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« on: June 06, 2006, 11:04:35 PM »

From Street Fights to Empire
 The British roots of the American corporation

The year was 1267, and blood flowed in the muddy streets of London. A dispute between two guildsthe Goldsmiths and the Tailorshad escalated until it turned into armed conflict. The issues that led to the fighting are not recorded, but history does tell us that over 500 men were involved, including members of the Clothworkers’ Guild and the Cordwainers’ Guild, and that many were injured or killed.

Such rumbles broke out from time to time among the scores of craft guilds that had arisen during the thirteenth and fourteenth centuries. In 1340 it was the Skinners fighting the Fishmongers in the Cheapside district of the city. In 1378, the Goldsmiths attacked the Grocers. Though bloody, those conflicts were both mere skirmishes compared to the all-out war of the 1390s in which a grand alliance consisting of the Drapers, the Mercers, the Tailors, the Goldsmiths, the Saddlers, the Haaberdashers, and the Cordwainers went to war against the Fishmongers and the Victuallers. The issues were a complex blend of the lofty and the mundane, including fish prices and the religious teachings of John Wyclif.

What, if anything, do these quaint-sounding medieval guilds and their conflicts over obscure and long-forgotten issues have to do with today’s goliaths, with General Electric, Microsoft, Merck, WalMart, and so on? The Skinners, Fishmongers, and Haaberdashers of the late Middle Ages did not yet display the particular features that would allow us to call them corporations. They were not unified businesses, but rather umbrella groups for the members of particular crafts. But already, some seeds of the corporation can be seen.

One such seed was a tendency toward exclusion and hierarchy as organizing principles. Even by the fourteenth century, the craft guild had moved a considerable distance from its communal roots in a Saxon tribal institution known as the frith gild, an association that included both men and women and served a variety of protective, religious, and mutual-aid functions. Medieval craft guilds had originally been “commonalities” in which all members were equal, but over time a stratification occurred, with the elite members of each guild assuming uniforms known as liveries. In time, non-liveried members were shut out entirely, and eligibility for membership was determined not by competency at a craft but by ability to pay a fee of capital. Among the London guilds, a strict ranking developed. Twelve became known as the “great livery guilds,” with the Mercers occupying the top slot, followed in order of prestige by the Grocers, the Drapers, the Fishmongers, the Goldsmiths, the Skinners, the Merchant Tailors, the Haberdashers, the Salters, the Ironmongers, the Vintonners, and the Clothworkers. Scores of other guilds were known as the “lesser livery guilds.” Membership in one of the great livery guilds required a membership fee of £1000; to belong to one of the lesser livery guilds, the fee was £500.

Guilds didn’t just fightthey also feasted. At one feast in 1516, the Drapers entertained the Mayor and the Sheriffs with “brawn and mustard, capon boiled, swan roasted, pike, venison baked and roast; jellies, pastry, quails, sturgeon, salmon, wafers and hippocras... six sheep, a calf, forty gallons of curds … swan’s puddings, a neck of mutton in pike broth, two shoulders of mutton roast, four conies, eight chickens, six pigeons, and cold meat plenty.”

Indeed, centuries after guilds such as the Skinners, Salters, and Long-bow Stringmakers had outlived their economic functionality, many of them lived on as vehicles for networking and socializing. (Lately, the guilds have been rediscovered by London’s young professionals, who have been forming new ones at a record pace, with names such as the Worshipful Company of Information Technologists and the Worshipful Company of Management Consultants, and the Worshipful Company of World Traders. A glance at the online social calendar for the Worshipful Company of Environmental Cleaners showed that its members were busily engaged in preparations for the annual Inter-Livery Clay Pigeon Shoot, the Inter-Livery Bridge Competition, the Installation of Masters, and the Lord Mayor’s Show, in addition to the regular practice sessions of the guild’s own Golfing Society.)

The nature of life in medieval times was such that the social, the religious, the economic, and the political spheres were fully mixed. Each guild had its own patron saint and altar. For example, the Fraternity of Pepperers, which begat the Company of Grocers in 1373, which in turn begat the Turkey Company in 1581 and the East India Company in 1600, maintained an altar in the Church of Saint Antonin and paid a priest to pray for the souls of past members. Since London had no police force, guilds also played a role in maintaining public order. As early as the thirteenth century, the guilds controlled the city government of London. They elected the Mayor, who was known as the “master of all the companies.” But despite their power, the guilds could not always rest secure, because their relationship with the British monarchy was complex and at times tense.

The main source of that tension was the revenue needs of the throne. By the 1500s, Parliament had gained control over taxation, and the English monarchs were scrambling to develop independent sources of revenue that did not rely on Parliamentary approval. One obvious source, especially in time of war, was the wealth of the livery guilds. For example, during the war between England and Spain, it was the Grocers’ Company, among others, that financed the ships that defeated the Spanish Armada.

During peace times, sales of land were a primary avenue of royal revenue, but as that source was exhausted by 1685. Another revenue source, employed both by Elizabeth I and James I, was to call in all the guilds’ charters for renewal, not because the charters needed renewal, but merely to create an opportunity for collecting fees. Similarly, royal revenue was generated by sales of monopolies, a term that had a somewhat different meaning than it does today. Rather than giving the owner exclusive control over producing a product, a monopolyalso called a “searching and sealing patent”signified authority over verifying the quality of a certain product. Given the advantages inherent in controlling such a function, it is no wonder that gifts or sales of monopolies to non-guild members provoked bitter guild opposition. In 1580, when Queen Elizabeth attempted to grant a monopoly on the gauging of beer to one of her court favorites, the Brewers’ Guild mounted a fierce campaign to dissuade her. Similarly, when one Edward Darcy obtained a right to approve and stamp all skins, his monopoly sparked a rebellion by the Leathersellers.

Despite the objections of the guilds, sales of monopolies became a major source of royal revenues in the sixteenth and seventeenth centuries. In 1623, Parliament passed the Statute of Monopolies, intended to halt the practice, but Charles I exploited loopholes in the act and managed to raise £100,000 per year from selling monopolies. In time, the practice ceased to be an effective source of revenue, since there were limits to how far even a king could go is selling off smaller and smaller slices of economic activity.

Meanwhile, as the livery guilds continued to joust with the monarchy over who would ultimately control the innumerable revenue streams produced by the English economy, growing international trade had begun to transform some of the guilds into the first actual business corporations. In 1505, the Mercers’ Guild spawned the “Guild or Fraternity of St. Thomas a Becket,” also known as the Merchant Adventurers, organized to conduct trade with in Holland and Germany. The Merchant Adventurers represented a transitional form, still a guild but beginning to show a few of the characteristics of the trading corporations that would subsequently define the first true corporations. As in a traditional guild, the Merchant Adventurers functioned as an umbrella for a group of independent traders rather than as an organized entity. So each trader handled his own capital independently. On the other hand, some common operations were beginning to emerge. Certain shared infrastructure, such as wharfs, conveys, and overseas embassies, was used jointly by all the members of the Merchant Adventurers, and this shared infrastructure needed to be developed jointly and financed out of pooled capital. This was the starting point for one of the key features that distinguished corporations from guilds: the pooling of capital.

The 1500s and 1600s saw the formation of a number of trading companies (see Table 2.1). For nearby regions such as Spain, the Baltic Sea, and France, the organizational model established by the Merchant Adventurers worked well. Thus, in the Spanish, the Eastland, and the French Companies, each company member maintaining his own separate capital. But, as new geographic discoveries and innovations in ship-building and navigation made it possible for voyages to range beyond the coastal areas of Europe to more distant regions, such as Russia, Turkey, West Africa, and China, it became more practical for the merchants to pool their resources.

The typical voyage was unsuccessful, but now and then a ship would return with cargo that generated fabulous returns. Trade was not the only way these expeditions generated rich returnsoutright piracy as often part of the equation. In 1587, one of Sir Francis Drake’s expeditions stumbled on a Portuguese galleon, and  promptly seized it. The cargo turned out to be worth £100,000, and investor enthusiasm for investing in further expeditions soared. As in a venture capital fund that finances high-risk opportunities with potentially high returns, the steepness of the “risk-reward curve” made it logical for the financial backers of such voyages to pool their capital across multiple rolls of the dice. To further increase their chances of success, the investor groups sought grants of exclusive access to particular regions, bringing the notion of exclusivity to its apexthe gene of violent organization grafted onto the chromosome of peaceful trade. Inside the boundaries of their designated regions, they deployed private armies and police, waging war against rivals and imprisoning miscreants.

Formation of British Trading Companies
Henry VII
 Merchant Adventurers (1505)
Henry VIII
Edward VI
Mary Tudor
 Russia Company (1553)

 Spanish Company (1577)

Eastland Company (1579)

Turkey Company (1581)

Morocco Company (1588)

East India Company (1600)
James I
 Virginia Company (1606)

French Company (1609)
Charles I
Commonwealth and Protectorate
Charles II
 Hudson’s Bay Company (1670)

Royal African Company (1672)
James II
William III and Mary II
 Greenland Company (1693)
 South Sea Company (1711)

Thus was born the “joint-stock company,” the form used by large corporations today. This method of pooling capital was briefly attempted by the Russia Company, which was chartered in 1553; and was also used for the first two decades of its existence by the Turkey Company. But it was most fully developed by the British East India Company. Initially, the company raised capital one voyage at a time; next, it tried raising capital for limited periods of eight to fifteen years. In 1613, the company issued its first permanent stock, and by 1650 that method of raising capital became the norm, with profits periodically divided among shareholders.

With pooled capital, the corporation for the first time become a single unified entity rather than merely a federation of independent merchants. This internal consolidation made the joint-stock corporation ideally suited for the emergence of a key defining principle of the corporation form, the idea that a corporation represents a separate legal identity from its owners. Essentially, a corporation is a deal between the state and a group of people in which the state says: You can create a separate entity and do business under that name, and the law will deal with the entity rather than with you as individuals. What made the separation even more significant is that shares in joint-stock companies could be sold to third-party investors.

The separation of the legal identity of the corporation from that of its owners has a profound impact in many ways, opening up the possibility of such corporate characteristics as corporate immortality (which doesn’t mean, of course, that a corporation is immune from extinction, but merely that it is not constrained by the finite lifespans of its mortal owners) and limited liability (the ability of owners to escape responsibility for corporate errors, misdeeds, and debts). Of course, neither immortality nor limited liability were inevitable features of joint-stock companies. Indeed, as we’ll see in Chapter 6, both of those features were deliberately withheld from corporations in the United States in the decades prior to the Civil War.

Although scholars disagree about how the legal doctrine of limited liability first emerged in England, one of the first verifiable early sightings was an act of Parliament in 1662 that applied to gentlemen who owned shares in the East India Company or two smaller corporations.

Besides pioneering the use of joint-stock capital and limited liability, the East India Company is historically significant because it was quite simply the most powerful corporation that has ever existed. Imagine a private company so unaccountable it conducts its own criminal trials and runs its own jails, so dominant it possesses an army larger than any other organized force in the world, and so predatory that for more than two centuries it squeezes the economy of the richest country in the world until observers report that some regions have been “bled white.” The King is dependent on periodic “loans” from the company. A third of Parliament owns stock in it, and a tax on its tea constitutes ten percent of the government’s revenues. A 250,000-man army (twice the size of Britain’s) fights the company’s wars, and the four out of five soldiers in that army who are “sepoys,” i.e. Indians, are kept in line by punishments such as “blowing away”strapping an offending soldier across the mouth of a cannon and firing the weapon.

At the time of the American Revolution, the British East India Company was nearly two centuries old, having received its charter on December 31, 1600 via a signature by Queen Elizabeth. “The Company of Merchants of London trading into the East Indies,” as it was formally knownor simply “The Company”received the largest grant of any of the trading companies: everything east of the Cape of Good Hope. Despite the queen’s largess, the company’s early years were difficult. A rival group of Dutch investors had gotten a head start and had access to ten times more capital than the English. In 1623, the Dutch captured ten employees of the British East India Company in Indonesia, tortured them on the rack, and executed them. Reluctantly—since Indonesia (known in those days as “East India”) was considered a more lucrative source for trade goods than India—the English retreated to the safer shores of India, whose coastline was large enough to absorb the trading settlements of multiple European powers.

India in the seventeenth and eighteenth centuries was a patchwork of small kingdoms engaged in constantly shifting alliances. Officially, the Mogul Empire extended across vast regions, but its actual authority was tenuous. Within this web of politics and intrigue, the Company sought alliances with various Indian princes and conducted military campaigns to outflank its European rivals. At the same time, the company’s own employees sometimes became the enemy. Consider the case of Samuel White, who came to India in 1676 at an annual salary of £20. White developed a colorful side business: using Company ships to transport elephants for the King of Siam. Eventually, he added to that the additional job of fortifying a port that the king intended to make available for the French, who happened not only to be allied with Siam but also were perpetual rivals of the British.

Using the small fleet of ships which he had armed for the King of Siam (directly against the interests of the East India Company), White proceeded to betray both of his employers by declaring his own private war on the kingdoms of Burma and Hyderabad. He seized ships belonging to those states and sold their cargoes as his own private property. In a two-year period, White’s extra-curricular activities earned him over £30,000, a vast fortune for the times.

White was hardly the first employee of the East India Company to engage in the forbidden activity of “free trading.” He just happened to be one of the more audacious and successful. Though the local administrators of the Company in India tended to tolerate such activity, so long as it did not interfere too greatly with the Company’s own revenue streams, the attitude of the central management was considerably harsher, as vividly described by historian Ramkrishna Mukherjee:

Sir Josiah Child, as Chairman of the Court of Directors, wrote to the Governor of Bombay, to spare no severity to crush their countrymen who invaded the ground of the Company’s pretensions in India. The Governor replied, by professing his readiness to omit nothing which lay within the sphere of his power, to satisfy the wishes of the Company; but the laws of England, unhappily, would not let him proceed so far as might otherwise be desirable. Sir Josiah wrote back with anger: “That he expected his orders were to be his rules, and not the laws of England, which were a heap of nonsense, compiled by a few ignorant country gentlemen, who hardly knew how to make laws for the good of their own private families, much less for the regulating of companies, and foreign commerce.”

Eventually, the Company sent a ship to escort White back to the port of Madras, where he would presumably be tried and imprisoned. Under cover of night, he slipped away from the escort and sailed to the Siamese port of Mengui, where he stopped just long enough to inform the Siamese that the escort ship “had come to seize the town.” In response, the Siamese attacked the British, killing some eighty Englishmen.

Even more impressive than White’s talent for evasion was his sense of timing. By a stroke of luck, the arrival of his renegade ship in London coincided with the flight from the throne of James II, a supporter of the East India Company. His successors, William and Mary, placed more power in Parliament, which at that time was in a mood against the Company. Judging the temper of the times to be favorable, White sued the East India Company for £40,000, but his luck had finally run out: before the case came to trial, he died.

White’s story provides a glimpse into an era when corporate enterprise was not yet fully cloaked in the trappings of legitimacy. If White was barely a step above piracy, the same could be said for the Company itself. Indeed, as the British gradually succeeded in outmaneuvering their opponents and taking over larger and larger portions of the Indian subcontinent, income from trade was dwarfed by revenues gained from taxing crops and local crafts via a middle stratum of tax collectors, fee assessors, and mandated buyers of crops and goods.

Far from enhancing the prosperity of areas under its umbrella, Pax Brittanica, by all accounts, proved highly ruinous to the unlucky inhabitants of India. In 1773, a Parliamentary committee investigating the Company wrote, “In the East, the laws of society, the laws of nature have been enormously violated. Oppression in every shape has ground the faces of the poor defenseless natives; and tyranny in her bloodless form has stalked abroad.”

In the same year, an anonymous pamphleteer wrote, “Indians tortured to disclose their treasure; cities, towns and villages ransacked, jaghires and provinces purloined: these were the ‘delights’ and ‘religions’ of the Directors and their servants.”

To guard its own revenues, the East India Company issued edicts prohibiting local trading or the development of local industries. Typically the extraction of revenues exceeded sustainable levels, to the point where entire regions became economically broken and socially ruined—reduced from relative health to destitute poverty.

Relative Shares of World Manufacturing Output (%)
Source: Paul Kennedy, The Rise and Fall of the Great Powers (Vintage Books, 1989), 149.

Table 2.2 shows the devastation suffered by India’s manufacturing sector and the corresponding ascent of Britain’s from 1750, shortly before the East India Company extended its control over most of the subcontinent, to 1880, two decades after Parliament finally terminated the charter of the Company and converted India into a formal colony.

While the impact of the East India Company on India can be generally be compared to a process of slow bleeding, its effect within England was to create a perpetual struggle that corrupted Parliament and produced fierce conflict within the monied classes. Within months of the first issuing of the East India Company’s charter, wealthy interests not included among the two hundred owning families initiated action in Parliament to nullify the franchise. In a pattern that was to repeat itself for the next two centuries, the Company’s representatives responded by bribing members of Parliament and providing open-ended loans to the monarch. In 1709, the company’s rivals finally won out, gaining authorization to replace the East India Company. The British government ordered the old company to relinquish its stations in India to the new company. But on the ground, the order proved impossible to enforce. In a standoff, the old company ordered its agents to stay at their posts, and eventually the new franchise had no choice but simply to merge with the old one. It was as though nothing had happened.

As for the trading companies, they had already begun to collapse, one at a time, unable to ward off the encroachments of independent merchants. In 1606 the Spanish Company vanished; in 1667 the French Company; in 1689 the Eastland Company and the Merchant Adventurers; in 1750 the Royal African Company; in 1752 the Levant Company. The demise of the Royal African Company, whose initials were branded on the chests of thousands of men, women, and children, was typical. Despite government backing and participation by numerous prominent Englishmen, the RAC could not outmaneuver the smaller, family-owned slaving enterprises such as the Browns of Rhode Island and the Hobhouses of Bristol.

The East India Company defied the trend, becoming increasingly wealthy and politically influential throughout the eighteenth century as it gradually assumed control of most of the Indian subcontinent, and then began expanding its ambitions even farther: toward China and toward America. Inevitably, those ambitions led to conflict and even war. The Opium War in China, which led to the acquisition of Hong Kong, was the result of a standoff between the government of China and the East India Company over the company’s shipments of opium into southern China. And in the America colonies, as we’ll see in the next chapter, an attempt by the East India Company to expand its tea business at the expense of independent American merchants in ports like Boston, Philadelphia, and New York was a principle cause of the merchant-led rebellion known as the Boston Tea Party.

Yet despite the crucial role played by the East India Company in British politics and the events that precipitated the American Revolution, there are other aspects to the story of how British corporations affected the politics and culture of pre-Revolutionary America. Of these, the most striking example is the brief and tragic story of the Virginia Company.

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The Ultimate Reality Show
 The brutal history of Virginia Company,
“a prison without walls” (1607-1624)

How’s this for a prime time concept? Take a few dozen British gentlemen, the type who like to search for gold and challenge each other to duels, but who have never done anything useful or practical in their lives. Make sure each brings along one or two footmen to powder his wig, shine his buckles, and prepare his afternoon tea. Add a few specialized workers, such as jewelers and glassmakers, and a few with more down-to-earth skillsbut just a few. Then fill up the rest of a ship with half-starved street vagabonds, poor children, the widows of executed thieves, and various petty criminals. Transport the group across the Atlantic Ocean and drop it off on some land under the control of a preexisting nation of indigenous people. Check back in a few years’ time and count how many people are still alive. That, in a nutshell, describes the dismal story of the Jamestown colony, the one and only business venture of the London-based Virginia Company.

As I began looking into what happened in Virginia, I didn’t have to go far. From the coffee table in my living room I picked up a copy of the National Geographic. The article, “Unsettling Discoveries at Jamestown: Suffering and surviving in 17th-century Virginia,” described recent excavations on the banks of the James River, 60 miles from the mouth of Chesapeake Bay near the city of Newport News, Virginia. Here, the first permanent settlement on the Atlantic coast was established in 1607.

In 1992, archeologist William Kelso discovered the site of the original James Fort, and his excavations confirmed in graphic detail the desperate accounts penned by survivors of the Starving Time, the winter of 16091610. The butchered bones of horses, cats, dogs, rats, and snakes indicated the downward spiral that the Virginia settlers had found themselves in. There were also many haphazard graves, hastily dug. Some contained multiple human bodies. Overall, of the 215 settlers who began the winter, only 70 were alive by spring.

Yet even as the first wave of settlers were starving to death, promoters continued to issue breathlessly optimistic new tracts, with titles such as “Good News from Virginia.” The new land, it was reported, “bringeth foorth all things in aboundance, as in the first creation, without toile or labour.” Cedars grew taller than in the Azores. Game was plentiful. And as for grapevines, “in all the world the like abundance is not to be founde.” As for the native inhabitants, they were reported to be “most gentle, loving, and faithfull, void of all guile, and treason.” Such people, it was thought, would take to the gentle hand of English rule, the “faire and loving meanes suting to our English Natures,” as readily as the primitive Britons had taken to the civilizing influence of the Romans.

Excitement about the Company ran high, and was tinged with the idea of adventure. One did not have to join the expedition to qualify. “Adventurer” included anyone who purchased a £12 share in the company, and the list included not only wealthy aristocrats and merchants but also such notables as William Shakespeare. Members of the Drapers’ Guild were especially active. Of course, the organizers were frank about the goal of the Company: to make a profit, mainly from the discovery of precious metals or minerals, or at least by the production of useful goods like glass, furs, potash, pitch, tar, and sassafras, considered a cure for syphilis. It was also whisperedthough officially the idea was a no-no, since King James I had recently made peace with Spainthat the location of the planned settlement would be ideal for launching piracy missions on the rich and poorly guarded Spanish colonies of the West Indies. Some organizers even saw the potential for the English to join forces with rebel Caribbean groups such as the Cimarrons, a group of fugitive slaves, and the Chichimici, a nation of Indians in northern Mexico, and eventually to dislodge the Spanish from their lucrative colonies. If that long-shot scenario came to pass, the Virginia Company might produce returns beyond all imagining.

To its backers, prospects that investing in the Virginia Company would pay off seemed greatly enhanced by the availability of a virtually unlimited conscript workforceBritain’s dispossessed rural tenants, imprisoned beggars, and petty criminals. Thousands of English people were transported to Jamestown, most against their will. They worked under harsh conditions of forced labor, with poor food and shelter, and brutal punishment. Only one out of five people sent to the colony survived to see the end of their seven-year period of servitude. Among transported children, the survival rate was only one in ten.

The Virginia Company’s aggressive and careless use of indentured servants had its roots in the conditions of severe stress that characterized English society at the beginning of the seventeenth century. Under feudalism, the nobility had made their earnings on the backs of the peasantry. But in the 1400s and 1500s, many nobles concluded that they could do even better by getting rid of the peasants. The ongoing practice of “enclosure” converted peasant subsistence lands into sheep pastures, driving countless people from the countryside into rural vagabondage or urban destitution. The scope of enclosure was vast: aerial photographs and archeological excavations have revealed more than a thousand deserted settlements, lending support to estimates that nearly a quarter of the land in England was affected by enclosure. Meanwhile, the English conquest of Ireland, and the banishment of Gypsies and Africans, created further waves of social disruption.

To lose one’s land was to become by definition a criminal. Under Henry VIII (15091547), vagabonds were whipped, had their ears cut off, or were hanged. During the reign of Edward VI (15471553) they were branded on the chest with the letter V. The Beggar Act of 1598 required first-time offenders to be whipped until bloody; second-time offenders were banished to work the oars of galleys or to serve time in the poorhouse.

The organizers of the Virginia Company presented their idea of converting the excess population of England into a new colonial workforce as a neat solution to two problems: gaining a foothold in the New World, while at the same time ridding the England of its unwanted people. Perhaps even more immediate on the minds of British leaders was fear of rebellion. During the Midlands Revolt, a large-scale uprising that took place in 1607, the same year that the James River settlement was founded, a group of peasants called Levellers took action to fill in (i.e. level) the ditches used to enclose and drain peasant fields.

Edward Hakluyt, who spent twenty years promoting the ideas that led to the Virginia Company, was quite frank in calling it a “prison without walls.” In 1609 the company applied to the city of London “to ease the city and suburbs of a swarme of unnecessary inmates, as a continual cause of death and famine, and the verey originall cause of all the plagues that happen in this kingdome.”

At the request of the company, Parliament in 1618 passed a bill allowing the Virginia Company to capture English and Scottish children as young as eight years of age. John Donne, one of the leaders of the company, promised in 1622 that the Virginia Company “shall sweep your streets, and wash your dores, from idele persons, and the children of idle persons, and imploy them.”

Historian John Van der Zee describes children “driven in flocks through the town and confined for shipment in barns.” Those who survived the Atlantic passage encountered regimentation and institutionalized cruelty as routine aspects of everyday life. Each person, including children, received a military rank, and those who violated the detailed rules were tied “neck and heels” for the first offense, whipped for the second, and forced to work on a convict galley for the third. Such methods of discipline had been devised by Maurice of Orange for training Dutch soldiers; they were introduced to the Virginia colony by Sir Thomas Gates and Sir Thomas Gale. Even petty crimes were harshly punished. Stealing an ear of corn or a bunch of grapes while weeding a garden was punishable by death. For stealing two or three pints of oatmeal, one worker had a needle thrust through his tongue and was then chained to a tree until he died of starvation.

Speaking out against the leadership of the company earned even worse punishment. For making “base and detracting” statements against the governor, the Company managers ordered one servant to have his arms broken, his tongue pierced with an awl, and finally to be beaten by a gauntlet of 40 men before being banished from the settlement. For complaining that the Company’s system of justice was unfair, a man named Thomas Hatch was whipped, placed in the pillory, had an ear cut off, and sentenced to an additional seven years of servitude.

But of all the offenses an employee of the Company could commit, the worst judging by the severity of the punishmentwas merely to quit. When one group of runaways was found living among the Indians, Governor Dale responded with a frenzy of executions: “Some he appointed to be hanged, some burned, some to be broken upon wheels, others to be staked, and some to be shot to death.”

Although some accounts describe the children sent to the Virginia Colony as “apprentices,” the implication that young people were being educated in a trade in exchange for their uncompensated labor is deceptive. According to historian Edmund S. Morgan, “Almost all servants were … in a condition resembling that of the least privileged type of English servant, the parish apprentice, a child who (to relieve the community of supporting him) was bound to service by court order, until he was twenty-one or twenty-four, with no obligation on his appointed master’s part to teach him a trade or pay him.” Ill treatment of children is reflected in the death rate. In 1619, several hundred children between the ages of eight and sixteen were shipped from the London poorhouse to Virginia. Of these the names of 165 were recorded; six years later, only 12 of the group remained alive.

Degrading treatment of servants appears to have known few if any limits. Elizabeth Abbott was beaten to death by her masters, John and Alice Proctor. A witness counted five hundred lashes inflicted on Abbott prior to her death. A second servant of the Hintons, Elias Hinton, was beaten to death with a rake. It is not recorded what offenses the two had committed.

In some ways, the ill treatment of servants in the Virginia colony merely reflected the harshly enforced class structure that characterized the times. But the corporate organization of the company actually made conditions for servants worse in Virginia than in England, since the absolute power enjoyed by the company’s managers over their workers led to the abandonment of English laws and customs that traditionally had given servants at least a small degree of control over their own lives. Buying and selling of servants became a common, and even a casual, practice. A Dutch sea captain observed Virginia landowners playing cards, with their servants as gambling stakes. An English sea captain reported seeing servants “sold here upp and downe like horses.” In a remarkably short time, the grandees of the Virginia Company had organized “a system of labor that treated men as things.”

Exacerbating the difficulties faced by the Virginia Company was a major dispute among its investors over company strategy. One group, consisting of large merchants, was content to let the company remain unprofitable for a long period. A second group, led by Lord Robert Rich, had obtained privateering commissions from small nation-states such as Savoy, and saw the colony as a convenient base for preying on Spanish shipping in the Caribbean. A third group, led by Sir Edwin Sandys, favored more aggressive programs to wring a profit out of the colony. Finally, the investors managed to unite in support of Sandys’ plan, which included creative new incentives for the privileged members of the colony, transporting more servants and laborers, and initiating a diversity of economic projects including production of lumber, silk, wine, and glass.

As part of the Sandys plan, the Company made an effort to coax free settlers not to abandon the colony by forming a governing body consisting of the governor, his appointed councilors, and 22 burgesses elected by the landowning settlers. The Virginia General Assembly convened for the first time in 1619the same year that African slaves were first brought to the colony. Thus, the Virginia Colony, despite its record as a deadly work camp for the English poor and as the starting place for the 244-year holocaust of African slavery, gets credit as the New World’s “cradle of democracy” for establishing the first legislative body among Europeans in America. To the north, the Massachusetts Bay Company similarly spawned a representative legislature among its most privileged members. And as more settlements were organized, the use of legislatures expanded accordingly. New Hampshire, Rhode Island, and Connecticut all modeled themselves after Massachusetts; the southern colonies (except Georgia), after Virginia. Pennsylvania and Delaware, both organized by William Penn, adopted legislatures modeled after those of Virginia and Maryland. In 1682, the Duke of York, responding to a petition, authorized the governor to call an assembly in New York like those of the New England colonies.

Sandys’ plan might be termed the “Enronization” of the Virginia Company because of the way the officers of its spin-off subsidiaries managed to enrich themselves while the company itself collapsed. As described by historian Edmund Morgan:

The company reserved a “quitrent” of a shilling a year on every fifty acres granted. The amount was small … but land was abundant. …t would yield a small income in quitrents to the company, increasing with the arrival of every new settler. …n order to speed up settlement, [Sandys] induced various members of the company to join in subcorporations or associations to found “particular plantations” peopled by tenants on the same terms. Investors in these associations obtained a hundred acres for every share of stock in the company plus fifty acres for every tenant…. In other ways, too, the company encouraged the formation of special-interest groups within itself. …It seems evident that while the Virginia Company was failing in London, a number of its officers in the colony were growing rich. …[W]e can see not only the fleeting ugliness of private enterprise operating temporarily without check, not only greed magnified by opportunity, producing fortunes for a few and misery for many. We may also see Virginians beginning to move toward a system of labor that treated men as things.

Eventually, the bitter splits among the Virginia Company’s investors led to an outside investigation of the company. A stockholder named Samuel Wrote had made a few calculations. Out of 3,570 people sent to the colony under Sandys, joining 700 people already there, only 900 remained alive just three years later. Approximately 350 people had been killed by Indiansbut that left 3,000 deaths unaccounted for. Most, it appears, had died of starvation, disease, abuse, or simply overwork on the tobacco plantations. “It consequentlie followes that wee had then lost 3000 persons within those 3 yeares,” noted the disgruntled Wrote.

Wrote and others asked the king for an official investigation, and after receiving the commission’s findings the king moved quickly in 1624 to revoke the charter of the Virginia Company and place the colony under direct governmental control. Overall, since the founding of the colony, 6,000 adults and children had gone to the Jamestown colony. Of those, an estimated 4,800 had died. 

The Virginia Company was not an anomaly, but instead just one island of misery in an archipelago that circled the Atlantic rim, from Ireland to West Africa to the Caribbean to the coast of North America. Around this circle, a cross-ethnic culture emerged among the conscript workforces of sailors and plantation workers. News traveled around the circle. Thus, in 1619, a request from the Virginia Company to the London Common Council for a shipment of children from Bridewell prison sparked a revolt among the children. Despite the glowing reports being fed to investors about conditions in the colony, more accurate reports about the deadly conditions in Virginia had apparently reached the inhabitants of Bridewell.

This subculture of resistance resurfaces repeatedly throughout the seventeenth and eighteenth centuries, most dramatically in street battles between sailors and press-gangs. During the Stamp Act protests of 1765, British General Thomas Gage noted that the rebellion was “composed of great numbers of Sailors headed by Captains of Privateers.”

By themselves, the indentured servants and conscript sailors who rebelled throughout the eighteenth century in port cities like Boston and New York were not sufficiently organized to pose a serious threat to the established order. As we’ll see in the next chapter, the spirit of rebellion that produced the American Revolution did not gain critical mass until it was picked up by more privileged members of society, including intellectuals like Tom Paine and merchants like John Hancock. But the connections are undeniable. Groups like Sam Adams’ Sons of Liberty,  made up of small and well-to-do merchants, consciously modeled themselves after the Sons of Neptune, a group of New York sailors. Men with one foot in each world such as George Hewes, a shoemaker and former sailor who “was mixed up in every street fight, massacre, or tea party that occurred in the Boston of his day,” carried the notions of freedom and equality with them as they crossed the boundaries that separated one class from another. There is no doubt that the eloquent ideas that flowed from the quill of Thomas Jefferson had gestated among generations of indentured servants, plantation workers, and conscripted sailors. These ideas are the legacy of the men, women, and children who suffered and died of starvation, overwork, and brutal treatment on the tobacco plantations of the Virginia Company and the ships of the East India Company.

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« Reply #2 on: August 16, 2006, 05:08:20 PM »

" . . . Elizabeth I presided over an England that led the world in the last half of the 16th century, prospering in diplomacy, wealth, and a culture named for her -- Elizabethan -- which gave birth to no less a figure than Shakespeare. Francis Bacon, the brilliant 17th-century essayist and advisor to Elizabeth and her successor, puzzled over what made his age golden. In his essay "The New Atlantis" he imagined a new utopia had replaced the original paradise that sank. It had no borders, no boundaries. In place of politics, vision ruled. Who was at the heart of The New Atlantis? Not Elizabeth herself. Not even the world's great playwright. Those responsible were the great merchant traders and capitalists of the Renaissance -- business leaders who plunged their personal wealth and reputations into ships that sailed beyond where all maps ended. They "sail into foreign countries," Bacon wrote, "under the names of other nations [did he mean corporations?] and bring us the books and abstracts, and patterns of experiments of all other parts. These we call Merchants of Light." . . . "

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