Restructuring the Virginia Company, the 1609 Second Charter

Restructuring the Virginia Company the Second Charter

Jamestown did not implode in 1607 through 1609. What created the crisis was, in my reading, the rubber meeting the road of plantation-building. Nearly half died in months after arrival, and others were sick throughout the year and died in large numbers also. The number left alive and functioning when the next supply ship arrived were so small they lacked any critical mass on which to build the colony with new immigrants. Just to keep enough people alive in the colony, new emigrants had to be recruited, paid for, transported, and supplied.

The early belief that stuff was waiting to be picked up on the beach and sent back to England for the king’s use, investors’ profit, and funds for the supplies, recruitment and transportation proved a bit premature. What is less evident today is that the problems could be easily identified, but the solutions were not. The 1606 start more resembled a wet campfire that could not sustain itself without constant attention and new resources. A economic and population treadmill that was moving too fast in the wrong direction.

They found fool’s gold, and wood in various styles, and in this early period the Indians were on the main friendly enough to offer food and advice, but there were no quick trading opportunities. So all that happened with each supply ship was the Company went more into debt, and bond issuers and investors were increasingly hard to find. Perhaps as much as anything was news that the colonists and councilors were squabbling and even hanging each other-rumors of cannibalism didn’t help. If anything did implode in 1607 it was Jamestown’s self-governance structures. Finally, the reader need be made aware that in this period Virginia did not exist in a vacuum; the activities associated with another colony were literally close at hand and seemingly offered much better prospects.

The point, I hope, is obvious. From the start the engine of growth approved for in the 1606 charter never worked. By the end of 1608 it was evident to the fatboys in London that the 1606 Charter had not worked and had to be fixed somehow, by somebody. So by very early 1609 we begin a period of charter-fixing, colony implosion, and a new round of charter fixing in 1612. 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 resulted, largely because the weed grew fast and easy, and there was a ready market; accordingly it was imbedded into Virginia, and our history. In the West Indies it was sugar, and rice in the future Carolinas. Perhaps Massachusetts was spared from this fate was rocky soil, and an earlier-developed fishing cluster, and its first settlers were Puritan familes who had their own minds what they would do..

(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.

Instability, Inconsistency and Incompetence: Company governance as seen by Jamestown

From the Jamestown perspective, the Company-investor defined-business plan lacked “wilderness savvy and plantation-building prioritization”. Nowhere was this more apparent than in the selection of gentlemen, Company employees-indentured, and council leadership qualifications. The gentlemen usually had connections to the investors or political officials salient to the Company board and officers. The incredible mortality rate, which killed off nearly forty percent of the first wave by early fall, was never considered, and its reality hurt the emigration recruitment and investor appetite.

That emigrants were sent in such large numbers proportionate to the first wave, in the following two supply ships, but did little to aid self-sufficiency, and, on the whole the illness and mortality rates fostered even more dispute and tension with the councilors and the body of residents. The graveyard rivaled the living quarters in their numbers. Each supply ship brought too many ill-fitting residents, with too few skills, who died off in such large numbers in the seasoning that they consumed whatever food was at hand, and were dead or sick in the planting and harvesting times. The supply ships were timed to the routes they traveled, rough seas and winds they encounters, and sufficient money to fill the holds with emigrants and supplies. Their arrival did not fit into the planting and harvesting schedule—BTW they still didn’t as late as 1621.

The absence of effective leadership—several quality possibilities died or were killed—and the lack of structural power within the council combined with a breakdown in traditional English social order meant endless factions, disputes, rivalries. To make matters worse, the resident council could not take charge of its own priorities, but rather had to follow the instructions of the Company, its investors, and whatever was inserted into them by unknown forces.

With each supply ship—there were two before 1609—new instructions arrived. Almost always they included orders for new English imports to pay for the supply ships. This is where the famous gold-seeking came from—company instructions set them off, not the whim of the gentlemen. More than anything these instructions sent the colonists off to find “stuff” with which the supply ship deficits could be paid—lacking a finance plan the Company could not feed its colonists without the latter paying for it with their exports. Williams specifies the various London-based instructions material to our discussion issued via several supply ships probably originating from the Royal Council: they include:

[1608] the company changed its initial policy and ordered the Virginia Council to make all tribes render tribute to the king; [1608] the company’s original scheme had been to ‘send people little by litte’ until the population reached 2,000”; [January, 1608-the first supply ship] ordered search for gold … that touched off a gold rush. There was no’talke, no hope, nor worke, but dig gold, wash gold, refine gold, load gold’. For two critical months this went on. Yet when Newport departed in April, he had only more ‘gilded dirt [fools gold] and a cargo of wood [xxxi]; [later, 1608] “increasingly worried about investor uneasiness, the company in 1608 gave Newport and President [John] Smith three specific goals to attain as quickly as possible: Either search for the Roanoke settlers or locate a northwest passage through the mountains [Smith did both], find goal and send back a cargo worth L2,000 to cover the costs of the second supply ship; and crown Powhatan emperor after extracting from him and oath of fealty to the king [99] D. Alan Williams, “Introduction”, Jamestown Colony, pp. xxxi-xxxiii

After this stream of instructional priorities, the third supply ship under Argall delivered six hundred plus settlers (forget the little increments], the promise of a new charter, and a total revamp of the colonies local governance. Moreover the tone of London command became more intense, even hostile, and the threat of exports for supply ship food more explicit:

It was expected that if possible each [supply-immigrant] voyage should pay its expenses, and if it made a serious loss, it was unlikely that capital would be readily forthcoming for a further expedition. … The local council [in Jamestown] was warned that [the Company] had hiterto had fed the adventurers ‘but with ifs and ands, hopes and some few proofes’ while the settlers were warned that if they could not make some return for the supplies sent them, which had cost between L2,000 and L3000, ‘they were like to remain as banished men” [99] William Robert Scott, the Constitution and Finance of English, Scottish, and Irish joint stock corporations to 1720 (Alpha Editions, 1910, 2019), p.249.

In other words, send exports or risk starvation. Staples are a second priority.

While many past histories have made much of the improper mix and poor character of the initial settlers, and their love of gold, we can now appreciate that the mix, recruitment and signing of settlers was done in England under the monitoring of the Royal Council, the gold rush craze was directly tied to London instructions, and the diversion from planting to exploring, mining, and harassing the Powhatan was also London-driven. By early, 1609, with the Company on the edge of fiscal destruction, the need for new and flexible investors was paramount, and company priorities and their governance priorities shifted to meld investor interests and approval at the expense of the Virginia colony itself, and that required, as we shall see, strong local authority and the shift of on site community relations to that of a military colony.

The dog that did not bark in these three years was the company instilling the values and practices of English society, government, economy and law as the foundation for a diversified economy and a sense of community of interest that reflected England’s, or were conducive to a sustained evolution of a permanent settlement. Little, if anything that the company did or practiced in this years, was either “permanent” or consistent. Not surprisingly all the “puppets” tied to company “strings” could do was argue, go hungry, and eventually die.

It is broke and we need to fix it: an expanded “company heritage”

As the reader will see there is a lot more going on in the investor community. The London leadership was never very cohesive, or efficiently organized. The first must-fix problem was the power imbalance in the 1606 charter. It came down to this: if the king was not willing to support the Virginia initiative with his own funds and resources, than the meddlesome, hard to find a quorum, Royal Council had to go. It had the authority—not the joint stock corporation. The original structure behind the public-private partnership had not worked once it sent the ships on their not very merrie way. Say it another way, if the private folk were to be delegated the responsibility to build the permanent settlement, than they had to have the authority to manage the process. That raised the second issue of increasing the capacity and resources of the joint stock corporation. Remember, as of January 1, 1609, the Virginia Company had only thirty-nine shareholders—actually less, Popham had died. A much larger investor base had to be developed.

As might be evident in our description of the motivations and experience of Thomas Smythe and Edwin Sandys, neither had experience in plantation building. But, in the first two + years, 1606-8 there is little evidence that either had sufficient influence and impact on the issuances of the governing Royal Council to deserve blame for what resulted in Jamestown. But there is evidence that during 1608 that these two led, probably different constituencies and holding different ambitions, a major transformation in the 1606 Company and its charter.

If “follow the money” has any applicability to 1608 Virginia Company, the obvious problem being there was no money to follow, then the need was to find sufficient capital investment that could stabilize and sustain the so-called permanent settlement gone awry. Where was this large investor base going to come from? Somebody had to recruit it. That almost inevitably meant the new investors were not only likely to be different in important ways from the initial investor base, but the new base itself would contain divisions, each with its own set of goals and timetable. Given the “merchant-adventurer structure” of the post-1606 Company, a new venture required a new structure—and that turned out to be our regulated joint stock corporation.

Charter reform leading to a functioning joint stock corporation exposed the Virginia initiative 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. The flow of money within the Virginia Council coffers was about to change, and with it the definition of the Company’s mission and its loyalty to the king’s wishes. The Parliament in its own time would have its own ideas about the definition of the public-private partnership.

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. In 1609, mercifully none of this was known, but still, … I wonder. 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 fractured 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 is a backstage whisper to the reader that the Company’s failure was to open up new paths for others, for good or bad. A not insignificant part of the Virginia Company heritage was how and who filled the vacuum that it created when it lost its charter rights over Virginia in 1624.

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. But first, let me state an obvious fact: none of this had to be; the drivers and the change were not foreordained. There could have been other paths; there is nothing casual about this analysis. To the extent this description and our metaphor make sense, it is not because they had to be this way, it is only that they did become the way the twig adjusted. We are not embarrassed by our reliance on hindsight. If this model of colonial development works at all, it is because it demonstrates strong ties to the actual happenings as they occurred.

What all this translates into is the Virginia political, social and economic development “twig” is going to be “bent” in ways that will be embedded into the “evolving, now mature tree” that is today’s state of Virginia (and its incorporated cities and counties). How did the 1609 broken public private partnership of the first charter bend the struggling twig barely surviving in Jamestown? There will be no single answer to that question. Several different drivers of change will be injected into the Virginia and the Virginia policy system, the twig, will have to figure out how to handle them.

To help the reader along, and to create some roadmap that supports reading this material, the three Charter period set in place a two-tiered policy and economic hierarchy, with the higher tier, the resident Company leadership in control of a workforce reduced to “property status”. The resident Company elite, however, was not empowered to self-manage the Company policy and policy-making which remained embedded in London-based Company instructions and implemented by its appointed leadership through to 1622—when the resident Company elite became literally the only European game in town. In short, the three company charters constructed and installed an unequal social, political system and economic base that was not to be altered until centuries later.

The tobacco monoculture developed “by default” of the company’s need to pay for its plantation-building and the king’s willingness and ability to derive his share of profits from its export and sale in England—in return for his willingness to grant land to the Virginia Company. Tobacco imposed its own restrictions on the workforce that produced it; cheap labor meant indenture and slavery—not homesteading which lead to other workforce configurations in other colonies.

Because of the fiscal constraints suffered by the Virginia Company, the Company was unable to pay its Virginia-based officials a salary, it gave them land which they could use to grow tobacco and set up their own plantations. Inevitably it blurred public and private in the Virginia policy system to such an extent that tobacco became the colony’s currency as well as its export product—allowing resident Company officials to use their offices to benefit their personal wealth accumulation.

Tied to their particular land holdings, the Company elite established a working dominance over the affairs of local governance sufficient to secure their plantation’s viability, and that embedded very early on a policy process that was decentralized at the local level, which transmitted its needs and requirements to a pliable provincial policy system composed of other Company elites sympathetic to that relationship. The workhorse of the policy system was the lower level.

With a weakened, unempowered provincial policy level in place, it is easy to see the tobacco monoculture was able to spread wherever it could, whenever it could—through private entrepreneurship if you prefer to consider it so. Colony-wide legislation, regulation and perspective were very rare, and seldom advocated by any other than the weak governor appointed by the Company and subject to her instructions. Geography and individualistic wealth creation tied to tobacco production was the default drivers behind settlement and the spread of the monoculture—leaving behind no appreciable urbanization and no serious port city.

The Second Charter

Behind the Scenes: Context and Compromise Underlying the Second Charter

The Virginia project was spiraling out of control, with concerns about its inadequate 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 saw his interests as defensive, that is to not rile up Spain while establishing a base of operations. He resisted intrusions by Parliament in foreign trade-colonization, and was reluctant to tap into his ownership of Virginia’s land. As the years went by he was not adverse to use his colonial operations to check his allies like Holland and France. But the bottom line was when 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 Virginia problems. That the Royal Council could not be so without his involvement and support, being part of the solution, left them not only without incentives to take action, but no solutions available even if they wanted to. Quorums were hard to get, and there was nothing “timely” to press them into action except the return of supply ships bearing bad news or indifferent imports to resell.

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. Smythe had many irons in the fire, and while he did put effort into Virginia, he had to this point resisted opening up membership in the regulated London joint stock corporation. I suspect, but do not know, that Sandys, now a member was pressing to open up membership and secure badly needed revenues.

So 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 their 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 yet comprehend the burden imposed by a permanent settlement strategy that required creating a new economic base, and infrastructure and skillsets oriented to self-sufficiency rather than quick revenues for English coffers. The merchant/guild investors were still concerned primarily with the exports for profitable sale; the traditional merchant adventurer 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.

With the benefit of hindsight, Brenner correctly 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.

Charles M. Andrews was willing to take Brenner’s thrust several steps more by blaming the “structure of the charter” internal governance” and the effects it produced in the colonization effort, and asserting that these deficiencies were derivative from the First Charter:

As the royal council had superior authority, but no financial responsibility, and only to a limited extent for maintenance, it is evident that the securing of suitable colonists and the building up of a self-supporting and profitable colony was likely, at best to be a difficult matter. In fact, it seems probable, as eventually proved to be the case that only men of the familiar rough, venturesome type would be found willing to take part, and they were not of the sort, as Gilbert and others had found to their sorrow from which good and reliable settlers are made. That at the very outset the form of control provided by the charter was not well adapted to promote a successful colonizing movement, and it is not to be wondered at that the first attempt should have been a failure”. [99] Charles M. Andrews, Colonial Period of American History, Vol 1, p. 88

That both of these prominent scholars no doubt had the benefit of William Robert Scott’s 1910 assessment of the First Charter, and each in their way reflect his conclusion that the failure of the Virginia Company began with the 1606 First Charter, and from the start its Royal Council management and decision-making were reactive, in constant crisis and impossible situations. The Council did not develop its own structural capacity did not develop consistent internal governance that could raise sufficient resources and devise colony-sensitive timely plans. It did not help that Jamestown’s local governance, was in worse shape, unable to effectively implement was devised in London. Besides an incapable and unempowered local government, the mix of colonists sent over by a hap-hazard recruitment and interview program was doomed to failure given the realities of the Jamestown situation and the necessities of plantation-building. None of this was ever solved during 1607 and 1608, and the matter persisted into 1609. Eventually, Scott concluded all this would cause the collapse of the company.

Under the charter of 1606 there were no sufficient incentives toward the development of the main element in the scheme [mission or business plan], namely the providing of suitable settlers. This side of the enterprise was taking. The Council had established no organization which would make the emigration of settlers easy. If, then, the plantation was to increase rapidly, such an organization must be created. The simplest method was to place the colonizing and commercial branches under one joint stock company, which would arrange for the raising of capital for the transportation of planters and for the survey and division of lands. The necessary change was effected by the Second Charter, which had been drafted in February, 1609. [99] William Robert Scott, the Constitution and Finance of English, Scottish, and Irish Joint Stock Corporations to 1720, Vol. II (Alpha Edition, 1910, 2019), p. 249

Here we can charitably inject Jamestown was a victim of its pioneering, first of a kind, English colonization effort. It is so evident the overtly political, extremely high status level Council had no clue, experience or sensitivity to the colony’s purposes; it was at a loss to do anything more than delay and red tape. If the Virginia Company was to learn by experience the risks and requirements of what North American colonization entailed had to be injected somewhere into the decision-making, and logically an empowered and competent local government was core to the solution. The need to place a more competent and flexible entity to which the local government would report was but a flip side of the coin.

If necessity is not always the mother of invention, fear suggested that change was necessary. The 1606 charter may have jump-started the Virginia colony, but it now stood in the way. Its most consistent outputs, delay, ignoring the need for action, and pro forma compliance with the king’s wishes, only limited the scope of action the merchant-adventure board members felt necessary. They were making small steps to change the mix of immigrants, but there was no push from the Royal Council to do more.

Osgood asserts that Edwin Sandys drafted the 1609 charter “and was rising to leadership among the opposition in the House of Commons gradually became more influential in the management of the company”. He further provides some support that the Company’s internal management had at this point—and by implication extended into 1618—not been a focus of shareholder interests; “during the administration of Sir Thomas Smythe it was difficult to secure an attendance of twenty at the quarter courts (quarterly shareholder council meetings) [99] Osgood, Vol. 1, p. 60. This That could well be, there are few records of this period, and much business was done in Smythe’s home—where company records were maintained, stored—and burned in the Great London fire.

Kenneth R. Andrews describes in some detail how the draft was handled by its authors in order to create an atmosphere where share subscriptions would be well received, and the support of the king willing to sign what was a major revision of his 1606 contract.

[By 1609] the need for change and a great new effort was clear, for the first two years of bitter experience at Jamestown had disappointed the hopes of its promoters … the English foothold on the continent still consisted of a mere two hundred people confined to a single location, and continually menaced by a much more powerful, and far from predictable neighbor. Above all national prestige was at stake. In 1609 the structure was therefore reorganized and a new charter therefore incorporated the Virginia Company, which now replaced the double company of 1606, since the Plymouth Company’s attempt to settle New England had meanwhile failed. The Council of the new company became ‘the Royal Council of Virginia’ responsible for colonizing lands up to 200 miles north and the same distance south of the entrance to the James River.

To mobilize support for this much enlarged enterprise, the government lent its influence to an unprecedented propaganda campaign. Many officials, gentlemen of the court, West Country men and others were induced to subscribe in addition to the City companies, and individual merchants who formed the core of the organization. The total amount raised … was certainly small in comparison with the kind of sum invested in an East India expedition at that time, but the number of contributors was nevertheless impressive for a colonial project, particularly in view of the existing skepticism and resistance of a public so recently reminded of the very poor financial prospects of western planting [colonization]. The pamphlets issued by, or on behalf of, the company, and the sermons printed and circulated at its expense put the emphasis therefore on national objectives and national honor. Of course, the clergy made much of the mission to the heathen … But the mission was invariably portrayed as a national undertaking for God and King [as typified by Robert Johnson’s Nova Britannia, which is further cited] [99] Kenneth R. Andrews, Trade, Plunder, and Settlement (Cambridge University Press, 1984) pp. 318-20

If so, the operation of the Company through the middle teens was probably fairly closed, and dependent on the methods and practices of a few, very busy, multi-tasking high status elite policy-makers. While accusations will be made during the 1620’s concerning Smythe’s administration, it seems fair to suggest he was deficient in books and record-keeping, but there is little evidence of systematic corruption or personal misuse of funds. Smythe invested much personally in the company, but also seemed willing to allow himself advantage of investment in property and such in Virginia and the Somers colony. The same probably cannot be said for his Deputy Treasurer Alderman Johnson who garnered a very unfavorable opinion in Virginia, and whose oversight of the Magazine was highly criticized..

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 to be 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 these relationships are contemporary presumed causes of the “starving time”, the early Jamestown economic distortions, and perhaps the principal driver behind the lack of production from the settlers, particularly of the gentlemen. Here one can see the origins of what was to become the Virginia oligarchy.

Accordingly, whatever its good points, the Second Charter did not address what was a fundamental problem that seriously inhibited its plantation-building. Hence, the damage to Jamestown was done in London, and since the types of individuals recruited and sent over to Jamestown, had at best been mildly “tweaked”, London-Jamestown in 1609 had not learned a great deal on this matter, and that there was no deviance from the path as of 1609. In this matter continuity resulted.

Whatever their conceptual deficiencies, however, the 1609 charter revision, despite its manifest deficiencies, still marked a fundamental repositioning of the Company away from a pure trading factory. The 1609 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) an amended public-private partnership could go forward and, if necessary—there was in 1609 some sense this charter would itself need to be amended—we can revisit what needs to be revisited

In this spirit [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 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 still 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).

The new/revamped joint stock company was renamed “the Treasurer and Company of Adventurers and Planters of the City of London for the First Colony in Virginia”—a catchy name to be sure, but it is more precise for us to call it the London Company of Virginia, and I shorten that to the Virginia Company. A strong point of the new structure was that, it replaced the Royal Council, by creating a new council, which effectively was the board of directors for the company, and simultaneously the council of shareholders—all rolled up into one. The shareholders council was empowered to elect and fire these officers at its will. The Governor of the colony, Lord De La Warre was to reside in Virginia and manage the affairs there. This was intended to end the factionalization and disunity of local governance—and it did work eventually.

Snuck into the charter was a hugely important resource that was an corporate investment incentive plus revenues for supply ships and immigration recruitment: the grant of land which the king made to the Company (its borders were significantly enlarged and the Company was allowed to make its own grants of these lands) to those shareholders that went to Virginia, and a set program in lieu of a dividend to those who stayed in England. The Company was also empowered to survey and allocate land for its own uses. To this extent the King had stepped up to the plate.

Smythe, it seems, wanted to change the Virginia Company into a regulated 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 (and, I might add, a provision in the charter that required an oath of office by the king for each officer, a sort of confirmation, which, if not issued denied the individual’s right to serve). 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..

A promotion campaign was conducted and Osgood reports the “enterprise was systematically advertise [ing] Letters, broadsides and pamphlets were issued explaining the plans of the managers, and setting forth the prospective wealth and attractions of the colony”. The unfortunate Plymouth colony activists in the second corporation, in some disarray at this point, were asked to cooperate in the Virginia endeavor. Also special programs provided incentives to recruit City Aldermen as shareholders–maybe to encourage some level of municipal support. If so, Scott reports by the time the Second Charter was signed (March, 1609) “fifty-six city companies and 659 individuals” had joined as shareholders [99] William Robert Scott, the Constitution and Finance of English, Scottish, and Irish joint stock corporations to 1720 (Alpha Editions, 1910, 2019), p.251.

As we shall soon discover, Theodore Rabb reported that even more joined in 1609, and still more in 1610. His total indicated more than 1100 new shareholders had signed up. Whatever the number, the reader ought keep in mind a new structure inevitably brought with it a new cast of characters in its leadership and most critically its new investment community.

So from less than forty, to a bit over eleven hundred shareholders was quite a drastic change in the London corporate governance. Osgood provides some description, taken from Brown in his “Genesis”, that 21 were peers, 96 were knights, 11 from “learned professions, 53 were captains, 58 gentlemen, 110 were merchants—a clear minority—and 230 unclassified. He concludes that the shareholders “represented the nobility, clergy, and merchants [99] p. 59 Vol 1 Shares were sold at L12+ apiece, and to those that offered to go to Virginia an offer of 100 acres of land was made. To those that bought shares they were promised not a future dividend, but an award of land after the seven year term was satisfied. This was a break from the traditional merchant adventurer shareholder package, and no doubt it took some getting used to. Most shareholders likely were not in the market for Virginia land.

Moreover, debt repayment for those who bought into a bond issuance was also seven years out (1616), and the revenue earmarked for this repayment was raised by the creation of a “company magazine” (a company store) which managed both imports to and exports from the colony. It was headed by a “cape merchant”. The proceeds of the Magazine would repay the debt and land dividend. City Alderman Robert Johnson was placed in charge as Deputy Treasurer. He was in likelihood an ally of Smythe. [99] William Robert Scott, the Constitution and Finance of English, Scottish, and Irish joint stock corporations to 1720 (Alpha Editions, 1910, 2019), p.250. Again, the point taken by the reader should be the Company was adjusting its non-existent fiscal plan, to reflect the realities of plantation-building. It was a first step to be sure, but a significant pivot nevertheless.

The 1609 Charter Negotiation and Agreement

Smythe was not completely successful in his efforts to make this organizational pivot, but he empowered a new London Company, and sort of merged it with the older master corporation. Smythe was named captain of the Virginia ship Treasurer to be precise), and he seems to have made room for Edwin Sandys, who as we conjecture not only drafted the charter revision but likely was heavily involved in the recruitment of M.P.s. Craven suggests that discussion and negotiation occurred in internal company “assemblies or courts”, similar in function to today’s board of directors, and the use of specific committees with an executive committee overseeing and hashing out a consensus agreement. [99] Wesley Frank Craven, the Virginia Company of London, 1606-1624 (Virginia 350^th Anniversary Celebration Corporation, 1956, Historical Booklet Number 5), p. 13

This process led to the selection of Smythe as Treasurer which was in fact is today’s CEO equivalent.

My suspicion is the relationship between Smythe and Sandys in this early period was cold and professional, supportive, but not cooperative. Smythe was the dominant, but obviously not exclusive, policy-maker in devising the transformation. Historians do not provide any evidence that the duo did, or did not, find a way to work together, but the reader should understand the rather serious institutional chasm that put each of the two in opposite camps. If Sandys had led the 1604-5 parliaments opposition to trading company colonization, Smythe was the member of parliament who was vocal in their defense. King and Parliament were in play with these two co-founders.

Smythe circled his allies and merchant adventurer-aligned supporters including Hakluyt (younger), and Thomas Hariot, a survivor of Roanoke who had published “True Report of Virginia” and they caused a public relations campaign to set the stage for raising funds and recruiting settlers. They published other background materials to pump up enthusiasm for overseas adventure and colonization. Apparently that included supportive Anglican pastors promised God’s support. Broadsides were published to recruit adventurers to sign up. To capstone the PR campaign City Auditor Robert Johnson, a new supporter key to the restructured charter, put together and published an outline of the proposed restructure in February, “Novo Britannia: Offering Most Excellent Fruites by Planting in Virginia” (that must have been a barnburner) [99] Wesley Frank Craven, the Virginia Company of London, 1606-1624 (Virginia 350^th Anniversary Celebration Corporation, 1956, Historical Booklet Number 5), p. 12

The rise of Sandys at this point bespeaks that he was on the rise in part because of his responsibility in the final rejection of James’s Act of Union in 1607. Sandys had played in the course of parliament’s debate on the Act a very important role, and one that bore fruits in the Acts defeat. The King was infuriated and Sandys was the object of his blame: “The Union was now in tatters, thanks, in no small part, to Sandys’s clear thinking, brilliant oratory and native cunning”. Defeat of the Union, arguably James’s signature initiative legitimizing his ascension to the English throne while holding onto his Scottish kingship, brought James to directly address both houses of parliament where he harshly condemned, without names, those who had caused its defeat, promising them considerable ill will in the future. [99] https://www.historyofparliamentonline.org/volume/1604-1629/member/sandys-sir-edwin-1561-1629 That Sandys could be a serious player in negotiations which required the king’s attention and participation no more than a year later suggests to me that the charter renegotiation had morphed into rather deep political waters hints of Salisbury in the background. I have no research on this question, but Sandys was listed in the final charter (which he drafted) as a member of the new Virginia Council created by the charter—a council empowered to be the governing body of the new Company. [99] Wesley Frank Craven, the Virginia Company of London, 1606-1624 (Virginia 350^th Anniversary Celebration Corporation, 1956, Historical Booklet Number 5), p. 14

It appears to me Sandys asserted leadership during the 1609 reorganization discussions, and one might surmise Sandys assessment of Jamestown’s problems at that point in time, stressed weak and inconsistent governance in Jamestown. Local leadership, i.e. the flip side of Virginia self-governance that was approved previous to charter signing reflected Sandys’s comment inserted into the drafting of the charter by Sandys that “full and absolute power” was invested into the Company, and that the old dysfunctional; Royal Council be dissolved; the charter also using the same phrase empowered the resident governor to exercise full authority, and reducing the councilors to be advisors only [99] D. Alan Williams, “Introduction” in Frank E. Grizzard Jr., and D. Boyd Smith, Jamestown Colony, p. 33

The first 1609 shareholder campaign seems to have been led by two fundraisers each trying to attract their base to contribute to the new Virginia Company. Sir Thomas Smythe, the leader of the merchant adventurers, pulled out his Rolodex, and Sir Edwin Sandys turned to his Facebook Friends in parliament and England’s gentry. It is fairly clear that the search for new investors began previous to the proposed charter revision having been drafted, or submitted to the authorities for review, and certainly before its actual signing. Thus it seems clear the fundraisers had agreed the new revamped Virginia Company would be the regulated joint stock corporation advocated by Sandys and parliamentarian gentry. It is not clear what else had been already negotiated in March, so it is possible fundraising overlapped the negotiations for the second charter. The final confirmation and announcement was in June-July when the results to the shareholder campaigns to that date were included in the announcement—as were the details of the king’s new 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 went to his merchant trader “funding well” which traditionally drew upon the exceedingly close relationship of the merchant trading companies with the twelve major guilds, including the huge and powerful 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 second generation member of two, the Skinners and the Haberdashers. [99] for more elaboration see Wesley Frank Craven, the Virginia Company of London, 1606-1624 (Virginia 350^th Anniversary Celebration Corporation, 1956, Historical Booklet Number 5), p. 14

As suggested earlier, decades before, guild officer 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 positions, and held many significant London administrative bureaucracies. It was this fused power of trading companies, with guilds, that the Crown achieved some measure of dominance over the London political-administrative structure. That is the background, in part, of the intense and bitter opposition from the West Country and other (out)ports dwarfed by London. In this 1609 promotion campaigning 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 [of guild members was preferable], 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)

Substantial new debt/shareholder equity also 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 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. Raab makes it clear that the fundamental motivation of the M.P.s was a personal invesment opportunity—that he asserts really underlay their opposition to non-regulated trading monopolies that did not accept their investment, and include them in the trading monopoly the company enjoyed.

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 composed of at least 400 and less than 500 members. Election to Parliament was not congruent with today’s democracatic strandards; a parliamentary district, a holding, could be purchased, others inherited, and still others arranged through oligopolistic bargaining, which could include and involve 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”. The process of “defeudalization” had begun, but only just begun. Indeed, a lesson offered by Raab is the profound overlap between MPs and the rise of an economic class, the gentry. In any case 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 the M.P.s constituted a sizeable block of the Virginia Company shareholders. If Osgood is correct, he probably is, these shareholders did not race to attend shareholder board of directors meetings [quarterly courts] in the following years. There is no sense or evidence that suggests their mobilization until 1619 or so. and to the extent they actually showed up at annual or committee meetings they would constitute a formidable force in Company decision-making. There is a reason for this: James’s First Parliament lasted from 1604 to 1610. It was not a happy experience for either King or Parliament and so with its 1610 adjournment, no parliament met until 1614—the Addled Parliament. As the name suggests this short session was a near, if not actual, disaster. James did not try again until 1621. That Parliament lasted through the year, when the parliament again adjourned amid considerable disruption and frustration. It was not reconvened until 1624-which would be James’s last session.

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. 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? There is, however, no parliament in session and that suggests that merchants and aristocrats-gentry interested in colonization and foreign ventures likely joined. This, of course, would have dilute parliamentary influence—but still left in tact a substantial block that could be mobilized.

In any event, after 1612, through 1625, only 124 new investors joined the Virginia Company–most (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.

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).

The second charter made Smythe Treasurer (the highest office in the 1609 corporation), and the supposed draftor of the 1609 charter, Sir Edwin Sandys, likely played an active role in recuiting about 333 M.P.s during the 1609-1612 period. Sandys, apparently was an active shareholder and as we shall see became a Deputy Treasurer. His commitment to colonization and (and his definition of) free trade and regulated trading associations, consistent with his multi-decade voting position in parliament, can by extention defined as shareholder activism, but the caveat is Sandys was promoting M.P. shareholder in terms of an expanded gentry access to what was thought to be a genuine opportunity to acquire wealth. The fleet departed, revenues raised, more were needed and efforts to acquire them were made, and everybody awaited the good news of the fleet’s impact on a hope for Virginia turnaround. It was not to be; the Virginia colony was not fated for any quick success.

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. It is reasonable to assume that all shared a willingness and desire to invest in colonial ventures like Virginia, there is, however, no reason to assume that aside for an opportunity to profit, they easily could have had additional motivations and definitions of how that profit was to be realized. Hindsight suggests that was the case. The Earl of Warwick, an individual who would play a very large role indeed in both the Virginia Company and the colony of Virginia, did not join as shareholder until 1612, when he was the “a founding member of the Somers Company and its largest shareholder”.

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.

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.

Sandys/Smythe’s instincts for the 1609 relief and supply fleet were to send over new leadership to Virginia, in the form of Sir Thomas Gates (with capable assistants and staff), a military leader, get the colony on its self-sustaining feet, tweak the immigrant mix and send as many over as the Company could afford, and renew the demand for more exports to pay for it all were the basic elements they came up with. Osgood supports these factors, and adds a search for a more efficient and safe Atlantic route, by sending Captain Argall with one ship to find such (he did, making the trip in only nine weeks).

When the 1609 Charter was signed, the largest expedition made to that point was sent off a few months later. But luck was not on the side of the Virginia Company in 1609. The year 1609-10 proved to be the nadir of the colony—at least until 1622-3. Before we address that, however, I will integrate the findings of Theodore Raab to add one more dimension to the 1609-12 shareholder recruitment: the number of M.P.s that signed on. I will also balance this with a description of Thomas Smythe’s efforts to enlist additional support from his traditional merchant adventure shareholder base: the guilds of London.

[999]

It is at this point, however, that a study of the shareholders of English trading companies, published by Theodore K. Rabb comes into play. His study makes evident that in 1609 a “corporation” was incorporated, either for the conglomerate royal council, or possibly for the London subsidiary; and later another corporation was incorporated by the New England subsidiary. It appears the initial incorporation was utilized by the Virginia subsidiary.

Most interesting is that in 1606 only twenty-one shareholders signed on; in the following two years, eighteen more joined. In total over the first three years, the Virginia Company had thirty-nine shareholders. [99] Theodore K. Rabb, Enterprise and Empire, Table 9, p. 90. That limited membership, particularly considering the shareholder installment plan, would not be sufficient to dig the Company out of its already existing fiscal hole, and send such a sizeable fleet. Accordingly, new debt–primariily from new bond issuance, followed. Say it another way, the Virginia Company used debt, not equity, to supplement the 1609 expedition, digging the Company’s fiscal hole still deeper.

First, a caveat. We are totally dependent on the writings of Theodore K. Rabb, in particular, from his Enterprise and Empire: Merchant and Gentry Investment in the Expansion of England, 1575-1630 (Harvard University Press, 1967). The data he gathers on this issue offers serious insight into the Virginia Company in particular (he identifies and attempts classification of over 1600 shareholders), and the comparison with other trading-colonization companies makes near certain support that the Virginia Company attracted the largest number of shareholders in this time period—with the East India Company second with 25% fewer shareholders. We can see interesting variations among these trading-colonization companies over the period between 1575 and 1630, but without question the Virginia and East India Company dominate the era after 1600.

I think it obvious that if I contend the management, capacity, and business plan of the Virginia Company is central to our thesis that the Virginia Company period, and its heritage through the period to 1639 explains a very great deal of how and why the twig of Virginia’s political, social and economic development tree bent in ways that it did, that we cannot ignore Rabb’s data base and must glean from it what we can.

The difficulty is that both Rabb’s data methodology and some of his interpretations of it have been strongly criticized. Both Kenneth Andrews and Robert Ashton, two very excellent scholars of the period, have expressed serious concerns. Our efforts to use Rabb have encountered my own concerns as well. All of these concerns are further compounded by his narrative,; his organization, and his selection of variables and breakdowns in his tables does not help his assertions, and can lead us astray of more important implications which he ignores.

But, there is one glimmer of hope. No one, I sense, has attacked the numbers of his data base as being incorrect or implausible—or have produced data to counter them. The interpretation, and the more sweeping generalizations the Rabb has made, strongly indicated Rabb has pushed his methodology and interpretations too far. Accordingly, I believe we can use his raw data, particularly on the Virginia Company, because no one has questioned it it, and we can draw our own thoughts on this data, using Rabb’s interpretations only when they are compatible with other sources and accepted interpretations.

Rabb has constructed a data base using only basic data points such as identified shareholders, time period of admission, and broad classification of background factors such as class and Ministers of Parliament. We can draw what insights we can from this data. In particular the data on M.P.s is important and is derived from excellent sources. Social class is more complicated, but it seems reasonably reflective of the primary profession engaged in by a particular individual than as a family status; the flux within families across generations across social classes in a period of great transition is to be expected. Knight and MP accuracy is reliable, and the records of the Virginia Company on shareholder status can be correlated with the minutes of numerous shareholder meetings. On the issue of whether a voting shareholder paid his due, I cannot determine, but if he was allowed to vote, than that is sufficient to our purposes. Most comforting is the large database on the Virginia shareholders, over 1600-the far and away largest grouping, followed only by the East India with 1200. The other companies are vastly smaller.

Restructuring the Virginia Company the Second Charter

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