A theory which crystallized the practice of two centuries must have been more than "an economic fallacy." And, indeed, in the time of Elizabeth and the first Stuarts it was a condition and not a theory that confronted England. Many essential commodities had long been imported from countries which, toward the close of the sixteenth century, were disposed to place obstacles in the way of English trade. From Baltic lands came naval stores, and potash so necessary to the woolen industry. Mediterranean countries furnished salt, dried fruits, sugar, and the staple luxuries wine and silk. Dyes, saltpeter, and spices from the Far East were sold to English merchants by the Portuguese or the Dutch; and at exorbitant prices, for the thrifty Hollanders no sooner got control of the spice islands than they raised the price of pepper from three to eight shillings per pound. And it was the Dutch, intrenched in the European fisheries partly through favors granted by Elizabeth, who imported into England two thirds of the fish so extensively consumed by the nation.
While England was dependent upon rivals for many necessities, the foreign markets for her own products were now becoming inadequate. Apart from wool, England exported little; but the confiscation of the monasteries, the ruin of Antwerp, the rising prices resulting from the influx of silver from New Spain, contributed to stimulate English industry and to increase in some measure the volume of commodities seeking markets abroad. Yet the markets were closing in some places and becoming less accessible in others. "It is publically knowne that traffique with our neighbor countries begins to be of small request, the game seldom answering the merchant's adventure, and foraigne states either are already or at the present are preparing to inriche themselves with wool and cloth of their own which heretofore they borrowed of us." English traders were persecuted in Spain; English exports were checked by tariffs in France and by Sound dues in Denmark; privileges formerly enjoyed in German towns were being withdrawn in retaliation for the exclusion of Hanse merchants from advantages long enjoyed in London; and as for Flanders, heretofore the great mart for English wool, the civil wars had, as Hakluyt says, "spoiled the traffique there."
The desire to change this untoward condition of things was what inspired the unwarranted enthusiasm of the time for American and Indian colonization. The voyages of Willoughby and Frobisher, seeking some northeast or northwest passage, were but the prelude to the later voyages by way of the Cape of Good Hope and to the foundation of the East India Company, the specific purpose of which was to procure the products of the Orient independently of the Dutch and at lower cost. The colonization of America it was supposed would serve a similar purpose. It was still thought to be rich in precious metals; its soil well adapted to commodities now purchased in the Levant. Its waters would furnish England with the herring now purchased of the Dutch, and its forests would make her independent of the Baltic countries for naval supplies. Once gain a footing in India and America, and the commerce of England, now so largely foreign, would be diverted into national channels to the benefit of all concerned: "Our monies and wares that nowe run into the hands of our adversaries or cowld frendes shall pass into our frendes and naturall kinsmen and from them likewise we shall receive such things as shall be most available to our necessities, which intercourse of trade maye rather be called a home bread traffique than a forraigne exchange."
The identification of the industrial and political interests of the nation with the fortunes of the centralized state was necessarily accompanied by a marked change in the character of international trade. The national king, whose power rested so largely upon the industrial class, could not leave in the hands of municipal councils the control which they had formerly exercised; while long ocean voyages, and traffic with countries inhabited by alien and often hostile people, required the combined capital of many men and a more powerful backing than any municipal council could furnish. Individual trading, therefore, gave way to corporate trading; the joint-stock company, assisted or controlled by the state, replaced the individual merchant operating under municipal encouragement and protection. It was accordingly in the age of Elizabeth, when English merchants were lamenting the want of markets, and when English ships were pushing into every part of the world, that such chartered trading companies made their appearance in rapid succession, taking their names from the distant regions in which they obtained a monopoly—Cathay, the Baltic, Turkey, Morocco, Africa. Of these, and of all subsequent organizations of a similar character, the most famous in England was the East India Company. By the charter, which bears date December 31, 1600, two hundred and fifteen knights and merchants were incorporated into a self-governing association competent to acquire property in land, and enjoying a monopoly of English trade with all countries lying east of the Cape of Good Hope as far as the Straits of Magellan. The laws of the company were required to conform to those of England, and its officers to take the oath of allegiance to the Crown. Encountering many obstacles and some serious reverses, the Company soon established a thriving trade in the Indian Ocean; its great East Indiamen acquired a fame unique in the annals of commerce; and the corporation itself, with privileges confirmed and extended by Charles II, was destined in the eighteenth century to be the chief instrument in the establishment of England's Indian Empire.
IV
When English knights and merchants set out to establish colonies in the New World, two familiar institutions were convenient to the purpose—the proprietary feudal grant, and the chartered trading company; noblemen ambitious for personal dominion turned naturally to the former, while merchants intent upon profits turned as naturally to the latter. The first hapless ventures in American planting, dominated by the idealistic and militant temper of the Elizabethan age, were initiated and directed in the spirit of the gentleman adventurer: in the spirit of Sir Humphrey Gilbert, who identified America with the fabled Atlantis and lost his life in a pathetic attempt to establish an English colony in Newfoundland; in the spirit of Sir Walter Raleigh, whose famous lost colony, settled in the year 1587, exhausted his fortune and disappeared at last, leaving no trace. These men were less interested in profit than in reputation; less intent upon commercial expansion than on the extension of the queen's dominions. But their resources were too limited, their ideals too little practical for the realization of their dreams. The patents to Gilbert and Raleigh took the form of a grant of lordship by feudal tenure; and from the papers left by the former we can create again, even to details, his vision of a transformed wilderness, America's future state: an America of extensive proprietary domains; an America reproducing, in its lords and landed gentry surrounded by freeholder and tenant, in its counties and boroughs and parishes, the social and political aristocracy of old England.
The proprietary feudal grant was destined to play its part in the colonization of America, but the resplendent vision of Gilbert did not survive the reign of Elizabeth. Raleigh was the last of the great Elizabethan adventurers, and with the accession of the pedantic James I the New World was beginning to be regarded in the dry light of a commercial opportunity. To the knights and merchants who had witnessed the vain efforts of Gilbert and Raleigh, the chartered company seemed better adapted to their purposes than the proprietary grant. The methods that had proved fortunate in the Old World would doubtless prove equally so in the New; and in the year 1609, men who were already netting one hundred per cent profit from their investments in the India Company were prepared to venture something in a solid business scheme to exploit the resources of America.
A tentative scheme, failing for want of efficient organization, had already been set on foot. Three years earlier, in 1606, James had been induced to license sundry of his loving subjects "to deduce and conduct two several colonies or plantations in America." Among those active in the undertaking were Bartholomew Gosnold, recently returned from a Western voyage, Richard Hakluyt, Sir Thomas Gates, Sir George Somers, and Edward Maria Wingfield, a London merchant. Though not incorporated, the patentees were formed into two companies, the London Company, so called because its members were mainly London merchants, and the Plymouth Company, consisting mainly of merchants from Plymouth and the west of England. Each company was permitted to establish one colony having a jurisdiction one hundred miles along the coast and one hundred miles inland; the London Company anywhere between 34° and 41°, the Plymouth Company anywhere between 38° and 45°, north latitude; provided only that no colony should be located within one hundred miles of one already established. The patent provided that there should be in each colony, for managing its affairs, a resident council of thirteen members which was to take instructions from the Royal Council for Virginia, a body of fourteen men—afterwards enlarged—residing in England and appointed and controlled by the king. The patentees were permitted to trade freely within the limits designated by the grant, and to enjoy the customs dues exacted from other Englishmen and from foreigners who might wish to compete with them.
After a single vain attempt to establish a colony at Sagadahoc, the Plymouth Company confined its activities to trade and exploration within the region to which John Smith in 1614 gave the name of New England. Sir Fernando Gorges was one of the patentees actively interested in these ventures; and in 1620 he procured, for himself and associates to the number of forty, a charter which transformed the old company into a close corporation under the title of the New England Council or Corporation for New England. Upon the patentees the charter conferred the sole right to trade, to grant title to land, and to establish and govern colonies within the region between 40° and 48°, north latitude, in America. The New England Council possessed neither the capital nor the popular support necessary for engaging in colonizing ventures; and during the fifteen years of its existence it did little but sublet to others the rights which it possessed. Of the council's land grants, of which there were many both to individuals and to corporations, and which, often conflicting, furnished the grounds for innumerable future disputes, four only are important as the basis of permanent colonies in New England. The territory at Plymouth was granted to the Pilgrims in 1621; in 1628 the territory between the Merrimac and the Charles Rivers was conveyed to the Company of Massachusetts Bay; and two grants made in 1629, of territory between the Merrimac and the Piscataqua to John Mason, of territory between the Piscataqua and the Kennebec to Fernando Gorges, mark the beginnings of the colonies of New Hampshire and Maine. All its ventures profited the New England Council nothing. February 3, 1635, the territory within its jurisdiction was parceled out among the patentees, and on June 7, its charter of fruitless privileges was surrendered.
It was reserved for the London Company to begin the planting of the first American commonwealth; but it was by happy chances rather than by wise foresight in the promoters that the colony outlived the company. The first comers, who were set down at Jamestown in 1607, would soon have perished but for the harsh good sense of the redoubtable Captain John Smith; and two years' experience with the wilderness and the Indian, with dissensions among settlers and councillors, demonstrated that the patent was unsuited to the purposes for which it had been granted. More colonists were needed in the colony, more capital required to transport and maintain them, more authority to direct and control them. To meet these needs, a charter was obtained in 1609 which created an incorporated joint-stock company under the title of "The Treasurer and Company of Adventurers and Planters of the City of London for the First Colony of Virginia." Shares were offered for subscription, to be paid for in money by the adventurers who remained in England, and in personal service by the planters who went to the colony. Each shareholder, whether adventurer or planter, was a member of the company, and was to receive such dividends as his shares might earn. The undertaking was widely advertised; and when the charter passed the seals, shares had been subscribed by 659 individuals, including 21 peers, 96 knights, 58 gentlemen, 110 merchants, and 282 citizens, and by 56 of the companies of the City of London.