The Approach Taken in this Module
I strongly believe the Virginia Company and the Jamestown Era were more impactful on Virginia’s economic and political development, and that it really set the stage for the tobacco monoculture and the installation of an elite and its distinctive political culture. Present day Virginia owes a lot more to the Virginia Company than is realized. The key to understanding why the Virginia Company conducted its colonization initiatives and strategy is to recognize the effect and implications of its two charter restructurings (1609, 1612)
We have in the two Virginia Company charter restructurings a major shift in British colonization policy and priorities. It represents a coming to grips wit realities of colonization, and the first concrete evidence of how, and why the joint stock Virginia Company responded with its 1612 version of Virginia colonization. I won’t hide my principal take away from this module: from 1612 on the Virginia Company was a dying corporate zombie, bypassed by the shifting colonization priorities of the day, and stripped of its core of investors such that it never again achieved sufficient fiscal stability (or internal cohesion) to mount a successful colony-building strategy. As far as I am concerned the die of Virginia Company’s ability to conduct a successful colony-building strategy had been cast.
Another word of warning is that the Virginia Company records through 1618 were burned in the Great Fire of London, 1669. On the other hand, complete records exist from 1619 to 1624 annual meetings, but financial records, and original documents have been lost. There is considerable evidence that in the 1606-18 period, quorums were hard to achieve–that whatever the membership levels, attendance in decision-making forums, especially quarterly meetings of the membership was low. Meetings in the post 1619 period, however, counted in hundreds [membership in both periods were more or less than a thousand].[99] Herbert Osgood, American Colonies in the Seventeenth Century, Vol. 1 (MacMillan, 1904), pp. 60-1 . Indeed to compound matters, one of Smythe’s homes burned in 1619 (Andrews, Vol. 1, p. 108.
Scholars, for literally more than a hundred years have poured through secondary and associated documents and sources to reconstruct both the goings on within the Company and the motivations of its various actors. We have attempted to overcome the limitations of such research by reviewing a good number of scholars, whose description of events and motivations can best be described as uneven, and each focusing on some topics or factors, and ignoring others–if wonderfully researched, they need to be aggregated and the dots of each effort connected to those of the other authors. However, imperfectly, I have tried to do this in this module. Combining these various elements, we do believe a somewhat different picture of the internal gyrations and policy-making of the Company is revealed in this history.
It is wise for the reader to have a sense why I think this so. So I will first describe the events, politics, and structural changes to the charter. From this description and my comments to it, the reader will be able to discern larger forces and deeper dynamics at work. Next, then, we will call attention to these forces/dynamics and introduce themes that follow in future module series, as well as in the present module series, the Jamestown Era.
The themes-dynamics that are present amid the two charter restructurings are:
(1) the Irish Ulster Plantation and the insertion of Parliament into colonization issues radically redirected Tudor policy-making and the Stuart entry into that policy area shifted the geographic focus of colonization away from North America toward Ireland and the Ulster Plantation. With resources always limited, the King’s (James and Charles) priorities strongly favored the Ulster Plantation, leaving a more or less barren investor climate conducive to North America;
(2) Evident in the restructuring was an attempt to address a rather poorly defined colonization strategy nexus, called at the time “the Plantation”. Pursuing a variety of goals, largely drawn from a series of colonization experiments closely linked to the sixteenth century English conquest of Ireland. This discussion is very important and relevant to our economic development interests as they set the stage for the first colonial American economic development strategy nexus and paradigm.
Not particularly successful, the Tudor-defined colonization strategy nexus contained misplaced priorities, a serious lack of knowledge about how best to achieve desired colonization goals, and a bit of insensitivity, inertia, and failure to understand how Ireland was different than the North American wilderness, three thousand miles distant. At first, they simply transferred the Irish-derived plantation strategy to Jamestown–and that failed miserably. As Jacobean policy makers came to grips with how to manage these realities, the beginnings of English-British colonial policy began to take shape, and were imposed in rudimentary and clumsy fashion on poor Virginia. The tobacco monoculture is what was imbedded into Virginia, and our history.
(3) No where is this more apparent than in the investor motivations that underlie Virginia Company’s fiscal future. That this lack of clarity in the strategic goals and realities of permanent settlement and colonial self-sufficiency exacted huge consequences on its colonists is already obvious, but it was its financial capacity to pay for what it attempted to accomplish that the Virginia Company ultimately failed. In our histories we do stress the fiscal incapacity of the Company as the ultimate cause of its death–but interestingly shift to its leadership, fragmented as it was, and the lack of internal cohesion and consensus between its membership and corporate leadership.
As the reader will see there is a lot more going on in the investor community, and the leadership was in fact never very cohesive as is evident in our description of the motivations and role of Thomas Smythe and Edwin Sandys. It exposed to all the limitations of a private joint stock corporation as the principal agent of English colonization. The Virginia Company always had a split personality and bi-polar leadership, and that Parliament, responding to the politics of the day, was eager to enter into Virginia Company corporate affairs and its membership. The key for us is to follow the timing and the volume of investor flows, and to understand the demographic configuration of that membership. Watergate’s Deep Throat’s admonition of “Follow the money or “its the money stupid” James Carville’s Obama era observation is our motto in this module.
By 1619 Parliament forces were dominant within the Virginia Company for a short period, and from that point merchant and gentry gravitated elsewhere, and by the late 1620’s a new generational cohort formed into a new investor-entrepreneur colonial elite–and let’s stop there for now.
What will become an important theme in future modules series is the inadequacy of the financial actors of the period to conduct colonization, and fit it into their fiscal-investor paradigm. As that paradigm wore and broke apart during the Jamestown period, it permitted the rise of a new financial fiscal paradigm that would be able to sustain Virginia’s future economic development, and provide some stability for its political evolution.
That it will lead to a new Virginia plantation elite, financed by a new English investor-entrepreneur class–the one which will lead Britain in its future “commercial revolution”, and inspire a new form of colonial merchant elite in America. That these folks will lead the American Revolution, and for the most part write our Constitution, is an added bonus;
The 1609 Second Charter: Motivations, Perceptions, Actors, Politics
Oh Yea, the Times they are Changing Again
The story behind the 1609-12 Virginia Company charter revisions begins in 1604–two years before the Virginia Company was incorporated. (We are, of course, putting aside the overlap with the Irish Plantation-specifically the events leading to the Ulster Plantation–to focus on another significant dynamic in English colonialization policy-making). The 1604 dynamic commenced with the agenda-initiatives associated with the “Blessed Parliament” of 1604, the first under James I.
Parliament under Elizabeth had its moments, but for the main part she was able to elect key supporters in number to dominate the outcome. But in her later years issues and tensions were accumulating and intensifying. James arrived in London as a newcomer to English politics and its decision-making process, and his injection, naturally enough, of Scots into London, the Court, and the elsewhere did prompt reaction, but more likely the opportunity to move in directions long frustrated by the entrenched Elizabeth was lifted with James on the throne. Also of note, James did not seriously involve himself in “getting his vote out” during Parliament’s election.
When the Parliament met, for what would be a sixteen week session in 1604, its royalist leadership was seriously weakened, principally by a new generation of M.P.s . to which the older Elizabethan core were unable to control. Lacking his own forceful spokesman, the King would in the course of the session turn mostly to his protégé and councilor, Sir Francis Bacon.
From the opening day it was obvious the King’s agenda was in trouble–borne out by significant reversals in his signature Union with Scotland initiative, and the rise of long-simmering reforms to modernizing-liberalizing feudal intuitions and “processes” such as “wardism”. The debate became insulting with insinuations about the Scots, and the divine right aspirations of the King. New agenda issues dominated committee sessions, reports, and finally erupted in legislation.
It is one new agenda-legislation with which we are concerned in this module: the advancement of “free trade”, which in the Blessed Parliament was defined as the end of “regulated” trading companies, like the Muscovy, Levant, and Company of Merchant Adventurers. In the end, while the Commons passed a bill, the Senate did not–and the legislation seemingly failed. But there is much to be gained, and learned, from this legislation because as we shall see, approved or not, the fate of regulated trading companies was sealed after this.
We are see from our study of free trade in the Blessed Parliament is the injection of Parliament into the vehicle of trading and colonization, the regulated and joint stock corporation”. More importantly we witness the joint stock corporation reform and the opening up of English investment to non noble and merchant individuals: the admission of a new investor class who had demanded their right to invest in trading companies thru Parliamentary legislation. The goal of this new investor group was to earn a return through investment in trading companies–and their horizon also saw opportunities from colonization. What they attempted in this legislation was to break up the trading company “monopolies” which in their mind constituted an inner closed, interlocking core of membership that deprived the great body of company membership of opportunities to secure profit and limited their access to company decision-making.
In a larger sense, the 1604 Commons was injecting itself into a policy area formerly a near exclusive preserve of the Crown and her/his key institutions such as the Privy Council. The structure and policy-making associated with English trading and foreign policy was about to be challenged and change dramatically over the next seven years. Its effect on the Virginia Company–and by implication, Virginia–was huge.
Parliament and Free Trade
What is this “free trade thing? Unfortunately, the answer requires an expedition into the “weeds” of late sixteenth and early seventeen trading finance and organization. [99] I rely on Theodore K. Rabb, “Investment in English Overseas Enterprise, 1575-1630 (the Economic History Review, New Series, Vol. 19, No. 1 (1966), pp. 70-81; Theodore K. Rabb, “Sir Edwin Sandys and the Parliament of 1604 (the American Historical Review, Vol. 69, No. 3 (April, 1964), pp. 646-670; History of Parliament, https://www.historyofparliamentonline.org/volume/1604-1629/member/smythe-sir-thomas-1558-1625; History of Parliament, https://www.istoryofparliamentonline.org/volume/1604-1629/survey/viii-officers-and-servants-house; History of Parliament, https://www.historyofparliamentonline.org/volume/1604-1629/member/sandys-sir-edwin-1561-1629.
Up to 1604, during the Elizabethan period, free trade was quite controversial, generating repeated legislation, to little avail. Final reform of the joint stock corporation was not achieved until 1623 “Statute of Monopolies”, but English courts did from time to time (1601 being an important court-imposed limitation) impose limits and conditions to what the royal charter could grant to a trading company. [99] See Frank Evans, The Evolution of the English Joint Stock Limited Trading Company“, Columbia Law Review, Vol. 8, No. 5 (May, 1908), pp. 339-361.
Parliament’s issue previous to 1604 was attachment to a joint stock corporation the right of its membership (shareholders/investors) to exercise a monopoly over sale of certain products derived from its foreign trade. This power was granted through a regulation, by the Crown no less, of the joint stock corporation. So, if one traded abroad for fur skins, only a member of the trading company could sell-license them in the English market. This is the razor “blade” that made the profit from the trading ‘razor”.
As one might expect, the rancid nature of this power generated a nexus of corruption, arguably the chief deficiency being that only favored individuals could take advantage of the profits derived from foreign trade. Those excluded wanted in. Since the Queen was among those who was in the inner circle, this legislation went no where. In 1604, a new generation of parliamentary leaders tried a new definition of free trade and attacked the lack of access problem from a different angle. Free trade in 1604 attacked the problem by submitting legislation to end “regulated joint stock companies”.
Regulated joint stock corporations could legally restrict their membership to include only those who were licensed to trade a specific product or commodity. Such regulation usually included training, an apprentice, and membership in a guild relevant to the specific products. The Company of Merchant Adventurers had forged this regulation and had convinced the Queen of its usefulness to her–and them. Regulated joint stock trading companies then could restrict who could be members, and could impose qualifications for holding higher office and board (or court) inclusion. A relative few of a company with thousands of members could hold and perpetuate their hold on the decision-making bodies of the trading company.
Moreover, an individual not of that particular occupation, nor a member of the appropriate guild, could not invest–i.e. become a member of a regulated joint stock trading company. As more and more new wealth flowed to non noble or merchants, however, a new grouping, called gentry, had disposable capital to invest–and they wanted in on foreign trade and sell of trade goods. They could not participate in foreign trade through trading company investment. This closed trading company, closely tied to the great twelve guilds, and their fraternity with the Crown was the target of gentry activists in the Blessed Parliament–and they saw an opportunity to press their dislike of regulated trading companies by taking advantage of a new (1601) joint stock corporation type that had been promulgated in 1621–the “limited” or non-regulated trading company we know as the East India Company.
the fourth item on his list had been monopolies, by which he had meant the special licenses given to individuals by the crown, granting the sole right to sell or manufacture certain commodities such as playing cards. These grants had come under heavy attack during the last two Elizabethan Parliaments, and legislation against them was passed again in 1604. But another kind of monopoly figured prominently at this session [1604] for the first time: the grants made to the great trading companies whose tight membership received complete control over large areas of overseas enterprise. Unlike their predecessors the gentry of the seventeenth century opposed and attacked several holders of this second type of monopoly [regulated joint stock trading companies] [99] Theodore K. Rabb, “Sir Edwin Sandys and the Parliament of 1604 (the American Historical Review, Vol. 69, No. 3 (April, 1964), p
Originally the East India 1599 charter was a regulated joint stock corporation, with all the traditional monopoly rights attached thereto. But within a year the East India Company was not able to raise sufficient funds to operate its proposed East Indies voyages–indeed, investors had signed on, but many just did not pay up–and so still enjoyed the rights and monopolies attached to the Company. The regulated charter included no penalties for partial payments and so such defaulted investors still enjoyed the unlimited rights of the regulated Corporation. So the Company attained a revision to the charter that granted such rights only to those who invested and paid fully their investment–not the entire membership. Say it in legal terminology the new charter “limited” the rights of investors to monopolies–hence the origin of the contemporary term for English private corporation: “Limited”. In any case, the East India Company became in 1601 a limited joint stock trading corporation–the only non-regulated English trading company.
As such, those who invested in the stock of a limited company could become a member and enjoy whatever the rights of such conveyed on the membership. Literally, that limitation meant individuals did not have to become licensed by the company to be members. but membership was secured by simply by purchase and payment of shares. The original revised charter was limited to a period no longer than 1609, but was renewed in 1610. [99] See Frank Evans, The Evolution of the English Joint Stock Limited Trading Company“, Columbia Law Review, Vol. 8, No. 5 (May, 1908), pp. 343. The purpose of the 1604 proposed legislation was to formalize this “limitation” and to create a second type of joint stock corporation whose membership was open to any could purchase and pay for a share in the trading company. The effect of this legislation was that any investor, of any occupation or even class, could purchase a share and become an owner. with all rights and dividends thereto.
While the 1604 legislation was successful in the Commons, approved with only forty dissenting votes, it was not approved by the Lords–despite aggressive advocacy by its activist leadership. The matter again came up in the Parliament of 1605, when leaders of the merchant community proposed another regulated trading company, the Spanish Company. The legislation for the incorporation of the company as a regulated joint stock corporation failed–and from that point on it was clear, no incorporation of a trading company would be successful if it were “regulated”. Accordingly in 1606, the first official non regulated trading joint stock corporation was incorporated: the London and Virginia Company.
It took a long time to get to this point–but hopefully the reader now sees the relevance of the topic. While the 1606 Virginia Company was structured in accordance with the wishes of the King–and Parliament–although no role for Parliament was made by the King in its 1606 Charter–it was chartered in a structure similar to the East India Company, i.e., non-regulated. When the time came to revise the 1606 Virginia Company charter, three years later, 1609, Parliament and the King were in a different mentality and negotiating posture–and the negotiations for that 1609 and 1612 revision were dramatically different from the 1606 charter.
So what should the reader get from all this? First, certainly the key organizational structure intended to be the backbone of colonization, foreign trade, and permanent settlement was in a flux–caught in an interchange between a divine right king, and a Parliament (a fledgling national legislature) at odds, starting down a path that will lead to England’s most destructive and turbulent period in her history: the pre-Civil War, the Civil War, the various stages of Cromwell and Protectorate, and Restoration of the Stuart monarchy.
Parliament as we shall discover did not YET want to “control” foreign trade and colonization and strip it from the King, but it wanted its fair share of the benefits from it. The King wanted as little of both as he could get. To compound matters as we shall see, James, far more than his son, was not especially focused on the policy area, and his bureaucracy injected its own royalist perceptions into the process.
As we shall shortly see, Parliament restructured the financing of the Nonregulated trading companies, the Virginia Company being the first, and the change in the investor configuration exacted immense repercussions on the organizational vehicle, the joint stock corporation. These repercussions rendered our Virginia Company unable of developing a coherent colonization and settlement program and strategy that satisfied its new investor membership. Virginia will bear the brunt of that division. Like a divorce of mother and father, the sibling will feel the consequences most. After this module, the reader will see how.
A Quick Look-See into the Future so the Reader can see the Bigger Picture
In this module, however, we must explain how the investor membership changed from 1606, and suggest how the motivations of the new investors inspired its parliamentary leadership embedded in the Virginia Company. We must also understand the changes made to the Company structure as a result of the two charter revisions. Those changes altered the nature of the Virginia Company, and set in motion a different model of joint stock corporation, the sole proprietor model, which will be the dominant Stuart organizational structure until its downfall in 1689.
The shift to sole proprietorship replaced the Virginia Company “corporate” proprietorship–meaning the Virginia Company would be the only example of corporate proprietorship in British North American colonial history. This, if for no other reason, would mean the Virginia colony, and the institutions it spawned would be distinct from the other English colonies.
In any event, the parliamentary faction injected in the Virginia Company during 1609-11 would devise a strategy, an inconsistent one it turns out, to both produce a permanent settlement and somehow find a way its allies could profit from a successful and prosperous colony–not just the royalist elites surrounding the King. Again, that strategy will be described in the next series of modules.
The agent for Parliament ensconced in the Virginia Company was its soon-to-be Deputy Governor, Edwin Sandys. His boss, Governor Thomas Smythe, a defender of the traditional Elizabethan model of trading companies and a protégé of James I after 1609 were forced to find a way to balance these pulls and tugs. It, we shall see, is not clear they did. Part of the reason was in 1611, James suspended Parliament for ten years (with a one year exception, the Addled Parliament in 1614). During this time, Sandys drew support within the Company from his investor-membership base, which BTW, will be developed shortly in this module.
Everything will blow up in 1618-19 when Sandys made a coup de etat, ousting Sandys. Using this new found power Sandys introduced a dramatic and profound economic and political strategy to establish an effective and prosperous Virginia colony , When James recalled the Parliament in 1621, he wound up shutting it down again–the fight was over foreign policy and trade, and in that year a sort of counter coup. The reaction that Sandys ran against Smythe for Smythe’s Kent seat in Parliament–and beat him. The King reacted by placing Sandys under house arrest, and from then on a combination of the Indian Massacre of 1622 and the deteriorating state of Sandys, and his faction, led to the termination of the King’s charter in 1624.
I might add, that the activists who led Parliament took advantage of the 1606 “opening” and purchased shares in the Virginia Company. In fact, the chief parliamentary proponent of the the 1604-6 “free trade” reform had in 1607 purchased shares and became a member in the Virginia Company: his name was Edwin Sandys. Accordingly, the next section will discuss both Smythe and Sandys, his boss, and later enemy. They are without doubt, the “odd couple” that constituted the core leadership of the Virginia Company–at least until 1618.
In this the reader ought keep in mind, the part-time nature of the Virginia Company corporate management. It was not even close to a full-time corporation of today. Both Sandys and Smythe were multi-tasking so to speak. Both for instance were full-time members of Parliament (when it was in session); both had day jobs, other than the Virginia Company. For most of the time, Sandys was not even in the office but abiding in his Kent country estate; and Smythe was scattered in the affairs of a CEO in charge of all the other major English trading companies–and after 1621 for sure, in deteriorating health.
Hopefully this description will suggest the tensions that likely existed between the two, and which underlie the evolution of the Company’s strategy between 1613 and 1618 especially. It will also lay a base for Sandys Greate Compact issued during and after his coup in 1618-9. Among its various features, we shall learn is the establishment of a proto-legislature that will evolve by the 1640’s into the famous institution of so-called democracy, the House of Burgesses.
Who is Edwin Sandys–and by the way–Who was Thomas Smythe
Without question the Parliamentary leader who drafted the 1604 free trade legislation, the committee chairman who conducted and spoke for the legislation, and the Commons spokesperson for the legislation in the Lords was Sir Edwin Sandys. Many readers will recognize Sandys as the future Deputy, then Treasurer (i.e. CEO] of the Virginia Company.
It is Sandys who is credited with the inspiration and composition of the colony’s 1618-9 Greate Charter. Arguably the most prominent force within the Virginia Company after 1618, but also its day-to-day chief administrator after 1612. Sandys was steadfast as the principal advocate for restoring that charter after its termination in 1624-5. His brother held critical positions in Virginia, including governor–and George Sandys’ replacement, John Wyatt was Sandys son-in-law and ally in the early period after Company termination. In many ways, Sandys remains the personification of the Company in the minds of many American historians, arguably even more than its founder Sir Thomas Smythe, Treasurer until 1618, when he was ousted by Sandys.
The issue we have stumbled onto is who was in control of the Virginia Company, its boards and committees, and who more accurately could count on the support of its membership in the annual election to its offices. Who and how was making Virginia Company policy? That answer in large part is revealed in the politics of negotiation that characterized the 1609 and 1612 charter revisions–and in who spoke with the King’s favor, and who acted with Parliament’s? The political conflict that commenced in 1604 escalated in the years after, involving the King and his prerogatives in the area of overseas trade and colonization and by nature of politics at that period, meant intrusion into that policy area by Parliament. Say it in plain English politics, did Smythe represent the King’s interests in the Company, and Sandys Parliament’s interest?
Was the Virginia Company, certainly after 1612, a tenuous balance of institutional interests, political interests, and the interests of the Company’s owner-shareholders–who themselves may be active supporters of royal or parliamentary interests as well as their own? As we describe the events that followed in this module, this and future module series, we are injecting the tensions and politics of the early pre-Civil War into the internal decision-making and operations of the Virginia Company.
And in so doing, we implicitly suggest these forces had their effect on the development of Virginia’s political and economic structures and institutions. More over, we are alerting the reader to the possibility that even after the Company’s administration was terminated and replaced by a royally-appointed governor, the impact and influence of former Company officials and associates would continue as major decision-makers in Virginia, and as the dominant owners of its economic base: large tobacco plantations.
Are we further advising the reader to expect more English political intrusions as England became involved in its own great Civil War, its Cromwell Protectorate, and the Restoration, and the Glorious Revolution? Were these intrusions fuel for the reaction of colonials, elites in particular, to develop institutions, structures and practices that protected, if not advanced their own self interests, which were then supplemented by the incremental development of an American autonomous self-identity?
If so, the path to any American exceptionalism may be more complex, subtle, and involve the incorporation of English dynamics and institutions, albeit tempered by American frontier and continental expansionary realities. If the Age of Enlightenment affected America’s drift to Independence, why not the seventeenth century turbulence and institutional chaos?
But for now let’s just understand what happened to the Virginia Company between 1609 and 1612. Let’s understand who Smythe and Sandys were, and then lets examine Company shareholders and see who they were, and consider their interests other than profit and self-interest associated with the break from rule by a divine right monarchy to a “hodgepodge pre democracy” of joint Crown and Parliamentary policy-making. Let’s start with Sandys.
Son of Elizabeth’s Archbishop of York, the second highest position in the Church of England. His father, labeled as a Marist was sent into exile for his less than radical attack on Catholicism, a bias his son seems to have inherited. In an age of English Protestantism, where radicals like Puritans were on the rise, the Sandys family were outliers. Our Edwin Sandys, through most of his life wrote often and thoughtfully on religious topics. He was to write an impactful and controversial book on religion, at a time when religious radicalism was abundant.
That reflected the perspective of a well-educated English gentleman. Interestingly Sandys had qualified in a guild-related occupation, (Merchant Taylors in 1571), but he went on to Oxford with a BA in 1579 and an MA in 1583. He then traveled through Europe (1596-99), also customary for a gentleman, and studied further in Geneva (1597). Although in some ways far from typical, he was thought of then and now, as a “solid and impeccable country gentleman”, a county squire, and his principal American biographer, Theodore Rabb as a “Jacobean Gentleman”.
Sandys principal home, and his holding for Parliament was in Kent–about forty miles from London–whose principal city is Canterbury. Kent was the place he conducted business when he was not active in Parliament–meaning, for significant portions of the year, he ran his side of the Virginia Company operations from his country estate in Kent–not London where the Company headquarters were lodged–and where Smythe was resident.
His early years were arguably those common to an English land-owning squire,, but in 1604, at the age of 42, he returned to Parliament as a new man–a man who had entered perhaps into a mid-life change which found expression in his advocacy for a greater Parliamentary role in English governance, and a firm and loud anti-divine-right view counter to that of his new sovereign, James I, a Scot, of course–and that also seemed not quite what Sandys preferred.
Sandys was among the first to oppose James’s signature 1604 legislation, a Union with Scotland. Instrumental in defeating that initiative, often using bitter and ad hominin attacks on the new King, Sandys earned a perpetual and personal dislike of the King–a dislike that entered into the King’s position on the Virginia Company during the 1620’s [99] Theodore K. Rabb, Sir Edwin Sandys and the Parliament of 1604 (the American Historical Review, Vol. 69, No. 3 (Apr, 1964), pp. 650-54.
Parliament’s Official History, which includes well-developed biographies and summaries of its members since 1364, opens its Sandys commentary with “One of the most brilliant parliamentary figures of his generation, Sandys burst suddenly and unexpectedly onto the parliamentary stage in 1604, establishing a dominance so complete that [M.] Prestwich [noted historian of Parliament and Medieval period] has dubbed him ‘the uncrowned king of the Commons in James’s reign“.
While acknowledging it is a bit of an exaggeration, the Commentary balances that comment with R. Gardiner’s [another noted English historian] assertion that “apart from [Sir Francis] Bacon no man enjoyed the confidence of the House [of Commons] more than Sir Edwin Sandys“. [99] Andrew Thrush, “Sandys, Sir Edwin of Northbourne Court, Northbourne Kent“, The record of his activities and role in Parliament over the next nearly twenty-five years bears this out–although it is evident his golden years were his first after 1604, and the 1620’s witnessed one episode and controversy after another, culminating in his “inglorious years” after termination of the Virginia Company charter. wttps://www.parliament.uk/about/living-heritage/evolutionofparliament/
Sandys then left his mark on Parliament during one of its most critical periods. Of note to this history, the reader ought note that whatever role Sandys played with the Virginia Company, as its Deputy CEO, then CEO, his day job was always Member of Parliament. He never left the body until near his death in 1629. One must include in one’s assessment of his role and his politics within the Company, it is not likely to have been in isolation of his role in Parliament, and indeed, at critical points as I hope to demonstrate, in response to his Parliamentary influence he used political leverage to secure his position, and votes on the Virginia Company’s annual board of directors meetings.
In this assertion, I caution the reader that American historians, while not countering my assertion, have done little to support it. For the most part Sandys, parliamentary career and activities, Theodore Rabb, perhaps Andrews, excepted , were treated as a world separate from those of the Virginia Company. From my point of view, whatever else Sandys was or was not, he was not an apolitical administrator, and never a “neutral” in the politics of England or the Crown. What is also apparent, his politics and his position with the King differed completely from that of his “boss”, Sir Thomas Smythe from 1607 (See Herbert Osgood), when Sandys first became Virginia Company shareholder eligible to vote in its affairs, through 1618, when Sandys led a coup against Smythe that forced him from the Virginia Company CEO, replaced by no other than Sandys himself. In 1621,
In addition, in that year, Sandys competed against Smythe for the latter’s position as an M.P. from Kent, and defeated him, ousting Smythe from Parliament until Smythe was able to replace that holding with another. From that point on, the King pressed various charges, relevant to the Virginia Company, against Sandys, culminating in Sandy’s placement under house arrest. As we shall see, this was a critical period in the history of the Virginia Company. The reader is alerted beforehand to lend support to my assertion of Sandys role and motivations as a Company official. The matter will be developed more fully in later modules.
Sir Thomas Smythe-– In a previous module, I offered an a more comprehensive introduction to Sir Thomas Smythe, but in this instance, I wish to shape my biography to emphasize the degree of distinction between Smythe and Sandys. Sir Thomas Smythe is cut from a different cloth entirely, There is a pun in this as Smythe got “his start” so to speak with training and certification as a “haberdasher” or a merchant specializing in sale of millinery, men’s apparels, and accessories–he was a member of that guild (earning master status in 1580) for his entire life. The second surviving son of Thomas “Customer” Smythe, our Thomas was well-born, into wealth–but not the manor. There is no degree of study from Oxford, or any other university. He was not a writer (with one exception,)He was a merchant, and a very wealthy one at that. The older Thomas and his son did not descend from nobility, but rather were closely associated with the Company of Merchant Adventurers, a membership he retained until his death in 1625. Born in 1558, Thomas was four years older than Edwin Sandys in 1604.
His father died in 1591 and from that time on our Thomas became heavily involved with the series of merchant joint stock trading companies of which we have earlier listed and discussed. By the late 1590’s, certainly, no later than 1600, he was CEO (governor) of the Muscovy, the Levant, and the first CEO-and founder, of the East India Company. In 1605, he was the proposed governor of the Spanish Company that failed to incorporate successfully as a result of parliamentary opposition to its “regulated” joint stock structure. In this context, whatever else Smythe was, he was an Londoner. He was a Londoner in the sense also that a Wall Street banker is also a New York City-centric. No doubt his voluminous Rolodex and his Facebook friends were predominately from London. His home was there, his offices were there, and he is not buried there (two out of three ain’t bad). In his final years, often in poor health he purchased an estate in Kent–Sandys “home town”.
Thomas Smythe (BTW, he spelled his name “SMYTHE” to separate himself from another Thomas Smith, no relation I can discern, who was at the time a powerful member of the Privy Council (1587-1605), and a most impactful player-owner in an Irish plantation just previous to 1600). Our senior Thomas’s active involvement in the affairs of London, evidenced by a variety of official and elected positions, he also enjoyed the franchise as the “King’s haberdasher”, blazed a London-based political path for the family. A holder of many formal positions in London government, Thomas Smythe senior passed on to his son, a network of contacts, and a model for the son to copy–which he did. Along that secondary career path, he was elected Sheriff of London, and held the position when the Earl of Essex attempted a rebellion which Elizabeth felt our Thomas should have headed off at the pass. Our Thomas was arrested and put into the Tower of London (1601). He languished in displeasure until Elizabeth died in 1603.
As alluded to earlier in a remarkable turnaround, James I rode into town and released him from jail, rehabilitated him politically, and knighted him. Immediately, he resumed offices as governor (CEO) of the Muscovy and Levant companies, board of directors of the Company of Merchant Adventurers, and in the next couple of years became once again governor of the East India, and proposed governor for the fledgling French and Spanish trading companies. He was appointed a magistrate in Kent, with only modest holdings there at that time. All and all, as Sinatra would say, “it was a very good year”.
What accounts for all this? Perhaps, a 1610 event can explain his influence and his source of political affiliation: “In January, King James attended the launch of a ‘goodly ship of above 1,00 tons’ ordered for the East India trade … when he ‘graced Sir Thomas Smythe, the governor , with a chain in the manner of a collar, better worth more than 200 pounds, with his [the King’s] picture hanging at it, and put it about [Smythe’s] neck with his own hands“. In this case a picture is worth a thousand words.
He was sent to Russia by the King in 1604 (late start in Parliament) where he met with and negotiated with Boris Godunov, the last Czar of Russia before the Poles captured Moscow and commenced Russia’s proverbial time of troubles; he was still in Russia (in Russia’s lovely vacation paradise, Archangel) when he heard Godunov had been fired out of a cannon from the Kremlin walls. Not wishing to miss this opportunity, he wrote a blog on his visit and it was an instant hit in London. The mission otherwise was a failure–and the books popularity ended abruptly with the Gunpowder Plot.
His popularity, however, explains, so asserts his Parliamentary biography, for his ample Parliament committee assignments, including being assigned a role in legislation promoting “better execution of the penal laws against Catholics”, and another bill to punish “crypto-Catholics” who attended church but failed to take communion–which I assume ruffled Sandys more moderate treatment for Catholics. He also attended a meeting of Parliamentarians with the King, one in which Sandys made several bitter remarks directly to the King on the Union of Scotland; his Parliamentary biography suggests he supported the king at this session. To make a point, Smythe served in Parliament from 1604 through 1621, and then from 1621 to 1623. Although he served on several prominent committees, he did not speak publicly and his parliamentary biography makes the point most of his committee assignments were related to foreign trade, marine and London-related issues, and, of course, trading company relevant legislation.
He was returned to Parliament in 1604 (holding in Dunwich) and was appointed to a considerable number of committees, but, I confess, he made no public speeches before that body. He was on the committee Sandys chaired on the legislation of the foreign trade-regulated monopoly legislation–concerning which his Parliamentary biography asserts “he may be presumed to have opposed the measure, as one of its chief targets was the Muscovy Company” [of which he was then governor].
https://www.historyofparliamentonline.org/volume/1604-1629/member/sandys-sir-edwin-1561-1629
the effects of Sagadahoc
Few have ever heard of Sagadahoc. When the King signed the Virginia Company charter in April 1606 Plymouth activists and board members purchased their shares, shares sufficient to send out an exploratory voyage to determine where their colony ought to be located. It was clear from the start that the London Company was heading to someplace south they called Virginia, somewhere to the north of Raleigh’s old settlement. The Plymouth Company leadership (primarily Popham and Gorgas) were closely associated with past voyages of exploration led by Waymouth, and so they funded an exploratory voyage to scout out a more precise and suitable location for their colony.
In August of 1606, Plymouth Company set off the “Richard of Plimouth” with seasoned captain, pilots and crew, along with a contingent number of men intended to hold any ground they might discover until a second voyage could be sent to formally start the colony. Well, the Richard of Plimouth, contrary to its instructions, took a different route to America, got adverse winds, and ran into a Spanish fleet around Puerto Rico. Something told the English this was not New England. Captured by the Spanish, only the leadership was set free to return to England, and the crew and contingent was sent, a la Ben-Hur, to row the Spanish galleys.
By the time these folk got back to England and relayed their tale, the Plymouth Board readied the second ship, which was being organized awaiting news from the first voyage, in October 1606, under an experienced captain and crew from Bristol. It was intended to carry out the exploratory mission of the Richard of Plimouth, and to report back its discovered location for the permanent colony. In the interim before the second Plymouth Company ship returned, the three vessels of the London Company set off for Jamestown (December 1606).
The second ship returned in February 1607 with a location they considered “made in heaven”. If there were any competition between the two sub-corporations, the pressure was on the Plymouth colony to catch up. So, in May 1607 they launched their three ships, carrying 120 men and two Indians (who were also men), and headed for contemporary New England.
The ships met off the coast of Maine in early August and by the middle of that month they found a suitable location that matched the instructions given them by the Privy Council, on todays Sagadahoc River, upriver from the mouth of the Kennebec River. As had Jamestown, they both operated under the same set of instructions and congruent to which set up their plantation, called the Popham Plantation. The instructions appointed the local resident council, which, like Jamestown, appointed company investors and high status individual . The Sagadahoc colonists, as did the Jamestown colonists, set about to build their port/fort and home away from home using an identical building plan, schedule, through common labor.
To make a short story even shorter, the settlement did not prosper. While Sagadahoc had one huge advantage over Jamestown–it didn’t locate next to a disease ridden tropical swamp–it soon became clear that the faults in planning the expedition and settling the colony were replicated in Maine. In particular, the leadership chosen to form the resident council was shallow; dominated by close relatives of the London incorporators, Gilbert, Popham, they were not chosen for leadership abilities. As Gorgas wrote to Lord Salisbury:
“the chief causes were the insufficiency of the food supply to carry the colonists through the winter, and the ‘childish factions, ignorant timerous and ambitious persons’ who ‘bread an unstable resolution and a general confusion in all theyre affairs’ … for at first, the President [of the resident council] George Popham himself is an honest man, but auld [old-he was 53], and of an unweildy body [fat], and timerously fearful to offend or contest with others that will or do oppose himj, but otherwise a discrete caeful man. Captain Gilbert [24 years of age] is described to be from thence to be, desiroous of supremacy and rule, a loose life, prompt to sensuality, little zeal in religion, humorose, head strong and small judgement and experience, otherwise valient inough. [99] Andrews, Vol. 1, p. 92
There was, however, one major difference. Jamestown arrived in May and had time to clear a field and plant a crop that would harvest before winter came. Sagadahoc arrived in mid August. Even trade with the Indians, if successful, was not likely to fill a gap so late in the year. Like Jamestown, food supplies could not be stored on ship without deterioration, and in winter the haphazardly built storage facilities were prone to fire. When one of the ships left in August, it carried forty-five of the colonists back. Andrews, citing Popham’s take on the colony, complained bitterly that the quality of the people sent over was not sufficient to the task. Idleness, disregard for the common welfare, argumentative and faction-prone they were at best difficult to govern. [99] Charles Andrews, Vol. 1, p. 93.
As expected the winter proved harsh, and in February one of its two key leaders, George Popham died. The storehouse and a number of dwellings burned, no supply ships came–and most important of all, the single key founder of the Plymouth Company, Sir John Popham died in London. His loss left Gorgas, a younger, more idealistic devotee of colonization (earlier writings called him “the father of North American colonization”, in error I believe) as the guiding spirit of the Plymouth Company–and the Governor of the port of Plymouth, England. With a family legacy that reached back to the days of William the Conqueror, Gorgas held such social status sufficient to keeping the Company functioning.
When a second ship returned to London in December, it brought rather discouraging news about Sagadahoc, which disheartened a number of Company investors. When the first ship, the Mary and John returned to Sagadahoc in early spring, it found a broken, conflict-ridden community on the brink of starvation. It brought no new settlers to replace those who left or had died.
At that point the Plymouth Company in London, discouraged, but still committed to the colony, but the Sagadahoc residents were not. They returned on the Mary and John–along with the surviving Gilbert, whose older brother had died, leaving him with his English inheritance. Sagadahoc had been abandoned.
This did not cause the Plymouth Company to fail. There were debts to be paid, and the Company owned two ships, manned by good captains and crew. Knowing the forests had great potential for fur trade, and the coast one of the most bountiful fishing banks than known–with more than a century of fisherman who had fished off its coasts and used small trading posts to store necessaries and trade for fur. Jamestown’s John Smith had explored the area, and in his writings and contacts further confirmed the image of New England as being a promising area for a permanent settlement.
Gorgas and Sir Francis Popham sent Company ships over to trade for fish and furs–and continued to so so for better part of the next decade. A byproduct of this was the publicity and general good perception of New England, especially its cod fishing potential. Others followed suit, and although no permanent developed, small fishing and trading posts did appear on the coast and on mouths of major rivers. When the time was to come for a second settlement, a it would in the late teens, a proto fishing cluster was in place off the coast of Maine [99] See Andrews, Vol. 1, pp. 95-7.
the Do-Do Hits the Fan
Through info obtained from Captain Newport, the captain of the expedition and its supply ships, Smythe and the board of directors kept informed about Jamestown affairs. The first supply ship arrived in January 1608, the second in October of that year. The news Newport carried was hesitant at best, but from it a replication of Sagadahoc did not seem imminent. Probably, the ineffectual resident council was becoming an issue of concern, as was the need for more supplies and settlers. There was also a greater appreciation for “artisans”, if only to locate and build infrastructure prospects for export trade. It was clear from the beginning the 1606 investor core were hungry for dividends, impatient the colony was not sending exports for quick profits. During this period, the colonists obliged by search for gold (the so-called gold rush that supposedly distorted the priorities of the colonists) yielded only ore, fool’s gold, which was sent to England where it was not well-received. The return of the deposed members of the resident council (Wingate, Archer and Ratcliffe) lent credibility to Newport’s warnings, and sensitized London about the failure of the resident council as the government of the settlement.
When Jamestown council returned on later supply ships (Wingfield, especially), they knew they were facing the need to seriously rethink the endeavor. To this end, for example they started to slightly change the demographic configuration of the settlers, and import more artisans. They also knew their local governance structures had not been viable from the start. “Placing the control of the colony in the hands of a group of councilors liable to faction and dispute was leading to continued mismanagement” was thought to be the obvious mistake, and so they searched for the proper manager to send over [99] Charles M. Andrews, the Colonial Period of American History: the Settlements, Vol. 1. (Yale University Press, 1964, p. 101. Their previous merchant trading legacy stressed a military background was essential to fend off the hostile environment, and to manage internal control of the outpost itself.
When Newport returned from his third voyage in January 1609, however, his commentary raised concern and elevated fears the colony was not going well–in need of radical reform and reorganization if it was to succeed and prosper. The winter of 1608 and 1609 was the turning point in the Virginia Company’s coming to grip with its (and investor’s) expectations, and the realities of establishing a permanent settlement in Virginia. Whatever else, the lingering possibility of a “Jamestown as Sagadahoc” alerted the London leadership that something had to be done–and fast.
According to Andrews the London leadership perceived two main causes of concern: (1) the route and timing of the supply voyages (too long at sea and consumed too much food in travel); and, (2) the failure of the resident council as the local government. The first problem could be addressed by the Company, but the second required a charter revision, and certainly approval of the royal council, a risky and time-consuming process.
Specifically, the charter had to be amended to allow the Company greater prerogatives in the administration of the colony, and that meant strengthening its ability to respond as required in a timely fashion. If they were given sufficient authority and autonomy, the Company was willing to finance and send over a large supply fleet, with five hundred settlers and sufficient supplies. Rather than dribble colonists in, a commitment was made to to link charter reform with a serious effort at establishing a permanent settlement (although even at this point, it remained rather vague in its conceptual design and strategy implications) [99] Andrews, Vol. 1, pp. 101-2.
The contemporary idea of colonization had advance no further than to conceive of settlement in terms of ships reasonably well equipped and captained, of hardy men in sufficient number, but of any class or quality, drawn together in part by the prospect of gold r and in part by the need of employment, and of supplies adequate for the purpose. The early desire to obtain wealth from mythical mines or Spanish plate fleets, though far from spent, was yielding to the wiser design of promoting trade in the commodities of the country, fish and furs chiefly, and of creating a legitimate barter … the company in England had not yet learned in the hard school of experience the fundamental lesson that a colony to be successful and permanent must be self-supporting, that it must raise its own food, and render itself independent of supplies furnished by the promoters at home [England] [99] Charles M. Andrews, the Colonial Period of American History: the Settlements, Vol. 1. (Yale University Press, 1964, pp. 99-100.
Facing the hard reality that nothing substantial could be gained without the production of staple crops, they initiated a full-scale effort at colonization. The Company took complete charge of production, which was [to be] carried out on company land by indentured servants and supplied at company expense. The Company’s chosen agents, a governor and council residing in Virginia, implemented decisions on planting, distributions and trade as well as government … As sole proprietor the company collected what was produced; as monopoly merchant it carried out all colonial marketing functions … the Virginia Company’s plantations required a good deal of time to reach a level of development sufficient to produce the staple exports required to yield profits. [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict, and London’s Overseas Traders. 1550-1653 (Verso, 2003, first published, Princeton University Press, 1993), pp. 93-4
It is at this point that Edwin Sandys probably entered into the Company’s centers of decision-making. Andrews and others credit him with writing the draft of the proposed 1609 charter revision. Sandys was then forty-eight, a member of the Royal Council, and since 1607 an investor in the Virginia Company. Likely, the revision was first drafted in February, 1609, and then sent through channels; the revision process was completed, with royal approval and seals, by May 23 of that year. In that my research has uncovered no significant discussion of the intervening process, I suspect the King, usually distant from the details, and more importantly the forces that be on the Privy Council and legal offices involved, were sympathetic to the goals of the Company.
Presumably, they were smart enough to realize they could not expect to micromanage the colony from London, and that the settler configuration was unstable and of little support in the colony’s governance. Rather than seeing a mission failure, they sensed mismanagement due to poorly designed local government. Quick profits were likely not going to happen soon, debt repayments were all the closer, and more supply ships had to be financed and that meant more debt-investment. Still, the late medieval mercantilist definition of trade had not yet been ruptured or broken; challenged yes, but the Company still believed the traditional trading model might yet be made to work.
Behind the Scenes: Context and Compromise Underlying the Second Charter
This project was spiraling out of control, with concerns about its member-investor base, Sagadahoc, and the hard facts costs exceeded their initial expectation–with no evident source of revenues that could retire even the existing debt. They feared the reaction of the king if both settlements so dramatically failed. While popular opinion was favorable, and colonization was seen in 1609 as a patriotic venture, the Virginia Company leadership knew it was they who would be held responsible for bad news, perceived mismanagement, and their own status and position in the economy and political life.
They were also frustrated by the king’s preoccupation with the Irish plantation, and the likely effects it would have on the investment community–which was beginning to come under royal pressure to dig into their pockets and start Irish plantations. Regarding Virginia, the king was favorably inclined, but clear saw his interests as more defensive, that is not rile up Spain, for that matter he resisted any further intrusions by Parliament in foreign trade-colonization, and to ensure/preserve royal long-term interests (land ownership, e.g.) and his executive autonomy of action were not jeopardized, plus in Virginia he had a counter to increasing French, Dutch, and Spanish colonization of North America. But … When it came down to it, if he thought about colonization at all, it was Ireland.
His interest in Virginia per se had not been piqued, and his bottom line was that no royal funds (he didn’t have any, anyway) were going into the project. His personal involvement was limited; his councilors, the Privy Council were his policy managers, and they and he clearly expected the Royal Council to bear the brunt of management and resolution of problems. That the Royal Council could not be so without his involvement, and without his support in being part of the solution, as a counter to out-of-whack member-investor expectations, and somehow finding sources of revenue the Company could tap to fund costs that were likely to increase with each year.
What’s more decision-making by such a large, diverse, politically fragmented body, a body which had a horrible track record for attracting sufficient members for a quorum, deprived the Company of a timely and relatively predictable process to devise, propose and receive permission to act on whatever problem came back on the next supply ship.
A corporation that was supposedly “royal” in nature and accountability need more from the king than he–and his advisors–were willing to give, and that left the private members on the hook, not only for the debt involved, but for coping with public and Parliamentary expectations that potentially jeopardized the other trading companies, especially the regulated ones. Smythe in particular was on a limb, and for the most part, it was his allies and fellow merchants-nobles that looked to him for solutions. Maybe only one, wheel had come off the Virginia Company thus far, but the other three needed repair badly.
But in the winter of 1608-9 all was not lost. Smythe knew like it or not, Parliament was interested in the fortunes of the Company–and not just for patriotic, anti Spain-Catholic nationalism, but because they, as well as others in the affluent rising classes saw an opportunity for their own personal fortunes. Smythe needed a well-heeled investor base that reached beyond his traditional trading company membership. Powerful and respected parliamentary leaders like Sandys wanted in, into the decision-making as their price for investment.
From the king’s perspective a new charter could preserve the tenuous bipartisan balance within the corporation (Crown versus Parliamentary), by empowering a Company private sector, loyal to him, to act in his behalf maintaining the primacy of the King in foreign trade-colonization-foreign affairs. Moreover, distancing the Crown from the day-to-day operation of the Company lent credibility to a troublesome relationship with Spain, and a fragile peace only two years old. Spain was pressing him for clarification on what this Virginia colonization was about–and evidently concerned it had implications on Spanish continental holdings.
Also, let the Company navigate on its own terms, the increasing North American competition and handle any nearby colonial aspirations (New York City was being founded at this time) by his allies the Dutch. With these troublesome moving parts off his agenda and responsibility, James could focus on his signature strategic foreign policy initiative: Ireland. So long as his long-term interests were preserved, he could deal with North America later.
What is clearly evident to me is the investors, the Crown, and the Company leadership did not realized the burden of settlement, creating a new economic base, and simple self-sufficiency in the North American wilderness. Still concerned primarily with the export of staples for profitable sale, investors did not anticipate the time it would take to install basic infrastructure, clear forests, and how to balance self-sufficiency with export–nor did they appreciate the risk and privation involved in being a settler-indenture. To the extent they did, it only encouraged them to take their chances in nearby Ireland.
Whatever their conceptual deficiencies, the 1609 charter revision marked a fundamental repositioning of the Company away from a pure trading factory. These changes did not convert the Company into a true and focused colonization vehicle, but they sharpened the edges of an English public-private partnership, empowering the private side to do more, even venture into governing, without the king looking over their shoulder and nodding, was certainly a step in the right direction, so long as the Crown safeguarded its long-term interests, and relied on short term management by a loyal board of directors (albeit with its own self-interests).
[The company] decided to renew the charter and to obtain ‘such ample and large privileges and powers’ as to make it possible ‘to reforme and correct these (inconveniences) already discovered and to prevent such as in the future might threaten the settlers’ [99] Charles M. Andrews, the Colonial Period of American History: the Settlements, Vol. 1. (Yale University Press, 1964, pp. 101-02
The Second Charter Changes
Smythe, it seems, wanted to change the Virginia Company into a joint stock corporation in which the king (the public sector) surrendered its primacy, and empowered the private corporation to assume the dominant position in decision and policy making–subject of course, to ultimate accountability to the king. Up to this point, the Company had conducted its affairs as a “semi-joint stock corporation” (the second of four varieties of a joint stock corporation). In a semi-joint stock corporation each individual venture required its own financing thru a network of subsidiary companies).
A true joint stock corporation, which Smythe contemplated, empowered the master “holding company” to issue such debt as it needed—hence was in a better position to defend itself was unwanted new members to its board of directors. This form of joint stock corporation is what eventually was imported into the thirteen colonies, and became the form that dominated American private-public partnerships into the 1840’s. The new form of proprietary joint stock corporation did away with the horde of individual investors all seeking the quickest profit, by replacing it with a single owner (think William Penn) or multiple investors lodged in a self-perpetuating board which was sovereign.
Smythe was not completely successful. The horde of individual investors lodged in a hodge-podge variety of subsidiary companies were retained, but power was lodged in the master corporation, the Virginia Company. Smythe was named captain of a ship (Treasurer to be precise), filled with human-investor dynamite, whose second-in-command, was likely as loyal to the investors as he was to the company itself. The ship was, from 1609 on, a ticking time bomb.
[100] As we shall see new investors wanted a say in the election of the holding company directors, it was going to be a question of time before Smythe and the initial investors could potentially be ousted and a new leadership installed. That is exactly what happened; by 1620, Smythe was out, and by 1625 a new board prompted the King to terminate the charter and install a royal-appointed governor in Virginia.
The new company, entitled in the King’s new charter as the “second company”, was formed with (in the words of the King’s charter issued in May 1609) “divers Knights, gentlemen and others from the Bristol, Exeter, and the town of Plimouth” (i.e. investors), who later in the charter were specifically named over several pages of the document. Referenced in the multi-page “Sirs”, guilds, private corporations (ranging from fishmongers, haberdashers, salters, tailors, wax chandlers, butchers, and sheep skinners) plus whoever bought a share and paid its first installment. The two older companies (London and Plymouth) were placed under a new Virginia Company board, appointed initially by the King–and placed above but accountable to the horde of shareholders and past investors.
The Second Charter terminated its supervisory Royal Council—removing the key instrument of Crown direct authority over the Corporation. Legally, the Virginia Company stood on its own as a private company and we now enter into a true private-public partnership.
After two years, it was evident that the initial plan had not worked, and the colony was in serious trouble. Sometime probably in late 1608 and early 1609, stirrings in London and in the Royal Council under whose tutelage the Virginia Company was placed, began to negotiate a restructure of the company, a new infusion of cash-equity to finance its literal survival, and internal reforms/reorganization of the provincial council/leadership in Jamestown. It also seemingly perceived a need to alter slightly the demographic configuration of its settler population (a few more artisans, and households/women).
What the master company got was enhanced powers to establish an economic base, but more important in 1609 form a secure local governance, with sufficient authority and perspective, to command obedience and enforce its vision on the residents. A local governor, bordering on a military commander, was sent over to govern the affairs of the colony. Underneath him a local council, more advisory than elective, would provide that governor a capacity to create order and stability.
… the decision was reached, probably at the end of 1609, to alter fundamentally the manner of governing the colony in Virginia, and instead of a local president and council which had been the form of organization until this time, to appoint a single head entrusted with exceptionally large powers. The company made up its mind to try a new experiment by sending to America a single and absolute governor, with authority so extensive as to make him almost a dictator for life … He was called Lord Governor and Captain General [99] Andrews, the Colonial Period in American History: the Settlement, Vol. 1, p. 107-108
A company “magazine” or store was created to manage the produce of the economic base, and ensure its sale to England. It also extended the boundaries of the colony (whoopee), to include the newly discovered Bermuda–whose settlement would be a separate colony within the Virginia Company.
Even more critical, if not amazing, was the King’s clarification that English residents of Virginia enjoyed the full rights of an English citizen in England. In the Second Charter the King name a new Treasurer (Smythe) for Virginia Company (the master corporation) and created the Captain-General Governor (for life) to serve within the Virginia Company (he was not a royal-appointed governor) responsible for the management and operation of the colony. The King also granted to the master company title to large parcels of land owned by the king, and now awarded to the company for its use.
The restructured Virginia Company was entrusted with greater powers of administration, greater autonomy from direct oversight and policy direction by the King and Royal Council in its internal affairs and its economic agenda had been clarified and given royal incentives design to make it more productive. Implicitly the Virginia Company had been afforded a limited power to self-govern the colony.
Key to that self-governance was the Company was empowered to diversify Virginia’s economy “to dig for all manner of mines of gold, silver, cotton, and iron, lead, tin and all sorts of minerals to be gotten thereby to the use and behoof of the said company of planters and adventurers [i.e. investors], yielding thereof, and providing to us” [the King] but granted a twelve year tax abatement and custom abatements, the right of future immigrants to be deemed as English citizens, and the authorization of what will be shortly known as the “headright” which allowed the granting of land at the end of an individual’s indenture. In its next to last section, the King grants the power to the Corporation to issue debt whose lenders shall be considered as “planters and adventurers of the company”.
The salient and unmentioned issue was the extent to which the finances on which the colony’s settlement strategy rested. The only currency allowed (coin was not) was land and its transfer or export trade. The East India Company enjoyed a monopoly of trade on the sub-continent and Southeast Asia—and within its merchant trader elite was a minority faction of affluent, often noble investors who had taken on the mission and good fortunes of being privateers who harassed “enemy” vessels for God, country and, lets not forget profit.
At this point in our history it is sufficient that we simply acknowledge how a land grant became the basic form of currency in colony finances, and that accordingly the grant of land became the principal economic development incentive throughout colonial America. The first, of several steps, in which the simple land grant became the bedrock economic development strategy and incentive in the 19th USA; we called it homesteading.
As alluded to earlier, the King had no money to bring to the Company’s table, and so if he was to retain a dominant a role as he formerly had, the King must find something of value which he could “give” to the Company to make its operations successful. What the King had in Virginia, and he had it all (a monopoly of it) was land ownership. By making land grants to the Company (which the Company could sell or use as a valuable incentive for a desired action/initiative) the Company got an equivalent to money for its use in the development and growth of the colony.
We shall see shortly the Company was not empowered to issue its own Virginia currency, so English coin, hard to export to Virginia, was always going to be very scarce. Without coin, bartering prevailed, and an alternative currency developed about land, its sale and use, and even trading of indentured servant contracts, and amassing property through marrying newly made widows. While it lacks sex appeal, this failure to address how economic transactions were to be made in Virginia, was, if you care to think about it, a very serious incumbrance.
The other dog that didn’t bark was the master of “holding company, the Virginia Company, which held the charter for the colony was tasked to finance its own activities and initiatives. Land was fine, but gold and hard English currency was better, certainly more flexible. By making the Company responsible for its fiscal affairs—i.e. making the company responsible for financing the public-private partnership, it meant that the Company would necessarily need to issue debt, accept equity, and conduct its own economic transactions, held accountable to its budget and audit processes.
Say it another way, instead of the King issuing orders for his mint to coin/ more English pounds for use in his colonial ventures, the company had to find its equivalent. This would set up what proved to be a major issue and chasm between England and the colony: its finances, debt issuance, lending practices and currency. In empowering the Company to do this, in its time the province itself, its legislature most specifically would inherit the company’s obligations and power. That was not the issue in 1609. The Company would rely exclusively on its semi-joint stock individual subscriptions/companies for financial resources for a little while longer. But the financial die had been cast.
The bottom line is that the Stuart reliance on a joint stock company to conduct and manage its first colonial venture (rather than operate it out of the royal bureaucracy) was becoming more mature. That meant English privatization of New World colonialization forced the upgrading of the late medieval joint stock company into something more robust, more responsible, more in tune with what we think of as a “modern company”. Modern it wasn’t in 1609 (or 1625 for that matter), but the 1609 Charter implicitly made it the responsibility of the Company for the success of the Virginia colonial venture—and that meant company reorganization, empowerment, and a strengthening of its management and personnel. It also meant the Company had to develop its own relationships with political and economic forces beside the Crown. It could no longer depend exclusively on the King to handle its environment.
With the benefit of hindsight, Brenner correctly observes that importance this pivot was to the Company–and he points out the dysfunction that proved to be the cutting edge of the Company’s future failure. As a result of the incomplete pivots of 1609 and 1612, “the company faced a crisis of investment … without fresh investment, the company [would] find itself paralyzed, but it never came close to solving this problem. The consequence of the Virginia Company’s failure to finance itself was a fundamental change in the nature of colonial enterprise.” [99] Robert Brenner, Merchants and Revolution, p. 94. Eventually, he concluded this would cause the collapse of the company. Here we see that Jamestown was to be a victim of its pioneering, first of a kind, English colonization effort. To say it plainly, the Virginia Company was to learn by experience the risks and requirements of what North American colonization entailed.
Complicated Tale of New Investors; the Guilds of Thomas Smythe and the Parliamentarians of Edwin Sandys
There were two capital fundraisers each trying to attract their base to contribute to the new Virginia Company. Smythe would pull out his Rolodex and Sandys his Facebook Friends.
It is fairly clear that the search for new investors began after the proposed charter revision had been drafted, and submitted to the authorities for review. Hence, fundraising overlapped the negotiations for the second charter. Subsequent events, our research indicates, had a material effect on the success of the fundraising.
The second charter confirmed the Virginia Company “was empowered to increase its membership at will” [i.e. it was a Non-regulated trading company]. This it did by selling shares or “bills of adventure” [even modern shares-stocks should always be described in this manner], which were transferable and represented a contribution [purchase] to the common stock of 12.1 pounds each … Planters [colonists and indentured servants] invested their labor, and that of their families and servants, and were entitled to shares therefor [at expiration of their contract]. [Accordingly] it was agreed by the Company that for the period of seven years, that is from the period of 1609 to 1616 the system of corporate management maintained by the former [1606-1609 Virginia Company [the First Company} should be continued in the colony. There should be NO [mine] landholding or trading by individuals, but the company should, as formerly, provide all necessities and receive all products [goods and services produced]. [99] Herbert Osgood, American Colonies in the Seventeenth Century, p. 58.
It is these last few sentences that specified the core of the initial Virginia Company economic base. Jamestown was a “company town”, whose labor was unable to be rewarded by payment, whose stores were held in common, as were all results from ones labor. Inadvertently, the Second Charter confirmed what came as close to corporate socialism as the early 17th century would allow. Many of the presumed causes of the “starving time”, and the early economic distortions of this early period, were embedded in the Second Charter, and the rules issued by the Company in response to it. The damage to Jamestown was done in London, whatever the damage that was piled upon it by the selection of colonists unsuited or unwilling to labor effectively in Jamestown.
First, Virginia Company’s initial request for investors to purchase shares-debt was made in mid-March. It appears the first, and most successful, was from that point to early June–a period in which the King signed off on the revision, and the Gates Expedition to Virginia was assembled. Gates left for Virginia in June, with 500 hundred colonists–a large number–and considerable supplies, and a new leadership for the colony. From then on to November, a second phase followed which was less successful but did bring in more funds, in the form of a few more new ones, and others that paid their second installment. By that time it was clear the first phase had NOT been sufficient to pay for the costs of the departed Gates expedition. This phase had all the characteristics of a Virginia Company making every effort to close the deficit.
Thomas Smythe and the Usual Suspects--Looking down from 40,000 feet the March to November phases were as Wesley Frank Craven described: “The joint stock subscription of 1609 had been the product of what is known as a high pressure campaign, and [he adds] many subscribers had hardly put their names to the list [with the downpayment] before doubt and regret beset them. They were slow in paying up, and some paid only in part, or not at all” [99] Wesley Frank Craven, the Southern Colonies in the Seventeenth Century, 1607-1689 (Louisiana State University Press, 1949 and 1970), pp. 100-101
He was echoed and expanded upon by Terrance H. O’Brien who described that period as “a brief period of enthusiasm in England for the Virginia adventure, and all contemporary accounts agree that this first issue of shares met with widespread support. But one is [also] met with some absence of enthusiasm, or at least the presence of caution among [at least] one important section of London merchants [99] Terrance h. O’Brien, “the London Livery Companies and the Virginia Company”, Virginia Magazine of History and Biography, Vol. 68, No. 2 (April, 1960), p. 140. Of note, I have chosen to rely not on the standard classic, Alexander Brown’s, 1890 Genesis of the United States, in deference to O’Brien’s more complete narrative of all the twelve guilds.
Smythe was going to his merchant trader “funding well” which traditionally drew upon the exceedingly close relationship of the merchant trading companies with the twelve major guild, including the clothing material guild. Most of the trading company leadership were also trained and certified by one guild or another, and remained life long members. Smythe was a member of two, the Skinners and the Haberdashers.
As suggested earlier, decades before, guild activists and leadership had exploited their strength, wealth and access to the Queen-King by participating in London’s administrative and elected offices. By 1606, the guilds and trading companies had saturated the chief electoral position, and held many of the significant London administrative bureaucracies. It was this fused power of trading companies, with guilds, the Crown and through dominance of the London political-administrative structure that had generated the strong opposition from the West Country and other ports dwarfed by London. In this instance we can see that power on display in the first two phases of the Virginia second charter financing.
The campaign was heralded by a early March letter from Smythe asking for the support of the Lord High Mayor of London (a prominent guild member in his private life), the city Aldermen, and the twelve guild companies. The letter spelled out key details of the promotional purchase (12.10 pounds per share, and the willingness to accept personal purchases as well as company purchases. The Mayor quickly lend his support in the form of a letter, with Smythe’s copy attached, urging each guild to ante up in support of the King’s colonial adventure. Both Brown and Smythe seem to agree that while enthusiasm was high, about half of the twelve guilds responded with it–and with various degrees of compliance, for differing reasons, the other half were less enthusiastic.
O’Brien summarizes this by saying whatever the degree of enthusiasm, “the companies first concern was to decide how much, if any, of the stock ‘of the house’ [the guild’s own money] to invest in the Virginia adventure. Willingness to follow the King’s or Privy Council’s wishes, the general advantage of the City [of London], the example of other companies and reasons of prestige guided the decision, perhaps as much as the hope of a good percentage return”. In addition, a notable element preferred a personal investment, quite likely O’Brien hints because they wanted to secure personal as opposed to guild profit. [99] Terrance h. O’Brien, “the London Livery Companies and the Virginia Company”, p. 139.
The response in these early months was truly spectacular. All twelve of the major guilds, subscribed as incorporators in the second charter debt-share purchase. Forty-four of the minor guilds signed on as well–56 in total. [99] Terrance h. O’Brien, “the London Livery Companies and the Virginia Company”, p. 143. In at least one prominent instance, Smythe’s Haberdashers, the subscription did not include a purchase, only a promise to do so. The same was true of a number of personal purchases from guild member companies or owners. For this reason, then, the funding did not reach levels to support the Gates expedition by the time news of that expedition and the exhausted state of Jamestown hit London in November.
New Investors: Sandys Mobilizers Ministers of Parliament (MPs)
The source of the new debt/equity came from several districts in England (London, Bristol, Exeter, Plymouth, and “other places”) whose leadership had indicated a willingness to invest “if the terms were right”. Many were refugees from the Plymouth Company, but most were new investors from a larger consortium of towns and cities. Having identified a source for his rescue money, a new charter draft was prepared for the King’s approval.
Also referenced in the charter of 1609 was the “first company”, whose fortune was being bailed out by the monies of the second company. The first company was also defined by the King as “diverse Knights, gentlemen, merchants, and others” of London and detail listings of its membership was also included. It is apparent the memberships of the two subordinate companies within Virginia Company had agreed to broaden the investor base greatly, extending it to guilds, merchants, and even several cities and towns who saw some advantage in taking an ownership position in the Virginia venture.
There is no doubt because the West Country, Bristol, Exeter, and Plymouth were bringing into the Virginia Company “tent” a number of local guilds, merchants, gentry and the like. What was new in 1609, was the folk recruited into investment by Edwin Sandys. His new shareholder-investors were English M.P.s, i.e. sitting and future members of Parliament. Without doubt there was no illusion of Smythe or the Crown that this would be a check on the London monopolies, and royal hegemony–that through Sandys, as the Deputy Treasurer, these new investors, shareholders, would have someone of their ilk to access the important decision-making.
As Smythe conducted his promotional campaign with his usual suspects, Sandys was no doubt engaged in his own recruitment of new investors. Let’s be clear about the lack of company records that could support our conclusions about either Smythe’s or Sandys efforts–and for that matter on the internal goings on within the Virginia Company. Simply put historians do not have a lot of company records to delve into–they were burned in the great London Fire of 1666. We often know what happened, but lack understanding of the motivations behind the different actors. We cannot support our observations with committee, board or annual meeting minutes. Historians are often reluctant to venture into these unchartered territories, and hence they are usually un or under reported.
As we venture into MP involvement in the Virginia Company, we should also understand there was no official list of Parliament members until 1621. Most likely it was at least 400 and less than 500. Election to Parliament was not congruent with today’s democracy, and a parliamentary district, a holding, could be purchased, others inherited, and still others arranged through oligopolistic bargaining, which could include the King. There is much of the feudal period that remans in English governance in this period–in fact the earlier discussed 1604 Blessed Parliament, and Parliaments after, were deeply involved in removing feudal practices, structures, procedures, and even institutions such as “wardships”. Indeed, a lesson from our comments is the profound overlap between MPs and the rise of an economic class, the gentry. The reader should not get too excited about reading “democracy” into the 1610 Parliament.
So let’s remind ourselves of how the typical Sandys recruited MP felt about a trading company “monopoly”. Historians do call attention to the opposition of Parliament to trading monopolies–and Sandys led the movement in 1604 and in Parliaments after. As earlier explained, regulated joint stock trading corporations did have control over their membership, which they used both to restrict competitors to the profession, and to limit who could purchase shares in a trading company. They also were able to manipulate company procedures to ensure a semi-permanent minority could control the company’s boards and decision-making.
The practical effect of these were a monopoly of guild-tied trading companies that had exclusive dominance in foreign trade, and even foreign policy-making. The 1604 free trade movement, taking advantage of a loophole created by the East India Company immediately previous to the incorporation of the Virginia Company created the first, if temporary, Non-regulated trading company, and when the Virginia Company 1606 incorporation was approved, it followed the East India Non-regulated path. That meant the Company was not able to restrict its membership and shareholders, and the rights of a shareholder went to anyone, of any occupation, who had the money to purchase a share–and at least made the first of any installments made. To put it succinctly, a non-guild member of Parliament for the first time could buy a share in a trading company.
As Rabb describes these attitudinal tendencies. Having elaborated on the 1604’s MP free trade-anti-regulated trading company legislation as an opening up to the MP, and to anybody with non-guild certification the ability to purchase shares in a trading company, he goes on to expand on their motivations in purchasing shares in the Virginia Company:
In the following years … [MPs] flocked to the [non-regulated trading company] ventures that asked for nothing more than an investment. Naturally they wanted as much trade as possible open to this kind of participation. With the gentry’s predilection for [non-regulated] joint stock companies, their subsequent rush into trade … the motives behind the discussion of [1604] free trade can be assessed. The debates of 1604 have long been regarded primarily as an attack of the lesser merchants on the greater, of the provinces of London. Both elements were undoubtedly present, but it was the third, the feelings of the nonmerchants (mainly of course the gentry … as they did when Sandys took control, other considerations entered the issue. [These included] … knights from cloth-producing counties gave support because of current economic difficulties and resentment against Londoners share of cloth profits …. other gentlemen … represented outports or because commerce was a good career for younger sons … [also] the gentry quite simply wanted to find a place for themselves in the spectacular expansion of English trade, and not just for their younger sons … [rather] the gentry wanted to enter [i.e. invest] in a trade without making it a career … Sandys motives for instance meant that free trade in his eyes meant not an end to monopolies, but an end [only] to monopolies for regulated companies … the key to his position was the fact that he could easily buy a share in the profits of the East Indies [Company], but not in the wealth of the Muscovy Company. [99] Theodore Rabb, Sir Edwin Sandys and the Parliament of 1604 (American Historical Review, Vol. 69, No. 3, April, 1964), pp. 663-4
To incorporate these last two paragraphs into the mindframe of a 1609-1610 parliamentarian, they had for decades been in opposition to regulated trading company monopolies. They hated the monopoly mostly because it deprived them of the opportunity to invest in what was perceived as a potentially lucrative opportunity to increase their personal wealth. Today, monopoly is infused with class distinctions that were much less salient in an England which was in its first phases of capitalist development. Moreover, foreign trade and expansion, future colonialization, was more than simple personal profit, but also an expression of English late medieval-early modern patriotism. The blurring of personal gain and the exercise of public authority was simply conflated in this period–and would be so for several hundreds years after.
The ability of foreign trade and colonization to generate genuine economic development and prosperity in England, and colonies and trade were also viewed in terms of self defense against the mercantile ambitions of foreign powers. As discussed earlier, there was also a very significant ill-feeling between London and the lesser cities, ports and counties, which foreign trade and colonization could take the form of municipal-regional economic development. The latter undercurrent was easily mobilized in Parliament, as that institution was seen by many as a check upon the Royal-London alliance that in many ways the Stuart divine right king based his legitimacy and practical authority.
With such motivations, indeed actual enthusiasm among the gentry, it may not be surprising that MPs who served in the 1604 Parliament, and those who served after, a considerable number of potential investors, were open to Sandys overture and draw to his promotion of the Virginia Company in 1609-1610. In fact, they were interested in a variety of trading companies. “The bulk of the gentry were interested only in the main joint stock companies where trading skill was not required [i.e. non regulated]. The Virginia Company, the Somers Island Company … the Newfoundland Company, the North West Passage Company, and the Massachusetts Bay Company, all had gentry accounting for between 25 an 40 per cent, and the varied Irish plantations with 21 per cent. [99] Theodore Rabb, Investment in English Overseas Enterprises. 1575-1630” (the Economic History Review, New Series, Vol. 19, No. 1, 1966), p. 75.
His database supports Parliamentary investment in non-regulated trading companies. In 1609 gentry invested in a deluge of support for the Virginia Company and East India. He finds in 1608 only 29 new investors in the East India Company, and 9 in the Virginia Company–the usual Elizabethan era suspects (for the most part) I suspect. In 1609, however, 81 new investors bought shares in the India Company and whopping 802 in the Virginia Company. In 1610, the respective numbers were 12, and 123..
What may be most shocking is a substantial number of Virginia Company 1609-10 investors (Rabb claims a substantial majority) were gentry who invested in the Company only after they became M.P.s. (either before or in the same year as they joined the Company). Of the 478 gentlemen in the Virginia Company, for instance, 275 were M.P.s, and of the 275, 188 entered the Commons either before or the same year as they joined the Company. [99] Theodore Rabb, Investment in English Overseas Enterprises. 1575-1630” See Table, p. 78, and commentary.
Whatever their motivations likely a mathematic majority of the Virginia Company shareholders were M.P.s, and to the extent they actually showed up at annual or committee meetings they would constitute a formidable force in Company decision-making.
Rabb suggests their presence in London during parliamentary sessions provided an opportunity to participate in the Company–and hence he implies not in session they likely did not attend. Parliament was in session through 1610, and was suspended, with one year exception, through 1621. In 1612, however, the year of the third charter, the Virginia Company attracted 211 new investors. It is possible the recognition of the Somers colony (Bermuda) a prominent element of the Third Charter, attracted a new crop of investors in the Virginia Company?
In any event, after 1612, through 1625, only 124 new investors joined the Virginia Company–most (likely over a hundred)in 1619-21–the Sandys years. Parliament returned to session in 1621, for a short period, and that period was the Virginia Company’s great reform initiative (the Greate Compact) which opened up new opportunities for Company investors.
Osgood provides a summary of investors as of the finalization of the 1609 charter revision–and he draws attention to the wide gap between the investor class and the colonists who went over to Virginia to settle–calling attention to the most basic of inequalities that pervaded the entire Company period of Virginia history. That is a legacy “that kept on giving” to the misfortune of Virginia and our future nation.
[W]hen the [1609] charter passed the great seal [of the king], the number of incorporators had been so increased as to include 56 city companies of London [members of the twelve guilds], and 659 individuals. Of the latter, 21 were peers, 96 were knights, 11 were members of the learned professions, 53 were [sea] captains, 58 were gentlemen, 110 were merchants, and 232 were citizens and unclassified. Of these 230 subscribed for three shares or more (37.1 pounds), 229 subscribed for less than that number. About 200 seemed to have paid in nothing. But as it was the active adventurers [investors] represented the nobility, clergy, and merchants, while the planters [the colonists] were being drawn to a large extent from the lower classes [99] Herbert Osgood, the American Colonies in the Seventeenth Century, Vol. 1, p. 59
The dramatic, almost incredible entry of gentry M.P.s in those pivotal years most associated with Sandys and parliament offer reasonable support for the existence of a Sandys faction within the Company–a faction when it could be motivated and assembled would likely dwarf the other elements (Smythe’s Old Guard, Rich’s merchant adventurers, and non-M.P. gentry, lower nobility whose sons and daughters could take advantage of opportunities in Virginia and Bermuda). All this, of course, ignores the king and Privy Council, whose support for Smythe and whose literal hatred for Sandys, made for a rather volatile concoction that was the Virginia Company investor base.
If Rabb is largely correct in his attributed motivation–the opportunity to participate in colonial=foreign trade wealth creation–their investment horizon would have been short-term, and given the terrible record of Virginia after 1622, one suspects a rather belligerent and hostile horde that, M.P. or not, brought no end of misery in the last years of the Virginia Company. That Sandys got caught up in a scandal, which his close supporters within the Company seemed to be associated, no doubt rendered the king some support for his termination of the charter in 1624.
The configuration of Company shareholders implied considerable future decentralization of decision-making, to committees, annual meetings/elections, and to the degree new investors were motivated by goals not especially congruent with the new tasks and time frames associated with the Company’s professed goal of colony-building, decentralization could imply very serious challenges to the Company and its colony-building strategies.
As the reader will see in the modules ahead, Sandys throughout professed a serious and even consistent long-term permanent settlement strategy, but his initiatives for this were saturated with allowing investors to bypass the company structures, and make individual entrepreneurial ventures using very aggressive company incentives. That these individual initiatives diluted the formal goals of the company (fueled the tobacco boom) and weakened the authority of company officials in Virginia–who pursued on their own their own private initiatives.
That these forces could produce a local elite, almost invulnerable to royal authority, an elite tied to tobacco, large plantations, forced labor (massive economic and political equality), and dominance in several political institutions created during the company period meant the company, riven with factions, conflict, and short term profits, created in Virginia a heritage stronger than most would see–an almost iceberg effect with a below the waterline mass that defied whatever crossed its path.
A final takeaway has to be the vulnerability–the unsuitability–of a corporate joint stock corporation whose shareholders held short term goals and expectations–as an effective vehicle for colony-building. It will be no accident the Virginia Company is the sole example of this type of joint stock corporation in North American British colonization. It will be hard to read the modules that follow without reaching that conclusion. Each module in its own way will demonstrate the Virginia Company’s inability to effectively lead and coordinate its strategies for permanent settlement and self-sufficiency, and instead to allow those goals to be dealt with by a horde of individual initiatives seizing advantage from a economic cluster in its golden period of expansion.
the Immediate Aftermath in London
So Smythe the second charter made Smythe Treasurer (the highest office in the 1609 corporation), and they placed under him a deputy, Sir Edwin Sandys, who over the next decade, was, in effect the COO of the Virginia colony—and the man who, over the years, radically shifted the management, the policy focus, and the implementation of self-sufficiency and settlement strategies. It is likely Sandys that convinced Smythe to create a House of Burgesses in 1618, by example. It was likely Sandys that wrote the draft for the 1609 Charter to submit to the King.
In, and certainly after, November, the promotional atmosphere changed, significantly for the worse. First, the Irish Plantation had crystalized and the King was leaning on the twelve guilds, and the merchant trading community for formal involvement and contributions into specific plantation projects–and he had released the details of how that involvement was expected. Second, news came back from the Gates expedition, exposing its near disaster, and the imploding of Jamestown and death rolls of those who died in the “starving time”. Either one could have been fatal to the investor promotion, both combined to shut it down. From that point on the Virginia Company restructured its financial plan away from investor promotion to the King’s–and Parliament’s approval and support for a lottery. We shall discuss the lottery in our commentary concerning the third charter.
We now enter the Valley Forge of the Virginia Company. In Jamestown this will be the first “starving time”, and in London the news of what had befallen the Gates expedition, and the disorderly and ineffective colony that had been Jamestown through 1609 became widely known, to the investors and to the policy-making and general public. If previous to the Second Contract there had been a sense of foreboding, in later 1609 and following, events got worse with each return ship. If only through the imagination of those in London, and in the reality of those in Jamestown the colony was on the edge of collapse. Indeed by the summer of 1610, the colony residents and governors abandoned Jamestown, boarded their vessels and set off down the James River to escape Virginia for some better refuge–on a path to return to England.
Osgood summaries this period: “When the vessels reached England, the full extent of the misfortune [of the Gates Expedition] became known. It was also seen that the colony was left in a precarious position. Some who had returned with the vessels [Captain John Smith for instance] began also to spread evil reports concerning the colony and the mismanagement of its affairs. This caused discouragement among the adventurers [investors], and many now ceased any longer to support the enterprise. But the group among the [active investors and management], whose hearts were wholly in the work, devoted themselves all the more to its prosecution. [A pamphlet] The True and Sincere Declaration was issued to show what the situation was, how it had come about, and that there was no grounds for discouragement. In a broadside the appeal was renewed for assistance, and for an additional supply of artisans and farmers as colonists. Sir Thomas West, Lord Delaware, a slow and formal man, selected because of his rank was appointed governor [the Gates Expedition governor, i.e. Gates, was presumed dead as his ship was presumably lost at sea], and preparations were at once made to send him out at the head of a [second] relief expedition [99] Herbert Osgood, the American Colonies in the Seventeenth Century, Vol. 1, p.65
It is worth note that Lord Delaware, whatever his failings, was the George Washington of this Valley Forge. He would personally restore the colonists to Jamestown, and stabilize the situation there before bad health sent him back to England; he did retain the office of governor, and exercised its powers while in London. His would be the very first plantation, and it was he that introduced Rebecca (“Pocahontas”) to the King. He died in route in 1617, a trip intended to repair the damage caused by a resident Deputy Governor, Argall. His brothers, resident in England assumed leadership functions, and upon the termination of the Virginia Company charter two of his brothers became royal governors, the last being replaced by Berkeley in 1642. The label “Delaware”, often attributed to an Indian word, was first used as a derivation of Lord Delaware’s formal title: Lord de la Warr. The state of Delaware owes its name to him.
Funds were sufficient for the immediate relief expedition (500 new settlers), but every additional relief expedition would have to raise new funds to pay for it. At that time, a number of investors, having made their initial payment into their subscription, were failing to make timely second or third payments. Andrews, for one, calls into question the financial foundation of the company in terms that today we recognize the coming as having troubles that jeopardized its future “as a going concern”.
After the departure of the relief expedition, the company published several releases (“A True and Sincere Declaration of the purpose and ends of the plantation begun in Virginia”) which pleaded for patience and sustained support for the endeavor, citing the success of the relief expedition and calling positive attention to several individuals as heroes of the colony (News from Virginia: the Lost Flocke Triumphant by Lord Robert Rich), and, in general to elicit new support and funds for the venture.
The Third Charter; 1612
To my way of thinking, the Third Charter reflected more of Thomas Smythe, and created seeds for the rise of Edwin Sandys. I see more of Smythe than Sandys, as the third charter gives expression to Smythe’s tendency to throw balls into the air–the more the better, each being an opportunity to find some niche to make profits. Smythe, I sense, lacked focus. With all his positions, jobs, and responsibilities, the man had more irons in the fire than one man, without a personal bureaucracy could handle. He was willing to throw off day-to-day management to Sandys who, for his own reasons, seemed to have a taste for it. For the moment at least, with Parliament suspended, Smythe closely tied to the King, was not threatened by any Parliament in session–therefore investors, dissatisfied or not, were away from London and quorums in the governing master corporation board seemed to boil down to the minions that he and Sandys could generate.
More to the point, the Company, Smythe for certain, finally decided the Company could not be managed (or controlled) through its “holding company” board or directors (then called the ‘council’), The original 1606 membership was now dwarfed by new members from additional investment groups. More realistic governance had to be constructed–“democratizing”—company governance and placing it in the hands of the entire membership, not just Smythe or his original investment cohort. Of all the changes made by the Third Charter, this was the most fundamental of all. The Company would ultimately by governed by its membership. Colonialization was playing a major part in the initial evolution of the modern private corporation.
Not by accident would the third charter create a new fire for Smythe: Bermuda, Somers Island Corporation and Smythe wasted no time in placing his irons in that. Gates and Dale, more in Smythe’s camp than Sandys, held down the fort in Virginia. It was left to Sandys to find some way to keep the investors on board, pay the bills, and figure out a long term plan. So the company inserted into the proposed new charter a newly created subsidiary company (with formal legal title as a full joint stock corporation—something the other subsidiary companies did not enjoy).
Smythe was put in charge and the board of the new company, named in honor of Somers, who had died in Bermuda after having delivered to it, the settlement’s first supply. The investor base of the Somers Company greatly overlapped that of the Virginia Company—the two companies at that time were considered as a joint endeavor. The Somers Company, however, proved to be a cancer that promoted the formation of factions within the Virginia Company membership–factions which openly competed by about 1619. We will add briefly to that tale in another section of the module.
Sandys, probably because the large numbers of new investors were disproportionately M.P.s, had ideas to find way to reward investors with something other than cash dividends. To this end, Smythe and Sandys nudged the king to provide a source of funds, other than investors, to pay the bills and keep the supply ships going–something they knew was absolutely necessary to prevent the collapse. If controversial, the lottery was in vogue at the time, and so they turned to the king for authorization to conduct lotteries–which, BTW, the king was not fond. Then again the king did not like tobacco either.
The charter revision impetus came from the Company, and it was clearly a reaction to the succession of bad news that had followed the launch of the 1609 Gates expedition, and the negative dynamics it unleashed: fiscal crisis, disaffected investor core, and the lack of a plan that translated into claims of perceived mismanagement. With De la Warr returning to England, the local deputy government position fell to Gates, and then to Dale. In this period, the institutional reaction to recognizing that the colony was a whole in the ground, and the first step was to stop digging a deeper hole that made things worse. Gates and Dale’s 1611-12 mission was to stabilize economy and population, and develop some version of local self sufficiency and sustainability. This, as we shall see in the nest mini module series is what Dale did–and well.
The polarized politics, evident in early 1609, would, in Dec 1610, result in James sending Parliament packing. In that year he suspended Parliament, choosing to rule without parliamentary fiscal/budget support for the next seven years–and again with one exception kept it at pay to his death in 1625. That meant no funds for Virginia from James, and James not without his own colonization ambitions was open to ideas on how to keep the Virginia colony monkey off his back. His seal attached to the third charter in March, 1612 constituted the final version of the corporation-based governance of his Virginia colony.
For our purposes, that last charter addressed several serious Virginia Company needs: the boundary changes and permission to incorporation a new company so to allow the Virginia Company to settle and develop “Bermuda” or the Somers Islands, authorization to initiate lawsuits on unpaid investor installments, the holding of lotteries, and “to give the rank and file of the adventurers [investor-shareholders] a larger voice in its control [of the Virginia Company]” [99] Craven, the Southern Colonies in the Seventeenth Century, p. 100; see also Andrews, Vol 1., pp. 116-118. For our purposes, discussion of the Somers Corporation and Bermuda, while exerting several noticeable impacts on the future development of Virginia, can be restricted to how this new corporation affected the attention of Sir Thomas on Virginia exclusively: “One could hardly tell the difference between the Virginia and the Somers Companies. Smythe was the Treasurer of one and Governor of the other. Both held their meetings in his London townhouse”[99] Grizzard Jr., and Boyd Smith, Jamestown Colony: a Political Social and Cultural History, p. xl
Whatever the schemes and interests of the main players, no sooner approved and applied in 1609 and 1610, the Second Charter revealed itself as a stopgap legislation, a crisis fix that demanded further work and attention. The pivot to a long-term self-sufficiency and settlement strategies and the myriad of initiatives, readjustments, and even changes of political style that had to follow needed addressing, consensual approval, and its environment, with Parliament in suspension, some updating.
It seems to me the Company’s decision to negotiate a Third Charter also represents the point at which the Company decided to adjust is views and perspective on the colonization process. While they might not have fully appreciated the complexity and implications of self-sufficiency or settlement, the Company knew it had to be in for the long haul. Virginia’s so-called permanent settlement or plantation was not just a simple trading factory writ large, rather; it involved populating a far away wilderness province, creating a brand new economic base in a hostile and endless forest, and finding some way to reduce the dependence on company-financed supply ships that sent in a constant stream of colonists to replace those who had died. It was a frank recognition that new questions had risen, for which the Company needed to develop capacity to answer.
Lotteries
That meant the Virginia Company had to face the prospect of raising its own funds desperately needed to finance the supply ships and population recruitment, Each new debt issuance meant new investors and the potential for new members to the board of directors. Hence, the prospect of dilution in the power of the London board of directors was going was now on the table. The charter reorganization had to devise a company structure that allowed each relief expedition to form its own subsidiary “company” while leaving the “conglomerate holding” company more or less in the hands of Smythe and his initial London board of directors. By the time of its dissolution (1625), some fifty-six subsidiary companies were formed. Smythe wanted to avoid this scenario at all costs, and so he also desired the “holding company” be authorized to raise funds without recourse to debt (i.e. no new members to a board of directors)—in 1600 that meant holding public “lotteries”.
The second sources of financing was third charter’s authorization for the Company to conduct lotteries to directly raise revenues for the Company and all its various activities and debts. These lotteries as we shall see were not wildly successful, but they were sufficiently large to support the Company until its demise in 1625. Because lotteries were an important revenue source, they also became a vital tool in the financing of joint-stock companies was they expanded in the New World.
They became a centerpiece economic development financing tool that lasted through to the second quarter of the 19th century. Lotteries were an important source for the venture capital raised by the embryonic railroads of that period. It is worth our while, therefore, to briefly describe a lottery and see how it was instrumental in raising funds for the Virginia province for more than a decade following.
For the reader there is no great violence done to compare contemporary lotteries with the 1612 English-style lottery. Probably the most important difference is today the average individual goes to the store and buys her ticket; in the 1612 period affluent individuals participated, and the proverbial Molly Malone (the oyster vendor) did not. A subscription ticket was still too much for the everyday citizen. So lotteries then were more a class thing than today.
The other exception is many voluntary joint stock corporations (guilds, trade associations, ad hoc investment groups, and some municipal-based entities did participate. In regards to the Virginia Company, the last groups were well represented, as the reader will remember in this period, cities competed among themselves for advantage in participating and sharing in the glories and prosperity of the New World. Municipalities franchised lotteries, and the Virginia Company would send in its team to organize, promote and distribute the winnings–a portion of which went to the home town.
In either case participation in the lottery did not entitle one to be a “member”, voting or not, in the joint stock corporation. Lotteries did award prizes to the winners drawn, and the drawing of the winner was an event followed and reported on. Selling of lottery tickets were a serious organizational activity and in the case of the Virginia Company hired vendors promoted sales, and these vendors went on circuits through towns/cities thought likely markets. Interestingly, a fair way to promote lotteries was to write ballads (songs) that linked the lottery to exciting ventures, finding gold, or other things of popular interest)—sort of like the famous Coke commercial “Like to Teach the World to Sing in Perfect Harmony”. Boy did that work well!
The first Virginia Company lottery (March 1612), the Great Lottery it was called, was at the public area of London’s St Paul (the old one, not Wren’s post-fire tourist and skyscape fame). They drew from London’s middle and upper classes, and were held in the country’s largest marketplace. Ticket price was 2 .6 shillings (half a crown), very affordable if one wanted to wager, and the prizes totaled 5,000 pounds, which included a “fayre (fair) plate worth 1000 pounds.
The sale period was extended a month because sales were not as expected—and trust was obviously lacking as rumors of corruption abounded. The Virginia Company, a creature of royalty and wealthy London merchants, generated a “populist-style” reaction we associated with today’s Wal-Mart in a small town, Chic-fil-A, or grapes/wine in the old Cesar Chavez days. The sales campaigns by the Company were not at all without serious controversy:
Barbour’s way [Virginia Company chief official of the lottery sales] way of conducting the lottery wrought its evils for the people of the towns in which his agents were at work complained at the demoralizing effects upon trade and industry that were caused by the popular excitement which the lottery aroused. The complaints were brought to the attention of Parliament, where the master of the wards, and later lord treasurer … reported from the King that the latter had never liked the idea of the lottery, and had only agreed to it because he was informed that the colony could not subsist without it. … Therefore, in March 1621 at the request of the House of Commons, the Privy Council ordered ‘that the further execution of these lotteries bee suspended” [99] Charles M. Andrews, the Colonial Period of American History: the Settlements, Vol. 1. p. 138
The Virginia Company lotteries needed to be marketed for extended times (the next lottery, “the Little Standing Lottery” was hawked for nearly a year. The Second great Lottery, started in summer of 1612 and the drawing and prize was held in November 1615. After 1616 the Company just conducted “running lotteries”. Individual lotteries were run in several larger cities throughout the decade, and such lotteries employed individuals who would, like traveling sales, work their districts. https://encyclopediavirginia.org/entries/virginia-company-of-london/
I might add the back of the barn tale that whatever its faults the lottery lingered on through from 1612 thru 1620. It had to wait for a suspended Parliament to be called into session. Lotteries in general possessed an aura of corruption (they benefited enterprises of the rich and were viewed as quick rich schemes that exploited the “gambling” instincts of “certain” people). Over the decade, pressures built first on Parliament, and return when the King reconvened Parliament after 1619. Eventually, the King issued an edict against them in 1621. By that time as we shall soon see, the Virginia Company after 1618 shifted away from lottery revenues and based its revenue raising on selling of land in Virginia.
Democratization of Company Governance
The final change from the Third Charter was a rather abrupt and transformative reorganization that followed from the Charter’s revision of the 1609 Charter’s termination of the Royal Council, and the placing of its powers and responsibilities to the King in the positions of the Treasurer (actually CEO) and his Deputy (Sandys). These two company officials had been elevated with authority superior to the other directors and investors of the Virginia Company.
That change engendered considerable disaffection within the Virginia Company and its multiple investors and subsidiary corporations. The Company still carried a whiff of royalty about it, and its internal decision-making was authoritarian at its best, and an infringement of the rights to shareholder-investors, the members of the Company at worst. The Company appeared to be as mindful of investor-member interests, but in practice it had not.
The Third Charter took back the powers it had placed on the Treasurer and Deputy, and lodged them in a “court” that was required to meet four times annually “for the handling order and disposing of matters and affairs of greater weight and importance” {with fifteen members considered a quorum]. It also allowed the creation of “lesser courts” made up of at least five members of the corporation’s “council” (i.e. board of directors) plus the mandatory membership of the Treasurer or his Deputy and fifteen members of the . “These lesser courts might meet as often as they pleased for the transaction of ordinary business” [99] Charles M. Andrews, the Colonial Period of American History: the Settlements, Vol. 1. p. 117
One change the Third Charter made was also to include in its provisions that no dividend would be paid for seven years, and that settlers and employees of the company in Virginia worked for food and boarding for that period. With that one bold stroke, financing stabilized for a longer period allowing the settlement to be stabilized without financial damage, and simultaneous reduced expenses of populating the colony by suspending employment costs derived from importation of settlers. This was in effect shoved down the investor membership’s throat, and it left its residues.
What we are seeing is that investors, members of the corporation, owners of the corporation had regulations imposed on them which restricted their return of investment and the term of their investment. Settlers on the other hand had imposed on them terms, which in a few short years would be transformed into an indenture contract between company and the individual. Both had their impact on the general perception of the Company, and its perception by Parliament, and the non-London elites.
In 1609 the promoter of the southern company succeeded in obtaining a new charter vesting complete control of government as well as trade in the company on the ground that otherwise people would not supply the funds, ‘the sinews and moving instruments … By the amended charter of 1612. The source of all power was nominally in the generality of ‘freemen’—the General Court—who were the shareholders, plus any others admitted to the right of freemanship by the company. Voting was by person, ‘voice’ not by share. But as in all [joint stock] companies vast powers were given to or taken by the officers, that I the council [board of directors] and the executive officers—the treasurer and deputy treasurer [99] Joseph Dorfman, the Economic Mind in American Civilization, 1606-1865 (Book One) (Viking Press, 1946), p. 15
Smythe and Sandys, however, in the meantime had their powers sufficiently enhanced to make and implement decisions that permitted Jamestown and the Virginia Colony to begin its pivot to self-sufficiency and permanent settlement. For very different reasons, each of these two powerful individuals had made and imposed a transformative decision probably over the objections of many of its members.
What we are seeing here is the location of ownership and legitimacy of its corporation in the aggregate of its “members”—folk we today call shareholders. It was they who were to elect officers and the “council” or board of directors, and it was the aggregate which that determined company policy. The lesser courts are today referred to as “committees” which were intended to inserts subsets of the members into those entities that formulated and monitored the implementation of strategies, programs, actions and individuals including officers.
But there is more to this democratization of the joint stock corporation—much more!
The Virginia joint stock Company was the King’s proprietor for the Virginia colony. Through royal grant the Company enjoyed rights and ownership possessed by n one individual in the colony or in London. The Virginia Company governance was the lawful governance of the colony—say it another way, the Company had few restraints in the type of government it installed in the Colony. Its board of directors, its council, was the de facto government of the colony so long as the King’s proprietary charter was in place.
As we shall see later in this module series, the Company, for its own reasons will establish a limited representative institution of government in 1618, and in 1619 that institution met and began its long career that evolved into the lower house of the provincial legislature: the House of Burgesses. This “democratic innovation” is customarily awarded as the original or first seed in the development of modern American legislatures and fundamental to our democracy. My take on this is much less enthusiastic. Craven sees it more as I do, as a step in the evolution of the joint stock company down the path to a more modern business corporation.
He and I see whatever “democratic” benefits the colony enjoyed, were more spill overs from a corporate-shareholder democracy which by the terms of the third charter were expanded from the second charter’s termination of the Royal Council, and its transference of some of its functions and powers to the corporation’s council or court (board of directors) and its periodic meetings (assemblies) of the shareholders,
“The third charter added the privilege of admitting new adventurers [investors-members], a direct control in the selection of all officers for both the Company and the colony, and the fundamental right to draft ‘such Laws and Ordinances for the Good and Welfare of the … Plantation .. shall be thought requisite and meet’“. As Craven further observes over the next decade these shareholder assemblies came to meet as often as weekly so long as a quorum of twenty along with either the Treasurer or his Deputy and four other members of the Court (board of directors). It was further required by the third charter to meet formally at least four times a year– a session that was usually larger and handled more weighty matters. [99] Wesley Frank Craven, the Southern Colonies in the Seventeenth Century, pp. 111-112.
In that our history attempts to explain policy-making, with economic development development as our filter, we can see that policy-making in the Virginia Company offered a considerable opportunity for the shareholder to participate in the making of a good number of decisions, and to check or at least help shape the various initiatives launched by management. In the Jamestown modules that follow, I will often allude to Deputy Treasurer–and Treasurer–Sandys as being the author, of much of Virginia’s governance and economic initiatives.
The reader ought be sensitive that Sandys, however primary his role, was not a dictator, and at times it will be obvious his initiatives not infrequently ran somewhat counter to other formal company priorities and policies. The impact of the weekly and quarterly assemblies are, to me the likely culprits in these deviations–a force that will explain the dominating role of tobacco in the colony, despite Sandys, Smythe (and the King’s) steadfast dislike and opposition. Sandys especially as we shall see wanted very much to diversity the Virginia economy, but he was never able to check the spread of the tobacco plantation.
What’s more, as Craven also suggests, the shareholder assembly set up in Virginia/Jamestown, a seemingly advisory council to the Company-appointed governor and deputy, developed in a fashion that the Company, “established a [local] council [which was] representative of the leading men of the colony” … “Notice should be taken“, he emphasizes, “of the close parallel to the organization existing among the adventurers [shareholders] at home” [the assemblies].
If so he concludes that after the 1612 third charter, all that was lacking in a Virginia autonomous “government” was a general assembly drawn from all members of the corporation, and provided with more fundamental powers. That too will evolve in the Virginia Company period after 1621, and it will persist long after the Company’s charter was terminated in 1625. Say it another way, the Virginia Company joint stock corporation by employing its internal governance in on-site colony governance planted the initial structures of modern day state government.
That they did not closely correspond to the evolution of local “government” of other states during the colonial period, and in reality developed distinctly undemocratic features, not to mention considerable societal, political, and economic inequality that persisted through the American Revolution can likely be attributed to its corporate nature, than from the experience of others which were driven by bottoms-up non corporation dynamics–dynamics which in Virginia hardly penetrated into these corporate-based decision-making structures.
Virginia Company corporate democracy had in fact little to do with “the real thing”–in fact and in practice it was not a political democracy at all. It would create so-called corporate political institutions, that on the surface could be used for more modern democratic purposes, but their reality at the time was they were “shareholder” democracy–and a very imperfect one at that. Future commentators would call attention to these structures as harbingers of future American greatness. They were not in 1612 or 1642 for that matter. I think we do ourselves little good in fabricating a modern democratic myth from this rudimentary 17th century shareholder democracy al la decentralization of some decision-making. It came to an evil end as far as the Company was concerned–and like an empty mansion, somebody else eventually moved in.
The history of the Virginia Company includes several questions of political alignment … which historians in the main have accepted as mere fact, scarce important enough to detain them, which still await their complete explanation. The first of these is the virtual surrender by Smythe and his faction of the colonizing and governing functions of the Company. Sir Edwin Sandys, the very antithesis of Smythe, was made ‘assistant to the Treasurer’, and apparently given a free hand in the matter of colonizing and governing. [99] N. W. Stephenson, “Some Inner History of the Virginia Company” (William and Mary Quarterly Vol 22, No. 2 (Oct 1913) Omohundro Institute of Early American History and Culture), pp. 90-1
The two men worked out this relationship for well over a decade. We will return to this relationship, however, in a few paragraphs, but in 1609, with the King still on top, Smythe was the chief internal policy-making who set the tone and direction of Sandys initiatives and strategies:
Sir Thomas Smythe, during nearly ten years of the Virginia Company was its directing spirit. And ever there was an out-and-out plutocrat, in our modern sense, it was Sir Thomas. With a finger in nearly every bold venture of his time, he literally ranged the world in search of dividends. The image of him who goes up and down seeking whom he may devour inevitably comes to mind [a robber baron, I insert]. We are not surprised that Virginia under Sir Thomas’s rule, resembled a penal settlement rather than a colony, justifying the modern account of the earliest Virginia as ‘a plantation system … with great rigor, the colonists working in gangs with officials as overseers, eating a common tables, and living in common barracks. It was only natural that the Company maintained both an absolute monopoly of land and trade as long as Sir Thomas ruled it
[99] N. W. Stephenson, “Some Inner History of the Virginia Company” (William and Mary Quarterly Vol 22, No. 2 (Oct 1913) Omohundro Institute of Early American History and Culture), pp. 90-1; Stephenson’s article is one drawn from a genre that operated on the fringe of American historians at the time. The more prominent historians of the time (Osgood, for one) did not challenge the thesis of this group (that the Virginia Company was Jamestown’s primary policy system for the first decade and only after 1612 did the local council exercise its own autonomy and initiative to define the Company policy to confront local realities as the council saw them). As we shall see the appointment of a company Captain-Governor, whatever else it did, created order and authority that we see lacking in the memoirs of John Smith, and the actions of its local council.
Grizzard Jr., and Boyd Smith take a different tack which alerts us to differences between the two and their constituencies over the direction of the company’s economic base.
Concurrent company affairs in London had not followed a smooth course. Fundamental disagreement between Sir Thomas Smythe and Sir Edwin Sandys and their followers over economic goals for Virginia [would lead] to the ouster of Smythe as the Treasurer and the elevation of Sandys to the post, then to bitter factional fighting at the stockholders meetings, and finally dissolution of the company.
Sandys desired a return to Hakluyt’s broad program of economic self-sufficiency. Along with many gentry he had invested in Virginia out of patriotism as well as personal gain. The merchant leadership, including Smythe, were no less patriotic, and strongly supported silk, iron, glass, wine an naval stores production, but once tobacco and [its associated] carrying trade developed, they were willing to direct their attentions to those profitable ends.
Tobacco, however, tended to benefit merchants more than it did the rank-in-file stockholders who were willing to believe stories that the merchants benefited from the subcompanies [hundreds and plantations and] the Bermuda and cape merchant operations [the company Magazine] which they were told drained potential dividends from the parent company. Sandys, a full partner with Smythe in several tobacco enterprises, worried along with the king that Virginia was abandoning national goals, for the “vile weed”. Actually, the very success of the tobacco may have rekindled interest in [economic] diversification. Many believed that if tobacco could succeed in Virginia, so could other more useful staples. [99] Frank e. Grizzard, Jr., and D. Boyd Smith, Jamestown Colony: a Political, Social and Cultural History-the 400th Anniversary of the Founding of Jamestown (ABC CLIO, 2007), pp. xlvii-xlviii
Ron W. Coan 