLASSEY
The Rival Companies
In the first two decades after the Restoration, the East India Company was able to keep the mischief of interloping within reasonable
^02^ Hedge's Diary, II, p. 46, quoted in Hunter, II, p. 244.
^63^ Hunter, II, p. 267. bounds and it was perhaps helped in this matter by its liberality in allowing outsiders to live in its Indian stations and to trade, except in the commodities which the Company exported to or imported from Europe. By the end of the seventies, however, the evident prosperity of the East India trade excited envy and even amongst the members of the Company there were those who wished to trade as individuals. A head on clash came in 1681, when the Deputy Governor of the Company, in opposition to a prayer for a royal proclamation against interlopers, moved an amendment in favour of winding up the Company and inviting subscriptions from the public to a new Joint Stock.^04^ This attempt failed and in 1683 the King issued a new Charter which strengthened the hands of the Company against interlopers and authorized its servants to seize unlicensed goods, since in the words of the Charter 'a loose and general trade will be to the Ruin of the whole'. This led to a challenge of the royal prerogative in the matter of the monopoly of the Indian trade, but the Lord Chief Justice found in favour of the Crown. After this triumph the Company prosecuted interlopers with great rigour, but the profits to be made were so great that prosecution had little effect and 'a safe and profitable business in Interloping was thus established on an enormous scale'.^03^
In 1686, James II issued a Charter further extending the Company's authority. Nevertheless, public resentment of the Company's monopoly and of the fact that it was in practice controlled by a small côterie of individuals grew rapidly and soon after the Revolution it was clear that there were several different elements in this opposition. There were the perhaps old-fashioned bullionists; there were those who genuinely considered a Regulated Company preferable to a Joint Stock Company; there were silk and wool manufacturers who objected to the import into Britain of cotton goods and silks; and there were others who simply wanted to be in on a good thing. There was also a feeling in many quarters that these matters should be settled by Parliament and not by the Crown. In
1690 the House of Commons passed a Resolution in favour of establishing a new Company by Act of Parliament, but no action was taken before Parliament was dissolved.^00^
In 1691 a group of interlopers and other opponents of the Company formed what is called the Dowgate Association, since it met at the Skinners Hall in Dowgate. The Company, perhaps unreasonably, rejected a compromise with the Association, which would only have involved increasing the Company's capital and broaden-
^M^ Hunter, II, p. 285.
"ibid., p. 297.
^M^ In these paragraphs, considerable use has been made of Hunter's History of British India, II, Ch. 8.
ing its basis by limiting individual shareholdings to £5,000. In 1693
a default by the Company over payment of tax rendered it liable to forfeit its Charter. In October the King issued a new Charter excusing the default, but this was followed in November by a much more important Charter which increased the Company's capital by £744,000, allowed any member of the public to subscribe, limited individual shareholding to £10,000 and allowed no shareholder more than ten votes. The Charter, which was to run for twenty-one years, also prohibited the Company from licensing private persons or private ships for the East Indian trade.^07^
A rude shock awaited the Company when, in January 1694, a Committee of the House of Commons reported that the detention of an interloping ship had been illegal, and a few days later the whole House resolved that 'all the subjects of England have an equal right to trade to the East Indies unless prohibited by Act of Parliament'.^08^ This raised the question of the royal prerogative, but William avoided this issue in September 1694 and issued a new Charter which omitted the clause regarding the licensing of private trade or shipping.
An attempt to introduce a Scottish Company into the East India trade proved abortive, but by this time the Company had become a mockery. In the hope of securing effective Parliamentary protection of its privileges, the Company offered the Government a Ioan of
£700,000 but the Dowgate group countered with an offer of £2 million, which was accepted. In 1698 an Act of Parliament empowered the King to create a new incorporated body---the General Society ---to which a Charter could be granted. This was done in July and the General Society was granted the exclusive right of trade to India after the expiry of the three years' notice of termination which was now given to the East India Company,^09^ henceforth generally known as the London Company. It was provided that any member of the public might belong to the General Society and might trade separately in proportion to the stock held by him. Stockholders might, if they wished, form a Joint Stock. By the same Charter, a considerable body of stockholders were incorporated into the English Company and at the same time the old East India Company subscribed £315,000 to the General Society's stock and so became entitled under the new Charter to trade in its own right. There were thus two Joint Stock Companies entitled to trade to the East, as
" It is alleged that the Charter was obtained by wholesale bribery of Ministers.
"Journal of the House of Commons, 19 January 1694, quoted in Hunter, II, p. 313.
"Hunter, II, p. 317-22.
well as any individual members of the General Society who had not joined the English Company.
The English Company at once found itself in financial difficulties, since almost its entire resources were absorbed in its share of the loan of £2 million to the Crown. The old Company still had its assets and its personnel abroad, besides a good deal of experience in negotiating with the authorities in India. The English Company soon decided to seek an amalgamation, but at this stage the London Company held aloof. The inevitable result was serious strife in each of the three Presidencies.
Doubts were now raised as to whether the London Company would continue to have a legal right to trade after the determination of its privileges, but these doubts were removed by an Act of Parliament in 1700.^70^
The conflict of jurisdiction and disputes as to right to appoint consuls until the London Company's Charter expired brought the English into disrepute with the Moghul Emperor and his officials.
Clearly this situation could not be allowed to continue and in 1702
pressure from the Crown brought about an agreement in principle that the two English Companies should unite. Each Company was to have seven years to wind up its own affairs and during that period each Company was to appoint twelve managers to conduct the joint trade. The arrangement was implemented by a document known as an Indenture Tripartite, the parties being the Queen and the two Companies. It was provided that the old Company would receive
£130,000 as an equalisation of the assets of the two Companies, while the old Company would buy additional stock in the General Society so that both Companies would have equal shares in it.^71^
There were, nevertheless, still disputes between the two Companies and a good deal of pressure had to be brought on them by the Government before, in 1708, an award by Lord Godolphin on disputed matters was enshrined in an Act of Parliament. A real union was effected in 1709 by two Charters, by one of which the old Company surrendered its separate rights, while by the other the United Company of Merchants of England trading to the East Indies was brought into being.
Trade and Finance before the Union of the Companies
The Company's trade at this time consisted of three main branches
---one to Surat and Bombay, with an off-shoot to Persia; another to Madras and Bengal; and a third branch to Bantam. In practice it
^10^ Hunter, II, p. 333.
^11^ ibid., II, p. 372. The Indenture is reproduced in the volume of Charters already quoted.
was often triangular in character, for a ship from England would perhaps buy goods at Surat and sell them in Persia or Bantam, while other ships would purchase goods on the east coast for Bantam and return with pepper and valuable spices. The trade between Indian ports was from a fairly early period left as private trade in the hands of the Company's servants. The 'Investment', i.e. the goods purchased in India for sale abroad, comprised Surat and Madras cloth,
Malabar pepper, and silks and saltpetre from Bengal. Exports to India followed much the same pattern as in the first half of the century.
It is impossible to read the Company's records without being impressed with the commercial acumen of the Directors and the way in which their detailed instructions were varied according to political circumstances. In spite of interruptions during the Dutch wars and of the difficulties of buying and selling when the troubles between the Marathas and the Moghuls were at their worst, the Company expanded its trade, made good profits and paid satisfactory dividends. In 1661 a dividend of 20 per cent was paid, and this was followed in 1663 and 1664 by payments of 40 per cent and 10 per cent respectively.'^2^ The valuation made in 1664 shewed the Company's assets at £661,542 and its liabilities at £165,807, as against a capital of £369,811. Shareholders now had the right to withdraw from the Company, but not unnaturally, none of them did so.'^3^. In the seventies and eighties, too, the Company's records made cheerful reading, though there was occasionally a shortage of ready cash in England so that the declaration of a dividend was sometimes accompanied by a statement that it would be paid 'as money shall come in'.'^1^
Progress was to some extent interrupted in the eighties by the war with the Moghuls and the years immediately following the formation of the rival company were difficult, but over the period from 1660 to the end of the century as a whole, the Company was prosperous, and in 1701 £100 worth of stock sold for £149. When the United Company of Merchants of England trading to the East Indies came into being, it was thus in a strong position to face the future.
The United Company
In spite of many troubles, the period between the establishment of the United Company and the Battle of Plassey was one of unspectacular but steady growth. It was obviously necessary for the
\" Court Minutes 1664---7, p. viii.
\" Hunter, II, 276.
^71^ Court Minutes 1677-9, p. 25.
United Company to regularize its trading position in India and in
1714, John Surman was sent on an embassy to the Moghul Emperor, the way having been satisfactorily prepared by a substantial payment to Mir J'afar Khan, the Deputy Governor of the Lower Provinces.^70^ Surman obtained three farmans, one of which confirmed the right of the Company to trade in Bengal, free of all duties, on payment of Rs.3,000 per annum, and authorized the Company to rent additional villages. But 'Dilli Dur Ast'^70^ and in Bengal J'afar Khan refused to allow the Company either to mint its own coinage, or to acquire more villages in spite of the farmans. Nevertheless, by a judicious mixture of tact, bribery and occasional threats, the Company's servants managed to overcome these difficulties and to conduct a trade which was profitable both to them and to their employers.
In the Madras Presidency matters went smoothly until in the fourth decade of the eighteenth century the English and the French took sides in the domestic quarrels of the Carnatic and were thus drawn into a conflict which at times coincided with war in Europe.
It is not necessary for our purpose to discuss this struggle in detail.
It is sufficient to say that while Clive and the French General Dupleix were perhaps equally matched, Clive was better supported from home and the English naval forces, which backed up the Company, were superior to those of the French. The result was inevitable and in 1761 the French abandoned the contest, and although they renewed it in 1782 for a brief period it had become clear that the English were the dominant European power in India.
The West Coast in this period calls for little comment. The United Company suffered, as the East India Company had done, from the prevailing anarchy in the countryside, from the dislocation of the economy consequent upon the ravages of the Marathas and from the depredations of the Malabar pirates. Nevertheless, the Company's agents managed to carry on trade though they had to adapt their methods to unfavourable circumstances. Whereas in the early days they had themselves taken the Company's goods to the interior for sale, they now had to distribute their wares through dealers. Similarly, they had to employ intermediaries for the purchase of the investment and Mill has provided us with an interesting account of how the system worked, through an elaborate system of agents, dealers, brokers and sub-brokers, so that the Company's servant was thus five times removed from the workers. A considerable organization at home was obviously needed to control the complicated operations of the Company and to give them the necessary
" Wilson, Early Annals of the English in Bengal, p. 242.
" 'Delhi is a long way away'----a common saying. flexibility. The ten committees did the detailed work of the Company under the general control of the Directors.^77^ Perhaps the most important of them were the Committee of Warehouses, the Committee of Buying and the Committee of Shipping. The first named committee prescribed the nature and quantity of goods to be brought from the East, arranged for their inspection and warehousing and organized the sale in England. The Committee of Buying was responsible for the purchase of the goods to be exported and for their delivery on board ship, while the Committee of Shipping hired the ships---for the Company had now discontinued the experiment of constructing its own ships---distributed the cargo and determined the tonnage which could be made available for private trade. As can be imagined, the remoteness of the London control and the constant fluctuations in the economic and political conditions of India, sometimes meant that the goods sent to the East could not be sold, or that the Company's directions regarding the investment could not be carried out. The correspondence between the Company at home and its servants abroad on this subject was at times acrimonious.
Nevertheless the system worked. Trade expanded rapidly and the Company made profits. In the first three years after the establishment of the United Company, dividends of 8 per cent, 9 per cent and 9 per cent respectively were paid. From 1712 to 1722 the dividend was 10 per cent, but in 1723 it dropped to 8 per cent and remained at that rate until 1732, when it was lowered to 7 per cent.
That rate continued to be paid until 1744, when it was again raised to 8 per cent.^78^ Mill makes an interesting comparison with the Dutch East India Company which, in the period from 1730 to 1744 paid dividends varying from 25 per cent to 12J per cent. The comparison, however, is hardly fair, since the most important Dutch theatre of trade at that time was in the Far East, where spices much more valuable than the commodities of India could be obtained.
Some sections of the English public took a somewhat different view of the affairs of the United Company from that which might be gained by looking at its profits. In this period imports by the Company into Britain considerably exceeded its trade exports and the imbalance involved the export of bullion. Critics therefore maintained that the handsome profits of the Company were made at the expense of the nation, and there was therefore much sympathy with groups of individuals who proposed to organize a Regulated Company in place of the United Company. According to the Act of
1711, the Company had been granted the monopoly of the Eastern trade up to 1733, but there was also the proviso that the debt from
^n^ Mill, III, 7-10.
^78^ ibid., 22 and 44.
the Government to the Company must be discharged before its exclusive rights could be terminated. In 1730 the sponsors of the new proposals for a Regulated Company offered to lend the Government the money to pay off its debt to the United Company and undertook to throw the new Company open to all merchants. After lengthy arguments, the Government accepted the United Company's counter offer of a payment of £200,000 to the Treasury and a reduction to 4 per cent of the rate of interest on its loan to Government. The Company's rights were then extended to 1769.^70^ In 1744
a further extension until 1783 was given, but the Company had in return to make a further loan to the Government of £1,000,000 at
3 per cent, and in 1750 the interest on the earlier loan was also reduced.^80^
At the end of our period, the Company had survived the attacks of continental rivals and the efforts of English competitors to oust it from its privileged position, and was in a healthy and prosperous condition.
\" Cambridge History of India, V, p. 109.
^80^ ibid., p. 109.
Chapter 6
The East India Company: II — 1757-1834
For half a century, the East India Company combined commercial activities with the functions of government over a large part of India. In this book we are not primarily concerned with the Company as the Government of India, but we must consider the steps by which it acquired dominion in the several regions of India.
In Bengal, the Battles of Plassey and Buxar were the starting points;
in Madras the cession to the Company of an important tract of territory was followed by expansion as a result of the Mysore wars;
while in Bombay and Central India the wars with the Marathas led to the acquisition of sovereignty over vast territories and the exercise of suzerainty over other extensive areas. By the second quarter of the nineteenth century the character and functions of the Company had changed so completely that it was necessary to divest it of its commercial functions.
The Acquisition of Bengal
While the Battle of Plassey can fairly be described as a necessary defensive measure against Siraj-ud-daula, the Subadar44 of Bengal,
Bihar and Orissa, the Battle of Buxar in 1764 was clearly aggressive in character and was closely connected with the personal ambitions of the Company's Council in Calcutta. Young men went to India in the eighteenth century to make a fortune and since they were grossly underpaid they relied for this purpose on private trade---a practice at times allowed and at other times connived at by the Directors. The Company's servants claimed that the farman of 1716^2^ entitled them to carry on the internal trade of the country free from all duties. In the sixties, this claim brought them into conflict with the Nawab Mir Kasim, whom the Company had installed as Subadar, but who was not as subservient as had been hoped.
He rejected the duty-free claim as regards the internal trade and made it meaningless by abolishing the internal duties altogether.
Since the Company's servants were not prepared to lose such a valuable privilege, the Company went to war and the Battle of Buxar resulted in the complete defeat and exile of Mir Kasim. The Company was left in effective control of Bengal, and a little later a succession to the Subadarship was only recognized on condition that the Subadar should delegate all authority to the Company's nominee as Deputy Subadar.
Another far-reaching change was at hand. Until the beginning of the eighteenth century, authority in a Moghul province had been divided between the Subadar, who was responsible for law and order and military security, and the Diwan, who collected the revenue and controlled the civil administration and the courts of criminal and civil justice. In 1765 the Emperor revived this division, and conferred the Diwani upon the Company in return for its help in annexing Allahabad. All authority over Bengal was now in the Company's hands, either by virtue of the Diwani or through its control of the Deputy Subadar. For a time, the Company did not exercise its Diwani jurisdiction, but delegated its authority to the same individual whom it had nominated as Deputy Subadar. There was thus a dual system of government, in which power was divorced from responsibility, with unhappy results for the inhabitants.
In the declining days of the Moghul Empire the tyranny and rapacity of local officials had remained unchecked. Justice was frankly bought and sold, and in the words of a contemporary observer 'trifling offenders and even many condemned on fictitious accusations, are frequently loaded with heavy demands and capital criminals are as often absolved by the venal judge'.^3^ Perhaps even more serious than judicial corruption was the oppression of the cultivators by the collectors of the revenue. After the Battle of Buxar, the local officials felt that with the might of the Company behind them, they could carry tyranny to even greater lengths. Added to their oppressions was the equal rapacity and unscrupulousness of many of the Company's servants. Villagers were forced to buy and sell at prices arbitrarily fixed by their new masters, and 'the Company's agents or Gomastahs, not content with ignoring the people, trampled on the authority of government, binding and punishing
^1^ Supra, ch. V.
^1^ Verelst, A View of the State of the English Government in Bengal, p.
229.
the Nawab's officers whenever they presumed to interfere'.^4^ In 1769
Richard Becher, the Company's Resident at Murshidabad, declared that 'since the accession of the Company to the Diwani the condition of the people of this country has been worse than it was before. . .
This fine country, which flourished under the most despotic and arbitrary government, is verging towards ruin'.^5^ There was some exaggeration in this statement, but it is clear that the first few years after Plassey were a period of gross misrule.
Parliamentary Control
Clearly some control from Britain needed to be exercised over an organization which in the words of Burke some years later, 'did not seem to be merely a Company formed for the extension of the British commerce, but in reality a delegation of the whole power and sovereignty of this kingdom into the East'.^0^
The abuses of the Company's newly acquired authority in Bengal made the need for control urgent and in 1773 the Regulating Act was the first, rather unsatisfactory, step in this direction. It was followed in 1784 by Pitt's Act, which has rightly been described as a great Act, and which strengthened the authority of the Home Government. The Act left the Company autonomous in commercial matters, but placed its political operations under a Board of Control consisting of the Chancellor of the Exchequer, a Secretary of State and four Privy Councillors nominated by the King. The Board's approval was required for all despatches relating to matters other than commercial affairs and the Board was empowered to issue orders to India, which would be sent out in the name of the Company. The Court of Proprietors would have no power to amend a decision of the Directors which had been approved by the Board.
Patronage, in the form of the right to appoint the Company's servants, was left in the hands of the Directors, partly because they were strong enough to insist on it, and partly because of a widely entertained fear that in the hands of the Government it would be a corrupting influence. This patronage was by convention apportioned among the Directors in a very elaborate way. It was divided yearly into twenty-eight parts of which the Chairman and Deputy Chairman received two parts each, the Board two parts and each of the twenty-two Directors, one part. 'A Director could normally expect to have at his disposal in any one year at least six
* ibid., p. 46.
Cambridge History of British. India, V, p. 207.
*ibid., p. 182.
H
or seven appointments',45 and since these appointments were very lucrative a Director could have earned a handsome income by selling them. This does not seem to have happened often and on two occasions a Director convicted of selling patronage was forced to resign.46 47
Some important changes were made by the Act in the Constitution of the Government of India. The Governor-General was to have three Councillors, and though he was given a casting vote he had no overriding authority. Similar Councils were set up in association with Governors in each of the three Presidencies, all of which were subordinated to the Governor-General and Council, although they were given power to commence hostilities or make treaties in emergencies or times of imminent danger.^0^ In 1786 an amending Act, opposed by Burke on the grounds that it would establish despotism in India, empowered the Governor-General to overrule his Council in certain circumstances.
Viscount Henry Dundas, who took a great and well-informed interest in Indian affairs, became President of the Board in 1788 and thereafter, although the fiction of a Board survived, 'the President was virtually a Secretary of State for India, and Indian affairs became a matter for the Cabinet in the same way as those colonial issues which were dealt with by a Secretary of State'.48
As we are concerned in this book with the Company as a commercial organization rather than with the Government of India, it is not necessary for us to describe the way in which the reforming intentions of Parliament were carried into effect or how the foundations were laid for an administration which, by reason of its efficiency and its integrity, excited the admiration of the world.
Madras and Bombay
The Acts of 1773 and 1784 were framed mainly to provide for the administration of Bengal, but as Madras and Bombay expanded, they fitted into that framework. In the south, expansion involved three separate developments. First there was the cession of the Northern Sarkars to the Company in 1765 as part of the deal which gave Allahabad to the Emperor. The Sarkars lay within the jurisdiction of the Nizam-ul-Mulk, who somewhat reluctantly acquiesced in this transaction in consideration of the Company's undertaking to provide him with military help and to pay a tribute. The next stage in expansion involved the annexation of the Carnatic at the end of a long period of misrule and confusion, in which many of the Company's servants resembled their Bengal colleagues in rapacity.
The Nawab had become independent of the Nizam as a result of English help, but in the process he had incurred considerable debts, foremost among the creditors being servants of the Company. The case for intervention by the Company in the affairs of such a misgoverned country was strong, but the creditors were determined that tliis should not happen and were backed by the influential body of Proprietors and Directors known collectively as the Arcot Interest.
It was not until the end of the century that the intrigues of the Nawab with Mysore gave Wellesley the opportunity and the justification for taking action. In 1801 the Carnatic was annexed by the Company, to the considerable advantage of the inhabitants. Two years earlier the administration of Tanjore---with which district the Nawab had for a long time been embroiled---was handed over to the Company in return for an annual allowance to the Rajah and his sons, and one is bound to agree with the view that this delivered the people 'from the effects of native oppression and European cupidity'.^11^
The Mysore wars, fought intermittently over several decades, provided the third factor in the Company's territorial expansion in the south. Until the end of the eighteenth century, the non-expansionist sentiments expressed by Clive in the sixties still governed the Company's policy, but it was, however, impossible to stand aside in the triangular conflict between the Marathas, Mysore, and the Nizam, and war was inevitable. Wellesley was an imperialist, but even if he had been otherwise, it is difficult to see that the annexations by the Company as a result of the Mysore wars could have been avoided.
As regards Bombay and Central India it is sufficient to say that the ultimate defeat of the Marathas---a congeries of warring groups united only by hatred of the British and of the Moghuls---resulted in considerable accretions to the Company's territories in Bombay and Central India. By the third decade of the nineteenth century, practically all of India south and west of the Punjab was either under the direct rule of the Company, or was politically controlled by what was later called paramountcy.
Later Charters
Dundas gave much thought to the whole question of the functions of the Company, and in particular of its retention of the monopoly of the import and export trade of India. It seemed clear to him Thornton, History of India, III, pp. 103-4.
that the import trade from India must remain with the Company, but for a time he had an open mind regarding the export trade to India. In the end he decided against any change and the Act of
1793, which renewed the Company's monopoly for twenty years, made little change in its rights or constitution, except that it required the Company to provide 3,000 tons of shipping a year for private trade.
When the Charter came up for renewal in 1813 the Company was in financial difficulties. On the other hand, the private trade, which on a limited scale had been permitted since 1793, had proved highly profitable and there were therefore strong arguments against the continuance of a monopoly. In the end, the Charter was renewed for another twenty years, but the Company's monopoly was limited to the China trade and the trade in tea. Over the rest of the field, any British subject was to be entitled to obtain a licence to trade, and to go to India for that purpose. The powers of superintendence of the Board of Control were continued and it was laid down that the territorial and commercial accounts of the Company must be separated. The maximum permissible dividend, which had been fixed at 8 per cent in 1784 and 10 per cent in 1793, was raised to 10| per cent, and if any surplus remained above that figure, five-sixths of it was to accrue to the State. The sovereignty of the Crown in British India was now for the first time expressly proclaimed. Another point of interest was the provision of an annual sum of one lakh of rupees for the encouragment of learning and literature in India.
Time was now running out for the East India Company. When the Charter came up for renewal in 1833, the current of English political thought was strongly liberal, and monopolies were considered objectionable in principle, particularly when they were held by the East India merchants, most of whom had opposed the Reform Bill. Moreover, the Company's trade was fast declining. The Act of 1833 not only terminated the China monopoly, but also directed the Company to wind up its commercial affairs. The Company's debt was charged on the Indian revenues and 'arrangements were made for redemption of the stock at £200 per cent for which purpose the Company was required to pay two million to the National Debt Company, to be accumulated at compound interest until it reached twelve million'?^2^
The Act came into force in 1834 and except for the purpose of winding up its outstanding balance, the Company ceased to be a commercial organization and became solely the agency through which Britain governed India. Orders to India were still sent through Berriedale Keith, p. 131.
the Directors. There was little to be said for the artificial system now introduced, and it would have been more satisfactory for the Home Government to have assumed direct responsibility. Be this as it may, the Company had lost its true character of a Company chartered for trade and its subsequent history is outside the scope of this book.
The Pattern of Trade
In the middle of the eighteenth century the Company's trade was concerned with much the same commodities and the same destinations as when it was first established, but one important change had taken place. It had begun to undertake the manufacturing, or at least the processing of raw materials, instead of buying the finished articles. This was particularly important in the case of silk. As early as 1673 dyers had been sent from England to improve the colour of Bengal raw silk.^13^ In the middle of the eighteenth century, it was found more satisfactory to reel the silk by hired labour in the Company's factories, and 'Italian experts in the growing of mulberry trees and the reeling of cocoons, were brought to Bengal'. A great improvement was soon evident in both the quantity and the quality of the product.
Several filatures on the Italian plan under the supervision of the Company's own employees started . . . and labourers were induced, partly by pressure and partly by high wages, to work in them.^11^
In indigo, too, the Company took the initiative in fostering improved methods of production, but in the process it lost a good deal of money, and perhaps for that reason it soon began to license private individuals to set up plantations.
Towards the end of the Company's commercial existence another change occurred as a result of the Industrial Revolution in England. For a considerable time the re-export to Europe of cotton piece goods imported from India into England had been an important element in the Company's trade. The export of such goods perhaps reached its peak in 1787 but even in 1794 its annual value was
£2 million.^15^ From about 1806 the competition of English mill cloths began to drive Indian piece goods off the European market, though it did not yet enter India on any significant scale. By 1818 the foreign trade in Indian piece goods had become virtually extinct.
^u^ Sinha, Economic Annals of Bengal, p. 29.
^14^ Buchanan, The Development of Capital Enterprise in India, p. 32.
" G. J. Hamilton, The Trade Relations Between England and India,
p. 258, quoting Millbum, Oriental Commerce, II.
104 ^A^ licence to trade The China trade presented the brightest aspect of the Company's affairs in the late eighteenth century. It consisted of the export of opium from India to China and the export from China of tea, silk and spices. The East India Company had begun to import China tea regularly as early as 1666 and it was bought 'partly by purchase from Chinese traders at Bantam and partly in Madras or Surat from Portuguese or other ships trading from China'.^16^ After the loss of Bantam, supplies of tea fell off and for a time the Company's monopoly was relaxed to allow the import into England of tea from Holland, though it had to be sold in the Company's auctions. In 1716 the Company's monopoly was restored, and the rapid growth of tea drinking in eighteenth century England made that commodity of considerable importance in the Company's accounts. In 1757 the Company began to export silver from India to China to pay for its purchases of tea. By the time when the Company lost its Indian monopoly, the China trade was the only profitable part of the Company's trade.
The Financing of the Investment
The Company's export trade to India was on the whole unprofitable, since there was little demand for English goods other than metals and at times the Company had to dispose of its commodities on barter terms which involved selling at a loss. Even in the case of metals, Dutch imports from Japan and Malaya undersold those of the East India Company. The trade from India to Britain, on the other hand was generally profitable, but it was conditioned by the fact that goods for export bought in India---the Investment---had to be paid for in rupees, whereas the proceeds were received in London in sterling. The Company thus had to cope with two problems---the marketing abroad of Indian goods and the provision of rupees with which to buy them. The first of these problems presented little difficulty until the end of the eighteenth century. The value of goods, exclusive of tea, sold in the East India Company's London sales increased steadily in the second half of the century from an average of £1,687,693 in the sixth decade to £4,953,599
in the last decade.^17^
Towards the end of the century the picture changed considerably, chiefly because private English traders encroached seriously on the Company's trade. The Company's servants had for a considerable time been allowed to trade on their own account, and, moreover, from 1793 onwards the Company was required by its
" P. J. Griffiths, A History of the Indian Tea Industry, p. 18.
^17^ MacGregor, Commercial Tariffs, quoted in G. J. Hamilton The Trade
Relations between England and India, p. 258.
Charter to provide 3,000 tons of shipping yearly for private trade inward and outward. The effect of this soon began to be felt and in the last decade of the century, nearly one-third of all goods, other than tea, sold in the Company's London auctions belonged to private traders. This process accelerated rapidly, with a consequent decline in the Company's fortunes. At this stage the competition of mill-made piece goods, to which we have already referred, began to affect the position even more adversely.
It was, however, only in the last years of the Company's commercial life that the problem of securing markets became acute, whereas the financing of the Investment was difficult throughout our period. In the early days, the Company had sent out bullion from England for this purpose, but there were statutory and practical limitations on this operation and funds were often inadequate for the desired level of the Investment. In the eighteenth century additional funds were provided by allowing the Company's servants to remit their considerable savings home by drawing bills on London, that is to say, the Company's servants made rupees available to the Company in India and received sterling in exchange. The bills, however, had to be met and this often embarrassed the Company at home, for as the Directors observed, ^c^our flourishing situation in India would not avail, if we were to suffer ourselves to be drawn to the amount of our homeward cargoes'.^18^
In 1769 a limit was therefore placed on the sums which could be remitted in this way and the Directors stated that they preferred borrowing in India to drawing bills in London.
After the acquisition of the Diwani, any surplus territorial revenue was available for the Investment and this was an element in what has been called 'the drain on India'. That there was such a drain is undoubted, though its extent and effect have often been exaggerated by Indian writers. In this book, however, we are mainly concerned with the fact that this method of payment for the Investment often led the Company into difficulties, since the surplus was at times inadequate or non-existent---particularly so when substantial payments of principal and interest on the Indian loans had to be made from the Indian revenues. In 1772, for example, the income of the Provinces of Bengal, Bihar and Orissa amounted to £2,373,650, while disbursements on administration came to
£1,905,279. From the surplus, the interest on the debt of £1,700,000
together with some repayment of the principal had to be made. Well over £600,000 was required for the Investment in that year and so further debt had to be incurred.^19^
" Mill, III, p. 396.
^J0^ Gleig, Memoirs of Warren Hastings\^ I, p. 211.
During the next three for four years the economies effected by Warren Hastings, including the discontinuance of payments to the Emperor and the reduction in the stipend of the Nawab of Bengal, resulted in an improvement and by 1776 the bonded debt in India was paid off. Nevertheless, the territorial revenue was still inadequate to pay for the Investment and the wars with Haidar Ali and the Marathas made matters worse. In 1782 the Governor and Council stated frankly that no investment could be made out of revenues and that subscriptions from individuals in India would be sought in return for which the subscribers would be allowed to ship their own goods in the Company's ships.^20^ In 1784 the Company's Indian debt was estimated at £8 million49 and drastic retrenchment was undertaken.
The whole question as to the use of the territorial revenue for the Investment and the resulting 'drain', is the subject of much controversy and we cannot pursue it here. It is enough to say that the investment sometimes could, and more often could not, be financed from the surplus. The Company's Indian debt therefore mounted.
In 1785, Dundas---the dominant figure in the Board of Control---■
procured the adoption of a very unrealistic scheme. The Company's Indian debts were funded at 5 per cent and transferred to London by bills on the Company at a fixed rate of exchange. It was proposed to step up the investment and repay the bills in England out of the resulting profits in England. The plan was opposed by the Directors and it was indeed fundamentally unsound, since the investment could only be increased by sending out bullion to India.
This was not done and the plan inevitably failed.
Revenue deficits or surpluses in India continued to fluctuate. In
1793-4, for example, there was a surplus, but this was due to temporary causes and in 1797-8 there was a small revenue deficit.50 In
1797, in order to provide for the Investment, the Company resorted to the earlier practice of sending out bullion. Wellesley's aggressive policies naturally increased Indian expenditure and made the position more difficult, but on the other hand the French wars gave some help to the Company's exports from India, since the Continental powers were almost excluded from the seas. Smuggling became so hazardous as to be almost impossible and the Company therefore gained the full benefit of the consumption of tea in England, which had now reached 25 million lb. per year. Saltpetre was also in great demand for the purposes of the war and in 1800 the Company's sales reached record heights. This improvement was short lived and more enduring adverse factors were at work. Funds for in-
^30^ Hamilton, p. 147.
^31^ Philips, p. 46.
"Mill, VI, p. 543.
vestment continued to be inadequate; the European market for Indian piece-goods continued to contract; and English and American private traders took an ever increasing share of the Indian trade. By 1807 the Company's sale of piece-goods had fallen to
£433,000 as against £3 million ten years earlier and 'by April 1808
there were goods to the value of £7,148,440 lying unsold in the Company's London warehouse'.^21\ *^ 51 The simple facts were that the Company's position as the Government of India, so far from being a source of profit, had become a drain on the Company's resources;
the export trade of India was declining rapidly; and that only the China trade kept the Company going. This state of affairs can well be illustrated by the fact that after the Company's territorial and commercial accounts were separated in 1814, in the following fifteen years £4,762,000 was transferred from the Company's commercial profits to the territorial branch for the expenses of administration.^24^
The Company's Finances
So far we have considered trade and finance from the point of view of the Company in India. It is now necessary to look at the London end of the business and to see how the shareholders fared. Here it is impossible to acquit the Company in this period of the charge of imprudence. Mill, who is never quite fair to the Company, goes so far as to observe that it was to the interests of the Company's servants in India to write flattering accounts of the state of affairs and that this rendered the proprietors \'impatient for a share of the treasures which the imagination of their countrymen, as well as their own, represented not only as vast but unlimited'.^25^ This verdict may be unduly harsh, but it would be difficulty to justify the action of the proprietors in 1766 in increasing the dividend from 6 per cent to 10 per cent---against the advice of the Directors and at a time when the Company was heavily in debt. A further increase of 12
per cent in the following year led to Parliamentary intervention.
Here we must explain how the British Government acquired the right to interfere in the fixing of dividends. In 1767, in return for being allowed to retain the territorial revenues of Bengal, the Company was placed under the obligation of making an annual payment of £400,000 to the Home Government. On account of the Company's financial difficulties this obligation was suspended from year to year and the suspension enabled the Government to lay down conditions regarding dividends. That right was exercised at once and in 1767 the Company's decision to pay a dividend was rescinded and it was laid down that no dividend higher than 10 per cent should be paid before the next session of Parliament.^20^
In 1771 the Company paid higher dividends than its financial condition justified. It was short of cash in London and had to borrow £600,000 from the Bank. In 1773 further assistance was required and the Government agreed to lend the Company
£1,400,000 at 4 per cent interest on the condition that no dividend above 6 per cent should be declared until the loan was repaid and that the dividends should not exceed 7 per cent until the Company's bonded debt was reduced to £1,500,000. By 1779, these conditions had been met and in that and the following year the Company was allowed to pay dividends of 8 per cent. In 1781 the whole question was considered afresh. It was then agreed that the Company should make a flat payment of £400,000 to Government in discharge of all arrear claims on account of its defaults; that the dividends should be limited to 8 per cent; and that three-quarters of any surplus after payment of that dividend should accrue to the Government.^2^'
The next few years saw little change. The Company was given a further loan of £300,000. It incurred a fresh bonded debt of
£500,000 and increased its capital but continued paying dividends of 8 per cent---which really meant paying them out of borrowed money.
As we have seen, the French wars gave a fillip to the Indian trade for the time being and in 1793 this led Dundas to take an unduly optimistic view of the Company's prospects. He rashly forecast that the Indian revenues would produce an annual surplus of
£1J million, of which £500,000 would be available for payment of the Indian debt. The results for that year were indeed good, but expenses in India were increasing rapidly and the Company was short of cash. It then had to be allowed to make a further capital issue of £1 million.
Dundas's assumptions were soon falsified and 'the more far-seeing of the Directors forecast the bankruptcy of the Company at home in the near future'.^28^ Nevertheless, unreasonable optimism still prevailed in the Board of Control and plans were made for increasing the Investment to £4 million annually. It was clear to the Directors that this was unrealistic, but they were overruled. In 1806
even the Board of Control was forced to recognize that the Company's deficit for the year would be £3 million and that its Indian debts would amount to £27 million.
" Mill, III, p. 384.
\" ibid., IV, p. 460.
^18^ Philips, p. 106.
It is not necessary to follow this story further in its depressing details. The Company had for some years been in the doldrums and the discontinuance of its monopoly in 1813, followed by the termination of its trading activities in 1833, was but the recognition of economic facts.
Chapter 7
The Hudson’s Bay Company
The Hudson's bay company occupies a position half way between the companies primarily concerned with trade and those whose main object was colonization, for its charter was 'the charter of a colony, Rupert's Land, as much as the charter of a trading company'.^1^ It is true that the Company did not embark on colonization for nearly one hundred and fifty years after its formation, but it had vast territorial rights and an extensive jurisdiction.
In the later middle ages the rising upper class standard of living had led to an increasing demand for the more elegant kinds of furs, which only Russia and the Scandinavian countries were then able to supply. In the sixteenth and seventeenth centuries, the Russians developed the technique of felting---a process in which 'the fur, torn from the pelt, was pounded and mashed together, soaked, and perhaps impregnated with a mixture of an adhesive and a stiffener such as shellac'.^2^ Beaver lent itself fairly readily to this process and as great fur-felted hats became very fashionable the demand for beaver in European circles soon outstripped the supply. The English colonists in Virginia and New England and the French in Canada were quick to realize that there would be a profitable market for the North American beaver, but there was the difficulty that the best trapping grounds lay far to the north and problems of transport were great. Hudson Bay^8^ lay much nearer the best beaver country and England could lay claim to that Bay on the ground that it had been discovered by Henry Hudson in 1610, and that possession of the River Nelson area had been taken for England by Thomas Button in 1612. It was therefore natural that the thoughts of English merchants should turn to Hudson Bay. Another factor working
^1^ Professor E. E. Rich, The Hudson's Bay Company, I, p. 55.
^2^ Rich, I, p. 47.
^1^ In modern times the Bay has been known as Hudson, not Hudson's Bay.
no in the same direction was the belief that somewhere north of the Bay the North West Passage to Asia would be found.
At this stage two adventurous and experienced, but unreliable, explorers and fur traders, Medart Ghouart, Sieur des Groseilliers and Pierre Esprit Radisson, who were dissatisfied with their treatment by the French Canadian Government, arrived at the Court of King Charles II with the blessing of Prince Rupert. They came
\'with the enthusiasm of the Canadian coureur de bois, the woodrunner at home with the Indian and content to winter in the woods',52 and they were able to persuade King Charles that trading posts in Hudson Bay, to which Indians would bring furs, would have great advantages over the long haul by canoe along the waterways from the North to Montreal or New England.
Their enthusiasm was infectious and in 1667 a group of fourteen English courtiers and businessmen, with the ever enterprising Prince Rupert at their head,53 54 raised the necessary funds and secured two ships---the Eaglet, a ketch of fifty-four tons lent from the Navy, and another ketch, the Nonsuch, of forty-three tons.^0^ Elaborate instructions were issued by the syndicate to the masters of the two vessels. Caution was their keynote :
You are . . . to bring your said vessells into some safe Harbour in order to trade with the Indyans there and you are to deliver unto them the goods you carry by small parcells with this Caution that there be no more than fifty pounds worth at a time out of each shipp and that when they returne on board with such goods as they shall have in Exchange from the Natives you stowe the same on board the Vessells before you deliver out any more.55
They were further instructed to erect fortifications as soon as they landed. When a reasonable supply of the commodities of the country had been obtained, they were to be sent back to England in the Nonsuch. The masters were also required to 'have in your thoughts the discovery of the Passage into the South sea', and to collect all possible information about that Passage.56 The two ships with Groseilliers and Radisson as Super-cargoes, left London in June 1668. The Eaglet turned back since she 'proved by reason of the deepness of her Wast unable to endure the violent Stormes they met with all'.57 But in September 1668 the Nonsuch sailed up Hudson Bay to the south east corner of James Bay and her crew speedily established a somewhat ramshackle Fort Charles. There they dug themselves in for the winter, living on 'ship's provisions supplemented by deer and fowl which they shot and small beer brewed with malt which they had brought'.^10^
Even before the Nonsuch returned to England in October 1669, the enthusiastic adventurers had made plans for the future, and in May 1699 Radisson set off in the Wivenhoe on a voyage which proved unsuccessful. In the following year the Wivenhoe had better fortune and reached the Nelson River, but no post was established there for more than a decade.
On 2 May 1670 a charter was granted by the King and the promoters were incorporated as 'The Governor and Company of Adventurers of England Trading into Hudson's Bay'. The charter, which named Prince Rupert as the first Governor, is a remarkable document.^11^ After laying down the organization of the Company on the usual lines, it went on to grant to the Company the sole trade and commerce of all those seas, straits, bays, rivers, lakes, creeks and sounds, in whatsoever latitude they shall be, that lie within the entrance of the straits, commonly called Hudson's Straits, together with all the land and territories upon the countries, coasts, and confines of the seas, bays, lakes, rivers, creeks and sounds aforesaid, that are not already actually possessed by or granted to any of our subjects, or possessed by the subjects of any other Christian Prince or State.
It further created the Company absolute lords and proprietors of this vast territory, to be holden of us . . . in free and common soccage . . . yielding and paying . . . for the same, two elks and two black beavers, whensoever and as often as we, our heirs and successors, shall happen to enter into the said countries.^12^
^J0^ Rich, I, p. 62.
^u^ The Charter is reproduced in E. E. Rich, Minutes of the Hudson's Bay Company---No. 71---1674. It consists, according to the Company's Volume commemorating its two hundred and fiftieth anniversary, of five sheets of parchment each measuring about 31| inches by 25 inches and occupies 27
square feet of close writing.
^12^ The Company has twice paid the traditional rent to the Sovereign in the form of two elk heads and two black beavers. The first occasion was on
24 May 1939 when Governor Patrick Ashley Cooper made the presentation to King George VI in Winnipeg. Winnipeg was again the setting for the second presentation which was made by Governor W. J. Keswick to the present Queen on 24 July 1959.
The geographical description of the territory granted was necessarily vague inasmuch as practically nothing was known as to what lay west and north of Hudson Bay. It was believed that there was a waterway from the Bay to the Pacific and it was intended to include the land on either side of the waterway in Rupert's Land.^13^
At a later date, when it was realized that no such waterway existed, the vagueness of the definition was to lead to disputes as to how far west the Company's territory extended.
It is interesting to note that although the grant excluded territories possessed by the subjects of any Christian prince or state, it paid no attention to the rights of Indians. The Company was authorized to erect forts, to commission and employ ships of war, and to make laws and to judge 'all persons belonging to the said Governor and Company or that shall live under them, in all causes, whether civil or criminal'. It was indeed a more comprehensive charter than that of any other Company, its nearest rival in this respect being the East India Company.
In dealing with the history of the Company up to 1870, it will be convenient to follow the division into four periods which has been adopted by most previous writers on this subject. First came the period from 1670 to the Treaty of Utrecht 1713, characterized by the early problems of establishing trade, the Company's financial difficulties and the armed struggle with the French for the possession of the region round Hudson Bay. In the next period, from
1713 to 1763, the struggle was transferred to the woods and prairies of the interior and there the Company had to face the dynamic competition of French traders. It was nevertheless reasonably prosperous. From 1763 to 1821, it had to meet the fierce challenge of British traders from Montreal, until in 1821 it was amalgamated with its main Montreal rivals. The fourth period, from 1821 to 1870, was one of remarkable commercial progress, but the American success in the Oregon Treaty, and the demand of the Canadian Government for the incorporation of the Company's territories in Canada led it to surrender its territorial rights.
1670 to 1713
The struggle with the French, which was to occupy much of the Company's energies for nearly a century, varied in form from time to time, but the conflict of aims was unchanging. The French sought to attract the fur trade south to the St. Lawrence, but also made extensive use of coureurs de bois who ranged far into the interior. The Hudson's Bay Company, on the other hand, for long A. S. Morton, History of the Canadian North West, p. 54. concentrated its activities entirely on the Bay. Its first care was to set up roughly fortified posts and within a few years it had done this at Fort Charles in James Bay, at Fort York on the River Nelson, and on the Albany and Moose Rivers.
Radisson soon disabused the Company of any idea that Indians only wanted beads and trinkets in exchange for their furs, and almost from the outset it sent out guns, hatchets and kettles. The cargo taken out on an early voyage appear to have been as follows :^14^
500 fowling-pieces and powder and shot in proportion.
500 brass kettles, 2 to 16 gallons apiece.
30 gross of knives.
2,000 hatchets.
Trade was reasonably good right from the start, but it is not at all clear that the voyage of the Nonsuch was profitable. Its importance consisted rather in the fact that it established the possibility of trade. The first sale after the grant of the charter took place by 'inch of candle' at Garroway's Coffee House on 24 January
1672. It was not a financial success---of between 2,700 and 3,000
lb. of beaver put up for sale, only 789 lb. were sold, realizing
£282 4s. Od. It has been stated that the Duke of York, Prince Rupert and Dryden attended the sale,^15^ but the Company know of no documentary evidence to this effect. A subsequent sale in April was more successful and the proceeds of the two sales together amounted to £3,860.^10^ The return was not unsatisfactory on a subscribed capital of £8,720, but the costs of the voyage had largely been met by borrowed money, and there could be no question of paying a dividend. Nevertheless a good start had been made and no time was lost in fitting out three ships---the Rupert, the Employ and the Messenger---for another voyage. The Employ was to remain in Hudson Bay.
An important change of policy was now proposed. On the previous voyages, practically all the Company's employees had returned to England after the close of the season, but in 1672 'bricks and mortar for building the "Fort" at Moose were shipped, and about half of the thirty or forty men taken had contracted to stay in the country'.^17^ It was apparently not possible to adhere to this plan, for it is clear that in 1675 all except the Governor and three others of the Company's servants returned to England at the onset of winter.
Three problems had already begun to figure prominently in the
" Beckles Willson, The Great Company, I, p. 66. ^M^ ibid., I, p. 61.
^18^ Rich, I, p. 68. \" ibid., I, p. 70.
deliberations of the Company. They were concerned with the fixing of prices to be paid for furs, the exclusion of interlopers and defence against the hostility of the French. The difficulties of deciding a proper price to be paid for the furs bought at different stations and under varying conditions, from Indians who had no money, were obvious, and for the next few years the head of each factory had unqualified discretion. It was mainly a matter of bazaar bargaining and Beckles Willson gives an interesting description of what normally took place when Indians, who might have travelled two whole months in the depths of winter, arrived at the trader's window.
He delivered his bundles first and the trader appraised them and gave what he saw fit. If a series of wild cries and bodily contortions ensued, the trader was made aware that the Indian was dissatisfied with his bargain and the peltries were passed back through the aperture.^18^
By 1678 the Company had acquired enough experience to be able to lay down a standard price for different classes of beaver, expressed in terms of commodities desired by the Indians. For example, according to Bryce, the price of a gun was twelve winter beaver skins for the largest guns, ten for medium and eight for the smallest guns, with corresponding prices for knives, kettles and the other goods concerned.^18^ Competition with the French would nevertheless have made rigidity impracticable and there had to be a margin of flexibility.
The Company exacted from its employees an oath that they would not indulge in private trade, but in practice it was prepared to tolerate a limited amount of such trade and there were indeed occasions when it was in the Company's interest to do so. If for example, the supply of the Company's exchange goods had been exhausted before the Indians had sold all their furs, it would have been foolish to leave the remainder in the hands of the traders. It became the practice in such cases for the Company's servants to buy furs on their account. The practice was clearly open to abuse, but it had to be accepted.
More serious were the attempts made by outsiders to trade in defiance of the Company's monopoly. The difficulties may be illustrated by an account of one of the most spectacular of these attempts. In 1682 a syndicate of four Englishmen chartered the ketch
Expectation, equipped her with a suitable cargo and placed her under the command of Richard Lucas, a former employee of the
'•Beckles Willson, I, p. 215.
" Bryce, The Remarkable History of the Hudson's Bay Company, p. 22.
Il6 A LICENCE TO TRADE
Company. On receipt of the news that the Expectation had left Dartmouth on a voyage to Hudson Bay, the Company promptly sent another ketch, the ]ames~3~ in pursuit. The Commander of the
Expectation deciding that the season was too far advanced for the journey, put back to Dartmouth, but the James went on and was lost at sea. In the following year the Expectation again put out to sea, 'laden with woollens and other trade goods, with guns, powder, shot, kettles and the like, to the value of about £1,400',^20^ but was intercepted by Captain Nehemiah Watt, who took her crew prisoner and 'helped himself to the choicer parts of the Expecta
tion's cargo, eight or ten gallons of brandy, half a hundredweight of sugar and about six gallons of sherry'. The Expectation was then wrecked in the Bay and the owners in due course sued the Company.
They lost their case, and although the costs incurred by the Company were considerable, it had established a principle.
The Company now had to cope with the militant rivalry of the French, who were quick to realize the threat to their trade implied in the presence of the Hudson's Bay Company in the Bay.
The first French reaction was relatively peaceful. In 1671 the Jesuit Father Charles Albanel was sent to the Hudson Bay region on what could be represented as an evangelizing mission, though its real purpose was to divert Indian traders from the Bay. Fie achieved a considerable measure of success and the Company's trade declined. The Company's servants now set themselves to cultivate the friendship of the Indian traders, and at a great banquet given by the Governor to the Indian traders 'they all sat down together, and one Man, a Kinsman of the King's, broke the Meat and Fat in small pieces, according to the Number of Men there'.^21^
The French soon became more aggressive and in 1682 an expedition led by Radisson---who had now deserted from the Hudson's Bay Company---seized the Company's fort on the Hayes River and took the Governor prisoner. At this time, England and France were at peace, but this did not prevent the occurrence of fighting in the Colonies, for at this time colonial rivalries were taken for granted^22^
and regarded by the parent governments as merely 'an affair of merchants'.^23^ A few years later, under the orders of the French Governor General of Canada, a French expedition took possession of all the Company's forts except Fort York at Port Nelson.
Within a short time England and France were openly at war, and during William's War, the forts on Hudson Bay were taken
^S0^Rich, I, pp. 149-50.
^21^ Morton, p. 74.
^23^ Similarly the English and French East India Companies were at war at times when England and France were apparently at peace.
^13^ Morton, p. 92.
THB HUDSON'S BAY COMPANY 117
and retaken more than once. At the end of the war, according to the Treaty of Ryswick 1697, all the forts were to be left in the hands of those who had been in possession at the outbreak of war.
In practice Albany, which should have been handed over to the French, was retained by the Company. It was, in fact, the only fort remaining in the Company's hands, while Fort York, which under the Treaty should have reverted to the Hudson's Bay Company, remained in the hands of the French. The French now built a fort on the River Severn, between Port Nelson and Albany, where they intercepted Indians on their way to trade at Albany. The War of the Spanish Succession, which broke out in 1702, had remarkably little effect on conditions in the Bay. At the end of the war, Queen Anne was very sympathetic to the Company, and in the Treaty of Utrecht obtained from France an undertaking to 'restore to the Kingdom and Queen of Great Britain . . . the Bay and streights of Hudson . . .
no tracts of land or sea being excepted which are at present possessed by the subjects of France'.^21^ Commissioners were to be appointed to determine the boundaries between Canada and the Hudson's Bay Company's territory. The Commissioners' discussions dragged on at length and no determination was ever made, although when importuned on the subject by the Company, Secretary of State Bolingbroke, declared that 'we are desirous greatly to see all these smug ancient gentlemen satisfied; notwithstanding which we are unable to budge an inch'.^23^
We must now retrace our steps and consider the organization and finance of the Company during the forty troublous years ending with the Treaty of Utrecht. The first decade of this period was a satisfactory one for the Company. Good relations with Indian traders were established; the supply of furs was adequate without being so large as to depress the market; and the rivalry of the French had not yet proved destructive. The chief difficulty was financial stringency. In modern terms, the Company was seriously under-capitalized and often had to have recourse to borrowing, either to pay seamen or to provide the goods to be exchanged for furs. Voyages had to be financed on credit and in 1678 the Company's precious charter was itself mortgaged to a group of investors.
An excellent sale in 1679 helped matters, but in the following year, partly as a result of a shipwreck, no furs were received and the Company had to borrow heavily in order to finance the 1681 expedition.
Members were encouraged to advance up to 40 per cent on their holdings, and loans were also obtained from city merchants. In 1681
sales reached a record figure, the Company's debts were paid and
\"ibid., p. 123.
" Beckies Willson, I, p. 256.
it was able then to borrow afresh on relatively easy terms. Short term loans, often renewed then repaid, were a feature of the period.^20^
An important change now took place in the character and organization of the Company. A considerable number of the original sponsors had been courtiers or men of high rank, not particularly interested in the minutiae of business and content to meet, when occasion demanded, in coffee houses or private residences. By the end of the first decade many of these founders had sold out and their places had been taken by City merchants, who were not prepared to continue these somewhat haphazard arrangements. A permanent headquarters in Scriveners Hall was acquired;^27^ minutes began to be properly kept; and definite rules for the attendance and conduct of meetings of the Committee were promulgated. A 'husband' was also appointed to supervize the provision of cargoes. This more systematic procedure had one unfortunate result, in that detailed instructions about matters which could not be within the knowledge of the London Committee were sent to John Nixon, the Governor in the Bay---a tendency which was strengthened by Nixon's own reports of the muddle which he had inherited from his predecessors.
The Company's stock now stood high and even the difficulties of selling the large quantities of furs which arrived in 1683 did nothing to diminish confidence. Undue optimism led in 1684 to a declaration of a 50 per cent dividend which was not justified by the facts since it ignored the extent to which the Company depended on credit. In fact at this time, expenditure and revenue were about in balance.^28^
In the next few years the Company suffered heavy losses as the result of capture of its ships by the French, and in a memorandum submitted in 1713, the Company claimed that those losses between
1682 and 1688 amounted to over £38,000.^29^ At the same time the French occupation of the Bottom of the Bay^20^ cut off all sources of
^M^ In a sense the Company's business was seasonal---and today seasonal industries often live on credit for part of the year.
^21^ Information supplied by the Company shows that from 1682 to 1696
the Hudson's Bay Company met in a Hall leased from the Scriveners Company, in Noble Street, off Cheapside. In 1696 the Company moved to premises at the upper end of Culford Court, on the north side of Fcnchurch Street and opposite the Elephant Inn. The lease of these premises came to an end in 1794 and the Company took a lease of 3 and 4 Fenchurch Street, near to the old church of St. Benedict. From 1861 until 1923 the Company occupied No. 1 Lime Street.
'■Rich, I, p. 170.
^22^ Beckles Willson, I, p. 251.
^12^ The name by which the south east of the Bay was known.
supply of furs except Port Nelson. Heavy borrowings were again necessary and in 1686 the Company's debt about equalled its capital.
In 1686 a very large consignment of furs arrived from Port Nelson, but together with furs captured from the French, it resulted in a glut on the market. In 1688 there was again an upsurge of confidence as a result of a good sale in May of that year, and it was strengthened by the belief that negotiations with the French were about to result in a cessation of hostilities. A dividend of 50 per cent was paid, the Committee justifying it by 'Considering the Money they have in Cash besides all engagements of the Companyes and the Trust that lyes upon them towards all the Members'.^31^ In 1689, a dividend of 25 per cent was paid and in the following year, the stock was trebled and a 25 per cent dividend was paid on the increased figures. No modern accountant would justify the payment of these dividends. The Company was still in debt and nothing further was paid until 1718.
At this stage the Company had to face an attack from its many enemies at home. After the accession of William III, charters granted by the Crown were out of favour and the Company thought it wise to obtain from Parliament confirmation of its grant. The Felt Makers Company, apprehensive that the Hudson's Bay Company would be able to prevent the import of beaver from Russia, or that the great furrier dealers who were the Company's principal purchasers would ship too high a proportion of beaver to Russia, strenuously opposed the application, but the Company won a limited victory. In 1690, the charter was confirmed, but for a period of seven years only, and in the interests of the 'small man', it was laid down that it must hold between two or four auction sales of certain classes of beaver fur every year and limits were placed on the size of the lots which might be offered. At the end of the seven years the Company failed to secure renewal of its parliamentary grant and had to rely on the continuance of the original royal charter. For somewhat obscure reasons, no further attempts were then made by its enemies to impugn the validity of its grant.
The next decade or so was a period of considerable difficulty.
War conditions interfered with the demand for furs both in England and on the continent, and at the same time---in spite of the loss of the Bottom of the Bay---supplies from Port Nelson exceeded demand and prices fell considerably. The expenditure on expeditions against the French was considerable and the Company depended heavily on borrowing. Fortunately, its credit was good and when the Treaty of Utrecht at last brought relief and established the Company in full possession of the Bay, it was in a position to go forward.
Rich, I, p. 250.
1713 to 1763
The return of peace and the opening up of the continental trade brought about a rapid revival in the demand for beaver and at the same time changes in the Company's management, under the vigorous leadership of Sir Bibye Lake and a small group of London merchants, brought a renewed dynamism into the Company's affairs.
In 1718 a dividend, soundly based on the true position of the Company, was paid for the first time for twenty-eight years, and over sixty years were to elapse before the dividend was again passed. In general, the financial policy of the Company in this period was prudent and even when, in 1720, it succumbed sufficiently to the spirit of the South Sea Bubble age to treble its stock, that step was justified by its assets. It did, however, depart from this policy of prudence when it decided to make what today would be called a
'rights issue' of three to one. Beckles Willson quotes a letter from an excited shareholder, Mrs. Mary Butterfield :
I cannot tell you how it is to be done, for that passes my wit;
but in short, the value of our interests is to be trebled without our paying a farthing; and then to be trebled again if the business is to the publick taste, and we are told that it cannot fail to be.^32^
The proposal for the rights issue was not soundly based and it was well for the Company that the bursting of the South Sea Bubble compelled the Directors to have second thoughts. The rights issue was cancelled after the first instalment of subscriptions for
£9,450 worth of shares had been paid, and from this time onwards the Company's stock stood at £103,950. A dividend on the new stock was declared in 1721. A decade of considerable prosperity followed during which the annual sales of furs amounted to between £20,000
and £30,000.^33^
By the end of the decade, however, French competition had begun to affect the Company's position. The armed French struggle for the Bay had been abandoned after the Treaty of Utrecht, but a more subtle danger now developed. The Sieur de la Verendrye, the Commandant of the Pastes du Nord, embarked on a dynamic programme of establishing small outposts far in the interior, from each of which the coureurs de bois could make contact with Indian hunters and intercept their trade with the English. The Company still continued its policy of limiting trade to the posts on the Bay, though it did from time to time send emissaries to make contact
^82^ Beckles Willson, I, pp. 264-5.
^M^ Rich, I, p. 489;
with remote Indian tribes in the hope of persuading them to come down to the Bay. Henry Kelsey in the eighties and nineties of the seventeenth century and William Stuart and Richard Norton thirty years later made notable journeys into the interior, but these occasional expeditions were far different from the determined and continuous activities of the French in the prairies and forests. Sound reasons could be advanced for the policy of the Hudson's Bay Company which has, perhaps unfairly, been described as a 'sleep by the frozen sea'.^34^ It could reasonably be maintained that provisioning inland posts would be difficult; that it was doubtful if corn could be grown in the northern regions; that the English were not accustomed to canoeing; and above all that continuous penetration would be impossible until the French had been evicted. There is scope for argument as to whether these reasons were compelling or not, but the fact remains that the forward policy of the French made serious inroads in the Company's trade, in spite of the fact that, on the whole, the Company supplied the Indian traders with better goods than did the French.
In the thirties, an attack at home on the Company for its alleged failure to search for the North-West Passage stimulated it to activity in the field of exploration. An expedition sent out in 1737
from Churchill, the most northerly of the Company's posts on the Bay, did not find 'any the least Appearance of a Passage'.^35^ Arthur Dobbs, one of the bitterest of the Company's critics, refused to believe that a genuine attempt had been made, and an expedition sent by the Admiralty in 1741, under the command of Captain Christopher Middleton, which failed to find a Passage, left him still unconvinced. Thanks to Dobbs' efforts, Parliament took an interest in the matter and in 1745 a reward of £20,000 was offered for the discovery of the Passage. A group of enthusiasts financed an expedition which coasted up the north west of the Bay in a vain search, and at least some of the sponsors were now satisfied that no passage existed. Dobbs was still not convinced and his scepticism led him to impugn the validity of the Company's charter and to demand that the trade should be thrown open to all. After an exhaustive enquiry, the House of Commons rejected Dobbs' proposal.
In the fifties, the obvious success of French policy compelled the Company to take a fresh interest in trade in the interior. In 1750, an outpost---Henley House---which had been established 150 miles from Albany in 1743, was made into an important trading centre, and at about the same time Richmond House was built on the east side of the Bay. Thought was also given to the possibilities of opening up trade from the Bay to Labrador. Neither these projects, nor the remarkable journey of Anthony Hendry through the great buffalo plains to the foot of the Rockies, led to any immediate result, but they were perhaps the early signs of a new spirit which was to manifest itself in the next period. In the meantime, the Company prospered in spite of its difficulties and of the fear that the French would attack again during the War of the Austrian Succession.
According to Rich^30^ in the ten years from 1739 to 1748, the profit and loss account was as follows :
£ s d
36,741 11 5
15,722 14 5
157,432 14 4
Trade goods Stores, building materials and provisions Charges
209,897 0 2
Revenue 273,542 14 10
10 years total profit 63,645 14 8
These results were by no means unsatisfactory and when the French surrendered Canada to Britain in 1763, the Company was in a good financial position to meet the problems of the next period.
1763 to 1821
Any hope that the British conquest of Canada would relieve the Hudson's Bay Company from the fierce competition of rival fur traders was soon proved illusory. A number of the most enterprising of the new British residents of Montreal entered into partnership or loose association with French-Canadian fur traders and embarked on aggressive fur trading from the former Postes du Nord. In theory traders had to be licensed and were subject to regulations which limited their activities to trading at the existing posts and forbade them to go further into the interior. In practice, the regulations could not be enforced and in 1768 they were abandoned.^37^ The Pedlars---as these traders were somewhat opprobriously named---
rapidly penetrated deeply into the main beaver areas, both in the lands exclusively reserved for Indians and in Rupert's Land. Their incursions into Rupert's Land were perhaps illegal, but the Hudson's Bay Company took no legal steps against them---partly, no doubt because it was conscious of the uncertainty as to the validity of its charter. Nevertheless, the threat from these rival groups could not
"Rich, I, p. 593.
\"ibid., II, p. 12.
be completely ignored, particularly when they acquired added strength in 1769 from the entry into their ranks of the powerful Montreal partnership of Todd, McGill and Frobisher. In a sense the threats galvanized the Company into new activity. Its first manifestations were the three remarkable journeys of Samuel Hearne, a servant of the Company, to the far north. It is true that these were not trading expeditions. Their object was to find the copper mines, to gain information about the North-West Passage and to investigate the possibility of inducing Indians from the north to come to the Bay side with their furs. Above all they were indicative of a new spirit of enterprise and by the seventies some of the Company's principal servants were convinced that its trading methods would have to be changed. The London Committee also formed this view and in 1773 it issued instructions for the establishment of a new inland trading post. As Rich puts it, 'the trade was to be carried inland and the rivalry with the Pedlars was to be taken to the Forks of the Saskatchewan'.^38^ In pursuance of this new policy,
Samuel Hearne was sent to establish a trading post known as Cumberland House at Sturgeon Lake on the Saskatchewan River, a hundred miles or so west of Lake Winnipeg. This was clearly a great step forward and was followed in the ensuing years by the establishment of other trading posts further inland.
The new policy paid and the Company's trade in furs increased rapidly until it was interrupted by the French occupation of Fort York and Fort Churchill during the War of American Independence. The interruption was brief, but after the war the Company found itself faced with the formidable rivalry of the North West Company which was formed in 1784 out of the Montreal partnership to which we have referred. The North West Company was enterprising and aggressive and in the struggle for trade the Hudson's Bay Company was soon left far behind. It was perhaps impossible for a Company strictly controlled as to policy from London to compete with the more flexible organization. There was moreover an enterprising and aggressive spirit in the new Company which was lacking in the servants of the Hudson's Bay Company, and the most important partners of the North West Company lived permanently in the fur districts,^30^ and from 1787 onwards they had as their moving spirit Alexander Mackenzie,^40^ who could well be described as a human dynamo. In 1789, he took an expedition from Lake Athabaska to the Arctic Ocean, covering the journey of over 3,000
" ibid., II, p. 42.
^M^ They were therefore known as the wintering partners.
Later knighted for his journey of exploration. miles there and back in 102 days/^1^ and four years later he crossed the Rockies to the Pacific Coast. Under his inspiration the North Westers established a veritable network of trading posts along the Saskatchewan and throughout the Athabaska region. Its aggressive policy paid and according to Rich, it was estimated at the end of the century that the North West Company controlled eleven-fourteenths of the fur trade, as against two-fourteenths in the hands of the Hudson's Bay Company. The Hudson's Bay Company had done much to develop the fur trade to the south and west of the Bay, but the North West Company 'dominated the trade of the Grand North'^12^ from Athabaska to the Rockies.
At this stage serious dissensions occurred within the North West Company. The details of the disputes do not concern us, but a fundamental issue of disagreement related to the fur trade which J. J. Astor and other Americans hoped to establish between the Pacific Coast and China. As long as the East India Company held the monopoly of British trade with China, neither the Hudson's Bay Company nor the North West Company could operate in any such trade directly. The majority of the North West Company Directors, therefore, sought collaboration with Astor and his colleagues. Mackenzie, on the other hand, dreamed of a joint venture between the North West Company, the Hudson's Bay Company and the East India Company, to deal in the fur trade to China.
In 1799 he therefore left the North West Company and was the principal party in a new XY Company.
This split brought no relief to the Hudson's Bay Company. Indeed, it ushered in a period in which the struggle between the three main competitors often assumed very violent forms. Disorder grew rapidly and it was impossible to control it since there were no Criminal Courts in the territories concerned, nor had the Canadian courts any jurisdiction. In 1802 a case occurred where a clerk of the Hudson's Bay Company, who had killed a clerk of the North West Company, was sent to Montreal for trial. It was then discovered that no court there had jurisdiction and thus 'neither his innocence nor his guilt can be legally ascertained'.^13^ 'Under such circumstances', reported the Governor, 'every species of offence is to be apprehended, from Trespass to Murder'. In 1803 the Canada Jurisdiction Act, enacted by the British Parliament, authorized the Governor of Lower Canada to appoint Justices of the Peace, who could apprehend offenders in the fur countries and send them back to Lower Canada for trial. Unfortunately, the Act also empowered
^41^A Brief History of the Hudson*s Bay Company---An official publication of the Company, p. 19.
^43^ Rich, II, p. 186.
^41^ Beckles Willson, II, pp, 130-2.
any person to arrest any other for a crime committed in the Indian territories, and to take him to Canada for trial. The abuse to which such a power lent itself in the chaotic and lawless tradition of the fur trading country will be readily understood.
In 1804, the North West and XY Companies were amalgamated and although the immediate attention of the new joint Company was concentrated on securing the Pacific trade with China, it pushed the trade in the interior so energetically as to provide the Hudson's Bay Company with even more formidable competition, resulting in still further violence. The London Committee now seemed to have lost heart and when negotiations to unite with, or sell out to, the North West Company failed, the Committee seriously contemplated abandoning the fur trade altogether.
A new factor now emerged. Although the original promoters of the Hudson's Bay Company had had colonization in mind, nothing had in fact been done in that direction, but at the beginning of the nineteenth century Thomas Douglas, fifth Earl of Selkirk, became deeply interested in the possibility of emigration as a means of relieving the poverty of Scotland and Ireland. In a letter to Lord Pelham, quoted by Bryce, he wrote as follows---
No large tract remains unoccupied on the sea-coast of British America except barren and frozen deserts . . . At the western extremity of Canada, upon the waters which fall into Lake Winnipeg . . . is a country which the Indian traders represent as fertile, and of a climate far more temperate than the shores of the Atlantic under the same parallel . . . Here, therefore, the colonists may, with a moderate exertion of industry, be certain of a comfortable subsistence.\'^1^\'^1^
Selkirk perhaps exaggerated the geniality of the climate, but he was obsessed with its possibilities and he went on to observe that
\'The greatest impediment to a colony in this quarter seems to be the Hudson's Bay Company monopoly'. Pie proposed therefore that the Company's monopoly should be abolished and that it should be compensated for the abolition.
This representation was unsuccessful and for the next few years,
Selkirk devoted his energies to colonization in Prince Edward Island and elsewhere. He had, however, great tenacity of purpose and soon returned to the charge. He was already connected by marriage with Andrew Wedderburn, who at this time was infusing new life into the Committee of the Fludson's Bay Company, and he now began to acquire influence in the Company by purchasing a relatively small block of its shares. He never possessed a dominating interest Bryce, p. 203.
but he was able to secure from the General Court of the Hudson's Bay proprietors a grant of 116,000 square miles of land on the Red and Assiniboine Rivers, for the purposes of colonization. His success was facilitated by the fact that his proposal coincided with the growth of the conviction amongst some of the Company's principal servants in Rupert's Land that 'nothing short of armed men and these more numerous than the Canadians can bring, will produce an increase of our returns.'^40^ Wedderburn had also shown much interest in land settlement as a means of providing for the Company's retired servants and their half-breed offspring, and also of making servants and labourers available for the Company's needs. The time was thus ripe for Selkirk's scheme.
We need not dwell on the inevitable muddles of the outset, or the considerable hardships suffered by the early batches of emigrants. Of greater long-term importance was the relentless opposition of the North West Company. That opposition was based on two perfectly understandable grounds. In the first place, the Northwesters were convinced that colonization and the wild life of the hunter or trapper could not co-exist, and that the supply of furs would gradually dry up. Secondly, the colony would be planted in an area on which the North West Company largely depended for its supply of the indispensable pemmican and the consumption of the colonists would inevitably reduce the quantity available for the North West Company. Indeed, before long, this danger became a reality and Miles Macdonnell, Governor of Assiniboia, forbade the export of pemmican.^40^
The North West Company men were now determined to drive the colonists away by force if necessary and what has been described as a 'pemmican war' was soon in progress. The appointment of some of the Company's servants as Justices of the Peace did little to restrain the lawlessness of the contestants. We need not follow these events in detail. It is sufficient to say that settlers were intimidated or cajoled into leaving the settlement; that Governor Semple and nineteen settlers were murdered by half-breeds who had almost certainly been instigated to the act by the North West Company; and that Selkirk responded by enrolling a body of Swiss and German mercenaries known as the de Meurons, and arresting a number of the North West Company's men. Things went from bad to worse.
Selkirk himself was arrested and tried but no verdict was secured.
Criminal charges and counter charges came to nothing, but in the upshot the North West Company was gravely discredited in the eyes of the public in Canada as well as in England.
It was clear that this kind of private warfare could not continue indefinitely and fresh consideration was given to the proposal, made long before by Mackenzie, that the rival Companies should unite.
Both Companies now had strong reasons for so doing. In the North West Company, the wintering partners were dissatisfied with their treatment and some of them were seeking service with the Hudson's Bay Company. Moreover, the great advantages of the Hudson Bay trade route over that through Montreal were obvious. On the side of the Hudson's Bay Company, two factors predisposed it to agree.
First there was doubt as to the validity of its charter and the Company's legal advisers had opined that while the Crown, which granted the charter, could undoubtedly authorize it to hold land, it could almost certainly not confer on it exclusive trading rights. Secondly, the Company's economic position was far from easy. In 1820 it had an overdraft at the Bank of England of £75,000 and according to Rich it had for some considerable time made a trading loss of over
£12,000 per annum.^17^ Its credit was indeed good and a satisfactory system of accounting set up in 1811 left it with a reasonable bookkeeping reserve---but no cash.
The logic of these facts was unanswerable and in 1821 the two Companies effected what has often been called an amalgamation, but is more accurately described by Rich as a working arrangement for twenty-one years, which preserved the charter intact, set up a joint board and laid down the proportion in which capital was to be contributed and profit shared. The arrangement was indeed a triumph for commonsense as it gave the new organization something approaching a monopoly of the fur trade.
1821 to 1870
The period of fifty years preceding the surrender of the Company's territorial rights can be conveniently divided into three overlapping phases, all of which were characterized by prosperity and by a dynamic attitude to new problems. The first phase was one of reorganization and commercial development; after amalgamation came the decades of struggle with Russian and American competition; while finally the growing strength of the national ambitions of Canada made the inclusion of the Hudson's Bay territory in Canada inevitable.
When the Hudson's Bay Company and the North West Company were united in 1821, the legal basis of their administration was somewhat shaky. There was, for example, room for doubt as to whether or not the Canada Jurisdiction Act 1803 applied to Rupert's Land as distinct from the Indian territories, and if it did not, no adequate machinery existed for dealing with the lawlessness which had become rife. There was even greater uncertainty as to the validity of those clauses in the Company's charter which granted it the exclusive right to trade, and the position was particularly open to question in the Northwest Territories. To meet these difficulties,
Parliament enacted in 1821 an Act for 'regulating the Fur Trade and establishing a Criminal and Civil Jurisdiction within certain parts of North America'/^18^ The Act gave the Crown power to grant exclusive rights of trade anywhere in British North America except in Canada and Rupert's Land, and it also cleared up the doubt as to the jurisdiction in Rupert's Land under the Canada Jurisdiction Act.
It did not deal with the Company's trading rights in Rupert's Land.
In virtue of the powers conferred by this Act, the Crown granted to the Hudson's Bay Company exclusive trading rights in the Northwest Territories for a period of twenty-one years, and fixed on it responsibility for the administration of justice under the Canada Jurisdiction Act, both in those territories and in Rupert's Land.
The Company had divided its territories into a Northern and Southern Department and appointed a Governor for each some years before the amalgamation. A separate Governor was also appointed for the Red River Settlement, whose authority would be in abeyance when one of the other Governors visited that settlement. It was clear that as a result of the union there was scope for retrenchment. This uncongenial task fell to the junior Governor, George Simpson, but it was accompanied by a generous scheme of profit sharing for the benefit of the 'Wintering partners', and by the provision for Factors who became redundant. It was facilitated also by the fact that in
1824 the Montreal agencies concerned in the union collapsed. The joint committee of management came to an end and as Rich puts it, 'coalition had been followed by absorption'.^40^ The disappearance of effective Montreal influence made it easier for Simpson to implement the sensible decision already taken that the main avenue of trade was to be through Hudson Bay rather than through Montreal, and Fort William was therefore abandoned as a depot in favour of York Fort.
More important than any of these organizational changes was the fact that George Simpson was one of the most remarkable men who ever served the Company. A tireless traveller, a shrewd and keen observer and a born organizer, even before he became sole Governor in 1826, it was his will that dominated the organization.
^48^ Rich, II, p. 401.
^49^ ibid., II, p. 437.
THE HUDSON'S BAY COMPANY 129
He rapidly effected retrenchment and economy, but simultaneously turned his attention to more positive measures. The fierce competition between the Hudson's Bay Company and the North West Company and individual traders had resulted in the indiscriminate trapping of beaver regardless of breeding seasons, and in some of the more important districts the beaver population had almost disappeared. Simpson embarked on a policy of resting certain districts, of fixing quotas for purchase from other districts, and above all of discouraging hunting or trapping in the summer, when the skins were in any case of poor quality. It was not possible to enforce these principles rigorously, particularly where other fur traders were still competing, but Simpson secured their acceptance in considerable measure.
The four decades of Simpson's rule were marked by unbroken prosperity for the Company and even when, in the middle of the century, beaver hats became less fashionable in England, the growing trade in martens and musk-rats maintained the Company's profits from the fur trade. From 1828 to 1832 an annual dividend of 20 per cent was paid and not until the Company's capital was reorganized in 1863 did the dividend fall below 10 per cent.^00^
Simpson was not content merely to develop the fur trade in the North West. At an early stage he turned his attention to the region west of the Rockies, where the North West Company had begun to develop the trade with China before the amalgamation. Here he had to face competition both from the Russians and the Americans.
In 1811, John Jacob Astor of New York, who had for some time been an agent for the North West Company in their China trade, established a trading post at Fort Astoria on the Columbia River.
When war broke out between Britain and America in 1812, his agents sold Fort Astoria to the North West Company, but neither Astor nor the United States Government considered that the claim to sovereignty or to the right to trade on the Pacific Coast had been surrendered. After the war, Astor's Pacific Fur Company and the North West Company struggled for possession of the post. In 1818, a Convention between Britain and the United States postponed any decision on the question of sovereignty or title, but provided that the coast west of the Rockies should be free to the trade and shipping of both countries. Rival posts were now established side by side, but at this stage Russian claims led to a further complication.
Russian explorers and traders had visited the North Pacific coast ever since the middle of the eighteenth century, and in 1821 the Tsar issued an order purporting to prohibit all trade on that coast by persons other than Russians. Neither Britain nor America could accept this ban and in 1825, after complicated negotiations, a tripartite treaty fixing the Russian frontier at latitude 54° 40\' N was signed.^01^ Fourteen years later the Company made an 'accord' with the Russians, under which the Russians surrendered all right to trade on the coast south of that latitude in return for which the Hudson's Bay Company agreed to pay an annual rent of 2,000 otter skins---
the commodity which had been the chief object of Russian trade in that region?^2^
American opposition proved much more intractable, particularly as the boundary between the Hudson's Bay Company's territory and the United States in the region of Oregon had never been defined. A prosperous fur trade in what the Hudson's Bay Company called its Columbia department was essential to Simpson's policy of allowing the beaver districts in the North West districts to rest, and it gained further importance from his determination to develop coastal trade and shipping. The Columbia department soon became extremely active and its traders, who frequently crossed even the admitted American boundary, completely outclassed their American competitors.
In the thirties, American national feeling with regard to the Oregon boundary became charged with emotion, and an American Emigration Society sponsored emigration to the Willametter Valley, south of Columbia and near the present city of Portland. There it established a settlement and set up a provisional Constitution. The Hudson's Bay Company then set up a subsidiary company^53^ to promote British settlement in the disputed area and although the Hudson's Bay Company never seriously expected to secure a boundary south of the Columbia River, its settlements were in fact established in Oregon. What has been called 'Oregon fever' grew apace.^54^ Claims and counter claims were made, incidents were frequent and at one time it even seemed possible the dispute might lead to war. Fortunately, good sense prevailed, and in 1846 the Oregon Boundary Treaty between Britain and America fixed the boundary at the 49th parallel of latitude. The Hudson's Bay Company lost an important area of trade, but retained the rights of navigation on the Columbia River and kept what were called its
'possessory rights'. The Company's position became more difficult when the principal local American official took his stand on an American law of 1834, which forbade foreigners to trade with
"Rich, II, p. 609.
« ibid., II, p. 654.
^63^ Paget's Sound Agricultural Company.
"Rich, II, p. 703.
Indians.^51^ Clearly the only satisfactory solution was for the United States to buy out the Company's rights. The necessary negotiations were long drawn out and were complicated by the fact that the American Government seemed to have assumed that the Company's
'possessory rights' ended when its British licence for exclusive trade terminated in 1859. Although this view of the legal position was perhaps unsound, it might well have prevailed but for the outbreak of the American Civil War and the consequent desire of the administration to stand well with Britain. At length all the rights of the Hudson's Bay Company and the Paget's Sound Agricultural Company were bought out for \$650,000 and payment was duly made in
1870 and 1871.^50^
The Hudson's Bay Company's part in the colonization of the Pacific coast requires only brief mention here. In the forties, Her Majesty's Government were anxious to see Vancouver Island settled, but were not prepared to spend money on that project. In 1849, the Company accepted a grant of the island for purposes of colonization, on the understanding that the revenue from sales of land would be used for the purposes of the colony itself. Trade prospered well but colonization made little progress, and in 1867 the Company surrendered the grant and was paid part compensation for what it had spent. Developments in British Golumbia were somewhat simpler inasmuch as the Company played no part in the colonization of that area and the colony was in fact established by Her Majesty's Government, which at the time of granting the renewal of the Company's exclusive licence in 1838 had particularly laid down the right of that Government to establish colonies in any of the areas concerned.
We must now turn to the events leading up to the surrender of the Company's territorial rights. That surrender was not only the result of political pressure, but was the logical outcome of the economic factors. In the sixties of the nineteenth century, the introduction of steamers on the Great Lakes, the construction of arterial roads and the development of railways were bringing the once remote fur districts within reach of the urban centres of Canada.
It was unthinkable that the great prairies, large areas of which were believed to be fertile, should remain almost uninhabited. The only question was as to who should colonize them. Britain and Canada were both interested, not only for economic reasons, but also because a prosperous colony would be a counterpart to the growing strength and wealth of America---but neither country wanted to bear the necessary expense. The problems of coping with their own administration and defence were already stretching Canadian manpower
" ibid., II, p. 738.
" ibid., II, p. 748.
K
fully. Nevertheless envious eyes were being cast on the Red River settlement and the Canadian authorities began to examine the basis of the Hudson's Bay Company's rights.
In 1857, the question of the renewal of the Company's Exclusive Licence to Trade was referred to a Select Committee of the British Parliament, and that Committee was very sympathetic to Canadian claims. William Henry Draper, the Chief Justice of Upper Canada, in his evidence to the Committee paid a great tribute to the Company, but went on to state that 'I do not think that the interests of a trading company can ever be considered as compatible with the settlement of the province'.^57^ Gladstone, as might have been expected, was opposed to any continuation of the Company's rights, but the Committee did not take so unfavourable a view. It recommended renewal of the licence subject to the qualification that It is essential to meet the just and reasonable wishes of Canada to be enabled to annex to her territory such portion of the lands in her neighbourhood as may be available to her for purposes of settlement, with which lands she is willing to open and maintain communications, and for which she will provide the means of local administration'.^58^
The Company did not oppose this view and the matter soon became of practical importance in connection with plans for rail and telegraphic communication right across the continent. Edward Watkin, (later Sir Edward), the prime mover in the proposals for the construction of a trans-continental railway, gathered together a few London businessmen who would, he hoped, negotiate with the Hudson's Bay Company for the necessary land and construct the railway. The Company was willing to make available the land actually required for the railway and telegraph line, but it soon transpired that Watkin and his associates wanted 'a considerable tract of land',^59^ the value of which would presumably go some way towards reimbursing them for the expenditure to be incurred. The Company was naturally not agreeable to this suggestion, but after a good deal of argument, agreed to sell its interests for million.
By this time the principal members of Watkin's group had withdrawn. He therefore had recourse to the recently formed International Financial Society, which in 1863 bought practically all the shares in the Company, made a new capital issue, and unloaded the resulting £2 million shares on to the public. It will be noted that the International Financial Society had not bought the Company's
^M^ Mackay, p. 197.
^08^ Rich, II, p. 799.
\" ibid, II, p. 830.
assets but had acquired the shares from the shareholders. The net effect of the transaction was that the Canadian Government, or any other body desiring to construct the railway and telegraph lines, would have to negotiate with a new Company representing new shareholders. The main difference was that the new Company was likely to be more interested in the sale of land and not just in the fur trade.
At the same time the Government of Canada, which was moving towards the federation of the British North America territories, became even more anxious to acquire the Hudson's Bay and North West territories, and the British North America Act 1867 provided for the inclusion of these territories in the federation if and when they were so acquired. The Canadian Government then urged Her Majesty's Government to annex the territories and hand them over to Canada, leaving the question of rights or compensation to be determined by the Canadian courts. Neither Her Majesty's Government nor the Company was prepared to accept this position and haggling continued for some time.
In 1869 agreement was reached. The Company was to be paid
£300,000 and to be allotted one acre for every twenty acres of land opened for settlement. It was also to retain its existing posts and surrounding lands and in return it was to surrender all its territorial rights to the British Government. The Deed of Settlement was signed in November, 1869, but at this stage some delay occurred as the result of a subversive movement of the metis or French half breeds in the Red River settlement who were apprehensive of losing their own rights. After this had subsided a deed of settlement was sent to the British Government, and Rupert's Land and the North West were included in the Canadian federation from July 1870. The Red River settlement was constituted into the province of Manitoba, while the other territories formed the Northwest Territories and came under the central rule of the Dominion.
It is difficult to say whether or not the financial value of the land retained by or to be allocated to the Company, together with the cash payment, was an adequate compensation for the surrender of its rights by a Company whose capital was £2 million, but it is at least clear that no better bargain could have been made.
The Company continued to exist and to expand rapidly as a trading concern. In due course it sold the land which had been allotted to it and it diversified its business to such purpose that today it has over two hundred stores in Canada and employs about 14,000
people. It is indeed a vastly different concern from that body which for two hundred years operated by the authority, and as the representative, of the British Government. During that period it opened up prairies and forests to western influence; it established a colony
134 ^A^ licence to trade
which was to grow into the province of Manitoba; it added considerably to the volume of British trade; and when changing conditions made its jurisdiction an anachronism, it surrendered its charter in the knowledge that the purposes of the founders had been abundantly fulfilled.
PART 3
THE PLANTATION COMPANIES
Introductory The distinction which we have drawn in this book between trading and plantation companies is one of convenience rather than of fact, for trade was undoubtedly one of the objects of those who set out to colonize the New World. Great merchants like Sir Thomas Smythe were equally concerned in both types of enterprise, but in the establishment of plantations other motives besides the desire for trade played an important part. In the days of Gilbert and Raleigh, hatred of Spain and the determination to break her monopoly of newly-discovered lands were powerful factors in awakening Englishmen to the possibilities of colonization and although the age ushered in by the accession of James I was in some ways more prosaic, the Elizabethan spirit was by no means dead. It was indeed reinforced by the growth of Puritanism and the resulting desire to convert the savages of America to Protestant Christianity. Economic and social factors were also at work. The economic depression and the rapid rise in the price of commodities had given rise to grave problems of poverty and unemployment, to which it seemed that emigration might prove a solution. There were also criminals and paupers for whom compulsory emigration might be an alternative to more drastic measures. The eastern lands, in which some of the great chartered companies were trading, were climatically unsuitable for these purposes, but the New World was reputed to be 'a garden of nature'---and moreover was believed to be rich in gold. South of Florida the Spanish were in effective occupation and it was to the American coast north of the Florida channel that the thoughts of English colonizers turned. Virginia seemed particularly attractive.
The difficulties of establishing plantations were much greater\'
than those which confronted the purely trading companies---much greater indeed than the pioneers realized. The emigrants and their leaders had to be men with the right qualities---and often they were not; provisions had to be supplied from home until the colonists had learned how to maintain themselves in the midst of savages who might be hostile; and adequate arrangements for defence had to be made. All this had to be done three thousand miles from the home base of the Company, and with no experience as a guide. Necessarily, there had to be a period of experiment and it is not surprising that the efforts of the first English plantation company ended in failure. The Virginia Company was the pioneer and paid dearly for its experience. To its tribulations we must now turn.
Chapter 8
The Virginia Company
Although his own efforts were unsuccessful, Sir Humphrey Gilbert may justly be regarded as the pioneer in England of the idea of colonization and in his mind it was closely linked with the discovery of the North-West Passage. In a discourse on this subject, he first dwelt on the access it would give to 'divers very rich countreys . . . where there is to be found great abundance of golde, silver . . . and other kinds of merchandize of an inestimable price'^1^ and he went on to deal with the possibility of colonization.
Also we might. . . settle there such needy people of our countrey which . . . through want here at home are inforced to commit outragious offences whereof they are dayly consumed with the gallowes.
In 1578 Gilbert obtained a perpetual patent to discover, occupy, fortify and enjoy in fee simple all lands 'not actually possessed of any Christian prince or people'.^2^ With a few associates he fitted out a fleet of eleven ships for America, but seven of them deserted the expedition and it was a total failure. In 1583 Gilbert sold part of his lands to raise funds and with the help of Sir Walter Raleigh again fitted out a fleet with the object of establishing a colony.
When the fleet reached Newfoundland, Gilbert was well received by the master of the numerous English and other fishing vessels in the harbour and proceeded to take formal possession for the Crown.
His first impressions were most favourable, but disaster soon supervened. Sickness and rebelliousness destroyed all possibility of establishing a plantation either in Newfoundland or on the coast further south, and three months after leaving England, Gilbert set sail for
^1^ Hakluyt, V, p. 116.
' ibid,, V, p. 350, home. He insisted on remaining himself on the smallest and least seaworthy of the vessels and to all entreaties of his colleagues to sail on the larger, Golden Hinde, he replied, 'I will not foresake my little company going homeward, with whom I have passed so many stormes and perils.'58 The seas were outrageous, 'breaking short and high and Pyramid wise' and at midnight on Monday, 9 September,
'the frigat being ahead of us in the Golden Hinde, suddenly her lights were out', and, 'a souldier resolute in Christ Jesus', perished with all his crew.
The mantle of Gilbert fell on Raleigh, who in 1584 obtained a patent similar to Gilbert's, and then sent out a small exploratory expedition, commanded by Arthur Barlowe and Philip Amadas.
One of the commanders tells us that about ten weeks after leaving England, 'we found shole water, wher we smelt so sweet and so strong a smell, as if we had bene in the midst of some delicate garden abounding with all kinds of odouriferous flowers'.59 They coasted 120 miles south in search of a harbour and in due course arrived at the island of Roanoke. There they were well received by the Indians and discovered that they were within the kingdom of Wingandacoa, which was rechristened Virginia. Their account of the country, with 'fish the best of the world . .. fruites very excellent good . . . and soile . . . the most plentifully, sweete and fruitful and wholesome of all the world',60 was so encouraging that in 1585 Raleigh sent a fleet with 108 settlers under the command of Sir Richard Grenville, to establish a colony on the mainland in Virginia. The illusions which the glowing report of the two former commanders had created were soon shattered. The natives proved hostile, supplies ran out, food was unobtainable and when Sir Francis Drake happened to call at Roanoke on his way home, the entire body of settlers left with him. A fortnight later, Grenville,---who had returned to England for supplies---arrived, only to find the settlement deserted.
He left fifteen men on the mainland, with supplies for two years, to form the nucleus of a new colony. A relief expedition sent two or three years later found no traces of the fifteen and the colony was at an end. Raleigh had spent £40,000 on his Roanoke enterprise and had received no return,^0^
Shortly after the accession of James I, England made peace with Spain and although the Treaty of London, 1604, did not deal with affairs in the New World, Spain seemed for a time to have acquiesced tacitly in the right of the English to colonize north of Florida. A proposal for raising a public stock for colonization in the New World was considered in the Privy Council and in a memorandum the authorship of which is unknown, the view was expressed that 'It is honourable for a state rather to backe an exploite by a publique consent then by a private monopoly." This view did not prevail and the matter was left to private enterprise, licensed but not financed or organized by the State.
The initiative was taken by the Earl of Southampton, and in
1602 an expedition under the command of Bartholomew Gosnold was fitted out for the purpose of establishing a colony in Virginia.
Gosnold sailed south of the route normally followed and thus reduced the journey by fifteen hundred miles.^8^ The expedition nevertheless reached the mainland a good deal north of Virginia. Prospects seemed hopeful and the Indians were friendly, but provisions ran out and the expedition returned to England with all the intended settlers. Thanks partly to Hakluyt's great influence, another expedition followed in 1603, but it was becoming clear that the task of colonization was beyond the resources of any individual.
In 1605 a group of influential public men, chief amongst whom were Hakluyt, Sir Thomas Gates and Sir George Somers, petitioned the king for a patent for the colonization of that part of America
'between the thirty-fourth and forty-fifth degrees of north latitude, and also occupying islands within one hundred miles of the coast'.^8^
The patent,^10^ which was issued on 6 April 1606, 'per breve de privato sigillo', divided the proposed company into two groups. The first group, in which Somers, Gates and other well-known Londoners were concerned, was to be known as the First Colony, and was authorized to colonize between the 34th and 41st degrees of north latitude---that is to say approximately between what are now South Carolina and New York. The second group, which consisted mainly of men from Plymouth and has often been known as the Plymouth Company, was designated the Second Colony and was to operate between 38° and 45° parallel. The areas overlapped, but it was provided that neither group should establish a settlement within one hundred miles of a settlement set up by the other colony. Each group was to have exclusive territorial rights within fifty miles of its settlements, land being held in free and common socage, and no other English subjects were to inhabit those areas without a licence in the Company. Mining rights were also granted, subject to the payment to the Crown of one-fifth of all gold and silver and one-fifteenth part of copper, mined. The Company was authorized to mint its own coinage, to take all necessary measures for defence, and to seize the
' Alexander Brown, Genesis of the United States, I, pp. 37-42.
^8^ Doyle, I, p. 140.
^0^ Edward D. Neill, History of the Virginia Company of London, p. 3.
^30^ The patent is reproduced in Brown, I, pp. 52-63.
persons and goods of interlopers. Persons trading with the Colonies were to pay duties, a tariff preference being given to English subjects, and for twenty-one years those duties were to accrue to the Company.
A Council of Virginia was to be established in England to 'have the supreme management and direction' of affairs in both Colonies.
The Council of Virginia was initially constituted of fourteen members, including representatives of both Colonies. Perhaps its most important member was Sir Thomas Smythe, who may be regarded as the principal English merchant of his time. It also included Sir Ferdinando Gorges who was to play an important part in the later development of the English colonies.
James had every intention of keeping control over the proposed colonies and he issued a series of Royal Instructions,^11^ supplementing the Charter, which made it clear that the Council of Virginia was to act at the pleasure and subject to the direction of the Crown.
Under that direction the Council was to appoint Resident Councils for each of the two Colonies. Each such Council was to have the right to elect and remove its own President---a power which was to be a cause of much mischief in years to come---and to make ordinances which, provided they conformed with the laws of England, would remain in force unless and until they were disallowed by the Crown. Perhaps the most remarkable clause in the Instructions was that which laid down a form of communal economy. For the first five years after landing, the colonists were to 'trade together all in one stocke, or devideably, but in two or three stockes at the most and bring . . . the fruits of their labours . . . into severall magazines or storehouses'. It followed that 'every person of every the said several colonies, and plantations shall be furnished with all necessaries out of those several magazines or storehouses'. After the enumeration of this good Communist principle, the Instructions went on to command that the colonists should 'well entreate those salvages in those parts, and use all good meanes to draw the salvages
. . . to the true service and knowledge of God'.
The arrangements for the establishment of the two Colonies now proceeded separately. The Second or Plymouth Colony will be discussed in a later chapter and here we need only say that it was a complete failure. In the meantime three ships---the Susan
Constant of one hundred tons, the God-speed of forty tons and the
Discovery of twenty tons---were equipped for the first voyage to the First Colony. The command of the fleet was assigned to Captain Christopher Newport, an experienced commander who had made several voyages to the West Indies, while the two smaller vessels The Instructions are reproduced in Brown, I, pp. 65-75. were to be under the command of Gosnold, to whom we have already referred, and Captain John Ratcliffe, about whose previous career nothing is known.
Before the expedition left, the Virginia Council issued to its leaders instructions as to the appointment of the Resident Council of Virginia.^12^ Nobody on board was allowed to know the composition of that council in advance, but their captains were given
'several instruments, close sealed with the Counsel's seal aforesaid', containing the names of such persons as had been appointed and these documents were to be unsealed and published within twenty-four hours of landing in Virginia. Thereafter the Resident Council was to elect a President. The Instructions went on to direct that Captain Newport should then spend two months 'in discovery of such ports and rivers as can be found in that country' and should then return to England with the fleet laden with what commodities and merchandize could be found.
The second document contained 'Instructions by way of Advice' on matters which it may be thought could better have been left to the commanders of the expedition, such as the finding of a safe port in the entrance of a navigable river, and the importance of settling at 'the strongest, most wholesome and fertile place' as far up the river as possible.^13^ The company was then to be divided into three sections, one of which would be employed in building and fortifying the site; while a second group would engage in cultivation; and the third section would be employed in exploring the neighbouring country. A particular search for minerals was to be made. Great care was to be taken to cultivate good relations with the natives, but suspicion must not be relaxed---guides must not be trusted implicitly and 'how weary soever your soldiers be, let them never trust the country people with the carriage of their weapons'. Instructions were also given as to the planning of the settlement, but above all, 'neither must you plant in a low or moist place because it will prove unhealthfull'. A place where the natives
'have their people blear eyed, and with swollen bellies and legs', must be avoided. The advice concluded with the exhortation to serve and fear God, 'for every plantation which our Heavenly Father hath not planted shall be rooted out'.
Fortified with these instructions, the three ships, carrying perhaps 140 emigrants^14^ left London on 20 December 1606. The voyage was relatively uneventful except for a conflict of wills which led the commander to put Captain John Smith in irons. Smith had
^n^ The Instructions are reproduced in Brown, I, pp. 77---79.
" The Advice is reproduced in Brown, I, pp. 79-85 and also in Neill, pp. 8---14.
^14^ There is some uncertainty about the numbers.
144 ^A^ licence to trade
had an almost incredible career, during which he had fought in the Low Countries, been thrown into the sea by French pilgrims and rescued by a pirate, had fought and killed a Turkish champion in single combat in Hungary, had been rescued by a Turkish beauty and 'after beating out his rival's brains with a club, had fled in disguise through the wilds of Circassia'.^16^
On 26 April 1607 the fleet entered into Chesapeake Bay. They were at first entranced with what they saw---lovely flowers, goodly trees, 'strawberries four times bigger and better than ours in England', and pleasant springs---and their first contact with Indians was most friendly. First impressions soon proved to be wrong.
Jamestown, where they had established their first settlement, turned out to be a most unhealthy locality and a narration by George Percy, one of the original settlers, tells a dismal tale of sickness.^18^
To add to the troubles of the colonists, they were soon attacked by savages.
Edward Maria Wingfield, who was elected President was a gallant soldier, but not suited by temperament to the management of an unruly band of colonists. His statement that 'I have learnt to despise the verdict of the vulgar',^17^ perhaps throws some light on the discord which broke out amongst members of the Council while Newport was away exploring, and which became intense when Newport left to fetch supplies from England. One of the Councillors was deposed and in September the other Councillors deposed Wingfield himself on charges which may or may not have been well-founded. At the same time the hostility of some Indian tribes made it impossible to obtain adequate provisions and in the absence of supplies from home, shortage of food necessitated the imposition of severe rationing. Percy tells us that 'Our men were destroyed with cruell diseases as Swellings, Flixes, Burning fevers and by Warres, and some departed suddenly, but for the most part they died of meere famine'.^18^ The change of season brought some relief and wildfowl began to be available, but relations with the different Indian tribes were a continual cause of anxiety. Newport had made friends with Powhatan, father of the celebrated Indian beauty, Pocahontas, but other tribes were hostile and Smith was attacked and taken prisoner by Powhatan's brother. The indomitable Smith so impressed his personality on his captors that he was released and sent back to Jamestown. Ratcliffe, who had succeeded Wingfield as President, now turned against Smith and although Newport, on his return from England in January 1608 imposed
"Doyle, p. 153. Doyle's account being based on Smith's own report.
^10^ Reproduced in Brown, I, p. 152.
\" Doyle, p. 155.
^18^ Brown, I, p. 167.
apparent peace on the disputants, trouble broke out again when Newport set sail for England. Ratcliffe was deposed and Smith became President.
It had now become clear that an oligarchy in which a majority could at any time depose the President was a wholly unsuitable instrument for the government of this settlement and accordingly at the beginning of 1608 the Company applied for a new patent.
It was granted in May 1609^19^ and unlike the first charter which had covered both the First and Second Colonies, it separately incorporated the Treasurer and Company of Adventurers and Planters of the City of London for the First Colony in Virginia, every planter and adventurer being a member of the Company. A
separate Royal Council for the Virginia Company, resident in England, was appointed in the Charter, but it was provided that in future the Council would be elected by the Company 'at their assembly for that purpose'. The Council was authorized to establish form of government and make laws for the Colony and it was laid down that when the Council had appointed a Governor of the Colony, the authority of the former President and local council would cease. There was in fact to be rule by one man in Virginia under the overall control of the Royal Council for the Virginia Company.^20^
The Company now sought to interest the public in its venture and so to raise funds. Pamphlets were issued describing the attractions of Virginia in somewhat unrealistic terms which would have done credit to a modern publicity agent and which emphasized the advantages which would accrue to England from colonization. One of the best known of these pamphlets was Nova Britannia issued in
1609 under the signature R.I. The author begins by saying that having long resisted invitations to join in the Virginia enterprise, at last with-holding no longer, I yeelded my money and endeavours as others did, to advance the same, and now upon more advised consideration, I must needes say I never accompted my poore means employed to better purpose.^21^
The pamphleteer next describes the fertility and natural wealth of Virginia and in effect might have said with Caleb^22^ that 'the land which we passed through to search it, is an exceeding good land'. He declares that 'the natives are generally very loving, and
^30^ Reproduced Brown, I, pp. 208-35.
-
It does not appear that the authority of His Majesty's Council for Virginia appointed in 1606 by the First Charter was abrogated.
-
Brown, I, p. 243.
^53^ Numbers, ch. XIV, ver. 7.
do entertain and relieve our people with great kindness'.^28^ The contrast between this description and the experience of the colonists suggests that the pamphleteer had only viewed the scene from afar, but he goes on to support colonization as a matter of national policy. There are, he says, swarms of idle persons which having no means of labour to relieve their misery, do likewise swarme in lewde and naughty practices, so that if we seeke not some waies for their forreine employment, we must provide shortly more prisons and corrections for their bad conditions.
He does not nevertheless advocate that Virginia should be peopled only with bad characters. On the contrary, on the whole, men of good character ought to be sent, and poor though they may be, the soil will make them rich . . .
only they must go with this determination that all must be busy in some way and not yield to idleness.
The Colony would, the pamphleteer claims, provide a market for English goods, but above all it would lead to a great development of English shipping.
We shall not still betake ourselves to small and little shipping as we daily do beginne, but we shall rear againe such Marchants Shippes both tall and stout, as no forreine sayle that swimmes shall make them vayle or stoop.
To those who might be apprehensive of Spanish opposition, the author replies :
Where is our ancient might and power? Where is that great repute, sleeping now, that we won so few years ago? Let not the world be deceived : we are the same now we were then.^24^
The clergy were also enrolled as propagandists, but perhaps of greater practical importance was a letter written by the Council of Virginia to the Lord Mayor, Aidermen and Companies of London inviting them to take shares in the enterprise either collectively or individually in Bills of adventure---that is, stock units of not less than £12 10s. 0d.; since smaller contributions would lead to 'infinite trouble nowe and a confusion in the contribucon'.^28^ As
^13^ Doyle, pp. 167-8, quoting from Peter Forces Collection of American
Tracts. A summary of the pamphlet prepared for the Spanish King is also partially reproduced in Brown, I, pp. 260-77.
^24^ Brown, I, p. 263, quoting a summary of the pamphlet prepared for the Spanish king.
^23^ Brown, I, p. 252.
an inducement the Council proposed that any Alderman investing
£50 should be made a Councillor, while their Deputies could become Assistants of the Council on subscribing £25.
Membership of the Company was defined to include planters who went in person to settle there and Adventurers who contributed their money but did not go in person. Every settler was to be credited with one share which would entitle him to a proportionate share in the distribution of land when it came to be made---in addition of course to any shares for which he might subscribe. For the first seven years trading would be collective, the expenses of the colony being borne by the Company which would therefore receive any trading income.
In response to these appeals considerable sums were contributed, by the City Companies and their members and finance thus being available, the Virginia Company fitted out nine ships which left England in June 1609 carrying five hundred colonists.
Lord Delaware, the President-elect, was unable to leave England at this time and command of the expedition was entrusted jointly to Gates, Somers and Ratcliffe. An amusing dispute about precedence at once broke out, and it was settled by arranging that Gates and Somers should sail together in the Sea Venture. This decision was particularly unfortunate since the Sea Venture did not reach Virginia, but was driven ashore at the Bermudas in a great storm. When seven ships of the expedition arrived at Virginia there was thus no one who had been designated as leader by the Council of Virginia. John Smith was at this time acting as President, but as usual he quarrelled with his fellow Committee-men, and was replaced first by West, brother-in-law of Delaware, and then by George Percy who had been in the Colony from the beginning.
Smith was seriously injured by an explosion and returned to England.
Disaster overtook the newcomers almost at once. Jamestown was as unhealthy a place as could have been chosen for the new Colony, and the new arrivals were soon stricken with the 'sicknesse'
so sorely that only about sixty of the several hundred new emigrants survived to 1610.^20^ Famine took perhaps as heavy a toll as sickness.
Indians were hostile and cut down the standing corn, while in the absence of any effective leadership, the dissolute and worthless character of many of the immigrants led to both idleness and anarchy. One cannot help feeling that Smith---who though quarrelsome was a man of courage---might have retrieved the situation if he had still been in Virginia. As it was, the position was desperate
" T. J. Wertenbaker, Virginia Under the Stuarts, pp. 11-12.
when Gates and Somers managed to reach the colony in May
1610. On his arrival Gates found that it appeared raither as the ruins of some auntient fortification, then that any people living might now inhabit it: the pallisadoes he found tourne downe, the portes open, the gates from the hinges.. . the Indian as fast killing without as the famine and pestilence within.61
Neither Gates nor Somers lacked courage, but they rapidly concluded that with the shortage of provisions and the demoralization of the community, there was no alternative but to return home. They were in fact on their way when Delaware arrived in June 1610 to take up his post as Governor. He persuaded the settlers to return to Jamestown, accepted an offer from Somers to go back to the Bermudas for provisions and deputed Gates to England for fresh supplies. With the aid of the 150 new emigrants, mostly craftsmen, who had accompanied him, he revived the spirits of the colonists at least for the time being. He insisted that emigrants of a good type should be sent to Virginia and he wrote that they are not an hundred or two of deboisht hands, dropt forth by yeare after yeare, with pnury and leysure, ill provided for before they come, and worse governed when they are here,. . .
whome no examples dayly before their eyes, either of goodness or punishment, can deterr from their habituall impieties,
. .. that must be the carpenters and workers in this so glorious a building.62
Delaware's insistence on this point was effective, and in about December 1610, when preparations were in hand for the despatch of the Hercules to Virginia with emigrants, the Council ordered that 'none but honest sufficient Artificers, as Carpenters, Smiths,
Coopers, Fishermen, Brickmen,. . . shall be entertained into this Voyage'.63
In 1611 Delaware's health broke down and at this time the Company not unnaturally thought of abandoning the colony altogether. Funds were short and shareholders had lost confidence and defaulted in their subscriptions, but Gates' report revived hope and the Council of Virginia determined to make a fresh start. The Council estimated that an expenditure of £30,000 over a period of two years would put the colony in a sound position and it appealed for funds. This time the appeal was not limited to aidermen and other dignitaries, but was addressed to citizens generally.64 A sum of £18,000 was raised in a short time and this made it possible in March 1611 for the Company to send out an expedition of three ships with three hundred settlers under the command of Sir Thomas Dale, together with 'all things necessary for the Colony, and also twelve kine, twenty goates, besides Coneies, Pigeons and Pullen'.65
A valuable lesson had been learned and supplies for a whole year appear to have been sent with Dale.
At this time the Company seems to have felt the need for some enlargement of its authority and in 1612 a new Charter 'granted them more extensive property and more ample jurisdiction'.66 It made four main changes. It included the Bermudas in the Company's jurisdiction, it provided that meetings of the Company must be held at least once a week; it empowered the Council to send back to Virginia offenders who had returned to England; and it provided for the organization of lotteries to raise funds for the Colony. The need for the lottery apparently arose from the failure of many of the original subscribers to pay up. The first lottery was held in June 1612 and in it there were 'five thousand pound in prizes certayne, besides rewardes of casualtie'.67 The chief prize,
'foure thousand crownes in fayre plate', went to a tailor. It is interesting to note that churches took part in the lottery, and that the vestry of the Church of St. Mary, Colechurch, which invested six pounds in it, received a prize of 'twoe spones price twentye shillinge'.
Dale, who had served in the Low Countries with distinction, had abundant self-confidence and was the right man to bring order out of chaos in Virginia. He introduced Draconian laws which at times were enforced with rigour, though it has been suggested that to some extent they were held in terrorem rather than applied. Few contemporary observers would have doubted the need for a drastic regime, since Dale rightly described the three hundred emigrants who accompanied him as 'so profane, so riotous, so full of mutiny, that not many are Christians but in name, their bodies so diseased and crazed that not sixty of them may be employed'.68
In view of the unhealthiness of Jamestown, Dale established a new settlement at Henrico, ninety miles from the mouth of the River.
When Gates returned as Governor of Virginia, Dale took charge of Henrico. For the next four years or so, Dale and Gates between them ruled Virginia and brought about remarkable changes in the state of the colony and the morale of the colonists. The planters were organized into different classes, to each of which its own work was assigned. Each farmer was required not only to do thirty-one days service for the colony when his own business could best spare him, but also 'to pay yearlie into the magazine for himself and every manservant. . . twelve bushells and a halfe of English measure'.^35^
Dependence on England for provisions was thus lessened. Houses were built and the new settlements which Dale and Gates established during this period were adequately fortified. More important still, better relations with neighbouring Indians were established. It is with this period that the name of Pocahontas is associated. A good deal of legend has accumulated round her name, but it is beyond dispute that in 1613 her capture by Captain Argali---who had earlier distinguished himself as an unauthorized private trader, but was now one of the Company's commanders---opened up relations with her father, Powhatan, the most important of the local chiefs and led to friendship with other tribes also.
This was indeed an eventful year for Argali, for in the summer he happened to be fishing off the coast of Maine in a well-armed vessel when he learned that the French had established a settlement there. Maine was within the area of His Majesty's Council for Virginia---though not within the area occupied by the First Colony under the new Royal Council of Virginia---and Argali promptly attacked the French, who were hopelessly outnumbered and driven away.^30^
In 1616 when Dale returned home, he and Gates (who had left a year or two earlier), can be said to have rescued the colony from its enemies and to have rehabilitated it economically. Tobacco cultivation, started in 1612, had already become important, but had not been allowed to interfere with the growing of cereals; a 'magazine'
or Company shop, supplied from England, sold the necessities of life to the settlers; the old communal economy had been partially changed to one of private enterprise; and no fewer than six settlements, with a population of 351, had been established. In a Broadside, written in 1616-17, the Virginia Council were able to claim that 'by the blessing of God and good government, there is great plentie and increase of Corne, Cattell, Goates, Swine, and such other provisions, necessary for the life and sustenance of man'.^37^
Perhaps the most important development of this period was the establishment of representative government. The struggles between
" Rolfe's Relation, quoted in Neill, pp. 106---112.
"Doyle, p. 198.
^37^ Brown, II, p. 797.
King and Parliament in England had their repercussions within the Company and about this time the liberal party under the guidance of Sir Edwin Sandys gained the upper hand in the Council of Virginia. Under the second and third charters it was within the competence of the Council of Virginia to establish a representative assembly. In 1619, when George Yeardley was sent out as Governor, he took with him instructions to summon a House of Burgesses. He issued a proclamation which granted that a General Assembly should be held yearly once, whereat were to be present the Governor and Counsel!, with two Burgesses from each plantation freely to be elected by the inhabitants thereof; this Assembly to have power to make and ordaine whatsoever lawes and orders should by them be thought good and proffittable for our subsistence.^38^
There were eleven districts in Virginia and twenty-two Burgesses therefore assembled in the church at Jamestown on 30 July 1619 to form the first representative assembly in the New World.^39^ The Assembly at once claimed the right to decide on the eligibility of its members. It proposed to exclude one member because he had not received a patent for his lands from the Company and was presumably a squatter, but he was admitted, subject to his rectifying this omission. Another plantation presented greater difficulty, since its owner's patent exempted him from the jurisdiction of the Jamestown government. He refused to surrender the exemption and the representatives of the plantation were therefore excluded.
In its early days the Assembly was by no means as independent as might be thought, since it was bound by any instructions issued by the Council. Its enactments, therefore, fell into two classes---
those implementing the Council's instructions and those devised by itself---and nearly all its important enactments fell into the former class. In particular the Assembly legislated to carry out the Council's orders that the trade in tobacco was to be a monopoly of the Company and that every household must grow a stipulated quantity of corn.^40^ Manners and morals were also regulated and on the opening day of the first session, the Assembly passed an Act penalizing drunkenness so severely that for a third offence the culprit was 'to lye in boltes' for twelve hours and also to pay a fine.^41^ The Assembly also passed an Act which, though it might appear to be merely a piece of sumptuary legislation, was the beginning of a long struggle in which the colonists sought to
^18^ Wertenbaker, p. 36. *•
" Calendar of State Papers (Col.) 1574---1660, p. 22.
\"Doyle, p. 213.
"Neill, p. 141.
establish their sole right to levy internal taxes. It dealt with
'excessive apparall', and laid down that 'every man be cessed in the churche for all publique contributions, if he be unmarried according to his owne apparell; if he be married according to his owne and his wives, or either of their apparell'.^42^ Another Act passed in the same session required every adult male to contribute one pound of tobacco into the public coffers.
In this session the Assembly also considered the general question of relations with Indians and found itself in disagreement with the Council of Virginia over proposals for the education of the natives and their conversion to Christianity. When the Company was formed, its founders had looked forward to seeing 'all Paganisme and idolatarie by little and little utterly extinguished.'^43^ In 1613, Alexander Whitaker, Minister of Henrico, made a very moving appeal to the Council of Virginia for funds for missionary work; for, he asked, 'are not these miserable people heare better than hawkes, hounds, whores and the like?'^44^ objects on which, he alleged, rich men did not scruple to spend their wealth.
This theme frequently recurred in contemporary writing, but it was not until 1618, under the influence of Sandys, that the Virginia Council gave instructions that practical steps were to be taken towards that end. Donations were then received from private individuals and land was allotted for the establishment of a college in Henrico, but it was decided to postpone building the college while funds accumulated from which it could be maintained. The Assembly of Burgesses on the other hand considered that it was desirable to have as little to do with Indians as possible, except in the way of trade. The Council's instructions could not be openly rejected, but the Assembly and the local Council shewed no enthusiasm in this matter and little was therefore achieved in this period.
In 1619 Sir Thomas Smythe, who was now sixty-one years of age and had too many commitments to devote much of his time to the Virginia Company's affairs, offered to resign from the office of Treasurer. He was, nevertheless, much displeased when his resignation was accepted and he became a bitter opponent of Sandys who was elected to succeed him. Sandys infused new life into the Company. Meetings of the courts were held more regularly
---though they still took place in the private houses of the Treasurer or Deputy Treasurer; plans were made to send out a large number of emigrants in 1619; and it was decided not to charter ships specially
^45^ Neill, p. 141.
-
ibid., p. 29.
-
ibid., p. 81.
for this purpose, since they might return with no freight, but to send the emigrants in ships bound for Newfoundland, which would only cost £6 per head. A letter was addressed to the Lord Mayor asking him to provide one hundred apprentices,
Our desire is that we may have them of twelve yeares old and upward, with allowance of Three pounds a pees for their transportation, and forty shillings a pees for their apparell,. . . They shall be apprentizes; the boys till they come to twenty one yeares of age; the girles till like age, or till they be marryed, and afterwards they shall be placed as Tennants upon the publique lands, with best condicions, where they shall have houses with stocke of corne and cattle to begin with.69 70
One hundred young maids were also to be sent as potential wives for the settlers, so 'that wifes, children and familie might make them lesse mouable and settle them, together with their Posteritie in that Soile'.
In the year 1619, crops in Virginia were excellent, relations with Indians were peaceful and it must have seemed that a bright future lay ahead. In reality disaster was just round the corner. The first shock came from the return of the 'sicknesse' with such severity that Yeardley wrote of the 'great mortallytie which hath been in Virginia, about three hundred of ye Inhabitants hauinge dyed this yeare'.^40^ Deaths were still more numerous in each of the following years. It is not clear whether the infection started in the colony or in the ships taking out the emigrants, but it is estimated that 4,000
deaths occurred during the period of four years.
When the tide of immigration was started by Sir Edwin Sandys, in 1619, there were living in Virginia about nine hundred persons; when it slackened in 1624 the population was but eleven hundred. The sending of nearly five thousand settlers to Virginia had resulted in a gain of but two hundred.71
This period also witnessed a recrudescence of Indian hostility.
For some years relations between the settlers and the natives had been peaceful and even friendly and the colonists were thus unprepared for the savage and widespread attacks which were organized in 1622 after the death of Powhatan. The attacks were treacherous indeed and were thus described by an eyewitness, Daniel Gookin.72
On the Friday morning (the fatal day) the 22nd of March as also in the euening, as in other dayes before, they came vnarmed into our houses, without Bowes or arrowes, or other weapons, with Deere, Turkies, Fish, Furres, and other prouisions, to sell, and trucke with vs, for glasse, beades, and other trifles:
yea in some places, sate down at Breakfast with our people at their tables, whom immediately with their owne tooles and weapons, eyther laid downe, or standing in their houses, they basely and barbarously murthered not sparing eyther age or sexe, man, woman or childe.
Once the first shock was over the Indians were quickly overcome, but in the meantime three hundred colonists were massacred and many houses burned. Worse even than the immediate results of the attacks was the fact that every Indian was now regarded as an enemy. Settlers were withdrawn from isolated plantations, fortifications were erected and the Governor and Council were constrained to ask the Council of Virginia to send out 'Armes and munitions. . .
without which we cannot only not goe fourth to reuenge us uppon our enemyes, but shallbe euen unable to defend ourselues at home.'^40^ Revenge was indeed now uppermost in the minds of the colonists. The planters were directed by the Assembly to 'fall upon their adjoining savages', and Edward Waterhouse, a Secretary of the Company, wrote of the many ways in which the Indians might be conquered.
by force, by surprize, by famine in burning their Corne, by destroying and burning their Boats, and Canoes, and Houses,
. . . by pursuing and chasing them with our horses and blood-
Hounds to draw after them and Mastiues to teare them, which take this naked, tanned, deformed Sauages for no other than wild beasts.^50^
We need not dwell further on this unhappy theme, except to remark that the necessity of employing a large percentage of the colonists in armed reprisals, defence measures, or watch and ward, seriously interfered with the cultivation of cereals and left the colony short of food.
The Company might nevertheless have survived these troubles if it had not been a house divided against itself. Smythe's antagonism towards Sandys, to which we have already referred, was heightened when doubt was cast on the accuracy of Smythe's accounts, and he joined the Earl of Warwick, Argali and Aiderman Johnson (formerly Deputy Treasurer), in unrelenting opposition to Sandys and his
* Neill, p. 297.
^60^ ibid., p. 321.
colleagues. 'The Company now obtained the name out of doors of a very hotbed of quarrels, whose meetings were rendered unseemly by the wranglings and recriminations of the members.'^51^
In 1923 Johnson submitted to the King a petition alleging mismanagement by the Company, and asking for the appointment of a Commission of Enquiry.^02^ At the same time, Captain Nathaniel Butler, Governor of the Somers Islands, appears to have been suborned to submit a memorandum entitled 'The Unmasked Face of our Colony in Virginia'.^53^ He alleged that the settlements were badly sited, that emigrants were sent at the wrong time of the year, that the Chief of the Company engrossed foodgrain meant for the settlers, that fortifications were neglected and that the Governor in Virginia deliberately flouted the law.
The Company was summoned before the Privy Council to answer these charges and in 1623 a Commission of Enquiry was appointed by the Grown.^54^ The Council of Virginia gave satisfactory answers to the allegations, but they were bullied to submit their replies in an unreasonably short time and there was clearly a bias against them. The men now dominant in the Council of Virginia were in the main Parliament men, by no means friends of the King, and it is also reasonable to believe that their establishment of representative government in Virginia was not pleasing to a King who was engaged in an attempt to crush his own Parliament. There was, however, a deeper reason for the King's antagonism. The foreign policy of James I was based on close friendship with Spain, and the Spanish Ambassador, Gondomar, had great influence with him. Spain at this time fought strenuously to exclude England from the New World and there was therefore continuous pressure to influence James against the Virginia Company. Relations between the King and the Company had for some time been strained. In 1620 the King tried to interfere with the Council in its election of a Treasurer and was rebuffed. It is said that James 'flung himself away in a furious passion'.^55^ About the same time, a dispute arose regarding the duty on tobacco. Under the Company's charter it could not be required to pay a duty of more than 5 per cent on the import of tobacco, but it was forced to agree to an increase. In 1621 the King took the further step of limiting the import of tobacco from Virginia and the Somers Islands to £55,000 per annum---a decision taken in
" Colonial Papers, 1623, 19 April and 26 July, quoted in Doyle, p. 234.
^05^ The Petition is reproduced in Neill, p. 388.
^63^ The principal allegations and the Company's answer were read at a meeting of the Court of Virginia in April 1623, and are quoted in Neill, pp. 395---406.
^M^ A Calendar of State Papers (Col.) 1574-1660, p. 44.
^60^ Wertenbaker, p. 55.
order to benefit Spain and of great damage to the colonies, since tobacco cultivation had now become important to their economy.
An attempt on the part of the Company to export tobacco from Virginia direct to the Netherlands met with a prohibition. In 1622, perhaps under pressure from Parliament---and partly because of the loss of revenue---James modified his policy. The limit on the import of Virginia tobacco was removed, but one-third of the crop was to be given to the Crown?^0^ and the colony was also required to import between 40,000 and 60,000 pounds of Spanish tobacco annually?^7^
It was against this background of royal hostility that the Commission of Enquiry was conducted and it is significant that it included Smythe, Argali and other opponents of the Company's administration. Thirty-nine Articles of indictment were presented to the Company and it was required to reply within four days?^8^ The Assembly of Burgesses in Virginia submitted evidence rebutting these charges and adopted towards the Commission a hostile attitude which greatly displeased the King. The Company was evidently considered blameworthy for defending itself with spirit and in May 1623 the Privy Council issued orders confining Sandys and some other officials of the Company to their houses for 'an impertinent declaration containing bitter invective and aspersions'?^9^ The King now proposed a compromise under which the Company would continue to trade, but the administration of the colony would be transferred to the Crown, thus undoing the mischief which James considered to have been done by the second charter. To its great credit the Council of Virginia rejected this compromise and since it was evident that the King was bent on the destruction of the Company, petitioned the House of Commons. The King forbade the Commons to discuss the matter and it is reported that 'This was assented to by a general silence, but not without soft muttering, that any other business, in the same way, might be taken out of the hand of Parliament'?^0^
The Company was now called upon to surrender its charter and as it refused, a quo warranto proceeding before the King's Bench led to a judgment annulling the Charter, and in May 1625 the Letters Patent incorporating the Company were repealed and the King assumed the direct government of Virginia?^1^ The King had triumphed and the arbitrary attitude which was to lead to the downfall of his successor had put an end to a Company which, in spite of many mistakes, had founded the first English colony in the New
" Wertenbaker, p. 45.
^fl^' Doyle, p. 232.
-
ibid., 236.
-
Calendar of State Papers (Col.) 1574---1660, p. 45.
-
ibid., p. 62.
^01^ Calendar of State Papers (Col.) 1574-1660, p. 73.
World, had established the first representative assembly in what was to become the British Empire, and had created the tobacco industry on which the economy of Virginia was to depend.
We must now look briefly at the financial aspect of the Company's operations. The dissolution of the Company did not mean that its members had lost their investment, for they retained the land which had been allotted to them. In the case of a Plantation Company it is not possible to construct a profit or loss account or a balance sheet comparable to that of a Joint Stock trading company. To the receipts and expenditure of the Plantation Company must be added the nett income of the shareholders from their individual tracts of land, and figures for these items do not exist. In a careful analysis of the Company's accounts, Scott has estimated that up to 1619 the outlay of the Company was about £67,000 and that its sources were as follows :
Total paid by adventurers £36,624
Profit of lotteries 20,000
Borrowings 5,000
Miscellaneous 5,000
£66,624^02^
Shares to the value of £56,000 had been issued but nearly £20,000
remained unpaid, and as a result of these defaults the Company was often hard put to it to furnish supplies and provisions. It was indeed, only kept going for some years by the ability of its Treasurer, Smythe, to borrow on a considerable scale. Still greater difficulties arose in the time of his successor, Sandys, for in 1621 the King marked his displeasure by revoking the licence to hold lotteries. By May of that year, the stock was 'clean exhausted' and the price of shares had fallen to between 40 and 50 shillings.^03^
Fresh capital was needed and it was raised by the formation of separate joint stocks for particular purposes of the parent company.
Between 1620 and 1623, capital to the extent of £25,000 was subscribed to these subsidiaries and at least one of them, that for transporting maids to Virginia was very lucrative---£12 was charged for the passage of each maid, and the planter who married her paid
150 lb. of tobacco, worth about £22 10s. Od. These subsidiaries were in general established by groups of shareholders in the Virginia Company but more important than the shareholders' returns from these miscellaneous companies was the fact that they had acquired potentially valuable land in Virginia.
^02^ Scott, II, p. 258.
^03^ ibid., II, p. 276.
Scott takes the case of a shareholder with 4 shares for which he would have paid £50. He would have been allotted 400 acres initially and would have been entitled to another 400 acres after he settled his land, together with 50 acres for each emigrant he sent out. If he sent 5 men, their transport and provisions would have cost him £100 so that his total expenditure would have been £150, for which he would have received 1,050 acres. His land would thus have cost him a little under 3s. per acre. Once the land had been developed, the return on this investment would be handsome, even on the basis of a half-share of the crop. In spite of the financial stringency experienced by the Company as an entity, those shareholders who settled their lands and held on to them through the difficult early days, reaped a satisfactory reward. The experience of Virginia therefore encouraged later attempts at colonization in the New World.
Chapter 9
The Somers Islands^1^ or Bermuda Company[^]
On chronological considerations we ought now to give an account of the Newfoundland Company, but it will be more convenient to give priority to the Somers Islands Company, which was in origin merely an offshoot of the Virginia Company. There is some uncertainty about the date when the Spanish first discovered the Bermuda Islands, but it is clear that it was before 1511 and it is generally believed that they were named after their discoverer Juan de Bermudez.73 In 1527 the King of Spain authorized an expedition to colonize the islands, 'so that there could be found a roadstead and also assistance' for ships on the long voyage from the Indies, but the project came to nothing.74 75 76 77 78 No further attempt at colonization seems to have been made in the sixteenth century---
a fact sufficiently explained by the evil reputation the islands had amongst seamen who passed near them on their way to the West Indies or America. They were indeed regarded as a most prodigious and inchanted place, affording nothing but gusts stormes, and foule weather. . . and no man was euer heard to make for the place, but as against their willes they have by stormes and dangerousnesse of the rockes, lying seuen leagues
into the sea, suffered shipwracks?
One of those to suffer shipwreck was Henry May and Hakluyt has preserved a graphic description of the way in which in 1593, on board a French ship, he was cast ashore on the north west part of Bermuda. The pilots, having certified the Captain that they were well south of the islands, and so out of danger 'demanded of him their wine of height', and after they had enjoyed it, negligence led to the ships striking on the rocks. The crew took to the rafts and boats, but May 'durst neither presse into the boat, nor upon the raft, for feare they should have cast me overboord'.^0^ At length he entered the boat and after rowing all day the little company reached the shore having left 'the better half of our company to the mercy of the sea'. Water was hard to find, but one of the pilots 'digging among a company of weeds found fresh water to all our great comforts'. After a five months stay, May---the first Englishman to visit Bermuda---and his party built a small barque of eighteen tons and made their way to Newfoundland.
In all this there was little to encourage interest in these islands and when, in June 1609, a fleet of seven ships and two pinnaces left Plymouth to convey Gates---the Governor General designate---
and Somers, the Admiral, together with five hundred colonists and supplies, to Virginia, Bermuda was not at all in the thoughts of the company or the organizers. Towards the end of July, at about two hundred leagues from Bermuda, a 'most sharpe and cruell storme', separated the Admiral's ship from the rest of the fleet and in the words of Silvanus Jourdan with the violent working of the seas our ship became so shaken, tome, and leaked, that shee receiued so much water as couered two tire of hogs-heads aboue the ballast: that our men stood vp to the middles, with buckets, baracos and kettles to baile out the water.^7^
All hope seemed lost and some of the crew, 'hauing some good and comfortable waters in the ship', took to drink, 'taking their last leaue one of the other, vntill their more ioyfull and happy meeting in a more blessed world'. Somers, who had kept watch for three days and three nights and supported tire fainting spirits of the crew, sighted
^0^ Silvanus Jourdan's Narrative, quoted in Memorials, I, p. 16.
•Hakluyt, VII, p. 162.
^7^ Memorials, I, p. 15. Quoting Sylvanus Jourdan's Narrative 1610. land, 'when no man dreamed of such happiness', and finding it impossible to anchor near the island of Bermuda ran the Sea Venture
ashore where she was 'fast lodged and locked' between two rocks. So firmly indeed was she wedged that all the crew and colonists, one hundred and fifty in number, together with a considerable quantity of goods and provisions were able to be carried by boat to dry land.
Under the leadership of Somers, a man inured to extremitie. . . euery man presently begins to playe a seuerall part, for the good of the whole : some looked out for fish which euen offered themselues to their hands :
others to catch birdes and foules, who likewise with their multitudes and tamenesse wearied the catcher with being caught; the rest contriued cabbins to keepe themselues from weather, which was a taske as easily performed as the other by reason of the store of palmitoe leaues, most proper for that tume, and the nerenesse of woode.79
Fruit, too, was found in abundance and the shipwrecked mariners soon rejected the traditionally Spanish description of the Bermudas as the Devil's Islands.
Gates and Somers, however, were mindful that the purpose of their mission was to take men and supplies to Virginia and after an attempt to despatch the long boat on the one hundred and forty league journey to Virginia had ended in disaster, they set to work on the construction of a more suitable vessel. Ten months were occupied in this task and it is not surprising that many of the immigrants had begun to regret having left England. Discontent soon developed into conspiracy and mutiny and although three successive mutinies were suppressed, two of the ring leaders, Christopher Carter and Edmund Waters,80 went into hiding in the woods and remained behind in Bermuda when, early in May 1610, Gates,
Somers and about one hundred and fifty sailors or colonists set sail in their newly constructed pinnace, Patience, for Virginia.
We have already seen that when the party arrived in Virginia, conditions were parlous, since 'every living thing had been eaten and some had fed upon snakes or adders'.81 82 A few days after landing,
Somers returned to Bermuda in the Patience to collect provisions, particularly hogs and fish. After a perilous voyage he reached Bermuda, but shortly thereafter 'the strength of his body not answering the euer memorable courage of his minde',^11^ he died. In spite of his
162 a licence to trade
dying command that the pinnace should return to Virginia with provisions, the remainder of the party embalmed his body and set sail for England. This time, however, three men remained behind---
Carter, Waters and one Edward Chard---'the only lordes of the island'. There they lived a Swiss Family Robinson existence,
First of all they fell to cleareing of some ground, plantinge of corne and settinge of pomp ions, as their groundworck; next for conueniencye, they began to cutt downe timber, saweing of bordes and planncks to make them cabbins, then a feelinge superfluitye and wealth, they make a priuye search into euery nooke and corner . . . so that at length (answerable to their wish and paines) they chaunced vpon the goodlyest and greatest peece of Amber-Grece that the world is knowen euer yet to have had in one lumpe.^12^
Anxious though the emigrants had been to return from Bermuda to England, they had much to say of the attractions of the islands, but they were not believed 'till it came to be apprehended by some of the Virginia company, how beneficiall it might be, and helpfull to the Plantation in Virginia\'^13^ Those who realised the possibilities therefore 'resolued vpon a generall purse (which could not be much senceable of it) to send ouer thether for the discouery some voluntary men, who wer to be entised with hope of gaine'.^14^
The Virginia Company therefore petitioned the King for the inclusion of Bermuda in their third charter, but in 1612 before this was granted, a group of the Company's members known as 'the Undertakers', had already sent out a small ship called the Plough,
with fifty or sixty passengers under the command of Richard Moore,
(by his trade a carpenter, but an excellinge master of his art)'.^18^
Moore took with him detailed instructions, as well as well as a sealed box containing the name of the person nominated to succeed in the event of his death and a second sealed box with a similar nomination in case the first nominee had died. He was directed to see that morning and evening prayers were read daily; to construct fortifications and storehouses; to allot to every house 'one roode of ground for his garden and his backside', with two roods for a married couple;
to plant corn; to pay reasonable day wages to persons employed on the business of the Undertakers; to procure any ambergris obtainable; to take care to dry fishing nets thoroughly; and above all to send the Plough back quickly.
^M^ Lefroy, p. 18.
^33^ Memorials, I, p. 54, quoting an account by William Strachey in Purchas,
His Pilgrims, IV, Ninth Book, ch. VI.
^34^ Lefroy, p. 17.
"ibid., p. 17.
Moore landed in what was afterwards to be called Smith's Isle on 13 July 1612. Before he had been many weeks at work, the position of the Undertakers was regularized by their purchase from the Virginia Company, for £2,000, of all the Company's rights in the Bermuda Islands.^10^
Moore at once had to face a difficulty in connection with the three persons who had remained behind in Bermuda when all the others left for England. They were 'fat and faire,. . . and they say theselues they neuer were sicke all the time of their being there'.^17^
They had planted wheat and tobacco; they 'had wrought vpon timber'. They were 'ciuill, honest and religious, and making conscience of their waies'. Their conscience apparently did not require them to surrender the considerable quantity of ambergris which they had found^18^ and which the Undertakers claimed---
presumably on the strength of the Virginia Company's charter.
Ambergris at that time was of importance both in perfumery and cooking and could fetch a considerable price in a large lump. As soon as Chard realized that Moore knew of this find, he entered into a conspiracy with Edwin Kendall (one of Moore's Council)
and Captain Davis, the master of the Plough, to smuggle it to England. Firmness on Moore's part broke the conspiracy down and Moore recovered the bulk of the precious commodity, although
'some peeces only ther wer, the which haueinge falne into Kendalls fingringe wer (either by the ignorance or conniuence of the gouernour) by him stolne ouer into England'.^10^
In the meantime, in 1613 the Undertakers had sent out the
Martha with sixty passengers, amongst whom was one Bartlett, described by John Smith as 'a miscarryed merchant, employed by the aduenturers to suruaye the ilands, and to prie into the gouernours actions'.^20^ The Company had come to know about the ambergris and the Governor had already been directed to send it to England in the Martha, but he seems to have felt that once this had been done the Company would take little trouble over sending out emigrants and provisions. In spite of Bartlett's expostulations, he therefore sent back in the Martha only one-third of the ambergris. The second instalment was despatched a little later and in September 1613, when the Elizabeth, bringing forty more immigrants also conveyed peremptory instructions from the Undertakers, Moore could delay
^38^ Vide Preamble to the Somers Island Company's Patent 1615, Memorials,
I, pp. 84-5, and vide infra, p. 165.
" Memorials, I, p. 70-71.
- A piece of ambergris found as big as the body of a giant.' Calendar
of State Papers (Col.) 1574-1660, p. 15.
- Lefroy, p. 23.
^19^ ibid., p. 29.
M
no longer---he had indeed, already incurred the displeasure of the Company. The balance of the ambergris was now sent to England and the whole consignment seems to have fetched between £9,000
and £10,000.^21^
Moore now settled down to the normal tasks of a pioneer---the construction of houses, arrangements for defence from the Spanish attacks which were always considered probable, and the cultivation of foodgrains. The measures necessary to compel the settlers to undertake all this hard work were resented and unfortunately his Minister, named Keath, successfully stirred up discontent.^22^ By a mixture of firmness and clemency Moore suppressed the incipient mutiny, but soon had to face a serious shortage of food. Temporary relief was afforded by the arrival of a captured Spanish ship, with a considerable quantity of meal, but before long there was again danger of famine, and the situation was made worse by the plague of rats which the captured ship had apparently brought. 'Rats so multiplied that they destroy whatever is planted'.^23^ Moore therefore abandoned his construction work for the time being and dispersed many of the settlers through the islands so that they could catch fish and birds. The birds known as cahows were remarkably tame,
'suffering themselves to be caught faster than they could be killed'.
Fish, too, were abundant. Men who had been hungry went naturally to the opposite extreme and Smith tells us how monstrous was it to see, how greedily euery thing was swallowed downe. . . whervpon (as the sore effect of so ranck a cause, the birds with all being exceedeingly fatt) then sodenly followed a generall surfettinge, much sicknesse, and many of their deathes.^21^
The harassed Governor called them back again from the outposts, employed regular gangs on commissariat duties, and set the rest again to construction work.
At this period life was organized on a semi-communal basis.
As was the case for a time in Virginia, the settlers had formed a kind of joint stock in which the fruits of each man's labour went into a common store, while food, clothing and other necessities were issued from that store. There were, however, two qualifications to this community of goods. In the first place, as we have already seen, each man was allotted a small plot of land which he might cultivate or use for his own benefit; secondly, it was also found necessary to issue 'a certaine kind of brasse money with a hogge on the one
^21^ Henry C. Wilkinson, The Adventurers of Bermuda, p. 62.
^22^ Lefroy, p. 24.
^28^ Calendar of State Papers (Col.) 1574-1660, p. 18.
^34^ Lefroy, pp. 41-42.
side, in memory of the abundance of hogges was found at their first landing.'^20^ Not unnaturally it was called hog-money, and presumably it was used to purchase goods in the magazine, or superfluous goods brought over by new settlers.
At this stage, when Moore had more than enough to tackle, orders came from home that he should divide up the island into regions and allot land to the shareholders and their tenants. Moore considered this course of action imprudent until he had finished his construction work, and he declined to carry out the orders. He was now seriously in the bad books of the Company and when his term of office expired in 1615, although no successor had been appointed, he left for home.
For an expenditure of £20,000 the Undertakers had had nothing up to this time except the initial find of ambergris. Moore had, nevertheless, served the Company well, under circumstances which would have been considered impossible by many men, and his only real disservice to the Company lay in the arrangements he made for the temporary succession. He appointed six temporary governors and laid it down that each should act as Governor in turn for a period of one month. Needless to say, the result was chaos, intrigue and stagnation. 'Everything in Bermuda now fell into disrepair---
the rats were rampant, and ruin seemed the only possible end.'^20^
It has been suggested that at this stage there was doubt as to the soundness of the legal position of the Undertakers, since 'the Crown had granted the Bermudas to the Virginia Company after the sale of them by that body to the Somers Islands Company'.^22^
This does not appear to be quite correct for the formal sale did not take place until November 1612. Nor does the charter granted to a new Company in 1615 suggest that there had been any irregularity in the position. Be this as it may, in November 1614 the Undertakers surrendered their rights to the Crown and in 1615 a new charter was issued incorporating 'the Governour and Company of the City of London for the Plantacon of the Sorrier Islands', and granting them the land and mining rights of the Bermudas, to be held in free and common socage, subject to the payment to the Crown of one-fifth of any gold or silver obtained.^28^ The Company was to be managed by a Governor and twenty-four assistants to be elected from time to time, though Sir Thomas Smythe was nominated as the first Governor. It was to have power to make laws and ordinances. The charter laid down that up to one-quarter of the
^M^ Memorials, I, p. 134, quoting Smith's History of Virginia.
- Wilkinson, p. 74.
" Scott, II, p. 262.
^28^ The charter is reproduced in the Memorials, I, pp. 83-99.
land was to be set aside for defraying the charges of administration and the remainder was to be divided into eight regions, known as tribes, each named after one of the original Adventurers. Each tribe was to be divided into fifty shares of twenty-five acres each. The physical allocation of the twenty-five acre holdings was to be made by lot and, except with the sanction of the court in two successive meetings, no individual was to hold more than ten shares---though some important persons got round this limitation by taking shares in the names of their followers. The issue price of a share was
£12 10s. Od. The Company was to be exempt from all taxes or duties either in the Somers Islands or England for seven years, and for fourteen years thereafter import and export duties levied in England were limited to 5 per cent. The Company was also granted a monopoly of the Somers Islands trade.
The composition of the original membership of the Company is interesting. Foremost in rank amongst its members were the Earl of Southampton---the patron of Shakespeare---'handsome, versatile and bold' : the Earl of Pembroke, the richest peer in England; Lord Cavendish; Sir Robert Rich; and Lucy, Countess of Bedford.^20^
Perhaps more important than those high personages was Sir Thomas Smythe, the greatest merchant of his age, a Governor of the East Indies, the Levant, the Muscovy and the Virginia Companies, an enthusiastic supporter of attempts to find the North-west Passage and a great shipbuilder. It was in his house in Philpot Row that the Bermuda Company held its offices, and 'his hospitable house was ever open to the masters of his vessels'. Of almost equal importance was Sir Edwin Sandys, a constant critic of the pretensions of James I, a staunch Puritan and one of the leading spirits in the Virginia Company. Merchants made up the majority of the shareholders and nearly all the great livery companies were represented. Seventy-three members were also members of the East India Company, twenty-one were members of Parliament, and nearly all were shareholders of the Virginia Company.83 84 85
One of the first acts of the new Company was to appoint Daniel Tucker, formerly Cape merchant86 at Virginia, as Governor of Bermuda. He arrived in the Somers Islands in May 1616, and for a short time it seemed as if the acting Governor for the month would resist the take over. Some the colonists 'taken and wonne with a love of his government and clemencye'^32^---in other words sorry to see the end of a period of slackness and indiscipline---urged him to 'accept of noe strange and real governor whatsoever', unless that Governor brought money with him. The plot was revealed to Tucker and a display of force soon brought the acting Governor to heel.
The new Governor's rule was harsh and even tyrannical and the elected Council which he established under instructions from London, did not exercise any effective restraint. He introduced the severe Code which had been promulgated by Dale in Virginia, but administered it with a good deal less discretion than its author. He was seen in one morneinge before breakefast to cudgell with his owne hands not fewer than fortie of his poore workmen euen for very smale and slight neglects . . . (it began to be said that) when in a morneinge his hatt stoode on the one side, and such a couloured sute of cloathes was worne, there was noe comeinge nere him all that whole daye after.^33^
To make matters worse, he hanged one man for a very trivial offence, 'to lett the rest know that his authoritie extended to life'.
Against these unpleasing facts must be set the energy with which he restored order, completed the necessary public works and 'set euery one was with him at Saint Georges, to his taske, to cleere grounds, fell trees, set corne, square timber, plant vines, and other fruits brought out from England'.^34^ So diligent indeed was he in these pursuits that 'some of the snarleinge meaner sort of the aduenturers in England. . .' wrote that he was 'fitter to be a gardiner than a Gouernour'.^33^ Tucker in fact did a good job in these ways and at length fortune favoured him in that the plague of rats which had given so much trouble, disappeared suddenly so that
'the wilde cats and many dogs that lived on them, were famished'.^30^
In 1618, Richard Norwood, a surveyor sent out from England for the purpose began the demarcation and allocation of lands as provided in the charter. This work was completed by 1619 and the Adventurers began to take up the particular lands allotted to them, either cultivating them through hired labourers, or establishing tenants on them.
In the course of the demarcation, Norwood entered into collusion with Tucker, who had been promised by the Company an allocation of shares at the end of his term of office. Norwood confided to Tucker that the 'principal or choice peeces of soyle'^37^ were to be found in an area known as St. Georges. He therefore began
" ibid., p. 79.
** Memorials, I, p. 133.
" Lefroy, p. 87.
\" Memorials, I, p. 138.
\" Lefroy, p. 104.
the survey by allocating land from the East, but then switched operations to begin from the West, so that after 10,000 acres had been allotted to the shareholders, and the requisite area had been reserved for public ownership, the 'overplus' happened to be in the most fruitful area just east of the area allotted to the Southampton tribe. Confident that he would be allotted his share in this area,
Tucker proceeded to take advantage of his position as Governor to build a fine cedar house, which would have been beyond the capacity of a private man to construct, and he had no scruple in felling timber and dragooning labour for the purpose, 'neither was ther any recompence or pay so much as propounded'.^38^ His scheme ultimately came to nothing for at the end of his service the Company declined to allot him the land in question and gave him shares elsewhere.
A little light relief is provided by the story of one of his many quarrels with a somewhat truculent minister, who in open church reproved the young men of the congregation for gazing upon the young women. Whereupon the Governor cried out, 'And why not,
I pray, sir! Are they not God's creatures.'^30^
The islands prospered during Tucker's term of office and it was not entirely his own fault that he made enemies in high places. He had, for example, quite properly imprisoned---and then pardoned---
Robert Rich, a kinsman of Lord Rich, for encouraging rebellion at a time when Lord Rich was becoming one of the most powerful members of the Company in London. An attempt was therefore made by some members of the Court to have a successor to Tucker nominated well before his term was at an end, but Smythe bluntly refused to put the matter to the vote.
By the time that Tucker returned home, serious dissensions had grown up amongst leading personalities in the Court. Sandys was at loggerheads with Smythe, while Smythe was antagonistic to Lord Rich, partly on personal grounds and partly because of Rich's interloping activities, both in the East Indies and in Bermuda. It may be also the case that, as an enthusiastic reformer, Sandys felt that Smythe had become conservative and had dominated the Company for too long. Much lobbying over the election of new office bearers went on amongst the various factions, but in the end Smythe remained at the head of the Somers Islands Company, while Rich's nominee, Nathaniel Butler, was appointed Governor of Bermuda.
The two matters of greatest interest during this period were the summoning of an Assembly of Burgesses, and the problems connected with the sale of tobacco.
^a8^Lefroy, p. 109.
^80^ ibid., p. 113.
Before his departure for Bermuda, Butler had been instructed to hold representative Assemblies at least once a year and had been advised to 'take too many rather than too fewe, both because euery man will more willingly obey lawes to which he hath yielded his consent; as likewise because you shall the better discover such things as have need of redresse'.^40^ It was made clear that the Acts of the Assembly would require ratification by the Company and could be annulled by it, though such Acts might be enforced pending the Company's decision. The first Assembly was summoned on 1 August
1620 and consisted of the Governor, the Council, the bailiffs of the tribes, two burgesses elected by each tribe, and a Secretary. After the swearing in of members, the Governor delivered a stirring address setting forth the proper aims of the Assembly as being the Glory of God, allegiance to the King, 'such causes as may best secure the undertakers in England from many abuses and wrongs'
and finally, the welfare of the Bermuda Islands. He had much to say about the need for defence against Spain and he finished with some moral exhortations :
It may well be that some men chosen to be burgeoses here may find some bills preferred into this Assembly that may strike at some gettinge and in-come of theirs in perticuler. If they doe so, let them yet remember their oathes; let them not shame themselues, and the place they hold here, by doeing the contrary.^41^
Fifteen Bills were passed in this Session and it is of interest to see what were the matters dealt with in this, the Second colonial representative assembly in the Empire. Some of the Bills were connected with public works---the making of bridges and highways;
the manning of the King's Castle; the maintenance of fences and the levy of a duty, to be paid in tobacco, for the upkeep of public ferries. Others provided for the accumulation of a public stock of corn and required all persons to plant at least one acre of corn every season. Provision was also made in other Acts for dealing with vagabonds, penalizing those who entertained other men's servants, and for returning to England, at the cost of those who sent them, aged and diseased immigrants. Another interesting Act prohibited the killing of young tortoises, since there were those who 'snatch and catch up indifferently all kinds of Tortoyses both young and old .. .
to the much decay of the breed'. Another Act sought to prevent the manufacture of rotten and unmerchantable tobacco by establishing a system of inspection in each tribe.^42^ Perhaps of equal importance
-
ibid., p. 190.
-
ibid., p. 196.
-
The Acts and Orders are reproduced in Memorials, I, pp. 165-79.
was an Act which provided that if the term of a Governor expired before his successor arrived the existing incumbent should continue in office, since there cannot fall out a more deadlier dissease, nor a more speeding blowe be anyway giuen to the verye being and life of this well setled plantacon, then by the confusions that an Anarchie by vacancy of Govern? may bringe upon yt.
On the whole it is clear that the burgesses in this, their first Assembly, behaved like sensible, practical men. In 1622 the Company followed this up by issuing an elaborate series of orders for the organization and governance of the Company in the colony. The first section of the orders dealt with what might be called Company procedure. Part two laid down the pattern of administrative and judicial procedure in the colony, set out the respective rights of the Company and the planters and made wholesome provision for public manners and morals. In some ways it reflected the Puritan attitude which had been imported into the Company since the growth of the influence of Sandys. Common swearers, drunkards, those exceeding their degree in bravery of apparel, men of unquiet or contentious spirit, were to be declared infamous., A person so declared would be incapable of holding any official dignity or command.
He shall not sit or stand in the Church with the rest of the Congregation . . . His testimony shall not be received in any cause of businesse. If he commit any Crime, or breaks any Law or order, his punishment shall be double to that of another man in the like case.\"
There were also interesting provisions regarding communal life. The inhabitants were not to live too scattered from one another; every tribe should maintain storehouses for corn and arms; and every family should 'plant a convenient quantity of corn', to be brought into the common storehouse, as a kind of buffer stock, which if not used, might be returned to the producer when he brought his quota in the following year. Kipling's 'much administered man' was the normal pattern in seventeenth-century colonies.
The sale of tobacco occupied a good deal of Butler's energy.
It had been the practice for planters of tobacco to keep the share to which they were entitled and to consign only the balance to the Company in England, but at the beginning of Butler's term of office, the Company directed that the practice of local division should cease, the whole crop being sent home, so that the planters
Memorials, I, pp. 221-2.
would receive payment for their share in London. Since tobacco had been an important medium of exchange, this created great difficulty and was much resented by the planters. In his reply to the Company Butler quoted one planter as saying,
Sir . . . I am a kind of chirugien, and haueinge cured many this yeare vpon creditt, I nowe heare I am to goe into England for payment. I haue lent corne (sayth another) this last hard winter, to be payed in tobacco this yeare, and saued some Hues with it, must I goe to London for it?^44^
Butler coped with the situation by providing on his own authority for exceptions from the general order---for example, where petty debts were to be paid.
The Company now criticized Butler harshly regarding a bill of exchange which he had drawn on the Council to meet public expenditure. He was greatly hurt by the tone of the letter and after stating that on his arrival he found a lack of commodities of many kinds, he asked rhetorically.
Informe me then, I beseech you, how shall your publick botes attendinge the fortes be furnished? how are your negroes to be kept from goeinge naked? and what meanes els are ther to recouer mattocks, shouells, grabbinge axes, and the like tooles requireable for fortinge? For it is not your meaneinge nor expectation sure, that the Gouernours peculier entertainement (especially being at the passe that mine is) shall be lyable to this charge?^43^
In this correspondence one's sympathies must necessarily be with Butler.
His time as Governor was far from easy. He inherited from his predecessors a shortage of stores and provisions, there was still an insufficient population for all that had to be done in the way of cultivation and public works, and the Bermudas lived up to their usual reputation for storms. Three ships were put out of action and it was only by diverting to England a ship intended for Virginia that Butler was able to send the tobacco crop home in his first year of office. To add to his difficulties, an infectious disease---probably the plague---which had attacked passengers in the magazine ship, spread rapidly in the island, and for some weeks a considerable proportion of the labourers were unfit for work.
Although disenchanted, Butler did not give up. Perhaps the best commentaries on his regime are the facts, first that the 1623
Lefroy, p. 220~;~
ibid., p. 219.
Commission of Enquiry which led to the cancellation of the Virginia Company's charter did not make a similar recommendation for the Somers Islands Company; and secondly, that in spite of the firmness of Butler's administration, when he left the island the inhabitants chose him as the medium through which to represent their grievances to London, He was, however, a target for many malicious allegations, some of which were conveyed in an anonymous petition, and according to Captain John Smith, Sandys was only too glad of an opportunity to criticize a protege of Warwick.^40^
In the troubled period before the Civil Wars interlopers presented the Company with a serious problem. Nearly all the chartered companies in the sixteenth and seventeenth centuries had to cope with this difficulty, but its particular characteristic in the case of the Bermuda Company is that the offenders were themselves members of the Company. No less a person than Lord Rich had been a serious offender when he sent the ship Treasure on expeditions which were not only piratical, but also involved trade with Bermuda, contrary to the provisions of the Company's charter. More serious, however, were the operations of John Delbridge, himself a member of the Company and from time to time engaged by the Company to transport colonists to Bermuda. As early as 1622 he had sent a ship, without the Company's permission, to take out supplies and bring back tobacco. When he was taken to task, he pleaded that the ship was already on the way and offered to pay the Company Id. per lb. for any loss of freight to the magazine ship on her return voyage. He went on to say,
I knowe not the extent of your power and authoritye herein, but being p^r^uided with necessaryes for the poore planters there
. . . I will send to them and the rest untill by authoritye I be restrayned, though I be not suffered to bring home one pownd of Tobacco.^47^
The planters were of course on Delbridge's side, since it was clear that the infrequent ships sent by the Company could not satisfy their needs. Delbridge indeed claimed that 'he sold the planters a better pennyworth than they could obtain from the magazine ship'.^48^ The Company was not at all convinced by Delbridge's argument. It was, however, stimulated to promise that it would send at least two ships a year. A compromise was reached in 1628 when it was agreed that outsiders might send goods to the Somers Islands provided they went in the Company's ships, and a by-product of this agreement was that commodities sent out in the magazine had to
^48^ Smith disliked Sandys and his statement perhaps needs to be discounted.
\" Memorials, I, p. 445.
^48^ Scott, II, p. 290.
be sold at reasonable prices. Delbridge had in fact won his battle and by 1644 trade was free, except that tobacco had to be carried to England in the Company's ships.
Another matter of interest in this period is the growth of a tendency for the colonists of Bermuda to emigrate to other islands.
Smith reported that by 1629 the islands were overcropped.^40^ It is not possible to assess the technical correctness of this statement, but it is clear that the economic position of Bermuda was not sound. It had come to depend far too much on the export of tobacco, and the price of tobacco was low, import duty into England was high and the nett proceeds were insufficient to support the population, which had now grown to between two and three thousand. Better tobacco was in fact being manufactured elsewhere. Bermuda had become economically unattractive and the Company was losing money.
Emigration to other islands held out possibilities and when Kathalina, one of the Providence Islands group, was discovered, a Company many of whose members already belonged to the Bermuda Company was established to develop it. Recruiting missions were sent to Bermuda and in 1631 eighty colonists emigrated to Kathalina. They 'had been selected neither for their energy nor religious zeal', and they 'proved to be less of an asset to their new home than a desirable riddance from their old one'.87 88 The Providence Islands did not fulfil the high hopes which had been entertained and before long many of the emigrants returned to Bermuda. A few years later, attempts were made to recruit Bermudans for Trinidad and Tobago, and emigration on a small scale took place. In 1639 the Governor and Company applied to the Lords Commissioners for Foreign Plantations for land in Virginia. The application stated that
'about one hundreed and thirty persons' had emigrated from Bermuda to St. Lucia, where they had not fared well, by reason of sickness and attacks by savages. There were, however, 'four or five hundred more ready in like manner to depart the Islands.. . and that many more must of necessity yearely depart, by reason of the increase of the people and straitness of the place'.89 They reminded the Lords Commissioners that at the time when the undertakers purchased the Somers Islands there was an agreement that they should receive land in Virginia, 'in consideration of the great defect of the quality of Land found in the said Somer Islands'. No action appeal\'s to have been taken on this application, but in 1641 Charles I issued a royal proclamation permitting complete freedom of emigration between one colony and another. There is no record of any large scale movement as a result of this proclamation and all these attempts at finding land elsewhere must be regarded primarily as evidence of economic difficulties and general discontent in Bermuda, rather than of any real attraction from other islands in the West Indies.
In the Bermudas as elsewhere in the Colonies, the Civil War in England produced religious and political strife. In 1639 Independent Ministers were in the ascendancy and were accused of 'esteeming the government to be theirs'.^52^ Presbyterians were not yet dominant in England and in accordance with official policy the Company directed the Governor to see that orthodox religious practices were observed. The directive did not have much effect and orthodox churchmen continued to complain that they suffered from constant catechism by Independent Ministers. In 1645, Turner, who did not like the Independents, became Governor and the Burgesses 'turned upon the Independents and enacted against their meeting in any of the nine churches or the chapel'. The Independents were recalcitrant and were ordered to leave the island. It was, of course, impossible to enforce this order, but some of them left voluntarily and a few years later there was an organized migration of seventy Independents to Eleutheria---the proposed republic in the Bahamas.
In 1649 there was an incipient royalist rebellion, but in 1650
the Commonwealth Government imposed a ban on trade with Bermuda and three other Colonies and in 1651 the appearance of a Commonwealth fleet in the West Indies put an end to the rebellion.
Nevertheless, for three years from 1650 the Company was forbidden to elect its own officers and it was indeed in a state of suspended animation. In 1653, a Commission, including some of the shareholders who supported the Commonwealth, was appointed to take over the Company's responsibilities and before long the Company came under the rule of one of the Major-Generals. This allowed normal trading to be resumed and when, in 1656, the Earl of Warwick, who was a friend of Cromwell, became Governor of the Company, matters improved.
The financial position was, however, very unsatisfactory. Because of the difficult competitive position of Bermuda tobacco, the Company had to reduce its own tax on sales and as a result, expenditure and revenue only just balanced. There was no way of recouping the losses incurred over the long period during which, not only had the Civil War interrupted normal shipping, but thereafter the Dutch had seized much of the Company's carrying trade.
From the point of the colonists the Restoration was not an
" Calendar of State Papers (Col.) 1573-1660, p; 323. unmixed advantage. Whatever the theory may have been, it had not been possible to enforce trade regulations strictly during the long struggle in England, but the Restoration Government had very clear cut ideas as to the role of the colonies in subserving the English economy. This was particularly irksome to the Bermuda planters since they could now obtain many of their needs from New England and felt that they gained little from the connection with England. Nor were the London Adventurers any happier. Most of the original investors were dead and the old enthusiasm had disappeared. Wilkinson rightly says that 'No one henceforth had Sir Thomas Smith's blunt, sturdy attitude: 'tis not honourable to give over a great enterprise'.^03^ At the same time the old jealousy of competitors was still strong and many restrictions were placed on individual members of the Company who might wish to send out ships or conduct trade on their own account. The plain fact is that the Company was becoming an anachronism, for within a year or two after the Restoration, the majority of the shareholders lived permanently in Bermuda, while control remained with the minority in London. The last flicker of real energy was seen in the attempt to float a subsidiary company for whaling, but many of the shareholders did not pay up and it proved to be a losing concern.
Matters were brought to a head by Perient Trott, who was himself a shareholder and had for a considerable time been the Company's 'husband'. He had for some years traded to Bermuda without a licence and had many acrimonious disputes with the Company. In 1668 he was fined and when he refused to pay, the validity of his title to his shares was questioned on technical, legal grounds.
This led him to launch a bitter attack on the Company and to stir up agitation against it amongst the colonists, who now felt capable of standing on their own feet. They readily supported Trott and petitions were filed against the Company to the Lords of Trade, a particular charge being that the Company had levied taxes without summoning the Assembly---a. charge which was certain to excite sympathy in England at that time. The preliminary findings of the Lords were unfavourable to the Company and they were followed in 1682 by quo warranto proceedings. Important residents in Bermuda offered to pay the 4| per cent export duty which had been imposed on some other colonies, if they could be relieved from the yoke of the Company. This did not necessarily influence the finding, but at least it led the Crown to ensure that the case was not delayed. The verdict went against the Company and in 1684 the charter was cancelled.
This was indeed inevitable. Defenders of the Company might
"Wilkinson, p. 312. say that the Company's demise came about because it had brought the colony to a stage where it could afford to be independent. Perhaps a juster view would be that the initial impetus had been spent, that the Company had contributed little to the colony in the last forty years, and that the time for a change had arrived.
Chapter 10
The Plymouth Company
The circumstances of the foundation and growth of the New England Colonies differed greatly from those which gave rise to the earlier plantations. The Virginia Company was a purely commercial venture promoted by London merchants who hired or dragooned emigrants for the development of the colony; the Somers Islands Company was an accidental offshoot of the Virginia Company; while the Newfoundland Company was a natural but shortlived extension of the fishing activities which had been carried on by men from the West Country for a considerable time. In all these cases profit was the governing motive, but in the New England colonies a dual purpose was at work. The belief of businessmen that colonization would pay happened to coincide with a period when for political, religious or economic reasons, large numbers of individuals were willing to emigrate in search of a better life.
The dramatic presentation of the story of the Mayflower by writers of English text books has tended to distort the picture and to leave the impression that the settlement of New England was simply the work of groups of earnest, high-minded Puritans seeking religious freedom. Such groups were indeed an important element---
though for most of the period they were in a considerable minority
---but there were many others whose motives were more worldly and even the Leyden Separatists would have been unable to colonize New Plymouth but for the support of hard-headed investors.
The New England Council
We have already seen that the Virginia Company consisted of two groups, conveniently known as the London and Plymouth Companies respectively.90 G. J. Popham and Sir Ferdinando Gorges were the moving spirits of the latter Company, though their names do not appear in the Company's patent. Shortly after the formation of the Plymouth Company, an expedition sent by Gorges to explore the coast of Maine proved abortive, but it was followed in 1607 by the despatch of another expedition consisting of two ships---the Gift of God and the Mary and John---which arrived at the mouth of the Kennebec River some two months after leaving Plymouth. The colonists at first sent back encouraging reports, but within a few months it was clear that the little community suffered from lack of any real leadership. Faction became rife and when a specially hard winter with a serious food shortage supervened, the colonists lost heart and returned home in 1608. For the next twelve years, the only operations of the Plymouth Company consisted of the despatch of occasional trading ships and of attempts to prevent the London Company from fishing within the Plymouth Company's limits. Captain Smith, whose part in the colonization of Virginia has already been discussed, was now active in exploring and mapping the coast of North America. He was a natural publicist and his reports stirred up interest in the New World on the part of English merchants. He gave the name New Plymouth to the spot where the Pilgrims were to land some years later and it was on his suggestion that the Plymouth Company's area was named New England.
Smith's reports may have helped to inspire Sir Ferdinando Gorges to new efforts aimed at reviving the moribund Plymouth Company. The London Company had received a fresh charter in
1620 and in view of the disputes between the two Companies it was perhaps natural that Gorges should also sponsor an application by the Plymouth Company for a new charter. The opposition of certain members of the London Company, together with the general dislike of monopolies which was strong at this time, led to a prolonged enquiry by a Committee of the House of Commons. Gorges appeared before the Committee and argued that 'the benefits sought
. . . were no more than those enjoyed by many lords of manors in their counties'.^2^ After much argument, it was agreed that the new charter should be granted, but that within certain limits the London Company should have the right to fish in the waters of its northern rivals.
The charter issued in November 1620, incorporated the 'Council established at Plymouth in the County of Devon for the Planting,
Ruling, Ordering, and Governing of New England'? The charter followed the Virginia pattern in conferring on the Council the powers of government, the right to appoint officials and to give instructions to magistrates and the like, but whereas the Virginia Company consisted of a large number of members with a small controlling Council, the New England Council comprised the whole body of its members. The Company was in fact the Council. There were only forty members and no provision was made for any expansion, though new members could be co-opted to fill vacancies. Other future shareholders would derive their rights not directly from the charter, but from contracts with the Council.
The Council completely failed to attract general interest. A number of the original members did not pay up their share capital, and a group of merchants which had talked of providing finance to the extent of £100,000 soon resiled. Even an attempt in 1623 to send out a fishing vessel was delayed by the difficulty of finding money to pay for it? The Council persuaded the King to issue a proclamation forbidding all persons to trade on the coast without a licence from the Council, and the Council then fixed a licence fee of 'five fishes out of every hundred'? Clearly some organization to enforce these regulations was needed and in 1623 the Council appointed Robert Gorges, son of Sir Ferdinando, as Governor General of New England. No practical results followed his appointment and before long he abandoned the attempt at controlling the settlers already there, and returned to England. The Council in fact achieved nothing by itself and its only importance for our purpose is that it became an agent for allotting lands in New England at a time when certain individuals and groups were anxious to acquire them.
The Puritans in Holland
One such group was indeed on the move even before the Council came into existence. It consisted of Puritans---and here it is necessary to utter a word of caution about the term Puritan which will recur frequently in this chapter. At the beginning of the seventeenth century, Puritanism in England was in state of flux. There were Puritans who wanted to remain within the Church of England;
others who were in the process of becoming Presbyterian; and yet others who called themselves Independents or Separatists. It was not until after the Hampton Court Conference of 1604---when
" See State Papers, Colonial Entry Book, LLX---28 for the Charter---or Hazard's Historical Collections, I, p. 103. Because of various disputes the Charter was not actually delivered until June 1621.
* Scott, II, p. 302.
^0^ Osgood, I, p. 119.
James I insisted on 'one doctrine and one discipline, one religion in substance and in ceremony',^0^ and declared his intention of harrying those who would not conform---that more extreme Puritans contemplated emigration.
In 1608 a group of Puritans who had formed an Independent Church under the leadership of John Robinson and William Brewster at Scroop in Nottinghamshire---together with others from Lincolnshire and Yorkshire---emigrated to Amsterdam. Here they seem to have prospered moderately, but strife arose between some of their number and the local Dutch Church and the leaders considered it wise to move the little community to Leyden. William Bradford, who joined the Group as a boy of seventeen and afterwards became their spiritual leader and governor in New Plymouth, tells us that 'they fell to such trades and imployments as they best could; And at length they came to raise a competente and comforteable living, but with hard and continuall labore'.^7^ Their life was indeed hard, so much so that amongst many of them the original enthusiasm and sense of exaltation faded away. Some of the younger members left and became soldiers, others 'tooke upon them farr viages by sea; and other some worse courses, tending to dissolutnes and the danger of their soules'.^8^ The thoughts of the leaders of the community turned towards a second emigration---perhaps to the New World. They weighed the risks carefully---the hazards of the sea voyage; the uncertainties of life in an unknown land; and the dangers from savages who delight to tormente men in y" most bloodie maner that may be;
fleaing some alive with y' shells of fishes, cutting of y° members and joynts of others by peesmeale, and broiling on y^8^ coles, eate y^8^ collops of their flesh in their sight whilst they live.^9^
None of the harrowing possibilities was overlooked, but the desire to leave Leyden and seek a better life was strong.
Careful consideration was given to the choice of a new country.
Guiana was considered and rejected, partly because of its climate and partly for fear of the Spanish; while Virginia was open to the objection that the emigrants would still be under the English Government and might not enjoy religious freedom. Eventually the community decided to seek 'to live as a distincte body by them selves, under y^8^ generail Government of Virginia'.^10^ Three obstacles had to be overcome. They had 'to sue to his Majestie that he would
^8^ Godfrey Davies, The Early Stuarts, p. 68 .
^1^ William Bradford, History of the Plymoth Plantation, I, p. 40.
^8^ ibid., I, p. 55.
^8^ ibid., I, p. 57.
" ibid., I, p. 65.
be pleased to grant them freedome of Religion'; they would need a grant of land from the Virginia Council; and they would have to find someone who would finance the voyage.
Before approaching either the King or the Company they had to state their views on Church and State. This they did in Seven Articles^11^ which can only be described as a masterpiece of evasion.
They appeared to acknowledge the supremacy of the civil power even in ecclesiastical matters, but the general reservation 'if the thing commanded be not against God's word', gave room for an infinite degree of elasticity. The Articles were, nevertheless, enough to satisfy James, who was perhaps only too thankful that the Separatists did not want to return to England. He would not give them a charter or, in so many words promise them freedom of religion, but he gave them to understand that 'he would connive at them, and not molest them, provided they carried them selves peacably'.^12^
As early as in 1617 Jack Carver and Robert Cushman had been sent to London to negotiate for a grant of land and to find financial backers. A patent was granted by the London Company in the name of John Wincob, one of a group of merchants who were interested in the commercial possibilities of the venture. In the event this patent was not used. The emigrants proceeded on the basis of another patent obtained from the London Company in the name of John Pierce, another of the merchant associates, but as we shall see later, this too was not used.
Finding money was more difficult. The Dutch were interested, but collaboration with them would have been contrary to the desire of the Leyden Group to remain English. Fortunately, English businessmen were in an enterprising mood and saw the chance of a profit. Early in 1620 Thomas Weston visited Leyden on behalf of a group of merchants to negotiate an agreement. The merchants were not in the least interested in the spiritual or political aspirations of the Puritans and the agreement was incorporated in a business-like document regarded by the men of Leyden as harsh. It stipulated that for seven years there should be no individual trading by the colonists, everything produced or earned should go into a common stock, and each man's needs should be met from a common store.
At the end of seven years the assets would be divided pro rata
amongst all shareholders---adventurers in England as well as planters. The Leyden community maintained strenuously that each emigrant should be entitled to work on his own account for two days in each week, but the London merchants would not accept this ibid., I, p. 72.
ibid., I, p. 68.
modification and the leaders of the emigrants had perforce to agree.
The share unit was fixed at £10 and participants were divided into three classes. Each emigrant who took with him £10 in money or provisions was to receive two shares while emigrants not so provided would receive one share each. The Adventurers, that is those who invested but stayed at home, would of course receive whatever number of shares they purchased.^18^ The original share structure is obscure, but it appears that there were about seventy Adventurers whose shareholding amounted to about £l,500.^w^ Figures to shew the shares allotted to the emigrants are not available.
New Plymouth
In July 1620 the emigrants left Holland in the Speedwell for
Southampton, where they were joined by the Mayflower and a considerable number of other emigrants, only a few of whom were impelled by religious motives. Twice the expedition left Southampton, only to return because the Speedwell was leaking seriously. The emigrants had to be accommodated in the Mayflower alone, some of the weak ones being left behind, while a few had second thoughts and abandoned the enterprise.
On 6 September 1620 the Mayflower finally left Southampton.
It is not clear if the Pilgrims had any definite destination in view, but presumably they had a vague intention of landing somewhere in the area of the Virginia Company. After a stormy but remarkably healthy voyage, they landed at Cape Cod, one hundred and two strong. They had no constitution or legal existence as a body and before landing they therefore drew up the Mayflower Compact by which they covenanted to combine themselves 'into a civill body politick. . . to enacte, constitute and frame such just and equall lawes. . . as shall be thought most meete and convenient for y°
generail good of y° Colonie'.^10^ It is interesting to note that of the forty-one men who signed the Compact, only seventeen were from Leyden.^10^
The first intention of the Pilgrims was to go further south from Cape Cod, but contrary winds and dangerous shoals made this difficult, and they therefore established their first settlement at New Plymouth, so named by John Smith some years before. They elected Carver as their Governor, set up a rudimentary administration and embarked on the hard tasks of pioneering. They realized that they were outside the limits of the Virginia Company's grant and within
^u^ The Agreement is reproduced in Bradford, I, pp. 104-6.
^11^ Scott, II, p. 308. But only £1,200 was paid up.
"ibid., I, p. 191.
" J. T. Adams, The Founding of New England, p. 98. the jurisdiction of the Council of New England. They were in fact mere squatters, but in 1621 the Council granted a patent to John Pierce, who had held the earlier patent from the Virginia Company.
It was presumably granted to him as a Trustee---though there has been some controversy over this subject---but in due course the patent was transferred to the colony on payment of £500 to Pierce.
The patent was of a very general character.^1^' It authorized the patentees to trade, to fish and to export goods to England on payment of the usual duties, and it also granted them land, though neither its location nor its boundaries were specified. It was, however, laid down that land must not be taken up within ten miles of any other English settlement. The patentees were authorized to make temporary arrangements for their own governance, but there is room for doubt as to the legal validity of these arrangements. Plymouth had been chosen as the site for the new colony on account of its having good water, a satisfactory harbour and access to supplies of food in the adjacent forests and waters.^18^ Under Carver's leadership the colonists at once built a common house and then began to build separate houses for each of the nineteen families. The houses were 'constructed of hewn planks with gardens also enclosed behind'
and before long signs of hostility on the part of the local Indians made it necessary to erect stockades and gates. More serious, however, than any threats from Indians were the ravages of sickness and during the first winter, of the 102 colonists who came over in the Mayflower, almost one half died . . . The living were scarse able to bury the dead . . . But with the advance of spring, the mortality ceased and the sick recovered.^10^
The survivors were not daunted and they justified what Robinson and Brewster had written before the departure from Leyden. 'It is not with us as with other men, whom small things can discourage, or small discontents cause them to wish themselves at home again.'^20^
In spite of the doubt as to their legal authority, the colonists seem to have established the framework of government almost at once. An Assembly was elected by all freemen and a Court was established, consisting of the Governor and seven Assistants elected by the Assembly. As the limits of the colony were extended and new townships created, a simple form of representative government became necessary, but it was not until 1638 that a formal system of appointing representatives was established.
^11^ The Patent is reproduced in Bradford, I, pp. 246-51.
^18^ Osgood, I, p. 110.
\'\"ibid., I, p. 110.
\"Bradford, I, p. 76.
In 1623 an important change in the economy of the Colony took place. From the beginning the Colonies had been dissatisfied with the system of commercial ownership imposed on them by the Adventurers who financed them. That dissatisfaction was heightened when some of the Adventurers departed from the spirit of their agreement with the Pilgrims and sent over about sixty emigrants, who were to live under the general jurisdiction of the Plymouth Colony, but were not to be included in the general stock or the communal economic organization. Partly as a result of the increased dissatisfaction, the original provision regarding the communal ownership of land was relaxed to the extent that a parcel of land was assigned to each family for its own private cultivation. Bradford comments on this change in terms that might well be taken to heart by some economic theorists today.
This had very good success; for it made all hands very industrious, so as much more corne was planted than other waise would have bene by any means ye Gov^r^ or any other could use, and saved him a great deall of trouble, and gave farr better contente.^21^
This departure from the original stipulation of the Adventurers was symptomatic of a growing disharmony between them and the planters. It was soon obvious that a partnership between hardheaded merchants and men interested in founding a theocratic state could not last long. The planters felt that they gained nothing from the association and the Adventurers were impatient for returns.
When, in 1627, Isaac Allerton---one of the Leyden Company, who had been appointed by the planters as their agent---returned to New Plymouth with a proposal for the sale of the Adventurers'
interest, it was found very acceptable. A group of eight planters known as the Undertakers assumed the responsibility for paying the merchants' price of £1,800 as well as for repaying other debts of the Colony amounting to £600. The payment to the merchants was to be made by instalments of £200 per annum. In return the Undertakers were given a monopoly of the trade of the Colony for six years.
Clearly the base of this responsibility had to be broadened and the colonists now formed a company which was to carry on the trade of the Colony on a joint stock basis for six years and the resulting profits were to be used for making the necessary payments. Single freemen were to have a single share and each head of a family was to have as many shares as there were persons in his family.^22^ The Undertakers were to be the managers of the Company. The debts
" Bradford, I, p. 300.
" Osgood, I, pp. 117-8, were not finally cleared until 1642 and joint trading continued until that date. In 1627 the Colony had, however, ceased to be under outside control and it at once broke away from the hated system of communal ownership of land. A distribution of land and cattle was made and henceforth every man farmed for himself.
From the point of view of the merchant-adventurers, this arrangement was simply a case of cutting their losses. The extent of those losses cannot be accurately determined, but Scott has given reasons for suggesting that the £1,800 which they were to receive amounted to about one-third of their investment.^23^ Against their loss must be set the profit on goods which had been sent to the Colony by the merchants and it is alleged that the prices were often exorbitant. It is impossible to strike a balance.
Although the colonists had now ceased to be a proprietary company, their legal position was not clear and the patent of 1621
had not specified the boundaries of the Colony with any precision.
They felt the need of a firmer foundation and in 1630 they secured from the Council of New England a new patent, in the name of William Bradford, who had succeeded Carver as Governor in 1622.
It defined the boundaries of the Colony, delegated to the colonists the powers of legislation, granted them the monopoly of the Indian trade in their area and confirmed a previous grant of land along the banks of the Kennebec River.^24^
This still left the Colony subject to the overriding authority of the Council of New England. An attempt was therefore made to secure a charter from the Crown and it appears that the application was supported by suitable largesse to some of the officials concerned, for as the Agent of the Colony observed, 'many locks must be opened with y^e^ silver nay, golden key'.^25^ The Company did not obtain its charter and the colonists continued to be patentees under the Council, but they had achieved a fair measure of independence. The patent of 1630 continued to be held by Bradford, until in 1641 he transferred it to the freemen of the Colony assembled in General Court. This transaction was but a recognition of existing facts. The patent had ceased to have have any practical significance and 'the freemen were in every sense the actual possessors of political power, subject of course, at least in theory, to the authority of the Crown'.
"Scott, II, p. 311.
" Hazard, I, p. 298.
"Bradford, II, p. 71.
Chapter 11
The Massachusetts Bay Company
As we have seen, the Council of New England had great difficulty in raising funds and almost from the outset was content to be merely an agent for making grants of land. Most of these grants were to individuals, or associations of individuals and no question of a charter arose, though one of the grantees, Sir Ferdinand© Gorges, did ultimately obtain a royal charter constituting him Lord Proprietor of Maine. A number of the early grants were not taken up and they were ignored when subsequent grants were made.
Before long the Plymouth colonists found themselves in a minority amongst the men of New England.
Much the most important of the new settlements was that of the Massachusetts Bay Company. The circumstances of its foundation differed in several respects from those of the Plymouth colonists, but it resembled them in cutting loose from England at an early stage as far as was possible and in establishing a narrow, theocratic state---much narrower indeed than that of Plymouth. Its history can best be considered in four phases---its foundation, the growth of a theocratic state, confederation and abolition.
The Foundation of the Colony
In 1623 a few merchants from Dorchester, Dorset, who had for some time employed fishing vessels off the mouth of the Kennebec River, set up a depot at Cape Ann in Massachusetts Bay by permission of the Plymouth colonists who had an indirect grant of that area.^1^ The fishermen were not good colonists and the fishing itself did not pay and in 1626 the Dorchester merchants abandoned the station.
Amongst the Dorchester Adventurers was their rector, the Rev.
^1^ Doyle, I, p. 111.
John White, who conceived the idea of converting the abandoned settlement into a colony for Puritans. Either he or one of his associates published a pamphlet in 1629 which put stress on the desire 'to raise a bulwark against the kingdom of Antichrist, which the Jesuits labour to rear up in all quarters of the world', and the writer went on to warn the Puritans of the trouble ahead in England and 'to avoid the plague while it is foreseen, and not to tarry as they did till it overtook them'.^2^ Some time before the appearance of this pamphlet, White had associated with himself six others---his parishioner, John Endicott, Matthew Cradock and four others.
With their help a patent was obtained from the Council of New England in the name of these six for lands south of the River Merrimac down to three miles south of the Charles River---that is some way south of Boston---and extending west as far as the ocean.
While capital was being raised, Endicott was sent out with sixty men to take possession and prepare for the reception of further emigrants at Salem. The promoters were not unmindful of the possibilities of trade. Endicott was supplied with goods which it was hoped could be sold • to the Indians and he was directed to ship home beaver, fish, timber and medicinal herbs. He was appointed as Governor and in spite of his habitual tactlessness, the inevitable disputes between the newcomers and the old residents of the fishing colony were satisfactorily settled.
An occupation very congenial to Endicott was now at hand and it provides a little light relief to a somewhat humourless story. In
1628 or a little before, Captain Wollaston, a 'man of pretie parts', and accompanied by a number of gentlemen and many servants, established a settlement at a place afterwards known as Merrymount, about thirty miles north of New Plymouth. Before long he abandoned the settlement and went to Virginia and Thomas Morton, a gentleman of very different temperament and habits from those approved by the Puritans, succeeded him. He rapidly turned Merrymount into an abode of pleasure and the existence of such a place, a few hours journey from the theocratic state of Plymouth, so scandalized the Pilgrim Fathers that Bradford expatiated indignantly upon it.^3^
And Morton became lord of misrule, and maintained (as it were) a schoole of Athisme . . . They allso set up a May-pole, drinking and dancing aboute it many days togeather, inviting the Indean women, for their consorts, dancing and frisking togither, (like so many fairies, or furies rather,) and worse practises. . . Morton likwise (to shew his poetrie) composed
^1^ ibid., I, p. 115.
• ibid., I, p. 105.
sundry rimes & verses, some tending to lasciviousnes, and others to y" detraction & scandall of some persons, which he affixed to this idle or idoll May-polle.
Before long the scandal was removed, for a combined force from the various scattered settlements, organized by John Endicott, a stern Puritan, drove Morton out. Endicott caused the maypole to be cut down 'and rebuked them for their profannes'. This is a fitting note on which to turn again to the affairs of Massachusetts, perhaps the most puritanical of the colonies.
The patent granted to White and his associates was in some respects unsatisfactory. It did not give them the powers of government, but was little more than a grant of land and permission to trade. Moreover, as a result of the haphazard way in which these grants were made by the Council, there were conflicting claims and the most important of them related to the area granted to Robert Gorges in 1622, which was included in the new grant. To remove these difficulties, on 4 March 1629 the founders, with the powerful backing of the Puritan Earl of Warwick, obtained a Royal Charter which incorporated 'the Governor and Company of the Massachusetts Bay in New England'.91
In the matter of organization the charter followed the usual pattern. The 110 orginal members could add to their number---
members being designated free men; the general body was to elect its Governor, Deputy Governor and eighteen assistants annually; a Court consisting of the Governor, the Deputy and the Assistants was to meet monthly and in fact to run the business. The Company was in fact a proprietary company of the normal kind, but it differed from the other chartered companies in that its charter did not require the government of the Company to remain in England.
Matthew Cradock was appointed Governor of the Company, while Endicott became Governor in New England. Endicott's emphasis on the fact that these developments were 'the work of the Lord', was an indication of the spirit which was to prevail in the counsels of the colony for some decades.
The Charter might have meant little but for the fact that in the reign of Charles I many factors combined to generate a great impulse to emigrate. Religious dissensions played a part, but economic causes were perhaps of greater importance. War on the Continent seriously interrupted trade; the cost of living rose rapidly; enclosures for pasture made matters worse for the poor; and unemployment became a serious problem. Only the yeoman classes prospered, while the pinch was felt equally by the poor and the gentry and it is interesting to observe the importance of economic factors in the decision of John Winthrop to emigrate. Winthrop---a Puritan who was to play a leading part in the development of New England---
wrote as follows:
His meanes heer are so shortened (now 3 of his sonnes being com to age have drawen awaie the one half of his estate) as he shall not be able to continue in that place and imployment where he now iss, his ordinary charg being still as great almost as when his meanes was double.
The prospects in England, for his wife and children, lay heavily on his mind. 'For my care of thee and thine,' he wrote to the former, after the die was cast, 'I will say nothing. The Lord knows my heart, that it was one great motive to draw me into this course.'"
Similar considerations must have been present in the minds of many men of Winthrop's class, while other emigrants were influenced by their belief that fertile land was to be had free and in fee simple in the New World.
These economic causes combined with religious and political difficulties to produce a widespread malaise.
The Laudian persecution made many Puritans feel that England was no place for them and in 1629 John Winthrop wrote with great feeling on this subject.
I am veryly persuaded God will bring some heavye Affliction upon this land and that speedylye. . . Why then should we stand here striving for places of habitation . . . and in the meantime suffer a whole continent. . . to lie waste."
It was in this mood that in 1629, some distinguished leaders of the Puritan movement initiated two separate projects for emigration, one concerned with Providence Island and one with Massachusetts Bay. In August 1629, eleven of them met and bound themselves to emigrate to Massachusetts with their families not later than March 1630, subject to an important condition. They feared that as long as the Governor and Council of the Company were located in England, the Massachusetts colonists would still be subject to the tyranny of King and Parliament and they therefore stipulated that the charter and the Company must be moved to Massachusetts.
They presumably did not deny the right of the Crown to legislate for English subjects overseas, but if the controlling authority of the Company were in Massachusetts, the practical risk of interference in the internal affairs of the colony would be slight. Legal advice
^0^ Adams, p. 136.
^8^ Osgood, I, pp. 144-5.
was to the effect that there was nothing in the charter to prevent them from making such a move and without further delay they decided upon it. A Governor, a Deputy Governor and eighteen assistants were elected in accordance with the charter and those assistants who were not prepared to emigrate resigned. A sufficient number of Assistants and members of the Company to form a General Court agreed to emigrate, so that when, in the summer of
1630, the great emigration took place, the entire mechanism of the Company was established in Massachusetts. The precious charter itself was also taken to Massachusetts---a fact to which great significance seems to have been attached.
The local government now had to be organized more systematically. It was located at Salem and Endicott was provided with a Council of thirteen, of whom seven were to be chosen by the Company---three of them were to be Ministers---two by the old planters, while the rest would be appointed by the Governor and the other ten Councillors. So far it all sounded very democratic, but democracy was soon to be interpreted in a way which made it a mockery.
Capital now had to be raised. The six grantees co-opted associates and shares of £50 each were issued. When the land came to be divided, each shareholder was to receive two hundred acres for every share, with an addition of fifty acres for every servant or labourer whom he sent to the colony. Those 'emigrants who were not shareholders were each to have an allotment of fifty acres with the same quantity for each servant exported.' There was to be nothing corresponding to the system of joint land-holding which had been forced on the Plymouth Colony, and even before the mass emigration took place, Endicott was directed from home to allot two acres per share to every Adventurer, as a preliminary to the allotment to which they would become entitled when the general division of land took place.^8^
The planters who had been there before the formation of the Company were allowed to keep their land, but they must not grow tobacco, since the Puritans had a strong objection to that weed.
Arrangements were also made for the establishment of large plantations by individuals, who might or might not be members of the Company.
It was apparently at first contemplated that the commercial management of the Company would remain in England. 'The government of persons was to be held there, the government of trade and merchandize to be here.'^8^ It was, however, soon clear that
\' Doyle, I, p. 122.
* Osgood, I, p. 135.
'Doyle, I, p, 130, those members of the Company who were not prepared to emigrate had no further interest in the venture. The Company was in debt, many shareholders had not paid up and great difficulty was experienced in raising finance for the 1630 expedition. Many of the non-emigrant shareholders were now very ready to disburden themselves, while the planters were anxious to be free of control by the Company. Accordingly a group of ten 'Undertakers' was formed in the Colony to take over the assets and liabilities of the Company.
The Undertakers, who consisted of five Adventurers and five planters, took over the management of the Joint Stock for seven years, at the end of which period they would repay the shareholders their principal. In return for their risk the Undertakers were to have the monopoly of the fur trade, the manufacture of salt and the supply of goods from the magazine. At the end of the seven years the assets would either belong to the Colony collectively or be divided amongst the colonists.^10^ When a valuation was made, it was found that most of the Company's capital had been lost. It was therefore agreed that at the end of the seven-year period the shareholders should receive only one-third of the capital invested, but that each
£50 shareholder should also be allotted 400 acres of land. Scott points out that shareholders would thus in effect have bought land for 20d. per acre.^11^ This was perhaps a reasonably satisfactory bargain for the shareholders, but it is not clear how the Undertakers fared, since the attractions of the fur trade and the manufacture of salt proved illusory. The nett effect of these transactions was that in 1630 the Company's joint stock was terminated and its place was taken by ten partners who soon ceased to be concerned with the trade of the Colony.^12^ The residual effect of the charter was to make Massachusetts a virtually self-governing colony, though subject at least in theory or at times in practice, to the authority of the Crown.
When over a thousand emigrants arrived in New England in the last half of 1630 they were not so much concerned with these formalities as with the problem of survival. No adequate supplies had been sent with them, the earlier emigrants were desperately short of food and a supply ship had not arrived. Although winter began later, it was exceptionally severe and the sufferings of those settlers who had no shelter other than a canvas tent must have been acute. The tales of hardship told by the survivors of the emigrants who had gone with Endicott were discouraging and some of the newcomers lost heart and returned home by the first available ship. The great majority remained in the Colony, thus justifying
\"ibid., I, pp. 130-1.
\"Scott, II, p, 315.
\"Doyle, I, p. 131.
the proud statement made by the pastors of the Leyden group before they emigrated.^13^ The problem of finding food compelled the colonists to scatter and so a number of distant settlements
---afterwards to form the townships characteristic of New England
---came into existence.
A Theocratic State
The settlement now had to face the task of forming an administration and it was unfortunate that the narrow basis which might have been adequate for the management of a company had to serve for the government of a colony. The political history of Massachusetts in the next few decades was to be the story of the struggle between a narrow, intolerant oligarchy and the general body of the citizens. Authority under the charter was vested in the General Court, and although there were in Massachusetts a sufficient number of members of the Company to form a quorum, they were a very small proportion of the whole body of colonists. Before long a number of settlers sought to break into the charmed circle by becoming freemen of the Company. This was not at all to the liking of the members of the Court, most of whom also held magisterial or other official positions, but it would have been difficult to resist this demand directly. In 1631 the leaders of the community found another way of safeguarding their narrow basis, by resolving only to admit church members as freemen.
To the end the body of the commons may be preserved of honest & good men, it was likewise ordered and agreed that for time to come no man shall be admitted to the freedome of this body polliticke but such as are members of some of the churches within the lymitts of the same.^14^
In 1636 a similar exclusion was applied to membership of the Councils of the townships. If the great majority of the colonists had been church members this exclusion might not have mattered much, but this was far from being the case. A modern historian has indeed estimated that only one in five so qualified.^15^ It must also be remembered that the Ministers and Assistants who dominated the colony were just as anxious to preserve the select character of their churches as to keep the business of government in their own hands. Before a person could become a church member, he had to
" Supra, p. 183.
^14^ Osgood, I, p. 154.
^35^ Adams, p. 121.
satisfy existing members of his spiritual fitness. As Cotton, with characteristic far-fetched use of Old Testament texts, wrote:
The stones that were to be laid in Solomon's temple were squared and made ready before they were laid in the building
. . . and, wherefore so, if not to hold forth that no members were to be received into the Church of Christ, but such as were rough-hewn, and squared, and fitted to lie close and level! to Christ and his members ?^w^
There was, moreover another aspect to this struggle All executive power resided in the Court, which consisted of Governor,
Deputy Governor and the Assistants and in 1631, the General Court decided that the Governor and Deputy Governor should be elected only by the Assistants and not by the general body of freemen. This change must have delighted the Governor, Winthrop, who wrote on one occasion that 'democracy is amongst civil nations, accounted the meanest and worst of all forms of government',^17^ but the general body of freemen soon reversed this decision and regained the right of election. Another victory was gained by the freemen in 1634 when it was declared that only the General Court had the right to make laws, grant lands or admit freemen---powers which had before then been exercised by the Governor and the Deputy Governor and Assistants.
The settlements soon became widely scattered and some kind of representative system was clearly necessary. In 1632 it was agreed that three Deputies of each of the settlements should form part of the General Court for all purposes of legislation and taxation. The Deputies were elected by the freemen of their towns.
For ten years the Town Deputies and the Assistants sat as one Chamber, but there were from time to time disputes as to whether or not the concurrence of both sections was required to enactments. The issue was not settled until, in 1644, the Court was split into two Chambers, the Town Deputies sitting in one and the Assistants in the other.
It is of great interest that at this early stage, representative bicameral government should have been established in a colony without legislation in parliament or an order from the Crown. The Colony was in fact asserting its independence wherever possible.
Separatist tendencies were encouraged by the open hostility of important persons in England. Attacks on the Company were in fact launched on two fronts. In 1632 Gorges and Mason, whose
" John Cotton, The Way of the Churches of Christ in New England
(London, 1645) quoted in Adams, p. 132.
^11^ Adams, p. 143.
claims to territory previously granted to them had been rejected by the Massachusetts Authorities, presented a petition to the Privy Council against the Massachusetts Company. A little later Laud, who was determined to suppress Puritanism as effectively in the Colonies as in England, became the head of a new body known as the Lords Commissioners for Plantations, which was given practically unlimited authority over colonies. Quo warranto proceedings were started against the Company. They went unfavourably for the Company and in July 1637 the King resolved to take the management of New England into his own hands.^13^ The colonists had no intention of surrendering their charter. They resolved that they would resist the appointment of a royal Governor by force, and they made elaborate preparations for defence. At this stage political troubles at home diverted attention from the affairs of the Colonies and Massachusetts was left to its own devices for a considerable time.
Although the freemen were to some extent able to resist the attempts of the Governor and Assistants to exclude them from political power, they were not able to prevent the establishment of a tyranny which would tolerate neither criticism nor religious unorthodoxy. It was indeed dangerous to criticize the Government, as one Ratcliffe discovered to his cost. He was foolish enough to make what was described as 'mallitous and scandalous speeches' against the Government and was therefore whipped, heavily fined, had his ears cropped and was banished from the colony. Thomas Dexter was unwise enough to say that 'This captious government will bring us all to naught', and went on to remark that 'the best of them was but an atturney'.^19^ For this he was fined £40, put in the stocks and deprived of his vote. These are only two instances out of many which could be given.
An even more heinous offence than criticism of the Magistrates was departure from the orthodox creed of the Massachusetts Puritans. We have referred earlier to the different shades of Puritanism.
The majority of the emigrants would have been content to remain within the fold of the Anglican Church or to become Presbyterians, but the governing clique would only tolerate the Congregational form of Church. In theory this meant that each Church was an independent entity, controlled by its own Ministers, but the Government of Massachusetts did not scruple to interfere with this independence from time to time. This determination to allow no nonconformity had been made apparent even before the transfer of the Company to Massachusetts. The brothers John and Samuel Browne were adherents of the Church of England and criticized the Ministers
" Calendar of State Papers (Col.) 1574-1660, p. 256.
^11^ Adams, p. 151, for not using the Book of Common Prayer. They were told that New England was no fit place for men like them and were banished.^20^
A little later, Captain Israel Stoughton ran into serious trouble by denying the right of the authorities to call themselves 'Scriptural Magistrates'---whatever that may have meant---and for this atrocious offence he was disqualified from all public offices for three years.
The treatment of Roger Williams is interesting, inasmuch as he was even more extreme in his puritanism than the Magistrates and he began by calling on them to repent for ever having participated in Church of England services. Pie went on to deny the right of the State to interfere in matters of religion; he criticized the Government of Massachusetts for administering the oath of allegiance to non-churchmen; and worse still he asserted that since the King had no right to give away the land of Indians, the Company's patent was invalid. This doctrine would not only have undermined the authority of the Governor and Assistants, but would have seriously antagonized the Crown just at a time when the Company's charter was under attack before the Lords Commissioners.
In this case Williams' teaching was clearly subversive of the State, and it would be difficult to condemn the Massachusetts authorities for banishing him---an act which had the unexpected effect that he went to Providence and established a nucleus of what was to become Rhode Island.
No such excuse can be found in the case of the banishment of a Mrs. Hutchinson and her brother-in-law, John Wheelwright, who taught a doctrine known as anti-nomianism, which differed from the orthodox Puritan belief in points so fine that only a professional theologian would be competent to discuss them. The real interest of this episode lies in the attitude of those who sat in judgment on these heretics. Mrs. Hutchinson, who was a highly intelligent woman, had much the better of the argument at her trial, but her witnesses were bullied, and when the judges had the worst of the interchanges, they blandly replied, 'We are your judges, and not you ours, and we must compel you to it.'^21^
In 1637, 89 Articles of orthodox belief were issued. In principle this might seem no different from the laying down of 39
Articles by the Church of England, but whereas in England there were liberal forces at work to temper dogmatism, no such ameliorative factors existed in New England. Massachusetts in fact settled down to a long period of intellectual and spiritual stagnation.
-Doyle, I, p. 128.
^11^ Doyle, I, p. 182.
Confederation
We need not consider in any detail the next phase, in which other colonies grew up round Massachusetts and then entered into a confederation with her. The colonies to the immediate south were an overspill from Massachusetts---produced either, as in the case of Connecticut, by pressure of land in Massachusetts, or, as in Rhode Island, by the determination of individuals or groups to escape from Massachusetts tyranny. To the north, Maine and New Hampshire had a somewhat different origin. Individuals established plantations on more or less capitalist lines, and the plantations in due course coalesced to form new states. Massachusetts was on many occasions domineering in her attitude towards these new colonies, in the north as well as the south, but danger from the French, the Dutch and the Indians gradually made it clear that some common action for defence was essential. In 1643 articles of confederation were signed between Massachusetts, Plymouth, Connecticut and New Haven, but the northern colonies and the settlements which later formed Rhode Island held aloof. The reasons for confederation were clearly set forth in the articles.
Whereas we live encompassed with people of severall nations and strang languages, which hereafter may prove injurious to us and our posterities and for as much as y^e^ natives have formerly comitted sundrie insolencies and outrages upon severall plantations of y^e^ English, and have of late combined them selves against us; and seeing, by reason of those distractions in England (which they have heard of) and by which they know we are hindered from y^l^ humble way of seeking advice or reaping those comfurtable fruits of protection which at other times we might well expecte; we therefore doe conceive it our bounden duty, without delay, to enter into a presente consociation amongst our selves, for mutuall help & strength in all our future concernments.^22^
The units were to remain entirely self-governing, confederated only for the purpose of just wars, offensive or defensive. They also contracted that except in an emergency none of them would embark on any war without the permission of the Commissioners, two of whom were to be appointed by each unit. Provisions for extradition between one unit and another were also made.
The Annulment of the Charter
The articles of confederation were signed without any reference to the King or Parliament and there can be little doubt that events were
^M^ Bradford, p. 497.
moving towards a direct clash between Massachusetts and England.
The Civil War and the establishment of the Commonwealth and Protectorate, gave the colony a breathing space. Warwick, who was appointed head of the Commission on Plantations, was himself a Puritan and sympathized with the colonists, but he was nevertheless not prepared to abdicate authority. An attempt on the part of the Parliamentary naval forces to seize royalist ships in Massachusetts waters was resisted by order of the Massachusetts Court, while petitions to the Commissioners from a number of aggrieved persons produced a flat denial by that Court that there could be any appeal to England except 'in a way of justification of our proceedings questioned from the words of the patent'.^23^ The patent, according to the colonists, gave them absolute powers of self-government, though once or twice tactical considerations led them to temporize with regard to the jurisdiction of Parliament. The Commissioners did not accept the contention of the colonists, but gave an assurance that they 'intended not to encourage any appeals from your justice nor to restrain the bands of your jurisdiction to a narrower compass than is held forth by your letters patent, but to leave you with all that freedom and latitude that may in any respect be duly claimed by you'.^21^
For practical purposes Massachusetts was left alone for the next decade. It was, however, obvious after the Restoration that the relations between the colony and the Crown needed to be regularized.
Charles II had no intention of reintroducing the Laudian tyranny in the matter of religion, but he could not overlook either the petitions against Massachusetts' aggressive action in Maine, or the general attitude of defiance of English authority, or the death sentences passed on Quakers. In 1662, Charles issued instructions that freedom of worship should be allowed to Anglicans, that the narrow religious tests in the matter of political rights should be abandoned, that Quakers should be sent to England for trial, and that all legal processes should be issued in the name of the King. The Massachusetts authorities failed to send Quakers to England for trial as directed and found means to evade the most important of the other directions.
In 1664, a Royal Commission was appointed to settle these and other matters, but the Massachusetts Court adopted an attitude of intransigence which was to be maintained for twenty years. It refused to co-operate with the Commission except to the extent of providing information and it forbade residents to give evidence in any of the cases in which the Commissioners decided to hear complaints or appeals. The Court was duly rebuked by the Commissioners.
" Osgood, III, p. 111.
'•Doyle, I, p. 380.
The King did not grant away his Soveraigntie over you when he made you a Corporation. When His Majestie gave you power to make wholesome laws and to administer Justice by them, he parted not with his right of judging whether those laws were wholesome, or whether justice was administered accordingly or no.^20^
This clear enunciation of the undoubted legal position made no impression and in 1666 the King perforce recalled the Commission and ordered the Court to send agents to England to discuss the matters in dispute. There were now signs that some of the more commercially minded of the colonists favoured conciliation, but the Ministers still had their own way and the Court declined to send agents. At this stage England became involved in war with France and Holland, and although the Council for Foreign Plantations at one stage recommended the appointment of another Royal Commission, no action was taken for another decade.
In 1675 all these matters were reopened. Mason and Gorges^20^
revived their territorial claims and the defiance by Massachusetts of the Acts of Trade also came under examination. Once again it was decided in England that Massachusetts must send agents to answer these complaints, and Edward Randolph was sent to deliver the order personally and to make a report on the affairs of the colony.
The Massachusetts Court now made a statement of its claim to independence more extreme than any previous declaration. 'The lawes made by your Majestie and your parliament obligeth them in nothing but what consists with the interests of that Colony.'^27^
The Court still declined to send agents authorized to deal with the main issues, and it was not until peremptory orders had twice been sent by the King that such agents were at last sent to London.
Their attitude then was one of complete intransigence. The transfer of the charter to Massachusetts had been a step towards independence and the Massachusetts authorities were now determined to go further and for all practical purposes to repudiate the authority of the Crown. There could be only one answer and when in 1684 the Massachusetts Court finally decided not to submit, a writ of quo war
ranto was issued against it. For technical reasons it could not be served in time and was replaced by another writ---scire facias---for which no such difficulty existed.^28^ The defendants did not appear and a decree annulling the charter was issued on the legal grounds that non-
" Osgood, HI, pp. 185-6.
^70^ Presumably John Gorges, who had succeeded his brother, Robert.
" Osgood, III, p. 315.
"ibid., Ill, p. 333.
freemen had been taxed, that the oath of allegiance had been replaced by a new oath of fidelity, and that the Company had minted money without lawful authority. The gravamen of the offence of Massachusetts was that it would not acknowledge the authority which had created it.
Conclusion
In some ways the Massachusetts Company is the most interesting of all the early chartered companies. It was compounded of two elements---emigrants who sought a better life or greater freedom, and businessmen who believed that colonization might be a profitable investment. The men of commerce soon dropped out and the unfortunate result was that the control of the Company and the colony was left in the hands of a narrow, intolerant group of Puritans. They secured a firm grip on the life of the country and their stiff-necked attitude led them step by step into a confrontation with the Home Government. The Civil War and foreign wars gave them a respite, but after the Restoration they were clearly doomed and it would be difficult to regret the disappearance of what had once been a Company, but had become an oligarchy. Its chief merit was that it laid the foundations on which an important part of the United States would in due course be constructed.
Chapter 12
The Newfoundland and Guiana Companies
The companies chartered to colonize Newfoundland and Guiana lasted only a short time and cannot be regarded as of great importance. They nevertheless deserve reference in this book, partly because they differed in character from the other plantation companies and partly because they provided additional channels for English sea-going enterprise.
Newfoundland
It is now recognized by historians that Scandinavian sailors, following a route through Iceland and Greenland, discovered Newfoundland in the eleventh century, but the discovery was not followed up and nothing was known about it in Western Europe. At the beginning of the sixteenth century the Portuguese explored the Newfoundland coast and developed fishing operations there, as John Cabot had done off Labrador a year or so earlier. Writing of Cabot's discovery of Labrador, a Milanese agent reported that 'the Englishmen, his companions, say that they will fetch so many fish that this kingdom will have no more need of Iceland, from which country there come a great store of fish which are called stock-fish'.^1^ A similar statement could have been made regarding Newfoundland. Nevertheless, the earliest large-scale exploration of the fisheries there was not undertaken by the English but by the Portuguese, the Bretons and the Normans, and as late as 1527 an English sailor reported that when he visited St. John's there were no English vessels there.^2^ A similar
^1^ Cambridge History of the British Empire, VI, p. 120.
^1^ Cambridge History of the British Empire, VII, p. 122, quoting Purchas,
XIV, p. 305. D. W. Prowse in A History of Newfoundland, dissents from this view and maintains that the English were fishing there from the beginning of the century.
report was made in 1536---two years after Cartier had explored the Straits of Belle Isle and established the fact that Newfoundland was an island. By the middle of the century English fishermen from the West Coast were active off the Newfoundland coast and an Act of Edward VI makes it clear that Newfoundland was then much frequented by English sailors. Other nations were nevertheless ahead of the English in this enterprise, and according to a report of a traveller in 1578, a hundred Spaniards, about 150 Frenchmen,
Bretons and Biscayans, 50 Portuguese and 50 English ships were engaged in fishing off Newfoundland.^3^
The English fishermen were pushful and Hakluyt tells us that they 'commonly are lords of the harbours where they fish' and that they protect other nationals in thos harbours in return for 'a boat or twain of salt'---though in general men of different nations tended to keep to their own harbours. Gilbert's short-lived attempt in 1583
to annex the territory round about St. John's came to nothing,^4^ but it was followed by a pamphlet issued by Sir George Peckham, an associate of Gilbert, in the hope of keeping Gilbert's patent alive.
It was a well-written piece of propaganda which ignored Gilbert's failure to secure possession, and promised sixteen hundred acres of land to every hundred pounds subscriber.^5^ Peckham emphasized the importance of establishing a safe harbour and headquarters, and stated that 'it is well known to all men of sound judgment that this Newfoundland voyage is of greater importance and will be found more beneficial to our country than all other voyages at this day in use and trade amongst us'.^6^ No response was forthcoming and indeed the West Country fishermen were strongly opposed to the colonization of Newfoundland since they feared that the colonists would in due course drive them out of business---an argument which several decades before had led the French fishermen to oppose Cartier's plan for settlement. In the eighties English success in the war with Spain almost drove the Spanish out of the fishing industry leaving France and England as the only serious competitors, with the important result that Spain and the Mediterranean countries had to buy fish from those two countries even in time of war.^7^ It is interesting to note here that the growth of the English cod fishing industry off the Newfoundland coast gave rise to the practice of marine insurance. The earliest such policy, dated 1604, has been preserved.^8^ It covered the period
* Hakluyt, V, p. 344. ^4^ Supra, ch. VIII.
^0^ Prowse, p. 77. ^8^ ibid., p. 76-77.
^T^ Cambridge History of the British Empire, VI, p. 124.
^8^ Prowse, p. 84.
Beginninge the adventure from the day and hower of the lading of the said Fishe aboorde the said shippe in the newe found land aforesaid and so shall continewe and endure untill suche time as the same shippe with the same fishe shalbe ariued at Toulone and Marcelleze and the same their dischardged and laid on Land in good safetye.
The risks insured were, of the Seas men of warr, Fier, Enemies, Pirates, Robers, Theeves,
Jettesons, Letters of Mark and counter Mark, forrestes,
Restraintes, and detaynements of kinges and princes and of all other persons, barratrye of the Master and Marriners of all other perilles, Lossess and misfortunes whatsoeuer they be, or howsoeuer the same at any time before the date hereof haue chaunced or hereafter shall happen or come to the hurte detriment or damage of the said Fishe or of any parte or parcell thereof.
The rates of insurance varied from 4 per cent to 7 per cent.
Somewhere about 1607 a group of influential men, including the Earl of Northampton and Francis Bacon, collaborated with two working partners, John Guy and John Roberrow, in working out a scheme for the establishment of a permanent fishing colony in Newfoundland. In 1610 they obtained a charter in the name of 'The Tresorer and company of adventurers and planters of the cittie of London and Bristoll for the colony or plantation in Newfoundland.'^8^
The charter covered the south eastern portion of Newfoundland and land was granted on the usual terms, to be held in free and common soccage on payment of a fifth part of any gold or silver obtained. It was stipulated, however, that fishing should be open to all, whether members of the Company or not and whatever their nationality. The Company was fully incorporated and was given power to mint coinage, to appoint a governor, to make laws, to take necessary measures for defence, and to transport to the colony willing emigrants as well as goods and livestock. Provision was made for the admission of additional members into the Company, but no Roman Catholics were to be allowed to emigrate to Newfoundland, since
'the principall effects which we can desire of this action is the conversion of the people in those p'tes if any be there inhabiting unto the true worshipp of god and Christian religion'.^10^ /
It has been stated that an application was made to the Crown for a subsidy, but it does not appear that this was granted and as none of the shareholders subscribed more than £100, finance for
' The Charter xs reproduced in Prowse, pp. 122-4.
\"ibid., p. 125.
the undertaking must have been very limited. Nevertheless, in 1610
it was possible to despatch an expedition consisting of three ships and thirty-nine persons, of whom the leaders were John Guy, his brother Philip, and his brother-in-law William Colston.^11^ Guy was furnished by the Company with elaborate instructions.^12^ All fish caught, except what was required by the settlers themselves, was to be despatched to England, except late in the season when it might be sent to Spain, since prices there could be expected to be high at that time of year. Train oil was to be bought and sent to England if it could be obtained for £8 a ton and a search was to be made for timber to make casks and hoops, while enquiries were also to be made as to the possibility of manufacturing glass. Moreover, the colonists were 'to assay by all good meanes to (capture) one of the savages of the country and to intreate (him well and) to keepe him and teach him our language that you may after obtayne a safe and free commerce with them which (are) strong there'. Perhaps most important of all they were to avoid upsetting the regular fishermen, who might well fear that the new enterprise would prejudice their interests.
'We do hould it expedient that you call an assembly of all the fishermen that shall be nere thereabouts and there in their presence openlie and distinctlie cause to be read the graunt under the King's Majesties great seal which you shall have along with you, that by the tenour of it they may be satisfied that there is no intent of depriving them of their former right of fishing.'^13^
The Company's apprehensions as to the attitude of the fishermen from the western ports of England were fully justified and when Guy introduced regulations to remedy disorders in the fishing industry the Devonshire fishermen petitioned the Crown against the Company. The fishermen complained that 'great quantities of their provisions have been appropriated; they have been prevented from taking birds which are used for bait; fees have been exacted from them; and pirates harboured to their great prejudice'. The Company replied that 'their chargeable maintenance of a colony entitled the inhabitants to choose their fishing places . . . The taking of birds has been denied, it shall be ordered to the contrary. Utterly disclaim the exaction of fees.'" The petition was rejected and an attempt on the part of the petitioners to take the law into their own hands by damaging the Company's property did not have much effect. In
\" ibid., p. 94.
" ibid., p. 94---96.
^12^ ibid., pp. 94---96.
" Calendar of Stale Papers (Col.) 1574---1660. p. 20.
1611 or 1612 Guy went to England and returned to Newfoundland with sixty more colonists. The Colony began to suffer attacks from numerous pirates who infested the local waters and who received collaboration from the non-colonist fishermen. Guy tired of the project and went home and even when in 1615, Sir Richard Whitbourne, a man of great experience of the Newfoundland trade, was commissioned as Vice Admiral to suppress piracy, there was little that he could do.
In March 1621, the Company petitioned the King for help against pirates. Newfoundland, stated the Company, had 'become a hopeful country', employing yearly 300 ships with 10,000 British seamen, but it was infested with pirates. The King was, therefore, petitioned to empower John Mason, the Governor, to act as King's Lieutenant, with two ships or more '. . . to defray his charges, five nobles or 500 dry fish, about the fiftieth part of a boat's ordinary fishing in the summer'.^15^
Little effective action was taken and with the continued opposition of the seasonal fishermen and the pirates, it was impossible to make the Company pay. The later history of the Company is obscure, but it appears that it gradually sold its rights to interested individuals. There is a record of a negotiation for such a sale in
1628, to a Mr. Paine, who was apparently interested in the possibility of iron and silver mining, together with furs and sarsaparilla.^10^ It appears also that a few years later the Company came to an end, though there is no record of its formal dissolution.
Guiana
By the end of the sixteenth century Spain was well-established in Central America, Mexico, the Greater Antilles and much of South America, while Portugal was in undisputed possession of Brazil. In between the Spanish and Portuguese domains lay the largely unexplored region of the Amazon and the Orinoco, loosely known as Guiana. From 1531 onward a number of Spanish sailors had discovered the Orinoco and Amazon Rivers, but none of them had succeeded in establishing a settlement. Of one it is recorded that
'neither hee nor any of his companies did returne again', of others that they were slain by Indians; and of yet another that 'he endured great miserie, but never entered one league into the country. . .
and was at last slaine'.^17^ These abortive attempts had nevertheless given rise to the myth of a vastly wealthy city of Manoa in that
" Calendar of State Papers (Col.) 1574---1660, p. 16.
''Browse, p. 109.
\" Hakluyt, X, pp. 300-2.
region, in the kingdom of El Dorado. As early as 1584 these stories had reached England for in that year Hakluyt wrote of all that part of America eastwards from Crimora into the river of St. Augustine in Brazil, containeth in length along the sea side 2,100 miles. In which compass there are neither Spaniard,
Portiugales nor any Christian man, but only Caribs, Indians and savages. In which place there is great plenty of gold, pearl and precious stones.^18^
Since this land of such reputed wealth was not in the effective occupation of any Christian power, it was, according to accepted international law, open to all comers and it naturally attracted the attention of English seamen in their new adventurous mood towards the end of the sixteenth century.
At the beginning of 1595, Sir Robert Dudley took an expedition to Trinidad and the glowing accounts he heard of the riches of Guiana led him to send fourteen men in his slip-boat to explore.
There they heard of a 'rich nation, that sprinkled their bodies with the poueder of golde and seemed to be guilt, and farre beyond them a great town called El Dorado'. Nevertheless, they 'thinking their company too few to stay among these savages and their victual! spent, returned'.^19^ Dudley was resolved to follow the exploration up himself, but seeing that fourteen men had come home 'in very pitifull case almost dead for famine' the main body of his expedition would not accompany him and he was forced to abandon the idea. Soon after he had left for England, Sir Walter Raleigh sailed with five ships and one hundred men to the Orinoco River. He did not visit the fabled city, but he penetrated four hundred miles up the Orinoco, established good relations with local Indians and saw enough traces of gold dust to convince him that the stories of great wealth were well-founded. He fell perhaps too readily for the stories of the wealth of Guiana. Thus he wrote,
It hath more abundance of golde than any part of Peru and as many or moe great cities than ever Peru had when it flourished most;. . . and I have been assured by such of the Spaniards have seene Manoa. . . that for the greatnesse for the riches . . . it far exceedeth any of the world.^20^
Raleigh left two Englishmen behind in Guiana to study the country and in 1596 he sent Lawrence Keymis, who had been with him on his voyage, to follow up the search for gold. Keymis, whose
'"Adamson and Folland, The Shepherd of the Water, p. 217.
" Hakluyt, VII., p. 168.
" Hakluyt, VII, p. 287, narrative has been preserved for us by Hakluyt, was an enthusiast who only too readily accepted travellers' tales of gold, but this did not stop him from thoroughly exploring the coast from the Orinoco to the Amazon and listing the rivers and towns which he visited.^21^
He sought to 'remove all fig-leaves from our unbelief', and to
'exprobate our remisnesse and long deliberation, that in twelve months space have done, or sought to doe, nothing worthy the ancient fame and reputation of our English nation, interessed in so weighty business'. The interest taken in that region by the Spanish still further convinced him of its importance.
As a result of the reports of Raleigh and Keymis, a number of expeditions to Guiana followed, one of the most important of them being financed by Sir Oliver Leigh and some associates. In
1602 Captain Charles Leigh, brother of Oliver, had entered the Wiapoco River,^22^ and on his return to England funds were raised for an expedition consisting of himself, one ship and forty-nine men, which left Woolwich in March 1604. He was well received by the local Indians, who hoped to secure in him an ally against their aggressive neighbours, the Caribs. In July 1604 he reported to the Privy Council,
Arrived in the country with fifty men with whom he proposed to inhabit in some by-place, away from the Indians; but accepted the offers of the natives to dwell amongst them in their best houses and gardens. He resolved to remain with forty men, and return the rest for England, with four Indian chiefs as pledges. The natives desire that he will send for men to teach them pray. Doubts not but God hath a wonderful work in this simple-hearted people.^23^
By this time the vision of gold had begun to fade and the more realistic motive of trading was uppermost in the minds of the home sponsors of this enterprise as well as of Charles Leigh, who wrote that 'the greevous rememberance of my untymly ffortunes at home enfforced me to undertake a verye daungerus enterprise'. He sent home for supplies and reported the excellent prospects of growing flax, sugar cane and cotton. The home partners duly sent provisions and for a short time the prospects of the little Colony of thirty-five men looked good. Before long, however, things took a turn for the worse. The Indians became unfriendly and food was therefore difficult to procure, while the unhealthiness of the climate began to take its toll. Within a few months a quarter of the colonists were
" Hakluyt, VII, pp. 358-98.
^23^ later known as the Oyapok.
^M^ Calendar of State Papers (Col.) 1574-1660, p, 4.
dead, and when Charles Leigh himself died in 1605, the heart went out of the enterprise. A ship from England, carrying provisions and another batch of colonists, failed to reach Guiana and within a few months all the colonists abandoned the colony and the enterprise was at an end.^21^
In 1609 or 1610, two other adventures to Guiana were organized. Sir Thomas Roe, later to be famous as the English Ambassador to the Court of the Great Moghul, raised funds from a group which included Raleigh, and himself commanded an expedition which thoroughly explored the Wiapoco. He wrote a detailed report but did not plant a colony. A year or so later, he sent two more expeditions and on one of these occasions twenty men were left in Guiana to form a nucleus of a colony.^28^ After this, other matters engaged Roe's attention.
Almost simultaneously with Roe's first expedition, Robert Harcourt, 'the gentility of this person inclining him to see and to search out hidden regions',^28^ obtained a commission from the King to establish a colony. Ninety-seven men, sixty of whom were intended to be settlers, accompanied Robert and his brother in three vessels, the Rose, the Patience and the Lily. Harcourt penetrated some way up the Wiapoco, cultivated good relations with the Indians of the locality, and was joined by a number of the earlier colonists. In
1613 he strengthened his position by obtaining from the Crown a patent conferring on him and two associates the lands between the Amazon and the Essequibo, to be held in free and common soccage on payment of one-fifth of any gold and silver mined.^27^ The patentees were also granted concessions in the matter of customs duties. Harcourt then issued a prospectus according to which every emigrant would be granted five hundred acres of land, even if he made no investment, while a similar area would be allotted to each
£12 10s. Od. shareholder who did not emigrate. The colony was to be worked on communal lines for ten years, profits being allotted partly to the shareholders and partly to the common stock. Harcourt called to mind the explorations of Raleigh and Leigh and made a moving appeal.
By these memorable examples may our nation, being in valour inferior to none other under Heaven, be moved or stirred up to the undertaking of this noble action of Guiana; which, in respect of the climate, fertility of the soil, and tractable disposition of the people . . . doth assure us, that with God's favour
" Purchas, His Pilgrims, XVI, chs. XII and XIV.
^M^ V. T. Harlow, Colonizing Expeditions, p. Ixxi.
" Harlow, p. Ixxi.
^M^ Williamson, p. 40.
and assistance, as great effects may be wrought in the conversion of these nations, and as great benefit and commodity may arise to the realm and crown of England, both in general and particular as ever was performed or obtained by the Spanish nation.^28^
It fell on deaf ears. Capital was not forthcoming and the enterprise came to an end, though a few colonists remained in Guiana.
We need not dwell on Raleigh's fruitless and fatal voyage to Guiana in 1617, but can pass to the formation of the Amazon Company in 1619. In that year, Captain Roger North, with associates who included Warwick, obtained a patent, in partial supersession of Harcourt's patent, for the area between the Wiapoco and a line south of the Amazon. The Company now established was known as The Governor and Company of Noblemen and Gentlemen of the City of London Adventurers in and about the River of the Amazons.^20^
The southern boundary of the area quoted involved an encroachment on Portuguese territory, and Portugal at that time was united with Spain---a country which James I desired to conciliate. Some historians have criticized James for his subservience to Spain and have regarded him as being unduly influenced by the Spanish Ambassador, Gondomar. Williamson, whose authority is not to be disregarded, takes a better view of James and attributes to him the praiseworthy desire to put an end to the religious warfare between England and Spain.^30^ Be this as it may, James yielded to the remonstrances of Gondomar, who claimed that Spain possessed this region, and James forbade North to proceed. North nevertheless went ahead and established a plantation on the Amazon, which was joined by a number of individual settlers who had been there some years. Prospects of trade seemed good---sugar-cane, tobacco, gums and spice were all to be had, and, moreover,
The Christians which live in this Countrie take no paines nor labour for anie thirige; the Indians both house them, worke for them, bringe them victualls, and theire Commodities for a small reward and price, either of some Iron worke or glasse beades, and such like contemptible things, whereof greate vent would be made, and manie Artificers mainteyned.^31^
At this stage, however, James could not disregard the Spanish protests. In 1620 Harcourt was peremptorily summoned home and the Company's patent was cancelled.
^a^ Harlow, p. Ixiii. ^M^ Williamson, p. 83.
*° ibid., p. 14. ^11^ ibid., p. 88.
Individuals continued to send settlers to Guiana, but the next corporate attempt was not made for seven years. Circumstances were now more favourable, since Charles I at this time was not at all inclined to conciliate Spain. In 1627, North and Harcourt joined forces and obtained from Charles a patent for the area between the Amazon and the Essequibo, in the name of The Governor and Company of Noblemen and Gentlemen of England for the Plantation of Guiana.^32^ There were fifty-five original members of the Company, a considerable number of whom belonged to the nobility.
Each member undertook to subscribe amounts varying from £50
to £150, while other members joined later. The. Duke of Buckingham became Governor, while North, the real promoter of the enterprise, was Deputy Governor.^33^ The Company was granted exemption from import duties and was given the privilege of transporting arms out of England---even to 'furnish themselves with fower peeces of Iron Ordinance called Drakes, and to buy the same in the markett here'.^34^ The capital promised was only £5,000^35^ and the Company did not attract a great deal of support from the mercantile classes.
Nevertheless, in 1628 it managed to fit out an expedition under Robert Harcourt.
The little Hopewell, with a few shareholders and about a hundred other emigrants left England in November of that year under instructions to proceed to the Amazon region. Harcourt, however, decided in favour of the Wiapoco---perhaps because it was further from Portuguese territory---and there he joined up with a party which seems to have been sent out by the Company earlier in the year. North radically disagreed with this change of plan and sent out orders superseding Harcourt and ordering the colonists to move to the Amazon. In the meantime, no supplies were to be sent to the Wiapoco. 'It is ordered that such provisions as are sent to any of the Colony at Wiapoco shalbee kept at the Amazones till they come thether for them.'^30^ The Rev. Richard Thornton who was himself a shareholder, wrote home protesting against these orders. 'For first howe can they bee remooved 600 myles by water w^th^out danger of their lyves in that part of their passage by Sea in Shallopps?'^37^ Again : 'If all of them bee remooved to the Amazones, then wee loose their labours heeretofore spent in plantinge, in makinge sugar workes, in fortifications, & the like.' The protest was overruled, but Harcourt and most of his party made no attempt to comply with the Company's orders.
" ibid., p. 110.
" Calendar of State Papers (Col:) 1574-1660, p. 8.
^14^ Harlow, Ixxxiii, footnote 2. ^35^ Williamson, p. 111.
'"ibid., p. 117. " Harlow, p. 151.
Nothing appears to be known of subsequent events in the Wiapoco region, except that Harcourt and two other principal shareholder-emigrants died in 1631 and the little colony came to an end.
Williamson surmises that it may have been wiped out by the aggressive and hostile Caribs, but this is only a reasonable guess.92
In the meantime, in August 1629 the Company had sent a new expedition consisting of about 200 emigrants to the Amazon region.
Here the settlers were drawn into an alliance with local Indians against the Portuguese, who were established at Para in the neighbourhood of the English colony. The upshot was disastrous, for in
1631 the Portuguese destroyed the settlement and the surviving colonists fled.93
The Company might have made a fresh effort to establish a colony, but for the fact that it was at the end of its financial resources. It appealed to the Crown to take over the venture and set forth 'Inducements to bee propounded to his royall Majestie to take the proteccion of the Adventurers unto the river of the Amazones or Guiana in America and theire plantacion there'.94 The Company estimated that the provision of naval defence and land armaments, and the transport and financing of several thousand colonists would cost £48,000 in the first four years---after which, it is to be presumed, it was considered that the Crown would make a profit.95 Such an arrangment would have been quite out of line with normal English practice and the proposal was not seriously considered by an impecunious Sovereign. Money could not be raised from commercial sources and although some individual members of the Company continued to finance voyages on their own account, the Company itself appears to have sent out no more expeditions. For practical purposes it came to an end in 1635, though it still tried to restrain non-member interlopers.
No further attempts were made by any chartered company to found a colony in Guiana. It can fairly be said that the failure of the original Guiana Company was due to the unwisdom of planting its colony on the Amazon, where conflict with the Portuguese was inevitable, instead of concentrating its resources on the Wiapoco or Orinoco, where the prospects seemed fair.
The Darien Company
A number of companies chartered early in the seventeenth century, such as the Laconia, the New Scottish and the Providence Island Company, achieved nothing and we need not discuss them.
Towards the end of the century, a more spectacular enterprise---
the Darien Company---was launched and although it too proved abortive, its political importance justifies a brief consideration of its activities. It was the brain-child of William Paterson, the founder of the Bank of England and it came into existence at a time when Scottish nationalism was seeking for commercial outlets. The possibilities of the Isthmus of Panama as an entrepot appealed strongly to Paterson and in 1695 he secured the incorporation by the Scottish Parliament of the Company of Scotland Trading to Africa and India. By the terms of the charter at least half the capital was to be issued to Scots and the Company was to have a monopoly against all other Scots. From the outset it was faced with the difficulty that it would encroach on the rights of the East India Company and Englishmen were therefore prohibited by law from taking shares. Attempts were made to raise capital in England sub
rosa, but the East India Company was able to make this hazardous and capital had therefore to be raised in Scotland, which was at that time a poor country. Scottish enthusiasm was nevertheless aroused and capital of £400,000 was subscribed, but the first call only amounted to £100,000---a hopelessly inadequate sum with which to compete with the powerful East India Company.
Matters hung fire for a time and since the Company had as yet no practical achievements to its credit, the response to further calls was very poor, and, moreover, the issue by the Darien\'Company of bank-notes without proper backing undermined confidence. From then on everything went wrong. There were disputes amongst the Directors as to whether Panama or India should be the main theatre of operation,^1^ and the Company was badly organized in almost every possible way.
In 1698 an expedition was sent to Darien, but it was inadequately supplied and it took out goods quite unsuitable for sale;
and 'the system of government by a Council, without any duly appointed chief'.96 97 did not work. The territory to which the expedition was sent was claimed by the Spanish, though they had never effectively occupied it, and though a Spanish attack was repulsed, the settlement soon had to be abandoned. Feeling against England was bitter, but fresh money was not forthcoming in Scotland, and the plain fact was that 'investments had been made beyond the quantity of capital available' in Scotland. Union with England was now imminent and the Scots sought unsuccessfully to have the Company's rights continued after the Union, even though it had no money with which to give them practical effect. In 1707, the Company's assets amounted to £1,654 and its liabilities to £14,809.
There was indeed no chance of salvaging the Company and it was fortunate for the shareholders that when the Company was expropriated in 1706, the English agreed to refund the paid up capital, together with interest. The original investors had lost badly by the venture, but those who bought their shares after 1700 did well out of the compensation.
PART 4
THE ADMINISTRATIVE COMPANIES
Introductory The chartered companies of the sixteenth and seventeenth centuries had proved to be effective instruments for the expansion of British overseas trade and the development of plantations. By the middle of the eighteenth century, all except two of those companies had either been wound up or had ceased to be important. They had in fact created the conditions in which individuals or private associations could trade without a monopoly. The exceptions were the Hudson's Bay Company and the East India Company. The circumstances in which the Hudson's Bay Company traded were similar to those of the earlier plantation companies, and they continued in full vigour under the protection of their charter. The East India Company, too, had a long life before it, but its work as an instrument of government was to become more important than the purpose for which it was established, and it was for this reason that it survived.
The current of thought in England had now swung strongly against monopolies and those companies which were chartered at the end of the eighteenth or the first half of the nineteenth century had specific and limited functions and enjoyed no monopoly. They were the Sierra Leone Company, two Canadian Land companies, the New Zealand Company, and the Falkland Islands Company, chartered in 1797, 1826, 1834, 1841 and 1852 respectively.
It is interesting to note that the two Companies organized initially by philanthropists rather than businessmen---the Sierra Leone Company and the New Zealand Company---were badly managed and were a financial failure though they served a useful purpose. The other two Companies were efficiently run on business methods.
Towards the end of the Victorian era, the concept of the Chartered Company was revived. The dynamism of the age combined with international political and economic rivalry to generate a new spirit of commercial expansionism which took British traders to uncivilized countries. It was felt that such countries could not be left uncontrolled by any civilized authority, while at the same time the new spirit of imperialism in Britain made it unthinkable that they should become subject to a foreign power. Britain could not, therefore, avoid accepting some responsibility for their governance and the chartered company provided a means of doing this with due regard for economy. The companies in fact did what the British government would otherwise have had to do and they did it cheaply.
Chapter 14
Companies with Limited Objects
The Sierra Leone Company
The Sierra Leone Company was an offshoot of the humanitarian movement which strongly influenced leaders of British thought in the latter part of the eighteenth century and which had its most striking manifestation in the evangelical Clapham Sect. In 1772,
Granville Sharp, a clerk in the Ordnance Department, who was to become one of the leaders of the movement for the abolition of the slave trade, brought a case against an owner in England who had recaptured a runaway slave named\' Somerset. The Chief Justice,
Lord Mansfield, was anxious on grounds of public policy that the matter should be settled out of court, but when he had to decide it he had no hesitation in finding that the owner of a slave in England had no right to detain him. Slavery, he pronounced to be so odious that nothing can be suffered to support it but positive law . . . whatever inconveniences therefore may flow from this decision, I cannot say that this case is allowed or approved by the law of England; and therefore the black must be discharged.^1^
The effect of the Somerset decision was that slaves in England at once regained their freedom. Six years later, a similar decision was given in Scotland. Of the 14,000 slaves thus set free in England, some remained with their masters, but others were reduced to sheer poverty and presented a grave social problem. This problem was aggravated at the end of the War of American Independence, when many negroes who had fought on the side of the British were sent to England where they automatically became free, or to Nova Scotia or the Bahamas where they were emancipated.
^1^ Cambridge History of the British Empire, II, p. 192.
In 1783, Dr. Smeatham---a botanist residing in the Plantain Islands off Sierra Leone---proposed that destitute negroes should be settled there.^2^ This suggestion might have come to nothing but for the formation in 1786, by Sharp and some associates, of the Committee for Relieving the Black Poor. Smeatham's proposal appealed strongly to the Committee, not only because it would further their main object, but also because it might prove the starting point for the civilization of Africa. Sharp at once prepared a Plan of a Settlement to be made near Sierra Leone . . . intended more particularly for the Service and happy Establishment of Blacks and People of Color to be supplied as free men under the directions of the Committee for Relieving the Black Poor and the Protection of the British Government?
The proposal was approved by the Government, which agreed to pay the cost of transport of negroes from England to Sierra Leone.
Early in 1787, 400 negroes and 60 whites were sent out to Sierra Leone under the command of Captain Thompson, R.N. Many of them died on the way, but when the survivors reached Sierra Leone,
Thompson bought about twenty square miles of land from King Tom, a local chief subordinate to King Naimbamma. The area was described by Sharp---who had not been there---in almost lyrical terms. 'They have purchased twenty square miles of the finest and most beautiful, they all allow, that was ever seen . . . the woods and groves are beautiful beyond description . . . and the soil very fine.'^4^
In spite of this lyricism, the settlement soon fell on evil days. Land was distributed in 364 lots of one acre each, but the early mortality was appalling and, moreover, the settlers showed no inclination to take to cultivation or to strenuous work of any kind. Numbers of them deserted the settlement and joined slave traders elsewhere along the coast. Sharp was not daunted and in 1788, partly at his own expense and partly with aid from other philanthropists and from the Government, he sent out a brig laden with provisions and other necessaries and carrying thirty-nine passengers, black and white?
Although the settlement had been sent out with the help of the Government, it does not appear that any kind of legal authority had been conferred on the founders. Sharp assumed to himself the power to make regulations and they were informally approved by the Government, but he had an almost pathetic belief in the virtue
' E. G. Martin, The British West Africa Settlements, 1750-1821, p. 104.
' Claude George, The Rise of British West Africa, p. 17.
^4^ ibid., p. 21.
"ibid., p. 21.
of complete freedom, and when Thompson left Sierra Leone, nobody was appointed to be in charge. The settlers were left free to elect their own leader. They were, however, not at liberty to tolerate slavery and Sharp firmly directed that the property of those who even temporarily joined the slave traders should be forfeited. Freedom did not have the stimulating effects for which Sharp had hoped and the settlers had made little progress when, in 1789, a disaster not of their own making befell them. A British naval officer not connected with the settlement had burned down a town belonging to a local chief, King Jimmy, and by way of retaliation Jimmy gave three days warning and then plundered and destroyed the settlement.
The settlers were dispersed and it looked as if this experiment was at an end.
Even before the news of this disaster had reached London, it had become apparent to Sharp that philanthropic motives were not always by themselves sufficient for the maintenance of a colony and that commercial interests must be attracted to it. In 1794 he therefore put forward a scheme ^c^to engage several respectable merchants and gentlemen to form a company in order to carry on an honourable trade with the coast of Africa'.^0^ The St. George's Bay Company was accordingly formed and at once applied for a charter and a monopoly of trade with Sierra Leone. This was strenuously opposed by the Company of Merchants trading to Africa^7^ which was responsible for the maintenance of settlements and forts all down the West coast. The Company of Merchants took its stand on the Act of 1750, which had conferred on it freedom of trade within its boundaries. Sharp and his associates perforce abandoned their request for a monopoly and had to content themselves with an Act of 1791, which incorporated them as the Sierra Leone Company. The Act did not confer on the Company any legal or administrative authority and specifically provided that they could not exclude others from trading in Sierra Leone, nor could they prevent British shipping from anchoring there. Indeed, all that the Act did was to form the Adventurers into a Joint Stock Company and to empower them to hold land conferred on them by the Crown. It was decided to raise capital of £100,000 and to spend £15,000 on sending out three vessels with supplies.98 Mr. Falconbridge, who went out as an Agent for the Company, repurchased the original area from King Naimbamma for goods worth £30. He reassembled the scattered settlers to the number of sixty-four and a fresh start was made.
Sharp soon found that the practical-minded men who formed an important element in the directorate did not share his views as to ultra-democratic methods. He complained that The community of settlers are no longer proprietors of the whole district as before as the land has been granted, since they were driven out, to the Sierra Leone Company; so that they can no longer enjoy the privileges of granting land of the free vote of their own Common Council. . . nor the choice of their own Governor. I could not prevent this humiliating change; the settlers must have remained desolate if I had not thus far submitted to the opinions of the Association's subscribers.^0^
Sharp's concept of an informal kind of self-government might or might not have worked as long as the colony consisted merely of a hundred or so settlers, but immigration on a much larger scale was now imminent. The negroes who had been emancipated in Nova Scotia after the War of American Independence, had found the climate uncongenial and in 1791 they sent a deputation to England to ask that they should be sent to Sierra Leone. The advantage to the Company of an accession of a labour force used to a tropical climate was obvious and the directors strongly supported the petition. The British Government agreed to pay the cost of transport and early in 1792, over 1,000 negroes embarked from Nova Scotia under the command of Lieutenant Clarkson, a brother of the well-known abolitionist Thomas Clarkson. They arrived at Sierra Leone in March with their number much depleted by deaths on the voyage. The settlement was now christened Freetown. The maintenance of this enlarged colony clearly called for greater financial resources and better organization than had previously been necessary.
To meet the first of these needs, the Company's capital was raised to £235,280,^10^ and the administration of the colony was then put on what it was hoped would be a sounder basis. As a first step, a Governor was appointed with a Council of eight to assist him.
Difficulties were at once experienced and although an insurrection of the Nova Scotians was easily suppressed, they proved as unwilling to work and as intractable as their predecessors. A further cause of trouble appeared when it was realized that the available land was not sufficient to give each Nova Scotian settler the promised twenty acres of land for himself, ten for his wife and five for every child.^11^
The Council proved too unwieldy an instrument to deal with all these problems and the Governor had no power to overrule it. The result, according to a report by the Directors,^12^ was 'confusion in the accounts, in the stores, in the Government, in the information
'Martin, p. 116. ^10^ ibid., p. 115.
" ibid., p. 120. ^u^ Quoted in Martin, p. 118. sent home and in the operations of every kind'. In November 1792, the Governor was therefore instructed to act without his Council and a little later a smaller Council of two replaced the more cumbrous earlier body. The Governor was fortunate in the choice of his two Councillors---Zachary Macaulay, a leading member of the Clapham Sect, and William Dawes, a former marine officer at Botany Bay.
One of the first tasks of the new Council was to establish machinery for the maintenance of law and order and here they drew freely on Anglo-Saxon ideas. They laid down that every ten families of the colony should elect a tythingman, whose duties should be to keep the peace and decide causes of less importance, every ten of these tythingmen to choose from amongst themselves a hundredor to be appealed to from the tythingmen and appeal made from them by the party discontented to the justice of the peace.99
For more important cases there were Courts presided over by an official of the Company and it is interesting to note that in those courts Nova Scotians proved very satisfactory as jurors.
The functions of the tythingmen and hundredors were gradually extended. It became the practice to consult them on matters of general interest and before long they sought to assume the functions of a legislature. These developments were interrupted for a time in 1794, when a French squadron, apparently influenced by local slave traders who were hostile to the colony, destroyed Freetown. Progress was soon resumed and in 1797 there were three hundred houses, with a population of 1200 in Sierra Leone. In the meantime, difficulties had arisen from the fact that some of the leaders of the tythingmen and hundredors were becoming overconscious of their own importance and were encouraged in the attitude by the liberalism of Zachary Macaulay---a man of ability and integrity, but perhaps not tough enough for the circumstances of the day. The imposition of a light quit rent evoked protests and two European agitators did not scruple to exploit the situation and stir up feeling against the other whites. Further trouble arose when a section of the settlers objected to the immigration of a body of Maroons without payment---a strange attitude indeed in view of the settlers' own origin. A rebellion broke out in 1800, but it was easily suppressed with the aid of the very Maroons who had been at least partly the occasion of the trouble.
It had, however, become clear before this that the legal constitution of the colony was far too vague and in July 1799 the Company applied to His Majesty's Government for a Charter of Government, 'which should convey to them a clear formal, well-grounded authority to maintain the peace of the settlement and to execute the laws within the Company's territory'.^1^* The Charter was granted under the Great Seal in July 1800. It constituted the settlement an independent colony in which the Company was endowed with full territorial rights and empowered to appoint a Governor and Council, and to legislate either directly or through the Council. The tythingmen and hundredors were deprived of the legislative authority they had sought to assume and became little more than a Watch and Ward Committee.
Sustained attacks by local chiefs in 1801 and 1802 were eventually repulsed and thereafter the colony was left in peace. The Company was now beset with financial difficulties. One ship was captured, another was lost in a gale, and either lack of experience or poor judgment resulted in the accumulation of a considerable amount of irrecoverable debt. Apart from all these contributory causes, the basic fact was that the commercial operations of the Company could not possibly pay for the cost of administration and defence. In spite of drastic retrenchment, by 1800 the Company had lost £145,000,^15^ and the Directors petitioned His Majesty's Government for help. In 1801, they received grants of £4,000 and in 1802
a grant of £10,000 was made after a Committee of the House of Commons had reported that in the absence of such a grant, the Company would have to abandon the colony. The Directors seem to have assumed that the grant would be repeated annually, but in
1804 yet another Committee of the House of Commons was appointed to enquire into the Company's affairs. The Committee rejected the adverse findings of one Captain Holloway, who in 1803
had reported unfavourably on the Company's management. It considered that administration had been improved and the currency put on a reasonable basis, but it concluded that the financial resources of the Company were quite inadequate to the tasks imposed on it.
The Committee estimated that the civil establishment would cost
£10,000 annually, that defence would require £4,000 a year, and that necessary capital works would cost £8,000. It observed that the British Government had obligations to the Nova Scotians and Maroons whom it had sent to Sierra Leone, and that the colonists were now more inclined to work than formerly, and it pointed out that three hundred free colonists had been attracted to the colony from neighbouring areas. The Committee therefore recommended that the responsibility for civil and military administration should be
"Report of the Directors of the Sierra Leone Company 1801, quoted in Martin, p. 131.
" George, p. 93.
transferred from the Company to His Majesty's Government. Even before this report was written, the Secretary of State had expressed his intention to make such a transfer and the Company had acquiesced in it. In 1807 the Company formally petitioned for the abrogation of its charter. In that year Act 47 George III c. 49
ordered the dissolution\' of the Company at the end of seven years, but the Directors decided not to avail themselves of this period of grace and retired from the field at once. On 1 January 1808, Sierra Leone became a Crown Colony.
In spite of its short life, it would not be fair to regard the Sierra Leone Company as a failure. It had introduced civilization to an important area of West Africa and had started Freetown on the way to prosperity; it had assisted the growth of the newly-founded Church Missionary Society; and it had given a considerable impetus to the anti-slavery movement. Through its agency Britain had begun to atone for her considerable share in an infamous trade.
The Two Land Companies in Canada
When the authorities in Canada at the end of the eighteenth century found themselves confronted with the problem of allocating land to settlers, they were without experience and failed to work on any satisfactory principle. Instead of developing compact blocks, where communications and amenities could have been provided, they settled plots widely separated from each other, and the settlers were thus isolated from each other by vast tracts of uncultivated land. The authors of the Durham Report wrote thus in 1835.
Their numbers are too few and their position too distant to allow them to support schools, places of worship, markets or post offices. They can neither make nor maintain roads. The produce of their farms, owing to the necessarily imperfect methods of cultivation pursued under such circumstances, is small in quantity and owing to the difficulty and expense of conveying it to the market, of little value.^10^
There were, moreover, extensive areas of land which had not been settled at all. In the Constitutional Act of 1791, it was laid down that one-seventh of all lands granted should be reserved for the support of the Protestant clergy and an equal area was to be maintained as Crown reserves, the revenue from which would provide for the expenses of Government. The Crown lands were not in fact settled and were abandoned in 1862 and much of the clergy reserves remain undeveloped.
^18^ Lord Durham's Report on the Affairs of British North America,
Appx. B.
Clearly some better system of settlement and development was required and it was largely due to the efforts of a well-known writer,
John Galt, that a fresh start was made. After the end of the American war, a number of the principal inhabitants put forward claims for compensation for the damage which they had suffered during the invasion, and Galt was appointed as their agent. It was at first suggested that he should raise a Ioan for the purpose of compensating them, but this was seen to be impracticable when it was realized that it would only bear interest at 5 per cent and would not be fully guaranteed by the Government of the United Kingdom. In
1823 Galt therefore suggested that the necessary funds should be provided by the sale of the Crown lands and clergy reserves and induced Hullett of the well-known firm of Hullett Brothers & Company to undertake to form a Company for purchasing and settling those lands. The Canada Lands Company was formed under an Act of Parliament passed in June 1825 and received a Royal Charter in August 1826. According to Charles Buller's report to Lord Durham, the underlying motive of the Government in adopting this method---which was in effect a delegation of the powers of Government to a private company---was 'the obvious ill success of the proceedings of the Government and the hope that persons having a pecuniary stake in the result of their measures would be more careful and therefore more successful in their operations'.^17^
The Company undertook to purchase in Upper Canada
1,384,413 acres of Crown Reserves and 828,430 acres of Clergy Reserves at a price which was fixed by Commissioners representing the Crown and the Company.^18^ Although an Imperial Act of 1827
permitted the sale of some portions of the Clergy Reserves, the Government were not able to make lands from these reserves available to the Company and 'as a substitute, the Company were allowed to select 1,100,000 acres in a block on the shores of Lake Huron, at the same price for the whole as was to have been paid for 800,000
acres of Clergy Reserves, making the whole of their purchase
2,484,413 acres'.^19^ The purchase money was to be paid by instalments over a period of sixteen years, and one-third of the purchase price of the Huron block was to be spent on roads, canals, bridges, wharves, churches and the like.
The scheme worked well and in 1839 Charles Buller reported that 'the settlement appears to have proceeded with somewhat more rapidity and regularity upon the land thus disposed of than upon that which remained under the control of the officers of the Crown'.
By 1877 the Company had disposed of all except 400,000 acres of
\" Durham Report, Appx. B.
^38^ J. Galt, Autobiography, I, pp. 306-7.
^18^ G. P. Lucas, Introduction to the Durham Report, p. 170. the land purchased from the Government and in 1881 an Imperial Act was passed to continue its existence.
A somewhat similar arrangement was made with the British American Land Company in 1833 and the Company received a Royal Charter on 20 March 1834, confirmed by Act of Parliament in May 1834. The charter covered the whole of British North America, but in practice the Company only operated in Lower Canada. It originally agreed to purchase 847,661 acres in what was known as the eastern townships at a price of 3s. 6d.- per acre for Crown Reserves and surveyed land, and 3s. per acre for unsurveyed land, but the quantity actually acquired seems to have been
700,000 acres100.
The French in Lower Canada resented the encouragement of British immigrants and contended that Canadian interests had been disregarded for the sake of a United Kingdom monopoly. Perhaps for this reason, progress was slower than in Upper Canada and by
1877 the Company still had 500,000 acres to sell. Its existence was therefore continued by Imperial Acts of 1881 and 1894.
The New Zealand Company
For fifty years after Cook's discovery of New Zealand no systematic colonization was attempted, though a considerable number of individuals, mainly British, settled in North Island. Whalers found it necessary to establish bases in the Bay of Islands; traders visited New Zealand to buy flax or timber and set up depots; and undesirable characters---escaped convicts from New South Wales, or loose living adventurers---found the absence of any restraining authority congenial. In 1814 the Rev. Samuel Marsden founded an Anglican Mission Station in the Bay of Islands and before long missionaries of other denominations set up schools and churches in several places.
There were now three separate British communities in New Zealand
---missionaries, scallywags and respectable traders, but at this stage none of them thought of New Zealand as a potential colony.
The first individual to envisage organized settlement appears to have been a Baron Charles de Thierry, on whose behalf Captain James Herd went to New Zealand in 1822 and bought land on the banks of the Hokianga River for thirty-six axes, from three Maori chiefs.101 Some kind of backing was clearly required if a settlement was to be established in these lands, but His Majesty's Government declined to support the scheme and told the Baron that New Zealand was not a British possession. The Baron then applied to the Netherlands Government, but here too he was unsuccessful and he abandoned his plan. Two other settlement plans in the next three years were also infructuous, but of greater importance as the harbinger of things to come was the foundation of the first New Zealand Company in 1825 under the powerful sponsorship of J. G. Lambton, later the Earl of Durham. The Company proposed to establish a fort and to send out settlers, but it failed to secure the desired monopoly from the British Government and it was told bluntly that it could expect no military aid from Britain beyond what might be required to protect its withdrawal if that became necessary. The Company nevertheless acquired land and sent out a batch of colonists, who soon lost heart and came home. It was becoming clear that without the active support of the Home Government, colonization was, not likely to be practicable, and in the mood of that Government in the twenties, there was little prospect of receiving such backing.
In the following decade there was a change of mood and an important part in bringing it about was to be played by Edward Gibbon Wakefield. Like most visionaries, Wakefield was unbalanced and in his early days found himself in trouble with the law as a result of abducting an heiress. During his term of imprisonment he came into contact with convicts from Australia and was led to give much thought to the possibilities of colonial expansion. He was perhaps the first Englishman to work out a consistent policy in this field and his influence was therefore considerable. He was helped too by the fact that economic conditions were leading English statesmen to consider emigration as a possible means of dealing with the serious problem of unemployment. Suspicion of French activity in the Pacific also played its part in the change, for while the British Government might not welcome colonial expansion, they had no desire to see France establish herself in Australasia. Wakefield's evidence in 1836 to the House of Commons Select Committee on Emigration was thus timely.
Very near to Australia there is a country which all testimony concurs in describing as the fittest country in the world for colonization, as the most beautiful country with the finest climate and the most productive soil; I mean New Zealand. It will be said that New Zealand does not belong to the British Grown and that is true, but Englishmen are beginning to colonize New Zealand. Adventurers go from New South Wales and Van Diemen's Land and make a treaty with a chief, a tripartite treaty, the poor chief not understanding a word about it. But they make a contract on parchment, with a great seal; for a few trinkets and a little gunpower, they obtain land.102
The Committee were impressed, but when in June 1837 the New Zealand Association, which had been formed early in the year, put to the Government a scheme of colonization, it found no favour with the Colonial Secretary, Lord Glenelg, or with the powerful permanent Under-Secretary, James Stephen. Glenelg was much influenced by the Church Missionery Society, which was strongly opposed to the colonization of New Zealand, though missionaries on the spot were beginning to change their attitude. At an earlier stage, the bad character of many of the settlers had led many missionaries. to fear that colonization would merely magnify the existing evils, but those evils had now become so rampant that perhaps only Her Maj\'esty's Government could deal with them.
The settlement of the Bay of Islands was a sink of iniquity in which the few respectable inhabitants were outnumbered by the lawless adventurers who deemed it a paradise, remote from the operation of any law.103
By the end of the year Glenelg had come to realize that some form of organized colonization was necessary and he stated that the Government would be prepared to charter a Company for this purpose, subject to a considerable measure of government control. The New Zealand Association considered a Joint Stock Company unsuitable, since they did not propose to make profit out of the enterprise.
In June 1838 they therefore introduced a Bill proposing the appointment of Commissioners for Settlement in New Zealand, who would make treaties, vesting in themselves the powers of government and would sell land at a uniform price of 12s. per acre. The Bill was rejected, but in August the Association decided to form a 'private joint stock association' with a capital of £25,000, and a little later the Association arranged to purchase lands in New Zealand previously acquired by Lieutenant McDonnell on the River Hokianga.
Glenelg was now moving a little nearer to the view of the Association. In December 1838 he recommended the appointment of a British Consul to New Zealand, perhaps partly because the French were considering a similar appointment, and in February 1839, he proposed negotiations with the chiefs for the cession of sovereignty in areas where British individuals had already settled.104
By this time the New Zealand Association was losing patience and in May 1839 it sent out an advance party under the command of Colonel Wakefield^25^ in the Tory to purchase land and prepare for settlement. This was followed in August by the Cuba, carrying a staff of surveyors. The Association also arranged to purchase the land bought in 1825 by the abortive first New Zealand Company and on the strength of this acquisition and its purchase from McDonnell, it sold 67,000 acres of land to intending colonists for just under £70,000.^20^ The sale of land, theoretically acquired but without certainty as to possession or validity of title, was undoubtedly a mistake.
In August 1839, Captain William Hobson, R.N., was appointed as British Consul in New Zealand and was given his instructions in a letter which must be one of the most remarkable documents ever issued by the Colonial Office, since it said in effect that the Colonial Secretary disagreed with the instructions that he was issuing.
The Ministers of the Crown . . . have deferred to the advice of the Committee appointed by the House of Commons in the year 1836 to inquire into the state of the aborigines residing in the vicinity of our colonial settlements; and have concurred with that Committee in thinking that the increase of national wealth and power promised by the acquisition of New Zealand would be a most inadequate compensation for the injury which must be inflicted on this kingdom itself by embarking in a measure essentially unjust, and but too certainly fraught with calamity to a numerous and inoffensive people, whose title to the soil and to the sovereignty of New Zealand is indisputable and has been solemnly recognized by the British Government.
We retain these opinions in unimpaired force, and though circumstances entirely beyond our control have at length compelled us to alter our course, I do not scruple to avow that we depart from it with extreme reluctance . . .
It is impossible to confide to an indiscriminate body of persons, who have voluntarily settled themselves in the immediate vicinity of the numerous population of New Zealand, those large and irresponsible powers which belong to the representative system of Colonial Government. Nor is that system adapted to a colony struggling with the first difficulties of their new situation.^27^
Hobson was successful in his mission and in February 1840, forty-six chiefs of North Island signed the Treaty of Waitangi, by
=> Brother o£ E. G. Wakefield.
"Hansard, 1839, XLVIII, quoted in Harrop, p. 70.
" Harrop, pp. 70-71.
which sovereignty was transferred to the Queen of England, who in return undertook to protect the natives of New Zealand and to guarantee them in the possession of their lands. The Treaty also provided that if any of the Maori proprietors wished to sell their land, the Crown would have the right of pre-emption. Other chiefs soon signed. While these transactions were taking place, the first batch of settlers sent by the New Zealand Association arrived at Port Nicholson and almost at once they tried to assert their independence---or perhaps it would be fairer to say that in the absence of any provision for their governance, they sought to establish a judicial machinery. To deal with this situation, Hobson was not content to rely on the Treaty of Waitangi, but on 21 May 1840, formally proclaimed the sovereignty of the Crown, basing it in the case of North Island on the adherence of the chiefs and for the South Island on the right of discovery. This prompt action enabled him to forestall a French party which was on its way to New Zealand to take possession in the name of France.
There was little point in further opposition by Her Majesty's Government to the Company's plans and in November 1840 an agreement was reached whereby the Company would be granted a charter of incorporation for forty years and would receive from the Crown four acres of land for every £1 spent by it. The Company would be allowed to purchase lands in New Zealand, except from natives. The agreement left many questions unanswered. Did the vast area of unoccupied land in New Zealand belong to the chiefs or not ? If it belonged to them, how was their title to be extinguished before the land was purchased by the Company? The failure to settle these matters was to lead to serious disagreement between the Company and the British Government later. The charter was issued on 12 February 1841. Unlike the charters to the Plantation Companies of the seventeenth and eighteenth centuries, it did not confer the powers of government, but was confined to the right to colonize.
Hobson, who had become Governor of New Zealand when sovereignty was ceded to the Crown, was authorized to form legislative and executive councils consisting entirely of officials. The first meeting of the Legislative Council was held in May 1841 and ordinances were passed providing for judicial and police organization and other branches of administration. The purely official character of the Government was much resented by the Company and the settlers and gave rise to considerable ill-feeling when Hobson fixed the capital at Auckland instead of at Port Nicholson as demanded by the settlers. Friction between the Government and the settlers was indeed continual.
Two more serious difficulties now appeared, the first of which resulted from the fact that settlers had been sent out before any survey had been made. Progress in settlement was therefore very slow and much speculation in land took place. The second difficulty arose from the vagueness in the arrangement regarding the Company's acquisition of land. The Company maintained that the responsibility for extinguishing any native title rested with the Home Government and was implicit in the original agreement. Her Majesty's Government firmly repudiated this interpretation and it is difficult to disagree with their view in the light of a letter written by Colonel Wakefield to Hobson on 24 August 1841.
It is presumed in the arrangement that the Company has acquired a valid title from the natives to a very large territory on both sides of Cook's Strait, to which they lay claim, and to which their settlements are to be confined. The Colonial Minister, upon that presumption, authorizes the selection by the Company . . . of certain portions of land within that territory.^28^
A representative of the Company then made a shameful attempt to impugn the Treaty of Waitangi, 'made with naked savages', but received an answer from the Colonial Secretary so just and crushing that it deserves quotation.
Lord Stanley is not prepared . . . to join with the Company in setting aside the Treaty of Waitangi, after obtaining the advantages guaranteed by it, even though it might be made 'with naked savages', or though it might 'be treated by lawyers as a praiseworthy device for amusing and pacifying savages for the moment'. Lord Stanley entertains a different view of the respect due to obligations contracted by the Crown of England, and his final answer to the demands of the Company must be that, as long as he has the honour of serving the Crown, he will not admit that any person, or any Government acting in the name of Her Majesty, can contract a legal, moral or honorary obligation to despoil others of their lawful and equitable rights.^20^
The Company's position was now precarious. Its funds were exhausted, it had no clear title to its lands, and it was at loggerheads with the British Government. The Company had indeed managed its affairs badly. It had sold lands before being certain of its own title and it had paid out sums for the purchase of the first New Zealand Company and the New Zealand Association which no accountant could have justified. A modern writer justly comments that the Company had paid £50,000 for the rights of a commercial
"Parliamentary Papers, 1844, p. xiii. Appendix---quoted in Harrop, p.
200.
" Harrop, p, 197.
company unheard of for fifteen years and 'for the privileges of an Association which had gained no recognition from the Government, was composed of men who expressly stipulated that they should have no financial interest in the scheme, and whose claims to lands were derived merely from the Company of 1825'.^30^ There was moreover the fear that the Company would have to face suits from purchasers who could not get possession of their lands. The Company asked Her Majesty's Government for a loan and in August 1846 a loan of £100,000 was given. Of this sum £67,000 of it was to be used for the purchase of land and for satisfying native claims.
This, however, was only a stopgap and in July 1847 a Bill was passed implementing an agreement between Her Majesty's Government and the Company. That government agreed to take over the Company's unsold land at a price of 5s. per acre, amounting in all to £268,370 15s. 0d.; to allow the Company for three years to exercise the Crown's right of pre-emption of land sold by Maoris; and to advance to the Company sums amounting to
£136,000 during a three-year period. In return for these concessions,
Her Majesty's Government was to have the right to veto any resolution of the Directors. The Company was now free in theory to embark on the purchase of land from those chiefs who wished to sell, but in the jungle of conflicting claims to land titles in New Zealand, this freedom did not mean much. It was clear that the Company's days were numbered, but in a last burst of energy it sponsored the establishment of Church colonies in New Zealand.
An Association of Churchmen was to select the immigrants, while the Company was to transport them to New Zealand and to purchase the lands for the Association, which would sell them to the intending immigrants. The scheme worked well in the sense that the immigrants were well selected and satisfactory settlements were established at Otago and Canterbury, but the progress in the sale of land was so slow that the Company derived very little financial benefit.
In 1850 the three-year agreement with Her Majesty's Government came to an end and was not renewed. The Company was not in a position to buy land or indeed to keep itself alive. It therefore surrendered its charter and in lieu of the £268,000 due from the Grown, it received £200,000 in U.K. Government debentures, which were later redeemed by the New Zealand Government.
The Company's life had been short and it had been mismanaged. It is difficult indeed not to feel that it had been bedevilled by the predominance of idealistic objects over purely commercial motives and might have done better under a directorate composed ibid., p. 199.
entirely of hard-headed business men. It had, however, made it certain that New Zealand would be British and not French and that rapid progress would be made in opening up the country. It had, moreover, on the whole stood for fair treatment of the Maoris and in the view of A. J. Harrop, 'if there had been no New Zealand Company, the Maoris would be far worse off than they are today'.105
The Falkland Islands Company
The objects of the Falkland Islands Company were very limited and it is of interest chiefly because it has prospered and is one of the only two chartered companies which still carry on trade under their own names and charters. Although the Falkland Islands were discovered at least as early as the end of the sixteenth century, it was not until 1764 that they attracted serious attention and became the subject of conflict between the colonial powers. Thereafter,
Spain, France and England all claimed them on one ground or another and when the Argentine achieved her independence of Spain, the Argentine Government considered that it had succeeded to Spanish rights and took possession of the islands.
Britain had never admitted the Spanish claim and was not prepared to recognize that of the Argentine. It is nevertheless possible that no action would have been taken by Britain if the Argentine had not become embroiled in a quarrel with the United States over Argentinian attempts to maintain exclusive fishing rights. In 1831
three American fishing vessels were seized and by way of retaliation an American ship broke up the settlement and her commander declared the Islands to be 'free of all governance'.106
His Majesty's Government took advantage of the resulting vacuum to revive British claims and in 1833 Captain Onslow, R.N., took possession in the name of that Government. He then sailed away 'leaving the islands with no more government than before',107
but with a few settlers or whalers and a number of Indian convicts.
For the next few years nothing was done to form an administration, though Admiralty surveys were continuous and the naval officers in charge of them were appointed as Residents.
In 1841 an Act of Parliament provided for the establishment of a government and the first Governor was appointed to govern a population which five years later numbered only 155 inhabitants
---108 Europeans, 3 coloured persons and 14 aliens.108
The early years of the Colony were by no means happy and there was constant friction between the handful of settlers and the Colonial Land and Emigration Commissioners who were responsible for the sale of lands in the Islands.
In 1846 Samuel Fisher Lafone, a British subject living in Montevideo, bought from the Crown a grant of land in the south of the East Falkland Island and named it Lafonia. Along with the land he acquired the absolute ownership of all wild cattle and sheep in East Falkland. The cattle had been introduced by the French in 1764
and had increased in number to an estimated total of 40,000.^35^
Lafone soon fell into financial difficulties and looked for a purchaser of his rights. A group of business men in England formed a trading company to purchase Lafone's assets which they estimated at £212,000. A preliminary meeting was held in April 1851, at which the objects of the Falkland Islands Company were defined to be the breeding of sheep and cattle and the provision of ancillary services, such as the supply of stores and the organization of postal communications. A few months later the Company was formally incorporated with an initial capital of £100,000 and with Lafone as a substantial shareholder. In 1852 it was granted a royal charter, but it was only a trading company and did not assume the responsibilities of government. The Colonial Office and its governors continued to administer the Islands, as its successor, the Foreign and Commonwealth Office, still does.
As with so many overseas companies, the early years were full of disappointments and in 1853 there was some doubt as to whether the Company could continue or not. It was soon realized that sheep would be more profitable than cattle and an expert was brought from New Zealand to give technical advice. This paid dividends and the Company went from strength to strength. It acquired the interests of competitors and it diversified its activities to include banking and storekeeping. The faith of its founders was justified and the efficiency of its early management is evident from its growth and prosperity.^30^
^M^ Rudolph Robert, The Chartered Companies, p. 168.
^30^ These paragraphs are based on the account in Robert's admirable book on the Chartered Companies.
Chapter 15
The Royal Niger Company
For nearly a century after the dissolution of the Royal African Company in 1752, no large scale British organization carried on trade in the Bights of Benin and Biafra. The Company of Merchants Trading Into Africa was not concerned with trade but with the maintenance of nine forts on the Guinea coast.^1^ None of these forts was in the Bights, for the Royal African Company had not established shore stations in that area, but had traded from ships moored in the lagoons and creeks. This did not mean that Britain now ceased to take interest in Nigeria.^2^ Three factors kept that interest alive. First the educated English public was spellbound by the accounts of the exploration of the Niger from the time of Mungo Park onwards.^3^ Secondly, after 1807 the determination of the British Government to suppress the slave trade directed attention to Nigeria, which was a focal point of that trade. Thirdly, there were a few British individuals who continued to trade along the Nigerian coast.
It might have been thought that the abolition of the slave trade in
1807 would have put an end to their activities, but about that time there began to be a considerable demand in England for palm oil, which Nigeria was well able to supply. The trade in that commodity and in ivory grew rapidly and a number of Liverpool merchants took a hand in it. As in earlier days the trade was carried on from ships which moved from place to place along the coast, where English manufactured goods were bartered for palm oil and other commodities brought from inland by African middlemen.
This trade at arm's length had its limitations and when in 1830
the Lander brothers discovered one of the mouths of the Niger,
^1^ Supra, ch. IV.
' The name Nigeria came into use in 1900.
* His first voyage was in 1795, the possibility of direct inland trade naturally suggested itself. A base of some kind was required and Fernando Po---which the Spanish claimed but never effectively occupied and which had become the headquarters of the British anti-slavery squadron in 1828---was suitable for the purpose. In 1832 a Liverpool engineer, Macgregor Laird, built the first ocean-going iron steamer, the Alburkah, and built or acquired another steamer, the Quorra, for the purpose of trade up the Niger. Under his leadership, the two ships, carrying fortyeight Europeans and a number of Africans, reached the Niger in
1832 and after exploring the delta, steamed up the River as far as Lokoja, the confluence of that river with the Benue. In the following year, Laird took another expedition up the Niger and went by boat some way up the Benue. He was detained by a local chief and his story of the method by which he obtained his release is amusing?
Everything being ready, I fired my pistol, and up flew four beautiful rockets, the discharge of which was immediately followed by the blaze of six blue lights, throwing a ghastly glare over the whole scene. The effect was electric, the natives fled in all directions; and the king, throwing himself on the ground, and placing one of my feet on his head, entreated me to preserve him from harm, and inform him what was the decision of the fates. . . I then took from my pocket a little compass, and explained that if the needle pointed towards me when placed on the ground I was to go, if towards him I was to stay.
The needle did what was expected of it and Laird and his companions returned to Fernando Po. Laird was now ill and returned home, but in 1834 two of his associates---Dr. Oldfield and Lander---took another expedition up the river. The party was attacked and Lander and several others were killed. By this time sickness had taken a heavy toll and of the forty-eight Europeans in the original party, only nine were still alive. The venture was now perforce abandoned. Much useful topographical information had been obtained, but no progress had been made in establishing trade and the failure discouraged other businessmen from making further attempts for more than a decade. It did not, however, deter John Beecroft, who had been superintendent of the anti-slavery base in Fernando Po and had remained unofficially in charge after the disbandment of that squadron in 1834, from making exploratory voyages up the Niger in 1835109 110
In 1841, an expedition on a much larger scale, consisting of
148 Europeans and 133 Africans in three naval ships, was organized and financed by the British Government. Its objects were to open up the country, to interest local inhabitants in direct trade with the British and to establish a model fort near Lokoja. The mortality in the expedition was appalling, the model fort had to be abandoned almost as soon as it was started and the expedition was a complete failure.
At this stage, Her Majesty's Government had no thought of acquiring territory, and in spite of its anxiety to suppress slavery was anxious to avoid entanglements. Nevertheless, Beecroft was appointed British Consul for Benin and Biafra---a difficult charge since he had very little legal authority and no force behind him.
This did not prevent him from making treaties with a number of chiefs in what had come to be known as the Oil Rivers. Those treaties conveyed no sovereignty rights, but dealt mainly with the abolition of slavery.
The possibilities of trade were now beginning to occupy a place in British thoughts almost as important as the abolition of slavery.
By 1850, business with the coastal areas had increased to such an extent that the total quantity of registered tonnage employed in the trade, to and from the West Coast of Africa, amounted to 40,410
tons outwards and 42,057 tons inwards, and the quantities of tonnage actually carried may fairly be reckoned at one-third more.^0^
The need for regular sea communication between England and Nigeria had become apparent and in 1852, Macgregor Laird negotiated with Her Majesty's Government a ten-year contract for the monthly conveyance of mail to West Africa, with an annual subsidy commencing at £23,250 and diminishing at the rate of £500 per year.' A Company, with Sir John Campbell as its Chairman and Laird as its Managing Director, was formed for this purpose and five iron screw steamships, with a total carrying capacity of 3,650
tons and 'excellent accommodation for first and second class passengers' were constructed. No difficulty was found in raising capital, and 1,128 shares of £20 each were issued. The first voyage was that of the Forerunner of 400 tons, which departed on 24 September
1852, followed by the Faith which on the homeward run called at Fernando Po, Cape Coast Castle, Sierra Leone, Bathurst, Teneriffe and Madeira. There is a familiar modern ring about the statement that in the Company's second year costs had increased by 35 per
• African Steamship Company papers, quoted in an article by Dr. P. N.
Davies in Liverpool and Merseyside.
\' Liverpool and Merseyside, p. 235.
cent, but the Company progressed and continued to provide the only commercial link by ocean between Britain and West Africa until the British and Africa Steam Navigation Company entered into competition with it in 1869.111 112
English merchants now began to feel the need of some kind of legal framework on the coast and in 1854 they established at Bonny a Court of Equity, the membership of which included both European and African traders.
All disputes were brought before this court. . . and with the consent of the King, fines were levied on defaulters. If anyone refuses to submit to the decision of the court, or ignores its jurisdiction, he is tabooed, and no one trades with him. The natives stand much in awe of it, and readily pay their debts when threatened with it.^8^
Before long, similar courts were established elsewhere on the coast and however much the Colonial Office might dislike it, Britain was being drawn slowly but inexorably into entanglement with the affairs of Nigeria.
Laird never ceased to press on Her Majesty's Government the importance of developing Nigeria and in 1853, he built and equipped the Pleiad for the exploration of the Niger under the auspices of the British Government. Beecroft was to have commanded the expedition, but he died before the Pleiad reached the mouths of the Niger and the command was given to Dr. Baikie, a naturalist. Baikie made a useful survey of part of the Niger and the Benue and did a little trading, but the importance of the expedition arises from the fact that thanks to the use of quinine and of general medical care, all its members survived.113 114 In 1857 Laird entered into a contract with the British Government to place and keep on the Niger River a fully-found iron steamer to convey up and down the river and to and from Fernando Po as passengers whom the Government might name, he to receive in return an annual subsidy, which was to commence at £8,000 and to be reduced by £500 per annum thereafter.^11^
In fulfilment of this contract, early in 1857 he sent out the Dayspring
well stocked with trade goods, under the command of Baikie, a primary object in Laird's mind being the establishment of trading stations on the banks of the Niger. The Dayspring was wrecked, but in 1858 Laird equipped two new steamers and sought unsuccessfully to form a company to back his enterprise. Hostility was encountered from the natives by the crew of one of Laird's vessels, the gunboat sent to protect them arrived too late, and the trading stations just established had to be abandoned. Laird died in January
1861, having lost money on the enterprise and his Executors terminated the contract. Baikie, who had held a vague official post at Lokoja for some years, stayed on until 1864 and established a model settlement near Lokoja.
From 1861, HMG sent a gunboat up the Niger annually to protect those British traders who remained in spite of the continuing hostility of some of the tribes. In 1866 a British Consulate was established at Lokoja and one J. L. McLeod was appointed to the post, but the Consulate suffered frequent attacks and at one stage was blockaded for six months. In 1869 it was withdrawn. In 1872
the Consul for Benin and Biafra was given 'certain judicial and administrative powers' and the Courts of Equity were legalized and regulated.^12^
The determination of the British Government to suppress the slave trade led, in 1851, to friction with Ko.soko, the King of Lagos.
When he attacked the British settlement at Badagri, he was driven out and his successor, Akitoya, entered into a treaty for the abolition of the slave trade. He was succeeded by Docemo, who geniunely sought to observe the treaty, but opposition from his subjects was too strong and it became clear that nothing except direct British control would achieve the desired result. In August 1861, Docemo was therefore persuaded to cede his kingdom to Britain and was given a very adequate pension.
While these transactions were taking place, British trade on the Niger had grown rapidly and it was reported by the Consul in 1871
that there were sixty large British trading establishments in the Delta, owned by twenty British firms, employing over two hundred Englishmen and two thousand Africans.^12^ They were operating in an uncivilized and sometimes hostile country and were not backed by the authority of any civilized government---and withal, French and German rivals were beginning to appear. Clearly some consolidation of British interests was required and by good fortune a man supremely fitted to achieve it arrived in Nigeria in 1877. In that year, George Goldie Taubman115 116 visited Nigeria partly because of his interest in African exploration and partly on account of the affairs of a Company in Nigeria in which he was a shareholder. He succeeded in persuading a number of leading firms of the necessity for amalgamation and, in 1879, the West African Company, the Central African Company, Miller Brothers and James Pinnock, joined to form the United African Company. In 1881 the Company applied for a Charter, but its capital was considered too small and moreover there were complications on account of the presence of a French firm in the same locality.- The application was rejected. To overcome these difficulties, Goldie reconstituted the Company as the National African Company, with a capital of £1 million, and brought out the Compagnie Frangaise de 1'Afrique Equatoriale.^18^
German rivalry now presented another complication, but in
1885 the Berlin Conference recognized the Lower Niger as being within the British sphere of influence. The British Government then declared a Protectorate over the Niger Districts, which were defined as including the line of coast between the British Protectorate of Lagos and the right or western bank of the mouth of the Rio del Rey; and also the territories on both banks of the Niger, from its confluence with the River Benue at Lokoja to the sea, as well as the territories on both banks of the River Benue, from the confluence up to and including Ibi.^10^
Up to this time the Company had possessed no legal authority and was, in theory, merely a trading organization. In practice it had exercised a good deal of control over the territories on both banks of the Niger and had concluded treaties with a considerable number of chiefs, including the important rulers of Sokoto and Gando. The treaties varied greatly in their content. Some amounted to a cession of authority; others merely precluded the native ruler from entering into relations with any foreign power and gave the Company the right to trade and mine in his territory. In some cases the treaties were signed by the British Consul in the interests of technical correctness, but very often the Consul merely acted as a witness.117 118 119
In 1886 the National African Company was granted a charter which gave legal sanction to the existing facts. The Company was authorized to govern the territories of the chiefs who had ceded their authority by treaty as well as territories obtained by similar cessions in future; to levy customs duties, the proceeds of which were to be used solely for the purposes of administration; and to exercise jurisdiction over British subjects and foreigners alike in its territories. It was required to tolerate all religions, 'except in so far as may be necessary in the interests of humanity\', and to discourage and as far as may be practicable to abolish any system of domestic servitude existing amongst the native inhabitants. No trade monopoly was granted and indeed there was to be no differential treatment of the subjects of any power as to settlement or access to markets.^18^ The name of the Company was changed almost at once to the Royal Niger Company.
The Niger Protectorate which had been proclaimed in 1885 now comprised the Oil Rivers Protectorate and the territories of the Royal Niger Company, so that if we include Lagos Colony, there were three separate British administrations in Nigeria. Many of the treaties made by the Royal Niger Company either before or after the grant of the charter, related to areas outside the Niger Protectorate, and in 1887 that Protectorate was therefore redefined to include.
all territories in the basin of the Niger and its affluents, which are or may be for the time being, subjects of the Government of the National African Company (now called the Royal Niger Company) in accordance with the provisions of the charter of the said Company.^19^
The organization of administration in the Company's territories was taken in hand as soon as the charter was granted. Headquarters was fixed at Asaba, on the Niger opposite Onitsha, though the main base of the Company's trading operations was in the Delta near Warri. A High Court was established at headquarters, with subordinate courts in the interior; the territory was divided into districts under Agents and Assistants; a police force and an armed Hausa constabulary were raised under European officers; and a Customs service was organized, the proceeds of import and export duties being used to defray the costs of administration. Soon after the Company was chartered, Customs revenue amounted to £88,000. It rose to
£90,000, but nearly all of this was paid by the Royal Niger Company on its own imports and exports.^20^ It must be emphasized that the Company's profits arose solely from its commercial operations and not from territorial revenues.
The London organization of the Company followed the normal pattern and had as its Chairman Lord Abedare, but the driving force in Africa was Goldie, the Deputy Chairman---a man who combined in an unusual way the qualities of the visionary and the
" Papers relating to the surrender of the Charter of the Royal Niger Company 1899.
" The Charter is reproduced in Parliamentary Papers, C 9372,
^10^ Mockler-Ferryman, p. 264, man of action. Those qualities were exercised to the full in the Delta, where many of the tribes keenly resented the presence of the Company. Its activities not only undermined their position as middlemen but also threatened their way of life, since the Company was determined to put an end to slavery and to suppress the barbarous customs of cannibalism and human sacrifice. On many occasions the Delta tribes attacked the Company's stations or sought to cut off its trade, but bit by bit, either by peaceful treaty or by force, the Company established its ascendancy and within a few years the Delta was fully under its control. Thereafter, one episode threatened to reverse this process. For reasons which are not clear, the town of Brass was not included in the Company's area and as the Brass men were thus foreigners, they found a Customs barrier interposed between them and their traditional markets. This matter had been the subject of an enquiry by a Special Commissioner sent out by the Home Government in 1889, but he had come to the conclusion that the Company was correctly interpreting its Charter. Nevertheless, the Brass men had a grievance and in 1895 they attacked the Company's trading headquarters at Akassa in considerable force.
They retired on the appearance of a steamer which they mistook for a warship,^21^ but in the meantime they had done great damage to the Company's property and had killed or captured a number of the Company's African servants.
When the main work of pacification of the Delta was accomplished, the Company turned its attention to the Hausa and Fulah areas, west and north of the Niger. Some time previously a treaty had been signed with the Emir of Nupe, whose state was situated in what are now the Kwarra and North Western States. In spite of the treaty he had interfered with the Company's trade and had encouraged slave raiding, even on villages within the Company's jurisdiction. An expedition was sent against Nupe in 1897 and a small British-officered force defeated a vastly superior Fulah army and took the capital, Bidar. Further resistance was impossible and the Emir surrendered. The northern half of Nupe was included in the Company's area, while in respect of the southern half, the Emir acknowledged the Company's protection. Here as elsewhere, slavery was abolished in the territories which the Company acquired. A
similar expedition against Ilorin----a State adjacent to Nupe---
followed immediately after the Nupe campaign and there too the ruler had to acknowledge the Company as suzerain. Before the end of the century the authority or influence of the Company had spread over a vast area of modern Nigeria.
While this process of consolidation was going on, the Company Bums, p. 171.
had to keep a watchful eye on attempted encroachments by the Germans and the French, who were now greatly interested in this part of Africa. The indifference of the British Government to possibilities of expansion had allowed Germany to forestall Britain in Togoland and the Cameroons in 1884 and 1885, before the Company had any legal authority in these matters. In 1887 a German merchant named Hoenigsberg, apparently an emissary of the German Colonial Society, visited Nigeria with the frank intention of making trouble for the Company and 'bursting up the Charter'. He began by infringing the Customs regulations and went on to intrigue against the Company in Nupe. He was promptly deported and a little later Bismark's nephew, von Puttkamer, was sent to Nigeria to claim damages. Nevertheless, relations between Britain and Germany in West Africa improved and agreements as to the boundaries between Nigeria and the adjoining German territories of Togoland and the Cameroons were confirmed by the Heligoland Agreement in 1890.
No serious difficulty arose thereafter.
The claims of the French proved to be more intractable. They were too complicated to be discussed in detail here, but the crux of the matter was well expressed by a writer at the end of the last century. 'The West Coast of Africa at the present day resembles a huge estate that has been split up into building lots, with desirable frontages on to the Atlantic, and boundary fences running back on either side of each lot, but in many cases having no fence at the end of the back garden, and it is these back gardens (or hinterlands)
and their limits that have become the cause of a certain amount of trouble.'^22^ At the Berlin Conference Britain had proposed that in order to confer territorial rights a treaty must be followed by effective occupation, but this was rejected at the instance of France as inapplicable to interior regions. There was thus endless scope for argument as to how far the hinterland of Nigeria extended. A joint Anglo-French declaration in 1890 defined the boundary between the British and French spheres of influence in a way that included in the British sphere 'all that fairly belongs to the Kingdom of Sokoto'.
This led to much argument as to what that kingdom covered, but of greater importance was the dispute regarding Borgu, on the western border of Nigeria. The Company had made a treaty with the Chief concerned, but the French alleged that he was only a vassal of the Chief of Nikki and had no authority to make such a treaty.
Confirmation from the ruler of Nikki thus became important and in 1894 there ensued a race to obtain it. Captain Lugard was sent out on behalf of the Company, while Captain De Coeur rushed towards Nikki in the French interest. Lugard won and obtained the Mockler-Ferryman, p. 411.
required confirmation. There were other episodes of this character, but in 1898 a convention between England and France settled the outstanding matters and Britain was left in possession of Nigeria.
All these political affairs made great demands on Goldie's time and energy, but it was not forgotten that the main object of the Company was trade. Commercial development was in fact, remarkable. By the end of the century the Company had about forty trading stations, known as factories, on the banks of the Niger and Benue, all linked to a main depot at Akassa, at the mouth of the Niger, by a service of steamers and launches. Trade was by barter, though for convenience the cowrie, valued at Is. 3d., was used as a unit of account. A contemporary writer tells us that the native was most capricious in his taste 'and whereas at one time his heart will be set on a particular pattern cloth, at others he will take nothing but salt, or perhaps cowries, so that it is by no means an easy matter for the agent to know with what article to stock his store'.^23^ This is, of course, a problem for all traders at all times, but the difficulty was very real when English manufactured goods had to be ordered many months before they were required. Such goods, together with salt and tobacco, were the main commodities sold by the Company, which bought in return mainly palm oil, ivory, hides, tin and shea butter. The only arms imported by the Company were flint-locks or percussion guns, for the Company adhered strictly to the Brussels Act prohibiting the supply of war materials. Spirits were also imported, but soon after the Charter was granted the Company imposed a duty of 2s. per gallon with the deliberate object of restrainconsumption and in 1892 it prohibited the import of spirits into the countries north of Lokaja.
The Company made steady, but not large profits. Of its authorized capital of £1,000,000, the paid up amount in 1887 was
£443,500 and it remained at that figure until 1893, when a fresh issue brought it up to £493,680 and at the same time debentures for £7,500 were issued. Profits, after deduction of depreciation and substantial credits to general reserves, averaged £33,567 and if we omit two exceptional years, fluctuated between £28,000 and £49,000
per annum. The Company followed a modest dividend policy and after the first two years paid a fairly steady 6 per cent which fell to
5 per cent in 1893 and 3| per cent in 1895, and rose to 9 per cent in 1897. As a result of this careful policy, the financial position at the end of the Company's Charter was sound, reserves in 1898
amounting to nearly 23 per cent of its paid up capital.^21^
^23^ Mockler-Ferryman, p. 276.
^11^ Parliamentary Papers, C 9372. Profit and loss accounts and balance sheets from 1887 to 1898.
In spite of the Company's achievements---or perhaps because of them---it had many enemies both in Nigeria and in Liverpool.
Jealousy naturally played its part in this enmity, but there may have been some justification for allegations that, although the Company had in theory no monopoly, it was able by administrative action to make it difficult for others to compete with it. Such allegations had, indeed, been the subject of an official enquiry in 1889 and although the Company was then found not to have exceeded its legal rights, the complaints gathered strength from year to year.
Moreover, the trouble with the Brassmen had shewed the Company in a somewhat unfortunate light to the British public. In 1899 Her Majesty's Government decided to revoke the Company's charter and their reasons were thus set out in a letter from the Foreign Office to the Treasury.^25^
The Marquess of Salisbury has for some time past had under consideration the question of approaching the Niger Company with a view to relieving them of their rights and functions of administration on reasonable terms. His Lordship has arrived at the opinion that it is desirable on grounds of national policy that these rights and functions should be taken over by Her Majesty's Government now that the ratifications of the Anglo-
French Convention of June 14th, 1898, have been exchanged, and that the frontiers of the two countries have been clearly established in the neighbourhood of the territories administered by the Company. The state of affairs created by this Convention makes it incumbent on Her Majesty's Government to maintain an immediate control over the frontier and fiscal policy of British Nigeria such as cannot be exercised so long as that policy is dictated and executed by a Company which combines commercial profit with administrative responsibilities. The possibility of the early claim by the French Government to profit by the advantages in the Lower Niger which are secured to them by the Convention makes it essential that an Imperial Authority should be on the spot to control the development of the policy which actuated Her Majesty's Government in granting these advantages, and to prevent the difficulties which would be sure to arise were the Company's officials alone to represent British interests.
There are, moreover, other cogent reasons for the step now contemplated. The West African Frontier Force, now under Imperial officers, calls for direct Imperial control; the situation created towards other firms by the commercial position of the Company, which, although strictly within the rights devolving
^15^ Parliamentary Papers, C 9372.
upon it by Charter, has succeeded in establishing a practical monopoly of trade; the manner in which commercial monopoly presses on the native traders, as exemplified by the rising in Brass, which called for the mission of inquiry entrusted to Sir John Kirk in 1895, are some of the arguments which have influenced his Lordship.
The Company was obviously entitled to compensation and indeed it was observed in a Treasury Minute that the Company was entitled to full recognition of the position which it had created for itself and the rights which it had acquired in the territories covered by the Charter. The government therefore agreed to pay the Company a sum of £565,000, made up of £150,000 as compensation, £300,000 in respect of sums spent by the Company for the development and expansion of the Niger territories in excess of the revenue from Customs duties and the like, and £115,000 for stores taken over from the Company. The government also took over the public debt of the Niger territories which amounted to
£250,000. It was also agreed that for a period of ninety-nine years the Company would enjoy half the receipts from the royalties which Her Majesty's Government intended to impose on the winning of minerals. The settlement must, on the whole, be regarded as fair to both parties.
The Charter was revoked as from 1 January 1900 and the Company then became an ordinary Joint Stock Trading Company.
The Company's Chartered life had been short, but it had served Britain and Nigeria well. It had added vast territories to the British Empire---and whatever one's views on the rights and wrongs of empire, one must admit that the Company had established peace and justice, had greatly curtailed the slave trade and had gone a long way towards the suppression of the barbarous practice of human sacrifice. It had, in fact, laid the foundation on which, much later, modern Nigeria would be built.
Chapter 16
The British North Borneo Company
The British North Borneo Company was remarkable amongst Chartered Companies not only for its survival until the Second World War, but also for the fact that it was at no stage of its life directly concerned with trade. It was purely an administrative company, which governed a large area of Borneo on the strength of its Charter and of grants from the Sultans of Brunei and Sulu.
It depended mainly for its profits on any excess of territorial revenues over expenditure, though in its later stages it did have an interest in several subsidiary companies.
In the sixteenth century, the Sultan of Brunei had ruled most of the northern half of Borneo, but the power of Brunei had declined and in the nineteenth century it lay open to encroachment by Western powers. In 1761 the East India Company had entered into a treaty of friendship and commerce with the Sultan of Sulu, but this was not followed up immediately and the next move was made by Spain, which made a treaty with Sulu in 1836.120 Three years later, James Brooke, son of a servant of the East India Company,^2^
visited Borneo and in 1840 he assisted the Sultan of Brunei in suppressing a rebellion. In 1841, the Sultan conferred on him the Government of Sarawak, where he soon established his authority.
Brooke's action had been that of an individual not prompted by Her Majesty's Government, but in spite of its non-interventionist policy, that Government was on the look-out for a site for a naval station in the China Sea. Penang and Singapore offered protection through the Malacca Straits to China bound ships, but once the Straits had been passed ships had to traverse the pirate infested China Sea,^3^ An intermediate station was badly needed. In 1844,
Captain Bethune, R.N., was sent to examine possibilities and as a result of his enquiries, in 1846 the Sultan of Brunei was persuaded to cede the island of Labuan---on which coal had been found---to the British Government.^4^ In 1847, Her Majesty's Government followed this up by making a treaty of friendship with the Sultan and a convention of commerce was also concluded with the Sultan of Sulu in 1849?
The United States now became interested in this area and in
1850 negotiated a most favoured nation treaty with the Sultan of Brunei. Fifteen years later, a go-ahead adventurer, Charles Lee Moses, was appointed as American Consul in Brunei. Almost at once he obtained from the Sultan the cession for ten years of a large tract to the north-west of Sarawak, which he sold without delay to two American merchants of Hong Kong, Joseph W. Torrey and Thomas B. Harris. In' collaboration with two Chinese, they formed the American Trading Company. The Sultan conferred extensive powers on its President Torrey, but the settlement founded by the Company at the mouth of the Kimanis River was a complete failure and was abandoned within a few months.
In 1875 Baron Gustavus de Overbeck, the Austro-Hungarian Consul in Hong Kong, agreed to purchase the rights of the American Company, provided that the lease from the Sultan was renewed within nine months. The lease was not renewed and the arrangement fell through. Overbeck, however, did not give up and in 1877 he secured the financial backing of Alfred Dent, of the business house of Dent Brothers. Dent put up £10,000, assumed control of the enterprise and sent Overbeck to Borneo. In December 1877, in conjunction with Torrey, Overbeck obtained three grants of territory from the Sultan of Brunei for annual payments amounting to
\$12,000? Another grant was obtained from the Pangeran Tumangon, who apparently exercised independent jurisdiction in the provinces of Kimanis and Benoni on the north-west coast. The grantees' chief representative was appointed supreme ruler of the territories granted, with the title of Maharaja of Sabah and Raja of Gaya and Sandakan, and was authorized to coin money, to create an army and navy, to levy customs duties, to exercise the power of life and death and to
* K. Tregonning, Under Charter Company Rule, p. 4.
^4^ Cambridge History of the British Empire, II, p. 608.
^0^ Papers, Appendices 3 and 4.
^e^ The grants are specified in the Company's Charter, which is printed at pp. 192---9 of Papers.
have absolute rights over the soil and its products, mineral, vegetable or animal.
It now appeared, that the Sultan of Sulu also had rights in some of the ceded territory and in January 1878, Overbeck, together with William Hodd Treacher, the Consul General in Brunei, obtained the necessary grant from the Sultan in return for an annual payment of \$5,000.^7^ Each of the two Sultans then deputed a high officer to accompany the representatives of the grantees in a voyage round the coast, 'to inform the chiefs and people of the grant and to enjoin on them obedience to the new authorities'.^8^
Dent and his associates then formed a provisional association to which they transferred their rights. It was intended to be an intermediary between the grantees and the chartered company which it was hoped to form. In March 1879 a meeting presided over by Sir Rutherford Alcock, K.C.B., was called in the Westminster Palace Hotel to secure support for the scheme and in December 1878, Alfred Dent applied for the grant of a charter for the incorporation and regulation of the proposed British North Borneo Company." The Colonial Office was perhaps not very enthusiastic about the proposal, but in any case the fact that the Spanish had put in somewhat unrealistic claims with regard to Borneo made it necessary to delay a decision. The Spanish had, indeed, tried to compel the Sultan of Sulu to rescind his grant to the Company and in 1880 they had attempted to hoist flags in Borneo. Dent continued to press Her Majesty's Government for early orders, in view of the difficulty of organizing any regular administration or permanent system of revenue until a decision as to the future was taken. In the end, in spite of his innate dislike of all forms of colonial enterprise, Gladstone sanctioned the Company's proposal. There is some mystery as to how this decision slipped through, since Gladstone declared afterwards that he had no recollection of seeing the papers. Nevertheless, in November 1881 the Charter was granted and the assets of the provisional Association were transferred to the new Company which had Alcock as its Chairman.
The main conditions of the Charter were---that the Company should remain British in character; that disputes with the Sultan of Brunei or Sulu should be settled by the Secretary of State, who would also have power to give directions to the Company regarding its dealings with foreign powers and with the people of Borneo; and that the appointment of the Company's principal representative should be approved by the Secretary of State. The Company was
\' Vide recital in the Charter in Papers, pp. 192-9.
^8^ Report of a meeting at Westminster Palace Hotel on 26 March 1879, for the discussion of affairs in Borneo. F.C.O. Library, HD 2900 15 B.
"Papers, pp. 192-9.
directed to discourage slavery and, as far as might be practicable, to abolish it by degrees; to have regard to the customs and laws of the natives, especially in the matter of the holding of land; and not to interfere with the religion of any class or tribe. The Company was empowered to acquire by purchase or cession or other lawful means, interests or powers in other territories; but it was not to grant or set up any monopoly. Trade was to be free, subject to the levy of customs duties. No time limit was fixed for the operation of the Charter.
The authorized capital of the Company comprised 65,000 shares of £20 each, of which 4,500 were to be issued to the members of the Provisional Association as part of the purchase price for their rights. 10,000 fully paid up shares and 50,500 half-called up shares were to be offered to the public. By October 1882, 5,104 fully-paid and 23,630 half-paid shares had been allotted, representing in all, capital of £574,680, though only £338,300 had been received in cash by the Company. There were at this time 600 shareholders.
The capital remained at this level until 1885, when a further call of £1 on the half-paid up shares was made.
At the first half-yearly meeting of shareholders in October 1882, the Directors expressed the unrealistic view that they had 'every reason to believe that they had sufficient funds at their disposal to enable them to develop the property to a position where it would be self-supporting, besides giving a fair return for the capital invested'. They were on sounder ground when they warned the shareholders that until considerable development had taken place, no dividend could be expected. In this meeting the Directors laid down the policy which was in fact to govern the Company throughout its life. 'We are not necessarily going into planting on our own account. . . we had not as yet thought that desirable; what we desire is to encourage traders and planters to come.'^10^
The Company obtained five good harbours and 500 miles of sea front, together with a soil which was reported to be fertile and its first care was to lay down regulations for the settlement of land.
For a grant of more than 100 acres the grantees could either pay
\$ 1 per acre and be free of quit rent, or could pay 50 cents together with an annual quit rent of 10 cents per acre. The Directors attached importance to the encouragment of Chinese emigration and almost at once they sent out Sir Walter Medhurst to pursue this aim.
Treacher, who became the Company's first Governor, established the normal form of district administration and introduced Indian Criminal Law and Procedure. He overstrained the Company's
^10^ Minutes of Shareholders' Meeting, October 1882. All Minutes and Directors' Reports of this Company arc in the Foreign and Commonwealth Office Library, HD 2900 15 B.
financial resources and within the first few months used up one-third of the Company's working capital---which is not surprising when one reads that forty Europeans were employed. Dent soon had to go out to insist on economy. Treacher must, however, be given credit for the rapid development both of the administration and of the economy. By the time he left in 1887, the timber trade was developing, and a number of tobacco companies had commenced operations and had shewn that good quality tobacco could be produced in British North Borneo. The Consul-General remarked on the growth in the import of cloth which was due to the increasing taste of natives 'for the manners, customs and costume of more civilized people' instead of the bark 'chawats' which most of them had worn previously. The Singapore-Chinese had competed vigorously for building plots in Gaya Bay and elsewhere and an important land concession had been taken up by Australians. Imports into Sandakan alone had risen from \$18,000 in 1878 to \$527,690 in 1887, while corresponding figures for exports were \$25,000 in 1878 and \$271,350
in 1887.^11^ Regular steamer communication had been established by the firm of Mansfield & Co., between Hong Kong, Singapore, Kudat and Sandakan.
Nevertheless, Borneo expenditure still exceeded revenue and at the shareholders' meeting in December 1885, a shareholder lamented that he saw no prospect of a return on his money, and asked why Her Majesty's Government 'should not take the Company off our hands'. Another speaker commented that this would be selling at the bottom of the market. At this stage, Directors were optimistic, but ordinary shareholders were far from happy. Towards the end of Treacher's Governorship, the Chinese Emperor sent a commission to Borneo which expressed itself as well satisfied with the condition of the Chinese in British North Borneo.^12^
During this period Rajah Brooke and the Company vied with each other in attempts to expand their territories at the expense of Brunei. In spite of Brooke's opposition, the Company acquired by purchase a fertile tract of land at the foot of Kinabalu and a still more useful area, then known as the Padas-Klias Peninsula but afterwards renamed Province Dent. Brunei was in fact rapidly being swallowed up by the two competitors and it was chiefly in order to frustrate Brooke's ambitions in this respect that the Company asked Her Majesty's Government to declare a Protectorate over all three territories. A Protectorate was in fact declared over the British North Borneo Company's territory on 12 May 1888, in terms which made it clear that British North Borneo would continue to be
^u^ Diplomatic and Consular Reports on Trade, Annual Series, No. 493,
Borneo.
^13^ Diplomatic Reports No. 420 for 1887. governed by the Company as an independent State and that Her Majesty's Government would have no right to interfere with its internal administration. Her Majesty's Government would have the right to appoint Consular officers, and British subjects, commerce and shipping would enjoy the same rights and privileges as those of the most favoured nation as well as any other rights enjoyed by subjects of the British North Borneo Company.^13^ A few months later a Protectorate was established over Sarawak and Brunei.
Shortly after Treacher's departure, serious trouble arose on the border of Province Dent.
The Pangeran Shabandar's men began cattle stealing over the border and bad characters of all kinds found refuge in his territory . . . raids soon became of a more serious character; the natives who lived near the border, and who naturally preferred the Company's government, being attacked, houses burnt, men murdered and women carried off in the usual style adopted by a Brunei Pangeran when dealing with his subjects.^14^
The Pangeran refused to punish the miscreants and defied the Sultan, who supported the Company's authority. Daly, the Acting Resident on the West Coast, advanced into the Pangeran's territory, but it was not until the following year, after a good deal of fighting, that the situation was brought under control.
The next five years, during which C. V. Creagh was the Company's Governor, were characterized by the steady growth of trade, but in 1891 progress was checked by the McKinley Tariff, which imposed a heavy duty on the import of tobacco into the United States, and caused a recession in the industry throughout the East.
Two Borneo Dutch companies went into liquidation and three smaller concerns abandoned cultivation. In the absence of banks, the Company had to come to the rescue by the provision of finance.
It gave advances to a number of estates and even took shares in a tobacco company and in two development companies, but the recession soon passed and the industry had weathered the storm.^ls^
Tobacco at this time provided 50 per cent by value of all exports, followed at a long interval by rattans, edible birds nests and gutta percha.
Expenditure continued to exceed earnings, though this was sometimes concealed by treating the proceeds of land sales as revenue.
However convenient this might be for accounting purposes, this was contrary to the Deed of Settlement executed when the Company
^a^ Despatch from the Marquess of Salisbury to Her Majesty's Minister at the Hague, 1888. C. 5617.
" Diplomatic Report, no. 493 of 1888.
" Directors' Report, 4 July 1893.
was founded. In 1891 the Deed was amended to permit such treatment and it was then possible to pay a dividend of 10s. on paid up shares and 6s. on half-paid-up shares.
In 1890 the Company accepted from Her Majesty's Government the responsibility for the administration of Labuan. This enhanced the Company's prestige, but it also added to its financial burdens.
If the Company had been free to integrate Labuan completely into its own territories and to impose customs duties, all would have been well, but Labuan remained a Crown Colony and Her Majesty's Government insisted that it must continue to be a free port. This meant that in the early stages the Company had practically no additional revenue from which to meet the cost of administration, but before long the development of the coal mining industry by another British Company led to an increase of Labuan revenues.^10^
In the early nineties a new atmosphere appeared in the Company's half-yearly meetings. Until then, criticism of the Directors had been mild and had been made more in sorrow than in anger, but in July 1892, W. C. Cowie, who had been successful as a trader in the China Sea and as owner of a coal mine in Brunei, attacked the Directors for not developing communications. He alleged that by not building a road, they had in effect compelled plantation companies to scatter their estates all over British North Borneo, separated from one another by hundreds of miles---and under these circumstances it was unreasonable to expect the gregarious Chinese to work on the plantations. Why should the Company not make more serious efforts to establish a road and so enable jungle produce to be brought down to the coast for export? Why should the Directors not call up more capital ? There may have been some justification in Cowie's complaint that the Company was too cautious, but as one reads the minutes of the meeting one instinctively turns against Cowie. He was an aggressive, self-assertive type and could never conceive that he might be wrong. Nevertheless, he was supported by some of the more vocal shareholders, who demanded that he should be asked to join the Board and infuse new life into it. For a time the Chairman was able to resist this proposal on the reasonable ground that Cowie had already secured the concession for the construction of a railway in Borneo and his personal interest in this would conflict with his duty as a Director.^1^' In the December meeting he carried the attack further and described the Company as being like Rip Van Winkle---in contrast with the small but progressive, Malay State of Selangor.
The Rajah of Sarawak now offered to buy the Company's interests Tregonning, p. 42.
Minutes, 5 July 1893.
on terms which would have given them a guaranteed one per cent on their capital, together with one-third of any revenue in excess of \$210,000 up to a maximum revenue of \$1 million. The Directors did not initially take a very definite line over this proposal. They thought it possible that, with lais excellent organization in Sarawak,
Brooke could run the North Borneo territories more cheaply than the Company had done, but on the other hand they disliked his proposal that he should be entitled to buy them out at par whenever he liked. A circular was issued to shareholders inviting their opinions, and most of those who replied when the matter was discussed in two meetings opposed the proposals. The Chairman now came out strongly against the proposal. He spoke optimistically of the future of the Company and drew attention to the considerable influx of capital into British North Borneo. 'There is no reason,' he declared, 'why shareholders should part with their shares at the present unduly depressed prices.' One of the Cowie group of shareholders suggested that the Board 'should take a weathercock as a trade mark', but in the end the Rajah's proposal was rejected. Cowie and another newcomer were then elected to the Board. At this meeting it was clear that members had faith in the future of British North Borneo, but had not a great deal of confidence in the Directors.
Cowie, they felt, could supply the necessary dynamism.^18^
Cowie, who became Managing Director in 1894, did indeed provide a galvanic impulse, but caution was not in his mental make-up.
He embarked on ill-advised schemes, he hurried them through without sufficient detailed examination, and he made no adequate provision for their technical and financial supervision. Some of them, such as the Trans-Borneo Railway, ultimately proved of great value to Borneo, but as a result of bad planning they were far more expensive than was necessary.
More capital was badly needed and in 1895 and each of the following years an additional shilling was called up on shares not fully paid. In July 1897 the Directors declared a dividend of 1 per cent for 1896 and a similar amount was paid for 1897. The dividend for 1898 was raised to 2 per cent and an examination of the accounts shews that these payments were justified. Things were, in fact, going fairly well for the Company and the era of regular Borneo deficits had passed. It is true that Consul Keyser wrote a gloomy report at this time. Trade had fallen off, he wrote, because of the difficulties and debts of the Sultan of Brunei and the monthly visits of steamers had been discontinued. The Consul went on to write that except for fishing nobody does any work and all live in poverty.
Hundreds have left to escape seizure of their women and children to sell as slaves. Others are driven from the country by exhorbitant demands of Chinese and native money lenders to whom the collection of taxes had been transferred for cash.^10^
As one reads this report it is difficult not to feel that the Consul was a tired man badly needing his leave.
In 1898 the shares which had been converted in 1895 from
£20 to £1 units, stood at 27s. 6d., but the Chairman did not feel that sufficient confidence had been generated to justify the Company in seeking fresh capital. He was severely criticized for this at a shareholders meeting in December 1898, but events soon justified his caution. Expenditure was growing rapidly and to meet it the Company unwisely imposed a tax on the import of rice, justifying it on the ground that it would encourage local cultivation. This was, indeed, one of the factors which in the closing years of the century led to a serious rising led by one Md. Salleh, in the course of which a number of the Company's west coast stations were burned or looted and much damage was done. In 1897 Cowie paid a brief visit to British North Borneo and took charge of the negotiations with Salleh. It is impossible not to admire Cowie's courage in going alone to meet Salleh and equally one cannot help being moved by Salleh's statement that 'You cannot prevent us from dying for what we consider to be our right.'^20^ Cowie and Salleh arrived at a settlement which transferred to Salleh a valley in which the Company had never exercised any authority, but there seems to have been some equivocation on Cowie's part as to the interpretation of the agreement and there was a recrudescence of the fighting. It seems probable that the over-confident Cowie had exaggerated his ability to bring out a settlement, but in 1899 Salleh was killed and a little later peace was restored. Perhaps as a result of these troubles, in
1899 share prices fell to 15s. 6d.
Cowie made difficulties for himself by his overbearing attitude and an outstanding Colonial Civil Servant, Hugh Clifford (later Sir Hugh) found it impossible to work under Cowie, who did not seem even to want Clifford to give a frank opinion on proposals and prospects. Clifford resigned and was succeeded by E. W. Birch (later Sir Ernest), who effectively abolished slavery, considerably improved local communications and encouraged Chinese immigration. His disclosure of the muddle over the construction of the railway displeased Cowie and in 1904 Birch resigned.^21^ Cowie's attempt to put the blame on Birch for overspending is not convincing.
" Diplomatic Report 2491 of 1899.
^20^ Brief daily record by W. C. Cowie of his recent mission to Borneo---
attached to Minutes, July 1898.
^21^ Tregonning, p. 59.
Apart from these personal clashes, the Company had other causes of anxiety, foremost amongst which was the fall in the value of the local dollar. The Company had issued its own currency since
1883, but it was tied to the Mexican dollar, which was based on silver. In the early days of the Company the dollar had been worth
3s. 9d., but thereafter it fell steadily during the next two decades.
At the beginning of the twentieth century the drop was catastrophic and in the two years 1901 and 1902, the value of the dollar fell by
6d. to Is. 74d.^22^ It was contended that this helped planters and others whose main expenditure was on labour paid in Borneo, but it seriously affected the Company's profit expressed in sterling and led the Chairman at the half-yearly meeting in December 1902 to speak of a financial crisis.^23^
A second cause of anxiety to the shareholders at this time was the consistent failure of the Directors to prevent Borneo expenditure from rising almost as fast as revenue. At a shareholders' meeting in July 1903 the Chairman frankly explained the impossibility of unduly curtailing expenses, since the Company was the sovereign power and could not therefore ignore the constant demands for improvement of all kinds. It was in fact becoming clear---though this was not admitted at the time---that administration divorced from trade was not likely to prove very profitable. It is true that the Company now had several subsidiaries in which it had received shares in return for concessions, but the subsidiaries were in an early stage of development and could not yet contribute significantly to the Company's income. The Company itself was short of capital and a request to His Majesty's Government for a loan of million at interest of
3 per cent was rejected on the ground that the Government would have no financial control. In 1903 the Company, therefore, had to issue fresh bonds involving a heavy recurring charge. To meet these difficulties, in 1904 the Directors undertook a resolute economy drive and at the meeting in July 1905 a shareholder pointed out, with approval, that almost every item of expenditure had been reduced.
In this period the shareholders began to hear rumours that all was not well with the railway under construction. In December
1903 the Chairman drew a distinction between the section from Weston to Fort Birch which the Company itself was constructing and the line from Jesselton to Beaufort which was being constructed under contract, and he admitted that the latter section had suffered
^21^ In 1905 the Borneo dollar was fixed at the par of the Singapore dollar, namely, 2s. 4d.
^33^ Minutes, December 1902.
ffom neglect.^24^ This subject was to loom large in the Company's discussions a little later.
In his report in 1905, the Consul, though taking a less gloomy view than had been expressed by Keyser in 1900, described the state of trade as by no means satisfactory. Only three of the original tobacco companies had survived and he saw no signs of expansion in this industry. He attributed the slackness of general trade partly to the lack of local capital, partly to sluggish economic conditions in South China, and partly to the temporary confusion arising from the Company's action in stabilizing the rupee. Nevertheless, figures of exports and imports were impressive and a useful indicator of progress was the fact that there was now an adequate German steamer service from Singapore to British North Borneo, while a German and a British line were both operating services from Hong Kong.^26^
While all this was happening, Charles Brooke had not abandoned his ambition to acquire the whole of Borneo and during Birch's tenure of office he offered to purchase the sovereignty of what remained of Brunei in return for a pension to the Sultan.
Joseph Chamberlain, who was now Colonial Secretary, was not prepared to see Brunei swallowed up like this and in 1905 he appointed a Resident in Brunei, after which Brooke's proposal was dropped.
The frontiers of Brunei were now stabilized and both Brooke and the Company had to abandon the idea of encroaching further on the Sultan's territory. The Company's administrative area now indeed suffered a contraction, for in 1906 the administration of Labuan was resumed by His Majesty's Government and placed under the authorities of the Straits Settlements.
During the last few years of Cowie's control of the Company, first as Managing Director and then as Chairman, the development of British North Borneo was rapid and impressive. In order to encourage the cultivation of rubber, in 1905 Cowie introduced a scheme under which companies were guaranteed a dividend in the early non-productive years, repayment being made later whenever their dividends exceeded 6 per cent.^20^ On the other hand before the companies were granted concessions they had to guarantee to raise a stipulated minimum capital. The scheme was remarkably successful and by July 1907, five companies with a total capital of £240,000
had planted 2,604 acres of rubber,^27^ and other companies entered the field in the next two or three years. Contrary to the view
^s^* Minutes, December 1903.
^M^ Diplomatic Report, 3719 for 1905.
"Minutes, July 1906.
\" Minutes, July 1907/
expressed by the Consul in 1905, the tobacco industry had also expanded considerably and paid excellent dividends. The quality of the leaf was good and suitable not only for wrapping but also for filling. The timber industry also developed rapidly and in 1910 sawn logs began to be exported to Europe. The Company's biggest disappointment at this stage was with regard to minerals. Great hopes had been expressed of the exploitation of iron and manganese, but the iron ore concessionaires were unable to raise the necessary capital and the manganese mines were not a success.
Revenue increased steadily throughout this period as will be seen from the following table :^28^
| +------+:----------------:+:---------------:+:--------------+:------:+ | Revenue | Expenditure | Surplus | *Div | idend* | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| *per | |||||||||||
| cent* |
+------+------------------+-----------------+---------------+--------+ | | £ s. d\< | £ s. d. | £ s. d. | | +------+------------------+-----------------+---------------+--------+ | 1901 | 66,581 10 11 | 52,384 16 9 | 14,196 14 2 | 2 | +------+------------------+-----------------+---------------+--------+ | 1902 | 76,442 9 4 | 59,041 11 6 | 17,400 17 10 | 2 | +------+------------------+-----------------+---------------+--------+ | 1903 | 84,709 17 0 | 61,989 8 0 | 22,720 9 0 | 2 | +------+------------------+-----------------+---------------+--------+ | 1904 | 98,178 5 6 | 67,838 4 8 | 30,340 0 10 | 2 | +------+------------------+-----------------+---------------+--------+ | 1905 | 113,355 9 2 | 73,748 17 2 | 39,606 12 0 | 3 | +------+------------------+-----------------+---------------+--------+ | 1906 | 140,262 17 10 | 88,227 11 0 | 52,035 6 10 | 3 | +------+------------------+-----------------+---------------+--------+ | 1907 | 145,816 4 6 | 92,907 10 4 | 52,908 14 2 | 4 | +------+------------------+-----------------+---------------+--------+
By 1909 revenue had increased still further to £243,187, but nearly
£80,000 of the increase over the previous year was the result of sales of land.
The Directors' earlier feeling that a public issue of equity capital would not be successful until the Company had become more prosperous was justified, when in 1909 649,259 shares were offered to the public. They were not taken up and it was then arranged to place them privately and 820,500 shares were issued. In
1910 the Company's issued capital amounted to 1,840,000 £1 shares.
60,000 shares were still under option and 100,000 were reserved.
From time to time shareholders were anxious to know what their shares represented on the ground and at the half-yearly meeting in July 1908 the Chairman made an interesting statement of the Company's assets. They consisted of the sovereign rights under which the Company could impose taxes and levy duties; territorial rights over an area of 31,000 square miles, much of which was suitable for the cultivation of rubber and tobacco; a great deal of marketable timber; a one-fifth share in the profits from any minerals discovered by the British Borneo Exploration Company; 19,180 shares in two rubber companies; 800 miles of telegraph and telephone lines and
124 miles of railway?" It could fairly be claimed that the breakdown value of the assets exceeded the capital of the Company.
In 1910 Cowie died after having dominated the Company for sixteen eventful years. He could justly be criticized for his concentration of all authority in himself at the expense of the Governor and still more so for his failure to ensure proper supervision of the construction of the railway. It must nevertheless be recognized that he had galvanized the Company into life and that more than any other man he was responsible for the rapid development of British North Borneo.
Cowie was succeeded by a man of a very different type---Sir West Ridgeway---an official of great experience who had been Governor of Ceylon from 1896 to 1903. Almost at once Ridgeway had the unpleasant task of announcing that the condition of the railway was unsatisfactory and that partly owing 'to want of care and foresight on the part the local management' it would be necessary to overhaul the permanent way and the rolling stock.121 It was clearly necessary to obtain expert advice from outside and two Railway officers from the Federated Malay States inspected the system. They reported with regard to the line from Jesselton to Beaufort that
'every bridge and nearly every sleeper and bank was unsafe, that the gear was faulty and the management ill-organized'.122 In fact, the line needed to be reconstructed.
The new Chairman evidently felt that the Company's administration in Borneo required examination and at the half-yearly meeting in December 1910 he announced that Sir Richard Dane.
K.C.I.E., a former high official of the Government of India, had been asked to make 'a thorough investigation of every department of the service of North Borneo, not only with regard to the administrative machinery, but also as to the financial administration.'^32^
Dane found the machinery for executive government suitable, but commented that the five Divisional Residents were not given sufficient power and noted that the Council, which consisted of the Resident, nine other officials; and one non-official, rarely met. He suggested that the number of non-official members should be increased. Law and order were well controlled with the aid of Indians in the military police, but the settlement of Indians in Borneo, he found, was not encouraged because of their tendency to become money lenders. He was very critical of the way in which land had been allotted. In his view, Cowie had seriously exaggerated the amount of available land and had ignored the rights
"Minutes, July 1908.
^31^ Tregonning, p. 63.
of natives. At an earlier stage, Treacher had emphasised the importance of reserving ample land for natives, with a considerable margin for extension of their occupation, but this principle had been disregarded. Dane commented adversely on the fact that collection of the opium, liquor and gambling duties had all been farmed out to one Chinese group and he advised that the Government should manage the collection directly. He also disapproved of the system under which a poll-tax of one dollar was collected from natives only and recommended that it should be abolished as and when the lands were brought under assessment.
Under the new Chairmanship, the style of management of the Company changed considerably. Ridgeway, who was altogether a more likeable and cultured man than Cowie, visited Borneo on numerous occasions, but left more freedom to men on the spot than his predecessor had done. At times he was criticized by shareholders for not controlling expenditure firmly enough, but it would perhaps be fairer to say that at this time, with the support of his fellow directors, he embarked on a policy of borrowing for the development which he believed would pay the Company in the long run. In
1912 a debenture issue of £500,000 at 95 and bearing interest at
44 per cent, was made for development purposes. By the end of
1913, £283,800 of the sum thus raised had been spent on railways, public works, telegraphs and other forms of development, while
£169,000 had been utilized for advances to companies or guaranteed dividends of subsidiary companies?^3^ These advances to companies were indeed the fundamental element in the policy followed by the Company under Ridgeway's chairmanship. The argument was that since the Company itself did not trade, it depended for its revenue on the development of industry and trade within its territories and when the companies operating there fell into difficulties they must therefore be supported.
In February 1914, another debenture issue of £500,000 was made. The Company now carried a heavy burden of debt which could only be justified by optimism as to the future. The First World War seriously interrupted all the Company's plans for development, but its impact---in spite of the lack of shipping and the absence of traditional buyers for the market in tobacco---was not as disastrous as might have been feared. At the end of the war the Chairman felt able to state that the financial position was satisfactory and that liquid assets were much above the level of 1910. This was not altogether a sound argument in view of the considerable volume of the Company's debt and there was always an element of optimism in Ridgeway's approach to financial problems.
Ridgeway and his co-directors, however, were much more open to criticism for the policy followed in the first few years after the war. The boom in world trade, which was so confidently expected in 1920, rapidly gave place to a severe depression, in which British North Borneo suffered along with all primary producers. A crisis developed in the rubber industry; tobacco for a time suffered a slump; and in November 1922, even the normally optimistic Ridgeway admitted that the position might be called serious---though strangely enough nett revenue remained at a reasonable level. The dividends paid in this period slightly exceeded true profits, but this would have mattered little if the Company had followed a cautious policy in respect of capital expenditure. This was far from being the case. The Directors continued to borrow and to spend heavily on development, and on advances to subsidiaries or other companies which were in difficulties. By the end of 1924 5 per cent debentures outstanding amounted to £1,649,800. It must be admitted that 'the liberal expenditure of Ridgeway had given the economy of North Borneo a shot in the arm. It had also set in train another development; there was a prospect of imminent bankruptcy'.^34^
Discontent had been simmering among the shareholders for some time and several of the more recently appointed Directors shared this dissastisfaction. When the Directors' Report for 1924
came to be drafted, there was a serious division of opinion and it was carried only by a majority of Directors against a Minute of Dissent by the Chairman and two others. At the shareholders meeting on 8 December 1925, the dispute was brought right out into the open. Douglas Malcolm, one of the majority group amongst the Directors, severely criticized the financial management of the Company by the Chairman. The matter is too technical for detailed discussion here, but the pith of the criticism was that over a long period items which should have been charged to revenue had been charged to capital, and revenue expenditure amounting to over £1
million had, on a true accounting view, been met out of capital.
It was for this reason that such heavy borrowing had been necessary.
A Committee of three stockholders---one nominated by the majority and one by the minority of the Directors, and a third shareholder agreed upon by those two---was appointed to examine the points at issue.^35^ The Committee reported in 1926 and substantially supported the majority view. Ridgeway resigned from the Chair and was replaced by Major General Sir Neil Malcolm, and Mountstuart Elphinstone became Managing Director.
The new Board at once took the situation in hand. Considerable
" Tregonning, p. 68.
"Minutes, December 1925.
economies were effected; expenditure was meticulously scrutinized before sanction; and at the same time---if we accept, as we must,
Malcolm's view of the past financial policy of the Company---for the first time for thirty years the Company began to live within its means. Reserves were built up again and steady progress was made in paying off the debt, though it was reckoned that it would take forty years to clear it altogether.^30^
Fortunately for the new Directors, trading conditions now improved and the Company enjoyed three or four years of relative prosperity, but the Directors followed a prudent policy and except in 1928 no dividend was paid until 1938. The wisdom of this policy became apparent in the early thirties, when Borneo inevitably suffered from the world wide trade depression. Expenditure was further curtailed and the Company was still able to continue paying off its debts. Revival came in 1934 and until the Second World War interrupted progress, prospects looked rosy. By that time, export earnings had risen to £2,364,892 and revenue had reached the respectable figure of £468,438.^37^ Population had grown to
310,000, including 60,000 Chinese.
The Japanese war for all practical purposes put an end to the life of the Company, since political and financial conditions at the end of the war made it impossible for it to resume its operations.
On 22 August 1945, the Colonial Secretary announced in the House of Commons that discussions were taking place with the British North Borneo Chartered Company with a view to reaching agreement as to the assumption by His Majesty's Government of direct responsibility for the administration of the territories. In July 1946
British North Borneo became a Crown Colony. The Company did not oppose the transfer in principle, but felt unable to accept an offer of £2,100,000 as compensation. According to the Chairman, this offer would have meant that, after payment of the debenture debt and other liabilities, shareholders would have received only
13s. 4d. a share. The Directors preferred to go to arbitration and an agreement with His Majesty's Government was negotiated whereby, in return for the transfer to the Crown of the Company's sovereign rights and Borneo assets, His Majesty's Government would pay to the Company a sum to be settled by arbitration, together with £5,000 in respect of the Company's shares or debentures in two Clubs in Sandakan and in an Ice and Power Company. The Crown also agreed to make an advance payment of £860,000 to enable the Company to redeem the outstanding debentures. It was provided that if the sum fixed in arbitration were less than £860,000,
^33^ Tregonning, p. 69.
^37^ Report of Deloitte, Plender, Griffiths & Co., to the Treasury Solicitors,
1948. F.C.O. Library HD 2900 15 B 6. the Company would not be required to repay any part of that sum.
Lord Uthwatt was appointed as arbitrator and he was directed to determine a fair price on the basis of the nett maintainable revenue and the number of years purchase which, in his opinion, should be applied.^88^
In March 1949, the arbitrator awarded to the Company
£1,400,000 together with the Company's costs in the arbitration.
The Directors expressed disappointment, but there was no appeal and they had to accept this decision. An argument then took place on a proposal that the Company should go into liquidation. This was opposed by some shareholders on the ground that it would adversely affect the further pursuance of the Company's claim for war damage compensation, but the Directors were able to explain that liquidation would not in fact affect their claim. The Company went into voluntary liquidation on 11 August 1949, two partners of the firm of Turquand, Youngs, McAuliffe & Co., being appointed as Liquidators. By October 1953 all available funds had been disbursed and shareholders had received a little over 10s. 6d. in the £. By then Her Majesty's Government had decided that no claim for war damage could arise in respect of property no longer owned by the Company and the Company's Counsel concurred in that view. The liquidation proceedings were therefore closed.
Shareholders who had bought their shares at par cannot be said to have done well out of their investment. They had enjoyed few dividends and they had lost nearly half their capital, and even if the Second World War had not interrupted progress when prospects seemed bright, it is doubtful if the administration of Borneo could ever have been commercially profitable. The Company had in fact played the unrewarding part of a catalytic agent, but the President was more than justified in claiming that it had fulfilled its trust.
Minutes, 25 July 1945.
Chapter 17
The Imperial British East Africa Company
The Imperial British East Africa Company provides a useful illustration of the fact that in the circumstances of the late nineteenth century the possession of a Charter from the British Government was not an unmixed blessing. The Company was founded by a group of businessmen who had obtained a satisfactory concession from the Sultan of Zanzibar and who, if they had been free agents, might well have confined their activities to the coastal area until they had acquired a financial base adequate for territorial expansion. As a Chartered Company, however, they were considered to have responsibilities almost as agents for Her Majesty's Government and so had to undertake an unprofitable advance into territories from which that Government wished to exclude the Germans. As a result, the shareholders received no dividends and lost much of their capital.
Zanzibar
The starting point of the Company's operations was Zanzibar. From the end of the seventeenth century, the Sultan of Oman had exercised a somewhat vague overlordship over Zanzibar and the adjacent coastal area. At the beginning of the nineteenth century, an outstanding Sultan, Seyyid Said, began to make his authority felt in Zanzibar and his position there was greatly strengthened when, in
1822, the British Government recognized his authority on the coast by the Moresby Treaty---the primary purpose of which was to impose limitations on the slave trade. Seyyid Said soon came to regard Zanzibar as of more interest to him than Oman and in 1840 he moved his headquarters to Zanzibar. Before his death he expressed the wish that the two dominions should be divided. In a succession dispute, the Viceroy of India was asked to arbitrate and his award in 1861 installed one of Seyyid Said's sons, Majib, as Sultan of Zanzibar, while another brother succeeded in Oman.
For some time before this partition, the economic possibilities of Zanzibar had attracted traders from several countries. The United States had established a consulate there in 1836 and trade between the United States and Zanzibar had grown rapidly until it was interrupted by the American Civil War. A considerable number of British Indians had also settled there to trade and perhaps for this reason Her Majesty's Government appointed a Consul in Zanzibar in 1841.
In 1872 the British India Steam Navigation Company under the Chairmanship of Sir William Mackinnon, inaugurated a regular steamship service between India and Zanzibar and H. A. Fraser became the Company's Agent. Fraser died in 1874 and was succeeded by Archibald Smith, who was originally employed by William Mackinnon of Glasgow, but had perhaps been trading on his own account at Zanzibar for some time.^1^ In 1874 E. M. Mackenzie, of the well known Calcutta firm of Mackinnon Mackenzie & Co., arrived in Zanzibar and formed a trading partnership with Smith.
Three other partners, two of whom had close Mackinnon connections, joined them and in 1877 the partnership was formally constituted as Smith, Mackenzie & Go. Its main business was to act as Agents for the British India Steam Navigation Co., but it also supplied water to the ships of that line and transferred cargo to and from the shore. Mackinnon at this time gave thought to the possibility of developing trade with the interior and in collaboration with Sir Thomas Fowell Buxton agreed to meet the cost of constructing a road from the coast towards the north end of Lake Nyasa. Seventy-three miles of the road were constructed in the next four years, but it never became an important route to Lake Nyasa.^2^
While these developments were taking place, Sir John Kirk, who had been Consul General at Zanzibar since 1873, had acquired great influence with the Sultan Barghash, who realized that in the new game of power politics in Africa he needed protection. That realization became even more vivid when the Egyptians made their abortive attempts to establish themselves on the coast in areas which were considered to be part of the Sultan's dominions. Britain was the country most fitted in virtue of its long and close relations with Zanzibar to afford the protection which the Sultan needed, and in the summer of 1876 he wrote to Lord Derby asking him to
' E. R. Vere Hodge, The Imperial British East Africa Company, p. 4.
^2^ R. Goupland, The Exploitation of East Africa, p. 303. arrange for British capitalists to assist him in developing the interior.^3^
Inevitably the Foreign Office turned to Mackinnon; since what little development had taken place on the east coast of Africa was due to him and his connections. Mackinnon and his associates sent out a draft of terms of a possible concession from the Sultan and for a time it looked as though no obstacles lay ahead, but in June
1878 for reasons which are not clear the matter was dropped. It has been suggested on the one hand that Mackinnon and his colleagues had second thoughts in view of the risks involved; and on the other hand that the Foreign Office disapproved the proposal
---and the latter theory has been given some support by a letter brought to light by Miss de Kiewiet. The mystery was made darker by a note written by the Assistant Under-Secretary of the Foreign Office in 1885, in which he referred to 'the secret history of the failure of the former Mackinnon scheme which I will not commit to paper'.^4^
In the next few years, Smith, Mackenzie & Go., continued to develop an important export trade at Zanzibar, but Her Majesty's Government still tried to avoid entanglement and a modern writer has pointed out that in this period no fewer than four opportunities of extending British influence in the East Africa area---three of which were initiated by the Sultan himself---were rejected by the British Government. One of them is of particular interest. In 1881 the Sultan proposed that in the event of his death during the minority of his children, Her Majesty's Government should appoint and supervise the Regent, but that Government declined to accept the responsibility.
It was nevertheless a time in which European interest in East and Central Africa was rapidly being awakened. Missionaries had been at work with almost incredible courage and devotion since
1876; and a great explorer, James Thomson, had shewn that it was possible to travel from the coast to Lake Tanganyika without firing a shot. H. H. Johnston (later Sir Harry) had acquired rights by treaties with Chiefs, without any specific authority from Her Majesty's Government to do so. None of these activities, however, might have stirred the British Government to action but for the rapid growth of German interest in this area. By about 1884 Bismarck had become converted to colonialism and in that year the Gesellschaft fur Deutsche Kolonisation, with Dr. Carl Peters as its moving spirit, was founded.® In 1885, Peters made treaties with twelve chiefs, which not only conveyed to the Gesellschaft territories
■ ibid., p. 305.
* ibid., p. 318.
"Ingham, p. 133.
'for exclusive and universal utilization for German colonization', but also expressly repudiated the authority of the Sultan of Zanzibar.
The Sultan was naturally indignant at this usurpation of his authority
---however nominal that authority may have been---but in spite of Kirk's support of the Sultan, Her Majesty's Government were not prepared to help. The British Cabinet was at this time a house divided against itself on colonial matters and a proposal by Sir Charles Dilke and others that the Sultan should be encouraged and assisted to establish his paramountcy in the areas where Peters was active, was turned down by Gladstone. In February 1886 the German Emperor proclaimed a protectorate over the areas in which Peters had made treaties. The Sultan had already been compelled to sign a commercial treaty with Germany, by which the Germans were authorized to occupy and fortify the port of Dar-es-Salaam, and he now had no option but to acknowledge the German Protectorate 'under pressure'.
The British Government now awakened to the realities of the situation and however reluctant they might be to assume fresh responsibilities they had no desire to see Germany establish a dominant position in an area of strategic importance in relation to the Nile Valley. An Anglo-German Commission set up to demarcate the boundary between the Sultan's dominions and the German Protectorate produced no agreement on the most important points at issue, but in October 1886, discussions in London resulted in an agreement which dealt with two main matters. First, it defined the mainland territories of the Sultan as consisting of a coastal strip ten miles wide extending from Tungi Bay in the south to the River Tana in the north, together with certain coastal towns further north. Secondly, it demarcated British and German spheres of influence east of Victoria Nyanza by a line which intersected the eastern shore of the Lake at the first degree of southern latitude.
'Each power undertook not to make acquisitions of territory, accept protectorates, or interfere with the extension of the other's influence across the line.'^0^ Needless to say the Sultan was not consulted but had to accept a fait accompli. The only consolation he received was that Germany now joined the much earlier Anglo-French agreement guaranteeing his independence.
The Concession and the Charter
In 1885 Holmwood, the Consul at Zanzibar, had written glowing reports of Kenya and when home on leave thereafter had sought to revive Mackinnon's interest in East Africa. In May 1886
• P. L. McDermott, British East Africa or /BEA, pp. 7-8.
Mackinnon and one of his associates, J. F. Hutton, organized an expedition to take over the rights which Johnston had obtained by treaties with the Chiefs in the interior and had transferred to the Company. The Sultan for his part was nervous of Germany's expansionist mood and as a protection he offered Mackinnon a concession of the coastal strip. Mackinnon was naturally hesitant about going ahead without any certainty that real help from Her Majesty's Government would be forthcoming, and official criticisms of him in this respect were perhaps a little unfair. The fact is that Her Majesty's Government wanted to see East Africa occupied by the British but did not want to undertake either the expense or the responsibility of the process. Mackinnon eventually accepted the Sultan's offer and in May 1887 the Sultan granted a concession by which he transferred all his authority on the mainland between Wangi and Kipini to the British East Africa Association which had just been formed by Mackinnon and his associates. The concession was to run for fifty years and gave the Association the right to make treaties with native chiefs, to levy taxes or collect the customs duties, and indeed to carry on administration in all its aspects, though this would be done in the Sultan's name and would be subject to the Sultan's rights.' This reservation did not appear to mean much, but it was to be of some importance when the application of the free trade zone to the Sultan's dominions was under consideration some years later. The Company for its part undertook to pay to the Sultan the whole of the customs duties then received at the Sultan's mainland ports, together with half of any additional customs revenue that might be realized in years to come.
The British East Africa Association does not appear to have had a formal constitution and clearly a more formal body would be needed to operate the concession. Shortly before the Sultan's grant was made, the founders therefore drew up a memorandum of association constituting the Imperial British East Africa Company. The objects of the Company were defined as being---to accept and administer the Sultan's concession and to acquire concessions or other rights from chiefs within the British sphere of influence; to obtain from the Crown a charter of incorporation; to construct roads and other public works; and to carry on trade. The share capital was fixed at £1 million, of which £250,000 was to be issued in the first place. Five special shares, designated Founders Shares, were also to be issued free of payment and to these shares was to be allotted annually 10 per cent of any profits after payment of an 8 per cent dividend. The annual income from the Founders Shares was to be distributed as follows: One-fifth to the Sultan, two-fifths to be
' The Concession is reproduced in McDermott, Appx I.
divided amongst the Founders, one-fifth to the President and Directors as remuneration and one-fifth to be applied at the discretion of the Board.^8^ When the prospectus was issued in the following year, the shares were offered in £20 units and it appears that 12,000 units had been taken up by the Founders. It was proposed to offer 37,500
shares to the public and to keep shares to the value of £10,000 in reserve.
On 3 September 1888 the Imperial British East Africa Company was granted a charter which followed what was becoming almost a standard pattern. It authorized the Company to administer the territories conceded by the Sultan or similar grants obtained in future; it enjoined on the Company the duty of discouraging slavery;
it directed the Company not to interfere with religion except in the interests of humanity; and it stipulated that the Company should not transfer any of the grants without the consent of the Secretary of State. It also provided that the Secretary of State would control the dealings of the Company with any foreign power and would be authorized to settle disputes between the Company and the Chiefs.
The Company was not authorized to set up or grant any monopoly and it was not to accord differential treatment to the subjects of any foreign power.^0^
When the Company's first Administrator, George Mackenzie, arrived in Zanzibar, he was at once confronted with two difficulties, one of which arose from a rebellion in the area, south of the Company's concession, for which the German East African Company had received a concession from the Sultan in April 1888.^10^ The rebellion naturally had a reaction in the IBEA Company's area. The British and German Governments, rather against the view of the British Company's local representatives, jointly blockaded the coast with the ostensible object of preventing the importation of arms and the export of slaves, but the German record in the matter of the slave trade in East Africa makes this excuse sound somewhat unconvincing. The troubles were, however, soon brought under control.
Mackenzie's other difficulty was connected wtih domestic slavery. The Protestant missions had given refuge in their stations at Rabai and elsewhere to more than 1,000 runaway slaves who, according to Moslem law, belonged to the local Arab traders. When the Arabs demanded the surrender of the slaves, Mackenzie could obviously not sanction action to compel the Missions to surrender the slaves, nor could he arrange for the purchase of the slaves, since
• The Memorandum is reproduced in McDermott, Appx II.
' The Charter is reproduced in McDermott, Appx III.
\" K. Ingham, A History of East Africa, p. 140.
possession of them, even temporarily, would have- been an offence under English law. He hit on the ingenious expedient of persuading the Arab traders to treat the slaves as lost property and compensated them for loss by payment of £3,500, of which the Missions provided
£1,400 while the British Treasury contributed £800, so that the Company itself had to pay £1,300." There were also slaves from the interior, whose ownership was not claimed by Arab traders, and they too sought refuge in the Mission settlements. There was no reason against their reception, but if the hostility of the Arabs was not to be incurred, it was necessary to distinguish between the two classes of slaves and Mackenzie therefore compelled the Missions to agree that unidentified slaves who arrived at their stations should be sent to the local chief, who would enquire into their origin.^12^
This was indeed the only policy that could be followed by a Company in its infancy, backed by no military force. That it worked well is shown by the fact that at a shareholders meeting in July
1890, the Chairman could claim that 3,000 slaves had been liberated.^13^
Anglo-German Rivalry
The fact that the German and British Companies had acted jointly in the blockade, did not mean that friction between them was at an end. When the concession was granted to the Imperial British East Africa Company in 1887, the Sultan had been prepared to include in it Lamu and certain other islands and ports of the river Tana, but the Company had not then been anxious to take on wider responsibilities. In 1889 the Company was disturbed at an attempt by the Germans to obtain a concession of Lamu, which was offshore from Witu---a district in the territory over which Germany had declared a protectorate in October 1889. The Company would thus have been more firmly hemmed in between two German protectorates. In spite of much pressure from Germany, the Sultan adhered to his promise to grant Lamu to the Imperial British East Africa Company, but for reasons of wider international policy, Her Majesty's Government was not prepared to quarrel with Germany at this stage. The Imperial British East Africa Company was forbidden to proceed in this matter pending arbitration by the Belgian Minister of State. The arbitrator held that the Sultan was not bound by any previous obligation, but was free to cede Lamu to the Imperial British East Africa Company if he so wished. This the Sultan did.
" McDermott, p. 27.
" McDermott, pp. 27-32.
^11^ Report of First Meeting of Shareholders, F.G.O. Library 38602 F DT 421.
The concession of Lamu included Kismaya and other northern ports, but the Company did not want to burden itself with further responsibilities north of the Tana and proposed to transfer those ports to Italy with the Sultan's approval. The negotiations were prolonged and it was not until March 1891 that the transfer was effected and at the same time the Italians' sphere of influence was defined as extending from the Juba to the Sixth Northern Parallel and westward to the Thirty-fifth East Meridian.123 It will be noted that this excluded the Italians from the Nile Basin.
We must now turn our attention to Uganda. The possibility of ultimately opening up trade with that country cannot have been absent from the minds of the founders, but they were in no hurry and for the first year or so were wholly occupied with administering their concession and entering into relations with chiefs in the interior.
The first contact with Uganda was indeed not made by the Company, but by the British Consul General in July 1888, when he sent a trader named Stokes as an emissary to King Mwanga with letters from the Sultan of Zanzibar.124 125 As it happened, the time was unpropitious since the Arabs in Uganda had just driven Mwanga into exile and their evident hostility to Europeans made it useless to follow up this mission immediately. At the beginning of 1889, when the Imperial British East Africa Company sent a caravan under the command of J. B. Jackson to the interior for the purpose of exploring the country and forming treaty relations with the various chiefs and tribes en route, he was expressly directed to avoid Uganda.^18^ The Germans, however, had different ideas. The recently formed German Colonial Company had passed a resolution proposing that German states should be established from Victoria Nyanza to Wadelai, north of the Albert Nyanza. An expedition intended to further this object, but disguised as one for the relief of Emin Pasha, was organized under Dr. Carl Peters and set out from Witu for Uganda in July 1889. Emin Pasha, who was again at large, now accepted service with the German East Africa Company and joined in the enterprise. In the Spring of 1890 a situation had thus been reached in which Peters had arrived in the north east of Victoria Nyanza, while Emin Pasha was about to start from the coast for the same area.
By this time, there had been a change in the attitude of Her Majesty's Government. Salisbury had replaced Gladstone in 1886
and although he was by no means a full-blooded Imperialist, he had been convinced of the necessity of forestalling the Germans in their attempts to control Uganda, since that country was of importance for several reasons. It was the most powerful and politically advanced state in East or Central Africa; its economic potential was considerable; and British and other missionaries had established themselves there effectively. Moreover, at this time,
Britain was determined to safeguard the approaches to Egypt and the Nile Valley and Uganda was, therefore, strategically important.
Public feeling in Britain was now aroused to the danger from the German pincer movement described above, and Her Majesty's Government could not remain inactive. Their action took two forms
---a demand for a fresh agreement with Germany and pressure on the Imperial British East Africa Company to move into Uganda.
As regards the conflicting British and German claims there was the difficulty that the demarcation of 1886 had only dealt with the area east of Victoria Nyanza, while part of the territory now concerned lay west of that Lake. It is true that in 1887, the doctrine of the 'hinterland' had been vaguely accepted by both the British and the German Governments, but the recent German advance seemed to disregard it---it might indeed be based on a claim to the hinterland of the German Protectorate north of the Tana. Bismarck at this time was less sure of his good relations with France than he had been a year or so earlier and was not willing to go too far in antagonizing Britain. Negotiations between the two countries led, in July 1890, to the signing of a fresh Anglo-German agreement which laid down that the boundary between British and German spheres of influence in East Africa would be extended westward across Lake Victoria and then on to the Congo border along the first parallel of South latitude. .Germany abandoned her claim to Witu.^17^
The Advance into Uganda
Something more than an agreement was required, however, if British influence was to be established in Uganda and even before the negotiation of the treaty, pressure had been brought by Her Majesty's Government on the Company to advance into that country.
In March 1890, Sir Percy Anderson, the head of the African Department of the Foreign Office, went so far as to say 'when we gave the charter to the East Africa Company, we understood that its main idea was to push up to Uganda'.^18^ This was not altogether a fair statement, since it had been clear from the beginning that the Company's capital was not adequate for such an advance.
In March 1890, Colonel (later Sir Charles) Euan Smith, Consul
" Ingham, p. 148.
^18^ F. O. 84/2026, 31 March 1890, quoted in Margery Pelham, Lugard~}~
The Years of Adventure, p. 181.
General in Zanzibar, strongly urged the Company's Administrator to push inland at all costs and wrote somewhat scathingly of what he called 'the insouciant and sleepy Company'.^10^ The pressure on the Company mounted and on 3 April 1890 The Times came out with an article which called particular attention to the German aggressive advance in East Africa and to the danger that the Company would be hemmed in. 'The Company must lose no time in putting its house in order and in taking effective possession of whatever it hopes to keep on the shores of Victoria Nyanza.^20^ Mackenzie, the Company's Administrator, was a strong advocate of the move into Uganda and although the Directors naturally felt that Her Majesty's Government should share the financial burden, as a Chartered Company they were almost bound to accept this new responsibility. After some acrimonious argument as to who should lead an expedition to Uganda, the command was assigned to Captain F. J. (later Lord)
Lugard, an officer on extended half pay leave from the Army, who had made a great reputation in Nyasaland, and had recently completed a survey of an inland route into the Company's territories.
Before Lugard started for Uganda, the Anglo-German agreement had been signed, but this by no means lessened the need for action, since Uganda was now in a state of turmoil. Mutesa, the former King of Buganda, had been favourably disposed towards the Christians and both the Church Missionary Society and the French White Fathers had established stations and made a considerable number of converts in that country. The two bodies of missionaries were hostile to each other from the start, but in the eighties the desire of the French to exclude the British from Central Africa made relations even worse. There was also another complication. Under the influence of the numerous Arab traders in Buganda, Islam too had made a good many converts and they tended to look for support to the Moslem country of Bunyoru on the northern borders of Buganda. There were now four groups in Buganda 'a numerically strong pagan group, who did not wish to see the old traditions and the old political systems swept aside by a transfer of loyalty from the Kabaka to a divine ruling spirit; the Moslems, the Catholics and the Protestants'.^21^ Mutesa had been able to keep all these groups under some kind of control, but this was quite beyond his successor,
Mwanga. A triangular struggle between Protestants, Catholics and Moslems now began and Mwanga allied himself first with one and then with another of the contestants. For a time, in 1888, he was under the influence of the Moslems and planned to drive out the
''Perham, p. 185.
''McDermott, p. 119.
" Ingham, p. 145.
Christians, but was himself driven out along with the Christians when the Arabs seized power. In 1890 the Arabs were defeated and Mwanga and the Christians returned. The triangular contest was then resumed.
When Jackson, on his journey of exploration, reached Mummia's, just north-east of Victoria Nyanza, he received an appeal asking him to help Mwanga in regaining this throne. In view of the Company's instructions that he was to avoid Uganda, he declined the invitation, but sent Mwanga the Company's flag, thus claiming notional sovereignty over him. A few months later Jackson heard that Mwanga had been restored and that Peters had visited Uganda and made treaties with him which the Protestant chiefs had refused to acknowledge. Action to counter Peters' move was now urgent and Jackson left Mummia's for Mengo, the capital of Buganda. The French missionaries, who regarded the Company as the natural protector of the Protestants, were able to frustrate Jackson's attempts to negotiate a treaty with Mwanga and no progress was made until Lugard arrived at the end of the year. By the force of his personality,
Lugard was able to break down the resistance of the French priests and on 26 December 1890 a treaty was made by which Mwanga acknowledged the suzerainty and accepted the protection of the Company and agreed to place finance, the army and other important departments of administration under the control of the Company's Resident. Slave trading and the import or export of slaves or firearms were declared illegal.^22^
This did not mean that the Company's troubles were at an end. The Moslems who were now 'living as predatory outcasts, camping on the borderland between Uganda and Bunyoro', again became aggressive and burned villages near the capital. Lugard led an army of Baganda against them and completely defeated them, but it was obviously necessary to garrison the frontier against attacks from Bunyoro. For this purpose Lugard recruited nearly 1,000
Sudanese under the command of Selim Bey, who had been left behind after the failure of Emin Pasha's attempt to assert the authority of Egypt in the neighbourhood of Victoria Nyanza.
The Christian problem now proved more intractable than that of the Moslems. When Bishop Tucker arrived in Uganda in December 1890, he 'was astonished to see the Christians coming to church with their rifles in their hands'---not as might be imagined, as a measure of defence against the Moslems, but for fear of the Catholics.
Matters then improved for a time in spite of disputes as to the distribution of official posts between Catholics and Protestants, but in January 1892 a fresh body of French priests, together with their Bishop, Monseigneur Hirth arrived in Uganda, and now that the troubles with the Moslems were over, 'found it needful to begin another and far more arduous battle with the Protestants'.126 Civil war was imminent and since the Catholics were numerically much the stronger of the two parties, Lugard issued arms to the Protestants.
Both then and later he was accused of partiality towards the Protestants, but though his own rather narrow, evangelical upbringing might have implanted in him a prejudice against Catholics in general, all the evidence suggests that he remained as impartial as possible at a time when the Catholics were hostile to the Company.
Whether his arming of the Protestants was wise or not is open to doubt.
Full scale fighting broke out, but the Catholic party had the worst of it and retreated to the adjacent country of Buddu, taking Mwanga with them. Before long they recognized that in spite of their numbers the odds were against them and sued for peace, and returned to Uganda with the pathetic figure of Mwanga. Lugard now made a partition of the country between the rival parties.
Buddu was assigned to the Catholics, while three provinces were allotted to the Moslems---a settlement which was accepted by Mbogo, the self-styled king of the Uganda Moslems. Lugard followed up this success with a new permanent treaty with Mwanga, which reaffirmed the rights and obligations accepted in 1890. The new treaty was executed on 30 March 1892 and two months later was endorsed by the principal chiefs. Lugard had achieved a notable success and it is not difficult to imagine his chagrin when he learnt a little later that the Company had decided to withdraw from Uganda because of its financial position.
Steps to Withdrawal
The plain fact was that the Company was living on capital, not only for development purposes, but even for the recurring costs of administration. It will be remembered that in terms of the concession of 1887, the Company was required to pay to the Sultan the sum realized from customs duties in the year ending 28 August
1889---a sum later ascertained to be \$56,000---together with half of any increase of customs revenue. In March 1891 a new arrangement was made by which the Sultan was to receive a fixed annual payment of \$80,000,127 and to surrender his claim to a share of any increase. The Company did not trade on the coast and the cost of general administration considerably exceeded the surplus of customs revenue over the annual payments to the Sultan. In the year ending
30 April 1891, for example, the customs surplus was £6,852 15s. Id., while the cost of general administration was £27,143 18s. Id., so that the Company's loss amounted to £20,290 3s. 0d.^26^ In spite of these discouraging results, the Directors were prepared to believe that the Company would ultimately pay its way if a railway from the coast to Victoria-Nyanza were constructed, so that trade with the interior could be developed. As far back as 17 December 1890,
Mackinnon had written to Lord Salisbury, asking Her Majesty's Government to guarantee interest on the loan which would be required for the construction of the railway. Mackinnon had pointed out that under the Brussels Act, Her Majesty's Government were under an obligation to open up communications as a means of suppressing the slave trade and that under the Act this responsibility could be discharged through a chartered company. Salisbury accepted Mackinnon's proposal and the Treasury supported it and put up a plan under which the Government would guarantee the interest on a capital of £1,250,000 on the condition that half of all profits from the railway would accrue to the Government until the sums paid under the guarantee had been recouped.128
As might have been expected, the Gladstonian Liberals were strongly opposed to such a guarantee and Salisbury temporized by deciding to ask first for a Parliamentary vote for a preliminary survey. It was estimated that the survey would cost £20,000 or
£25,000, of which the Company would contribute £5,000. In July
1891 the Opposition took their stand on an undertaking which had apparently been given by the Government that no controversial legislation would be introduced before the prorogation. Salisbury had to content himself with assuring the Company that he would reintroduce the vote and reimburse the Company before the end of the financial year. On this assurance the Company agreed to advance the cost of the survey.
The guarantee, however, was not even in sight and it was impossible, therefore, for the Company to raise capital. The calling up of the unpaid balance of the shares would only have produced
£158,000, which would have been of little use. The Directors therefore considered it essential to withdraw all their establishments from Uganda and to fix Dagoretti as the extreme point of the Company's occupation in the interior. In their letter informing Her Majesty's Government of this decision, they pointed out that the German East Africa Company had enjoyed the financial backing of the German Government, whereas the Imperial British East Africa Company had had no such support and its capital was only just adequate for the administration of the concession's area.^27^
The order to withdraw was passed on 16 July 1891, but by this time the British public were becoming more imperialist minded than they had been and there was a considerable outcry, accompanied by much criticism of Her Majesty's Government on account of its failure to support the Company. The Times declared that withdrawal would be nothing short of a national calamity and would also mean 'handing over all in Uganda who had trusted us to a worse fate than would have been theirs if we had never penetrated Uganda at all'.^28^ The leader writer went on to demand that Her Majesty's Government should guarantee the loan required for the railway and so inspire the confidence which would attract capital for the development of the interior. The Protestant missionaries were also alarmed at the prospect of the Company's withdrawal and subscribed £26,000 to enable the Company to carry on until
31 December 1892. The order to withdraw was therefore countermanded. In the following months the Salisbury administration does not appear to have formed any plan as to what should happen at the end of 1892 and in August of that year, Gladstone came back into power. He first sought to postpone a decision by offering the Company a subsidy if it would continue in Uganda for another three months. The Directors saw no virtue in this suggestion, but nevertheless accepted it. In true Gladstonian fashion, Her Majesty's Government 'reserved to themselves absolute freedom of action in regard to any further measures consequent upon the revaluation'.
Shortly before this temporary arrangment was made, the Company had asked Her Majesty's Government if they considered that the Company should either surrender its charter and confine its operations to the coast, or surrender its concession also and leave Her Majesty's Government to establish a protectorate over the entire area of the Company's operations. Gladstone now played for time by proposing that the Company should remain in Uganda for a period of three years in return for a subsidy, but when the Company suggested a figure of £50,000 per annum, the proposal was quietly dropped. A spokesman for the Company, writing two years later, justly observed that this figure could not be considered unreasonable, since when Her Majesty's Government replaced the Company in Uganda, Parliament was asked for a vote of £50,000 per annum for the administration of that country. In November 1892 the Government decided not to interfere with the proposed evacuation of Uganda, but directed Sir Gerald Portal, the Consul General in The letter is reproduced in McDermott, pp. 197-9.
McDermott, p. 201.
Zanzibar, to proceed to Uganda and make proposals for its future administration.
In the meantime, public attention in Britain had been directed to allegations by the French priests in Uganda of atrocities said to have been committed under Lugard's direction. The French Government appear to have accepted these allegations at their face value and in order to placate the French, Her Majesty's Government considered it necessary to hold an enquiry. Captain J. R. L. Macdonald, who had made a survey of a route for a railway in East Africa, was deputed for this purpose. This was an unwise choice as he was an enemy of Lugard, and Gladstone commented a little later on this unwisdom. The bearing of this report on the future of Uganda or the Company was only indirect and it is sufficient for our purpose to say that his report was intemperate and inaccurate in its criticisms of Lugard and that the Government did not accept it.
Portal was perhaps to some extent prejudiced by Macdonald in the early stages of his enquiry and from time to time made strictures on the Company which were not justified by the facts. His report, submitted on 1 November 1893 was critical of the Company in some important respects. Fie asked whether the possession of the only two posts in the interior now retained by the Company^29^ was sufficient result for the five years during which the Company had held the charter and he referred somewhat unfairly to the 'publicly acknowledged failure of the Company in Uganda'. The Directors submitted a reply to his criticisms and on an impartial reading of both documents one cannot help concluding that the Company had had the best of the debate.^30^ Indeed, in spite of his criticisms, Portal admitted that to the founders of the Company belongs the sole credit of the acquisition, for the benefit of British commerce, of this great potential market for British goods. It should moreover be remembered in justice to them, that in face of many initial difficulties they succeeded in marked contrast to the neighbouring European colonies in establishing their influence without bloodshed and by their own unaided efforts.^31^
More important than Portal's comments on the past were his proposals for the future. He definitely advised against the evacuation of Uganda which would inevitably lead to civil war and chaos and he considered, but rejected, the possibility that Uganda might be administered through Zanzibar. Direct rule by Her Majesty's Government would, in his view, be too expensive and he advocated
^M^ Machakos and Kikuyi.
^10^ See also Lugard's reply, C. 6847.
\" Portal's report is reproduced in McDermott, Appx XIII. a system of indirect rule under which a sphere of influence would be maintained through Commissioners, who would be concerned with suppressing civil war and repelling invasion but would not normally interfere with the detailed administration of the country.
He considered that the continuance of the political authority of the Company either in the coastal strip or in the districts between that strip and Uganda would lead to difficulties and he recommended that the charter and the concession should be terminated.
He went on to emphasize the fact that without the development of communications administration would be both inefficient and expensive and he proposed that the British Government should construct a railway from the coast to Kikuyi---a recommendation of particular interest since it was the unwillingness of the Government to assist such construction that had led to the Company's withdrawal.
Portal arrived in Uganda as Commissioner on 17 March 1893
and replaced the Company there from 31 March. On that day the Company's flag was taken down in the Uganda capital and the Union Jack was hoisted in its place. The change affected only Uganda and for two years more the Company continued to administer the coastal strip, under its concession, and the interior of what was to become Kenya under the charter---though it withdrew from Witu on 31 July 1893. On 1 June 1895 this somewhat unsatisfactory arrangement came to an end and the British Government took control all the way to the coast. It had in fact been in virtual control of Zanzibar itself since October 1891.
The Award of Compensation
We have already seen that the Company's financial position was difficult and it was made even worse when in June 1892 the Sultan's dominions were declared a free zone. The Berlin Act 1886 did not force the acceptance of such a zone on independent states and when the Sultan adhered to that Act he excluded his dominions from this particular provision. The position, however, was changed when Her Majesty's Government declared a Protectorate and for all practical purposes superseded the Sultan. The effect of the extension of the free zone by the Government was that the Company lost its main source of revenue. The Company maintained that the Sultan was thus involved in a breach of contract, but this view was rejected on legal grounds by Her Majesty's Government. In July 1892 this loss of revenue lent additional force to the Company's expression of willingness to surrender its concession, but the Company had an unanswerable claim to compensation.
After the submission of Portal's report, the Directors nevertheless made it clear that they were not prepared to negotiate with the Sultan for the surrender of their concession until Her Majesty's Government declared their willingness to give the Company some compensation for the surrender of the charter. On 14 November
1894 the Foreign Office discussed this matter at some length in a letter to the Company.^32^ It was not easy to arrive at a fair figure for the payment by the Sultan for the surrender of the concession, but in view of the certainty that customs' revenue would increase, the Government considered that £150,000 would be reasonable and undertook to recommend this figure to the Sultan. As regards compensation for the surrender of the charter, the Foreign Office distinguished this case from that of other chartered companies in Africa
'in which the commercial element is a prominent factor', whereas apart from Uganda there were no prospects that the Company's operations in the interior would be profitable. Moreover, the Company were the pioneers through whose agency British influence was extended to the Lake Districts, and by these means the condition of the native inhabitants had been improved and the slave trade had been suppressed in the territories administered by them.
The Government therefore proposed to recommend to Parliament a grant of £50,000, in return for which the Company would make over to Her Majesty's Government its administrative posts but would retain its private stores and assets. The letter conveying these decisions expressed the pious hope that with the grant the Company might be able to continue to trade, but a subsequent letter made it clear that the Company would be under no obligation to do this.
The Company considered Her Majesty's offer inadequate and after reciting its claims to better treatment, suggested arbitration.
The Foreign Office replied somewhat stuffily that arbitration was
'a mode of settlement not contemplated in Her Majesty's Government's offer', and all that the Directors could do was to bargain over the price at which the Sultan should take over the Company's private assets. Eventually it was settled that the Company should receive £250,000 in all---£150,000 from the Sultan for the surrender of the concession, £50,000 from Her Majesty's Government for the surrender of the charter, and £50,000 for the Company's assets taken over by the Sultan. The Company considered that it had received
'harsh treatment', but had no option but to accept the settlement.
Although the Company had been registered under the Companies Act in 1893, so that it could continue to operate as a trading concern after the termination of its charter, the Directors decided The letter and the connected correspondence are reproduced in G 7646.
not to do this and at a shareholders meeting on 24 July 1894, the Company resolved to go into voluntary liquidation.
From a purely commercial point of view, the Company might be considered to have been a failure, but against this must be set its contribution to much wider interests. It had opened up what was later to become Kenya; it had done much to suppress the slave trade; and it had made it impossible for the British Government to shirk the duty---as it was seen at the time---of bringing civilization to East Africa.
Chapter 18
The British South Africa Company
At the beginning of the last quarter of the nineteenth century, Central Africa remained as it had been throughout the centuries, undeveloped and primitive. West of the Orange Free State lay Griqualand West which had been annexed by Britain in 1871, but which was not incorporated in Cape Colony until 1880. Further West and North was Bechuanaland, which consisted mainly of the Kalahari Desert and a strip to the east through which ran the
'missionaries road' to the north. Beyond Bechuanaland and the Transvaal, Lobengula ruled in savage state over the warlike Matabele and the relatively mild Mashona. A variety of motives, some materialistic and some idealistic, had begun to attract the attention of the world to this undeveloped region and the discovery of gold and diamonds had given it a new importance. Britain,
Germany and Portugal were all interested in it, but the keenest competition for this wide open area was to be between Cape Colony and the Dutch Republics of the Transvaal and the Orange Free State.
That competition was to be a recurring motif in South African politics for two decades, but it was due to Cecil Rhodes that, through the agency of the British South Africa Company the interests of Britain and the Cape were to predominate in Central Africa in spite of the hesitation of the British Government.
Rhodes was fully alive to the material advantages which would result from an expansionist policy, but of greater importance was his vision of British dominance from the Cape to Cairo. There was, no doubt, an element in Rhodes' thought of what today would be called 'jingoism', but it was strangely mixed with genuine idealism and rightly or wrongly he was convinced that the Anglo-Saxon race was the best fitted to bring peace and justice to the world. Later in life he shed some of this racial arrogance, but at the period with which we are concerned nothing seemed to him more desirable than the maximum possible extension of British rule. To promote this object he needed power and it was his firm belief that 'it is no use having big ideas if you have not the cash to carry them out'.129 For several years, therefore, he devoted himself to accumulating wealth and by 1885 he had become a very rich man, with a commanding interest in De Beers and other mining companies. He had entered politics some years previously and had begun to wield considerable influence in South African affairs.
At this time the Transvaal and Cape Colony were both interested in occupying part of Bechuanaland. This would in the case of the Transvaal have been a contravention of the Pretoria Convention, but the Boers felt that Bechuanaland naturally belonged to them---while to Cape Colony it was important as the outlet for trade to the north. Each party to the struggle attached to itself one or other of the rival chiefs in that country and the Boers established two miniature republics, Stellaland and Goshen. After the struggle had continued for some years, in August 1884 Rhodes was sent by the High Commissioner as Deputy Commissioner to try to settle the many disputes. In Stellaland he soon persuaded the local administrator to accept British protection, but Goshen presented a more difficult problem. Kruger not only backed the administrator there in his resistance to Rhodes's proposal, but took under his protection a chief named Montsioa in whose territory Goshen lay. This was a clear breach of the London Convention which Kruger had just signed and Her Majesty's Government could not ignore it. A military expedition was sent from England and Kruger climbed down. The British Government then annexed South Bechuanaland and formed it into a Crown Colony and at the same time declared a Protectorate over the northern part of Bechuanaland contiguous to Matabeleland.
The rivalry between the Transvaal and the Cape was now transferred to Lobengula's dominions, interest in which had been stimulated by the discovery of the Tati goldfields in 1868. In 1887
a Boer trader, Piet Grobler, negotiated a treaty with Lobengula authorizing the Transvaal Government to maintain a Consul and exercise jurisdiction over Transvaal subjects in Matabeleland.^2^ It seems likely that Lobengula did not attach much importance to this treaty and in February 1888, J. S. Moffat---a son of the great missionary and now Assistant Commissioner---had little difficulty in negotiating a treaty of friendship by which Lobengula undertook not to part with territory to, or enter into an agreement with, any foreign power.
Lobengula was now 'pestered by the solicitations of the white suitors who crowded round him, bearing gifts to the value of which he was keenly alive and pressing for concessions, the nature of which he but dimly understood'.^8^ When Rhodes sent C. J. Rudd, his friend and partner, to secure a concession from Lobengula, he had to face opposition not only from Grobler but also from the Exploring Company---an English concern---and other syndicates. It was at this stage that Lobengula made his famous remark about the chameleon,
Did you ever see a chameleon catch a fly? The chameleon gets behind the fly and remains motionless for some time, then he advances very slowly and gently, first putting forward one leg and then another. At last, when well within reach, he darts his tongue and the fly disappears. England is the chameleon and I am the fly.130 131 132 133
The chameleon was successful and on 30 October 1888 Rudd obtained a concession giving him and his associates 'complete and exclusive charge' over all minerals in Lobengula's dominions, together with the rather vague power to do whatever was necessary to extract those minerals and the more specific right to exclude other seekers after concessions. In return Lobengula was to receive £12,000
annually and to be supplied with 1,000 breech loading rifles and a good stock of cartridges?
In 1889, under the influence of Rhodes' rival, the Exploring Company, Lobengula repudiated the Rudd concession and wrote to London telling the Colonial Office that he had been misunderstood. Dr. Leander Starr Jameson (later Sir) who was associated with Rhodes, secured the restoration of the concession, but Lobengula once again changed his mind. Rhodes then bought out his rivals and the Exploring Company and the Bechuanaland Exploration Company were amalgamated with Rhodes' interest to form the United Concessions Company under the chairmanship of Lord Gifford, but really controlled by Rhodes.
In April 1889 the Company applied for a charter and since it was desirable to associate with the Company persons distinguished in public life, Lord Abercorn was appointed chairman. The petitioners stated that their objects were to extend the rail and telegraph systems of South Africa to the north; to encourage emigration or colonization; to promote trade and commerce; and to develop mining. They had to face a good deal of opposition in the House of Commons. One Member objected to what he described as giving to a syndicate of private adventurers as much power as the old East India Company had possessed and he went on to say that 'the pith of the charter is to confer all these powers on one person---
Mr. Cecil Rhodes'.^0^ Other Members criticized the action of the Company in supplying Lobengula with modern firearms and the Company's defence was singularly unconvincing. In spite of this opposition, on 29 October 1889, a charter was granted to what was now called the British South Africa Company. The charter was for a period of twenty-five years in the first place, renewable thereafter for ten-year periods. The Company was authorized to operate Lobengula's concessions and to acquire powers of government by concessions or agreements elsewhere, subject to the approval of the Secretary of State; it was to remain British and to be controlled by the Secretary of State in its relations with chiefs or foreign powers;
it was to put an end to slavery as far as practicable; and it was to prevent the sale of spirits to Africans. As with all other charters granted in this period, it was forbidden to set up a monopoly.^7^ The most interesting feature of the charter was the fact that it set no limit to the Company's jurisdiction to the north, since Rhodes was determined not to be confined to the south of the Zambesi. A press note made it clear that the Company was willing to proceed at once with the construction of the first section of the railway and the extension of the telegraph system and that for this purpose £700,000
had been privately subscribed.^8^
The initial authorized capital of the Company was one million
£1 shares. The response of the public was rapid and within three years of the formation of the Company, there were 8,000 shareholders. Fully paid up capital amounted to £743,038, while there were 158,922 partly paid up shares and 76,900 fully paid up shares had been allotted in payment for concessions or shares in other companies.^9^
Southern Rhodesia
Within a short time after the grant of the charter, the Company administered the three separate areas of Southern Rhodesia, North
'Hansard, 3 September 1889.
^1^ The Charter is available in the F.C.O. Library.
"General information to the country and Press Notice 1889. F.C.O.
Library.
'Balance sheet for year ended 31 March 1892. F.C.O. Library, HF 3540
S 6.
Eastern Rhodesia and North Western Rhodesia. It will be convenient to depart from an overall chronological order and to deal with these regions separately.
When the charter was issued, the Company was particularly warned by Her Majesty's Government not to exaggerate the meaning of the Rudd concession.
The Company no doubt understands that the concession does not confer any such powers of government or administration as are mentioned in clauses 3 and 4 of the Charter. Those powers will have to be obtained whenever a proper and favourable time for approach to Lobengula on the subject arrives.
The Company was further warned that if it should be necessary to introduce armed police into Matabeleland, before doing so it should ascertain if this would be acceptable to Lobengula.134 135
A charter and a limited concession were not likely to mean much until action was taken to implement them on the spot. There was the difficulty that Lobengula now apparently regretted his concession and was not prepared to 'give them the road'. Jameson managed to talk him round for the time being and in the middle of 1890, with the approval of Her Majesty's Government, a body consisting of 200 Pioneers, commanded by one Frank Johnson, and accompanied by a force of British South African police, was organized. The pioneers were carefully recruited from a large number of volunteers and included a majority of Dutch from the Cape. It was considered inadvisable for them to risk an encounter with the Matabele and under the guidance of F. C. Selous, a very experienced hunter, they avoided Matabeleland and entered Mashonaland by a little known and difficult route. Lobengula had evidently not realized that his concession would lead to an expedition on this scale, and he protested twice, but the pioneers went on and in September 1890 stopped short of Mount Hampden, hoisted the Union Jack and built a fort which they named in honour of Lord Salisbury, the British Prime Minister.^11^ In accordance with the promises made to them by Rhodes, each pioneer was given fifteen gold claims and a little more than 3,000 acres of land.
Her Majesty's Government had no legal authority at all in Mashonaland, but in May 1891---in spite of their warning to the Company as to the limited meaning of the Rudd concession---
they evidently considered that the Company was in effective occupation. An Order in Council therefore authorized the High Commissioner to make provision for the administration of Mashonaland.
The High Commissioner appointed a Resident Commissioner, who was nominated by the Company and who was also appointed by it as its administrator. In practice the authority of Her Majesty's Government or the High Commissioner amounted to very little.
The position of the Company was anomalous in as much as its concession gave it no legal authority to deal with land, except for purposes ancillary to mining. Rhodes was, therefore, more than a little disturbed when, in October 1891, a German, E. A. Lippert, secured from Lobengula a far reaching concession in return for a payment of £1,000 down and £500 annually. It assigned to Lippert for a hundred years the sole right 'to lay out, grant or lease for such period or periods as he may think fit, farms, townships, building plots and grazing areas'.^12^ Rhodes now bought the concession from Lippert^13^ and the Company assumed, wrongly as it turned out many years later,^14^ that its ownership of the land was settled. It is difficult to read of these transactions without smiling at the thought that Lobengula and his like were signing agreements based on ideas of ownership which had no meaning in their circumstances---and the Judicial Committee of the Privy Council was to have this thought in mind later.
Lobengula much resented the settlement of Europeans in Mashonaland and was not prepared to surrender his jurisdiction over the Mashona inhabitants, even if they were in the employment of the Company or the settlers---nor indeed was there any moral or legal reason why he should have done so. Jameson, the Company's Administrator, proposed demarcation of a boundary between the jurisdiction of Lobengula and the Company, but Lobengula rejected this proposal. Raids to recover cattle which Lobengula regarded as his had for long been frequent, but when they took the raiders into farms in the possession of the settlers, clashes were frequent and serious. They culminated in July 1893 in the appearance of a force of 2,500 Matabele in the south of Mashonaland. War followed and the Matabele were completely defeated. Lobengula died shortly afterwards and as a modern historian puts it, 'the Company, representing the Grown, possessed all his dominions by the same right as he had himself possessed them, the right of conquest'.^115^
On 18 July 1894 the Matabele Order in Council provided for the administration of Matabeleland by the Company and thus
"Williams, p. 171.
" Hanna suggests that Lippert may have been an ally rather than a competitor of Rhodes, but this suggestion does not appear sound.
^14^ Infra, p. 32.
^19^ Hanna, p. 95.
brought the whole of Southern Rhodesia under the Company's administration.^10^
The Company's next trouble was mainly of Rhodes' own making and it must be remembered that from 1890 he had combined the functions of Managing Director of the Company with those of Prime Minister of Cape Colony. Relations between the Cape and the Transvaal had for some time been strained and they were worsened by Rhodes' determination to force the Transvaal into an economic federation with the other three main South African territories. Kruger, though himself a bully, was not prepared to be bullied and replied by putting difficulties in the way of the operation of the railway from the Cape. The Cape Colonists sought a way round this obstacle by using ox wagons, but Kruger closed the drifts across the Vaal on 1 November 1895. This action nearly precipitated a war, but strangely enough the approaching imminence of war led to a boom in the Company's shares, since the shareholders apparently envisaged the possibility that the war would result in a federation including Rhodesia as well as the Transvaal.^17^ Kruger now reopened the drifts and war was averted.
At this stage the Uitlanders---or foreigners, mainly British---
in the Transvaal had genuine grievances and a rising seemed to be under preparation. Rhodes was determined to use the rising to further his federal aims and planned to intervene with armed force when it took place. For this purpose, he needed a jumping off point.
The transfer of British Bechuanaland to the Company on 16 November 1895 brought him nearer to the only practicable road of access, but the Company had no right to station its forces in Cape territory.
This difficulty had, however, been removed a few days earlier by the transfer to the Company, with the consent of Khama, of a 'railway strip' in the Bechuanaland Protectorate, adjacent to the Transvaal.
A considerable force of the Chartered Company's police was now stationed in that strip, ready to move in when the rising took place.
The Uitlanders were divided in their attitude to the rising and when it appeared that it might never take place, Jameson made his notorious raid. The story of its disastrous failure is too well known to need to be recounted here. It is enough to say that Rhodes resigned both as Managing Director of the Company and as Prime Minister of Cape Colony.
Trouble for the Company was now brewing in Matabeleland.
The Matabele had genuine grievances, foremost amongst which was one relating to the distribution of land. The volunteers who had formed an important element in the Company's force during 136 the Matabele war had been promised substantial allocations of land.
A Land Commission was established under the 1894 Order of Council and was charged with the duty of ensuring that adequate and satisfactory reserves were provided for the Matabele. Before it could commence its operation, the volunteers had taken whatever they wanted and the Matabele were left with reserves which were far from satisfactory. They also suffered a good deal from the arrogance and bullying of many of the Company's subordinate officers, and when the witch doctors threw the blame on the Company for the rinderpest and other natural calamities which befell in 1895, they found a receptive audience.137
In March 1896 the Matabele rose en masse and many Europeans were massacred. The rebellion was suppressed with difficulty and Rhodes' unarmed encounter in the Matoppo Hills with the rebel leaders138 led to peace with the Matabele. For reasons which are not clear there was a similar outbreak in Mashonaland and it was not until late in 1897 that peace was restored there.
After the Jameson Raid and the Matabele rebellion, it was clear that a greater measure of control must be exercised over the Company's administration by Her Majesty's Government and a new Order in Council was passed in November 1898 with this object in view. The authority of the High Commisisoner was to be exercised more strictly than before through a Resident Commissioner and the Rhodesian armed police were placed under the command of an Imperial Commandant General appointed by Her Majesty's Government. There was indeed a fear for a time that the Company's charter might be cancelled, but this line of thought was not pursued.
Northern Rhodesia and Nyasaland
The Company was only concerned with administration in Nyasaland for a very brief period and the importance of that country for our purposes arises from the fact that it was the starting point for the occupation of North Eastern Rhodesia. Livingstone's travels had thrown much light on the activities of the slave traders and slave raiders in the region of Lake Nyasa and had led in 1861 to an abortive attempt by the Universities Mission to work there. The hostility of the Yaos compelled Bishop Tozer to withdraw the mission in 1863, but in 1875 a fresh start was made, this time by the Free Church Livingstonia Mission. The missionaries soon established friendly relations with the Angoni on the western shore of the Lake and before long other missionary societies commenced work in the Nyasa region. In 1883, Her Majesty's Government appointed a Consul
'to the territories of the African kings and chiefs in the districts adjacent to Lake Nyasa'.^10^ and he was particularly charged with the duty of weaning the chiefs away from the slave trade. In the following year a Glasgow merchant established the African Lakes Company to organize transport and the supply of stores for the Livingstonia Mission. This Company was inefficiently run and earned a bad reputation for unreliability and profiteering, but it served a useful purpose and its station at Karonga, at the north end of the Lake, became a key point in the missionaries' defence against the attacks of Arab and half-caste slave dealers. The Arabs and their associates were now importing arms on a considerable scale and in
1886, Mlozi, one of the half-caste dealers, was thus able to make effective attacks on Karonga. In spite of the disapproval of Consul A. G. S. Hawes,^20^ the African Lakes Company had no alternative but to engage in armed hostilities with Mlozi and his Yao allies, and in May 1888 Lugard arrived to command the defences of the station.
The available force was quite inadequate and little progress was made against the slavers.
The Portuguese at this time were determined to establish their influence throughout a belt of territory running across Africa from east to west---more or less at right angles to Rhodes' contemplated line from the Cape to Cairo. They claimed the entire Shire valley and granted to two Portuguese citizens the exclusive right to place steamers on the Shire and the Zambesi. They also sought to compel every individual proposing to visit Lake Nyasa to buy a permit in Mozambique. Her Majesty's Government took their stand on the principle of 'effective occupation' and so denied that Portugal had any rights except near the coast, but of greater importance than any assertion of principle were the steps taken to establish British occupation. In 1885 the Agent of the African Lakes Company had obtained treaties of cession from various chiefs but they were repudiated by the British Consul. In 1889, however, H. H. Johnston, the Consul at Mozambique toured extensively between Lakes Nyasa and Tanganyika, making treaties with a number of chiefs en route.
Alfred Sharpe, later Sir Alfred, a solicitor who had some kind of authority from Johnston, made similar treaties further west. Another unofficial agent of Johnston's, Joseph Thompson, was also concerned in the treaty-making operations. As Johnston put it, the treaties were
^JB^ Hanna, p. 103.
^10^ ibid., p, 104.
of a character not necessarily committing the British Government to actually granting British protection, but still forestalling and precluding any subsequent attempts of Portuguese emissaries to bring the same districts by treaty under Portuguese sovereignty.^21^
In January 1890, one of Johnstone's subordinates informed the Portuguese that he had taken the country north of the River Ruo under his protection, though he does not appear to have had any explicit authority from Her Majesty's Government for doing so.
Nevertheless, that Government supported him and when the Portuguese tried to advance north of the Ruo, the Government issued an ultimatum and the Portuguese withdrew. Nyasaland thus came within the Company's administration, but for the next eighteen months it paid the African Lakes Company £9,000 per annum to discharge this duty. The Portuguese now abandoned the struggle and by a Convention in August 1890 surrendered their claim to the Shire Highlands and recognized the freedom of navigation on the Shire and the Zambesi. The boundary fixed by this Convention assigned to the Portuguese the area known as Manicaland, to which Rhodes attached importance. He behaved in characteristic fashion and occupied Manicaland by force. In May 1891 Her Majesty's Government formally declared a Protectorate over Nyasaland, which was described as the British Central African Protectorate and in June a second Anglo-Portuguese Convention recognized the fait
accompli over Manicaland. In effect, Portugal renounced all claims to Nyasaland or North East Rhodesia. This was in fact the end of her dream of a corridor across Africa.
For the next four years Nyasaland and North East Rhodesia were, the subject of an unsatisfactory arrangement under which Johnston, as Commissioner, governed Nyasaland on behalf of the Crown, while the Company paid to his administration the subsidy which it had previously contributed to the African Lakes Company.
The amount of the subsidy was fixed at £10,000 and was later raised to £17,500. Rhodes felt that he was paying for nothing and when the British South African Company bought out the African Lakes Company in 1893, it discontinued the free use of that Company's steamer services by the Nyasaland administration. In 1895
the Home Government took over the direct financial responsibility for the administration of Nysaland, and the Company henceforth had no concern with the running of that country. North East Rhodesia did not become a Protectorate, but the Company continued to administer it by virtue of its charter and its treaties with chiefs,
Hanna, p. 112.
while Johnston exercised supervision in those matters in which the charter had made the Company amenable to Her Majesty's Government.
North West Rhodesia
The administration by the Chartered Company of what became North West Rhodesia was an overspill from North East Rhodesia and it was not until the end of the century that the two regions were separated. From about 1889 Johnston and his associates had sought to extend British influence to the west by means of treaties with local chiefs. It had even been hoped at one stage to involve part of the Congo in this network. Joseph Thompson, who apparently had no official position but was an experienced traveller in Africa, was also used by Johnston in these operations and made treaties over an extensive area on the upper Kafue. The African Lakes Company also moved westward, though it was concerned with establishing trading stations rather than with treaty making. When Johnston found it impossible to make a treaty with chiefs in the Congo, he sought to prevent the new Congo Free State from extending its influence into North East Rhodesia and for this purpose established a fort on Lake Mweru---a key point for the prevention of the export of slaves into German East Africa.^22^ Gradually the network of treaties was extended until it almost reached Barotseland, though the territories of the important Bemba tribe remained outside the network for some years.
Lewanika, the ruler of Barotseland, also had paramount authority over an extensive area on both banks of the Zambesi, which was particularly vulnerable to the dreaded Matabele. In 1889 he asked for the Queen's protection, but the Colonial Office was in no hurry to take on fresh responsibilities. Lewanika then granted to a trader,
James Ware, a concession of mineral rights, which were sold to a syndicate in Kimberley. Rhodes promptly bought it from the syndicate.^23^ The concession was limited in that it only applied to the outlying areas of Lewanika's territory and not to Barotseland itself, but it was enough to whet Rhodes' appetite and in 1890 he sent an emissary, F. E. Lochner to Lealui, the capital of Barotseland, to persuade Lewanika to ask once again for protection. Lochner now represented himself to be an agent of the Queen---which he was not---and described the proposed agreement as the alliance with Queen Victoria which Lewanika had previously sought.^24^ The chiefs
^23^ Hanna, p. 127.
^23^ R. I. Lovell, The Struggle for South Africa, p. 214.
^24^ Lovell, p. 214.
U
were at first opposed to Lochner's proposals, but when Khama of Bechuanaland advised them that they had nothing to lose and everything to gain from British protection, they accepted his advice and in June 1890 agreement was reached. Lewanika placed his dominions, as he thought, under the protection of the Queen---
but really of the Company---and granted the Company full mineral and trading rights in return for an annual payment of £2,000?'
The Company did not appoint a Resident for some years and Lewanika seems to have felt that he had been cheated, but the fear of the Matabele was too strong to allow him to quarrel with the Company.
There was still some doubt as to the boundaries of Barotseland with Angola, but the question was referred to the King of Italy for arbitration, and he fixed the boundary at the 22° East Longitude.
For some years the influence of the Company in Barotseland was purely nominal, but in 1897 the Company sent up R. T. Coryndon to Lealui as Resident. In the following year a fresh agreement was negotiated, but it was not formally executed until October
1900.^20^ By its terms it was settled that there should be no prospecting in Barotseland itself as distinct from the outlying territories, and in consideration of this restriction, the Company's annual payment was reduced to £850. The Company was also given exclusive jurisdiction over civil and criminal cases involving white men.
In the meantime it had become clear that the Company's responsibilities in this region could not be discharged from North East Rhodesia and in 1899 the Barotseland and North West Rhodesia Order in Council, followed in 1900 by the North East Rhodesia Order in Council divided the Company's administration in Northern Rhodesia into two distinct regions. In 1909 the earlier agreement was modified. The reserved area, in which prospecting was not allowed, was extended, but on the other hand the Company was granted the actual ownership of all land outside that area. In 1911 North East Rhodesia and North West Rhodesia were amalgamated into Northern Rhodesia with its capital at Livingstone. (In practice Lewanika retained a considerable measure of autonomy, particularly in Barotseland itself until his death in 1916.)
Economic Affairs
In its report on land ownership by the Company, the Judicial Committee of the Privy Council stated that 'those who had petitioned for the grant of the charter were influenced by patriotism as much
" Hanna, p. 131.
\"ibid., p. 133.
as profit and desired to further the development of British South Africa consistently with Imperial policy and progress'.^27^ This was undoubtedly true, but before long there were 8,000 shareholders and they could not be expected to be satisfied with a situation in which they received no dividend and in which expenditure on administration exceeded receipts. In February 1898 the Company therefore proposed that administrative expenditure not met by revenue should be regarded as a first charge on the country and treated as a public debt if the Company's administration were terminated. The Secretary of State rejected this proposal, but stated that in such an event the Company must look to the Crown for reimbursement of 'the outstanding balance of aggregate advances'.
In the first decade of the Company's existence it might have been taken for granted that the cost of administration would be heavy, but there were also special factors making matters worse.
The occupation of Mashonaland in 1891 involved considerable capital expenditure and even two years later revenue from Mashonaland, including sales of land, amounted only to £34,153 7s. 7d.
against current expenditure of £85,097 7s. 10d.^2S^ The Matabele War was necessarily expensive and in that year the Company invested £300,000 in the debentures of the Bechuanaland Railway Company. It also bought half the nett receipts of the United Concessions Company, which had apparently maintained its separate existence when the amalgamation into a group took place. In the year 1893-4 it was therefore necessary to increase the equity capital to £2 million and to issue 6 per cent debentures to the amount of £750,000. The Company had now acquired interests in five mining companies and revenue was improving, but there was nevertheless an excess of expenditure over revenue amounting to
£21,277 7s. 7d.^2^"
At the shareholders meeting on 18 July 1895, Rhodes struck an optimistic note. The Company had acquired, he said, all the Khama's mineral rights, had paid for a hundred miles of railway in Bechuanaland as well as the Beira Railway, and had constructed
1,400 miles of the telegraph system. He referred to the rapid rise in the value of land and 'stands' (i.e. plots of land in townships), and in spite of the revenue deficit declared confidently that the Company had no need of fresh capital. In the following year the Matabele Rebellion had disastrous financial results. It cost 139
£2,266,976 4s. Id.---a figure which apparently included £360,000
paid to settlers as compensation for damage to property. Rhodes'
optimism regarding the capital position was found to be unjustified.
In July 1896 £1,250,000 of 5 per cent debentures were issued at
97J and in November £1,000,000 of new shares were created.
Receipts for the year exceeded expenditure by £59,650 14s. 0d., but this result was only reached after taking into account land sales of £211,676 odd.140
During the next few years trade and industry developed considerably and fortunately the Rhodesian economy was not seriously affected by the Boer War. Up to 1902 the proceeds of land sales had been included in figures of revenue, but this practice was discontinued and a truer picture was revealed. Deficits recurred year by year and in the year ending 31 March 1905, the revenue deficit on Southern Rhodesia alone was £133,752 19s. Id. The Company also had to bear a heavy burden of expenditure in North East Rhodesia and in that year it amounted to £62,482 Is. 8d. while the corresponding figure for North West Rhodesia was £39,662 14s. 7d.141
Perhaps the Company's most important asset was its land and since land prices depended on demand, the Company laid itself out to encourage immigration. In 1905 it considered using the Salvation Army as a means of directing suitable immigrants from Britain to Rhodesia. It is questionable if this would have been a wise approach, since the bulk of the immigrants to Rhodesia were not of a class which could suitably have been recruited in this way. Publicity as to the terms and conditions on which land could be obtainable was more to the point and ten years later the number of Europeans in Southern Rhodesia had risen to 31,500.142 In Northern Rhodesia, too, there was a steady influx of Europeans before the First World War and in 1915 their number had reached 2,000. This naturally gave an impetus to trade in both regions and by 1915 the import and export trade of Southern Rhodesia had grown to £7f million, though as was to be expected in a developing economy the balance of trade in both regions was unfavourable.
The period in between the Boer War and the First World War was indeed one of growing prosperity. The production of the mines increased rapidly and in the case of gold, rose from £308,249 in
1900 to £3,475,391 in 1917. The farmers, too, shared in this prosperity as can be seen from the figures of ownership of cattle and agricultural implements by Africans:
Cattle
1902 55,155
1917 551,632
Sheep Ploughs
60,569 (191) 2,794
302,701 11,213
Tobacco and citrus fruits had also become important in the economy.
This growth proved of little immediate benefit to the shareholders. There continued to be deficits on administration and although, in the last few years of the period, commercial revenue as distinct from administration grew rapidly, capital expenditure was heavy and no dividends were paid. At the end of 1915 the equity capital issued for cash amounted to £7,760,239, but the Directors stated that 'out of pocket expenditure' to that date was £7,466,688---
£6,370,734 and £1,095,354 on account of Southern Rhodesia and Northern Rhodesia respectively. This was regarded as the cost of establishing, developing and protecting the Company's position as the owner of the territory.^33^ As long as the Company considered that it owned the unalienated land it could feel that it possessed a very valuable asset which made up for the lack of dividends. On this matter a rude shock now awaited the Company.
Two factors combined to produce that shock. On the one hand, the Company's ownership of unalienated land in Southern Rhodesia was challenged; and on the other hand, there was a growing demand by the settlers there for Responsible Government, which would necessarily mean the end of the Company's rule. In the early days, the settlers could have been regarded as more or less the Company's men, but by the second decade of the twentieth century a second generation had grown up which knew not Joseph. Settlers no longer felt that their interests coincided with those of the Company. There had been a change, too, in the attitude of the Company. When the Charter was granted, the founders had assumed that at the end of the initial twenty-five year period, they would be able to divest themselves of responsibility. Now, however, the Directors wanted to continue to enjoy the benefit of the ownership of the land.
In 1914 the Legislative Council of Southern Rhodesia was asked to express its views as to the future constitution. All but one of the elected members voted for continuance of the Company's rule for the time being, but resolved that Responsible Government
"Directors Report for year ending 31 March 1915. F.C.O. Library HF
3540 S 6.
should be established when financial and other conditions permitted.
Instead, therefore, of extending the Company's administration definitely for another ten years, as had been provided in the charter,
His Majesty's Government agreed to grant Responsible Government whenever certain conditions were satisfied, provided that the Legislative Council voted for it.
In April 1914, the Legislative Council claimed that the unalienated land did not belong to the Company, but to the Crown, and would naturally pass to the new government of Southern Rhodesia, if and when the Company's rule came to an end. This raised a question of fundamental importance, which clearly had to be settled before any advance to Responsible Government took place. His Majesty's Government therefore referred it to the Judicial Committee of the Privy Council, which, on 28 July 1918, gave a decision unfavourable to the Company. The Judicial Committee expressed the view that 'the notion of separate ownership, in lands or the alienation of land by a chief or anyone else was foreign to their idea'----i.e. the ideas of the Matabele. The Lippert Concession did not in fact 'give the concessionaires the right to use or to take the usufruct. . . What land he appropriated to others was to be appropriated in Lobengula's name. No estate or vested interest in land was vested in Herr Lippert.' The Judicial Committee held that as long as the Company administered Southern Rhodesia under the Crown it was entitled to dispose of unalienated land and to apply the proceeds in reimbursement of all proper outlay on administrative account, but that the land in fact belonged to the Crown. When the Company ceased to be the Agent of the Crown, it would have no special right in it. There was, however, comfort for the Company in the Judicial Committee's statement that 'the Company must have the right to look to the Crown to secure for it. . . the due reimbursement of its outstanding balance of accumulated advances, made by it for necessary and proper expenditure upon the administration of Southern Rhodesia'.^34^
This ruling could not be challenged and since the ownership of the land was the only asset which could make it worth while for the Company to suffer continuing deficits on administration, the Company naturally wished to disburden itself of administrative responsibility and secure fair compensation as soon as possible.
The question as to what payment should be made was immensely complicated and on 10 July 1918, the Secretary of State referred it to a Committee under the chairmanship of Lord Cave.
After some adjustment of the figures originally submitted, the Company claimed £7,866,117.^30^ The Crown, on the other hand, claimed
" Report of the Judicial Committee of the Privy Council.
" Report of the Cave Commission. Cmd. 1129. the return of advances made to the Company for expenditure on defence during the First World War. The Cave Committee awarded
£4,435,225 to the Company, subject to a deduction of an allowance for land appropriated by the Company for commercial purposes or alienated for considerations other than cash. It also considered that the Company would be entitled to compensation for land and buildings taken over by the new administration and the Company then contended that this would bring the figure of the award to
£4,893,467. The Company's claim for interest on the accumulated deficit was not allowed.
In 1921 a Committee under the Chairmanship of the Rt. Hon.
Earl Buxton was appointed to consider the introduction of Responsible Government in Southern Rhodesia and to advise as to the future of Northern Rhodesia. With the broader issues involved we are not concerned, but the Committee was of the opinion that the introduction of self-government without implementation of the Cave award would be unfair and it discussed in some detail the adjustments which the Cave Committee had not quantified. The Buxton Committee also considered the Company's position in Northern Rhodesia. It took it for granted that the Company's administration should be wound up simultaneously in Northern and Southern Rhodesia and it recommended that the question as to the ownership of land in Northern Rhodesia should now be referred to the Judicial Committee of the Privy Council.^30^ The Company was not prepared to face protracted litigation a second time and it preferred to settle the matter by negotiation. In the end an agreement was reached on 29 June 1923, under which the Company was to receive £3,500,000 for its non-commercial assets. It would also receive, for a period of forty years, half the proceeds of any sale of land in what had formerly been North Western Rhodesia and it would retain its mineral rights in both Northern and Southern Rhodesia.- His Majesty's Government abandoned its claim to recover advances made for defence purposes.
There is always scope for argument as to the fairness or otherwise of a settlement of this kind. Those who have been concerned with this kind of negotiation know that governments are always niggardly and business men or concessionaires always grasping---and both parties, in fact, do what they should in the interests of their constituents. Perhaps the best approach to the question of fairness is by consideration of the Company's position after the agreement.
This appears to be as follows :^37^
\"Cmd. 1471.
\" Minutes of Shareholders Meeting of 1 March 1923. F.C.O. Library HF 3540 S 6.
By the agreement Company investments and debtors Debentures (to be paid off)
Balance
£3,750,000
[£3,315,000]{.underline}
£7,065,000
[£1,300,000]{.underline}
[£5,765,000]{.underline}
The Company also had commercial assets in 1922 valued at £8
million,^38^ and as its equity capital was £13 million, its assets were about equal to its capital. Shareholders had had no dividends, but they had not lost their capital and in their entitlement to half the proceeds of land sale in North Western Rhodesia they had retained an asset which appreciated very rapidly in later years. It is interesting indeed to note that it was only after it had given up its administrative responsibility that the Company began to pay dividends. On the whole the agreement with the British Government cannot be regarded as unfair to the Company.
The Charter was not terminated, though it did not now mean much and as the Company had for all practical purposes become an ordinary commercial concern, we are not concerned with its subsequent history. It seems fitting to conclude this account with a quotation from the First Report of the Buxton Committee.^39^
In spite of varying fortunes and manifold and great difficulties, the British South Africa Company has administered the vast tract of country---covering nearly 450,000 square miles---which was placed under its control by its charter. The Company, though they have not yet been able to pay a dividend to their shareholders, have built up and developed the Territory in a liberal and enterprising spirit, meeting out of their own resources, for many years, any deficits between the administrative expenditure and the revenue received for taxation.
^88^ Douglas Malcolm, The British South Africa Company 1888-1939.
'■ Cmd. 1273,
Epilogue The chartered companies had their origin in special and temporary national needs and most of them came to an end when those needs had been met. It is natural, therefore, to ask how important these companies were to the economic development of Britain or to the extension of British influence in the world.
In the sixteenth and seventeeth centuries England was bursting with energy and a new outward-looking mood of Englishmen coincided with a time when the production of goods had outstripped the demand at home or in the traditional markets. Great merchants began to look further afield for profitable trade, but the capital required and the risks involved put enterprise in distant or unknown lands out of the reach of individuals. Associations of merchants were required for this purpose and only a charter could provide them with a satisfactory legal form or could grant them the monopoly without which the enterprises would not have been worth undertaking. A charter, too, would be the outward and visible sign to foreign potentates that the merchants were under the protection of the Crown.
As the years passed, the new channels of trade opened by the Chartered Companies became well known and the risks diminished, so that individuals began to feel that they could do what the companies had done. Interloping became common and profitable and the failure to suppress it was in itself a sign that the special privileges of the companies were no longer necessary. They came to an end because the companies had been efficient catalysts in the creation of British overseas trade.
The Plantation companies were the product of a complex variety of motives. The hope of gain; the belief of humble folk that they could live a better life in the New World; the natural land hunger of the English; and the spirit of adventure . . . all these played their parts in the foundation of the colonies. The economic benefit derived by Britain from colonies has long been a matter of controversy and in Victorian days there were able economists who maintained that Britain could develop her foreign trade without an Empire. This may or may not have been true when they wrote, but it would have been untrue when the plantation companies were established. At that time nearly all colonial powers followed a policy of commercial exclusiveness. Even the British had their Navigation Acts, but the Dutch, the Spanish and the Portuguese were much more rigorous in their monopolistic policies and if they had established their rule in India or Ceylon or the New World, there would have been no British trade to those regions. The struggle for colonies or dependencies was to a great extent a fight for trade.
When we come to what we have called the administrative companies of the late nineteenth century, it is not so clear that their chartered obligations benefited the British economy. The Imperial British East African Company, for example, might have prospered and survived if it had not had to accept the obligations which resulted in practice from its charter. The British North Borneo Company, too, found that the sovereignty conferred on it by charter compelled it to spend money on expensive improvements and that administration was unprofitable. It might well have been better for the shareholders of some of these companies if they had done without a charter and been content to operate under the ordinary Company Law. Their importance was, indeed, not economic but political. They were the means by which the British Government was able, without direct responsibility or expense, to extend British rule or influence with results that are generally admitted to have been on the whole beneficial. On this view, the administrative companies must be held to have justified their existence.
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chapter 12 The Newfoundland and Guiana Companies
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Cambridge History of the British Empire, vol. I, 265, 324.
chapter 14 Companies with Limited 0bjects
Cambridge History of the British Empire, vol. II, chap. 5.
Claude George, The Rise of British West Africa, London,
1904.
Eviline C. Martin, The British West African Settlements,
1750-1821, London, 1927.
C. P. Lucas, Introduction to Lord Durham's Report on the
Affairs of British North America, vols. I and III, Oxford,
1912.
The Autobiography of John Galt, vol. I and II, London,
1833.
The Cambridge History of the British Empire, vol. VII, pt. n.
A. J. Harrop, England and New Zealand. London, 1926.
V. F. Boyson, The Falkland Islands, Oxford, 1924.
T. R. St. Johnston, The Falkland Islands, The Government Printing Office, Stanley, Falkland Islands, 1920.
Lord Durham Report on the Affairs of British North
America, vols. I and III. Clarendon Press, 1912.
chapter 15 The Royal Niger Company
A. C. Burns, A History of Nigeria, 5th ed., London, 1956.
A. F. Mocklor Ferryman, British West Africa, London, 1898.
Cambridge History of the British Empire, vol. II, chap. 18;
vol. Ill, chap. 3.
Liverpool and Merseyside, ed. J. R. Harris, London, 1969.
Dorothy Wellesley, Sir George Goldie, London, 1934.
Parliamentary Papers, C.9372, 1899 (no. 808 in the London Library).
chapter 16 The British North Borneo Company
K. Tregonning, Under Chartered Company Rule in Borneo,
2nd ed. (New title : A History of Modern Sabah), Singapore, 1965.
Note on the Administration of British North Borneo by Sir Richard Dane, K.C.I.E., 1911 (F.G.O. Library).
Papers Relating to the Affairs of Sulu and Borneo, Part I.
(F.G.O. Library HD 2900 15 B 6).
Cambridge History of the British Empire, vol. II.
Report of a Meeting at Westminster Palace Hotel, 26 March
1879 (F.G.O. Library HD 2900 15 B).
Minutes of Shareholders Meetings (F.G.O. Library).
Diplomatic and Consular Reports on Trade :
Annual Series no. 493 Borneo for 1888
no. 420 Borneo for 1887
no. 2491 Borneo for 1899
no. 3719 Borneo for 1905
Despatch from the Marquess of Salisbury to Her Majesty's Minister at The Hague, 1888 (F.G.O. Library C. 5617).
Report of Deloitte, Plender, Griffiths & Co. to the Treasury Solicitor, 1948 (F.C.O. Library HD 2900 15 B 6).
chapter 17 The Imperial British East Africa Company
R. Coupland, The Exploitation of East Africa, 1856-1890,
London, 1939.
Margery Perham, Lugard, The Years of Adventure, 1858-
1898, London, 1956.
Kenneth Ingham, A History of East Africa, London, 1962.
E. R. Vere Hodge, The Imperial British East Africa Com
pany, London, 1960.
P. L. McDermott, British East Africa, London, 1895.
Sir Gerald Portal, The British Mission to Uganda in 1893,
London, 1894.
N. J. Robinson, The History of Smith, Mackenzie & Co.
Ltd. London.
Parliamentary Papers: C6847 1893; C6848 1893; C6853
1893; C7646 1894.
Directors Reports and Minutes of Shareholders Meetings
(in F.G.O. Library).
Cambridge History of the British Empire, vol. Ill, chaps.
2 and 5.
G. P. Lucas, A Historical Geography of the British Empire
(London, 1887; revised until 1931), vol. IV: South and
East Africa.
chapter 18 The British South Africa Company
A. J. Hanna, The Story of the Rhodesias and Nyasaland,
London, 1965.
Eric A. Walker, A History of South Africa, London, 1957.
Basil Williams, Cecil Rhodes, London, 1921.
R. I. Lovell, The Struggle for Africa 1875-1899, New York,
1934.
Douglas O. Malcolm, The British South Africa Company,
1889-1939 (Printed for the Company).
Directors' Report to the Shareholders of the British South Africa Company (F.G.O. Library. HF 3450 S 6).
Report of a Committee Appointed to Consider Certain Questions relating to Rhodesia (the Buxton Committee),
Cmd. 1273 and 1471 of 1921.
Agreement between the Secretary of State for the Colonies and the British South Africa Company, Cmd. 1984.
Report of the Judicial Committee of the Privy Council re the Ownership of Unalienated Land in Southern Rhodesia, 28 June 1918.
The Report of the Cave Committee, 15 January 1921.
-
Hakluyt, III, pp. 2-3. ↩
-
• Rymer, Foedera, XIII, p. 353, quoted in Wood, p. 2. ↩
-
' Hakluyt, HI, p. 10. ↩
-
Supra, Ch. 2. ↩
-
Hakluyt, III, p. 361. ↩
-
This note is reproduced in Epstein, pp. 245-51.
^17^ The name is not used in the Charter and the Company was not in
corporated.
^13^ The letters patent are reproduced in Hakluyt, III, pp. 64-72. ↩
-
Early Voyages and Travels in the Levant (Hakluyt Society, No.
LXXXVII). ↩
-
"Wood, p. 14. ↩
-
The Travels of John Sanderson, Hakluyt Society, Second Series, LXVII,
p. 133. ↩
-
Anderson, Annals of Commerce, II, p. 299, quoted in Scott, II, p. 85. ↩
-
Lipson, II, p. 337. ↩
-
ibid,, p. 337. ↩
-
The Letters Patent are reproduced in Hakluyt, III, pp. 370-87. ↩
-
Wood, p. 21. ↩
-
^80^ Hakluyt, III, p. 373. ↩
-
Scott, II, p. 142.
^48^ Gawston and Keane, Early Chartered Companies, p. 80. ↩
-
Scott, II, p. 143. ↩
-
Hakluyt, VII, p. 53.
" ibid., VII, p. 54.
"ibid., VII, p. 61. ↩
-
Quoted in Cambridge History of the British Empire, I, p. 437. ↩
-
Supra, p. 59. ↩
-
Hunter, I, p. 320-327, or see Purchas, His Pilgrims, I, p. 500. ↩
-
Hunter, II, p. 62. ↩
-
ibid., I, p. 341. ↩
-
Bruce, I, p. 368. ↩
-
The grant is reproduced in The English Factories in India, 1637---4-1, ↩
-
pp. 156-158. ↩
-
" i.e. Rs. 1,330. ↩
-
^28^ Bengal here is used in the wider sense of including all the territories in ↩
-
the Moghul Province of Bengal, Bihar and Orissa. ↩
-
Griffiths, The British Impact on India, p. 54. The account is based on
William Bruton's News from the East Indies, 1638. Orissa was not,
in fact,
within the jurisdiction of the King of Golconda, but the Company's
servants
did not let that worry them. ↩
-
G. R. Wilson, Early Annals of the English in Bengal, I, p. 17. ↩
-
Hunter, II, p. 97, quoting Norman Hedges Diaries, pp. 184-6. ↩
-
Bruce, I, p. 463. ↩
-
Michelborne had been disenfranchised by the Company in 1601 because
he did not subscribe to any of the ventures. (Court Minutes, 6 July
1601). ↩
-
^84^ Hunter, I, p. 284. ↩
-
Cambridge History of India, N, p. 92. ↩
-
Bruce, I, p. 293. ↩
-
ibid., I, p. 165. ↩
-
Hunter, II, p. 174, quoting Calendar of State Papers, East Indies,
1625-9, No. 771. ↩
-
Bruce, I, p. 306, ↩
-
^48^ Hunter, II, p. 175. ↩
-
ibid., II, p., 176.~:~ ↩
-
The Charters of 1669 and 1674 granted Bombay and St. Helena re
spectively to the Company. That of 1677 confirmed its privileges in
spite of
certain defaults; while that of 1683 strengthened the Company's
power
against interlopers and provided for the establishment of Courts of
Judiciary.
The charter granted by James II in 1686 was mainly confirmatory of
earlier
charters and extended the authority of the Company to coin money to
places
other than Bombay. The authority from the King to establish a
municipal
Constitution for Madras in 1687 was apparently not made by charter.
All these charters will be found in the bound volume in the London
Library, referred to on page 75 of this chapter. ↩
-
Moghul Viceroy. ↩
-
C. H. Philips, The East India Company, p. 15. ↩
-
ibid., p. 16. ↩
-
Berriedale Keith, A Constitutional History of India, pp. 96-97. ↩
-
ibid., p. 99. ↩
-
Philips, p. 155. ↩
-
" ibid., p. 288. ↩
-
"Mill, II, p. 233. ↩
-
Rich, I, p. 23. ↩
-
Prince Rupert did not begin to pay his share until June 1668. ↩
-
"Rich, I, p. 36. ↩
-
' Douglas Mackay, The Honourable Company, pp. 25-6. ↩
-
Mackay, p. 26. ↩
-
^8^ Sir William Schooling. The Hudson^3^s Bay Company 1670-1920. ↩
-
Hakluyt, VI, p. 35. ↩
-
* ibid., VI, p. 122. ↩
-
ibid., VI, p. 127.
^8^ J. A. Doyle, The English in America, I, p. 96. ↩
-
Letter from Virginia to London after Delaware's arrival reproduced in
Neill, pp. 36-49. ↩
-
Neill, p. 45. ↩
-
A broadside of the Council reproduced in Brown, I, p. 439. ↩
-
Brown, I, p. 466. ↩
-
" ibid., I, p. 461. ↩
-
" Calendar of Slate Papers (Col.) 1574---1660, p. 13. ↩
-
" Brown, II, p. 570. ↩
-
" Neill, p. 74. ↩
-
Proceedings of Council of Virginia, quoted in Neill, pp. 161-2. ↩
-
\"Neill, p. 174. ↩
-
\" Wertenbaker, p. 47. ↩
-
Neill, pp. 318-19. ↩
-
duced in the following two books by General Sir J. Henry Lefroy. ↩
-
(i) The Historye of the Bermudaes or Summer Islands reproduces an
untitled manuscript which has often been attributed to Captain ↩
-
Nathaniel Butler but Lefroy gives convincing reasons for attributing it
to Captain John Smith and that view is accepted in this book. It
will ↩
-
be referred to in the footnotes as Lefroy. ↩
-
(ii) Memorials of the Discovery and Early Settlement of the Bermudas
or Somers Islands. This reproduces a considerable number of seven
teenth-century documents. It will be referred to as Memorials. ↩
-
Memorials, I, pp. 1 and 2.
*Herrerara, Historia General, quoted in Memorials, I, p. 5. ↩
-
Lefroy, p. 13. ↩
-
In some accounts called Robert Waters. ↩
-
Calendar of State Papers (Col.) 1574-1660, p. 10. ↩
-
^u^ Memorials, I, p. 52. ↩
-
Calendar of State Papers (Col.) 1574---1660, p. 17. ↩
-
^80^ Wilkinson, pp. 86-87. ↩
-
^81^A kind of factor. ↩
-
^88^ Lefroy, p. 71. ↩
-
Quoted in Scott, II, p. 292. ↩
-
" Wilkinson, p. 222. ↩
-
^n^ Memorials, I, p. 557, and Calendar of State Papers (Col.) 1574---1660,
p. 301. ↩
-
Supra, ch. 8.
'Herbert L. Osgood, *The American Colonies in the Seventeenth
Century*,
I,p. 101. ↩
-
Calendar of State Papers (Col.) 1574---1660, p. 97. ↩
-
Williamson, p. 123. ↩
-
ibid., p. 126. ↩
-
ibid., p. 130. ↩
-
Colonial Calendar, 1574---1660, p. 101, quoted Williamson, p. 130. ↩
-
Scott, II, p. 218. ↩
-
ibid, II, p. 219. ↩
-
Martin, p. 108.
^7^ vide supra, ch. IV.
^8^ Martin, p. 114. ↩
-
Minutes of the Council at Sierra Leone, 12 December 1792, quoted
in Martin, p. 121. In these paragraphs we have drawn freely on
Martin. ↩
-
Lucas, Durham Report, p. 172. ↩
-
" Cambridge History of the British Empire, VII., pt. II, p. 59. ↩
-
British Parliamentary Papers---Reports 1836, IX, p. 499, quoted in
Cambridge History of the British Empire, VII, pt. II, p. 66. ↩
-
Cambridge History of the British Empire, VII, pt. II, p. 64. ↩
-
^21^ A. J. Harrop, England and New Zealand, p. 65. ↩
-
Harrop, Cambridge History of the British Empire, VII, pt. II, p. 92. ↩
-
^12^ V. F. Boyson, The Falkland Islands, p. 95. ↩
-
^M^ Cambridge History of the British Empire, II, p. 545. ↩
-
'* Boyson, p. 387. ↩
-
A. C. Burns, History of Nigeria, p. 102. ↩
-
^8^ A. F. Mockler-Ferryman, British West Africa, p. 150. ↩
-
This paragraph is based on the article by Dr. Davies already quoted. ↩
-
^s^ Dr. W. B. Baikie's narrative, quoted in Burns, p. 146, ↩
-
Bums, p. 107. ↩
-
Mockler-Ferryman, p. 178. ↩
-
Burns, pp. 151-2.
" Cambridge History of the British Empire, III, p. 75. ↩
-
"Later Sir GeorgeTaubman Goldie. ↩
-
Parliamentary Papers, C 9372. ↩
-
^18^ ibid. ↩
-
" Bums, p. 163. ↩
-
The Treaties are reproduced in Papers relating to the Affairs of Sulu •
and Borneo, Part I. F.C.O. Library HD 2900 15 B 6. (Referred to as
Papers
hereafter).
* Cambridge History of the British Empire, II, p. 606. ↩
-
Minutes, December 1910.
-
^33^ Minutes, December 1910.
-
McDermott, p. 99. ↩
-
^M^ibid., p. 111. ↩
-
^18^ Directors' Report to Annual Meeting, 17 July 1890. ↩
-
McDermott, p. 160. ↩
-
^M^ £11,350 at the current rate of exchange. ↩
-
The accounts are available in the F.C.O. Library.
^20^ Africa, no. 2 (1892). Quoted in McDermott, p. 181. ↩
-
Basil Williams, Cecil Rhodes, p. 52.
'Williams, p, 119. ↩
-
Report of the Joint Committee of the Privy Council, on the ownership
of unalienated land in Southern Rhodesia, 28 June 1918. ↩
-
* Quoted in A. J. Hanna, The Story of the Rhodesias and Nyasaland, p. ↩
-
8L ↩
-
C. 5918 of 1890 quoted in Eric A. Walker, The History of South Africa,
p. 413. ↩
-
Report of the Judicial Committee of the Privy Council. ↩
-
Hanna, p. 87. ↩
-
The name Rhodesia was not used at first, but was officially proclaimed
in May 1895. ↩
-
This paragraph is based on Hanna, pp. 137-140. ↩
-
Although Rhodes had resigned as Managing Director of the Company
after the Raid, he was still its moving spirit and remained so until
his death. ↩
-
Report of the Judicial Committee of the Privy Council.
^aa^ Directors Report for the year ending 31 March 1893. F.C.O.
Library,
HF 3450 S 6.
" Directors Report for the year ending 31 March 1894. F.C.O. Library
HF 3450 S 6. ↩
-
Directors Reports 31 March 1896 and 31 March 1897. F.G.O. Library
HF 3540 S 6. ↩
-
" Directors Report for the year ending 31 March 1905 F.G.O. Library HF
3540 S 6. ↩
-
\"Directors Report for the year ending 31 March 1915 F.G.O. Library HF
3540 S 6, ↩