Trading Companies played an important part in colonial American settlement. Six incorporated British companies established settlements: the Virginia Company at Jamestown (1606), the London and Bristol Company at Sagadahoc (1610), the Council for New England at Newfoundland (1620), the Bermuda Company at Bermuda (1622), the Massachusetts Bay Company at Salem (1629), and the Old Providence Company at Old Providence (1630). The Dutch used a similar organization to plant their settlement in New Netherland at New Amsterdam.
There were two types of trading companies: jointstock and associates. Joint-stock companies were legally incorporated by the crown by royal charter. They were run by a treasurer and an executive council from headquarters named in the charter. They resembled a modern corporation in selling shares to stockholders, whose liability was limited to their specific investments and who met quarterly in "general courts." A company's charter gave it title to a specific territory and a legal monopoly to trade in that region, and it granted the company governmental powers over any settlements in its territory. The company also had control over the natives and authority to defend its settlements and trade from foreign aggression.
The colonists themselves lived under a complex of rules and regulations that originated with both company officers and the settlers participating in colonial governments. All the ships, storehouses, and livestock bought from company funds were company property. Individual colonists might also own private property, and these holdings were subject to taxation to raise money for the colony. The land was a common stock belonging to the stockholders until disposed of by grant to settlers or investors. Practically, there was no way a stockholder in England could share in this common stock except by emigrating to the colony. Trading privileges belonged to the stockholders of the home company.
Limited partnerships called associates—less formal arrangements than joint-stock companies—were another common type of trading company. Such companies were not fully incorporated, and their territorial grants came from some legally incorporated company. The London Company used this device in the settlement of Virginia, where associates settled Berkeley Hundred and many other regions. In return for a title to a specified tract of land, associates agreed to transport a certain number of settlers to a given area and establish them within a limited time. The London Company issued forty-four such grants, including one to the group of settlers that came to be known as the Pilgrims, which they never used because they landed in Plymouth instead. Another company of associates, the Dorchester Company (1624), received a grant in what later became Massachusetts and established a settlement at Salem. This company, with its grant, was finally merged into the Massachusetts Bay Company, which was incorporated under royal charter. Because the charter stipulated no place for the company's offices and meetings, the officers moved the company and charter to America, where the company became the basis of a commonwealth, and the "general court" assumed governmental power. The company's trading division maintained headquarters in London until 1638. The Massachusetts Bay Company furnished a model for later settlements in Rhode Island and Connecticut, the governments of which were similar to that of the joint-stock companies.
Bibliography
Andrews, K. R., N. P Canny, and P. E. H. Hair, eds. The Westward Enterprise: English Activities in Ireland, the Atlantic, and America, 1480–1650. Detroit, Mich.: Wayne State University Press, 1979.
Carr, Lois Green, Philip D. Morgan, and Jean B. Russo, eds. Colonial Chesapeake Society. Chapel Hill: University of North Carolina Press, 1988.
Clark, Charles E. The Eastern Frontier: The Settlement of Northern New England, 1610–1763. New York: Knopf, 1970.
Cook, Jacob Ernest, et al., eds. Encyclopedia of the North American Colonies. New York: Scribners, 1993.
