Bluntly: this book is worth your attention if two things are true: 1) you're interested in the history of the early joint stock companies and their role in colonial history, and 2) you're willing to put up with a long, cluttered and disorganized book.
Empire, Incorporated doesn't know what it really wants to be, and as a result author Philip Stern finds himself scattered everywhere, throwing at the wall anything and everything to do with mercantile-era joint stock companies. The book simply crawls with minutia to the point where even its own author at times gets his own lines crossed and loses his own thread.
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I'll critique the work more in another paragraph, but let's first get into why these early proto-corporations matter. First, they give us a good historical analog and mental model for how modern corporations act as instruments of state power. Centuries ago, royally-chartered joint stock enterprises were instruments of literal imperialism: exploring, exploiting, conquering, governing and extracting resources all over the world. Today's modern corporation, a distant but direct descendant of those early joint stock companies, are likewise instruments of state power, but via more subtle and inditrect predation. Today's system is less blatant, and as a result it works even better. The author touches only lightly on this (sub)topic, but in reality we can draw a line from the mercantile/colonial era right down to today, and it shows us how nation states use various proxies to project power and control. For readers interested in more on this--again, a subtopic only lightly discussed in this work--I'll share a brief collection of works at the end of this essay. Honestly, it's crucial to understanding modern geopolitics.
Back to the book and more critiques. Any author grappling with a staggering load of factoids over centuries of history is at grave risk of writing "one damn thing after another"-style history. There are so many different corporations, societies and institutions here, so many royal charters, patents, sub-charters and sub-patents, all doing so many things in so many parts of the world that the author, unable to organize it coherently, seems even to confuse himself. Readers will get lost for sure.
Which brings us to a more serious (albeit related) problem: a type of author solipsism. It's almost as if the author knows his subject so well and so thoroughly that he's lost the ability to explain it to a reader new to the subject. From time to time the author makes references to things the reader can't possibly know, and as a result the reader has to spend more time than necessary figuring out what the author is trying to do, where he's going, and what, precisely, he's trying to say. An author should never expect his readers to share his knowledge and context--why would they read his book in the first place? Thus Empire, Incorporated ta times reads as if the author can't get out of his own head, that he can't step back far enough from his knowledge to relate it properly to readers.
A possible solution to hack away at these problems (as well as hack away at the book's astounding overgrowth) would involve the author asking himself a metaquestion, and ask it with practically every sentence in the book: "Why, precisely, would the reader want to know this?" I think this might help the author step away from his head, where he's inundated with an admirable range of facts and events, and I think it might cut down and streamline Empire, Incorporated, making it a tighter, more readable, and more understandable work. I think it might also give the author space to discuss more deeply some of the implications of his history: what do all these royally chartered corporations imply for today's limited liability corporations? What might this mean to the business world today as our geopolitical environment starts to look more and more like the old multipolar mercantile era? What might it all look like if we analogize that era's history into our future?
Perhaps the author is just staying in his lane by not ranging into these questions, but these are gaps that, if filled, could make it a more relevant and readable work. The truth is, states use the business sector today quite like they did in the old joint stock corporation era. Mercantilism never died, sadly: it's alive, well and healthier than ever.
Finally, for those readers interested in learning more about how nation-states project power in various (as well as nefarious) ways, I've created a five book reading list for you. Enjoy!
Reading List for Nation-State Power Projection (links are to reviews here at this site):
1) Confessions of an Economic Hitman by John Perkins -- Describes how foreign aid and foreign lending system simply launder money back into the USA via engineering and defense companies, permanently indenturing and impoverishing the developing world.
2) Democracy Incorporated by Sheldon Wolin -- Shows how corporations are used as direct and indirect instruments of nation-state control.
3) The Collapse of British Power by Correlli Barnett -- Shows the disturbing decline of England from a land of great statesmen and an even better military into a second-rate country led by losers and weaklings. Essentially this book teaches exactly what to do to piss away your country's primacy.
4) The Story of French by Jean-Benoît Nadeau and Julie Barlow -- A fun read illustrating how even a totally incompetent nation state can still project power, all around the world, in the form of its language and culture. [Note: I would direct this author to this book to show how to take an highly complex and amorphous topic--in this case centuries of French history and French power projection--but yet teach it with a clear thread that really pulls the reader along.]
5) The Devil's Chessboard by David Talbot -- Excellent and disturbing bio of Allen Dulles, who led the original Deep State as head of the CIA, wielding supra-governmental power worldwide in the decades following WWII.
[Readers, as always, a friendly warning: what follows are my notes and quotes from the text. They are to help me order my thinking and better remember what I read. They are almost certainly not worth reading for you! Please feel free to return to your lives.]
Notes:
Introduction: Incorporating Empire
1 "This book offers a new history of British colonialism, one that envisions empire as conceived not only by sovereigns and statesman but also by investors and idealists, creditors and convicts, peers and parvenus, pirates and poets, lawyers and landowners, entrepreneurs and embezzlers. Their efforts produce what one might call venture colonialism, a particularly prolific, if controversial, brand of overseas expansion that was bound across four centuries by the conviction that the public business of empire was and had always been best done by private enterprise." [A long but competent couple of lead sentences right here.]
1-2 On the joint stock concept as a financing and organizing mechanism, and on the corporation as a concept: these two concepts existed but they had never been combined in quite the same way before; on the joint stock corporation being both mercantilist and capitalist, and the cornerstone of an empire that was "never fully owned or operated by Britain as such."
2ff Reaching back in history for progenitor forms of joint stock corporations: the Roman societas policanorum, on medieval guilds and trusts, on organizations of the Muslim world even South Asian and Chinese enterprises; different examples of individuals pooling risk, resources and management. The nuance about a joint stock company was that it was divided into shares (or "dividends" an interesting proto-use of the term) that could be purchased in a secondary market, shares could be bought even by strangers, and also the company could theoretically draw resources and funds from anywhere and anyone. On governance based on share ownership; also on how the corporation had a sort of personhood, it was a legal entity that could be sued or could sue, could contract debts, possess property, and in theory could live forever; the author draws a parallel here with the Christian church as well as city-states as similar institutions in certain ways.
6 On the irony that subjecting an artificial person/corporation to the law also allows the entity to claim certain rights reserved by people also under that law [!] and this eventually afforded corporations "an outsize power that states could not always control and that frequently could be employed to control states." [This is quite a striking comment here.]
7 More paradoxes: Is the corporation "an extension of sovereign power, a check on sovereign power, or a sovereign power unto itself?" This became a real quandary in the 16th and 17th centuries with the early-stage corporations chartered by the Crown with specific rights and monopolies.
10ff On "company-states" like the East India Company, the Hudson's Bay Company, bodies that "came to rule millions of people over vast territorial empires."
12 The author tells us that even though this book focuses on the British Empire and its corporate mercantile entities, this is not something that's especially British in any way. "In fact, through its long history, corporate colonialism demonstrates time and again just how porous the borders of nations, empires, and companies themselves were in the first place."
Chapter 1: Initial Public Offerings: The Age of Discovery
16ff On the Elizabethan era; 16th century England, which was a "franchise government, in which offices and positions were both public service and private property... Overseas franchises could be bought, shared, sold, inherited, farmed out, and financed." These partners and investors often included the Queen and her ministers, and thus "did not easily distinguish state from individual interest"; all of this blurred the line between colony and commerce and public office and private profit and "they arose from a world in which such fast boundaries had never existed in the first place."
19ff On John Cabot and his discovery of Newfoundland, on a charter from English King Henry VII, [surprisingly this was in 1497, not too long after Columbus's voyage]. By the mid 16th century England started to colonize Western Africa; on the Company of Merchant Adventurers of London which was sort of a quasi-guild, but also kind of a joint stock type company as well; the first fleet of this company had three ships, two of which disappeared, but the third established trading relationships with the Russian Empire, under Czar Ivan IV; later an act of Parliament in 1566 gave it a formal new name: Fellowship of English Merchants for Discovery of New Trades, although its more common name was The Muscovy Company. Note also as a main conduit of relations between England and Russia the company had de facto command of Anglo-Russian diplomacy.
23ff On adventurer/discoverer Humphrey Gilbert who was given 40 years exclusive control over trade and government over any territories or passages he might find; technically this infringed on the patent of the Muscovy company; discussion here on various methods where the state would indirectly use corporations to expropriate land in places like Ireland, where they force people to show deeds in a specific form that would be recognized by England (that everyone knew they didn't actually have) and thus members of the Irish aristocracy were more or less blackmailed into voluntarily surrendering their territory, and then having some of that land re-granted back to them under English title, and any seized lands were colonized; this was done via corporation while the actual English government was distracted in domestic politics and conflict with France.
25ff See for example Sir Thomas Smith who had a proposal to settle Ireland's Ards Peninsula in 1571, and set up a partnership with his son Thomas under a royal patent, structured proportionally into shares; one could take up a share as a settler or one could stay in England and collect rent. The structure is pretty savvy here: it would be based on recruiting soldiers who would be given land; they wouldn't have to pay anything for the first four years other than their initial transport thus basically you could recruit soldiers at no cost and they were also invested along with the company in doing their job--which was to stay and defend the land that was being taken. [Gross, but also savvy on a bunch of levels. These institutions really are sort of like mini-states!] Note however that this entire plan more or less failed; it didn't turn out to be successful at scale and it met with violent resistance; the son of the partnership was killed and the encampment was routed out by the locals; but the central idea here is the structure came to be seen as a model for taking and settling land by force.
30ff On Michael Lok, securing a license from the Muscovy Company for a voyage westward; the expedition returns with an Inuit hostage, claiming to find a Northwest passage; then the Company of Cathay was created in late 1576, modeled after the Muscovy Company. Somehow it managed to mount two massive expeditions without a formal incorporation; it was all a failure; the company even invested in building mills and a furnace in England to refine the ore that they expected to bring back from the Americas; it turns out that Lok had inflated the company's assets; the fraud was exposed and he ended up spending time in debtor's prison; he would spend the rest of his life trying to get his reputation back; the author claims Lok was the inspiration for Shylock in The Merchant of Venice, under the theory that Shakespeare was actually Edward de Vere the 17th Earl of Oxford who lost a lot of money in Lok's third voyage.
34ff On Francis Drake and his search for the Northwest Passage; Drake put together two dozen ships with a substantial investment from Queen Elizabeth; ultimately he ended up running privateering missions in the Spanish Caribbean; then on to Humphrey Gilbert, looking to set up an English plantation near the St. Lawrence River which would be a base for preying on Iberian shipping in the Caribbean; and then a discussion of how things like this had to be done outside of state control: it was better if it was done behind a "cloak" to avoid any kind of direct military conflict between the countries, so the crown could benefit indirectly from these efforts but yet still disavow them, saying they were done by private people. [Here's where we can see a mental model for modern corporations which today are basically instruments of neo-imperialism, instruments of the state, instruments of economic colonialism, dollar colonialism; you can think of these techniques as various forms of power projection that are always plausibly deniable; think of Standard Oil, Coca-Cola, Starbucks, the media/Hollywood, etc.]
35ff More on Sir Humphrey Gilbert [p23 and p34 above], he started his company outside of London after he ran afoul of certain royal officials; he called it the "Merchant Adventurers with Sir Humphry Gilbert"; note here some of Gilbert's interesting machinations here, like giving away patents for mining, fishing, exploration or trading, or offering land grants, all before his company had any control over the territory involved! It looked like an official royal patent, but it was done through a private association of a proto-company. It turned out that Gilbert died on the way home from his first voyage in 1583, and this led to the creation of a bunch of sub-companies reselling these patents later.
39 An example of the author's poor writing here: "It was Adrian Gilbert who perhaps looked most explicitly to carry on this legacy. Partnering with Dee [John Dee, mentioned two pages earlier], who still theoretically held the grant from Humphrey for the Northwest Passage routes, and John Davis [the reader doesn't know who this is yet], he sketched out a proposal for a chartered company with "lyke privyleages" as his brother. Unlike Humphrey, the partners were also open to cooperation with the Russia Company and met with several of their leadership, presumably to work out in agreement." [Holy cow. The author refers to people the reader should know or remember, but doesn't; he neglects to tell us that Adrian Gilbert and Humphrey Gilbert are brothers; instead he just refers to "Humphrey," assuming we remember that Humphrey isn't anybody's last name but the first name of Humphrey Gilbert--whose full name probably should have been mentioned in the first place to reduce this confusion. The author writes as if his readers have the same familiarity with these figures as the author does! He would do well here to add a reader-friendly parenthetical clause early on in the sentence: "It was Adrian Gilbert, brother of Humphrey Gilbert, who perhaps looked..." Always help your readers along, don't make life difficult for them!]
39 On Walter Ralegh [note the spelling "Raleigh" is typically used but Ralegh himself spelled and preferred "Ralegh"], who participated to some extent in Adrian Gilbert's scheme but then started his own colonial venture to Roanoke Island, Virginia, a colony that failed, producing vast losses for Ralegh. He then went on to try other expeditions to Guyana and elsewhere in the New World. Comments here that there were at least 74 privateering and smuggling ventures between 1585 and 1603 and that these various "assaults at sea that were essentially side hustles" for the larger trading ventures; most of these ventures took in partners/adventurers, cash investments as well as "investments" in the form of ships from ship owners, merchants, even the Queen. Most of these ventures failed to repay, a minority succeeded, and of course Drake's circumnavigation [1577-1580] made so much money that it seeded many later privateering ventures.
41ff Because of the failure of the Muscovy Company's efforts in creating an overland route to Asia, there were other ventures looking to get new monopolies, for example a monopoly on Iberian trade held by the Spanish Company; the Eastland Company with trade with the Baltic region; the Barbary Company, which traded with northern and western Africa; see also the Turkey Company which traded with the Ottoman sultan; and then the Venice Company which merged with the Turkey Company forming the Levant Company, incorporated in 1592. Initially operated as a joint stock, then later "reformed into a so-called 'regulated' company" which looked more like a guild; it maintained the English ambassador and councils in Constantinople, kept trading outposts in the region, it also had more or less a monopoly over much of English-Mediterranean commerce [here the author gives us here a strange, contextless toss-off sentence that means absolutely nothing to the reader] "...not least the lucrative Venetian currant trade."
42 On the discovery of some documents found after seizing a Portuguese ship that gave details on aspects of the Portuguese system of colonization in Asia; this became known as the "matricola"; it was the argument that persuaded England to launch a competing effort; see also reports in 1599 of the Dutch doing the same, England then formed a joint stock company to trade with India, leading to the creation of the English East India Company; the author ties this in with the rise of the freedom of navigation, as this company claimed a right to trade in the East Indies despite Portugal's existing position there.
44 "The whole point of a joint-stock corporation was that it could be funded and directed by a wide base of individuals, regardless of whether they had experience--or even interest--in the mechanics of trade." [Exactly: I might want to invest in Coca-Cola, but I know literally nothing about making or marketing soda.] Also comments here on how various important political people may not have been direct shareholders but they were indirectly connected or invested even "through the wider ecology of interlocking companies." [Perhaps these are proto-examples of the interlocking trusts that we saw in the late 1800s in the United States.] Comments here on the structure of the East India Company, it didn't have a single permanent stock: there were several subscriptions over time, each established for a set term in years; also shareholders could "take in men under them" meaning they could subdivide individual shares into "shadow joint stock" of a subsidiary, these also were issued (like most ventures in those days) in the form of a partial payment up front and then the later full subscription, and often the company had to chase down those payments from subscribers; also the company might issues calls for fresh capital from shareholders; note the initial charter was experimental and limited to a 15-year term; only later did it become perpetual, also the charter's powers expanded over time. Note also the competition with the Muscovy Company, these two companies encroached on each other's markets to some extent, while the two companies also had overlapping ownership, and they actually worked together on certain expeditions: they co-sponsored John Knight's exposition as well as the second voyage of Henry Hudson.
47 Also interesting blurb here on escalating tensions with the Dutch East India Company in the mid-1610s, this led to a short-lived agreement to do a joint military and commercial enterprise in Asia; the companies even floated the idea of merging [now we can kind of see a very early example of an Anglo-Dutch partnership like for example today's Unilever Corporation or Royal Dutch Shell]
48 Concluding discussion here at the end of this chapter, sort of a thesis restatement, that these English overseas companies were by definition transnational institutions, they were intertwined across political boundaries, the companies served both sovereign functions but were also active subjects of the sovereign, likewise they were "political chameleons" able to "blend into systems of sovereignty in multiple places at once." A form of franchise government across the early modern world. By the 17th century these experiments grew into a pervasive "model for funding and governing commercial and colonial expansion."
Chapter 2: Municipal Bonds: The Age of Crisis
[Note the two chapter titles so far are fairly decent finance puns, uh, as far as finance puns go.]
49ff The author starts this chapter with a blurb about the Fife adventurers, a joint-stock organization formed to set up a colony in the northern Hebrides, the organization foundered and ran out of funding, but was then acquired by a Highland leader who used its "pretended rights" to the territory to fortify his "longstanding but contested hereditary claim" to the lordship of the region. The author shares this example to show how, over time, this helped establish "the rather bizarre idea that in buying a company, one could buy a colony."
50ff After the failed Spanish invasion of Ireland, England and Scotland used the London Corporation to take the various newly seized estates in Ireland, populating them with loyal Scottish or English citizens; this plan was known as the London Company in Ireland and in London it was known as the Irish Society; seen as sort of a trusteeship, holding and managing a colony on behalf of the city of London and ultimately the Crown; also on London investors setting up corporations that would send adventurers to coastal North America, one to Maine and another to Virginia to form Jamestown. Both of these colonies more or less foundered; but then the city of London started yet another charter for a joint stock company that came to be known as the Virginia Company: it had exclusive rights to a 400 mile stretch of the coast of North America, including 100 miles into the Atlantic and 100 miles into the South Seas; note that the company "orchestrated an elaborate tour of London society of nearly a dozen indigenous Virginians, including Pocahontas..."
55 Note some of the early dodgy financings used here: the leader Thomas Smythe (more or less seen as the CEO or chairman), took out a large loan using his joint stock as collateral, also issuing bonds and sub-licenses to raise additional capital, and also used of lotteries as a source of fundraising "despite their dodgy reputation as scams and swindles" as the author puts it. This helped the company recover from the loss of its flagship in 1609 (it had run aground in Bermuda), as well as created a sort of shadow revenue source from non-subscribers. Also on sort of subfranchising or sublicensing aspects of their monopoly: for example the Virginia Company had a supply company that it gave exclusive rights to provision the colony; another example here of the so-called Greenland Company which was a semi-autonomous venture from Russia Company subscribers for whaling activity in Spitsbergen; the Virginia Company also lost its ability to hold lotteries as James I disallowed them, so it set up "calls" [capital calls] for investors in four additional subsidiaries, including a company to recruit women to the colony and a also for a fur trading expedition into the interior.
56 There seems to be a transition of power at the Virginia Company here, between Smythe and another leader, Edwin Sandys; Sandys introduced another innovation, which was joint stock plantations having very large landholdings with their own administrative responsibility, even establishing central market towns and boroughs; this was kind of a method of introducing economies of scale to a new colony.
57ff Mention here of the Pilgrims, who financed The Mayflower through a joint stock association [I did not know this]; departing from the Netherlands to live as a separate body under the general government of Virginia (although they ended up near Cape Cod); also the Virginia Company established a subsidiary to lay claim to Bermuda, they sold these rights to to a group of 117 adventurers who were all Virginia Company shareholders. This gave the parent company much needed cash; it gave the responsibility for colonizing Bermuda to a new joint stock enterprise incorporated in 1615.
59ff Comments here on the the Newfoundland Company and its various ventures, including offering territory in the Newfoundland colony to the Scottish writer/poet William Alexander, who wrote a treatise, "An Encouragement to Colonies" which acted essentially as promotional literature for the company. Also around this time the Compagnie de la Nouvelle France was formed to reinforce Quebec and settle the St Lawrence and Acadia regions, thus there arrived competition from a French joint stock organization.
63ff Interesting controversy here where certain corporations went to colonize the Amazon region in Brazil, encroaching on Spanish territory during a time when England had a relatively fragile peace with Spain; note that one corporation actually captured a couple of Spanish slave ships which contains 60 African slaves from Angola which were later sold in Jamestown: "the first known instance of the African slave trade in British North America." In this instance England's king stepped in and forced the company to renounce its charter and because of the geopolitical concern with Spain, also throwing one of the leaders into prison until he promised never to have anything to do with the Amazon region; there's a discussion here about how threatening one charter would affect them all, thus this was sort of an early example of the Crown imposing its power on these transnational corporations as they were still ostensibly subjects of the British Empire. Then the author moves on to a discussion of what was called "free trade": basically questions about to what extent these companies could act without the interference of the Crown, as well as a debate over monopolies and what constituted exactly a monopoly; eventually this led to a solution that compelled these companies to open membership more broadly.
71ff On examples of a kind of inconsistency in the definition of "monopoly" at this time: see Edwin Sandys, who backed the Free Trade bill yet defended the Virginia Company's monopoly on the tobacco trade; a monopoly on a specific business wasn't really seen as a "monopoly" under the various legal wranglings happening here; aspects of this debate also framed up to what extent the Crown could unilaterally eliminate one of these corporations: see when Charles I reached the throne and a disgruntled former advocate for the Irish Society (which held the charter for the Ulster colony in Ireland) led an inquiry into the society's "defects and omissions," advocating for Ulster to return to individual ownership; note that this charter was actually recalled but then left in legal limbo because King Charles got into deep political problems with both his English and Scottish parliaments.
74ff Also on complaints about the Virginia colony and Sandy's profiteering there--to the extent that their were claims he was even running a tyranny on the colony's indentured laborers; note that Charles I basically yanked this charter, and proclaimed Virginia's government "to depend upon ourself" because it was too important "to be committed to any company or corporation." This was decisive language that shocked colonists in New England; ironically however, Charles didn't continue to yank or undermine patents, he went on to issue many more of them, despite the fact that historians traditionally observe Charles I's reign as "a shift in this period away from corporate government toward greater assertions of Crown authority"; Charles started giving direct charters--essentially feudal-style land grants--for Maryland, the Carolinas, Georgia and Florida.
77ff A wandering discussion here describing conflicts between different joint stock companies, both English and Dutch, over fishing rights; then a discussion of different conflicts over land as different charters overlapped: see for example Kent Island, owned by William Claiborne dating from the Virginia Company but then it became part of Maryland, and thus fell under Maryland's charter after the Virginia Company had its charter rescinded; Claiborne sued, saying Maryland's charter did not abrogate his property rights; see another example in New England where there were various overlapping charters between the Massachusetts Bay Company and the struggling New Plymouth colony which caused the latter to seek out a charter of its own.
85ff Also a discussion here of tensions between the English Puritans and the Crown; as Charles shut down Parliament and arrested several members, the leadership of the Massachusetts Bay Company made a strategic decision to transport their charter across the Atlantic and basically ignore any Crown ruling or request to "show justification for their charter"; there was nothing the Crown could really do without physical possession of the charter, although note there was a an aborted effort to invade Massachusetts at this point to physically repossess the charter and arrest the colonial leaders [!]; the ship sent to execute this mission fell apart just after its launch, and the scheme sort of disappeared; and then the Crown was distracted by far more pressing matters, this left Massachusetts "never more autonomous." Massachusetts went on employ charters extensively, forming various corporate entities for commerce, infrastructure building, even down to the very local government level of the colony.
87ff On the Saybrook Company, holding a large tract of land that eventually would become the breakaway colony of Connecticut. Also the corporation of New Haven.
89ff On the execution of Charles I in 1649 and the establishment of a military protectorate in the British Isles; this turned out to be a mixed bag for the colonial companies: see for example what happened to the Russia Company, as the Tsar, appalled by the execution of a fellow monarch, suspended the company's charter; also on the formation of the New England Confederation or the United Colonies, somewhat of a unification experiment in the wake of Britain's political transition at home; note that the protectorate under Oliver Cromwell essentially continued to use these joint stock companies as a mechanism of colonial expansion. On instances where patents or charters were owned by royalists, Puritan-connected charters would spring up by people allied with Cromwell to take their place.
89ff On the execution of Charles I in 1649 and the establishment of a military protectorate in the British Isles; this turned out to be a mixed bag for the colonial companies: see for example what happened to the Russia Company, as the Tsar, appalled by the execution of a fellow monarch, suspended the company's charter; also on the formation of the New England Confederation or the United Colonies, somewhat of a unification experiment in the wake of Britain's political transition at home; note that the protectorate under Oliver Cromwell essentially continued to use these joint stock companies as a mechanism of colonial expansion. On instances where patents or charters were owned by royalists, Puritan-connected charters would spring up by people allied with Cromwell to take their place.
91ff On Cromwell's expansion in Ireland using a joint stock company called the Adventure for Irish Land which would clear and plant forfeited rebel land; see also an affiliated sea venture which was to raise an expeditionary military force to evict Catholics from the land, transferred the territory of Ulster to investors in the form of dividends, in addition to any other spoils of war. [Again, an example of overt and violent population replacement here.]
Chapter 3: Corporate Finance: The Age of Projects
94ff The author draws a historical parallel here between a sort of "corporate restoration" that came along with the 1660 restoration of England's monarchy with Charles II. Most of England's overseas activities remained in private hands; many of the companies that had weathered the political chaos of the prior regimes had emerged on stronger footing with new charters issued by Charles II; at this point this created a sort of "scaffolding" for these entities, while they "served as the fundamental infrastructure of colonial civil society abroad."
95ff The author says "the late seventeenth century seemed to teem with schemes" [cute!] for various public works: mines, draining swamplands, offering insurance, etc., at the time most of these projects "conjured images of fraudsters and failures," but now we look back and see "budding capitalist entrepreneurs." Note also the Royal Society of London was first incorporated in 1662.
97ff Discussion here of no one being able to find the so-called Saybrook Company's original grant; new royal patents were needed to confirm the colony of Connecticut's status; also on territorial disputes with Rhode Island which was excluded from the United Colonies; Connecticut and Rhode Island both claimed that the Narragansett territory was within their boundaries; there was eventually a compromise, but Rhode Island had agreed in their charter that for the first time intercolonial disputes could explicitly appeal to the Crown; Then in 1664 a royal commission headed by Richard Nicolls arrived in New England to investigate various affronts to Royal authority; also it became clear at this time that the joint stock companies, especially their towns and communities "served to help legitimize the accumulation of indigenous lands in English and colonial law" basically by prohibiting private persons from making treaties or purchases of indigenous territory without specific authority.
103ff Various examples of legal arguments for inheriting or passing land from owner to owner through inheritance for example; see the example of Roger Ludlow's land in Fairfield Connecticut; also ownership disputes over Carolina.
106 On joint stock enterprises owning East and West New Jersey, divided into divisible shares; see also William Penn who secured a proprietary charter for a huge colony west of the Delaware River in 1681, Pennsylvania. This was granted to Penn in lieu of significant debts the Crown owed William Penn's father.
108 On urban corporations like the Philadelphia Corporation, chartered in 1691 and again in 1701, to handle various jurisdictional rights and regulations, including the development of public works, licensing and regulating taverns, and managing the distribution of property lots; note however this form of government kind of died out by the mid 1700s and much of the day-to-day governing fell to voluntary associations.
110ff More corporations: the Africa Company; also a company to revive activity in North America: a renewed Hudson's Bay Company that retained its royal patronage but evolved into an independent corporation. [Note here that the author is so buried in so many different corporations and so much minutia here that he mistakenly explains Rupert's land twice two pages apart: first as "a vast tract of North America to be known as Rupert's Land" on page 110, and then "what was now to be known as Rupert's Land." on page 112. There's so much "one damn thing after another" here that even the author is forgetting what he already wrote!]
112ff On the creation of the Council of Trade and Foreign Plantations; the 1672 revival and merger of two councils into a sort of bureaucracy to regulate overseas affairs, and also to help resolve complaints and disputes concerning colonial enterprises; then in 1674 on this council being rescinded and absorbed into a subcommittee of the Privy Council. [I think in order to hack away and cut back on the minutia, the author could ask himself a metaquestion: "For what reason, precisely, would the reader want to know this?" I think this would help the author cut this book down by a third and make it a lot tighter work.]
114ff Example in Bermuda of the Crown using the quo warranto process, basically forcing a company to justify its charter in court; this is a device to more or less take over Bermuda, this was also done some decades earlier in Barbados without even any formal process; essentially the court decided that the Crown had the ability to appoint directors or leaders or take over territory owned by a company if it wanted to. Charles II also entertained similar actions in the American colonies, using a writ of scrire facias, but then in 1685 Charles II died, replaced by his brother King James II, and James "saw corporations as a means to extend the Crown's own power abroad." He also reorganized the governance of the American colonies, sweeping away colony-based governments and instead installing four regional viceroyalties.
117ff Note also that James II was ousted after just a few years, replaced by William of Orange and his wife Mary in 1688. There was sort of a similar Glorious Revolution in the colonies too, where agents of James II were arrested, others fled to England etc. "...nothing about the Glorious Revolution resolved the question as to whether a colony's corporate status rendered it an independent, self-governing, and even sovereign body politic" or if it fell under Crown sovereignty. Things stayed as unclear for the colonies as before.
122ff Discussion on what to do with the American colonies in the years following the Glorious Revolution, circa 1715; moving towards some degree of autonomy; see William Penn, who wanted a manorial-type system of running the colonies, with urban corporations like those used in England that had chartered bodies handle civil governance while military affairs were handled by the Crown.
129ff Back now discussing the English East India Company, "following its near-death experience in the 1690s, both in British politics and its disastrous war with the Mughal Empire." Recall that there were the two East India companies in Britain: the old one essentially survived by becoming an the largest shareholder in the new company; also a legal precedent here that withdrawing the charter would have basically meant seizing private property, but combining the companies was a legal maneuver that stopped the embarrassing situation of having two exclusively English companies competing in India. Thus the two companies combined to become the United Company of Merchants of England Trading to the East Indies. Note also that the company became an investor in British national debt. [The author does not explain this very well at all, but essentially the English government monetized its debt, allowing this company to buy it; perhaps this is something similar to what happened with the South Sea Company, which the author will get into in a few pages.] The fact that the company's Capital stock was government debt made it more stable and more valuable, ensuring "the continued high price of its shares." [We can see some of the early examples of the inversion of money where "money" became "debt" as it now is in the case of United States Treasury bills--these are debts, liabilities of the US government, and yet they are thought of as the best collateral!]
131ff On the financial revolution which happened in the wake of the 1688 Glorious Revolution, giving rise to an active market in joint stock companies; a frenzy of opportunities for investments in loans, annuities, bonds, etc. Shareholding became something done by more than just elite classes; comments here on an early example of a repurposing of a charter: the so-called Sword Blade Company, which ceased their basic business and repurposed themselves with a business plan to acquire land in Ireland; also a company created to engage in commerce in New Spain [South America] in the wake of the War of Spanish Succession in 1702-1713: this entity eventually morphed into the South Sea Company; it would be engaged in the slave trade and various other activities in the Americas; in reality it subcontracted obtaining slaves for trade from the Royal African Company.
136ff On the various opacities of the South Sea Company: it had a complicated balance sheet of loans, government securities, other credit instruments; on its great popularity, promoted by Robert Harley, Queen Anne's chief minister who recruited Daniel Defoe and Jonathan Swift; this also happened during a boom for company formation and speculation in the late 1710s across Britain and Europe, including the famous Mississippi Company promoted in France by John Law.
138ff On discussions in Parliament to pass an act to stop companies from acting under an obsolete charter without legal authority in 1720; then it became (theoretically, at least) illegal to operate a joint stock company without a charter. Then in 1719 and 1720 the South Sea Company stock rose precipitously as well as the value of many other companies; and then on the 1720 collapse of the South Sea Company, what people call the "South Sea bubble"; on the debate on whether it caused an actual financial crisis or not. What for sure happened though was a flood of pamphlets and criticism of joint stock schemes at this time. "Something seemed broken." Discussion here where the author claims that the entire South Sea bubble and related issues showed how little consensus there was on how to value a company [as if this problem was discovered then?]; then on the Bubble Act of 1720 making it illegal to use unchartered companies; but this law was too vague and was largely ignored; only one company was successfully prosecuted under it, an unchartered fisheries scheme; "meanwhile other long-standing colonial companies flourished." Also the South Sea Company continued in business through this period, involved in slave trading, smuggling and financing government debt; in 1723 it formally split its capital stock into separate shares of the commercial company, while its financing arm was converted into perpetual government-backed annuities, "ensuring it would remain central, if perhaps far more quietly so, to the making of the British state and empire for more than a century to follow."
Chapter 4: Hostile Takeovers: The Age of Revolutions
143-4 [The opening of this chapter is a good example of what not to do if you want to write well.] "For at least two decades after traveling to the Pacific on William Dampier's infamously disastrous 1705 St. George expedition, John Welbe hatched many schemes to mount a return of his own, many of them conceived while whiling away his time in one of London's several debtors' prisons." [The reader will know neither of these people nor know anything about this expedition: this is an extremely oblique reference to multiple nested items here, and the reader will have no context as to what the author is talking about. This is not how you open a chapter! You can't expect your readers to know these things--if they could "get" your references they wouldn't need to read the book. This kind of writing happens when the author can't get out of his own head, when he can't step back from his knowledge to relate it appropriately to readers who don't have his knowledge. It's a form of authorial solipsism. The point of this part of the chapter is to illustrate a series of various company scandals, and he's trying to show "something of the moment" with this opening anecdote. Better to just tell the reader openly what he's trying to do, rather than start with oblique references that will mean nothing and make no sense to 99.9% of his readers.]
144 A quote here from economist John Sinclair, observing how England now began looking downfield, seeking a long-term "plan of perpetual accumulation and aggrandizement" as Britain had finally "assumed the appearance of a great corporation."
145ff Discussion of joint stock companies created to run prisons and "export" convicts to be settlers for various colonial projects; note that 18th century prisons were essentially private businesses [I had no idea about this] they were inherited, sold, farmed-out routinely; there were demands on the owners to "raise revenue" which [obviously] created perverse incentives to extort bribes and fees from prisoners, to skimp on basic services, etc., all to increase profits; see the findings of The Gaols Committee in 1729. The author then moves on to the Georgia Project, conceived in 1730 by James Oglethorpe, this was to establish the colony of Georgia in America: it was more like an endowment, not a real joint stock corporation, although it was called a corporation, a company and a society [this factoid doesn't appear to have anything to do with anything other than to perform as a device enabling the author to somehow argue "one way or another, empire was something not to be governed by government." He's making the case here that groups, organizations, corporations, trusts, etc., were governing much of the British Empire. Georgia appears to be a strange example to use here, since the Georgia Project actually gave up its charter: it never got any money from the government, it ran short on cash and surrendered its charter in 1752--at which point Georgia became completely administered by the Crown. Georgia appears to be an anti-example for the author's argument!]
151ff On the land bank schemes in New England in the 1730s and 1740s: they would mortgage land and other forms of property, then offer loans in the form of paper notes, which later would circulate as ready money. New England at that time had a huge shortage of coin; it set off a debate about paper money and whether it could be issued without royal sanction; also it was a challenge to sovereign power; and finally it was a question of ethics to issue paper money backed by loans [this was an ethical problem then, it is obviously not anymore in the modern era of inversion, where our money literally is debt].
152ff Now the author moves on to a similar debate over the incorporation of colleges and universities, a strange transition here. Discussion of Harvard and Yale, debates about whether these institutions could even pursue incorporation in the first place; also on the idea that having a charter made it "too vulnerable" because the institution could be sued, or worse: randomly served a writ of quo warranto and then annihilated by the whim of the Crown.
155ff More examples here of joint stock companies continuing to lay claim to indigenous trade and territory acquisition: see the 1747 Ohio Company the 1749 Loyal Company and the 1763 Mississippi Company all meant to profit from land speculation, while they were also meant to act as a counterweight to French expansion in the New World. On the Treaty of Paris which ended the Seven Years' War in 1763, giving England several new formerly French and Spanish colonies; also King George III and his proclamation of the formation of four new royal colonies: Quebec, Granada and East and West Florida, along with asserting the Crown's right to settle vast tracts of North America west of the Appalachians, this proclamation of 1763 at least theoretically prohibited colonial governments and private persons from acquiring or purchasing land without the permission of British imperial officials. Note also that some colonists "ignored, scorned, or mocked" these new conditions, which in any event were difficult to enforce.
157ff On the Walpole Company, involving Benjamin Franklin and Thomas Walpole who took their financial and political clout to London to obtain a grant to negotiate with the Iroquois Confederacy for trade and land; on conflict from the Ohio Company, objecting to what they saw as a Pennsylvania conspiracy to take away their rights in the same region; also in London the Walpole group tried to buy the Virginia Company, but the Virginia Company shareholders in Virginia rejected this merger; eventually then the Walpole Company eventually came to be known in 1772 is the Grand Ohio Company. Note also at this time Franklin was becoming a leading critic of Crown policy toward the colonies. Note that the Grand Ohio's charter never arrived and the whole thing was sort of interrupted by the outbreak of the revolutionary War in 1775. [The reader experiences something that can only be described as an intellectual coitus interruptus here, as the author goes into great detail describing a company that never actually gets off the ground, and then he moves on to another subject.]
158ff On the Susquehanna Company, established in Connecticut in the mid-1750s, another land bank corporation undertaking the work of acquiring native territory. [This company is interesting: their land claims included Penn family territory in Pennsylvania; note also there's a whole rabbit hole here about Connecticut's land claims to the Ohio territory, the so-called "Western Reserve" land by Lake Erie; this was ceded to Ohio when Ohio became a state. The author doesn't mention anything about this here.] Also there is actual armed conflict between Pennsylvania residents and Connecticut residents in the late 1760s: a conflict called the Yankee-Pennamite Wars; and then in 1774 Connecticut annexed the territory outright, calling it Westmoreland County. A debate about whether this institution even was chartered, if it had a real right to buy this territory, or if it even could make a claim to it in the first place [and then the author just drops the whole topic here and backtracks to 1763 at the end of the Seven Years' War.]
161ff After the conclusion of the Seven Years' War, the British Empire now included an unprecedented number of non-British subjects: the colonies were much more decentralized and "plural" on many levels. Also quite a number of British crown troops were lingering in North America after the war. Finally, the war was expensive and London expected the colonies to "pay their share" thus they taxed the colonies with various Acts like the Stamp Act that angered the colonies and were to them and act of great overreach.
163ff Discussion here of how George III expressed indignation that the Americans would rebel after Britain spent so much treasure to establish the colonies, and then Thomas Jefferson's lengthy response of the "palpable untruth" of George's claim, arguing that each American colony had arisen in some form of private enterprise.
164ff Discussion of some of the unusual and idiosyncratic aspects of American law and politics, thanks to the colonies' corporate roots: starting with the novel idea of having a written constitution in place first. Also on whether the states were corporations; whether their individual cities and communities were corporations; debates about the structure of government, also whether the federal government is a corporation or not; should the federal government have the same power to make corporations or charter institutions as the king did or Parliament did? Note that the constitution never discussed this explicit power or prohibited it; also States absorbed most lawmaking authority, including the capacity to establish corporations. After independence legislatures across the early Republic used their power to charter commercial, municipal and educational corporations "with a certain abandon." "Twenty new cities were incorporated across the United States in the 1780s alone." "...as in so many other ways, the new American Republic did not break from the British Empire over corporations so much as pick up right where it had left off." Also an interesting discussion about institutions and who owned them and who was accountable to them as the regime changed: see for example Justice John Marshall who argued in the landmark case Trustees of Dartmouth College v. Woodward that Dartmouth's charter had been conveyed at the Revolution from the Crown to the State, that it otherwise remained the same as it was in 1769.
167ff On various companies emerging, organized as corporations, trusts, syndicates, etc., to settle in Ohio, Pennsylvania, Maine, western New York, etc.; see also a mention here of Georgia in 1795 selling 35 million acres, the so-called Yazoo Lands, to four new companies, but then Georgia decided to rescind the original sale; then there was a lawsuit, Fletcher v. Peck, which was foundational in establishing the supremacy of the Federal government, the sanctity of private property rights, and also the power of the United States to dispossess indigenous lands and displace peoples there with their own settlers.
168ff Now the author moves to British India and England's issues here, citing Parliament's theoretical absolute and unlimited sovereignty there, thus it could therefore make (or abrogate) corporations at will. On William Pitt's India Act: this was something simmering for a long time based on how the East India Company had to be reviewed by Parliament every 20 years; there was a debate about either eliminating the company outright because having open trade in India would fetch more revenue; also there were repercussions from the recent bubble years; the company itself said that the government was being a pickpocket here trying to steal the company's rights and properties; this was settled as the company received its charter renewal in return for a payment of $200,000 and agreeing to reduce the interest rate on the standing loan they made to the government; note also the French invasion and occupation of Madras in 1746 drove calls to have the Crown directly assume political and military control of India. Also comments here on how the interests of the East India Company were "neither fully allied with nor fully inimical to those of British policymakers." [The point here is that corporations can have all sorts of interests, sometimes aligned with, but sometimes against, the interests of the nation-state. And one could further conclude that to the extent the nation-state and the major corporations can line up their interests together this makes for a more successful collective enterprise: this perhaps was one of the keys to United States dominance in the 20th century.]
171 Interesting blurb here about in 1766 an "espionage-like" activity of a French envoy in London, where they purchased £100,000 worth of English East India Company stock "with the plan of distributing it to allies who were to use their votes as shareholders to endorse policies that might further the rift between the Company and Government." [The author doesn't say it, but this is a form of corporate and country espionage.] Note England and France, both threw their power into dynastic/succession struggles in various carve-out Mughal successor states like Hyderabad; they got involved in what became known as the Carnatic Wars; note that the East India Company loaned money to one of the claimant rulers, Mohammed Ali Khan, creating sort of a military debt cycle that further expanded the company's claims over the territory. [Wow, this looks quite a lot like the kind of thing the USA did in the modern era as described by John Perkins in Confessions of an Economic Hit Man; this is also literally what the United States is doing in Ukraine: lending money, selling weapons, offering economic support, in return for mineral resources. In both of these examples, much of the money gets laundered right back into the USA's economy as part of the process.]
173ff On the 1756 fighting over Calcutta, which "ultimately established the [East India] Company as a dominant political and military power in the region." Also on the East India Company's ability to integrate itself into the Mogul Empire; comments here on the corporation being "a very strange kind of person" that looks like a hereditary sovereign on some level, although it is not one individual but a body, with councils, officials, numerous people, none of whom are permanent. Also note this quote from the satirist Horace Walpole: "Stock-jobbing now makes patriots." This refers to how the stock price went up, and many Britons were invested in the Indian Empire via the East India Company, among them many members of Parliament, and in 1766 for example the stock price went up quite a bit on presumption of increased tax and territorial revenue windfalls. The government really didn't have a coherent policy on how to govern a complicated institution like the East India Company, while at the same time a quarter of Parliament's members were stockholders. [!]
177ff Comments here on a collapse in East India Company stock after a panic, a credit issue cropped up having to do with bills of exchange remitting money back and forth between India and Britain, as well as famine and military setbacks, all of which caused the price to fall; at this point the company was "too big to fail" so the government offered a loan with a catch that there would be a plan of regulation; this resulted in the 1773 Regulating Act, which introduced a new position of Governor General and a Supreme Court, along with other measures modifying company government both in India and in England. On various debates and comments both pro and con for this law; also interesting here that customs duties paid by the Company to the British government outstripped the company's dividends by a factor of five; thus England had a greater financial stake in the company on some level then the actual owners. Also worth noting that the country had invested in the company through loans and credit, and thus it had yet another direct interest in the company's survival and success. There were actually two bills here: Charles Lord North (who at the time in 1767 was both Prime Minister and also part of company leadership) offered one bill; Charles James Fox brought forth another bill; this coincidentally influenced Adam Smith to critique "monopoly corporations" and the East India Company in particular in his book The Wealth of Nations. Smith considered these institutions inherently corrupting: a bad form of government and a bad form of commerce, compared to his preferred competitive markets; Smith also called this the "mercantile system" and later generations came to call it mercantilism; also Smith talked about the agency problems involved [although the author doesn't phrase it this way] where joint stock directors trafficked in other people's money, which often caused them to take irresponsible risks with that money. Note also Smith offered some "quiet caveats" to his criticisms of corporations saying for example that banks and insurance companies were institutions that were appropriate for charters; note also Smith carved out a highly illogical exception for the Hudson's Bay Company.
182 Discussion here about the principle of self-interest; from a speech of Edmund Burke on this issue of the Company's structure, calling it "the best contrivance that ever has been thought of" to govern a remote large disjointed Empire: "...if you can apply the regulations which private wisdom makes for private interests to the concerns of the State, you will then find that active, awakened and enlightened principle of self-interest has contrived a better system of things for the guard of that interest than ever the droning wisdom of people looking for good and of themselves--I mean for the greater part of mankind--ever contrived for the public." [Very interesting, and on some level he's likely right: see for example the famous expression "the road to hell is paved with good intentions."]
183ff Further debates in Parliament: see William Pitt and the India Act, on whether it should be regulated, what kind of control the Crown should have, how much the Company should be supervised, on the introduction of a Board of Control, etc.; also when the Company's charter came up for renewal again in 1793 it was discussed as an indispensable organ of the government; thus the East India Company survived yet again but at the cost of canceling the British government's £4.2 million debt and increasing the Company's annual payments to £500,000, as well as agreeing to other obligations like wartime demands for soldiers, ships and supplies. [This is actually extremely interesting where once you get in bed with the company, you automatically align your incentives--just like various US state governments aligned themselves, inadvertently, with tobacco companies by issuing municipal bonds backed by tobacco taxes! Once England became dependent on annual payments and supplies from the East India Company--or US states became dependent on cigarette tax revenues, suddenly the governments "need" these companies to continue in business.]
184ff On the Africa Company, and how it became both beleaguered and then was dissolved in 1752; then on the creation of a new company: the Company of Merchants Trading to Africa, which engaged in the slave trade but was actively supervised by the Board of Trade; then discussions of how there could be corporate colonial experiments not for promoting slave trading but for abolishing slavery. [Note here that the author oddly delves into a different topic here: the recolonization of American black Loyalists arriving to London in the wake of the American War of Independence; the idea was to repopulate them back to Africa using philanthropic money; the author argues that this "began to intersect" with a growing abolition movement in England, this is his way of (very) loosely tying together these concepts.] Also a charter sought by a group of abolitionist resettlement experimenters: the St. George's Bay Company; this turned out to be a failed effort, there were too many slaving interests that worked as a broad coalition against this according to the author; ultimately it was chartered as a corporation called the Sierra Leone Company to run a colony in Africa. The author cites it here as a clear descendant of a long history of corporate colonies but also reflecting "significant shifts in thinking over the century" as it was "a corporation made to govern first and trade second." Note that the company collapsed in 1807 (the same year Parliament abolished the slave trade), giving all its assets and authority to the Crown colony of Sierra Leone.
Chapter 5: Corporate Innovations: The Age of Reform
193ff Two legal cases where in the 1830s companies were considered colonial sovereigns by British courts; see also an unusual example after the East India Company invaded one of the princely states of India in 1834, seizing territory (as well as the Prince/Raja himself!); the prine sued for his territory and private assets back: the Court ruled against him, saying basically that the East India Company was a form of government.
194 Odd quote here from the author: "...it turned out that people still did dream of asking for charters to govern and were in fact doing so with an exuberance perhaps not seen since the early seventeenth century. The 1820s and 1830s, long thought to be a period either of imperial doldrums caught between the tempests of the first and second British empires or connected to them only by the 'informal' empires of capital and trade, turned out to be fertile with corporate projects from South America to South Australia." [First, this is a good example of the author's often suspect writing style and indirect way of communicating. But also this is the first time I have heard of the historical description of the "first" and "second" British empires.]
196 On the East India Company's charter renewal in 1813, where it kept its activities in China, but was stripped of much of its commercial monopoly; certain jurisdictions were taken away and also the company's books were to be made available to Parliament for annual inspection. Then on the 1834 charter renewal: Parliament finally stripped the company of its trading functions, as well as declaring that the company held its territorial government in trust for the British Crown. This was seen as a settlement of a great dispute. The author describes here, poorly, the wind-down of the business, as company subscribers were bought out at 100% premium and then received 40-year annuity payments. [This wind-down could be described much more clearly and succinctly and less confusingly; see the East India Company's Wikipedia for a far clearer explanation.]
198ff The East India Company went on to charter a whole bunch of other subsidiary companies: steel companies, railroads, etc., in some cases investing, or arranging interlocking holdings; see for example how the East Indian Railway deposited a million pounds of capital stock in the East India Company's treasury in return for a 5% guaranteed interest.
202ff Discussion of a wide range of joint stock foreign investment banks looking to engage in trade, deposit remittance, mortgage financing and property investment across colonial boundaries. Note that these "colonial banks" got a lot of business after the end of slavery in 1833 as they were managing the capital that the government offered to compensate slaveholders.
203ff On the Levant Company, which was more or less closed down in 1825 but had already gone into decline in the wake of the Napoleonic War, devolving to a set of regional trading interests while the British government took over its diplomatic functions. Likewise the Africa Company, hobbled by the end of the slave trade in 1807, "was divested of its responsibilities in West Africa, though it would be another two decades before the Crown took them in directly." [Once again, this is bad writing! The passive voice, the unclear entity that did the "divesting"... it appears the author is implying the Crown did this "divesting," but he never says for sure, nor does he say which responsibilities, or how--or even why, likely a more interesting question--this all happened. The reader is left with several threads here, never tied together, that the author drops and forgets.] Also the South Sea Company still hobbled along in the 1820s, servicing annuities as an arm of government finance; by the 1850s it would transform into a philanthropic trust.
204ff Reference here to the Hudson's Bay Company and how it merged with the Northwest Company in the United States to unify fur trading, but that it was broken up in 1812 as the US made it illegal to have ties with foreign fur traders; also there was a bloody battle in the West over fur territories, although the company was technically not a party to the conflict. [Note that this tale, the conflict between England and the USA for the Oregon Territory, is far, far better told in Throne of Grace.]
210ff On a speculative fervor for more and more companies in the mid 1820s: sort of "roaring twenties" except it was in the 19th century; some 600 companies, a number of which were driven by speculation in the newly independent nations of Latin America. Note that these companies were in theory illegal by the 1720 Bubble Act but the statute had been ignored for nearly a century. It also in 1825 Parliament repealed the Bubble Act, seen as "a string of non sequiturs from first to last." [Slightly comforting to know that my government isn't the only one that passes severely retarded laws.]
212ff Discussion of a couple different scammers from this era: Gregor MacGregor, who had raised and commanded troops under Simon Bolivar, tried to run a company where he announced himself sovereign ruler of a large territory in Nicaragua (the so-called "Republic of Poyais") this as well as another venture he failed. See also John Diston Powles, who attempted to sell mining investments in Colombia as well as land settlements in what is now Venezuela, these collapsed.
214ff Various immigration plans and projects that were corporatized in various forms to move people from England to Australia or to British North America/Canada; also mentions here of various unseemly characters like John Galt and Edward Gibbon Wakefield who were involved or promoted various speculations for land companies and related companies during this boom.
220 [This chapter has really devolved into "one damn thing after another"-style history: there isn't any real thread, there's nothing here to help the reader find any coherency, it's bordering on unreadable. This could have been articulated far better as a (very brief) list of bullet points.]
220ff Very long discussion here on Edward Gibbon Wakefield and his plan to carry out "systematic colonization," using a corporation, the South Australian Company, his whole idea of distributing land and bringing families and all types of professions to Australia. It ended up getting nixed by the British government, but then this venture took a few different forms thereafter; this is a long--too long--discussion here.
228 On how Wakefield "somehow insinuated himself into the inner circles of Utilitarian political economists" including John Stuart Mill, Jeremy Bentham and David Ricardo. Wakefield's association got its charter, finally, in 1834, but at this point Wakefield had moved on to other things and the project continued without him.
229ff On George Fife Angus, an early enthusiast of Wakefield's venture; he proposed a new joint stock company to buy up that commission's remaining land; it was to be called the South Australian Company; Angus had quasi-religious ideas about immigration and settlement in Australia, note also the symbolism in having the ship Prince George carry 200 German settlers to the colony, just like the New England pilgrim fathers.
231ff Now the author goes over various other immigration schemes and programs to Guatemala as well as other Central and South America locations. Also on even an effort to colonize Hawaii, and an offhand comments here about Belgium's King Leopold I and his efforts to use the Belgian Colonization Company to acquire the Sandwich (Hawaiian) Islands by buying shares in New England's Ladd & Company; basically most of these examples fail or never get off the ground [and so the reader learns not only about all companies that made it, but all the companies that didn't!]
233ff The author moves on to the Hudson's Bay Company, attempting to establish a charter to develop a colony in the Vancouver Island region (known at the time as New Caledonia); this was after the company had been more or less evicted from The Oregon Territory after the boundary with the United States was settled in 1846 under the Oregon treaty. I guess the overall theme here is the so-called "Wakefield system" of using corporations to colonize, but by having the individual colonists purchase the land for themselves rather than giving a single chartered company a huge land grant.
236 "As Wakefield's model was taking root in admittedly sometimes weird ways around the globe, Wakefield himself had not gone anywhere." On Wakefield attempting to replicate his Australia plan in New Zealand. It was also rejected by Parliament as the Crown and the British government began to turn against the idea of using philanthropic entities to do these immigration schemes. Then Wakefield actually reformulated his New Zealand plan as a joint stock company, the New Zealand Company, with a 40-year term chartered in 1841.
Chapter 6: Limiting Liabilities: The Age of Imperialism
242ff Somewhat inexplicably, the author leaps ahead some 60 years to 1893, discussing Gilbert and Sullivan and their "comedic opera about, of all things, the limited liability corporation." The musical was called Utopia, Limited. On a proliferation of new limited liability joint stock companies involved in banking, transportation, communication, land, mining, etc., all "critical to late 19th century imperial expansion."
244ff Now we return to 1850 again; on the collapse of the New Zealand Company as it abandoned its charter under an uprising among shareholders (the author doesn't go into detail here unfortunately); also a collapse of the Hudson's Bay Company after atrocities against indigenous peoples in the Vancouver colony surfaced, as well as questions on the legality and legitimacy of the company's charter; likewise the renewal of the East India Company's 20-year charter came up in 1853 and the company once again went on trial in front of Parliament. The author spends a couple pages going over the legal back and forth here, those against the East India Company considered the company to be basically despotic in India, that it wasn't right to have a company form a government, much less that that government would be a plutocracy; also criticism of the East India Company because its shareholders included women and Jews, who could never be trusted to "exercise a sound discretion" in choosing the government of India [interesting arguments here...]; opposing these critics were people like John Stuart Mill and soon-to-be chairman Ross Mangles who argued that it was a good idea to have an intermediate body standing between India and the British home government; and that far from being a plutocracy, a joint stock company was actually the model of middle-class government, or as one member of Parliament from Edinburgh, Thomas Babington Macaulay, put it: the real contribution was the development of a professionalized and middle class colonial civil service. The point here was that company government had worked effectively for some time and that it had grown up with the Indian empire, and that it worked better than other Crown-governed colonies: see for example the various rebellions in Canada, South Africa, Ceylon and New Zealand, when nothing of the sort happened in India. In 1853 after some concessions to critics were offered, the charter was renewed.
248ff Ironically just a few years after this renewal, in March 1857 a general uprising happened in India, the Sepoy Mutiny. Suddenly public opinion flipped the other way, and in 1858 Parliament "remov[ed] the company from its role as the Government of India." Sadly nobody knew what shape the government in India should take, and the Queen Victoria herself did not really know what the precise structure or form it should have; no one was willing to part with the East India Company's structure entirely.
250 Kind of a funny quip here where Queen Victoria was skeptical of William Gladstone's idea to vest the governmental control of India in Parliament: her response was that this would leave her with "less authority than the president of the American Republic." [It's interesting today that everybody seems to think the president of the United States is extremely powerful, but the USA's system is structured to seriously limit executive branch power. Somehow everyone has forgotten this is a design implementation, a feature, not a bug, of American political power! Queen Victoria saw the US Presidency for what it was, she saw it accurately.]
251 Another interesting section here where Parliament flipped conservative, and under Benjamin Disraeli managed to pass the Government of India Act that would put a viceroy in power over India. But it took a full twenty years to finish the process of forming a true government there, with the establishment of the whole suite of government propaganda instruments: the issuance of new coins, new bank notes, new postage stamps, etc., that "announced" the Crown's direct rule under Queen Victoria, who was declared Empress of India. [Very very interesting on a few levels: you need this full suite of things--money, stamps, etc.,--note you're official. Just like in ancient Rome or any Kingdom in antiquity: you have to have the emperor's face on the money!]
251-2 On this transition being far from seamless, the East India Company still held debts, they were still constitutionally part of the government of India, they held other obligations, also the company's soldiers were not happy about being transferred from company service into Crown service: they protested this transition [!] and the company's legacy actually continued in the form of various joint stock sub corporations that the East India company itself had created to operate finance, transportation, infrastructure, resources and territory. Further the company actually had not been abolished: it wasn't until 40 years after the 1833 settlement that the company's shareholders were bought out by Parliament to finally end its existence.
252ff On the transition of the Hudson's Bay Company from a colonial company to just a regular company; after the company's 1858 charter renewal, it was bought in 1862 out by a private company, British North American Association, a group of Anglo-Canadian financiers and merchants; it then sold off a lot of its land, gave up claims to land leases in the Alaska territory when Alaska was sold to the US in 1867; it formally surrendered Vancouver that same year; it ceded its rights to Rupert's Land [for a paltry $1.5m]; it gave up its outstanding claims against the United States, and it remained as simply trading company; all of this happened as Canada became a country upon the creation of the Dominion of Canada, also in 1867.
255 Interesting quote here from the Anglo-Italian economist Leone Levi in 1870, referring to the monopolies of chartered companies running England's foreign trade in Russia, in the Levant, in the East and West Indies, in Africa, in the Hudson Bay: "all such monopolies have long ago been abolished, yet the reign of companies is as undisputed as ever."
256 The author backtracks again, to 1844, when "Parliament passed the first of what turned out to be a string of joint stock company laws" beginning with the Companies Act of 1862: this formalized shareholder's limited liability, introduced streamlined mechanisms for creating a company, as well as winding down/liquidating a company, also it created a superintendent, the Registrar of Joint Stock Companies, to regulate it; the result here--in theory--was that incorporation would "become a bureaucratic process not a political one." The author points out continued blurring from the prior chartered joint stock system: a lot of these companies actually handled colonial-like activities, immigration processes, etc., citing as an example the British Honduras Company, which wanted to recruit Americans to move to Central America to harvest mahogany plantations; likewise there were still traditional British charters being approved during this era, even right up until 1914! However it sounds like most of these are more like Royal Societies (like the Royal Colonial Society or the Royal Geographical Society) [the author would do well to clarify this a bit better].
258ff Discussion here of telegraphy as a burgeoning new industry, beginning in the 1840s; on international telegraphy as "a paradoxical intervention into the world of company colonialism"; it helped to centralize British Empire control but it "was almost wholly dependent on regionalized incorporated companies" to actually maintain the communication links. Also comments here about an octopus-like monopoly on telegraphy, the Eastern Telegraph Company, which cobbled together several existing telegraph companies, eventually coming to control 45% of the global telegraph network. Note also the overlapping multinational shareholders and company ownerships of different types of telegraph companies: see for example the partnership between a US-based and a French-based cable company with subsidiaries that were registered in Britain, both had boards populated by British and Canadian directors; this company won British government subsidies to create a Canada-to-Caribbean telegraph line. See also the Reuter Telegram Company Limited, which had a virtual monopoly over news across the British Empire, promoting itself as an imperial service even though the founder was German and owned investments in other European telegraphs; this company attempted to formally merge in 1875 with a French and German telegraph company.
262ff More examples of corporations/chartered companies indirectly or directly executing national policy: see for example Samuel Lafone, who started the Falkland Islands Company in 1850 and obtained a charter from the Crown plus subsidies and grants to develop those islands; see also James Brooke in 1841, who in return for helping the Sultan of Brunei put down an insurgency in Sarawak on Borneo, he was offered a territorial fiefdom as a reward, but then had a falling out with other investors. What follows here is a lot of "one damn thing after another" discussion of other random companies started in the 1850s and 1860s without much rhyme or reason other than some level of connection to Borneo.
271 "Borneo was thus in theory an independent state, governed as a colony by a British chartered company in the name of the sultans of Brunei and Sulu, whose external affairs were managed by the British Empire and its naval power. Incorporation allowed the company an expectation of institutional permanence, vastly preferable to the hereditary sovereignty of someone like Brooke..." The company went on to raise money by offering opium and alcohol licenses, land grants, mineral concessions, and plantation agriculture licenses, most of these concessions were sold to companies.
275 Now on to another tangential company, Alfred Dent and his company Dent & Company, which went on to run the Peruvian Corporation which was put into operation to take over defaulted debt from the Chilean and Peruvian governments in return for concessions from these countries including into railway and guano monopolies [guano was used as a source for fertilizer/phosphates/nitrogen, the author gives no context here at all].
275ff Another surprise transition here: now to Africa and the 1884 Berlin West Africa conference, at which Africa was carved up into European spheres of influence; see the infamous Belgian Congo Free State, a colony run by a philanthropic corporation, which was the sole personal property of Belgium's King Leopold II. This "became either inspiration or competition for further British companies in Africa."
276ff Onto a new topic, following William Mackinnon and his efforts to establish concessions in Africa (in Zanzibar) and Borneo; the reader is forced to jump back and forth from Africa to Borneo and back again. [This chapter really is devolving into a very poorly arranged and loosely connected one-damn-thing-after-another, and it is severely losing its way.]
281 Good example of a tortured, poorly-writing sentence here: "To what exactly African polities imagined they were agreeing is an open question."
283ff Backtracking again by some two decades to the Natal Land and Colonisation Company Limited, a joint stock company created to act as landlord, land broker and mortgage lender for territory in southern Africa; by the 1860s and 1870s during the gold and diamond rush in that region there was a brand new collection of partnerships, corporations and cartels involved in mining and natural resources; also on Cecil Rhodes, using financing from the Rothschilds, who set up several companies including the De Beers Consolidated Mines Company and the Consolidated Gold Fields of South Africa Company. Then on the founding of the British South Africa Company which was meant to be to South Africa what the East India Company had been to India.
284ff Discussion here of Lobengula, tribal leader of the Ndebele people in a region north of South Africa that later became Rhodesia (now Zimbabwe); on the so-called concession of mining and territorial rights over the entire region that this tribal leader supposedly agreed to but then later denied. On the creation through a kind of sleight of hand the Matabeleland Company; the author quotes an unnamed financial writer: "a most interesting exhibition of how to make money by starting a new empire."
289ff This whole description of these nested institutions, the various nested claims and ownership between the British South Africa Company and the Matabeleland Company is incredibly complicated. "Schemes like this served various purposes, sheltering legal claims in separate companies, channeling profits back to individuals, and expanding options for financing various enterprises. Many of these companies were especially valued for their ability to borrow, especially in the form of bond issues. Unlike public shares, bonds infused a company with capital without having to offer any say in company governance." [Yes, this is true, but also bonds have a prior claim to payment before shareholders too. This is the tradeoff.]
290 The author contradicts himself just paragraphs later where he talks about how the British South Africa Company used shares to buy out or control competitors with "an endless supply of shares, rather than cash." [It appears this author doesn't have much of an understanding of capital structure, it's a little bit disturbing to discover this so late in the book!]
294 On criticism of the African chartered companies in the closing decades of the 19th century, on critics seeing it as private despotism for the sake of dividends; the author here rehashes the various arguments for and against "governments by corporate joint stock": first, that there is nothing that made these companies any worse than other forms of government; it didn't matter if the British South African company turned a profit as long as it was conducive to the interests of the British public; also all government officials are motivated by a personal incentive too, anyone from a school teacher to a civil servant or a member of Parliament; and the British Empire itself really was like a gigantic company; also corporations weren't limited by short-term thinking in the same way politicians worried about staying in power or balancing budgets were; finally, history itself was an argument on the behalf of these structures: see what the Hudson's Bay Company added to the Dominion of Canada for example; note another commentator here Flora Shaw, citing J.R. Seeley in his 1882 book Expansion of England, the British South Africa Company "can neither be killed in battle nor die of fever."
298 Another good quote here taken from a promotional tract for the North Borneo Company, saying that the East India Company and Hudson's Bay Company had been responsible for making "the smallest of European States [meaning Great Britain] in the 16th century the greatest of maritime and commercial powers."
299-300 The author finishes this chapter quoting repeatedly from the 1896 book The Early Chartered Companies by George Cawston and A.H. Keane. [Unfortunately, it makes the reader want to read that book rather than this one.]
Epilogue: Winding Up
301 This section opens with a discussion between Frederick Maitland and Cecil Carr and the development of Carr's history of the early chartered companies called Select Charters of Trading Companies; by the 20th century it seemed that this era was ancient history, that the chartered company was an anachronism, hopelessly out of date, and that company colonialism likewise was an anachronism.
303ff On the Imperial British East Africa Company and the Royal Niger company, both entering talks to surrender their charters, both companies had complex collections of assets and neither were on good financial footing; further discussion on the British government more or less taking over Rhodesia after a suit against the British South African Company. Note also the British North Borneo Company managed to survive until the Japanese occupation during World War II; after the war it was de facto a British colony and it was ultimately paid £1.4 million for a complicated list of assets and infrastructure.
308ff Comments here on how in 1933 Australia's prime minister offered charters for the development of the Northern Territory, thus maybe this structure wasn't quite so anachronistic as it seemed; also companies still commonly used the word "chartered" as part of their name, see for example the 1910 Chartered Company of Mexico; note that while huge companies like the East India Company were "increasingly unthinkable" the idea of getting a grant or concession from foreign or colonial government was alive and well.
310ff [A lot of us now reads like "the chartered company is dead, long live the chartered company"; a lot of on the one hand/on the other hand about how the entity was an anachronism but now have a look at the United Fruit Company for example, as we get another example of similar thing: a genuinely public corporation, but also an extension of government power, basically "corporate colonialism" all over again; [This is a bit irritating here as there is zero context about the United Fruit Company at all--especially on its direct role in various regime changes in Latin America in the 20th century--the author I guess assumes the reader would know this context, yet almost no reader would.]
310ff Example here of the British Broadcasting Corporation, which began as a private subsidized company but became a chartered public corporation in 1927; also Cable & Wireless in the 1940s was created by a merger of Eastern Telegraph with Marconi's radio telegraphy company, offering telephone service; note that in 1947 the British government acquired Cable & Wireless. Also a discussion on the air travel and the creation of British Airways, Qantas Airways and Indian National Airways.
314 Now a discussion of a new form of colonial enterprise in the form of development corporations, many led by banks: see Barclays Bank and its 1946 overseas development corporation. Finally a discussion of the Commonwealth Development Corporation, a direct investment and lending institution, along with a weird comment here where the author says "In 1950, who would be selected to lead it but John Reith." [As if the average reader would know who John Reith is? Note that Reith was in charge of the BBC and a major figure of World War II but no modern reader would know who this was, this is another example where the author needs to give context, all it takes is a parenthetical clause!]
314ff Discussion here of the post-colonial era, where many of these companies became targets for protests, revolutions and labor actions; see the 1930s protests against the Belize Estate and Produce Company which was formerly the British Honduras company; see also nationalizing efforts across the globe which were important aspects of decolonization and post-colonial state-building: see Egypt's "appropriation" of the Suez Canal as the author phrases it [many would argue here that a more "appropriate" word might be "expropriation"--or theft.]
315ff "In time, the postcolonial world became famously fertile ground for myriad European and American companies, from oil to tobacco, to expand their 'private empires,' a story that is well known and has been well told." Comments on the Hudson's Bay Company as the most famous survivor of this era, now a largely American-owned retail, technology and real estate company boasting that it is "North America's longest continually operating company." [Note the 2025 liquidation of the company as it stumbled into bankruptcy, the brand assets are now owned, oddly, by Canadian Tire Corporation.] Also citing here De Beers and a couple other companies that are still in business, as well as other companies that lived on through conglomeration or diversification and are surviving "unrecognized and unrecognizable in the DNA of their corporate progeny." Examples here of the Unilever buying certain assets of the British South Africa company; also GlaxoSmithKline, built out of the New Zealand company, Joseph Nathan and Co., etc.
317-8 The book closes with a kind of weak example of the Falkland Islands Pressure Group a shadow lobbying arm the author claims inserted itself into negotiations between Britain and Argentina over the Falkland Islands and turned it into "trilateral" talks; ironically the Falklands Islands conflict in 1982 was given the code name Operation Corporate by the British military. Cute.
Vocab:
Prorogation: an interruption of Parliament, see for example 1614 to 1621, "the longest prorogation in a century."
Scrire facias: a writ requiring a person to show why a judgment regarding a record or patent should not be enforced or annulled (see for example the Virginia Company holders were required to appear before the Court of King's Bench to defend their grants)
Quo warranto: a writ or legal action requiring a person to show by what warrant an office or franchise is held, claimed, or exercised.
To Read:
***George Cawston and A.H. Keane: The Early Chartered Companies: (A.D. 1296-1858)
***J.R. Seeley: The Expansion of England
Cecil Carr: Select Charters of Trading Companies
Philip J. Stern: The Company-State
Kenneth Andrews: Trade, Plunder, and Settlement
For What It's Worth: Historical Financial Bubbles and the Boundaries of Economic Rationality [paper]
Jon Lynn: Capital and Labour on the Rhodesian Railway System, 1888-1947
Camões: Os Lusíadas/The Lusiad [16th century epic translated by Mickle, public domain copy free at the Internet Archive]