The London Company
Joint-stock corporations played a significant role in the early colonization of America. In 1606, two separately incorporated groups of prominent English merchants, one at London and one at Plymouth, joined under one charter as "The London Company" in an investment venture to establish two colonies in Virginia under separate land grants. The southern company, ("Virginia Company of London,") was authorized to make settlements from 34-41 degree north latitude. The northern company, ("Virginia Company of Plymouth,") was authorized to settle between 38-45 degrees of latitude. The two companies were technically "semi joint-stock" organizations, anticipating separate stock solicitations for each successive voyage.
The 1606 charter patented land to the corporation on the basis of payment of "soccage" or socage - payments of annual rents. (As opposed to "capite" or "quitrents" - payments to be quit of all feudal obligations and services based on acreage.) The charter also allowed for the division and distribution of lands into plantations
The London Company's charter provided for the general affairs of the company to be directed by a governor and a council of 13. A separate Royal Council in London was empowered to supervise all activities as concerned the interests of the crown. The stockholders of the company were instructed to assemble from time to time in a general court.
Initially, the new colony was operated on a communal basis. When it did not produce commercially as expected, a new charter was drawn up in 1609. The new charter provided the company with a seal and charged it with the authority to survey and patent landholdings individually to the settlers. It severed the company's connection with the "Viginia Company of Plymouth" and established a regular joint-stock company with some 700 permanent voting stockholders. A purchaser of one or more shares became an "Adventurer of the Company." Anyone who migrated to Virginia at his own expense was a "Planter", entitled to a share of stock.
The charter improved the corporate structure by abolishing the separate Royal Council and vested actual control in the company's treasurer and council in London. The councillors were nominated by the stockholders, (usually controlled by the inner executive group of the company, and appointed by the King.) The charter also provided for "one able and absolute governor," appointed for life, subject to the council and the company in England. This governor was delegated full military, executive and lawmaking power. He was to be called Lord Governor and Captain General of Virginia, and he would choose his own deputy to govern when he was absent from the colony.
Under the new charter, all the costs of the enterprise were to be borne by the company, including food and supplies. All labor was on a communal basis, and all produce and profits were to go to the company. Initially, all property was jointly owned by the company, with no individually owned land or housing. Seven plantations were established on that basis. Profits were to be distributed after seven years and subsequent intervals to the Adventurers and Planters in proportion to their stock and services rendered. Part of this profit was to be in land dividend.
As tobacco crops became developed and established, the Virginia Company's stockholders felt the need for another revision of the charter in 1612. London stockholders were provided with four "great courts" or stockholders meetings each year to dispose of matters of great importance. One or more annual "lotteries" were authorized to raise funds for the colony.
The charter recognized the planters and adventurers as "one body politique incorporated by the name of The Treasorer and Planters of the Cittie of London for the First Colonie in Virginia.."
In 1616, Governor Dale began granting 100 acres to each settler; with an entitlement to an additional 100 acres if the first was well cultivated. The company retained several large reserves, planning to develop them with tenant farmers.
In 1617, the company granted large tracts of land called "Hundreds" or "Particular Plantations" to groups willing to buy a sizeable block of stock in return for the privilege of sending out their own settlers. These groups obtained land from the company and a certain amount of self-government on the order of manorial estates in return for agreeing to send 100 persons to work the land at their own expense. The first grant of 80,000 acres went to the Society of Smith's Hundred. Forty three others followed between 1617-23, some as large as 200,000 acres. Few of these hundreds were actually settled and workers had to be drafted from other settlements to construct some plantations. Eventually, most of this land was granted to private individuals. Policy dictated that lands could not be purchased, but could only be awarded to stockholders.
From 1618, land was granted by patent of 50 acres for every settler brought to the colony under the "headright" system. The patent was issued to the person importing the settlers and not the settler himself. It was common for young people without means to sign a deed or indenture, assigning their labor for a period of years to a shipper in exchange for passage. The shipper would sell the deed to a colonist who would file for the headright.
In 1618, Sir Edwin Sandys - a leader in the House of Commons, who espoused popular rights and the abolition of feudal tenure, was instrumental as Company Treasurer in reorganizing the London Company. The "Greate Charter," or "An Ordinance and Constitution of the Treasurer Council, and Company in England, for a Council of State and General Assembly," replaced the Lawes Divine Morall and Martiall with the English common law and instituted a legislative, administrative and judicial system modeled upon its own charter provisions.
The pattern of the company's general court or stockholder's meeting in London was the begining of the Virginia legislature. Members of the newly created House of Burgesses was to be elected by the freemen of the colony, including indentured servants, and would "sit" with the company's local council to compose one chamber.
The new Governor Yeardley proclaimed that the purpose of the new charter government was so that the inhabitants "might have a hande in the government of themselves, it was granted that a general assemblie should be helde yearly once whereat were to be present the Governor and Counsell with two Burgesses freely to be elected by the inhabitants thereof; this assembly to have power to make and ordaine whatsoever lawes and orders should by them be thought good and poffittable for our subsistence." (R.C. Simmons, The American Colonies - From Settlement to Indepenence, David McKay Co. Inc. 1976, pg.15)
Twenty two elected burgesses, the Governor and the governor's council of six members chosen by the company, met in 1619 for the first time. John Pory, who had previously served in Parliament and was secretary of the colony, (as well as one of the councilors,) was appointed Speaker of the House. A clerk and a sergeant at arms were also on hand. A half-dozen revisions embodied in the new "Greate Charter" were formally enacted. Most involved the distribution of land.
In addition, the new legislature petitioned the Company in London for modifications to its privileges, requesting that no company laws made in London should bind them unless approved by the assembly in Virginia. This motion, accepted by the Virginia Company in 1621, viced the first assertion of local rights and privileges against the authority of the English-based government.
James I appointed a committee to investigate the London Company, which reported that the company was ready for receivership. The company's officers refused a new charter and the king began "quo warranto" proceedings, under which the franchise was forfeited. In 1624, King James dissolved the Virginia Company and declared Virginia to be a royal colony by order from the Court of King's Bench.