up a cross at Spitzbergen in 1613 with King James’s arms upon it. Among other associations trading to the continent of Europe, receiving charters at this time, were the Turkey Company (Levant Co.) and the Eastland Company. Both the Russia and Turkey Companies had an important effect upon British relations with those empires. They maintained British influence in those countries, and even paid the expenses of the embassies which were sent out by the English government to their courts. The Russia Company carried on a large trade with Persia through Russian territory; but from various causes their business gradually declined, though the Turkey Company existed in name until 1825.
The chartered companies which were formed during this period for trade with the Indies and the New World have had a more wide-reaching influence in history. The extraordinary career of the East India Company (q.v.) is dealt with elsewhere.
Charters were given to companies trading to Guinea, Morocco, Guiana and the Canaries, but none of these enjoyed a very long or prosperous existence, principally owing to the difficulties caused by foreign competition. It is when we turn to North America that the importance of the chartered company, as a colonizing rather than a trading agency, is seen in its full development. The “Hudson’s Bay Company,” which still exists as a commercial concern, is dealt with under its own heading, but most of the thirteen British North American colonies were in their inception chartered companies very much in the modern acceptation of the term. The history of these companies will be found under the heading of the different colonies of which they were the origin. It is necessary, however, to bear in mind that two classes of charters are to be found in force among the early American colonies: (1) Those granted to trading associations, which were often useful when the colony was first founded, but which formed a serious obstacle to its progress when the country had become settled and was looking forward to commercial expansion; the existence of these charters then often led to serious conflicts between the grantees of the charter and the colonies; ultimately elective assemblies everywhere superseded control of trading companies. (2) The second class of charters were those granted to the settlers themselves, to protect them against the oppressions of the crown and the provincial governors. These were highly prized by the colonists.
In France and Holland, no less than in England, the institution of chartered companies became a settled principle of the governments of those countries during the whole of the period in question. In France from 1599 to 1789, more than 70 of such companies came into existence, but after 1770, when the great Compagnie des Indes orientales went into liquidation, they were almost abandoned, and finally perished in the general sweeping away of privileges which followed on the outbreak of the Revolution.
If we inquire into the economic ideas which induced the granting of charters to these earlier companies and animated their promoters, we shall find that they were entirely consistent with the general principles of government at the time and what were then held to be sound commercial views. Under the old régime everything was a matter of monopoly and privilege, and to this state of things the constitution of the old companies corresponded, the sovereign rights accorded to them being also quite in accordance with the views of the time. It would have been thought impossible then that private individuals could have found the funds or maintained the magnitude of such enterprises. It was only this necessity which induced statesmen like Colbert to countenance them, and Montesquieu took the same view (Esprit des lois, t. xx. c. 10). John de Witt’s view was that such companies were not useful for colonization properly so called, because they want quick returns to pay their dividends. So, even in France and Holland, opinion was by no means settled as to their utility. In England historic protests were made against such monopolies, but the chartered companies were less exclusive in England than in either France or Holland, the governors of provinces almost always allowing strangers to trade on receiving some pecuniary inducement. French commercial companies were more privileged, exclusive and artificial than those in Holland and England. Those of Holland may be said to have been national enterprises. French companies rested more than did their rivals on false principles; they were more fettered by the royal power, and had less initiative of their own, and therefore had less chance of surviving. As an example of the kind of rules which prevented the growth of the French companies, it may be pointed out that no Protestants were allowed to take part in them. State subventions, rather than commerce or colonization, were often their object; but that has been a characteristic of French colonial enterprise at all times.
Such companies, however, under the old commercial system could hardly have come into existence without exclusive privileges. Their existence might have been prolonged had the whole people in time been allowed the chance of participating in them.
To sum up the causes of failure of the old chartered companies, they are to be attributed to (1) bad administration; (2) want of capital and credit; (3) bad economic organization; (4) distribution of dividends made prematurely or fictitiously. But those survived the longest which extended the most widely their privileges to outsiders. According to contemporary protests, they had a most injurious effect on the commerce of the countries where they had their rise. They were monopolies, and therefore, of course, obnoxious; and it is undoubted that the colonies they founded only became prosperous when they had escaped from their yoke.
On the other hand, it must not be forgotten that they contributed in no small degree to the commercial progress of their own states. They gave colonies to the mother country, and an impulse to the development of its fleet. In the case of England and Holland, the enterprise of the companies saved them from suffering from the monopolies of Spain and Portugal, and the wars of the English, and those of the Dutch in the Indies with Spain and Portugal, were paid for by the companies. They furnished the mother country with luxuries which, by the 18th century, had become necessaries. They offered a career for the younger sons of good families, and sometimes greatly assisted large and useful enterprises.
During the last twenty years of the 19th century there was a great revival of the system of chartered companies in Great Britain. It is a feature of the general growth of interest in colonial expansion and commercial development which has made itself felt almost universally among European nations. Great Britain, however, alone has succeeded in establishing such companies as have materially contributed to the growth of her empire. These companies succeed or fail for reasons different from those which affected the chartered companies of former days, though there are points in common. Apart from causes inherent in the particular case of each company, which necessitates their being examined separately, recent experience leads us to lay down certain general principles regarding them. The modern companies are not like those of the 16th and 17th centuries. They are not privileged in the sense that those companies were. They are not monopolists; they have only a limited sovereignty, always being subject to the control of the home government. It is true that they have certain advantages given them, for without these advantages no capital would risk itself in the lands where they carry on their operations. They often have very heavy corresponding obligations, as will be seen in the case of one (the East Africa) where the obligations were too onerous for the company to discharge, though they were inseparable from its position. The charters of modern companies differ in two points strongly from those of the old: they contain clauses prohibiting any monopoly of trade, and they generally confer some special political rights directly under the control of the secretary of state. The political freedom of the old companies was much greater. In these charters state control has been made a distinguishing feature. It is to be exercised in almost all directions in which the companies may come into contact with matters political. Of course, it is inevitable in all disputes of the companies with foreign powers,
