CHARTERED COMPANIES. A chartered company is a corporation enjoying certain rights and privileges, and bound by certain obligations under a special charter granted to it by the sov ereign authority of the State, such charter defining and limiting those rights, privileges and obligations, and the localities in which they are to be exercised. Such companies existed in early times, but have undergone changes and modifications in accordance with the developments which have taken place in the economic history of the States where they have existed. In Great Britain the first charters for foreign trade were granted, not to English companies but to branches of the Hanseatic League (q.v.), and it was not till 1598 that England was finally relieved from the presence of a foreign chartered company. In that year Queen Elizabeth closed the steel-yard where Teutons had been established for 700 years.
Of all early English chartered companies, the "Merchant Ad venturers" conducted its operations the most widely. Itself a development of very early trading gilds, at the height of its prosperity it employed as many as 5o,000 persons in the Nether lands. In the reign of Elizabeth British trade with the Nether lands, reached, in one year, 12,000,000 ducats, and in that of James I. the company's yearly commerce with Germany and the Netherlands was as much as f 1,000,000. Hamburg afterwards was its principal depot, and it became known as the "Hamburg com pany." Here it maintained itself until as late as 18o8, when the company was at last dissolved. In the "Merchant Adventurers' " enterprises is to be seen the germ of the trading companies which had so remarkable a development in the i6th and 17th centuries. These old regulated trade gilds passed gradually into joint-stock associations, which were capable of far greater extension in both the number of members and the amount of stock, each member being only accountable for the amount of his own stock, and being able to transfer it at will to any other person.
The discovery of the New World, and the opening out of fresh trading routes to the Indies, gave an extraordinary impulse to shipping, commerce and industrial enterprise throughout western Europe. The English, French and Dutch Governments were ready to assist trade by the granting of charters to trading associations. The Baltic trade had already been the sphere of activities of an English company, since Henry IV. founded one by charter in 1404; and Elizabeth revived this "Eastland company" in To the "Russia company," which received its first charter in Great Britain owed its first intercourse with Russia and a direct trade with the Levant and Persia. Later, the Turkey com pany was founded, which in 1592, after amalgamation with the Venice company, took the name of the Levant company. Like the Muscovy company it was still trading in the 18th century. Both the Russia and Turkey companies had an important effect upon British relations with those empires. They maintained British influence in those countries, and even paid the expenses of the embassies which were sent out by the English Government to their courts.
The chartered companies which were formed during this period for trade with the Indies and the New World have had a more wide-reaching influence in history. The East India company (q.v.) is dealt with elsewhere. Charters were given to companies trading to Guiana and the Canaries, but none of these enjoyed a very long or prosperous existence, principally owing to the diffi culties caused by foreign competition. It is when we turn to North America that the importance of the chartered company, as a colonizing rather than a trading agency, is seen in its full de velopment. The "Hudson's Bay company," which still exists as a commercial concern, is dealt with under its own heading, but many of the 13 British North American colonies were in their inception chartered companies very much in the modern accepta tion of the term. The history of these companies will be found under the heading of the different colonies of which they were the origin. It is necessary, however, to bear in mind that two classes of charters are to be found in force among the early American colonies : Those granted to private individuals or to trading associations, which were often useful when the colony was first founded, but which were later withdrawn when the country had become settled and was looking forward to com mercial expansion. The colonies were then brought under the direct control of the Crown, and their trade subject only to regulation by the Government. Thus the Virginia company lost their charter in 1624. The substitution of royal and later of parliamentary control for that of the company was an important factor in the growth of the Navigation Acts. (2) The second class of charters were those granted to the settlers themselves as a guarantee of their system of government. This, for example, was the effect of the charter granted to Massachusetts. In the later 17th century, however, the cancellation or amendment of the charters, and the growth of legislative assemblies tended to pro duce a uniformity of colonial practice, irrespective of the original character of the colony.
Chartered companies continued to be formed for the develop ment of new trade, e.g., the Royal African company in 1662 and the South Sea company in 171I.
In France and Holland, no less than in England, the institution of chartered companies became a settled principle of the Govern ments of those countries during the whole of the period in ques tion. In France from 1599 to 1789, more than 7o of such companies came into existence, but after 177o, when the great Compagnie des Indes orientales went into liquidation, they were almost abandoned, and finally perished in the general sweeping away of privileges which followed on the outbreak of the Revo lution. The monopoly rights granted to such companies were in accordance with the views generally accepted at the time, although there were many critics even in the 17th century. There were serious difficulties in the way of private trade owing to the large capital required to maintain factories and the necessity for their supervision. It was only the need for capital which induced statesmen like Colbert to countenance them, and Montesquieu took the same view (Esprit des lois, t. xx.c. io). John de Witt's view was that such companies were not useful for colonization properly so called, because they wanted quick returns to pay their dividends. So, even in France and Holland, opinion was by no means settled as to their utility. In England historic protests were made against such monopolies, but the chartered companies were less exclusive in England than in either France or Holland. French commercial companies were more privileged, exclusive and artificial than those in Holland and England. Those of Holland may be said to have been national enterprises. French companies were more fettered than their rivals by the royal power and had less initiative of their own, and therefore had less chance of surviving.
During the last 20 years of the 19th century there was a great revival of the system of chartered companies in Great Britain. It was a feature of the general growth of interest in colonial expansion and commercial development which had made itself felt almost universally among European nations. But the modern companies were not like those of the i6th and 17th cen turies; they were not monopolists, and were more definitely subject to the control of the Home Government. The charters, in fact, prohibited any monopoly of trade, and prescribed a State control which is their distinguishing feature. It is to be exercised in almost all directions in which the companies may come into contact with matters political ; it is inevitable in all disputes of the companies with foreign Powers and is extended over all decrees of the company regarding the administration of its ter ritories, the treatment of natives and mining regulations. In all cases of dispute between the companies and the natives the secre tary of State is ex officio the judge, and to the secretary of State (in the case of the British South Africa company) the accounts of administration had to be submitted for approbation. The British character of the company is insisted upon in each case in the charter which calls it into life. The Crown always retains complete control over the company by reserving to itself the power of revoking the charter in case of the neglect of the stipu lations. Special clauses were inserted in the charters of the British East Africa and South Africa companies enabling the Govern ment to forfeit their charters if they did not promote the objects alleged as reasons for demanding a charter.
The chartered company of these days is therefore very strongly fixed within limits imposed by law on its political action. As a whole, however, very remarkable results have been achieved. This may be attributed in no small degree to the personality of the men who have had the supreme direction at home and abroad, and who have, by their social position and personal qualities, acquired the confidence of the public. With the exception of the Royal Niger company, it would be incorrect to say that they have been financially successful, but in the domain of Government generally it may be said that they have added vast territories to the British empire (in Africa about 1,700,000 sq.m.), and in these territories they have acted as a civilizing force. They have made roads, opened facilities for trade, enforced peace and laid, at all events, the foundation of settled administration ; while anti slavery and anti-alcohol campaigns have been carried on, the latter certainly being against the immediate pecuniary interests of the companies themselves. The occupation of Uganda certainly, and of the Nigerian territory and Rhodesia probably, will prove to have been rather for the benefit of posterity than of the com panies which effected it. In the two cases where the companies have been bought out by the State, they have had no compensa tion for much that they have expended.
One common characteristic is to be noted in the histories of the old chartered companies and the new. In both periods the company has been used by the English Government as a useful instrument of colonial expansion, but in both periods only for temporary uses. When the colony is settled, or Government established, the State takes the lead. This is well illustrated by the history of the slow decline of the independence of the East India company in the 18th century and of the British South Africa company in the loth. Both these companies are distinguished for their length of days, but both had to submit to the gradual penetration of State control.
See also BORNEO, NIGERIA, RHODESIA, etc. For the share of the chartered company in the development of the modern trading company, see COMPANY.