A Deep Dive Inside the London Approach to Overseas, Trade, Colonization and Empire:
2050 is only twenty-five years away. This chapter discusses English overseas commercial development after 1550 in order to assess the impact of English economic, political, and social development on the design and capacity of the 1605-6 Virginia Company. In particular the chapter focuses on the major pivot in English overseas commercial trade that occurred after 1550. That period is nearly five hundred years ago.
Five hundred years in the English past is a lot to expect from my reader. Most readers, particularly American readers, are not familiar with English history that far in the past. Many will not instinctively find it interesting, or relevant; most Americans understandably will not have the background and will not easily navigate a period of time from which the Virginia Company emerged.
My argument is relatively straightforward: the Virginia Company, indeed England itself, had not developed sufficient capacity and experience to attempt a permanent settlement in North America. Entrusting that mission to the Virginia Company in 1606 was too much to ask. Baring an extraordinary miracle, that mission in 1606 was beyond the capacity of the Virginia Company. More likely than not, was either doomed to outright failure or major set back. England and its proxy, the Virginia Company, had not emerged from its medieval age, although it was in its very first years of transitioning away from it.
Add to that the idea that American history goes back that far may be quite a shock. The notion that the Virginia Company was a creature of the late medieval, or, if one prefers early modern history, may literally be a bit of a temporal shock for Americans. While it is not my purpose in this chapter to debate the character of America, it is reasonable to argue that most contemporary Americans are not “English”; we are not, and arguably never have been, ethnically descendant from England, but have embraced ethnic backgrounds across the globe, including indigenous North American.
Accordingly, this chapter draws from English history, my assessment of those factors and drivers that limited the capacity and prospects of the Virginia Company by an attempt to cross one bridge too far, from commercial trade to permanent settlement in 1606. A defective Virginia Company, not equal to that task, left its mark on the political, social and economic development of Virginia, the first successful North American English colony, and created in Virginia its own heritage and impact that affected its subsequent development to, and after, American statehood.
That impact by the Company, in my judgement, has not been satisfactorily assessed, leading to important misunderstandings of Virginia and its development. Virginia, I argue has been a distinctive American colony and state throughout its history and in the interests of all Americans we need to better understand its beginnings, and its relevance to the larger development of the United States.
All Americans no matter their ethnic or racial backgrounds can benefit from recognizing the Virginia Company went wrong in its initial settlement, and Virginia’s subsequent development was affected and shaped by that heritage. Being the first successful English colony, Virginia bore the burden of English colonialism in a period when England itself was emerging from its medieval age and entering into a period of transition that climaxed with its own civil war. Virginia experienced over fifty years in that transition, noticeably more than its companion early states (New England and Maryland especially). Virginia was shaped most profoundly because of the timing of its development and the expression of that inopportune timing, the Virginia Company.
Unfortunately, if I leave this historical gap unattended, the reader will almost naturally let his or her contemporary priorities, preoccupations, impressions of that foggy past, crowd into what is read in this history. A rush of old movies and fictional books will fill in any gaps. Not knowing much about it, many might not appreciate England is on the threshold of its own Civil War, an event that changed her as much as ours changed us. We may think of her England as the beginning of the British Empire–and toss in all that baggage. Powerful contemporary paradigms such as democracy, colonialism, or industrialization, can subtly creep in as benchmarks or virtuous paths to follow, even though the Elizabethan era is “pre” all of them.
Hard as it may be, the real-life setting of this module’s time may not match our images. The period we now discuss is when London started its growth to become a large city–i.e. English urbanization is just starting. We are two hundred years before Charles Dickens and Adam Smith. Highclere castle (Downton Abbey) was built in1679, more than 125 years in the 1550 future. The ships, tools, weaponry, navigation aides, heavy equipment, the lack of maps and a globe filled with unknown geographies–even the modern fork lies in its future. Illness, disease, scurvy, death, and pandemic’s as plague, smallpox changed family life, marriage, and shortened lifespans. While the Virginia Company was being negotiated London was just recovering from a plague episode. We are the better part of three quarters of a century before the infamous Navigation Acts which established the basic rules of England’s commercial trade and its colonial economy. Those governance principles were issued AFTER England’s civil war was over, and Cromwell was dictator of England (1651).
America is older than most of us realize. Virginia’s roots go deeper into medieval England than most of us realize.
Bluntly, in order to instill some contemporary relevance into the Virginia Company’s impact on our history, and the development of the state of Virginia, we’ve got to take a brief and focused glimpse into this period in which America became a glimmer in the English eye. At minimum we need a sense of the chronology, and outlines of its economic and social dynamics that characterized the time period and the institutions that mattered in its policy-making, all of which were in flux.
Our “history” in this module thus focused mostly to Elizabeth’s launching of English overseas and commercial trade, the foreign policy she pursued, and the dominant institutions of policy-making in use as England entered into early European mercantilist system after 1550. This is hundreds of years before England developed into the British Empire; a period when she was not a major player and had a very weak economy. In this section my focus centers around the Elizabethan overseas policy-making process, the the state of the English economy in transition, and the level England had attained in overseas trade and commerce by 1550.
The drivers and initiatives of that period, immediately before the design of the Virginia Company, exerted serious impact on its formation, and offer insight into why its supposedly principal mission, permanent settlement in North America, got sidelined by an implementation process dominated by commercial trade and import into England. They offer important insight as to why the Virginia Company was NOT “ready for prime time”. Neither was England for that matter, but that is another story [See England’s Crisis of the Seventeenth Century is America’s Inability to Deal With Virginia’s First Fifty Years as a Colony]
The key to my argument that England itself was not ready to launch a colony in 1606 follows from an understanding that England had just begun–literally–her entry into what would be the “modern” era. Many historians have called Virginia’s colonization as “an experiment”. I disagree. It was much less than an experiment. England had not reached the point where it had upgraded her medieval policy system to the stage that it possessed the capacity to design and manage a permanent settlement thousands of miles across the Atlantic. Mankind talked about going to the moon centuries before it ever could launch an expedition; just because England and others could dream about colonization in a remote wilderness three thousand miles across the Atlantic doesn’t mean they could launch an effective expedition to do so.
In fact England was just entering into the pursuit of meaningful global overseas trade and commerce only fifty years previous to the charter for the Virginia Company–the period which we are now going to describe. That entry into overseas commerce reflects the transition England was making in its economic-social-and political transition into its early modern period. Trade and commerce is not colonization. In this module I hopefully demonstrate that England in the post 1550’s still retained a great deal of her medieval politics, society and culture and they greatly affect the shape and design, not to ignore leadership of the Virginia Company and her definition of just what a colony entailed and required.
Amazingly, so little was known about North America; England’s exploration and discovery of its Atlantic coastline had just begun. One of the tasks assigned to John Smith while he was in Jamestown was to sail up the North American coastline and make a map. Those who designed and led the Virginia Company had no clear idea where it was going, nor what they needed to do after it set up shop there.
The story behind the design and incorporation of the good ship Virginia Company emerged out of the turbulent change that characterized England’s pivot to overseas trade and commercialization over the last half of the sixteenth century. As such the Company was, first of all, an expression of England’s aggregate experience (or the lack of it) in overseas commerce and secondly reflected the determination of activists who firmly believed the future of England lay in its attainment of a leading position in mercantile trade and strength to compete in European mercantilist foreign affairs. The “settlers” who went on the expedition were either desperate economic refugees, or aristocratic/gentry victims of primogeniture who sought wealth, adventure and opportunity. None had any experience in a permanent North American settlement.
To understand the dynamics of change in play, I describe several English demographic and demographic factors (population growth, urbanization, and the rupture of the medieval class structure that affected English migration, and policy making during this period. By no means comprehensive or inclusive of the period, my presentation stresses relevant aspects of each as they affected the design, incorporation, and implementation of the Virginia Company and its charter.
In the Beginning Was the Enclosure Movement
It is best to provide an historical timeline so the reader can fit our story into a larger context. I start the description of the drivers which influenced the English post 1550 pivot to comprehensive global trade and commerce with the English enclosure movement. That movement, more complex and evolutionary than its simple description of its features. Embraced by a few aristocrats as a means to an end to increase their wealth and position, they transformed their manors by taking control over larger lots of their land for sheep farming, associated wool-making, facilitating agricultural innovation-efficiency, and added meat stocks.
This creation of an “enclosure commons” for these nobles, over the years, if not centuries that followed, took aggregations of land away from private ownership/renting/sharecropping of land. This triggered an incremental increase of a mobile population either moving from agriculture into cities by pushing medieval serfs on manors to transforming those displaced over time to land-owning yeomen-artisans; those who were unable to cope with displacement were transformed into economic refugees that eventually resettled in urban areas into which an English cloth industry-cluster developed. The movement started slowly in the 13th century but gathered momentum during the Tudor years from the late 15th century through the 16th, the period on which we focus.
Whatever its good or bad intentions, the movement was incredibly disruptive, and over the several centuries that followed the change it unleashed tore away at medieval economy, and its political and social-class order. Of particular relevance to the incorporation and implementation of the Virginia Company and its mission to promote overseas trade, commerce, and colonization, I can identify the following drivers: formation of several proto classes such as land-owning freemen/gentry, artisans, and a cloth-making labor force; a mobile population that moved into more densely populated areas, many of which became towns, regional urban centers, and to London especially; agricultural innovation which increased foodstuffs, eventually wool export, and urbanization which itself required merchants who distributed foodstuffs and artisan products and service to and from agricultural areas to urban. Change also meant the development of an underclass, mostly urban–which meant London–compose of those in the process or simply unable to find a fit in the new emerging transitional life. From the last will follow a perception of a “surplus population”, or a grouping in need of “Christian charity”.
Intentioned or not, opened Pandora’s box of English modernization that led by the time of Elizabeth I into an English economy, society, and political life in transition from medievalism to, well, something else, some of which can be the very first discernible steps into the modern world. A great deal of contemporary development economics stresses the critical and fundamental role played by land and its ownership, and new policy systems that develop from the breakup of a nearly pure agricultural economic base as an early trigger for modernity–and more disruption. .
In essence, because England in the Elizabethan-Stuart period still was encrusted with profound medievalist institutions, beliefs and practices, does not mean they are frozen in time, but in fact were in transition. All of these drivers or factors mentioned above will play a large role in the design and use of the Virginia Company in its attempted colonization of North America. In the Elizabethan period especially England grappled with its need to accommodate these changes with increases in wealth, disposable income, and commercial growth that would be created through global commerce and trade. The success of English global commerce would mean increased wealth, and from that vibrant investment and increased resources available to meet crown and state demands would hopefully result.
That mission is one of the very first steps England took as it started to enter into what will become its modern age. That colonization came so early into England’s drive to modernization, however, suggests to me strong evidence England, nevermind the Virginia Company was not ready for prime time settlement of colonies. The capacity for the latter assumes the former can develop greater capacity and effective institutions that can cope with the demands of effective colonization.
the Wool-Cloth Export Cluster: Cloth Industry, the Company of Merchant Adventurers, the One Export English Overseas Trade and Commerce System
The enclosure movement incrementally altered the English manor-centered medieval agricultural base, it also facilitated the formation of multiple groupings into proto-classes that either owned their own land, settled in small and regional centers, or fled to London in their search for prosperity, employment, and a homestead. Over the years that followed it sustained gradual urbanization, but it also formed an industry manufacturing cluster, cloth/wool, in the enclosures.
That oligarchy started from the enclosure movement. Landowners responded by enclosing more pasture land, and raising more sheep until sheep outnumbered English by three-to-one. Scattered about England these manufacturers organized themselves into regional/occupational guilds that led to a cohesive and skilled that centralized the industry around its larger institutions, a process that inherently favored London a few larger centers. From there macro guilds formed to establish scale the could exert economic power among its members and the economy. This began in 1508 with the Shearmen’s Company; with its membership it was able to leverage with the Crown and king both a charter that included a variety of privileges for the industry and its members, and monopoly over the industry.
Obviously, cloth-making existed ages and eons before the enclosure movement, and it enjoyed found an early access into the English gild system. Among the very first to achieve a gild charter not only in London, but also in many regional centers as well. Unwin observes “What the fishmongers may be said to have won by stealth, the weavers secured at an early date by the open grant of charter. Like the bakers they gained the privilege of farming their own taxes. But they secured it much earlier (before 1130) and continued to hold tit till Tudor times. The position of the weavers amongst London trades was in this respect unique, but in the 12th century there were gilds of weavers enjoying similar privileges at Lincoln, Oxford, York, Winchester, Huntington and Nottingham … [and] Winchester.
A century later many of these gilds are found to be engaged in a struggle with a newly constituted municipal authorities who refuse them the rights of freemen… The weavers of London gained their first charter from Henry I at about the same time as the city received its charter… Now the effect of the charter granted to the weavers was to place them effectively on a level … with the barons and religious houses that possessed “sokes” in London. The grant of a gild gave them a private jurisdiction, a soke, a collective leadership over their trade”. [99] George Unwin, The Gilds and Companies of London (Frank Cass & Company, 1632, Fourth Edition), pp. 43-45
That description, however, is incomplete. As Unwin further states “The first weavers were not mere craftsmen. Their ability to purchase a charter, the amount of their farm, which was twice that of the bakers and their possession of a court of merchant law, all point to their having a body of well-to-do traders amongst them [However] During the 12th century, a body of influential citizens who were interested in the cloth trade and had an unchartered gild of their own“–attempted to buy out the weaver charter and were successful. While the old gild would fight back, it is clear there was money in cloth making and intense competition to enter the profession. [99] Unwin, pp. 45-6
To be sure the enclosure movement opened up the craft and fed into its manufacture. generating wealth as its size and scale wealth generator. Bristol and other outer ports, inland regional centers, as well as London morphed into small wool/cloth centers. By the 1500’s, this sectoral nexus grew into England’s chief, by default since it was England’s only, manufacturing industry. Operating within the parameters of the gilds, the industry expanded into many products and sub- categories, including export that required infrastructure that included factories, ports, and ships—and over time developed close relationships with continental merchants and agents (factors) principally in Antwerp.
But as this cluster grew in number, scale and complexity it underwent like most gilds a centralization in its organizational structure and the development of an internal hierarchy that through wealth formation and individual activism fostered an oligarchy whose ambitions and desire to maintain and increase their position and wealth by not only dominating their gild, but extending their influence into the larger economy and polity. Certainly by 1550 this nexus had transformed itself into an “establishment’ of the English economy, an establishment remarkably small that secured an oligarchy for itself, an oligarchy that made its members the wealthiest group of entrepreneurs had at that time. In 1528 the Clothworkers Guild combined the Shearmen, Fullers, and Weavers–the industry had not only organized itself, but had secured its autonomy from other gilds creating in the process a relationship of power and access into crown politics and a relationship with the king.
While guilds could be either craft, with apprentices and quality standards, other guilds called livery gilds were composed mostly of merchants who developed working relationships with the larger urban corporations, i.e. early English city government. They also took actions to institutionalized their export to northern Europe by incorporating a wool and cloth exporting company to manage their holdings and protect their interests. Key to this was their use of this new company to inhibit competition that threatened their profits and wealth. In what had now become the path to autonomy and power, the exporters formed themselves into what became England’s first merchant trading company: the Company of Merchant Adventurers of London.
Almost simultaneously these powerful large cloth merchant adventurers got themselves elected to London political offices, eventually assuming dominance over not only England’s cloth/wool industry, but the politics and electoral offices of London. Their dominance over wool/cloth export led them into an alliance with the Crown that resulted in an export trading monopoly from the Crown. The linkage of an export trading monopoly for northern continental Europe with a clothing worker guild itself with monopolistic-like control over the occupations of and the manufacture of the products, underscores a institutional practice that developed in England during the age of the Plantagenets (12th century), and by the time of our post 1550 overseas trade and commerce pivot, were deeply embedded, quite legitimate, expected and aspired to.
That this internal centralization of authority would not only reflect wealth and social status, but also correspond to the “art of a deal” that would characterize guilds, as well as joint stock corporations and their membership, should not be a surprise. An oligarchy of families, wool and cloth dynasties of family and wealth, were virtually destined to settle over the Company of Merchant Adventurers–indeed, all in place by the last years of Elizabeth–meant this nexus constituted the political establishment of any export and overseas trading policy-making.
Whatever the goals, promoting or joining a joint stock [corporation] in early modern Europe was as much a form of ‘civil self-presentation’ [keeping up with the Joneses] as a financial choice, where a shareholder was understood not just as an investor but also an undertaker [believe it or not, that was the term attributed to those that developed plantations, often overseas], and an adventurer [an occupational term applied to those in overseas trade/commerce] in a society association, fellowship, brotherhood, and–in the sense, the term applied to any group of people, from friends to soldiers, come together for some reason–company. In an medieval guild dominated economy was in reality a “closed and tightly regulated world, which valued expertise enforced by elaborate rules and norms and centuries-old commercial and social associations like the guilds and livery companies … though it would be centuries before shareholders would be thought of as owners, even at these early stages they often took some part in deciding how a company was run, or at least in selecting some among their number to do so on their behalf” [99]Phillip J. Stone, Empire Incorporated, pp. 3-4
So by the time of Henry VII, (1496) exporting wool merchants, operating out of a guild-like joint stock corporation, we shall call for convenience “the Company of Merchant Adventurers” had established a significant institution that effectively oversaw what constituted England’s overseas trade and commerce. With the monopoly granted to them from Henry VII , the Company secured a trade monopoly to northern Europe, with Antwerp, as its headquarters. Henry further secured the monopoly’s position through treaty with the Low Countries. With the start of sixteenth century the cloth industry built upon its core guilds nexus a second congruent organizational layer, the Company of Merchant Adventurers, to insulate its oligarchy and to spun off an export trading company to service their continental trade to Europe. In 1505, Henry VII awarded them a new and “improved” charter that enhanced their export monopoly. and solidified the the company’s governing oligarchy, making it nearly impregnable to attack from its members-shareholders.
Company of Merchant Adventurers: the Corporation, Royal Monopoly, Charter
Using the Company of Merchant adventurers, the more aggressive companies ventured out across the English Channel into continental European where the English had relationships and a past history. Holland, then a part of the Hapsburg Empire in revolution against the Catholic Hapsburgs, was the natural home base. From Holland, English cloth attracted serious demand from northern Europe, and over time cloth and wool became England’s first export product of size. Underlying this centralization was two budding institutions of early English mercantilism: the joint stock corporation and the Crown’s use of monopolies, charters, and “farming”. These institutions will be fleshed out shortly, but they are formalized business structures that dominated a great deal of Elizabethan colonial and indeed crown policy-making. Phillip Stern introduces these institutions to the reader
Like other chartered offices and enterprises [of this period] overseas franchises could be bought, shared, sold, inherited, farmed out [think of farming as a royal franchise over a government product, service or function] and financed. As they marshalled partners and investors, often including the ... [crown and ministers] such projects did not easily distinguish state from individual interest [i.e. public from private interests] and as such were less public private partnerships than portmanteaus [mutual personal largesse] … Overseas charters projected [the Company’s] authority into places where the Crown legally and pragmatically had none. Territory jurisdiction or trading privileges abroad had to be acquired by taking it, or by negotiating for it, via grants, contracts, purchases or agreements with the peoples and polities they found there. … If such ... [practices and structures] seemed to blur the lines between colony and commerce, finance and governance, they arose from a world in which such …boundaries had never existed in the first place. [99] Phillip J. Stern, Empire Incorporated: the Corporations that built British Colonialism (the Belknap Press of Harvard University Press, 2023), pp. 18-19)
[999] Like Professor Stern, I encounter in this historical tale a difficulty translating it into terms and expressions comprehensible to a contemporary reader. But such terms are hard to find as their meaning and application and use five hundred years in the past does not conform easily to contemporary understanding and modern realities. In this period of time of this history, a corporation was an institutional term for an entity to perform certain broad but specified functions and purposes, and provided sufficient autonomy to conduct a “business” or a set of transactions for what was construed as a government function–such as export trade. In 1500-1600, the King/Queen owned/ruled the country/kingdom; the state is personal to him/her. The sovereign’s dilemma is that he/she cannot do everything at the same time and the “corporation” was a vehicle by which the sovereign could delegate and/or decentralize sovereign powers. This is not a classic definition of today’s Wal-Mart, or GE, but sometimes one wonders about corporations such as Microsoft and Alphabet.
In this history, a corporation such as the joint stock merchant trading company Company of Merchant Adventurers is granted by the crown and endowed with rights, privilege’s and responsibilities salient to its mission. This royal treatment is commonplace in this era and dates back quite a few years into the 12th century. This “corporation” is also similar to the municipality, such as London (entrusted with task, functions and a mission to govern a municipality), which is “governed” in the Tudor period by the City of London Corporation, headed by a Lord Mayor, and a Common Council whose alderman were elected from wards. This form of government evolved from the 1141 royal charter that granted its local authority and autonomy, and the rights and privileges to the corporation salient to its governance of London as defined at that time, and adjusted as it expanded.
The use of a “corporation” structure in medieval England by the time of the Tudors, very evident during the Elizabethan period, was widespread for missions of some importance, complexity and scale, and for which they should be considered “traditional” in the English context. Today, of course, “corporation” is private and not governmental, and usually considered as “business”, but through this period of English history that is not accurate. That distinction truly became more solid hundreds of years in the future. During English history the “corporation” was a flexible structure, a hybrid in each distinctive period that delegated royal powers to a private, i.e. non royal entity, and enjoyed through its royal charter delegated powers and autonomy relevant to their implementation.
While they were not a public-private partnership in today’s spirit of the term, they were such in the spirit of the time when kings and queens ruled a kingdom given to them by God (or something close to it). Thus when we refer to the Virginia Company in this history, it should be thought of as a 1605-6 great merchant trading company structured as a joint stock corporation, empowered by royal charter to perform specified tasks with parameters and responsibilities that limited and defined the permissible actions and responsibilities. Americans ought to regard the Company, not as a contemporary business company with greedy investors, but as a royally empowered entity delegated formerly royal powers and resources entrusted with functions and mission to which it is accountable to the Crown and its sovereign. It does not fit our contemporary definitions very well, so our Company of the early seventeenth century should not wear clothes that generate reactions more typical of the modern age. [999]
Stern proposes this period to be an age of “corporate colonial capitalism”. He is expressing what is almost obvious when one delves deeply into colonialism of this era is that in many ways it is foreign affairs subcontracted with a corporation that enjoys a relatively distinctive relationship with the crown and is subject to direct sovereign accountability. Stern’s creative description of that age does properly focus on the organizational structure which he, as I, believe is central to understanding its behavior and actions. It allows us to include in the corporate decision-making the necessity of its accountability to the English sovereign.
It also makes obvious that these corporations are far from pure profit-making entities, and their investors have multiple motivations, that while including profit, are also tempered by fealty, patriotism, and the kingdom’s ability to function amid mercantile competition. Religion too will also infuse the behavior of these entities. Finally, their decision-making is very much linked to macro politics of the kingdom, and the priorities of the sovereign. Ironically, and correctly, Stern also observes how all this can lead over time, distance, and personality to an insulated corporation aloof from its home base nation.
In the Virginia Company, the problem, I stress is the “drift into civil war” that created such tensions between the king and parliament and their supporters, and between classes and religions. In the beginning of this period, the City of London for instance, is tied closely to the Crown; by the time of the English Civil war, less than forty years in the future, London is a creature of Parliament. The Company–and the Virginia colony–will be greatly affected by such drifts. As such one might construe as part of England’s inheritance to Virginia, is her turbulence as it affected colonization.
Usually much stress is made by American historians of positive inheritances such as English common law, and its fledgling “drift” to democracy. True enough, but each has their limits regarding England’s initial half-century or so early North American colonization. While there were limits to excesses provided by English common and contract law of that period; instead one could include the definition of individual honor, as medieval a value characteristic of that age, could check individual misbehavior, and affect positive motivation as well. Still more than anything, the medieval “art of the deal” in which we can label policy-making, was more personalistic than legalistic, reflecting social and hierarchical institutional realities (although the jurist Coke played a role in the design of the Virginia Company while serving as a Cecil protégé). As one must navigate this drift to civil war, anyone who has his office in, or adjacent to, the Tower or London, seldom forgets who signs her paycheck.
But the businesses and business practices we value today had yet to be developed; the institutions of business were rudimentary, and among them the joint stock corporation was respected, and consciously employed in the more substantial, complicated, and risky business enterprises such as overseas trade. Business practices, the audit/bookkeeping for example existed, but do not compare to modern practices, and were casual in their use and not without biases in their application.
The use of farming, grants and patents, were used often of necessity due to the chronic lack of discretionary income by the Crown and its bureaucracies. Crown fiscal affairs is arcane and medieval as one might expect, but fiscal liquidity in an age of land being the primary asset of choice, leaves little room for cash lying around; when there are few, if any, institutions such as banks, if one needed cash an exchange of it for a “deal” such as corporate colonialism constantly required made, the art of the deal quite different than one normally experiences or expects today–but even this is questioned by Stern:
The story of how the joint stock corporation came to shape British colonialism from its sixteenth century origins through the era of decolonization may on first glance seemed ripped from today’s headlines, as billionaires race to colonize Mars, and global technology companies have grown to the point that they look, as Mark Zuckerberg [Facebook or META founder and owner] ‘more like a government’. In a world where an oil conglomerate might run what has been aptly described as a ‘private empire’, and even insiders [today] come to think of the British Crown as “the Firm”, understanding the thin line between private and public governance has a deep and complex past has never been more consequential … that if the joint stock corporation was well-suited to [ late medieval] empire, it was not because it was some inexorable juggernaut. Rather, like empire itself, it was–as it remains–a powerful paradox: person and group; public and private; commercial and political; mercantilist and capitalist; sycophantic and rebellious; regional and global; immortal and fragile; smugly patriotic and belligerently cosmopolitan; and the cornerstone of a British Empire never fully owned or operated by Britain as such’. [99] Phillip J. Stern, Empire Incorporated, p. 2
Naturally, the Company’s royal overseas “monopoly” generated considerable compliant, opposition and resentment from disenfranchised merchants and gentry, but the great merchant trading companies, placed well in court politics, protected by court bureaucracies, and with resources to mobilize the overseas farmers and Elizabethan monopolies/franchises that saturated the imports from overseas markets.
One final term pertinent to this art of a Tudor deal, is “the royal charter”. The charter is somewhat similar in spirit and function to an American executive order; in particular it is personal to the sovereign and is intended to be flexible with its ultimate meaning at any point being defined, not simply by law or contract, but by the continued support of and by the king. Over this period, the issue of royal charter was being challenged by a rising and not especially happy House of Commons (lower chamber of Parliament). Stern comments that such charters could become “unseated through never fully supplanted by Parliamentary legislation, but [each] ,,, shared the basic assumption that corporations, in the words of the seventeenth century jurist Edward Coke, ‘[rest] only in intendment [intentions] and consideration of the law“–i.e. limitations cited above that a charter was both a political as well as legal transaction.
“Conceiving of corporations as “concessions” of the State [as we do in argue in this section], made for another formidable irony. Stern reminds us that over time and place that “affording corporations an outside power that states [home government] could not always control and that frequently could be employed to control states“, I will propose Coan’s corollary that such powers could be exercised by colonies in the name of the corporation to reflect their own needs and requirements. This corresponds to my larger insertion that weakness of the Virginia Company translated into self-government by Virginians during the extended Company period. [99] Phillip J. Stern, Empire Incorporated, p. 6
Company of Merchant Adventurers–Political-Policy-Making
Headquartered in London and Antwerp, the Company of Merchant Adventurers elites were in a potentially influential and strategic position from which a commanding role in England’s overseas trade and commerce. As we shall see, they chose to do so but for the most part limited their activity to protecting and enhancing their Company access to northern Europe through Antwerp and to confine themselves to cloth-wool apparel related products for export. They were not interested in imports, save to commodities use to cloth and wool industry/guilds.
Still, in that cloth and wool constituted three quarters or so of all English exports in this period, their use of London as their principal English port secured for them the status of evolving into the so-called establishment of English foreign trade. [99] Robert Ashton, the City and the Court, pp. 23-4
In many ways, especially social, the Company elites transformed London into a Company town, Company members and officeholders transformed their elites into an English elite quite different from the dominant landed agricultural-manor-based aristocracy; the Company was a merchant elite, an urban commercial one that concentrated in the mega city that London had become. Having said that, however, company elites often chose to involve themselves in London politics and to secure elective office, alderman, and the Lord Mayor. Their primary interest, aside from securing what benefit they could from London politics, was to access and cement an alliance with the Crown and the Sovereign. Their wealth made loans to the state possible, and their experience offered advice and middlemen for the sovereign to supplement his initiatives and priorities abroad.
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Moreover, as Robert Ashton suggests, residence in London offered access to the network of arrangements such as farming and patents which they as members of the business elite became interlocked with the crown, its priorities, factions and bureaucracies. As such Company elites “were more intimately associated with the crown and the court. These were magnates whose economic interests while resting on a firm foundation of commodity trade, split over into the exploitation of concessions on the periphery of government finance and economic policy … Many of the patents of monopoly of this period fall into this category; so, in a sense does the expedient of customs farming. Other concessions were the product of the crown’s shortage of income which forced it back on the expedient of rewarding its servants and those whom it delighted to honor by concessions in kind rather than by payments in cash–by such devices as patents, licenses, and custom farms. [99] Robert Ashton, the City and the Court, pp. 11-12
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As a prominent and affluent element in London’s governance of the capital city they could offer considerable resources and advantage to the cash-starved monarchy. In the Tudor period they gained access to court politics and acquired the sovereign’s favor at least to the extent the Queen saw them as a useful ally in domestic finance and foreign affairs, an ally that brought stability and critical resources. With London England’s mega city and the Crown as allies the Company’s members and core oligarchy became as close to the commercial established as England possessed at that time.
Their narrow view of such trade, however, was not encouraging or facilitative for a more expanded notion of overseas trade, and, as we shall see made London somewhat more vulnerable to political instability particularly when the cloth/wool trade was in some difficulty or in lean years when exports declined due to war or market issues. In such times when the gilds and cloth/wool companies reduced their workforce or were not hiring workers the economic refugees from the countryside looking for employment easily visible groupings of restive and sometimes volatile underclass raised anxiety of more affluent and secure Londoners, as their neighborhoods and substandard housing could not easily be ignored or bypassed.
Monopoly and Internal Oligarchies
During the sixteenth century that followed after its incorporation, Company of Merchant Adventurers took steps to limit access of “mere merchants” into its membership, casting out retailers, wholesalers, finance and other merchant groups. Keeping these elements from being able to export, at least easily, profitably and at a scale, the were able with their geographic and industry monopolies marginalized other rivals, frustrated opportunities not to their benefit, while further accumulating the wealth derived from export of England’s sole export industry–thus limited export only to cloth/wool/textiles. Simultaneously, the Company of Merchant Adventurers turned their own corporate leadership into small, narrow near-perpetual oligarchy that founded member family dynasties that effectively closed the door for the rising gentry class that could not achieve membership in the Company.
With the royal charter they secured a royal grant of monopoly to a specified geography (Antwerp) that limited competition, reduced risk, and provided legitimacy to the traders in their relationships abroad. Being the first of guilds-exporters, the pattern was set for all that followed. The all-important take away was that a guild monopoly over a trade was then infused with a second monopoly to trade that product in a defined geography. This model became preconditions for future overseas trading ventures. Thus these devolved from the Company of Merchant Adventurers before the sixteenth century.
Cloth industry became more concentrated as it matured, raising the cost of entry so over a few generations only a few merchant owners dominated overseas wool export and the Company of Merchant Associates-Adventurers that held the royal monopoly itself developed into an oligopoly of its own. The propensity to concentrate cloth manufacturing and export on the eastern side, along the English channel, was pronounced, and it facilitated a Company of Adventurers transformation in a London-based industry nexus, ‘Merchant adventurers’ who risked themselves and their money to find new commercial markets in Europe had emerged in the fifteenth and sixteenth centuries in commercial cities across England. Exeter had one, as did Newcastle, Hull, Chester and York. Bristol’s Merchant Ventures which dated back centuries, had recently received its first charter of in corporation from King Edward VII in 1552 [99] Phillip J. Stern, Empire Incorporated, p. 10
Overseas merchants, among others, routinely organized themselves into guilds and companies to maintain and control access to the special techniques and knowledge, or ‘mysteries’ of their trades. Many only later sought out royal grants to allow them further immunities of self-government, relief from certain taxes, and most importantly, unimpeded rights to travel from and reside beyond the realm … [99] Phillip J. Stern, Empire Incorporated, p. 10.
By the 1550’s, actually earlier, the Company essentially ran the one-horse export economy that England enjoyed. As such it developed into a bastion of wealth for its members, this wealth was put to use in a number of investments and opportunities. Some merchants, however decided that opportunity lie in expanding overseas trade to the four corners of the globe, particularly the Far East and the East Indies. And so in the middle 1550’s England started its oversea commercial trade pivot. With the power emanating from their privileged monopolies London-based cloth merchants pleaded their case to the central royal government in residence at London.
Cloth export, primarily a one way export only concentrated in ports such as Antwerp, the primary entrance point, and over time a European agent-factor nexus developed that allowed London and eastern-sited cloth merchants to develop and sustain an advantage in cloth trade that other English regions could not penetrate. English cloths came to be shipped almost exclusively to Antwerp, and from there to their ultimate destinations in various parts of Europe” [99] Robert Brenner, Merchants and Revolution: Commercial Change, Political Conflict and London’s Overseas Traders, 1550-1653 (Verso, 2003), p. 6. During the fifteenth century, the focus of the Company of Adventurers was abroad; that’s where its offices were and the continent and its ups and downs, conflicts and opportunities, captured the interest of these merchant adventurers.
1550 the decade the Pivot Begins
By 1550, this trade occupied such a compelling economic position in the English economy that it overwhelmed other trade opportunities, and England settled into to a one product export overseas trade. From that point England’s non wool/cloth continental trade was limited to some Levant and Iberian peninsular ports, with northern Europe easily dominate. Wool/cloth manufacture was widespread. At least twenty-five counties had flourishing wool/cloth production clusters; heavy cloth tended not to be exported, but lighter blends were likely to be exported, and they concentrated near port cities. Supple concluded these exports injected lifeblood into local economies, but London was the chief beneficiary. … perhaps as much as 90 per cent, and certainly over 75 per cent of England’s exports were of articles made from wool. No wonder to contemporaries it appeared ‘the cloth trade is … the axis of the commonwealth, whereon all the other trades … do seem to turn and have their revolution’, or that it could be called ‘the flower of the king’s crown’ …the milk and honey of our Canaan, the Indies of England. [p.6]
the merchants wanted “artificial restrictions on mobility–limitations on the number of looms to be owned or managed by individual entrepreneurs, apprenticeship requirements, general industrial control–in the hope of making the influx of factors [labor] of production more difficult. This had clearly happened in the 1550’s with the Cloth Acts, and in 1563 with the Statute of Artificers after a period of boom and slump. There is little doubt that the attempted regulatory measures in the early years of the seventeenth century were a response to structural difficulties which the broadcloth industry was experiencing as a consequence of a prolonged period of low overseas demand“. [99] Supple, p.28-9. In essence, these London cloth merchants were able to dominate, if not control, the fortunes of the cloth cluster and the one export overseas trade and their program to protect their industry and the wealth it generated did not foster the economic growth England so badly needed.
Population Change, Urbanization, Parliament,
The key to this change was by the late 1500’s, population increase had gotten to the point it exposed an unanticipated consequence of population increase: the silent creation of new election districts in the Houses of Commons and Lords, most of which were outside of London.
In Henry VIII’s first parliament [Jan, 1510] there were 37 knights who sat in 37 shires (Lords) and 223 burgesses who represented the chartered boroughs and towns of the kingdom. By the end of Elizabeth’s reign [1603] borough representation [Commons] had increased by 135 seats. The Commons was replacing the Lords in importance because the social element it represented had become economically and politically more important than the nobility. Should the crown’s leadership falter, there existed by the end of the century an organization [Commons] quite capable of seizing the political initiative … Elizabeth has sense enough to avoid a showdown with the Commons and she retreated under parliamentary attack on the issue of her prerogative rights to grant monopolies regulating and licensing the economic life of the kingdom [99] https://www.britannica.com/place/United-Kingdom/The-clash-with-Spain
As time inched on, an increasingly more powerful Parliament facilitated a power shift towards parliament away from the king during the transition from Tudor to Stuart that followed from Elizabeth’s 1603 death.
During the last decades of her reign, during the war with Spain, the composition, size, and configuration of that political institution evolved dramatically. Elizabeth would feel its first efforts to shape policy—and that pushback from royal dominance centered in large measure on the monopolies, their effects on the economy, and the corrupt exercise of authority and access by very restricted elements of society. It would be the Scot James I that would have to deal with it in full flush in 1604—and that didn’t work out well for him or his son.
While there were several “third rails” of the Tudor-Stuart transition policy, religion was certainly one, but the one most salient to our topic remained “monopolies”. The floating monopolies of overseas trade were as much a target as the customs and farmers that had prospered under Elizabeth. The good ship Virginia Company was doomed to go on the rocks of a growing parliamentary and religious-based opposition. Jamestown and Virginia was caught in the havoc it created.
Left in the background was that England was enjoying population growth at the same time as its enclosure movement was displacing former serfs from the manor and its fields. Economic refugees found their way to regional centers and thus England started to urbanize, and London exploded, to her discomfort. Gaps between the larger towns and regional cities, also undergoing a milder urbanization, prompted Elizabeth and her Crown government to delegate overseas trade and commerce to the rising gentry/aristocratic private sector.
Therein lies the origin of the public-private partnership nexus that was to be the Virginia Company and the other great merchant trading companies previously. That was ok enough, but shifts in population during this period led to shifts in power configuration in the Houses of Lords and Commons. Effects of this would be felt in the 1590’s, but in 1604 they exploded in Parliament especially. The Virginia Company, formed in 1605, really got caught up in this fight–never got out of it–and then lost the charter to manage Virginia in 1624.
Finally, if we link increase in population with urbanization, the wool trade London cluster created another dynamic: the unemployable poor, a restive urban population base when times were tough and a Dickensian like workforce in booms. That the functions of the capital, governance for example, overlapped with the restive population some form of economic development that could alleviate this was facilitated and was supported by the affluent in London. “Since cloth made up the bulk of exports, and since the industry was highly concentrated, in all cases of abrupt decline in overseas demand society was faced with the phenomenon of mass unemployment …[no one] could hope to absorb the idle labor resulting from a cessation of activity [p.6]. London and the nation’s chief decision-makers did not have to travel far to see consequences of poor economic growth.
The 1590’s were a low point in the boom-bust English economy, and while they were followed by some “boom” a few decades after, the bust left its mark on the period during which the Virginia Company was designed. The key to the post 1600 return to prosperity principally resulted from peace that was made in the war with Spain (1604).
The English population, already increasing, increased a bit more intensely, creating pressure on agriculture, and propelling an unbalanced, yet widespread, relocation to what became urban English cities. Urban population, the last resort of agricultural refuges grew denser and filling up with more poor and desperate residents became more volatile, unsafe, and not very prosperous. The one-export overseas trade was not sufficient to induce much prosperity.
Begin again
[999]
the Elizabethan Policy System
With such a success story, it is no wonder the Company of Merchant Adventurers became a role model for on-the-make merchants from the rising gentry class. They could deal with products other than cloth/wool/textiles but when domestic demand was insufficient or satisfied, they saw the merit in broadening overseas trade, commerce and import. Their willingness to innovate and break into new areas of trade was stifled by the dominance of the cloth/wool behemoth, whose wealth and dominance over decision-making and key financial institutions and capital simply made a desert out of London for their interests.
While not reaching the point of opposition to the Company of Merchants of the establishment of this era, they saw potential in copying the Company of Merchant Adventurers methods and organizations. When an opportunity opened up in the 1550’s the more adventurous, under the leadership of John Cabot’s son, Samuel broke the ice by creating a new merchant trading company (Muscovy) around a new trading elite that sought opportunities, mostly in China and Japan, following the Portuguese and Spanish leads.
The 1550 pivot seemingly threatened to be a pivot in overseas trade away from the Company of Adventurers, but was not regarded so in that period. It was more a wave of interest in overseas trade that was perceived as an economic opportunity that should be seized. Led by a generational change in English entrepreneurs, and sons of the establishment that were willing to carpe diem. Since they did not threaten the interests of the establishment, but indeed offered them prospects that stabilized England’s tensions and offered prosperity to the rising population and growing urban centers.
As London became king of the wool export trade, it compelled England’s outer ports to devise their own path. England’s post 1550’s overseas pivot followed a bimodal development pattern: London and the Outer Ports. The rivalry and bitter competition played a notable role in England’s invasion of Ireland, and global discovery and exploration. London’s approach to overseas trade, the trading factory, and the great merchant trading companies differed radically from that used in the Outer Ports. We will discuss that in more detail below.
Equally, important, London’s organizational vehicle, the joint stock Company of Merchant Adventurers became the model, the corporate form that dominated England’s overseas trade and commerce, and colonization. In that the Tudor’s, for reasons to be soon discussed, delegated much of overseas commercial trade to private corporations the joint stock corporation’s strength, the ability to attract private investors in a manner that transcending individual companies and wealthy merchants it proved to most in that time period as the most promising corporate structure suitable to the task.
That form of business organization demonstrated an ability to achieve dominance over the domestic cloth industry. Its entry into partnership with the sovereign and the English state in its overseas export venture was made possible by a sovereign grant of monopoly to that corporation in the industry export to northern Europe. To the merchants on the inside, however, its attractiveness included a flexibility in its governance structures that centralized corporate authority into a few largest investors of the corporation–offering to them security in an investment most risky.
What made the joint stock merchant trading company seemingly effective in their view was it oligarchic and restricted membership created wealth that could be reinvested in more expeditions and trade. By the late 1500’s the joint stock corporation, not unlike a Russian doll, proved amenable to superimposing a hierarchy of internal oligarchies, that centralized its governance in a few, very few investor who were converted in to a corporate governance by family dynasties. Later on, we shall focus on this issue, but for now the change in joint stock governance over the last half century came at the increasingly noted expense of fostering jealously and frustration of those who wanted in on this opportunity.
The point of controversy was on their “monopoly” which closed their access and prevented others from participating and sharing in its wealth creation. Their perception was they lacked the political and policy making power to do so. The point of this is the dominant corporate structure of English overseas trade and commerce, had entered into the seventeenth century with what proved to be a fundamental flaw–a flaw so serious the structure would be unable to enter effectively into the new policy area du jour: colonization.
How the partnership with the state and sovereign was affected by the union of the joint stock corporation and the royal monopoly and grants or, the crown, privilege. Unable to form their own great merchant trading company, the Outer Ports turned to privateering, the development of Irish plantations, and after the 1580’s, leadership in the discovery and navigation of North America and the West Indies.
In the meantime, London merchants, including some of the cloth merchants, pressed as they were by Henry for financing, looked to expand their overseas trading monopolies to other geographies besides northern Europe, now entrapped in a series of wars and crosscutting webs of political alliances. But they too were frustrated by the stagnant power of the Company of Merchant Adventurers and its dominance of crown politics and English economic life.
Integrate with F: the Elizabethan Policy System
England, a half-century before the Virginia Company, had evolved into a one-export only overseas commerce economy. That one-export, wool and cloth commerce to northern Europe, was about all the English economy had, other than a small Iberian peninsula trade. The reason behind this limited trade was the the rise of England’s cloth merchant elite oligarchy, its dominance over London politics, and its coming of age in the late 16th century as the commercial establishment of both London and England’s commercial and overseas trade community.
The cloth merchant elite oligarchy was not particularly interested in moving into other products or geographic areas, but rather focused itself on milking profits for itself from northern Europe. The Crown, being more reactive to pressures for domestic overseas trade than risking negative reactions from its more successful European competitors simply found other matters of interest in its foreign affairs. If we express this in policy-making terms, I suggest England’s overseas policy system had become mired in a more medieval guild-dominated semi closed policy system that was unable to aggregate the interests of other groupings to pursue a more aggressive overseas commercial policy. That is essentially what happened in the post-1550 overseas commercial trade pivot in the last half of the sixteenth century.
Firmly embedded during the sixteenth century, the oligarchies of the Company of Merchant Adventurers, comprised as it was with the vanguard dynastic families within the guild-based commercial elite of England, this policy actor-institution merits further investigation. The English domestic economy, as had its European neighbors, had evolved into a nexus of guilds built around crafts and occupations along what we call today industry sectors. Organized around the domestic supply and demand constraints and resources these guilds had themselves evolved into hierarchies and from there into family dynastic oligopolies. Within each a guilds a bimodal internal organizations separated craftsmen from merchants, with the latter dominating the politics and policy-making of the organizations.
George Unwin describes this system of these gilds-companies that emerge from the late medieval years into the establishment in existence during the period this history is concerned. Unwin describes it as “a social hierarchy … organized on the principle of selection from above“, in which “the membership of the company did not necessarily confer equal rights on all its members“. Most companies by that time, as stated above, had divided each organization into “an upper section known as a livery and a lower, usually known as a yeomancy. The distinction corresponds roughly with that between those who exercised trade in the products of a craft or crafts, and those who manufactured them. The livery consisted of the more affluent members of the society …[with] the vast bulk of the members of the livery were traders rather than craftsmen. [99] Robert Ashton, the City and the Court, p. 43 in summary of George Unwin’s, the Gilds and the Companies of London, p. 217.
Ashton observes that by the end of sixteenth century the guilds and the livery companies had evolved into oligarchies as discussed above, but from those oligarchies there emerged, or were in process of emerging, a smaller subset of members whose power positions within the company was superior to others. Ashton then asserts that the smaller, more powerful grouping manipulated, legally, the election process within the company in a way that “one oligarchy superimposed itself upon another” (p. 45) (Ashton asserts “the executive authority within each company was normally vested in a master and a number of wardens … who exercised their functions in conjunction with a select body which was usually known as a court of assistants) (p. 44). In contemporary parlance, we could label the masters as chair of the board of directors, the wardens as committed chairs, and the court of assistants as board of directors– all of which I might add are elected by the membership of the company.
The bottom line is that within each gild and company protests arose, and as time elapsed the superimposed elite dynastic elites who reduced not only the company membership to subservience but all but a few of the most powerful members of the company’s leadership. Say this another way, a very small grouping of the London merchant community dominated the larger merchant community–and even though the latter lacked power to defend themselves, were in effect induced to pursue their own interests outside the establishment and its company. It is these individuals that will feed into those who advocate for larger overseas trading and commerce, and who therefore will dominated the post 1550 pivot.
Thus these splits were not without their tensions, and during the period of the post-1550 overseas pivot those merchants, in particular, who were outside the London power base of these oligarchies took action and developed initiatives that was able to interest the Crown and draw a measure of support from it. At the same time, the English merchant elite, underwent a generational change in which the younger commercial merchants outside of the cloth-wool Company of Merchant Adventurers, themselves became interested in an aggressive overseas commercial trade. It is these two groupings that injected themselves into the overseas trade policy nexus and pressured-interested the Crown into involvement with their initiatives–without breaking from the larger uninterested Company of Merchant Adventurers.
The point of this is the reader is alerted that England’s commercial elite was in no way exclusively composed of a nexus of oligarchical guilds and trading companies but also included other merchant elites that operated on their own terms and interests in their own businesses, and who given the opportunity, usually obtained by the award of farming monopolies and franchises conferred by the Crown upon them. As such they were isolated from the other wealth driven oligarchies derived from each segment of the English economy. In our contemporary perspective, these practices are medieval at best, and simply wrong-headed or corrupt. But in an age of transition when their use, if controversial, was widespread if not pervasive, they were commonplace and for the most part legal and legitimate.
That over time they engendered intense opposition among many, especially among the rising gentry who, if anything wanted “in” on these or protection from them, they aggregated and with the rise of parliament at the onset of the seventeenth century they emerged as a major issue high priority during the Virginia Company period. These “monopolies” had an enormous affect, one way or another, on the Company’s administration of Virginia–and as we shall see, Virginians themselves sought to use them for their personal advancement, and they too became a significant feature of the policy system Virginians set up for themselves.
Say it another way, there was another different, and for some alternative career in what I call farming, but more precisely involves being awarded, usually for some payment, by the crown a concession, sort of a franchise over some economic sector, product, service over which the awarded enjoys a monopoly. In our day and age it is amazing that several key public matters, for example tax, fee, and custom collection were “farmed out” with monopolistic concessions to individuals for some “consideration” to the crown or the exchequer.
Lacking a public bureaucracy to monitor these affairs, the institution was rife with whatever evil one wants to attribute to it: inefficient, abusive, arbitrary, corrupt, incompetent, or in a kindlier world, privatize the function or activity. Volumes have been written on this institution, but the institution which saturated the Tudor years, especially Elizabeth’s reign, but was passed over to the Stuarts who as we shall see put their own stamp on it to reflect their own preferences. In a public-private partnership such as the Virginia Company, the institution infused itself into various aspects of the corporation, for example the Company Magazine, and later Dale’s Gift grants of land.
England’s politics and policy-making were no way a democracy at this time period. Its economic policy-making was closed off from many who normally were themselves elites, but unable to penetrate the web of court decision-making to engage in overseas trade. Nevertheless, a seeming peculiarity of this period is the merchant grouping was in great flux, with power centered in oligarchies at each level, but with interaction and contact with each other, and those in lesser positions in their institutional hierarchies. Isolated socially to be sure, merchants and even craftsmen at all levels came together to make their way in their drive to status and wealth. While the “art of the deal” was largely restricted to the haute bourgeoisies [described below] those included in the deal would include individuals from the many groupings within the merchant community.
The higher one moved up the hierarchy of the greater livery companies, the more prominent become the members of what can be described as the “haute bourgeoisie“. … its wealth was derived mainly from activity in the sphere of overseas and domestic trade, sometimes associated with the exploitation of government concessions [farming]. It was from such persons that the ruling civic class-those that attained to the aldermanry and mayoralty–was primarily recruited; and in their view the raison d’etre of members of a livery company was probably radically different from that of liverymen who sought to use the machinery of the gild to put themselves in a favorable position vis-à-vis the crafts. It must be admitted that the centre of gravity of the economic world of many of the members of this haute bourgeoisie, institutionally speaking, was not the livery company, but the privileged chartered company [great merchant trading companies] engaged in foreign trade [pp. 47-8].
Needless to say fragmentation created rivalries, and alliances, with the great bulk of the elite unable to pursue their ambitions without making their deal with the Crown and its bureaucracies. It is in this context the Virginia Company would be designed and a consensus forged to approve its incorporation. Put it bluntly, the Virginia Company would be a creature of this policy system, and its corporate structure proved a poor insulator in shielding its internal affairs from the practices of the macro English-crown policy system. To understand how this economic policy-making culture was infused into both the corporate design and the actions of its corporate leadership Ashton integrates the farming institution with the various groupings of the period’s commercial elite, the crown policy making process, and by implication into the public-private partnerships such as were the great merchant trading companies of the period:
… powerful as the ties which bound such multiple commercial concessionaires to the government … there were other members of the business elite whose fortunes were more intimately associated with the crown and the court. These were magnates whose economic interests, while resting on a firm foundation of commodity [business] trade, split over into the exploitation of concessions on the periphery of government finance and economic policy. Some of these concessions arose out of that familiar conjuncture of circumstances whereby a government with an ambitious programme of economic and social controls lacked the administrative machinery to make that programme effective and filled the vacuum by using private enterprise. Many of the patents of monopoly of the period fall into this category; so, in a sense, does the expedient of customs farming. Other concessions were the product of the crown’s shortage of income which forced it back on the expedient of rewarding its servants and those whom it delighted to honour by concessions in kind rather than by payments in cash–by such devices as patents, licenses and customs farms. The courtly recipients of these privileges had in turn to call upon the aid of the business world to put their concessions to profitable use. [99] Robert Ashton, pp. 17-18
Thus, we can see how and why an influential and powerful merchant such as, Sir Thomas Smythe could play such a central role in the Company, but also connect it too the highest levels of the court and the various groupings within this merchant community. “His father, the celebrated Elizabethan concessionaire, Customer (also named Thomas) Smith(e), the son engaged in activities which were more purely commercial in character. Unlike his father, he is not to be found in the forefront of those merchants who dabbled extensively in government financial concessions. But there can be no doubt about his pre-eminence in the world of Jacobean commerce. Governor for fifteen years in all of the East India Company, he was also in his time, governor of the Russia, French, Levant, Virginia and Somers Islands [Bermuda] companies. [99] Ashton, pp.16-7
Smythe was to become one of James I most trusted allies in the business world, and the government made extensive use of his talents, not only in his capacity as governor of so many chartered companies, but also as a member of government commissions, including the navy commission in 1618, and the treasury commission in 1619“. A longstanding member of parliament, a philanthropist, as well as CEO of his own substantial mix of businesses (from mining to haberdashery, as well a experience as an alderman and sheriff of London, and an ambassador representing the crown in several foreign missions, Smythe transformed his mammoth home on Philpot Street as the headquarters not only of the Virginia Company but the place in which his business, trading companies, and government interactions took place.
At one point he even housed the French embassy in this residence, and conversely at one point he spent a year or more imprisioned in the Tower of London, awaiting possible execution. To think Smythe as simply a businessman, as most histories do, is a misnomer. Businessman he was, but he was also representative of the various tilts and nooks in which a merchant during the post-1550 pivot into global overseas trade could venture. Perhaps, as much as any, he was the personification of London, and the dominant merchant of that capital city. Link this with membership in the cloth-based Company of Merchant Adventurers who held the charter and monopoly over the export of cloth and wool.
Most, if not all, of the major players behind the Virginia Company incorporation already possessed wealth, a level of status, and position in England’s affairs. Personal wealth was certainly an element of this, however, their policy activism was not primarily based on greed but patriotism. After the post 1550’s England competed to defend herself from the ambitions of the major mercantilist power, Spain (and Portugal) and the Hapsburgs, and it was widely sensed in England that it had gotten off to a late start in mercantilist affairs and it was necessary to catch up–as fast as possible.
Elements of the merchant class broke away from the Company of Merchant Adventurers to broaden trade opportunities for themselves and in order to make such trading feasible entered into a partnership with the Crown. In need of royal monopoly privileges they agreed to incorporate public obligations to pay the Crown for its expenses. They both justified these as a need to increase England’s economic development by in part turning their profits into investments for creating jobs and domestic prosperity through overseas trade. Imports and exports was the strategy they employed to create discretionary income that fueled English growth that would allow her to catch up and compete in the European mercantilist system.
In an age in which the dominant historical paradigms are anti-capitalist, the prevalent notion of wealth and greed as the motivation for Virginia translates into to the belief the Virginia Company was a private business enterprise, armed with a royal charter. seeking to make a profit out of colonization. I argue in this history that belief misinterprets the role and function of the great merchant trading companies, and sidesteps the mission of the Virginia Company to be the first of the English merchant traders tasked with the founding of a permanent settlement-colony. In this mission the Virginia Company was distinctive, and that distinction reflected what was a signature project of its sovereign and an intent to raise England into a first rate mercantile European power by bringing about serious economic growth and prosperity for the king, and his kingdom.
The proponents for Virginia colonization in England envisioned a lot more than a bunch of England’s second son nobles and gentry wandering about the countryside looking for gold. The basis for this sad story arises from how the Company carried out its first expedition in 1606. That expedition and the supply and settler ships that immediately followed wound up pursuing gold for a different set of reasons than the Virginia settlers looking for gold. How this misdirection happened is a story we will tell in the history.
English Economic Development Turns To Overseas Commercial Trade
Chapter 1 deals with the post 1550 expansion of commercial trade by England. It ends previous to the start of the incorporation of Virginia Company. If we are to understand how the Virginia Company was designed as it was, and how it came to be the vehicle by which England launched a permanent settlement colony we have to recognize that The Company was a creature of England’s entry into the mercantile age of Europe. That entry was conducted in earnest as a result of England’s post 1550 pivot to global commercial trade. With this pivot England broke from its pre-1550 English semi-isolationist one export trade exclusively with northern Europe. The relative success of that pivot encouraged England’s overseas community to press the Crown into establishing a North American permanent settlement as a first step in achieving her Far East commercial ambitions, along with defending itself against its mercantilist European competitors.
Where North America fit in at this time, having only been discovered, sort of, by Columbus fifty years earlier, was during the period discussed in Chapter 1 in the process of exploration and discovery–which we will discuss in our next section, the Outer Ports– and the adventurers association with London that formed companion merchant trading companies that ventured into various geographies in their search for commercial trading opportunities across the globe, and because of war with Spain engaging in fisticuffs with the leading colonial empire of the period.
In this period of the pivot of overseas trade, colonialism, as we would define it today, was not yet defined in precise terms, but floated somewhere between a permanent trading factory in a settled geography, and a military-export focused permanent settlement that fit into the anti-Catholic, anti Spanish, then anti-other European mercantile companies/settlements crusades entered into during the time of the post-1550 pivot. Obviously, lacking specific definition, the colonization attempted by the London and Plymouth subsidiary companies of the larger conglomerate Virginia Company incorporated in 1606 was a venture into the unknown in a wilderness three thousand or so miles across the Atlantic. This venture was not an experiment, there was no theory underlying it; colonization was a Hail Mary ball toss fifty yards into enemy territory.
Colonization at that point (1605-6) was a means to a larger end, and as we shall see, there were at least two different approaches to commercial trade contemplated in the design and organization of the Virginia Company. One followed goals advocated by merchants and aristocrats from England’s Outer Ports, and another (trading factories to developed-settled geographies, preferably in the Far East) which was the style followed by the establishment London merchant community. While this will be further developed in Chapter 1 and others that follow, I believe it of benefit to those less familiar with English history to delve deeper into this bifurcation of the English overseas commercial elite.
Ron W. Coan 