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THE     CONSTITUTION     AND     FINANCE 

OF   ENGLISH,   SCOTTISH    AND    IRISH 

JOINT-STOCK    COMPANIES   TO    1720 


VOLUME    I 

THE    GENERAL   DEVELOPMENT   OF   THE   JOINT-STOCK    SYSTEM 

TO    1720 


CAMBRIDGE   UNIVERSITY   PRESS 

Honbon:    FETTER  LANE,  E.G. 

C.  F.  CLAY,  Manager 


ffiHtnburgij:    loo,  PRINCES  STREET 

Berlin:   A.  ASHER  AND  CO. 

ILeipjifl:    F,   A.   BROCKHAUS 

i^efaj  Sotk:   G.  P.  PUTNAM'S  SONS 

18om6aa  anU  Calcutta:    MACMILLAN  AND  CO.,  Ltd. 


Ail  rights  reserved 


THE     CONSTITUTION     AND    FINANCE 

OF  ENGLISH,   SCOTTISH   AND  IRISH 

JOINT-STOCK  COMPANIES  TO  1720 


BY 


WILLIAM  ROBERT  SCOTT,  M.A.,  D.Phil.,  Litt.D, 

LECTURER   IN    POLITICAL    ECONOMY    IN    THE    UNIVERSITY   OF    ST    ANDREWS 


VOLUME  I 

THE  GENERAL  DEVELOPMENT  OF  THE  JOINT-STOCK 

SYSTEM  TO   1720 


Cambridge : 

at  the  University  Press 

1912 


(•TamijrtKge : 

PRINTED   BY  JOHN   CLAY,    M.A. 
AT  THE   UNIVERSITY   PRESS 


PREFACE 

TN  the  study  of  economic  progress,  more  especially  in  relation  to 
-*-  capital,  the  development  of  the  joint-stock  system  occupies  an 
important  place.  This  method  of  organization  became  prominent  at 
an  early  period  in  England,  and  the  investigation  of  it  has  all  the 
fascination  arising  out  of  the  small  beginnings  of  a  type  of  association 
which  eventually  attained  great  magnitude.  In  a  number  of  ways  this 
enquiry  contains  much  both  of  interest  and  romance  which  would  scarcely 
be  expected  in  a  work  that  necessarily  includes  a  large  amount  of 
statistical  material.  At  the  present  time  joint-stock  management  has 
been  standardized.  In  the  sixteenth  and  seventeenth  centuries  methods 
were  still  to  be  discovered,  and  the  conflict  between  different  practices 
is  suggestive  and  instructive.  Not  only  were  the  methods  new,  but  the 
system  itself  was  applied  to  enterprizes  which  were  then  novel.  Thus 
early  companies  were  concerned  in  voyages  of  discovery,  privateering, 
foreign  trade,  the  exploiting  of  new  inventions  and  the  financing  of  the 
government.  In  these  early  ventures  there  is  a  remarkable  freshness  in 
the  point  of  view  of  the  shareholders,  and  their  speech  and  writings  are 
characterized  by  vigour  and  directness. 

The  enquiry,  of  which  the  results  are  given  in  the  following  pages, 
is  confined  to  a  period  which  is  comparatively  self-contained ;  but,  even 
in  this  epoch,  no  attempt  has  been  made  to  treat  the  whole  life-history 
of  the  joint-stock  system.  A  complete  account  of  its  organization,  in 
its  entirety,  would  have  required  much  more  space  than  that  available  in 
this  and  the  remaining  two  volumes.  Accordingly,  certain  aspects  of 
the  system  have  been  selected  for  treatment.  These  include  the  internal 
management  of  companies  in  relation  to  their  corporate  character,  the 
means  by  which  capital  was  collected  and  controlled  and  the  methods  by 
which  those  who  provided  it  participated  in  the  profits  or  losses.     It 


vi  Preface 

would  appear  that  this  enquiry,  when  carried  on  over  a  period  of  less 
than  one  hundred  and  seventy  years,  ought  to  be  capable  of  compression 
into  a  shorter  space  than  that  which  has  been  assigned  to  it ;  but  there 
arise  many  cognate  problems  for  which  solutions  must  be  found,  unless 
the  results  are  to  be  left  incomplete.  Indeed,  to  preserve  a  due  balance 
between  the  different  sub-divisions  of  the  subject,  it  has  been  necessary 
to  omit  altogether  or  merely  to  suggest  much  information  that  is  not  at 
present  available  save  in  manuscripts  or  very  rare  pamphlets.  The 
detailed  working  of  many  of  the  companies  or  the  particular  kind  of 
improvement  in  production  they  attempted  to  accomplish  is  often 
exceedingly  valuable  ;  but,  instead  of  describing  either  of  these  in  full, 
an  effort  has  been  made  to  convey  a  sufficient  impression  of  its  character 
to  indicate  the  profit-earning  capacity,  without  entering  into  a  full 
discussion  of  the  many  technical  issues  involved.  Even  when  the  subject 
has  been  limited  to  this  extent,  there  remains  the  question  of  the  best 
method  of  presentation  to  the  reader.  The  material  must  be  regarded 
from  two  points  of  view,  which  are  distinct  but  complementary.  On 
the  one  side  there  is  the  comparative  method  of  treatment,  and  on  the 
other  the  history  of  each  company  as  a  distinct  unit — the  first,  in  fact, 
regards  the  phenomena  during  a  very  short  period,  as  it  were,  from 
above ;  while  the  second  follows  out  a  series  of  events  in  a  direct  line 
along  a  horizontal  plane,  taking  the  enterprizes  one  by  one  from  the 
foundation  till  their  end,  or  in  some  cases  to  the  time  at  which  this 
investigation  closes.  Considering  the  number  of  companies  to  be  dealt 
with,  I  am  convinced  that  nothing  would  have  been  gained  by 
attempting  to  combine  these  two  points  of  view.  For  an  under- 
standing of  the  joint-stock  system,  one  requires  a  knowledge  of  how 
it  was  related  to  other  activities  at  a  certain  time  and  how  it  developed 
afterwards:  one  also  needs  to  be  able  to  follow  the  history  of  a  company 
throughout.  Both  objects  are  secured  by  treating  each  aspect  separately. 
No  doubt  this  method  involves  some  repetition,  but  the  amount  of  it 
will,  I  think,  be  found  to  be  less  than  might  have  been  expected.  It 
has  sometimes  happened  that  the  same  events  must  be  referred  to  in 
each  part  of  the  work,  but  it  has  frequently  turned  out  that  "  the 
values,"  in  an  artistic  sense,  are  quite  different — circumstances  may  be 
very  important  in  the  separate  history  of  a  company  and  only  deserve 
the  merest  passing  mention  in  the  comparative  treatment  of  the 
system  as  a  whole.     After  much  consideration,  I  decided  to  place  the 


Preface  vii 

comparative  portion  in  the  first  volume,  assigning  to  the  second  and  the 
third  the  accounts  of  the  individual  companies.  Accordingly,  the  first 
part  of  the  work  consists  of  an  attempt  to  record  the  beginning  and  the 
development  of  the  joint-stock  system  during  the  first  important  stage 
in  its  history,  namely  till  the  year  1720.  Stated  in  this  way  the  enquiry 
seems  a  simple  one,  but  a  little  consideration  will  show  that  it  is  in 
reality  exceedingly  complex.  Early  companies  were  affected  by,  and  in 
their  turn  affected  the  national  life  at  so  many  points  that,  in  order  to 
present  a  reasonably  complete  view  of  the  evolution,  it  is  necessary 
to  reconstruct  the  environment  in  which  the  system  worked  and  to 
notice  contemporary  types  of  joint-stock  activity  in  other  countries. 
When  one  looks  beneath  the  merely  surface  view  of  things,  it  will  be 
found  that  early  companies  were  influenced  by  a  vast  number  of  circum- 
stances, such  as  the  trend  of  trade,  the  state  of  the  Crown  finances,  the 
general  social  conditions,  the  economic  and  foreign  policies  of  successive 
governments  and  the  ethical  standard  of  the  time.  All  these,  with 
other  events,  constituted  the  external  influences  which  affected  the  rise 
of  the  joint-stock  system  in  Great  Britain;  and,  as  it  progressed,  the 
form  it  assumed  was  determined  also  by  causes  arising  mainly  from 
within.  To  arrive  at  these,  a  comparison  of  the  methods  and  results  of 
the  chief  companies,  existing  at  a  given  time,  is  needed ;  and  these  data 
are  collected  from  the  accounts  of  the  individual  companies  in  the 
second  and  third  volumes.  Thus  in  one  sense  the  first  part  consists  of  a 
general  introduction,  providing  a  summary  of  the  early  years  of  joint- 
stock  organization ;  while  in  another  sense,  through  the  comparison  of 
company  with  company,  it  also  aims  at  presenting  conclusions.  It  is 
hoped  that,  taking  the  two  parts  together,  the  rise  of  the  system,  in 
spite  of  a  seeming  mass  of  disconnected  particular  instances,  will  be  seen 
to  evolve  gradually  a  delicately  balanced  causation  of  its  own,  and,  in 
the  end,  to  develope  according  to  a  comparatively  simple  and  precise 
method. 

Though  in  the  order  of  arrangement  this  volume  comes  first,  owing 
to  the  number  of  paged  references  to  the  other  two,  it  is  the  last  to  be 
issued;  and,  while  apologising  to  my  readers  for  the  apparent  anomaly, 
the  value  of  the  system  of  cross-references  may  perhaps  be  held  to  justify 
the  delay.  I  am  glad  to  thank  the  Secretary  of  State  for  India 
in  Council,  the  Syndics  of  the  University  Press,  Cambridge,  the 
University  Court  of  the  University  of  St  Andrews  and  the  Carnegie 


viii  Preface 

Trust  for  the  Universities  of  Scotland  for  providing  for  the  publication 
of  the  whole  book.  I  am  greatly  indebted  to  Prof.  W.  J.  Ashley  for 
valuable  suggestions  arising  out  of  his  reading  of  the  MS.  of  the  first 
two  chapters. 

My  thanks  are  also  due  to  the  officials  at  many  libraries  for 
favourable  opportunities  for  prosecuting  my  enquiries.  It  was  through 
these  facilities  that  several  important  authorities  were  discovered. 


W.  R.  S. 


The  University 
St  Andrews 

'Uh  July  1912 


CONTENTS  OF  VOLUME  I 


PAGE 

PREFACE    V 


LIST  OF  AUTHORITIES  . 


PART  I.  THE  GENERAL  HISTORY  OF  ENGLISH, 
SCOTTISH  AND  IRISH  JOINT-STOCK  COMPANIES 
TO  1720.  « 


CHAPTER  I.  THE  VARIOUS  LINES  OF  ECONOMIC  DEVELOP- 
MENT WHICH  CONVERGE  IN  THE  FIRST  ENGLISH  JOINT- 
STOCK  COMPANIES. 

The  earliest  English  joint-stock  companies  might  have  been  evolved  either 
from  the  mediaeval  partnership  or  from  the  idea  of  a  corporation,  (a)  The 
Societas  or  Commenda — the  societas  was  extensively  used  by  Italian  financiers 
in  England  during  the  thirteenth  and  fourteenth  centuries.  Italian  influence 
declined  after  the  failure  of  the  Bardi  in  1845.  (6)  The  development  of  the 
corporate  idea — traces  of  the  conception  of  perpetual  succession  implicit  in 
the  Saxon  gilds.  Brotherhood  inside  the  gild  resulted  in  exclusiveness  out- 
side, and  from  the  latter  the  monopoly  of  early  trading  societies  was  derived. 
The  government  of  gilds,  feasts  and  processions  involved  the  ownership  and 
management  of  property  by  the  gild,  and  also  general  meetings  and  audit  of 
accounts.  The  monopoly  of  the  gilda  mercatoria  led  to  collective  bargaining. 
Government  of  the  gild  merchant  became  established  as  consisting  of  a 
governor  with  a  council  to  assist  him,  or  to  be  associated  with  him,  whence 
was  later  derived  the  governor  and  assistants  of  the  regulated  company. 

The  internal  organization  of  the  Staple  and  of  the  Merchant  Adventurers 
— by  the  sixteenth  century  groups  of  members  had  been  formed  within 
regulated  companies,  who  traded  "in  joint-stocke,"  and  transactions  are 
recorded  which  approximate  to  the  early  joint-stock  type  of  a  corporate 
purchase  followed  by  a  commodity-division.  When  this  stage  was  reached 
the  transition  to  a  joint-stock  company  would  soon  follow,  and  the  same  result 
was  possible  by  an  extension  of  the  societas.  A  third  possibility  was  the 
transplanting  of  a  joint-stock  constitution  from  the  Continent — instances  of 
the  latter  tendency  are  wanting,  though  allowance  must  be  made  for  foreign 
influences  in  early  English  joint-stock  companies  as  determining  some  minor 
points  in  their  organization 


Contents 


CHAPTER  II.      FROM  THE  BEGINNING  OF  THE  RUSSIA 
COMPANY   IN  1553  TO  THE  CRISIS  OF  1569. 

From  the  economic  point  of  view  the  Reformation  involved  a  dislocation 
of  production  in  England.  After  the  dissolution  of  the  monasteries  there  came 
a  period  of  extravagance  which  resulted  in  the  contraction  of  a  large  Crown 
deht,  amounting  in  1555  to  £148,526  at  14  per  cent.  These  loans  were  due 
abroad,  and  the  payment  of  the  interest  constituted  a  serious  drain  on  the 
commerce  of  the  country.  One  direction  in  which  eiforts  were  made  towards 
development  of  commerce  was  the  use  of  capital  in  new  foreign  trades,  which 
were  carried  on  by  the  joint-stock  system.  The  Russia  company  and  the 
Adventurers  to  Guinie  were  started  in  1553.  The  constitution  of  the  Russia 
company  under  the  charter  of  1555 — the  three  orders  of  officials  in  the  court 
and  the  origin  of  the  office  of  consuls.  While  the  Russia  company  was  a 
development  of  the  regulated  company,  the  Adventurers  to  Guinie  repre- 
sented an  extension  of  the  societas — the  position  of  the  '^  under-ad venturers," 
the  initial  capitalization  of  these  two  companies  and  the  profits  obtained. 

The  commercial  depression  at  the  end  of  the  reign  of  Mary  delayed  the 
benefits  which  would  otherwise  have  followed  from  the  opening  of  new 
trades.  The  finances  of  the  Crown  were  in  an  unsatisfactory  condition — the 
debt  being  £226,910  in  1559 ;  estimates  of  the  Ordinary  Revenue  and  Ordinary 
Expenditure  in  1560-1.  An  expenditure  of  £300,000  was  required  for  national 
defence;  the  difficulty  in  financing  the  debt  when  foreign  lenders  refused 
advances  and  voluntary  loans  could  not  be  raised  in  England.  Gresham 
operated  on  the  foreign  exchange  in  order  to  meet  the  financial  emergency. 
The  political  and  diplomatic  anxieties  connected  with  Scotland  reacted  on 
English  credit  abroad,  and  in  1560  there  was  a  panic  amongst  the  creditors  of 
the  Crown  at  Antwerp.  Both  trade  and  the  credit  of  the  Crown  improved 
between  1560  and  1563.  The  Russia  and  Guinie  companies  were  used  to 
aid  in  the  carrying  out  of  Elizabeth's  policy — the  former  by  supplying  naval 
requisites  on  credit,  and  the  latter  by  relieving  the  Exchequer  from  the  cost 
of  maintaining  a  ship-of-war  which  was  employed  by  the  Adventurers.  The 
reform  of  the  coinage  was  begun,  also  schemes  for  the  production  of  ordnance. 
The  grant  of  the  privilege  of  mine  royal,  which  formed  the  basis  of  an 
important  mining  company. 

An  outbreak  of  plague  in  1663  caused  a  serious  dislocation  of  trade, 
followed  by  a  crisis.  English  goods  were  prohibited  in  Flanders  ;  and  again 
the  foreign  creditors  of  the  Crown  pressed  for  payment  of  their  loans,  causing 
great  anxiety  in  the  administration  of  the  finances.  The  effects  of  the  crisis 
on  the  companies — the  Guinie  company  came  to  an  end  about  1566,  mainly 
through  the  slave-trading  of  Hawkins'  syndicate ;  the  Russia  company  was 
forced  to  increase  its  capital.  The  Russia  company  endeavoured  to  establish 
a  European  wax-monopoly — its  difficulties  with  interlopers  and  the  settlement 
of  1566  on  the  basis  of  admission  of  independent  traders  on  equitable  terms. 
The  franchises  of  the  company  in  Russia  were  suspended  in  1570.  The 
development  of  mining  was  carried  out  in  connection  with  the  national  policy 
of  the  time,  and  the  societies  of  the  Mines  Royal  and  the  Mineral  and 
Battery  Works  were  begun  in  1564  and  received  charters  in  1568.  The 
total  capital,  invested  in  joint-stock  companies  in  1570,  may  be  estimated  at 
£100,000,  the  relation  of  this  amount  to  other  statistical  data  of  the  period. 
^^Considerations  pointing  to  the  general  trend  of  profits  of  companies  at  this 


PAGE 


Contents  >  xi 

PAOB 

time  and  the  results  of  joint-stock  activity.  Tlie  early  conception  of  "  the 
share,"  the  number  of  which  was  regarded  as  fixed,  while  the  amount  paid 
up  varied.  As  calls  increased,  fractional  shares  came  into  existence.  Hence 
the  share  was  understood  as  a  ''part"  in  the  business.  In  this  respect  the 
early  company  was  related  to  the  partnership ;  but,  at  the  same  time,  its 
corporate  character  is  clearly  marked  by  its  by-laws  and  by  the  early  appear- 
ance of  a  comparatively  free  market  for  shares       ......         15 

CHAPTER  HI.     THE  CRISIS,   1569  TO   1574. 

There  were  several  causes  tending  towards  a  crisis — («)  the  political 
dangers  of  privateering,  (6)  the  situation  in  Scotland,  (c)  internal  troubles 
in  Flanders  prevented  the  renewal  of  loans  to  Elizabeth,  {d)  the  seizure  of 
Spanish  bullion  in  1568,  (e)  Alva  seized  English  goods  in  the  Low  Countries 
in  1569. 

The  interruption  of  trade  with  Flanders  marked  the  beginning  of  a  crisis, 
which  was  intensified  by  Norfolk's  Rebellion  and  by  bad  harvests.  The 
crisis  caused  many  failures  and  much  embarrassment  in  the  Crown  finances. 
A  Parliament  was  summoned  in  1571,  in  which  complaints  were  made  of 
monopolies,  usury  and  abuses  in  the  Treasury.  The  legislation  against 
usury  failed. 

The  crisis  affected  all  the  chief  joint-stock  companies.  The  Russia  com- 
pany was  reorganized  and  a  new  stock  was  formed.  A  ** farming"  system 
was  adopted  by  both  the  Mines  Royal  and  by  the  Mineral  and  Battery 
Works.  Farming  caused  dissensions  in  the  Mineral  and  Battery  Works. 
Capital,  at  this  period,  was  not  distinctly  understood — various  uses  of  the 
term  ''stock."  Capital,  as  a  term  in  accountancy,  appears  as  early  as 
1569.  The  financial  results  of  joint-stock  management  from  1569  to  1574 
were  poor.  The  only  new  company,  formed  during  the  period  of  depression, 
was  the  society  for  the  New  Art  of  making  Copper — its  analogy  to  a  modern 
private  company 47 

CHAPTER  IV.     FROM   1575  TO  1586— THE  ELEVEN  YEARS 
OF  GREAT  PROSPERITY. 

The  recovery  from  the  crisis  began  in  1575  and  was  the  beginning  of 
a  period  of  prosperity.  ITie  Crown  credit  was  good.  The  effect  of  better 
times  on  the  joint-stock  companies — improved  position  of  the  Mineral  and 
Battery  Works ;  the  Mines  Royal  worked  at  a  profit  in  1586,  its  policy  was 
enlightened ;  the  reorganized  Russia  company  developed  "  a  new  trade " 
from  Persia  via  the  Caspian  Sea  and  the  Volga,  which  was  profitable  from 
1573  to  1581 — possible  competition  between  the  Russia  and  Levant  companies; 
the  Russia  company  and  the  discovery  of  a  north-west  passage. 

The  importance  of  privateering — (a)  the  political  motive,  {h)  English 
progress  in  shipbuilding.  Privateering  syndicates  were  joint-stock  bodies. 
This  method  of  organization  possessed  the  financial  advantage  of  enabling 
the  capitalist  to  distribute  his  risk,  and  the  political  one  of  escaping  legal 
complications.  The  accounts  of  privateering  companies  were  kept  secret, 
but  those  of  the  Adventurers  in  Frobisher's  Voyages  afford  a  basis  for  calcula- 
tion.    Capital  was  often  provided  in  the  form  of  commodities,  e.g.  ships  or 

62 


xii  '  Contents 


PAGE 


stores :  ratio  between  the  tonnage  and  number  of  crew  in  a  privateering 
expedition.  This  mode  of  calculation  fixes  the  capital-outlay  on  Drake's 
voyage  round  the  world  at  about  £5,000.  The  captured  bullion  was  said  to 
have  been  between  £1,500,000  and  £1,750,000.  A  comedy  was  arranged  to 
deceive  the  Spanish  Ambassador  as  to  the  amount,  by  landing  the  greater 
part  of  it  secretly  prior  to  the  official  inspection.  Out  of  the  secreted 
bullion,  the  adventurers  received  a  division  of  4,700  per  cent,  or  about 
£250,000;  while  Elizabeth  obtained  the  uncustomed  bullion,  valued  at 
£250,000  to  £300,000.  These  funds  improved  the  position  of  the  Crown 
finances  and  enabled  Elizabeth  to  give  assistance  to  the  Netherlands. 

Good  trade  and  the  success  of  privateering  resulted  in  a  general  spirit  of 
optimism.  The  standard  of  living  was  raised,  and  it  was  estimated  that  the 
wealth  of  England  had  trebled  since  1558.  The  boom  in  privateering  was  an 
appearance,  rather  than  the  reality  of  prosperity.  Its  temporary  success 
depended  on  secrecy,  which  was  not  maintainable  to  the  same  extent  when 
the  expeditions  became  more  numerous.  Several  of  these  made  some  attempts 
at  colonization.  As  the  privateering  expeditions  became  larger,  the  profits 
were  smaller.  By  1586  the  reprisals  of  the  Spaniards  occasioned  depression 
of  trade,  which  was  increased  by  a  bad  harvest  in  1587.  The  crisis  of  1586-7 
affected  the  joint-stock  companies — the  second  joint-stock  of  the  Russia 
company  and  the  subsidiary  companies  of  the  Mines  Royal  in  Cornwall  and 
Cumberland  were  wound  up. 

The  crisis  of  1586-7  made  the  financing  of  the  struggle  against  the 
Armada  very  difficult.  The  subsidizing  of  Flanders  had  involved  a  large 
outlay.  When  money  was  needed  suddenly  in  1588,  the  foreign  loan-market 
was  closed  to  Elizabeth;  and,  owing  to  the  crisis,  she  found  it  difficult  to 
borrow  enough  at  home.  Hence  funds  were  wanting  to  drive  home  the 
victory,  which  had  been  obtained  at  an  outlay  of  only  £161,185       .         .         64  . 

CHAPTER  V.     THE  DEPRESSION  FROM  1587  TO  1603. 


War  expenditure  increased  greatly  after  1588,  and  the  burden  of  direct 
taxation  was  heavier,  even  when  allowance  is  made  for  the  easy  methods  of 
assessment.  Yet  the  parliamentary  grants  only  paid  half  of  the  Extraordinary 
Expenditure  from  1588  to  1603,  the  other  half  being  met  from  the  surplus 
Ordinary  Revenue  and  other  sources.  Much  of  the  increase  in  the  Ordinary 
Revenue  was  due  to  augmented  duties  or  to  a  more  rigorous  collection  of 
existing  indirect  taxes,  which  eventually  involved  a  further  burden  on  trade. 
By  1591  many  ships  had  been  captured,  and  foreign  trade  was  greatly 
restricted.  Privateering  was  less  profitable,  and  expeditions  became  fewer. 
The  decline  in  privateering,  added  to  the  error  in  a  disproportionate  outlay  on 
land  operations,  tended  to  prolong  the  war  with  Spain. 

Trade  was  also  depressed  by  the  bad  harvests  from  1594  to  1597,  and 
there  was  great  distress  in  1597.  Privateering  revived  ;  this,  however,  was 
offset  by  losses  of  shipping.  The  maximum  of  the  depression  was  reached 
during  the  plague  of  1602-3.  The  Levant  company  suffered  from  the  war  and 
was  reorganized,  but  as  a  regulated  company.  The  foundation  of  the  East 
India  company  in  1600.  The  Russia  company  was  in  difficulties  through 
want  of  capital  and  internal  disputes— its  profits.  Operations  of  the  Mines 
Royal  were  impeded  by  scarcity  of  funds.     The  society  of  the  Mineral  and 


Contents  xiii 

PAOI 

Battery  Works  was  unfortunate  in  the  letting  of  its  iron-works,  but  well- 
established  in  its  legal  position 93 

CHAPTER  VI.     THE  DISCUSSION  OF  MONOPOLIES,  1697-1604. 

The  preoccupation  of  the  government  during  the  war  with  Spain  caused 
a  relaxation  in  the  supervision  of  home  affairs.  By  1597  there  were  com- 
plaints of  *'the  enormities"  of  monopolies.  Elizabeth  promised  that 
monopolies  should  be  tried  by  law.  Coke's  opinion  on  the  prerogative  in 
relation  to  monopolies.  Many  patents  were  defensible  as  grants,  but  there 
had  been  abuses  by  the  agents  of  the  patentees  in  certain  instances. 
Difficulties  had  been  placed  in  the  way  of  trying  some  patents ;  and,  in  1601, 
the  Commons  considered  monopolies  a  grievance.  Monopoly  defined  as  an 
exclusive  grant  to  an  individual,  hence  there  was  no  enquiry  into  the 
privileges  of  the  Mineral  and  Battery  Works  and  of  the  Levant  company. 
The  report  of  the  Committee  dealt  with — (a)  licenses  relating  to  home  and 
foreign  trade,  some  of  which  were  relaxations  of  existing  restraints  of  trade, 
(6)  copy-rights,  (c)  privileges  to  sow  hemp,  flax  and  woad,  {d)  grants  relating 
to  munitions  of  war,  (e)  luxuries,  (/)  manufacturing  privileges,  (^f)  grants  for 
personal  reasons — Raleigh  and  tin-mining.  The  gun-powder  patent  was 
objected  to  on  the  ground  of  the  inconvenience  it  caused  householders. 
The  gold  and  silver  thread  and  dice  patents — the  latter  had  been  tried  at 
law  in  1697,  but  Elizabeth  intervened.  The  industrial  monopolies— the 
starch  patent,  how  financed,  arbitrary  action  of  searchers ;  the  Aqua  ViUe 
patent ;  the  paper  patent  and  the  supply  of  rags.  Bacon  arbitrated.  Alleged 
rise  of  prices  througli  patents  for  drinking  glasses,  stone  bottles  and  steel. 
These  were  newly  established  industries,  hence  there  was  an  element  of 
protection  in  the  encouragement  of  them.  Summary  of  the  position  of 
monopolies  in  1601. 

The  parliamentary  enquiry  of  1604  related  to  monopolies  granted  to  cor- 
porations for  foreign  trade.  Sandys'  "Instructions"  for  "the  free  exercise 
of  industry"  and  against  "a  monopolizing  foreign  traffick."  The  bona 
fides  of  this  document  discussed  in  relation  to  Sandys'  part  in  the  proposed 
tobacco  monopoly  of  the  Virginia  company.  Many  of  the  statements  in  the 
"  Instructions  "  are  false  or  perverted.  This  document  favoured  the  regulated, 
as  against  the  joint-stock  company.  Monopolies  for  the  life  of  the  discoverers 
of  a  new  trade  were  approved — application  of  these  principles  to  the  Levant 
company.  The  case  of  the  Spanish  company.  The  state  exercised  its  super- 
vision of  foreign  trading  monopolies  in  a  wrong  direction.  Sandys  attacked 
the  Russia  company — its  legal  position  and  discoveries;  the  points  in  its 
favour  and  against  it 106 

CHAPTER  VII.     BRITISH  COMMERCE  AND  FINANCE  FROM 
THE   PEACE  OF   1604  TO  THE  CRISIS  OF  1620. 

Trade  began  to  revive  in  1604  after  the  peace,  when  markets,  closed 
during  the  war,  were  re-opened.  Returning  prosperity  showed  itself  in  an 
increase  of  population  and  a  rise  in  the  standard  of  living,  also  in  an  advance 
in  the  receipts  from  Customs.  The  progress  of  joint-stock  companies — the 
East  India  and  Russia  companies  were  making  large  profits,  the  African  trade 


xiv  Contents 


was  re-opened  in  1618.  In  colonization,  two  Virginia  companies  were  in- 
corporated in  1606,  the  Bermuda  company  in  1611,  the  Guiana  company  in 
1619,  the  New  England  company  in  1620  and  the  New  Scotland  company  in 
1621.  In  the  home  trade  there  were  the  beginnings  of  the  Irish  society 
in  1609,  the  foundation  of  the  New  River  company  and  large  silver  discoveries 
in  Wales  by  a  subsidiary  company  of  the  Mines  Royal  society. 

The  provision  of  capital  for  commerce  was  largely  conditioned  by  the 
state  of  the  Crown  finances.  James  I.  often  showed  considerable  insight,  but 
he  was  deficient  in  the  more  practical  qualities.  Tlie  Crown  spent  more  in 
his  reign,  when  the  country  was  at  peace,  than  Elizabeth  had  needed  in  time 
of  war.  By  1606  the  debt  was  £735,280.  The  increased  expenditure  was 
caused  in  part  by  payments  to  courtiers;  and,  in  addition,  privileges  were 
granted  to  individuals  which  gave  rise  to  new  and  objectionable  monopolies. 
In  1608  the  debt  had  grown  to  £1,400,000,  and  the  attempt  to  reduce  it 
involved  the  new  impositions.  Parliament  investigated  these,  together  with 
other  burdens  on  trade,  such  as  the  taxes  on  coals,  currants,  wines  and 
hides.  The  East  India  company  and  the  pepper  tax.  Failing  sufficient  grants 
from  Parliament,  there  were  various  projects  to  improve  the  revenue. 

The  activity  of  trade  culminated  between  1613  and  1615 — money  was 
plentiful  everywhere  except  in  the  Exchequer.  Loans  were  obtainable  by 
the  chief  companies  at  9  per  cent,  and  sometimes  at  8  per  cent.  Foreign 
trade  was  flourishing — from  1609  to  1613  the  East  India  company  made  total 
profits  of  121f  per  cent,  to  234  per  cent. ;  while,  in  1613  and  1614,  the  Russia 
company  paid  two  dividends  of  90  per  cent.  each.  There  were  two  hindrances 
to  the  continuance  of  the  prosperity — the  competition  of  the  Dutch  and  the 
condition  of  the  Crown  finances.  James  I.  attempted  to  obtain  revenue  from 
the  cloth  trade  by  the  export  of  dyed,  instead  of  undyed  cloth.  The  promoters 
of  the  scheme  anticipated  a  profit  of  £600,000  a  year,  of  which  the  Crown 
was  promised  £300,000.  The  great  gamble  in  the  cloth  trade  was  begun  by 
the  establishment  of  the  New  Merchant  Adventurers  in  1613.  The  scheme 
failed  totally,  exports  of  cloth  declined,  and  this  trade  experienced  a  crisis  in 
1616.  This  crisis  did  not  become  general,  partly  owing  to  the  re-establish- 
ment of  the  Merchant  Adventurers,  partly  through  the  success  of  the  new 
foreign  and  colonial  trades.  From  1608  to  1615  the  Russia  company  dis- 
tributed 339  per  cent.,  while  the  First  Joint-Stock  of  the  East  India  company 
divided  87J  per  cent,  from  profits,  making  a  total  estimated  profit,  since 
1600,  of  £1,028,281.  These  results  compared  with  those  of  the  Dutch  East 
India  company.  The  rate  of  the  English  company  per  cent,  was  higher,  but 
the  Dutch  company  had  a  larger  capital,  and  besides  it  expended  undivided 
profits  in  improving  its  trade — a  policy  which  could  not  be  carried  out  by  the 
English  company  owing  to  its  terminable  stocks. 

The  Scottish  whaling  and  India  company  received  a  Scottish  charter  in 
1617 — the  legal  position  as  between  it  and  the  East  India  and  Russia  com- 
panies. The  two  latter  purchased  the  assets  of  the  Scottish  company  and 
formed  a  joint-adventure  for  whaling.  The  Second  Joint-Stock  of  the  East 
India  company  was  floated  successfully  in  1617.  Capital  in  1618  was  apparently 
plentiful,  but  the  real  reason  of  the  quantity  of  funds  seeking  investment  was 
the  depression  in  the  cloth  trade.  The  repayment  of  advances  by  Holland 
produced  a  temporary  improvement  in  the  Crown  finances.  The  grants  of 
James  I.  were  becoming  a  serious  burden  on  industry,  through  the  sums 


Contents  xv 

PAGE 

exacted  from  the  mercantile  classes  by  courtiers.  Some  of  the  patentees 
began  to  use  their  privileges  in  compelling  persons  in  allied  trades  to  com- 
pound with  them 129 

CHAPTER  VIII.    THE  ORGANIZATION  OF  THE  JOINT-STOCK 
COMPANY  FROM  1600  TO  1620. 

Early  in  the  seventeenth  century  there  was  a  standard  type  of  incorpora- 
tion. Most  companies  were  controlled  by  governors  and  assistants,  the 
number  of  the  latter  being  twelve  or  a  multiple  of  twelve.  There  were 
several  points  of  contact  between  regulated  and  joint-stock  companies.  The 
struggle  between  a  temporary  and  a  permanent  capital  in  companies — the 
prevalence  of  the  former  explains  the  payment  of  divisions,  as  distinguished 
from  dividends  out  of  profits.  This  method  was  convenient  in  the  plantation 
companies,  where  the  shareholders  received  a  division  in  land.  Even  in  the 
East  India  company,  there  was  a  tendency  against  a  temporary  capital,  while 
companies  for  the  home  trade  had  a  permanent  capital.  There  was  difficulty 
in  obtaining  capital  owing  to  the  fixing  of  the  number  of  shares — attempt  of 
the  East  India  company  to  procure  subscriptions.  Shares  of  small  denomina- 
tions were  introduced  and  also  of  different  values,  but  without  priority  as  to 
dividend — progress  towards  the  idea  of  a  capital-stock  in  the  East  India 
company  1613-17. 

Methods  of  deciding  the  distributions  to  be  paid  to  shareholders  and  the 
formulae  by  which  they  were  described.  The  meaning  of  a  division  of  "a 
capital "  by  the  East  India  company  and  the  magazine  of  the  Virginia  com- 
pany. The  introduction  of  the  term  capital  into  accountancy  is  probably 
traceable  to  Italian  influence.  The  need  for  a  special  name  became  clearer  as 
the  ambiguity  of  "  stock  "  was  recognized.  Divisions,  in  terms  of  ^'  capitals," 
must  be  regarded  from  the  contemporary  point  of  view. 

How  far  were  there  public  subscriptions  of  capital  and  a  free  market  in 
shares  ? — sales  of  shares  "  by  inch  of  candle "  and  the  prices  obtained  in 
relation  to  the  divisions.  Peace  or  dissension  in  the  management  of  com- 
panies depended  on  the  state  of  the  finances.  Regulations  determining 
voting  qualifications  and  the  quorum.  Payments  made  to  the  governor  and 
assistants.  In  1609  the  governor  of  the  East  India  company  threatened  to 
resign  unless  his  honorarium  was  reduced  by  more  than  one-half.  The 
mutual  relations  of  companies — monopolies  were,  in  reality,  often  confined  to 
the  trade-route,  hence  at  one  time,  in  some  respects,  the  Russia,  Levant  and 
East  India  companies  were  in  competition.  On  the  other  hand,  there  were 
cases  of  community  of  interest — (a)  the  Mines  Royal  and  the  Mineral  and 
Battery  Works,  {b)  the  Russia,  Levant  and  East  India  companies  in  relation 
to  the  proposed  discovery  of  a  north-west  passage,  (c)  the  proposed  amalgama- 
tion of  the  English  and  Dutch  East  India  companies,  {d)  the  absorption  of 
interloping  expeditious  by  chartered  companies 160 

CHAPTER  IX.     THE  CRISIS  OF   1620-1625. 

The  disturbance  of  the  cloth  trade  might  have  caused  a  crisis  in  1616-17. 
The  activity  of  new  foreign  trades  tended  for  a  time  to  postpone  the  depres- 
sion.    By  1620  the  competition  of  the  Dutch  had  reduced  profits,  and  the 


xvi  Contents 

PAGE 

East  India  and  Russia  companies  could  not  pay  their  debts.  The  crisis  was 
marked  by  great  depression  in  the  cloth  trade  and  in  agriculture.  There 
was  much  unemployment,  a  high  rate  of  interest  and  numerous  bankruptcies. 
Popular  opinion  regarded  the  crisis  as  a  monetary  one,  but  this  analysis 
was  superficial — the  true  position  of  international  indebtedness.  The  deferred 
effects  of  the  interference  with  the  cloth  trade  and  the  reaction  on  trade  of 
the  bad  state  of  the  Crown  credit. 

Parliament  sought  to  remedy  "the  scarcity  of  money"  by  various  recom- 
mendations. The  scheme  to  prevent  export  of  bullion  by  importing  tobacco 
from  the  plantations,  instead  of  from  Spain.  That  "an  Imperial  preference" 
was  not  intended  is  shown  by  contemporary  proposals  for  restricting  imports 
from  Scotland  and  Ireland.  Investigation  of  grants  made  by  the  Crown — 
patents  for  the  delegation  of  administrative  functions,  e.g.  registration  of  ale- 
houses— increase  of  licenses  and  at  the  same  time  hardships  inflicted  on 
inn-keepers.  Industrial  monopolies — the  iron-smelting  and  glass  patents, 
lighthouses,  the  lobster  grant,  the  linen-printing  company,  the  gold  and  silver 
thread  patent.  The  latter  resulted  in  very  many  abuses.  A  "bill  against 
monopolies"  introduced  in  1621.  The  East  India  company  criticized  for  ex- 
porting bullion.  The  position  of  the  African  company  from  1621  to  1624.  The 
finance  of  the  Russia  company  was  described  as  involving  "gross  juggling." 

Partial  failure  of  the  harvests  of  1622  and  1623,  followed  by  the  plague  in 
1625,  tended  to  delay  a  recovery  of  trade.  Industry  was  burdened  through 
the  financial  mistakes  of  the  Crown  and  the  monopoly  of  the  Merchant 
Adventurers.  The  crisis  of  1620-6  marked  a  stage  in  the  history  of  the 
plantation  companies.  By  1625,  many  of  them  had  made  land-divisions,  and 
some  had  come  to  an  end.  The  capital  outlay  to  1624,  on  founding  the 
British  Empire  in  America,  may  be  estimated  at  £300,000;  while  share- 
holders in  the  companies  obtained  land  at  about  2«.  6rf.  an  acre  .         .         .         166 

CHAPTER  X.     FROM   1624  TO  THE  CRISIS  OF  1630. 

By  the  summer  of  1625  trade  had  begun  to  improve.  The  years  1625-30 
were  only  fairly  good,  the  cloth  trade  was  better,  but  it  had  not  regained  the 
prosperity  of  1610 ;  the  East  India  and  African  trades,  while  showing  some 
recovery,  remained  depressed.  Reviving  trade  was  checked  by  the  state  of 
foreign  politics,  which  caused  a  fresh  strain  on  the  finances.  The  views  of 
the  Crown  and  Parliament,  as  to  the  scope  of  the  projected  hostilities,  were 
essentially  divergent — James  I.  asked  {^ths  and  ffths;  but  Parliament  only 
granted  5^ths  and  ^ths.  Charles  I.  failed  to  obtain  sufficient  parliamentary 
grants  for  the  war,  and  in  1626  he  levied  a  compulsory  loan,  but  in  1628 
there  was  a  deficiency  of  over  a  million  on  the  war-expenditure.  The 
subsidies  of  1628  and  other  receipts  would  have  reduced  this  deficit,  had  it 
not  been  that  part  of  the  Ordinary  Revenue  was  precarious,  through  the 
effect  of  the  tonnage  and  poundage  dispute  on  the  finances.  Position  of 
companies  in  1629-30 — the  Russia  company,  having  re-adjusted  its  finances, 
was  more  prosperous,  the  development  of  colonization,  new  plantation 
companies,  the  Second  Joint-Stock  of  the  East  India  company,  the  Mines 
Royal,  the  Mineral  and  Battery  Works. 

Disputes  about  tonnage  and  poundage  tended  towards  depression  of 
trade — want  of  employment  in  the  cloth  trade  in  1630.     A  shoi't  crisis  in 


Contents  xvii 

PAOB 

1630  came  to  an  end  on  the  announcement  of  the  peace  with  Spain.  The 
dividends,  paid  by  the  English  and  Dutch  East  India  companies  from  1018 
to  1630,  compared.  The  consequences  of  their  respective  financial  policies 
reacted  on  the  question  of  monopolies  for  foreign  trade.  It  is  possible  that 
the  financial  methods  of  the  English  company  were  due  to  its  relation  to 
the  Stuarts  and  the  pressure  exerted  on  it  by  the  Crown  .        .        .      186 

CHAPTER  XL     THE  DELEGATION    OF  INDIRECT  TAXATION 
BY  THE  CROWN  TO  MONOPOLISTIC  COMPANIES,  1630-40. 

In  1631  the  prospects  for  investment  were  considered  favourable.  The 
Greenland  and  Russia  companies  were  making  profits;  the  position  of  the 
East  India  company  and  the  foundation  of  a  new  African  company.  Colo- 
nizing was  progressing — the  Massachusetts  Bay  company,  the  settlement  of 
the  West  Indies,  the  Mosquito  Islands  company.  In  the  h"Slne  trade  the 
Mines  Royal  and  Mineral  and  Battery  Works  were  still  in  existence,  and 
several  companies  were  formed  for  the  drainage  of  land.  A  British  Fishery 
society  was  established  in  1632,  to  which  subsidiary  associations  were 
affiliated. 

The  personal  government  of  Charles  I.  had  consequences  which  tended 
towards  the  restriction  of  commercial  activity — religious  disputes  caused 
emigration  and  the  tonnage  question  remained  unsettled.  The  Crown 
finances  became  involved,  owing  to  the  cessation  of  subsidies.  Various  ^ 
plans  were  devised  to  create  revenue  to  meet  the  deficit.  Companies,  being 
exempt  from  the  Monopoly  Act,  were  formed  to  a  considerable  extent,  on 
condition  they  should  pay  substantial  sums  to  the  Crown — the  coal,  the  salt 
and  the  soap  monopolies.  These  were  expected  in  1635  to  produce  £80,000 
a  year  for  the  Exchequer,  but  that  amount  was  obtained  at  a  cost  of  between 
£200,000  and  £300,000  to  consumers.  This  method  was  essentially  waste- 
ful, indirect  taxation.  By  1636  trade  had  become  dull — the  soap  monopoly 
affected  the  Greenland  company,  while  the  salt  monopoly  injured  the  Fishery 
society.  The  East  India  and  New  River  companies  were  prejudiced  by  the 
encouragement  of  rival  undertakings  by  Charles  I. 

In  1637  trade  was  depressed— the  parallelism  between  1610-20  and  1630- 
40.  Further  attempts  to  obtain  revenue  from  monopolies — the  Soap-makers 
company,  the  wine,  currant,  starch  and  coal  monopolies.  From  these  £200,000 
a  year  was  payable  to  the  Crown,  which  cost  tax-payers  at  least  £760,000 
a  year  in  a  rise  of  prices  and  aroused  great  indignation.  By  1640  the 
government  of  Charles  I.  was  bankrupt — the  seizure  of  pepper  from  the 
East  India  company  and  of  bullion  from  the  Mint,  the  latter  caused  a 
serious  crisis. 

Summary  of  the  position  of  joint-stock  companies  from  1630  to  1640 — 
the  East  India  company  made  smaller  profits  than  the  Dutch  company. 
Failure  of  the  African,  Greenland,  Fishery  and  Russia  companies.  A  sub- 
sidiary company  of  the  Mines  Royal  was  succeeding,  progress  of  the  New 
River  company,  state  of  the  Mosquito  Islands  company.  The  nature  of  the 
internal  organization  of  the  monopolies — its  points  of  contact  with  both  the 
regulated  and  joint-stock  company.  Subsidiary  associations  were  consti- 
tuted without  charters,  and  the  style  '^A.  B.  and  Co."  began  to  appear. 
In  the  Fishery  and  Mosquito  Islands  companies  there  was  an  approximation 


xviii  Contents 


towards  a  species  of  limited  liability.  The  controversy  between  votes  by 
ballot  and  votes  by  shares  became  acute.  Charles  I.  intervened  in  favour  of 
the  latter.  Questions  of  policy  were  keenly  debated  in  the  coui*ts  of  the 
East  India  company — an  attempt  to  appoint  a  committee  of  inspection,  and 
shareholders  forbidden  "to  dive"  into  the  accounts 199 

CHAPTER  XII.    THE  DEPRESSION  FROM   1640  TO   1660. 

Political  unrest  precluded  a  trade-revival  after  the  crisis  of  1640.  In 
1642  the  cloth  trade  was  very  depressed,  and  the  situation  became  worse  on 
the  outbreak  of  the  Civil  War.  The  finance  of  the  struggle  involved  a  great 
drain  on  the  capital  of  the  country.  The  appointment  of  finance  committees 
led  to  waste  and  a  grave  burden  of  debt.  Parliament  was  prepared  to  grant 
encouragement  to  the  Merchant  Adventurers,  the  Levant  and  East  India 
companies.  Hence  it  appears  there  was  a  consensus  of  opinion,  between 
1640  and  1650,  in  favour  of  monopolies  for  foreign  trade.  But  the  com- 
panies favoured  had  lent  money  to  the  State — others,  that  made  no  loans, 
received  no  privileges — e.g.  the  Russia  company.  The  great  monetary 
stringency  resulted  in  an  economizing  of  currency  and  the  organization 
of  credit  through  the  rise  of  banking  about  1645.  This  phenomenon  is 
evidence  of  a  mitigation  of  the  depression,  but  in  1646  there  began  a  great 
dearth,  and,  at  the  same  time,  foreign  trade  suffered  by  the  depredations 
of  privateers.  The  disorganization  of  production  had  reacted  still  further 
on  the  wool  trade,  and  there  was  widespread  poverty  and  distress.  The 
Civil  War  and  bad  trade  made  this  period  one  of  great  depression  for  the 
joint-stock  companies — the  Russia,  African,  Greenland,  Mines  Royal,  Mineral 
and  Battery  Works  and  East  India  companies.  The  financial  difficulties  of 
many  companies  were  attributable  to  the  want  of  reserve  funds.  Conse- 
quences of  the  expulsion  of  "delinquents"  from  joint-stock  and  regulated 
companies  and  the  slower  recovery  of  the  latter 230 

CHAPTER  XIII.     JOINT-STOCK  COMPANIES  UNDER  THE 
COMMONWEALTH  AND  THE  PROTECTORATE. 

The  beginning  of  a  revival  in  trade  manifested  itself  in  England  in  1650 
and  somewhat  earlier  in  Scotland.  The  United  Joint-Stock  of  the  East 
India  company  was  floated  in  1650.  Financial  difficulties  caused  sales  of 
land  by  the  government — the  low  price  obtained.  The  number  of  unin- 
corporated companies  increased.  The  Committee  of  Trade  inquired  into  the 
position  of  the  Greenland  and  African  companies — the  settlement  by  limited 
reserved  areas.  The  reasons  for  the  passing  of  the  Navigation  Act  in  1651, 
and  its  reaction  on  the  carrying  trade.  The  chartered  companies  and  the 
Dutch  War.  Losses  of  shipping  and  dissensions  in  the  East  India  company. 
The  war  caused  general  depression  of  trade  and  a  great  strain  on  the  finances — 
the  recurring  deficits,  a  great  debt  and  the  sale  of  public  property.  The 
Protectorate  was  compelled  to  reduce  expenditure  or  else  to  find  new  sources 
of  revenue — the  adventure  of  the  Spanish  War  and  its  failure  as  a  financial 
expedient.  The  relation  of  the  necessities  of  the  government  to  the  charter 
of  the  East  India  company — its  profits  compared  with  those  of  the  Dutch 
company.     The  New  General  Stock  subscribed.     The  government  was  on 


Contents 


XIX 

PAOB 


the  verge  of  bankruptcy  in  1668 — ''the  public  faith"  had  become  "the 
public  despair. "  The  i)urden  of  taxation  contrasted  with  that  under  Charles  I. 
There  were  many  causes  of  commercial  depression  in  1659,  and  tlie  distress 
was  great.  Parliament  had  reached  the  end  of  its  credit,  and  tax-resistance 
was  common 2A^ 

CHAPTER  XIV.     INDUSTRIAL  RECUPERATION  AFTER 
THE  CIVIL  WAR  (1660-71). 

After  the  Restoration  attempts  were  made  to  recover  previous  losses,  the 
first  step  towards  which  was  a  national  stock-taking — Petty's  estimates  of 
the  National  Wealth  and  National  Dividend;  calculations  of  imports  and 
exports ;  reports  of  the  Committee  of  Trade  relating  to  (o)  bullion,  (6)  fishing, 
(c)  the  Merchant  Adventurers,  {d)  the  Levant  company.  The  position  of 
the  joint-stock  companies  in  1060 — the  Russia  company  and  Greenland 
Adventurers  had  ceased  to  trade,  the  African  company  had  suffered  from 
losses  of  ships  and  a  new  company  was  formed  in  1662.  The  East  India 
company  was  making  a  fresh  start.  Developments  of  joint-stock  organi- 
zation— an  act  of  quasi-limited  liability  (1662).  Opinion  began  to  be  con- 
centrated on  certain  aspects  of  monopolies  for  foreign  trade.  s/ 

Reviving  commercial  activity  showed  itself  in  new  schemes.  The  shortage 
in  the  settled  revenue  led  to  an  increase  of  banking  transactions.  Scotland 
and  the  Plantations  were  developed.  With  the  beginning  of  the  Dutch  War 
there  came  a  crisis,  which  was  intensified  by  the  Great  Fire  and  the  appear- 
ance of  the  Dutch  fleet  in  the  Thames.  The  financing  of  the  war  injured 
the  credit  of  the  Crown.  The  run  on  bankers  resulted  in  a  panic  in  June 
1667 — magnitude  of  distress  after  the  crisis — "the  infinite  wantsof  all  men." 
Effects  of  the  crisis  on  joint-stock  companies — difficulties  of  the  African 
and  Fishery  companies,  reasons  for  the  large  dividends  of  the  East  India 
company. 

Revival  of  trade  after  the  war — an  insurance  office  and  a  mining  company 
founded,  Scottish  companies  established.  Various  indications  of  commercial 
progress  between  1667  and  1671.  The  African  company  reconstructed,  the 
position  of  the  East  India  company  shown  by  its  dividends  and  prices  of 
stock,  comparison  with  the  Dutch  company.  Development  of  the  internal 
affairs  of  companies — form  and  methods  of  transfer  of  stock,  the  principle  of 
a  maximum  vote. 

The  Crown  finances  again  reacted  on  trade — the  growth  of  the  debt,  and 
Crown  property  sold  to  obtain  funds.  Tlie  advisers  of  Charles  II.  planned  to 
commit  England  to  a  war  with  Holland  by  seizing  the  Dutch  Levant  fleet. 
In  order  to  procure  funds,  payments  out  of  the  Exchequer  were  stopped  in 
1671,  with  the  result  of  a  crisis  in  1672  involving  the  failure  of  many  bankers 
and  widespread  ruin 263 

CHAPTER  XV.     FROM  THE  STOP  OF  THE  EXCHEQUER 
TO  THE  CRISIS  OF  1686. 

The  stop  of  the  Exchequer  caused  a  depression  in  trade  till  early  in  1674. 
The  Crown  finances  were  disorganized — continued  shortage  of  the  settled 
revenue,  reduction  in  Customs-revenue  during  the  war,  excess  of  expenditure 


XX  Contents 


PAGE 


above  the  estimates,  the  cost  of  bribery  in  the  House  of  Commons, 
posed  retrenchment  of  expenditure  caused  a  brief  crisis. 

After  the  Peace  with  Holland  there  came  a  great  trade  revival.  Existing 
companies  were  more  prosperous  and  several  new  inventions  were  made — a 
discount-bank  in  existence  in  1676  and  a  land-bank  proposed.  The  rebuild- 
ing of  London  had  aided  the  water-supply  companies — position  of  the  New 
River  company  and  the  foundation  of  the  York  Buildings  company.  Petty's 
Political  Arithmetick  showed  the  progress  made  since  1665. 

Different  views  of  Charles  II.  and  Parliament  on  foreign  policy  affected 
the  finances,  and  the  revenue  was  heavily  anticipated,  while  salaries  had 
fallen  into  arrear.  Fears  of  war  with  France,  together  with  disclosures 
concerning  the  Popish  Plot,  caused  a  minor  crisis  in  1678.  The  attempt  to 
rehabilitate  the  finances  was  aided  by  the  advance  in  the  settled  revenue 
through  the  activity  of  trade — new  inventions  and  the  progress  of  the 
Milled-Lead  Adventure.  Statistical  data  showed  industrial  progress — the 
development  of  credit  and  banking.  The  East  India  company  borrowed 
at  3  per  cent.,  reasons  of  a  low  rate  of  interest  when  trade  was  active. 
A  private  fire  insurance  undertaking  transferred  to  a  joint-stock  company, 
and  a  postage  company  established  (1680),  scheme  for  infant  insurance  by 
the  State,  the  Shadwell  water  company  founded.  In  Scotland  a  cloth  manu- 
facturing company  was  started  in  1681 — its  minutes,  differences  as  between 
England  and  Scotland  in  the  organization  and  privileges  of  companies. 
Position  of  companies  already  established — the  Royal  Fishery  company  had 
sold  its  remaining  assets,  but  it  was  succeeded  by  an  unincorporated  company. 
The  East  India,  Royal  African  and  Hudson's  Bay  companies  had  made  large 
profits.  The  dividends  of  the  English  and  Dutch  East  India  companies 
compared,  also  the  quotations  of  their  stocks.  The  East  India  company 
divided  a  scrip-bonus  of  100  per  cent,  in  1682 — the  danger  of  this  course 
was  shown  during  the  crisis  of  1682,  when  the  company  was  forced  to  suspend 
payment. 

Since  1678  trade  had  been  less  active — dissatisfaction  concerning  the 
decline  in  exports  of  cloth  and  the  increase  of  imports  from  France.  The 
Merchant  Adventurers  and  Levant  companies  were  in  difiiculties ;  the  attack 
of  the  latter  on  the  East  India  company.  In  1686  the  cloth  trade  experi- 
enced a  crisis,  which  was  intensified  by  the  failure  of  the  City  bank,  which 
involved  *Hhe  Orphans'  Fund,"  whence  there  was  great  distress   .         .         .       288 

CHAPITER  XVI.     FOREIGN  TRADING  COMPANIES,  1682  TO  1697. 

The  political  situation  from  1682  to  1688  had  different  effects  on  the 
foreign  and  home  trades,  respectively — the  dissolution  of  the  Bermuda 
company  (1684).  The  attitude  of  Parliament  kept  the  Crown  expenditure 
relatively  low,  and  the  restoration  of  credit  was  helped  by  the  continued 
improvement  in  the  settled  revenue,  independently  of  the  new  duties  on 
French  goods,  llie  arrival  of  the  Huguenots  made  great  additions  to  the 
immaterial  and  material  wealth  of  the  country — foundation  of  the  White 
Paper,  Linen  and  Lustring  companies  (1685-7).  The  City  and  Friendly  Fire 
Insurances  started,  also  the  company  for  making  Salt  Water  fresh  and 
the  Convex  Lights  company.  Summary  of  progress  in  1688  according  to 
Davenant,  Gregory  King  and  Petty. 


Contents 


xzi 

PAOK 


The  prosperity  to  1G88  was  largely  due  to  foreign  trade — from  1683  to 
1692  the  East  India  company  divided  400  per  cent,  on  the  original  stock. 
The  position  of  an  adventurer  of  1658  reconstructed  in  each  of  the  chief  foreign 
trading  companies.  Tliis  result  was  important  in  the  parliamentary  struggle 
from  1689  to  1698  with  reference  to  privileges  for  foreign  trade.  The  oppo- 
nents of  the  East  India  company  received  an  accession  of  strength  from  dis- 
sentient stockholders,  who  sold  out  at  high  prices  with  a  view  to  buying  back  at 
par  or  less,  and  of  deposing  Child  from  the  position  of  governor.  Up  to  1693 
the  opposition  was  apparently  successful,  but  it  failed  in  securing  a  sufficient 
modification  of  the  voting  power  for  its  purposes.  Hence  the  campaign 
developed  in  the  direction  of  the  overthrow  of  the  company,  and  in  1698  the 
New  Company  was  incorporated ;  but  the  Old  Company  took  up  stock  in  the 
former  and  was  thus  entitled  to  a  reduced  trade.  Tliese  events,  together 
with  the  foundation  of  the  Darien  company,  resulted  in  a  great  depreciation 
in  the  price  of  stock  of  the  Old  Company — the  total  capital  of  foreign  trading 
companies  and  its  market- value  1689-94 311 

CHAPTER  XVII.     THE  BOOM   OF  1692-5   IN  THE  STOCK 
AND  SHARE  MARKET. 

A  period  of  speculative  activity  began  with  the  success  of  the  Phipps 
treasure-seeking  expedition  of  1687-8,  the  shareholders  in  which  received  a 
division  of  10,000  per  cent. — the  organization  and  finance  of  similar  ventures. 
Up  to  1695  about  150  companies  are  known  to  have  been  formed.  JThe 
causes  of  these  promotions  are  connected  with  the  French  war — {a)  to  pro- 
duce commodities  which  could  not  be  imported,  (6)  to  provide  munitions, 
(c)  to  aid  in  financing  the  government.  From  1692  prices  of  stocks  were 
regularly  quoted,  description  of  the  different  types  of  Houghton's  list — its 
peculiarities  and  ambiguities.  The  total  capital  invested  in  companies, 
existing  in  1695,  is  estimated  at  4:\  millions — the  relation  of  this  figure  to 
that  of  wealth  employed  in  trade. 

Houghton's  description  of  a  typical  promotion  of  the  period  shows  that 
the  obtaining  of  a  charter  was  not  essential ;  but,  in  special  instances,  these 
instruments  were  sought,  and  acts  of  Parliament  obtained.  The  English 
and  Scottish  models  of  company-government  differed ;  numbers  of  officials, 
of  the  quorum ;  amount  of  qualification.  The  rival  principles  of  a  maximum 
vote  and  the  sliding  scale.  In  industrial  companies  the  capital  was  divided 
into  shares,  the  usual  denominations  of  these.  Some  typical  promoters'  profits 
analyzed.  The  remarkable  reluctance  of  shareholders  to  pay  calls.  Relations 
between  the  governing  body  and  the  shareholders  were  sometimes  very 
cordial,  but  there  are  cases  of  abuse  of  trust.  Exceptional  characteristics  in 
promotions,  e.g.  the  promising  of  dividends  to  charity  or  of  limited  liability. 
The  glamour  of  "a  fund  of  credit"  misled  certain  companies.  Examination 
of  the  general  level  of  prices  of  manufacturing  companies'  shares,  from  1692 
to  1694. 

As  the  pressure  of  war-taxation  grew  greater,  markets  became  less  active — 
the  adverse  state  of  the  foreign  exchanges,  the  re-coinage,  the  run  on  bankers 
and  the  suspension  of  the  Bank  of  England  (1696).  The  crisis  continued 
till  March,  1697,  owing  to  pressure  of  war-expenditure,  which  resulted  in  a 
dangerous  addition  to  the  unfunded  debt.     The  engraftment  of  tallies  into 


xxii  Contents 


PAGE 


Bank  of  England  stock  transferred  the  discount  on  these  to  Bank  stock. 
The  severity  of  the  crisis  measured  by  the  fall  in  representative  securities 
between  1692  and  1697 326 

CHAPTER  XVIII.     JOINT-STOCK  COMPANIES  FROM  THE 
CRISIS  OF  1697  TO  THAT  OF  1708. 

Credit  improved  on  prospects  of  peace — rise  in  the  stocks  of  the  Bank  of 
England  and  the  Hudson's  Bay  company.  The  chief  causes  which  led  to  the 
failure  of  many  of  the  companies  founded  before  the  crisis,  out  of  the  whole 
number  28  per  cent,  to  29  per  cent,  are  known  to  have  been  in  existence  in 
1698.  *^*The  pernicious  art  of  stock-jobbing"  was  condemned  by  the  Com- 
missioners of  Trade,  but  the  available  information  does  not  justify  the  charge 
against  promoters  or  dealers  in  stocks.  While  dealings  in  stocks  had  become 
highly  organized  {e.g.  bear  sales  and  options  were  common)  the  movements 
in  shares  of  manufacturing  companies  are  to  be  assigned  to  causes  other  than 
market-manipulation.  Nor  is  there  evidence  of  fraudulent  promotions;  on 
the  contrary  most  of  the  founders  of  companies  held  their  shares.  Stock- 
jobbers, in  fact,  were  made  scape-goats,  and  their  business  was  subjected  to 
several  restrictions. 

A  time  of  prosperity  began  in  1697  and  continued  till  1700 — agriculture 
and  shipping  were  good,  while  foreign  trade  expanded.  Attempts  were 
made  to  settle  the  African  and  East  India  trades.  In  the  former  a  system 
of  licenses  was  adopted ;  while  in  the  latter  the  act  of  1698  (founding  the 
New  Company)  was  virtually  a  compromise,  giving  scope  for  the  inde- 
pendent trader,  the  regulated  company  and  the  joint-stock  company.  New 
enterprize  from  1697  to  1700  manifested  itself  chiefly  in  the  direction  of 
provident  schemes.  As  a  contrast,  the  Mine  Adventurers  company  was  floated 
by  an  ingenious  lottery.  The  gradual  emergence  of  different  classes  of  shares, 
so  that  by  1700  the  division  of  capital  into  debentures,  preference  and  ordi- 
nary shares  had  been,  to  some  extent,  anticipated. 

Early  in  1701  fears  of  war  and  the  struggle  between  the  East  India 
companies  resulted  in  a  crisis,  when  several  bankers  failed,  and  stocks  fell 
34  per  cent,  to  53  per  cent.  Since  1698  the  Old  Company  had  improved  its 
position,  and  in  1702  an  agreement  was  signed,  which  was  intended  to  bring 
about  an  eventual  amalgamation  of  the  companies.  In  1702  the  Sword  Blade 
company  had  started  its  land-development  undertaking,  and  in  1703  the 
London  Bridge  water  works  and  the  City  Conduits  were  amalgamated. 

Trade  and  credit  were  good  from  the  summer  of  1701  till  1704.  Though 
the  number  of  companies  was  smaller,  the  capital  was  larger  than  in  1695 — 
in  1703  the  share  capital  was  8^  millions,  with  bonds  it  may  be  calculated  at 
10  millions.  The  strain  of  the  war  made  itself  felt  at  the  end  of  1704 — in 
Scotland  there  was  great  depression  through  the  failure  of  the  Darien 
company  and  bad  harvests,  hence  the  Bank  of  Scotland  suspended  payment. 
Friction  between  England  and  Scotland  produced  an  unsettling  ejffect,  and 
the  dividend  of  the  Bank  of  England  was  reduced  in  1705  and  1706,  while  in 
the  latter  year  its  stock  was  below  par.  The  crisis  of  1706  aflfected  the  bank- 
ing activities  of  the  Mine  Adventurers  and  the  Sword  Blade  company ;  while 
the  African  company,  after  having  paid  dividends  out  of  capital,  was  unable 
to  meet  the  interest  on  its  bonds 352 


Contents  xxiii 

PAOB 

CHAPTER  XIX.  THE  AMALGAMATION  OF  THE  EAST  INDIA 
COMPANIES,  THE  RE-ORGANIZATIONS  OF  THE  ROYAL 
AFRICAN  COMPANY  AND  THE  MINE  ADVENTURERS,  AND 
THE  CRISIS  OF  1710. 

Hopes  of  an  early  peace  and  relief  from  anxiety  concerning  the  situation 
in  Scotland  brought  about  an  improvement  in  credit.  The  Union  produced 
striking  consequences  on  Scottish  companies — cloth  factories  suffered,  but 
the  Bank  of  Scotland  was  successful,  while  the  repayment  of  the  capital  of 
the  Darien  company  was  beneficial.  The  better  times  enabled  important 
financial  operations  to  be  carried  out — the  extinction  of  the  engrafted  stock 
of  the  Bank  of  England  and  a  new  issue  of  capital.  In  the  East  India  trade 
no  less  than  seven  distinct  stocks  were  merged  in  that  of  the  United  company. 
Reliance  on  "a  fund  of  credit"  had  diminished  the  working  capital  of  this 
trade,  since  the  funds  subscribed  were  used  by  the  State.  The  outcome  of 
an  investment  in  India  stock  depended  on  the  time  when  a  purchase  was 
made — the  gains  and  losses  of  various  classes  of  investors.  The  re-organiza- 
tions of  the  African  company  and  the  Mine  Adventurers  were  related  to 
peculiarities  in  the  finance  of  these  bodies — the  position  of  an  original 
investor  in  the  former. 

The  jirqsperity  from  1708  to  1710  is  shown  by  the  increase  of  dividends 
of  the  Bank  of  England  and  the  East  India  company,  but  the  war  forced 
enterprize  into  new  channels,  the  chief  of  which  was  speculative  insurance. 
The  Amicable  Society  and  the  Sun  Fire  Office  were  founded  in  this  period, 
and  in  addition  a  very  great  number  of  dividend-societies.  The  latter 
encouraged  gambling  and  led  to  fraud.  The  government  objected  to  the 
diversion  of  capital  from  its  own  lottery-loans,  and  the  prohibition  of  gambling 
insurances  was  one  cause  of  the  crisis  of  1710.  Also,  the  cumulative  burden 
of  war  expenditure  was  now  making  itself  felt,  and  there  was  a  large  addition 
to  the  floating  debt.  Prices  of  government  stocks  fell  heavily,  until,  in  some 
cases,  the  discomit  was  40  per  cent 375 

CHAPTER  XX.     FROM  THE  RETURN  OF  CREDIT  IN  1711  TO 
THE  CULMINATION  OF  THE  BOOM  IN  JUNE  1720. 

Prospects  of  peace  and  the  funding  of  the  floating  debt,  through  the 
foundation  of  the  South  Sea  company  in  1711,  tended  towards  a  restoration  of 
credit.  An  unfounded  rumour  of  the  death  of  Anne  resulted  in  a  small 
crisis  early  in  1714 — comparison  of  the  fall  of  stocks  in  1710  and  in  1714. 
For  the  year,  August  1714  to  August  1715,  trade  was  active ;  but  a  check  came 
through  the  Rebellion —fall  in  stocks.  Business  was  good  till  the  end  of 
1717.  The  capital  of  companies  in  1717  was  20^  millions.  Fears  of  a 
rupture  with  Spain  led  to  two  minor  crises  in  1717  and  1718. 

The  check  to  activity  made  capital  appear  plentiful,  and  the  rate  of 
interest  was  low.  The  importance  assigned  to  "a  fund  of  credit,"  tended 
towards  speculative  activity  in  the  form  of  financial  operations.  Law's 
Mississippi  scheme  was  at  once  a  consolidation  of  French  foreign  trade  and 
a  conversion  of  the  debt.  Through  expectations  of  great  profits  on  the  series 
of  operations,  the  shares  of  the  company  advanced  immensely.  Though  the 
South  Sea  conversion  and  the  speculation  in  the  shares  of  this  company 


xxiv  Contents 


appear  to  be  a  reflex  of  the  French  "system/'  it  developed,  to  a  large  degree, 
independently.  As  early  as  October  1719,  there  was  considerable  specu- 
lation in  London ;  and,  before  the  end  of  the  year,  several  large  fishery, 
insurance  and  finance  companies  had  been  promoted.  In  November  plans 
were  under  discussion  for  the  conversion  of  the  National  Debt  into  the  stock 
of  a  trading  company — the  rivalry  of  the  Bank  of  England  and  the  South  Sea 
company,  in  which  the  latter  was  the  victor. 

The  system  of  conversion  by  the  South  Sea  company  depended  for  its 
success  in  the  obtaining  of  a  surplus  of  issuable  over  issued  stock,  and  the 
amount  of  that  surplus  was  determined  by  the  premium  on  the  stock.  The 
growth  of  speculation  in  the  shares  of  fishery  and  insurance  companies  in 
January  and  February  1720  made  the  directors  of  the  South  Sea  company 
apprehensive  that  the  available  capital  and  credit  would  be  consumed  by 
these  ventures,  and  steps  were  taken  to  check  new  promotions.  In  May 
the  terms  for  the  first  series  of  conversions  were  announced,  and  South  Sea 
stock  was  quoted  at  400,  while  there  was  great  activity  in  new  promotions. 
The  boom  culminated  in  June,  when  South  Sea  stock  touched  1,050.  The 
market  was  then  an  artificial  one,  the  company  having  made  large  advances 
on  its  own  stock.  New  companies  were  still  floated  in  large  numbers — the 
capital,  offered  from  June  4th  to  11th,  being  estimated  at  224  millions. 
Companies  were  prohibited  from  acting  without  a  charter  or  under  an 
obsolete  one,  with  the  result  that  speculation  became  concentrated — in- 
stances of  great  premiums  on  popular  stocks,  some  of  which  were  10,  15,  20, 
25,  35  or  60  times  the  amount  actually  paid  up 388 

CHAPTER  XXI.     THE  COLLAPSE  OF  THE  BOOM  OF  1720. 

The  intensity  of  speculation  in  the  summer  of  1720  had  subjected  credit 
to  a  severe  strain.  The  inflation  was  maintained  till  August  when  further 
conversions  were  made.  In  order  to  divert  capital  from  new  promotions,  the 
South  Sea  company  caused  a  writ  of  scire  facias  to  be  issued  against  the 
Royal  Lustring,  the  English  and  Welsh  Copper,  and  the  York  Buildings 
companies.  The  issue  of  the  writs  resulted  in  a  great  fall  in  the  shares  of 
these  and  other  new  companies,  which  reacted  on  South  Sea  stock — the  fall 
in  a  month  (August  20  to  September  19)  being  450.  The  attempt  of  the 
Bank  of  England  to  arrest  the  panic  was  frustrated  by  the  failure  of  the 
Sword  Blade  bank.  In  the  last  days  of  September  the  panic  was  at  its  worst, 
and  the  fall  of  stocks  continued — the  amount  of  the  depreciations  from  June 
to  December. 

The  crisis  affected  diflferent  groups  of  companies  in  different  ways.  Finance 
companies  suffered  most — effects  on  the  Million  bank  and  the  York  Buildings 
company,  the  position  of  the  South  Sea  company,  where  the  nature  of  the 
settlement  was  the  touchstone  of  the  national  honesty.  The  Bank  of  England, 
too,  was  influenced  by  the  fund  of  credit  fallacy.  The  Royal  Exchange  and 
London  Assurances  experienced  a  period  of  financial  stress,  while  the  Sun 
Fire  Office  rearranged  its  capital.  An  attempt  was  made  to  force  the  Bank  of 
Scotland  to  engraft  equivalent  debentures  into  its  capital.  Of  the  companies 
named  in  the  writ  of  scire  facias,  the  York  Buildings,  the  English  and  the 
Welsh  copper  companies  continued  to  transact  business — the  fate  of  other 
mineral  companies  after  the  boom.     Water  supply  companies  were  little 


Contents 


XXV 


PAGE 


affected  by  the  panic.  The  boom  involved  the  directors  of  the  East  India 
company  in  many  anxieties,  while  the  African  and  Hudson's  Bay  companies 
issued  further  capital,  the  one  too  early  and  the  other  too  late. 

Tlie  panic  of  1720  determined  the  position  of  the  joint-stock  system  during 
the  ensuing  century.  The  cause  of  the  break-down  of  credit  was  found  in 
stock-jobbing  and  efforts  were  made  to  suppress  it.  After  1720  companies 
were  required  to  obtain  a  charter,  and  these  instruments  were  granted  rarely. 
Hence  the  inflow  of  capital  into  industry  by  means  of  the  joint-stock  system 
was  restricted,  until  unchartered  companies  were  permitted  early  in  the  nine- 
teenth century 422 


CHAFfER  XXII.  REVIEW  OF  THE  JOINT-STOCK  SYSTEM  FROM 
1553  TO  1720 :  WITH  A  NOTE  ON  THE  CRISES  DURING  THAT 
PERIOD. 

The  increase  in  the  amount  of  capital  employed  by  the  joint-stock  system 
was  striking.  From  1553  to  1560  it  was  under  £10,000,  while  in  1720  the 
sum  actually  paid  in  may  be  estimated  at  50  millions.  The  ratio  of  these 
figures  to  the  national  wealth  and  to  trading  capital  estimated.  The  progress 
of  companies  is  closely  connected  with  the  progress  of  English  marine  enter- 
prize,  with  early  colonization,  with  the  extension  and  consolidation  of  distant 
foreign  trades,  with  the  organization  of  credit  and  with  the  prosecution  of 
WQVf  manufactures. 

Tlie  reasons  for  the  success  of  the  joint-stock  system  were  (1)  that  it 
broke  down  the  quasi-monopoly  of  mercantile  capital,  as  such,  (2)  member- 
ship of  a  joint-stock  was  more  easily  obtainable  than  that  of  a  regulated 
company — the  relatively  free  market  for  shares,  (3)  the  advantage  of  the 
union  of  different  classes  in  early  joint-stock  undertakings,  (4)  the  com- 
paratively high  profits  which  were  earned  on  the  whole.  Adam  Smith  held 
that  there  were  serious  counterbalancing  disadvantages.  Adam  Smith's 
historical  data  examined — his  charges  of  ''waste  and  profusion"  against  the 
East  India  company,  errors  in  his  account  of  the  early  history  of  the  company, 
and  his  tendency  to  assume  financial  failure,  when  profits  were  made.  The 
assumption — that  the  interest  of  the  managers  was  not  sufficient  to  induce 
care  and  attention — investigated,  and  shown  to  be  erroneous  in  the  case  of  the 
early  history  of  the  East  India  company.  A.  Smith  confused  the  ratio  of  a 
qualification  to  the  whole  capital  w  ith  that  of  a  qualification  to  the  manager's 
total  wealth.  When  A.  Smith  compared  joint-stock  with  individual  manage- 
ment in  interloping  expeditions,  he  was  ignorant  of  the  fact  that  important 
ventures  of  the  latter  type  were  organized  by  joint-stock  companies.  A.  Smith 
admitted  the  necessity  of  fortifications  in  some  foreign  trades,  but  the  plea 
for  liberty  of  trade,  which  he  endorses,  was  often  a  disingenuous  effort  by 
the  unscrupulous  to  obtain  the  benefit  of  outlay  by  others  without  making 
any  return.  In  several  distinct  ways  there  was  scope  for  an  enterprising 
merchant  in  a  foreign  trade  where  there  was  a  monopoly.  The  possibility 
of  defence  of  a  foreign  trade  being  undertaken  by  the  State  and  of  the 
compensation  of  the  founders  of  it— various  considerations  show  that  this 
course  was  impracticable  in  the  seventeenth  century.  The  problem — whether 
England  was  "ripe"  for  the  East  India  trade  early  in  the  seventeenth  century 


xxvi  Contents 


PAGE 


— discussed.  AVTiile  several  considerations  point  to  this  trade  having  been 
perhaps  opened  too  soon,  there  was  compensation  in  a  reduction  in  prices. 

A.  Smith  considers  the  joint-stock  system  only  applicable  in  industries 
where  there  was  a  routine,  e.g.  banking,  insurance,  water  supply  and  inland 
navigation.  But  from  1694  to  1720  banking  and  insurance  were  in  a  purely 
experimental  condition  and  routine  was  impossible.  On  the  contrary,  joint- 
stock  companies  were  found  applicable  in  new  industries,  in  those  where  there 
was  a  large  risk  or  where  large  capital  or  large  credit  was  required.  The 
development  of  the  system  in  dealing  with  these  was  marked  by  the  evolution 
of  methods  for  managing  the  capital  and  for  representation  of  the  members. 

The  charge — that  the  formation  of  companies  increased  the  risk  of  crises — 
examined.  There  is  an  apparent  symmetry  in  the  crises  from  1559  to  1720 
which  is  interesting,  but  does  not  represent  the  whole  truth — a  more  com- 
plete list  of  crises.  Traces  show  themselves  of  an  incomplete  decennial 
periodicity,  but  these  are  too  broken  to  be  of  value.  Theories  of  crises 
examined  in  relation  to  the  period  1559  to  1720 — "sun-spots,"  agricultural 
scarcity,  over-speculation,  over-production,  the  Psychological  theory.  Early 
crises  are  assignable  to  the  concurrence  of  objective  and  subjective  con- 
ditions. The  necessity  of  forecasting  the  future.  An  inaccurate  forecast, 
on  a  sufficiently  large  scale,  often  led  to  a  crisis — instances  of  this.  Once 
a  tendency  towards  good  trade  or  towards  bad  trade  had  established  itself,  it 
tended  to  persist.  At  first  the  development  of  banking  and  the  extension  of 
credit  made  crises  more  frequent,  the  publication  of  commercial  intelligence 
in  the  Press  produced  similar  effects.  In  the  sixteenth  and  seventeenth 
centuries  the  objective  causes  of  crises  were,  on  the  whole,  more  important 
than  the  subjective  causes,  but  this  was  a  temporary  condition,  and  at  a  later 
period  the  latter  influences  have  become  more  powerful         ....       439 

Index 473 

Plate  showing  types  of  quotations  of  stocks  and  shares  from  Collections  for 

Improvement  of  Husbandry  and  Trade  by  John  Houghton,  1692-1700       .       351 


AUTHORITIES 


I.     MANUSCRIPTS   AND  COLLECTIONS  OF   PAPERS 

Cambridge.     Magdalene  College — The  Ferrar  Papers. 

Darlington  Library.     Bills  of  Exchange  of  the  King's  and  Queen's  Corporation  for 

the  Linen  Manufacture  in  England. 
Dublin,  Record  Office.     King's  and  Queen's  Letters;  Patent  Rolls;   Petitions  to 

the  House  of  Commons. 

Trinity  College  Library.     A  discourse  of  Free  Trade  against  incorporated 

societies ;   Character  of  a  Projector ;    Letters  of  Archbishop  King. 

Edinburgh.  Advocates'  Library.  Collection  of  MSS.  and  other  papers  relating  to 
the  Darien  Company;  Collection  of  MSS.  entitled  " Scotland— Trade  and 
Manufactures";  Wodrow  MSS. 

Bank  of  Scotland,  Head  Office.     Records  of  the  Bank. 

General  Register  House.    Register  of  the  Great  Seal ;  Privy  Council  Records ; 

Parliamentary  Papers ;  a  Minute  book  and  other  papers  of  the  Newmills  Cloth 
Manufactory. 

University  Library.     A  Minute  book  of  the  Newmills  Cloth  Manufactory ; 

Collection  of  Petitions  to  the  Barons  of  the  Exchequer  ;  Laing  MSS.  (including 
Policies  of  State  practised  in  diverse  Kingdoms  for  the  encrease  of  trade  by 
John  Keymor;  Laing  MSS.,  Division  ii.  No.  52). 

London.     Bank  of  England.     Records  of  the  Bank. 

British  Museum.     Additional  MSS.   (and  in  particular  The  Laws... of  the 

Fellowschippe  of  Merchants  Adventurers— Add.  MSS.  18,913,  f.  5 ;  Causes  of 
the  Decay  of  Trade  amongst  English  Merchants— Add.  MSS.  34,324,  f.  191 ; 
A  brief  narrative  of  the  discoverie  of  the  Northern  Seas — Add.  MSS.  33,837  ; 
Minutes  of  the  Committee  of  Trade  (Charles  II.)— Add.  MSS.  25,115; 
Collections  for  a  history  of  the  East  India  Company,  by  James  Pulhagi — 
Add.  MSS.  24,934;  Court  Books  of  the  South  Sea  Company— Add.  MSS. 
25,497-8),  Cotton  MSS.,Egerton  MSS.,  Harleian  MSS.  (and  in  particular  Severall 
Grievances  concerning  trade— Harl.  MSS.  2,244  ;  A  small  treatise  or  discourse 
touching  the  diminution  of  the  Subsidie— Harl.  MSS.  188 ;  A  regulated  company 
more  national  than  a  joint-stock  company  in  the  East  India  trade — Harl.  MSS. 
7,310,  f.  1) ;  Lansdowne  MSS.  (and  in  particular  Petition  and  remonstrance  of 
the  English  Merchants  for  the  discoverie  of  New  Trades — Lansd.  MSS.  142, 
f.  301 ;  Extract  of  the  Mines  Royal  at  Christmas  anno  1575— Lansd.  MSS. 
22  (5) ;  Summary  of  Avenant's  Bill  against  cei-tain  of  the  Company  of  the 
Mineral  and  Battery  Works— Lansd.  MSS.  56  (47));  Otho  MSS.,  Sloan  MSS., 
Stowe  MSS.  (and  in  particular.  The  Rise  of  the  Fellowship  of  Merchant 
Adventurers  of  England— Stowe  MSS.  303,  f.  99), 

c2 


xxviii  List  of  Authorities 

London.     Goldsmiths'  Hall.     Records  of  the  Goldsmiths'  Company. 

Guildhall  Library.     Compendium  omnium  privilegiorum,  libertatum  et  im- 

munitatum  concessarum  illustri  Societati  Mercatorum  Anglorum  de  Stapula, 
by  Wm  Ryley — MS.  88 ;  Minutes  of  Common  Council ;  Collection  of  Papers 
relating  to  the  water  companies  of  London ;  Deed  of  covenant  between  the 
New  River  Co.  and  the  proprietors  of  the  London  Bridge  Water  Works ; 
A  short  account  of  the  London  Bridge  Water  Works  and  memorandums 
relating  to  their  business. 

Hampstead  Aqueducts.     Staple  Inn.     Records  of  the  Company. 

House  of  Lords   Library.     Accounts  of  the   Muscovie  Company ;   Act  to 

encourage  the  manufacture  of  White  Paper,  2  Will.  &  Mary,  No.  25 ;  [Petition] 
Royal  Mynes  Bill,  Jan.  26,  1693. 

Hudson's  Bay  House.     Records  of  the  Hudson's  Bay  Company. 

India  Office.     Court  Books  of  the  East  India   Company ;   General  Court 

Minutes ;  Papers  relating  to  the  Union  [of  the  Companies]  1706-8 ;  Home 
Miscellaneous  Series  of  MSS. ;   Draft  memoir  of  the  East  India  Company. 

London  Assurance  Corporation.     Records  of  the  Company. 

Record  Office.     Domestic  Series  of  State  Papers  (Edward  VI.  to  Anne); 

Foreign  Series  (Elizabeth) ;  East  India  Series ;  Colonial  Series  (and  in  particular 
the  minutes  of  the  New  England  Company) ;  Petition  Entry  Books  (Charles  II. 
to  George  I.);  Colonial  Entry  Books  (and  in  particular  the  minutes  of  the 
Providence  Islands  Company) ;  H.  O.  Warrant  Books ;  Warrant  Books  (Scot- 
land) ;  Domestic  Correspondence ;  Colonial  Correspondence ;  Privy  Council 
Register ;  Levant  Papers ;  Board  of  Trade,  Commercial  Series  II. ;  Trade 
Papers  (Charles  II.);  Manchester  Papers;  K.  R.  Exchequer  Depositions, 
22  James  I. ;  Q.  B.  Special  Commissions  and  Depositions,  2  Charles  I. ; 
Chancery  Proceedings  (and  in  particular  pleadings  relating  to  the  Convex 
Lights  and  Royal  Lustring  Companies) ;  Treasury  Papers  ;  Treasury  Books ; 
Treasury  Records  (and  in  particular  Court  Books,  Stock  Books,  Transfer  Books 
and  Ledgers  of  the  Royal  African  Company) ;  Patent  Rolls  (Elizabeth  to 
Charles  II.) ;  Close  Rolls  (and  in  particular  indentures  relating  to  the  New 
River  Company) ;  Exchequer  of  Receipt  (Miscellanea) ;  Auditors'  Declaration 
Books  (Charles  II.,  James  II.);  Audit  Office  Declared  Accounts  (Elizabeth); 
Issue  Books  (Elizabeth)  ;  Pells  Declaration  Books  (Elizabeth)  ;  Entry  Books  of 
Issues  (Elizabeth). 

Royal  Exchange  Assurance.     Records  of  the  Company. 

Russia  Company,  4,  St  Helens  Place,  E.C.     Records  of  the  Company. 

Sun  Fire  Office.     Records  of  the  Company. 

Lyons.  Recueil  du  Precis  des  titres  et  papiers  de  la  communaute  des  marchands  et 
des  maitres  fabriquants  de  la  ville  de  Lyon. 

Oxford.  Bodleian  Library.  Carte  MSS. ;  Lister  MSS.  (and  in  particular  the 
Report  of  George  Bowes  and  Francis  Needham  sent  to  take  view  of  the  Mines 
Royal  at  Keswick) ;  Rawlinson  MSS.  (and  in  particular  the  Minute  Books  and 
other  documents  of  the  Mine  Adventurers  Company) ;  Tanner  MSS.  (and  in 
particular  papers  relating  to  the  New  River  Company)  ;  English  History  MSS. 
(and  in  particular  the  Exchequer  Accounts,  Charles  II.  to  William  III.). 

St  Andrews.  University  Library.  The  Formulare ;  List  of  the  town  of  Edinburgh's 
creditors  at  Lambas,  1713;  Memoirs  concerning  the  affairs  of  Scotland  from 
Queen  Anne's  Accession  to  the  Throne  to  the  commencement  of  the  Union  of 
the  two  Kingdoms. 

Simancas.     Archivo  general,  Secretaria  de  Estado,  Legajo  833. 


List  of  Authomties  xxix 

Venice.  Rubricario  del  dispaccio  dell'  Ambasciatore  Veneto  Cappello  de  Constan- 
tinopoli,  17  Oct.  1598. 

Wanstead.     Weavers'  Almshouses.     Court  Books  of  the  Weavers'  Company. 

Washington.     Library  of  Congress.     Records  of  tlie  Virginia  Company. 

Private  Libraries.  On  a  Land  Bank,  by  Patrick  Campbell  of  Monzie ;  Second  and 
last  advice  to  ye  Freeholders  of  England,  1721 ;  Depositions  of  witnesses  before 
the  Committee  of  Secrecy  relating  to  the  South  Sea  Directors,  1721. 


IL     OFFICIAL  PUBLICATIONS 

A  Collection  of  the  Debates  and  Proceedings  in  Parliament  in  1694  and  1695  upon 
the  Enquiry  into  the  late  Briberies  and  Corrupt  Practices.     (And  Supplement.) 
1695. 
Account  of  the  Transactions  of  the  Million   Bank  (in  vol.  96  of  the  General 

Collection,  1792-3). 
Act  of  Parliament  for  erecting  a  Bank  of  Scotland.     [1695.] 
Acts  of  the  Parliaments  of  Scotland.     7  vols.     Index  and  Supplement. 
Ancient  Laws  and  Institutes  of  England.     1840. 
Calendars  of  State  Papers. 

Acts  of  the  Privy  Council ;   Domestic  Series ;  Irish  Series — Adventurers  for 

Land ;  Colonial  Series ;  East  Indies ;  Foreign  Series ;  Treasury  Books ;  Treasury 

Papers ;  Spanish  Series,  in  the  Archives  of  Simancas  ;  Venetian  Series. 
History  of  the  Earlier  Years  of  the  Funded  Debt  from  1694  to  1787.     [Blue  Book, 

c.  9010.     1898.] 
Journals  of  the  House  of  Commons. 

Journals  of  the  House  of  Commons  of  the  Kingdom  of  Ireland.    19  vols.    1796-1800. 
Journals  of  the  House  of  Lords. 

List  of  the  Marine  Records  of  the  late  East  India  Company.     1896. 
Proceedings  and  Debates  of  the  House  of  Commons,  1620  and  1621.    Oxford.    1766. 
Proceedings  and  Debates  of  the  House  of  Commons  in  the  Sessions  of  Parliament 

begun  the  twentieth  of  January,  1628.     1707. 
Proceedings  of  the  House  of  Commons  (Chandler's).     14  vols.     1742-4. 
Proceedings  of  the  House  of  Lords  (Timberland's).     8  vols.     1742,  1743. 
Proceedings  of  the  Parliament  of  Scotland  begun  at  Edinburgh  6th  May,  1703.    1704. 
Report  from  the  Committee  of  Secrecy  to  enquire  into  the  state  of  the  East  India 

Company  (in  vol.  4,  Reports  Committees). 
Report  of  the  Commissioners  appointed  by  Parliament  to  enquire  into  the  Irish 

Forfeitures.     1700. 
Report  of  the  Commissioners  for  Taking,  Examining  and  Stating  the  Public  Accounts 

of  the  Kingdom,  with  the  Examinations  and  Depositions  relating  thereunto. 

1712. 
Report  of  the  Committee  concerning  the  Indian  and  African  Company.     Edinb. 

1707. 
Report  of  the  Committee  of  the  Lords  in  England,  concerning  the  encouraging  of 

the  linen  manufacture  in  Ireland.     1704. 
Report  on  the  State  of  the  Copper  Mines,  1803  (in  vol.  10,  Reports  Committees). 
Reports  from  Committees  of  the  House  of  Commons.     16  vols.     1803-6. 
Reports  from   Parliamentary  Committees,   Session   1821,   vol.    v..   Session   1828, 

vol.  VIII. 


XXX  List  of  Authorities 

Reports  of  the  Historical  MSS.  Commission. 

Scobell,  H.     Acts  and  Ordinances,  1640-56.     1658. 

Special  Report  from  the  Committees  appointed  to  enquire  into  the  several  subscrip- 
tions for  Fisheries.     1720. 

Statutes  of  the  Realm.     11  vols.     1810-28. 

The  Several  Reports  of  the  Committee  of  Secrecy  to  the  Honourable  the  House  of 
Commons,  relating  to  the  South  Sea  Directors.     1721. 


III.     BOOKS,   INCLUDING  ARTICLES  IN  REVIEWS  AND  IN 
PUBLICATIONS  OF  SOCIETIES 

A.  R.     Caution  against  Suretiship.     1688. 
Airy,  Osmund.     Charles  II.     1904. 

Anderson,  Adam.     Historical  and  Chronological  Deduction  of  the  Origin  of  Com- 
merce.    4  vols.     1790.     Ditto.     1805  ed.  by  D.  MacPherson. 
Andreades,  A.     History  of  the  Bank  of  England.     1909. 
Anspach,  L.  A.     History  of  Newfoundland.     1827. 
Archffiologia  Americana.     Vol.  iii. 
Arnot,  Hugo.     History  of  Edinburgh.     1779. 
Ashley,  W.  J.     Introduction  to  English  Economic  History,     Vol.  i.  pts  1  and  2. 

1892-3. 
Ashton,  John.     History  of  English  Lotteries.     1893. 
Atkinson,   Stephen.     Discoverie  and   Historie  of  the  Gold  Mynes  in  Scotland. 

(Bannatyne  Club.)     1825. 
Aulicus  Coquinariae,  in  The  Secret  History  of  James  the  First.     2  vols.     1811. 
Baines,  Thomas.     History  of  Liverpool.     1852. 

Barbour,  J.  S.     History  of  William  Paterson  and  the  Darien  Company,  1907. 
Barrow,  John.     Life  of  Sir  Francis  Drake.     1843. 
Bastable,  C.  F.     Public  Finance,     1900. 
Baumer,  Edw.     Early  Days  of  the  Sun  Fire  Office.     1910. 
Baxter,  J.  P.     Sir  Fernando  Gorges  and  his  Province  of  Maine.     (Prince  Society.) 

3  vols.     1890. 
Beckmann,  John.     A  History  of  Inventions.     2  vols.     1846. 

Benbrigge,  J.     Usura  Accomodata ;  or  a  Ready  Way  to  rectify  Usury...,  in  The 
Writings  of  William  Paterson,  ed.  S.  Bannister.     1858. 

Benn,  George.     History  of  Belfast.     1877. 

Besugon,  A.     History  of  the  Dutch  Sea  Fisheries.     1884. 

Bingham,  H.     Early  History  of  the  Scots  Darien  Company,  in  Scottish  Historical 
Review,  vol.  iii. 
•  Birdwood,  Sir  Geo.     The  First  Letter  Book  of  the  East  India  Company.     1895. 

Bisschop,  W.  R.     The  Rise  of  the  London  Money  Market.     1910. 

Black,  Wm.     The  Privileges  of  the  Royal  Burrows,  etc.     1707. 

Blencowe,  R.  W.     Diary  of  the  Times  of  Charles  II.     1843. 

Boase,  C.  W.     A  Century  of  Banking  in  Dundee,     1867. 

Boate,  Gerard,     Ireland's  Natural  History,     1652. 

Bonnassieux,  Pierre.     Les  Grandea  Compagnies  de  Commerce.     1892. 

Bosman,  William.    A  New  and  Accurate  Description  of  the  Coast  of  Guinea.    1721. 

Boyer,  Abel.     Reign  of  Queen  Anne.     1735. 

Bradford,  Wm.     History  of  Plymouth  Plantation.     1856. 


List  of  Authorities  xxxi 

Brakel,  S.  van.  Die  Entwicklung  und  Organisation  der  Merchant-Adveatorers,  in 
Vierteljahrschrift  fur  Social-  und  Wirthschaftsgeschichte,  v. 

De  Hollandsche  Handels-compagnieen  der  zeventieude  eeuw.     1906. 

— —    Geschiednis  der  Noordsche  Compaguie.     1874. 

Brand,  J.     History  of  Newcastle.     2  vols.     1789. 
Brewster,  Sir  Francis.     New  Essays  on  Trade.     1702. 
Brief  (A)  History  of  Trade  in  England.     1702. 
Brown,  Alex.     The  Genesis  of  the  United  States.     2  vole.     1890. 
•  Bruce,  John.     Annals  of  the  East  India  Company.     3  vols.     1810. 
Bryce,  Dr  Geo.     History  of  the  Hudson's  Bay  Company.     1900. 
Burgon,  J.  W.     Life  and  Times  of  Sir  Thomas  Gresham.     2  vols.     1839. 
Burke,  Sir  J.  B.     General  Armory.     1878. 

Burnet,  G.     History  of  His  Own  Time.     6  vols.     Oxford.     1833. 
Burridge,  Dr.     A  Short  View  of  the  Present  State  of  Ireland,  written  in  1700. 

[Lib.  Trin.  Coll.  Dub.] 
Burton,  J.  H.     A  History  of  the  Reign  of  Queen  Anne.     3  vols.     1880. 

History  of  Scotland.     8  vols.     1873. 

Burton,  Thos.     Diary,  ed.  by  J.  T.  Rutt.     4  vols.     1828. 

Cambridge  Modern  History.     12  vols.     1902-10. 

Camden,  Wm.     Annales  Rerum  Anglicarum  regnante  Elizabetha.     3  vols.     1717. 

Britannia.     2nd  ed. 

Carte,  Thomas.     Life  of  the  Duke  of  Ormonde.     3  vols.     1736. 
Catalogue  (A)  of  the  Lords,  Knights  and  Gentlemen  that  have  compounded  for 
their  Estates,  1655,  reprinted  in  Historical  Sketches  of  Charles  I.  by  W.  D. 
Fellowes.     1828. 
Otto's  Letters,  or  Essays  on  Liberty,  Civil  and  Religious.     4  vols.     1733. 
k^awston,  Geo.  and  Keane,  A.  H.     The  Early  Chartered  Companies.     1896. 
Chalmers,  Geo.     An  Estimate  of  the  Comparative  Strength  of  Great  Britain.    1794. 
Chamberlain,  John.     Letters.     (Camden  Society.)     1861. 
Chamberlayue,  Edw.     Angliae  Notitia.     1692. 
Chambers,  llobt.     Domestic  Annals  of  Scotland.     3  vols.     1859-61. 

Edinburgh  Merchants  in  the  Olden  Time.     1859. 

Edinburgh  Papers.     1861. 

Charters  granted  to  the  East  India  Company  from  1601,  also  the  Treaties  and 
Grants  made  with,  or  obtained  from,  the  Princes  and  Powers  in  India  from 
1756-72. 

Child,  Sir  Josiah.     A  New  Discourse  of  Trade.     4th  ed. 

Churchill's  Voyages.     6  vols.     1704-32. 

Churchyard,  Thos.  The  Miserie  of  Flaunders...and  the  Blessed  State  of  Englande 
[1579].     Brit.  Mus.  C  .  34 .  h .  8. 

Clarendon,  Earl  of.     History  of  the  Rebellion.     3  vols.     1712. 

Cleland,  James.     Annals  of  Glasgow.     2  vols.     1816. 

Clifford,  F.     A  History  of  Private  Bill  Legislation.     2  vols.     1887. 

Cobbett.     State  Trials.     Vol.  x.     1811. 

Parliamentary  History  of  England.     12  vols.     1806-12. 

Cochran-Patrick,  R.  W.     Early  Records  relating  to  Mining  in  Scotland.     1878. 

Records  of  the  Coinage  of  Scotland.     2  vols,     1876. 

Cochut,  P.  A.     Law,  son  Systeme  et  son  Epoque.     1853. 

Coke,  Edward.     Institutes  of  the  Laws  of  England.     7  vols.     1794-7. 

Coke,  Roger.     A  Detection  of  the  Court  and  State  of  England.     3  vols.     1719. 

A  Discourse  of  Trade.     1670. 


xxxii  List  of  Authorities 

Coke,  Roger.     England's  Improvements.     1675. 

A  Treatise  wherein  it  is  demonstrated  that  the  Church  and  State  of  England 

are  in  equal  danger  with  the  trade  of  it.     1671. 

Colenhrander,  H.  T.  Ueber  das  erste  Auftreten  des  Wortes  Aktie  in  den  Neder- 
landen,  in  Zeitschrift  fiir  des  gesammte  Handelsrecht.     1898. 

Collection  (A)  of  Scarce  and  Valuable  Treatises  upon  Metals,  Mines  and  Minerals. 
1740. 

Collection  (A)  of  some  Memorable  and  Weighty  Transactions  in  Parliament  in  the 
year  1678  and  afterwards,  in  relation  to  the  Impeachment  of  the  Earl  of  Danby, 
1695.     [Brit.  Mus.  100.  i.  76.] 

Collection  (A)  of  the  Names  of  Merchants  living  in  and  about  the  City  of  London. 
1677.     (Reprinted  1878.) 

Concise  (A)  View  of  the  Origin... of  the  Honourable  Society  of  the  Governor  and 
Assistants  of  London  for  the  New  Plantation  in  Ulster.     1822. 

Corbett,  Julian.     Sir  Francis  Drake.     1890. 

Corry,  James.  Precedents  and  Abstracts  from  the  Journals  of  the  Trustees  of  the 
Linen  and  Hempen  Manufacturers  of  Ireland  to  the  25th  of  March,  1737. 
[Linen  Hall  Library,  Belfast.] 

Coxe,  W.     Memoirs  of  Sir  Robert  Walpole.     3  vols.     1798. 

Crommelin,  Louis.  An  Essay  towards  improving  the  Hempen  and  Flaxen  Manu- 
factures in  the  Kingdom  of  Ireland.     1705.     [Lib.  Trin.  Coll.  Dublin.] 

Cromwell,  O.     Letters  and  Speeches,  ed.  Thos.  Carlyle.     5  vols.     1888. 

Cunningham,  Wm.     Alien  Immigrants  to  England.     1897. 

Growth  of  English  Industry  and  Commerce.     2  vols.     1903. 

Dalrymple,  Sir  John.     Memoirs.     2  vols.     1771-8. 

Darien  Papers.     (Bannatyne  Club.)     1849. 

Davenant,  Chas.     Works.     5  vols.     1771. 

Davidson,  John,  and  Gray,  Alex.     The  Scottish  Staple  at  Vere.     1909. 

Deane,  Charles.     The  First  Plymouth  Patent.     1854. 

Declaration  (A)  for  the  Certaine  Time  of  Drawing  the  Great  Standing  Lottery,  in 

Brown,  A.,  Genesis  of  the  United  States.     Vol.  ii. 
Defoe,  Daniel.     History  of  the  Union  of  Great  Britain.     1709. 
Delaune,  Thos.     Metropolis ;  or  the  Present  State  of  London.     1690. 

The  Present  State  of  London.     1681. 

Devon,  Frederick.     Issues  of  the  Exchequer.     1836. 

D'Ewes,  Sir  Simonds.  Autobiography  and  Correspondence,  ed.  by  J.  O.  Halliwell. 
2  vols.     1845. 

The  Journals  of  all  the  Parliaments  during  the  reign  of  Queen  Elizabeth. 

1682. 

Dictionarium  Rusticum,  Urbanicum  et  Botanicum.     1717. 

Dictionary  of  Legal  Decisions.     21  vols.     1801-10. 

Digges,  Sir  D.     A  Defence  of  Trade.     1615.     [Brit.  Mus.  1029.  c.  19.] 

Discourse  of  the  Rise  and  Power  of  Parliaments.     1677. 

Discourse  (A)  of  Trade  wherein  is  plainly  discovered  the  true  cause  of  the  great  want 

of  Money.     1675.     [Brit.  Mus.  8245.  a.  16.] 
Discovery  (The)  of  the  Large,  Rich  and  Beautiful  Empire  of  Guiana,  by  Sir  Walter 

Raleigh.     (Hakluyt  Society.)    1848. 
Dobbs,  Arthur.     Essay  on  the  Trade  and  Improvement  of  Ireland.     1729. 
Down  Survey.     Ed.  T.  A.  Larcom.     1851. 

Doyle,  J.  A.     The  English  in  America — The  Puritan  Colonies.     1887. 
Drake,  Sir  Francis.     The  World  Encompassed.     (Hakluyt  Society.)    1854. 


List  of  Authorities  xxxiii 

Dugdale^  Sir  Wm.     The  History  of  Imbankiiig  and  Draining  of  Divers  Fens  and 

Marshes.     1732. 
Duguid,  Chas.     The  Story  of  the  Stock  Exchange.     1901. 
Dunlop^  R.     A  Note  on  the  Export  Trade  of  Ireland  in  1641^  1G65  and  1669,  in 

Eng.  Hist.  Review,  vol.  xxii. 
Dunn,  Matthias.    An  Historical,  Geological  and  Descriptive  View  of  the  Coal  Trade 

of  the  North  of  England.     1844. 
Durham,  F.  Hermia.     Relations  of  the  Crown  to  Trade  under  James  I.  in  Trans,  of 

the  Royal  Hist.  Soc.     N.  S.  xiii. 
Early  Dutch  and  English  Voyages  to  Spitzbergen.     (Hakluyt  Soc.)    1904. 
Early  Voyages  and  Travels  to  Russia  and  Persia.     (Hakluyt  Soc.)    1887. 
Edwards,  Bryan.     History  Civil  and  Commercial  of  the  British  Colonies  in  the 

West  Indies.     3  vols.     1793-1801. 
Ehrenberg,  R.     Die  Amsterdamer  Aktienspekulation  im  xvii*"  Jahrhundert^  in 

Jahrbiicher  fiir  Nationalokonomie  und  Statistik.     1892. 

Das  Zeitalter  der  Fugger :  Geldkapital  und  Creditverkehr  im  16.  Jahrhundert. 

2  Bde.     1896. 

Hamburg  und  England  im  Zeitalter  der  Konigin  Elisabeth.     1896. 

Elsing,  H.     Notes  of  Debates  in  the  House  of  Lords.    1021.    (Camden  Soc.)    1870. 
Endemann,   W.      Studien   in  der   Romanisch-Kauonistischen   Wirthschafts-   und 

Rechtslehre.     2  vols.     1874-83. 
Epstein,  M.     Early  History  of  the  Levant  Company.     [1908.] 
Estobb,  W.     An  Historical  Account  of  the  Great  Level  of  the  Fens,  called  Bedford 

Level.     1793. 
Evelyn,  John.     Diary.     Bohn's  ed.     4  vols.     1859. 
Extracts  from  the  Records  of  the  Merchant  Adventurers  of  Newcastle-upon-T)me. 

(Surtees  Soc.)     1895. 
Fairman,  Wm.     The  Stocks  examined  and  compared.     1796, 
Felicius,  Hector.     Tractatus  de  communione  seu  societate.     1606. 
Fellowes,  W.  D.     Historical  Sketches  of  Charles  I.,  Cromwell,  Charles  II.     1828. 
Feniandez-Duro,  D.  C.     Armada  Espailola.     9  tom.     1895-1903. 
[Fleetwood,  Bishop.]    Chronicon  Preciosum  :  or,  an  Account  of  English  Money,  etc. 

1707. 
Forbonnais,  F.  V.  de.     Recherches  et  Couside'rations  sur  les  Finances  en  France 

depuis  1595  jusqu'en  1721.     6  tome.     1758. 
Force,  P.    Tracts... relating  principally  to  the  origin,  settlement  and  progress  of  the 

Colonies  of  North  America.     4  vols.     1836-46. 
Foster,  Wm.     The  English  Factories  in  India,  1618-21.     1906. 

„  „  „  1624-29.     1909. 

Foulis,  Sir  John.    Account  Book  of  Sir  John  Foulis  of  Ravelston.    (Scottish  History 

Soc.  Pubs.,  vol.  16.)     1894. 
Fountainhall,  Lord.    Chronological  Notes  of  Scottish  Affairs  from  1680-1701.    1822. 
Francis,  John.     Annals,  Anecdotes  and  Legends  of  Life  Insurance.     1853. 

Chronicles  of  the  Stock  Exchange.     1849. 

History  of  the  Bank  of  England.     2  vols.     1848. 

Freke,  John.     The  Prices  of  the  several  Stocks  and  other  publick  Securities. 

3  vols.     1715-22. 

Frobisher,  Martin.     The  Three  Voyages  of  Martin  Frobisher.     (Hakluyt  Society.) 

1867. 
Froude,  J.  A.     History  of  England.     12  vols.     1856-70. 
Galloway,  A.  L.     Annals  of  Coal  Mining.     1898. 


xxxiv  List  of  Authorities 

Gardiner,  S.  R.    Debates  in  the  House  of  Commons  in  1626.    (Camden  Soc.)    1873. 

History  of  England,  1603-16.     2  vols.     1863. 

„  „        1628-37.     2  vols.     1877. 

„  „        1649-60.     3  vols,  and  Supplement.     1894-1903. 

„  „        1603-49.     14  vols.     1889-93. 

Parliamentary  Debates  in  1610.     (Camden  Soc.)     1862. 

Gardner,  Ralph.     England's  Grievance  discovered  in  relation  to  the  Coal  Trade. 

1655.     (Reprint,  Philipson,  North  Shields,  1849.) 
Gibbon,  Edw.     Miscellaneous  Works.     5  vols.     1814. 
Gibson,  James.     History  of  Glasgow.     1777. 
Giffen,  Sir  Robt.     The  Growth  of  Capital.     1889. 

' Stock  Exchange  Securities.     1877. 

Gilbert,  Sir  Geoffrey.     Treatise  on  the  Court  of  Exchequer.     1758. 

Glasghu  Facies :  A  View  of  the  City  of  Glasgow,  ed.  J.  F.  S.  Gordon. 

Goldschmidt,  L.     Universalgeschichte  des  Haudelsrechts.     1891. 

Gonzalez,  T.     Documents  from  Simancas,  ed.  S.  Hall.     1865. 

Gordon,  J.  W.     Monopolies  by  Patents.     1897. 

Graham,  Wm.     The  One  Pound  Note.     1886. 

Graunt,  John,  Capt.    Natural  and  Political  observations... upon  the  Bills  of  Mortality. 

1665. 
Gross,  Chas.     The  Gild  Merchant.     2  vols.     1890. 

Grossmann,  J.     Die  Amsterdamer  Borse  vor  zwei  hundert  Jahren.     1876. 
Hakluyt,  Richard.     The  Principal  Navigations.     12  vols.     1903-6. 
Hall,  Hubert.     Antiquities  and  Curiosities  of  the  Exchequer.     1898. 

A  History  of  the  Customs-Revenue  in  England.     2  vols.     1892. 

Hannay,  David.     A  forgotten  Puritan  Colony  in  Ships  and  Men.     1910. 

Hanway,  Jonas.     Historical  Account  of  the  British  Trade  over  the  Caspian  Sea. 

4  vols.     1753. 
Hardinge,  W.  H.     On  Manuscript  Mapped  and  Townland  Surveys  in  Ireland  from 
1640  to  1688,  in  Trans.  Royal  Irish  Academy.     Vol.  xxiv. 

On  the  Circumstances  attending  the  outbreak  of  the  Civil  War  in  Ireland  on 

23rd  Oct.,  1641,  in  Trans.   Royal  Irish  Academy.     Vol.  xxiv.     Antiquities, 

Pt  VII. 

Harris,  John.     Navigantium  atque  Itinerantium  Bibliotheca.     2  vols.     1744. 

Hatton,  E.     A  New  View  of  London.     1708. 

Haward,  Capt.  L.    The  Charges  issuing  forth  of  the  Crown  Revenue  of  England  and 

Wales.     1660. 
Hawkins,  Sir  John.     Book  of  the  Whole  Navy,  in  Publications  Navy  Records  Soc. 

Vol.  XI.     1898. 
Hawkins  Voyages  (The)  (Hakluyt  Society),  1878. 
Hazard,  Ebenezer.     Historical  Collections.     2  vols.     1792-4. 
Heath,  J.  B.     Some  Account  of  the  Worshipful  Company  of  Grocers.     1829. 
Herbert,  Wm.     History  of  the  Twelve  Great  Livery  Companies.     2  vols.     1836-7. 
Herkless,  J.  and  Hannay,  R.  K.     The  Archbishops  of  St  Andrews.     1907,  etc. 
Het  Groote  Tafereel  der  Dwaasheid.     1720. 
Hewins,  W.  A.  S.     English  Trade  and  Finance.     1892. 
Heyd,  W.     Histoire  du  Commerce  du  Levant.     1885-6. 
Historic  (The)  Note  Book.     1891. 
History  and  Description  of  Fossil  Fuel,  the  Collieries  and  Coal  Trade  of  Great 

Britein.     1841. 
History  of  the  Trade  and  Manufactures  of  the  Tyne,  Wear  and  Tees.     1863. 


List  of  Authorities  xxxv 

Historye  of  the  Bermudaes  or  Summer  Islands.     (Hakluyt  See.)    1882. 
Hooke,  Andrew.     An  Essay  on  the  National  Debt  and  National  CapitaL     1750. 
Houghton,  John.     A  Collection  for  Improvement  of  Husbandry  and  Trade.     1692- 
1703. 

Collection  of  Letters  for  the  Improvement  of  Husbandry  and  Trade.    1681-2. 

Howell,  James.     Epistolae  Ho-Eliante.     1737. 

Londonopolis.     1667. 

Hume,  David,  Lord  Crossrigg.     Diary.     (Bannatyne  Club.)     1828. 

Hume,  Martin  A.  S.     The  Great  Lord  Burghley.     1898. 

Hunter,  Sir  W.  W.     History  of  British  India.     2  vols.     1899. 

Hutcheson,  Francis.     An  Inquiry  into  the  Original  of  our  Ideas  of  Beauty  and 

Virtue.     4th  ed. 
Hutchinson  Papers.     (Prince  Society.)     1865. 
Hyde,  J.  W.     The  Post  in  Grant  and  Farm.     1894. 

Ingram,  Dale.     An  Historical  Account  of  the  Several  Plagues  since  1346.     1765. 
Inventarie  (The)  of  the  Ship  Ayde,  in  The  Three  Voyages  of  Martin  Frobisher. 

1867. 
Irons,  James  Campbell.     Leith  and  its  Antiquities.     2  vols.     [1898.] 
Jannet,  C.     Le  Capital,  la  Speculation  et  la  Finance  au  xix®  Siecle.     1892. 
Jevons,  W.  S.     Investigations  in  Currency  and  Finance.     1884. 
John  Law  of  Lauriston,  in  A  Treatise  on  Money,  by  J.  S.  Nicholson.     1901. 
Jones,  E.  D.     Economic  Crises.     1900. 
Jonge,  J.  K.  J.  de.    De  Opkomst  van  het  Nederlandsch  gezag  in  Oost-Indie.    13  de. 

1862-90. 
Joyce,  Herbert.     History  of  the  Post  Office.     1893. 
Juglar,  Clement.     Des  Crises  Commerciales.     1889. 
Justice,  Alex.     A  General  Discourse  of  Commerce.     1707. 

A  General  Treatise  of  Money  and  Exchanges.     1707. 

Kane,  Robert,     llie  Industrial  Resources  of  Ireland.     1845. 

Keith,  Theodora.    Commercial  Relations  of  England  and  Scotland,  1603-1707.    1910. 

Kerr,  A.  W.     The  History  of  Banking  in  Scotland.     1902. 

King,  Chas.     The  British  Merchant  or  Commerce  Preserv'd.     3  vols.     1721. 

Gregory.     Natural  and  Political  Observations  on  the  State  of  England,  1696. 

1810. 

Kingsbury,  8.  M.    The  Records  of  the  Virginia  Company  of  London.    2  vols.    1906. 

Kirke,  Henry.     The  First  English  Conquest  of  Canada.     1871. 

Kleinschmidt,  A.     Augsburg,  Nurnberg  und  ihre  Handelsfiirsten  im  fun&ehnten 

und  sechszehnten  Jahrhunderte.     1881. 
Klerk  de  Reus,  G.  C.     Geschichtlicher  Ueberblick  der  administrativen  rechtlichen 

und   finanziellen   Entwicklung    der    Niederlandisch-Ostindischen   Compagnie. 

1894. 
Kowalewsky,  M.     Die  okonomische  Entwicklung  Europas  bis  zum  Beginn  der 

kapitalistischen  Wirtschaftsform.     1901-11. 
Labat,  J.  B.    Nouvelle  relation  de  TAfrique  occidentale  avec  I'etat  ancien  et  present 

des  compagnies  qui  y  fond  le  commerce.     5  tom.     1728. 
Laet,  J.  de.    Historie  ofte  jaerlijck  verhael  van  de  verrichtinghen  der  Geoctroyeerde 

West-Indische  Compagnie.     1644. 
Lambert,  J.  M.     Two  Thousand  Years  of  Gild  Life.     1891. 
Lancaster,  Sir  J.     Voyages  of  Sir  James  Lancaster  to  the  East  Indies      (Hakluyt 

Soc.)    1877. 
Lang,  Andrew.     Historical  Mysteries.     1904. 


xxxvi  List  of  Authorities 

Lannoy,  C.  de  and  Linden,  H.  van  der.     Histoire  de  I'Expansion  coloniale  des 

Peuples  Europeens — Neerlande  et  Danemark  (xvii«  et  xviii®  siecles).     1911. 
Laud,  Wm,  D.D.    The  Works  of  the  most  Rev^  father  in  God,  William  Laud,  D.D. 

7  vols.     1847-60. 
Lawrence,  Richard.    The  Interest  of  Ireland  in  its  Trade  and  Wealth  stated.    1682. 
Lawson,  W.  J.     History  of  Banking.     1850. 
Leake,  S.  M.     An  Historical  Account  of  English  Money.     1793. 
Lee,  W.     Daniel  Defoe :  his  Life  and  recently  discovered  writings.     3  vols.     1869. 
Lefroy,  Sir  J.  H.     Memorials  of  the  Bermudas.     2  vols.     1877-9. 
Lenge,  Robt.     The  True  Description  of  the  last  Voiage  of  Sir  Francis  Drake. 

(Camden  Soc.  Miscellany  v.)    1864. 
Lescure,  J.     Des  crises  generales  et  periodiques.     1910. 
Letter  and  Account,  signed  James  Marr,  clerk  of  the  manufactorie  at  Air,  in  the 

Scottish  Antiquary,  vol.  i. 
Letters  and  Papers  relating  to  the  First  Dutch  War,  1652-4,  ed.  S.  R.  Gardiner. 

(Pubs.  Navy  Records  Soc,  vols.  13,  17,  30.)    1898-1905. 
Levasseur,  E.     Recherches  Historiques  sur  le  Systeme  de  Law.     1854. 
Levett,  C.     A  Voyage  into  New  England  begun  in  1623  and  ended  in  1624.    (Mass. 

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Levy,  H.     Monopole,  Kartelle  und  Trusts.     1909. 

Lewis,  G.  R.     The  Stannaries  :  a  Study  of  the  English  Tin  Mines.     1908. 
Lewis,  S.     History  of  the  Parish  of  St  Mary,  Islington.     1842. 
Lex  Talionis :  or  the  Law  of  Marque  or  Reprisals.    1682.    [Brit.  Mus.  712 .  g .  18  (2).  ] 
Lex  Talionis,  in  a  Collection  of  the  Writings  of  the  Author  of  the  True-born 

Englishman,  1703.     (The  unauthorized  edition  of  Defoe's  Tracts.) 
Lingelbach,  W.  E.     The  Merchant  Adventurers  of  England.     Philadelphia.     1902. 
Lintum,  C.  te.     De  Merchant  Adventurers  in  de  Nederlanden.     1905. 
Locke,  John.     Works.     3  vols.     1727. 
Lockyer,  Chas.     An  Account  of  the  Trade  to  India.     1711. 
Lodge,  R.     Political  History  of  England,  1660-1702.     1910. 
London's  Account :  or  a  Calculation  of  the  Arbitrary  Taxations  within  the  lines  of 

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Lucas,  C.  P.     Historical  Geography  of  the  British  Colonies.     1906-. 
Luttrell,  Narcissus.     A  Brief  Historical  Relation  of  State  Affairs.     6  vols.     1857- 
Macaulay,  Lord.     History  of  England.     5  vols.     1849-61. 
M^Culloch,  J.  R.     Dictionary  of  Commerce.     1837. 

Collection  of  Scarce  Tracts  on  Commerce.     1859. 

Collection  of  Scarce  Tracts  on  Money.     1856. 

MacGeorge,  Andrew.     Old  Glasgow.     1880. 

Machyn,  Henry.     Diary,  1550-63.     (Camden  Soc.)     1848. 
Mackenzie,  E.     Descriptive  Account  of  Newcastle-on-Tyne.     1827. 
Mackenzie,  Sir  George.     Memorials  of  the  Affairs  of  Scotland.     1821. 
Mackinnon,  James.     The  Union  of  England  and  Scotland.     1896. 
Mackintosh,  John.     History  of  Civilization  in  Scotland.     4  vols.     1892-6. 
Macpherson,  David.     History  of  the  European  Commerce  with  India.     1812. 
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Monthly  Journal,  vol.  xviii. 
Maitland,  W.     History  of  London,  eds.  1754,  1756  and  1774. 
Malone,  Edward.     Inquiry  into  the  Authenticity  of  certain  Miscellaneous  Papers... 

attributed  to  Shakespeare.     1796. 
Malynes,  Gerard  de.     Center  of  the  Circle  of  Commerce.     1623. 


List  of  Authorities  xxxvii 

Malynes,  Gerard  de.     Consuetude  vel  Lex  Mercatoria.     1622. 

Tlie  Maintenance  of  Free  Trade.     1622. 

Martin,  F.     History  of  Lloyd's.     1876. 

Martin,  Germain.     La  Grande  Industrie  sous  le  Regne  de  Louis  XIV.     1899. 

Martin,  J.  B.     The  Grasshopper  in  Lombard  Street.     1892. 

Mason,  Capt.  J.     Captain  Jolni  Mason.     (Prince  Society.)     1887. 

Matthews,  W.     Hydraulia.     1835. 

May,  R.  E.     Das  Grundg^esetz  der  Wirthschaftskrisen.     1902. 

Merchant's  (Tlie)  Dayly  Companion.     By  J.  P.     1684. 

Michael,    W.     Der   Sudseeschwindel   vom  Jahre   1720,   in   Vierteljabrschrifl  fur 

Social-  und  Wirthschaftsgeschichte,  vi. 
Miege,  Guy.     The  Present  State  of  Great  Britain.     1707. 
Minsheu,  John.     Spanish-English  Dictionary.     1599. 

Monson,  Sir  W.    Naval  Tracts.    (Publications  Navy  Records  Soc.  xxii.,  xxiii.)    1902. 
Montague,  F.  C.     Political  History  of  England,  1603-60.     1907. 
Morellet,  M.  I'Abbe.    Memoire  sur  la  Situation  actuelle  de  la  Compagnie  des  Indes. 

1769. 

Examen  de  la  reponse  de  M.  N....au  Memoire  de  M.  I'Abbe  Morellet,  sur  la 

Compagnie  des  Indes.     1769. 

Mossman,  R.  C.     On  the  Price  of  Wheat  at  Haddington  from  1627  to  1897,  in 

Accountants'  Magazine,  1900. 
Motley,  J.  L.     The  Rise  of  the  Dutch  Republic.     3  vols.     1856. 
Mount,  G.     Relation  or  Journal  of  the  Beginning  and  Proceedings  of  the  English 

Plantation  settled  at  Plymouth  in  New  England,  1622,  in  Mass.  Hist.  Soc.  Coll. 

2nd  Series,  ix. 
Mun,  T.     England's  Treasure  by  Forraign  Trade.     1664. 
Munro,  Henry.     Statistics  relative  to  the  Northern  Whale  Fisheries,  in  Reports  of 

the  British  Association,  1853. 
Murdin,  Wm.     Collection  of  State  Papers,  1571-96.     1759. 
Murray,  David.     The  York  Buildings  Company.     1883. 

Murray,  Sir  James  A.  H.  New  English  Dictionary  on  Historical  Principles.   1884,  etc. 
Naunton,  Sir  R.     Fragmenta  Regalia.     1642. 
Navy  Records  Society  Publications. 
Neal,  D.     History  of  New  England.     1720. 
Neil,  Edward  D.     The  Virginia  Company  of  London.     1869.  ^ 
Nelson,  John.     History  of  the  Parish  of  St  Mary,  Islington.     1811. 
New  England,  General  History  of,  in  Mass.  Hist.  Soc.  Coll.,  2nd  Series,  v. 
Nicholson,  J.  Shield.     A  Treatise  on  Money.     1901. 
Nicholson,  Joseph,  and  Burn,  Richard.    History  of  Westmoreland  and  Cumberland. 

1777. 
Nicolas,  Sir  Harris.     Memoirs  of  Sir  Christopher  Hatton.     1747. 
Nicolas,  N.  H.     Life  of  William  Davison.     1823. 
North,  Hon.  Roger.     The  Lives  of  Francis  North,  Baron  Guilford  and  Sir  Dudley 

North.     3  vols.     1826. 
Norwood,  Richard.     Relations  of  Summer  Islands.    1625.    [Brit.  Mus.  679.  h .  14.] 
Observations  of  the  Scheme  of  Mr  Law  in  France  and  of  Sir  Humphrey  Mackworth 

in  Great  Britain.     [Brit.  Mus.  8223 .  d  .  7.] 
Observations  on  the  Religion... of  the  Turks,  to  which  is  added  the  State  of  the 

Turkey  Trade.     1771.     [Brit.  Mus.  1194.  c.  8.] 
Observations  touching  Trade  and  Commerce  with  the  Hollands,  1601,  in  M"=Culloch, 

Tracts  on  Commerce.     1859. 


xxxviii  List  of  Authorities 

Of  Trade.     By  J.  P.     1700.     [Brit.  Mus.  08226 .  ee .  2.] 

Orders  and  Constitutions  [of  the  Virginia  Company].     Brit.  Mus.  C .  32 .  g .  22. 

Overall^   W.   H.    and  H.   C.      Analytical   Indexes  to  vols.    ii.    and   viii.    of  the 

Remembrancia.     1870. 
Packman,  Francis.     France  and  England  in  North  America.     Boston.     1865. 
Page,  W.  S.     The  Russia  Company  from  1553  to  1660.     [1912.] 
Paper  and  Paper-making  Chronology.     1875. 
Papers  relating  to  the  Navy  during  the  Spanish  War.    (Pubs.  Navy  Records  Soc.  xi.) 

1898. 
Papillon,  A.  F.  W.     Memoirs  of  Thomas  Papillon.     1887. 
Park,  J.  J.     History  of  Hampstead.     1818. 

Parliamentary  or  Constitutional  History  of  England.     24  vols.     1751-61. 
Paterson,  W.     An  Inquiry  into  the  Reasonableness  and  Consequences  of  an  Union 

with  Scotland.     1706. 

Life  and  Writings  of  William  Paterson,  ed.  Bannister.     2  vols.     1858. 

Paul,  Jas.  Balfour.     The  Scottish  Ordinary  of  Arms.     1893. 

Peckard,  P.     Memoirs  of  the  Life  of  Mr  Nicholas  Ferrar.     1790. 

Peebles,  Charters  and  Documents  relating  to  the  Burgh  of  Peebles.    [Scottish  Burgh 

Record  Soc]     1872. 
Peele,  Jas.    The  Pathwaye  to  Perfectnes  in  th'  Accomptes  of  Debitour  and  Creditour, 

1569.     [Brit.  Mus.  712.1.23.] 
Pepys,  Samuel.     Diary.     Chandos  Lib.  ed.     1871. 
Pettus,  Sir  John.     Fodinae  Regales.     1670. 
Petty,  Sir  Wm.     Economic  Writings,  ed.  H.  C.  Hull.     1899. 

Several  Essays  in  Political  Arithmetic.     1755. 

Verbum  Sapienti.     Appendix  to  the  Political  Survey  of  Ireland.     1719. 

Philipps,  Fabian.     Regale  Necessarium.     1671. 

Phillpott,  N.     Reasons  and  Proposals  for  a  Registry  or  Remembrancer  of  all  Deeds 

and  Incumbrances  of  Real  Estates.     1671. 
Phips,  Sir  Wm.    Pietas  in  Patriam :  The  Life  of  his  Excellency  Sir  Wm  Phips,  Knt. 

1697.     [Brit.  Mus.  615 .  d .  2.] 
Plowden,  E.     The  Commentaries  or  Reports  of  Edmund  Plowden.     1816. 
Pollard,  A.  F.     The  Political  History  of  England,  1547-1603.     1910. 
Postlethwayt,  James.     History  of  the  Public  Revenue.     1759. 
Postlethwayt,  Malachy.     Universal  Dictionary  of  Trade  and  Commerce.     1774. 
Povey,  Charles.     General  Remark  No.   215,  in  An  Account  of  Fire  Insurance 

Companies,  by  F.  B.  Relton.     1893. 

Secret  History  of  the  Sun  Fire  Office.     1733. 

Prendergast,  J.  P.     The  Cromwellian  Settlement  of  Ireland.     1870. 
Price,  F.  G.  Hilton.     A  Handbook  of  London  Bankers.     1890-1. 
Price,  W.  Hyde.     The  English  Patents  of  Monopoly.     1906. 

Prince,  Thos.     A  Chronological  History  of  New  England.     5  vols.     1887-8. 
Purchas,    Samuel.      Hakluytus   Posthumus  or   Purchas  His   Pilgrims.      20  vols. 

1905-7. 
Records  of  a  Scottish  Cloth  Manufactory  at  Newmills,  Haddingtonshire,  1681-1703, 

edited  by  W.  R.  Scott.     (Scottish  Hist.  Soc.)     1905. 
Records  of  the  Convention  of  Royal  Burghs,  1615-1711.     5  vols.     1870-90. 
Records  of  the  Council  for  New  England,  ed.  C.  Deane.     1867. 
Relton,  F.  B.     An  Account  of  Fire  Insurance  Companies.     1893. 
Reresby,  Sir  John.     Memoire.     1736. 
Roberts,  L.     The  Merchants'  Mappe  of  Commerce.     1638. 


List  of  Authorities  xxxix 

Rogers,  J.  E.  Thorold.     The  First  Nine  Years  of  the  Bank  of  England.     1887. 

A  History  of  Agriculture  and  Prices  in  England.     7  vols.     1866-1902. 

Rooseboom,  M.  J.     The  Scottish  Staple  in  the  Netherlands.     11)10. 

Rosier's  Relation  of  Weymouth's  Voyage  to  the  Coast  of  Maine,  1606,  ed.  H.  S. 

Burrage.     (Georges  Society.)     1887. 
Royal  Letters,  Charters  and  Tracts  relating  to  the  Colonisation  of  New  Scotland, 

1621-38.     (Bannatyne  Club.)     1867. 
Ruddiman,  Thos.     Introduction  to  Mr  James  Anderson's  Diplomata  Scotiae.    1773. 
Ruding,  R.     Annals  of  the  Coinage  of  Britain.     3  vols.     1817. 
Rushworth,  John.     Historical  Collections.     7  vols.     1659-1701. 
Russia  at  the  end  of  the  Sixteenth  Century.     (Hakluyt  Soc.)     1866. 
Rymer,  T.     Fcedera.     20  vols.     1704-35. 
Sagadahoc  (llie)  Colony,  comprising  the  Relation  of  a  Voyage  into  New  England, 

ed.  H.  O.  Thayer.     (Prince  Soc.)    1892. 
Sainsbury,  E.  B.     The  Court  Minutes  of  the  East  India  Company,  1636-9.     1907. 
Salkeld,  W.     Reports  of  Cases  1  Wm  and  Mary  to  10  Anne.     3  vols.     1795. 
Sayous,  Andre  E.     Le  Fractionnement  du  Capital  Social  de  la  Compagnie  Neer- 

landaise  des  Indes  Orientales  aux  xvii**  et  xviii®  Siecles,  in  Nouvelle  Revue 

Historique  de  Droit  Fran^ais  et  Etranger.     1901. 
Schanz,  Georg.    Englische  Haudelspolitik  gegen  Ende  des  Mittelalters.    2  Bde.   1881 . 
Schmid,  Reinhold.     Die  Gesetze  der  Angelsachsen.     1832. 
SchmoUer,  G.  von.     Les  Phases  typiques  des  Crises  econoraiques,  in  Revue  Econo- 

mique  Internationale.     Tom.  i. 
Scott,  W.  R.    The  Fiscal  Policy  of  Scotland  before  the  Union,  in  Scottish  Historical 

Review,  Vol.  i.  p.  181. 

Scottish  Economic  Literature  to  1800.     1911. 

Sellers,  Maud.     Acts  and  Ordinances  of  the  Eastland  Company.    (Royal  Hist.  Soc.) 

1906. 
Sharpe,  Reginald  R.     London  and  the  Kingdom.     3  vols.     1894-5. 
Shaw,  W.  A.     The  Beginnings  of  the  National  Debt,  in  Owen's  College  Hist. 

Essays.     1902. 
Shurtleff,  N.  B.    Records  of  the  Colony  of  New  Plymouth  in  New  England.     1855-. 

Records  of  the  Governor  and  Company  of  the  Massachusetts  Bay.     5  vols. 

1853-4. 

Sieveking,  H.     Die  Casa  di  S.  Georgio  und  ihre  Bank,  in  Bank  Archiv,  1910. 

Die  kapitalistische  Entwicklung  in  dem  italienischen  Stadten  des  Mittelalters, 

in  Vierteljahrschrift  fiir  Social-  und  Wirthschaftsgeschichte,  vii. 

Sinclair,  Sir  John.     History  of  the  Public  Revenue  of  the  British  Empire.     3  vols. 
1803-4. 

Statistical  Account  of  Scotland.     21  vols.     1791-9. 

Sisley,  R.     The  London  Water  Supply.     1899. 

Slafter,  E.  F.    Sir  W.  Alexander  and  American  Colonisation.    (Prince  Soc.)    1873. 
Smiles,  Samuel.     The  Huguenots.     1867. 

Smith,  Adam.     Wealth  of  Nations,  ed.  J.  S.  Nicholson,  also  ed.  E.  Cannan.    1904. 
Smith,  J.  Toulmin.     Ordinances  of  Early  English  Gilds.     (Early  Eng.  Text  Soc.) 

1870. 
Smith,  Capt.  John.     The  Generall  Historie  of  Virginia,  New  England,  and  the 

Summer  Islands.     2  vols.     1907. 
Smith,  Simon.     True  Narration  of  the  Royall  Fishings  of  Great  Brittaine  and 

Ireland.     1640. 
Sombart,  Werner.     Die  Juden  und  das  Wirthschaftsleben.     1911. 


xl  List  of  Authorities 

Sombart,  Werner.     Der  Moderne  Kapitalismus.     2  Bde.     1902. 

Some  Account  of  Mines... with  an  Appendix  relating  to  the  Mine  Adventure  in 

Wales.     1707. 
Some  Considerations  of  the  Consequences  of  the  Lowering  of  Interest,  in  Works  of 

John  Locke.     Vol.  11.     1727. 
Somerville,   T.      History  of  Great  Britain  during  the  Reign  of  Queen   Anne. 

1798. 
Sparks,  Jared.     The  Library  of  American  Biography.     10  vols.     1837. 
S[preul],  J[ohn].     An  Accompt  Current  between  Scotland  and  England.     1705. 
Stanhope,  Earl.     History  of  England  during  the  Reign  of  Queen  Anne.     2  vols. 

1889. 
State  Papers  relating  to  the  Defeat  of  the  Spanish  Armada,  ed.  Prof.  J.  K.  Laughton. 

(Pubs.  Navy  Records  Soc,  vols.  1  and  2.)     1894-5. 
Stauber,  A.     Das  Haus  Fugger,  von  seinen  Anfangen.     1900. 
Stephens,  T.  A.     Bibliography  of  the  Bank  of  England.     1897. 
Stevens,  Henry.     The  Dawn  of  British  Trade  to  the  East  Indies  as  recorded  in  the 

Court  Minutes  of  the  East  India  Company.     1886. 
Stevens,  Capt.  John.     The  Royal  Treasury  of  England.     1725. 
Stith,  Wm.     History  of  the  First  Discovery  and  Settlement  of  Virginia.     1747. 
Stow,  J.     Survey  of  London,  ed.  Strype.     2  vols.     1754-5. 
Strachey,    Wm.      The   Historie  of  Travaile  into  Virginia  Britannia.      (Hakluyt 

Society.)     1849. 
Strange  News  from  th'  Indies,  or  East  India  Passages  further  discovered.     By 

J.  D[arrell].     1652. 
Strieder,  J.     Zur  Genesis  der  modernen  Kapitalismus.     1904. 
Stringer,  Moses.    Opera  Mineralia  Explicata,  or  the  Mineral  Kingdom  within  Great 

Britain  display'd.     1713. 
Strype,  John.     Life  of  Sir  Thomas  Smith.     1820. 
Stubbes,  Philip.     Anatomy  of  Abuses  in  England,  1583.     (New  Shakespeare  Soc.) 

1877-82. 
Sturtevant,    S.      Metallica:    or  the  Treatise  of  Metallica,    1612.      Reprinted   in 

Supplement  to  the  Series  of  Letters  Patent  and  Specifications... recorded  in  the 

Great  Seal  Patent  Office,  ed.  B.  Woodcroft.     1858. 
Succinct  (A)  but  compleat  History  of  the  rise,  progress  and  suppression  of  the 

Imperial  Company  of  the  Indies,  established  at  Ostend,  in  Navigantium  atque 

Itin.  Bib.,  ed.  John  Harris,  1744-8.     Vol.  i. 
Swift,  J.     Works.     Faulkner's  ed.     1767. 
The  Happy  Future  State  of  England.     1688. 
Thomson,  Richard.     Chronicles  of  London  Bridge.     1827. 
Thorpe,  B.     Diplomatarium  Anglicum  Aevi  Saxonici.     1865. 
Thuanus,  J.  A.  de.     Hist,  sui  Temporis.     7  vols.     1732. 
Thurloe,  John.     State  Papers.     7  vols.     1742. 

Townsend,  Dorothea.     Life  and  Letters  of  Mr  Endymion  Porter.     1897. 
Townshend,  H.     Historical  Collections.     1680. 
Unwin,  Geo.     Industrial  Organization  in  the  Sixteenth  and  Seventeenth  Centuries. 

1904. 
Victoria  County  Histories — Cornwall.     Vol.  i. 
Walford,  C.     The  Insurance  Cyclopaedia.     6  vols.     1871-80. 
Walker,  Clement.     Anarchia  Anglicana...by  Theodorus  Verax.     1649. 

The  Compleat  History  of  Independency.     1660-1. 

Ward,  John.     Lives  of  the  Professors  of  Gresham  College.     1740. 


List  of  Authorities  xli 

Warden,  Alex.  J.     The  Linen  Trade,  Ancient  and  Modem.     1864. 

Wells,  Samuel.     A  Collection  of  tlie  Laws  which  form  the  Constitution  of  the 

Bedford  Level  Corporation.     1828. 
Welwood,  Jas.     Memoirs  of  the  Most  Important  Transactions  in  England  for  the 

last  Hundred  Years.     1718. 
Wheeler,  John.     A  Treatise  of  Commerce.     1601. 
Whitelock,  B.     Memorials  of  English  Affairs.     1732. 
Whitworth,  Sir  Charles.     A  Collection  of  the  Supplies.     1765. 

State  of  the  Trade  of  Great  Britain.     1776. 

Whymper,  W.  N.     The  Royal  Exchange  Assurance,  an  Historical  Sketch.     1896. 

Willson,  Beckles.     The  Great  Company.     2  vols.     1900. 

Wirth,  Max.     Geschichte  der  Handelskrisen.     1890. 

Wiston-Glynn,  A.  W.     John  Law  of  Lauriston.     1907. 

Wiszniewski,  Prince  A.     Histoire  de  la  Banque  de  Saint-Georges  de  Genes.     1865. 

Wood,  Anthony  A.     Athense  Oxoniensis.     4  vols.     1813-20. 

Wood,  J.  P.     Memoirs  of  the  Life  of  John  Law.     1824. 

Wood,  William.     New  England's  Prospect,  1634.     (Prince  Soc.)     1866. 

Worcester,  Marquis  of.     The  Century  of  Inventions,  1663,  No.  15,  in  The  Life  of 

the  Second  Marquis  of  Worcester,  by  Henry  Dircks.     1865. 
Wright,  Thomas.     Queen  Elizabeth  and  her  Times.     2  vols.     1838. 
Yarranton,  Andrew.     England's  Improvement  by  Sea  and  Land.     2  pt.     1677-81. 
Zycha,  A.    Zur  neuesten  Literatur  (iber  die  Wirthschafts-  und  Rechtsgeschichte  des 

deutschen  Bergbaues,  in  Vierteljahrschrift  fiir  Social-  und  Wirthschaftsges- 

chichte,  v. 


IV.     PAMPHLETS 

A  Bill  for  the  Relief  of  the  Creditors  and  Proprietors  of  the  Mine  Adventure. 

[Brit.  Mus.  522  .  m  .  12 .  (22).] 
A  Brief  Account  of  the  Great  Oppressions  and  Injuries  which  the  Managers  of  the 

East  India  Company  have  acted  on  the  Lives,  Liberties  and  Estates  of  their 

fellow  Subjects.     [1698 .?]    [Bod.  Lib.  Pamphlets  6,  658  (24).] 
A  Briefe  Apologie  of  Certaine  New  Inventions  whereof  there  hath  bene  a  publicke 

View  taken  in  London.     [1593.]    Coll.  Broadsides  Soc.  Antiq.,  No.  91. 
A  Brief  Debate  upon  the  Dissolving  of  the  late  Parliament  and  whether  we  ought 

not  to  chuse  the  same  Gentlemen  Again.     1722. 
A  Briefe  Declaration  of  the  Present  State  of  Things  in  Virginia  [1616  }\  in  Brown, 

Alex.,  Genesis  of  the  United  States,  vol.  ii. 
A  Brief  Essay  on  the  Copper  and  Brass  Manufactures  of  England,  1712.     [Brit. 

Mus.  726.0.1.(3).] 
A  Brief  Narration  of  the  Originall  Undertakings  of  the  Advancement  of  Plantations, 

in  Coll.  of  Maine  Hist.  Soc. ,  vol.  ii. 
A  Brief  Narrative  of  the  Royal  African  Company's  Proceedings  with  their  Creditors. 

[Brit.  Mus.  8223  .  e  .  30.] 
A  Brief  Relation  of  Sir  Walter  Raleigh's  Troubles,  1669,  in  Harl.  Misc.,  vol.  iv. 
A  Brief  Relation  of  the  Discovery  and  Plantation  of  New  England  by  the  President 

and  Council,  1622,  in  Mass.  Hist.  Soc.  Coll.,  2nd  Series,  vol.  ix. 
A  Brief  View  of  the  late  Scots  Ministry ;  and  of  the  Reasons  the  Scots  had  to  wish 

for  a  Deliverance  from  them  by  the  Union,  1709,  in  Somers*  Tracts  (1751), 

vol.  XV. 

d 


xlii  List  of  Authorities 

Abstract  of  Proceedings  in  the  House  of  Commons  in  Relation  to  the  East  India 

Company  and  Trade,  1691. 
Account  of  the  Levant  Company.     [By  R.  Walsh.]     1825. 
Account  of  the  Value  of  Estates  subscribed  towards  the  Fund  for  a  National  Land 

Bank,  11  June  to  3  August,  1695.     [Brit.  Mus.  712 .  m  .  1 .  (43).] 
A  Collection  of  Advertisements,  Advices  and  Directions  relating  to  the  Royal  Fishery. 

1695.     [Brit.  Mus.  1029  .  e .  29.] 
A  Collection  of  the  Debates  and  Proceedings  in  Parliament  in  1694  and  1696  upon 

the  Inquiry  into  the  late  Briberies.     1695. 
A  Commission  to  Enquire  whether  Nicholas  Page  or  Sir  Nicholas  Halse  was  the  first 

Inventor  of  Cei-tain  Kilns  for  the  Drying  of  Malt,  1637,  in  Suppt.  to  the  Series 

of  Letters  Patent,  ed.  by  Bennet  Woodcroft.     1858. 
A  Declaration  concerning  the  generall  Accompts  of  the  Kingdome  [1642],  in  Somers' 

Tracts,  vol.  vi. 
A  Declaration  of  the  Right  Honourable  Robert,  Earl  of  Warwick.     1644.     [Brit. 

Mus.  E  .  265  .  (6).] 
A  Declaration  of  the  State  of  the  Colony  and  Affiaires  in  Virginia.     1620.     [Brit. 

Mus.  1447  .  c  .  11.] 
A  Deduction  of  the  whole  matter  relating  to  the  Lead-sheathing  of  his  Majesty's 

ships,    in   An   Account    of   several    new    Inventions.       1691.       [Brit.    Mus. 

534.  a.  27.] 
A  Description  of  the  Office  of  Credit.     1665.     [Brit.  Mus.  1339  .  f .  13.] 
A  Dialogue  between  Francesco  and  Aurelia  two  unfortunate  Orphans  of  the  City  of 

London,  1690,  in  Harl.  Misc.  (1746),  vol.  iv. 
A  Dialogue  between  two  Members  of  the  New  and  the  Old  East  India  Companies. 

[Bod.  Lib.  Pamphlets  6,  658(64).] 
A  Discourse  concerning  the  East  India  Trade,  in  Somers'  Tracts,  vol.  x. 
A  Discourse  consisting  of  Motives  for  the  Enlargement  and  Freedom  of  Trade. 

1645.     [Brit.  Mus.  1102  .  h  .  1 .  (3).] 
A  Discourse  of  Marriage  and  Wiving,  1615,  in  Harl.  Misc.  (1746),  vol.  ii. 
A  Discovery  of  Subterraneall  Treasure.    1639.    [Lib.  Trin.  Coll.  Dublin.    P .  gg .  40. 

No.  17.] 
Advertisement  and  Proposals  offered  by  Captain  John  Poyntz.     [1683.]    Brit.  Mus. 

816.  m.  18.  (52). 
A  Familiar  Letter  containing  an  Account  of  the  proceedings  of  the... Mine  Adven- 
turers of  England.     1720.     [Brit.  Mus.  726  .  m  .  12  .  (11).] 
A  Fund  for  granting  Annuities  with  terms  for  joining  the  Million  Bank.     [1695  Y\ 

Brit.  Mus.  712  .  m  .  1 .  (42). 
A  Just  and  Modest  Vindication  of  the  Two  Last  Parliaments  of  King  Charles  II.,  in 

State  Tracts  of  the  Reign  of  Charles  II.,  vol.  i.     1693. 
A  Letter  from  a  Lawyer  of  the  Inner  Temple  to  his  Friend  in  the  Country  concerning 

the  East  India  Stock.     1698.     [India  Office  Tracts,  vol.  268.] 
A  Letter  from  a  Parliament  Man  to  his  Friend,  1675,  in  State  Tracts  of  the  Reign 

ofCharlesIL,  vol.  II.     1692. 
A  Letter  from  a  Soldier  to  the  Commons  of  England,  1702,  in  State  Tracts  published 

during  the  reign  of  William  III.     Vol.  iii.     1705-7. 
A  Letter  to  a  Friend  concerning  the  East  India  Trade.    1696.    [India  Office  Tracts, 

vol.  268.] 
A  Letter  to  a  Friend  in  which  is  shewn  the  Inviolable  Nature  of  Publick  Securities. 

1717.     [Brit.  Mus.  8225 .  a  .  29.  ] 
A  Letter  to  a  Member  of  Parliament.     1700.     [Advocates  Lib.] 


List  of  Authorities  xliii 

A  Letter  to  a  Member  of  Parliament^  on  the  Resolution  of  the  House  to  settle  a 

Trade  to  the  South  Seas  of  America,  1711,  in  Somers'  Tracts  (1748),  vol.  u. 
A  Letter  to  a  Member  of  Parliament  showing  the  Injustice  of  the  proposal  made  by 

the  Old  East  India  Company.     1701.     [Bod.  Lib.  Godw.  Pamph.  2086(5).] 
A  Letter  to  a  New  Member  of  the  Honourable  House  of  Commons ;  touching  the 

Rise  of  all  the  Embezzlements  of  the  Kingdom's  Treasure,  1710,  in  Harl.  Misc. 

(1746),  vol.  VI. 
A  Letter... whereunto  is  added  avisos  from  several  places  of  the  taking  of  the  Island 

of  Providence  by  the  Spaniards.     1641.     [Brit.  Mus.  E  .  141  .  (10).] 
A  List  of  the  Estates  in  Ireland  belonging  to  the  Governor  and  Company  for  making 

Hollow  Sword-Blades.     [1709.]     Lib.  Trin.  Coll.  Dublin,  Press  A .  7 .  11. 
A  List  of  the  Governor  and  Court  of  Directors  of  the  Company  of  Mine  Adventurers. 

1727.     [Brit.  Mus.  522  .  m  .  12  .  (25).] 
A  List  of  the  Names  of  the  Subscribers  for  raising  the  Summe  of  one  million  sterling 

as  a  Fund  for  Insuring  Sliips  and  Merchandisse  at  Sea.     [1718.]    Brit.  Mus. 

8225  .  a  .  38. 
A  List  of  their  names,  who  by  their  Adventures  are  capable  of  being  chosen 

committees    by  the  East  India  Company  for   the  year   1679.      [Bob.    Lib. 

Pamphlets  6,  658  (28).] 
A  List  of  the  Names  and  Stocks  of  the  Governor  and  Company  of  the  Adventurers 

of   England    trading    into    Hudson's    Bay  (November,   1673).       Brit.    Mus. 

816  .  m  .  11 .  (101). 
An  Abstract  of  money  raised  in  England  by  the  Long  Parliament  from  Nov.  3, 1640 

to  Nov.  1659,  in  Harl.  Misc.,  vol.  vi. 
An  Abstract  of  Proposals  for  the  Bank  on  Tickets  of  the  Million  Adventure.    [Brit 

Mus.  816 .  m .  10  (20).] 
An  Abstract  of  the  Charter  granted  by  their  late  Majesties  to  the  Governor  and 

Company  for  making  Iron  with  Pit  Coal.     [Brit.  Mus.  816 .  m .  13  (9).] 
An  Abstract  of  the  Deed  or  Instrument  for  an  Union  of  all  Parties  concerned  in  the 

Mine  Adventure,  1710.     [Brit.  Mus.  522 .  m .  25  (9).] 
An  Abstract  of  the  Receipts  and  Issues  of  the  Publick  Revenue,  Taxes  and  Loans 

during  the  Reign  of  His  late  Majesty  King  William,  in  Somera'  Tracts  (1751), 

vol.  xn. 
An  Abstract  or  brief  Declaration  of  the  present  state  of  his  Majesties  Revenew. 

1651.     [Brit.  Mus.  E .  1951  (2).] 
An  Abstract    or  Short  Account  of   the  Duty  laid    upon   Paper.      [Brit.    Mus. 

816.  m.  12(40).] 
An  Account  of  some  Transactions  in  the  Honourable  House  of  Commons  and  before 

the  Privy  Council,  relating  to  the  East  India  Company,  1693,  in  Somei*s'  Tracts, 

vol.  X. 
An  Account  of  the  clear  Profits  of  extracting  Silver  out  of  Lead  by  the  Governor 

and  Company  of  the  Mine  Adventurers  of  England.      1705.     [Brit   Mus. 

622.  m.  12.(9).] 
An  Account  of  the  French  Usurpation  of  the  Trade  of  England.    1679.    [Brit  Mus. 

1102.  h.  1.(15).] 
An  Account  of  the  late  Scots  Invasion  as  it  was  opened  by  my  Lord  Haversham,  in 

the  House  of  Lords  on  25th  February,  170f .     1709.     [Brit.  Mus.  101 .  c  .  42.] 
An  Account  of  the  National  Land  Bank.     [Brit  Mus.  816 .  m  .  10 .  (6).] 
An  Account  of  the   Proceedings  of  the  Directors  [of  the   Mine  Adventure]  in 

relation    to    the    Accounts,    their    Charter    and  other    affairs.    [Brit.    Mus. 

522 .  m .  12 .  (33).] 

(22 


xliv  List  of  Authorities 

An  Account  of  the  Proceedings  of  the  Directors  [of  the  Mine  Adventure]  with 

Mr  D.  Peck.     [?  1708.]     Brit.  Mus.  522 .  m .  12 .  (11). 
An  Advertisement,  shewing  that  all  former  objections  against  the  Mill'd-Lead 

Sheathing  have  been  answered  by  the  Navy- Board  themselves.     1696.     [Brit. 

Mus.  816.  m.  7.  (122).] 
An  Advertisement  to  all  that  are  concerned  in  the  use  of  Sheet  Lead,  demonstrating 

that  Cast- Lead  for  covering  of  Churches  is  worse  and  dearer  than  Mill'd  Lead. 

1702.     [Brit.  Mus.  T .  100* .  (223*).] 
An  Answer  to  several  objections  against  the  Mine  Adventure.     1698.     [Brit.  Mus. 

522.  m.  12.  (46).] 
An  Answer  to  the  Proposal  for  the  universal  use  of  Irish  Manufactures.     1720. 
An  Answer  to  two  Letters  concerning  the  East  India  Company.    1676.    [Brit.  Mus. 

1029.  g.  22.  (2).] 
An  Argument  proving  that  it  is  more  to  the  Interest  of  the  Government  and  the 

Nation  of  England  that  the  Forfeited  Estates  in  Ireland  be  purchased  by  an 

Incorporated  Company  than    by  a  single  Purchaser.      1701.      [Brit.   Mus. 

8225.  c.  44.] 
An  Argument  proving  that  the  South  Sea  Company  are  able  to  make  a  Dividend  of 

38  per  cent,  for  twelve  years.     1720. 
A  Narrative  concerning  the  Salt  Works  in  the  North,  in  Reprints  of  Rare  Tracts,  by 

W.  A.  Richardson.     Vol.  iii. 
An  Essay  on  the  East  India  Trade.    1770.    [India  Office  Pamphlets,  53 .  A  .  11 .  (5).] 
An  Essay  towards  the  History  of  the  last  Ministry  and  Parliament,  1710,  in  Somers* 

Tracts  (1748),  vol.  ii. 
An  Essay  upon  Industry  and  Trade.     1706.    [Advocates  Lib.] 
An  Essay  upon  Loans,  1710,  in  Somers'  Tracts  (1748),  vol.  ii. 
An  Essay  upon  Public  Credit.     1710.     [Brit.  Mus.  E .  1986 .  (3).] 
An  Essay  upon  the  Necessity  of  raising  the  value  of  twenty  millions  of  pounds  at 

least  according  to  Dr  Chamberlain's  method.     [Brit.  Mus.  1390 .  e .  1.] 
A  New  Abstract  of  the  Mine  Adventure.     [1698.]    Brit.  Mus.  726 .  m .  25 .  (2). 
A  New  Year's  gift  for  the  directors  with  some  account  of  their  plot  against  the  two 

insurances.     1721.     [Guildhall  Lib.] 
An  Exact  and  Curious  Survey  of  the  East  Indies  even  to  Canton,  1616,  in  Somers' 

Tracts,  vol.  ix. 
An  Exact  List  of  all  the  Bubbles,  1721,  in  Somers'  Tracts  (1751),  vol.  xvi. 
An  Examination  and  Explanation  of  the  South  Sea  Company's  Scheme  for  taking  in 

the  Public  Debts.     1720.     [Brit.  Mus.  712 .  g .  19 .  (7,  8).] 
An  Exhortation,  to  stir  up  the  Mindes  of  all  her  Majesty's  faithful  Subjects  to 

defend  their  Countrey  in  this  dangerous  Time,  1588,  in  Harl.  Misc.  (1744), 

vol.  I. 
Angliae  Tutamen.     1695.     [Brit.  Mus.  1029.  e.  14.] 
An  Historical  Account  of  the  Rise  and  Growth  of  the  West  India  Colonies  and  of 

the  Great  Advantages  they  are  to  England  in  respect  to  Trade,  1690,  in  Harl. 

Misc.,  vol.  II. 
An  Inquiry  into  the  Miscarriages  of  the  last  Four  Years  Reign.     1714. 
Answer  of  the  East  India  Company  to  the  Allegations  of  the  Turky  Company. 

[Brit.  Mus.  522.1.5.(8).] 
Anti-Projector  or  the  History  of  the  Fen  Project.     [Brit.  Mus.  725 .  d .  35.] 
A  Penny  Post.     1659.     [Brit.  Mus.  1391 .  e .  25.] 
A  Penny  Well- Bestowed,  or  a  Brief  Account  of  the  new  Design,  contrived  for  the 

great  Increase  of  Trade  and  Correspondence.     1680.     [Guildhall  Lib.] 


List  of  Authorities  xlv 

A  Plaine  Description  of  the  Bermudas,  by  W.  C,  1613,  in  Force  Tracts,  vol.  iii., 

No.  3. 
A  Proclamation  prohibiting  his  Majesties  subjects  to  trade  within  the  limits  assigned 

to  the  Governor  and  Company  of  Adventurers  of  England  trading  into  Hudson's 

Bay,  except  those  of  the  Company  [31  March,  1688].    Bod.  Lib.  Ash.  H .  23 .  (362). 
A  Proposal  agreed  unto  for  the  more  Eflfectual  Support  and  carrying  on  the  Trade 

to  Africa.     [Brit.  Mus.  816  .  m  .  11  .  (4).] 
A  Proposal  for  Settling  Jointures  and  granting  Annuities  after  the  rate  of  40/.  per 

cent,  per  annum.     1714.     [Brit.  Mus.  8235  .  a  .  49.] 
A  Proposition  for  Remeding  the  Debasement  of  Coyne  in  Scotland.     [St  Andrews 

Univ.  Lib.  Pamphlets,  c.lO  .  20  .  (10).] 
A  Publication  by  the  Counsell  of  Virginia  touching  the  Plantation  there.     1610. 

[Soc.  Antiq.  Broadsides,  No.  122.] 
A  Record  of  some  Worthie  Proceedings  in  the  Honourable,  Wise  and  FaithfuU 

House  of  Commons  in  1611,  in  Somers'  Tracts  (1752),  vol.  xui. 
A  Remonstrance  of  the  State  of  the  Kingdom,  Dec.  1, 1641,  in  Rushworth's  Historical 

Collections,  vol.  v. 
A  Report  from  the  Commissioners  appointed  to  take  the  Publick  Accounts,  1714,  in 

Somers'  Tracts  (1748),  vol.  ii. 
A  Representation  of  the  Advantages  that  would  arise  to  this  Kingdom  by  the 

erecting  and  improving  of  Manufactories.     1683.     [Advocates  Lib.] 
A  Representation  of  the  Loyal  Subjects  of  Albinia.    1712.    [Brit.  Mus.  104  .  a  .  76.] 
Armour,  J.     A  Premonitor  Warning  or  Advice.     1702. 

A  Proposal  to  supply  the  Defect  of  Money.     1696. 

Articles  concluded  and  agreed  upon  by  the  Society  of  the  White  Writing  and 

Printing  Paper  Manufactory  at  Edinburgh.     1695.     [Brit.  Mus.  1391 .  c  .  21.] 
Articles  of  Agreement  and  Subscription  between  His  Highness  Prince  Rupert  and 

Divers  Noble  and  Honourable  Persons  and  others,  for  the  Undertakers  for 

working  of  Mines  Royal  in  the  Counties  of  Cardigan  and  Merioneth.     1670. 

[Brit.  Mus.  C.27.f.  1.] 
Articles  of  Agreement  between  the  Governor  and  Company  of  the  Copper  Miners  in 

England,  and  Thomas  Chambers,  Junr.     1725.     [Brit.  Mus.  522  .  m .  12 .  (3).] 
Articles  of  Agreement  between  the  Royal  Free  Burrows  of  Scotland  and  Nicholas 

Dupin.     1694.     [Advocates  Lib.] 
Arwaker,  E.     Fons  Perennis,  a  Poem  on  the  Invention  of  making  Sea  Water  fresh. 

1686. 
A   scheme    for    advancing    the  Trading    stock    [Mine  Adventure].      Brit.    Mus. 

622  .  m  .  13  .  (32). 
A  scheme  for  making  a  fund  for   granting   annuities   for  lives.      [Brit.   Mus. 

712.  m.  1.(33).] 
A  Scheme  of  Scotland's  product  and  manufactures.     [Advocates  Lib.] 
A  Second  Advertisement  relating  to  Lead-Sheathing  upon  the  Rising  Eagle.     1700. 

[Brit.  Mus.  816.  m.  7.  (127).] 
A  Settlement  of  the  Mine  Adventure.     [1698.]    Brit.  Mus.  522 .  m  .  12 .  (38). 
[Asgill,  John.]    Several  Assertions  proved  in  order  to  create  another  species  of 

Money  than  Gold  and  Silver.     1696.     Reprint,  Econ.  Tracts,  Baltimore. 
A  Short  Accompt  of  the  first  Motives  and  Reasons  for  the  Mill'd-Lead  Sheathing, 

its  Excellency.     1700.     [Brit.  Mus.  T.  100*.  (221).] 
A  Short  Account  of  the  profit  and  Security  which  all  persons  will  enjoy  who  advance 

money  by  way  of  loan  to  increase  the  stock  and  dividend  of  the  Mine  Adven- 
turers.    [Brit.  Mus.  522  .  m  .  12  .  (29).] 


xlvi  List  of  Authorities 

A  Short  and  True  Account  of  the  Importance  and  Necessity  of  Settling  the  African 

Trade.     [1712  ?]     Brit.  Mus.  816  .  m  .  11  .  (12). 
A  Short  and  True  Relation  concerning  the  Soap  Business.     1641.     [Brit.  Mus. 

E  .  156  .  (6).] 
A  Short  Collection  of  the  Most  Remarkable  Passages  from  the  Originall  to  the 

Dissolution  of  the  Virginia  Company.     [Brit.  Mus.  C  .  32  .  g  .  22.] 
A  short  History  of  the  Last  Parliament,  by  James  Drake,  M.D.,  1699,  in  Somers' 

Tracts  (1750),  vol.  viii. 
A  Short  State  of  the  Case  of  the  Company  of  Mine  Adventurers.     1710.     [Brit. 

Mus.  522  .  m  .  12  .  (8).] 
A  Spark  of  Friendship,  1588,  in  Harl.  Misc.  (1745),  vol.  in. 
A  Speech  made  the  21st  of  June,  1715,  upon  the  question  about  impeaching  his 

Grace  the  Duke  of  Ormond.     1715. 
A  Speech  without  Doore  concerning  the  Exportation  of  Wool.     [1700  ?]    Advocates 

Lib. 
At  a  General  Court  of  the  Adventurers  for  the  General  Joint-stock  to  the  East 

Indies,  holden  Nov.  11,  1693.     [Brit.  Mus.  816 .  m .  11 .  (80).] 
A  Treatise  on  Wool  and  Cattel.     1677.     [Brit.  Mus.  1102 .  h .  1 .  (9).] 
A  Treatise  touching  the  East  India  Trade.     [India  Office  Tracts,  vol.  268.] 
A  True  Copy  of  Several  Affidavits  and  other  Proofs  of  the  Largeness  and  Richness 

of  the  Mines  of  the  late  Sir  Carbeiy  Price.    1698.    [Brit.  Mus.  726 .  m  .  25 .  (1).] 
A  True  Declaration  of  the  Estate  of  the  Colonie  in  Virginia,  1610,  in  Force  Tracts, 

vol.  III. 

A  True  Declaration  of  the  Horrid  Conspiracy  against  the  late  King — Copies  of  the 

Informations  relating  to  the  Horrid  Conspiracy.    1685.    [Brit.  Mus.  f .  18 .  (1,  2).] 
A  True  Discovery  of  the  Projectors  of  the  Wine  Project  out  of  the  Vintners'  Own 

Orders.     1641.     [Brit.  Mus.  E .  165  .  (13).] 
A  True  Relation  of  the  Illegal  Proceedings  of  the  Somers'  Islands  Company  in  the 

Court  at  London.     1678.     [Brit.  Mus.  10470 .  e .  12.] 
A  True  Relation  of  the  Just  and  Unjust  Proceedings  of  the  Somers'  Islands  Company. 

1676.     [Brit.  Mus.  601 .  i .  21.] 
A  True  Relation  of  what  passed  between  the  English  Company  trading  to  the  East 

Indies  and  the  Governor  and  Company  of  the  Merchants  of  London  trading  to 

the  East  Indies.     [1698.]     Brit.  Mus.  816 .  m .  11 .  (88). 
A  True  Remonstrance  of  the  State  of  the  Salt  Business  by  the  Societie  of  Salt- 
Makers  of  South  and  North  Shields  and  of  Scotland.     [1638.]    Soc.  Antiq. 

Broadsides,  No.  310. 
Awake  O  England :  Or,  the  People's  Invitation  to  King  Charles,  in  Harl.  Misc.,  vol.  i. 
Bank  Credit ;  or  the  Usefulness  and  Security  of  the  Bank  of  Credit  examined.    1678. 
Barbon,  N.     A  Discourse  of  Trade.     1690.     Reprint,  Econ.  Tracts,  Baltimore. 
[Bentley,  Richard.]    A  Proposal  for  building  a  Royal  Library.     1697.     [Brit.  Mus. 

816.  m.  12.  (32).] 
Bethell,  Slingsby.     A  True  and  Impartial  Narrative  of  the  most  material  Debates 

and  Passages  in  the  last  Parliament,  1659,  in  Somers'  Tracts,  vol.  iv. 
Beware  of  Bubbles.     1729,  1730  't    [Brit.  Mus.  816 .  m .  13 .  (14).] 
[Binning,  John.]    A  Letter  to  a  Member  of  Parliament.     [1704.] 
Book  of  Vouchers  to  prove  the  Case  and  Defence  of  the  Deputy  Governor  and 

Directors  of  the  Company  of  Mine  Adventurers,  Pts  1  and  2.     [Brit.  Mus. 

102 .  k  .  37 ;  522  .  m  .  12  .  (43).] 
Brereton,  John.     A  Brief  and  True  Relation  of  the  Discovery  of  the  North  Part  of 

Virginia,  1602,  in  Coll.  Massachusetts  Hist.  Soc,  3rd  Series,  vol.  viii. 


List  of  Authorities  xlvii 

Briscoe,  John.     Advice  to  the  Freeholder.     [Brit.  Mus.  712  .  m .  1 .  (46).] 

The  following  proposals  and  Accounts  of  a  National  Land  Bank  having  been 

printed  at  London.     [1695.]     Brit.  Mus.  8223 .  e .  7  .  (5). 

Proposals  for  Raising  money  for  the  National  Land  Bank,  Aug.  7,  1696. 

[Brit.  Mus.  712.  m.  1.(44).] 

Britaine,  William  de.     The  Dutch  Usurpation,  1672,  in  Harl.  Misc.,  vol.  iii. 

Britain's  Buss,  1616,  in  Arber's  English  Garner,  vol.  iii. 

Britannia  Jjanguens,  1680,  in  M<^Culloch's  Tracts  on  Commerce,  1856. 

Brown,  John.     A  Brief  Remonstrance  of  the  grand  Grievances  suflFered  by  Sir  Paul 

Pyndar.     1680. 
BurghJey.     Notes  of  Queen  Elizabeth's  Reign,  in  Murdin,  State  Papers.     1571-96. 
Bushell,  Thos.     A  Just  and  True  Remonstrance  of  His  Majesties  Mines  Royal  in 

Wales.     1642.     [Brit.  Mus.  C .  27  .  f .  1 .  (1).] 
Butler,  Samuel.     A  Letter  from  Mercurius  Civicus  to  Mercurius  Rusticus,  1643,  in 

Somers'  Tracts  (1750),  vol.  v. 
Carey,  Walter.    The  Present  State  of  England,  1627,  in  Harl.  Misc.  (1745),  vol.  in. 
[Carte,  Thos.  ]    A  Full  Answer  to  a  By-stander.    1742.    [Brit.  Mus.  1103 .  f .  16 .  (3).] 
Cary,  J.    Some  considerations  relating  to  the  carrying  on  of  the  Linnen  Manufacture 

in  Ireland  by  a  joint-stock.     [1704.] 
Cause  of  the  Decay  of  Coin  and  Trade,  in  Harl.  Misc.,  vol.  iv. 
Certain  Considerations  relating  to  the  Royal  African  Company.     1680.     [Brit.  Mus. 

712.  f.  19.  (1).] 
Chamberlain,  Hugh.     A  Bank  Dialogue.     [1696.]    Brit.  Mus.  8223 .  e  .  7  .  (6). 

A  Rod  for  a  Fool's  Back.     [Brit.  Mus.  8227  .  b .  7.] 

Charter  of  the  Corporation  of  the  Amicable  Society.  1710.   [Brit.  Mus.  1027 .  i .  19 .  (1).  ] 

Child,  Josia.  Treatise  wherein  it  is  demonstrated  that  the  East  India  trade  is  the 
most  national  of  all  foreign  trades,  1681,  in  Somers'  Tracts,  vol.  iv. 

Clutterbuck,  R.  H.     A  Dismal  Depression  in  1622. 

Collins,  John.     Salt  and  Fishery.     1682.     [Brit.  Mus.  981 .  b  .  6.] 

Considerations  on  the  Present  State  of  the  Nation  as  to  Publick  Credit,  Stocks,  the 
Landed  and  Trading  Interests.     1720.     [Brit.  Mus.  104 .  c .  26.] 

Cooke,  John.     Poor  Man's  Case.     1648.     [Brit.  Mus.  1102  .  h  .  1 .  (5).] 

Cope,  Sir  Walter.  An  Apology  for  the  late  Lord  Treasurer,  in  Collectanea  Curiosa, 
vol.  I. 

Cornwaleys,  Sir  Charles.  A  Discourse  of  the  State  of  Spayne,  1607,  in  Somers' 
Tracts  (1761),  vol.  xiv. 

Correspondence  between  Sir  Henry  Bennet  and  the  Duke  of  Ormond,  in  Miscel- 
lanea Aulica,  ed.  T.  Brown,  1702. 

Cotton,  Sir  Robt.  An  Abstract  out  of  the  Records  of  the  Tower  touching  the  King's 
Revenue.     1642.     [Brit.  Mus.  E  .  107  .  (20).] 

The  Danger  wherein  the  Kingdome  now  Standeth  and  the  Remedie,  1627,  in 

Somers'  Tracts  (1750),  vol.  v. 

[Davenant,  C]    A  Discourse  upon  Grants  and  Resumptions.     1700. 

Davies,  John.     An  Answer  to  those  Printed  Papers  published  in  March  last,  1640, 

by  the  late  Patentees  of  Salt.     1641.     [Brit.  Mus.  1029  .  e  .  31.] 
Defoe,  D.     The  Chimera ;  or  the  French  way  of  paying  National  Debts  laid  open. 

[1720.] 
■ The  Consolidator  or  Memoirs  of-Sundry  Transactions  from  the  World  in  the 

Moon.     1705. 

An  Essay  upon  Projects.     1697. 

The  Freeholder's  Plea  against  Stock  Jobbing  Elections  of  Parliament  Men, 


xlviii  List  of  Authorities 

1701,  in  A  True  Collection  of  the  Writings  of  the  Author  of  the  True  Bom 
Englishman.     1703. 

Defoe,  D.  The  Villany  of  Stock  Jobbers  Detected,  in  A  True  Collection  of  the 
Writings  of  the  Author  of  the  True  Born  Englishman.     1705. 

Dud.  Dudley's  Metallum  Martis ;  or  Iron  made  with  Pit  Coale,  Sea  Coale,  &c.,  1666, 
in  Supplement  to  the  Series  of  Letters  Patent  and  Specifications  in  the  Great 
Seal  Patent  Office,  ed.  B.  Woodcroft.     Vol.  i.     1868. 

Egleton,  John.     A  Letter  written  to  a  Member  of  Parliament  relating  to  Trade, 

1702,  in  Somers'  Tracts  (1748),  vol.  111. 
Elking,  H.     A  View  of  the  Greenland  Trade.     1726. 

England's  Almanack,  showing  how  the  East  India  Trade  is  Prejudicial!  to  this 

Kingdom.     [Brit.  Mus.  816  .  m  .  11 .  (92).] 
England's  Petition  to  their  King.     1643.     [Brit.  Mus.  E  .  100  .  (27).] 
England's  Tears  for  the  Present  Wars,  1644,  in  Somers'  Tracts,  vol.  xiii. 
England's  Wants :  or  Several  Proposals  probably  beneficial  to  England,  1686,  in 

Somers'  Tracts  (1751),  vol.  xiv. 
England's  Way  to  win  Wealth  and  to  employ  Ships  and  Mariners,  by  Tobias 

Gentleman,  1614,  in  Harl.  Misc.,  vol.  iii. 
English,  Henry.     A  complete  view  of  Joint-stock  companies  formed  during  the 

years  1824  and  1825.     1827. 
Estimate  of  the  Debt  of  Her  Majesty's  Navy,  1711^  in  Somers'  Tracts,  vol.  11. 
Estimate  of  the  Profits  from  the  Meliorating  of  Oils  under  a  Patent  of  7th  May, 

1720.     [Advocates  Lib.] 
Extracts  from  several  Mercators,  being  considerations  on  the  State  of  British  Trade. 

1713.     [Brit.  Mus.  8246 .  b .  9.] 
Extracts  from  two  Acts  of  Parliament  relating  to  the  Governor  and  Company  of 

Undertakers  for  raising  the  Thames  Water  in  York  Buildings.     [1720.]    Brit. 

Mus.  357 .  b  .  3 .  (58). 
Fitzgerald,  R.     The  Conditions  upon  which  the  Patentees  for  making  Salt  Water 

fresh  and  wholesome  intend  to  conclude  with  such  persons  that  please  to  agree 

with  them  for  the  use  of  this  Invention.     [1685  }]    Brit.  Mus.  712 .  g .  17 .  (15). 

Salt- Water  Sweetned  or  a  true  Account  of  the  Great  Advantages  of  this  New 

Invention.     1683.     [Brit.  Mus.  712 .  g .  17 .  (7).] 

Fletcher,  Andrew.     Scotland's  Interest :  Or  the  great  Benefit  and  Necessity  of  a 

Communication  of  Trade  with  England.     1704. 
Forde,  Sir  Edward.    Experimental  Proposals  how  the  King  may  have  money  to  Pay 

and  Maintain  his  Fleets,  1666,  in  Harl.  Misc.  (1746),  vol.  iv. 
Fortrey,   Samuel.     England's  Interest  and  Improvement.     1663.     [Reprint,   ed. 

J.  H.  Hollander,  Baltimore,  1907.] 
Godfrey,  Michael.     A  Short  Account  of  the  Bank  of  England,  in  Somers'  Tracts 

(1748),  vol.  II. 
Gorges,  Sir  Fernando.     America  Painted  to  the  life,  in  Collections  of  the  Maine 

Hist.  Soc.  1847,  vol.  11. 

A  Brief  Narration  of  the  originall  Undertakings  of  the  Advancement  of 

Plantations  into  the  Parts  of  America,  especially  New  England.     1658.     Coll. 
Maine  Hist.  Soc.  11.     1847. 

Gosse,  Wm.     How  to  advance  the  Trade  of  the  Nation,  in  Harl.  Misc.,  vol.  iv. 
Graves,  E.     A  brief  Narrative  of  the  Cases  of  Sir  W.  Courten  and  Sir  Paul  Pyndar. 

1679.     [Brit.  Mus.  515 .  k  .  21 .  (5).] 
Great  Britain's  Union,  and  the  Security  of  the  Hanover  Succession  considered,  1706, 

in  Somers'  Tracts  (1751),  vol.  xv. 


List  of  Authorities  xlix 

Greene,  R.     A  Quip  for  an  upstart  Courtier :  or  a  Quaint  Dispute  between  Velvet- 
breeches  and  C'loth-breeches,  1592,  in  Harl.  Misc.  (1745),  vol.  v. 
Grenvill,  Sir  Foulk.     The  Five  Years  of  King  James,  1643,  in  Harl.  Misc.  (1746), 

vol.   VII. 

[Haldane,  Patrick.]    The  Case  of  the  Forfeited  Estates  in  Scotland,  considered. 

1718.     [St  Andrews  Univ.  Lib.] 
Harcourt,  Herbert.     A  Relation  of  a  Voyage  to  Guiana,  1613,  in  Harl.  Misc., 

vol.   VI. 
Hill,  Aaron.     An  Impartial  Account  of  a  New  Discovery  to  make  a  pure,  sweet  and 

wholesome  oil  from  tlie  fruit  of  the  Beech  Tree.     1714. 

An  Impartial  State  of  the  Case  between  the  Patentee,  Annuitants  and  Shares 

in  the  Beech-Oil  Company.     1714. 

Proposals  for  a  Beech  Oil  Company.     [1714  }"] 

Proposals  for  raising  a  Stock  of  £100,000  for  laying  up  great  quantities  of 

Beech-Mast  for  two  years.     1714.     [Brit.  Mus.  T .  1856  (1).] 

Historical  Account  of  the  Bank  of  Scotland.     1728. 

Holland,  John.     The  Ruine  of  the  Bank  of  England  and  of  all  Publick  Credit 

inevitable.     1715. 
Hutcheson,  Archibald.     A  Collection  of  Calculations  and  Remarks  relating  to  the 

South  Sea  Scheme.     1720.     [Brit.  Mus.  522 . 1 .  8  .  (2).] 

Computations  relating  to  the  Public  Debts.     [1717.]     Reprinted  1720. 

Index  Rerum  and  Vocabulorum  for  the  use  of  Free-holders  of  Counties  and  Freemen 

of  Corporations.     1722.     [Brit.  Mus.  8135  .  i .  1 .  (2).] 
James  I.     His  Majesties  Speech  the  last  Day  of  March,  1607,  in  Somers'  Tracts 
(1750),  vol.  V. 

The  Peacemaker.     1618.     [Brit.  Mus.  501 .  a .  20.  (3).] 

Jus  Regium :   or  the  King's  Right  to  grant  Forfeitures,  1701,  in  Coll.  of  State 

Tracts,  William  III.     Vol.  ii.     1705-7. 
Keymor's  (John)  Observations  upon  the  Dutch  Fishing  about  the  Year  1601,  in  The 

Phoenix,  vol.  i.     1707. 
Lambe,  Samuel.     Seasonable  Observations  humbly  offered  to  his  Highness  the  Lord 

Protector. — Certain  Proposals  for  establishing  a  Bank  at  London,  in  Somers' 

Tracts  (1751),  vol.  x. 
Lane  Mayor — Commune  Concil'  tent'  in  Camera  Guildhald'  Civitat'  London'.     An 

Act  of  Common  Council  for  Lighting  the  Streets.  [Brit.  Mus.  1881 .  b .  3 .  (9).] 
Law,  John.  Money  and  Trade  Considered,  1705,  in  Somers'  Tracts  (1751),  vol.  xvi. 
Laws  of  the  Lead  Mines  of  Werksworth  in  Derbyshire,  in  Houghton,  John,  Rara 

Avis  in  Terris,  or  the  Compleat  Miner.     No.  xv.     1680. 
L' Estrange,  R.     The  Ancient  Trades  Decayed  Repaired  again.     1678.     [Brit.  Mus. 

1102.  h.  1.(13).] 
Letter  from  a  merchant  at  Whitehaven  to  his  Friend  in  London.     [Brit.  Mus. 

816.  m.  3.  (11).] 
Letter  from  Sir  Henry  Benuet  to  the  Duke  of  Ormond,  Sept.  11, 1665,  in  Miscellanea 

Aulica,  ed.  T.  Brown,  1702. 
Lettre  a  un  ami  en  HoUande  au  sujet  de  la  Nouvelle  Compagnie  Imperiale  des  ludes. 

[1726  .?]     Brit.  Mus.  8245  .  b  .  90  ,  (6). 
Lewis,  M.     Proposals  to  the  King  and  Parliament,  or,  a  Large  Model  of  a  Bank. 

1678. 
Lilburne,  John.     The  Case  of  the  Tenants  of  the  Manor  of  Epworth  in  the  Isle  of 

Axholm... truly  stated.     [1651.] 
List  of  the  Adventurers  in  the  Mine  Adventure.    1701.    [Brit.  Mus.  726 .  m .  25 .  (5).] 


1  List  of  Authorities 

List    of   the    Fortunate    Adventurers    in    the    Mine    Adventure.       [Brit    Mus. 

726  .  m  .  25  .  (3).] 
List  of  the  Several  Reversionary  Annuities  to  which  the  Million  Bank  are  entitled. 

[1695  ?]    Brit.  Mus.  8223 .  e .  7 .  (11). 
London's  Lord  Have  Mercy  upon  us.    A  True  Relation  of  the  Seven  Modern  Plagues 

or  Visitations  in  London,  1665,  in  Somers'  Tracts  (1750),  vol.  vii. 
Manley,  Thos.     Usury  at  six  per  Cent.  Examined.     1669. 
Marvel,  Andrew.    An  Account  of  the  Growth  of  Popery  and  Arbitrary  Government, 

1677,  in  State  Tracts  printed  in  the  Reign  of  Charles  II.     Vol.  i.     1693. 
Memorial  and  Intimation  of  the  Governor  and  Company  of  the  Bank  of  Scotland, 

1704,  in  A  Century  of  Banking  in  Dundee,  by  C.  W.  Boase.     1867. 
Memorial    on    Behalf   of  the    Royal    African    Company.      [1710.]      Brit.    Mus. 

816  .  m  .  11 .  (45). 
Misselden,  E.     The  Circle  of  Commerce.     1623. 

Free  Trade ;  or  the  Means  to  make  Trade  florish.     1622. 

Molard,  M.     Essai  sur  I'origine  et  I'organisation  de  la  Banque  de  Saint-Georges. 

[1878.] 
Money  Encreased  and  Credit  Raised.     1705.     [Advocates  Lib.] 
Morris,  C.     A  Letter  from  a  By-stander  to  a  Member  of  Parliament.     1741.     [Brit. 

Mus.  1103.  f.  15.(1).] 
Mr  Aislabie's  Second  Speech  on  his  Defence  in  the  House  of  Lords,  on  Thursday, 

July  20,  1721.     [Brit.  Mus.  517  .  k  .  16 .  (30).] 
Mun,  T.    A  discourse  of  trade  from  England  into  the  East  Indies,  1621,  in  Purchas, 

Pilgrims.     Vol.  v.     1906. 
Murray,  John.     A  proposal  for  a  National  Land  Bank.     1695.     [Guildhall  Lib. 

A. 9. 2.] 
Murray,   R.     A   Proposal  for  the  Advancement  of  Trade.     1676.     [Brit.  Mus. 

712 .  m  .  1 .  (9).] 
Nashe's  Lenten  Stuff,  containing  the  Description  and  first  Pro-creation  of  the  Town 

of  Great  Yarmouth,  1599,  in  Harl.  Misc.,  vol.  vi. 
Neale,   Thos.     Proposals  touching  the  National  Land  Banks.     [Guildhall  Lib. 

A.  9.  2.] 
No  Punishment,  no  Government,  and  no  Danger  even  in  the  worst  Designs.     1712. 
Nova  Britannia,  offering  most  excellent  Fruits  of  Planting  in  Virginia,  1609,  in 

Force  Tracts,  vol.  i..  No.  6.     1836. 
Observations  on  the  Acts  made  for  the  Encouragement  of  the  Lustring  Company 

which  relate  to  the  Exportation  of  French  Alamodes  and  Lustrings ;  humbly 

offered  by  Walter  Stewart  and  William  Murray,  Petitioners.     [1708 .''] 
Observations  on  the  Establishment  of  New  Water  Works  Companies.     [Guildhall 

Library.] 
Office  Keepers'  Answer  to  a  Scandalous  Reflection  on  them  by  the  Societies  of  the 

Mines  Royal,  Mineral  and  Battery  Works.    [1718.]   Brit.  Mus.  357 .  b .  3 .  (73). 
Of  Fishing  the  Seas  and  Converting  Waste  into  Wealth.     1612. 
Omnia  Comesta  a  Bella.     1667.     [Brit.  Mus.  Burney  67.  a.] 
Osmond,  George.    A  Proposal  for  raising  great  sums  of  money  all  over  Great  Britain 

for  the  use  of  the  Government,  1711,  in  The  Early  Days  of  the  Sun  Fire  Office, 

by  Edw.  Baumer.     1910. 
Overture  for  Establishing  a  Land  Bank  Office  whereby  the  Nation  may  be  rendered 

rich  and  happy.     1704. 
Papers  relating  to  a  Bank  of  Credit  on  Land  Security.      1693.      [Brit.   Mus. 

1139.  h.  18.] 


List  of  Authorities  JI 

Parker,  Henry.     Of  a  Free  Trade.     1648. 

Petition  of  the  Mariners  and  Sea-men,  Inhabitants  in  and  about  the  Porta  of  London 

and  the  Thames  [1642],  in  Somers'  Tracts,  vol.  vi. 
Pierrpoint,  W.     A  Treatise  concerning  Registers  to  be  made  of  Estates,  in  Harl. 

Misc.  (1746),  vol.  III. 
PoUexfen,  Sir  H.     Discourse  on  Trade.     1696.     [India  Office  Tracts,  63 .  A .  11.] 
Poyntz,  Capt.  John.     The  Present  Prospect  of  the  Famous  and  Fertile  Island  of 

Tobago.     1683.     [Brit.  Mus.  1061 .  g.  29.] 
Reasons  humbly  offered  to  the  House  of  Commons  relating  to  the  Bill  for 

making  decayed  Havens,  Ports,  &c.  more  navigable.    [Brit.  Mus.  816 .  m .  8 .  (62).] 
Proceedings  at  the  Council  of  Trade  between  the  Muscovia  Company  and  other 

Adventurers.     [Brit.  Mus.  618  . 1 .  13  .  (13).] 
[Proceedings]  At  a  Court  of  Directors  [Mine  Adventurers]  16  June,  1704.     [Brit 

Mus.  726.  m.  25.  (8).] 
Proceedings  at  a  General  Court  Meeting  of  the  Royal  African  Company,  Feb.  18, 

1714.     [Brit.  Mus.  8223 .  e .  4.] 
[Proceedings]  At  a  General  Court  [Mine  Adventurers].    Brit.  Mus.  622 .  m .  12 .  (49). 
Proclamation  for  the  well  ordering  of  the  making  of  white  Starch.     [Brit.  Mus. 

816.  m.  13.(163).] 
Proposals  about  Lights  for  this  City.     [Brit.  Mus.  816  .  m  .  13  .  (46).] 
Proposals  for  a  large  Model  of  a  Bank.     1678.     [Brit.  Mus.  1139  .  f .  19.] 
Proposals  for  the  Sale  of  £260,000  of  the  East  India  Stock.     [Bod.  Lib.  Pamphlets 

e,  658  (26).] 
Proposals  humbly  offered  for  the  better  lighting  of  the  City  of  London.    [Brit.  Mus. 

816.  m.  9.  (9).] 
Proposals  of  Dr  Hugh  Chamberlen  and  James  Armour  for  a  Land  Credit.     1705. 

[Advocates  Library.] 
Proposals  of  Dr  Hugh  Chamberlain  for  a  Bank  to  secure  current  credit.     1696. 

[Brit.  Mus.  8223 .  e  .  7  .  (3).] 
Proposals  of  Nicholas  Dupin,  First  Deputy-Governor  of  the   Linen  and  White 

writing-paper  Corporations  in  England,  Scotland,  and  Ireland.     1698.     [Brit. 

Mus.  8223  .  d  .  17.] 
Proposals  of  the  Company  of  London  Insurers.     [Brit.  Mus.  8226  .  e  .  31.] 
Proposals  of  the  Gov'^  and  Ass**  of  the  King's  and  Queen's  Corporation  for  the  Linen 

Manufacture  in  England.     [Brit.  Mus.  816  .  m  .  13  .  (48).] 
Reasonable  Proposals  for  a  Perpetual  Fund  or  Bank  in  Dublin.    [1696.]    Lib.  Trin. 

Coll.  Dublin,  33  .  q  .  22 .  (16). 
Reasons  against  further  additional  Duties  on  Paper.    [Brit.  Mus.  816  .  m  .  12  .  (43).] 
Reasons  against  Grafting  or  Splicing,  and  for  dissolving  this  present  East  India 

Company  or  Joint  Stock,  and  erecting  and  establishing  a  new  Joint  Stock 

Company,  Jan.  3,  16f  §.     [Bod.  Lib.  6,  658  (69).] 
Reasons  for  further  additional  Duties  on  Paper.   [1 698-9  }]  Brit.  Mus.  816 .  m .  12 .  (39). 
Reasons  for  passing  the  Mine  Adventurers'  Bill ;  Reasons  against  passing  the  Bill 

relating  to  the  Mine  Adventurers ;  Remarks  on  a  Paper  entitled  Observations 

on  a  Bill  relating  to  the  Mine  Adventurers.     [Brit.  Mus.  816 .  m .  13 .  (79, 80, 

81).] 
Reasons  for  the  East  India  Company's  sending  out  Twelve  Ships  to  India  about  the 

15th  of  January  next,  Dec.  7,  1692.     [Bod.  Lib.  Pamphlets  6,  658(37).] 
Reasons  humbly  offer'd  against  laying  a  farther  duty  upon  Paper.     [Brit.  Mus. 

816.  m.  12.  (42).] 
Reasons  humbly  offered  against  the  Bill  for  the  sole  use  of  Convex  Lights  or  Glasses. 

[Brit.  Mus.  816 .  m .  13 .  (47).] 


Hi  List  of  Authorities 

Reasons  humbly  offered  against  the  Societies  of  the  Mines  Royal,  Mineral  and 

Battery  Works  who  have  undertaken  to  insure  Ships  and  Merchandize  at  Sea 

without  a  Charter.     [Brit.  Mus.  357  .  b  ,  3  .  (76).] 
Reasons  humbly  offered  by  the  Company  of  Glass  and  Earthenware  Sellers,  in  answer 

to  the  Pot-Makers.     [1698  }]    Brit.  Mus.  816  .  m  .  12  .  (120). 
Reasons  humbly  offered  by  the  Societies  of  the  Mines  Royal,  Mineral  and  Battery 

Works,  who  insure  Ships  and  Merchandize  with  the  security  of  a  deposited 

Joint-Stock.     [Brit.  Mus.  816  .  m  .  10  .  (117).] 
Reasons  Humbly  offered  for  laying  a  farther  duty  on  all  foreign  paper.    [Brit.  Mus. 

816  .  m  .  12  .  (41).] 
Reasons  humbly  offered  on  behalf  of  the  Hudson's  Bay  Company  that  they  may  be 

exempted  in  the  clause  that  will  be  offered  for  suppressing  the  Insurance  Offices. 

[Bod.  Lib.  Bromley's  Parliamentary  Papers,  ii.  No.  130.] 
Reasons  Humbly  offered  to  the  House  of  Commons  for  Incorporating  the  Subscribers 

for  carrying  on  a  National  Fishery.     [1720 .?]     Brit.  Mus.  357  .  b  .  3 .  (78). 
Reflections  on  the  Answer  of  the  East  India  Company.     [Brit.  Mus.  8223  .  g  .  2.] 
Reflections  on  the  East  Indy  and  Royal  African  Companies.     1695.     [Brit.  Mus. 

1029.6.10.(6).] 
Remonstrance  of  the  Farmers  and  Adventurers  in  the  Wine  Farm  of  40/^  per  tun  to 

the  House  of  Commons.     [1641.]     Soc.  of  Antiq.  Coll.  Broadsides,  No.  316. 
Roberts,  Lewes.     The  Treasure  of  Traffike,  1641,  in  M<^Culloch's  Early  English 

Tracts  on  Commerce. 
Roe's  (Sir  Thomas)  Speech  in  Parliament,  1641,  in  Harl.  Misc.  (1746),  vol.  iv. 
Rovenzon,  John.     A  Treatise  of  Metallica,  1613,  in  Suppt.  to  the  Series  of  Letters 

Patent  and  Specifications,  ed.  B.  Woodcroft.     1858. 
Sam  against  Shepherd.     [Bod.  Lib.  Pamphlets  6,  658(62).] 
Scotland's  Interest :  Or  the  Benefit  and  Necessity  of  a  Communication  of  Trade  with 

England.     1704.     [Advocates  Lib.] 
Sheppard,  W.     Of  Corporations,  Fraternities  and  Guilds,  Forms  and  Presidents  of 

Charters  concerning  Corporations.     1659. 
Shiers,  Wm.     A  familiar  Discourse  or  Dialogue  concerning  the  Mine-Adventure. 

1709.     [Brit.  Mus.  444 .  a  .  5.] 
Smerthwicke,  Thomas.     A  Motion  to  the  East  India  Company,  Feb.   19,  1628. 

[Coll.  Broadsides,  Soc.  Antiq.  No.  294.] 
Smith,  John.     Trade  and  Fishing  of  Great  Britain  Displayed.     1661. 
Some  Calculations  relating  to  the  Proposals  made  by  the  South  Sea  Company  and 

the  Bank  of  England  [March  1720],  in  A  Collection  of  Calculations,  1720,  by 

A.  Hutcheson. 
Some  Considerations  on  the  late  Act  of  the  Parliament  of  Scotland  for  Constituting 

an  Indian  Company.     1695.     [Advocates  Lib.] 
Some  of  the  Bye-Laws  made  by  the  Governour  and  Company  of  the  City  of  London 

for  the  Plantation  of  the  Summer  Islands.     [Brit  Mus.  816  .  m  .  18  .  (35).] 
Some  Paragraphs  of  Mr  Hutcheson's  Treatises  on  the  South  Sea  Subject.     [1723.] 
Some  Queries  relating  to  the  Present  Dispute  about  the  Trade  to  Africa.     [1710.''] 

Brit.  Mus.  816 .  m .  11 .  (5). 
Some  Reasons  against  the  clause  for  Restraining  all  Corporations  but  the  Bank  of 

England  from  keeping  Cash  or  borrowing  money  payable  at  demand.     [Brit. 

Mus.  712.  m.  1.(28).] 
Some  Reasons  offered  by  the  late  Ministry,  in  Defence  of  their  Administration. 

1715.     [Brit.  Mus.  E .  2007 .  (3).] 
Some  Short  Considerations  concerning  the  State  of  the  Nation,  in  State  Tracts... 

William  III.    Vol.  m. 


List  of  Authorities  liii 

• 

St  Hilary's  Tears,  in  Harl.  Misc.,  vol.  ii. 

St  Loo,  George.     England's  Safety  or  a  Bridle  to  the  French  King,  1693,  in  Somers' 

Tracts,  vol.  iv. 
Stringer,  Moses.     English  and  Welsh  Mines  and  Minerals.     1699. 
Swift,  J.     A  Proposal  for  the  Universal  Use  of  Irish  Manufacture,  in  Works,  1762, 

vol.  IV. 

A  Letter  to  the  Archbishop  of  Dublin  concerning  the  weavers,  in  Works, 

vol.   XII. 

The  Advantage    of   the    New    Scheme    of   the  Mine   Adventure.      [Brit.    Mus. 

522.m.l2.(30).] 
The  Allegations    of   the  Glass-Makers   Examined    and   Answer' d.      [Brit.    Mus. 

816  .  m  .  12  .  (135).] 
The  Allegations  of  the  Turky  Company  and  others  against  the  East  India  Company, 

relating  to  the  management  of  that  Trade.     [1681.]     Brit.  Mus.  522 . 1 .  6  .  (8). 
ITie  Anatomy  of  an  Equivalent,  in  State  Tracts,  printed  in  the  Reign  of  Charles  II. 

Vol.  II.     1692. 
The  Anatomy  of  Exchange  Alley,  1719,  in  Chronicles  of  the  Stock  Exchange,  by 

John  Francis.     1849. 
The  Answer  of  the  East  India   Company  to  S.   White.      [1689.]      Brit.   Mus. 

522.1.6.(5). 
The  Art  of  Good  Husbandry,  by  R.  T.,  1675,  in  Harl.  Misc.,  voL  i. 
The  British  Bellman,  1648,  in  Harl.  Misc.  (1746),  vol.  vii. 
The  Bubbler's  Mirror.     [Brit.  Mus.  Print  Room.] 
The    Case    and    Grievance    of   divers    Merchants    and   others    Members    of   the 

Bermuda  Company  and  of  the  Planters  within  the  said  Islands.     [Brit.  Mus. 

816.  m.  18.(34).] 
The  Case  of  John  Powell  of  London.     [Brit.  Mus.  8223 .  d .  43.] 
The  Case  of  Richard  Thompson  and  Company.     1678.     [Brit.  Mus.  1417 .  h .  42.] 
The  Case  of  Rock-Salt.     [1702.]    Brit.  Mus.  816 .  m .  13 .  (108). 
The  Case  of  Sir  Humphrey  Mackworth — Answer  to  the  several  particulars  of  the 

Complaint  upon  the  Petition  of  several  Creditors  and  Proprietors  of  Principal 

Money  Annuities  and  Shares  of  the  Company  of  Mine  Adventurers.     [1710.] 
The  Case  of  the  Company  of  Merchant  Adventurers  for  the  Discovery  of  New  Trades. 

[Brit.  Mus.  816  .  m  .  11  .  (118).] 
Tlie  Case  of  the  Creditors  of  the  Mine  Adventurers  Company.      [Brit.   Mus. 

522  .  m  .  12  .  (4).] 
Tlie  Case  of  the  First  Undertakers  for  Reducing  of  Letters  to  half  the  Former  Rates 

truly  Stated.     [Brit.  Mus.  816  .  m  .  10  .  (57).] 
The  Case  of  the  Governor  and  Company  for  making  Hollow  Sword-Blades  in 

England.     [Guildhall  Lib.] 
The  Case  of  the  Merchants  importing  Geneva  Paper  in  relation  to  the  Duty  on 

Cards.     [Brit.  Mus.  816  .  m  .  12  .  (69).] 
The  Case  of  the  Mine  Adventurers  on  a  proposed  Restriction  of  the  Issue  of  Notes 

of  Credit.     [Brit.  Mus.  522  .  m  .  12  .  (26).] 
The  Case  of  the   Paper-Traders,   Humbly  offer'd   to  the  Honourable   House  of 

Commons.     [}  1697.]     Brit.  Mus.  816  .  m  .  12  .  (45). 
The  Case  of  the  Royal  African  Company.     [Brit.  Mus.  8223  .  e .  18.] 
The  Case  of  the  United  Society  for  the  Improvement  of  Mineral  Works.     1716. 

[Brit.  Mus.  816  .  m  .  13  .  (75).] 
The  Case  of  the  Weavers  who  are  Petitioners  to  be  relieved  against  the  Clause  in 

the  Coale  Act.     [1695.]    Brit.  Mus.  816  .  m  .  13  .  (122). 
The  Case  of  the  York  Buildings  Company.     [1726  >]    Brit.  Mus.  816  .  m  .  14 .  (31). 


liv  List  of  Authorities 

The  Case  of  Thomas  Bushell  truly  stated.     1649.     [Brit.  Mus.  C  .  27  .  f .  1 .  (3).] 
The  Case  of  W.  W[aller]  upon  the  complaint  of  E.  Vaughan.     [1714.]    Brit.  Mus. 

516  .  m  .  18  .  (43). 
The  Charter  of  the  Bank  of  England^  in  Lawson,  W.  J.,  History  of  Banking.    1850. 
The  Charter  of  the  Royal  Lustring  Company.     [Brit.  Mus.  8223 .  e .  69.] 
The  Charters  of  the  Corporation  of  the  London  Assurance.     [N.  D.] 
The  Charters  of  the  Royal  Exchange  Assurance  and  of  the  Royal  Exchange  As- 
surance of  Houses  and  Goods  from  Fire.     [N.  D.] 
The  Circumstances  of  Scotland  considered.     1705.     [Signet  Lib.  Edinburgh.] 
The  Compleat  Collier,  by  J.  C,  1708,  in  Richardson's  Reprint  of  Rare  Tracts, 

Miscellaneous. 
The  Constitution  of  the  Office  of  Land  Credit.     [Brit.  Mus.  8223  .  e .  7  .  (12).] 
The  East  India  Trade  a  Most  Profitable  Trade  to  the  Kingdom,  and  best  secured  and 

improved  in  a  Company  and  a  Joint-Stock.     1677.     [Brit.  Mus.  1029  .  g .  24.] 
The  Examinations  and  Informations  upon  Oath  of  Sir  Thomas  Cooke.    [India  Office 

Tracts,  vol.  268.] 
The  Exorbitant  Grants  of  William  III.  Examined  and  Questioned.     1703.     [Brit. 

Mus.  8122.  cc.  2.] 
The  Fears  and  Sentiments  of  all  True  Britons  with  respect  to  National  Credit.    1710. 

[Spectator,  No.  3.] 
The  Grand  Concern  of  England  explained,  1673,  in  Harl.  Misc.  (1746),  vol.  viii. 
The  Grand  Question  Resolved  whether  a  King  of  England  can  make  Wars  and 
Alliances  without  Notifying  it  to  Parliament  [1673],  in  Miscellanea  Aulica,  ed. 
T.  Brown,  1702. 
The  Grievances  of  Scotland  in  Relation  to  their  Trade  with  England,  166|,  in 

Miscellanea  Aulica,  ed.  T.  Brown,  1702. 
The  Humble  Remonstrance  of  the  Benefits  of  Draining  Fenne  Lands.     [Brit.  Mus. 

816.m.8.(25).] 
The  Importance  of  the  Ostend-Company  consider'd.    1726.    [Brit.  Mus.  1391 .  c.  23.] 
The    Just    and    Amicable    Society    kept    by    the    Widow    Pratt.       [Brit.    Mus. 

1890.  b.  6.  (34).] 
The  King's  Majesties  Speech  as  it  was  delivered  the  19th  day  of  March,  1603,  in 

Somers'  Tracts,  vol.  v. 
The  Linen  and  Woolen  Manufactory  Discoursed,  with  the  Nature  of  Companies  and 

Trade  in  general.     1691.     [Advocates  Lib.] 
The  Lord  Treasurer  Burleigh's  Advice  to  Queen  Elizabeth  in  matters  of  Religion 

and  State,  in  Somers'  Tracts  (1752),  vol.  xiii. 
The    Management    of  the    Last    Four    Years  Vindicated.      1714.      [Brit.    Mus. 

1103 .  a .  2 .  (6).] 
The  Mine  Adventure;  or  an  Expedient  for  composing  all  differences  between  the 
partners  of  the  Mines,  late  of  Sir  C.  Pryse.    1698.    [Brit.  Mus.  522 .  m .  12 .  (6).] 
The  Mine  Adventure ;  or  an  Undertaking  advantageous  to  the  Publick  good.     [Brit. 

Mus.  622.  m.  12.  (37).] 
The  Monthly  Account  of  the  Land  Bank.     [Brit.  Mus.  712 .  m .  1 .  (6,  46).] 
The  Mournfull  Cryes  of  many  Thousand  Poore  Tradesmen  who  are  ready  to  famish 

through  decay  of  Trade.     1647.     [Brit.  Mus.  669 .  f .  11 .  (116).] 
The  Mystery  of  the  New  fashioned  Goldsmiths  or  Bankers,  1676,  in  The  Grasshopper 

in  Lombard  Street,  by  J.  B.  Martin.     1892. 
The  Naked  Truth  in  an  Essay  upon  Trade.     1696.     [Brit.  Mus.  1102 .  h .  1 .  (17).] 
The  New  Invention  of  Mill'd  Lead  for  Sheathing  of  Ships,  in  An  Account  of  Several 

New  Inventions.     1691.     [Brit.  Mus.  534.  a.  27.] 
The  New.Life  of  Virginia,  1612,  in  Force  Tracts,  vol.  i. 


List  of  Authorities  Iv 

The  Occasion  of  Scotland's  Decay  in  Trade.     [1705.]    Advocates  Lib. 

The  Particular  Grievances  of  those... which  lye  under  the  oppressions  of  George 

Wood's   Patent  for  the  sole  printing  of  linnen  cloth.     [1624.]    Society  of 

Antiquaries,  Coll.  Broadsides,  No.  222. 
The  Petition  and  Remonstrance  of  the  Governor  and  Company  of  Merchants  of 

London  trading  to  the  East  Indies.     1628.     [Brit.  Mus.  1029 .  c  .  30.] 
The  Petition  and  Remonstrance  of  the  Governour  and  Company  of  the  Merchants  of 

London  trading  to  the  East  Indies.     1641.     [Brit.  Mus.  1029 .  c .  31.] 
The  Petition  of  Dorothy  Petty,  a  director  of  the  Union  Society,  in   Walford's 

Insurance  Cyclopaedia.     Vol.  i.     1871-80. 
Tlie  Petition  of  Thomas  Bushell.     1660.     [Brit.  Mus.  516 .  m .  18 .  (95).] 
The  Practical  Method  of  the  Penny  Post.     1681.     [Brit.  Mus.  8245 .  g .  6.] 
The  Present  State  of  Christendom  and  the  Interest  of  England  with  regard  to 

France,  1677,  in  Harl.  Misc.,  vol.  i. 
The    Present    State    of   Mr   Wood's  [Mine]   Partnership.      [1720.]      Brit.    Mus. 

8223 .  e .  95. 
The  Projector's  Downfall  or  Times  Changeling,   wherein  the  Monopolists  and 

Patentees  are  unmasked   to  the  View  of  the  World.      1642.     [Brit.   Mus. 

E  .  140  .  (22).] 
The  Proposals  of  the  Friendly  Society  for  Widows.     [Brit.  Mus.  712 .  m  .  1 .  (47).] 
The  Report  of  a  Committee  appointed  at  a  General  Court  (Mine  Adventure),  May  6, 

1708.     [Brit.  Mus.  622  .  m  .  12  .  (13).] 
The  Report  of  the  Committee  of  the  House  of  Commons  to  whom  the  Petition  of  the 

Royal   Lustring  Company  of   England   was    referred.      1698.      [Brit.    Mus. 

816  .  m  .  8  .  (62).] 
The  Report  of  the  Committee  to  consider  the  petitions  of  several  Creditors  and 

Proprietors  in  the  Mine  Adventure.     1710.     [Brit.  Mus.  522  .  m  .  9  .  (3).] 
The  Royal  African  Company  and    the  Separate  Traders  agreed.      [Brit.    Mus. 

8223.0.11.] 
The  Royal  Fishing  Revived,  in  Harl.  Misc.,  vol.  iii. 
The  Sea's  Magazine  Opened.     1653. 
The  Secret  History  of  the  Trust :  with  some  Reflections  upon  the  Letter  from  a 

Soldier.     1702.     [Brit.  Mus.  601 .  f .  22  .  (6).] 
The  Settlement  of  the  Land  Bank  established,  anno  Domini,  1695,  in  Somers'  Tracts, 

vol.   XI. 

The  Several  Articles  or  parts  of  the  Proposals  upon  Land  Credit.     [Brit.  Mus. 

8223.0.7.(4).] 
The  Summarie  of  Certaine  Reasons  which  have  moved  Quene  Elizabeth  to  precede 

in  Reformations  of  her  base  and  course  monies,  in  Harl.  Misc.  (1746),  vol.  viii. 
The  Trade  of  Britain  stated.     [1708.     By  Defoe.]    Brit.  Mus.  1103 .  f .  69. 
The  Trade's  Increase.     By  J.  R.,  1615,  in  Harl.  Misc.,  voL  iv. 
The  Trade  to  India  critically  and  calmly  considered.     1720.     [India  Office  Tracts, 

63.  A.  11.(1).] 
The    Trade  with    France,   Italy    and    Portugal    considered,    in    Somers'   Tracts, 

vol.    IV. 

The  Weavers'  Answer  to  the  Objections  made  by  the  Lustrings'  Company.     [1696.] 

Brit.  Mus.  816  .  m .  13 .  (123). 
The  World's  Mistake  in  Oliver  Cromwell :  Or  a  short  political  Discourse  shewing 

that  Cromwell's  Male- Administration  laid  the  foundation  of  our  present  condition 

in  the  Decay  of  Trade,  1668,  in  Harl.  Misc.,  vol.  i. 
Thomas,  Dalby.     Propositions  for  general  Laud  Banks.     [Guildhall  Lib.  A .  9 .  2.] 


Ivi  List  of  Authorities 

To  all  Ingenious  People — A  Second  Intimation  from  the  New  Undertakers  for 

conveyance  of  Letters  at  half  the  rates  to   Severall   Parts  of  England  and 

Scotland.     [1653.]     Brit.  Mus.  669 .  f .  16 .  (95). 
Tom  Tell-Troath  :  Or  a  free  Discourse  touching  the  Manners  of  the  Time  [1622  ?], 

in  Harl.  Misc.  (1746),  vol.  ii. 
To  the  Hon.  the  Knights   Citizens  and  Burgesses  assembled,  &c.     [Brit.  Mus. 

712.  m.  1.(35).] 
Truth  if  you  can  find  it :  Or,  a  Character  of  the  present  M y.     1712.     [Brit. 

Mus.  T.  1990.  (18).] 
Truth,  Truth,  Truth.     1715.     [Brit.  Mus.  101 .  e .  50.] 

Two  Letters  concerning  the  East  India  Company.    1676.    [Brit.  Mus.  1029 .  g .  22 .  (1).  ] 
Two  Overtures — The  First  for  supplying  the  present  scarcity  of  coyn,  and  improving 

Trade,  in  The  Writings  of  Wm  Paterson,  ed.  S.  Bannister.     Vol.  ii. 
Two  Seasonable  Discourses  concerning  the  present  Parliament,  1675,  in  State  Tracts 

of... Charles  II.     VoL  i.     1693. 
Violet,  Thos.     An  Appeal  to  Caesar.     1660. 

A  True  Discoverie  to  the  Commons  of  England  how  they  have  been  cheated 

of  almost  all  the  Gold  and  Silver  Coin  of  the  Realm.     1651. 

Mysteries  and  Secrets  of  Trade.     1653. 

— —    Proposals  for  the  calling  to  a  True  and  Just  Accompt  all  Committee-Men, 

1656. 
Walcott,  Wm.     Answer  to  Mr  Fitzgerald's  State  of  the  Case  concerning  the  Patent 

for  making  salt  water  fresh.     1693.     [Brit.  Mus.  712  .  m  .  1 .  (24).] 
Walker,  Clement.     Relations  and  Observations... upon  the  Parliament  begun  in 

1640,  1648,  in  Maseres,  Civil  War  Tracts.     Vol.  i. 
Waller,  W.     The  Mine  Adventure  laid  open,  being  an  Answer  to  a  Pamphlet  by 

W.  Shiers.     1710.     [Brit.  Mus.  444 .  a .  28 .  (3).] 

Value  of  the  Mines  of  the  late  Sir  C.  Price.     1698.     [Brit.  Mus.  990 .  c .  14.] 

Ward,  Patience,  Papillon,  Thos.,  and  others.    A  Scheme  of  Trade  as  it  is  at  present 

carried  on  between  England  and  France,  1674,  in  Somers'  Tracts  (1748),  vol.  iv. 
Whiston,  James.     England's  Calamities  Discovered,  1696,  in  Harl.  Misc.,  vol.  vi. 
Yalden,  Thos.     A  Poem  on  the  Mines  of  Sir  Carbery  Price.     1701. 

V.     NEWSPAPERS  TO  1720 

Applebee's  Journal ;  Caledonian  Mercury ;  Daily  Courant ;  Daily  Post ;  Domestic 
Intelligence ;  Edinburgh  Courant ;  Edinburgh  Evening  Courant ;  Edinburgh 
Gazette  ;  Evening  Post ;  Flying  Post ;  Glasgow  Mercury  ;  Heraclitus  Ridens  ; 
Historical  Register ;  London  Gazette ;  London  Journal ;  London  Mercury ; 
London  Post ;  Mercurius  Civicus ;  Mercurius  Politicus ;  Mist's  Journal ;  TTie 
New  State  of  Europe  ;  Post  Boy  ;  Postman  ;  Postman  and  Historical  Account ; 
Protestant  Domestic  Intelligence ;  Scots  Courant ;  Scots  Postman ;  Smith's 
Currant  Intelligence  ;  Smith's  Protestant  Intelligence ;  Spectator ;  Tatler ; 
True  Domestic  Intelligence;  True  News,  or.  Mercurius  Anglicus ;  Weekly 
Journal,  or  British  Gazetteer. 
Also  the  following: — 

Gentleman's  Magazine,  vol.  i. ;  Notes  and  Queries,  6  Ser.,  vol.  x. ;  Royal  Exchange 
Assurance  Magazine,  vol.  i. ;  Journal  of  the  Royal  Historical  and  Archaeological 
Association  of  Ireland,  3rd  series,  vol.  i.,  4th  series,  vol.  iv.;  Virginia  Magazine, 
vol.  IV.;  Stamp  Lover,  No.  1  et  seg.;  Times,  Oct.  2,  1909. 


PART    I. 


CHAPTER  I. 

The    various    Lines    of    Economic    Development    which 

CONVERGE   in   THE   FiRST   ENGLISH   JoINT-StOCK   COMPANIES. 

Though  it  is  not  possible  to  discover  instances  of  the  joint-stock 
company  in  England  before  the  middle  of  the  sixteenth  century,  it 
must,  at  the  same  time,  be  recognized  that  before  that  date  there  were 
tendencies  which  would  make  its  ultimate  establishment  inevitable.  In 
the  Italian  states,  organizations  of  a  similar  character  had  been  in 
existence  early  in  the  fifteenth  century,  if  not  before  that  time\ 
Prominent  amongst  these  was  the  Bank  of  St  George  at  Genoa,  which 
had  been  constituted  by  1407 ^  When  the  importance  of  Italian 
finance  in  England  at  an  early  period  is  remembered,  allowance  must  be 
made  for  the  possibility  that,  when  the  time  was  ripe,  the  method  of 
constituting  a  company  might  have  been  copied,  and  that,  when  an 
organization  of  this  type  was  at  length  founded,  it  would  be,  in  its  main 
essentials,  an  importation  from  abroad  and  not  an  indigenous  product. 

Further,  should  the  whole  mechanism  not  be  transported  bodily 
from  outside,  there  were  two  main  lines  of  development,  which  by  their 
union,  or  again  by  the  gradual  extension  of  either,  might  result  in  the 
formation  of  a  joint-stock  body.  These  were  the  mediaeval  partnership 
and  the  growth  of  the  idea  of  a  corporation.  With  reference  to  the 
first  of  these,  the  canonist  doctrine  on  the  use  of  capital  discouraged 
loans,  while  it  encouraged  partnership^     There  were  the  Commenda  and 

^  Universalgeschichte  des  Handelsrechts,  von  L.  Goldsclimidt,  Stuttgart,  1891, 
pp.  293-7 ;  Studien  in  der  Romanisch-Kanonistischen  Wirthschajls-  mid  Rechtslehre, 
von  W.  Endemann,  Berlin,  1874,  i.  pp.  432,  433.  In  Germany  mining  partnerships, 
with  transferable  shares,  were  common  in  the  fifteenth  and  early  sixteenth  centuries. 

2  Histoire  de  la  Banque  de  Saint-Georges  de  Genes,  par  le  Prince  A.  Wiszniewski, 
Paris,  1865,  p.  22. 

3  The  Growth  of  English  Industry  and  Commerce  during  th^  Early  and  Middle 
Ages,  by  W.  Cunningham,  Cambridge,  1905,  p.  367. 

S.  C.  I.  1 


2  The  Commenda  and  Societas  [chap.  i. 

the  Societas^,  both  of  which  were  in  frequent  use  on  the  Continent. 
In  England  the  latter,  at  least,  must  have  been  understood,  since  there 
are  numerous  references  which  point  to  associations  of  this  type  having 
been  introduced  by  foreigners  in  their  financial  transactions.  Thus  in 
1284  there  appeared  in  London  Simon  Gherardi  della  compagnia  di 
Messer  Thomaso  Ispigliati  e  di  Lapo  Ughi  Spene,  in  1296  Boniface 
recommended  to  Edward  I.  certain  merchants  de  societate  Riezardorum. 
In  the  fourteenth  century  mention  of  the  societas  Bardorum  and  of  the 
societas  Peruzzarum  becomes  frequent,  while  the  context  shows  that  this 
term  was  not  used  in  a  vague  general  sense,  but  as  implying  distinctly 
that  these  societates  were  partnerships.  For  instance,  in  1312  Stephanus 
Peruzzi  undertook  certain  obligations,  nomi7ie  suo  et  ceterorum  sociorum 
de  societate  Peruzzorum^.  It  might  be  supposed  that,  when  there  came 
a  time  at  which  English  capital  began  to  be  used  in  enterprizes  of 
magnitude,  the  model  of  the  societas  would  be  adopted ;  but,  before  that 
stage  had  been  reached,  the  influence  of  Italian  bankers  in  I^ondon  had 
greatly  declined,  through  the  failure  of  the  Bardi  and  some  other  firms 
in  1345^.  It  follows  that,  when  a  considerable  capital  began  to  be 
needed  to  develope  English  industries  about  the  middle  of  the  fifteenth 
century,  it  was  unlikely  the  methods,  adopted  in  the  management  of  it, 
would  be  copied  from  the  Italian  societas.  By  that  time  the  corporate 
idea  had  developed  in  such  a  manner  as,  temporarily,  to  check  the 
extension  of  partnership,  with  the  result  that  the  union  of  the  two 
principles  was  postponed. 

To  understand  the  reaction  of  the  corporate  idea  on  that  of  partner- 
ship, it  is  necessary  to  trace  with  some  detail  the  growth  of  the  former. 
The  beginnings  of  this  development  are  to  be  found  in  the  Anglo-Saxon 
and  Anglo-Norman  gilds.  From  these  bodies  a  number  of  institutions 
have  been  derived  by  a  gradual  process  of  differentiation  ;  and,  in  many 
cases,  the  stages  of  the  evolution  have  been  carefully  traced.  Accord- 
ingly, it  will  be  necessary  to  bring  to  light  only  those  characteristics  of 
the  gilds,  which  reappear  in  the  early  joint-stock   companies.     First 

^  Both  were  forms  of  the  mediaeval  partnership.  In  the  commenda,  in  its  earlier 
form  which  is  traceable  in  foreign  trade,  the  commendator  provided  the  capital  and 
the  commendatarius  managed  the  investment.  In  the  societas^  the  commendatarius 
contributed  a  portion  of  the  capital.  The  development  of  the  system  is  explained  in 
An  Introduction  to  English  Economic  History  and  Theory,  by  W.  J.  Ashley,  Loudon, 
1893,1.  (Pt.  ii.)pp.  411-21. 

2  Fcedera,  edited  T.  Rymer,  London,  1705-8,  ii.  p.  706,  iv.  p.  387 ;  Historical 
and  Chronological  Deduction  of  the  Origin  of  Commerce,  by  A.  Anderson,  Dublin, 
1790, 1,  p.  411 ;  Goldschmidt,  Handelsrechts ,  p.  275  ;  H.  Sieveking,  Die  kapUalistische 
Entwicklung  in  den  italienischen  Stddten  des  Mittelalters ,  in  Vierteljahrschrijl  fur 
Social-  und   Wirthschaftsgeschichte,  vii.  p.  78. 

3  Alien  Immigrants  to  England,  by  W.  Cunningham,  London,  1897,  p.  76. 


CHAP.  I.]       The  Germ  of  Perpetual  Succession  8 

amongst  these  is  that  of  the  germ  of  the  conception  of  "  perpetual 
succession."  In  a  gild,  established  before  the  Norman  Conquest  at 
Abbotsbury  by  Orcy,  property  was  granted  for  the  gildship  '*  to  possess 
now  and  hence-forth,'"*  thereby  implying  that  the  body  was  to  continue 
indefinitely  as  the  owner  of  the  premises  devised^  Subsequently,  the 
ideal  of  continuity  becomes  more  explicit,  some  fellowships  were  founded 
"  evermore  to  lasten  "*'  and  others  "  to  abyde,  endure  and  be  maynteyned 
withoute  ende'^.''  Visible  expression  was  given  to  the  corporate  character 
by  the  use  of  a  common  seal.  It  seems  probable  that  this  usage  grew 
gradually.  Some  method  was  required  by  which  the  act  of  the  whole 
body  could  be  identified.  At  first  the  seal  of  some  well-known  per- 
sonage was  appended  to  documents — as  for  instance,  in  the  case  of  the 
P'ullers'  Gild  of  Lincoln,  which  is  said  to  have  been  founded  in  1297, 
the  ordinances,  approved  in  1337,  were,  "  at  the  special  request  of  the 
bretheren  and  sisteren,'"*  sealed  with  the  official  seal  of  the  Deanery  of 
Lincoln,  in  order  "  to  have  the  greater  proof  thereof  in  time  to  come'."" 
In  another  early  gild — that  of  the  Blessed  Virgin  Mary  at  Chesterfield — 
the  charters  were  kept  in  a  box,  under  the  private  seals  of  the  officials, 
to  which  later  the  common  seal  of  the  gild  was  added  ^  At  the  end  of 
the  thirteenth  century  and  in  the  fourteenth,  several  fellowships  had 
common  seals — as  for  instance  the  gild  of  the  Trinity  at  Worcester, 
that  of  the  Holy  Cross  at  Birmingham,  that  of  Corpus  Christi  at  York 
and  that  of  the  Palmers  at  Ludlow ^ 

From  one  point  of  view  early  gilds  or  "fellowships"  were  marked  by 
the  analogy  to  the  family.  The  members  were  usually  described  as 
"bretheren"  and  "sisteren."  Whether  there  was  any  conscious  reference 
to  an  artificial  family  is  not  clear;  but,  on  the  other  hand,  there  is 
ample  evidence  that  there  was  a  decided  tendency  to  strengthen  the 
solidarity  of  the  members  in  every  way  that  was  possible.  This  tendency 
again  was  not  only  positive — it  acted  also  negatively,  in  fostering  a 
spirit  of  exclusiveness  towards  all  outsiders.  Even  in  those  gilds  that 
were  purely  social,  in  many  cases,  candidates  for  admission  had  to  swear 
not  to  betray  their  affairs ^  Thus  the  conception  of  the  separateness  of 
the  fellowship  grew  up,  and  thence  emerged  the  monopolies  exercised  by 
certain  of  the  trading  gilds. 

}  Diplomatarium  Anglicum  Aevi  Saxonici,  edited  by  B.  Thorpe,  Tx)ndon,  1865, 
p.  605. 

2  Shipmanes  Gild,  Lynn ;  Gild  of  the  Purification  and  Gild  of  St  Lawrence, 
Bishop's  Lynn  ;  Gild  of  St  Katharine,  Stamford ;  Ordinances  of  Early  English  Gilds, 
edited  by  Toulmin  Smith,  London,  1870,  pp.  53,  89,  91,  188. 

3  Ibid.,  p.  181.  *  Ibid.,  p.  168. 
fi  Ibid.,  pp.  193,  207,  250. 

«  Cf.  Gild  of  the  Holy  Trinity,  Cambridge:  Ibid.,  p.  267. 

1—2 


4  Government  of  early  Gilds  [chap.  i. 

One  element  in  the  organization  of  the  social  gilds,  was  the  series 
of  regulations  as  to  the  management  of  their  business  and  the  control 
of  members  at  the  convivial  and  other  meetings.  As  a  rule,  the 
government  of  these  gilds  was  committed  to  an  alderman,  who  was 
the  chief  official,  one  or  more  wardens  or  stewards,  who  had  charge 
of  the  property,  a  dean  or  clerk,  who  summoned  the  brethren  to  the 
meetings  and  kept  the  register  of  members  ^  This  was  the  general 
type  of  organization,  but  there  were  a  few  exceptions.  The  gild  of 
the  Holy  Cross  at  Stratford-on-Avon  elected,  not  one  alderman,  but 
two  aldermen^ — a  case  of  special  interest,  as  it  will  appear  that  some 
of  the  early  joint-stock  companies  had  two  chief  officials ^  In  this 
gild,  instead  of  the  subordinate  officers,  there  were  selected  six  other 
brethren,  to  manage  the  affairs  of  the  gild  with  the  aldermen.  Again, 
in  the  gilds  of  the  Young  Scholars  and  of  Corpus  Christi  at  York,  the 
head  in  each  case  was  described  as  the  Master^.  In  two  fraternities  at 
Lincoln,  the  leading  officer  was  named  "the  Graceman^,"  while  it 
appears  that,  in  the  gild  of  the  Holy  Trinity  at  Lancaster,  the  govern- 
ing body  consisted  of  "twelve  good  and  discrete  men,""  elected  annually ^ 
This  mode  of  controlling  the  affairs  of  the  body  suggests  the  beginnings 
of  some  species  of  committee  or  council,  in  addition  to  the  officials,  and 
further  evidence  is  afforded  by  references  to  the  choice  of  "  two  of  the 
most  discrete  men  of  the  gild  to  help""  the  alderman  and  stewards ^ 
There  is  another  form  in  which  a  group  of  this  kind  is  common  amongst 
the  social  gilds,  namely  as  elective.  While,  in  some  cases,  the  alderman 
and  stewards  were  chosen  by  the  fraternity  as  a  whole,  in  many  others 
the  procedure  was  more  complex.  The  outgoing  alderman  nominated 
four  or  eight  of  the  members,  and  these  appointed  the  new  officials^ 

Two  of  the  main  activities  of  the  gilds  have  some  bearing  on  the 
early  joint-stock  system.  They  organized  feasts  and  convivial  meetings, 
and  it  will  be  found  that  this  characteristic  persisted.  Thus — at  times 
of  rejoicing — the  East  India  company  was  noted  for  its  festive  gatherings; 
and,  on  these  and  other  occasions,  there  was  a  system  of  penalties  for 
absence  or  for  disorderly  behaviour^    Then,  in  some  instances,  the  gilds 

1  Toulmin  Smith,  English  Gilds,  pp.  3,  7,  9,  14,  15,  17,  19,  45,  47,  49,  54,  58, 
60,  62,  64,  Q5,  67,  69,  71,  74,  78,  80,  83,  86,  89,  91,  95,  97, 100,  103, 106,  108,  114, 
116,  119,  121,  122,  148,  149,  156,  160,  161,  165,  174,  176,  187,  263. 

2  Ibid.,  p.  217.  3  Vide  infra,  ii.  pp.  38,  78,  386,  415. 
*  Toulmin  Smith,  English  Gilds,  pp.  52,  141. 

6  IMd.,  pp.  174,  176.  6  Ibid.,  p.  164.  ?  Ibid.,  p.  156. 

»  Ibid.,  pp.  64,  74,  83,  89,  91,  97,  100,  119. 

®  Vide  infra,  ii.  p.  96.  The  same  custom  was  followed  by  the  Sun  Fire  Office 
{vide  infra,  in.  pp.  381-8).  The  sum  allocated  for  the  dinner  in  1712  was  305., 
which  amount  had  been  increased  to  £6  in  1715  ;  in  addition  to  this  it  was  ordered 
that  "  what  is  drunk  in  the  court  room  be  payd  for  out  of  the  public  stock."     In 


CHAP.  I.]         General  Meetings  of  early  Gilds  6 

arranged  processions  with  no  little  pomp  and  ceremony,  and  the  same 
feature  reappears  at  the  beginning  of  the  history  of  the  Russia  com- 
pany— there,  just  as  in  the  social  fraternities,  at  the  funeral  of  a  member*. 
It  is  to  be  noted  also  that,  in  another  aspect  of  gild-life,  there  is  some- 
thing that  was  a  remote  preparation  for  the  joint-stock  body.  This 
arose  out  of  the  benefit-side  of  these  fraternities.  Such  activities 
involved  the  collective  ownership  of  property  by  the  gild,  vested  in, 
and  managed  by  its  elected  representatives^.  That  property  was  not 
necessarily  used  as  capital,  but  in  certain  cases  the  gilds  had  a  fund 
designed  for  loan,  in  the  form  of  stock,  to  the  brethren  who  were  in 
need  of  such  assistance,  and  much  of  the  business  at  the  Morgespreche 
(the  prototype  of  general  meetings)  consisted  of  reports  on  the  progress 
of  these  loans,  over  the  employment  of  which  the  officials  of  the  gild 
exercised  a  general  supervision.  As  a  consequence  of  this,  the  audit  of 
accounts  was  a  prominent  characteristic  of  the  proceedings ^ 

Very  soon  after  the  Norman  Conquest  there  appears  a  new  develop- 
ment of  the  gild-idea,  in  the  institution  known  as  the  gilda  mercatm^ia. 
This  type  of  fellowship  is  distinguished  from  the  social  gilds  in  so  far  as 
it  was  directly  related  to  trade,  whereas  in  the  latter  such  reference  was 
accidental,  rather  than  essential.  In  the  gild  merchant  the  conception 
of  the  corporate  character  becomes  somewhat  more  explicit,  though  it 
must  be  recognized  that,  while  social  gilds,  as  far  as  is  known,  existed 
before  the  gilda  niercatoria  in  England,  later  the  two  types  of  fellowship 
flourished  side  by  side. 

In  view  of  the  exceedingly  narrow  views  on  freedom  of  exchange  of 
goods  in  the  eleventh,  twelfth  and  thirteenth  centuries'*,  it  was  natural 
that  the  idea  of  exclusiveness,  which  has  already  been  shown  to  have 
been  inherent  in  the  gild°,  should  result  in  the  gilda  mercatoria  in  the 
formation  of  bodies,  which  confined  trade  within  the  circle  of  their  own 
members.  Thus,  in  the  gild  merchant  there  was  involved  a  monopoly, 
which   came  to  be   implied   in  the  grant   of   the   privilege   of  gilda 

1714  it  was  necessary  to  make  a  rule,  ^*  to  prevent  feuds  and  quarrels,"  that  no 
healtlis  should  be  drunk  at  the  dinner,  with  the  exception  of  one  for  the  prosperity 
of  the  office.  The  last  official  dinner  of  the  company  was  held  in  1873 — The  Early 
Days  of  the  Sun  Fire  Office,  by  E.  Baumer,  London,  1910,  pp.  22-4,  44. 

1  The  Diary  of  Henry  Machyn,  edited  by  John  Gough  Nichols  (Camden  Soc, 
1848),  pp.  166,  170,  173,  236,  237. 

"^  Industrial  Organization  in  the  Sixteenth  and  Seventeenth  Centuries,  by  George    y/ 
Unwin,  Oxford,  1904,  p.  153. 

3  Toulmin  Smith,  English  Gilds,  pp.  69,  60,  63,  m,  70,  76,  79,  81,  83,  87,  92,  95, 
98,  106,  109,  161,  174,  206. 

*  An  Introduction  to  English  Economic  History  and  Theory,  by  W.  J.  Ashley, 
1893,  I.  (Part  I.)  p.  102. 

^  Vide  supra,  p.  3. 


6  Corporate  Purchases  hy  Gilds  [chap.  i. 

merccdoria,  and  which  was  jealously  guarded  by  the  officials  of  these 
fellowships.  Moreover  the  gildsmen  were  forbidden  to  "colour"  the 
goods  of  unfreemen,  or  to  enter  into  partnership  with  them^  It  thus 
becomes  obvious  that  the  development  of  the  gild  system  acted  as  a 
check  on  the  extension  of  partnership,  which  would  otherwise  have 
followed  from  the  canonist  teaching  on  usury.  Indeed,  at  this  period, 
there  were  immense  obstacles  to  the  association  of  capitals  owned  by 
different  persons.  The  inhabitants  of  distant  places  were  cut  off  from 
each  other  by  artificial  restraints.  Even  though  these  were  mitigated 
subsequently  by  the  system  of  the  affiliation  of  the  gilds  merchant  of 
certain  groups  of  boroughs,  the  disabilities  remained  considerable ^  In 
the  same  town  a  member  of  the  gild  merchant  might  not  join  with  a 
non-member  for  the  prosecution  of  any  enterprize.  Thus  there  was  a 
tendency,  during  the  period  the  gild  merchant  was  most  flourishing,  to 
separate  capital  into  what  might  be  called  water-tight  compartments, 
each  of  which  could  not  communicate  with  any  other.  This  was  the 
situation  as  between  the  members  of  any  gild  merchant  and  all  outsiders. 
Within  the  fellowship  strong  efforts  were  made  to  encourage  joint- 
action.  As  traders,  the  members  were  possessed  of  some  capital,  and 
they  were  now  associated  by  their  membership  of  the  gild.  The  prin- 
ciple of  collective  working  extended  a  little  further  than  this.  A  gilds- 
man  was  required  to  share  any  purchase,  he  had  made,  with  other 
members  who  might  wish  to  participate  at  the  same  priced  In  the 
fifteenth  century  this  principle  had  been  widened,  and  the  gild  appointed 
certain  officials  to  make  the  purchase  on  behalf  of  the  gild  and  they 
subdivided  it  amongst  the  members*.  Transactions  of  the  latter  type 
are  scarcely  to  be  distinguished  from  a  certain  species  of  dealing  that 
was  obviously  of  a  joint-stock  character.  Some  of  the  early  companies, 
instead  of  paying  what  would  now  be  called  a  dividend,  made  a  division 
of  commodities  to  the  members.  This  was  proposed  in  the  case  of  the 
society  of  the  Mines  Royal  (1571),  it  was  a  common  practice  of  the 
East  India  company  in  the  first  half  of  theAwijfceenth  century,  and  it 
was  the  rule  of  the  Ayr  and  Newmills  cloth  manufactories  from  1670  to 
1713^  If  it  be  supposed  that  the  officials  of  the  gild  collected  the 
funds  from  the  members  before  the  goods  were  delivered  to  them,  the 
transaction  resolves  itself  in  its  essentials  into  a  joint-stock  followed  by 
a  commodity-division. 

1  The  Gild  Merchant,  by  Charles  Gross,  Oxford,  1890,  i.  p.  48. 

2  Ibid.,  I.  pp.  242-67. 

3  Ibid.,  II.  pp.  46,  150,  161,  185,  218,  219,  226,  290,  362. 

4  Ibid.,  II.  p.  67. 

5  Vide  infra,  n.  pp.  110,  127  (note  11),  128  (notes  2  and  5),  139,  178,  390,  391, 
III.  pp.  126,  14],  142. 


CHAP.  I.]        Germ  of  Governor  and  Assistants  7 

As  compared  with  the  social  fraternities,  the  gild  merchant  had  a 
greater  variety  of  affairs  to  control,  and  therefore  it  is  to  be  expected 
that  the  organization  of  the  government  in  it  would  be  more  complete. 
At  first,  the  model  of  the  social  gilds  was  followed,  and  there  are  many 
cases  of  gilds  merchant  with  an  alderman,  stewards  and  a  dean  or  clerk 
to  which  other  subordinate  officials  were  added.  But  as  administration 
became  more  complex,  there  are  signs  of  the  beginnings  of  a  change. 
At  Ipswich,  besides  the  alderman  (who  was  elected  to  govern  the  gild 
faithfully  and  well),  there  were  also  chosen  four  members,  who  should  be 
associated  with  him  {associentur  eiy.  By  1325  there  were  two  alder- 
men, and  the  gild  house  was  to  be  in  gubernacione  of  these  officials  ^ 
while  by  the  reign  of  Henry  VII.  the  heads  of  the  body  are  spoken  of 
as  aldermanni  aid  gubernato7'es\  As  early  as  1446,  the  men,  who  were 
associated  with  the  alderman,  were  named  assodantes*;  and,  in  the  time 
of  James  I.,  they  were  known  as  "the  twenty-four^."  Similarly  at 
Great  Yarmouth  there  is  mention  of  "  the  four  and  twenty  and  the 
eight  and  forty  V'  at  Andover  in  1485  there  were  twenty -four  fforward- 
mwmi,  which  had  been  referred  to  as  early  as  1262^.  From  this  type  of 
organization,  there  was  subsequently  evolved  the  governor  and  his  ! 
assistants  of  the  regulated  company — the  aldernmnmis,  rnagister  or 
gubernator^  becoming  the  governor,  and  the  men,  selected  to  help  him 
or  to  be  associated  with  him,  the  assistants.  This  type  of  constitution, 
while  it  occurs  frequently,  was  not  by  any  means  the  only  one.  In 
many  gilds  merchant  there  is  no  trace  of  the  select  group  appointed  to  ( 
help  the  alderman.  Sometimes,  too,  the  head  of  the  fraternity  was  - 
known  as  the  master,  the  mayor  or  the  rector^.  The  alderman  and  those  ) 
associated  with  him  were  responsible  for  what  might  be  termed  the 
business-management  of  the  gild  in  general.  In  addition  there  were 
other  officers,  called  stewards,  skevins,  ferthingmen,  levelookei-s,  heyners^**, 
most  of  whom  discharged  specific  functions ;  and  it  would  appear  that, 
as  the  corporate  organization  became  developed  and  was  applied  to  more 
specialized  types  of  industry  and  commerce,  such  duties,  or  the  new 
ones  that  emerged,  were  performed  by  the  servants  of  the  later  com- 
panies— these  being  appointed  by  the  governor. 

The  increase  in  the  commercial  affairs  of  the  gilds  merchant  gave 
increasing  importance  to  the  framing  of  by-laws,  many  of  which  related 

1  Gross,  Gild  Merchant,  ii.  p.  119.     This  gild  was  m  existence  in  1200. 

2  Ibid.,  II.  p.  126.  3  ii,ici^^  II.  p,  128.  *  Ihid.,  ii.  p.  127. 

5  Ibid.,  II.  p.  131.  6  Ibid.,  II.  p.  277.  ^  Ibid.,  ii.  pp.  5,  10. 

8  In  the  case  of  Cirencester  (temp.  Henry  IV.)  the  phrase  magister  sive  gubernator 
occurs.     Ibid.,  ii.  p.  364. 

»  lUd.,  II.  pp.  25,  45,  49,  167,  207,  245. 
10  Ibid.,  1.  pp.  27,  28. 


8  The  Staple  and  Merchant  Adventurers   [chap.  i. 

to  the  exercise  of  the  monopoly.  These  records  were  of  greater  value 
to  the  members,  in  that  the  privileges  of  these  fellowships  were  to  a 
large  degree  customary ;  so  that  written  evidence  could  only  be  provided 
in  this  way,  since  the  privileges  of  a  gild  merchant  were  not  specified  in 
the  early  charters.  It  follows  that  the  process  of  framing  and  recording 
by-laws  was  another  step  in  the  development  of  the  corporate  idea,  in 
so  far  as  it  provided  a  mechanism  for  expressing  the  will  of  the  members 
as  a  community.  Like  the  social  gilds,  the  gilda  mercatoria  often  used 
a  seal,  and  audits  of  the  accounts  were  held^ 

With  the  progress  of  industry  it  began  to  appear  that  circumstances 
had  rendered  the  gild  merchant  rather  a  hindrance  than  a  help  to 
trade.  In  the  fourteenth  century  this  institution  was  beginning  to  be 
replaced  by  specialized  associations  of  traders,  such  as  the  craft  gilds  and 
companies  of  merchants.  When  the  latter  became  further  specialized 
in  relation  to  foreign  trade,  the  evolution  towards  the  joint-stock 
company  will  be  found  continued.  But,  in  the  order  of  time  there  is  a 
gap,  occasioned  by  the  early  dominance  of  foreigners  in  the  external 
trade  of  England.  This  interval  is  bridged  to  some  extent  by  the 
appearance  of  the  organization,  partly  commercial,  partly  fiscal,  which 
later  was  incorporated  as  the  Mayor,  Constables  and  Fellowship  of  the 
Merchants  of  the  Staple  of  England.  This  body  is  said  to  have  been 
in  existence  in  1248,  and  there  are  clearer  traces  of  its  activity  in 
1266-7^.  The  claim  of  the  staplers,  as  the  first  organized  body  for 
over-sea  trade,  was  disputed  by  the  fellowship  of  Merchant  Adventurers, 
which  asserted,  in  the  most  circumstantial  manner,  that  it  had  received 
concessions  from  John,  Duke  of  Brabant,  as  early  as  1216^.  It  was  not 
till  nearly  two  hundred  years  later  that  recognition  from  the  Crown  of 
England  was  obtained.  In  the  last  years  of  the  fourteenth  century 
and  during  the  first  years  of  that  following,  several  grants  were  sealed 
which  may  be  taken  as  the  official  recognition  of  the  beginnings  of  the 
regulated  company  for  foreign  trade.  These  grants  relate  to  the 
countries  bordering  on  the  North  Sea  and  the  Baltic.  The  earliest  is 
that  to  the  merchants  trading  to  Prussia  (mercatores  in  terra  Prtccia£  et 
in  partibus  de  Liscone,  Sounde  et  in  dominiis  de  Hansa  commorantes). 
By  1391,  these  traders  had  already  elected  a  governor;  and,  in  that  year, 
the  King  granted  them  the  privilege  of  assembling  together  each  year, 
on  the  feEist  of  St  John,  to  make  choice  of  a  suitable  person  to  serve  in 
this  office.  The  governor  was  given  powers  of  executing  justice  amongst 
English  merchants  in  the  territories  described  and  of  protecting  the 

1  Gross,  (Mid  Merchant,  ir.  pp.  14,  34,  61,  804. 

2  Englische  Handelspolitik  gegen  Ende  des  Mittelalters ,  von  Georg  Schanz,  Leipzig, 
1881,  I.  p.  329. 

3  Ibid.,  II.  pp.  682,  583;  Stowe  MS.  (Brit  Mus.)  303,  f.  99. 


CHAP.  I.]    Government  of  the  Merchant  Adventurers         9 

concessions  they  had  already  obtained  ^  In  1404  a  further  charter  was 
signed  on  behalf  of  the  same  body.  The  privilege  of  assembly  was 
extended — the  merchants  now  being  authorized  to  meet,  not  on  some 
fixed  day,  but  as  often  as  they  pleased.  They  might  also  elect  a 
governor  or  governors,  and  provision  was  made  for  the  functions  of 
these  being  discharged  by  deputies.  Further,  a  new  clause  was  added, 
granting  powers  of  making  statutes  and  ordinances  for  the  better 
government  of  the  body,  while  the  governor  was  permitted  to  punish, 
"  rationally,'*''  any  English  subjects,  who  disobeyed  these  rules ^  From 
this  it  followed  that  a  way  was  opened  for  the  establishment  of  a 
monopoly.  The  merchants  could  meet,  and,  by  passing  an  ordinance, 
determine  that  participation  in  the  franchises,  they  had  procured,  was 
limited  to  certain  persons,  who  had  complied  with  specified  conditions 
as  to  their  occupation  or  by  making  a  money-payment.  Thus  the 
question  of  the  freedom  of  an  association  of  this  type  soon  became 
important. 

In  1407  a  similar  grant  was  made  to  the  merchants  of  Holland, 
Zealand,  Brabant  and  Flanders,  the  only  variation  (and  that  of  minor 
importance)  being  the  inclusion  of  the  term  "  dmnini,'"  as  an  alternative 
to  '•' giihematores^^''  in  the  title  of  the  chief  officials^  In  the  following 
year  a  charter  in  the  same  terms,  save  for  the  names  of  the  privileged 
merchants,  was  sealed  on  behalf  of  the  merchants  trading  to  Norway, 
Sweden  and  Denmark*.  The  latter  patent  was  the  foundation  of  the 
Eastland  company,  that  of  1407  recognized  another  regulated  body, 
which  became  celebrated  as  the  Fellowship  of  the  Merchants  Adventurers 
of  England^  which  title  was  sanctioned  by  the  charter  of  1505.  Between 
1407  and  1505  the  corporate  character,  which  was  implicit  in  the  grant 
of  the  former  year,  becomes  more  explicit,  and  by  1498  the  fellowship 
had  received  a  grant  of  arms^.  This  progress  is  marked  in  the  charter 
of  1505,  which  records  the  development  of  the  constitution  of  the  fellow- 
ship. Besides  the  governor,  or  governors,  there  were  also  to  be  elected 
four  and  twenty  of  "the  most  sadd,  discreet  and  honest  persons... to 
be  called  and  named  assistants  to  the  governor.'"*  Of  this  court,  com- 
posed of  the  governor  and  assistants,  thirteen  members  constituted  a 
quorum.  Vacancies,  through  illness,  were  to  be  filled  by  co-option  ; 
while  assistants,  who  refused  to  serve,  were  subject  to  a  fine  of  £9,0. 
The  fellowship  received  the  most  ample  powers  of  making  ordinances, 
on  condition  that  these  were  not  contrary  to  the  laws  of  England,  and 

1  Fasdera,  vii.  p.  694.  2  n^^^^  ym,  p,  360. 

3  Ibid.,  VIII.  pp.  464-5.  *  Ibid.,  viii.  p.  511. 

^  Schaiiz,  Englische  Handelspolitik ,  11.  p.  575.  An  engraving  of  these  arms 
forms  the  frontispiece  of  The  Early  Chartered  Companies,  by  G.  Cawston  and 
A.  H.   Keene,  London,  1896. 


10  Organization  of  regulated  Companies    [chap.  i. 

that  applicants  should  be  admitted  to  the  freedom  on  payment  of  a  fine 
of  10  marks  ^ 

In  the  charter  granted  in  1505  to  the  Merchant  Adventurers,  the 
idea  of  a  trading  corporation  had  reached  a  form  closely  resembling  that 
in  which  it  appears  in  the  first  joint-stock  company,  established  by  an 
instrument  of  this  kind  fifty  years  later.  An  association  of  those,  who 
made  their  living  "by  grete  aventour^,""  acted  as  a  body  in  the  forming 
of  by-laws  governing  their  commerce  with  the  country  where  they  had 
obtained  privileges.  These  ordinances  were  put  in  force  by  the  governor 
and  assistants,  which  titles  will  be  found  to  repeat  themselves  in  many 
of  the  early  joint-stock  undertakings.  Moreover,  the  elected  repre- 
sentatives of  the  members  were  empowered  to  direct  the  conduct  of  each 
individual,  who  acquired  the  freedom,  in  very  many  ways.  Not  only 
were  minute  rules  framed,  as  to  the  times  and  the  manner  of  trading, 
but  also  as  to  the  details  of  social  and  family  life.  How  far-reaching 
some  of  the  ordinances  of  the  latter  class  were  may  be  realized  by  the 
citation  of  one  of  them,  which  forbad  any  member  to  marry  an  alien 
under  penalty  of  the  forfeiture  of  his  freedom^.  On  the  other  hand, 
there  are  traces  of  the  survival  of  the  benefit  side  of  the  early  gilds  in 
the  provision  that  help  was  to  be  given  to  those  of  the  fellowship  who 
required  it"*. 

The  organization  of  the  regulated  company  in  many  directions 
approached  that  of  the  early  joint-stock  enterprize.  It  formulated  and 
defined  the  principle  of  corporate  action  in  relation  to  foreign  trade, 
and  provided  a  type  of  government,  by  which  control  could  be  exercised. 
Though  each  freeman  remained  relatively  isolated,  as  a  capitalist,  he 
was  compelled  to  employ  his  resources  according  to  the  ordinances  of 
the  fellowship.  Not  only  so,  but  the  regulated  company,  as  a  whole, 
became  possessed  of  a  certain  amount  of  corporate  property,  arising 
from  the  fines  for  admissions  and  from  special  levies.  In  some  cases, 
these  funds  were  used  in  providing  loans  to  British  or  foreign  sovereigns; 
and,  as  a  result  of  such  assistance,  the  privileges  of  the  companies  were 
increased  from  time  to  time.  There  are  traces  also  of  the  formation  of 
groups  within  the  main  body.  This  process  was  governed,  in  some 
instances,  by  considerations  that  were  altogether  local.  Thus  the  Mer- 
chant Adventurers  and  the  Eastland  company  had  "  residences  "  at  the 

^  Schanz,  Englische  Handelspolitik,  ii.  pp.  549-53;  Cawston  and  Keene^  Early 
Chartered  Companies,  pp.  249-54. 

2  The  Merchant-Gild  of  Kingston-upon-Hull  (1499)— Ttt-o  Thousand  Years  of 
Gild  Life,  by  J.  M.  Lambert,  Hull,  1891,  p.  158. 

3  Stowe  MS.  (Brit.  Mus.)  303,  f.  101. 

*  The  Lawes,  Customes  and  Ordinances  of  the  Fellowshippe  of  Merchautes 
Adventurers  of  the  Realm  of  England,  Add.  MS.  (Brit.  Mus.)  18,913,  f.  5. 


CHAP.  I.]     Joint-Stocks  in  regulated  Companies  11 

chief  English  towns,  which  participated  in  trade  with  the  respective 
countries  in  which  they  were  interested ;  and  many  of  these  residences 
were  constitutionally  quasi-independent,  in  so  far  as  they  had  charters*. 
In  addition,  there  was  a  further  subdivision,  where  the  freemen  in  small 
bodies  entered  into  partnership  ^  Some  such  development  was  rendered 
necessary  by  the  universal  rule,  that  members  might  not  join  with  non- 
members  and  also  to  the  antagonism  between  the  ideas  of  the  regulated 
company  and  the  commenda.  It  is  recorded  that  amongst  the  Merchant 
Adventurers  of  Newcastle-upon-Tyne  (an  affiliated  body  of  the  fellowship 
of  Merchant  Adventurers),  by  the  middle  of  the  sixteenth  century,  it  had 
become  common  for  a  freeman,  who  owned  a  ship,  to  take  a  mariner 
into  partnership,  the  latter  receiving  a  share  in  the  profit  of  the  voyage. 
It  was  natural  that  the  sailor  or  supercargo  (who  was  in  fact  the  tractator, 
portator  or  commendatarius  of  the  commenda  thus  established)  should  "not 
only  practys  the  fetys  of  merchaundrese,  in  as  large  and  ample  maner  as 
many  and  sondrye  marchaunts  of  the  saide  feloshipe  do,  but  also  for 
thar  mor  singuler  prophet  doo  occopye  the  forsaid  shipe  and  take 
frawght  from  divors  partes  beyonde  the  see  of  merchauntes  strangers  ^" 
both  these  practices  being  contrary  to  the  whole  spirit  of  the  regulated 
company ;  and  so  it  follows  that,  once  these  bodies  had  been  organized 
and  were  able  to  enforce  their  rules,  the  commenda  could  not  flourish  in 
the  trades  they  controlled.  In  another  direction,  also,  the  Merchant 
Adventurers  of  Newcastle-upon-Tyne  tended  to  limit  partnership.  The 
regulated  companies  laid  great  stress  upon  apprenticeship,  and  it  was 
by  this  device  that  membership  was  confined  to  what  were  called  later 
"  legitimate  merchants,""  namely  those  who  had  been  apprentices.  About 
the  middle  of  the  sixteenth  century,  a  practice  had  come  into  existence 
in  this  company  for  freemen  to  permit  apprentices  to  employ  capital 
"  under  clocke  and  cover  of  theyr  mayster's  trade  " ;  and  it  was  ordained, 
in  1554,  that  no  apprentice  might  enter  into  any  venture  during  the 
first  five  years  of  his  indentures  and,  for  the  remainder  of  his  term,  to 
the  extent  of  d^lO  only.  By  a  further  statute  these  rules  were  made 
more  precise.  When  an  apprentice  had  been  bound  for  five  years,  he 
was  permitted  to  employ  £20  "  in  jointe-stocke  with  his  maister,"  after 
three  years  more  (and  to  the  end  of  his  term)  his  investment  might  be 
increased  to  =£^40,  subject  to  the  proviso  that  the  use  of  it  should  be  also 
in  joint-stock  with  the  freeman  to  whom  he  was  indentured^.    A  further 

1  Acts  and  Ordinances  of  the  Eastland  Company,  edited  by  Maud  Sellers^  London 
(Royal  Hist.  Soc),  1906,  pp.  xiv,  xix,  xxvii,  Ixi,  Ixiii,  Ixvii. 

^  Extracts  from  the  Records  of  the  Merchant  Adventurers  of  Newcastle-upon-Tyne 
(Surtees  Soc,  1895),  i.  p.  2. 

3  Ibid.,  I.  p.  41.  This  ordinance  is  dated  1553,  and  it  may  be  taken  as  typical 
of  what  happened  elsewhere  at  an  earlier  date.  *  Ibid.,  i.  pp.  6,  7. 


12  Joint-Stocks  in  regulated  Companies     [chap.  i. 

extension  of  a  similar  principle,  which  may  have  happened  in  the  gild 
merchant,  is  explicitly  recorded.  In  1599  an  oiFer  was  made  to  the 
Newcastle  company  of  80  fother  of  lead  at  £1  per  fother.  This  was 
purchased  by  the  fellowship  as  a  whole,  and  provision  was  made  that 
a  committee  should  determine  the  quantity  to  be  assigned  to  each 
member,  collecting  the  price  of  it  from  him  at  this  rate  and  discharging 
the  debt  of  the  company  to  the  original  seller^.  This  was  in  fact  a 
joint-stock  purchase,  followed  by  a  commodity-division.  When  such 
bargains  became  the  rule,  instead  of  the  exception,  the  regulated  com- 
pany would  be  transformed  into  a  joint-stock  body,  as  the  latter  will  be 
found  to  have  existed  during  the  sixteenth  century ;  and,  when  this 
stage  in  the  evolution  was  reached,  all  that  was  necessary  to  effect  the 
change  was  an  occasion  which,  in  some  new  enterprize,  would  make 
it  seem  to  be  desirable. 

Such  then  is  one  line  of  development,  which  would  inevitably  lead 
to  the  formation  of  the  joint-stock  company  in  its  primitive  form — 
a  tendency  which  might  be  expected  to  manifest  itself  in  the  prosecution 
of  distant  foreign  trades.  There  remains  another  to  be  considered, 
namely  the  extension  of  the  societas.  In  an  industry,  which  was  long 
continued  or  which  was  growing  rapidly,  there  would  be  a  tendency  for 
additional  partners  to  be  assumed ;  so  that,  in  time,  the  undertaking 
would  grow  from  a  societas  to  a  type,  which  might  be  more  correctly 
described  as  a  company.  In  several  cases  of  this  character,  which  will 
be  noticed  below,  the  transition  is  marked  by  the  grant  of  a  charter  to 
the  enlarged  partnership.  But  growth,  of  the  kind  indicated,  could  only 
arise  when  there  was  a  need  for  considerable  employment  of  capital  in 
industry.     Prior  to  the  beginning  of  the  fourteenth  century,  there  was 


1  Extracts  from  the  Records  of  the  Merchant  Adventurers  of  Newcastle-upoiv- 
Tyne,  i,  pp.  104,  105.  In  view  of  the  long  disputes  in  the  Virginia,  Somers 
Islands,  and  East  India  companies  as  to  whether  votes  should  be  taken  by  show  of 
hands  or  by  ballot  {vide  infra,  ii.  pp.  106,  269 — 85),  the  following  ordinance  of  the 
Merchant  Adventurers  of  Newcastle,  dating  from  1563,  is  of  interest.  "  Wharas 
dyvers  and  sondrie  oflFencis  haythe  ben  corny  ttyd  and  don  by  dyvers  of  the  Fellyshype, 
and  ther  falts  beinge  provyd  before  the  governor  and  the  Felyshype,  yett  nevertheles, 
for  so  moche  as  yt  haytlie  ben  allwayes  accustomyd  that  all  suche  deffalts  haithe  ben 
refferred  to  the  Felyshype  and  to  be  tryed  by  holdinge  up  their  handes,  by  reassinge 
wherof  eyther  by  effection,  or  for  fer  of  the  parents  of  the  partye,  yt  haithe  ben 
juged  and  thowgth  by  some  of  the  Felowshypp  that  the  falts  and  fyns  don  to  the 
Fellyshype  haithe  nott  ben  well  handlytt  for  the  profeatt  of  the  Howse  and 
Fellyshipe,  for  reforemacion  wharof  be  it  enactyd...  That  all  dowtts,  falts,  treaspas 
or  fynnes. .  .shal  be  tryed  by  the  boxe  accordinge  to  the  most  dyscreatt  and  indifFerende 
means,  so  thatt  no  man,  doinge  accordinge  to  his  conscience,  shal  be  juged  of  no 
partye  nether  to  do  ytt  of  bearings  no  of  dysepleasur."     Ibid.,  i.  p.  69. 


CHAP.  I.]  Extension  of  the  Societas  t% 

little  room  for  the  investment  of  capital  in  England  by  Englishmen*. 
From  this  time  onwards,  there  are  traces  of  a  capitalistic  organization 
of  mining  in  Cornwall^,  and  in  the  last  quarter  of  the  fifteenth  century 
there  are  references  to  large  partnerships  for  the  working  of  the  Mines 
RoyaP.  These  were  the  forerunners  of  the  first  joint-stock  company, 
incorporated  for  a  home  industry.  Then,  in  the  time  of  Edward  VI., 
there  is  an  account  of  a  partnership  for  the  smelting  of  iron^  At  that 
time,  the  increasing  importance  of  capital  in  industry  was  marked  by 
the  development  of  the  textile  industries  by  its  aid".  It  may  have  been 
that  in  this  movement  there  were  partnerships  comprising  a  large 
number  of  members;  but,  if  so,  particulars  of  them  have  not  been 
discovered.  It  is  significant  too  that,  during  the  first  century  of  the 
joint-stock  system,  it  did  not  affect  the  cloth  trade. 

In  addition  to  these  two  streams  of  tendency  towards  the  formation  of 
joint-stock  bodies,  there  is  the  possibility  that  the  method  of  constituting 
them  might  have  been  copied  from  similar  institutions  on  the  Continent 
and,  more  especially,  in  Italy  or  Germany.  There  are  two  main  reasons 
which  explain  the  absence  of  any  direct  influence  of  this  character  on 
the  earliest  English  joint-stock  undertakings.  Just  at  the  period  when 
they  came  into  existence,  Italian  commercial  and  financial  relations 
with  England*  had  declined,  and  therefore  there  would  not  be  the  same 
disposition  to  borrow  a  constitution  from  Genoa  or  Venice.  Besides, 
the  development  of  the  idea  of  a  trading  corporation  from  the  gild- 
merchant  to  the  regulated  company  was  so  complete  that  there  was  no 
need  to  go  beyond  it;  while  the  prevalence  of  the  gild-system,  in  its 
various  later  developments  (such  as  the  livery  company  and  the  regulated 
company),  showed  that  these  were  suitable  to  the  temperament  of  the 
merchants  of  the  period.  Indeed  the  change  from  a  regulated  company  . 
or  a  societas  of  the  middle  of  the  sixteenth  century  to  a  joint-stock,  as-_  ^• 
the  latter  existed  in  the  second  half  of  that  century,  was  so  small  that 
it  was  one  that  would  come  almost  insensibly  by  the  normal  course  of 
commercial  and  industrial  development.     At  the  same  time,  while  there 

*  An  Introduction  to  English  Economic  History  and  Theory,  by  W.  J.  Ashley, 
London,  1892,  i.  (Part  i.)  p.  155.     . 

2  Victoria  County  Histories— Cornwall,  i.  p.  559;  The  Stannaries:  a  Study  of  the 
English  Tin  Mines,  by  George  Randall  Lewis,  Boston,  1908,  pp.  189-91. 

3  Vide  infra,  ii.  p.  384  (note  2).  *   Vide  infra,  ii.  p.  46(3. 

^  The  Growth  of  English  Industry  and  Commerce,  during  the  Middle  Ages,  by 
W.  Cunningham,  pp.  524,  525. 

8  The  connection  of  the  Italian  societas  with  Scotland  continued  till  the  Reforma- 
tion. For  instance  from  1518  to  1521  there  are  references  to  transactions  with  the 
Bardi,  the  Gualterotti  and  other  bankers — "The  Formulare"  (MSS.  Univ.  Lib. 
St  Andrews),  if.  36,  44 ;  The  Archbishops  of  St  Andrews,  by  J.  Herkless  and 
R.  K.  Hauuay,  ii.  p.  40. 


X 


14  Foreign  Influences  [chap.  i. 

was  no  direct  adoption  of  foreign  types  of  joint-stock  bodies,  allowance 
must  be  made  for  the  occasional  presence  of  influences,  derived  from 
abroad,  in  determining  some  points  of  detail.  If,  as  suggested  else- 
where^, certain  peculiarities  appear  in  particular  joint-stock  companies, 
and  it  is  found  that  foreigners  were  prominent  in  the  promotion  of 
these,  while  again  those  peculiarities  were  usual  in  the  bodies  of  this 
type  in  the  native  countries  of  these  men,  it  may  be  concluded  that  such 
special  variations  from  the  normal  English  type  of  constitution  are  to 
be  assigned  to  a  definite  influence  from  the  Continent. 

1  Vide  infra,  p.  20,  ii.  pp.  38,  78. 


CHAPTER  II. 

From  the  Beginning  op  the  Russia  Company  in  1553 
TO  THE  Crisis  of  1569. 

The  appearance  of  the  fully  constituted  joint-stock  company  was 
the  product  of  two  different  lines  of  development.  As  already  shown  ^, 
on  the  one  side,  there  were  the  diverse  forms  of  mediaeval  partnership ; 
and,  on  the  other,  the  organization  of  corporate  activity,  which  originated 
in  the  gild.  The  former  practice  effected  a  synthesis  of  the  capital,  owned 
by  a  few  persons,  but  the  undertaking,  started  in  this  manner,  was  tem- 
porary in  its  nature,  and  no  lasting  plans  could  be  made  for  its  con- 
tinuance. Moreover,  should  events  require  the  utilization  of  considerable 
resources,  it  would  be  necessary  to  introduce  a  large  number  of  partners, 
and  the  mediaeval  societas  had  not  a  sufficiently  elaborate  organization 
for  the  government  of  an  extended  membership.  Yet  the  necessary  j 
system  had  been  developed  in  the  gild-merchant  and  the  early  regulated 
companies,  and  it  only  required  the  stimulus  of  a  suitable  occasion  to 
graft  the  company  organization  on  to  the  partnership. 

The  precise  date,  at  which  this  union  was  effected  in  England,  was 
conditioned  by  a  number  of  circumstances  connected  with  the  religious, 
social  and  industrial  condition  of  the  country.  The  progress  of  maritime 
discovery  was  extending  foreign  trade  at  the  commencement  of  the 
sixteenth  century,  and  it  was  in  this  branch  of  commerce  that  capital 
was  of  most  importance.  But  the  attitude  of  the  Church  to  capital  was 
on  the  whole  not  a  progressive  one.  How  far  the  canonist  doctrine  of 
usury  was  justified  by  the  circumstances  of  the  time,  how  far,  in  countries 
where  there  was  no  Reformation,  the  Civil  Law,  derived  from  Roman 
jurisprudence,  enabled  companies  to  be  formed  with  a  joint-stock,  are 
questions  beyond  the  scope  of  the  present  work.  In  England,  in  many 
respects,  the  Reformation,  in  liberating  capital  from  the  position  it  had 
occupied  under  the  Church,  forced  this  country  to  work  out  the  corporate 
organization  of  capital  independently. 

1   Vide  supra,  pp.  2-10. 


16  The  Crown  Debt  1552-5  [chap.  n. 

If  the  Reformation  be  regarded,  not  alone  in  its  religious  and  political 
aspects,  but  also  from  the  social  and  economic  point  of  view,  it  had 
a  marked  effect  upon  the  distribution  of  capital  in  England.  The 
Church  was  the  pivot  of  mediaeval  activities,  and  not  the  least  of  its 
functions  was  its  economic  agency.  At  the  Reformation,  in  the  general 
upheaval,  some  of  these  economic  functions  disappeared,  while  the  form 
of  the  remainder  was  changed.  The  transference  of  ecclesiastical  pro- 
perty on  an  enormous  scale ^  meant,  for  a  time,  an  economic  loss.  A 
considerable  amount  of  dislocation  in  national  production  was  inevitable, 
and  the  release  of  hoarded  and  unproductive  wealth  caused  great 
extravagance. 

To  turn  the  economic  loss  of  the  Reformation  into  national  gain 
required  a  period  of  reconstruction,  but  this  was  not  reached  till  the 
reign  of  Elizabeth.  Henry  VIII.  wasted  the  wealth  that  reached  him 
from  the  monasteries,  and  his  extravagance  resulted  in  the  debasement 
of  the  coinage  and  the  contraction  of  a  debt,  which  involved  an  annual 
charge  on  the  revenue  of  the  Crown  of  ^40,000  a  year.  Partly  through 
an  adverse  balance  of  indebtedness,  partly  by  the  debasement  of  the 
coinage  the  exchange  at  Antwerp  was  so  low  that  c^^l  sterling  only 
realized  IQs.  Flemish 2.  In  1552  the  debt  abroad  was  J'l 08,000,  and 
three  years  later  it  had  grown  to  d^l 48,526.  5*.  8c?.,  while  the  interest 
was  about  14  per  cent.^  How  onerous  this  rate  was  may  be  judged 
from  the  fact  that  in  1407  the  bank  of  St  George  was  able  to  convert 
existing  obligations,  borrowed  from  10  per  cent,  to  8  per  cent.,  into 
a  new  security  at  7  per  cent.**  Therefore,  from  1550  to  1570,  there 
was  a  continual  drain  on  England,  through  the  interest  payable  on  the 
loans  contracted  abroad.  Moreover,  not  only  was  the  interest  high,  but 
the  form  of  loan  was  especially  onerous.  All  these  debts  were  contracted 
for  short  periods,  and  if,  through  any  cause,  the  principal  as  well  as  the 
interest  was  not  forthcoming,  a  renew^al  could  only  be  effected  on  still 
more  disadvantageous  terms.  It  may  be  urged  that,  after  all,  the  pay- 
ment of  interest  might  be  off-set  against  the  pre-Reformation  remittances 
to  the  Pope  and  to  foreign  ecclesiastics,  who  drew  revenues  from  English 
benefices.     But  to  take  this  view  is  to  consider  the  economic  disadvan- 

^  Stevens,  in  The  Royal  Treasury  of  England  or  an  Historical  Account  of  all  Taxes, 
London,  1725,  pp.  213^  214,  gives  the  gross  annual  value  of  the  religious  houses  in 
England  and  Wales,  suppressed  by  Henry  VIIL,  as  £152,517-  18s.  \0\d.  and  the 
nett  annual  value  as  £131,607.  Qs.  4t^d. 

2  The  Lives  of  the  Professors  of  Gresham  College,  by  John  Ward,  London,  1740, 
p.  9;  The  Life  and  Times  of  Sir  Thomas  Gresham,  by  John  William  Burgon,  London, 
1839,  I.  p.  68. 

3  Burgon,  Life  of  Gresham,  i.  pp.  93,  182. 

*  Histoire  de  la  Banque  de  Saint-Georges  de  Genes,  par  le  Prince  Adam  Wiszniewski, 
Paris,  1865,  p.  7. 


CHAP.  II.]      Joint-Stocks  in  new  foreign  trades  1553      17 

tages  of  the  mediseval  Church  as  stereotyped,  through  regarding  the 
Crown  debt  as  a  kind  of  charge  on  the  benefits  to  accrue  from  the 
Reformation.  Just  at  the  time  that  the  interest  pressed  most  heavily, 
it  is  probable  that  the  national  production  was  less  than  it  had  been  in 
the  first  thirty  years  of  the  sixteenth  century;  so  that,  on  the  whole, 
there  appears  every  reason  to  believe  that,  about  1550,  the  capital  of 
the  country  was  being  depleted.  Under  these  circumstances,  attempts 
would  be  made  to  secure  a  higher  return  on  that  capital  which  was  free 
to  seek  for  it.  Thus  the  more  enterprizing  merchants  would  be  forced 
to  give  gi-eater  attention  to  foreign  trade.  Already,  however,  the  exist- 
ing regulated  companies — the  Merchant  Adventurers,  the  Staplers  and 
the  Eastland  company^ — were  in  possession  of  the  chief  known  trade 
routes,  and  those,  who  wished  to  extend  English  foreign  commerce, 
would  be  forced  to  go  further  afield.  To  provide  funds  for  voyages 
to  distant  places  would  require  considerable  capital,  and  therefore,  once 
such  enterprizes  were  undertaken,  some  kind  of  joint-stock  company 
would  naturally  be  formed.  It  may  indeed  be  asked  why,  at  this 
juncture,  supposing  foreign  trade  were  about  to  be  prosecuted  in  a  new 
direction,  such  trade  might  not  have  been  organized  by  a  regulated 
company?  The  regulated  company  had  a  complete  constitution — it 
had  perpetual  succession  and  a  permanent  body  of  officials,  but,  subject 
to  the  rules  of  the  governor  and  assistants,  each  member  might  use  his 
own  capital  as  he  thought  best.  But  to  do  this,  it  was  necessary  that 
the  trade  should  be  carried  on  with  a  country,  not  too  distant,  which 
was  civilized.  Moreover,  the  trade,  suitable  for  a  regulated  company, 
must  be  one  of  some  magnitude  following  well-defined  lines,  in  order  to 
facilitate  the  provision  of  shipping.  In  trading  to  a  distant  country 
larger  vessels  would  be  needed ;  and,  if  such  an  expedition  were  managed 
by  a  regulated  company,  the  loading  of  the  goods  of  a  number  of  adven- 
turers in  one  ship,  accompanied  by  the  factors  in  charge  of  them,  would 
produce  almost  inextricable  confusion.  Therefore,  when  a  trade  was 
opened  to  Russia  or  to  Africa,  it  was  almost  inevitable  that  it  should 
be  founded  on  a  joint-stock  basis. 

If  then  the  joint-stock  company  be  distinguished  from  the  mere 
partnership  by  some  corporate  character  and  fixed  methods  of  procedure 
in  the  conduct  of  business,  the  first  English  joint-stock  company  of 
importance  was  that  founded  in  1553,  and  which  may  be  described,  for 
the  sake  of  convenience  by  the  name  it  was  commonly  known  by  later, 
as  the  Russia  company.  It  is  significant  also  that,  in  the  same  year, 
another  joint-stock  enterprize  was  established  to  trade  to  Africa.  Prior 
to  the  Russian  and  African  companies,  there  were  several  ventures  which 

J  Vide  aupra,  pp.  8,  9. 
8.  C.  I.  2 


J 


18  The  Russia  Company  founded  1553       [chap.  it. 

stand  on  the  border-line  between  the  company  proper  and  large  partner- 
ships. As  early  as  1485  a  number  of  noblemen  and  gentlemen  of 
England  were  granted  rights  of  mining  the  precious  metals  in  certain 
districts  and  were  constituted  "governors  of  the  Mines  RoyaP.""  A 
somewhat  similar  grant  was  made  for  Scotland  to  a  group  of  foreigners 
in  1526".  Then  in  1540  it  is  recorded  that  several  merchants  of 
Southampton  joined  in  sending  a  trading  expedition  to  Africa^  So 
little  is  known  of  the  internal  affairs  of  these  undertakings  that  it  is 
difficult  to  determine  how  far  they  might  be  characterized  as  companies, 
how  far  as  partnerships. 

Failing  sufficient  data  relating  to  earlier  ventures,  the  two  trading 
^  expeditions  of  1553  may  be  taken  as  the  beginnings  of  important  English 
joint-stock  enterprizes.  Each  is  the  complement  of  the  other,  in  so  far 
as  the  Russia  company  represents  the  evolution  of  the  joint-stock,  from 
the  regulated  company ;  while,  in  the  case  of  the  African  Adventurers, 
the  same  goal  is  reached  from  the  partnership.  It  is  significant  that,  in 
both  cases,  the  enterprize  is  characterized  as  one  for  the  discovery  of 
places  unknown,  or  not  previously  frequented  by  Englishmen  ^  This 
note  is  very  clearly  sounded  in  the  title  by  which  the  voyage  (which 
resulted  in  the  opening  of  the  maritime  route  to  Russia)  was  described. 
This  was  the  Mysterie  and  Companie  of  the  Marchants  Adventurers  for 
the  discoverie  of  regions,  dominions,  islands  and  places  unknown.  Sebastian 
Cabot  was  one  of  the  founders  of  the  venture ;  and  it  may  have  been 
through  his  knowledge  of  the  joint-stock  system  in  Italy  that  it  was 
decided  there  should  be  "  one  common  stocke  of  the  company,""  and  that 
y  no  member  or  servant  might  trade  on  his  own  account.  The  adventurers 
subscribed  ^£^6,000  by  calls  of  £^5  on  each  share,  and  this  sum  was 
devoted  to  the  purchase  of  three  ships  and  some  goods,  suitable  for 
trade.  The  expedition  started  with  the  idea  of  discovering  new  countries 
to  trade  with,  along  the  north-eastern  passage  to  China  and  the  East. 
Two  of  the  three  ships  were  lost  in  the  ice,  but  the  third  succeeded 
in  reaching  Archangel ;  and  Chancellor,  who  was  in  command,  set  out 
overland  to  make  a  commercial  treaty  with  the  ruler  of  the  country. 
He  obtained  the  promise  of  extensive  privileges  and  concessions  for  the 
agents  of  the  company,  since  it  was  to  the  advantage  of  Russia  to  open 
a  maritime  trade — that  country  at  this  time  having  no  port  on  the 
Baltic.  Thus  in  1554  the  position  was  that  the  adventurers  had  pro- 
cured important  franchises  in  Russia  at  an  expenditure  which  was  con- 
siderable for  the  time.  In  order  to  secure  the  benefits  of  the  "new 
trade "  to  the  discoverers  of  it,  a  charter  was  signed  on  February  6th, 
1555,  which  reserved  to  the  company  the  sole  right  of  trading  with 

1  Vide  infra,  ii.  p.  383.  2  /ft^^,^  ^^  p,  g84. 

3  Ibid.,  II.  p.  3.  *  Ibid.,  11.  pp.  4,  37,  41. 


CHAP.  II.]        Its  Objects  and  Cofistitutimi  1553-5  19 

Russia,  or  with  any  other  countries  that  might  be  opened  up  by  the 
adventurers  in  the  future  and  which  had  not  been  commonly  fre(juented 
by  Englishmen.  This  grant  clearly  bases  the  monopoly  of  trade  on  the 
ground  of  the  right  of  discovery ;  and  the  promptitude,  with  which  such 
privileges  were  granted,  is  to  be  ascribed  in  part  to  the  national  import- 
ance of  the  branch  of  commerce  now  made  available.  Not  only  would 
a  new  market  be  found  for  English  connnodities,  but,  what  was  more 
important,  England  obtained  direct  access  to  materials  of  the  greatest 
possible  importance  for  the  shipping  trade,  such  as  cordage  and  timber 
for  masts. 

The  charter  also  prescribed  with  considerable  detail  the  constitution 
of  the  undertaking,  which  is  described  as  "one  bodie  and  perpetuall 
fellowship  and  communaltie.''  This  characterization  gathers  up  the 
various  lines  of  development  leading  to  the  establishment  of  corporate 
life — suggesting  the  description  of  the  contemporary  regulated  and  livery 
companies;  while,  as  already  shown ^  the  term  "  fellowship"  was  common 
in  the  early  gilds.  The  explicit  reference  to  "the  one  bodie"  shows 
that  greater  emphasis  was  being  laid  on  the  idea  of  a  corporation.  The 
charter  is  not  explicit  on  the  specifically  joint-stock  character  of  the 
concern,^  which  shows  itself  rather  in  the  ideas  of  the  founders  and  in 
the  actual  working  out  of  the  enterprize,  and  hence,  in  the  written  con- 
stitution, the  development  of  the  idea  of  partnership  is  less  prominent, 
though  it  was  precisely  this  side  of  its  activities  which  differentiates  this 
company  from  others  already  incorporated. 

There  could  be  no  clearer  example  of  the  tentative  nature  of  the 
incorporation  of  a  company  than  the  lengthy  title  given  to  this  one. 
Probably  in  the  middle  of  the  sixteenth  century,  the  practice  that  was 
later  enforced — namely  that  no  corporation  could  act  legally,  except 
under  the  full  title  by  which  it  was  established ^ — had  not  been  accepted. 
Evidently,  just  as  in  the  case  of  treatises  in  the  following  century,  it  was 
supposed  that  the  name  of  a  company  or  of  a  book  should  be  at  the 
same  time  a  concise  epitome  of  the  whole  objects  of  either,  and  therefore 
the  Russia  company  began  its  career  as  the  MarchmiU  Adventurers  of 
England  for  the  discovery  of  lands,  territories,  isles,  dominions  and 
seignories  unknown,  and  not  before  that  late  adventure  or  enterprize 
commanli/  frequented.  The  inconvenience  of  this  extended  title  was  so 
marked  that  in  1566  it  was  shortened,  under  the  authority  of  an  act 
of  Parliament,  and  thenceforth  the  undertaking  was  known  officially  as 
the  Fellowship  of'  English  Merchants  for  discovery  of  New  Trades^, 

1  Vide  supra,  p.  3. 

2  Reports  of  Cases  adjudged  in  the  Court  of  King's  Bench  from  1  Will,  and  Mary 
to  10  Anne  by  William  Salkeld,  London,  1795,  in.  p.  102. 

3  Vide  infra,  ii.  pp.  37,  42. 

2—2 


20     Government  of  the  Russia  Company  1555     [chap.  ii. 

The  charter  prescribed  with  some  minuteness  the  internal  constitution 
of  the  body.  The  members  had  the  right  of  assembling  and  making 
elections  of  officials.  At  first  there  was  to  be  one  governor,  and  this 
position  was  to  be  held  by  Sebastian  Cabot  for  life.  After  his  death, 
two  governors  might  be  elected.  In  addition  to  the  governor,  or 
governors,  the  fellowship  was  empowered  to  choose  annually  twenty - 
eight  persons,  of  whom  four  were  described  as  "consuls'"  and  the 
remaining  twenty-four  as  "  assistants  ^'^  Several  points  of  interest  arise 
in  the  constitution  of  this  court.  In  the  gild-merchant,  originally,  the 
chief  power  lay  in  the  hands  of  the  governor  with  whom,  as  time  went  on, 
other  subordinate  officials  became  associated  to  assist  him^  The  same 
order  of  evolution  prevailed  in  the  livery  and  the  regulated  company, 
and  gradually  the  court  became  constituted  as  consisting  of  a  governor 
and  assistants  ^  Possibly  through  religious  influences,  the  number  of 
assistants  was  almost  invariably  either  twelve  or  a  multiple  of  twelve. 
In  fact,  in  almost  all  cases  where  details  are  recoverable  of  early  com- 
panies, the  assistants  and  the  shares  were  counted  by  dozens,  not  by  tens. 

It  will  be  noted  that  in  the  court  of  the  Russia  company,  besides  the 
governor  and  assistants,  there  is  an  intermediate  order,  namely  the  four 
consuls.  This  office  was  the  prototype  of  that  of  deputy-governor,  but 
the  name  given  to  it  is  rare  in  English  companies.  The  only  other  case 
\  is  that  of  the  Company e  of  Katha%  incorporated  in  1577,  which  was 
formed  by  members  of  the  Russia  company.  There  can  be  little  doubt 
that  this  temporary  introduction  of  the  term  "  consul,'"  as  applied  to 
a  deputy -governor,  was  of  Italian  origin.  From  the  beginning  of  the 
debt  of  Genoa,  consuls  had  been  appointed  to  superintend  the  administra- 
tion of  the  finances.  In  the  complex  organization  of  the  Bank  of 
St  George,  four  consuls  were  nominated  by  the  chief  officials  or  Pro- 
tectors*. That  English  merchants,  trading  in  Italy,  were  influenced  by 
the  local  nomenclature  is  shown  by  the  fact  that,  when  in  1486  a  grant 
was  made  for  the  internal  government  of  these  traders,  instead  of  the 
person  nominated  being  named  governor  {guhernator)  as  in  other  cases, 
he  is  called  consul  or  president^. 

The  idea  of  three  orders  in  the  management  of  the  affairs  of  the 
Russia  company  was  developed  in  the  constitution  of  the  quorum  at 
court  meetings.  Out  of  the  twenty-nine  or  thirty  officials  as  the  case 
might  be,  the  normal  quorum  was  formed  by  the  governor,  two  consuls 
and  twelve  assistants.     If,  however,  during  the  lifetime  of  Cabot  (when 

1  Vide  infra,  ii.  p.  38.  2  yidg  gupra,  p.  7. 

3  Ibid.f  p.  9 ;  Some  Account  of  the  Worshipful  Company  of  Grocers  by  J.  B.  Heath, 
London,  1829,  p.  58. 

^  Essai  sur  torigine  et  l' organisation  de  La  Banque  de  Saint-Georges,  par  M.  Moland, 
pp.  33,  43.  *  Fcedera,  xiii.  p.  314. 


CHAP.  II.]  The  Adventurers  for  Ghiinie  1553  21 

there  was  only  one  governor),  he  should  be  absent  through  illness,  it  was 
provided  that  a  court  might  be  constituted  by  three  consuls  and  twelve 
assistants. 

It  will  thus  be  seen  that  the  Russia  company  came  into  existence  with 
a  complete  internal  organization,  which  in  the  main  was  transferred  from 
the  previously  existing  type  of  incorporation.  No  provision  was  made 
in  the  charter  for  any  of  the  functions  that  would  arise  out  of  this 
company  being  formed  on  a  joint-stock  beisis.  Thus  there  were  no 
regulations,  relating  to  the  votes  of  members  or  to  their  other  rights  or 
obligations.  If  any  attention  was  given  to  such  problems,  it  may  have 
been  considered  that  any  powers  necessary  were  conveyed  by  the  clause, 
connnon  to  this  charter  and  those  of  the  regulated  companies,  that 
orders  might  be  made  for  the  governing  of  the  trade ;  and  it  will  be 
found  one  of  the  points  of  interest,  in  the  growth  of  the  joint-stock 
form  of  organization,  how,  when  such  difficulties  had  arisen,  attempts  to 
deal  with  them  are  introduced  into  the  charters  of  later  companies. 

It  would  be  erroneous  to  conclude  from  the  existence  of  the  charter 
of  the  Russia  company  that  this  was  the  sole  type  of  joint-stock 
organization  for  foreign  trade.  In  the  same  year  (1553)  the  African 
trade  was  re-opened,  and  was  conducted  for  a  number  of  years,  without 
a  charter  or  a  monopoly.  The  African  expeditions  were  promoted  by 
five  "chief  adventurers,"  who  had  each  of  them  partners  under  him. 
This  undertaking,  although  not  incorporated,  was  frequently  described 
as  a  "company,''  and,  in  1564,  the  calls  on  the  shares  were  sanctioned 
at  a  meeting,  of  which  a  formal  minute  was  kept\  Several  reasons 
may  be  discovered  for  the  diff*erent  form  in  which  the  African  trade  was 
organized.  First  of  all,  the  Portuguese  were  established  on  the  coast 
of  Guinea,  and  they  endeavoured  to  prevent  the  ships  of  other  nations 
from  trading.  Thus  there  was  something  furtive  in  the  first  English 
expeditions,  and  it  was  advisable  to  advertize  them  as  little  as  possible. 
In  the  second  place,  although  the  agents  of  the  Adventurers  had 
established  friendly  relations  with  the  native  chiefs,  they  did  not  obtain 
privileges  from  them  that  could  be  compared  with  those  granted  the 
Russia  company  in  that  country.  It  is  true  that,  on  the  grounds  of  re- 
discovery, the  Adventurers  to  Gumie  were  entitled,  on  existing  precedents, 
to  a  monopoly  of  the  trade  to  some  part,  or  even  the  whole  of  the 
known  African  coast  line ;  but,  in  the  confusion  existing  during  Mary's 
reign,  it  may  have  been  that  it  was  not  considered  desirable  to  ask  for  a 
charter.  This  conjecture  is  confirmed  by  the  fact  that  some  of  the 
"  chief  adventurers  "  were  prominent  during  the  time  of  Elizabeth,  and 
therefore  it  is  unlikely  that  they  would  have  obtained  favoui*s  from  her 
predecessor. 

^   Vide  infra,  ii.  p.  7. 


22        Capitalization  of  Companies  1553-60         [chap.  ii. 

In  the  mode  of  capitalization,  adopted  by  these  two  companies,  there 
were  certain  important  differences.     The  Russia   company  owned  its 
ships,  while  the  African  Adventurers  hired  those  which  carried  their 
goods.     Thus  the  latter  undertaking  was  in  complete  continuity  with 
the  mediaeval  commenda,  and  indeed  it  might  be  described  either  as  an 
intricate  form  of  societas,  or  as  a  joint-stock  company.     There  is  no  in- 
formation as  to  the  arrangements,  made  with  the  owners  of  the  ships  in 
the  first  voyages ;  but,  later,  the  price  of  the  charter  was  discharged  by 
a  share  of  the  profits.     Therefore,  the  capital  required  for  the  African 
company  was  less,  in  comparison  with  the  volume  of  the  trade,  than 
that  needed  by  the  other  undertaking,  which  had  to  provide  ships,  trader 
goods,  besides  building   residences  for  its  factors  and  making  costly 
presents  to   influential   pei-sons   in    Russia.     These   different   practices 
account   for  another   variation    in   the   financial   history   of  the   two 
\        organizations.     As  far  as  can  be  determined,  each  African  expedition 
>  \       was  financed  by  a  separate  capital ;   and,  on  the  completion  of  the 
I      accounts,  the  venture  was  finally  wound  up,  and  a  fresh  series  of  calls 
I      made  for  the  next  voyage.     This  method  was  the  simplest,  where  there 
I      were  no  assets  of  doubtful  value  to  realize,  and  where  the  subscribed 
capital  was  represented,  at  the  end  of  a  given  voyage,  by  a  few  com- 
modities readily  saleable.     In  the  case  of  the  Russia  company,  a  similar 
plan  would   not  have  been  equally  equitable;   since,  in  a  few  years, 
expenditure  had  been  made  on  property  in  Russia  and  in  acquiring  the 
good-will  of  persons  there,  and  so  the  capital  of  this  undertaking  con- 
tinued as  a  permanent  one  for  a  considerable  period. 

Possibly  what  strikes  the  modem  reader  most  is  the  meagre  amount  of 
the  capital  employed.  In  either  case,  it  is  doubtful  if,  at  any  given  date, 
the  floating  capital  employed  in  trade,  would  materially  exceed  =3^5,000 
for  each  company  as  invested  in  English  goods.  The  single  case  in  which 
the  amount  of  the  outlay  of  the  African  Adventurers  has  survived  was 
exactly  that  sum',  and  in  several  cases  the  cargoes  of  ships  sent  to 
Russia  in  one  year  came  to  less  2.  It  seems  almost  incredible  that  a 
turn -over  of  d^l  0,000  a  year  or  thereabouts  should  have  made  a  material 
addition  to  the  foreign  trade  of  the  country,  yet  there  are  several  indi- 
cations which  point  in  this  direction.  About  this  period,  a  shipment  of 
woollen  goods  by  the  Merchant  Adventurers  was  valued  at  some 
<jP60,000  a  year,  so  that  these  two  "  new  trades ''  represented  an  increase 
of  about  16  per  cent,  on  the  value  of  the  staple  product  of  the  period. 
Moreover,  the  profit  on  the  African  trade  was  very  great,  and  that  on 

^  Vide  infra,  11.  p.  6. 

2  As  stated  above  the  cost  of  ships  and  cargo  for  tjie  first  voyage  was  £6,000. 
In  1691  two  ships  out  of  five  carried  an  adventure  which  had  cost  £3,000 — State 
Papers,  Domestic,  Elizabeth,  ccxxxviii.  129. 


CHAP.  II.]  Profits  of  Companies  1553-8  2S 

some  of  the  early  voyages  to  Russia  may  have  been  equally  remarkable. 
With  regard  to  the  former,  the  expedition,  which  sailed  in  1553,  brought 
back  no  less  than  400  lbs.  weight  of  gold^,  250  ivory  tusks,  besides 
large  quantities  of  spices,  and,  during  the  next  four  years,  there  are 
frequent  references  to  considerable  quantities  of  gold  and  ivory  being 
obtained 2.  There  are  no  figures  available  as  to  the  results  of  the  Russia 
trade  at  this  period,  and  early  accounts  are  contradictory ;  but,  judging 
by  the  alacrity  with  which  English  merchants,  who  were  not  members  of 
the  company,  availed  themselves  of  the  capture  of  Narva  by  the  Russians 
in  1558 — the  argument  being  that  this  port,  not  being  within  the 
Russian  dominions  when  the  charter  was  signed,  was  not  covered  by 
that  charter — it  must  have  been  thought  that  this  trade  too  was  a 
lucrative  one^ 

Under  more  favourable  circumstances  the  impetus  given  to  trade  in 
England,  by  producing  for  new  foreign  markets  and  in  re-exporting 
tropical  products,  joined  with  the  accretions  to  the  national  capital  out 
of  the  profits  made,  would  have  aided  in  producing  a  great  industrial 
revival.  Unfortunately,  however,  the  disorganization  of  the  previous 
system  of  production,  through  the  dissolution  of  the  monasteries  followed 
by  the  entanglement  with  Spain,  as  well  as  the  religious  troubles,  resulted 
in  a  serious  unrest  which  was  as  detrimental  to  material  as  to  social 
progress.  Even  had  more  been  accomplished  in  opening  up  new  foreign 
markets,  the  demands  of  Philip  would  have  drained  England  of  capital, 
just  as  Spain  had  depleted  the  resources  of  other  countries  which  had 
fallen  under  her  influence.  Added  to  all  these  depressing  influences,  the 
last  years  of  Mary's  reign  had  been  marked  by  famine  and  pestilence  at 
home  and  by  a  disastrous  war  abroad.  In  1558,  not  only  was  the 
treasury  empty,  and  the  country  bare  of  munitions,  but  the  Crown  debt 
had  almost  reached  the  limit  to  which  it  could  be  pushed.  In  1552  the 
total  borrowings,  both  at  home  and  abroad,  amounted  to  .£^220,000; 
and,  even  after  allowing  for  sales  of  Church  lands  and  plate,  there  was 
a  balance  of  i?89,000  which  remained  as  a  deficiency".  In  1559  the 
liabilities  were  slightly  increased,  being  returned  in  that  year  at  the 

1  According  to  figures  given  by  Atkinson  in  The  Discoverie  and  Historie  of  the 
Gold  Mynes  in  Scotland  (Edin.  1825,  p.  20),  in  1567,  400  lbs.  weight  of  gold  would 
have  been  worth  £22,500;  and  since  this  was  after  the  reform  of  the  coinage, 
in  1554,  the  nominal  value  would  have  been  greater. 

^  Vide  infra  J  ii.  pp.  4,  5.  3  /^^.^  h.  pp.  41^  42. 

*  Debts  due  abroad        £111,000 

„       „  at  home      109,000 

£220,000 

Available  from  sales  of  land,  plate  and  bullion     £131,000 

Deficiency         £89,000 

State  Papers,  Domestic,  Edward  VI.,  xv.  42;  Calendar ,  1547-80,  p.  46. 


24  Finances  of  the  Crown  1559-60  [chap.  ii. 

sum  of  <£*Ji26,910^     These  figures  only  acquire  meaning,  when  viewed 
in  relation  either  to  the  national  wealth  or  to  the  Crown  Revenue. 
There  are   no  data  for  determining   the   former  at  this   period,  but 
fortunately  there  is  an  estimate  of  the  latter  for  the  year  1560-1.     It 
may  be  premised  that  the  income  from  land,  from  Customs  and  feudal 
privileges   was   expected   to   suffice   for   the   normal   expenses   of    the 
sovereign.     This  was  often  described  as  "the  Ordinary  Revenue,"  to 
which   were   added,    under    exceptional    circumstances,    parliamentary 
grants  and  other  extraordinary  receipts,  such  as  proceeds  of  the  sale  of 
lands   or  of  loans.     Now,  in   1560-1,  this  estimate  of  the  Ordinary 
Revenue  (which  appears  to  be  an  optimistic  one)  gives  a  gross  total  of 
c£*327,267,  and,  after  allowing  for  expenses  of  collection  and  other  pay- 
ments made  by  the  receivers  and  collectors,  a  nett  total  of  ^^^276,1 82 ^ 
The  latter  sum  cannot  however  be  taken  as  the  average  nett  main- 
tainable Ordinary  Revenue  for  several  reasons.     In  the  first  place,  it 
included  an  exceptional  credit  of  .^30,000,  under  the  heading  of  "  the 
Tower.*"     Also  several   branches   were  greatly  over-estimated ;   and  it 
turned  out  that,  through  interruptions  of  trade  and  other  causes,  the 
Customs   yielded  much  less  than  the  amount  estimated^.     For  these 
reasons,  it  may  be  calculated  that  the  average  nett  Ordinary  Revenue  at 
the  beginning  of  the  reign  was  rather  under  than  over  0^*200,000  a  year. 
Drastic  reductions  had  been  made  in  the  sums  allowed  for  the  Ordinary 
Expenditure,  which  it  was  hoped  could  be  brought  down  to  ,i£*l 34,000'*. 
This  left  an  apparent  surplus  of  .^65,000  a  year,  out  of  which  provision 
had  to  be  made  for  interest  on  the  foreign  debt  and  for  other  extra- 
ordinary charges.     Some  of  these,  however,  were  of  such  magnitude 
that  they  could  not  be  defrayed  from  this  source.     It  was  estimated 
that  the  re-arming  and  fortifying  of  the  country,  with  further  outlay  on 
the  navy,  would  require  ^^300,000.     It  was  proposed  to  defray  this 
charge  partly  by  the  grant  made  by  Parliament  in  1559  of  two  tenths 
and  two  fifteenths,  which  realized  ci^l9l,000^,  and  partly  by  the  surplus 
Ordinary  Revenue  which  would  have  been  required  for  this  purpose,  if 
the  sum  estimated  were  spent,  until  the  end  of  1560.     It  was  un- 
fortunate that,  while  this  scheme  was  in  course  of  realization,  it  became 
necessary  to  undertake  warlike  operations  in  Scotland  in  1559  which 
cost  <i£*178,820^     The  strain  on  the  finances  is  shown  by  the  increase  of 
the  Crown  debt  abroad  from  .£106,649  in  1559  to  as  much  as  ^79,565 
in  the  following  year''.     This  was  an  immense  sum  for  the  period,  and 
the  irony  of  the  situation  lay  in  the  fact  that  the  political  complications, 

1  Vide  infra,  iii.  p.  510.  2  /^,-^^  m.  512. 

3  Ibid.,  III.  pp.  494,  512,  513.  *  Ibid.,  in.  p.  512. 

fi  IMd.,  III.  p.  526.  6  Ibid.,  in.  p.  527. 
7  Ibid.,  III.  p.  496. 


CHAP.  II.]        Loans  unobtainable  abroad  1559-60  25 

which  made  a  rapid  arming  imperative,  at  the  same  time  caused  the 
foreign  financiers  to  incline  towards  calling  in  their  loans,  rather  than  to 
suffer  them  to  be  increased.  Therefore,  it  soon  became  clear  that  the 
initial  steps,  towards  the  re-establishing  of  the  credit  of  the  English 
Crown,  must  be  taken  from  within,  not  from  without.  But  at  this 
period  voluntary,  as  distinguished  from  forced  loans,  could  only  be 
negotiated  abroad.  In  England  the  mercantile  classes,  while  to  a  large 
extent  in  favour  of  Elizabeth,  were  not  prepared  to  support  her  by 
providing  large  sums  of  money — indeed  it  is  doubtful  whether  it  would 
have  been  possible  to  have  collected  sufficient  free  capital  to  liquidate 
the  external  debt.  Moreover,  it  must  be  admitted  that  the  security 
was  not  attractive.  Needless  to  say  the  loans,  even  though  guaranteed 
by  the  collateral  security  of  the  City  of  London,  constituted  a  Crown 
debt,  not  a  national  one.  At  the  beginning  of  the  year  1559,  it  was 
impossible  to  tell  whether  Elizabeth  could  maintain  her  position  or 
not — certainly  the  Spanish  Ambassador  thought  she  was  "  on  the  high 
road  to  lose  her  throne  \""  Thus  a  voluntary  loan  could  be  secured 
neither  abroad  nor  at  home.  At  this  stage,  a  temporary  relaxation  of 
the  financial  strain  was  obtained  by  the  Merchant  Adventurei-s  being 
compelled  to  find  c£*20,000,  which  was  used  to  discharge  some  of  the 
most  pressing  obligations  in  Flanders*.  This  sum  however  did  not 
represent  ten  per  cent,  of  the  whole  foreign  debt,  and  to  deal  with  the 
rest  more  heroic  measures  were  necessary. 

The  method  adopted  was  a  somewhat  intricate  one,  which  depended 
on  the  state  of  the  foreign  exchanges  at  this  time.  As  a  rule,  regu- 
lations prohibiting  the  export  of  coin  or  bullion  were  in  force  in  most 
countries ;  and,  for  this  reason,  "  the  specie-point "  in  foreign  exchange 
was  theoretical,  rather  than  practical.  The  sovereign,  however,  was  able 
to  export  bullion  to  meet  his  debts,  and  therefore  he  had  this  advantage 
over  the  subject,  that  he  could  pay  either  by  bills  or  bullion  :  while  the 
merchant,  if  he  acted  legally,  could  only  pay  by  bills  or  goods.  In  this 
way,  from  the  appointment  of  Gresham  as  "King's  agent'*''  in  the  time 
of  Edward  VI.,  a  practice  had  grown  up  of  operating  on  the  exchange, 
and  Gresham  claimed  that  he  had  succeeded  in  materially  reducing  the 
discount  at  which  it  had  stood  in  the  closing  years  of  Henry  VIII. 
His  original  idea  seems  to  have  been  to  keep  the  merchants  "  bare  of 
money "";  and,  by  taking  advantage  on  the  one  hand  of  the  discount  on 
English  bills  at  Antwerp  and  on  the  other  of  the  monopoly  of  exporting 
bullion  on  the  royal  account,  to  buy  English  bills  cheap  and  to  pay 


*  Froude,  History  of  England,  vii.  p.  69. 

2  j)(is  Hans  Fugger,  von  seinen  Anfdngen,  von  A.  Stauber,  Augsburg^  1900, 
p.  25  ;  Burgon,  Life  of  Gresham,  i.  p.  258 ;  Heath,  Company  of  Grocers,  p.  63. 


26        Juggling  with  foreign  Exchange  1559       [chap.  n. 

these  against  the  Crown  debts  as  they  matured ^  This  plan  broke 
down,  through  the  home  government  sending  insufficient  quantities  of 
bullion ;  and  then  a  more  drastic  method  was  adopted.  When  the 
Merchant  Adventurers  made  a  large  shipment  of  cloth,  a  considerable 
sum  would  be  due  to  them  at  Antwerp,  when  the  goods  were  sold. 
Gresham  conceived  the  idea  of  diverting  this  credit  of  the  individual 
merchants  to  relieve  the  royal  necessities.  When  the  ships  were  loaded 
and  on  the  eve  of  starting,  an  order  was  made  to  "  stay  them "";  and  no 
release  could  be  obtained,  until  the  Adventurers  contracted  to  pay  to  the 
creditors  of  the  Crown  in  Flanders  a  certain  amount  of  the  proceeds, 
obtaining  in  return  a  promise  for  repayment  in  London.  Up  to  this 
point,  the  scheme  was  arbitrary,  but  not  wholly  reprehensible.  There 
was  however  another  side  to  it.  The  obligation  of  reducing  the  heavy 
discount  on  the  exchange  was  thrown  on  the  Merchant  Adventurers. 
When  each  of  them  individually  had  paid  his  quantum  of  the  Crown 
debt  in  Flanders,  he  remained  in  possession  of  a  discharge  from  the 
Flemish  house  for  a  certain  sum  of  Flemish  currency.  Now  in  making 
the  repayment  in  London,  the  £  sterling  was  rated  higher  and  the 
shilling  Flemish  lower  than  in  the  original  transaction.  It  was  for  this 
reason  that  Gresham,  in  his  report  to  Queen  Elizabeth,  said  that  "  as 
the  exchainge  is  the  thinge,  that  eatts  ought  all  princes  to  the  wholl 
destruction  of  ther  comon  well,  if  itt  be  nott  substantially  loked  unto,  so 
likewise  the  exchainge  is  the  chiefFest  and  richist  thinge  only  above  all 
other.""  "  This  thinge,"  he  adds,  "  is  only  keppt  up  by  artte  and  Godes 
providence'^,'" — the  art  was  plain  enough,  for  by  this  device  a  fictitious 
value  was  given  to  the  ci^  sterling,  which  was  rated  in  such  exchange  at 
considerably  more  than  twice  its  intrinsic  value  ^ — ^where  room  was  found 
for  God's  providence  is  somewhat  of  a  conundrum,  unless  in  the 
merchants  being  able  to  bear  the  loss  involved !  It  was  admitted  that 
the  exporters  of  cloth  lost  considerably,  many  manufacturers  had  to 
retire  from  the  trade  altogether,  so  that  the  real  cost  of  the  transaction 
to  the  country  must  have  been  very  great.  This  was  offset,  but  only  to 
a  small  extent,  by  the  reduction  in  the  price  of  foreign  commodities*, 
indeed  it  may  well  be  doubted  whether  this  was  material;  since  the 
reduction  of  the  trading  capital,  available  for  the  purchase  of  goods 

^  The  royal  monopoly  of  the  foreign  exchange  was.  considered  of  such  importance 
that  in  twelve  urgent  matters  noted  in  "  The  first  paper  or  memorial  of  Sir  William 
Cecil"  in  the  reign  of  Elizabeth,  the  eleventh  was  the  issue  of  a  proclamation 
prohibiting  all  subjects  from  "  the  making  over  any  money  by  Exchange  "  unless 
authorized  by  the  Crown — Somers'  Tracts  (1748),  i.  p.  159. 

2  Printed  by  Burgon,  Life  of  Gresham,  i.  p.  486. 

3  It  was  probably  for  this  reason  that  Gresham  strongly  urged  the  restoration  of 
the  currency  in  the  same  paper. 

*  Burgon,  Life  of  Gresham,  i.  p.  261. 


CHAP.  II.]  The  Situation  in  Scotland  1559  27 

at  Antwerp,  would  have  tended  to  restrict  the  supply  brought  into 
England. 

Doubtful  as  the  policy  was  of  juggling  with  the  foreign  debt  by 
means  of  exchange  transactions  of  this  kind,  it  is  clear  that  the  scheme 
served  Elizabeth  in  the  hour  of  her  need.  In  March  1559  this  device 
was  again  adopted;  and,  by  the  aid  of  the  funds  extracted  from  the 
Merchant  Adventurers,  partly  by  the  direct,  partly  by  this  indirect 
loan,  it  was  possible  for  Gresham  in  April  1559,  by  paying  off  a  part  of 
the  loan,  to  obtain  a  renewal  of  the  remainder,  and  also  to  have  funds 
in  hand  to  purchase  powder  and  arms.  Probably  Gresham's  mission 
had  been  facilitated  by  the  conclusion  of  peace  with  France  in  the 
previous  month,  and  it  turned  out  that  the  financial  negotiations  had 
been  concluded  at  the  most  favourable  moment ;  since  the  assumption 
of  the  Royal  Arms  of  England  by  Mary  Queen  of  Scots  foreshadowed 
fresh  complications. 

In  July  1559,  the  diplomatic  situation  had  changed  with  almost 
dramatic  suddenness.  During  the  first  six  months  of  the  reign  of 
Elizabeth,  her  government  had  been  embarrassed  by  payments,  made 
by  foreign  powers,  to  malcontents  in  England.  Now  the  opportunity 
came  for  Elizabeth  to  retaliate.  It  was  believed  that  France  would  use 
Scotland  as  a  base,  whence  to  invade  England;  but  the  Scottish  Reformers 
were  in  arms  against  the  government  of  the  Queen -Regent,  and  applica- 
tion was  made  to  Elizabeth  to  intervene  in  their  favour.  The  apparent 
inconstancy  of  the  action  of  England  was  due  as  much  to  financial,  as 
to  political  re«isons.  It  was  money  the  Scots  needed  most,  and  this 
kind  of  aid  could  be  given  in  a  form  which  it  would  be  difficult  to 
trace.  France  might  suspect,  but  could  not  prove  the  unfriendly  act 
Money  however  was  exceedingly  difficult  to  obtain.  All  that  could  be 
raised  was  already  ear-marked  for  making  good  the  deficient  armament 
of  England.  Therefore  from  July  to  November  Elizabeth  could  do  no 
more  than  send  occasional  remittances  of  ^3,000,  to  keep  the  Scots  in 
the  field.  In  August  Cecil  had  considered  the  question  of  mobilizing  a 
small  English  force  on  the  Borders,  and  had  come  to  the  conclusion  that 
it  was  "  pitiful  *'"'  to  recognize  how  unequal  the  finances  were  to  bear  the 
burden.  Meanwhile,  by  November  all  that  was  possible  had  been  done 
in  turning  as  much  as  could  be  borrowed  into  arms  and  gunpowder. 
The  arrival  of  reinforcements  from  France  and  the  laxity  of  the  Scots 
compelled  Elizabeth  either  to  acquiesce  in  French  domination  in  the 
north,  with  all  that  was  involved  in  it,  or  else  to  take  more  decisive 
steps  than  she  had  done  hitherto.  Finally,  at  the  close  of  the  year  it 
was  decided  to  dispatch  the  fleet  under  Sir  William  Winter  to  prevent 
the  landing  of  reinforcements  from  France,  and  at  the  same  time  to 
authorize  Gresham   to  borrow  ^200,000.     Some  of  this  was  sent  to 


28    Panic  amongst  Creditors  of  the  Crown  1560    [chap.  ii. 

England  in  bullion,  but  the  greater  part  in  munitions.  The  need  for 
haste  was  considered  to  be  so  great  that  the  same  precautions  that  had 
been  adopted  earlier  could  not  be  observed,  and  Gresham  was  seriously 
concerned  lest  his  shipments  should  be  detected  and  seized.  Such 
rumours  tended  to  make  lenders  look  doubtfully  at  loans,  made  to 
Elizabeth;  and,  at  the  end  of  February  1560,  Gresham  reported  "a 
great  scarsity  of  monny  upon  the  burse "  at  Antwerp^,  and  efforts  were 
made  to  induce  the  Staplers  to  lend  ^15,000  or  =£'20,0002.  In  April 
«£*20,000  was  required  for  the  service  of  the  English  troops  who  were 
besieging  Leith  and  for  those  in  reserve  on  the  Borders,  but  it  not  only 
became  increasingly  difficult  to  negotiate  new  loans,  but  there  was  a 
marked  disinclination  to  renew  those  already  in  existence.  Towards  the 
end  of  the  month  the  rumour  that  Philip  of  Spain  intended  to  use  his 
army  in  Flanders  for  service  in  Scotland  resulted  in  a  panic  amongst  the 
creditors  of  Elizabeth.  Those,  who  held  her  obligations,  immediately 
prepared  to  seize  English  goods  in  the  Low  Countries,  to  be  held  as 
security  for  the  moneys  due  them^  These  expectations  had  "clean 
alteryd  the  credit  of  the  Queenes  Majestic  and  of  all  the  nacione.'** 
Most  of  the  creditors  pressed  to  be  paid  what  was  owing  them,  as  soon 
as  the  due  date  arrived,  and  Gresham  could  only  secure  six  months 
grace,  by  engaging  that  sufficient  cloth  should  be  exported  to  answer  the 
whole  outstanding  debt^.  Fortunately  the  extreme  tension  was  relaxed, 
when  it  was  known  that,  owing  to  the  defeat  of  the  Spanish  Fleet  in 
the  Mediterranean,  Philip  had  given  orders  for  the  recall  of  his  army 
from  the  Netherlands.  This  was  in  June,  and  the  arrangement,  by  the 
Treaty  of  Edinburgh  in  the  following  month  for  the  withdrawal  of  the 
French  troops  from  Scotland,  was  another  circumstance  favourable  to 
the  maintenance  of  Elizabeth's  credit. 

This  relief  came  at  a  time  when  the  financial  situation  was  critical. 
Owing  to  the  renewal  of  loans  in  the  early  part  of  1560,  no  less  than 
^150,000  (out  of  a  total  of  about  .£280,000)  fell  due  on  August  20th^ 
Negotiations  had  been  far  advanced  for  a  new  obligation  of  =^^75,000  at 
10  per  cent.,  out  of  which  it  was  proposed  that  =£^25,000  should  be 
devoted  to  satisfying  the  most  importunate  creditors  and  the  remainder 
remitted  to  England,  either  in  the  form  of  specie  or  munitions.  Two 
very  different  circumstances  made  it  eminently  desirable  that,  as  far  as 
possible,  the  finances  should  be  in  a  sound  condition.     In  October  there 

1  Burgon,  Life  of  Gresham,  i.  p.  287. 

2  lUd.,  I.  p.  288.  3  /ftj-^,^  I.  p,  292. 
*  lUd.,  I.  pp.  298,  299. 

^  Ihid.f  I.  pp.  344,  490.  In  the  two  years  1560-2,  according  to  the  estimates, 
provision  was  to  be  made  for  the  repayment  of  £216,954  of  debt — vide  infra,  in. 
p.  512. 


CHAP,  n.]      Improvement  in  the  Crown  Credit  1562      29 

were  threats  of  a  fresh  French  expedition  on  a  larger  scale,  and  the 
reform  of  the  currency  had  been  decided  on.  Local  events  prevented 
the  French  from  proceeding  with  the  proposed  invasion,  and  early  in 
1562  Elizabeth  was  able  to  retaliate  by  countenancing  the  Huguenots 
in  France.  In  September  of  the  same  year  she  assisted  Cond^  by  the 
loan  of  100,000  crowns,  which  was  followed  by  the  English  expedition  to 
Havre — carefully  prepared,  but  not  countenanced  officially  \  These 
fresh  political  complications  caused  Gresham  to  write  in  August  that  the 
alteration  of  credit,  adverse  to  England,  was  such  as  "  this  pen  cannot 
wryte  you'^,'"  and  a  few  days  later  he  says  that  every  merchant  at 
Antwerp  was  glad  to  be  "quit  of  an  Inglishman''s  bill'.'*' 

On  a  hasty  inspection  of  the  position,  on  the  eve  of  the  expedition 
to  Havre,  it  might  appear  that  the  financial  outlook  was  no  better  than 
it  had  been  in  1560,  since  at  both  dates  Elizabeth  could  not  borrow 
abroad.  But,  underlying  the  apparent  similarity,  there  was  a  striking 
advance  at  the  later  period.  It  is  true  that  the  external  debt  was  some- 
what increased,  and  that  lenders  were  not  for  the  moment  disposed  to  add 
to  their  commitments.  Still  Elizabeth  had  better  credit  than  her  rivals 
in  Spain  or  France,  for  she  had  obtained  a  reputation  for  paying  interest, 
although  she  could  not  always  repay  the  principal  when  it  had  been 
promised.  Moreover,  what  was  still  more  important,  the  country  in 
1562  was  fairly  well  provided  with  munitions  of  war,  as  compared  with 
the  state  of  depletion  that  existed  in  1558^  This  improvement  was 
the  effect  of  rigorous  economy,  accompanied  by  vigorous  reconstruction. 
Although  there  was  the  drain  of  the  Scottish  and  French  expeditions 
on  the  finances,  the  demands  for  men  had  not  been  great,  and  the 
example  of  the  Queen  and  her  ministers  in  economy  and  industry  was 
beneficial  to  the  whole  nation.  Trade  was  more  vigorous  than  it  could 
have  been  in  the  time  of  Mary.  The  new  sources  of  commerce  were 
increasing  the  turn -over  of  the  country,  and,  still  more  important, 
Cecil  was  disposed  to  be  sympathetic  to  any  scheme  which  would  in- 
crease the  industry  of  the  nation.  The  Russia  company,  as  far  as  is 
known,  had  not  been  drawn  upon  for  a  forced  loan  during  the  first  five 
eventful  years  of  the  reign  of  Elizabeth.  At  the  same  time,  it  was 
serving  the  State  in  two  different  ways.  This  undertaking  was  per- 
forming a  function  for  the  navy,  similar  to  that  done  by  Gresham  for 

1  Burghley's  Notes  in  A  Collection  of  State  Papers  relating  to  Affairs  in  the  Reign  of 
Queen  Elizabeth  from  1571  to  1596,  transcribed... by  William  Murdin,  London, 
1759,  p.  753. 

2  Burgon,  Life  of  Gresham,  ii.  p.  10. 

^  Ibid.,  II.  p.  18;  Augsburg,  Niimberg  undihre  Handelsfursten  im  fiinfzehnten  und 
sechzehnten  Jahrhunderte,  von  A.  Kleinschmidt,  Cassel,  1881,  p.  31. 
*  Burgon,  Life  of  Gresham,  ii.  p.  10. 


/ 


30    Political  Uses  of  foreign  trading  Cos,  1561     [chap.  ii. 

the  army,  in  providing  equipment.  Indeed,  the  Russia  company  had 
this  advantage,  that  while  Gresham  had  to  smuggle  the  munitions  he 
obtained  out  of  Flanders,  the  company  brought  its  naval  requisites 
from  Russia  with  the  good-will  of  the  Czar.  Moreover  gunpowder  had 
to  be  paid  for  on  delivery,  while  the  Russia  company,  being  an  English 
body,  was  induced,  or  compelled,  to  give  the  Queen  long  credit.  It  is 
probably  for  this  reason  that  the  great  increase  in  its  capital  (to  be 
referred  to  below  ^)  was  necessary.  Thus  the  situation  resolved  itself 
into  this  that,  over  and  above  the  debt  due  at  interest,  there  was  a  further 
running  amount  owing  to  this  body.  Elizabeth  had  become  interested 
in  the  African  company  by  1561,  and  nothing  could  afford  stronger 
evidence  of  the  want  of  money  at  that  date  than  the  fact  that  she  lent 
the  Adventurers  four  men  of  war  (which  would  be  absent  from  England 
for  nine  months  or  a  year,  when  relations  with  France  were  so  strained) 
on  condition  of  receiving  a  third  of  the  profits.  This  partnership  with 
the  Queen  accounts  for  a  peculiar  feature  in  the  organization  of  the 
African  Adventurers.  It  was  to  the  interest  of  Elizabeth  that  a 
sufficient  quantity  of  trade  goods  should  be  sent  to  Africa,  and  there- 
fore the  five  "chief"  adventurers  were  bound,  under  a  bond  of  ^1,000 
each,  to  provide  sufficient  and  suitable  commodities^  It  is  plain  that 
there  would  have  been  difficulties  in  transferring  sub-divisions  of  the 
liability,  and  so  the  chief  partners  remained  nominally  liable  for  the 
whole  capital  and  for  the  bond  to  the  Queen,  while  in  reality  they  had 
parted  with  a  portion  of  their  interests  to  others,  who  became  partners 
"under''  them.  This  expedition  was  not  so  successful  as  the  earlier 
ones,  still  Elizabeth  received  ^^1,000  in  cash  and,  in  addition,  was 
relieved  of  the  cost  of  maintaining  her  ships  for  nearly  a  year.  The 
adventurers  obtained  a  profit  of  from  40  per  cent,  to  60  per  cent.* 

In  this  way  Elizabeth  utilized  the  two  joint-stock  organizations  which 
had  been  established  in  the  time  of  Mary.  But,  in  the  vigorous  ad- 
ministration of  the  first  years  of  the  new  reign,  much  more  was  done. 
It  is  highly  creditable  that,  in  spite  of  political  dangei-s,  as  early  as 
the  end  of  1560,  steps  were  being  taken  towards  industrial  progress. 
Allusion  has  already  been  made  to  the  reform  of  the  coinage,  which 
may  be  connected  to  some  extent  with  the  inconvenience  of  a  foreign  ex- 
change, which  could  be  saved  from  an  enormous  discount  only  by  artifice. 
The  effects  of  the  debasement  of  the  currency  had  been  felt  by  the  people 
in  the  rise  of  prices:    it  was  recognized  by  the  sovereign  in  making 

1  Vide  infra,  ii.  p.  40. 

2  State  Papers,  Domestic,  Elizabeth,  xxvi.  44 ;  vide  infra,  ii.  pp.  6,  7. 

3  There  is  some  doubt  as  to  how  the  figures,  in  the  account  between  Elizabeth 
and  the  adventurers,  are  to  be  interpreted.  This  point  is  dealt  with  infra,  ii. 
p.  6. 


CHAP.  II.]         Development  of  Industry  1560-3  31 

payments  abroad \  Such  payments  moreover,  as  already  shown',  were 
in  fact  purchases  of  munitions  on  long  credit.  Even  after  the  financial 
difficulty  had  been  surmounted,  there  remained  the  strategic  one  of 
obtaining  delivery  of  the  arms  and  powder  in  England.  Therefore  it 
was  eminently  desirable  that  a  number  of  commodities,  needed  for 
national  defence,  should  be  produced  to  some  extent  within  the  country  ; 
so  that,  at  a  great  national  crisis,  the  arsenals  might  be  replenished.  The 
chief  requisites  were  gunpowder  and  brass  for  cannon.  As  early  as 
October  1560,  Cecil  was  superintending  experiments  in  the  mixing  of 
powder^;  and,  in  1562,  a  petition  was  presented  from  a  group  of 
partnei-s,  who  undertook  to  make  it  within  the  realm*.  The  production 
of  guns  in  England  was  a  problem  of  considerable  complexity.  First 
of  all  copper  was  required,  then  zinc  ore — at  this  time  known  as 
calamine — must  be  found ;  and  lastly,  when  brass  had  been  made,  it  was 
necessary  to  have  it  cast  into  the  proper  shape.  The  realization  of  the 
whole  scheme  extended  over  about  ten  years  beginning  from  1561. 
Whether  this  object  was  kept  in  view  from  the  commencement  is  un- 
certain ;  and,  at  all  events,  a  start  was  made  in  the  mining  of  copper 
and  lead.  From  an  early  period  the  Crown  had  claimed  the  right  of  all 
precious  metals,  and  by  an  instrument,  signed  on  July  16th,  1561, 
Elizabeth  granted  this  right  of  mine  royal  to  an  Englishman  and  a 
German,  on  condition  that  one-tenth  of  the  metals  won  should  be 
rendered  to  the  Crowns  The  miners  claimed  all  ores,  showing  traces  of 
silver,  as  royal,  and  therefore  Elizabeth  was  certain,  as  long  as  operations 
were  continued,  to  obtain  considerable  quantities  of  copper,  without 
having  to  pay  anything  for  it.  Up  to  1563,  as  far  as  can  be  gathered, 
the  work  consisted  chiefly  in  prospecting,  but  after  that  date,  on  copper 
being  found  in  Cumberland,  an  influential  and  important  company  was 
formed. 

From  1560  up  to  the  middle  of  1563,  rapid  progress  was  being  made 
in  the  reconsti-uction  of  industrial  life  in  the  more  progressive  parts  of 
England.  The  removal  of  some  of  the  most  acute  causes  of  anxiety, 
that  had  distracted  the  country  during  the  reign  of  Mary,  was  in  itself 
an  influence  for  commercial  progress.  With  a  settled  government  at 
home,  there  came  renewed  hope,  which  showed  itself  in  increased  pro- 
duction for  the  domestic  and  foreign  markets.  The  revival  in  trade, 
however,  was  far  from  being  unchecked.     It  has  been  shown  how  the 

1  The  Summarie  of  Certaine  Reasons  which  have  moved  Qu&ne  Elizabeth  to  procede 
in  Reformations  of  her  base  and  course  monies^  in  Harleian  Miscellany  (1746),  viii. 
pp.  67-9. 

2  Vide  supra,  pp.  24-7. 

3  State  Papers,  Domestic,  Elizabeth,  xiv.  3 ;  Calendar,  1547-80,  p.  160. 

4  Ibid.,  XXI.  56;  Calendar,  1547-80,  p.  195.  «  Vide  infra,  n.  p.  384. 


32  Causes  of  the  Crisis  of  1563-4  [chap.  ii. 

necessities  of  the  State  tended  to  absorb  capital,  that  would  have  been 
of  great  advantage  in  trade ;  and,  although  some  of  the  most  pressing 
political  troubles  had  been  avoided,  there  remained  many  causes  for 
anxiety.  As  often  happens,  the  indirect  or  accidental  effects  of  the 
situation  were  more  important  than  those  to  which  the  attention  of 
statesmen  was  directed.  No  one  could  have  predicted  that  the  expedi- 
tion, sent  to  Havre  at  the  end  of  1562,  would  have  resulted  in  a  panic 
in  London  after  the  soldiers  had  returned.  Yet  this  happened,  through 
the  men  coming  back  to  England  infected  by  the  plague.  The  pestilence 
broke  out  in  London  on  August  2nd,  1563,  and  it  spread  with  alarming 
rapidity.  At  the  same  time  the  harvest  was  bad,  so  that  there  are 
many  allusions  to  the  country  being  afflicted  by  famine.  In  some 
districts  the  price  of  grain  advanced  by  nearly  200  per  cent.^,  and  the 
distress  was  most  serious.  In  addition  to  the  blow,  dealt  to  the  wool 
trade  by  scarcity  of  labour  for  attending  to  the  sheep,  the  government 
of  Philip  in  Flanders  took  advantage  of  the  existence  of  the  plague  to 
prohibit  imports  from  England,  and  it  became  necessary  to  remove  the 
mart  of  the  Merchant  Adventurers  from  Antwerp  to  Emden.  In 
London,  according  to  Stowe,  there  was  "  great  scarcity  of  money 2,'"'  and 
Gresham  describes  the  crisis  in  almost  the  same  words — "this  plague 
tyme  there  is  noe  money  nor  creadit  to  be  had  in  the  Streat  of 
London  ^"  The  pestilence  was  still  raging  in  August  1564;  and,  in  the 
following  November,  it  became  necessary  to  re-assure  those  who  held 
obligations  under  the  Privy  Seal  for  loans,  promising  eventual  payments 
When  England  was  recovering  from  this  crisis,  the  financial  horizon  in 
the  Low  Countries  became  seriously  overcast.  The  attempt  of  Philip 
to  stamp  out  the  Reformation  there  resulted  in  great  suffering  to  the 
people,  culminating  in  an  insurrection.  The  joint-effect  of  the  troubles 
abroad  and  the  crisis  at  home  was  that  in  August  the  creditors  of 
Elizabeth  at  Antwerp  demanded  payment  of  the  sums,  owing  to  them, 
under  threat  of  proceedings  by  process  of  law  against  Elizabeth 
personally  and  of  seizure  of  English  merchandise®.  The  interest  paid 
at  this  time  averaged  12  per  cent.,  so  that,  apart  from  the  special  cir- 
cumstances of  the  moment,  English  credit  was  better  than  it  had  been 
in  the  time  of  Mary^.  But,  in  the  existing  state  of  Flanders,  accom- 
modation was  no  longer  a  question  of  interest,  for  the  financial  houses 
had  not  the  money  to  lend,  and  in  1566  Gresham  wrote  that  loans  could 
be  had  "  at  no  price''.''"' 

1  A  History  of  Agriculture  and  Prices,  by  J.  E.  T.  Rogers,  iv.  p.  265. 

2  Survey,  p.  26.  ^  Burgon,  Life  of  Gresham,  ii.  p.  26. 
*  Burghley's  Notes  in  Murdin,  State  Papers,  ut  supra,  p.  756. 

'°  Burgon,  Life  of  Gresham,  ii.  p.  28. 

8  Ihid.j  II.  p.  33.  7  iind.,  ii.  pp.  141,  168. 


CHAP.  II.]      Reduction  of  the  foreign  Debt  1560-5  33 

^rom  1560  to  1566  the  financial  situation  was  one  of  exceeding 
difficulty.  There  were  several  elements  tending  towards  disaster.  The 
loans  abroad  were  all  current  for  short  periods  and  had  been  borrowed 
on  the  collateral  secunty  of  the  city  of  London.  Therefore,  any  failure 
on  the  part  of  Elizabeth  to  pay  either  the  interest  or  the  principal,  on 
its  being  demanded  after  the  due  date,  would  result  in  the  seizure  by 
the  creditors  of  English  goods  in  Flanders  as  satisfaction  of  the  debt. 
Since  the  lenders  were  unwilling  to  renew  the  obligations,  over  a 
quarter  of  a  million  had  to  be  found  to  pay  off  that  amount  of  foreign 
debt.  Further,  the  Newhaven  expedition  had  cost  a  like  amount,  so 
that  altogether  half  a  million  had  to  be  found  to  meet  these  two 
extraordinary  charges.  The  situation  was  further  complicated  by  the 
decline  in  the  Ordinary  Revenue,  owing  to  the  interruption  of  trade 
during  the  plague  \  The  emergency  was  met  by  sales  of  Crown  lands, 
extending  from  1561  to  1563,  and  in  this  way  over  =£^1 70,000  was 
obtained  I  In  the  Parliament  of  1562-3,  two-tenths  and  two-fifteenths 
were  voted,  and  the  clergy  gave  a  subsidy  of  three-tenths,  all  of  which 
together  produced  about  c£*245,000^  By  means  of  these  receipts  the 
foreign  debt  was  reduced  from  £279,565,  at  which  it  hsA  stood  in  1560, 
to  between  ^17,000  and  i:^25,000  in  1565*. 

The  impossibility  of  borrowing  abroad  explains  the  failure  of 
Elizabeth  to  adopt  a  more  vigorous  foreign  policy,  and  it  is  probably  to 
this  cause  and  the  falling  off  in  the  Ordinary  Revenue  that  the  summon- 
ing of  a  Parliament  in  1566  is  to  be  assigned,  when  one-fifteenth  and 
one-tenth  were  voted^. 

Towards  the  close  of  1564  there  were  some  signs  of  the  beginning 
of  a  revival  in  trade,  but  the  crisis  left  traces  on  the  existing  companies 
with  the  possible  exception  of  the  African  Adventurers,  whose  trade 
was  curtailed  through  other  causes.  The  original  African  trade  had 
depended  on  a  very  profitable  exchange  of  English  commodities  against 

1  Vide  infra,  iii.  pp.  494,  497- 

2  Audit  Office  Declared  Accounts  593/1.  The  Account  of  Thomas  Gardiner 
(1561-3),  State  Papers,  Domestic,  Elizabeth,  xxviii.  66.        ^  vide  infra,  m.  p.  626. 

4  Ibid.,  III.  pp.  496,  511. 

Cost  of  Newhaven  Expedition 


Foreign  loan  1560     ... 
„  „     1565     ... 

Balance  paid  off 
Extraordinary  expenditure 
Sale  of  Crown  Lands 
Subsidy  clergy  and  laity 
Extraordinary  Receipts 


£279,565 
17,000 


171,866 
246,000 


£246,380 

262,565 
608,946 

£416,866 


*  ITiis  grant  was  strictly  speaking  more  than  one-tenth  and  one-fifteenth  vide 
infra,  iii.  p.  526. 

s.  CI.  3 


34      Divergent  Aims  of  African  Cos.  1562-6      [chap.  n. 

gold,  ivory  and  spices.  The  voyages  were  made  from  England  to  Guinea 
and  home  again.  The  Adventurers  had  no  dealings  in  slaves,  but  it  is 
to  be  remembered  that,  unlike  the  Russia  company,  they  had  no 
monopoly,  and  therefore  other  Englishmen  might  touch  at  African 
ports.  Accordingly,  in  1562  John  Hawkins  seized  300  negroes  by  force 
and  shipped  them  to  the  Spanish  plantations.  This  expedition  was 
profitable,  and  two  others  were  undertaken  in  1564  and  1567\  But 
beyond  the  immediate  profit  to  Hawkins  and  the  adventurers  who  were 
in  partnership  with  him  in  the  first  two  voyages  (the  third  was  a  failure), 
there  were  remote  consequences,  both  political  and  financial.  Owing  to 
the  Spanish  royal  monopoly  of  the  negro  trade  in  the  West  Indies,  the 
"  cargoes  *"  of  the  ships  could  not  be  sold,  except  under  the  guns  of  the 
fleet,  and  it  was  only  to  be  expected  that  collisions,  between  the  Spaniards 
and  the  English,  would  occur.  As  affecting  the  existing  Adventurers, 
the  expeditions  of  Hawkins  produced  an  impossible  situation.  The 
seizure  of  so  many  negroes  by  force  resulted  in  a  panic  on  the  African 
coast,  and  the  news  spread  with  great  rapidity.  Hitherto  the  English 
had  been  distinguished  amongst  Europeans  by  a  comparatively  fair 
treatment  of  the  natives.  Now,  when  an  English  ship  appeared,  instead 
of  being  welcomed,  it  was  received  with  hostility,  and  trade  became 
exceedingly  diflficult.  Moreover,  at  this  period  each  voyage  was  con- 
ducted against  a  time  limit ;  for,  so  as  to  avoid  the  unhealthy  season, 
every  effort  was  made  to  return  within  nine  or  ten  months  2.  This  left 
a  short  time  for  the  actual  trading;  and,  when  the  natives  were 
frightened,  there  was  great  delay.  For  these  reasons,  the  last  voyage 
mentioned,  with  which  the  Adventurers  can  be  connected,  was  in  1566 ; 
and,  after  the  final  expedition  of  Hawkins  in  the  following  year,  there 
is  no  record  of  a  regular  African  trade  until  15881 

Although  there  is  little  information  recoverable,  as  to  the  early 
history  of  the  Russia  company,  there  are  indications  which  point  to 
certain  conclusions  about  its  position  at  this  period.  While  it  did  not 
aid,  in  relieving  the  financial  strain  at  the  beginning  of  the  reign  of 
Elizabeth,  by  furnishing  a  direct  loan,  there  is  reason  to  believe  that  by 
giving  long  credit  for  naval  stores  it  lessened  the  calls  on  the  resources 
of  the  administration.  The  original  capital  had  been  only  ^6,000  in 
shares  of  £9^5  each,  and  by  1563  a  further  amount  of  £Wb  had  been 
paid  in  on  each  share.  Therefore,  at  that  time  the  whole  capital  was 
<£*33,600.  It  was  probably  due  to  the  crisis  of  1563-4  that  it  was 
necessary  to  call  up  an  additional  ,^60  per  share  (making  £9^00  in  all) 
and  increasing  the  capital  to  about  ^48,000*.     It  may  have  been  that 

1  Vide  infra,  11.  pp.  8,  9.  ^  State  Papers,  Colonial,  xi.  15. 

3  Tliere  was  a  proposed  expedition  in  1682,  vide  infra,  11.  p.  10. 
*  Vide  infra,  11.  p.  40. 


CHAP,  n.]     Parliament  and  the  Russia  Company  1566     35 

up  to  1559  very  large  profits  were  made,  in  spite  of  the  occasional 
losses  of  ships \  The  aim  of  the  company  was  an  ambitious  one.  It 
not  only  possessed  the  monopoly  of  exporting  Russian  commodities  to 
England  and  of  importing  English  goods  into  Russia,  but,  under  its 
concessions  in  Russia,  it  had  the  sole  right  of  bringing  wax  out  of 
the  country.  Therefore  it  had  the  monopoly  of  this  commodity,  not 
only  for  England  but  for  the  whole  of  Europe  and  to  a  certain  extent 
that  of  cordage  also^  In  such  circumstances  the  injury,  done  by  the 
Reformation  to  the  fishing  trade,  would  not  apply  to  that  in  wax,  since 
any  deficiency  in  the  consumption  in  England  would  be  made  good  by 
exporting  to  Catholic  countries. 

Unfortunately  for  the  company,  the  capture  of  Narva  by  the 
Russians  in  1558  opened  a  way  for  English  and  other  interlopers'  to 
participate  in  this  highly  profitable  trade.  The  new  route  was  not  only 
shorter,  but  very  much  safer  than  that  discovered  in  1553.  In  the 
midst  of  the  troubles,  due  to  the  political  situation  up  to  1562,  all  that 
the  company  could  do  was  to  hold  its  own.  But,  when  Parliament  had 
leisure  to  attend  to  minor  matters,  the  question  of  the  English  trade 
to  Narva  was  raised ;  and  in  1566,  as  a  reward  for  its  assistance  to  the 
navy,  the  company  obtained  an  act  of  Parliament,  which  was  designed 
to  effect  a  settlement.  The  occasion  was  one  of  no  little  interest  in  the 
development  of  joint-stock  enterprize,  since  it  affords  an  instance  of  a 
problem,  that  became  of  importance  later,  namely  how  fai-  Parliament 
was  prepared  to  recognize  any  trading  privileges  conferred  by  a  royal 
charter.  At  this  period  the  involved  discussion  of  monopolies  had  not 
begun*,  and  the  Russia  company  was  more  fortunate  than  many  later 
undertakings  in  obtaining  Parliamentary  sanction  of  the  privileges,  pre- 
viously granted  by  the  Crown.  The  reasons  determining  this  decision 
may  be  traced.  By  giving  long  credit,  at  a  critical  time,  the  company 
had  deserved  well  of  the  State.  Besides,  it  had  not  only  past  claims,  but 
it  could  promise  future  benefits.  The  policy  of  naval  power  had  been 
definitely  enunciated**,  and  one  essential  in  the  programme  was  a  ready 
supply  of  stores,  such  as  cordage  and  timber  for  spars.  It  was  required, 
too,    that    such    a    supply    should    be    permanent,    not    intermittent. 

1  According  to  the  account  of  the  company,  it  was  unfortunate  up  to  this  date, 
having  experienced  a  "hard  beginning,"  vide  infra,  ii.  p.  44.  The  members 
however  had  somewhat  extreme  expectations — cf.  ibid.,  ii.  pp.  44,  45. 

2  Ibid.  pp.  40,  41. 

3  The  term  interloper  ("  interleapers,")  as  applied  to  a  person  wlio  invaded  the 
privileges  of  a  trading  corporation,  occurs  in  a  petition  of  the  Merchant  Adventurers 
drawn  up  in  the  reign  of  Elizabeth — Schanz,  Englische  Handelspolitik ,  ii.  p.  587. 

*  Vide  infra.  Chapter  vi. 

^  The  development  of  this  policy  is  admirably  stated  by  Dr  Cunningham  in  The 
Growth  of  English  Commerce  and  Industry  in  Modem  Times  (Cambridge,  1903), 
pp.  63-74. 

3—2 


36     The  Russia  Company  and  Interlopers  1566     [chap.  ii. 

Now  independent  traders  were  the  precursors  of  the  owner  of  the 
modern  tramp  steamer.  They  sent  their  ships  to  certain  ports,  only  as 
long  as  they  saw  a  clear  profit  on  the  voyage.  If  the  returns  diminished, 
the  ships  went  elsewhere ;  and,  although  it  is  clear  that  in  time  the 
lean  years  would  have  been  followed  by  profitable  ones,  what  doubtless 
weighed  with  the  legislature  was  that,  in  the  doubtful  condition  of  the 
relations  of  England  with  other  powers,  with  an  open  trade  to  Narva, 
in  the  circumstances  indicated,  the  country  might  be  unable  to  have 
efficient  ships,  when  these  were  most  needed.  Therefore  Parliament 
confirmed  the  monopoly,  at  the  same  time  expressly  forbidding  other 
English  merchants  to  trade  either  northwards,  north-eastwards  or 
north-westwards  to  any  country  that  had  not  been  "  commonly  fre- 
quented" prior  to  1553^  At  the  same  time,  the  position  of  the  inde- 
pendent traders  was  deserving  of  consideration.  The  government  was 
anxious  to  encourage  maritime  enterprize,  and  an  unsympathetic  attitude 
to  those,  who  had  made  a  practice  of  sailing  to  Narva  for  several  years, 
would  have  tended  to  check  similar  ventures.  These  men,  too,  had  in 
all  probability  performed  a  public  service  in  reducing  the  price  of 
Russian  commodities.  Therefore,  if  the  interlopers  were  to  be  sacrificed 
to  a  real  or  supposed  political  necessity,  it  was  the  object  of  Parliament 
to  save  them  from  actual  loss.  To  carry  out  this  idea,  several  provisos 
were  added  to  the  confirmation  of  the  company's  monopoly.  It  was 
enacted  that  the  independent  merchants  might  enter  the  company 
up  to  Christmas  1567,  by  contributing  to  the  capital  of  the  company 
as  much  as  members,  who  had  joined  in  the  beginning,  had  paid  on 
their  shares'^.  Unfortunately,  beyond  the  wording  of  the  act,  there  is 
,.  no  information  as  to  how  the  financial  details  were  arranged.  At  this 
period,  and  indeed  for  long  afterwards,  the  connection  between  capital 
and  commodities  was  much  less  disguised  than  it  is  at  present.  Capital 
was  sometimes  subscribed  in  the  form  of  goods,  and  dividends  were 
^distributed  in  the  same  manner.  A  striking  instance  of  the  former  may 
be  noticed  in  the  case  of  a  Scottish  gold  mining  company,  which  was 
floated  at  this  time,  in  which,  according  to  a  contemporary  account,  the 
shareholders  met  together,  and  some  provided  corn,  some  malt,  meal  or 
other  kinds  of  food  and  some  moneys.  Probably  what  happened  in  the 
case  of  the  Russia  company  was  that  the  ships  of  the  interlopers  and 
their  goods  were  valued,  and  shares  given  to  the  amount,  so  estimated. 
Whether  this  transaction  was  carried  out  by  the  creation  of  new  shares 
or  by  the  purchase  of  a  sufficient  number  by  the  company  and  the 
transfer  of  these,  in  exchange  for  the  goods  taken  over,  is  unknown. 
Judging  by  what  happened  much  later  in  similar  cases,  it  is  probable  that 
the  latter  and  more  cumbersome  method  was  adopted.     The  reason  was 

1  Vide  infra,  ii.  p.  41.  2  jud.,  11.  p.  42. 

3  Ibid.,  n.  408. 


CHAP,  n.]      The  Settlement  in  the  Eussia  Trade  1566        37 

that,  in  the  evolution  of  the  joint-stock  company,  the  astimation  of 
capital  has  become  more  flexible  than  it  was  at  the  beginning.  The 
number  of  shares — almost  invariably  a  multiple  of  twelve — was  quite 
rigid,  and  there  are  few  cases  discoverable,  until  after  the  Revolution,  in 
which  the  parts  or  portions,  as  they  were  called,  were  increased.  If  the 
sum  paid  up  became  inconveniently  large,  the  shares  were  divided  into 

fractions,  but  the  original  number  remained  unaltered.     If  the  settle-. , 

ment  was  carried  out  in  this  manner,  it  accounts  for  the  fact  that  the 
company  appears  to  have  borrowed  money  after  this  date.     Such  funds     / 
would  be  used  in  paying  for  the  shares  purchased  for  the  persons,  who     I 
were  to  become  members  under  the  act. 

The  fact  of  such  a  settlement  having  been  made  shows  that  at  this 
period  the  company  must  have  been  making  profits,  exceeding  12  per 
cent.  Obviously  it  would  not  be  to  the  advantage  of  the  new  members 
to  exchange  their  trading  capital  for  a  security,  which  would  return 
them  less  than  that  amount,  since,  owing  to  the  closing  of  the  foreign 
money-market  to  Elizabeth,  she  would  have  been  glad  to  pay  this  rate, 
or  more,  to  obtain  a  loan.  Probably  the  actual  return  was  more, 
perhaps  considerably  more,  but  if  the  explanation  suggested  above, 
concerning  the  manner  of  adjusting  the  financial  part  of  the  settlement, 
is  correct  then  it  is  plain  that,  if  the  profits  exceeded  the  standard  rate 
very  materially,  shareholder  would  not  have  been  willing  to  sell.  On 
this  hypothesis,  then,  there  is  a  hint  of  an  upper  limit,  and  it  may  be 
conjectured  that  in  1566  the  dividends  had  been,  or  were  expected  to  be, 
between  12  per  cent,  and  20  per  cent. 

In  making  such  an  arrangement,  the  company  gained  not  only  by 
the  parliamentary  confirmation  of  its  monopoly,  but  also  by  the  actual 
removal  of  competition.  The  outcome  of  the  agreement  for  the  new 
members,  apart  from  unforeseen  circumstances,  would  depend  on  the 
comparative  efficiency  of  joint-stock,  as  compared  with  independent 
management.  No  judgment  can  be  formed  as  to  the  result,  since  so 
many  new  factors  were  introduced  into  the  situation  in  the  next  five 
years  that  methods,  which  would  have  made  a  profit  at  the  earlier 
period,  might  have  resulted  in  loss  later.  Lastly  there  was  the  effect  of 
the  settlement  on  the  consumer.  Since  the  government  used  the  com- 
modities, imported  by  the  company,  to  a  large  extent,  it  is  to  be 
concluded  that  it  would  not  acquiesce  in  the  crushing  of  the  independent 
trader,  unless  there  were  compensating  advantages.  The  conditions  of 
foreign  trade  have  changed  so  much,  since  the  time  of  Elizabeth,  that 
it  is  exceedingly  difficult  to  see  events  in  their  true  relations.  Some 
circumstances  were  so  universal  that  men  of  affairs  scarcely  mentioned 
them,  accepting  them  as  axiomatic.  Thus  it  frequently  happened 
that  conditions,  which  have  passed  away,  were  scarcely  alluded  to,  and 


38      Russia  Company's  Trade  prohibited  1570      [chap.  n. 

it  was  just  such  conditions  that  were  of  prime  importance.  Chief 
amongst  these  was  the  fact  that  the  right  of  entry  into  a  country,  such 
as  Russia,  depended  wholly  on  the  will  of  its  ruler.  To  placate  him, 
large  sums  had  to  be  paid,  and  the  company  came  under  certain  obliga- 
tions. Independent  traders  were  forced  to  outbid  the  established 
organization,  and  it  was  easier  to  do  this  in  promises  than  in  per- 
formances. When  the  promises  were  not  made  good,  a  man  like  the 
Czar  of  Russia  was  likely  to  visit  his  displeasure,  not  only  on  the 
offenders,  but  on  all  Englishmen.  To  prevent  such  an  interruption  in 
the  supply  of  naval  stores,  it  was  considered  best  to  confirm  the  company's 
monopoly.  There  was  no  limit  in  time  attached  to  this  confirmation, 
but  it  was  enacted  that,  in  the  event  of  the  company  not  trading  to 
Russia  by  the  northern  route  for  a  period  of  three  years,  the  trade  to 
Narva  should  be  open  to  all,  until  the  company  again  made  voyages  to 
Archangel.  The  effect  of  this  clause  was  to  provide  at  least  a  theoretical 
limit  to  the  monopoly. 

After  the  act  of  1566,  the  unauthorized  trade  to  Russia  from  England 
increased.  Dutch  merchants,  too,  began  to  find  their  way  into  the 
country,  and  by  1569  the  trade  of  the  company  was  less  prosperous  than 
it  had  been.  Moreover  the  undertaking  began  to  lose  the  support, 
hitherto  given  it  by  the  Czar.  Unfortunately,  it  is  impossible  to  de- 
termine whether  this  was  due  to  the  machinations  of  rival  merchants, 
or  whether  it  is  to  be  attributed  to  malpractices  of  the  company's 
agents  in  Russia^  In  1570  all  its  privileges  in  Russia  were  suspended. 
If  it  could  be  shown  that  the  company  had  given  the  Czar  no  cause  for 
complaint,  this  fact  might  be  adduced  as  evidence  in  favour  of  the  view 
that,  since  the  right  of  Englishmen  to  enter  the  country  was  at  the 
mercy  of  the  ruler,  any  offence  by  one  of  them  would  be  visited  on  all 
the  rest ;  and  therefore,  in  addition  to  the  encouragement  of  the  dis- 
coverers of  a  new  trade,  it  was  necessary  that  there  should  be  a  company 
with  the  monopoly  of  that  trade.  But,  there  is  ample  evidence  that  the 
company  was  exacting  very  high  prices  for  English  commodities  in 
Russia,  and  so  it  might  be  contended,  on  the  other  hand,  that  the 
sentence  of  exclusion  was  to  be  assigned  to  its  own  short-sightedness, 
and  that  the  trade  would  have  been  more  satisfactory  had  there  been  no 
monopoly  at  this  time.  Thus  it  would  appear,  as  far  as  events  had 
developed  up  to  1570,  that  the  withdrawal  of  the  company's  fi-anchises 
in  Russia  might  be  due  either  to  its  own  fault  or  to  the  abuses  of  the 
independent  traders,  each  of  which  causes  would  have  sufficed  to  produce 
the  effect.  It  is  not  impossible  that,  although  the  company  cannot  be 
acquitted  of  blame,  the  weight  of  censure  should  be  assigned  to  its 

^  Vide  infra,  ii.  pp.  42^  46,  47. 


CHAP.  II.]      Two  mining  Companies  founded  1564-6      39 

rivals,  but  the  evidence  pointing  in  this  direction  belongs  to  the  next 
chapter. 

Mention  has  already  been  made  of  the  project  to  obtain  some  control 
of  the  production  of  cannon,  and  that  in  1561  a  grant  of  the  privilege 
of  mine  royal  had  been  made  to  two  partnei-s^  The  crisis  of  156^4 
left  its  mark  on  this  venture,  as  well  as  on  most  of  the  contemporary 
undertakings.  The  partners  found  themselves  in  want  of  capital,  and 
in  1564  the  undertaking  was  divided  into  twenty-four  shares.  As  funds 
were  needed,  half  of  these  were  sold  in  Germany  and  half  in  England. 
The  reports  of  the  discoveries  of  gold  in  Scotland^  raised  the  highest 
expectations  of  the  profits  likely  to  be  made,  and  it  is  recorded  that,  in 
some  cases,  as  much  as  =i^l,200  was  paid  as  a  premium  in  order  to 
obtain  admission  to  the  company.  Copper  ore,  containing  silver,  was 
discovered  in  Cumberland,  calls  were  made  on  the  shares,  and  by  1566 
a  considerable  quantity  of  work  had  been  done^  This  undertaking 
may  be  regarded  from  two  different  points  of  view.  The  object  of  the 
shareholders  was  to  obtain  as  much  of  the  precious  metals  as  possible. 
Should  this  object  be  achieved,  the  Crown  would  benefit  under  the 
royalty  of  one-tenth  reserved  by  the  original  grant.  On  the  other 
hand  Elizabeth  was  also  interested  to  a  further  extent,  since  the  pro- 
duction of  copper  within  the  country  would  be  a  possible  benefit  for 
her  arsenals. 

The  great  use  of  copper,  however,  was  not  in  its  original  form,  but 
as  brass  for  cannon.  But  to  make  the  mixed  metal,  zinc  was  required, 
which  had  not  been  discovered  as  yet  in  England.  It  was  no  doubt 
satisfactory  to  the  Queen  and  her  ministers  that  in  1565  a  group  of 
partners  offered  to  make  the  search ;  and,  if  they  succeeded,  to  establish 
brass  works  and  also  mills  for  drawing  the  wire,  used  in  making  wool- 
cards.  By  November  1566  wire  was  successfully  drawn,  but  at  first  the 
search  for  calamine  was  unsuccessful,  and  in  1565  it  was  necessary  to 
import  it*.  However  by  June  of  the  following  year,  the  necessary  ore 
had  been  found,  and  the  erection  of  works  was  pushed  on  as  rapidly  as 
possible.  As  in  the  case  of  the  Mines  Royal  it  was  found  imperative  to 
procure  capital,  by  dividing  the  whole  privilege  into  shares,  upon  which 
calls  were  made  as  required °. 

One  point  of  interest  about  this  undertaking  should  not  be  over- 
looked. At  first  sight  it  would  seem  that  its  operations — namely  the 
making  of  brass  and  wire — were  disconnected,  but  this  was  not  so  in 
reality,  since  both  were  used  in  the  production  of  wool -cards.     What 

^  Vide  supra f  p.  31 ;  cf.  infra,  ii.  pp.  384,  411. 

2  Vide  infra,  ii.  p.  407.  ^  n^d.,  n.  p.  385. 

*  State  Papers,  Domestic,  Elizabeth,  xli.  12. 

^  lu  this  case  into  thirty-six  shares. 


4, 


40     Constitution  of  the  mifiing  Companies  1568     [chap.  ii. 

is  more  striking  is  the  existence  in  this  undertaking  of  an  "in- 
tegrated industry.""  It  owned  "  calamine  mines  '"*  in  Somersetshire. 
Thence  the  ore  was  conveyed  to  Nottingham  or  London  (the  company 
had  brass  factories  at  both  places),  copper  was  purchased  from  the  Mines 
Royal  society,  and  brass  was  made.  In  Monmouthshire  the  company 
was  possessed  of  iron  mines,  whence  it  obtained  ore  to  make  "  Osmond 
iron,*"  which  was  drawn  into  wire.  Finally,  the  wire  (whether  of  iron 
or  brass)  was  used  in  the  manufacture  of  wool  cards  ^ 

Both  of  these  undertakings,  at  the  inception,  were  in  a  somewhat 
unsatisfactory  legal  position.  Ample  privileges  had  been  granted  by 
Elizabeth  to  the  founders  but,  by  the  sale  of  shares,  their  respective 
interests  had  been  diminished.  Moreover,  in  so  far  as  the  brass  and 
wire  works  had  to  do  with  the  woollen  industry,  it  was  especially  open 
to  the  interference  of  Parliament.  An  effort  was  made  to  regularize 
the  position,  by  the  promotion  of  an  act  in  1566,  but  this  met  with 
opposition  in  the  House  of  Lords;  and  later  two  bills  were  brought 
forward,  but,  since  it  was  probably  known  that  Cecil,  Leicester  and 
a  number  of  other  prominent  courtiers  were  interested,  there  was 
opposition,  and  the  proposed  measures  were  withdrawn.  On  the  same 
day — May  28th,  1568 — charters  were  signed  incorporating  the  two 
undertakings,  the  one  as  the  Governors,  Assistants  and  Commonalty  of 
the  Mines  Royal,  and  the  other  as  the  Governors,  Assistants  and  Society 
of  the  Mineral  and  Battery  Works.  Comparing  the  character  of  incor- 
poration with  that  of  the  Russia  company,  drawn  up  fourteen  years 
earlier,  it  may  be  noticed  that,  while  the  latter  described  itself  as  a 
company",  this  word  is  not  applied  to  either  of  the  mining  ventures. 
The  term  "mysterie,"  too,  is  not  used,  nor  "fellowship,"  while  com- 
monalty, which  appears  in  the  body  of  the  Russia  charter,  is  taken  into 
the  title  of  the  Mines  Royal.  The  description  of  the  remaining  under- 
taking as  a  "society"  is  of  interest,  as  recalling  the  societas.  It  is 
noteworthy  that,  although  the  word  "company""  had  been  used  to 
describe  other  organizations,  as  yet  this  term  had  not  been  applied 
officially  in  the  four  titles  of  joint-stock  bodies,  namely  those  of  the 
Russia  company,  in  its  charter  and  act,  and  in  the  charters  now 
described.  In  the  grant  to  the  Mineral  and  Battery  Works  it  is  ex- 
pressly stated  that  the  incorporation  was  granted,  so  as  to  prevent  the 
great  inconvenience  which  might  otherwise  arise  on  the  deaths  of  the 

^  Vide  infra,  ii.  p.  413.  It  is  assumed  here  that  the  company  made  wool-cards, 
although  this  is  nowhere  expressly  mentioned.  But  unless  this  was  so,  the  state- 
ment of  Pettus  that  the  factories  (other  than  the  wire  and  iron  works)  maintained 
8,000  persons  is  inexplicable. 

2  The  Mysterie  and  Companie  of  Merchants  Adventurers  S^c. — the  title  of  the 
syndicate  before  it  was  incorporated  by  charter — vide  infra,  ii.  p.  37. 


CHAP.  II.]       Capital  of  the  mining  Companies  1568-9      41 

then  existing  partners.  With  regard  to  government,  both  these  charters 
revert  to  what  may  be  described  as  the  English  model,  in  making  pro- 
vision for  the  election  of  governors,  deputy-governors  and  assistants — 
the  deputy-governor  taking  the  place  of  the  "consul'^  of  the  Russia 
company.  The  management  in  each  case  consisted  of  the  same  number, 
namely  twelve  persons,  but  the  division  of  offices  differed.  In  both 
there  were  powers  to  elect  two  governor,  but  while  the  Mines  Royal 
had  four  deputy-governors  and  six  assistants,  the  Mineral  and  Battery 
Works  might  choose  two  deputy-governors  and  eight  assistants.  It  is 
not  a  little  singular  that  in  bodies  where,  even  with  a  subdivision  of 
shares,  the  membership  would  probably  be  small,  provision  was  made 
for  two  governors.  A  duality  at  the  head  of  the  organization  was  a 
characteristic  which  had  existed  in  some  gilds,  but,  in  view  of  its 
obvious  inconveniences,  it  soon  disappeared.  Finally  the  charters  re- 
capitulate and  confirm  the  privileges  granted  under  the  original 
agreements  ^ 

These  two  companies  were  closely  associated,  several  persons  owning    _^ 
shares  in  both.     As  capital  was  required  calls  were  made  on  the  shares,         \ 
and  in  1569  a  sum  of  c£*850  had  been  called  up  on  each  of  the  twenty-         i 
four  shares  of  the  Mines  Royal.     At  that  time  little,  if  any,  copper         [ 
had  been  actually  sold,  so  that  much  expense  had  been  incurred  in  the 
payment  of  wages  since  1564.     As  very  often  happened  in  the  case  of 
early  companies,  there  was  great  delay  in  the  actual  payment  of  the 
calls,  and  hence  it  cannot  be  concluded  that  in  1569  the  whole  <£*i20,400 
had  been  actually  received. 

The  capital  of  the  society  of  the  Mineral  and  Battery  Works  cannot 
be  fixed  with  absolute  precision.  It  was  more  foi-tunate  than  the  related 
undertaking  in  reaching  the  producing  stage  earlier,  and  in  1568  it  was 
calculated  that  a  call  of  ^£^200,  on  each  of  the  thirty-six  shares,  would 
suffice  for  the  capital  outlay.  This  would  give  c^7,200.  At  a  later 
date  there  is  the  important  information  that  the  expenditure,  either  on 
the  brass  works  or  on  the  iron  works,  was  10,000  marks  or  £^jo^^.  13a*.  46?. 
The  interpretation  of  this  statement  is  discussed  in  the  account  given 
elsewhere  of  this  company  2;  and,  for  the  purposes  of  the  present  chapter, 
it  is  unnecessary  to  say  more  than  that  about  1568  the  capital  was 
between  dLnO,000  and  ^^6,000. 

These  figures  enable  some  estimate  to  be  formed  of  the  capital 
subscribed  to  joint-stock  companies  before  1570.  Trade  with  Africa, 
whether  for  gold  or  negroes,  had  come  to  an  end  for  a  time  in  1567. 
The  Adventurers  had  a  capital  of  X^5,000,  and  probably  that  employed 
in  the  voyages  of  Hawkins  was  about  the  same  amount,  so  that  the  two 

1   Vide  infra,  ii.  pp.  38G,  387,  416,  *  Ihid.,  ii.  pp.  416-18. 


42    Total  Capital  of  joint-stock  Companies  1569    [chap.  ii. 

together  required  some  .^1 0,000.  When  these  expeditions  ceased,  there 
was  an  increase  in  maritime  ventures,  which  were  on  the  border-line  of 
piracy.  Some  of  the  more  reputable  of  these  were  joint-stock  enter- 
prizes  ;  and,  for  purposes  of  a  rough  calculation,  it  might  be  estimated 
that  the  increase  in  such  voyages  consumed  an  amount  of  capital,  roughly 
equal  to  that  withdrawn  from  the  African  trade.  Then  the  Russia 
company  had  called  up  ^48,000  in  1564,  and  additions  to  the  nominal 
capital  may  or  may  not  have  been  made  to  carry  out  the  settlement  of 
1566.  In  1569  the  capital  of  the  Mines  Royal  and  Mineral  and 
Battery  Works,  taking  both  together,  was  about  d£^27,500.  So  that  the 
three  most  important  companies  had  an  aggregate  capitalization  of 
some  d6^75,000\  Making  allowance  for  small  industrial  undertakings 
and  for  shipping  expeditions,  it  might  perhaps  be  estimated  that  the 
whole  amount,  invested  in  companies  (as  distinguished  from  partnerships), 
was  somewhat  more  than  d^lOO,000. 

Important  as  it  is  to  obtain  a  rough  approximation  to  the  total 
capital,  employed  during  the  first  fifteen  years  of  the  joint-stock  com- 
pany, such  an  estimate  is  devoid  of  all  reality,  unless  it  can  be  brought 
into  contact  with  industrial  phenomena,  subject  to  a  quantitative  state- 
ment. Failing  any  reliable  particulars  of  the  total  wealth  of  the  country 
at  this  time,  all  that  is  possible  is  to  take  certain  illustrative  data. 
A  single  shipment  of  cloth  by  the  Merchant  Adventurers  seems  to  have 
been  from  .^50,000  to  ^60,000  2,  so  that  roughly  the  capital,  invested 
in  companies,  was  double  this  sum.  If,  as  recorded  by  Camden,  the 
whole  annual  export  of  cloth  by  this  fellowship  was  valued  at  5  million 
ducats,  or  a  million  and  a  quarter  sterling,  the  capital,  so  far  invested 
in  companies,  was  only  one-tenth  of  that  sum^  The  nett  Ordinary 
Revenue  in  1571-2  was  =£^209,912.  10*.  \0d.,  so  that  the  ratio  to  this 
sum  was  about  50  per  cent.^ 

When  capital  was  so  scarce,  much  depended  on  the  success  or  failure 
of  these  early  companies.  Yet  the  investigation  of  this  question  is  one 
which  fails  to  yield  satisfactory  results,  if  treated  by  the  usual  statistical 
methods.     It  must  be  remembered  that,  where  there  was  a  monopoly 

1  Russia  Company,  1564     £48,000 

Mines  Royal,  1569  20,400 

Mineral  and  Battery  Works,  1568  7,200 

£75,600 

2  Burgon,  Ufe  o/Gresham,  ii.  pp.  325,  338,  340. 

3  Camden,  Elizabeth,  ut  supra,  i.  p.  108. 

*  Vide  infra,  iii.  p.  514;  cf.  An  Abstract  out  of  the  Records  of  the  Tower,  touching 
the  King's  Revenue,  by  Sir  Robert  Cotton,  p.  2.  This  account  is  without  the  income 
from  the  Duchy  of  Lancaster  and  Court  of  Wards.  Sinclair  {History  of  the  Public 
Revenue  of  the  British  Empire,  1803,  i.  p.  209),  by  very  greatly  overestimating 
these,  obtains  a  total  which  is  much  too  large. 


CHAP.  II.]    Profits  of  joint-stock  Companies  to  1570       43 

and  any  particular  trade  or  industry  was  profitable,  the  gains  from  it 
were  carefully  concealed.  On  the  other  hand,  when  an  undertaking 
became  involved  in  difficulties,  information,  more  or  less  accurate,  is 
almost  always  forthcoming.  Therefore,  as  a  general  rule,  it  is  fairly  safe 
to  assume  that  any  company,  concerning  which  there  is  no  information 
for  a  number  of  yeai-s,  was  doing  fairly  well.  Keeping  this  proviso  in 
mind,  it  is  possible  to  form  some  estimate  of  the  general  trend  of 
profits.  From  this  point  of  view,  the  history  of  the  Russia  company 
may  be  divided  into  three  nearly  equal  periods.  From  1554  to  1559 
profits  may  have  been  exceedingly  large ^  from  1560  to  1566  the  trade 
was  only  fair,  from  1566  to  1570  it  appears  on  the  whole  to  have  been 
bad.  As  already  shown  %  the  gains  of  the  African  trade  were  at  first 
enormous,  and  a  profit  of  from  40  per  cent,  to  60  per  cent,  was  counted 
poor  in  comparison.  The  first  two  of  Hawkins"*  expeditions  conformed 
to  about  the  same  standard,  yielding  a  profit  of  a  similar  amount.  The 
Mines  Royal  up  to  1570  had  given  no  return  whatever,  but  there  is 
reason  to  believe  that  the  Mineral  and  Battery  Works  had  already  begun 
to  make  a  considerable  gain.  It  is  clear  then  that,  on  the  whole,  the 
profit  from  joint-stock  management  was  increasing  the  capital  of  the 
country.  Perhaps  the  position  might  be  stated  more  accurately  in  the 
following  terms.  During  the  period  under  notice,  interest  paid  abroad 
by  the  Crown  varied  from  14  per  cent,  to  12  per  cent.  This  rate  is  a 
more  satisfactory  criterion,  with  which  to  start,  than  the  interest 
mentioned  in  the  various  acts,  dealing  with  usury.  If  then  the  investi- 
gation be  not  extended  beyond  the  year  1570,  taking  the  companies  all 
over,  if  they  were  successful  financially,  the  original  capital  must  have 
been  either  intact  or  returned  to  the  shareholders  at  that  date  and  in 
addition  interest  of  about  13  per  cent,  must  have  been  paid,  during  the 
time  the  capital  was  actually  risked.  By  1570  it  seems  probable  that 
the  assets  of  the  Russia  company  were  worth  considerably  less  than  the 
nominal  capital,  but  there  is  no  means  of  knowing  how  much  of  the 
original  subscription  had  been  returned  in  the  form  of  dividends  or 
divisions^  The  issued  capital  increased  slowly  between  1554  and  1558-9 ; 
and,  if  the  accounts  of  the  early  successes  of  this  undertaking  can  be 

^  As  stated  above  (p.  35  note)  this  interpretation  of  the  situation  is  contrary  to 
the  account  given  by  the  company ;  but,  in  that  statement,  attention  is  concentrated 
on  the  unfavourable  aspects  of  the  trade,  such  as  losses  of  ships.  The  eagerness  of 
interlopers  is  evidence  that,  occasionally,  large  profits  could  be  made. 

2  Vide  supra,  p.  23. 

3  For  instance,  it  is  known  that  the  Persian  Voyage  of  1578-81,  which  was 
described  as  unsuccessful,  returned  a  division  of  106  per  cent. — vide  infra,  ii. 
p.  45. 


44       Profits  of  joint-stock  Compmiies  to  1570    [chap.  ii. 

accepted,  it  would  necessarily  follow  that,  during  these  years,  very  large 
profits  were  distributed.  It  never  was  the  policy  of  the  Russia  company 
to  form  a  reserve  fund,  and  so  the  large  profits,  made  at  the  beginning, 
would  be  divided.  The  subsequent  calls  would  only  represent  a  part  of 
these,  and  therefore,  even  if  the  whole  capital  called  up  in  1570  were 
lost,  it  is  possible  that  there  may  have  remained,  not  only  the  original 
investment,  but  interest  at  the  standard  rate  thereon.  The  Mines 
Royal  company  had  been  in  existence  at  the  same  time  for  about  six 
years,  and  had  made  no  profit,  while  its  assets  had  suffered  some  de- 
terioration ;  but  on  the  other  hand  the  Mineral  and  Battery  Works  had 
increased  its  plant  out  of  profits,  besides  paying  dividends.  Therefore 
the  loss  of  the  former  would  probably  be  balanced  by  the  profit  of  the 
latter.  As  shown  above ^,  it  is  probable  that  the  Russia  company  may 
have  more  than  held  its  own  on  this  basis  of  calculation,  and  finally  very 
large  returns  had  been  made  by  the  African  trade. 

Thus  the  direct  effect  on  the  accumulation  of  capital  was  important ; 
but  there  was  the  indirect  one,  which  was  probably  greater,  in  the  sub- 
sidiary trades,  which  grew  up  as  a  result  of  the  new  developments  in 
industry.  For  instance  the  Mineral  and  Battery  Works,  in  so  far  as  it 
made  brass  and  drew  wire,  had  introduced  in  the  former  an  altogether 
new  trade  and  in  the  latter  a  new  method.  These  two  industries 
together  maintained  over  10,000  persons  2;  and  in  addition  there  would 
be  aU  those,  who  worked  up  brass  for  any  purposes,  not  undertaken  in 
the  company's  factories. 

It  is  to  be  noticed,  further,  that  in  all  these  cases  the  capital 
was  divided  into  shares.  To  understand  the  position,  it  should  be 
noted  that  the  share,  "portion,'"*  or  "part"  was  dealt  with  in  a  less 
complex  form  than  is  customary  at  the  present  time.  In  a  modern 
company,  owing  in  part  to  the  limited  liability  acts,  what  is  fixed  is  the 
denomination  of  the  share,  while  the  number  of  shares  will  vary  with 
the  progress  of  the  undertaking.  In  the  first  Elizabethan  companies, 
on  the  contrary,  what  was  fixed  was  the  number  of  shares  ;  and  the  sum, 
called  up  on  each  of  them,  increased  from  time  to  time.  Thus,  if  further 
capital  were  needed,  it  was  provided  in  the  early  company  by  adding  to 
the  sums  already  called  up ;  whereas,  in  the  modern  one,  as  a  rule,  once 
shares  have  been  fully  paid,  developments  are  provided  for  by  the 
creation  and  issue  of  new  shares. 

This  method  of  capitalization  had  two  consequences.     In  the  first 


1  Vide  supra,  pp.  37,  43. 

2  I.e.  8,000  in  the  brass  works  (Pettus,  Fodinae  Regales,  p.  33)  and  400  families 
by  the  iron  works.     Lausd.  MS.  (British  Museum)  6Q,  No.  47,  §  4. 


CHAP.  II.]     Concejytion  of  the  "  Share  "  or  "  Part "  1570    45 

place  it  might  happen,  as  in  the  case  of  the  Mines  Royal,  that  it  was 
necessary  to  call  up  an  unexpectedly  large  amount.  Therefore,  in  some 
cases,  shareholders  had  not  capital  available  to  make  the  necessary  pay- 
ments; and,  if  only  a  single  share  was  held,  it  became  necessary  to 
divide  it  into  fractions,  and,  by  selling  a  part,  to  realize  enough  to 
pay  the  calls  on  the  remainder.  Besides,  a  share,  such  as  that  in  the 
Mines  Royal  with  £S^0  paid  up,  would  be  difficult  to  sell,  so  that 
there  was  a  second  cause  tending  towards  subdivision,  and,  so  early  as 
1571,  halves,  quarters  and  even  eighths  had  come  into  existence^  When 
it  is  remembered  that  there  was  an  important  group  of  German  share- 
holders in  the  Mines  Royal,  it  is  possible  that  this  process  of  sub- 
division may  be  traced  to  foreign  influence;  since,  early  in  the  sixteenth 
century,  shares  in  German  mines  had  been  split  up  into  small  parts^ 

In  the  second  place,  "  the  share ""  at  this  time  was  used  in  its  natural 
sense,  namely  as  an  appreciable  part  of  the  whole  undertaking,  not  as  a 
multiple  of  units  of  the  capital.  The  person,  who  owned  one  share  in 
the  Mines  Royal  considered  himself  as  an  owner  of  one  twenty-fourth 
part  of  the  whole,  and  similarly,  if  he  had  two  shares,  he  thought  of  his 
property  as  a  twelfth^.  In  this  way  the  Elizabethan  company  may  be 
regarded  as  an  extended  partnership,  in  which  each  participant  possessed 
a  considerable  portion  of  the  business ;  and  this  idea  was  strengthened, 
in  the  rare  but  by  no  means  isolated  case  of  the  African  Adventurers, 
where  there  were  chief  adventurers,  with  others  under  them.  At  the 
same  time,  the  distinction  between  the  company  and  the  partnership  is 
sufficiently  clear.  The  shareholders  in  the  former  were  capitalists,  con- 
trolling the  business,  but  not  taking  part  personally  in  the  management. 
Moreover,  the  company  had  rules  for  the  transaction  of  its  business 
through  orders  of  general  meetings,  as  distinguished  from  the  prompter, 
but  less  formal  decisions  of  a  partnership.  Within  certain  limits,  there 
was  another  difference,  namely  that  there  was  some  approximation  to  a 
free  market  in  the  shares.  This  freedom  of  sale  was  relative  rather 
than  absolute.  In  the  Mines  Royal,  for  instance,  no  one  could  become 
a  member,  unless  he  held  a  certain  amount  of  real  property.  Most  of 
the  early  companies  probably  began  by  being  exclusive,  in  the  sense 
that  shares  were  sold  amongst  persons,  known  to  each  other.  But  with 
the  calls  required,  the  sale  of  shares  or  parts  of  shares  would  be  made 
to  those,  who  would  offer  most,  and,  to  that  extent,  there  would  be  a 
comparatively  free  market,  although  the  transactions   might   not   be 

1  Vide  infra,  ii.  p.  387 ;  cf.  p.  414. 

2  A.  Zycha,  Zur  neuesten  Literatur  ilber  die  Wirthschafts-  und  Rechtsgeschichte 
des  deutschen  Berghaucs  in  Vierteljahrschrift  fur  Social-  und  Wirthschaflsgeschichte, 
V.  p.  284. 

3  Cf.  the  passage  quoted  infra,  ii.  p.  395  (note  5). 


46     Corporate  Character  of  Companies  1560-70    [chap.  n. 

numerous.     In  this  way  men  like  Cecil,  Leicester,  Mountjoy  and  Pem- 
broke became  associated  with  an  Italian  such  as  Benedick  Spinola^  or  with 
merchants,  who  had  capital  to  invest,  or  again  with  persons,  who  though 
they  could  only  purchase  a  fraction  of  a  share,  had  special  knowledge  of 
J  mining  or  of  the  smelting  of  iron.     Finally,  it  may  be  added  that  the 
1  incorporated  company  was  distinguished  from  the  partnership  by  its 
\  perpetual    succession   and   common   seal,   in   fact   many   of  the   more 
*  important  undertakings  were  granted   elaborate   coats   of   arms  with 
j  supporters,  mottoes  and  crests^. 

^  Cecil  and  Spinola  were  two  of  the  largest  shareholders  in  the  Mines  Royaly 
each  owning  two  whole  shares — vide  infra,  ii.  p.  387. 

2  The  exigencies  of  space  have  precluded  the  inclusion  of  the  arms  of  the 
companies  in  Part  ii.,  Division  xiv.  Those  of  the  more  important  enterprizes  are 
engraved  in  A  New  View  of  London  by  Edward  Hatton,  1708,  and  are  described  in 
The  General  Armoury  by  Sir  Bernard  Burke  and  The  Scottish  Ordinary  of  Arms  by 
James  Balfour  Paul. 


CHAPTER  III. 
The  Crisis,  1569  to  1574. 

Underlying  the  great  material  progi'ess  made  by  England  from 
1564  to  1569,  there  were  many  causes,  which,  while  temporarily 
increasing  the  wealth  of  the  country,  led  inevitably  to  a  crisis.  The 
political  exigencies  of  the  early  years  of  the  reign  of  Elizabeth  had 
made  the  employment  of  privateers  necessary.  These  vessels,  by  preying 
on  the  Spaniards,  increased  the  wealth  of  the  country,  but  it  was  only 
to  be  expected  that,  when  the  inconvenience  to  Philip  became  in- 
supportable, he  would  retaliate. 

Such  were  the  essential  elements  of  the  crisis  which  began  at  the 
end  of  1568.  The  steps  leading  to  it  were  a  stage  in  the  diplomatic 
contest  which  involved  the  fate  of  England  and  Scotland.  Although 
the  French  had  been  ejected  from  Scotland,  Mary  believed  herself 
sufficiently  strong  to  make  headway  against  Elizabeth,  and  Scottish 
emissaries  were  in  frequent  contact  with  Elizabeth  on  behalf  of  the 
Protestants,  and  with  the  English  Catholics  on  behalf  of  Mary.  Then 
came  the  Darnley  marriage  in  1565  and  the  defeat  of  the  Protestant 
forces  by  Mary.  At  this  time  the  prospects  of  England  were  more 
critical  than  any  but  the  most  far-seeing  statesman  recognized.  Should 
Mary  be  able  to  crush  the  Reformed  Religion,  there  was  the  danger 
that  Scotland  might  be  made  the  base,  whence  either  a  French  or 
Spanish  army  could  invade  England.  With  regard  to  Scotland  again, 
which  from  this  point  of  view  might  become  the  strategic  key  to  the 
whole  European  situation,  neither  Queen  nor  Congregation  had  sufficient 
resources  to  keep  an  army  in  the  field  for  the  period  necessary  to  bring 
the  quarrel  to  an  absolutely  decisive  issue.  The  whole  balance  of  power 
was  too  delicate  to  be  disturbed  by  the  overt  act  of  any  one  country, 
without  others  becoming  involved.  Thus,  no  aid  in  men  could  be 
sent  to  either  side,  but  Elizabeth  followed  her  former  policy  of  being 
prepared  and  of  sending  subsidies  to  the  Protestant  leaders,  while  Mary 
succeeded  in  obtaining  20,000  crowns  from  Philip  \     Matters  dragged 

1  Documents  from  Simancas,  edited  by  Spencer  Hall,  London,  1865,  p.  97. 


48  Effects  of  political  Tension  1568  [chap.  iii. 

on  for  over  a  year,  by  staving  off  any  actual  conflict  outside  Scotland. 
Spain  was  occupied  in  the  attempt  to  suppress  heresy  in  the  Low 
Countries,  France  was  distracted  by  religious  wars,  England  was 
paralyzed  by  the  fear  of  a  Catholic  insurrection.  For  the  time  the 
position  of  England  was  surrounded  by  dangers,  and  safety  lay  in  the 
preoccupations  of  France  and  Spain  and  their  jealousy  of  each  other. 
Fortunately,  from  the  point  of  view  of  the  interest  of  England,  the 
policy  of  delaying  an  actual  conflict  was  justified  by  events.  The 
murder  of  Darnley  indirectly  strengthened  the  position  of  Elizabeth, 
owing  to  the  suspicions,  entertained  by  many,  of  the  complicity  of 
Mary.  Her  marriage  with  Bothwell,  not  only  caused  trouble  in 
Scotland,  but  alienated  her  supporters  in  England.  Finally,  when  she 
was  forced  to  take  refuge  at  Carlisle,  although  many  troubles  remained 
to  be  faced,  the  immediate  risk  of  the  situation  was  averted  for  the 
time. 

No  doubt,  for  a  number  of  years  up  to  1568,  the  most  pressing  and 
immediate  danger  was  to  be  expected  from  Scotland ;  but,  in  the  pre- 
occupation of  English  statesmen  with  this,  there  were  other  menaces 
which  could  not  be  ignored.  The  condition  of  Flanders  reacted  in 
several  ways  upon  England.  In  so  far  as  the  stubbornness  of  the 
burghers,  in  refusing  to  give  up  at  the  fiat  of  Philip  the  religion  they 
had  adopted,  kept  Spain  engaged  in  the  Low  Countries,  the  effect  was 
favourable  to  England.  Moreover,  the  arrival  of  skilled  refugees  was 
most  beneficial  in  introducing  the  secrets  of  several  important  industrial 
processes.  These  tendencies  constituted  the  gain  of  the  situation, 
against  which  the  losses  must  be  allowed  for.  The  confusion  in  Flanders 
had  for  the  time  destroyed  the  money-market  at  Antwerp,  and  the 
result  was  most  serious  to  the  finances  of  England.  In  spite  of 
economies,  Elizabeth  had  been  unable  to  escape  from  debt.  When 
the  country  had  been  rearmed,  subsidies  had  to  be  given  to  the 
Protestants  in  France  and  Scotland.  Therefore,  the  increasing  difficulty 
of  renewing  the  Crown  loans  reacted  on  the  whole  policy  of  Elizabeth, 
and  tended  to  limit  her  powers  of  initiative.  In  fact  many  of  the 
complaints  against  her  parsimony,  as  well  as  much  of  the  apparent 
vacillation  in  her  public  actions,  are  to  be  attributed  to  this  cause. 
Moreover,  the  theory  was  accepted,  at  the  Court  of  Philip,  that  England 
was  a  rallying  point  for  heretics,  and  the  obstinacy  of  the  Protestants 
in  the  Low  Countries  was  assigned  to  the  example  of  England.  Thus 
Philip  was  hostile  to  Elizabeth  as  a  Protestant  sovereign,  not  only  on 
general  grounds,  but  even  more  through  the  encouragement,  which  her 
example  gave  to  his  own  revolted  subjects. 

Another  related  phase  of  the  same  political  problem  was  the 
existence  of  the  English  privateers.     The  unsettled  condition  of  Europe 


CHAP.  III.]   Economic  Aspects  of  privateering  1565-8      49 

had  diverted  merchants  from  their  former  routes ;  and,  at  the  same 
time,  the  great  profits  of  distant  trading  voyages  had  induced  persons 
owning  ships  to  desert  the  older  and  less  profitable  trades  for  these 
more  adventurous  expeditions.  In  such  enterprizes  the  merchant  and 
the  man  of  arras  could  unite.  But  the  accession  of  the  latter  tended 
to  add  to  the  risks  of  such  voyages,  for  he  had  not  the  trader's  respect 
for  law,  and  he  was  prepared  to  seize  wealth  where  he  could  find  it, 
iiTespective  of  payment.  This  train  of  events  might  be  described  as 
the  purely  economic  element  in  the  new  foreign  trade.  But  that  trade 
was  far  from  being  conditioned  by  economic  causes  only.  At  the 
beginning  of  the  reign  of  Elizabeth,  she  was  glad  to  avail  herself  of 
the  services  of  armed  vessels,  which  received  letters  of  marque.  These 
ships  occasioned  great  inconvenience  to  the  French  in  aid  of  the 
Huguenots;  and,  in  the  diplomatic  situation,  such  a  policy  possessed 
the  advantage  that  it  could  be  disowned,  should  events  require  such 
action.  Great  as  were  the  services  rendered,  and  even  allowing  for  the 
inestimable  value  of  privateering,  as  a  training-school  for  a  naval  power, 
it  must  be  recognized  that  these  ventures  possessed  certain  incon- 
veniences. The  procession  of  Spanish  ships,  sailing  to  Flanders  through 
the  Channel,  was  too  tempting  to  the  privateersman,  and  frequent 
captures  were  made.  The  men  of  Devon  were  not  skilled  in  the 
subtleties  of  diplomacy,  and  they  seized  Spanish  vessels,  even  in  English 
waters.  Naturally  Spain  retaliated,  and  English  crews  taken  were 
handed  over  to  the  Inquisition.  As  the  news  of  the  sufferings  of  the 
captives  was  circulated  amongst  the  shipping  population,  a  spirit  of 
revenge  came  into  existence ;  and  the  seamen  were  bent  as  much  upon 
destroying  Spanish  ships  as  on  seizing  their  cargoes.  In  June  1567 
the  ambassador  of  Philip  described  the  losses  as  without  remedy  and 
without  end^  while  the  annual  damage  was  estimated  at  300,000  ducats'. 
The  following  year  the  issue  between  the  two  countries  came  to  a  head. 
Alva  had  found  it  impossible  to  maintain  his  army  in  the  Low  Countries 
out  of  the  resources  obtainable  there,  and  it  became  necessary  to  find 
funds  to  pay  the  troops.  Philip  negotiated  a  large  loan',  which  was 
remitted  in  bullion,  carried  by  a  number  of  vessels.  The  English 
privateers,  acting  as  they  claimed  under  commissions  from  the  Prince 
of  Conde,  attacked  the  fleet,  some  of  which  were  taken  and  the 
remainder  driven  into  English  ports.  ^Vhat  would  have  happened  is 
difficult  to  determine,  and,  in  any  case,  an  altogether  new  element  was 
introduced  into  the  situation.     While  the  Spanish  ships  were  sheltering, 

^  Froude,  History  of  England  {Reign  of  Elizabeth),  ii.  p.  482. 

2  Ibid.,  III.  p.  326. 

3  According  to  Sir  John  Sinclair  (History  of  the  Public  Revenue  of  the  British 
Empire,  London,  1803,  i.  p.  217)  amounting  to  400,000  crowns.  y 

S.  C.  I.  •  i 


50  Seizure  of  the  Spanish  Bullion  1568    [chap.  m. 

news  arrived  from  Hawkins.  Mention  has  been  made  elsewhere  of  his 
third  voyaged  At  one  stage  of  the  expedition,  he  calculated  that  he 
had  bullion  and  goods  of  very  great  value.  Unfortunately  for  himself, 
his  crew  and  the  adventurers,  all  this  was  lost  in  the  encounter  with 
the  Spanish  Fleet  at  St  Jean  de  Luz,  and  many  of  the  sailors  were 
captured.  The  ari'ival  of  the  news  of  this  disaster,  at  a  time  when 
England  held  in  her  grasp  the  Spanish  treasure-ships,  inevitably  pro- 
voked schemes  of  retaliation.  There  seems  little  doubt  that,  had  the 
ships  been  allowed  to  sail,  nothing  could  have  saved  them  from  the 
privateers.  Elizabeth  dared  not  allow  a  Spanish  fleet  to  come  as  a 
convoy,  and  she  could  scarcely  be  expected  to  lend  her  own.  Eventually, 
the  whole  treasure  was  taken,  as  it  was  said,  for  safe  keeping,  until  it 
could  be  handed  over  to  the  rightful  owners.  For  some  time,  Elizabeth 
and  her  ministers  played  the  role  of  the  honest  banker ;  but  the  political 
and  financial  situation  rendered  it  almost  impossible  to  maintain  more 
than  a  show  of  honesty.  At  this  period  money  was  a  most  important 
element  in  war.  Few  princes  could  obtain  sufficient  funds  to  drive  home 
their  victories.  Time  must  elapse  before  Philip  could  secure  fresh 
resources ;  and,  meanwhile,  Alva  would  be  impeded  by  the  discontent 
of  his  men  and  Orange  proportionately  encouraged.  These  were  the 
chief  political  reasons  for  preventing  the  treasure  from  reaching  its 
destination.  From  the  financial  point  of  view,  even  stronger  arguments 
could  be  urged,  not  only  to  retain  the  money,  but  even  eventually  to 
divert  it  altogether.  The  terms  of  the  loan  to  Philip  were  such  that 
the  Genoese  bankers,  who  found  the  bullion,  engaged  to  deliver  it  to 
Alva.  Therefore,  Philip's  liability  did  not  begin,  till  delivery  was  made' 
in  Flanders.  This  being  so,  Elizabeth  could  argue,  plausibly,  that  the 
retention  of  treasure,  which  was  imperative  owing  to  the  presence  of 
Conde's  privateers,  was  no  real  loss  to  Philip.  Moreover,  owing  to  the 
practical  closing  of  the  Antwerp  loan-market,  the  arrival  of  the  money 
was  a  god-send  to  Elizabeth.  She  was  in  an  excellent  position  to 
bargain  with  the  owners.  Should  any  political  crisis  arise,  the  treasure' 
could  be  used  immediately.  Meanwhile,  questions  of  ownership  could 
be  raised,  which  would  require  time  to  settle,  and,  in  the  interval, 
Elizabeth  was  in  the  happy  position  of  possessing  a  "war-chest," 
without  having  to  pay  interest  on  the  capital  that  formed  it.  Finally, 
should  it  be  necessary  to  use  the  bullion,  it  would  be  possible  to  obtain 
favourable  terms  from  the  owners  of  it,  since  the  debtor,  who  gets  his 
loan  before  agreeing  to  terms,  can  usually  make  an  arrangement 
moderately  satisfactory  to  himself.  From  the  point  of  view  of  those, 
who  found  the  money — faced  as  they  were  by  innumerable  legal 
questions,  and   by  the   practical  impossibility  of  getting  the  bullion 

^   Vide  infra y  ii.  p.  9. 


CHAP,  ni.]  Prohibition  of  Commerce  with  Flanders  1569   51 

out  of  England — it  would  be  more  advantageous  to  accept  any  rate 
of  interest  obtainable,  than  to  run  the  risk  of  ultimate  loss  of  the  whole. 
By  August  1569  overtures  had  been  made  by  the  bankers,  and 
Gresham  gathered  the  impression  that  they  would  be  "  right  glad  ^  to 
receive  interest  for  a  loan  of  such  part  of  the  bullion  as  might  be 
withdrawn  from  the  Tower^ 

The  detention  of  the  Spanish  treasure  might  be  described  in  the 
language  of  diplomacy  as  a  necessity,  but  it  was  plain  that  the  motive 
was  to  impede  the  operations  of  Alva  with  a  view  to  assisting  the 
Protestants  in  the  Low  Countries.  Therefore,  it  lay  with  the  Spanish 
administration  there  to  exact  reprisals  in  any  manner  open  to  it,  short 
of  a  declaration  of  war.  Alva  acted  promptly,  and  in  January,  1569, 
he  gave  orders  for  the  seizure  of  all  English  goods  within  his  juris- 
diction. Elizabeth  countered  this  stroke  by  confiscating  the  merchandize 
of  Spanish  subjects  in  England,  so  that  by  February,  1569,  commerce 
with  the  Low  Countries  was  interrupted. 

It  needs  little  consideration  to  discover  that  the  effects  of  these  pro- 
hibitions constituted  a  dangerous  dislocation  of  trade.  Contemporary 
writers,  viewing  events  on  the  surface,  congratulated  themselves  on  the 
excess  of  goods,  so  obtained,  over  the  losses'*.  Possibly  this  may  have 
been  so ;  although,  owing  to  England  being  a  debtor  country,  over  a 
period  of  years  there  would  necessarily  be  an  excess  of  visible  exports*. 
In  any  case,  even  if  there  were  a  balance  of  seizures  in  favour  of  England, 
allowance  must  be  made  for  the  loss  of  an  important  market  and  for  the 
disturbance  of  production  over  the  whole  country.  Already,  owing  to 
the  close  relation  of  the  English  wool  trade  with  that  of  Flanders,  both 
had  suffered  from  the  troubles  in  the  latter  place.  In  addition  to  this, 
after  the  edict  of  Alva,  the  cloth-making  industry  was  reduced  in  out- 
put ;  although,  owing  to  the  even  greater  stoppage  of  Flemish  weaving, 
the  price  of  a  smaller  volume  of  sales  may  not  have  diminished  as  much 
as  might  have  been  anticipated.  Moreover,  at  a  time  when  capital  was 
scarce,  the  resources  of  traders  were  locked  up  for  a  considerable  period. 

*  Burgon,  Life  of  Gresham,  ii.  p.  304. 

2  E.g.  Camden,  Annales  Rerum  Anglicarum,  regnante  Elizdbetha,  1717,  i.  p.  177- 
'  Tlie  following  *^ memoranda"  by  Cecil  give  the  values  ascertained  up  to  April 
1569— 

Groods  of  the  Merchants  Adventurers,  seized  in 

Low  Countries  £112,456     7     1 

Goods  of  Merchants  of  the  Staple        17,994    9  10 

Goods  of  English  Merchants  in  Spain  ...  59,783  15     7 

£190,234  12    6 

Goods  of  strangers,  seized  at  London 37,486    0    0 

(The  details  of  seizures  elsewhere  are  not  filled  in.) 
Calendar,  State  Papers,  Foreign,  1569-71,  p.  67. 

4-2 


52  Failures  of  Merchants  1569  [chap.  m. 

The  English  merchant,  whose  goods  were  seized,  might  be  reimbursed 
eventually  out  of  the  property  of  Spaniards  in  England;  but,  in  the 
meantime,  his  business  was  at  a  standstill.  The  reduced  foreign  market 
lessened  the  consumption  of  wool,  and  so  the  purely  domestic  trade 
began  to  feel  the  effects  of  the  check.  Moreover  the  good  years,  from 
1564  to  1568,  had  encouraged  a  spirit  of  enterprize,  and  many  merchants 
had  pledged  their  credit.  The  disturbance  of  existing  commercial  re- 
lations caused  numerous  traders  to  be  unable  to  meet  their  engagements, 
and  thus  failures  became  frequent,  with  the  result  that  it  was  not 
long  before  the  beginnings  of  a  crisis  were  in  existence.  Then  political 
events  gave  a  further  shock  to  mercantile  credit.  The  Catholic  party 
formed  a  plot,  in  conjunction  with  Alva,  for  the  seizure  of  the  fleet 
of  the  Merchant  Adventurers,  which  was  carrying  a  year\s  supply  of 
cloth  and  yarns,  valued  at  about  ^^100,000,  to  Hamburg,  whence  they 
had  removed  their  mart,  so  as  to  be  outside  the  jurisdiction  of  Alva^ 
It  was  anticipated  that,  should  these  ships  be  captured,  there  would  be 
great  discontent  in  England.  Probably  the  noblemen,  who  were 
responsible  for  this  scheme,  relied  on  the  distress  of  the  mercantile 
classes ;  still,  if  these  were  wholly  or  mainly  on  the  side  of  Elizabeth, 
the  attainment  of  this  contingent  object  of  the  plot  would  have  been 
doubtful.  It  may  be  one  of  the  numerous  inconsistencies  in  the  British 
character  that  traders,  whose  sole  motive  appears  to  be  that  of  gain, 
can  yet,  in  the  hour  of  a  great  emergency,  subordinate  their  individual 
interests  to  the  national  welfare.  Happily  for  the  merchants,  already 
sorely  tried,  their  loyalty  was  not  subjected  to  further  strain,  for  the 
fleet  arrived  in  safety. 

During  the  latter  half  of  the  year  1569,  further  Catholic  plots  were 
simmering,  which  culminated  in  the  insurrection  of  Norfolk  in  November 
and  December.  In  a  country,  where  production  has  reached  some  degree 
of  complexity,  even  the  danger  of  revolution  injures  the  ramifications  of 
commerce.  This  rebellion,  short  as  it  was,  increased  the  crisis  which 
had  already  begun.  Failures  became  more  numerous,  and  the  Crown 
finances  were  again  strained  by  the  expenses,  connected  with  the  sup- 
pression of  the  insurrection,  added  to  which  there  was  the  outlay  on 
Ireland,  which  for  some  time  had  been  considerable 2.  The  Crown  debt 
in  Flanders,  which  may  have  been  as  low  as  =^17,000  in  1565^  was 
returned  at  as  much  as  ^192,500  in  the  following  year^     As  already 

1  Die  Entwicklung  und  Organisation  der  Merchant- Adventurers ,  by  S.  van  Brakel, 
in  Vierteljahrschriftfiir  Social-  und  WirthschaJUgeschicht^,  v.  pp.  425-7. 

2  Vide  infra,  iii.  p.  627.  Up  to  August  Slst^  1570,  the  total  charge  of  the  Army 
in  the  North  is  returned  at  £20,140.  16*. ;  whereof  £8,616  had  been  raised  by  loan 
(Calendar,  State  Papers,  Foreign,  1569-71,  p.  328).     The  whole  cost  was  £92,932. 

3  Vids  infra,  iii.  p.  611.  *  Calendar,  State  Papers,  Foreign,  1666-8,  p.  21. 


CHAP.  III.]  Difficulties  of  the  Crown  in  borrowitig  1570      53 

shown  ^  the  situation  in  the  Low  Countries  made  lenders  disinclined  to 
furnish  Elizabeth  with  funds,  and  the  increase  in  her  borrowings  was 
only  obtained  by  an  addition  to  the  rate  of  interest.  Though  the 
political  outlook  had  improved  in  1566-7,  the  new  loans  were  made 
at  a  higher  rate  of  interest  than  had  been  given  earlier  in  the  reign ; 
and  it  appears,  at  this  time,  as  much  as  sixteen  per  cent,  was  paid*. 
The  subsidy,  granted  by  Parliament  in  1566,  was  payable  in  the  two 
following  years;  but,  against  this,  there  were  the  expenses  of  the 
rebellions  in  Ireland  and  in  the  North.  To  meet  the  exigency,  it 
was  proposed  to  raise  money  by  means  of  a  lottery ;  but,  before  the 
drawing  was  made,  the  Spanish  treasure  had  been  detained,  and  the 
prizes  were  not  distributed  until  1569'.  Meanwhile,  although  the  Spanish 
bullion  was  in  the  Tower,  it  had  not  been  drawn  upon ;  and,  not  only 
were  there  the  expenses  of  the  army,  as  well  as  the  need  for  being  ready 
for  any  naval  demonstration  made  by  Philip,  but  the  revenue  derived 
from  the  Customs  had  declined  seriously,  owing  to  the  embargo  on  trade 
with  Flanders^  Gresham  had  been  sent  to  try  to  borrow  in  Germany, 
but  was  unable  to  report  any  success.  He  returned  to  London  and 
made  efforts  to  obtain  capital  there,  but  was  forced  to  confess,  in 
October  1570  that  he  "never  saw  the  scarcity  of  monny  as  ys  here 
now  in  the  City"."  Under  these  circumstances,  Elizabeth  was  compelled 
to  summon  a  Parliament  which  met  in  April  1571.  While  the  need 
for  a  subsidy  was  admitted,  some  attempts  were  made  to  use  the 
opportunity  to  obtain  a  reform  of  certain  grievances.  References  were 
made  to  the  abuses  of  "  licences  and  promoters,"  whereby  "  a  few  only 
were  enriched  and  the  multitude  impoverished^";  and  hints  were 
dropped,  which  pointed  to  the  Queen's  favourites  in  this  connection. 
It  was  also  urged  that  there  had  been  fraudulent  bankruptcies  amongst 
certain  high  officials  in  the  Treasury.  These  men,  it  was  said,  "had 
become  bankrupts,  like  so  many  others  at  this  time,"  but  had  been 
found  to  have  purchased  estates,  which  were  concealed,  when  only  an 
instalment  of  the  debts  due  was  paid.  Eventually  the  subsidy  was 
granted  by  the  Housed 

The  prevailing  distress  engaged  the  attention  of  Parliament,  and  an 
act  was  passed  to  amend  the  law  relating  to  bankrupts,  the  preamble 

*  Vide  supra,  p.  32. 

2  Calendar,  State  Papers,  Foreign,  1566-8,  p.  271. 

3  A  History  of  English  Lotteries,  by  John  Ashton,  London,  1893,  pp.  6-24. 

*  The  Journals  of  all  the  Parliaments  during  the  Reign  of  Queen  Elizabeth,  Collected 
by  Sir  Simonds  D'Ewes,  London,  1682,  p.  139. 

^  Burgon,  Life  of  Gresham,  ii.  p.  419. 
^  D'Ewes,  Journals,  ut  sujyra,  p.  158. 

7  This  amounted  to  j^^ths  and  ^^ths  {Statutes,  iv.  p.  568)  realizing  £116,000 
(State  Papers,  Domestic,  Elizabeth,  ccxliv.  51). 


54  Parliament  and  Usury  1571  [chap.  m. 

of  which  stated  that  "bankrupts  doe  still  increase  into  greate  and 
excessive  numbers  and  are  lyke  more  to  do^""  Somehow  or  other,  the 
members  connected  the  existing  crisis  with  the  taking  of  interest,  and 
there  was  an  important  debate  on  this  subject  on  April  the  19th. 
It  was  evident  there  were  two  quite  distinct  points  of  view.  One  of 
which,  relying  on  Scripture,  Aristotle,  Canon  Law  and  other  authorities, 
denounced  usury  as  a  "  canker,"'  an  "  asp,"  a  "  serpent "  and  a  "  devil." 
It  was  argued  that  this  practice  resulted  in  loss  to  the  Queen  and  State. 
The  loss  to  the  Queen  arose  from  "  men  not  using  their  own  money,  but 
finding  great  gain  in  usury,  do  imploy  the  same  that  way,  so  that  her 
Customs  must  decrease.  To  the  commonwealth,  for  that,  whoso  shall 
give  hire  for  money,  is  to  raise  the  same  in  the  sale  of  his  commodity. 
All  trades  shall  be  taken  away,  all  occupations  lost ;  for  most  men 
seeking  most  ease  and  greatest  gain,  without  hazard  or  venture,  will 
forthwith  imploy  their  money  to  such  use."  This  standpoint  had 
weight  in  the  act  which  was  eventually  passed,  in  which  "the  utter 
undoing  of  many  gentlemen,  merchants  and  others "  was  attributed  to 
usury.  But  the  opinions  of  the  more  moderate  party  were  embodied 
in  the  last  clause,  which,  instead  of  prohibiting  the  taking  of  all 
interest,  declares  contracts,  at  a  rate  exceeding  ten  per  cent.,  should 
be  void.  The  justification  of  interest  was  well  expressed  by  a  member, 
named  MoUey,  who  said  that  the  "mischief  was  of  the  excess,  not 
otherwise.  Since  to  take  reasonably,  or  so  that  both  parties  might  do 
good,  was  not  hurtful;  for  to  have  any  man  lend  his  money  without 
any  commodity,  hardly  should  you  bring  that  to  pass.  And  since 
every  man  is  not  an  occupier  who  hath  money,  and  some  which  have 
not  money  may  have  skill  to  use  money,  except  you  should  take 
away  or  hinder  good  trades,  bargaining  and  contracting  cannot  be 
[hindered]  2."  It  is  a  curious  comment  on  the  debate  of  1571,  that 
Elizabeth  had  to  pay  about  13  per  cent,  in  the  following  year.  This 
is  sufficient  testimony  both  to  the  inefficacy  of  the  measure  and  to  the 
necessities  of  the  Crown. 

The  subsidy  of  the  laity  in  1571,  partly  through  the  depression 
in  trade,  partly  through  other  causes,  produced  a  lower  yield  per  tenth 
and  per  fifteenth  than  those  of  1562  and  1566^  Early  in  the  year 
it  was  necessary  for  Gresham  to  prolong  the  existing  debt,  which  was 
then  returned  at  .£59,584.  8*.  8(/.*  of  which  less  than  half  was  out- 
standing at  London  and  the  remainder  in  Antwerp ^  The  statute  of 
usury,  which   had  just  been   passed,  was   evaded  by  the  loan  being 

1  Statutes,  IV.  p.  539.  ^  D'Ewes,  Journals,  ut  mpra,  pp.  171-3. 

3  Vide  infra,  in.  p.  526. 

*  IHd.,  III.  p.  611.  These  figures  relate  to  the  debt  under  the  management  of 
Gresham. 


CHAP.  III.]     Trade  with  Flanders  reopened  1572  55 

described  as  for  six  months  at  6  per  cent.,  with  an  additional  1  per 
cent,  commission,  making  the  total  charge  a  minimum  of  13  per  cent.* 
In  all  probability,  the  great  reduction  in  debt  from  nearly  X^200,000, 
due  in  Flanders  in  1566,  to  under  at^60,000,  owing  both  in  Antwerp  and 
London  in  1570  and  1571,  is  to  be  ascribed  to  the  use  made  of  the 
captured  treasure.  Statements  of  the  actual  amount  in  the  Tower  vary, 
owing  to  inventories  being  taken  sometimes  of  the  coin  only,  sometimes 
of  coin  and  bullion,  and  in  some  of  the  accounts  the  value  is  expressed 
in  Spanish  or  Flemish  currency.  On  the  whole,  the  totals  tend  to 
diminish.  Thus  in  a  statement,  apparently  drawn  up  in  1569,  there 
was  over  d^0,000  in  coin  and  bullion,  and  by  1571  there  remained 
.;^87,457.  16*.  4c?.  2  Possibly,  before  the  first  account  was  taken,  a 
considerable  sum  had  been  borrowed,  and  there  is  evidence  of  a  great 
pressure  on  the  finances  of  the  Crown,  since  the  repayment  of  sums, 
that  had  been  borrowed  in  London  about  1569,  was  two  years  overdue'. 
Apparently,  although  the  total  debt  of  Elizabeth  had  been  reduced,  the 
reduction  on  balance  was  less  than  would  appear,  being  rather  effected 
by  the  incurring  of  new  liabilities  elsewhere,  partly  to  the  Genoese 
bankers,  partly  to  merchants  in  Hamburg''. 

Elizabeth,  having  secured  the  bullion  intended  for  Alva,  was  not 
indisposed  by  the  month  of  May  1571  to  open  negotiations  for  the 
removal  of  the  embargo  on  English  goods  in  Flanders.  The  political 
objects,  gained  by  the  seizure,  had  cost  a  serious  decay  of  trade;  and, 
even  though  Spain  may  have  suffered  more  in  goods  lost,  the  southern 
commerce  of  that  country  was  continuing  with  comparatively  little 
disturbance.  Therefore,  if  the  percentage  of  loss  be  taken  as  affecting 
on  the  one  side  Spain  with  the  Low  Countries  and  England  on  the 
other  hand,  the  latter  was  at  the  greater  disadvantage  in  the  reprisals. 
Granting  that  Spanish  merchants  had  had  goods  valued  at  3,000,000 
ducats  seized  or  destroyed,  England's  trade  was  at  a  standstill,  and, 
being  the  poorer  country,  the  loss  was  all  the  more  felt^  The  rumours 
of  a  projected  Spanish  invasion,  as  well  as  the  Catholic  plot  towards 
the  end  of  1571,  made  an  agreement  all  the  more  necessary.  Eventually, 
in  April  1572  an  arrangement  was  made,  under  which  trade  with 
Flanders  was  reopened. 

Apart  from  the  Massacre  of  St  Bartholomew  in  August  of  the  same 
year  (1572),  the  political  causes  of  the  crisis  had  ceased  to  exist ;  and, 
had  it  not  been  for  other  reasons,  the  depression  would  have  passed 
away.     It  unfoi-tunately  happened  that,  beginning  with  1571,  there  was 

1  Calendar,  State  Papers,  Foreign,  1569-71,  p.  463. 

2  Ibid.,  pp.  163,  523.  ?  Burgoii,  Life  of  Greaham,  ii.  p.  421. 
*  Ibid.,  II.  p.  418. 

^  Froude,  History  of  England  {Elizabeth),  iv.  p.  242. 


56        The  Russia  Co.  during  the  Crisis  1569-72  [chap.  m. 

a  run  of  exceptionally  bad  seasons,  which  lasted  until  1573-4.  In  the 
latter  years  the  price  of  wheat  was  nearly  three  times  as  great  as  it  had 
been  in  1570\  But,  although  this  time  of  scarcity  delayed  the  process 
of  recovery,  the  crisis  was  passing  away ;  and,  towards  the  end  of  1574, 
the  country  began  to  emerge  from  the  period  of  depression,  while  in 
1575  the  material  progress,  that  had  been  interrupted  since  1569,  was 
resumed. 

The  severity  of  the  crisis  of  1569-74  is  attested  by  its  effects  on  the 
existing  joint-stock  companies.  Allusion  has  already  been  made  to 
the  want  of  flexibility  in  the  capitalization  of  early  companies.  Under 
a  system  whereby  the  number  of  shares  was  rigidly  fixed,  fresh  capital 
was  most  readily  obtainable  by  making  calls  as  required.  But  in  a 
time  of  crisis,  it  would  almost  certainly  happen  that  some  of  the  share- 
holders could  not  make  the  necessary  payments,  and  the  system  of 
sub-division  of  shares  came  into  existence.  Still,  even  with  this  modi- 
fication of  the  original  rigidity  of  the  system,  the  undertakings,  in 
existence  at  the  time  of  the  crisis,  found  it  difficult  to  weather  the 
storm ;  and  methods  had  to  be  devised  to  meet  the  exigencies  of 
the  case.  These  took  different  forms  as  originated  by  the  various 
companies. 

The  privileges  of  the  Russia  company  in  Russia  were  suspended  in 
1570,  but  the  disorganization  of  English  and  other  merchants  there  was 
such  that,  in  1571-2,  the  Czar  was  prepared  to  renew  the  former  grants 
to  a  group  of  traders''.  In  connection  with  the  question  discussed  in 
the  previous  chapter^,  as  to  the  issue  between  the  company  and  the 
interlopers,  this  fact  tends  to  show  that,  although  both  sides  were  in 
fault,  probably  the  lesser  blame  is  to  be  assigned  to  the  company.  Thus 
about  1572,  the  situation  of  this  undertaking  was  that  it  was  in  a 
position  to  make  a  fresh  start,  but  this  was  by  no  means  easy  at  the 
close  of  a  long  continued  crisis.  Much  of  the  subscribed  capital  had 
been  lost,  and  more  funds  would  be  required.  It  would  be  impossible 
to  collect  a  call  on  the  existing  stock,  and  therefore  it  was  determined 
to  start  a  "  new  stock,"  or,  as  we  should  say  now-a-days,  a  reorganized 
company.  It  seems  possible,  as  suggested  in  the  detailed  account  of 
this  enterprize^,  that  those  who  were  prepared  to  go  on  agreed  to  pay 
a  certain  sum  to  the  members  of  the  old  company  for  its  privileges  and 
assets.  This  amount  would  be  available  to  discharge  the  debts,  and  any 
balance  remaining  would  be  divisible  amongst  the  former  members. 

1  A  History  of  Agriculture  and  Prices,  by  J.  E.  T.  Rogers,  iv.  p.  267 ;  Chronicon 
Preciosum  or  an  A  ccount  of  English  Money,  the  Price  of  Com  and  other  Commodities 
[by  Bishop  Fleetwood],  1707,  p.  123. 

2  Vide  infra,  ii.  p.  43.  ^  Vide  supra,  p.  38. 
*  Vide  infra,  ii.  pp.  44-6. 


CHAP.  III.]     The  Position  of  the  Mines  Royal  1571         57 

The  same  effect  of  the  crisis,  in  separating  those  who  were  able 
to  continue  to  support  the  undertaking  from  those  who  were  not, 
showed  itself  in  a  different  manner  in  the  case  of  the  Mines  Royal. 
This  company  was  caught  by  the  crisis  in  the  difficult  position  of  not 
being  fully  established.  Moreover,  of  the  calls  of  J*850  made  on  each 
share,  about  £9>y500  was  in  arrear  in  1571.  There  was  the  further 
difficulty  that,  owing  in  part  to  the  depression,  some  of  the  copper 
made  could  not  be  sold.  Any  arrangement  for  the  future  would  be 
complicated  by  two  elements.  In  the  first  place,  about  ten  shares  were 
owned  in  Germany^,  and  there  would  be  delay  in  agreeing  upon  a 
common  line  of  action.  Secondly,  at  this  period,  the  operations  of  the 
society  were  being  carried  on  only  in  the  Keswick  district,  while  there 
remained  a  number  of  other  counties,  included  under  the  grants  and 
charter,  which  had  not  been  examined.  The  first  recorded  step  was 
to  frame  a  valuation  of  the  assets,  which  were  actually  in  existence 
in  1571,  and  a  full  summary  and  analysis  of  this  document  is  given 
elsewhere  ^  The  whole  recorded  value  comes  to  over  d£*l  2,000,  as 
against  capital  actually  subscribed  by  the  shareholders  of  about 
ri£*l  8,000',  or  an  apparent  depreciation  of  one-third.  As  against  this 
deficiency,  there  were  several  unvalued  assets,  chief  of  which  were 
281,424  quintals  of  unessayed  ore*.  If  allowance  be  made  for  these 
additional  portions  of  the  company's  property,  and  it  be  assumed  that, 
including  them,  there  were  assets  against  the  capital  actually  paid  up, 
it  is  quite  plain  that,  as  things  were  in  1571,  those  shareholders,  who 
gave  a  premium  of  .^1,200  for  their  holdings,  had  made  a  great  mis- 
calculation. 

The  main  question,  however,  was  what  could  be  done.  If  the 
copper  could  not  be  sold  nor  the  outstanding  calls  collected,  it  would 
not  be  long  before  the  "  directors'' "  at  the  mines  would  be  unable  to 
pay  wages,  and  the  whole  undertaking  would  collapse.  In  this  exigency 
it  was  proposed  that  the  English  shareholders  should  purchase  each  his 
rateable  proportion  of  the  stock  of  copper,  at  the  price  at  which  it 
was  usual  to  value  it  in  the  accounts  of  the  company.     This  proposal 

^  In  the  thirteenth  and  fourteenth  centuries  mining  companies  were  known  in 
Germany,  and,  early  in  the  fifteenth  century,  there  was  extensive  speculation  in  the 
shares  of  these  ventures— G.  R.  Lewis,  The  Stannaries,  pp.  178,  182. 

2  Vide  infra,  ii.  pp.  387-9. 

»  /.e.  24  shares  at  £850        £20,400 

less  3  shares  with  calls  wholly  or  partly  in  arrear,  say  £2,400 

Cash  received  by  society        £18,000 
4  Vide  infra,  ii.  p.  390. 

^  The  term  director  appears  to  have  been  of  Dutch  origin — De  Hollandsche  Han- 
delscompagnieen  der  Zeventiende  Eeuw,  door  S.  van  Brakel,  'S-Gravenhage,  1908, 

p.    XXIII. 


58  Introduction  of  the  ''farming"  system  1571  [chap.  m. 

constituted  in  fact  a  method  of  obtaining  more  capital  from  the  English 
shareholders,  giving  them  the  security  of  an  equal  value  of  copper 
against  the  advance.  But  the  shareholders  would  have  been  forced  to 
run  the  risk  of  finding  a  market  for  the  copper,  and  probably  some  of 
them  had  not  the  capital  available,  though  there  is  no  doubt  several 
were  in  a  sound  position  financially,  since  the  names  of  two  members  of 
the  society  occur  amongst  those  who  made  a  loan  to  Elizabeth  at  this 
time,  and  these  two — Benedick  Spinola  and  Lionel  Duckett — lent 
between  them  £^^\00^. 

This  proposal  having  failed,  it  was  suggested  that  Elizabeth  might 
be  induced  to  accept  the  royalty  of  one-fifteenth,  reserved  to  her,  in 
kind,  not  in  cash.  At  another  time  this  method  might  have  answered, 
since  a  considerable  amount  of  copper  was  required  to  replenish  the 
supply  of  guns  for  the  fleet,  but  at  this  period  the  Queen  needed  the 
money,  owing  to  the  impossibility  of  arranging  new  loans  to  any 
considerable  extent  abroad.  It  follows  then  that  this  way  out  of  the 
perplexities  of  the  society  was  closed.  Finally,  as  the  copper  was  made, 
it  was  sent  to  London  and  deposited  as  security  against  a  loan,  which 
by  1575  had  grown  to  <^1,3502.  Even  though  by  that  time  the 
crisis  was  over,  capital  could  not  be  obtained  from  the  members,  and 
Elizabeth,  who  was  receiving  about  £¥)0  a  year  for  her  royalty,  was 
induced  to  lend  c£2,500.  This  loan,  however,  was  only  a  temporary 
one,  for  the  Queen  could  not  afford  to  be  out  of  the  money  for  long ; 
and,  if  the  undertaking  was  to  continue,  fresh  resources  must  be  found. 
The  system  adopted  was  an  ingenious  one.  The  society,  as  a  whole, 
"  farmed '"'  or  leased  the  Keswick  mines  to  one  of  the  members  at  a  rent 
and  royalty.  In  this  way  a  subsidiary  company  was  formed  and  the 
partners  in  this  venture  would  find  the  capital  required. 

The  same  system  of  farming  a  part  of  the  property  to  a  subordinate 
partnership  had  been  adopted  by  the  Mineral  and  Battery  Works ;  but, 
as  far  as  can  be  learnt,  from  different  reasons.  The  iron  and  wire  mills 
were  at  some  distance  from  the  other  factories ;  and,  either  because  they 
did  not  pay  or  because  it  was  difficult  to  obtain  adequate  supervision,  in 
1571  these  were  leased  to  three  shareholders  for  three  years  at  a  rent  of 
£\50  a  year.  One  of  the  partners.  Sir  Richard  Marty n,  purchased 
more  shares  in  the  parent  undertaking ;  and,  when  the  time  came  for  a 
renewal  of  the  lease,  he  owned  seven  or  eighth — that  is  between  a  quarter 
and  a  fifth  of  the  whole  business.     He  used  his  voting  power,  supported, 

1  State  Papers,  Domestic,  Elizabeth,  lxxvii.  29  (1) ;  Burgon,  Life  of  Gresham,  ii. 
p.  343.  In  1573  Spinola  was  repaid  £11,000— State  Papers,  Domestic,  Elizabeth, 
xci.  67. 

2  The  Extract  of  the  Mines  Royal  at  Christmas  anno  1575.  British  Museum, 
Lansd.  MS.  22  (5);  cf.  infra,  ii.  pp.  390-3. 


CHAP,  m.]   Creation  of  subsidiary  Companies  1571-4      59 

it  is  alleged,  by  fraudulent  accounts,  to  obtain  in  1574  a  reduction  in 
the  rent  from  ^£^150  to  =£^40.  This  event  brings  to  light  one  of  the 
great  dangers  of  the  farming  system  between  parent  and  subsidiary 
companies.  As  matters  were  arranged  in  the  sixteenth  century,  a 
conflict  of  interest  was  inevitable.  It  was  the  interest  of  the  original 
company  to  obtain  as  much  rent  or  royalty  as  it  could,  it  was  the 
interest  of  the  lessees,  provided  their  share  in  the  subordinate  under- 
taking was  the  greater,  to  pay  as  small  a  sum  as  possible.  The  result 
would  be  that  the  men,  who  were  interested  in  both,  would  be  strongly 
tempted  to  use  indirect  means  to  effect  their  objects.  It  might  be, 
as  in  the  case  of  the  court  meeting  of  the  Mineral  and  Battery  Works 
in  1574,  by  framing  accounts  which  showed  a  profit  only  one-seventh 
of  the  actual  one* ;  or  as  was  proposed  to  (but  not  accepted  by)  the 
governor  of  the  Mines  Royal  at  a  later  date,  that,  if  he  would  use 
his  influence  on  behalf  of  a  person  wishing  a  lease,  when  a  subordinate 
company  was  being  formed,  he  should  receive,  without  payment,  a 
number  of  shares  in  the  new  ventured  When  one  recollects  the  amount 
of  discussion  that  has  centred  round  "controlling  interests'"  and  the 
shifting  of  responsibilities  from  one  company  to  another  of  an  associated 
group  in  recent  years,  it  is  not  uninstructive  to  notice  how  soon  the 
evil  manifested  itself.  At  the  same  time,  certain  points  of  difference 
between  the  Elizabethan  and  the  modern  problem  should  be  noted. 
The  "  farming "'  was  always  the  result  of  financial  pressure.  To 
understand  the  circumstances,  the  great  scarcity  of  capital  must  be 
remembered.  When  crises  were  so  frequent  and  so  severe,  even  a 
profitable  undertaking  might  find  itself  in  temporary  difficulties.  There 
was  no  banking  system  in  England,  and  those  members  of  a  company, 
who  could  furnish  it  with  funds  when  these  were  most  required,  could 
exact  a  high  price  for  the  service  rendered. 

Reference  was  made  in  the  previous  chapter  to  the  manner  in  which 
capital  was  regarded  in  the  early  joint-stock  company'.  A  series  of 
accounts  of  the  Mines  Royal  enable  that  statement  to  be  developed 
further.  These  documents  are  dated  1575-6,  and  so,  in  strict  chrono- 
logical order,  they  belong  to  a  period  after  the  crisis  ;  yet,  since  in  many 
respects  they  reflect  the  influence  of  that  time  of  stress,  it  will  be  more 
convenient  to  deal  with  them  at  the  present  stage! 

It  should  be  premised  that  in  none  of  the  documents  relating  to 
English  companies  in  the  sixteenth  century  has  the  word  "  capital ""'  been 

*  A  Summary  of  Avenant's  Bill  of  Complaint  on  Her  Majesties  behalf  ex- 
hibited in  the  Exchequer  Chamber :  Brit.  Mus.  Lansd.  MS.  66  (47)  §§6,  7 ;  vide 
infra,  ii.  p.  419. 

2  Lansd.  MS.  28  (6).  3  y{^  fsujn-a,  p.  46. 

*  These  accounts  are  summarized  infray  ii.  pp.  392-3. 


60  Earhj  uses  of ' Stock''  and  "  CapitaV  1564-9  [chap.  iii. 

discovered  ^  The  term  stock  is  used  in  a  general  way,  as  co-extensive 
with  the  whole  property,  but  more  frequently  to  apply  to  what  might 
be  termed  trading  or  floating  capital.  For  instance,  in  the  inventory  of 
the  mines  at  Keswick  there  are  two  headings,  the  first  of  which  is  "  the 
stock  remaining  at  the  mines."  This  "  stock ""  includes  copper,  silver 
and  lead  (either  finished  or  partly  made),  fuel,  horses  and  wagons, 
furniture  and  bedding,  plate,  debts  due  to  the  society,  payments  made 
in  advance,  tools  and  implements,  also  a  brew-house  and  windmill*. 
These  items  could  all  be  included  under  floating-capital  except  the 
brew-house  and  windmill.  Possibly,  as  having  to  do  with  the  feeding 
of  the  work-people,  it  seemed  to  the  framers  of  the  account  not  un- 
natural to  classify  them  in  this  manner.  The  second  part  of  the 
account,  which  is  added  as  a  kind  of  appendix  and  which  is  treated 
as  quite  distinct,  includes  buildings  and  plant. 

At  this  period  there  was  no  need  of  a  term  to  describe  the  whole 
outlay.  As  yet,  the  company  stood  in  this  respect  too  near  the  partner- 
ship for  the  want  of  a  capital  account  to  be  felt.  The  idea  of  capital, 
as  something  which  should  be  kept  intact,  was  unknown,  and  very  much 
later  the  payment  of  dividends  out  of  capital  was  quite  usual.  In  fact 
the  temporary  joint-stock,  such  as  that  of  the  African  expeditions, 
made  this  method  of  procedure  unavoidable.  As  the  goods  brought 
home  were  sold,  the  adventurers  received  payments  pro  rata;  and, 
when  the  voyage  had  been  a  success,  they  obtained  more  than  they 
had  paid  in,  if  it  was  a  failure,  they  might  get  less.     For  such  circum- 

^  This  statement  must  be  confined  to  the  accounts  of  companies.  The  word 
capital  does  occur  in  other  connections^  e.g.  as  early  as  1564  a  grant  was  made  of  the 
capital  messuage  and  park  of  Copthall  in  Essex — State  Papers,  Domestic,  Elizabeth, 
XXXIV.  44.  The  term  also  appears  in  accountancy  as  early  as  1569,  when  it  was 
used  by  James  Peele,  who  taught  the  "  art  of  Italian  merchants'  accounts. "  In  a 
dialogue  between  "the  scholemaster  and  the  scholler,"  the  latter  describes  "an 
inventorie  for  trafique"  as  "a  note  to  be  taken  in  writinge  of  all  thinges,  founde 
and  remayninge  in  the  house  apperteyninge  to  trade  of  merchaundise,  thereby 
to  knowe  a  mans  estate  and  doth  consist  of  ii  kindes :  the  one  whereof,  is  that  a 
man  hathe  or  ought  to  have  in  possession,  to  saye  in  readie  monie,  debtes  and 
goodes :  and  thother  kinde,  is  that  whicli  he  oweth  to  other  men  being  his  creadi- 
tours,  and  by  comparinge  of  the  totall  somme  of  the  readye  monie,  debtes  and 
goodes,  with  the  totall  somme  of  the  creaditours,  the  estate  of  that  accompte  is 
presentlye  perceyved  (that  is  to  saye)  so  muche  as  the  monye  debtes  and  goodes 
sormounte  the  creaditours,  so  muche  apperteyneth  to  thowner  of  that  accompte  for  his 
proper  stocke  or  capitall  in  traffique  " — The  Pathewaye  to  Perfectnes,  in  th'  Accompte  of 
Dehitour  and  Creaditour :  in  manner  of  a  Dialogue j  very  pleasaunte  and  profitable  for 
Merchauntes,  by  James  Peele,  London,  16  August,  1569.  In  Murray's  Dictionary 
the  following  references  are  given :  1588,  J.  Mellin's  Briefe  Instr.  B.  ii.  b.  *^'The 
remaine  is  the  net  rest,  substance  or  capitall  of  the  owner";  1611,  "Capital — 
wealth,  worth,  a  stocke,  a  man's  principall  or  chiefe  substance." 

2  Vide  infra,  ii.  p.  388. 


CHAP,  m.]  Capital  Outlay  termed  ''the  Clmrges"  1575      61 

stances  the  view,  commonly  held,  of  the  nature  of  stock  was  sufficient. 
The  case  was  different  where  the  sums  adventured  remained  represented 
by  the  same  kind  of  acknowledgement  from  the  company — that  is 
where  the  member,  in  return  for  his  payments,  had  a  right  to  a  certain 
proportion  of  the  whole.  It  is  here  that  the  relatively  small  number  of 
shares  becomes  important.  Martyn,  for  instance,  had  eight  shares  in 
the  Mineral  and  Battery  Works ;  and  therefore  the  quarter  of  the 
undertaking,  he  owned,  was  represented  to  his  mind  by  the  price  he 
had  paid  for  those  shares.  If,  as  time  went  on,  he  could  sell  them  for 
more,  the  excess  was  profit,  and  conversely.  A  few  cases  occur  where  it 
is  necessary  to  speak  of  the  whole  cost  of  establishing  an  undertaking, 
that  is  what,  in  modern  language,  would  be  called  the  capital  outlay, 
and  in  two  cases  this  is  described  as  "  the  charge "'''  or  "  charges^""  At 
the  same  time,  occasionally  the  writer  drifts  from  the  standpoint  of  • 
regarding  the  undertaking  as  a  single  unit  and  expresses  the  whole  cost  > 
in  terms  of  the  amount  paid  on  each  share,  which  is  to  be  understood  /  \ 
as  multiplied  by  the  number  of  shares.  Thus,  in  describing  how  the*  j 
Mines  Royal  "  begun  and  went  forward,""  the  outlay  is  given  in  terms  of 
the  calls  on  each  shared  Therefore,  6is  far  as  the  joint-stock  company 
of  this  period  was  concerned,  there  was  no  need  for  the  word  "  capital," 
since  the  shareholders  were  unconscious  of  any  necessity  to  describe  the 
thing.  Even  the  "  stock  "  was  still  vague  in  their  minds.  What  really 
concerned  them  was  that  there  should  be  sufficient  funds  to  carry  on 
their  enterprize  and  to  leave  a  surplus.  Before  this  profit  was  arrived 
at,  it  may  have  happened  that,  as  in  the  case  of  the  Mineral  and 
Battery  Works',  expenditure  had  been  made  on  additions  to  the  under- 
taking— that  is,  in  fact,  that  the  funds,  according  to  modern  practice, 
available  for  dividend,  had  been  diminished,  and  capital  outlay  was 
provided  from  revenue.  But  conversely,  should  the  trade  decrease,  the 
resources,  which  would  thus  take  the  form  of  cash,  would  be  treated  as 
divisible  and  paid  away  to  the  shareholders,  as  if  the  whole  were  profit. 
Most  of  these  characteristics  may  be  seen  in  the  accounts  of  the  Mines 
Royal  in  1575  and  1576.  In  these  documents  the  whole  preoccupation 
of  the  shareholders  is  to  obtain  a  sufficient  amount  of  income  over 
expenditure.     It  is  true  that,  in  this  case,  such  excess  was  devoted  to 

^  E.g.  Mineral  and  Battery  Works — "The  societie  had  been  at  charges  in  the 
premisses  to  the  value  of  10,000  marks "—Lansd.  MS.  56  (47)  §  4:  e.g.  in  "Notes 
of  Richard  Leedes,  Keeper  of  the  books  of  account  of  the  Royal  Mines  in  the  North," 
it  is  stated  the  whole  charge  of  the  general  company  and  their  farmers  had  been  "  &c.. 
State  Papers,  Domestic,  Elizabeth,  cclxxv.  145. 

'^  Record  of  George  Bowes  and  Francis  Needham,  sent  to  take  view  of  the  Mines 
Royal  at  Keswick :  MS.  Lister,  17,  Bodleian  Library. 

3  Vide  infra,  ii.  pp.  417,  418. 


62     Ambiguities  of  the  term  ''Stock''  1569-76    [chap.  ni. 

the  paying  of  interest  and  the  extinction  of  debt ;  but,  had  the  society 
not  been  in  difficulties  at  the  time,  the  surplus  would  have  been,  from 
the  point  of  view  of  the  times,  available  for  dividend.  As  a  matter 
of  fact  it  is  shown,  in  the  analysis  of  these  figures,  that  the  profit,  which 
appeared  to  be  made,  was  obtained  by  diminishing  the  reserves  of  ore\ 
This  fact  indicates  one  of  the  ambiguities  which  arose  from  the  vague 
use  of  "stock."*"*  The  "stock  of  the  mines'*'  might  mean  either  the 
metal  smelted,  ores  on  hand,  tools  and  provisions  or  the  provisions  and 
cash  available  for  wages  and  dividend.  Now  it  is  plain  that,  since 
it  was  proposed  to  divide  the  copper  to  the  shareholders,  no  distinction 
was  made  between  these  two  points  of  view ;  yet,  supposing  a  dividend 
had  been  made  out  of  the  cash,  it  follows  that  "  the  stock  "*"*  remaining 
would  have  decreased.  Further,  when  the  term  stock  was  used  later  in 
the  precise  meaning  of  capital  subscribed — that  is  where  the  capital 
consisted  of  "stock,"*"*  not  of  shares — the  confusion  would  become 
intensified.  "Stock""  might  then  mean  the  whole  "charges"*'  or  total 
outlay ;  or  it  might  mean,  in  a  narrower  sense,  the  sums  provided  by 
the  shareholders,  or  again,  in  a  still  narrower  sense,  only  the  floating 
capital.  It  will  be  shown  below  how  an  effort  was  made  to  escape  some 
of  these  ambiguities,  by  distinguishing  a  "quick'"*  and  a  "dead  stock '^j"*' 
but  even  so  some  confusion  remained,  and,  once  this  was  recognized, 
the  need  of  a  new  word  would  be  felt  and  hence  the  use  of  the  term 
capital.  In  the  sixteenth  century,  however,  the  predominant  type  of 
company  was  the  temporary  undertaking,  divided  into  a  comparatively 
small  number  of  shares.  Such  were  the  African  expeditions  and  the 
trade  to  Russia.  Indeed,  as  has  been  shown,  this  idea,  that  a  "  stock  "*"• 
should  be  something  terminable  at  an  early  date,  prevailed  in  the  cases 
of  the  Mines  Royal  and  the  Mineral  and  Battery  Works,  resulting  in 
the  formation  of  subsidiary  companies  or  partnerships.  Therefore,  as 
yet,  for  all  practical  purposes  the  prevailing  vague  use  of  "stock"*' 
sufficed,  and  it  lay  with  the  course  of  future  development  to  bring  to 
light  the  ambiguities,  involved  in  the  term. 

To  complete  the  history  of  companies  during  the  crisis  of  1569  to 
1574,  a  few  words  may  be  added  as  to  the  financial  results  during  this 
period.  Of  the  three  important  companies  the  only  one  that  may  have 
made  profits  was  the  Mineral  and  Battery  Works  ^,  both  the  others  were 
in  difficulties,  and  all  of  them  emerged  from  the  depression  in  an  altered 
form. 

In  view  of  the  severity  of  the  crisis,  new  enterprizes  were  not  under- 
taken. There  is  only  one  instance  of  a  fresh  departure,  which  deserves 
mention  from  some  peculiarities  in  the  organization  of  the  partnership. 

1  Vide  infra,  ii.  pp.  393,  394.         2  /jj^.^  u.  pp.  133^  145,  147^  170,  173,  185. 

3  Ibid.,  II.  p.  418. 


HAP.  III.]    A  Company  ivith  limited  Membership  1574     63 

This  was  a  project  of  Sir  Thomas  Smith  (who  had  been  Ambassador  to 
France  and,  later,  Secretary  of  State)  for  transmuting  iron  into  copper. 
He  began  his  experiments  in  1571  and  there  were  in  all  five  persons 
concerned  in  the  venture,  the  whole  capital  of  which  was  no  more 
than  £lfiOQ.  In  January  1574  a  patent,  incorporating  the  persons 
interested  as  the  Society  for  the  New  Art  in  Makhig  Copper^  was  signed. 
This  instrument  provided  for  the  election  of  one  governor  and  one 
deputy-governor,  and  that  the  whole  undertaking  was  to  consist  of  five 
shares.  At  the  same  time  there  was  a  clause  limiting  the  membership 
to  twenty  persons^ ;  so  that,  had  any  partners  beyond  the  original  five 
been  admitted,  it  would  have  been  necessary  that  (as  in  the  case  of  the 
African  Adventurers)  these  should  have  been  "  under ""  the  chief  share- 
holders^. The  reason  for  this  arrangement  seems  to  have  been  the 
existence  of  a  personal  liability  for  «£'1,000,  entered  into  by  the  pro- 
moters, on  obtaining  a  lease  of  certain  buildings  for  the  making  of 
experiments  ^ 

^  The  explicit  limitation  of  the  number  of  members  is  an  interesting  anticipation 
of  the  provisions,  relating  to  '^private  companies,"  in  the  Companies  Act  of  1908. 

*  Vide  supra,  p.  30. 

3  Calendar y  State  Papers y  Domestic,  Addenda  1566-79,  p.  47 ;  The  Life  of  Sir 
Thomas  Smith,  by  John  Strype,  Oxford,  1820,  pp.  100-5,  282-6. 


CHAPTER  IV. 

From  1575  to  1587.    The  Eleven  Years  of  Great 

Prosperity. 

One  of  the  peculiarities  of  a  new  country  in  its  industrial  develop- 
ment, such  as  England  was  in  the  sixteenth  century,  is  the  elasticity  of 
its  recovery  from  a  crisis.  Beginning  in  1575  there  were  eleven  years, 
which  despite  temporary  disturbing  influences,  as  for  instance  many 
political  uncertainties  and  localized  outbreaks  of  the  plague  (1577, 
1583),  may  be  described  as  exceptionally  prosperous.  The  harvest  of 
1575  was  excellent — indeed,  in  Scotland  more  particularly,  it  was  said 
that  wheat  had  never  been  more  plentiful^  Crime  had  decreased,  as 
was  shown  by  the  fact  that  at  the  London  sessions  of  1575  there  were 
no  prisoners  to  be  tried^.  Partly  by  rigorous  economy,  partly  no  doubt 
through  the  use  made  of  the  "Spanish  treasure,""  the  Chancellor  of 
the  Exchequer  was  able  to  state  in  Parliament  that,  "  within  the  realm, 
her  Majesty  hath  most  carefully  and  providently  delivered  this  kingdom 
from  a  great  and  weighty  debt,  wherewith  it  hath  been  long  burdened — 
a  debt  begun  four  years,  at  the  least,  before  the  death  of  King  Henry 
the  Eighth  and  not  cleared,  until  within  these  two  years.*"  That  the 
State  was  at  last  freed  from  "  the  eating  corrosive  of  the  interest "  was 
proved  by  the  fact  that  the  Queen's  bonds,  issued  with  the  collateral 
security  of  the  City  of  London,  had  all  been  paid  off  and  cancelled^.  At 
the  same  time,  it  may  be  doubted  whether  the  foreign,  as  distinguished 
from  the  domestic  debt  was  altogether  paid  off.  Some  of  the  Spanish 
treasure  was  retained  in  England,  for  which  Elizabeth  became  liable  to 
the  bankers  of  Genoa.  Eventually  Benedick  Spinola  purchased  this 
obligation  from  the  original  lenders ;  and  just  a  month  before  it  was 
stated  in  the  House  of  Commons  that  the  debt  had  been  extinguished, 

1  A  Collection  of  State  Papers y  1571-96,  transcribed  by  William  Murdin,  London, 
1759,  p.  285. 

2  A  History  of  London,  by  William  Maitland,  I^ndon,  1756,  i.  p.  263. 

3  D'Ewes,  Journals^  p.  245. 


CHAP.  IV.]   Improvement  in  Cromn  Credit  1575-6  65 

he  wrote  pressing  for  payment  of  the  balance  which  was  then  still  out- 
standing^ 

It  was  no  doubt  true  that,  owing  in  a  large  measure  to  Elizabeth 
paying  interest  regularly  and  returning  at  least  a  part  of  the  principal 
when  due,  her  "  credit,  both  at  home  and  abroad,  was  greater  than  that 
of  any  other  Prince^"***  Philip  of  Spain,  for  instance,  had  been  forced 
sometimes  to  pay  12  per  cent,  and  18  per  cent,  on  loans,  the  interest  on 
which  was  in  arrear'.  Since  Elizabeth  was  practically  free  from  debt,  it 
is  difficult  to  obtain  any  quantitative  estimate  of  the  value  of  her  credit. 
As,  however,  she  lent  money  in  1575  to  the  society  of  Mines  Royal  at 
8  per  cent.^,  it  may  be  assumed  that  she  herself  was  not  paying,  or  would 
not  have  been  required  to  pay,  more.  This  estimate  of  her  credit  is  con- 
firmed by  the  fact  that  her  envoys  discovered  in  1576  that,  at  Hamburg, 
100,000  guilders  could  be  boiTowed  for  two  years  at  8  per  cent,  or  9  per 
cent.'  Indeed,  at  this  period  there  is  mention  of  an  offer  being  made 
of  ^£^200,000  or  ^300,000  from  Cologne  at  between  5  per  cent,  and  6  per 
cent. ;  but,  when  investigation  was  made,  it  was  found  that  this  offer  was 
conditional  on  the  renewal  of  all  the  former  privileges  of  the  Merchants 
of  the  Steelyard  in  London ;  and,  supposing  the  loan  were  needed,  the 
saving  in  interest  would  have  been  bought  at  a  high  price,  when  the 
loss  in  Customs  was  taken  into  account*. 

The  reduction  in  the  rate  of  interest  is  strong  testimony  to  the 
sound  state  of  the  Crown  finances  and,  indirectly,  to  the  thriving 
condition  of  the  country.  As  compared  with  France  and  Spain,  England 
had  enjoyed  a  lengthy  period  of  comparative  peace,  yet  internal  troubles 
had  made  themselves  felt.  The  danger  of  a  Catholic  insurrection 
still  remained  and,  beginning  in  1574,  there  had  been  a  revolt  in 
Ireland.  As  arising  out  of  this  period  of  comparative  peace,  the 
benefits  of  the  Reformation  and  of  a  government,  good  on  the  whole, 
had  had  time  to  make  themselves  felt,  and  the  spirit  of  entei-prize 
adapted  itself  to  the  changed  conditions,  which  were  manifesting  them- 
selves more  and  more.  The  continuance  of  the  destructive  war  in  the 
Low  Countries  tended  to  the  disturbance  of  the  wool  industry,  and  the 
English  capital,  so  displaced,  had  to  find  fresh  outlets.  Much  of  the 
prosperity  of  the  years  from  1575  to  1586  depended  on  the  fact  that 

1  Spiuola  to  Lord  Burghley,  Jan.  10,  1575.  Calendar,  State  Papers,  Foreign, 
1575-7,  p.  3. 

2  D'Ewes,  Journals,  p.  245. 

^  Anderson,  Historical  and  Chronological  Dediiction  of  the  Origin  of  Commerce, 
Dublin,  1790,  ii.  p.  188. 
*  Vide  infra,  ii.  p.  891. 

^  Calendar,  State  Papers,  Foreign,  1575-7,  p.  411. 
«  Ibid.,  pp.  122,  137,  176,  207,  208,  226,  250,  261,  262. 

s.  c.  I.  5 


66  Rise  in  Value  of  Wire-works  1571-80    [chap.  iV. 

Englishmen  had  the  initiative  and  the  courage  to  discover  profitable 
openings  for  the  resources,  so  released. 

The  crisis  of  1569-74  was  remarkable  in  so  far  as  the  companies, 
then  existing,  emerged  from  it  in  an  altered  form — the  Russia  company 
as  a  new  undertaking,  the  Mines  Royal  and  Mineral  and  Battery  Works 
as  parent  bodies,  leasing  certain  parts  of  their  property  to  associated  or 
subordinate  organizations.  It  has  been  shown  ^  that  the  roots  of  this 
change  lay  in  the  previous  development  of  the  joint-stock  company,  so 
that,  under  the  change,  there  is  in  reality  continuity.  Another  side  of 
the  enterprize  of  the  period  is  to  be  found  in  the  remarkably  successful 
privateering  expeditions,  and  these,  also,  are  to  be  connected  with  the 
crisis  and  the  years  that  went  before  it.  On  the  one  hand,  there  had 
been  the  expeditions  of  Hawkins  to  the  West  Indies,  followed  by  the 
seizure  of  the  Spanish  treasure — events  which  showed  the  vulnerability 
of  the  fleets  sailing  from  America — and  on  the  other  hand,  there  was 
a  certain  amount  of  displacement  in  capital,  previously  employed  in 
trade  with  the  nearer  European  countries. 

While  the  desire  to  make  a  fresh  start  manifested  itself  most 
strikingly  in  the  expeditions  against  the  Spaniards,  the  same  impulse 
is  to  be  traced  in  the  undertakings  already  in  existence.  In  the  case  of 
the  Mineral  and  Battery  Works  the  system  of  leasing  or  "  farming  "*** 
the  wire-works  came  into  existence,  as  already  mentioned^  in  1571. 
The  subordinate  company  had  endeavoured  at  the  end  of  1574  to 
obtain  a  reduction  of  the  rent  from  ^150  to  £^4i  a  year.  As  against 
this  offer,  another  group  of  shareholders  tendered  500  marks,  where- 
upon those  in  possession  increased  their  bid  to  ^200  a  year,  at  the  same 
time  binding  themselves  to  erect  additional  plant.  At  the  end  of  1575 
the  rent  increased,  probably  through  similar  competition,  to  £9Q0  a 
year — that  is,  it  had  almost  doubled  in  five  years'.  By  1580  the 
partners  were  protesting  bitterly  against  this  rent,  as  excessive,  while 
counter  charges  were  made  of  concealed  profits  and  of  "  indirect  getting 
of  voices"  at  the  court  meetings,  and,  as  a  result,  in  1582  a  lease  was 
made  to  a  new  partnership  at  1,000  marks  or  £Q6Q.  \^s.  ^d.  a  year, 
which  again  is  more  than  double  the  former  rent*.  A  few  years  after- 
wards as  much  as  d^l,100  a  year  was  offered  for  the  Monmouthshire 
works.  Providing  the  higher  rents  were  paid,  these  alone  would 
represent  a  respectable  return  on  the  original  capital,  altogether  irre- 
spective of  the  large  profits  of  the  brass-works.  Owing  to  some 
uncertainty,  as  to  how  various  statements  relating  to  the  capital  of 
this  company  are  to  be  interpreted*,  it  is  impossible  to  say  exactly  how 

1  Vide  supra,  p.  56.  *  Vide  supra,  p.  58. 

3  Vide  infra,  ii.  p.  419.  *  Ibid.,  ii.  p.  420. 

fi  JUd.,  II.  pp.  417,  418. 


CHAP.  IV.]  Financial  State  of  the  Minss  Royal  1575-86    67 

much  the  return  actually  was,  but,  supposing  the  wire  and  iron-works 
could  be  leased  at  d^l,000,  this  would  yield  apparently  about  14  per 
cent,  or  15  per  cent,  on  the  whole  share  capital,  and,  in  addition,  there 
were  the  profits  of  the  brass-works. 

The  importance  of  correcting  one  source  of  information  with  another 
is  shown,  when  this  system  of  farming  is  investigated.  As  practised  by 
the  Mineral  and  Battery  Works,  it  resulted  in  endless  charges  of  fraud 
and  betrayals  of  one  group  of  shareholders  through  another.  In  the 
case  of  the  Mines  Royal,  when  there  were  at  least  two  subsidiary 
companies  existing  simultaneously,  no  such  allegations  were  made.  In 
another  respect  too,  the  Mines  Royal  differed  from  the  related  under- 
taking. Unfortunately  for  its  shareholders,  it  was  far  from  a  successful 
venture  during  the  first  years  of  its  history.  Up  to  1575,  no  dividends 
had  been  paid.  At  the  end  of  1576  the  accounts  showed  that  a  profit  of 
about  5  per  cent,  appeared  to  have  been  made  on  the  nominal  capital. 
This,  for  the  time,  was  a  very  low  return,  and  it  represented  only  2  per 
cent,  for  those  shareholders,  who  had  bought  at  a  premium.  Moreover, 
the  profit  was  apparent,  rather  than  real,  since  it  had  been  earned  by 
suspending  the  work  of  developments  The  funds,  obtained  in  this 
way,  were  used  in  reducing  the  debt  due  to  Elizabeth,  and  it  was  not 
long  before  difficulties  were  again  encountered.  By  1579  the  members 
were  faced  by  the  alternatives  of  either  paying  a  call  of  £^0  per 
share  or  leasing  the  Keswick  mines.  At  first,  the  best  offers  they  could 
obtain  were  either  to  be  freed  from  liability,  or  else  to  reserve  them- 
selves a  share  in  the  profits  that  the  persons,  actually  working  the 
mines,  expected  to  make.  Eventually  from  1580  to  1583,  a  share- 
holder obtained  separate  leases  for  the  Keswick  and  Cornish  mines, 
engaging  to  pay  the  royalty  to  the  Queen  and  a  rent  in  money  to  the 
society  besides  a  portion  of  the  copper  or  silver  won.  Under  this 
arrangement  in  1586,  the  society  was  receiving,  in  rents  and  estimated 
royalty,  ^900  a  year,  yielding  about  4^  per  cent,  on  the  nominal 
capital.  In  the  following  year,  however,  a  very  important  discovery 
of  silver  was  made  at  Combe  Martin.  This  mine  was  situated  within 
the  area,  reserved  to  the  society,  and  therefore  it  is  probable  that  either 
a  rent  or  royalty  was  received.  Should  this  have  been  so  and  should  the 
company  have  been  able  to  exact  the  terais  it  claimed  in  other  cases,  it 
is  possible  that  all  the  capital  hitherto  expended  was  returned  to  the 
members.  It  is  recorded  that  the  partners  made  a  profit  in  two  years 
of  ^60,000.  This  would  be  clear  of  royalty  to  the  society,  which,  on 
the  basis  of  one-third  of  the  whole  profit,  would  have  been  ,^30,000. 
At  the  same  time,  it  may  have  been  that  this  mine  was  granted  directly 

1  Vide  infra,  ii.  pp.  31)3,  394. 

6—2 


68     Organization  of  the  Russia  Company  1573     [chap.  iv. 

from  the  Crown,  in  which  case  no  profit  would  have  accrued  to  the 
society,  and  there  is  a  certain  amount  of  indirect  evidence  in  support  of 
this  interpretation  of  the  facts,  since  the  rent,  received  for  the  Keswick 
mines,  was  set  aside  to  extinguish  the  balance  of  the  debt.  The 
results  obtained  by  Smith  and  his  partners  are  detailed  elsewhere ;  and, 
speaking  generally,  it  seems  that  up  to  about  1589  he  was  making 
a  profit  at  Keswick,  but  that  he  had  incurred  considerable  loss  in 
Cornwall  \ 

The  society  of  the  Mines  Royal  deserved  to  meet  with  more 
success  than  it  actually  obtained.  Burghley  was  governor ;  and,  during 
the  sixteenth  century,  its  management  was  enlightened.  The  share- 
holders, too,  were  alert  and  enterprizing,  many  of  them  frequently 
visited  the  mines  and  suggested  improvements.  A  large  amount  of 
prospecting  work  was  accomplished,  miners  being  sent  to  Ireland  as 
early  as  1571  to  look  for  copper  and  lead  mines  there.  The  skilled 
men  at  Keswick  were  treated,  on  the  whole,  with  consideration. 
Although  it  was  natural  that  shareholders,  who  had  invested  large 
sums  and  who  had  to  wait  almost  indefinitely  for  a  return,  should 
complain,  the  society  was  always  prepared,  once  it  was  receiving  rents, 
to  spend  a  part  of  its  revenue  in  making  fresh  discoveries ;  and,  on 
many  occasions,  it  remitted  a  portion  of  the  rent,  due  by  farmers  who 
had  fallen  into  difficulties. 

A  comparison  of  the  Mines  Royal  with  the  Russia  company  at  this 
time  shows  the  error  of  judging  on  a  priori  principles,  unsupported  by 
evidence.  Stating  the  matter  abstractedly,  it  would  seem  that  the 
management  of  an  undertaking,  composed  partly  of  noblemen,  partly  of 
gentlemen,  partly  of  merchants,  would  be  less  successful  than  that  of 
another  (such  as  the  Russia  company),  where  the  mercantile  class  was 
in  a  great  majority.  Yet  as  a  matter  of  fact  this  was  not  so.  The 
organization  of  the  mining  venture  has,  as  far  as  recorded,  escaped 
blame  ;  while  there  are  very  numerous  complaints  of  the  almost  complete 
failure  of  the  governor  and  assistants  of  the  other  body  to  exercise 
an  efficient  control  over  its  factors  in  Russia.  This  had  been  the. 
chief  cause  of  the  small  amount  of  success,  which  had  attended  the 
first  Russia  company ;  and,  after  the  formation  of  the  new  joint-stock, 
about  1573,  the  same  evil  continued^.  Still  as  far  as  can  be  gathered, 
this  venture  was  much  more  fortunate  than  its  predecessor.  There  were 
two  main  reasons  for  the  improvement.  In  the  first  place,  there  can  be 
no  doubt  that  the  management  was  most  enterprizing  in  making  new 
discoveries;  and,  during  the  closing  years  of  the  previous  company, 
expeditions  had  been  made  by  the  Volga  and  the  Caspian  Sea  into 

1  Vide  infra,  ii.  pp.  396-9.  2  yj^^.^  h.  pp.  42,  46,  47. 


CHAP.  iv.J    Prosperity  of  the  Russia  Company  1573-81     69 

Persia.  Circumstances  precluded  the  former  adventurers  from  profiting 
by  the  discovery,  which  was  the  most  valuable  asset  transferred  to  the 
new  company.  At  first  sight,  it  may  seem  that  the  idea  of  bringing 
Eastern  commodities  by  the  White  Sea  and  the  Baltic  involved  an 
unnecessary  amount  of  transportation.  But,  at  this  period,  English 
ships  had  not  established  a  regular  trade  into  the  Mediterranean.  The 
risk  from  the  Barbary  pirates,  the  hostility  of  the  Turks  and  the 
uncertainty  of  the  attitude  of  Spain  made  such  a  voyage  one  of 
remarkable  hazard.  Therefore,  up  to  the  foundation  of  the  Levant 
company  in  1581  ^,  it  is  probable  that  the  Russian  route  was  the  less 
dangerous  of  the  two.  Now  this  trade  gave  England  a  very  strong 
position  in  the  European  market  for  spices  and  drugs — in  fact  the 
Russia  company,  having  failed  to  establish  a  European  monopoly  in 
wax  and  cordage,  was  successful  for  a  few  years  in  making  one  in 
Oriental  commodities.  Therefore,  there  is  every  reason  to  believe  that, 
from  1573  to  1581,  this  part  of  the  trade  was  exceedingly  remunerative, 
as  is  shown  from  the  suggestion  made  by  Mendoza,  the  Spanish  Am- 
bassador in  England,  that  a  special  envoy  should  be  sent  to  intrigue  with 
the  Tartars  to  induce  them  to  interrupt  the  trade ■^. 

In  the  second  place,  the  growth  of  luxury,  after  the  privateers  began 
to  capture  Spanish  treasure,  increased  the  demand  for  the  goods  brought 
from  Persia;  while  the  activity  in  English  shipping  added  to  the 
steady  demand  for  ropes  and  sail-cloth.  To  some  extent,  the  decline 
of  the  export  of  cloth,  by  withdrawing  shipping  from  the  North  Sea 
trade,  would  diminish  the  consumption  of  these  commodities,  but  this 
loss  to  the  Russia  company  was  more  than  made  good  by  the  require- 
ments of  ships,  sailing  to  the  West  and  South.  Moreover,  the  losses  of 
spars  and  rigging,  either  by  storm  or  battle,  were  much  greater  in  the 
new  voyages  than  in  the  old ;  and,  altogether,  the  imports  of  naval 
stores  were  increased  materially  during  the  existence  of  the  second  Russia 
company.  Therefore,  up  to  1581,  both  branches  of  the  undertaking 
were  flourishing  exceedingly.  There  is  no  means  of  obtaining  a  quanti- 
tative estimate  of  the  profits  made  beyond  the  statement  that  the 
last  Persian  expedition,  which  was  counted  unfortunate,  owing  to 
the  loss  of  two-thirds  of  the  goods,  returned  the  shareholders  106 
per  cent.^ 

After  1581  the  Eastern  trade  was  abandoned,  owing  to  the  in- 
creasing dangers  of  the  route,  and  the  company  had  to  depend  upon 
its   original  Russian   trade.      This   may   have   afforded   a   respectable 

1  Vide  infra,  ii.  p.  84. 

'^  Calendar  of  Letters  and  State  Papers,  relating  to  English  Affairs,  preserved  prin- 
cipally in  the  Archives  of  Simancas,  1580-6,  pp.  365-8. 
3  Vide  infra,  n.  pp.  44,  45. 


70       The  Levant  Company's  Joint-Stock  1581     [chap.  rv. 

return  ^  although  the  dividends  would  have  been  inconsiderable,  as 
compared  with  the  300  per  cent,  or  400  per  cent,  that  may  have  been 
paid  during  the  best  years  of  the  Persian  expeditions  ;  but  the  company 
determined  to  share  in  the  prosperity  of  the  privateering  enterprizes, 
and  it  is  said  to  have  subscribed  ^4,000  to  the  voyage  sent  out  towards 
the  East  by  the  adventurers  in  Frobisher*'s  Voyages  2.  As  far  as  is 
known,  this  venture  was  not  successful,  and  by  1583  the  company  was 
in  difficulties.  In  1586  it  was  decided  to  transfer  the  remaining  assets 
to  a  new  company  which  came  into  being  at  that  date^ 

Two  questions  of  some  interest  arise,  in  connection  with  the  history 
of  the  Russia  company  from  1573  to  1586.  In  several  respects,  had  it 
been  able  to  recommence  the  Persian  trade,  it  would  have  found  a  rival 
in  the  Levant  company  after  1581.  In  fact,  the  great  caravan  route 
from  India  through  Persia  would  have  been  common  ground  to  both,  and 
therefore,  although  each  had  a  monopoly  as  against  any  other  English- 
men using  its  route,  both  would  be,  in  a  sense,  competitors.  Were  it 
true,  as  generally  assumed,  that  the  Levant  company  was  a  regulated 
one,  it  would  be  of  interest  to  endeavour  to  ascertain  what  were  the 
grounds  for  re-introducing  this  type  of  organization,  and  that,  too,  at  a 
time  when  the  most  important  joint-stock  company  and  the  only  one, 
as  yet,  for  foreign  trade  was  doing  remarkably  well.  But,  although  the 
Levant  company  was  undoubtedly  a  regulated  one  at  a  later  stage  of  its 

^j  history,  it  may  not  have  been  founded  as  such.  There  is,  at  least,  some 
evidence  that  would  point  to  some  such  conclusion.  At  its  foundation, 
Elizabeth  lent  the  governor  and  three  assistants  a  sum  of  over  <£^40,000, 
obviously  a  part  of  the  great  capture  brought  home  by  Drake  in  the 
previous  year*.  Now,  it  is  unlikely  the  loan  was  made  to  these 
merchants,  as  individuals,  and  previous  experience  had  shown  that  it 
was  difficult  to  collect  large  sums  from  a  regulated  company.  Besides, 
in  1583  Mendoza  wrote  that  efforts  were  being  made  to  raise  a  large 
capital,  to  sustain  the  "  Levant  negotiation.""     Not  only  had  the  richest 

'  merchants  and  companies  contributed,  but  Elizabeth  and  members  of 
the  Privy  Council  had  subscribed,  so  that  altogether  ^^80,000  was 
raised ^  It  is  difficult  to  understand  how  the  Queen  and  noblemen 
could  have  joined  in  the  venture,  had  it  been  a  regulated  company, 
since  this  would  have  involved  the  supervision  of  his  investment  by 

1  Tlie  last  season's  account  of  this  group  of  adventurers,  made  up  to  December 
1586,  g-ave  a  total  division  of  £108.  17«.  8<i.  per  cent.  So  many  of  the  debts, 
reckoned  as  good,  proved  bad,  that  the  shareholders  were  assessed  to  make  good 
the  loss. — Infra,  ii.  p.  47. 

2  lUd.y  II.  pp.  81,  82.  3  75j^.^  n.  p.  48. 

*  J^otes  of  Queen  Elizabeth's  Reign  by  Burghley  in  Murdin,  State  Papers,  1671-96, 

p.  747. 

6  Calendar  of  State  Papers. .An  the  Archives  ofSimancas,  1580-6,  p.  432. 


CHAP.  IV.]  The  Russia  Company  and  Exploration  1556-83  71 

f 
each  member,  in  purchasing  goods  and  sending  an  agent  to  sell  them 
in  Turkey,  besides  marketing   the  commodities   brought  back  in  his  \ 
ship\ 

In  another  connection  the  position  of  the  Russia  company  is  im- 
portant at  this  time.  Under  the  act  of  1566  it  had  the  sole  right  of 
trade  with  countries  "  not  commonly  frequented "  by  Englishmen, 
discovered  by  its  agents,  either  to  the  north,  north-east  or  north-west 
of  London  ^  The  company  prosecuted  its  discoveries  vigorously.  By 
1556  the  north-eastern  passage  had  been  traced  as  far  as  the  river  Obi*. 
Then  in  the  next  ten  years,  the  route  to  Persia  had  been  found  and 
trading  posts  established.  In  this  way  the  energies  of  the  company 
were  diverted  from  the  finding  of  a  north-western  passage,  and,  when  in 
1569  Frobisher  believed  he  could  accomplish  this  discovery,  he  was 
prevented  by  the  privileges  of  the  company  ^  It  required  a  letter  from 
the  Privy  Council  to  force  the  company  to  license  Frobisher's  first 
expedition.  The  necessity  for  such  an  order  seems  to  point  to  an 
abuse  of  the  monopoly  by  the  adventurers  to  Russia,  but  they  had 
certain  arguments  in  favour  of  their  action.  Frobisher  and  his 
associates  were  unable  to  convince  the  company  that  the  proposed 
expedition  was  really  designed  to  search  for  a  north-west  passage,  and 
the  vagueness  of  the  scheme  raised  suspicions  that  "  some  other  matter 
was  meant  by  the  parties  ^'"  The  attitude  of  the  company,  towards 
other  expeditions  to  America,  shows  that  it  was  not  adverse  to  en- 
couraging such  ventures,  provided  it  was  shown  that  no  attempt  would  be 
made  to  enter  the  market,  reserved  to  the  undertaking  in  Russia.  For 
instance,  after  some  negotiation,  the  company  licensed  a  proposed 
expedition  of  Humphrey  Gilbert  in  1567,  stating  that  it  "very  well 
liked"  the  suggestion  that  he  should  be  governor  of  any  territory  he 
planted  in  America  ^  Again  in  1583,  when  Christopher  Carlile  was 
arranging  for  a  voyage  to  the  "hithermost  parts  of  America,"  the 
articles  were  drawn  up  by  a  joint-committee,  composed  partly  of 
Carlile's  associates  and  partly  of  members  of  the  Russia  company'. 

By  either  itself  opening  new  trade  routes,  or  encouraging  others  to 
do  so,  the  Russia  company  constituted  the  pivot  of  maritime  enter- 
prize  to  the  north.  This  might  be  described  as  the  legitimate  ex- 
pansion of  English  foreign  trade  up  to  1580.  At  the  same  time,  there 
was  another  side  to  the  same  movement,  which  was  of  a  different 
character.     This  was  the  series  of  expeditions  for  the  plundering  of  the 

1  Vide  infra,  ii.  pp.  84,  85.  *  Ibid.,  ii.  p.  41. 

3  lUd.,  II.  p.  76.  4  lUd.,  II.  p.  77. 

^  The   Three    Voyages  of  Martin  Frobisher,  edited   by   Rear-Admiral    Richard 
CoUinson  (Hakluyt  Soc.  1867),  p.  89. 

6  Vide  infra,  ii.  pp.  241,  242.  "^  Ibid.,  ii.  pp.  242,  243. 


72  English  Privateering  1568-80         [chap.  iv. 

Spanish  plate-fleets  and  settlements  in  America.  The  origin  of  such 
ventures  is  to  be  found  in  the  crisis  of  1569-74,  partly  arising  from  the 
diversion  of  shipping  from  the  Baltic  trade,  partly  in  the  successful 
seizure  of  the  Spanish  treasure  in  1568.  Before  this  date,  there  had 
been  a  large  amount  of  English  piratical  privateering,  that  is,  the 
depredations  on  Spanish  commerce  within  the  Channel  and  other  home 
waters.  Legally,  perhaps,  the  unauthorized  expeditions  towards  Spanish 
America  were  of  a  similar  kind,  but,  morally,  some  excuse  may  be  made 
for  them,  although  they  cannot  be  altogether  extenuated.  International 
law  at  this  period  was  in  its  infancy,  if  indeed  it  could  be  said  to  exist 
at  all.  To  the  English  sailor  the  sea  was  open  to  all,  and  the  man, 
who  had  a  grievance  against  any  nation,  might  exact  reprisals  on  his 
own  account.  Unquestionably  the  Spaniard  was  within  his  rights  in 
closing  the  ports  of  the  countries  in  his  occupation  in  America.  The 
adventurers,  who  like  Hawkins,  tried  to  trade,  in  spite  of  this  well- 
known  prohibition,  must  have  expected  to  run  the  risk  of  loss  of  ships 
and  cargoes,  but  what  roused  intense  indignation  in  England  was  the 
policy  of  consigning  such  men,  as  were  captured,  to  the  tortures  of  the 
Inquisition.  Most  of  the  raiders  of  Spanish  commerce  had  lost  relatives 
or  friends  in  this  way,  and  it  was  not  contrary  to  the  spirit  of  the  time 
for  those,  who  had  been  aggrieved,  to  take  the  law  into  their  own  hands, 
by  exacting  retribution  how  and  when  they  could.  It  was  for  this 
reason  that  these  adventurers  aimed  as  much  at  the  doing  of  wanton 
damage  as  securing  plunder.  Spontaneous  action  of  this  kind,  while  it 
enormously  complicated  the  perplexities  of  the  political  situation,  had 
the  effect  of  teaching  the  world  the  high  value  set  by  Englishmen  on  the 
lives  and  liberties  of  their  fellow-countrymen. 

The  epoch  of  the  raids  on  Spanish  commerce  is  one  of  great  im- 
portance in  the  progress  of  England.  For  upwards  of  twenty  years,  the 
power  and  wealth  of  Spain  had  been  menacing  Elizabeth.  Her  states- 
men had  tried  to  weaken  or  embarrass  Philip  by  assisting  his  revolted 
subjects  in  the  Low  Countries,  but  what  Flanders  was  to  Spain,  Ireland 
was,  to  some  extent,  to  England  \  From  1574  Philip  was  able  to 
adopt  an  exactly  similar  policy  in  supporting  the  insurrection  against 
Elizabeth's  government,  so  that  the  diplomatic  strife  had  resulted  in  a 
di'awn  battle,  the  only  effect  of  which  had  been  a  very  serious  drain  on 
the  finances  of  Philip  and  a  considerable  one,  now  beginning,  on  those  of 

1  Thus  Burghley  speaks  of  Flanders  as  the  '' counterscarp"  of  the  defences  of 
England.  Similarly  Hatton  describes  Scotland  and  Ireland  as  a  "postern-gate"  by 
which  "the  entries  and  ways  to  our  destruction  may  most  aptly  be  found." — The 
Lord  Treasurer  Burleigh's  Advice  to  Queen  Elizabeth  in  Matters  of  Religion  and  State, 
in  Somers'  Tracts  (1752),  xiii.  p.  106 ;  Memoirs  of  the  Life  and  Times  of  Sir  Christopher 
Hatton,  by  Sir  Harris  Nicolas,  1747,  p.  158. 


CHAP.  IV.]  Sea-Potver  1568-80  73 

Elizabeth.  It  remained  for  the  seamen  of  England  to  discover  the 
most  vulnerable  part  of  the  power  of  Spain ;  and  they  did  this,  quite 
unconsciously,  with  a  view  to  avenge  personal  wrongs  and  for  their 
private  profit.  At  this  period  few,  if  any,  understood  the  importance 
of  power  on  the  sea.  Spain  was  drawing  much  of  its  wealth  from 
America ;  and  the  galleons  were  ill-adapted  for  preserving  the  necessary 
communications,  free  from  interruption.  Spanish  naval  construction, 
for  a  number  of  years,  had  failed  to  advance ;  while  that  of  England 
was  daily  adapting  itself  to  the  new  circumstances,  that  confronted  the 
maritime  population.  English  ships  were  being  built  so  as  to  give  both 
speed  and  capacity  for  manoeuvring.  Probably  there  was  no  aggressive 
intention  in  this  development.  For  it  was  forced  on  those,  who 
navigated  the  northern  seas,  so  as  to  be  able  to  avoid  ice-floes,  or  to 
sail  in  safety  along  an  unknown  coast.  Thus  English  ship-building  was 
evolving  a  medium-sized,  agile  ship ;  while  the  Spaniards  continued 
to  build  their  slow  and  massive  galleons.  Therefore,  when  the  pri- 
vateers began  to  engage  the  plate  ships,  they  soon  found  that  superior 
speed  more  than  compensated  them  for  their  smaller  tonnage,  and 
Spanish  naval  power  was  tersely  described  as  "  a  Colossus  stuffed  with 
clouts." 

The  privateering  expeditions  against  the  Spaniards  in  America  con- 
stituted the  training  school  for  the  battle  against  the  Armada.  The 
bravery  of  those,  engaged  in  them,  has  been  a  source  of  gratification  to 
Englishmefi  for  many  generations.  Naturally,  the  courage  shown  and 
the  victories  won  have  excited  attention  and  even  pride  in  the  historians 
of  the  period.  Yet  there  was  another  side  to  these  voyages,  namely 
their  effect  on  the  social  progress  of  the  country,  the  means  by  which 
the  objects  gained  were  effected  and  the  result  of  the  whole  movement 
on  the  commerce  of  the  country. 

The  raids  against  Spanish  America  from  1568  up  to  the  time  of  the 
Armada  divide  themselves  naturally  into  two  groups ;  the  earlier  of 
which  ends  with  the  return  of  Drake''s  expedition  round  the  world  in 
1580.  In  both  series  there  is  the  common  element  that  all  of  them,  of 
which  there  is  any  record,  were  conducted  by  joint-stock  companies. 
This  plan  had  many  advantages.  Financially  it  enabled  the  investor  to 
distribute,  and  so  minimize  the  risk  of  a  hazardous  enterprize.  Suppose, 
for  instance,  a  capitalist  was  prepared  to  adventure  cs^2,000  in  privateer- 
ing, he  could  only  fit  out  one  ship  of  about  200  tons  or  two  smaller  ones. 
His  expedition  might  be  too  weak  to  make  any  captures  of  importance,  or 
it  might  be  sunk  by  the  Spaniards.  If,  on  the  other  hand,  he  joined 
in  several  larger  expeditions,  even  if  one  of  these  were  a  total  failure, 
he  had  every  prospect  of  obtaining  handsome  profits  from  his  shares  in 
the  others.     Moreover,  the  sole-owner  was  subject  to  a  further  risk. 


74  Privateering  on  a  Joint- Stock  Basis  1570-80  [chap.  iv. 

Even  if  he  succeeded  in  taking  prizes,  the  Spanish  ambassador  had 
agents  at  all  the  chief  ports,  and  demands  would  be  made  for  the  return 
of  the  captured  ships  and  goods.  Whether  these  were  complied  with  or 
not  depended  partly  on  the  political  outlook  at  the  time,  partly  on  the 
amount  of  influence  that  could  be  brought  to  bear  in  favour  of  the 
privateersman.  Obviously  a  company  or  syndicate,  which  included 
amongst  its  members  prominent  personages  at  Court,  was  much  more 
likely  to  be  allowed  to  retain  its  prize  than  the  single  unsupported 
adventurer.  Besides,  there  was  not  only  financial,  but  personal  risk  to 
the  individual  owner  of  a  privateer.  There  was  always  the  danger 
that,  under  pressure  from  Spain,  the  English  government  might  hold 
him  criminally  liable  for  any  loss  of  life,  occasioned  by  his  ships  in 
an  engagement  at  sea.  This  risk  was  eliminated  by  the  formation  of 
a  syndicate  or  company,  which  conducted  its  operations  in  secret,  and 
the  members  of  which,  although  they  might  be  suspected,  remained 
undetected.  There  was  a  further  advantage  in  the  management  of  such 
enterprizes  on  a  joint-stock  basis,  which  applied  to  the  later  raids  and 
which  was  wholly  political.  Elizabeth  herself  was  able,  by  taking 
shares  in  an  expedition,  to  control  its  management;  and  thus  she 
was  in  the  strong  diplomatic  position  of  obtaining  all  the  gain  of 
carrying  on  a  localized  war  against  Spain  and  escaping  most  of  the 
disadvantages.  Should  any  particular  expedition  result  in  extreme 
complications,  it  could  be  disavowed  ;  and  there  would  be  no  proof  that 
the  government  had  been  in  any  way  committed  to  it.  There  was  also 
the  further  immense  saving  to  the  Crown  that  certain  ships  of  the 
navy  were  kept  in  commission  and  the  crews  trained,  without  involving 
any  charge  on  the  finances. 

To  understand  fully  how  these  objects  were  accomplished,  it  is 
necessary  to  investigate  the  internal  organization  of  the  privateering 
syndicate.  In  the  special  circumstances,  it  is  only  to  be  expected  that 
information  is  difficult  to  obtain.  The  whole  operations  were  conducted 
with  the  greatest  secrecy,  since  success  depended  on  the  raid  being  made 
at  a  place  where  the  Spaniards  were  unprepared.  The  spies  of  the 
Spanish  ambassador  were  always  on  the  watch  to  glean  any  news  that 
might  be  useful,  and  even  the  smallest  hint  might  have  occasioned 
disaster*  It  was  for  this  reason  that,  it  is  related,  Elizabeth  swore  she 
would  have  any  man"*s  head,  who  informed  the  King  of  Spain  about  the 
fitting  out  of  Drake's  expedition  in  1577^  There  was  yet  another 
cause  that  accounts  for  the  lack  of  detail  of  the  internal  affairs  of 
these  undertakings.  The  capital  required  W8is  found  only  for  a  specific 
expedition.     When  the  ships  returned  and  the  captures  had  been  sold, 

1  The  Great  Lord  Burghley,  by  Martin  A.  S.  Hume,  London,  1898,  p.  346. 


CHAP.  IV.]    Finance  of  privateering  Syndicates  1561-79    75 

the  proceeds  were  divided  and  the  whole  business  was  wound  up.  It  is 
fortunate  that  exceptionally  full  accounts  have  been  preserved  of  the 
allied  ventures  of  Frobisher;  and,  in  so  far  as  this  information  can  be 
applied  to  the  privateering  voyages,  almost  every  detail  can  be  sub- 
stantiated by  a  parallel  incident  in  the  management  of  some  one  of  the 
raiding  syndicates. 

First  of  all,  it  will  be  convenient  to  distinguish  such  parts  of  the 
Frobisher  expeditions  as  were  peculiar  to  them.  The  whole  series, 
extending  from  1576  to  1579  with  a  supplemental  voyage  in  1583,  was 
unfortunate.  Frobisher  believed  he  had  found  ore,  containing  gold, 
and  it  turned  out  that  a  serious  mistake  had  been  made.  Therefore,  the 
capital  subscribed  for  the  first  voyage  was  carried  down  to  the  second ; 
so  that,  in  this  case,  each  expedition  had  not  a  separate  capital  which 
was  wound  up  at  the  end  of  the  voyage.  Since,  too,  there  was  less  of 
a  furtive  character  about  this  company,  it  was  able  to  obtain  a  charter, 
with  full  incorporation  and  precise  rules  for  the  conduct  of  business. 
The  evolution  of  the  term  " stock, "''  in  the  sense  of  a  negotiable  security, 
is  shown  very  clearly  in  the  following  extract  from  one  of  these  rules — 
namely  that  £\00  was  to  be  accounted  "  one  single  parte  or  share  in  stok 
of  the  company  \"*'  It  therefore  follows  that  at  this  period  "stock"  meant 
simply  a  share  of  o£*100,  which  was  regarded  as  divisible  into  half 
shares,  but  not  into  smaller  subdivisions.  This  use  of  the  term 
brings  into  more  prominence  the  ambiguity  mentioned  in  the  previous 
chapter^,  since  the  whole  outlay  (or  stock  in  one  sense)  on  the  first 
three  voyages  was  .£^20,160,  whereas  the  "parts,''  or  "shares  in  stock," 
amounted  to  ^12,102.  lO*.^ 

Comparing  what  was  common  to  the  companies,  that  found  the 
capital  for  the  expeditions  of  Frobisher,  Drake,  and  others,  with  the 
methods  of  the  Adventurers  to  Africa*,  the  former  show  an  advance  in 
the  manner  of  dealing  with  the  capital  employed.  In  both  cases,  goods 
were  adventured ;  but,  in  the  earlier  instance,  these  were  dealt  with  on 
the  basis  of  a  share  in  the  profits,  whereas  subsequently  ships  or  com- 
modities were  valued  and  became  a  pail  of  the  capital.  For  instance, 
when  in  1561  Elizabeth  lent  ships  to  join  in  the  voyage  to  Africa,  she 
was  compensated  for  her  risk  by  receiving  a  share  of  the  profit : 
whereas  in  1577,  on  again  subscribing  a  vessel  to  Frobisher's  second 
voyage,  a  very  careful  and  minute  valuation  was  made,  and  "shares  in 
the  stock"  given  her  accordingly'.     This  change  of  procedure  had  two 

^  Vide  infra,  ii.  p.  79.  ^  Vide  supra,  p.  62. 

3  Vide  infra,  ii.  p.  82.  *  Vide  supra,  p.  30;  infra,  ii.  pp.  5-7,  77-81. 

^  The  Inventarie  of  the  Ship  Ayde,  printed  in  The  Three  Voyages  of  Martin 
Frobisher,  pp.  218-23,  cf.  Murdin,  State  Papers,  ut  supra,  p.  303;  Sir  Francii 
Drake,  by  Julian  Corbett,  Loudon,  1890,  p.  10. 


76        Floatation  of  privateering  Cos.  1576-85    [chap.  iv. 

important  consequences.  The  nominal  outlay  on  a  voyage  after  1575 
tends  to  appear  greater,  when  compared  with  that  on  an  earlier  one, 
owing  to  the  inclusion  of  the  estimated  value  of  the  ship  or  ships  at  the 
later  date.  In  the  second  place,  when  an  attempt  is  made  to  estimate 
the  success  of  a  privateering  expedition,  the  profit,  for  similar  reasons, 
was  generally  larger  than  it  would  appear  at  first  sight.  Suppose,  for 
instance,  the  whole  capital  of  an  expedition  were  d£*5,000  and  that  the 
captures,  after  all  expenses  were  paid,  realized  say  £\OfiQO,  it  would 
seem  that  the  division  would  be  200  per  cent.,  or  a  profit  of  100  per 
cent.  In  reality,  however,  it  would  have  been  about  250  per  cent.,  or  a 
profit  of  150  per  cent.  For,  if  all  the  ships  returned  safely,  when  they 
were  repaired,  each  shareholder,  who  "subscribed"  a  ship,  would  receive 
it  back  again.  On  an  average,  the  cost  of  the  ship,  as  distinct  from  its 
stores,  was  about  half  the  whole  sum  at  which  it  was  capitalized.  There- 
fore, when  a  division  came  to  be  made  on  the  £5fi00  nominal  capital, 
there  would  be  a  total  amount  of  £\%500  to  be  distributed,  namely 
d£*l  0,000  of  plunder  and  the  refitted  ships,  valued  say  at  <£^2,500  and 
returned  to  the  original  owners. 

In  organizing  a  privateering  expedition,  when  the  ships  had  been 
subscribed,  it  remained  to  fit  them  out  for  service.  This  outlay  was 
met  by  those  who  had  subscribed  money,  and  if  the  money  were 
proportionately  greater  than  the  commodity-subscriptions,  ships  might 
be  purchased^  and  sold  at  the  end  of  the  voyage.  Ammunition  and 
provisions  were  bought,  and  other  stores  were  provided  for  a  period  of 
service,  varying  from  three  months  to  two  years.  Generally  speaking, 
the  privateers  depended  upon  supplying  themselves,  when  they  reached 
their  chosen  cruising  ground ;  so  that,  as  a  rule,  their  cost  of  provisions 
was  lower  than  in  other  cases.  No  funds  were  reserved  for  the  payment 
of  wages,  since  the  claims  of  the  men  were  met  out  of  the  proceeds  of 
the  voyage.  If  it  were  highly  successful,  they  obtained  a  bonus :  if  it 
were  a  total  failure,  it  was  necessary  to  assess  the  shareholders  to  provide 
the  funds  required. 

The  whole  capital  outlay  of  Frobisher's  Voyages  and  of  one  or  two 
of  the  privateering  expeditions,  made  up  in  the  manner  explained,  is 
known  2.  From  a  careful  study  of  the  details  of  these  ventures,  certain 
ratios  emerge,  which  are  either  constant  or  vary  within  assignable 
limits.  Taking  the  number  of  men,  carried  on  armed  ships,  the  pro- 
portion was  almost  invariably  about  one  man  to  every  two  tons.  In 
ships  of  small  burden,  the  ratio  was  slightly  higher — for  instance  in 

1  E.g.  Frobisher's  first  Voyage,  cf.  infra,  ii.  p.  77. 

2  lUd.j  II.  p.  82;  The  Three  Voyages  of  Martin  Frohisher,  passim;  State  Papers, 
Domestic,  Elizabeth,  ccxxii.  89,  91,  97,  98,  ccxxxiii.  56;  Hakluyt,  Voyages,  passim; 
Life  of  Sir  Francis  Drake,  by  John  Barrow,  1843,  passim. 


CHAP.  IV.]     Outlay  per  Ton  and  per  Man  1576-88         77 

Frobisher's  first  voyage,  there  were  34  persons  and  the  aggregate 
tonnage  was  55  ^  The  general  ratio  of  one  to  two  is  confirmed  by  the 
figures  of  the  ships  serving  against  the  Armada,  which  were  of  31,985 
tons,  manned  by  15,272  men^  The  importance  of  this  ratio  is  that,  if 
either  the  capital  outlay  per  ton  or  per  man  can  be  established,  the  cost 
of  an  expedition  can  be  ascertained  within  narrow  limits. 

The  chief  element  of  variation  in  the  charge  for  an  armed  expedition 
was  the  amount  of  provisions  carried.  Frobisher''s  first  voyage  was 
provisioned  for  a  year,  and  therefore  the  expense  was  greater  than  the 
average.  Neglecting  some  wages  or  bounty  to  seamen,  the  whole  cost, 
before  the  ships  sailed,  was  ^992,  of  which  ^£^387  (or  39  per  cent.) 
represented  provisions.  Therefore,  in  an  expedition  of  this  size,  pro- 
visioned for  a  year,  the  outlay  per  ton  was  ^^15*9,  but  on  the  same 
basis,  allowing  only  three  months'  provisions,  the  charge  per  ton  would 
be  reduced  to  ^£'12*75.  The  figures  for  the  second  voyage  are  slightly 
higher,  and  some  difficulty  arises  in  interpreting  those  for  the  third, 
since  the  outlay  was  <£*6,922.  10*.,  and  fifteen  ships  sailed.  It  is  almost 
certain  that,  of  these,  eleven  were  hired  to  carry  the  ore  and  were  fitted 
out  by  their  owners,  irrespective  of  the  joint-stock.  This  left  four 
vessels  of  650  tons,  carrying  250  men,  giving  an  outlay  of  <^10*7  per  ton, 
<£*27'7  per  man  or  ^^1,730  per  ship. 

The  following  statement  shows  in  detail  the  results  of  a  number  of 
calculations  on  this  basis : 

Statement  of  Capital  cost  of  certain  expeditions^ 
per  ton,  per  man,  per  ship. 


Voyage 

Number 
of  ships 

Tonnage 

Men 

Capital 
valuation 

per 
ton 

per 
man 

Frobisher  1676 
„  1577 
„        16783 

Drake*       1686 

3 

4 

4 

21 

about  55 

260 

660 

3690 

34 

134 

260 

1932 

£876 

£4,276 

£6,962 

£67,000 

16-9 
17-1 
10-7 
16-8 

26-7 
31-9 

27-7 
29-6 

^  This  is  the  highest  figure  given  for  the  tonnage,  others  are  recorded  which  are 
lower. 

2  Murdin,  State  Papers,  p.  618 ;  State  Papers  relating  to  the  Defeat  of  the  Spanish 
Armada,  edited  by  Prof.  J.  K.  Laughton  {Publications  Navy  Records  Soc.  1896,  ii. 
p.  331). 

3  On  the  basis  of  there  being  four  ships  on  the  joint-stock. 

*  Adding  to  the  tonnage  of  the  20  ships,  as  given  in  Naval  Tracts  of  Sir  W. 
Monson,  ed.  by  M.  Oppenheim  {Publications  Navy  Records  Soc.  xxii.  p.  124),  that  of 
the  Drake  {Ibid.,  p.  139),  and  taking  40  as  the  number  of  its  crew. 


78  Capital  of  Brake's  Syndicate  1577-80    [chap.  iv. 

Applying  these  results  to  the  expedition  of  Drake  in  1577  to  1580, 
it  is  possible  to  reconstruct,  with  some  approximation  to  accuracy, 
the  valuation  of  his  little  fleet,  together  with  other  financial  aspects  of 
the  venture,  which  were  sedulously  concealed.  There  were  four  small 
ships  with  an  aggregate  tonnage  of  375.  The  number  of  the  crews 
varies  in  different  accounts  from  150  to  164*.  Therefore,  in  size,  this 
voyage  was  midway  between  the  second  and  third  Frobisher  expeditions. 
Taking  the  average  of  these  and  also  that  of  the  maximum  and 
minimum  of  the  number  of  the  crews,  according  to  the  tonnage  rate  2, 
the  whole  outlay  would  amount  to  <^5,212,  and,  on  the  rate  per  man,  to 
about  <£4,678^.  Probably  the  actual  expenditure  lay  between  the  two 
sums,  and  it  is  not  unlikely  that  the  capital  required  was  slightly  under 
«£'5,000.  The  consequences  of  this  modest  outlay  were  sufficiently 
startling.  The  expedition  had  the  distinction  of  being  the  first  to 
circumnavigate  the  globe,  it  brought  about  an  acute  political  crisis  with 
Spain,  besides  capturing  an  amount  of  silver,  gold,  pearls  and  precious 
stones,  described  as  "  enormous,"  "  immense,"  or  even  "  incalculable." 
From  the  financial  point  of  view,  there  is  no  little  fascination  in  the 
effort  to  bring  to  light  facts,  which  were  concealed  with  extraordinary 
care ;  besides,  there  is  the  interest  of  ascertaining  how  the  shareholders 
in  the  syndicate  fared,  and  what  were  the  dividends  they  received. 

The  whole  situation  was  unique.  Drake  had  rounded  Cape  Horn 
and  secured  vast  treasure  before  the  Spaniards  had  made  any  pre- 
parations to  resist  him.  When  armed  ships  had  been  collected,  Drake 
evaded  the  avengers  by  sailing  west,  instead  of  returning  by  the  way  he 
came.  Then  he  disappeared  for  months  ;  and,  meanwhile,  news  reached 
Spain  of  the  variety  and  extent  of  his  depredations.  In  time  this 
information  filtered  to  England,  and  in  September  1579  Mendoza 
records  that  the  adventurers  were  beside  themselves  with  joy,  and  that 
people  were  talking  of  nothing  else  but  the  fitting  out  of  similar 
expeditions*.  Steps  were  at  once  taken  by  the  adventurers  to  convey 
secret  instructions  to  all  justices  of  the  peace  that,  wherever  Drake 
might  land,  every  assistance  should  be  given  him  in  at  once  concealing 
the  treasure''.  Even  at  this  early  date,  it  is  quite  plain  that  Mendoza 
had  almost  despaired  of  obtaining  restitution.  These  preparations 
ante-dated  the  actual  arrival  of  the  plunder  by  more  than  a  year. 

When  Drake  returned  everything  was  in  readiness.     It  was  reported 

*  160  men  and  14  boys. — Sir  Francis  Drake,  by  Julian  Corbett,  London,  1890, 
p.  60. 

.,.,     111+2517x375.  3,.,     31 W7  ^  1504j6_4 

*  Calendar  of  State  Papers.. An  the  Archives  o/Simancas,  1668-79,  p.  694. 
6  Ibid.,  p.  701. 


CHAP.  IV.]     Takings  of  Brake's  Sijndicate  1577-80  79 

that  the  treasure  amounted  to  a  million  and  a  half  sterling ^  Mendoza 
records  that  it  had  been  "  confessed  "  that  silver,  gold  and  pearls  were 
brought  back  to  the  value  of  over  a  million  and  three  quarters,  while, 
according  to  advices  from  Seville,  Drake  had  captured  even  more  than 
this^. 

It  is  highly  probable  that,  before  news  reached  London  of  the 
arrival  of  the  expedition,  a  large  amount  of  the  bullion  and  jewels  had 
been  secreted.  In  the  Privy  Council,  opinion  was  divided  as  to  what 
should  be  done  with  the  treasure.  Burghley  was  in  favour  of  repaying 
the  adventurers  their  principal  and  returning  the  rest;  Leicester  and 
others,  who  probably  had  shares  in  the  syndicate,  were  strongly  opposed 
to  this  course.  The  documents,  relating  to  the  transaction,  have  every 
appearance  of  being  prepared  for  some  ulterior  purpose.  They  comprise 
a  letter  from  Edmund  Tremayne  (who  supervised  the  detention  of  the 
bullion  on  behalf  of  the  government)  to  Walsingham  with  certain 
enclosures,  giving  the  answers  to  various  questions,  he  was  to  ask  the 
members  of  the  expedition.  The  replies  were  signed  by  forty-six 
persons,  but  since  they  had  not  as  yet  been  paid  their  wages,  it  is  im- 
possible to  give  too  little  credence  to  their  depositions.  Asked  first 
whether  it  was  true  that  the  value  of  the  plunder  was  a  million  and  a 
half,  the  seamen  replied  that  some  silver  and  some  gold  had  been  taken, 
but  they  did  not  know  the  value  of  it,  "  which  was  a  very  small  sum  in 
respect  of  what  there  is  reported."'*'  It  was  altogether  untrue  that  any 
ships  were  sunk  with  their  crews  on  board.  No  Spaniards  were  slain  or 
maimed ;  and,  in  only  one  case,  was  a  man  wounded.  He  was  hurt  in 
the  face,  and  Drake  lodged  him  in  his  own  ship,  fed  him  at  his  own 
table  and  would  not  suffer  him  to  depart  before  he  was  recovered^  To 
complete  the  comedy,  a  most  exact  and  careful  inventory  was  taken  of 
the  bullion,  which  was  packed  in  46  bales,  containing  in  all  10,812  lbs., 
worth  about  ^^46,000.  This  was  conveyed  to  the  Tower,  publicly  with 
due  escort^.  It  is  highly  significant,  however,  that  as  late  as  1585, 
there  was  then  remaining  of  the  bullion  "brought  by  Sir  Francis 
Drake,"  despite  the  fact  that  many  payments  had  been  made  in  the 
interval  out  of  this  treasure,  no  less  than  9,056  lbs.  17  ozs.  besides 
101  lbs.  1  oz.  of  gold^  It  is  quite  plain  that  what  had  happened  was 
that  Drake  had  removed  a  certain  amount  of  the  treasure;  this  was 

*  State  Papers,  Domestic,  Elizabeth,  cxliv.  17. 

2  Calendar  of  State  Papers... in  the  Archives  of  Simancas,  1580-6,  p.  63.  The 
amount  stated  is,  in  weight  of  bullion,  400,000  lbs.  of  silver,  five  boxes  of  gold  a 
foot  and  a  half  long  and  some  valuable  pearls.  The  silver  bullion  was  valued  at 
£4.  48.  2\d.  per  lb.     Murdin,  State  Papers,  p.  781. 

3  State  Papers,  Domestic,  Elizabeth,  cxliv.  17  (ii). 

*  Ihid.,  cxliv.  17  (i).  ^  Murdin,  State  Papers,  p.  540. 


80  Destination  of  the  P7'ize-Bidlion  1580  [chap.  iv. 

primarily  for  the  adventurers,  but  some  of  it  was  sent  secretly  to  the 
Tower.  These  facts  appear  clearly  in  the  despatch  of  Tremayne, 
covering  the  documents  already  mentioned.  He  was  careful  to  explain 
that  he  enjoined  Drake  to  impart  no  more  than  was  needed,  "for  so 
I  hear  him  commanded,  in  Her  Majesty''s  behalf,  that  he  should  not 
reveal  the  certainty  to  any  man  living.*"  Drake  agreed  with  Elizabeth 
that  he  was  to  receive  ,^10,000  secretly,  this  sum  was  partly  as  a 
personal  reward  for  his  services,  partly  to  afford  him  ready  money  to 
secure  the  support  of  some  doubtful  members  of  the  Privy  Council. 
Time  was  given  Drake,  not  only  to  remove  the  <£*! 0,000  unobserved,  but 
also  to  conceal  elsewhere  "  the  portion  that  had  been  landed  secretly.^' 
Accordingly,  when  only  enough  remained  to  make  a  respectable  show, 
Tremayne  and  Christopher  Harris  (who  was  to  convey  the  bullion  to 
the  Tower)  went  with  Drake  to  the  place,  where  the  ingots  were  stoied, 
and  thereupon  the  inventory,  already  mentioned,  was  made^ 

Soon  after  the  arrival  of  the  treasure,  the  only  question  remaining 
undecided  was  whether  a  small  part  of  the  plunder  was  to  be  restored, 
or  all  of  it  was  to  be  retained.  Already  the  greater  part  was  placed 
out  of  reach  of  the  government.  The  attitude  of  Elizabeth,  at  the 
time  of  the  arrival  of  the  expedition,  is  difficult  to  determine.  She 
appeared  to  have  an  open  mind  on  the  subject,  but  there  is  some 
evidence  that  she  held  shares  in  the  syndicate.  At  a  time  when  the 
crews  were  dissatisfied  during  the  voyage,  Drake  produced  "a  byll  of 
hir  Maiesties  adventure  of  a  1,000  crowns,"  also  one  in  favour  of  Sir 
Christopher  Hatton^  If  this  account  is  correct,  Elizabeth  was  in- 
terested as  an  adventurer ;  and,  besides,  tempting  offers  were  made  to 
her  by  Drake  of  a  much  larger  part  of  the  coin  and  bullion.  At  first 
there  were  two  parties  in  the  Council,  the  one  in  favour  of,  and  the 
other  against  restitution.  Eventually  a  compromise  was  agreed  upon. 
Attention  was  drawn  to  the  subsidizing  of  rebellion  in  Ireland  by  Philip, 
and  the  assistance  given  to  the  insurgents  by  Spanish  soldiers.  If,  on 
the  one  hand,  Philip  gave  satisfactory  assurances  that  he  would  cease  to 
interfere  in  Ireland,  it  was  proposed  that  the  adventurers  should  either 
receive  back  their  capital  or  their  capital  with  a  profit  of  100  per  cent., 
and  that  the  rest  of  the  plunder  should  be  restored.  If,  on  the  other 
hand,  no  such  undertaking  were  given,  the  whole  amount  ^  would  be 
employed  in  carrying  on  the  war  in  Ireland*.  This  compromise  was  an 
obvious    subterfuge,   since   at   this   time   and   for   some   years   before, 

1  State  Papei-8,  Domestic,  Elizabeth,  cxliv.  17. 

2  The  World  Encompassed,  by  Sir  Francis  Drake  (Hakluyt  Society,  1854),  p.  216. 

3  That  is  the  whole  ostensible  amount — as  already  shown  much  of  the  treasure 
had  already  been  concealed. 

4  Calendar  of  State  Papers... in  the  Archives  ofSimancaSf  1580-6,  pp.  59,  63. 


CHAP.  IV.]  The  Adventurers  received  4:,700  per  cent.  \^S0  81 

Elizabeth  had  been  subsidizing  and  assisting  the  leaders  of  the  revolt  in 
the  Low  Countries.  However,  the  whole  question  was  whether  Philip 
was  able,  or  was  willing  to  go  to  war  on  the  ground  of  the  captures, 
made  by  Drake ;  and,  although  for  some  time  the  situation  was  very 
threatening,  war  was  avoided. 

Since  then  the  treasure  was  not  restored  to  Spain,  it  was  available 
for  division  in  England.  First  of  all,  there  were  the  claims  of  the 
adventurers.  These  had  been  secured  from  the  beginning  by  the  con- 
cealment of  a  very  large  portion  of  the  proceeds  of  the  voyage. 
Fortunately  the  amount  of  the  division  made  to  them  has  survived. 
Lewis  Roberts  records  the  result  in  the  following  terms:  "the  voyage... 
made  profit  to  himselfe  [i.e.  to  Drake]  and  merchants  of  London  his 
partners  and  fellow-adventurers,  according  to  an  account  made  up  at  his 
return,  all  charges  paid  and  discharged,  which  I  have  seen  subscribed 
under  his  owne  hand,  47  li  for  one  pound ;  so  that  he  who  adventur'*d 
with  him  in  this  voyage  100  li  had  4700  li  for  the  same^"  Therefore, 
on  the  estimate  of  the  capital  outlay,  upon  the  basis  already  indicated^, 
as  being  something  under  <£*5,000,  the  amount  divided  to  the  ad- 
venturers would  come  to  about  ^^250,000.  This  agrees  Vith  the  figures 
recorded  of  the  bullion  captured,  namely  1,189,200  ducats;  which, 
taking  the  ducat  at  5^.  6d^  would  give  =£'307,030,  as  the  gross  captures 
of  silver  and  gold*.  Moreover,  in  the  numerous  histories  of  the  ex- 
pedition, all  the  details  of  the  larger  captures  agree ;  so  that  it  would 
appear  that  the  plunder  was  wholly  accounted  for,  in  paying  charges 
and  bonuses  on  the  return  of  the  ship  and  in  divisions  to  the  share- 
holders. But  so  much  agreement  in  the  authorities  is  in  itself  suspicious; 
and,  as  a  matter  of  fact,  there  still  remained  a  large  sum,  diverted  from 
the  adventurers,  which  found  its  way  to  Elizabeth.  The  manner  in 
which  this  operation  was  effected  was  ingenious.  It  was  the  practice  in 
Spanish  America  to  smuggle  bullion  on  board  the  homeward-bound 
ships,  without  passing  the  Customs,  so  as  to  avoid  the  exactions  of  the 
officials.  The  valuation  of  1,189,200  ducats  is  expressly  stated  to  be 
that  of  the  "  customed  "  bullion  only,  and  the  compiler  of  it  states  that 
there  was  "besides  the  treasure  which  was  uncustomed  (the  value 
whereof  I  cannot  learne),  consisting  of  pearles,  precious  stones,  reals  of 
plate  and  other  things  of  great  worth."     It  frequently  happened  that 

1  The  Merchants'  Mappe  of  Commerce,  1638,  p.  61. 

2  Vide  supra,  p.  78. 

3  Hakluyt,  Voyages,  x.  p.  114.  Although  the  silver  in  the  ducat  was  subse- 
quently reduced  {vide  Newton's  Tables  in  Postlethwaite,  Dictionary  of  Commerce — 
"Coin")  the  value  was  not  9s.  6d,  as  stated  by  Froude  {History  of  England,  reign  of 
Elizabeth,  v.  p.  383)— 9«.  Qd.  was  the  value  of  the  gold  ducat. 

*  Drake,  World  Encompassed,  ut  supra,  p.  291. 

s.  a  I.  6 


82  EUzahetKsGain  from  Drake's  Adventure  \bS{)  [chap.  iv. 

the  value  of  uncustomed,  was  as  great  as  that  of  the  customed  plate 
and  precious  stones ;  so  that,  it  is  clear,  there  was  a  large  concealed 
surplus,  after  the  "  customed ""  bullion  had  been  sold  for  the  benefit  of 
the  shareholders.  In  April  1581  it  is  recorded  that  the  whole  treasure 
"  was  better  than  ^600,000  \"  If  this  estimate  is  correct,  there  would 
have  been  from  ^^250,000  to  ,£*300,000  which  was  received  by  Elizabeth. 
She  certainly  obtained  as  much  as  <£*263,790 ;  since,  in  a  memorandum 
made  by  Burghley  and  conjecturally  dated  1581,  there  is  mention  of 
that  amount  being  then  in  the  Tower  in  Spanish  coin^  Judging  from 
the  state  of  Elizabeth's  finances  in  1580,  she  would  not  have  had  money 
on  hand,  and  if  she  had,  it  would  not  have  been  in  Spanish  coin,  so 
that  it  is  almost  certain  that  this  sum  came  from  Drake''s  capture.  In 
addition  the  Queen  received  most  of  the  jewels,  and  she  may  have  had 
the  uncoined  silver  as  well.  Whatever  may  have  been  the  exact  sum 
she  obtained,  it  was  certainly  large,  and  the  disbursement  of  a  con- 
siderable portion  of  it  can  be  traced.  A  sum  of  ^28,757  had  been 
borrowed  and  it  was  re-lent  to  the  Protestants  in  the  Low  Countries,  at 
about  14  per  cent,  interest.  Elizabeth  appears  to  have  satisfied  her 
creditors  in  1580-1  for  this  obligation^.  Then  the  first  of  the  pay- 
ments, made  to  Alenc^on,  amounting  to  c£*42,000,  was  said  to  have  been 
coined  out  of  the  captured  bullion*.  Further  there  was  over  c£*42,000 
invested  in  the  Levant  trade  and  delivered  in  uncoined  silver  out  of  the 
Tower ^.  These  sums  amount  to  over  d^l  10,000 ;  and,  if  the  statement 
of  the  Chancellor  of  the  Exchequer  can  be  relied  on,  in  January  1581 
additional  payments,  in  excess  of  this  figure,  must  have  been  made  from 
the  same  source.  It  was  then  said  that  the  subsidy  of  1575-6  had  only 
sufficed  to  provide  half  the  cost  of  the  war  in  Ireland,  the  remainder 
being  paid  by  Elizabeth,  who  was  not  at  that  time  in  debt^.  That  a 
deficit  had  been  incurred,  but  had  been  met  out  of  the  balance  of  the 
treasure,  is  consistent  with  the  report  of  Mendoza,  in  September  of  the 
same  year,  that  Elizabeth  was  then  about  ^100,000  in  debt,  since  in 
the  interval  large  sums  had  been  remitted  to  Alen^on. 

The  winter  of  1580-1  represents  the  culmination  of  the  financial 
administration  of  Elizabeth.  With  only  moderate  assistance  from 
Parliament,  she  had  been  able  to  extinguish  the  Crown  debt  and  to 
improve  the  status  of  the  country  abroad.     In  the  midst  of  the  per- 

1  Queen  Elizabeth  and  her  Times,  A  series  of  original  letters,  edited  by  Thomas 
Wright,  London,  1838,  ii.  pp.  133-6. 

2  Calendar  Salisbury  MSS.,  ii.  p.  384. 

3  Murdin,  State  Papers,  p.  780. 

*  Calendar  of  State  Papers... in  the  Archives  of  Simanceis,  1580-6,  p.  165. 
^  Murdin,  State  Papers,  p.  781,  cf.  infra,  ii.  p.  84. 
6  D'Ewes,  Journals,  p.  287. 


CHAP.  IV.]  The  spending  of  the  captured  Treasure  1580-5   83 

plexities  in  the  understanding  of  the  accounts  of  the  finances  during 
this  period,  it  becomes  clear  that  the  improvement  was  due,  less  to  the 
increase  in  the  Ordinary  Revenue,  even  when  supplemented  by  aids  from 
Parliament,  than  in  quite  exceptional  receipts,  such  as  that  resulting 
from  Drake's  expedition.  The  total  amount  of  these  cannot  be  recorded 
precisely,  since  they  did  not  come  within  the  purview  of  the  tellers  of 
the  Exchequer.  From  the  latter  type  of  account  it  may  be  gathered 
that  the  Ordinary  Revenue  had  not  increased  materially  since  the 
beginning  of  the  reign,  for  the  gain  in  Customs  and  impositions,  due  to 
industrial  progress,  was  partially  neutralized  by  the  alienation  of  Crown 
property.  Moreover,  either  through  necessity  or  a  development  of 
foreign  policy,  an  increased  outlay  abroad  was  begun,  which  continued 
for  a  number  of  years.  This  led  to  an  increasing  strain  on  the  finances. 
Thus  it  is  recorded  that  from  May  to  December  1581  no  less  than 
d£*278,000  had  been  remitted  to  Alen^on^  and  in  1581  a  further  subsidy 
of  two-fifteenths  and  two-tenths  was  granted  by  Parliament^. 

The  effects  of  the  diffusion  of  the  great  quantity  of  captured 
valuables  in  England  was  sufficiently  marked.  Not  only  was  Elizabeth 
able  to  re-habilitate  her  finances  for  a  few  months,  but  she  was  en- 
couraged to  pursue  a  more  vigorous  foreign  policy.  The  part  of  the 
treasure,  however,  which  yielded  the  best  results  in  her  hands  was  that 
used  in  aiding  the  foundation  of  the  Levant  trade.  The  sums  divided 
amongst  the  seamen  and  adventurers  produced  many  consequences,  the 
most  desirable  of  which  was  the  increase  of  English  shipping.  When 
even  the  rumour  of  Drake's  success  had  started  everyone  talking  of 
fitting  out  similar  expeditions,  it  can  readily  be  understood  that,  after 
his  arrival,  new  ships  were  being  arranged  for;  and  even  already 
England  had  secured  the  monopoly  of  the  carrying  trade  to  and  from 
Spain  l  Drake  was  offering  all,  who  would  adventure  with  him  in  a  new 
expedition,  a  profit  of  six  or  seven  times  their  original  subscriptions*. 

Persons,  who  had  obtained  large  gains  from  the  expedition  of  1577- 
80,  spent  money  freely  and  there  were  complaints  of  the  growth  of 
luxury  and  extravagance^.  The  standard  of  living  of  the  upper  classes 
was  higher  than  it  had  been  during  the  years  of  economy,  early  in  the 
reign  of  Elizabeth.     This  prosperity  was  shared  by  the  rest  of  the 

'  State  Papers,  Foreign,  France,  x.  158,  159. 

2  Statutes,  IV.  684 ;  vide  infra,  iii.  p.  526. 

^  Calendar  of  State  Papers... in  the  Archives  of  Simancas,  1580-6,  pp.  8,  9. 

*  Ibid.,  pp.  55,  75. 

^  Anatomy  of  Abuses  in  England,  by  Philip  Stubbes  (1583),  New  Shakespeare 
Society  (1879-82);  An  Exhortation,  to  stir  up  the  Mindes  of  all  her  Majesty's 
faithful  Subjects  to  defend  their  Countrey  in  this  dangerous  Time  from  the  Invasion 
of  Enemies,  1588,  in  Harleian  Miscellany  (1744),  i.  p.  165  ;  A  Treatise  on  Money,  by 
J.  Shield  Nicholson,  London,  1901,  p.  229. 

6—2 


84  Prosperity  attributed  to  Privateering  1580-5  [chap.  iv. 

population,  and  Thomas  Churchyard  contrasted  the  distress  in  Flanders 
with  the  good  fortune  of  those  living  in  England : 

^'Hier  thyngs  are  cheape  and  easly  had 

no  soile  the  like  can  showe 

No  State  nor  Kingdome  at  this  daie 

doth  in  such  plentie  flowe^." 

Sir  John  Hawkins,  who,  as  Treasurer  of  the  Navy,  may  have  had 
opportunities  of  forming  an  opinion,  estimated  that,  since  1558,  the 
wealth  of  England  had  trebled^.  Part  of  this  increase  must  be  off-set 
against  the  economic  loss  involved  in  the  suppression  of  the  monasteries ; 
but,  even  after  this  allowance  is  made,  there  was  a  substantial  gain. 

It  was  natural  that  the  superficial  observer  attributed  the  activity 
of  trade  to  the  captures  of  bullion,  made  by  Drake  and  other  privateers- 
men;  but  the  real  cause  is  to  be  found  in  the  years  of  peace  and 
national  economy.  Although  the  cloth-trade  was  suffering  from  the 
troubles  on  the  Continent,  profitable  exchanges  were  being  effected  in 
Russia ;  and,  when  the  Persian  route  was  closed,  the  Levant  company 
had  been  founded,  bringing  the  same  commodities^.  The  home  trade 
was  flourishing,  as  is  shown,  amongst  other  indications,  by  the  influx  of 
persons  from  the  country  to  the  towns.  As  early  as  1579  Burghley 
described  England  as  "  surely  abounding  in  riches^,"  and  the  liberation 
of  the  captured  treasure  accentuated  the  general  prosperity. 

Considering  privateering  solely  from  the  economic  standpoint,  there 
can  be  little  doubt  that,  in  the  long  run,  it  was  prejudicial  to  the  best 
interests  of  the  commerce  of  England.  Much  of  the  capital,  either 
withdrawn  from  the  cloth-trade  or  rendered  available  by  the  opening  up 
of  new  enterprizes,  had  been  invested  in  shipping ;  and,  once  it  was 
known  that  Philip  would  not  declare  war  against  England  on  the  ground 
of  Drake's  plunderings,  it  remained  for  him  to  make  English  trade 
with  Spain  uncertain.  Even  though  the  loss  in  a  single  year,  as  com- 
pared with  the  magnitude  of  the  captures,  would  be  small  (as  long  as 
this  policy  could  be  maintained)  it  would  be  recurrent,  and,  over  a. 
number  of  years,  would  exceed  the  value  of  the  bullion  seized. 

But,  in  addition  to  the  purely  economic  aspect,  there  is  also  the 
political  one.     If  it  were  possible  for  England  to  avoid  war  with  Spain, 

1  The  Misery  of  Flanders... arid  the  Blessed  State  of  England^  1579. 

2  July  20,  1584— Lansd.  MS.  (Brit.  Mus.)  43  (11),  printed  hy  Wright,  Elizabeth, 
II.  p.  232. 

3  Vide  infra,  ii.  85. 

*  An  Order  how  to  proceed  to  the  discussion  of  the  Questions  concerning  the 
Queene's  marriadge  with  Monsieur  d'Anjou — Murdin,  State  Papers,  p.  327.  It  is 
interesting  to  notice  in  the  same  document  that  Burghley  proposed  the  foundation 
of  a  State-bank. 


CHAP.  IV.]     The  Boom  in  Privateering  1580-5  86 

privateering  was  a  blunder,  since  it  added  to  the  existing  tension  in 
the  relations  of  the  two  countries.  If,  on  the  other  hand,  a  war  was 
inevitable;  then  expeditions,  such  as  those  of  Drake,  were  invaluable. 
The  finances  of  Philip  were  in  an  embarrassed  condition,  and  the  seizure 
of  bullion  increased  the  strain.  If  the  estimate  of  the  proceeds  of 
Drake's  expedition  is  correct,  it  represented  from  one-third  to  one* 
quarter  of  the  whole  average  annual  produce  of  the  American  mines, 
remitted  to  Spain  ^  Still  more  important  was  the  moral  effect. 
English  sailors  learnt  their  superiority  over  the  Spaniard ;  and,  if  the 
contest  with  the  Armada  was  unavoidable,  this  lesson  was  of  the  greatest 
importance. 

From  the  return  of  Drake's  expedition  of  1577-80,  English  pri- 
vateering increased,  both  in  the  numbers  of  voyages  and  in  the  size  of 
each  venture.  Much  of  the  money,  taken  by  Drake,  found  its  way  to 
persons  connected  with  maritime  enterprize,  and  it  was  inevitable  that 
very  many  armed  ships  should  have  been  prepared.  The  joint-stock 
system  was  so  flexible  and  had  answered  so  well  in  previous  expeditions 
that  capital  could  be  easily  procured  from  noblemen,  gentlemen  and 
merchants.  Munitions  of  war  were  plentiful,  and  it  did  not  take  long 
to  convert  a  merchantman  into  a  privateer.  Activity  at  the  ports  was 
so  great,  that  the  spies  of  the  Spanish  Ambassador  were  compelled  to 
report  that,  so  many  armed  ships  were  constantly  going'  and  coming,  it 
was  impossible  to  ascertain  what  expeditions  were  contemplated. 

It  is  obvious  there  was  a  danger  in  this  boom  in  privateering.  The 
success  of  any  venture  depended  on  its  arrival,  where  it  was  least 
expected.  Once  it  was  known  that  England  had  a  great  fleet  of 
privateers,  the  Spaniards  in  America  lived  in  a  state  of  preparation,  and 
bullion  was  kept  in  the  interior,  instead  of  at  the  ports ;  while  it  was 
only  transported  to  Europe  in  heavily  armed  fleets.  To  meet  this 
new  development  it  was  necessary  to  augment  the  size  of  the  English 
expeditions,  which  consisted  of  more  ships  of  larger  size.  For  instance, 
the  four  vessels  in  the  expedition  of  1582,  intended  for  the  Indies,  but 
which  did  not  penetrate  further  than  Brazil,  had  an  aggregate  tonnage 
of  790.  This  voyage  was  the  concluding  one  of  the  Frobisher  series, 
and  like  its  predecessors  resulted  in  loss  2.  It  was  probably  the  failure 
of  this  enterprize  which  prevented  the  formation  of  a  Company  to  trade 
beyond  the  Equinoctial^  which  had  been  proposed  in  1580  and  of  which 
Drake  was  to  be  first  governor^. 

1  The  Rise  of  the  Dutch  Republic,  by  J.  L.  Motley,  London,  1856,  ii.  p.  618. 

2  Vide  infra,  ii.  p.  82.  The  capital  was  £11,600,  of  which  about  £3,000  con- 
sisted of  trade  goods  (Calendar  of  State  Papers... in  the  Archives  of  Siiyiancas,  1580-6, 
p.  199).  Tlierefore,  deducting  this  amount,  so  as  to  preserve  the  same  basis  of 
comparison,  there  remains  £8,600  for  ships  and  provisions,  or  £10.  9*.  per  ton. 
These  ships  were  provisioned  for  two  years. 

3  State  Papers^  Domestic,  Elizabeth,  cxuev.  44 ;  Calendar,  1547-80,  p.  689. 


86  Early  colonizing  Companies  1582-3    [chap.  iv. 

At  the  same  time,  some  efforts  were  made  towards  colonization  by 
Gilbert  in  1583  and  by  Raleigh  in  1584.  As  yet,  however,  the  minds 
of  the  promoters  were  divided  between  the  legitimate  objects  of  the 
voyages  and  the  obtaining  of  gold,  either  by  discovery  or  capture,  and 
the  planting  did  not  succeeds  Most  of  these  enterprizes  were  small 
companies,  and  the  capital  outlay  was  larger  than  in  privateering.  Even 
if  success  were  eventually  obtained,  the  results  involved  more  waiting. 
In  colonizing,  it  was  necessary,  not  only  to  make  a  voyage  to  the 
proposed  settlement,  but  to  establish  the  settlers  there  and  provision 
them,  until  they  became  self-supporting.  For  this  reason,  an  estimate, 
made  in  1583,  places  the  capital  outlay  for  each  colonist  at  ,^^40,  a  rate 
higher  than  those  of  the  contemporary  trading  or  privateering  ventures 2. 

It  follows  that  the  efforts  at  colonization  were  merely  anticipations 
of  later  developments,  and  the  chief  energies  of  the  more  venturesome 
seamen  continued,  for  some  years,  to  be  devoted  to  privateering. 
Though  Drake  had  wished  to  follow  up  the  success  of  his  voyage  of 
1577-80,  it  was  not  until  1585  that  he  succeeded  in  obtaining  the 
sanction  of  Elizabeth  for  another  expedition.  This  was  organized  on  a 
much  larger  scale  than  its  predecessors,  consisting  of  twenty-one  ships. 
A  valuation  was  made  of  the  vessels,  subscribed  by  the  adventurers,  and 
cash  might  also  be  ventured.  Thus  Elizabeth  provided  <^20,000,  one 
half  in  cash  and  the  other  half  in  ships  of  850  tons.  The  whole  capital 
was  d^60,400,  subsequently  reduced  on  adjustment  to  ^£^57,000.  The 
prize  goods  were  valued  at  ^£^64,900,  of  which  «^1 7,000  was  set  aside  for 
the  seamen.  The  balance  remaining,  after  some  expenses  had  been 
deducted,  was  ^45,908.  18^.  6^.;  so  that,  even  including  the  estimate 
of  the  ships  returned  to  the  owners,  there  was  a  loss  of  20  per  cent. 
To  some  extent,  this  may  have  been  a  deficit  on  paper;  since,  on 
examining  the  Queen's  account,  it  appears  that  her  ships  were  valued  at 
«£^10,000  as  capital,  but  only  at  £SfiOO  as  part  of  her  division.  She 
received  the  remainder  in  cannon  and  pearls^ 

The  expedition  of  1587,  also  under  the  command  of  Drake,  was 
more  successful  from  the  point  of  view  of  the  adventurers.  It  was 
organized  on  a  different  model  from  previous  ventures.  Besides  Eliza- 
beth, Drake  and  his  friends,  there  were  twenty  merchants  interested*. 

1  Vide  infra,  ii.  pp.  242,  244.  The  Genesis  of  the  United  States.  A  Series  of 
Historical  Manuscripts  now  first  Printed,  by  Alexander  Brown,  London,  1890, 
I.  pp.  9-14. 

2  Hakluyt,  Voyages  (1904),  viii.  p.  148 ;  vide  supra,  p.  77. 

3  Barrow,  Life  of  Drake,  ut  supra,  p.  191 ;  Hakluyt,  Voyages,  x.  pp.  97-9,  133 ; 
Calendar  of  State  Papers... in  the  Archives  of  Simancas,  1580-6,  p.  661;  Atkinson, 
Gold  Mynes  in  Scotland,  ut  supra,  p.  69 ;  Papers  Relating  to  the  Navy  during  the 
Spanish  War,  ed.  J.  S.  Corbett  {Publications  Navy  Records  Soc.),  xi.  pp.  86-96 ; 
XXII.  pp.  124-30. 

*  The  names  are  printed  in  an  appendix  to  the  Camden  Society's  edition  of  The 


CHAP.  IV.]    Profits  of  privateering  Companies  1585-7       87 

By  an  agreement,  made  between  the  latter  and  Drake  on  March  18th, 
1587,  it  was  arranged  that  all  captures  should  be  divided  equally,  as 
between  the  Queen's  ships  and  those  of  the  other  adventurers ^  This 
understanding  appears  to  have  been  based  on  the  supposition  that  the 
tonnage  and  number  of  the  crews  of  the  vessels  from  the  Navy  and  of 
those  provided  by  private  persons,  would  be  approximately  the  same. 
When  the  expedition  had  returned,  having  taken  a  prize  valued  at 
<£*! 08,049.  13*.  lld^  and  a  division  came  to  be  made,  it  was  found  that 
the  quota  in  tonnage  and  men,  furnished  by  the  private  adventurers, 
was  larger  than  that  of  Elizabeth.  Therefore,  a  modification  was 
proposed,  whereby  the  spoil  should  be  divided  into  the  same  number  of 
parts  as  the  aggregate  both  of  the  tonnage  and  the  men.  This  basis 
required  the  calculation  to  proceed  on  the  principle  of  there  being  7,623 
parts,  of  which  3,120  were  reckoned  as  belonging  to  Elizabeth  and  the 
remainder  (namely  4,503)  to  the  other  adventurers.  Allowing  for 
certain  minor  expenses  after  the  arrival  of  the  fleet,  this  left  a  division 
for  the  Queen  of  either  .£^42,699.  3*.  M.  or  ^^45,063.  15*.  9d,  according 
as  her  tonnage  was  reduced  or  not  by  an  item  of  400  tons,  which  was  in 
dispute,  and  proportionately  for  the  remaining  ship-owners^.  Since  this 
expedition  was  not  organized  on  an  estimated  capital,  there  is  some 
difficulty  in  determining  the  amount  per  cent,  of  this  division.  On  the 
rates  per  ton  and  per  man  of  the  previous  venture,  the  estimated 
capital  would  be  ,^78,500,  giving  a  gross  profit  of  138  per  cent.  This 
was  not  considered  great,  since  Raleigh  wrote  that  100  per  cent,  (also 
gross)  was  but  "  a  small  return,"  and  that  he  "  might  have  gotten  more 
to  have  sent  his  ships  fishing*.""  Several  deductions  have  to  be  made 
before  the  nett  profit  can  be  arrived  at.  Wages  had  to  be  paid  and  the 
ships  refitted.  Elizabeth  allowed  ,^^8,643  for  the  former  charge'',  and 
20  per  cent,  of  the  estimated  value  of  the  ships  for  the  latter.  On  her 
tonnage,  the  original  capitalization  of  her  venture  would  be  =£^33,000, 
giving  a  nett  profit  of  d^28,500  or  87  per  cent.® 

True  Discription  of  the  last  Voiage  of  Sir  Frauncis  Drake,  by  Robert  Lenge  (Mis- 
cellany, V.  1864,  p.  27). 

1  Ibid.f  p.  26.  2  Publications  Navy  Records  Soc,  xi.  pp.  200-6. 

^  Camden  Soc.  Miscellany,  v.  pp.  53,  54. 

4  Publications  Navy  Mecords  Soc,  xxii.  p.  268  ;  cf.  infra,  ii.  pp.  298,  361. 

^  Publications  Navy  Records  Soc,  xi.  p.  191. 

®  Estimated  valuation   of  the    ships,    "subscribed"    by 

Elizabeth  at  £15.  8s.  per  ton £33,180 


Average  of  the  gross  profit,  payable  to  Elizabeth 

Deduct  20  %  of  estimated  capital  value 

Wages  and  rewards 

Nett  Profit 


£43,881 
£6,636 
8,643        15,279 


£28,602 

It  was  said  that  it  was  the  capture  of  the  San  Filipe  which  first  impressed 
Englishmen  with  the  riches  of  the  Indies  (Hakluyt,  Voyages,  vi.  p.  438),  but,  as  already 


88      Spanish  Reprisals  cause  Depression  1586-7   [chap.  iv. 

Whether  privateering  was  a  political  necessity  or  not,  as  time  went 
on,  the  economic  loss  it  involved  began  to  be  felt.  By  1586  the  reprisals 
of  the  Spaniards,  in  hindering  English  trade  when  possible,  had  begun 
to  induce  commercial  depression,  which  was  aggravated  by  the  disloca- 
tion of  trade  with  the  chief  European  countries.  The  following  report, 
drawn  up  by  a  Spanish  spy  in  London,  sums  up  the  situation  in  the 
least  favourable  terms :  "  The  whole  country  is  without  trade  and  knows 
not  how  to  recover  it ;  the  shipping  and  commerce  here  having  mainly 
depended  upon  the  communication  with  Spain  and  Portugal.  They 
feel  the  deprivation  all  the  more  now,  with  the  loss  of  the  cloth  trade 
with  Germany,  which  they  formerly  carried  on  through  Holland  and  up 
the  Rhine,  but  have  now  been  deprived  of  by  the  capture  of  Nutz  on 
that  river.  If  Berck  be  taken  also,  which  please  God  it  will  be,  now 
that  the  neighbouring  places  have  fallen,  they  will  not  be  able  to  send 
any  cloths  at  all,  and  this  is  causing  much  dissatisfaction  all  over  the 
country.  The  rest  of  their  trade  with  the  other  German  ports  and 
Muscovy  is  a  mere  trifle;  as  all,  they  brought  from  those  places,  was 
sent  by  them  to  Spain,  and,  their  Spanish  trade  being  now  gone,  the 
other  is  of  no  use  to  them,  as  they  do  not  know  what  to  do  with  the 
merchandize  they  bring  hither'.  All  that  is  left  to  them  is  the  Levant 
trade,  which  is  with  Turkey  and  Italy,  and  that  with  Barbary.  If 
these  two  are  taken  from  them,  which  can  easily  be  done,  they  will  be 
driven  into  a  corner,  without  any  commerce  or  navigation  at  all.  Their 
French  trade  is  very  insignificant  and  is  carried  on  by  a  few  small 
vessels  only^."  Information  from  such  a  source  may  well  be  suspected 
of  some  exaggeration,  but  it  is  remarkable  that  Burghley  describes  the 
situation  in  somewhat  similar  terms.  "  This  great  matter  of  the  lack 
of  vent,"  he  writes,  "  not  only  of  clothes,  which  presently  is  the  greatest, 
but  of  all  other  commodities  which  are  restrained  from  Spain,  Portugal, 
Barbary,  France,  Flanders,  Hamburgh  and  the  States,  cannot  but  in 
process  of  time  work  a  great  change  and  dangerous  issue  to  the  people 
of  the  Realm,  who,  heretofore,  in  time  of  outward  peace,  lived  thereby, 
and  without  it  must  either  perish  for  want  or  fall  into  violence  to  feed 
and  fill  their  lewd  appetites  with  open  spoil  of  others  ^" 

mentioned,  an  expedition  had  been  projected  and  actually  started  for  that  region  in 
1582 — vide  supra,  p.  82,  infra,  ii.  p.  82. 

1  In  spite  of  the  embargo  a  considerable  trade  was  carried  on  with  Spain  by  the 
use  of  Scottish  ships,  or  English  ones  registered  as  Scottish — Calendar  of  State  Papers 
...in  the  Archives  of  Simancas,  1687-1603,  p.  186. 

2  Ibid.,  1580-6,  pp.  651,  652.  The  writer  continues  by  recommending  that  the 
Levant  and  Barbary  trades  should  be  closed,  by  stationing  Spanish  war-ships  at  the 
Straits  of  Gibraltar. 

3  Burghley  to  Hattou,  May  12,  1687,  printed  in  Memoirs  of  the  lAfe  and  Times 
of  Sir  Christopher  Hatton,  by  Sir  Harris  Nicolas,  1847,  p.  470. 


CHAP.  IV.]     Companies  affected  by  the  Depression  1586      89 

A  further  cause  of  the  industrial  depression,  which  now  began  to 
manifest  itself,  was  the  uncertainty  of  the  political  situation.  There 
were  Catholic  plots  in  England,  culminating  in  the  Babington  conspiracy 
(1586)  and  the  execution  of  Mary  Queen  of  Scots  (1587).  The  year 
1587  was  marked  by  the  financial  aid  of  the  Pope  to  Philip  and  by  the 
collection  of  the  ships  that  formed  the  Armada.  At  the  same  time, 
poor  trade  and  a  threatening  political  outlook  were  aggravated  by 
exceptionally  bad  harvests  in  England,  and  in  London,  especially,  wheat 
reached  the  highest  recorded  price  of  the  whole  century  ^ 

The  depression  of  the  years  1586-7  affected  the  existing  under- 
takings, in  a  manner  similar  to  the  crisis  of  1569-74.  The  second 
joint-stock  of  the  Russia  company  was  wound  up,  and  a  new  one  begun 
in  1586^.  About  the  same  time,  the  subsidiary  companies  of  the 
Mines  Royal  in  Cornwall  and  Cumberland,  formed  by  Smith,  came 
to  an  end,  and  a  new  undertaking  for  the  northern  district  was 
constituted^. 

This  crisis  had  an  important  bearing  on  the  contest  with  Spain  in 
1588.  While  the  diversion  of  capital  towards  the  shipping  trade  was 
an  important  element,  making  for  the  success  of  England  in  the 
struggle,  the  want  of  money  prevented  the  fleet  from  being  as  efficiently 
manned  and  provisioned  as  it  should  have  been.  The  Crown  finances 
were  in  a  more  embarrassed  condition  in  1588  than  they  had  been, 
since  the  beginning  of  the  reign  of  Elizabeth.  The  transition  from  the 
soundness  of  1575  to  the  difficulties  of  ten  years  later  is  remarkable. 
The  policy  of  subsidizing  the  enemies  of  Spain  had  grown  during  the 
interval ;  and,  although  much  of  the  money  was  spent  unwisely,  such 
payments  may  be  regarded  as  an  insurance,  made  by  England  against 
the  risk  of  invasion.  The  peculiar  hardship  of  the  situation  in  1587-8 
was  that  these  expenses  had  been  incurred,  merely  to  delay  the  evil. 
Though  the  strain  on  the  finances  became  marked  in  1588,  events  had 
been  leading  up  to  it,  since  the  beginning  of  1581.  Prior  to  that  date, 
the  assistance,  provided  by  Elizabeth  to  Protestants  abroad,  had  not 
involved  any  burden  on  her  finances,  beyond  what  could  be  borne  by  the 
surplus  Ordinary  Revenue.  Up  to  1579,  the  Queen  had  lent  to  foreign 
States  d£*65,000S  while  she  had  become  security  for  a  loan,  raised 
abroad  by  the  Netherlands ;  and,  should  the  Estates  default  in  the  pay- 
ment of  interest,  the  liability  would  fall  upon  her**.     It  was  no  small 

^  Chronicon  Preciosum,  London,  1707,  p.  123.  Fleetwood  records  64*.  per 
quarter.  Maitland  says  the  price  ''in  divers  places"  (other  than  London)  was  104*. 
History  of  London j  p.  271. 

2  Vide  infra,  ii.  p.  48.  3  Ibid.,  ii.  pp.  396,  397. 

*  State  Papers,  Domestic,  Elizabeth,  cxxxi.  49 ;  Calendar,  1547-80,  p.  628. 

^  Calendar,  State  Papers,  Foreign,  1577-8,  p.  366. 


90  State  of  the  Crown  Finances  1570-88    [chap.  iv. 

financial  achievement,  during  the  ten  years  1570  to  1580,  to  have  ex- 
tinguished the  remainder  of  the  Crown  debt,  borne  the  cost  of  the 
rebellions  in  Ireland,  which  together  may  be  estimated  to  have  cost 
^585,000  while  the  grants  from  Parliament  only  realized  .^417,000, 
besides  contributing  to  extraordinary  expenditure  on  the  Navy  and 
Ordnance,  mainly  out  of  the  surplus  Ordinary  Revenue  \ 

No  doubt,  the  freedom  from  debt  in  1580-1  was  attributable  to  the 
treasure,  received  by  the  Crown  from  Drake's  expedition ;  but,  after 
the  outstanding  loans  had  been  repaid,  there  remained  a  considerable 
surplus,  which  would  in  normal  circumstances  have  provided  an  adminis- 
tration, as  economical  as  that  of  Elizabeth,  with  ample  funds  for  the 
development  of  its  foreign  policy.  Just  at  this  time,  however,  there 
came  the  Alen^on  entanglement;  and,  between  1581  and  1583,  the 
great  sum  of  ^632,071  was  disbursed  in  this  way^.  Moreover,  the 
policy  of  fighting  Philip  in  Flanders  was  one  which,  once  it  was  begun, 
must  be  continued;  and,  on  the  fall  of  Antwerp  in  1585,  it  became* 
necessary  for  Elizabeth  to  incur  further  outlays  in  the  Low  Countries. 
A  considerable  sum  was  required,  beyond  the  ordinary  charge,  for 
Ireland ;  a  subsidy  was  paid  to  James  VI.  of  Scotland,  the  outlay  on  the 
Navy  and  Ordnance  was  large  and  much  had  to  be  spent  on  secret  and 
special  service^.  But  the  total  grants  from  Parliament,  receivable 
between  1581  and  1588,  came  to  less  than  d^400,000*,  so  that  it  was 
only  possible  to  meet  expenses  by  the  savings  from  the  Ordinary 
Revenue,  which  may  be  estimated  at  this  time  to  have  been  about 
,^70,000  a  year». 

It  follows  that  the  financing  of  the  defence  of  England  against  the 
Armada  presented  some  difficulty.  Already,  through  the  assistance 
given  to  the  Low  Countries,  there  was  considerable  pressure  on  the 
Crown  finances.  Moreover,  the  peculiar  state  of  the  money-market, 
both  at  home  and  abroad,  just  at  this  time  created  unexpected  diffi- 
culties. The  credit  of  Elizabeth  was  good,  and,  under  ordinary 
circumstances,  it  would  have  been  easy  for  her  to  have  borrowed  such 
funds  as  she  required,  either  abroad  or  at  home.  It  so  happened,  that 
in  1587  and  1588  England  could  not  procure  a  loan  abroad*.     Early  in 

^  For  the  details  vide  infra,  iii.  pp.  515,  526,  527. 

2  State  Papers,  Foreign,  France,  x.  158, 159.  This  sum  was  practically  identical 
with  that  paid  by  the  King  of  France  at  the  same  time.  He  added  a  further 
£279,000,  making  in  all  £1,012,500.  Alen9on  altogether  received  £2,583,282,  the 
remainder  being  raised  by  the  Estates  (£160,979)  or  by  loans  (£777,732).  He 
expended  £2,683,905. 

3  Vide  infra  J  iii.  pp.  503,  504.  *  Ibid.,  in.  p.  526. 
6  Ibid.,  III.  p.  503. 

®  Cf.  "  I  find  no  probability  how  to  get  money  here  in  specie,  which  is  our  lack, 
but  by  exchange,  to  have  it  out  of  parts  beyond  sea,  which  will  not  be  done  but  in 


CHAP.  IV.]       Difficulties  in  borrowing  1587-8  91 

the  reign  Elizabeth  could  borrow  with  comparative  freedom  at  Antwerp, 
but  now  that  city  had  been  sacked  and  its  wealth  dispersed.  So  far 
from  the  Low  Countries  being  a  lender,  its  goverament  was  now  a 
debtor,  and  in  Germany  capital  was  not  available  to  lend  to  England. 
Already  considerable  sums  had  been  borrowed  from  capitalists  at  Lyons, 
and  it  would  appear  that,  at  this  juncture,  these  men  were  not  disposed 
to  add  to  their  commitments^  The  Italian  bankei-s  were  pledged  to 
Philip  of  Spain,  both  on  religious  and  financial  grounds,  and  the  only 
foreign  capital  available  was  that  which  found  its  way  into  the  country 
through  Spinola,  Pallavicino  and  Justinian.  Therefore,  during  the 
great  national  trial  of  1588,  England  had  to  depend  almost  wholly  on 
its  own  resources.  There  were  two  ways  in  which  money  could  have 
been  obtained  at  home,  as  it  had  been  previously,  to  meet  an  emergency 
until  funds  were  granted  by  Parliament,  and  these  were  paid  into  the 
Exchequer,  namely  either  by  loans  on  Privy  Seals  or  borrowings  upon 
interest.  Since  wealth  had  been  increasing  during  the  past  twenty 
years,  little  difficulty  would  have  been  experienced  in  finding  a  sufficiency 
of  money,  had  it  not  been  that,  at  the  critical  moment,  the  country  was 
in  the  throes  of  a  commercial  crisis.  No  doubt  it  is  to  the  difficulty  in 
raising  funds  by  borrowing  that  much  of  the  vacillation  in  England's 
foreign  policy  during  1587  is  to  be  assigned.  Possibly,  too,  Elizabeth's 
ministers  relied  on  their  success  in  previous  diplomatic  encounters, 
which  had  hitherto  resulted  in  the  preservation  of  the  species  of  peace 
that  England  desired.  No  doubt,  also,  Drake's  expedition  of  1587  had 
much  to  do  with  delaying  the  sailing  of  the  Armada,  and  another 
influence  in  the  same  direction  is  said  to  have  been  certain  operations 
on  the  foreign  exchanges,  whereby  Spanish  bills  were  collected  and  then 
presented  in  large  quantities  at  the  same  time,  with  the  result  that  they 
were  "  protested,"  and  money  could  not  be  procured  in  time  to  enable 
the  fleet  to  sail  that  year  2. 

The  year  1588  was  not  far  advanced,  before  it  was  realized  that 
the  arrival  of  the  Armada  was  to  be  expected,  and  Elizabeth  was  iU- 
prepared  to  provide  the  funds  that  were  necessary  for  the  defence  of 
England.  It  is  true  that  at  this  time  there  was  a  surplus  from  the  nett 
Ordinary  Revenue  of  over  d^70,0003,  while  the  subsidies  granted  in 
1586-7,  which  were  payable  in  1587  and  1588  in  October,  realized 

a  long  time" — Burghley  to  Walsingham,  July  19,  1588  ;  State  Papers  relating  to  the 
Defeat  of  the  Spanish  Armada,  ed.  J.  K.  Laughton  {Publications  Navy  Records  Soc.), 
I.  p.  285. 

1  Entry  Books  of  Issues— Eliz.  27-28,  28-29. 

^  Of  a  Free  Trade,  by  Henry  Parker,  London,  1648;  Memoirs  of  the  Most 
Important  Transactions  in  England  for  the  last  Hundred  Years,  by  James  Welwood, 
London,  1718,  p.  9 ;  Anderson,  Annals  of  Commerce,  ii.  p.  222. 

3  Vide  infra,  iii.  p.  503. 


92     Finance  of  the  Defeat  of  the  Armada  1588    [chap.  iv. 

«£*!  85,000^,  but  it  is  to  be  noted  that  only  the  first  moiety  was  receivable 
in  the  financial  year  Easter  to  Easter  1587-8,  when  the  need  was 
specially  great ;  and,  owing  to  many  payments  being  in  arrear,  the  laity 
paid  to  the  Exchequer  less  than  ^£^50,000,  instead  of  twice  that  sum*. 
Moreover  liabilities  against  these  resources  had  already  been  incurred, 
so  that  it  was  absolutely  necessary  to  borrow,  in  order  to  provision  the 
fleet  and  to  feed  the  levies  that  had  been  raised.  But  it  has  been 
shown  that,  for  various  reasons,  loans  were  difficult  to  arrange.  Though 
Privy  Seals  were  issued,  and  d^30,000  was  lent  by  the  City  of  London 
in  March  on  the  security  of  the  Crown  lands  at  10  per  cent,  interest'', 
it  was  reported  in  April  that  Elizabeth  was  so  short  of  money  that  she 
could  not  raise  funds  for  fitting  out  her  remaining  ships,  and  in  the 
following  month  Walsingham  said  that  England  "  was  in  such  a  state, 
as  neither  they  nor  their  forefathers  had  ever  been  in  before*." 
Burghley,  in  the  midst  of  other  pressing  duties,  was  frequently  in  the 
City  endeavouring  to  raise  a  loan,  but  money  had  been  scarce  before 
and  was  still  scarcer  after  the  assessments  for  the  Privy  Seals  had  been 
made.  Eventually  the  Livery  companies  undertook  to  provide  d£*25,970, 
but  most  of  this  money  was  not  paid  over  until  after  the  defeat  of  the 
Armada '';  and,  during  the  critical  weeks  immediately  prior  to  the 
great  battle,  there  was  a  shortage  in  the  provisioning  and  powder- 
supplies  of  the  ships ^  When  victory  was  secured,  in  spite  of  these 
and  other  difficulties,  it  remained  to  count  the  cost.  Considering  the 
immense  importance  of  the  issue,  this  was  surprisingly  smaU,  being 
returned  at  a  total  of  only  d£*161,185,  for  both  the  land  and  sea  forces  ^ 
The  meagre  expenditure  is  accounted  for,  partly  by  the  comparative 
absence  of  preparation,  the  difficulty  of  borrowing  and  the  levying  of 
ships  from  the  ports  and  men  from  the  inland  counties.  It  is  an 
instance  of  the  prudence  with  which  the  finances  of  Elizabeth  were 
managed,  that  the  debt  after  the  Armada  exceeded  only  by  a  little  the 
outlay  on  these  operations,  being  returned  at  i^200,000  in  1 588-9  ^ 

1  Vide  infra,  iii.  p.  626.  That  is  the  subsidy  of  the  laity  and  j^ths  of  that  of  the  clergy. 

2  Ibid.,  III.  p.  519.  The  first  payment  was  very  nearly  double  the  second,  i.e. 
the  first  was  2«.  8c?.  on  lands,  the  second  1*.  4d. ;  on  goods  they  were  respectively 
1*.  8rf.  and  1*. 

3  State  Papers,  Domestic,  Elizabeth,  ccix.  45;  Calendar,  1581-90,  p.  471.  In 
1590  this  loan  was  increased  to  £60,000 — Ibid.,  ccxxxv.  55 ;  cf.  Calendar  of  State 
Papers... in  the  Archives  of  Simancas,  1587-1603,  p.  279  (note). 

*  Calendar  of  State  Papers... in  the  Archives  of  Simancas,  1587-1603,  pp.  264,  278. 

^  State  Papers,  Domestic,  Elizabeth,  ccxvii.  51  ;  Calendar,  1581-90,  p.  554. 

6  Publications  Navy  Records  Soc,  i.  p.  Ixv.  ;  xxii.  pp.  175,  176. 

"^  Vide  infra,  iii.  p.  527.  According  to  an  account  of  Hawkins,  the  expense  was 
£225,000.— Murdin,  State  Papers,  p.  627. 

8  Salisbury's  speech  in  Parliament  1610 — Journals  of  the  House  of  Commons, 
I.  p.  395.  Taking  Hawkins'  statement,  the  debt  would  be  less  than  the  cost  of 
repelling  the  Armada. 


CHAPTER  V. 

The  Depression  from  1587  to  1603. 

From  the  political  point  of  view  the  defeat  of  the  Armada  may 
be  regarded  as  a  decisive  victory;  but,  from  its  effects  on  the  Crown 
finances,  it  constitutes  only  the  prelude  to  a  long  series  of  costly  opera- 
tions, which  involved  very  great  expenditure  up  to  1603.  These  grew 
to  be  so  great  that  the  savings  from  the  Ordinary  Revenue,  considerable 
as  they  were,  failed  to  provide  more  than  a  small  fraction  of  the  funds 
required ;  and  it  became  necessary  for  Parliament  to  grant  supplies  on 
a  much  larger  scale  than  during  the  previous  portion  of  the  reign  of 
Elizabeth.  The  war  with  Spain  thus  resulted  in  a  very  material  increase 
in  taxation,  which  reacted  on  trade ;  while,  at  the  same  time,  the  closing 
of  certain  markets  on  the  Continent,  with  the  levies  of  men  and  ships 
added  to  the  dearth  from  1594  to  1598  and  again  in  1600,  made  this 
period  one  of  great  depression. 

The  pressure  of  direct  taxation  may  be  gathered  from  the  fact  that, 
in  the  first  thirty  years  of  the  reign  of  Elizabeth,  the  laity  contributed 
fifteen  tenths  and  fifteen  fifteenths,  that  is  one  and  a  half  times  the 
valuation  of  the  rental  of  lands  above  a  certain  minimum  and  exactly 
that  of  the  whole  capital  value  of  personal  property  as  assessed,  pro- 
vided such  assessment  was  £S  or  over^  From  1589  to  1605,  there 
were  raised  twenty-four  tenths  and  twenty-four  fifteenths :  that  is,  the 
average  annual  burden  from  1558  to  1588  was  only  one-half  of  one- 
tenth  and  of  one- fifteenth  ;  whereas,  in  the  remaining  sixteen  and  a  half 
years,  it  was  just  thrice  as  much,  being  one  and  one-half  tenth  and 
fifteenth  per  annum.    While  this  form  of  statement  is  sufficiently  correct 

*  In  the  grant  of  1559  the  minimum  was  higher.  The  subsidy  of  1566  was  not 
strictly  speaking  ^th  and  ^th,  since  the  payments  per  £  were  2s.  Sd.  on  lands 
(and  proportionately  on  goods)  instead  of  2^.  or  the  tenth.  The  explanation  is 
interesting.  A  grant  of  ^ths  =  4*.  was  payable  in  two  instalments  2*.  S(L  and 
1*.  4d.  The  so-called  j^th  of  1566  was  taken  as  the  first  instalment  of  f^ths  and 
therefore  at  2s.  Sd.  Reference  to  Statement  I.  {inde  infra,  iii.  p.  626)  will  show  that 
the  yield  of  this  grant  was  enhanced  to  this  extent. 


94       Decline  in  Produce  of  Tenths  1592-1601    [chap.  v. 

for  many  purposes,  it  does  not  describe  adequately  the  whole  facts. 
Although  the  country  was  much  more  prosperous  from  1572  to  1586 
than  it  had  been  at  the  beginning  of  the  reign  of  Elizabeth,  the  produce 
of  the  tenth  and  fifteenth  was  steadily  declining,  as  is  shown  by  the 
following  table  of  the  subsidies  of  the  laity : 

Yield  of  J(j  and  J^  of  the  subsidy  1562-3  £103,861 

„            „            „                1586-7  81,565 

1592-3  74,348 

„            ,>            „               1597  68,975 

„            „            „                1601  65,2851 

This  progressive  diminution  in  the  proceeds  of  the  tenth  and  fifteenth 
is  a  remarkable  and  apparently  anomalous  fact ;  since  it  might  be  sup- 
posed that  the  yield  of  this  tax  would  afford  a  basis  for  comparing  the 
condition  of  the  country  at  different  times,  as  is  customary  at  a  much 
later  date  from  the  produce  of  \d.  of  the  Income  Tax.  Indeed  it 
would  seem  that,  for  statistical  purposes,  the  advantage  lies  with  the 
Elizabethan  impost,  since  from  1563,  if  the  grant  of  1566  be  excepted, 
no  change  was  made  in  the  nature  of  the  tax  itself.  It  was  the  method 
of  assessment  which  resulted  inevitably  in  a  decrease  per  tenth  and 
fifteenth.  Naturally  there  were  many  claims  made  for  a  reduction  in 
the  assessments.  When  farmers  received  a  high  price  for  their  corn, 
they  endeavoured  to  show  that  their  profits  were  not  increased,  owing 
to  the  quantity  for  sale  being  proportionately  less.  The  clothiers  and 
allied  trades  insisted  on  the  decay  in  this  industry,  through  the  "  ill-vent 
of  cloth,"  while  the  sheep  farmers  protested  that,  for  the  same  reason, 
their  wool  could  not  be  sold  at  "  any  reasonable  priced"  A  writer  of 
an  exhaustive  treatise  on  the  subject  shows  how  it  came  about  that, 
while  full  weight  was  given  to  pleas  for  abatements,  few  if  any  increased 
assessments  were  obtained.  The  fault  lay  with  the  Commissioners  of  the 
subsidy  and  the  assessors,  some  of  whom  "  knew  too  much,  some  too 
little,  some  were  for  show,  some  for  protection  of  their  friends,  some 
remiss  and  slack  and  others  distaste  the  service.""  The  greatest  blame 
is  accorded  to  those,  described  as  the  "  populares,"  "  who  see  and  will 
not  see — and  what  they  see  is  with  the  eyes  of  partiality.*"  These 
assessors  sought  popularity  by  "smooth  words,  pleasing  talk... and 
pitying  the  poor.""  The  returns,  received  from  them,  were  found  to 
be  largely  composed  of  the  names  of  those  who  were  exempt  from  the 
payment  of  the  tax.  There  was  a  prevalent  opinion  amongst  the 
officials  that  "men  must  not  rise  in  the  subsidy-book,  although  they 
rise  in  wealth.""  For  these  reasons,  there  were  few  increases  in  assess- 
ments and  very  many  reductions  or   total  remissions.     For  instance, 

1  Vide  infra,  iii.  p.  526. 

2  Lansd.  MS.  (Brit.  Mus.),  59  (57). 


CHAP,  v.]    The  Burden  of  Taxation  1588-1603  95 

amongst  the  Commissioners  themselves,  the  highest  valuation  was  <£^100 
a  year  rental  in  a  single  case,  one  other  at  .^'SO,  another  at  £bO  and 
only  some  few  at  £^5  to  d^40.  Many  knights  and  justices  of  the  peace 
paid  on  <£20  a  year,  others  under  that  amount,  and  some  knights 
escaped  assessment  altogether ^  This  statement  is  confirmed  by  that 
of  Sir  Robert  Cecil  in  Parliament  on  March  2nd,  1593,  who  said  that 
the  maximum  annual  valuation  of  lands  for  any  individual  was  only 
ci^80  a  year,  and  the  highest  rating  of  the  capital  value  of  personal 
property  in  London  was  £9,00  and  that  in  only  four  or  five  cases ^ 
The  same  under-valuation  obtained  with  those  of  more  moderate  means. 
Men,  who  had  been  assessed  at  £^  or  £5  personal  property,  were  now 
able  to  pay  on  twice  these  sums,  respectively,  but  the  old  rates  had  been 
continued  ^ 

It  follows  that,  under  this  system,  the  produce  of  the  tenth  and  the 
fifteenth  would  continue  to  fall,  and  that  therefore,  while  the  number 
of  these  levied  is  some  indication  of  the  burden  of  taxation,  it  fails  to 
provide  a  completely  accurate  standard.  A  better  index  is  obtained 
from  the  total  sums,  realized  by  the  grants  made  by  the  Parliaments 
from  1588  to  1601,  which  produced  over  .£'1,950,000^  Owing  to  the 
data,  required  for  balancing  the  various  items  of  Extraordinary  Revenue 
and  Expenditure,  being  so  compiled  that  they  can  be  best  co-ordinated 
from  October  to  November  1590,  there  is  some  difficulty  in  fixing  the 
amount  from  the  end  of  1588  to  that  date  to  be  added  to  the  sum  that 
can  be  assigned  to  the  period  from  1590  to  1603,  so  as  to  provide  a 
complete  view  of  the  war-expenditure  after  the  Armada  had  been  de- 
feated until  the  end  of  the  reign  of  Elizabeth.  During  the  two  years 
from  October  1588  to  October  1590,  the  largest  item  of  Extraordinary 
Expenditure  was  the  cost  of  the  troops  in  the  Low  Countries.  This 
may  be  taken  to  have  been  (as  stated  by  Burghley)  o£^l  30,000  per  annum 
or  .^260,000  in  alP.  The  "Portugal  voyage^'  in  1589  cost  ^61,019', 
and  the  outlay  on  other  naval  expeditions  may  be  estimated  at  =£^35,000', 
making  altogether  ^^356,01 9.  The  expense  of  the  operations  in  Flanders, 
France  and  Ireland  from  the  end  of  1590  was  .£'3,057,226,  to  which  is 
to  be  added  the  estimated  cost  of  the  Navy  during  the  same  period  (over 

1  ''  A  Small  Treatise  or  Discourse  touching  the  Diminution  of  the  Subsidie  and 
how  it  may  be  justly  raised,"  by  William  [.?  Tucker] — Harl.  MS.  (Brit.  Mus.)  188. 

2  D'Ewes,  Journals,  p.  483. 

3  ''A  Small  Treatise...  of  the  Subsidie,"  ut  supra. 

*  Including  the  subsidies  of  the  Clergy —  Vide  infra,  iii.  p.  526. 

^  Cobbett,  Parliamentary  History  of  England,  London,  1806,  i.  p.  870,  cf.  State 
Papers,  Domestic,  Elizabeth,  ccxl.  69,  72 ;  Calendar,  1591-4,  pp.  326,  327. 

®  Vide  infra,  iii.  p.  527. 

7  Tlie  voyage  of  Frobisher  (1589)  cost  £11,320,  that  of  Hawkins  and  Frobisher 
(1590)  £17,275,  vide  infra,  iii.  p.  502. 


96     The  War- Expenditure  to  he  paid  1588-1603    [chap.  v. 

and  above  the  ordinary  charge)  of  ^475,000  and  <£>100,000  debt  paid 
off,  making  a  war-expenditure  of  ^^3,988,245.  The  Extraordinary 
Revenue  from  1588  to  1590  included  subsidies  of  the  clergy  and  laity 
of  .^1 82,545 ^  proceeds  of  sales  of  land  .£*1 26,305*  and  prize-money, 
which  may  be  estimated  at  <£*7,500^  It  follows  then  that,  over  the 
whole  period  from  1588  to  1603,  the  parliamentary  grants  only  met 
one-half  of  the  Extraordinary  Expenditure.  The  deficiency  was  partly 
made  good  by  the  sales  of  land,  by  prize-money,  repayments  of  former 
loans  from  the  Low  Countries  and  France,  with  forfeitures  from  persons 
convicted  of  treason.  In  this  way,  ,^924,988  was  provided,  leaving  still 
a  deficiency  of  ,£1,103,007  which  was  met  by  the  surplus  Ordinary 
Revenue : 

Summary  Extraxyrdinary  Expenditure  1588  {Oct.)  to  1603. 

Cost  of  Military  and  Naval  expeditions         £3,988,246 

Subsidies,  clergy  and  laity £1,960,250 

Sale  of  Lands 645,493 

Prizes 207,500 

Repayments,  Fines,  &c 71,995 


2,885,238 

Deficiency  met  by  surplus  Ordinary  Revenue         ...         £1,103,007 

These  figures  show  the  importance  of  the  surplus  from  the  Ordinary 
Revenue,  without  which  the  burden  from  taxation  would  have  been 
greater.  So  far  the  effect  of  that  surplus  was  negative  rather  than 
positive;  but,  in  being  reached  simultaneously  with  increased  alloca- 
tions to  Ordinary  Expenditure,  it  required  an  advance  in  the  Ordinary 
Revenue.  In  1571-2  the  nett  proceeds  had  been  <£209,912,  in  1588-9 
^258,419  and,  on  the  average  of  the  five  years  1598  to  1603,  .£^326,066*. 
Tlie  remarkable  increase  at  the  later  date  is  noteworthy,  since  it  was 
accomplished  in  spite  of  depressed  trade  (which  would  tend  to  diminish 
the  income  from  Customs  and  impositions)  and  the  sale  of  Crown 
lands.  Indeed,  the  growth  of  the  Ordinary  Revenue,  and  especially  the 
augmented  income  from  Customs',  constitutes  an  apparently  convincing 
statistical  argument  against  the  complaints  made  of  the  decay  of  trade 
at  this  time.     The  explanation,  however,  is  not  far  to  seek.     Prior  to 

1  ^  of  the  subsidy  of  the  clergy  of  1586-7  and,  roughly,  the  first  half  of  that  of 
the  laity  fell  within  this  period. 

2  State  Papers,  Domestic,  Elizabeth,  ccxxxviii.  30 ;  Calendar j  1591-4,  p.  8. 


3  Vide  infra,  m.  pp.  501,  516. 

*  Ibid.,  III.  pp 

*  Revenue  from  Customs  and  Impositions : 

1571-2       

£  62,439 

1575-6       

69,240 

1588-9       

101,698 

1598-1603  (average) 

121,400 

CHAP,  v.]    Improved  Collection  of  Customs  1588-1603     97 

the  years  of  financial  stress,  while  the  revenues  were  prudently  ad- 
ministered, no  strenuous  efforts  were  made  to  obtain  the  highest  possible 
return  from  the  farmers  and  collectors.  Therefore,  during  the  eleven 
good  yeai-s,  the  Customs  do  not  reflect  the  full  amount  of  the  improve- 
ment. When  money  was  required,  schemes  for  increasing  the  Revenue 
were  sought  for  and  carefully  considered.  About  1588  a  change  was 
made  in  the  farm  of  the  "Customs  inwards  of  London  and  the  four 
ports"  (which  provided  about  one-quarter  of  the  whole  income  under 
this  head)  with  the  result  that  the  return  to  the  Crown  was  at  once 
improved  by  .£^1 0,000 ^  The  same  process  was  applied  in  the  other 
branches,  notably  in  ctises  of  tin,  coal  and  lead'' ;  and,  as  a  consequence, 
the  Ordinary  Revenue  increased,  though  trade  was  dull.  Moreover, 
such  increases  in  time  necessarily  involved  additional  payments  by 
merchants.  Just  as  in  the  case  of  the  collection  of  subsidies,  so  in 
that  of  Customs  allowances  had  been  permitted,  but  as  the  farmers 
had  to  pay  into  the  Exchequer  more  and  more,  they,  in  their  turn, 
exacted  full  rates  from  the  traders  who  exported  or  imported.  Thus 
the  cost  of  the  war  had  a  further  consequence,  in  addition  to  the  burden 
of  the  subsidies,  in  tending  to  depress  trade,  by  what  was  virtually  an 
increase  in  the  Customs  actually  paid. 

A  further  burden,  while  more  direct,  is  less  easily  calculable.  This 
was  that  for  musters  of  levies  in  the  inland  counties  and  on  the  ports 
for  ships.  The  tax,  so  demanded,  is  stated  to  have  been  "  higher  than 
the  subsidy  itself  V'  and  it  follows  that  the  pressure  of  the  two,  on  the 
people  rated,  was  considerable. 

The  interruption  of,  and  added  danger  to  trade  by  the  war  produced 
serious  losses,  and  as  early  as  1588,  the  clothiers  were  making  "a  grievous 
complaint  of  the  ill  vent  of  cloth  "  and  the  distress  in  Gloucester  and 
Wilts  from  this  cause  was  so  extreme  that  the  people  were  ready  "  to 
mutiny*,'"  while,  in  1591,  it  was  reported  that  many  merchants  had 
become   bankrupt   "through   loss   of  traffic^"      English    traders   were 

*  State  Papers,  Domestic,  Elizabeth,  ccxxxix.  67 ;  Calendar,  1591-4,  p.  64. 

2  Ibid.,  ccLi.  100,  120 ;  vide  infra,  iii.  p.  517. 

3  '^Subsidies  be  in  the  valuation  of  every  man's  lands  and  goods  by  records 
called  the  Queen's  Books  ;  and,  according  to  men's  valuation  of  subsidies,  are  they 
at  all  other  charges  as  to  the  wars  and  in  time  of  muster  with  horse  and  armour ; 
and  this  charge  maketh  men  so  unwilling  to  be  raised  in  the  subsidy  ;  but,  if  these 
subsidies  brought  in  no  other  charge  with  them,  they  would  be  yielded  willingly. 
But  the  tail  and  appendage  of  it  being  so  great,  and  higher  than  the  subsidy  itself 
is  the  reason  that  men  are  so  unwilling  to  yield  it" — D'Ewes,  Journals,  p.  494. 

*  A  Treatise  of  Commerce,  wherein  are  shewed  the  Commodities  arising  by  a  wel 
ordered  and  ruled  Trade  such  as  that  of  the  Societie  of  Merchants  Adventurers  is  proved 
to  bee,  written  principailie  for  the  better  Information  of  those  who  doubt  the  Necessarie- 
ness  of  the  said  Societie,  by  John  Wheeler,  Middleburg,  1601,  pp.  61,  62. 

^  State  Papers,  Domestic,  Elizabeth,  ccxl.  143 ;  Calendar,  1591-4,  p.  162. 

s.  c.  I.  7 


98  Causes  of  Trade-Depression  1591-6      [chap.  v. 

now  excluded  from  Spain,  Portugal,  Barbary,  the  Levant  and,  to  a 
considerable  extent,  from  Poland,  Denmark  and  Germany  ^  Moreover, 
foreign  trade  was  conducted  at  very  great  risk,  since  captures  of 
merchant  vessels  by  the  enemy  were  not  infrequent;  and,  after  the 
taking  of  a  fleet  of  ships  from  Bordeaux,  it  was  said  by  Raleigh  in 
1593  that  the  merchants  of  Newcastle  "  lay  still  from  fear,"  while  "  our 
trades  decay  every  day,  and  our  poverty  increaseth  every  day  more  and 
more'^."  As  time  went  on,  it  became  clear  that  the  loss  from  stoppage 
of  trade  and  the  taking  of  ships  by  the  enemy  was  far  from  being  made 
good  by  the  prizes,  obtained  by  the  privateering  syndicates.  From  1588 
to  1591  there  is  no  record  of  any  captures  of  considerable  value.  In 
1592  an  expedition,  sent  out  by  Raleigh,  secured  a  prize,  valued  at 
<£*1 50,000.  A  rival  syndicate,  formed  by  the  Earl  of  Cumberland,  had 
a  claim  for  salvage,  and  Elizabeth  (who  had  a  small  share  in  one  of  the 
syndicates)  took  possession  of  the  ship,  under  the  plea  of  settling  the 
dispute.  The  capital,  ranking  for  division  in  both  the  privateering 
fleets,  was  a  little  over  ^50,000^ ;  so  that,  if  the  prize  had  been  divided 
proportionately  between  them,  the  division  would  have  been  300  per 
cent,  gross.  The  award  of  Elizabeth  provided  a  profit  (gross)  of  100 
per  cent,  for  Cumberland  and  the  London  merchants ;  while  Raleigh 
received  only  <£'24,000,  which,  according  to  his  own  account,  left  him  at 
a  loss,  though  this  was  the  most  valuable  single  ship  taken  during  the 
war^  This  action  by  the  Queen  was  unfortunate;  and,  when  the 
London  ship-owners  experienced  delay  in  obtaining  the  share  they 
claimed  as  due  to  them  from  the  Cadiz  voyage  of  1596,  there  was  a 
distinct  tendency  for  the  privateersman  to  avoid  the  larger  expeditions. 
These,  as  investments,  suffered  from  different  commanders  having  dif- 
ferent ideas.  The  man,  appointed  by  a  group  of  private  adventurers, 
desired  to  obtain  as  much  plunder  as  possible,  while  the  naval  captains, 
though  they  had  orders  not  to  neglect  this  side  of  the  enterprize,  had 
also  to  obey  instructions  from  which  profit,  in  a  pecuniary  sense,  was 
unlikely  to  result.  The  consequence  of  this  friction  was  that  the  in- 
dependent adventurers  were  forced  to  act  alone,  and  also,  to  some 
extent,  privateering  was  discouraged ^    This  had  a  considerable  effect  on 

1  State  Papers^  Domestic,  Elizabeth,  cclxvi.  3 ;  Calendar ^  1598-1601,  p.  2. 

2  D'Ewes,  Journals,  p.  492. 

3  Raleigh  and  adventurers  under  him         ...         ...         26,200 

London  Merchants 6,000 

Cumberland 19,000 

£51,200 
*  Publications  Navy  Records  Soc,  xxii.  p.  295.     The  valuation  of  this  ship  is 

independent  of  a  large  quantity  of  precious  stones  on  board,  most  of  which  were 

embezzled.     Their  value  is  said  to  have  been  £100,000. 

^  Thus  in  November  1596  the  Lord  Mayor  wrote  to  the  Privy  CouucU  in  order 


CHAP,  v.]         Decline  in  Privateering  1591-6  99 

the  whole  political  situation.  Out  of  a  war-expenditure  of  3^  millions 
from  1590  to  1603,  about  three  millions  were  spent  on  the  land  forces 
and  about  half  a  million  on  the  extraordinary  expenses  of  the  navy^ 
But,  if  the  true  import  of  the  situation  had  been  recognized,  it  was  an 
efficient  naval  service,  that  would  have  been  able  to  terminate  the  war 
in  favour  of  England.  Spain  had  come  to  depend  entirely  on  the  arrival 
of  the  treasure-fleets  for  the  canying  out  of  commercial  and  political 
obligations.  In  the  words  of  Mr  Oppenheim,  "  the  arrival  of  the  fleets 
was  awaited  with  strained  anxiety.  The  effects  of  their  non-aiTival  were 
felt  equally  in  the  hut  of  the  Spanish  peasant,  payment  for  whose  wool 
was  to  be  made  from  their  lading,  in  the  offices  of  the  German  and 
Italian  financiers,  in  the  warehouses  of  the  Swedish  or  Dantzig  merchants 
who  supplied  naval  stores,  in  the  camps  of  Flanders  and  in  the  cities  of 
France  where  civil  war  was  bought  with  the  silver  of  Potosi^"*"*  At  this 
time,  out  of  a  total  revenue  of  14 J  million  ducats,  over  two  millions 
were  derived  from  the  West  Indies  and  more  than  a  million  and  a  half 
from  the  East  Indies*.  It  follows  that  the  true  source  of  the  strength 
of  Philip  lay  in  the  mines  of  America,  and,  after  1588,  his  weakness  was 
the  long  sea-route,  that  had  to  be  traversed  before  these  resources  could 
be  made  available.  Had  less  been  spent  on  land  operations  and  the 
funds  so  released  been  used  to  equip  the  Navy  to  cruise  across  this  line 
of  communication,  while  at  the  same  time  privateers  were  encouraged  to 
make  raids,  by  receiving  fair  treatment,  when  they  were  successful,  in 
being  permitted  to  enjoy  the  fruits  of  the  voyages  unmolested ;  then,  it 
seems  possible  that  sufficient  plate-ships  would  have  been  captured  or 
destroyed  to  have  rendered  it  impossible  for  Philip  to  keep  his  troops  in 

to  express  "the  dissatisfaction  of  the  citiisens"  at  the  poor  results,  financially,  of 
the  last  two  voyages  to  which  they  had  contributed,  when  directed  to  do  so  by 
Elizabeth — Remembrancia,  ii.  68,  summarized  in  Analytical  Indexes  to  vols.  ii.  and 
VIII.  of... the  Remembrancia,  1870,  p.  38. 

1  Mr  Oppenheim  {Publications  Navy  Records  Soc.,  xxii.  p.  10)  estimates  the 
expense  of  naval  expeditions  from  1585  at  a  million  and  that  of  land  operations 
at  four  and  a  half  millions.  According  to  the  figures  and  estimates  in  the  text,  the 
former  from  1585  to  1603  would  be  as  follows — 

The  Armada £137,829 


Navy  (extraordinary)  1585-90 

„  „  1590-1603 

Navy  (ordinary)  1585-1603 

Total  


101,019 
475,000 
275,000 


£988,848 

To  this  is  to  be  added  any  payments  for  the  sea  forces,  made  through  the  treasurers 
of  the  armies  in  the  Low  Countries,  France  or  Ireland. 

2  Publications  Navy  Records  Soc.,  xxiii.  pp.  309,  310. 

3  A  Discourse  of  the  State  of  Spayne,  written  in  1607,  by  Sir  Charles  Corn- 
waleys  in  Somers'  Tracts  (1751),  xiv.  p.  440.  After  the  war  it  was  estimated  that 
the  Spanish  debt  was  160  million  ducats. 

7—2 


100  The  Crisis  of  1597  [chap.  v. 

the  field.  As  it  was,  England  surrendered  the  advantage,  secured  by 
the  defeat  of  the  Armada,  by  concentrating  its  chief  resources  on  a 
land- war,  where  it  was  at  a  disadvantage;  and  therefore  the  struggle 
was  protracted  and  proved  financially  exceedingly  burdensome  to  the 
country. 

The  continuance  of  the  war,  involving  loss  of  trade  and  shipping  as 
well  as  high  taxation,  was  followed  by  further  events  prejudicial  to 
commerce.  From  1594  until  1597  there  was  a  great  dearth,  and  the 
price  of  wheat  and  other  provisions  was  very  high.  In  1594  and  1595 
the  quotation  of  com  was  from  5Qs.  to  53<y.  ^d.  a  quarter,  rising  sharply 
in  1596  to  80^.  and  finally  to  120,9.  which  was  repeated  in  1597\ 
Tillage  was  described  as  being  very  greatly  decayed,  and  bread-riots 
were  frequent 2.  The  distress  in  rural  districts  was  accentuated  by  the 
rise  in  rents  that  had  taken  place  during  the  time  of  prosperity  from 
1575  to  1586^  The  wool-trade  at  the  same  time  suffered,  since  in 
1597  the  Merchant  Adventurers  were  expelled  from  Germany ;  and,  for 
several  years,  it  was  difficult  to  obtain  a  market  for  wool*.  The  situation 
was  so  serious  that  it  was  reported  that  this  company  was  on  the  eve  of 
dissolving,  and  the  whole  trade  of  the  city  was  described  as  being  much 
impaired  and  its  traffic  greatly  diminished^  The  cumulative  effect  of 
these  misfortunes  was  a  period  of  considerable  distress  in  1597  and  part 
of  1598,  which  approximated  a  crisis.  That  the  Dutch  succeeded  in 
carrying  on  a  trade  with  Spain,  in  spite  of  the  efforts  of  Philip,  pro- 
duced great  dissatisfaction  amongst  the  mercantile  classes  in  England. 
It  was  represented  that  "  we,  for  theire  sake  and  defence  entring  into 
the  warre,  and  being  barred  from  all  commerce  and  entercourse  of 
merchandize,  they  in  the  meantime  thrust  us  out  of  all  trafficke  to  our 
utter  undoing  (if  in  time  it  be  not  looked  into)^"  The  difficulty, 
experienced  by  Elizabeth  in  endeavouring  to  obtain  a  loan  of  .£'150,000, 
is  another  symptom  of  the  acute  depression  of  the  time.  The  mention 
of  it  made  the  citizens  "  shrinke  and  pull  in  theire  homes' "" ;  and,  after 

1  State  Papers,  Domestic,  Elizabeth,  cclxvi.  90 ;  Calendar ,  1598-1601,  p.  36 ; 
Maitland,  History  of  London,  i.  p.  280 ;  Chronicon  Preciosum,  pp.  123,  124 ; 
Analytical  Indexes  to  vols.  ii.  and  viii.  of... the  Remembrancia,  1870,  pp.  61-3. 

2  State  Papers,  Domestic,  Elizabeth,  cclvii.  80,  cclxii.  151,  cclxiii.  55 ;  Calendar, 
1595-7,  pp.  217,  401,  420. 

3  A  Quip  for  an  upstart  Courtier:  Or  a  quaint  Dispute  between  Velvet-breeches  and 
Cloth-breeches.  Wherein  is  plainely  set  down  the  Disorder  in  all  Estates  and  Trades, 
by  R.  Greene,  1592,  in  Harleian  Miscellany  (1745),  v.  pp.  376,  388,  396. 

*  State  Papers,  Domestic,  Elizabeth,  cclxix.  6 ;  Calendar,  1598-1601,  p.  130 ; 
Camden,  Eliz.,  ut  supra,  iii.  p.  748.  Calendar  Salisbury  MSS.,  vii.  pp.  307,  308 ; 
Early  Chartered  Companies,  by  G.  Cawston  and  A.  H.  Keane,  London,  1896,  p.  27. 

^  Letters  written  by  John  Chamberlain  (Camden  Soc.  1861),  p.  31. 

«  Ibid.,  p.  12.  7  ij^id,^  p.  35. 


CHAP,  v.]    Captures  and  Losses  in  Shipping  1597-1603    101 

efforts  extending  over  six  months,  it  was  found  impossible  to  obtain 
two-thirds  of  the  sum  required^,  so  that  the  Queen  was  forced  "to 
descend  to  mean  men"  and  "pick  up  money  here  and  there*"  as  it 
could  be  obtained'^.  Some  return  of  confidence  arose  from  the  rumoured 
pefice  negotiations;  but  the  outlook  again  became  overcast,  through 
anticipations  of  a  Spanish  invasion  and  by  the  serious  nature  of  the 
revolt  in  Ireland.  The  concluding  years  of  the  war  made  great  demands 
on  the  Crown  finances,  more  than  a  million  and  a  half  being  spent  in 
Ireland  alone  from  August  14th,  1598*.  Against  this  and  other  charges, 
there  was  part  of  the  subsidy  of  1597  still  to  be  received;  and  in  1601 
Parliament  granted  eight-tenths  and  eight-fifteenths,  which,  on  the  basis 
of  collection  early  in  the  reign,  should  have  realized  three-quarters  of  a 
million,  but  actually  produced  only  a  little  over  half  a  million ^  The 
remainder  of  the  funds  required  was  obtained,  with  considerable  difficulty, 
by  sales  of  land,  savings  from  the  Ordinary  Revenue  and  from  miscel- 
laneous extraordinary  receipts,  such  as  prize-money.  Privateering  was 
prosecuted  vigorously ;  and  Sir  John  Gilbert  was  said  to  have  taken  a 
ship,  which,  if  proved  a  prize,  was  likely  to  be  worth  d£'100,000^  This 
capture  was  made  with  the  assistance  of  four  other  privateers^,  owned 
by  a  syndicate  formed  by  Alderman  John  Wattes,  who  had  been  very 
successful  in  previous  expeditions'^.  The  prizes  of  the  latter  were  valued 
at  ^1 8.625 «,  while  in  February  1603  it  was  reported  that  Captain 
Newport  had  taken  five  treasure-ships^.  Apart  from  individual  prizes 
of  great  value,  there  is  sufficient  evidence  to  show  that  the  adventurers 
at  this  time  met  with  very  considerable  success^".  This,  however,  was 
only  one  side  of  the  national  account  in  relation  to  this  phase  of  the  war. 
The  captures  of  English  shipping  were  very  great.  In  1 598  the  Russia 
company  was  exceptionally  unfortunate,  losing  two  or  three  ships  in  this 
way  on  the  voyage  to  Archangel  and  one  of  those  returning";  while,  three 
years  later,  the  Levant  company  had  one  of  its  vessels  taken,  which  was 
valued  at  £4iOfiOO^^.  In  1600  the  Danes  and  Norwegians  began  to  make 
reprisals  on  English  shipping ^^    The  Dunkirk  privateers  were  very  busy 

^  Chamberlain,  Letters,  ut  supra,  p.  37-  ^  Ihid.,  p.  43. 

3  Journals  of  the  House  of  Commons,  i.  p.  395  ;  Parliamentary  Debates  in  1610, 
edited  from  the  Notes  of  a  Member  of  the  House  of  Commons,  by  S.  R.  Gardiner 
(Camden  Soc.  1862),  p.  4. 

*  Vide  infra,  iii.  p.  526. 

^  Chamberlain,  Letters,  ut  supra,  p.  127. 

fi  State  Papers,  Domestic,  Elizabeth,  cclxxxiii.  59 ;  Calendar,  1601-3,  p.  163. 

'  Publications  Navy  Records  Soc. ,  xxii.  p.  268. 

8  State  Papers,  Domestic,  Elizabeth,  cclxxxvi.  32 ;  Calendar,  1601-3,  p.  275. 

^  Chamberlain,  Letters,  ut  supra,  p.  180. 

^'^  Publications  Navy  Records  Soc. ,  xxiii.  p.  246. 

"  Chamberlain,  Letters,  ut  supra,  p.  18.  ^^  Ibid.,  p.  109. 

^^  Camden,  Eliz.,  ut  supra,  iii.  p.  824. 


102  The  Plague  of  1602-3  [chap.  v. 

along  the  coasts,  even  taking  vessels  in  the  harbours  ^  and  in  1600  and 
1601  some  districts  were  so  terrorized  that  no  ship  dared  to  leave  the 
ports  ^ 

It  follows  that  the  loss  of  trade  through  the  plague  in  1592^  and  bad 
seasons,  the  interruption  of  the  woollen  industry  and  the  exclusion  of 
English  merchants  from  the  Spanish  dominions — all  influences  tending 
towards  depression — became  intensified  towai'ds  the  end  of  the  war  by 
numerous  captures  of  ships  and  goods.  The  final  misfortune  was  the 
serious  outbreak  of  the  plague  which  began  in  1602,  and  which  reached 
its  height  in  September  1603.  During  the  year  December  1602  to 
December  1603,  it  was  reported  that  38,138  persons  had  died  of  the 
pestilence  in  London'*,  this  being  close  on  one-quarter  of  the  estimated 
population  at  that  time^  Merchants,  like  many  of  the  other  in- 
habitants, had  fled  to  escape  the  risk  of  infection,  and  trade  was 
described  as  "having  utterly  ceased"  for  a  period  of  almost  six 
months  ^ 

For  these  reasons  it  is  only  to  be  expected  that,  during  this  period, 
,  the  existing  joint-stock  companies,  as  well  as  the  system  as  a  whole, 
>i  would  remain  in  a  condition  of  arrested  development.  Trading  outside 
England  was  subject  to  new  and  serious  risks,  while  the  series  of  minor 
crises,  as  well  as  the  discussions  about  monopolies^,  tended  to  restrict 
invention  at  home.  Joint-stock  privateering,  which  had  been  so  pro- 
minent prior  to  1590,  had  declined  for  several  years  and  only  revived 
again  towards  the  close  of  the  war.  The  Spaniards  in  America  were 
adopting  precautions,  which  made  captures  a  matter  more  of  chance 
than  of  daring.  In  the  larger  expeditions,  the  loss  of  Granville  and 
the  Revenge  in  1591  and  the  deaths  of  Hawkins  and  Drake  in  1594 
were  far  from  being  off*-set  by  the  capture  of  the  Madre  de  Dios 
in  1592. 

^  Chamberlain,  Letters.,  ut  av/pray  p.  101 ;  Analytical  Indexes  to  vols.  ii.  and  viii. 
of... the  Remembrancia,  p.  39. 

2  Calendar  Salisbury  MSS.,  ix.  343,  350. 

3  The  deaths  from  plague  in  1592  in  London  were  11,503 — London's  Lord  Have 
Mercy  upon  usj  A  True  Relation  of  the  Seven  Modem  Plagues  or  Visitations  in  London, 
1665,  Somers'  Tracts  (1750),  vii.  p.  53;  An  Historical  Account  of  the  Several  Plagues... 
since... 134l6,  by  Dale  Ingram,  1755,  p.  2;  Natural  and  Political  Observations  men- 
tioned in  a  following  Index  made  upon  the  Bills  of  Mortality,  by  Captain  John  Graunt, 
1665,  p.  65. 

*  The  First  Letter  Book  of  the  East  India  Company,  edited  by  Sir  George  Bird- 
wood,  p.  39;  London's  Lord  Have  Mercy  upon  u,s;  Dale  Ingram,  An  Historical 
Account  of  Several  Plagues,  p.  2. 

^  The  population  of  London  was  estimated  to  have  been  about  160,000  by 
Giovanni  Botero — Anderson,  Annals  of  Commerce,  ii.  p.  235. 

8  First  Letter  Book  of  the  East  India  Company,  p.  30. 

7  Vide  infra,  Chapter  vi. 


CHAP,  v.]       Position  of  Companies  1587-1603  103 

The  war  told  especially  on  the  Levant  trade  which  began  to  fall  on 
evil  times  towards  the  end  of  the  century.  At  first  the  company  was 
accustomed  to  a  return  of  about  300  per  cent.^,  but  during  the  war 
many  ships  were  captured  and  the  currant  monopoly  was  heavily 
burdened  with  taxation,  with  the  result  that  there  was  dissatisfaction, 
and  the  privileges  of  the  company  were  suspended.  Eventually  it  was 
re-organized,  but  as  a  regulated  company*.  During  the  last  years  of 
the  existence  of  this  body  under  joint-stock  organization,  a  group  of 
its  members  was  instrumental  in  forming  the  East  India  company, 
which  was  incorporated  in  1600.  The  closeness  of  the  connection 
between  the  two  undertakings  is  shown  by  the  fact  that  the  same 
volume  was  used  as  a  letter-book  by  the  Levant  adventurers  and  for 
the  earliest  minutes  of  the  East  India  merchants'.  If  the  origin  of 
the  capital,  used  for  the  foundation  of  the  India  trade,  be  traced  back, 
it  will  be  found  to  have  a  curious  history.  Much  of  that,  employed 
in  establishing  the  Levant  company,  came  from  the  gains  of  Drake'^s 
privateering  in  the  voyage  round  the  world.  Then,  out  of  the  profits 
of  the  Levant  trade,  a  considerable  part  of  the  resources,  required  to 
start  the  East  India  venture,  was  provided.  As  yet,  however,  the  latter 
was  in  a  purely  experimental  condition,  and  its  development  required 
better  times.  The  same  remark  is  true  of  other  promising  enterprizes, 
the  Russia  company  had  discovered  whaling  grounds*,  Raleigh  was  con- 
tinuing, under  great  disadvantages,  to  act  as  the  pioneer  of  colonizing"* ; 
and,  in  the  Parliaments  of  1597  and  1601,  proposals  had  been  made  for 
the  draining  of  low-lying  lands  at  home*.  With  the  return  of  more 
settled  conditions,  these  various  activities  became  prominent  in  the  next 
period. 

Probably  of  all  the  companies,  that  trading  to  Russia  should  have 
been  least  disturbed  by  the  war.  Its  trade  route  lay  outside  the  area 
of  hostilities,  and  the  numerous  expeditions  led  to  an  increase  in  the 
demand  for  some  of  the  commodities  it  imported.  Unfortunately  it 
suffered  from  some  special  disadvantages.  The  third  company  started 
in  1586-7  with  a  small  capital ;  and,  in  the  commercial  world  after 
1587,  it  was  difficult  to  obtain  more.  Even  though  interest  was 
relatively  low — it  appears  to  have  been  about  8  per  cent,  on  loans  to 
Elizabeth — this  was  an  evidence  of  want  of  confidence,  rather  than  of 
an  abundant  supply  of  capital.  Thus  in  three  years  following  1586, 
dividends  of  profits  were  declared  of  11  per  cent.,  9S^  per  cent,  and 

*  Anderson,  Annals  of  Commerce,  ii.  p.  299.  ^  Vide  infraj  ii.  p.  88. 

3  The  Dawn  of  British  Trade  to  the  East  Indies y  by  Henry  Stevens,  London,  1886, 
pp.  226-83 ;  cf.  infra,  ii.  pp.  91,  97. 

*  Vide  infra,  ii.  p.  47.  ^  /Wd.,  ii.  p.  244. 
8  Ibid.,  II.  pp.  352,  363. 


104  Position  of  Companies  1587-1607       [chap.  v. 

30  per  cent.,  respectively.  It  was  unfortunate  that,  in  making  up  the 
accounts,  insufficient  provision  was  made  for  doubtful  debts,  and  it  was 
found  necessary  in  each  case  to  make  an  assessment  on  those  who  had 
received  these  distributions.  By  means  of  these  levies,  the  second  pay- 
ment was  reduced  to  9J  per  cent,  and  the  third  to  f  per  cent.^  Other 
difficulties  arose  from  the  attack,  made  on  this  company  in  the  Parlia- 
ment of  16042;  and,  in  addition,  there  were  disputes  between  the 
governor  and  the  commonalty  about  the  private  trade  carried  on  by 
the  former  ^  The  delay,  involved  in  the  elucidation  of  claims  arising 
out  of  this  matter,  prolonged  the  existence  of  the  existing  joint-stock, 
which  appears  to  have  been  wound  up  about  1607. 

The  society  of  the  Mines  Royal  was  also  troubled  by  financial 
difficulties,  and  especially  the  subsidiary  company,  formed  by  the 
German  miners,  which  in  1600  was  forced  to  suspend  operations,  until 
it  could  obtain  payment  for  copper  sold*.  There  was  nearly  being  a 
serious  dispute  between  this  society  and  that  of  the  Mineral  and  Battery 
Works.  The  former  had  the  right  of  mining  the  precious  metals  in  the 
whole  of  Wales,  while  the  latter  had  iron  works  (concerning  which  there 
had  been  the  numerous  disputes  mentioned  in  a  previous  chapter"^)  in 
Monmouthshire.  One  of  the  farmers  of  a  portion  of  these  works  used 
his  lease  to  cover,  as  it  was  alleged,  the  smelting  of  large  quantities  of 
silver  ore,  without  paying  a  royalty  to  the  Mines  Royal  ^. 

The  period  of  depression  shows  itself  in  the  change  that  now  appears 
in  the  tenure  of  the  wire  and  iron  works.  Up  to  1587  each  new  offer, 
for  the  farm  of  these,  produced  an  increased  rent.  Possibly,  in  view  of 
the  favourable  impression  such  competition  would  produce  as  to  the 
profits,  the  society  ran  the  works  on  its  own  account  for  a  number  of 
years,  but  it  was  not  long  before  a  reversion  was  made  to  the  farming 
system,  though  at  a  greatly  reduced  rent'. 

In  one  respect  the  society  of  the  Mineral  and  Battery  Works  was 
very  fortunate.  It  was  able  to  obtain  an  act,  prohibiting  foreign  wool- 
cards  in  1601,  and  it  escaped  condemnation  in  that  Parliament,  though 
it  exercised  two  monopolies :  since  the  bill,  discussed,  only  applied  to 
patents  granted  to  individuals.  When  the  subject  was  dealt  with  in 
1604,  the  investigation  was  confined  to  bodies  engaged  in  foreign 
trade,  so  that  this  society  was  outside  the  range  of  censure  on  both 
occasions^. 

1  Vide  infra,  ii.  pp.  48,  49.  In  the  summary  in  the  text  the  dividends  and 
assessments  are  given  in  the  nearest  fraction  per  cent.  The  exact  sums  are  stated 
in  the  account  of  this  company. 

2  Vide  infra,  p.  127.  ^  Ibid.,  ii.  p.  52. 

*  Ibid.,  II.  p.  399.  ^  Vide  supra,  p.  66. 

6  Vide  infra,  ii.  p.  422.  ^  Ibid.,  ii.  pp.  421-3. 

8  Ibid.,  II.  p.  424. 


CHAPTER  VI. 

The  Discussion  of  Monopolies,  1597-1604. 

The  strain  of  the  war  with  Spain  showed  itself,  not  only  in  high 
taxation  in  England,  but  also,  to  a  certain  extent,  in  a  relaxation  of 
supervision  in  the  internal  management  of  the  State.  The  policy 
of  avoiding  foreign  complications,  €is  far  as  possible,  during  the  earlier 
part  of  the  reign  of  Elizabeth  had  given  her  ministers  time  and 
opportunity  to  control  domestic  affairs.  After  the  Armada  there  were 
successive  naval  and  military  expeditions,  which  had  to  be  prepared 
generally  at  short  notice.  The  political  situation  emerged  from  one 
crisis  only  to  enter  another,  and  the  best  energies  of  the  greatest 
statesmen  were  concentrated  upon  foreign  politics.  For  these  reasons, 
during  the  closing  years  of  the  sixteenth  century,  there  is  frequent 
mention  of  abuses ;  and  the  people  were  able  to  make  their  voices  heard 
through  Parliament,  since  the  need  for  supplies,  to  carry  on  the  war, 
compelled  Elizabeth  to  call  the  members  together  more  frequently  than 
had  been  thought  necessary  at  the  beginning  of  her  reign.  One  of  the 
abuses  to  which  attention  was  drawn  was  the  existence  of  patents 
of  monopoly.  This  subject  received  particular  attention,  together  with 
a  number  of  others,  in  1597,  owing  to  the  industrial  depression  of  that 
year\  Parliament  endeavoured  to  discover  the  causes  that  had  con-' 
tributed  towards  the  existing  distress,  and  the  "  enormities  growing  by 
patents  of  privilege  and  monopolies  "*"*  were  mentioned^  The  House  of 
Commons  did  not  pass  any  resolution,  but  the  Speaker  brought  the 
matter  under  the  notice  of  Elizabeth.  She,  in  the  speech  at  the  close 
of  the  Parliament,  declared  that  "she  hoped  her  dutiful  and  loving 
subjects  would  not  take  away  her  prerogative,  which  is  the  chiefest 
flower  in  her  garden  and  the  principal  and  head  pearl  in  her  crown 
and  diadem,  but  that  they  will  rather  leave  that  to  her  disposition. 
And  as  her  Majesty  hath  proceeded  to  tryal  of  them  already,  so  she 

1  Vide  supra,  p.  100. 

2  D'Ewes,  Journals,  ut  supra,  p.  554. 


106        The  Crown  and  Monopolies  1597-1600    [chap.  vi. 

promises  to  continue,  that  they  shall  all  be  examined  and  abyde  the  trial 
and  true  touchstone  of  the  law^" 

In  this  manner  the  full  discussion  of  the  subject  was  evaded,  and,  at 
the  same  time,  the  Crown  tacitly  admitted  that  a  royal  grant  of  trading 
privileges  was  subject  to  a  trial  at  law.  How  much  or  how  little  this 
meant  depended  on  the  purity  of  the  administration  of  justice,  which  at 
this  period  was  far  from  being  immaculate.  There  is  some  evidence  that 
an  effort  was  made  to  carry  out  the  promise,  made  to  Parliament  in 
1597^.  About  1600,  an  opinion  was  obtained  from  Coke,  the  Attorney- 
General,  on  the  extent  of  the  prerogative.  He  stated  that  the  Queen 
might  prescribe  orders  for  the  advancement  of  trade,  that  being  a 
point  of  government.  This  was  supported  by  the  precedent  of  the 
incorporation  of  the  Merchant  Adventurers.  She  was  also  entitled 
to  grant  patents  for  the  exercise  of  new  inventions,  as  convenient  to 
the  commonwealth,  that  the  inventor  may  reap  some  reward  for  his 
service  and  she  might  also  grant  privileges  for  new  trading  voyages*. 
These  principles  were  not  illiberal,  considering  the  times ;  but  there 
were  two  loop-holes  by  which  abuses  might  enter.  The  Queen  might  be 
misinformed  as  to  the  novelty  of  some  privileged  trade,  or  again  it  was 
possible  that,  during  a  period  of  some  confusion,  the  beneficiary,  under 
a  certain  grant,  might  use  it  in  an  oppressive  manner,  by  exacting 
something  which  was  not  included  in  the  patent.  There  appears  to  be 
little  doubt  that  there  were  abuses  of  the  latter  kind ;  and  it  was  stated, 
later,  that  some  of  these  had  been  remedied,  and  that  more  would  have 
been  tried  had  it  not  been  for  the  pressure  on  the  courts,  arising  out  of 
the  trials  occasioned  by  the  rebellion  of  Essex*.  At  the  same  time,  it  is 
important  to  notice  that,  at  least  in  one  case,  a  suit  against  a  patent  in 
the  Common  Pleas  was  stayed  by  an  order  from  Elizabeth,  "that  her 
prerogative  might  not  be  called  in  question  ^^  Thus  the  investigation 
was  not  as  complete  as  had  been  expected.  If  Elizabeth  had  been 
prepared  to  allow  a  trial  of  the  patents  in  existence  in  1600  and  1601, 
it  is  probable  that  the  majority  of  them,  as  grants^  would  have  been 
defensible.  At  the  same  time,  the  agents  of  the  patentees  in  many  cases 
had  acted  ultra  vires  and  thereby  occasioned  great  complaint ;  therefore, 

1  D'Ewes,  Journak,  p.  647. 

^  In  1601  Bacon  stated  that  since  the  last  Parliament  fifteen  or  sixteen  patents 
had  to  his  knowledge  been  repealed,  *'some  by  her  Majesty's  own  express  command- 
ment upon  complaint  made  to  her  by  petition,  and  some  by  Qiw  Warranto  in  the 
Exchequer."  Ibid.,  p.  645.  At  the  same  time  another  member  stated  he  had 
''never  heard  the  cry  against  monopolies  greater  and  more  vehement."  Ibid., 
p.  646. 

3  State  Papers,  Domestic,  Elizabeth,  cclxxvi.  81 ;  Calendar,  1598-1601,  p.  521. 

*  D'Ewes,  Journals,  p.  652. 

^  State  Papers,  Domestic,  Elizabeth,  cclxxxii.  8 ;  Calendar,  1601-3,  p.  108. 


CHAP.  VI.]     The  Commons  and  Monopolies  1601  107 

on  the  ground  of  these  abuses,  there  would  have  been  sufficient  reasons 
for  the  quashing  of  some  of  the  patents.  Such  a  course  would  have 
been  the  most  satisfactory  one  in  the  circumstances.  The  reasons  it 
was  not  adopted  completely  were,  first  of  all  and  in  the  main,  the  great 
pressure  of  other  public  business,  secondly  there  may  have  been  the  fear 
that,  although  it  could  have  been  shown  that  in  most  cases  the  abuses 
arose  from  illegal  acts  of  the  patentees  or  their  agents,  the  voiding  of 
the  patents  might  have  appeared  to  reflect  on  the  prerogative.  Finally, 
there  was  a  small  group  of  grants  in  favour  of  some  of  the  younger 
favourites  of  Elizabeth,  and  she  was  unwilling  to  deprive  them  of  the 
privileges,  recently  conferred  upon  them. 

While  these  causes  afford  an  adequate  explanation  of  the  delay  in 
obtaining  a  redress  that  would  have  been  easy  to  grant  without  any 
sacrifice  of  dignity  by  Elizabeth,  such  partial  satisfaction  only  en- 
couraged the  Commons  to  press  the  matter  with  more  insistence  in  the 
Parliament  of  1601.  In  fact  England  was  smarting  under  the  cessation 
of  the  prosperity  that  had  been  enjoyed  from  1575  to  1586,  and,  as  has 
often  happened  since,  the  first  impulse  was  to  seek  for  real  or  imaginary 
abuses  to  be  remedied  by  Parliament.  Amongst  a  number  mentioned, 
the  monopolies  seemed  to  be  in  some  respects  the  line  of  least  resistance, 
and  therefore  attention  was  again  directed  to  this  subject.  On 
November  19,  1601,  this  topic  was  re-introduced  in  a  somewhat  un- 
expected manner.  On  a  bill  being  handed  to  the  clerk  to  be  read, 
a  number  of  members  clamoured  for  another  bill,  intended  to  reform 
abuses  in  the  Exchequer,  and  "some  said  'yea'  and  some  'no'  and 
a  great  noise  there  was^"  Eventually  Laurence  Hide  was  able  to  make 
himself  heard,  and  he  obtained  leave  to  bring  in  a  bill  "  to  explain  the 
common  law  in  certain  cases  of  letters  patents."  In  the  important 
debate  which  followed,  a  number  of  different  lines  of  argument  cross 
each  other.  There  was  the  constitutional  question,  as  to  whether  the 
House  should  proceed  by  bill  or  by  petition  to  the  Queen  or  by  the 
compromise  of  a  petition  for  leave  to  consider  a  bill.  Then  there  were 
numerous  points  of  law,  and  finally  the  economic  question  of  the 
advantages  and  disadvantages  of  monopolies  emerges.  The  grievance 
of  patents  was  prefaced  by  many  speakers  with  extravagant  expressions 
of  condemnation.  The  monopolist  was  described  "  as  the  whirlpool  of 
the  princes'  profit,"  "  the  bloodsucker  of  the  commonwealth."  Francis 
Moore  said  that  no  act  of  Elizabeth  "hath  been  more  derogatory  to 
her  own  majesty,  more  odious  to  the  subject,  more  dangerous  to  the 
commonwealth  than  the  granting  of  these  monopolies."  Another 
member'  represented  himself  as  speaking   "for  a   town  that  grieves 

^  D'Ewes,  Journals,  p.  644. 

^  Richard  Martin^  representing  Barnstaple. 


108  The  Patents  complained  of  in  1601    [chap.  vi. 

and  pines,  for  a  countrey  that  groaneth  and  languisheth  under  the 
monstrous  and  unconscionable  burden."  In  such  language,  there  was 
necessarily  a  certain  amount  of  exaggeration,  and  the  House  was  well 
advised  in  committing  the  whole  subject  to  a  Select  Committee.  The 
most  complete  list  of  the  patents,  complained  of,  was  given  by 
Sir  Robert  Wroth,  who  mentions  twenty-four  patents,  which  he 
considered  objectionable \  These  include  all  privileges,  relating  to 
commodities,  whether  exercised  by  an  individual,  a  corporation  or  a 
trading  company.  It  was  held  at  this  time  that  a  true  monopoly 
(or  certainly  the  most  objectionable  one)  was  that  granted  to  a  single 
individual,  thus  Bacon  said,  "  if  the  grant  be  to  a  number  of  burgesses 
or  to  a  corporation,  that  must  stand  and  is  forsooth  no  monopoly^." 
For  this  reason  several  of  the  alleged  monopolized  commodities, 
mentioned  by  Wroth,  do  not  appear  in  the  list  returned  by  the 
Committee.  Those,  controlled  by  companies,  were  currants  (the  Levant 
company^)  and  calamine  stone  (the  Mineral  and  Battery  Works*). 

Altogether  the  Committee  had  before  it  upwards  of  forty  grants  of 
different  kinds.  The  only  unity  amongst  these  consisted  in  the  fact 
that,  in  all  of  them,  there  was  an  element  of  compulsion,  originating 
from  the  Crown.  It  cannot  even  be  said  that  the  whole  list  contains 
only  those  grants,  limiting  the  initiative  of  the  individual  trader,  since  a 
considerable  number  were  aimed  at  removing,  rather  than  the  imposing 
of  restrictions.  This  group  of  licenses  comprises  two  sub-divisions,  the 
one  relating  to  domestic,  and  the  other  to  foreign  trade.  With  regard 
to  the  former,  it  was  considered  that  the  act  for  the  right  tanning 
of  leather  resulted  in  certain  inconveniences ;  and,  as  far  back  as  1575, 
a  patent  had  been  granted  to  Sir  Edward  Dyer  to  release  certain  of 
the  forfeitures  under  the  statute,  in  some  specified  cases.  Then,  the 
laws,  prohibiting  exportation  of  various  commodities,  sometimes  resulted 
in  a  glut  of  these  in  the  home-market;  while  conversely  it  was  held 
advisable,  in  other  cases,  to  relax  the  impediments  to  imports.  It  was 
customary  to  effect  these  objects  by  means  of  a  royal  license,  which, 
as  a  rule,  specified  the  quantity  of  a  given  commodity  to  be  exported 
or  imported.  There  were  eight  of  these  grants,  mentioned  by  the 
Committee.  Several  affected  trades  of  very  small  importance,  as  for 
instance  the  license  to  export  lists  and  shreds,  aniseed,  a  limited 
number  of  calf-skins  and  two  others,  described  as  of  "no  great 
importance,"  for  small  quantities  of  iron  and  tin''.  There  still  re- 
mained three  grants.  One  of  them  was  the  permit  to  export  steel. 
At  this  time,  it  was  admitted  that  steel  was  a  new  trade,  and  efforts 

1  D'Ewes,  JmimalSy  p.  648.  ^  /^-^.^  p,  646. 

3  Vide  infra,  ii.  pp.  86,  87.  *  Ibid.,  ii.  p.  424. 

6  D'Ewes,  Journals  J  p.  650. 


CHAP.  VI.]       The  Transportation-Licenses  1601  109 

were  being  made  (as  will  be  shown  below*)  to  establish  the  manufacture 
in  England  by  the  limitation  of  competitive  imports.  Obviously,  the 
encouragement  of  an  individual  to  export  English  steel  would  be 
productive  of  good,  if  only  as  showing  how  far  it  could  compete  in 
foreign  markets.  Then  there  was  the  patent  for  the  brewing  of  beer  for 
export.  This  was  the  continuation  of  an  old  grant,  surrendered  by 
William  Carr  in  1596.  On  November  23rd  a  new  patent  was  issued, 
which  conferred  the  privilege  of  the  sole  brewing  of  all  beer  for  ea^port 
hy  license  in  London,  Westminster,  Sussex,  Essex,  Kent,  Middlesex  and 
Surrey,  subject  to  the  following  provisos,  that  the  grant  was  not  to 
apply  to  beer  for  the  navy,  the  army  or  members  of  the  Royal  House- 
hold and  that,  if  the  price  should  "  excessively  increase,"  it  was  to  be 
moderated  by  the  Lord  Treasurer^  Finally,  there  was  a  license,  which 
had  originally  been  made  to  Dr  Hector  in  1567  and  which  expired 
in  1594,  to  import  wool  from  Spain  for  making  Spanish  felts.  This 
was  renewed  in  favour  of  Michael  Stanhope,  groom  of  the  privy- 
chamber,  for  twenty  years,  on  condition  that  he  should  pay  4^.  9d, 
per  cwt.  custom'.  As  yet  the  demand  for  Spanish  wool  in  England  was 
not  great,  and,  in  any  case,  during  the  war  with  Spain,  the  possibilities 
of  such  importation  would  not  be  frequent.  At  the  same  time,  in 
principle,  even  from  the  point  of  view  of  the  time,  this  license  was 
objectionable,  since  it  tended  to  impede  the  development  of  one  branch 
of  the  cloth  trade. 

At  first  sight,  it  is  not  easy  to  discover  why  these  transportation- 
grants  were  included  in  the  indictment  against  monopolies.  The 
difficulty  arises  from  the  popular  impression  that  the  House  of 
Commons,  in  the  time  of  Elizabeth  and  James  I.,  was  the  champion 
of  freer  trade.  If  this  were  so,  it  would  have  been  in  the  illogical 
position  of  condemning  a  tendency  in  this  direction.  As  a  matter 
of  fact,  the  ground  of  objection  to  this  group  of  licenses  was  that 
the  Crown  had  intervened  to  modify  the  consequences  of  restrictions, 
imposed  on  trade  by  Parliament'*.  Even  granting  there  may  have  been 
some  abuses  in  the  carrying  out  of  such  licenses,  it  is  plain  that  at  a 
period,  when  Parliaments  were  infrequent,  some  machinery  was  required 
to  relax  regulations  made  to  meet  a  temporary  emergency.  In  addition 
to  the  feeling  of  irritation  against  the  interference  of  the  Crown,  there 
was  another  element  which  explains  the  attitude  of  the  Commons. 
As  already  shown**,  trade  had  been  bad,  and  the  mercantile  class  had 

1  Vide  infra,  p.  117. 

2  State  Papers,  Domestic,  Elizabeth,  ccijc.  [Docqtiei] ;  Calendar,  1595-7,  p.  307. 

3  Ihid.,  ccL.  [^Docquet]  ;  Calendar,  1591-4,  p.  556. 

*  The  English  Patents  of  Monopoly,  by  W.  Hyde  Price,  Boston,  1906,  pp.  9,  10. 
^  Vide  supra,  pp.  100-2. 


110    Copyrights  and  Grants  for  Hemp,  dc.  1601   [chap.  vi. 

suffered.  It  resented  the  growing  importance  in  commerce  of  the 
capitalist,  who  was  not  a  merchant.  During  the  first  twenty  years 
of  the  reign  of  Elizabeth,  capital  was  so  exceedingly  scarce  in  England 
that  it  was  welcomed  from  any  source,  even  from  abroad  ^  After  a 
series  of  good  years  there  was  considerable  accumulation.  Had  trade 
been  prosperous  in  the  last  years  of  the  sixteenth  century,  in  view 
of  the  large  war-expenditure,  it  is  probable  that  merchants  would  have 
been  glad  to  obtain  capital  from  other  classes.  But,  with  the  depression 
of  trade,  the  series  of  losses  through  the  war,  the  high  prices  occasioned 
by  the  recent  scarcity  and  the  consequent  fall  in  profits,  merchants 
were  anxious  to  limit  competition  to  their  own  class  at  least.  This 
spirit  expresses  itself  with  sufficient  emphasis  in  a  petition  of  the 
Merchants  of  the  Staple,  as  early  as  1560,  against  licenses  to  export 
wool,  which  had  been  granted  to  persons  who  were  not  merchants  or 
members  of  the  society.  This  course,  they  urged,  had  led  to  the  utter 
decay  of  the  company,  through  the  competition  of  the  broggers  of  the 
licensees  who  "swarmed"  through  the  country  and  bought  wool  at 
"unreasonable"  prices 2. 

After  separating  the  export  and  import  licenses,  there  still  remain 
about  thirty  grants,  complained  of  by  the  Committee  in  1601.  Six 
of  these  may  be  readily  disposed  of  These  were  authorizations  to  print 
certain  specified  books,  and  are  in  reality  instances  of  copyright.  There 
was  no  question  of  an  important  trading  monopoly  in  an  edition  of 
Tacitus,  or  of  the  Psalms  in  Hebrew,  or  of  songs  in  three  parts. 

Another  small  group  of  grants  related  to  the  sowing  of  certain 
seeds,  which  were  related  to  the  textile  industries,  such  as  hemp,  flax 
and  woad. 

It  is  plain  that  the  grievances,  if  grievances  there  were,  are  to  be 
sought  in  the  remaining  fifteen  grants.  These  may  be  divided  into 
four  distinct  classes,  one  related  to  munitions  of  war,  another  to  articles 
of  the  greatest  luxury,  another  to  manufactures,  alleged  to  be  new, 
and  a  final  group,  which  is  made  up  of  miscellaneous  privileges  given  by 
Elizabeth  for  personal  reasons.  This  last  class  to  a  certain  extent 
is  a  cross  division,  since  it  could  be  amplified  by  the  inclusion  of 
patents,  such  as  those  to  Darcie,  Stanhope  and  others,  which  have  been 
assigned  to  one  of  the  other  sub-divisions,  but  it  will  be  convenient  to 
distinguish  cases  where  there  was  an  element  of  royal  favour,  conjoined 
with  a  supposed  economic  benefit  to  the  country,  from  others  where  the 
latter  element  is  either  absent  or  not  apparent.     The  patents  granted 

1  Cf.  the  existence  of  German  shareholders  in  the  Mines  Royal,  infra,  ii. 
pp.  385-7. 

2  State  Papers,  Domestic,  Elizabeth,  Addenda,  ix.  66 ;  Galendar  Addenda,  1647- 
65,  p.  600. 


CHAP.  VI.]     Grants  as  Payment  for  Services  1601  111 

for  personal  reasons  were  to  a  considerable  extent  conditioned  by  the 
state  of  the  Crown  finances.  It  has  been  shown  that,  during  the  closing 
years  of  the  reign,  there  was  a  great  strain  on  the  Exchequer,  and  one 
direction  in  which  some  alleviation  was  sought  was  by  means  of  the 
grant  of  offices  or  privileges ^  Thus,  in  some  cases,  grants,  affecting 
trade,  were  made  to  servants  of  the  Crown,  as  a  remuneration  for 
services.  It  was  characteristic,  both  of  the  times  and  the  temperament 
of  Elizabeth,  that  there  was  a  tendency  towards  payment  being  made 
in  kind  rather  than  in  money,  and  most  occasional  or  exceptional 
services  were  rewarded  in  this  way  as  well  as,  in  some  cases,  claims 
arising  out  of  fixed  salaries  that  had  fallen  into  arrear.  Thus  the 
paramount  necessity  of  increasing  the  surplus  from  the  Ordinary 
Revenue,  in  order  to  provide  for  extraordinary  charges,  accounts  for 
the  appearance  of  monopolies  in  favour  of  those,  who  had  claims  on 
the  Crown,  which  could  not  be  conveniently  liquidated  otherwise^ 
One  of  these  personal  grants  may  be  readily  disposed  of,  namely  that 
to  Eliza  Matthews,  widow  of  a  Yeoman  of  the  Poultry,  to  make  train 
oil  out  of  blubbers  and  the  livers  of  fish,  which  was  granted  in  1594, 
with  a  monopoly  for  twenty-one  years'.  It  was  scarcely  in  accordance 
with  the  dignity  of  Parliament  to  draw  attention  to  a  paltry  matter  of 
this  kind,  since  the  amount  of  oil  extracted  from  the  livers  of  fish 
in  England  must  have  been  inconsiderable.  Two  grants  to  Raleigh 
were  on  an  altogether  different  basis.  One  of  these  was  the  farming 
of  the  impost  on  sweet  wines'*.  The  objection  to  this  must  have  been 
due  to  the  personality  of  Raleigh  (who  is  said  at  this  time  to  have 
been  the  most  unpopular  man  in  England),  since  the  system  of 
"farming""  certain  imposts  was  a  recognized  method  of  fiscal  ad- 
ministration. There  were  numerous  other  farms  of  Customs  in  existence, 
and  it  is  not  altogether  creditable  to  the  agitators  in  Parliament  that 
one  of  these  should  be  pilloried  and  the  rest  ignored. 

Part,    at    least,    of   the   objection    to    Raleigh's    connection    with 

1  Fragmenta  Regalia,  or  Observations  on  the  late  Queen  Elizabeth,  her  Times  and 
Favourites,  by  Sir  R,  Naunton,  1642,  p.  7  ;  vide  supra,  p.  99 ;  infra,  in.  pp.  498, 
508,  509. 

2  Vide  supra,  p.  96 ;  infra,  iii.  pp.  507,  508. 

3  State  Papers,  Domestic,  Elizabeth,  ccxlviii.  [Docquet];  Calendar,  1591-4, 
p.  513. 

*  There  was  a  prejudice  against  any  interference  with  the  trade  in  sweet  wines 
dating  back  to  the  time  of  Edward  III.,  in  whose  reign  John  Peachie  of  Loudon  was 
punished  for  exercising  a  monopoly  of  selling  these  wines  in  London.  Again,  by 
a  patent  of  Mary,  the  burgesses  of  Southampton  obtained  the  sole  right  to  import 
malmsey  into  England.  This  grant  was  pronounced  contrary  to  the  statutes  by 
a  court  composed  of  all  the  judges — Institutes  of  the  Laws  of  England,  by  E.  Coke, 
London,  1797,  vi.  p.  181. 


112    Raleigh's  Farm  of  the  Tin  Royalty  1601    [chap.  vi. 

tin-mining^  is  to  be  attributed  also  to  personal  motives.  In  this  case, 
the  privileges  he  exercised,  while  far  from  unobjectionable,  constituted 
an  immense  improvement  on  the  system  in  vogue  a  few  years  before. 
For  an  understanding  of  the  position  it  is  necessary  to  bear  in  mind 
two  different  circumstances.  The  Crown  was  entitled  to  certain  rights, 
arising  out  of  the  Duchy  of  Cornwall,  amongst  which  was  the  pre- 
emption of  tin,  as  well  as  a  royalty  on  the  quantity  raised.  As  yet, 
tin-mining  was  insufficiently  provided  with  capital,  and  therefore  the 
miners  had  to  be  financed  by  some  outside  person.  In  1595,  there  was 
keen  competition  between  Lord  Buckhurst  and  the  Earl  of  Oxford  for  a 
transfer  of  this  right  of  pre-emption.  The  plan  proposed  was  that  the 
farmers  should  purchase  the  whole  output  of  the  mines,  paying  <£*25 
per  1000  lbs.  to  the  miners,  and,  by  creating  an  artificial  scarcity,  they 
expected  to  advance  the  price  to  =£'50  per  1000  lbs.  It  was  expected 
that,  in  this  way,  a  gross  profit  of  =£'40,000  a  year  could  be  made. 
It  was  proposed  to  pay  Elizabeth  =£7000  annually  after  the  first  year, 
to  lend  her  money  at  8  per  cent.,  and  to  reduce  the  high  rate  of  interest, 
then  paid  by  the  miners  to  the  London  merchants,  who  advanced 
capital,  before  the  tin  was  smelted ''.  Buckhurst  proposed  to  Burghley 
that  the  latter  might  put  in  ^10,000  stock,  if  he  used  his  influence  as 
against  Oxford.  In  1599,  Bevis  Bulmer,  who  had  previously  been 
interested  in  a  number  of  mining  speculations^,  tendered  £?10,000  a  year 
for  the  right  of  pre-emption  at  =£26.  \^s.  4d.  per  1000  lbs.**  About 
1600,  Elizabeth  decided  to  abolish  the  system  of  pre-emption  of  the 
whole  output,  substituting  for  it  a  fixed  levy  on  each  1000  lbs.  In 
a  proclamation  to  the  tinners,  the  Queen  stated  that  this  method  was 
more  convenient  to  the  whole  realm,  thoug^h  less  profitable  to  the 
Crown.  To  remedy  the  lack  of  working  capital  amongst  the  miners, 
money  was  to  be  lent  them  up  to  £^4000,  half  yearly,  free  of  interest*. 
It  appears  to  have  been  the  farming  of  the  royalty,  which  was  granted 
to  Raleigh,  of  which  the  Commons  complained.  This  method,  in 
spite  of  the  censure  of  the  House,  was  more  advantageous  to  the  coimtry 
and  the  miners  than  that  of  pre-emption.  There  was  now  only  one 
price  (about  £27  per  1000  lbs.),  and  this  was  received  by  the  miners, 
subject  to  the  deduction  of  the  royalty,  and,  allowing  for  the  payment 
of  it  in  money,  not  in  kind  as  before,  they  obtained  more  than  formerly. 
Moreover,  the  purchaser  of  tin  was  able  to  buy  it  at  the  mine,  freely, 

1  G.  R.  Lewis,  The  Stannaries,  p.  146. 

2  State  Papers,  Domestic^  Elizabeth,  ccli.  71,  100,  120;  cclii.  49;  ccliii.  68; 
ccLV.  68;  Calendar  Salisbury  MSS.,  v.  pp.  160,  168. 

3  Vide  infra,  ii.  pp.  398,  409. 

*  State  Papers,  Domestic,  Elizabeth,  cclxxiii.  9 ;  Calendar,  1598-1601,  p.  330. 
6  Ibid.,  ccLxxvi.  18  ;  Calendar,  1598-1601,  pp.  506,  507. 


CHAP.  VI.]  Grants  for  Gunpowder  1601  113 

and  thereby  effected  a  saving  of  almost  100  per  cent.  When  the  matter 
was  debated  in  Parliament,  Raleigh  stated  that,  before  his  patent,  wages 
amongst  the  tin  miners  had  been  as  low  as  %s.  a  week,  but  that, 
afterwards,  4*.  a  week  was  paid  and  that  "there  is  no  poor  that  will 
work  there,  but  may  and  have  that  wages.*"  At  the  same  time,  he  said 
that,  if  all  other  patents  were  to  be  repealed,  he  "  would  give  his  consent 
as  freely  to  the  cancelling  of  this  as  any  other  member  of  the  House.*" 
It  is  recorded  that  there  was  " a  great  silence""  after  his  declaration ^ 

Doubtless  had  Raleigh  not  been  personally  unpopular,  the  patents 
granted  to  him  would  not  have  been  mentioned.  In  fact,  the  inclusion 
of  these  raised  the  whole  question  of  leasing  the  collection  of  the 
different  taxes ;  and  public  opinion,  as  yet,  was  not  sufficiently  formed 
to  see  the  objections  to  this  method  of  fiscal  administration. 

A  distinct  group  of  the  grants  impugned  relates  to  munitions  of 
war,  such  as  ordnance  and  gunpowder.  It  will  be  remembered  that, 
at  the  beginning  of  the  reign  of  Elizabeth,  the  greatest  difficulty  was 
experienced  in  importing  arms  and  powder  from  abroad^  Had  England 
not  been  able  to  produce  some  powder,  the  country  would  have  been  at 
an  enormous  disadvantage  in  the  contest  with  Spain.  During  the  years 
before  the  Armada,  this  industry  had  been  reduced  to  small  dimensions 
in  England ;  and,  when  the  need  arose,  it  was  found  impossible  to 
obtain  a  supply  abroad.  Warned  by  the  danger  then  experienced,  the 
administration  took  steps,  whereby  a  patentee,  bound  under  certain 
penalties,  undertook  to  supply  powder  up  to  a  certain  amount  each 
year,  when  required.  It  was  claimed  in  1600  that  English  powder  had 
been  sold  for  the  past  eleven  years  at  %d.  per  lb. ;  whereas,  had  it  been 
imported,  the  price  would  have  been  l*.  It  was  said  that  the  saving  to 
the  State  in  this  period  was  c£*l  00,000.  The  same  reason  accounts  both 
for  the  necessity  of  a  monopolistic  element  in  this  industry  and  for  the 
dissatisfaction  with  which  it  was  regarded.  The  foundation  of  powder- 
making  in  the  sixteenth  and  seventeenth  centuries  consisted  in  the 
obtaining  of  earth  from  the  floors  of  buildings  that  had  been  used 
for  stablest  This  earth  required  to  be  put  through  certain  processes 
in  order  to  extract  the  saltpetre.  In  a  period  of  national  crisis,  it 
was  necessary  that  someone  should  be  invested  with  powers  of  entering 
private  property,  of  removing  the  soil  required,  subject  to  making  good 
any  damage  done.  Such  powers  could  only  be  exercised  either  by  the 
State  or  by  persons  to  whom  the  duty  was  delegated,  under  satisfactory 
guarantees.  In  this  case,  the  Crown  concerned  itself  chiefly  with 
obtaining  an  undertaking  that  the  powder  should  be  supplied  to  it 
at  a  low  price,  and   by    1600   no    more   than   ^d.  per  lb.   was   paid. 

1  D'Ewes,  Journals,  p.  646.  *  Vide  supra,  pp.  24,  30. 

^  Ficfe  infra,  ii.  p.  471. 

s.  c.  I.  8 


114  The  Patent  for  Playing  Cards  1601     [chap.  vi. 

From  this  point  of  view,  the  working  of  the  patent  was  satisfactory, 
since  Burghley  is  said  "  oftentimes  to  have  spoken  of  this  contract, 
as  the  greatest  service  that  could  be  done  for  the  security  of  the 
kingdom,  the  strength  of  the  wars  being  altered  from  bows  and  arrows 
to  ordnance.''  The  demand  for  powder,  towards  the  end  of  the 
sixteenth  century,  made  it  necessary  to  empower  the  patentees  to 
dig  for  peterish  earth  in  the  grounds  "of  the  better  sort,  which 
had  not  been  entered  previously."  It  was  probably  for  this  reason 
that  objection  was  made  to  this  class  of  grants  Sir  Robert  Cecil, 
in  informing  the  House  of  the  decision  of  Elizabeth  on  the  subject, 
described  this  patent  in  the  following  terms :  "  There  is  another  patent 
— that  for  saltpetre — that  hath  been  both  accused  and  slandered.  It 
digs  in  every  man's  house,  it  annoys^  the  inhabitant  and  generally 
troubleth  the  subject.  For  this  I  beseech  you  be  contented... for  I 
must  tell  you  the  kingdom  is  not  so  well  furnished  with  powder  as 
it  should  be.  But,  if  it  be  thought  fit  (upon  advice),  that  it  should 
be  cancelled,  her  Majesty  commanded  me  to  tell  you  that,  though 
she  be  willing  to  help  the  grave  gentleman  that  hath  that  patent,  yet, 
out  of  the  abundant  desire  she  hath  to  give  you  compleat  satisfaction,  it 
shall  be  repealed^." 

Another  group  of  patents,  which  fell  under  the  censure  of  the  House 
of  Commons,  affected,  articles  that  may  be  described  as  superfluities, 
such  as  the  making  of  gold  and  silver  thread,  the  selling  of  playing 
cards  and  the  keeping  of  unlawful  games,  otherwise  described  as  the 
"  dice  patents"  The  object  in  issuing  these  grants  was,  by  reserving  a 
substantial  money  payment  from  the  patentee,  to  increase  the  price  of 
the  commodities  with  a  view  to  diminishing  the  sale.  The  State  was 
entitled  to  restrict  gambling,  and  the  only  questions,  that  remained 
open,  were  whether  the  tax  should  be  imposed  by  the  Crown  or  by 
Parliament,  or  whether  the  imposition  should  be  collected  by  officials  or 
farmed  to  an  individual.  None  of  these  problems  were  considered  by 
Parliament,  attention  being  concentrated  solely  on  the  inconveniencies 
occasioned  by  the  patents.  Of  these  the  playing-card  grant  was  con- 
sidered most  obnoxious.  It  had  been  made  to  Edmund  Darcie,  who 
had  obtained  powers  from  the  Privy  Council  to  search  shops  for  any 
cards  that  did  not  bear  his  seaP.     It  was  said  that,  in  the  execution  of 

1  State  Papers,  Domestic,  Elizabeth,  cclxxv.  76 ;  Calendar,  1598-1601,  pp.  470-2. 

2  In  Townshend,  Historical  Collections,  p.  261,  instead  of  '^annoys,"  there  is 
printed  ^^  removes." 

3  D'Ewes,  Journals,  p.  653. 

*  It  is  recorded  that  at  the  mention  of  this,  during  the  debate,  Raleigh  ''blushed." 
Since  there  is  no  evidence  that  he  was  interested  in  this  grant,  it  seems  likely  that 
his  confusion  or  indignation  was  manifested  at  the  mention  of  the  patent  for  tin. 

5  State  Papers,  Domestic,  Elizabeth,  cclxxix.  93 ;  Calendar,  1601-3,  p.  46. 


CHAP,  vl]  The  Starch  Patent  1601  115 

such  search-warrants,  Darcie's  deputies  summoned  delinquents  to  appear 
at  courts  fifty  miles  distant,  and  that,  in  many  cases,  the  persons 
accused  compounded  for  a  money  payment  to  the  searchers,  rather  than 
face  the  loss  of  time  involved  in  defending  themselves^  This  patent 
was  one  of  those  tried  under  the  promise,  made  by  Elizabeth  to 
Parliament  in  1597,  and  a  message  was  sent  to  the  judges  that  the 
Queen  "  would  not  have  her  prerogative  called  in  question'.""  At  this 
date — the  message  was  dated  October  7th,  1601 — it  is  to  be  remembered 
that  some  fifteen  grants  had  already  been  annulled,  so  that,  although 
Elizabeth  appears  to  have  broken  the  letter  of  her  promise,  she  had 
shown  a  disposition  to  carry  out  the  spirit  of  it. 

There  remains  one  group  of  patents  which  comes  nearest  to  industrial 
monopolies.  There  were  in  all  seven ^  of  these ;  and  it  was  urged  that, 
through  these  grants,  the  price  of  common  commodities,  such  as  glass, 
paper,  starch,  and  steel,  was  enhanced.  The  starch  patent  should  not 
have  been  included,  as  it  had  already  been  revoked ;  it  is,  however,  of 
interest  as  showing  the  peculiarities,  connected  with  the  execution 
of  some  of  these  grants,  and  how,  in  time,  numerous  persons  became 
interested.  Originally  granted  in  1588,  this  patent  had  been  acquired 
by  Sir  John  Packington  in  1594,  and  was  reissued  in  1598  in  favour  of 
a  new  method  of  making  starch;  and  thus  constituted  a  legitimate 
encouragement  of  invention.  Packington  assigned  his  franchise  to 
Sir  Robert  Cecil  who  sold  it  to  George  Rivers  and  John  Ellys.  They 
transferred  it  to  four  persons,  reserving  an  annual  rent  of  <£*4,200. 
Finally,  this  rent  charge  was  purchased  by  Burghley  and  Sir  Robert 
Cecil*.  The  partners,  who  had  to  make  this  considerable  rent  before 
obtaining  a  profit  for  themselves,  secured  authorization  to  search  for 
starch,  made  in  contravention  of  their  patent ;  and,  in  1600,  a  man  was 
arrested  in  Taunton  for  resisting  the  agents  of  the  patentees".  In  1601 
a  complaint  was  presented  by  38  persons  in  London,  who  alleged 
that  they  had  been  wronged  by  the  "  rigorous  dealing  '■*  of  the  servants 

1  Townshend,  Collections ,  pp.  240,  241.  It  should  be  carefully  noted  that  this 
and  all  statements,  relating  to  prices,  were  not  made  in  open  debate.  They  were 
contained  in  a  paper,  shown  to  Townshend  by  the  member  who  sat  next  him. 

2  State  Papers,  Domestic,  Elizabeth,  cclxxxii.  8 ;  Calendar,  1601-3,  p.  108. 
Subsequent  proceedings,  Darcy  v.  Allen,  embodied  the  pleadings  on  monopolies  at 
this  time  ;  this  case  is  reported  in  Monopolies  by  Patent,  by  J.  W.  Gordon,  1897, 
p.  2. 

3  This  is  confirmed  by  the  statement  of  Chamberlain  in  1621,  who  wrote  that  at 
the  accession  of  James  I.  there  were  "  some  eight  or  nine  monopolies  then  com- 
plained of."  State  Papers,  Domestic,  James  I.,  cxvi.  13;  printed  in  Gardiner, 
History  1603-42  (1893),  iv.  p.  1. 

*  Calendar  Salisbury  MSS.,  viii.  p.  172. 

^  State  Papers,  Domestic,  Elizabeth,  gclxxvi.  84 ;  Calendar,  1698-1601,  p.  521. 

8—2 


116  Aqua  Vitse  and  Paper  Patents  1601     [chap.  vi. 

of  this  partnership^.  This  was  one  of  the  worst  instances  of  the  abuse 
of  search-warrants,  issued  by  the  Privy  Council,  although,  strictly 
speaking,  the  matter  should  not  have  been  mentioned,  since,  as  already 
stated,  the  patent  had  been  recalled.  Another  case,  that  presents 
some  points  of  similarity,  was  the  grant  for  substitutes  for  Aqua  Vitoe 
and  vinegar,  which  had  been  made  also  on  behalf  of  a  new  invention. 
In  this  instance,  persons,  acting  for  the  patentee,  forced  those  selling 
the  original  commodities  in  a  certain  district  either  to  purchase  the 
substitute,  or  else  to  compound  with  the  patentee  so  that  they  might 
dispose  of  the  stock  they  owned  at  the  time.  This  action  was  shown  to 
be  quite  unauthorized  by  the  patent^.  It  is  interesting  to  notice  that 
when  Ben  Jonson  wrote  his  play,  "  The  Devil  is  an  Ass,"  about  1616, 
this  patent  was  still  remembered — 

'^  Via  pecunia !   when  she's  run  and  gone. 
And  fled  and  dead  ;  then  will  I  fetch  her  again 
With  aqua  vitce,  out  of  an  old  hogshead  ! 
While  there  are  lees  of  wine  and  dregs  of  beer 
I'll  never  want  her^." 

The  paper  patent  was  objected  to  on  different  grounds.  It  was  also 
a  new  invention,  in  the  sense  that  there  was  no  paper-mill  in  existence 
in  England,  when  John  Spilman  received  this  grant  about  1588*.  He 
also  obtained  certain  privileges  for  the  collecting  of  the  rags  he  required. 
This  concession  was  enjoyed,  without  interruption,  until  1600,  when 
Edward  Marshall  established  another  paper-mill.  Marshall  approached 
the  Common  Council  of  London,  offering  a  yearly  rent  for  the  sole  right 
of  collecting  rags  in  the  city.  The  Council,  thereupon,  interdicted 
Spilman,  who  appealed  to  the  Privy  Council  **.  It  is  quite  evident  that 
in  this  case  the  origin  of  the  complaint  against  Spilman  arose  from  the 
desire  of  the  Council  to  obtain  a  revenue  from  the  refuse-rags ;  although 
the  plea,  actually  put  forward,  was  that  the  authorities  had  no  sufficient 
control  over  the  rag-pickers ^  As  showing  that  the  ordinary  law  was 
sufficient  to  deal  with  any  complaints  that  arose,  it  is  worth  noting  the 
settlement,  made  between  Spilman  and  Marshall  a  few  days  before 
Parliament  met  and  which  was  drawn  up  by  Francis  Bacon.     Spilman 

^  State  Papers,  Domestic,  Elizabeth,  cclxxxii.  29 ;  Calendar,  1601-3,  p.  115. 

2  D'Ewes,  Journals,  p.  644  ;  Analytical  indexes  to  vols.  ii.  and  viii.  of... the  Remem- 
brancia,  1870,  pp.  32,  34. 

3  Act  II.  scene  i. 

*  A  Spark  of  Friendship...  With  a  Description  and  Commendation  of  a  Paper-MiU, 
now  of  late  set  up  {near  the  Town  of  Dartford)  by  an  High-German,  called  Mr  Spilman, 
Jeweller  to  the  Queen,  by  T.  Churchyard,  1588,  in  Harleian  Miscellany  (1745),  in. 
p.  255. 

^  State  Papers,  Domestic,  Elizabeth,  colxxix.  87  ;  Calendar,  1601-3,  p.  43. 

6  Ibid.,  88 ;  Calendar,  1601-3,  pp.  43,  44. 


CHAP,  vl]    Steel,  Glass  arid  Bottle  Patents  1601  117 

undertook  to  exact  no  penalty  from  Marshall  for  any  invasion  of  his 
rights  in  the  past,  and  he  bound  himself  to  supply  a  mill,  established 
by  Marshall,  with  rags.  On  the  other  hand,  the  lease,  recently  granted 
by  the  Council,  was  to  be  surrendered,  and  Spilman  remained  the  sole 
collector  of  rags  for  paper-making\ 

The  patents  for  drinking  glasses,  a  special  kind  of  stone-bottle% 
and  for  steel  were  objected  to  on  the  ground  of  the  great  rise  in  the 
price  of  the  commodities.  In  dealing  with  the  increase,  two  facts 
should  be  noticed — first  that  these  statements  were  not  made  in  open 
debate,  but  were  contained  in  a  paper,  which  was  shown  to  Townshend 
(who  records  the  fact)  by  another  member.  Therefore  it  is  impossible 
to  determine  what  reliance,  if  any,  is  to  be  placed  on  the  figures. 
In  the  second  place,  supposing  that  the  agents  of  the  patentees  obtained 
an  advance  on  the  prices,  reached  thirty  years  before,  it  is  to  be 
remembered  that  there  was  a  general  rise  in  the  interval.  Townshend'*s 
anonymous  informant  stated  that  the  price  of  steel  had  doubled  and 
that  of  the  other  commodities  was  trebled,  or  (in  the  case  of  drinking 
glasses)  quadrupled'.  What  is  significant  in  these  industries  is  that  the 
earlier  quotation  was  that  of  an  imported  commodity,  while  the  later 
relates  to  the  same  things,  produced  in  England  after  importation  had 
been  practically  prohibited.  Therefore,  the  question  really  resolves 
itself  into  a  discussion  of  the  protection  of  "  infant  industries.""  Sup- 
posing Townshend's  friend  was  correct,  there  was  an  absolute  rise  in 
price ;  but,  when  the  change  in  the  general  level  is  taken  into  account, 
such  rise  would  be  less  than  it  appeared.  Then,  the  further  problem 
would  arise,  whether  this  relative  deamess  should  have  been  faced  to 
establish  the  industries  in  question  in  England.  There  can  be  little 
doubt  that,  if  the  matter  had  been  stated  in  this  form,  apart  from 
prejudice,  members  of  the  Parliament  of  1601  would  have  accepted  the 
sacrifice,  or  otherwise  they  would  have  departed  from  the  practice  of  the 
whole  of  contemporary  legislation  ^ 

Had  the  discussion  of  monopolies  been  a  temporary  phenomenon, 
the  foregoing  detailed  examination  of  the  state  of  the  case  in  1601 
would  have  been  unnecessary;   but,  since  that  discussion  is  no  more 

^  State  Papers,  Domestic,  Elizabeth,  cclxxxii.  6 ;  Calendar,  1601-3,  p.  108. 

2  Monopole,  Kartelle  und  TrustSj  in  ihren  Beziehungen  zur  Organisation  der 
kapitalistischen  Industrie,  dargestellt  an  der  Entmcklung  in  Grosshritannien,  von 
H.  Levy,  Jena,  1909,  p.  29. 

3  Memorials,  pp.  240,  241 ;  The  Political  History  of  England,  1647-1603,  by 
A.  F.  Pollard,  1910,  p.  474. 

*  Tliis  view  of  the  situation  is  confirmed  by  the  fact  that  there  were  two  patents 
for  steel,  representing  different  processes  of  manufacture,  besides  another  for  the 
exporting  of  it. 


118  Patents  defensible  as  Grants  1601     [chap.  vi.  | 

than  a  preface  to  later  debates  on  the  subject,  it  is  important  to  obtain 
as  clear  a  statement  as  possible  of  the  different  points  of  view  from  the 
beginning.  Moreover,  in  view  of  the  presentation  of  the  same  dispute 
in  1604,  it  is  advisable  to  estimate  the  clear-sightedness  and  dis- 
interestedness of  the  House  of  Commons. 

Summing  up  all  the  grants,  it  is  evident  that  many  of  the  com- 
plaints were  utterly  irrelevant.  Most  of  the  patents,  that  were  in 
reality  of  the  nature  of  trading  monopolies,  could  be  defended  as  grants,^ 
either  to  encourage  bona  fide  new  inventions,  for  fiscal  purposes  or  for 
national  defence.  The  complaints  of  Parliament  were  to  a  large  degree 
illogical,  since,  in  several  cases,  the  Crown  was  merely  carrying  out 
the  same  policy  that  had  received  legislative  sanction  from  the  House. 
For  instance,  the  importation  of  a  considerable  number  of  commodities, 
made  of  steel,  was  forbidden  by  an  act,  and  no  real  objection  could 
be  made  to  the  Crown  granting  patents  to  those,  who  would  start 
this  industry  in  England.  Moreover,  in  so  far  as  the  leaders  of 
the  agitation  were  actuated  by  motives  of  personal  dislike  to  a  few 
of  the  patentees,  or  by  the  inconvenience  some  of  them  had  sustained 
from  the  production  of  saltpetre,  their  attitude  deserves  little 
sympathy.  The  whole  debate  was  marked  by  animus  and  by  a 
profusion  of  reckless  statements.  On  the  other  hand,  there  were 
reasonable  grounds  for  objection  to  the  action  of  the  agents  of  some 
of  the  patentees.  By  means  of  letters  from  the  Privy  Council, 
exactions,  which  were  quite  unauthorized  by  the  grants,  were  made. 
The  most  objectionable  feature  of  these  was  that  they  were  collected 
from  those  tradespeople,  who  were  too  poor  or  too  ignorant  to  defend 
themselves.  As  Cecil  expressed  it  "  To  whom  do  they  repair  with  these 
letters  ?  To  some  out-house,  to  some  desolate  widow,  to  some  simple 
cottage  or  poor  ignorant  people  who,  rather  than  that  they  would  be 
troubled  and  undo  themselves  by  coming  hither,  will  give  any  thing 
in  reason  for  these  caterpillars'  satisfaction^.*"  Such  abuses,  in  the 
execution  of  the  patents,  were  incidental  to  the  irregularities  that  had 
grown  up  in  the  working  of  the  administration  all  over.  Probably  the 
frauds  in  the  Treasury  had  occasioned  much  greater  loss  to  the  country, 
and,  in  either  case,  there  was  nothing  that  could  not  have  been  remedied 
by  the  ordinary  process  of  the  existing  law.  Prior  to  the  meeting  of 
Parliament,  Elizabeth  had  shown,  by  making  void  a  large  number 
of  patents,  that  any  malpractices,  in  the  execution  of  a  grant,  would 
lead  to  the  revocation  of  it.  It  was  unfortunate  that,  at  least  in  one 
case,  a  suit,  initiated  under  the  promise  of  1597,  had  been  quashed 
by  the  direct  interposition  of  the  prerogative.  In  that  instance, 
however,  something  might  be  urged  in  defence  of  the  action  of  the 
1  D'Ewes,  Journals,  p.  652. 


CHAP.  VI.]    Abuses  in  Execution  of  Patents  1601  119 

Crown,  in  so  far  as  there  was  involved  the  question  of  the  control  of 
an  instrument  for  gaming,  such  as  playing  cards.  It  is  significant 
that  none  of  the  grants  impugned  could  be  used  to  affect  the  market  in 
commodities  of  common  consumption,  in  which  there  were  established 
producers  in  England.  The  only  possible  exception  is  the  case  of  salt, 
which  was  adduced  by  one  speaker,  but  not  included  in  the  list, 
furnished  by  the  Committee.  It  would  appear  that  the  patent  for 
salt  was  one,  granted  in  1599,  not  for  the  common  commodity,  but 
for  what  was  then  a  new  industry,  namely  the  production  of  white  salt. 
Strictly  speaking,  this  was  only  a  quasi -monopoly,  as  the  grant  confined 
the  privileges,  it  conferred,  to  an  area  on  the  East  coast  of  England, 
between  Lyme  Regis  and  Kingston-upon-HulP. 

The  immediate  effect  of  the  whole  agitation  was  the  issue  of  a 
proclamation,  dated  November  28th,  1601,  under  which  several  patents, 
"  the  execution  of  which  had  been  extremely  abused,'"  were  declared  void, 
and  the  remainder  were  subjected  to  trial  by  common-law^  Should  any 
be  found  bad  in  themselves,  or  to  have  been  attended  by  abuses  in 
execution,  it  was  promised,  unconditionally,  that  all  such  would  be 
recalled.  If,  on  the  other  hand,  some  patents  stood  this  test,  these 
should  continue  in  force,  during  the  respective  periods  for  which  they 
had  been  granted.  Before  the  series  of  suits  was  finished,  Elizabeth's 
reign  had  come  to  an  end,  and  James  I.,  on  his  accession,  issued  a 
proclamation,  recalling  all  patents  to  individuals,  which  were  then  in 
forced  Whatever  may  have  been  the  motives  which  occasioned  this 
proclamation,  it  eventually  turned  out  that  James  I.  had  simply  dis- 
posed of  the  gi-ants  of  Elizabeth,  to  prepare  the  way  for  a  series  of 
really  objectionable  ones  of  his  own  creation.  In  the  meantime,  how- 
ever, when  Parliament  met  in  1604,  it  seemed  as  if  all  monopolies, 
except  those  vested  in  corporate  bodies,  had  been  abolished,  and  the 
House  of  Commons  now  turned  its  attention  to  these.  Merchants,  who 
considered  themselves  aggrieved,  were  invited  to  furnish  particulai-s  of 
their  complaints,  and  a  committee  was  formed  to  initiate  legislation. 
This  body  spent  five  whole  afternoons  in  considering  the  arguments  for 
and  against  the  trading  corporations,  and,  on  May  21st,  1604,  two  bills 
were  introduced,  the  one  "  for  all  merchants  to  have  free  liberty  of 
trade,  into  all  countries,  as  is  used  in  all  other  nations,"  and  the  other 
"  for  the  enlargement  of  trade... into  foreign  countries."    These  measures 

1  State  Papers,  Domestic,  Elizabeth,  cclxxii.  [Docquet]  ;  Calendar^  1598-1601, 
p.  310. 

2  Printed  in  The  English  Patents  of  Monopoly,  by  W.  Hyde  Price,  1906,  Appendix  J, 
pp.  156-9. 

3  Proclamation  dated  May  7,  1603,  printed  in  Price,  English  Patents  of  Monopoly, 
Appendix  L,  p.  163. 


120  '' Instructions  for  Free  Trade''  1604    [chap.  vi. 

were  supported  by  Sir  Edwin  Sandys  in  a  document,  entitled  "  Instruc- 
tions touching  the  bill  for  Free  Traded""  This  paper  merits  the  most 
careful  examination,  not  only  on  account  of  some  curiously  modem 
expressions  it  contains,  but  still  more  in  view  of  certain  hidden  motives, 
that  occasioned  several  of  its  conclusions.  It  consists  of  three  distinct 
parts — first  the  reasons  for  abrogating  all  privileges  in  foreign  trade, 
secondly  the  measures  by  which  this  object  was  to  be  attained,  and 
finally  a  series  of  answers  to  the  claims  of  the  existing  companies. 

The  arguments  for  a  foreign  trade,  open  to  all  Englishmen,  may  be 
best  given  in  Sandys'*  own  words :  "All  free  subjects  are  born  inheritable 
as  to  their  land,  as  also  to  the  free  exercise  of  their  industry,  in  those 
trades  whereto  they  apply  themselves  and  whereby  they  are  to  live. 
Merchandize,  being  the  chiefest  and  richest  of  all  other  and  of  greater 
extent  and  importance  than  all  the  rest,  it  is  against  the  natural  right 
and  liberty  of  the  subjects  of  England  to  restrain  it  into  the  hands 
of  some  few ;  for,  although  there  may  be  some  5,000  or  6,000  persons, 
counting  children  and  prentices,  free  of  the  several  companies  of  the 
merchants,  in  the  whole ;  yet,  apparent  it  is,  that  the  governors  of  these 
companies,  by  their  monopolizing  orders,  have  so  handled  the  matter,  as 
that  the  mass  of  the  whole  trade  of  the  realm  is  in  the  hands  of  some 
200  persons  at  the  most,  the  rest  serving  for  a  shew  and  reaping  small 
benefit.*"  The  next  argument  quotes  "the  example  of  all  other  nations, 
generally,  in  the  world,  who  avoid  in  themselves  and  hate  in  us,  this 
monopolizing  way  of  traffick.""  It  was  further  urged  that  the  measures 
now  brought  forward  would  conduce  to  a  more  equal  division  of  wealth 
throughout  the  country  and  amongst  individuals.  In  this  connection, 
attention  is  drawn  to  the  customs  returns,  which  were  =£^11 0,000  at 
London  and  ^17,000  in  all  the  rest  of  England  ^ 

The  bills  aimed  at  the  empowering  of  anyone,  with  or  without 
apprenticeship,  to  engage  in  foreign  trade  to  the  countries  which  were 
at  that  time  within  the  limits  reserved  to  the  chartered  companies. 
It  was  recognized,  however,  that,  since  the  State  did  not  support 
ambassadors,  there  would  be  some  expense  involved  in  organizing  the 
trade  and  carrying  it  on.  Therefore  it  was  proposed  that  the  companies 
might  continue  to  exist,  and  that  levies  should  be  made,  from  time  to 
time,  on  all  those  who  availed  themselves  of  the  facilities  obtained. 
This  provision  would  have  had  the  effect  of  placing  all  foreign  trade  to  a 

1  Printed  in  Journals  of  the  House  of  Commons,  i.  pp.  218-21.  Roger  Coke 
{A  Detection  of  the  Court  and  State  of  England,  1719,  i.  pp.  67-9)  amplifies  these 
"  Instructions/'  according  to  his  own  standpoint. 

2  In  a  MS.,  entitled  A  Discourse  of  Free  Trade  against  Incorporated  Societies 
(Lib.  Trin.  Coll.,  Dublin,  862,  G  4,  13  No.  5),  the  tendency  of  companies  to  draw 
trade  to  London  is  noted  as  a  fact  "which  is  most  lamentable  to  consider." 


CHAP.  VI.]    Inaccuracies  of  the  ^'Instructions"  1604      121 

given  country  in  the  hands  of  a  regulated  company,  to  which  there  would  'i 
be  no  restrictions  on  admission,  beyond  the  payment  of  a  moderate  fee. 
This  result  was  foreseen,  and  the  "Instructions'"  favour  the  regulated  . 
type  of  organization,  apparently  on  the  unsubstantial  ground  that,  in  a  \ 
sense,  a  joint-stock  was  in  itself  a  species  of  monopoly,  as  restricting  the 
enterprize  of  the  individual  member.     At  the  same  time,  it  was  added 
that  individuals  might  unite  in  partnership,  should  they  desire  to  do  so. 

There  is  a  great  temptation  to  accept  this  document  as  an  unique 
example  of  a  noble  ideal  which  appeared  almost  too  early.  But, 
unfortunately,  all  through  the  seventeenth  century,  the  most  powerful 
arguments  against  existing  privileges  were  those  of  the  would-be 
monopolists.  It  seems  to  have  been  recognized  that  a  man  was  "  play- 
ing the  game "  in  condemning  in  unmeasured  language  the  practice  of 
exclusive  trading  grants ;  and  then,  immediately  he  had  fought  his  way 
within  the  charmed  circle,  to  point  out  the  evils  of  "  disorderly  trading,'** 
coupled  with  a  petition  for  a  more  stringent  monopoly.  It  was  so  in 
this  case  with  Sandys.  In  spite  of  his  maintenance  of  "the  natural 
right  of  Englishmen "'"'  to  trade  where  and  when  they  pleased,  one  finds 
him  a  few  years  afterwards  in  the  position  of  treasurer  of  the  Virginia 
company,  which  was  certainly  not  the  least  exclusive  of  the  trading 
corporations  in  the  beginning  of  the  seventeenth  century.  It  may  be 
urged  that  since,  as  will  appear  below,  these  bills  did  not  become  law, 
a  man  of  energy  was  forced  to  adapt  himself  to  the  prevailing  system. 
This  argument  might  account  for  his  occupying  the  position  of  trefisurer, 
but,  if  he  really  held  the  views  expressed  in  the  "Instructions,*"  it  is 
impossible  to  justify  his  action  in  relation  to  the  Virginian  tobacco 
monopoly,  where  he  acted  exactly  in  the  manner  he  condemns  in  the 
governors  of  the  companies  in  existence  in  1604\ 

Moreover  the  argumentative  portion  of  the  document  contains 
numerous  inaccuracies  and  many  distortions  of  facts.  It  is  not  true 
that  England  was  exceptional  in  sanctioning  privileged  trading  com- 
panies. At  Genoa  there  was  a  slave-trading  undertaking,  dating  back 
to  1580.  France  had  its  African,  its  coral,  and  its  Canada  companies, 
established  respectively  about  1561,  1600  and  1602.  All  these  had 
monopolies,  and  those  of  the  French  organizations  were  more  exacting 
than  any  ever  granted  in  England.  Then  Holland  had  built  up  an 
East  India  trade,  founded  by  independent  joint-stock  companies,  which 
had  been  amalgamated  into  the  celebrated  Dutch  East  India  company'. 

1  Vide  infra,  ii.  pp.  274-6. 

2  Les  Grandes  Compagnies  de  Commerce,  par  Pierre  Bonnassieux,  Paris,  1892, 
pp.  43-7,  181,  182,  254,  346,  453  ;  Geschichtlicher  Ueherblick  der  administrativen, 
rechtlichen  und  finanziellen  Entwicklung  der  Niederldndisch-Ostindischen  Compagnie, 
von  G.  C.  Klerk  de  Reus,  The  Hague,  1894,  p.  2. 


122       The  out-Ports  and  foreign  Trade  1604     [chap.  vi. 

Moreover,  this  consolidation  had  been  caused  by  the  disputes  of  previous 
associations,  whose  agents  treated  each  other  "almost  as  enemies^" — facts 
of  which  Sandys  can  scarcely  have  been  ignorant — so  that  the  compara- 
tive argument  is  against  him,  rather  than  in  his  favour 2. 

The  attempt  to  show  that  the  existing  system  favoured  London,  at 
the  expense  of  the  other  ports,  is  even  more  misleading.  The  gravita- 
tion of  capital  to  the  chief  city,  as  well  the  geographical  situation  of 
London  in  view  of  the  trend  of  trade  at  the  time,  sufficiently  account  for 
its  predominance.  Besides,  it  was  untrue  to  suggest  that  the  merchants, 
who  gained  by  their  membership  of  companies,  were  all  inhabitants  of 
London.  The  Merchant  Adventurers  was  a  national  organization,  to 
which  the  companies  at  Newcastle,  Hull  and  York  were  affiliated.  It 
had  also  ramifications,  extending  to  Lynn,  Norwich,  Ipswich,  Exeter  and 
Southampton^.  An  Exeter  company,  incorporated  by  Elizabeth,  had 
certain  exclusive  privileges  in  the  French  trade  and  the  Senegal  ad- 
venturers, who  received  a  charter  in  1588,  were  mainly  resident  in  the 
out-ports'*.  It  is  difficult  to  determine  how  far  the  joint-stock  com- 
panies, such  as  the  Russia  and  East  India  undertakings,  were  actually 
open  to  persons  non-resident  in  London.  An  examination  of  the  meagre 
information,  relating  to  sales  of  shares  during  the  sixteenth  century, 
tends  to  show  that  there  was  a  freer  market  than  might  have  been 
anticipated.  The  great  variations  in  the  numbers  of  members  of  the 
Russia  company  is  sufficient  to  establish  this  conclusion,  and,  at  the 
foundation  of  the  East  India  company,  subscriptions  of  capital  were 
invited,  and  even  canvassed  for  amongst  the  merchants  of  the  West 
Country^,  while  the  stock  was  sold  openly  to  the  highest  bidder  at  the 
same  time  that  commodities  were  being  auctioned^.  Therefore,  whether 
capitalists  outside  London  availed  themselves  of  their  opportunities  or 
not,  it  was  possible  for  them  to  enter  the  joint-stock  companies.  If  any 
considerable  number  did  so,  it  is  apparent  that,  although  these  organiza- 
tions paid  custom  in  London,  the  profits  might  be,  and  in  some  instances 
no  doubt  were,  distributed  through  the  country. 

1  Histoire  de  P  Expansion  Coloniale  des  Peuples  Europeens — Neerlande  et  Danemark, 
par  C.  de  Lannoy  et  H.  V.  Linden,  Bruxelles,  1911,  pp.  39,  41,  44,  75. 

2  This  point  was  brought  out  in  a  petition,  presented  against  the  bill  for  the 
enlargement  of  trade,  on  account  of  the  East  India  Company — State  Papers, 
Domestic,  James  I.,  ccxiv.  Addenda. 

3  The  Growth  of  English  Industry  and  Commerce  in  Modem  Times,  by  W.  Cunningham, 
Cambridge,  1903,  p.  245.  Wheeler,  the  secretary  at  this  time,  expressly  states  that 
the  fellowship  brought  much  wealth  to  these  out-ports — The  Early  Chartered 
Companies,  by  G.  Cawston  and  A.  H.  Keene,  London,  1896,  p.  28. 

*  Vide  infra,  11.  p.  10. 

5  The  Dawn  of  British  Trade  to  the  East  Indies  as  recorded  in  the  Court  Minutes  of 
the  East  India  Company,  1599-1603,  edited  by  Henry  Stevens,  1886,  pp.  53,  54. 
®  Vide  infra,  11.  p.  103. 


CHAP.  VI.]     Organization  of  foreign  Trade  1604  123 

Then,  with  regard  to  the  claim  of  natural  liberty  of  the  trade  of 
merchandize,  the  question  is  not  so  much  what  was  most  convenient  to 
the  mercantile  class,  but  what  kind  of  organization  was  most  advan- 
tageous to  the  country  as  a  whole.  Even  in  civilized  countries  the 
sovereign  exercised  some  powers  in  admitting  aliens  to  trade  there ;  in  a 
semi-civilized  State  the  permission  to  traffic  depended  wholly  on  the 
caprice  of  the  ruler.  Supposing  all  Englishmen  were  empowered  to 
enter  a  country  on  condition  of  paying  their  proportionate  share  of  the 
expenses  involved  (such  as  the  charge  for  an  ambassador,  for  bribes  and 
presents),  it  would  be  necessary  that  there  should  be  some  form  of 
organization  whereby  a  trader,  who  refused  to  bear  his  part,  might  be 
excluded.  Or  again,  in  order  to  comply  with  the  practices  of  the  foreign 
country,  it  would  be  essential  that  the  heads  of  the  trades  should  have 
powers  to  disfranchise  any  individual  whose  conduct  was  likely  to  injure 
the  reputation  of  the  whole  body ;  since,  in  places  like  Russia  or  India, 
the  offence  of  a  single  Englishman  was  likely  to  occasion  the  suspension 
of  the  privileges  granted  by  the  sovereign  there ^  If  these  ideas  be 
carried  to  their  logical  outcome,  one  obtains  the  conception  of  a  regulated 
company,  only  slightly  less  restricted  than  those  condemned  in  the  bills. 

It  is  obvious,  too,  that  the  conditions  on  which  Englishmen  could 
enter  on  foreign  trade  to  most  advantage  depended  to  some  extent  on 
the  nature  of  the  route  to  those  countries,  as  well  as  the  state  of  their 
civilization.  The  Mediterranean  was  infested  with  pirates,  and,  within 
a  few  years,  the  Dutch  had  fortified  trading  stations  in  India.  It  was, 
therefore,  necessary  that  English  ships  should  be  heavily  armed,  and 
that  several  should  sail  together.  That  this  should  be  so  required  some 
form  of  centralized  organization,  and  it  was  no  great  extension  of  its 
powers  to  place  some  limit  either  on  the  number  of  traders,  or  on  the 
goods  handled,  or  both,  as  had  been  the  practice  of  the  regulated  com- 
panies^. Moreover,  when  the  position  of  the  English  merchants  in  a 
foreign  country  was  so  precarious,  it  was  essential  that  they  should 
present  a  united  front,  and  this  object  was  best  obtained,  in  the  semi- 
civilized  countries,  by  the  joint-stock  system. 

The  promoters  of  the  bills  in  1604  expressed  themselves  in  favour  of 
the  regulated  company,  on  the  ground  that  it  gave  more  scope,  under 
the  modifications  proposed,  to  individual  initiative.  For  this  reason, 
the  joint-stocks  of  the  Levant  and  Russia  companies  were  condemned. 
The  fact  appears  to  have  been  that,  in  view  of  the  recent  peace,  there 
was  a  considerable  amount  of  energy  and  capital  ready  to  be  directed 
towards  foreign  trade.    This  idea  is  expressed  by  Sandys  in  the  following 

1  This  actually  happened  in  India  in  1647,  vide  infra)  ii.  pp.  118,  119. 

2  S.  van  Brakel,  Die  Entioicklung  und  Organisation  der  Merchant-Adventurers  in 
Vierteljahrschrijl  fur  Social-  und  Wirtschaflsgeschichte,  v.  p.  408. 


124       New  Trades  resembled  Inventions  1604    [chap.  vi. 

terms — "  What  else  shall  become  of  gentlemen's  younger  sons,  who 
cannot  live  by  arms,  when  there  is  no  wars,  and  learning  preferements  are 
common  to  all  and  mean  ?  So  that  nothing  remains  for  them,  save  only 
merchandize  (and  such  is  the  use  of  other  politick  nations),  unless  they 
turn  serving  men  which  is  a  poor  inheritance  ^^  Although  the  bills 
were  introduced  in  the  Commons,  as  measures  tending  to  make  the 
foreign  trade,  hitherto  restricted,  open  to  all ;  when  they  came  before 
the  House  of  Lords  on  June  30th,  it  was  clearly  recognized  that  they 
were  promoted  by  a  group  of  merchants,  and  eight  of  these  were  ordered 
to  appear  as  against  the  same  number  on  behalf  of  the  companies ^ 

While  it  appears  there  is  reason  to  suspect  that  the  promoters  of  the 
proposed  legislation  aimed  at  forcing  open  the  door  of  certain  foreign 
trades,  with  the  possibility  of  closing  it  again  in  the  faces  of  those  who 
sought  admission  after  them,  it  is  not  to  be  inferred  that  the  position 
taken  up  by  the  companies  was  altogether  maintainable.  To  form  any 
estimate  of  the  merits  of  the  case  it  is  necessary  to  remember  the  rela- 
tively small  amount  of  the  commerce  where  the  trade  was  reserved. 
With  the  exception  of  the  Merchant  Adventurers,  the  other  companies 
had,  at  this  time,  comparatively  small  capitals.  If  a  comparison  be 
made  with  a  home  industry,  such  as  the  Mines  Royal  (which  controlled 
only  a  moderate  amount  of  English  mining),  it  will  be  found  that  the 
maximum  recorded  stock  of  the  Russia,  the  Levant  and  East  India 
companies  was  not  more,  in  each  case,  than  two  or  three  times  that  of 
the  Mines  RoyaP.  On  the  whole,  contemporary  opinion  appears  to 
have  been  justified  in  regarding  a  new  branch  of  foreign  trade  as 
resembling  an  invention,  and,  as  such,  entitled  to  a  monopoly  for  a 
number  of  years.  This  claim  was  admitted  in  the  "  Instructions,"  and 
a  term  was  suggested,  namely  that  such  privileges  should  not  extend 
beyond  the  lives  of  the  discoverers^.    The  reasons  for  a  generous  measure 

1  Journals  of  the  House  of  Commons ,  i.  p.  219. 

2  Journals  of  the  House  of  Lords,  i.  p.  334.  The  bills  had  been  passed  in  the 
Commons,  only  forty  members  voting  against  them.  In  the  House  of  Lords,  after 
petitions  had  been  deposited,  counsel  were  heard  for  and  against,  and  afterwards 
Coke  addressed  the  House.  Although  he  thought  the  purpose  of  the  bill  was  good 
he  condemned  it,  on  account  of  its  form  and  the  many  inconveniences  that  would 
result  from  it.  A  conference  was  arranged  for  July  5th  but,  owing  to  the  dissolution 
of  Parliament,  no  further  steps  were  taken.     Ibid.,  i.  pp.  336,  341. 

3  In  1600  the  whole  outlay  by  the  Mines  Royal  was  returned  at  £27,000.  The 
capital  of  the  Russia  company  does  not  appear  to  have  exceeded  some  £50,000,  that 
of  the  Levant  company  is  said  to  have  been  £80,000  in  1581,  while  the  stock  of  the 
East  India  company  from  1600-3  was  £68,373. 

*  Journals  of  the  House  of  Commons,  i.  p.  221.  It  is  worth  noticing  however  that, 
although  the  East  India  company  had  only  been  in  existence  three  years,  it  also  was 
included  amongst  those  which  it  was  recommended  should  be  carried  on  without  a 
monopoly. 


CHAP.  VI.]    Term  for  Privileges  of  new  Trades  1604    125 

of  encouragement  are  obvious.  New  foreign  trades  were  opened  often 
at  great  personal  risk,  and  there  was  almost  invariably  an  expenditure  of 
capital,  without  any  immediate  return.  It  therefore  was  reasonable  that 
the  first  adventurers  should  be  given  a  number  of  years  of  exclusive 
trade,  in  which  they  should  have  a  chance  of  obtaining  the  reward  for 
their  risk.  From  the  point  of  view  of  the  encouragement  of  capital, 
the  period  of  such  concessions  would  therefore  be  fixed  at  about  a 
generation ;  since,  if  the  original  adventurers  had  not  recouped  them- 
selves in  that  time,  there  would  be  every  reason  to  doubt  either  the 
value  of  their  "  discovery,''  or  else  their  capacity  to  manage  it.  From 
the  point  of  view  of  the  nation  as  a  whole,  there  might  be  other  con- 
siderations which  would  justify  the  prolongation  of  the  monopoly.  The 
State  was  not  sufficiently  well  organized  to  protect  English  merchants  in 
foreign  countries,  and  therefore,  in  the  more  disturbed  places,  or  in  those 
to  which  the  route  was  dangerous,  the  traders  were  compelled  to  protect 
themselves.  Thus  until  the  home-government  was  powerful  enough  to 
guard  the  interests  of  its  commerce  abroad,  some  kind  of  company  with 
large  powers  was  required.  Therefore,  in  spite  of  the  short-sightedness 
of  some  of  the  companies,  it  seems  probable  that  English  foreign  trade 
was,  on  the  whole,  less  unstable  in  a  disturbed  foreign  country  under 
a  company  with  a  monopoly  than  when  open.  There  were  two  striking 
instances  of  this  just  at  this  time.  The  Levant  company  had  originally 
been  conducted  on  a  joint-stock  basis ^  It  had,  amongst  other  privi- 
leges, the  monopoly  of  importing  currants,  subject  to  the  payment  of 
a  very  heavy  tax  to  the  Crown.  The  joint-effect  of  the  monopoly  and 
the  tax  was  to  make  currants  dear;  and,  towards  the  end  of  the  sixteenth 
century,  the  trade  was  made  open.  Within  a  few  years  the  position  of 
the  merchants  became  so  precarious  that  it  was  necessary  to  re-establish 
the  company  as  a  regulated  one  with  a  moderate  fee  for  admission.  It 
was  not  long  before  the  management,  by  confining  membership  to 
"  legitimate ""  merchants  {i.e.  those  who  had  served  an  apprenticeship  in 
the  Turkey  trade),  made  entrance  more  difficult  than  it  had  been  before. 
Then  there  was  the  case  of  the  Spanish  trade,  which  had  been  under  an 
embargo  during  the  war.  A  company  was  founded  with  a  monopoly  for 
this  trade,  apparently  with  the  object  of  affording  the  merchants  pro- 
tection. Naturally  such  a  monopoly  was  subject  to  many  objections, 
for  there  could  be  no  claim  that  commerce  with  Spain  was  a  new  dis- 
covery. What  should  have  been  done  was  the  securing  of  the  rights  of 
English  merchants  under  the  treaty  of  peace,  and  then  for  the  govern- 
ment in  England  to  have  seen  that  these  were  observed.  Instead  of 
adopting  this  course,  a  company  with  a  monopoly  was  created,  which 

1  In  Sandys'  'instructions"  it  is  stated  that  the  joint-stock  was  unsuccessful,  but 
there  are  grounds  for  holding  a  contrary  opinion,  vide  infra,  ii.  p.  85. 


126     Gain  to  the  Crown  from  Monopolies  1604     [chap.  vi. 

was  dissolved  by  act  of  Parliament  in  1606.  Within  a  few  years, 
English  traders  with  Spain  were  involved  in  endless  difficulties,  through 
seizures  of  their  persons  and  goods  at  the  instance  of  the  Inquisition  ^ 
A  case  of  this  kind,  so  near  home,  shows  the  need  of  protecting  the 
merchant,  and,  when  the  State  was  unable  to  perform  this  function, 
delegation  of  some  of  its  powers  to  a  trading  corporation  appears  to 
have  been  inevitable. 

The  great  abuse  in  the  monopolies  for  foreign  trade  consisted, 
not  so  much  in  the  existence  of  the  monopoly  as  such,  but  in  the 
supervision  of  it  being  exercised  in  a  wrong  direction  by  the  State. 
The  effect  of  the  delegation  of  certain  powers  to  a  body  of  capitalists 
with  reference  to  a  given  area,  involved  a  large  privilege,  in  return  for 
which  the  State  was  entitled  to  exact  benefits  from  those  who  obtained 
that  privilege.  This  limitation  of  the  monopoly  took  the  form  of  the 
exaction  from  the  company  of  the  maximum  gain  to  the  Crown,  either 
in  furnishing  loans,  or  guaranteeing  the  credit  of  the  sovereign,  or  again 
in  making  high  customs  payments.  Therefore  the  tendency  was  to 
increase  the  price  of  the  commodities  imported,  irrespective  of  the 
influence  of  the  monopoly.  Thus  much  of  the  dissatisfaction  against 
the  high  prices,  charged  by  some  of  the  companies,  was  occasioned  by 
the  tax  imposed  on  them  by  the  government.  For  instance,  Sandys 
complained  that  the  Russia  company,  by  arranging  not  to  import 
I  cordage  for  three  years,  had  advanced  the  price  by  50  per  cent.^ 
I  What  appears  to  have  happened  was  that  the  whole  working  capital 
I  of  the  company  was  locked  up  in  a  debt,  due  to  it  by  the  Navy,  which 
{remained  unpaid  for  a  number  of  years,  and  therefore  the  company  was 
^without  funds  to  trade  to  any  considerable  extent^.  Instead  of  taking 
the  last  penny  possible  from  the  companies  by  the  methods  mentioned, 
the  administration  would  have  been  better  advised  to  have  controlled 
the  monopoly,  by  making  it  a  condition  that  a  limit  should  be  imposed 
on  the  prices,  at  which  the  imported  commodities  should  be  sold. 
So  many  measures  received  the  sanction  of  Parliament  for  checking 
the  possibilities  of  privileged  bodies  charging  monopoly-prices  in  the 
home  trade,  that  it  is  remarkable  that  the  same  plan  was  not  applied 
to  foreign  commerce.  Probably  the  reason  of  the  omission  was  that 
the  position  of  monopolies  was  always  debated  in  the  House  of  Commons 
under  great  pressure,  and  that  the  attacks  were  made  by  the  mercantile 
class,  whose  object  was  rather  to  keep  up  than  to  reduce  prices*. 

1  Relations  of  the  Crown  to  Trade  under  James  I.,  by  F.  Hermia  Durham  in 
Transactions  of  the  Royal  Historical  Society,  New  Series,  xiii.  pp.  205,  206. 

2  Journals  of  the  House  of  Commons,  i.  p.  220. 

3  Vide  infra,  ii.  p.  50. 

*  It  is  interesting  to  notice  traces  of  this  tendency  in  Sandys'  "Instructions" — 


CHAP.  VI.]    Position  of  the  Russia  Company  1604        127 

It  is  true  that,  in  most  of  the  Elizabethan  charters,  there  was  a 
revocation  clause;  but,  in  the  circumstances  indicated,  this  gave  little 
protection  to  the  consumer.  As  long  as  a  company  was  "  profitable 
to  the  Crown"  it  was  not  likely  that  its  charter  would  be  revoked. 
In  fact  the  outcome  of  the  situation  involved  the  taxing  of  the 
consumer,  mainly  for  the  benefit  of  the  Crown,  while  the  company  bore 
the  odium  of  the  resulting  high  prices. 

In  respect  to  the  nature  of  its  privileges,  the  Russia  company 
occupied  a  somewhat  unique  position,  since  its  charter  was  without  a 
revocation  clause,  and  it  had  an  act  of  Parliament  confirming  its 
monopoly  \  For  some  reason,  Sandys''  report  is  specially  hostile  to 
this  undertaking,  which  is  described  as  a  "strong  and  shameful 
monopoly."  In  its  petition  against  the  bill,  the  company  laid  special 
stress  on  the  fact  that  it  had  secured  parliamentary  sanction,  and 
that  it  had  in  effect  discovered  three  new  trades — first  the  trade  to 
Russia  proper,  then  to  Persia  and  lastly  the  whaling  industry  which 
as  yet  was  not  developed  2.  To  this  the  Committee  of  the  Commons 
replied  that  the  company  should  have  reaped  sufficient  profit,  or  if 
it  had  not,  the  management  was  to  be  blamed.  No  notice  is  taken 
of  the  fact  that  whaling  was  new,  or  that  the  present  company  had 
purchased  the  rights  of  its  predecessors  ^  Thus  the  members  could 
show  that,  in  the  half  century  since  the  foundation,  three  new  branches 
of  commerce  had  been  opened;  and  that,  so  far,  the  company  had 
justified  the  privileges  it  enjoyed.  These  matters  introduce  several 
points  of  difficulty  in  deciding  what  would  have  been  the  most  equitable 
solution  in  1604,  in  view  of  the  hostility  towards  the  immunities  vested 
in  this  body.  First  of  all,  the  claim  of  the  company,  that  it  was  in 
difficulties  and  had  not  been  able  to  recover  the  capital  outlay  on  its 
discoveries,  may  be  dismissed.  Although  the  fate  of  the  first  joint-stock 
is  uncertain,  there  is  every  reason  to  believe  that  the  second  made  very 
large  profits.  Hence,  on  the  ground  advanced,  there  was  no  reason  to 
prolong  the  monopoly  of  the  original  trade  to  Russia.  The  discovery  of 
whaling  grounds,  at  this  time,  stood  on  a  different  footing,  since,  as  yet, 
small,  if  any,  benefits  had  been  reaped  from  it.  Therefore,  in  1604, 
the  company  was  entitled  to  a  guarded  monopoly  for  a  term  of  years 
for  whaling.  Whether  the  monopoly  of  the  Russian  trade  should  have 
been  continued  or  not  depends  upon  several  considerations.  It  was 
necessary  to   send  heavily  armed   ships,  which   enterprize   required   a 

''There  is  no  greater  [.''error]  than  that,  if  trade  be  made  free,  our  commodities  will 
abate  their  price  abroad." 

1  Vide  infra,  ii.  pp.  37-42. 

2  State  Papers,  Domestic,  James  I.,  viii.  69 ;  Calendar ,  1603-10,  p.  117. 

3  Vide  infra,  ii.  p.  48. 


128        Position  of  the  Russia  Company  1604     [chap.  vi. 

powerful  organization.  Russia  was  scarcely  sufficiently  civilized  to 
enable  English  merchants  to  trade  there  without  stronger  protection 
than  could  be  given  either  by  the  government  or  by  a  regulated 
company.  For  these  reasons,  it  might  be  concluded  that,  in  spite  of  the 
unprogressive  way  in  which  the  monopoly  had  been  exercised  from  1595 
to  1605,  there  was  no  greater  disadvantage  in  continuing  it  than  in 
opening  the  trade.  On  the  other  hand,  it  was  asserted  by  Sandys  that 
Englishmen,  who  were  not  members  of  the  company,  traded  with  Russia 
through  Holland,  but  here  again  it  would  appear  that  there  is  a  certain 
suggestio  falsi  since  such  trade  or  that  at  Narva,  carried  on  by  inter- 
lopers, was  on  a  very  small  scale ;  thus  it  is  related  that  at  the  latter 
place  sales  of  cloth  of  this  kind  were  only  made  by  men  who  "  peddled '' 
it  through  the  streets  \  If,  however,  Sandys'  statements  be  accepted, 
it  would  follow  that  an  English  monopolistic  organization  was  no  longer 
necessary.  Had  this  conclusion  been  adopted,  and  the  company  were 
continued  with  a  monopoly  for  a  certain  time  for  whaling,  while  the 
Russian  trade  was  made  open,  something  remains  to  be  said  in  favour 
of  the  shareholders  in  1604.  Unlike  other  charters,  that  which  they 
had  bought  from  the  previous  company  had  no  revocation  clause,  and  it 
was  confirmed  by  an  act  of  Parliament.  In  view  of  the  discoveries  made 
and  the  assistance  given  the  government  in  various  ways,  there  were  no 
special  reasons  why  the  incorporation  should  be  revoked.  Therefore,  on 
the  supposition  that  merchants  could  trade  safely  to  Russia,  it  would 
appear  equitable  that  the  existing  shareholders  should  have  received  some 
moderate  compensation  for  surrendering  their  monopoly  of  the  Russian 
trade. 

1  A  Treatise  of  Commerce ,  wherein  is  showed  the  Commodities  arising  by  a  well-ordered 
and  ruled  Trade,  by  John  Wheeler,  Middleburg,  1601,  p.  74.  Even  if  Wheeler 
exaggerated,  the  foundation  of  the  Dutch  Russia  Company  a  few  years  later  made  any 
English  trade  through  Holland  to  Russia  very  precarious — Van  Brakel,  Hollandsche 
Handelscompagnieen,  pp.  22,  23. 


CHAPTER  VII. 

British  Commerce  and  Finance  from  the  Peace  of  1604 
TO  the  Crisis  of  1620. 

The  first  years  of  the  seventeenth  century  found  England  suffering 
from  loss  of  trade  and  high  taxation.  It  is  impossible  to  determine 
whether  the  cost  of  the  struggle  with  Spain,  on  the  whole,  had  checked 
the  increase  of  the  national  wealth.  It  is  estimated  that  the  aggregate 
property  of  the  country  in  1600  cannot  have  exceeded  100  millions^ 
This  sum,  though  apparently  small,  certainly  represents  a  great  increase 
on  the  total  fifty  years  before. 

The  period  of  depression,  which  had  lasted  since  the  crisis  of  1586, 
began  to  pass  away  after  the  outbreak  of  plague  in  1603  was  over,  and 
signs  of  revival  first  show  themselves  in  1604.  It  is  true  that  the 
foundation  of  the  East  India  company  in  1600  is  to  be  regarded  rather 
as  an  outlet  for  capital  diverted  from  the  Levant  trade  than  6is  an 
actual  gain  in  the  opening  up  of  an  additional  branch  of  commerce*, 
while  the  expedition,  organized  by  Raleigh  and  Southampton  to 
America  in  1602,  although  successful  to  a  limited  extent,  was  only 
experimental'.  The  succession  of  James  I.  was  accepted  as  an  omen 
of  better  relations  between  England  and  Scotland,  and  the  conclusion 
of  peace  with  Spain  prepared  the  way  for  a  period  of  recuperation  and 
development.  The  last  traces  of  the  depression,  which  had  continued 
for  about  seventeen  years,  are  to  be  found  in  the  final  payments  of  the 
subsidy  of  1602-5  and  the  efforts  of  Parliament  in  1604  to  make 
sweeping  changes  in  the  organization  of  foreign  trade.  If  the  reasoning 
in  the  previous  chapter  be  sound,  this  was  an  early  instance  of  those 
popular  remedies  for  trade  depression,  which  are  often  erroneous  and 
almost  always  too  drastic*. 

The  year  1604  is  a  turning  point ;  on  the  one  side  of  which  there 
were  seventeen  years  on  the  whole  bad,  and  on  the  other  there  was  a 

1  The  Ormoth  of  Capital,  by  Robert  Giffen,  London,  1889,  pp.  83,  110. 

2  Vide  infra,  ii.  pp.  87,  88,  91,  92.  3  j^^,^  ,j^  p^  246. 
*  Vide  supra,  pp.  120,  121. 

s.  c.  I.  9 


130       Progress  of  Joint-Stock  System  1603-20    [chap.  vn. 

period  of  about  the  same  length,  which  was  good  on  the  whole.  During 
the  latter  interval  British  commerce  made  rapid  progress.  The  opening 
of  markets,  closed  by  the  war,  was  in  itself  an  important  element 
towards  the  restoration  of  prosperity.  It  was  soon  noticed  that  wealth 
was  being  accumulated,  and  it  was  declared  that  "  the  nation  was  far 
richer  than  in  all  the  long  reign  of  Queen  Elizabeths"  There  was  both 
an  increase  in  the  standard  of  living  and  in  the  population ;  thus  a 
contemporary  writer  points  to  "the  superfluity  and  increase  of  these 
our  times,  of  this  our  kingdom  that  hath  more  people  than  pasture  ^.■" 
The  same  tale  of  industrial  progress  is  told,  with  more  precision,  by 
the  income,  returned  by  the  Exchequer  as  derived  from  Customs. 
Comparing  the  five  years  ending  with  the  plague  of  160S  with  the  same 
period  up  to  1615-16,  the  average  annual  receipts  show  an  increase  of 
35  per  cent.^  Such  expansion  of  trade  is  attributable  in  part  to  the 
recovery  of  European  markets,  but  allowance  must  also  be  made  for 
the  prosecution  of  new  enterprizes,  which  had  not  been  adventured 
during  the  war. 

The  East  India  trade  was  beginning  to  yield  large  profits;  and 
although,  after  the  amalgamation  of  the  independent  Dutch  under- 
takings into  one  powerful  company  in  1602,  there  was  a  concealed 
menace  to  the  progress  of  the  British  organization,  it  required  time 
for  this  danger  to  manifest  itself^  The  Russia  company  was  successful 
in  its  whaling  voyages  up  to  1615%  and  in  1618  the  trade  to  Africa 
was  re-opened^.  Not  only  were  former  markets  recovered,  but  real 
progress  was  made  with  the  colonization  of  America.  There  were  the 
two  Virginia  companies  incorporated  in  1606,  the  settlement  of  the 
Bermudas  in  1611,  the  attempts  to  occupy  Guiana,  first  by  Raleigh 
and  again  in  1619  by  a  company'^.  Then  came  the  formation  of  the 
New  England  company  in  1620  and  the  beginning  of  the  New  Scotland 
or  Nova  Scotia  venture  in  the  following  year^  The  same  spirit  of 
enterprize  manifested  itself,  not  only  abroad,  but  also  at  home.  The 
settlement  of  a  large  tract  of  land  in  Ireland  was  undertaken  in  1609 

1  A  Detection  of  the  Court  and  State  of  England,  by  Roger  Coke^  171 9,  i.  p.  94. 

2  A  Discourse  of  Marriage  and  Wiving,  3  615,  in  Harleian  Miscellany  (1746),  ii. 
p.  152. 

3  Vide  infra,  iii.  p.  621 ;  Gardiner,  History  1603-16  (1863),  ii.  p.  415.  These 
periods  are  comparable,  as  the  ''new  impositions"  are  not  included  in  the  second 
five  years.  The  increase  would  be  larger  if  1610-11  had  been  substituted  for 
1615-16,  as,  owing  to  the  disturbance  of  the  cloth  trade  in  that  year,  the  Customs 
were  greatly  reduced. 

4  Vide  infra,  ii.  pp.  93-101. 

6  Ihid.,  II.  p.  53.  6  Ibid.,  ii.  p.  11. 

7  Rid.,  II.  pp.  245-7,  252,  259-66,  299,  300,  323-6. 

8  Ihid.,  II.  pp.  301-6,  318,  319. 


CHAP,  vn.]  State  of  Invention  1603-20  131 

by  the  body  known  later  as  the  Irish  society ;  and,  about  the  same 
time,  efforts  were  being  made  to  recover  lands  by  drainage ^  Then  the 
improving  of  the  water-supply  of  London,  by  the  introduction  of 
spring-water,  as  distinguished  from  that  hitherto  provided  by  pumping 
engines  from  the  Thames,  was  begun  and  brought  to  a  successful 
conclusion'.  It  also  seems  to  be  within  this  period  that  large  quantities 
of  silver  were  discovered  in  Wales  by  a  subsidiary  company  of  the 
Mines  Royal  society'. 

It  is  perhaps  a  little  surprising  that  in  the  home  trade  there  were 
comparatively  few  inventions,  in  the  narrower  sense  of  the  word — that  is 
discoveries  of  new  processes,  as  distinguished  from  the  introduction  of 
a  method  previously  adopted  abroad  or  from  the  misleading  descriptions 
provided  by  petitioners  for  monopolies.  The  chief  direction,  in  which 
invention  showed  itself,  was  the  effort  to  devise  furnaces  for  the  sub- 
stitution of  coal  for  wood  in  several  industries*.  The  reason  for  the 
relative  absence  of  invention  in  this  period,  as  compared  with  the 
earlier  part  of  the  reign  of  Elizabeth,  appears  to  have  been  partly  that 
there  were  numerous  advantageous  openings  for  capital  in  foreign  trade, 
and  partly  that  men  of  an  ingenious  turn  of  mind  could  utilize  their 
abilities  more  profitably  in  devising  projects  for  obtaining  grants  for 
other  than  industrial  objects,  such  as,  for  instance,  "the  Dan  vers'",** 
"the  Green- Wax*""  and  "Jurors'"  patents^ 

During  the  reign  of  Elizabeth  the  development  of  enterprizes 
requiring  capital  had  been  largely  conditioned  by  the  state  of  foreign 
politics.  In  the  succeeding  seventeen  years  the  effects  of  peace  abroad 
were  modified  to  some  extent  by  the  personal  character  of  James  I.  and 
by  the  financial  situation.  It  is  difficult  to  touch  on  this  subject 
without  trenching  on  the  sphere  of  the  historian  of  the  British  con- 
stitution, since  the  views,  held  by  James  I.  on  his  prerogative,  were 
manifested  as  much  in  the  industrial  world  as  in  any  other.  Perhaps 
the  most  concise  manner  of  summing  up  a  character  which,  while  not 
more  contradictory  than  that  of  most  men,  appears  unstable  and 
vacillating  to  a  remarkable  degree,  would  be  to  describe  it  as  one  that 
possessed  the  intellectual  qualities  developed  in  certain  directions  to  a 
high  degree,  while  the  practical  activities  were  lamentably  deficient. 
In  many  respects  James  I.  was  more  clear-sighted  than  his  ministers, 

1  Vide  infra,  n.  pp.  338,  339,  363.  «  Ihid.,  in.  pp.  18-20. 

3  Ibid.,  II.  p.  401.  4  lUd.y  II.  pp.  463,  464. 

^  Three-quarters  of  the  benefit  of  fines  and  forfeitures  above  £2,800  a  year. 

®  Granted  to  Sir  Roger  Aston  for  fines  and  forfeitures,  known  under  the  name 
of  "  green-wax,  in  the  Duchy  of  Lancaster. " 

'  Granted  to  Sir  Henry  Bronker  for  the  collection  of  "  the  fines  of  Jurors  not 
appearing  in  England" — Journals  of  the  House  of  Commons ,  i.  p.  316. 

9—2 


132         Views  of  James  L  on  Trade  1607-15    [chap.  vn. 

and  it  sometimes  happened  that  his  views  were  exceptionally  enlightened. 
His  policy  of  peace  was  one  which  both  England  and  Scotland  needed, 
and  his  advocacy  of  the  Union  was  characterized  by  a  statesman-like 
outlook.  Speaking  of  the  latter  in  1607  he  described  it,  from  the 
point  of  view  of  the  advantage  of  England,  as  follows — "  Who  is  so 
ignorant  that  doth  not  know  the  gaine  will  bee  great  ?  Doe  you  not 
gaine  by  the  union  of  Wales?  And  is  not  Scotland  greater  than 
Wales?  Shall  not  your  dominions  be  encreased,  of  landes,  seas  and 
persons  added  to  your  greatnesse  ?  And  are  not  your  landes  and  seas 
adjoinying?  For  who  shall  set  downe  the  limits  of  your  borders  but 
as  a  mathematicall  line  or  idaea  ?  Then  will  that  backe  doore  be  shut 
and  those  portes  of  Janus  bee  for  ever  closed.  You  shall  have  them, 
that  were  your  enemies  to  molest  you,  a  sure  backe  to  defend  you;  their 
bodies  shall  be  your  aides  and  they  must  be  partners  in  all  your 
quarrels^"  In  the  same  speech,  a  reply  was  made  to  the  objection — 
that  a  commercial  union  would  involve  a  loss  of  trade  to  some  towns 
or  individuals — which  was  more  broad-minded  than  the  standpoint  of 
the  House  of  Commons.  "  It  may  be,"  said  James,  "  that  a  merchant 
or  two  of  Bristow  or  Yarmouth  may  have  a  hundred  pounds  lesse  in  his 
packe,  but  if  the  Empire  gaine  and  become  the  greater,  it  is  no  matter^"" 
On  the  blessings  of  peace,  James  dilated  almost  with  eloquence — 
"  Denmark  and  Suevia ;  Suevia  and  Poland ;  Cleves  and  Brandenburg ; 
have  not  these  and  many  more  come  to  this  oracle  of  peace  and  received 
their  dooms  from  it?  If  the  members  of  a  natural  body  by  concord 
assist  one  another;  if  the  politic  members  of  a  kingdom  help  one 
another  and  by  it  support  itself ;  why  shall  not  the  monarchical  bodies 
of  many  kingdoms  be  one  mutual  Christendom ;  if  still  they  sing  this 
blessed  lesson  taught  them — Beati  Pacijlci^y  With  special  reference 
to  trade,  James  had  sometimes  ideas  of  considerable  brilliancy.  He 
occasionally  had  the  foresight  to  select  the  more  promising  of  the 
schemes  of  his  day  and  to  be  desirous  of  taking  a  share  in  the  risk. 
Thus  he  was  not  only  willing  but  anxious  to  become  an  adventurer  in 
the  East  India  company*,  and  his  connection  with  the  inception  of  the 
New  River  company  affected  the  capital  account  of  that  undertaking 
for  nearly  three  hundred  years'*.     Even  granting  that  it  was  Salisbury «, 

1  Journals  of  the  House  of  Commons,  i.  p.  363  ;  His  Majesties  Speech,.. the  last  Day 
of  March  1607,  in  Somers'  Tracts  (1750),  v.  p.  170. 

2  His  Majesties  Speech... the  last  day  of  March  1607,  in  Somers'  Tracts  (1760),  v. 
p.  166  ;  Journals  of  the  House  of  Commons,  i.  p.  361. 

3  The  Peacemaker,  quoted  by  Gardiner,  History  1603-42  (1893),  in.  p.  183. 
*  Vide  infra,  ii.  p.  108.  «  Hnd.,  in.  pp.  20,  21. 

6  The  son  of  Lord  Burghley,  who,  as  Sir  Robert  Cecil,  was  a  member  of  the 
later  Parliaments  of  Elizabeth,  vide  supra,  pp.  114,  118. 


CHAP,  vil]     The  Crown  Finances  and  Trade  1603-17     133 

who  first  introduced  this  scheme  to  the  notice  of  James  I.*,  the  interest 
which  he  showed  in  the  progress  of  the  work  is  sufficient  evidence  that 
he  was  able  to  recognize  the  possibilities  of  considerable  profits  being 
made.  Then  in  his  efforts  to  start  the  silk  and  dyeing  industries  in 
England,  as  well  as  in  the  idea  of  encouraging  fishing  in  Scotland*, 
he  showed  at  least  a  real  interest  in  the  development  of  the  countries 
under  his  rule. 

While  James  I.  had  such  moments  of  insight,  he  was  altogether 
deficient  in  the  more  prosaic  practical  qualities.  He  was  remarkably 
tactless  and  devoid  of  the  faculty  of  recognizing  the  most  efficient 
ministers  to  carry  on  the  government.  According  to  his  theory  of  his 
own  position  in  the  State,  he  should  have  been  exceptionally  industrious 
in  supervising  the  details  of  the  administration,  yet  adequate  super- 
vision was  wanting  during  his  reign.  Similarly,  with  regard  to  the 
Crown  finances  he  expressed  the  most  unimpeachable  sentiments — as 
for  instance  when  he  told  the  members  of  both  Houses  of  Parliament 
in  1604  "  if  the  meanes  of  the  Crowne  bee  wasted,  I  am  behoved  then  to 
have  recourse  to  you,  my  subjects,  and  bee  burdensome  to  you,  which 
I  would  be  loathest  to  be  of  any  King  alive'"''' — yet  in  actual  practice 
he  permitted  great  waste  of  the  Crown  Revenues.  Probably,  in 
succeeding  to  the  English  throne,  he  may  have  believed  that  the 
income  was  inexhaustible,  but  it  is  certain  that  the  revenue  failed  to 
pay  the  outgoings.  Thus  James  I.  was  periodically  pressed  for  money, 
and  this  was  one  of  the  reasons  of  his  difficulties  with  Parliament. 
Besides,  the  various  attempts,  that  were  made  to  keep  the  rapidly 
increasing  Crown  debt  within  some  reasonable  dimensions,  resulted  in 
numerous  interferences  with  commerce  which  occasioned  great  dis- 
satisfaction in  England.  Therefore,  the  situation  resolved  itself  into 
the  paradox  that,  while  James  I.  saw  clearly  the  advantage  of  a  less 
restricted  traffic  between  England  and  Scotland,  few  sovereigns  have 
restricted  and  disorganized  trade  more  than  he  did,  by  the  numerous 
and  ill-considered  burdens  he  laid  upon  it. 

The  state  of  the  finances  being  such  an  important  element  in  the 
history  of  the  time,  it  is  necessary  to  form  some  estimate  of  the  normal 
revenue  and  expenditure,  when  the  country  was  at  peace.  At  the 
beginning  of  the  reign  of  James  I.,  once  the  liabilities  incun-ed  during 
the  war  had  been  discharged,  it  should  have  been  possible  for  him  to 

1  An  Apology  for  the  late  Lord  Treasurer  by  Sir  Walter  Cope  in  Collectanea 
Curiosa,  i.  p.  125 ;  Aulicus  Coquinariae  in  The  Secret  History  of  James  the  First, 
I.  p.  163. 

2  Vide  infra,  ii.  pp.  66,  104,  361. 

3  The  Kings  Majesties  Speech  as  it  was  delivered,,. the  19  day  of  March,  1603, 
in  Somers'  Tracts,  v.  p.  165. 


134  TheCrown  Revenue  and  Expenditure  1^()^-S  [chap.  vn. 

have  paid  his  way  out  of  the  Ordinary  Revenue,  which  had  yielded 
a  considerable  surplus  over  the  Ordinary  Expenditure  in  the  time  of 
Elizabeth.  Mr  Gardiner  formed  the  following  estimates  of  the  resources 
available  for  James  I.,  on  the  basis  of  the  Ordinary  Revenue  and  Ex- 
penditure during  the  first  five  years  of  his  reign : 

Ordinary  Revenue        £247,000 

„         Expenditure^  290,700 

Deficit      £43,700 

This  calculation,  it  seems  to  me,  tends  to  over-estimate  the  necessary 
Ordinary  Expenditure  while  conversely  it  under-estimates  the  Revenue 
available  to  meet  it.  If,  at  the  end  of  the  reign  of  Elizabeth,  there 
was  a  surplus  of  about  ^90,000  on  the  ordinary  account,  an  explanation 
is  needed  to  show  how  it  became  unavoidably  converted  into  a  deficit 
of  over  ^£^40,000  within  the  next  five  years.  The  discrepancy  is  partly 
explained  by  the  nature  of  the  documents,  on  which  Mr  Gardiner''s 
estimate  of  the  Ordinary  Revenue  is  based.  These  were  the  actual 
receipts  recorded  at  the  Exchequer ;  and,  even  after  adding  the  income 
of  the  Duchy  of  Lancaster  and  the  Court  of  Wards,  some  other  small 
branches  have  still  to  be  included.  Another  account  gives  the  whole 
annual  nett  Ordinary  Revenue  during  the  last  five  years  of  the  reign  of 
Elizabeth  at  £^'ilQfiQQ^.  But  it  has  been  explained  elsewhere'  that, 
owing  to  the  strain  on  the  finances  at  this  time,  great  efforts  had  been 
made  to  augment  the  Ordinary  Revenue.  Moreover  large  sales  of 
Crown  lands  had  been  effected,  with  the  result  that  for  some  years  a 
decrease  in  rents  might  be  expected*.  On  the  other  hand,  after  a  few 
years  of  peace,  an  advance  in  Customs  might  be  anticipated '^.  Since, 
however,  the  latter  would  not  be  immediately  available,  such  increase 
may  be  neglected  for  the  present,  and  it  may  be  estimated  that,  at  the 
beginning  of  the  reign,  the  nett  Ordinary  Revenue  would  be  c5^25,000 
a  year  less  than  it  had  been  from  1598  to  1603,  that  is  in  other  words, 
on  an  average,  James  I.  and  his  financial  advisers  could  count  on 
^300,000  a  year,  apart  from  any  further  income  from  extraordinary 
sources.  This  would  have  balanced  the  estimate  of  the  Ordinary 
Expenditure  made  by  Mr  Gardiner.     But,  if  the  calculation  of  the 

1  Parliamentary  Debates  in  1610,  edited,  from  the  Notes  of  a  Member  of  the 
House  of  Commons,  by  S.  R.  Gardiner  (Camden  Soc.  1862),  p.  x. 

2  Vide  infra,  iii.  p.  517.  ^  l^^d.,  iii.  pp.  507,  508. 

*  From  1590  to  1593,  the  amount  returned  by  the  Receivers  General  had 
averaged  £68,000  a  year.  From  1599  to  1603  it  was  £10,000  less.  In  1603-4 
it  was  only  £50,000,  rising  in  1605  to  1607  to  £58,000— vw/e  infra,  in.  pp.  520, 
521 ;  Gardiner,  History  1603-16  (1863),  ii.  pp.  414,  415. 

5  At  the  end  of  the  Treasurership  of  Salisbury  the  income  had  increased  from 
£86,000  to  £125,000,  cf  Coke,  Apology  for  the  Late  Lord  Treasurer,  p.  124. 


CHAP.  vn.  ]  The  Crown  Revenue  and  Expenditure  1 603-8  135 

similar  outlay  from  1698  to  1603,  which  places  it  at  £9.9,5 fiOO  on  an 
average,  is  correct,  it  is  clear  that  the  increase  of  dP65,000  is  too  great. 
Much  has  been  written  of  the  desire  of  Elizabeth  for  personal  adorn- 
ment and  the  extent  and  variety  of  her  costumes,  but  it  is  a  little 
astonishing  to  find  the  accession  of  a  male  sovereign  urged  as  a  plea  for 
an  increased  allocation  to  "  the  Wardrobe ^"  Necessarily  it  cannot  be 
forgotten  that  James  I.  had  a  family,  and  that  therefore  the  expenses 
of  the  sovereign  would  be  somewhat  increased.  Still,  after  allowance 
is  made  for  this  and  for  the  maintaining  of  the  Court  in  a  somewhat 
more  lavish  style,  if  the  Ordinary  Expenditure  from  1598  to  1603  were 
increased  by  ^^25,000  or  .^35,000  (bringing  it  up  to  .£250,000  or 
^260,000  a  year),  a  sufficient  sum  would  be  provided  for  all  suitable 
expenditure  on  the  ordinary  account.  This  is  from  d^30,000  to  £AiO,000 
a  year  less  than  the  estimate  of  Mr  Gardiner;  but,  while  basing  the 
expenses  of  the  home  government  on  those  during  the  last  five  years 
of  the  reign  of  Elizabeth,  he  allows  James  I.  ^20,000  more  than  had 
been  paid  from  1598  to  1603.  Even  taking  account  of  expenses, 
continuing  in  Ireland  after  the  rebellion  there  had  come  to  an  end, 
the  allowance  for  this  charge  and  for  the  Navy  might  be  reduced  by 
<£1 5,000,  making  for  the  two  ^75,000,  which  was  still  almost  double 
what  had  been  granted  on  the  ordinary  account  towards  the  end  of 
the  reign  of  Elizabeth.  Further,  the  estimate  for  the  expenses  of  the 
Court  and  for  ambassadors  exceeds  that  from  1598  to  1603  by  =£5,000 
a  year.  These  deductions  from  Mr  Gardiner's  estimate  together  come  to  • 
d£*40,000  a  year,  making  it,  as  revised,  £250,000.  Thus  it  may  be  calcu- 
lated that  the  Ordinary  Revenue  would  produce  at  least  £300,000,  while 
the  Ordinary  Expenditure  should  not  have  exceeded  £260,000,  leaving 
a  surplus  of  about  £^40,000,  and  in  all  probability  this  surplus  could 
have  been  considerably  augmented,  with  care  in  the  supervising  of  the 
Revenue  and  economy  in  the  Expenditure: 

Estimate  of  the  Ordinary  Revenue  and  Eocpenditure, 

1598-1603  £325,000 

Deduct  (owing  to  sale  of  land  &c.)  25,000  £300,000 

Expenditure  1598-1603  225,000 

Add  for  further  expenses  of  the  Court        35,000  260,000 

Surplus         £40,000 

It  remains  to  enquire  what  was  the  extent  of  the  liabilities,  classed 
as  extraordinaries,  that  were  left  by  Elizabeth.  After  crediting  her 
with  the  portion  of  the  subsidies  voted,  but  not  paid,  at  the  date  of 
her  death  (and  which  had  been  ear-marked  to  pay  for  certain  war- 
expenditure)  the  gross  debt  of  £400,000  at  the  accession  of  James  I. 

^  Grardiner,  Debates  in  1610,  ut  supra,  p.  xi. 


136    Assets  and  Liabilities  of  the  Crown  1603-8    [chap.  vn. 

would  be  reduced  to  dfi'l 00,000  ^  In  addition  to  this,  there  was  the 
expense  of  restoring  the  Irish  coinage,  which  was  an  operation  similar 
to  the  payment  of  a  further  debt.  This  cost  £96,016^  The  funeral  of 
Elizabeth,  the  coronation  expenses  of  James  I.  and  special  embassies 
may  have  required  c^'l 00,000,  making,  in  round  numbers,  .£300,000  to 
be  found.  The  whole  of  this  sum  was  provided  by  a  part  of  the  Parlia- 
mentary grant  of  six-tenths  and  six-fifteenths  in  1606^  leaving  the 
estimated  surplus  of  the  Ordinary  Revenue,  available,  with  the  re- 
mainder of  the  subsidy,  to  answer  any  exceptional  and  unforeseen 
outlay,  such  as  the  addition  to  the  ordinary  charge  which  was  discovered 
to  be  needed  for  Ireland.  Further,  at  the  accession  of  James  I.,  the 
Crown  had  other  important  assets.  There  were  considerable  sums,  due 
to  Elizabeth  in  England,  and,  necessarily,  the  Extraordinary  Revenue 
would  be'  increased  by  as  much  of  these  as  could  be  collected.  Then 
again,  according  to  the  treaty  with  Holland  in  1598,  the  States  had 
bound  themselves  to  repay  the  money,  spent  on  the  English  expeditions, 
at  the  rate  of  .£^100,000  a  year  as  long  as  the  war  with  Spain  continued. 
After  the  declaration  of  peace,  the  whole  debt  of  .£''2,000,000  was 
to  be  discharged,  or  interest  was  to  be  paid  thereon  at  the  rate  of 
10  per  cent."*  Probably  it  would  have  been  impossible  for  anyone 
to  estimate  in  1603,  how  much  this  debt  or  that  of  Henry  of  France 
would  realize,  but  it  is  clear  that,  even  allowing  for  the  expense  of 
garrisons  in  the  cautionary  towns,  this  was  an  asset  of  great  potential 
value. 

Summing  up  the  whole  financial  position  at  the  accession  of 
James  I.,  it  is  clear  that  he  succeeded  to  an  Ordinary  Revenue,  which 
would  have  been  sufficient  for  the  needs  of  a  prudent  sovereign,  and 
the  extraordinary  expenses  were  provided  for.  But,  in  these  estimates, 
it  is  assumed  that  the  disbursements  would  have  been  made  with 
economy.  Had  this  been  so,  and  granting  a  continuance  of  peace,  the 
resources  of  the  Crown  would  have  sufficed.  As  it  was,  there  was  laxity 
of  supervision  in  the  administration  and  prodigaHty  in  the  Royal 
Household.  Besides  there  was  the  temptation,  which  proved  in-esistible 
to  James  I.,  to  reward  his  favourites  lavishly.  Therefore,  during  the 
first  years  of  his  reign  which  were  eminently  critical  from  the  financial 

1  Vide  infra,  iii.  p.  609. 

2  Gardiner,  History  1603-18  (1863),  ii.  pp.  417,  418. 

3  The  subsidy  of  the  laity  only  yielded  the  following  sums  : 

First      payment  2/10  and  2/15  £123,894 

Second       „  „      „      „  £112,279. 

State  Papers,  Domestic,  James  I.,  xxxvii.  38. 

*  A  Detection  of  the  Court  and  State  of  England,  by  Roger  Coke,  London,  1719, 

I.  p.  56. 


CHAP.  VII.]     The  Commons  and  Monopolies  1603-6       137 

point  of  view,  the  deficiency  became  greater  and  greater,  so  that  by 
1606  the  Crown  debt  was  ^735,280^— made  up  of  the  ^400,000 
"  Queen's  debt  **"  already  analyzed  and  ^£^335,000  contracted  by  James  I. 
The  greater  part  of  this  had  been  borrowed  on  Privy  Seals,  and  there 
was  in  addition  a  loan  of  .£60,000,  raised  in  London ^  It  was  not  only 
a  matter  for  regret  that  James  I.  had  contrived  to  incur,  in  three  years  of 
peace,  a  debt  greater  than  had  been  contracted  by  Elizabeth  in  war,  but 
he  had  rewarded  his  courtiers  in  various  ways,  without  actually  granting 
them  money,  which  proved  very  burdensome  to  the  country.  In 
addition,  some  taxes  had  been  imposed,  without  the  consent  of  Parlia- 
ment. It  was  the  object  of  the  House  of  Commons  to  induce  the  King 
to  remove  some  of  the  more  objectionable  grants ;  and,  at  the  same 
time.  Parliament  was  prepared  to  vote  a  sufficient  supply  to  reduce  the 
Crown  debt.  Altogether  about  twenty  recent  patents  were  discussed. 
Two  of  these  were  industrial  monopolies.  Of  this  class,  there  were  the 
patent  for  a  new  dye,  made  by  mixing  log-wood  with  other  substances 
(from  which  the  Crown  was  to  receive  £^00  a  year),  and  a  new  method 
of  starch-making'.  Then  the  saltpetre  question  was  again  brought 
under  the  notice  of  the  House,  and  a  license  to  export  iron  ordnance,  as 
well  as  the  Royal  pre-emption  of  tin,  were  included  in  the  list  of 
grievances.  There  was  also  a  patent  to  sell  certain  wines,  at  an  advance 
on  the  prices  fixed  by  law.  Probably,  if  these  grants  had  stood  alone, 
they  would  not  have  excited  the  criticism  of  Parliament.  The  tax  on 
currants  had  been  imposed  to  make  good  the  loss  to  the  revenue, 
occasioned  by  the  withdrawal  of  the  payment,  made  by  the  Levant 
company,  on  account  of  the  monopoly  it  had  resigned  under  pressure 
some  years  before.  The  saltpetre  and  ordnance  grants  came  under  the 
category  of  the  provision  of  munitions  of  war.  There  remain  only  the 
log-wood  "*  and  the  starch  monopolies.  Since  in  the  same  Session,  Parlia- 
ment confirmed  the  monopolies,  previously  granted  by  charter  to 
the  Merchant  Adventurers  of  Exeter  (for  the  monopoly  of  trade  with 
France  to  the  exclusion  of  "  ignorant  artificers  who,  in  that  city,  took 
upon  them  to  use  the  science,  art  and  mystery  of  merchandize '"')  and  to 
the  gild  merchant  of  Southampton,  it  is  to  be  concluded  that  the 
objection  was  not  to  these  monopolies,  as  such,  but  to  their  origin, 

*  State  Papers,  Domestic,  James  I.,  xix.  45 ;  Calendar,  1603-10,  p.  300. 

2  Ibid.,  VIII.  108,  118 ;  x.  45 ;  xvii.  86 ;  Calendar,  1603-10,  pp.  133,  136,  276 ; 
Maitland,  History  of  London,  pp.  284,  290. 

3  A  Record  of  some  worthie  Proceedings :  in  the  Honourable,  Wise  and  FaithfuU 
House  of  Commons  in...  1611,  in  Somers'  Tracts  (1752),  xm.  pp.  284^  285;  Coll. 
Proclamations,  Soc.  Antiq.,  James  I.,  Aug.  23,  1607,  Jan.  10,  1609/10. 

*  The  Earl  of  Dunbar  received  £2,000  on  the  surrender  of  this  patent — State 
Papers,  Domestic,  James  I.,  xxxv.  22. 


138       The  Commons  and  Monopolies  1603-6    [chap.  vn. 

the  recipients  of  them  and  the  manner  in  which  they  were  exercised  ^ 
The  remainder  of  the  patents  introduced  the  objectionable  principle  of 
delegating  some  of  the  administrative  functions  of  the  home  govern- 
ment to  individuals,  in  order  that  the  patentees  might  be  provided  for. 
The  grant  to  Lord  Danvers  of  the  proceeds  of  fines,  forfeitures  &c.  was 
based  on  the  principle  that  those,  receiving  it,  should  pay  <^2,800 
a  year — that  being  the  average  amount  previously  realized — while  they 
retained  any  increase.  The  obvious  tendency  of  patents  of  such  a  kind 
would  be  towards  miscarriages  of  justice,  through  the  desire  of  the 
grantees  to  obtain  as  large  a  surplus  as  possible,  above  the  specified 
amount  which  was  to  be  paid  to  the  Crown.  When  this  concession  was 
recalled,  with  others  of  a  similar  nature,  James  I.  compensated  the 
patentees  by  promising  them  annuities  of  .£'1,100  a  year 2.  Another 
grant  of  a  somewhat  similar  character  was  that  to  the  Duke  of  Lennox 
for  sealing  New  Draperies.  This  had  been  intended  to  improve  the 
quality  of  certain  fabrics,  by  sealing  those  that  attained  to  a  specified 
standard.  But,  while  the  agents  of  Lennox  acted  according  to  the 
terms  of  the  patent,  the  income  would  be  confined  to  the  modest  fees 
derived  from  the  service  they  rendered.  It  was  not  long  before  further 
sums  were  exacted,  and,  what  was  still  more  reprehensible,  seals  were 
openly  sold,  so  that  the  presence  of  the  ofiicial  mark  was  no  longer  any 
guarantee  of  excellence  of  manufacture'. 

James  I.  was  induced  to  recall  or  modify  the  patents,  complained  of 
by  Parliament,  through  a  considerable  supply  having  been  granted  to 
him.  This  subsidy  consisted  of  six-fifteenths  and  six-tenths,  payable 
from  1607  to  1610^  When  Salisbury  became  Treasurer  in  May  1608, 
he  had  to  deal  with  an  accumulated  Crown  debt  which,  for  the  times,  was 
enormous.  It  amounted  to  about  a  million  ^  The  expenditure  was 
close  on  =5^600,000,  that  is  more  than  the  average  Elizabeth  had 
required,  when  the  country  was  at  war ;  and,  even  allowing  for  necessary 
additions  to  the  expenses  of  the  Crown  owing  to  the  princes  and 
princesses  having  grown  up,  this  was  double  what  was  necessary. 
Moreover,  the  expenditure  continued  to  gi-ow  at  an  alarming  rate; 
the  year  1607-8  showing  an  increase  of  about  40  per  cent,  on  the 
average  from  1603  to  1608^     Under  these  circumstances,  the  growth  of 

^  Anderson,  Annals  of  Commerce j  ii.  p.  305. 

2  Journals  of  the  House  of  Commons,  i.  pp.  205,  297,  298,  303,  316,  317,  318. 

3  The  English  Patents  of  Monopoly,  by  W.  Hyde  Price,  pp.  27,  28. 
*  Statutes,  IV.  p.  1108. 

^  State  Papers,  Domestic,  James  I.,  lii.  6;  Parliamentary  Debates  in  1610,  ut 
supra,  p.  XV ;  Gardiner,  History  (1889),  ii.  p.  13 ;  Montague,  History  of  England, 
1603-60,  p.  37. 

^  State  Papers,  Domestic,  James  I.,  xxxv.  29,  summarized  by  Gardiner,  History, 
1603-16  (1863),  p.  408. 


CHAP,  vn.]    Increase  of  the  Crown  Debt  1608  139 

the  revenue,  remarkable  as  it  was,  still  left  an  annual  deficit.  During 
the  first  five  years  of  the  reign  of  James  I.  the  total  receipts,  both 
ordinary  and  extraordinary,  were  ^^2, 183,244.  8*.  0^.,  as  compared  with 
06^2,612,137.  6.y.  3id  from  1698  to  1603,  when  the  supplies  granted  by 
Parliament  were  larger  owing  to  the  war^ 

Finding  that  it  was  hopeless  to  attempt  any  considerable  diminution 
in  the  expenditure,  Salisbury  devoted  himself  to  a  reduction  of  the  debt 
and  to  increasing  the  revenue.  By  Michaelmfiis  1608,  the  debt  had 
grown  to  dS'l, 400,000.  During  the  next  two  years  the  deficits  of  that 
time  were  met,  and  this  debt  was  reduced  to  ^300,000  by  means  of  the 
following  payments : 

The  subsidy  of  1607-10  realized  £460,000 

Sales  of  lauds  and  mills 400,000 

Copy-holders,  freed-woods  and  assarts  ...  100,000 

Old  debts  to  the  Crown 200,000 

Total  repaid  £1,150,000^ 

The  increase  in  the  revenue  was  accomplished  by  a  more  careful 
administration  of  the  Crown  property  and  also  by  the  creation  of  a 
system  of  additional  taxation  on  commodities.  These  new  duties  were 
estimated  to  produce  ^70,000,  and  they  represented  an  increase  of 
between  thirty  and  forty  per  cent,  on  the  existing  Customs'.  So  great 
an  addition  to  indirect  taxation  meant  a  heavy  burden  on  trade  and  on 
the  tax-payer.  The  subsidy  was  as  great  as  those  levied  from  1592  to 
1598;  and,  on  this,  the  increased  duties  were  superimposed.  Besides 
the  collection  of  the  other  sums,  on  account  of  old  debts,  fines  &c., 
meant  a  further  drain  on  the  floating  capital  of  the  country.  That  so 
great  an  unproductive  expenditure  was  borne  with  comparative  ease  is 
a  remarkable  testimony  to  the  advance  in  prosperity,  that  had  been 
made  since  the  restoration  of  peace.  The  fact  that  interest  at  this 
time  was  10  per  cent,  shows  partly  the  activity  of  trade  and  partly 
the  effect  of  the  diversion  of  capital  from  industry  towards  supplying 
the  royal  necessities*. 

When  Parliament  met  in  1610,  the  new  impositions  at  once  were 
brought  under  its  notice,  in  addition  to  other  interferences  with  trade, 
which  had  been  adopted,  either  with  a  view  to  increase  the  revenue,  or 
to  reward  favoured  persons.     The  duties  on  coals  from  Newcastle"*  were 

1  State  Papers,  Domestic,  James  I.,  xxxv.  29. 

^  Parliamentary  Debates  in  1610,  ut  supra,  p.  6.  ^  lUd.,  pp.  xviii,  xix. 

*  Court  Book  of  the  East  India  company,  ii.,  Feb.  16,  1608,  May  23,  1609. 

^  The  basis  of  this  tax  was  the  charters  to  the  town  of  Newcastle.  In  addition 
to  this  certain  charges  were  levied  in  London  which  James  I.  promised  should  be 
removed — England's  Grievance  discovered  in  relation  to  the  Coal  Trade,  by  Ralph 
Gardner,  North  Shields,  1849,  pp.  31-69;  The  Parliamentary  or  Constitutional 
History  of  England,  London,  1751,  v.  p.  240. 


140   ^^ Projects  to  improve  the  Revenue''  1611-14    [chap.  vii. 

complained  of  as  "  a  bad  grievance,"  and  attention  was  again  drawn  to 
the  taxes  on  currants,  wines  and  hides  \  Another  tax,  which  had  taken 
a  new  form,  was  that  on  pepper.  The  East  India  company  in  1609  had 
obtained  the  monopoly  of  importing  pepper.  The  duty  was  to  be 
6d  per  lb.,  while  the  company  was  bound  not  to  charge  more  than 
9>s.  6d.  per  Ib.^  It  was  felt  that  it  was  necessary  to  concentrate  the 
attention  of  the  House,  to  prevent  grievances  "  being  preferred  like 
pasquils^,""  and  criticism  was  directed  to  the  imposition  of  duties  by  the 
King,  irrespective  of  the  consent  of  Parliament.  The  speeches,  delivered 
on  both  sides,  bring  to  light  the  opposition  between  the  Court  and  the 
popular  party,  and  mark  at  the  same  time  the  beginning  of  the  con- 
stitutional struggle.  This  difficulty  was  only  one  of  several,  arising  out 
of  diffisrent  interpretations  of  the  prerogative,  and  occasioned  by  the 
extravagance  of  the  expenditure*.  Parliament  was  dissatisfied,  and  it 
adjourned,  having  granted  the  minimum  subsidy  of  only  one-tenth  and 
one-fifteenths 

After  the  dissolution,  the  financial  situation  presented  many  diffi- 
culties. Although  the  debt  had  been  reduced  in  1610,  the  supply  was 
far  from  sufficient  to  meet  the  deficit ;  and  there  was,  in  addition,  the 
expense  in  Ireland  due  to  the  rebellion  of  O'Dogharty  in  1608.  By 
1612  the  Crown  debt  had  grown  to  <£*500,000%  and  all  kinds  of  projects 
were  introduced  "  to  improve "  the  revenue.  A  notable  instance  of 
these  ingenious,  if  not  very  reputable,  devices  was  the  creation  of 
Baronets.  This  scheme  realized,  up  to  March  25th,  1614,  ,£'90,885  ^ 
Many  other  proposals  were  considered,  most  of  which  promised  either 
half  the  profit  or  a  substantial  money  payment,  annually,  to  the 
Crown.  It  is  this  class  of  project  that  is  satirized  by  Richard  Brome 
in  The  Court  Beggar : 

2  P.     Next  for  the  performance  of  our  undertakings. 

3  P.     And  then  the  certainty  of  the  propounded  profits. 

Both  to  the  king  and  us. 

It  frequently  happened  that  the  authorization  of  these  projects  gave 
James  I.  an  opportunity  of  rewarding  persons  about  the  Court,  either 

1  Journals  of  the  House  of  Commons ,  i.  pp.  416,  436. 

2  Court  Book,  ii.,  Oct.  27,  1609;  State  Papers,  Proclamations,  James  I., 
GLxxxvii.  No.  13  ;  Journals  of  the  House  of  Commons,  i.  p.  419. 

3  Journals  of  the  House  of  Commmis,  i.  p.  415. 

*  The  whole  question  is  fully  discussed  by  Gardiner,  History  (1889),  n. 
pp.  75-83. 

6  Statutes,  IV.  p.  1187. 

^  Parliamentary  Debates  in  1610,  pp.  163-79. 

7  Gardiner,  History  (1889),  ii.  p.  112 ;  An  Abstract  or  Brief  Declaration  of  the 
present  State  of  his  Majesties  Revenew,  with  the  Assignations  and  Defalcations  upon  the 
Same,  1651,  p.  11. 


CHAP.  VII.]  Activity  of  Trade  1613-15  141 

by  re-granting  the  sum  reserved  to  the  Crown  or  else  through  the 
propounder  having  agi'eed  to  pay  some  favoured  intermediary  a  large 
sum  on  obtaining  his  grant.  The  result  was  that,  when  Parliament 
met  in  1614,  it  was  reported  that,  "as  a  garden,  clean  weeded,  weeds 
next  year,"*'  so  since  1611  a  fresh  crop  of  objectionable  grants  had  sprung 
up^  The  patent  for  glass  was  characterized  as  a  "  pregnant  monopoly" 
and  there  was  a  likelihood  of  another  for  iron,  while  there  were  fears  that 
the  same  system  would  be  extended  to  glass  and  all  other  trades,  which 
would  be  "  like  taking  away  the  mill-stone  from  the  poor'.*" 

The  growth  of  projects,  for  the  improving  of  the  revenue,  was 
accompanied  by  many  ideas  for  new  processes  of  production — the  latter 
being  occasioned  by  the  great  activity  of  trade,  which  reached  its 
culminating  point  from  1613  to  the  beginning  of  1615.  Everywhere, 
except  in  the  royal  exchequer,  money  was  plentiful'.  The  rate  of 
interest  for  loans  on  the  best  security,  which  had  been  10  per  cent,  since 
the  beginning  of  the  seventeenth  century,  fell  to  9  per  cent,  in  1614; 
and,  for  a  short  time  in  the  following  year,  the  East  India  company 
was  able  to  borrow  at  8  per  cent.*  Most  of  the  companies,  which  had 
been  founded  on  the  de(;laration  of  peace,  had  begun  to  realize  some  of 
the  expectations  of  the  promoters.  The  planting  undertakings  were 
opening  new  markets  and  thereby  increasing  the  outlet  for  British 
commodities.  Foreign  trade  on  the  whole  was  flourishing.  The  capital 
employed  by  the  East  India  company  in  the  separate  stocks  during 
the  period  from  1609  to  January  1613  had  yielded  a  maximum  profit  of 
234  per  cent,  and  a  minimum  profit  of  121|  per  cent.,  not  per  annum, 
but  during  the  period  the  funds  were  employed,  which  was  longer'. 
The  Russia  company  had  been  remarkably  fortunate  and  it  was  able  to 
pay  90  per  cent.,  annually,  in  1611  and  again  in  1612^  At  home,  the 
reclamation  of  land  by  drainage  was  making  progress,  the  Irish  society 
had  been  formed  for  the  settlement  of  a  considerable  part  of  Ulster  and 
the  New  River  had  been  begun  ^. 

There  were  two  hidden  menaces  to  this  prosperity,  namely  the  com- 
petition of  the  Dutch  in  the  whaling,  the  East  India  and  the  cloth 
trades^ ;  and  added  to  this  was  the  possibility  that  James  I.,   under 

1  Journals  of  the  House  of  Commons,  i.  p.  491.  ^  Ibid.,  i.  p.  469. 

3  A  Detection  of  the  Court  and  State  of  England,  by  Roger  Coke,  1719,  i.  p.  94. 
*  Calendar  State  Papers,  Colonial,  East  Indies,  1513-1616,  pp.  272,  276,  293,  301, 
395,  418,  421. 

5  Vide  infra,  ii.  pp.  124,  125.  «  Ibid.,  ii.  p.  53. 

7  Ibid.,  II.  pp.  338-40,  353,  in.  p.  20. 

8  For  the  foundation  of  the  Dutch  East  India  company,  vide  supra,  pp.  121,  122, 
130.  A  Dutch  whaling  company  was  established  in  1614,  and  a  Dutch  Russia  company 
rather  earlier — S.  van  Brakel,  De  Hollandsche  Handelscompagnie'in,  pp.  22,  27,  28 ; 
Geschiedenis  der  Noordsche  Compagnie,  Utrecht,  1874,  p.  68. 


142      The  Crown  Revenue  and  Trade  1613-16    [chap.  vn. 

financial  pressure,  might  seriously  endanger  the  commerce  of  the  country 
by  snatching  at  some  temporary  alleviation  of  his  difficulties,  at  the 
expense  of  the  general  welfare  in  the  future.  By  May  1614  the 
liabilities  of  the  Crown  had  increased  to  ^^680,000  ^ ;  and  they  would 
have  been  higher,  had  it  not  been  that  considerable  payments  had  been 
made,  beginning  in  1611-12,  by  Holland  under  the  arrangement  of  1609^ 
James  I.  had  found  by  experience  that  the  patents  he  had  granted, 
hitherto,  had  not  been  effective  in  increasing  the  revenue  to  a  material 
extent.  If  they  were  for  bona  fide  new  inventions,  time  must  elapse 
before  the  royalty,  reserved  to  the  Crown,  was  received.  Often,  before 
that  stage  was  reached,  James  I.  had  parted  with  his  rights.  If,  on  the 
other  hand,  the  grant  were  one,  like  that  made  to  the  East  India 
company,  the  Crown  only  gained  by  increase  of  Customs,  and  the 
benefit,  from  this  source,  was  lost  sight  of  in  a  gross  total.  Sometimes, 
it  was  found  possible  to  exact  a  direct  payment  from  the  company,  as 
for  instance  in  1614,  when,  on  the  representation  of  "  the  very  many 
occasions  of  the  King  to  use  money,"  it  was  decided  to  make  him  a 
benevolence,  the  amount  of  which  was  to  be  kept  secret^.  As  yet,  beyond 
the  patent  for  a  new  dye,  nothing  had  been  obtained  from  the  cloth 
trade  up  to  1613,  beyond  the  usual  Customs.  This  industry  exported 
goods  to  the  value  of  about  nine-tenths  of  a  total  of  two  and  a  half 
millions^.  Of  this  the  Merchant  Adventurers  at  this  time,  even  though 
through  foreign  competition  their  trade  was  reduced^,  shipped  about 
.^600,000  a  year — this  being  more  than  double  the  export  of  spices 
by  the  East  India  company^.     It  was  the  practice  of  the  Merchant 


Gardiner,  Hutory  (1889),  ii.  p.  228. 

Ihid.,  1603-1616  (1863),  ii.  p.  418. 

1611-12.     French  King's  debt 

£45,000 

Low  Country       „ 

40,000 

1612-13.     French  King's    „ 

15,000 

Low  Country      „ 

58,000 

1613-14.     Low  Country      „ 

31,213 

£189,213 

3  Court  Book,  in.,  June  20,  1614. 

*  The  Circle  of  Commerce^  by  E.  M[isselden],  Merchant,  1623,  p.  121. 

^  In  1611  it  is  recorded  that,  though  the  clothiers  ^^  laboured  in  their  calling  as 
much  at  this  time  as  ever  before  they  did,  doe  of  late  find  so  little  fruit  of  their 
labour,  as  that  many  of  them  are  decayed  and  many  of  them  also  have  given  over 
that  trade  to  the  great  hindrance  of  the  realm" — A  Record  of  some  worthie 
Proceedings :  in  the  Honourable,  Wise  and  Faithfull  House  of  Commons  m...l611,  in 
Somers'  Tracts  {\162),  xm.  p.  271. 

8  The  Defence  of  Trade,  by  Sir  Dudley  Digges,  1615,  p.  43.  The  export  of  the 
Merchant  Adventurers  before  1614  was  65,063  cloths  {Proceedings  and  Debates  of  the 
House  of  Commons  1620  and  1621,  Oxford,  1767,  i.  p.  204).  These  sold  at  about 
£10  per  piece — Wheeler,  quoted  Early  Chartered  Companies,  ut  supra,  p.  28. 


CHAP,  vn.]     The  Cloth-finishing  Scheme  1613-14  143 

Adventurers  and  other  exporters  to  deliver  the  cloth  abroad,  either  partly 
finished,  or  else  undyed.  Thus  all  the  finer  cloth  was  dressed  and  dyed 
abroad.  It  was  thought  that  it  would  be  possible  to  perform  this  work  in 
England,  and  that  the  higher  price  realized  would  make  good  the  loss 
in  the  quantity  exported.  The  scheme,  so  far,  was  perfectly  legitimate, 
and  it  would  have  deserved  encouragement,  as  a  new  invention,  by  the 
grant  of  a  monopoly  of  the  dyeing  of  fine  cloth  for  a  term  of  years  and 
by  exemption  from  Customs  for  a  short  period.  If  it  were  possible  to 
perform  the  work  satisfactorily  in  England  at  that  time,  this  method 
would  have  enabled  the  government  to  watch  the  progress  of  the  experi- 
ment— if  it  failed,  there  would  be  little  loss,  except  to  the  capitalists 
who  would  have  voluntarily  undergone  the  risk  :  if  success  were  obtained, 
a  valuable  industry  would  have  been  established^  Unfortunately,  the 
adoption  of  such  a  method  would  only  have  benefited  the  Crown  after 
some  years,  and  the  necessities  of  James  I.  were  so  urgent  that  he 
required  an  immediate  increase  of  income.  At  this  stage,  the  inter- 
vention of  William  Cockayne  determined  the  form,  which  the  scheme 
eventually  assumed.  It  was  proposed  that  all  exportation  of  undyed 
and  undressed  cloth  should  be  prohibited,  and  Cockayne  and  the  other 
promoters  undertook  to  provide  sufficient  workmen  to  finish  all  cloth 
offered  to  them.  They  estimated  that  from  ^£^600,000  to  i?700,000  a 
year  would  be  added  to  the  value  of  the  cloth  exported,  and  the  Crown 
was  to  obtain  .^300,000  of  this^  The  offer  was  tempting  to  James  I., 
and  Cockayne  had  secured  the  support  of  many  influential  courtiers, 
by  means  of  lavish  bribery  ^  so  that  the  privileges  of  the  Merchant 
Adventurers  were  suspended  and  a  new  company  incorporated  as  the 
New  Company  of  Merchant  Adventurers.  A  commission  was  signed  at 
the  end  of  1613,  prohibiting  the  export  of  undyed  cloth  ^;  and,  in  a 
draft  proclamation  of  May  25th,  1614,  it  was  declared  that  no  "  stand 
of  cloth  "  need  be  feared,  for  those  engaged  in  this  industry  "  may  goe 
on  in  the  course  of  their  former  trading,  leaving  it  to  our  care  and 
providence  to  introduce  this  great  and  happy  alteration  for  the  better, 
without  any  alteration  of  trade  or  pulling  down  of  the  price  in 
the    meantime ^''      By    July    22nd    it    was    proclaimed    that,    after 

1  An  arrangement  such  as  that  indicated  in  the  text  would  have  invaded  some  of 
the  privileges  of  the  Merchant  Adventurers.  The  refusal  of  this  body  to  enter  into 
the  new  trade  enabled  the  government  to  make  other  plans. 

2  Add.  MS.  (Brit.  Mus.)  14,027,  f.  271 ;  Anderson,  Annals  of  Commercey  ii. 
pp.  308,  309 ;  The  Relations  of  the  Crown  to  Trade  under  James  /.,  by  F.  Hermia 
Durham,  in  Transactions  of  the  Royal  Historical  Society,  New  Series,  xin.  pp.  212,  213. 

3  The  Five  Years  of  King  James,  by  Sir  Foulk  Grenvill,  1643,  in  Harleian 
Miscellany  (1746),  vii.  p.  398. 

*  State  Papers,  Domestic,  James  I.,  Grant  Book,  p.  176. 

*  Coll.  Proclamations  Soc.  Autiq.,  James  I.,  No.  35. 


144  Crisis  in  the  Cloth  Trade  1616      [chap.  vn. 

November  2nd,  the  exportation  of  undyed  and  undressed  cloth  should  be 
prohibited  ^ 

It  will  at  once  be  obvious  that  the  experiment  was  highly  specu- 
lative. Supposing  the  most  glowing  expectations  of  the  promoters 
were  realized,  for  a  number  of  years,  the  increased  value  would  not 
exceed  <£*700,000  a  year ;  while,  as  it  turned  out  later,  the  loss  annually 
would  be  dg'l  ,000,000.  The  whole  unpleasant  transaction  was  a 
gambling  venture,  in  which  the  great  bulk  of  the  export  trade  was 
lightly  staked.  It  is  true  that  the  Privy  Council  had  conducted  an 
enquiry,  the  general  result  of  which  had  tended  to  show  that  the 
establishment  of  the  proposed  industry  would  be  advantageous,  and 
the  undertakers  had  given  security  to  purchase  the  whole  output  of 
the  looms.  If,  however,  the  dyers  did  not  succeed,  the  outcome  would 
be  that  an  immense  amount  of  the  best  cloth  would  be  spoiled,  and  no 
statesman  could  have  failed  to  foresee  that  the  Dutch  would  resent 
being  deprived  of  the  raw  material  for  their  dyeing  industry.  Both 
effects  followed,  the  cloth  dyed  in  England  is  said  to  have  been  a  failure 
and  the  Dutch  prohibited  it  I  Within  a  short  time,  the  new  company 
received  permission  to  export  undyed  cloth,  undertaking  to  produce 
6,000  dyed  cloths  by  1616,  12,000  the  next  year  and  18,000  in  1618^. 
Members  of  the  former  company  were  forced  to  compound  with  the 
existing  organization  before  they  could  deal  in  clothe  By  1616  the 
cloth  trade  was  experiencing  a  severe  crisis,  there  were  many  failures 
and  the  legality  of  the  position  of  the  new  company  was  questioned. 
The  assistants  frankly  admitted  that  they  would  be  unable  to  maintain 
their  ground,  if  the  clauses  in  the  charter  of  1615,  which  were  said  to 
be  illegal,  were  reformed.  They  clearly  recognized  that  the  whole  work 
rested  solely  on  the  King's  prerogative  ^  The  favour  of  James  I.  was 
cultivated  assiduously.  He  was  entertained  at  a  banquet  in  June  1616, 
and  the  company  presented  him  with  an  ewer  of  gold,  containing 
<£*1,000.  A  masque  was  performed  by  dyers  and  other  workmen,  who 
spoke  "  such  language  as  Ben  Jonson  putt  in  theyre  mouthes^*"  Efforts 
were  made  to  find  .^£^50,000  to  present  to  James  I.^  As  time  went 
on,  opinion  even  at  Court,  turned  against  the  company.  As  late  as 
September  1616,  James  had  been  reported  to  have  expressed  an  intention 

1  Coll.  Proclamations  Soc.  Antiq.,  James  I.,  No.  89. 

2  The  Five  Years  of  King  James,  by  Sir  Foulk  Grenvill,  1643,  in  Harleian 
Miscellany,  vii.  p.  412. 

3  State  Papers,  Domestic,  James  I.,  lxxx.  112;  Calendar,  1611-18,  p.  288. 

4  Ibid.,  LXXX.  127 ;  Calendar,  1611-18,  p.  291. 
6  Ihid.,  Lxxxvi.  40;  Calendar,  1611-18,  p.  347. 
«  Ibid.,  Lxxxvn.  67;  Calendar,  1611-18,  p.  373. 
"f  Ibid.,  xc.  147 ;  Calendar,  1611-18,  p.  454. 


CHAP.  VII.]  Disorganization  of  the  Cloth  Trade  1617-20  145 

of  venturing  d£'40,000,  but  the  puzzle  was  where  he  could  raise  the  money*. 
His  hopes  of  an  increased  revenue  had  not  only  been  disappointed, 
but  there  was  a  substantial  decline.  It  was  reported  in  November 
that,  owing  to  the  decay  of  the  cloth  trade,  the  King  intended  to 
force  the  members  of  the  old  company  to  enter  the  new  one*.  Few 
proposals  could  have  been  less  tactful,  since  there  were  bitter  animosities 
between  the  two  bodies.  Besides,  the  weavers  were  so  incensed  against 
Cockayne^s  undertaking  that  a  reconstituted  body  would  be  safer 
without  any  of  those,  against  whom  there  was  so  much  ill-feeling. 
The  members  of  the  old  company,  therefore,  stood  out  for  the  complete 
restoration  of  their  former  privileges.  After  protracted  negotiations, 
which  involved  the  paying  of  between  d£^60,000  and  .£^70,000  to  persons 
about  the  Court,  the  King  declared  that  he  would  no  longer  depend 
"  on  specious  and  fair  shewes,  which  produce  not  the  fruit  our  actions 
doe  ever  aim  af ;  and  on  August  12th,  1617,  the  old  company  was 
restored  to  its  former  status,  and  the  new  one  was  dissolved  ^  This 
payment,  on  the  re-establishment  of  the  Adventurers,  constituted  a 
serious  burden  on  a  trade,  that  had  already  suffered  severely.  Un- 
fortunately, too,  the  dislocation  of  the  industry  did  not  cease  with 
the  return  of  permission  to  export  cloth,  either  unfinished  or  finished, 
dyed  or  undyed.  The  Dutch  had  taken  steps  to  protect  themselves,  by 
starting  the  preliminary  stages  of  the  manufacture,  for  which  they  had 
hitherto  depended  on  England.  As  a  consequence  of  this  and  the  loss 
of  reputation  of  English  cloth,  the  export  by  the  Merchant  Adventurers 
in  1620  was  little  more  than  half  what  it  had  been  before  1613.  This 
meant  an  enormous  loss  over  a  series  of  years,  and  it  was  one  of  the 
chief  causes  of  the  crisis,  which  began  in  1620.  In  fact,  it  is  not  a 
little  remarkable  that  a  serious  panic  had  been  avoided  in  1616  or  1617. 
The  complete  dislocation  of  the  cloth  trade  and  the  failure  of  numerous 
merchants,  engaged  in  it,  indicated  that  credit  was  severely  strained. 
Probably  the  incipient  crisis  was  avoided,  partly  by  the  general  belief 
that  on  the  dissolution  of  the  New  Merchant  Adventurers,  the  trade 
would  return  to  its  former  level,  partly,  too,  by  the  success  of  the 
Russia  and  East  India  companies.  The  former  had  been  very  fortunate 
in  its  whaling  expeditions  from  1608  to  1615.  It  had  divided  from  its 
profits  for  this  period  aggregate  dividends  of  eis  much  as  339  per  cent., 
or  an  average  of  42|  per  cent,  per  annum.  Since  the  capital  was 
^£^64,687,  the  profit  for  the  eight  years  was  .^219,288*.    The  credit  of  the 

1  State  Papers,  Domestic,  James  I.,  lxxxviii.  89;  Calendar,  1611-18,  p.  395. 

*  Ihid.y  Lxxxix.  17;  Calendar,  1611-18,  p.  404. 

3  Ibid.,  Sigii  Manual,  vol.  viii.  Nos.  77,  80-84;   Proceedings  of  the  House  of 
Commons,  1621,  i.  pp.  87,  153;  Coll.  Proclamations  Soc.  Antiq.,  James  I.,  No.  82. 

*  Vide  infra,  ii.  pp.  53,  54.     In  the  statement  above  an  attempt  is  made  to 

S.  C.  I.  10 


146  English  and  Dutch  East  India  Cos.  1600-17  [chap.  vn. 

company  was  so  good  that  it  was  able  to  borrow  in  1618  at  8  per  cent.,  as 
compared  with  10  per  cent,  paid  both  by  the  Crown  and  the  East  India 
company  for  loans  \  The  India  trade,  up  to  this  time,  had  been 
highly  prosperous.  Until  the  termination  of  the  "  First  Joint-Stock  " 
in  1617,  the  profits,  in  addition  to  the  return  of  the  capital, 
amounted  to  c£*l  ,028,281.  It  is  by  no  means  easy  to  compare  these 
figures  with  those  of  the  Dutch  company,  owing  to  the  different 
financial  methods  of  the  two  bodies.  The  English  organization  from 
1600  to  1617  consisted  of  thirteen  distinct  ventures,  each  of  which  had 
a  separate  capital ;  and,  on  the  termination  of  one  voyage  (or  a  series  of 
voyages),  the  whole  assets  were  divided  to  the  adventurers.  Therefore, 
any  sum  of  the  divisions  would  be  misleading,  since  these  repre- 
sented the  return  of  the  capital  subscribed,  and  that  capital  varied 
in  amount  for  different  expeditions.  Moreover,  these  stocks  over- 
lapped— a  fresh  voyage  being  subscribed,  before  the  capital  of  a 
previous  one  was  repaid^.  One  source  of  confusion  may  be  eliminated, 
by  reducing  the  divisions  made  to  the  profit  distributed,  after  allow- 
ing for  the  return  of  the  various  capitals  adventured.  It  remains, 
therefore,  to  estimate  the  amount  of  capital,  required  to  earn  the 
specified  profit  of  over  a  million  in  the  seventeen  years.  Allowing  for 
the  overlapping  of  stocks  until  the  original  sum  was  returned  to  the 
shareholders,  it  seems  probable  that  the  average  amount  of  capital, 
earning  dividend  during  the  seventeen  years,  was  not  more  than 
^200,000,  and  it  may  have  been  less.  Therefore,  the  profit,  during 
the  whole  period,  was  at  least  five  times  the  stock  subscribed  and  out- 
standing. Since  the  English  company  started  de  novo  in  1600,  while 
the  Dutch  undertaking  was  an  amalgamation  of  a  number  of  existing 
undertakings,  whose  assets  were  taken  over  by  the  new  company,  no 
injustice  will  be  done  to  the  latter  by  comparing  its  profits  from  1602 
with  those  of  its  rival  to  1617.  The  dividends  of  the  Dutch  enterprize 
fall  into  two  series — the  first  of  which  was  paid  from  1605  to  1614  and 
represents  the  proceeds  of  the  expeditions  sent  to  India  in  1601.  These 
payments  amounted  to  9iQ6  per  cent. — but,  as  in  the  case  of  the  Russia 

represent  the  financial  situation  as  it  was  in  1617,  when  the  account  H  {i.e.  that  for 
1615)  was  made  up.  Through  subsequent  changes  in  the  outlook,  many  of  the 
assets  proved  bad  ;  and,  not  only  was  the  original  capital  lost,  but  the  Adventurers 
in  this  company  were  assessed  to  the  extent  of  £35.  9*.  lid.  per  cent.  Thus  it 
follows  that  the  total  nett  divisions  for  this  period  were  303^  per  cent.,  or  a  profit 
for  the  eight  years  of  203^  per  cent.,  being  at  the  average  annual  rate  of  25  per  cent. 
instead  of  42  per  cent. 

1  The  Petition  of  Mrs  Mary  Brocas,  27th  May,  1624,  House  of  Lords  MSS. ; 
Exchequer  of  Receipt  (State  Papers)  (Miscellanea)  43,  (3);  Calendar  State  Papers, 
Colonial,  East  Indies,  1617-21,  p.  85. 

2  Vide  infra,  ii.  pp.  98-101,  103. 


CHAP,  vn.]  English  and  Dutch  East  India  Cos.  1600-17   147 

company^,  there  had  been  a  miscalculation,  and  it  became  necessary 
to  recall  4  per  cent,  reducing  the  total  distribution  to  261  per  cent* 
The  second  series  was  derived  from  the  operations  of  the  company  on 
its  own  account  These  dividends  were  paid  between  1610  and  1611,  and 
came  to  162^  per  cent.'  It  will  thus  be  seen  that  the  English  company 
had  some  advantage  in  the  rate  per  cent,  of  profit;  but  it  is  to  be 
remembered  that  the  capital  of  the  Dutch  undertaking  was  larger, 
being  6,449,588  florins  4  st.*,  and  therefore  its  total  profit  was  the 
greater  of  the  two.  In  addition  to  the  profits  divided,  the  Dutch 
were  spending  considerable  sums  on  fortifications  in  the  East;  so  that 
the  situation  resolved  itself  into  one  in  which  the  Dutch  company  was 
forming  a  reserve  fund,  invested  in  forts  and  munitions;  while  the 
English  undertaking,  owing  to  its  system  of  terminable  stocks,  had  as  yet 
taken  no  effective  steps  towards  securing  the  permanence  of  its  trade. 
Neglecting  this  disposal  of  undivided  profits,  the  average  annual  rate 
for  the  English  company  was  over  31  per  cent,  about  25  per  cent  for 
the  Dutch  organization  and  over  42  per  cent,  for  the  Russia  company, 
the  calculation  in  the  latter  case  covering  the  period  from  1608  to  1615". 
The  success  of  the  Russia  and  East  India  companies  had  tempted 
some  of  the  members  of  the  Court  party,  and  in  1617  an  ingenious 
device  was  discovered,  whereby  it  was  thought  possible  for  several  of 
the  favourites  of  James  I.  to  share  in  the  gains,  without  undergoing  any 
considerable  risk.  This  scheme  was  the  incorporation,  under  the  great 
seal  of  Scotland,  of  a  body,  which  might  trade  within  the  limits  of  these 
two  companies.  Possibly  this  grant  was  defensible  on  legal  grounds, 
and  it  might  be  urged  that  there  were  equitable  arguments  in  its  favour. 
It  seemed  unfair  that  a  lucrative  trade,  which  was  incorporated  before 
the  Union  of  the  Crowns,  should  be  confined  to  Englishmen.  Such  a 
limitation  was  more  apparent  than  real.  Several  Scotsmen  resident  at 
Court  were  admitted  as  members*,  in  some  cases  it  would  have  been 

*  Vide  infra,  ii.  pp.  47,  48,  58. 

2  Klerk  de  Reus,  Niederldndisch-Ostindischen  Compagnie,  p.  178. 

3  Ibid.,  Appendix  vi.  The  payments  were  partly  iu  commodities,  partly  in 
money.  Some  shareholders  did  not  take  payment  in  this  form,  and  they  received 
162^  per  cent,  in  money  in  1612,  1613  and  1616. 

*  Ibid.,  p.  176;  Andre  E.  Sayous,  Le  Fractionnement  du  Capital  Social  de  la 
Compagnie  Neerlandaise  des  Indes  Orientales  aux  xvii*  et  xviii*  Siecles  in  Nouvelle 
Revue  Historique  de  Droit  Fran^aise  et  Etr anger,  1901,  p.  622. 

^  For  details  of  the  divisions  of  the  Russia  company  at  this  period,  vide  infra,  ii. 
pp.  52-4. 

^  In  1614,  on  the  admission  of  a  courtier  gratis,  it  is  recorded  the  company  was 
desirous  "  to  have  some  such  their  friends  about  the  King  that  should  be  tied  unto 
them  by  some  kindness,  especially  against  this  time  of  Parliament " — Court  Book, 
III.,  March  19,  1614.  At  the  previous  meeting  the  appointment  of  a  Scottish 
chaplain  was  considered. 

10—2 


148    Apparent  Abundance  of  Capital  1617-18  [chap.  vii. 

possible  for  others,  not  already  admitted,  to  buy  shares  ;  and,  on  at  least 
one  occasion,  subscriptions  of  capital  were  invited  from  the  general 
public  \  As  shown  elsewhere,  the  proposed  Scottish  company  was  a 
breach  of  the  promise  made  by  James  I.  in  the  charter  he  had  granted  to 
the  London  undertaking  in  1609,  and  the  whole  scheme  presented  many 
practical  difficulties  2.  Had  it  been  carried  out,  the  India  trade  would 
have  suffered,  like  the  cloth  industry;  and,  to  prevent  this  disaster,  it 
was  decided  to  form  a  new  whaling  company — the  capital  of  which 
should  be  provided  in  equal  parts  by  the  Russia  and  East  India 
organizations.  It  was  arranged  that  this  body  should  purchase  all  the 
materials,  which  had  been  procured  in  preparation  for  a  voyage  by  the 
Scottish  adventurers^. 

Although  the  Russia  and  East  India  companies  were  soon  to  experi- 
ence a  ch&,nge  of  fortune,  no  signs  of  this  were  apparent  in  1617.  In 
that  year,  a  new  subscription  was  made  by  the  latter  (which  was  intended 
to  continue  for  eight  years),  and  954  persons  undertook  to  adventure 
amongst  them  c£*1^29,04<0'*.  The  amount  of  capital  promised  shows 
that  the  public  was  prepared  to  invest  freely,  and  further  evidence  in 
the  same  direction  is  to  be  found  in  the  formation  of  an  African 
company  in  the  following  year  (1618)  ^  It  seems  likely  that  the  abund- 
ance of  capital  was  not  so  great  as  it  seemed  to  be.  The  injury  to 
the  cloth  trade  continued,  and  the  activity  of  enterprize  is  to  be  ascribed 
to  the  resources,  set  at  liberty  by  the  contraction  of  the  cloth-industry, 
seeking  new  fields  for  investment.  If,  as  actually  happened,  these 
proved  unproductive,  the  crisis,  that  might  have  come  in  1617,  would 
be  intensified  in  destructive  power. 

In  England  there  were  indications  that  trade  was  less  prosperous 
than  it  had  been.  Although  the  revenue  had  recovered  from  the  check, 
sustained  by  the  interference  with  the  cloth  trade,  the  rate  of  expansion 
was  slower^  While  in  1619  there  was  an  estimated  balance  of  .£^45,000, 
after  defraying  the  ordinary  charges,  the  extraordinary  expenses  con- 
tinued to  be  a  serious  burden,  transforming  the  ordinary  surpluses  into 
chronic  deficits.  In  September  1617  the  debt  was  .^726,000.  At  first 
sight,  it  is  surprising  that,  in  view  of  the  fact  that  the  subsidy  of 
1610-11  was  only  one- tenth  and  one-fifteenth,  and  that  the  Parliament 
of  1614  granted  no  supply,  the  borrowing  had  not  been  larger.  No 
doubt  some  reform  in  the  royal  expenditure  had  been  effected,  but  the 
small  increase  of  debt  was  due  mainly  to  two  different  causes.     Large 

1  Court  Book,  ii.,  April  22,  1608. 

2  Vide  infra y  ii.  p.  104.  3  /^-^^^  ^^  p^  55^ 
4  lUd,,  II.  p.  104.                                                     6  Ibid.,  II.  p.  11. 

^  Cf.  Estimates  of  Ordinary  Revenue  1610,  1614,  1619,  Gardiner,  History 
1603-16  (1863),  II.  pp.  412-15  ;  Ibid.  1628-37,  11.  p.  344 ;  (1904),  x.  p.  222. 


CHAP.  VII.]    State  of  the  Crown  Finances  1615-21         149 

sums  had  been  paid  by  Holland,  in  reduction  of  its  debt  (as  much  as 
.£*205,077  was  received  in  1615-16),  and  James  I.  was  rewarding  his 
favourites,  without  making  such  large  money  payments,  as  had  been  his 
custom  in  former  years.  During  the  long  gap  between  the  Parliaments 
of  1614  and  1621,  opportunities  had  arisen  for  a  fresh  series  of  monopo- 
lies. Though  the  annual  payments  actually  made  to  the  Crown  only 
amounted,  at.  the  most,  to  the  inconsiderable  sum  of  £^0\  there  were 
intermediate  persons  between  some  of  the  patentees  and  the  King,  who 
intercepted  considerable  amounts.  For  instance,  in  addition  to  large 
sums  exacted  from  both  the  "  New ""  and  the  "  Old "  Merchant  Ad- 
venturers, Lady  Bedford  had  received  d^500  from  one  of  several  persons, 
interested  in  obtaining  a  patent  for  gold  and  silver  thread'',  while 
Lord  Kelly  was  said  to  have  secured  £¥)fiOO  from  his  right  to  nominate 
400  merchants  or  others  under  a  new  patent  of  the  Staplers'.  Thus 
these  patents  were  burdened  by  heavy  preliminary  expenses,  and  those, 
who  had  obtained  privileges  through  them,  were  likely  to  use  oppressive 
measures  to  recoup  themselves.  It  followed  that,  under  orders  from  the 
Privy  Council,  the  patentees  began  to  tax  the  allied  trades  for  their  own 
benefit,  with  the  result  that  there  were  actions  against,  and  imprison- 
ments of  those,  who  refused  to  compound,  to  an  extent  hitherto 
unknown.  Such  harsh  measures  naturally  aroused  much  indignation, 
and  some  of  the  patentees  were  severely  handled,  when  Parliament  met 
in  1621. 

^  Gardiner,  History  (1893),  iv.  p.  21 ;  Mr  Price  (English  Patents  of  Monopoly, 
pp.  31-2)  calculates  that  there  was  "hardly  £60  annually  derived  from  the  true 
monopoly  rents." 

2  Proceedings  of  the  House  of  Commons,  1621,  i.  p.  127. 

3  Ibid.f  I.  p.  87.     With  reference  to  the  origin  of  the  Staplers,  vide  supra,  p.  8. 


CHAPTER  VIII. 

THE   ORGANIZATION   OF   THE   JOINT-STOCK   COMPANY   FROM 

1600  TO  1620. 

Even  though  much  had  been  accomplished  by  the  joint-stock  com- 
panies founded  jn  the  sixteenth  century,  it  was  not  until  the  reign  of 
James  I.  that  this  type  of  organization  became  sufficiently  common  to 
have  a  distinctive  life-history  of  its  own.  No  doubt  much  valuable 
information  could  be  gleaned  from  the  earlier  undertakings,  were  the 
documents  relating  to  them  complete.  As  it  is,  the  absence  of  minutes 
and  other  important  papers  limits  the  investigation  to  a  series  of 
glimpses  rather  than  a  full  view  of  the  methods  of  management  adopted. 

It  is  typical  of  the  development  of  this  class  of  venture  that, 
beginning  with  the  foundation  of  the  East  India  company  in  1600, 
a  more  exact  type  of  incorporation  was  adopted.  Prior  to  this  date 
there  was  a  wide  latitude  in  the  description  of  a  trading  body,  sometimes 
it  was  entitled  a  fellowship  or  a  society  or  a  company.  There  are 
instances,  too,  where  there  were  either  no  special  privileges,  or  where 
the  concession  was  for  a  short  period,  in  which  the  body  established  had 
no  special  name  given  it  in  the  charter  or  grant.  From  the  foundation 
of  the  East  India  company,  a  more  exact  system  of  nomenclature  begins, 
which  continued  until  the  end  of  the  reign  of  Charles  I.  Almost 
invariably  the  official  title  consisted  of  the  following  parts.  First  there 
was  the  "  Governor  and  Company ""  or  the  "  Governor  and  Society ,"'"' 
consisting  of  a  specified  class  of  persons,  formed  to  carry  on  a  certain 
enterprize,  and  to  this  a  local  designation  was  added,  either  as  applying 
to  the  persons  or  to  the  object  they  had  in  view.  Thus  the  full  title  of 
the  East  India  company  was  "  the  Governor  and  Company  of  Merchants 
of  London  trading  into  the  East  Indies^"  Similarly  the  Bermuda 
company  was  "  the  Governor  and  Company  of  the  City  of  London  for 
the  Plantation  of  the  Somers  Islands"  (1611)^.  In  1613  the  Irish 
Society  was  incorporated  as  "  the  Society  of  the  Governor  and  Assistants 

1  Vide  infra,  ii.  p.  92.  2  /^,^^.^  u,  p,  262. 


CHAP.  VIII.]    Incoi'poratio7i  of  Companies  1600-20         151 

of  London  of  the  New  Plantation  in  Ulster  within  the  realm  of  Ireland*,*" 
in  1618  the  Guinea  company  as  "  the  Governor  and  Company  of 
Adventurers  of  London,  trading  to  Gynney  and  Bynney',''  and  in  1619 
the  New  River  undertaking  as  "  the  Governor  and  Company  of  the  New 
River,  brought  from  Chad  well  and  Am  well  to  London  ^'"  The  same 
tendency  is  shown  in  the  charters  gi'anted  to  the  Mines  Royal  and  to 
the  Mineral  and  Battery  Works  in  1604 — the  former  being  described  as 
"  the  Governors,  Assistants  and  Society  of  the  City  of  London  of  and 
for  the  Mines  Royal,"  and  the  latter  as  "  the  Governors,  Assistants  and 
Society  of  the  City  of  London  of  and  for  the  Mineral  and  Battery 
Works  ^" 

In  these  incorporated  titles  it  is  to  be  noticed  that  the  name 
"  society,"  which  was  common  in  the  sixteenth  century,  is  giving  way  to 
that  of  "company."  The  only  cases  in  which  it  survives  are  the  re- 
incorporated bodies  for  the  Mines  Royal  and  for  the  Battery  Works 
and  in  the  new  undertaking  of  the  Irish  Society.  It  is  probably  a 
coincidence  that,  only  in  the  latter  and  in  the  title  of  the  Mineral  and 
Battery  Works  are  the  assistants  included  in  the  official  description. 
There  are  a  few  minor  exceptions  to  these  principles.  The  Virginia 
company  was  unique  in  having  no  official  known  as  a  governor.  The 
head  of  this  body  was  called  a  treasurer,  and  therefore  its  title  was  "  the 
Treasurer  and  Company  of  Adventurers  and  Planters  of  the  City  of 
London  for  the  First  Colony  in  Virginia"*." 

The  management,  as  a  rule,  was  entrusted  to  a  governor  and 
assistants — the  number  of  the  latter  being  either  twelve  or  a  multiple 
of  twelve.  In  the  Somers  Islap^ls  r^pripAny.  for  instance,  there  were 
24  assistants,  in  the  Irish  Society  12.  The  smaller  membership  of  the 
Mines  Royal  rendered  it  impossible  to  have  more  than  six  assistants, 
while  the  Mineral  and  Battery  Works  had  eight.  The  latter  is  the  only 
case  in  this  period  where  this  number  is  not  either  12  or  a  multiple 
or  sub-multiple  of  12.  There  are  two  interesting  divergencies  from 
the  normal  type.  The  one  in  the  case  of  the  East  India  company,  where 
the  management  consisted  of  a  governor,  a  deputy-governor,  and  24 
"  committees "" ;  while  in  the  African  company,  incorporated  in  1618, 
there  were  a  governor,  a  deputy-governor,  and  12  directors.  This  is  the 
first  use  of  the  term  director  in  a  charter;  but,  as  early  as  1604,  the 
word  occurs  in  Sandys'  "Instructions"  and,  curiously  enough,  in  reference 
to  the  Russia  company,  the  affairs  of  which,  it  is  stated,  are  "  managed 
by  fifteen  directors*."     Apparently  at  this  date  the  existence  of  consuls, 

1  Vide  infra,  ii.  p.  339.  2  jhid.,  11.  p.  12. 

3  Ibid.,  III.  p.  22.  *  Ibid.,  11.  p.  424. 

&  Ibid.,  II.  pp.  249,  250  (note). 

6  Journals  of  the  House  of  Commons,  i.  p.  220.     It  was  Sandys  who  introduced 


152       Regulated  and  Joint-Stock  Companies    [chap.  viii. 

,    in  addition  to  the  usual  governor  and  assistants,  was  felt  to  be  archaic. 

(Still  earlier,  the  term  had  been  employed  in  the  case  of  the  Mines  Royal 
for  certain  subordinate  officials,  who  occupied  a  position  resembling  that 
j  of  managers  or  foremen  \  The  introduction  of  the  word  by  Sandys  and 
\  again  in  the  charter  of  the  African  company  was  premature ;  since,  at 
\  this  period,  the  governor  had  larger  powers  than  the  chairman  of  a 
I  board  of  directors;  and,  therefore,  the  description  of  those  elected  to 
I  serve  with  the  governor  as  "  assistants,''  represented  most  adequately  the 
I  actual  relation  of  the  officials.  These  men  were,  both  in  name  and  in 
fact,  the  assistants  of  the  governor. 

Since  the  form  of  incorporation  and  the  mode  of  government  in  the 
regulated  and  the  joint-stock  companies  were  essentially  the  same,  it  is 
only  to  be  expected  that  there  should  be  many  points  of  contact,  indeed 
in  some  cases  there  are  features  in  the  first  joint-stock  ventures  that 
carry  one  back  to  the  social  gild.  Such  characteristics  are  of  excep- 
tional interest  as  showing  the  continuity  of  the  development  of  associated 
effort.  The  continuance  of  the  exclusive  spirit,  which  was  necessary  only 
as  a  bond  of  union  amongst  the  members,  is  repeated  in  the  company, 
not  only  in  the  desire  for  a  monopoly,  but  also  in  the  oath  of  member- 
ship-. The  terminology  of  the  gild  was  continued  in  the  naming  of  the 
shareholders  "  brothers  '"*  in  the  East  India  company,  and  in  fining  those 
who  were  absent,  when  summoned  to  meetings.  There  are  some  traces 
of  the  social  side  of  gild-life  in  the  feasts  that  were  held  on  suitable 
occasions  by  the  Russia  and  East  India  undertakings^. 

In  some  respects  the  East  India  company  had  more  points  of  contact 
with  the  regulated  bodies  than  other  joint-stock  undertakings  that  had 
been  founded  earlier.  In  this  case,  a  distinction  was  made  between 
a  purchase  of  shares  by  one,  who  was  already  a  member,  as  distin- 
guished from  another,  who  was  not.  In  the  latter  circumstances,  the 
new  shareholder,  in  addition  to  the  agreed-upon  price,  had  to  pay  a 
y  certain  sum  for  his  "  freedom,"  this  being  analogous  to  the  fine  on 
admission  to  the  regulated  company.  In  1615  a  graduated  scale  of 
payments  on  entrance  was  drawn  up — merchants  were  charged  £5Q 
each,  shopkeepers  100  marks  {i.e.  £QQ.  13^.  M.\  one  son  of  a  freeman, 
not  exceeding  21  years  of  age  at  the  date  of  his  father's  admission,  £\ 
to  the  poor  box;  and  the  other  children,  not  exceeding  14  years  of  age, 

the  term  director  in  this  connection  {vide  Records  of  the  Virginia  Company  of  London, 
edited  by  S.  M.  Kingsbury,  Washington,  1906,  ii.  pp.  144,  154),  but  it  was  William 
Paterson  who  brought  it  into  common  use. 

1  Vide  infra,  ii.  p.  399  (note). 

2  For  the  terms  of  the  oath  of  a  member  of  the  East  India  company,  vide  Bruce, 
Annals,  i.  pp.  8,  9. 

3  Vide  supra,  pp.  4,  5. 


CHAP,  vin.]     Tendencies  towards  a  permanent  Stock     153 

10^.  each,  when  they  came  of  age.  Gentlemen  were  admitted  by  the 
governor  on  such  terms  as  he  thought  fit*.  The  Virginia  company  was 
in  the  habit  of  admitting  persons,  who  were  not  shareholders,  to  the 
freedom  at  first  for  some  special  service,  and  subsequently  "  by  favour  of 
the  courf — a  system  which,  during  the  dissensions  in  this  body  from 
1619  to  1624,  led  to  several  abuses  ^ 

While  there  are  these  and  similar  resemblances  between  the  regulated 
and  joint-stock  companies  at  the  beginning  of  the  seventeenth  century, 
the  most  interesting  and  important  aspect  of  the  latter  is  that  which  is 
peculiar  to  itself — namely  the  management  of  the  common  capital  of  the 
undertaking.  There  can  be  little  doubt  that  the  primitive  type  of 
company  was  that  formed  for  a  single  expedition,  on  the  termination  of 
which  the  finances  were  investigated  and  the  venture  was  wound  up, 
although  the  same  persons  might  at  once  equip  a  fresh  voyage.  Thus 
the  partnership,  or  small  unincorporated  company,  was  only  terminable 
at  the  end  of  the  voyage,  but  it  was  customary,  in  the  case  of  a  dis- 
agreement and  when  the  discontented  partner  refused  to  sell  his  interest 
or  to  buy  that  of  the  others,  that  the  majority  might  carry  on  the  next 
voyage,  as  if  the  person  who  dissented  remained  a  voluntary  partner. 
Under  such  circumstances,  the  capital  of  the  new  expedition  would  be 
continuous  with  that  of  its  predecessor'.  The  Russia  company,  possibly 
owing  to  its  capital  being  locked  up^,  was  in  advance  of  its  con- 
temporaries in  having  only  a  few  different  stocks  in  the  sixty-seven 
years  up  to  1620\  The  company  for  Frobisher's  voyages  carried  on  the 
losses  of  its  early  expeditions*.  There  is  no  information  as  to  the  details 
of  the  capitalization  of  the  Levant  company,  while  it  traded  on  a  joint- 
stock  ;  but  the  adventurers  to  Africa,  during  the  reign  of  Elizabeth, 
treated  each  voyage  as  a  distinct  venture,  with  a  capital  of  its  own  on 
which  dividends  were  paid^ 

This  system  involved  the  payment  of  monies  to  the  adventurers,  both 
on  account  of  the  capital  subscribed,  as  well  as  from  profits.  Therefore, 
such  distributions  may  be  best  described  by  their  original  title  of 
"divisions,''  to  distinguish  them  from  the  modern  dividend.  These 
facts  have  an  important  bearing  on  the  finances  of  the  first  plantation 
companies.  Such  organizations  were  expeditions  for  surveying  and 
occupying  districts,  suitable  for  colonization.  There  were  two  clearly- 
marked  stages  in  their  histories.     When  the  area  chosen  had  been  made 

*  Court  Book,  iii.,  October  31,  1616. 

2  Records  of  the  Virginia  Company,  i.  pp.  264,  692,  also  infra,  ii.  pp.  280,  281. 

3  Consuetudo,  vel  Lex  Mercatoria,  by  Gerard  Malynes,  1622,  p.  169. 

*  Vide  supra,  pp.  30,  34. 

6  Vide  infra,  ii.  pp.  40,  44-6,  48,  49,  62-4. 

6  lUd,,  II.  p.  79.  '  Ibid.,  II.  p.  6. 


/ 


154      Tendencies  towards  a  permanent  Stock     [chap.  vm. 

sufficiently  safe  for  settlers,  it  was  divided  rateably  amongst  the  ad- 
venturers. Therefore,  there  was  at  an  early  period  a  division  of  land, 
which  constituted  the  chief  return  made  to  the  shareholders.  In  some 
cases  the  company  continued  to  exist  and  to  exercise  certain  trading 
rights,  vested  in  it  by  its  charter.  This  was  the  case  with  the  Bermuda 
company^.  A  peculiar  modification  of  the  same  method  occurs  in  the 
continuance  of  the  Irish  Society.  This  was  in  effect  a  joint-stock 
company,  the  shares  in  which  were  taken  up  by  the  Livery  companies  in 
1609,  while  by  1613  the  greater  part  of  the  land  had  been  divided  ;  and, 
as  time  went  on,  the  income  of  the  remainder  was  disbursed  by  the 
society,  in  its  corporate  capacity,  for  religious,  educational  and  charitable 
objects  I 

One  effect  of  the  foundation  of  plantation  companies  was  the 
lengthening  of  the  period  before  the  first  division  was  made,  and  another 
influence,  in  the  same  direction,  was  the  example  of  the  Dutch  East 
India  company.  In  a  foreign-trading  body  the  disadvantages  of  termin- 
able stocks  are  very  apparent.  These  are  noted  elsewhere^.  The 
contest  between  capital,  subscribed  for  a  short  or  a  long  period,  is  clearly 
marked  in  the  early  history  of  the  East  India  company.  The  sums, 
paid  in  by  the  shareholders  for  the  first  voyage  in  1601,  were  consoli- 
dated with  those  adventured  in  the  second  in  1603.  The  capital  of  the 
third  expedition  (1606)  was  merged  in  that  of  the  fifth.  The  remaining 
voyages  from  the  sixth  to  the  twelfth  (1609-13),  as  well  as  the  fourth 
(1607),  were  financially  distinct,  having  separate  capitals  which  (except 
in  the  case  of  the  fourth  voyage,  where  a  loss  was  made)  were  returned 
to  those  who  had  subscribed  ^  In  1613  a  new  method  was  adopted  of 
making  a  subscription,  which  was  to  extend  over  and  provide  funds  for 
four  years,  and  in  1617  a  further  prolongation  of  the  term  of  the  stock, 
issued  in  that  year,  was  determined  on.  This — the  Second  Joint-Stock, 
as  it  was  named — was  to  last  for  at  least  eight  years  ^  It  is  impossible 
to  determine  whether  the  plan  of  only  asking  for  capital  for  brief  periods 
was  due  to  the  desire  of  the  members  for  this  form  of  investment,  or 
whether  it  was  forced  on  the  governor  and  committees,  at  first,  by 
political  uncertainties  abroad,  and  continued  later,  through  the  fear  of 
interference  with  the  company  by  James  I.     There  is  no  doubt  that, 

1  Vide  infra,  ii.  pp.  263,  289-97. 

2  Ihid.y  II.  pp.  341,  342.  To  some  extent,  the  Irish  Society  resembled  the  Dutch 
East  India  company  in  the  manner  in  which  the  capital  was  provided. 

3  Ibid.,  II.  pp.  101,  109,  111. 

*  It  is  to  be  noted  however  that  it  was  usual  when  one  stock  was  being  wound 
up  at  the  time  another  was  being  formed,  for  the  latter  to  purchase  "the  remains" 
of  the  former — vide  infra,  n.  p.  103. 

6  Ibid.,11.  p.  104. 


CHAP,  vin.]  Fractional  Shares  and  "  Under- Adventures"  155 

during  the  subsequent  struggle  between  the  English  and  the  Dutch 
bodies,  the  former  suffered  through  its  having  been  unable  to  make 
strongly  defended  factories,  owing  to  the  necessity  of  keeping  its  assets 
liquid,  in  order  to  distribute  them  when  each  stock  was  wound  up*. 
The  few  companies  dealing  with  industries  in  England  had  permanent 
capitals — as  for  instance  the  Mines  Royal",  the  Mineral  and  Battery 
Works'  and  the  New  River  company*.  In  these  cases  no  other  method 
would  have  been  possible. 

During  the  seventy  years  up  to  1620,  there  was  a  gradual  evolution 
from  the  primitive  type  of  share  towards  a  capital  stock.  Attention  has 
already  been  drawn  to  the  tendency  at  first  to  treat  the  joint-stock 
company  as  an  extended  partnership",  with  the  result  that  the  whole 
undertaking  was  divided  into  a  comparatively  small  number  of  shares ; 
and,  as  a  consequence,  if  the  business  was  one  of  any  magnitude,  the 
amount  paid  up  on  each  share  was  large.  The  Mines  Royal,  Mineral  [ 
and  Battery  Works  and  African  Adventurers  are  instances  of  this  '^ 
tendency".  Had  this  system  been  continued  in  its  original  rigidity  it 
would  have  confined  membership  to  the  very  wealthy ;  and,  therefore, 
two  methods  were  adopted  of  attracting  the  smaller  investor — the  one 
by  dividing  shares  into  fractions  and  the  other  by  the  admission  of 
"  under-adventurers."  After  1600  these  devices  were  continued,  in  the 
case  of  the  New  River  company — the  adventurers'  moiety  was  divided 
into  thirty-six  shares,  the  original  par  value  of  which  was  .^257.  5*.  9|€?., 
and  which  were  soon  sold  in  fractional  parts''.  On  the  other  hand,  in 
the  Irish  Society  the  original  capital  was  divided  into  only  12  "portions" 
of  c£3,333.  6s.  Sd.  each,  and  the  smaller  livery  companies  subscribed 
"  under  "  one  of  the  greater  bodies,  to  which  the  shares  were  assigned  in 
the  first  instance^.  Yet  another  method  was  adopted  in  the  case  of 
the  syndicate  which  owned  the  Globe  Theatre  during  the  time  that 
Shakespeare  was  connected  with  it.  At  first  there  were  10  shares,  and 
new  ones  were  added  until  the  total  was  increased  to  sixteen*. 

With  the  foundation  of  the  East  India  company  a  modification  was 
introduced.  Instead  of  the  number  of  shares  being  determinate  and  the 
amount  paid  thereon  indeterminate,  at  the  formation  of  the  under- 
taking the  nominal  value  of  the  share  was  fixed,  but  there  was  con- 
siderable latitude  in  the  quantity  of  shares.  As  a  general  rule,  the 
committees  were  prepared  to  receive  more  capital  for  the  earlier  voyages 
than  was  actually  adventured,  and  so  the  subscription  lists  remained 

1  Vide  infra,  ii.  pp.  97,  108.  2  /^tU,  11.  pp.  385-405. 

3  Ibid.,  II.  pp.  406,  416.  *  Ibid.,  in.  pp.  21-31. 

^  Vide  supra,  p.  45.  ^  Vide  infra,  11.  pp.  7,  387,  416. 

7  Ibid.,  III.  pp.  21,  24.  8  Ibid.,  11.  p.  340. 

»  Shakespeare  in  London  by  C.  W.  Wallace  in  The  Times,  October  2,  1909. 


156  Denominations  of  Shares  1583-1620    [chap.  vni. 

open  for  a  long  period.  In  the  first  voyages  the  shares  appear  to  have 
been  £^50  each ;  while  in  the  fourth  expedition  the  amount  was  raised 
to  i£*550,  and  under-adventurers  found  a  part  of  the  calls  on  some  of 
the  shares  \ 

At  the  same  time,  a  movement  was  in  progress  towards  the  reducing 
of  the  denomination  of  the  share.  As  far  back  as  1583  Carlile  had 
proposed  the  formation  of  a  plantation  company  with  shares  of  .£'25, 
£\%  10*.  and  £Q.  5s.  each^  Similar  undertakings  at  the  beginning  of 
the  seventeenth  century  (with  the  exception  of  the  Irish  Society)  con- 
sisted of  shares  of  a  fixed  but  small  amount,  and  capital  was  created  as 
required  by  the  issue  of  more  shares.  Thus  the  first  Virginia  company 
had  "great  shares"  of  £12.  10s.  and  half-shares  of  £6.  5s.^  The  New 
England  undertaking  (1620)  had  two  distinct  capitals — the  one  for 
exploration,  the  shares  in  which  were  .^110  each;  and  the  other  for 
fishing,  in  which  ^50  on  every  part  was  paid  up  at  the  same  date"*.  In 
the  company  of  noblemen  and  gentlemen  for  planting  Guiana,  first 
formed  in  1619,  but  not  incorporated  until  1629,  there  were  three  kinds 
of  shares,  with  £150,  <^100  and  £50  to  be  called  up°.  In  this  case,  as 
well  as  Carlile's  proposed  venture  and  the  Virginia  company,  the  distinc- 
tion between  different  classes  of  shares  was  confined  to  the  amount  of 
each — there  was  no  priority. 

A  fresh  stage  in  the  evolution  was  reached,  on  the  formation  of  the 
First  Joint-Stock  of  the  East  India  company  in  1613.    The  adventurers, 
who  joined  in  this  series  of  voyages,  undertook  to  subscribe  a  certain 
amount  of  capital,  payable  in  equal  parts  over  four  years.     For  con- 
venience, the  subscription  was  dealt  with  as  consisting  of  units  of  .i^lOO 
each  to  be  paid,  annually,  up  to  1617^     Although  from  a  modern  point 
of  view  this  method  of  capitalization  would  be  considered  as  one  divided 
iinto  shares  of  d£*400,  the  tendency  of  the  seventeenth  century  for  ear- 
marking different  sums  as  far  as  possible  led  to  attention  being  con- 
centrated  on   the   annual   payments.      Therefore,   although   the   same 
persons  were  proprietors   of  the  thirteenth,  fourteenth,  fifteenth  and 
[sixteenth  voyages,  each  had  a  distinct  capital  on  which  divisions  were 
I  made.     Since,  moreover,  the  unit  in  all  of  them  was  ^fi^lOO,  an  approxi- 
•mation  towards  the  replacement  of  the  share  by  stock  is  reached.     As 
iyet,  however,  the  evolution  of  "  stock,"  as  a  marketable  denomination  of 
the  total  capital,  consisting  of  multiples  of  a  certain  specified  sum,  is 
i  incomplete.     In  fact  the  best  description  of  the  First  Joint-Stock  of  the 
East  India  company,  from  this  point  of  view,  would  be  €is  consisting  of 
shares  of  ^£^100  each — these  constituting  the  connecting  link  between  the 

1  Court  Book,  n.,  July  22,  1607.  ^  Vide  infra,  ii.  p.  243. 

3  Ibid.,  II.  p.  250.  4  Ibid.,  u.  p.  302. 

6  Ibid.,  II.  p.  325.  «  Court  Book,  in..  May  19,  1614. 


CHAP,  vm.]    Divisions  to  Shareholders  1600-20  157 

share,  as  such,  and  stock  in  its  later  meaning  as  a  transferable  portion 
of  the  whole  capital. 

Correlative  to  the  treatment  of  the  resources  subscribed  was  the 
distribution  of  the  profits  thereon.  The  East  India  company  was 
peculiar  in  its  partiality  for  terminable  stocks,  while  the  Russia 
adventurers  continued  to  trade  on  the  capital,  which  had  been  sub- 
scribed, as  long  as  it  continued  to  give  good  returns ^  It  was  only  when 
results  became  disappointing  that  it  was  wound  up  and  a  new  subscrip- 
tion taken.  In  both  cases,  no  distinction  was  made  between  the  capital 
that  earned  the  profit  and  the  profit  itself,  and  many  of  the  troubles  of 
the  Russia  company  in  1620  were  due  to  the  lack  of  this  precaution'. 
The  East  India  company  had  a  fixed  method  of  procedure  in  arriving  at 
the  amount  of  its  divisions.  There  was  often  some  doubt  as  to  what 
goods  were  to  be  credited  to  the  capitals  of  two  distinct,  but  co-existing 
"voyages,""  and  first  of  all  the  auditors  reported  to  the  governor  and 
committees,  recommending  a  certain  dividend  on  a  particular  stock. 
The  committees  then  passed  the  proposed  payment,  and  referred  it  to 
a  general  court  of  the  adventurers  concerned,  who  finally  sanctioned  the 
distribution'. 

There  were  several  formulae  by  which  the  divisions  were  announced. 
For  instance,  in  the  case  of  the  East  India  company,  at  a  meeting  of 
committees  on  June  8th,  1614,  it  is  recorded  that  there  was  a 
"remainder""  in  cash  of  between  £\OfiOO  and  d^l  1,000,  belonging  to 
the  third  and  fifth  voyages,  from  which  it  was  proposed  that  "  sixteen 
upon  a  hundred  should  be  divided \'"  As  a  rule,  single  payments  under 
50  per  cent,  were  spoken  of  in  this  way — namely  as  so  much  upon  a 
hundred.  Divisions  of  50  per  cent,  or  multiples  of  that  amount  were 
calculated  in  terms  of  "  capitals."'"'  Thus  on  September  20th,  1614,  a 
division  of  50  per  cent,  is  declared  as  "  fifty  on  the  hundred"^,""  while  on 
December  6th  the  same  distribution  is  referred  to  as  one  of  a  "half- 
capital*.""  About  a  fortnight  later,  a  "capital  in  money""  was  to  be 
divided  amongst  the  proprietors  of  the  eleventh  voyage''.  After  1614 
payments,  expressed  in  terms  of  one  or  more  "  capitals,"*"*  are  frequent, 
such  as  the  recommendation  of  the  auditors  of  three  capitals  on  the 
seventh  voyage,  and  one  capital  and  a  half  on  the  ninth  voyage^,  or, 
again,  the  sale  of  stock  upon  which  three  half-capitals  had  been  taken 
out^ 

1  Vide  infra,  ii.  pp.  45,  48,  52.  2  /^,^  ^^  pp,  54^  55. 

8  Court  Book,  iii.,  Sept.  8,  1616. 

*  Ibid. J  III.,  June  8,  1614.  As  the  subscribed  capital  was  £67,200,  a  division  of 
16  per  cent,  required  £10,752. 

5  Ihid.,  III.,  Sept.  20,  1614.  e  Ibid.,  m.,  Dec.  6,  1614. 

7  Ibid.,  III.,  Dec.  20,  1614.  8  /^,^  ^^^  Sept.  8,  1616. 

»  Ibid.,  IV.,  Feb.  24,  1618. 


158  Arnbiguities  of  the  Word  ''Stock"  1600-20  [chap.  vm. 

The  use  of  the  word  "  capital ""  in  this  connection  is  of  great  interest, 
as  one  of  the  earliest  applications  of  it,  in  relation  to  joint-stock  com- 
panies, in  English  records.  It  is  true  that  the  Italian  equivalent  is 
employed  in  a  communication  from  the  Venetian  ambassador  at  Con- 
stantinople, in  relation  to  the  proceedings  of  the  English  merchants 
there.  On  October  17th,  1598,  he  writes:  "Che  inglesi  hanno  intro- 
dotta  una  navigatione  nei  mari  et  nelle  Isole  di  Sua  Serenita,  tenendo 
pratica  et  intelligenza  con  sudditi  del  Zante,  Ceffalonia  ed  altri  luochi 
molti  de  quali  vanno  a  Constantinopoli  con  capitali  de  medesimi  inglesi 
et  alloggiano  nelle  case  loro^" 

The  introduction  of  the  term  by  the  East  India  company  into  their 
minutes  was  a  recognition  of  a  practical  difficulty,  arising  out  of  the 
different  significations  in  which  the  more  usual  word  stock  was  used. 
At  the  beginning  of  a  voyage,  the  "stock""  was  the  amount  actually 
paid  up  by  the  adventurers — it  was  both  the  stock-in-trade  in  the  widest 
sense  and  the  sum  total  of  the  sums  subscribed.  At  this  period  a  com- 
plication was  introduced  by  the  Dutch  and  the  English  East  India 
companies,  as  well  as  the  Russia  adventurers,  borrowing  large  sums^. 
It  followed  that  the  stock,  employed  in  the  business,  became  greater 
than  the  payments  made  by  the  members  on  their  shares.  The  tendency 
towards  confusion  became  accentuated,  when,  on  the  foundation  of  the 
First  Joint-Stock,  "  stock "  acquired  yet  a  third  meaning,  namely  as 
standing  for  a  share  of  dfi'lOO.  The  existence  of  this  difficulty  may  be 
traced  in  the  minutes  of  the  company,  as  for  instance  when  it  is  recorded 
that  the  Dutch  company  had  "a  stock""  of  ,£^900,000,  while  it  owed 
.5^400,000^,  where  the  term  denotes  the  whole  outlay.  Coupled  with  the 
necessity  to  avoid  misunderstanding,  there  was  a  second  cause,  which 
accounts  for  the  introduction  of  capital  as  a  business-expression  at  this 
time.  The  East  India  company  endeavoured  to  keep  its  accounts  in 
a  more  scientific  manner  than  had  been  usual  amongst  its  predecessors. 
The  need  for  improvement  was  sufficiently  apparent.  Not  only  are 
there  no  balance  sheets  of  the  Crown  revenue  and  expenditure,  but  errors 
in  addition  might  almost  be  described  as  the  rule  rather  than  the  excep- 
tion.    The  Italians  were  the  pioneers  of  accurate  bookkeeping,  and  it 

^  State  Archives,  Venice — Rubricario  del  Dispaccio  dell'  Ambasciatore  Veneto 
Cappello— No.  601-304,  Sez.  in.;  Calendar  State  Papers,  Venetian,  1591-1603,  p.  347. 

2  Vide  infra,  ii.  pp.  44,  104,  107. 

3  Court  Book,  iii..  May  5,  1615.  Similar  difficulties  showed  themselves  in 
reference  to  the  capital  of  the  Dutch  company  as  divided  amongst  the  shareholders. 
At  first  the  holding  consisted  of  ''^ parts"  (cf.  supra,  p.  45)  of  the  subscribed  capital 
which  were  eventually  consolidated  or  divided  into  shares  of  3,000  florins — 
A.  E.  Sayous,  Le  Fractionnement  du  Capital  Social  de  la  Compagnie  Neerlandaise  des 
Indes  Orientates  aux  xvii*  et  xviii*  Siecles  in  Nouvelle  Bemie  Historique  de  Droit 
Franfaise  et  Etr anger,  1901,  pp.  624,  625. 


CHAP,  viil]  Divisions  in  Terms  of 'Capitals''  1600-20    159 

has  already  been  shown  that,  as  early  as  1569S  an  attempt  had  been 
made  to  introduce  their  methods  of  accountancy  into  England,  including 
the  employment  of  the  term  capital.  It  appears,  however,  that  this 
effort  did  not  succeed,  and  it  was  only  when  merchants  who,  later,  had 
business  relations  with  the  Mediterranean  became  convinced  of  the 
advantages  of  the  Italian  method,  that  it  came  to  be  studied.  Now 
amongst  this  group  there  were  many  members  of  the  East  India  com- 
pany. Although  there  were  differences  of  opinion  between  this  body 
and  the  Levant  merchants,  the  latter  had  been  instrumental  in  the 
foundation  of  the  East  India  undertaking^  But  the  Levant  company 
itself  was  an  amalgamation  of  two  other  bodies,  one  of  which  was  the 
Venetian  merchants^.  In  this  way  there  was  a  connection  between  some 
of  the  East  India  adventurers  and  Italy,  so  that  it  is  probable  that 
several  of  the  officials  of  the  company  had  learnt  their  bookkeeping  in 
the  Mediterranean  and  would  introduce  improved  methods.  In  this 
manner  the  transplantation  of  the  term  capital  can  be  explained. 

At  the  same  time,  it  should  be  noticed,  as  an  example  of  the 
perplexities  attending  the  investigation  of  seventeenth-century  finance, 
that  the  description  of  divisions,  as  consisting  of  a  half-capital  or  a  whole 
capital,  is  liable  to  mislead  the  modem  reader.  Owing  to  the  incom- 
plete state  of  the  minutes  of  the  East  India  company,  our  knowledge  of 
the  divisions  made  during  the  beginning  of  its  history  depends  on  a 
report  drawn  up  by  the  accountant  at  a  later  date,  which  gives  the 
amount  of  each  separate  subscription  and  the  total  of  the  divisions  thereon. 
It  would  be  expected  that  the  dividend  of  a  capital  would  be  equal 
to  sums  paid  in  by  the  adventurers.  This  is  so  in  the  case  of  the  eighth 
voyage,  where,  according  to  the  minutes,  three  capitals  were  divided, 
with  a  final  payment  of  11  per  cent.,  making  311  per  cent.,  which  agrees 
exactly  with  the  figures  given  by  Sambrooke.  The  difficulty  begins 
with  the  First  Joint-Stock.  Unfortunately,  since  there  is  a  gap  of  nearly 
two  years  in  the  minutes,  it  is  not  possible  to  make  a  complete  list  of 
all  the  divisions  declared,  so  as  to  compare  them  with  the  result  stated 
by  Sambrooke.  However,  starting  with  the  amount  subscribed  which 
he  gives,  and  which  is  confirmed  by  the  minutes,  and  taking  "the 
capital  ■"  as  equal  to  this  sum,  the  extraordinary  result  is  arrived  at  that, 
on  this  basis,  the  incomplete  dividends  come  to  more  than  the  total 
should  be.  At  first  one  is  tempted  to  suppose  that  the  "  capital "" 
divided  must  have  been  less  than  100  per  cent.,  or  else  that  Sambrooke's 
figures  are  wrong.  Neither  of  these  suppositions  is  admissible.  There 
would  have  been  no  gain  in  the  adoption  of  "  capital "  as  a  term  of 
accountancy,  unless  it  were  used  in  its  natural  meaning ;  and  Sambrooke 

1  Vide  supra,  p.  60  (note).  ^  Vide  infra,  ii.  p.  91. 

3  Ihid.y  II.  pp.  84,  85. 


160   Divisions  in  Terms  of  ''Capitals''  1600-20  [chap.  vni. 

is  accurate,  where  his  work  can  be  checked.  The  solution  of  the  problem 
is  to  be  sought  in  a  different  direction,  namely  in  the  practice  of  keeping 
separate  accounts  for  each  of  the  four  voyages,  financed  by  this  stock  ^. 
Since  a  quarter  of  the  stock  was  called  up  each  year,  a  division  of  a 
whole  capital  on  the  first  of  these  would  mean  100  per  cent.,  not  on 
d£'41 8,691,  but  on  about  a  quarter  of  that  amount.  It  might  be  thought 
that  when,  in  the  second  year,  one-half  of  the  stock  was  called  up,  the 
division  of  a  capital  would  be  equal  to  this  sum ;  but  as  a  matter  of 
fact,  for  the  same  reason,  if  funds  accrued  from  that  voyage  they  were 
assigned  to  it,  and  similarly  with  those  of  the  succeeding  two  years. 
Thus  a  dividend  of  a  capital  on  the  First  Joint-Stock  was  in  reality 
not  100  per  cent,  on  the  whole  subscription,  but  on  the  voyage  of 
a  particular  year.  The  difference  between  the  usage  in  the  seventeenth 
century  and  that  now  adopted  was  one  in  the  point  of  view.  The 
East  India  adventurers  divided  the  whole  into  distinct  parts,  each  of 
which  was  kept  separate ;  and  therefore,  according  to  their  practice,  they 
were  logical  in  naming  each  of  these  parts  "  a  capital."  If  the  divisions 
on  this  stock  be  treated  by  assigning  each  of  them  to  the  voyage  on 
which  it  was  declared,  in  relation  to  the  subscription  allocated  to  that 
voyage,  taking  the  capital  as  100  per  cent,  on  the  funds  of  its  proper 
voyage,  it  will  be  found  that  the  divisions  in  the  minutes,  instead  of 
being  in  excess  of  Sambrooke^s  return,  come  to  a  smaller  sum,  as  is 
necessary  from  the  incompleteness  of  the  records.  A  precisely  similar 
result  is  arrived  at  in  the  case  of  the  subsidiary  joint-stock  of  the 
Virginia  company,  which  was  known  as  "  the  great,'"*  or  "  the  old 
magazine^."  Being  distinct  from  the  parent  undertaking,  its  minutes 
were  kept  separately^,  but  there  are  sufficient  references  to  its  finances  to 
enable  a  reconstruction  of  their  main  outlines  to  be  made.  The  sub- 
scribed capital  was  £1S)00,  payable  in  three  annual  instalments.  By 
December  19th,  1621,  "a  whole  capital"'  (in  the  form  of  two  "half- 
capitals")  had  been  divided^.  Yet  in  February  1623  it  is  recorded  that 
the  shareholders  had  then  only  received,  as  their  total  divisions,  ,£'4,000'; 
and,  as  in  the  case  of  the  East  India  company,  it  is  plain  that  "  the 
capital "  was  computed  on  the  stock  of  a  distinct  voyage,  as  is  clear  from 
the  form  of  declaring  a  distribution  as  "  half  a  capital  of  the  first  year's 
adventure^  y 

1  This  was  also  the  practice  of  the  Russia  company—  infra,  ii.  pp.  39,  45,  52-4. 

2  For  some  account  of  this  venture,  ibid. ,  ii.  pp.  256,  257,  270,  273,  276. 

3  With  the  exception  of  the  report  of  one  meeting,  which  was  copied  into  the 
Court  Book  of  the  Virginia  company  {Records  of  the  Virginia  Company,  i.  pp.  524-6), 
none  of  these  minutes  are  known  to  exist. 

4  Ibid.,  I.  pp.  227,  238,  535,  547,  572.  &  /jj^.^  „.  p,  279. 

®  Ibid.,  I.  p.  328.  The  division  of  £4,000  on  £7,000  appears  to  have  been  three 
half-capitals  with  a  balance  of  an  odd  amount. 


CHAP.  VIII.]  Sales  of  Shares  1600-20  161 

Owing  to  the  increased  importance  of  the  joint-stock  company  at 
this  period,  sales  of  shares  became  comparatively  common.  The  names 
of  proprietors  given  in  the  various  charters  of  the  society  of  Mineral  and 
Battery  Works  show  numerous  changes,  but  it  was  after  the  foundation 
of  the  East  India  company  that  these  transactions  became  frequent.  By 
the  formation  of  successive  subordinate  ventures,  there  were  opportunities 
for  those,  who  had  capital  to  subscribe,  to  acquire  an  interest  in  these 
stocks.  Application  was  first  made  to  persons,  who  were  already  fi*ee 
of  the  company,  and  subsequently  outsiders  were  invited  to  become 
adventurers^  It  is  surprising  that  in  spite  of  these  opportunities — 
there  were  twelve  distinct  subscriptions  up  to  the  beginning  of  1613 — 
many  shares  were  sold.  In  most  cases  these  were  dealt  with  by  private 
negotiation  between  the  parties,  and  the  company  recorded  the  "  trans- 
port "  without  noting  the  price  obtained.  It  sometimes  happened  that 
members,  for  various  reasons,  were  either  unable  or  unwilling  to  dispose 
of  their  interests  in  this  way.  In  such  cases,  the  "  court  of  sales ""  pro- 
vided a  ready  means  for  the  realization.  After  the  auction  of  East 
India  commodities  by  "  inch  of  candle,'^  any  shares  which  the  proprietors 
wished  to  part  with,  by  the  same  method,  were  offered.  This  procedure 
is  of  interest  as  showing  that  there  was  an  open  market  for  these 
securities,  since  the  court  of  sales  was  attended  by  any  persons  who  were 
prepared  to  purchase  the  goods.  In  many  cases  the  purchasers  of  shares 
by  auction,  as  well  as  those  who  had  bought  by  private  negotiation, 
were  not  members  of  the  company,  and  they  paid,  in  addition  to  the 
price  agreed  upon,  the  usual  fine  for  admission.  The  governor  and 
committees  were  anxious  to  encourage  public  sales  of  shares,  and,  in 
1615,  it  was  ordered  that  ^^00  paid  up  in  the  First  Joint-Stock  should 
be  auctioned,  "  whereby  they  may  better  know  the  worth  of  their 
adventures,  which  will  give  a  good  reputation  to  the  voyage,  if  it  shall 
be  well  sold''." 

The  prices  realized  at  these  sales  are  recorded  elsewhere'.  They  are 
of  interest  chiefly  as  very  early  quotations  for  stocks.  Had  this  company 
not  adopted  the  practice  of  making  divisions  on  terminable  stocks,  these 
figures  would  have  been  of  great  importance,  as  showing  the  yield  on 
an  investment  of  this  kind.  Unfortunately,  the  irregularity  of  the  pay- 
ments and  the  incomplete  state  of  the  minutes  make  it  impossible  to 
determine,  in  a  sufficient  number  of  instances,  how  much  of  the  total 
division  on  a  certain  stock  had  been  distributed  at  the  time  many  of  the 
sales  were  made.  A  long  period  elapsed  before  most  of  these  stocks 
were  wound  up,  and  it  might  be  expected  that  intending  purchasers 
would  have  been  able  to  forecast  with  considerable  precision  how  much 

»  Court  Book,  ii..  May  15,  1607.  *  Ihid,,  m.,  October  13,  1616. 

3  Vide  infra,  u.  pp.  123-5. 
S.  C.  I.  '      11 


162  Prices  of  Shares  1600-21  [chap.  vm. 

remained  to  be  divided.  Therefore  the  price  would  be,  in  fact,  the 
discounting  for  a  period  of  one  or  two  years  a  certain  payment  then 
probably  due.  One  series  of  prices  is  of  interest  as  showing  a  serious 
miscalculation.  In  1618  the  thirteenth  voyage^  had  a  number  of  assets 
as  yet  undistributed.  Since,  after  150  per  cent,  had  been  divided,  the 
stock  was  sold  from  214  to  91S\,  it  was  expected  that  the  "remains'^ 
would  realize  a  large  sum,  but  the  conflict  with  the  Dutch  company 
precluded  the  making  good  of  this  anticipation.  There  was  only  one 
case  in  which  it  was  recorded  that  an  adventure  was  sold  below  par. 
This  was  in  1601,  when  a  share  in  the  first  voyage  changed  hands  at 
only  90  per  cent,  of  the  sum  paid  in.  To  some  extent  the  sale  was 
a  forced  one,  since  the  original  adventurer  was  not  disposed  to  pay 
a  further  call,  then  due 2.  Other  companies  were  not  so  successful  as 
investments.  There  is  a  quotation  of  the  £\%  \0s.  shares  of  the 
Virginia  company,  though  belonging  rather  to  the  time  of  crisis  in  1621, 
which  was  between  40*.  and  50^.  This  was  from  16  per  cent,  to  20  per 
cent,  of  the  amount  paid  up^. 

During  the  years  of  good  trade  at  the  beginning  of  the  seventeenth 
century,  the  internal  affairs  of  the  joint-stock  companies  were  on  the 
whole  harmonious.  This  was  especially  so  in  the  East  India  company. 
There  are  indications,  however,  that  there  were  elements  in  the  manage- 
ment, which,  though  tolerated  in  good  times,  would  lead  to  dissatisfac- 
tion in  a  period  of  adversity.  Attention  has  already  been  drawn  to  the 
payment  of  moneys  to  the  Crown,  of  which  no  account  was  kept^  The 
same  tendency  is  shown  in  the  concealment  of  a  loan  contracted  in  1615, 
which  was  to  be  a  secret,  "in  regard  the  generality  cannot  suddenly 
apprehend  the  true  grounds  and  reasons  thereof  ^"  Both  the  East  India 
and  Russia  companies  had  many  difficulties  in  preventing  private  trade 
by  individuals^;  and,  on  laxity  being  shown  by  the  administration,  this 
evil,  from  the  point  of  view  of  the  joint-stock  system,  invariably  arose. 

Those  companies,  which  were  less  prosperous  than  the  East  India 
undertaking,  provide  instances  of  severe  criticism  of  the  management. 
In  the  Virginia  company  the  dissensions  and  disorders  at  the  meetings 
were  notorious',  whilst  amongst  the  Russia  adventurers,  after  1619, 
there  were  allegations  of  the  voting  and  other  business  being  conducted 
improperly*. 

As  a  general  rule,  up  to  1620  and  for  some  years  afterwards,  no 
special  arrangements  had  been  made  in  the  charters  as  to  the  relation  of 

1  That  is  the  first  year's  adventure  in  the  First  Joint-Stock— cf.  infraj  ii.  p.  125. 

2  Court  Book,  i.,  July  24,  1601.  3  vide  infra,  ii.  p.  276. 

*  Vide  mpra,  p.  142.  ^  Court  Book,  iii.,  June  20,  1615. 

6  Vide  infra,  ii.  pp.  42,  46,  52.  ^  jbid,^  n.  p.  283. 

8  Ibid.,  II.  p.  56. 


CHAP.  VIII.]  Internal  Organization  of  Companies  1600-20  163 

the  votes  to  the  shares.  In  most  cases  the  usual  clause,  which  gave  the 
companies  powers  to  make  by-laws,  was  held  to  provide  for  the  deter- 
mining of  the  amount  of  the  qualification.  The  charter  granted  in  1604 
to  the  society  of  Mines  Royal  was  an  exception  to  this  rule,  since,  in  it, 
it  is  stated  "  the  voice  of  everyone,  having  a  quarter  part,  is  to  be  held 
of  as  great  account  as  the  voices  of  two  others,  having  but  half-quarter 
parts  a  piece,  and  so  the  voice  of  any  other,  having  a  greater  part  than 
a  quarter,  to  be  esteemed  of  as  great  force  as  so  many  several  other 
persons,  having  but  a  half-quarter  a  piece*.""  It  was  the  practice  of  the 
East  India  company  to  decide  questions,  where  there  was  a  difference  of 
opinion,  by  a  show  of  hands  amongst  those  present  at  the  meeting',  and 
the  same  method  was  adopted  by  the  Virginia  company  up  to  1619*. 
To  some  extent  the  natural  objection  to  this  practice  was  minimized  in 
the  former  case  by  fixing  a  minimum  holding  for  voting  purposes ;  but, 
in  the  latter,  where  the  share  was  only  £\%  10*.  and  where  moreover 
members  of  the  council  and  freemen  could  attend  the  courts  and  vote, 
there  was  the  risk  that  a  minority  of  capital  might  have  a  large  majority 
of  voting  power*. 

Occasionally  some  light  is  obtained  on  the  number  fixed  upon  as  the 
quorum  at  a  general  meeting.  In  the  Mineral  and  Battery  Works  it 
was  twelve  pereons,  and  in  the  New  River  company  five'. 

It  was  the  practice  for  the  members  of  the  East  India  company  to 
vote  a  honorarium  to  the  governor  and  committees.  The  first  mention 
of  such  a  payment  being  made  was  in  1609,  when  the  meeting  passed 
a  motion  to  grant  Sir  Thomas  Smythe  cj^650  in  recognition  of  his  aid  in 
obtaining  the  charters  and  of  his  service  for  five  years  as  governor.  On 
his  re-election,  Smythe  absolutely  refused  to  serve  unless  the  vote  was 
reduced  by  =£^250®.  This  modesty  is  so  widely  different  from  modem 
practices  that  it  deserves  special  mention.  In  1615  £\fiOO  was  granted 
to  the  twenty-four  committees,  on  account  of  the  growth  of  the 
business,  which  required  their  attendance  every  day^. 

Turning  from  the  internal  management  of  the  individual  company 
to  the  relation  of  these  bodies  to  each  other,  there  are  several  unex-  ; 
pected  points  of  contact  and  antagonism.  The  so-called  monopoly,  i  \ 
granted  by  the  charters,  was  no  more  than  the  prohibition  of  subjects  of  y 
the  Crown,  other  than  the  discoverers,  to  use  a  certain  trade  route.  ! 
Therefore  unless,  as  in  the  case  of  the  Levant  company,  the  further  1 

*  Fodince  Regales :  Or  the  History,  Laws  and  Places  of  the  chief  Mines  and  Mineral 
Works  in  England,  Wales  and  the  English  Pale  in  Ireland,  by  Sir  John  Pettus, 
London,  1670,  p.  56. 

Vide  infra,  ii.  p.  92.  3  jf^^.,  n.  pp.  268,  269. 

*  Ibid.,  II.  pp.  278-9.  6  Ibid.,  ii.  p.  415,  iii.  p.  23. 

«  Court  Book,  ii.,  July  4,  1609.  ^  jbid.,  ui.,  September  1,  1616. 

11—2 


164  Competition  of  Companies  1580-1620  [chap.  viii. 

;  privilege  of  sole  importation  of  a  certain  commodity  was  granted^,  the 
I  company  had  to  face  the  competition  of  foreigners,  although  this  was 
•  limited  by  the  higher  customs  exacted  from  aliens.  Besides  it  some- 
times happened  that  although  each  organization  was  safeguarded  in  its 
own  route,  a  number  might  be  competing  directly  or  indirectly.  This 
was  the  case  with  the  Russia,  Levant  and  East  India  companies.  To  all 
of  them  the  spice-trade  from  Persia  was  open — the  Russia  company 
brought  the  commodities,  it  purchased,  over  the  Caspian  Sea  and 
through  Russia  via  Archangel  or  the  Baltic  2,  the  Levant  company 
through  the  Mediterranean^,  and  the  East  India  undertaking  round  the 
Cape  of  Good  Hope^.  The  Cossacks  had  interrupted  this  branch  of  the 
activity  of  the  Russia  company  after  1581^,  although  it  still  continued  to 
import  such  Oriental  commodities  as  it  was  able  to  purchase  in  Russia. 
At  times  the  competition  between  the  two  remaining  companies  was 
very  keen,  and  this  fact  accounts  for  the  antagonism  between  them  for 
nearly  a  century. 

At  the  same  time,  besides  opposition  of  this  nature,  there  were  many 
arrangements  for  establishing  a  "  community  of  interest.*"  In  the  Mines 
Royal  and  Mineral  and  Battery  Works  this  came  about  gradually  by 
a  number  of  persons  owning  shares  in  both^.  The  Levant  and  East 
India  companies  had  joined  with  the  Russia  undertaking  on  different 
occasions  in  providing  funds  for  the  discovery  of  a  North-west  passage^. 
A  closer  union  was  the  joint-adventure  of  the  Russia  and  East  India 
companies,  beginning  in  1618  for  a  series  of  whaling  voyages  ^  Still 
more  remarkable  was  the  proposition,  which  had  the  support  of  James  I., 
for  an  amalgamation  of  the  English  and  Dutch  East  India  companies*. 
This  scheme  had  been  developed  with  considerable  detail  in  1615,  and  it 
is  not  impossible  that  if  the  King  had  used  more  tact  in  his  dealings 
with  the  company,  composed  of  his  own  subjects,  some  arrangement 
might  have  been  arrived  at,  which  would  have  rendered  the  losses, 
incurred  by  both  bodies  a  few  years  later,  quite  unnecessary.  Yet 
another  side  of  this  tendency  towards  the  harmonizing  of  different 
interests,  through  the  joint-stock  principle,  is  shown  in  the  settlement  of 
disputes  between  the  privileged  undertakings  and  adventurers,  who  had 
opened  up  a  trade  within  the  limits  assigned  by  the  charters.  If  the 
persons  who  had  entered  these  trades  had  been  able  to  establish  an 
organized  business,  it  was  usual  for  the  privileged  company,  when 
enforcing  its  monopoly,  to  purchase  the  ships  and  stock-in-trade  of  their 
rivals  at  a  valuation,  and,  in  some  cases,  shares  in  the  company  were 
issued  to  carry  out  the  agreement.     The  precedent  for  transactions  of 

1  Vide  infrttj  ii.  p.  86,  2  n^^^  j^  p  43  3  /^^^^^  u^  pp.  33,  84. 

4  Ihid.,  II.  p.  89.  5  Ibid.,  11.  pp.  43,  44.  ^  Ibid.,  11.  p.  403. 

7  Ibid.,n.  pp.  49,  95.  »  Ibid.,  11.  pp.  55, 104.         »  Ibid.,  11.  p.  103. 


CHAP.  VIII.]  Co-operation  of  Companies  1600-20  165 

this  kind  was  the  Act  of  Parliament  in  favour  of  the  Russia  company  in 
1566S  ^^^  subsequently  the  absorption  of  competing  ventures  was 
effected  on  a  similar  basis  by  the  East  India  company  in  1614',  and 
by  the  whaling  undertaking,  financed  by  this  body  and  the  Russia 
adventurers,  which  agreed  to  purchase  all  the  ships  and  stores  of 
Cunningham's  Scottish  company*.  In  the  latter  case  there  was  delay  in 
the  payment  being  made,  but  the  principle  was  important,  since  it 
enabled  enterprizing  men  to  enter  the  privileged  bodies,  and  provided 
(in  addition  to  the  ordinary  means  through  transfers  of  shares)  for  the 
introduction  of  those  who  may  have  had  fresh  ideas  or  who  had  esta- 
blished new  methods  for  trading  with  the  natives  of  distant  countries. 

1  Vide  infra,  ii.  p.  42.  ^  Court  Book^  m.,  December  2,  1614. 

3  Vide  infra,  ii.  pp.  55,  104 


CHAPTER  IX. 

The  Crisis  of  1620—1625. 

The  progress  of  the  joint-stock  company,  during  the  peaceful  years 
of  good  trade  up  to  1619,  has  been  dealt  with  separately,  as  showing  the 
organization  under  favourable  conditions.  To  this  there  is  the  necessary 
complement,  which  represents  the  same  undertakings  during  a  time  of 
stress.  To  say  that  bad  years  follow  good  years,  at  more  or  less  uncertain 
intervals,  is  a  truism;  and,  concealed  under  the  fair  show  of  British 
commerce  during  the  reign  of  James  I.,  there  were  elements  making  for 
a  crisis  in  the  future.  The  time  at  which  the  depression,  that  was 
inevitable,  would  begin  to  show  itself  was  uncertain  and  depended  on 
several  causes.  Capital  had  been  driven  out  of  some  of  the  customary 
channels  for  investment,  and,  about  1614,  there  had  been  great  activity 
in  the  formation  of  new  schemes.  The  incipient  boom  had  been  checked 
by  the  partial  crisis  in  1616-7  in  the  cloth  trade,  and  capital  was 
directed  towards  the  extension  of  foreign  trade.  The  strength  of  this 
movement  is  shown  by  the  subscription  of  a  stock,  four  times  greater 
than  any  previously  taken  up,  for  the  East  India  trade,  by  the  formation 
of  a  new  whaling  company  and  the  establishing  of  another  African 
undertaking,  all  in  the  years  1617-8.  Had  these  ventures  been 
successful,  the  approaching  crisis  might  have  been  delayed  for  some  time, 
but  the  aggressive  competition  of  the  Dutch  meant  the  cessation  of 
immediate  profits  ^  Therefore  in  1620  these  trades  had  begun  to  suffer 
severely.  Neither  the  Russia  nor  the  East  India  companies  were  able  to 
pay  their  obligations  when  due,  and  the  African  body  had  lost  all  its 
capitaP.  The  great  English  industry — the  cloth  trade — had  for  some 
years  been  depressed,  and  early  in  1620  the  country  began  to  experience 
a  serious  crisis. 

Regarded  externally,  as  it  was  viewed  by  most  of  those  who  considered 
the  matter  at  the  time,  this  period  of  depression  was  described  as  a 
monetary  crisis.     It   seemed   impossible   for  any  of  those,  who  wrote 

1  Free  Trade  or  the  Means  to  make  Trade  Florish;  wherein  are  discovered  the  Causes 
of  the  Decay  of  Trade  of  this  Kingdom,  by  E.  Misselden,  1622,  p.  13. 

2  Vide  infra,  ii.  pp.  12,  55-8,  107. 


CHAP.  IX.]    Characterizations  of  the  Crisis  1621  167 

reports  to  the  government  or  who  spoke  in  the  Parliament  of  1621,  to 
allude  to  the  prevailing  bad  trade,  without  attributing  the  evil  to  scarcity 
of  coin,  or  (as  has  happened  in  many  subsequent  crises)  to  the  want  of 
moneys  To  this  cause  was  attributed  the  inability  of  the  farmer  to  pay 
his  rent,  or  the  merchant  to  meet  his  engagements.  The  range  of 
metaphor  was  taxed  to  describe  the  magnitude  of  the  evil:  trade  was 
said  to  be  "  at  a  stand,''  "  to  be  sick,"  to  be  "  in  a  consumption,"  "  to  be 
decayed  "  or  "  to  lie  a-bleedingl" 

The  phenomena,  that  marked  the  appearance  and  continuance  of  the 
crisis,  were  all  the  more  striking  after  the  years  of  prosperity.  Markets 
and  fairs  were  sparsely  attended,  prices  for  cattle  and  wool  were  low, 
weavers  and  agricultural  labourers  were  out  of  work'.  There  was 
necessarily  a  great  increase  in  pauperism;  and,  as  the  crisis  developed, 
there  were  "  mutinies ""  of  the  unemployed^  At  Bath,  for  instance,  the 
clothiers  were  "much  decayed,"  and  many  of  the  weavers  were  being 
supported  by  the  city.  In  Gloucester,  by  1622,  the  trade  was  described 
as  "growing  worse  and  worse."  The  local  authorities  were  unable  to 
relieve  "the  infinite  number"  of  those  out  of  work.  Many  of  these 
"  were  in  case  to  starve  as  their  faces  did  manifest,  and  they  so  far 
oppressed  those  parts,  wherein  they  lived,  that  the  abler  sort  of  people 
there  were  not  able  longer  to  mainteyne  the  same^"  Gloth-makers,  who 
kept  their  looms  running,  only  paid  the  weavers  1*.  a  week  in  1622; 
and,  even  under  these  conditions,  the  work  was  carried  on  at  a  loss,  since 
in  some  districts  cloth  was  "almost  valueless^."  Bankruptcies  were 
multiplying,  while  the  rate  of  interest  was  higher  than  it  had  been  for 
a  number  of  years. 

The  prevalent  impression,  that  the  crisis  was  due  to  a  "  scarcity  of 
coin,"  was  one  of  those  facile  explanations,  dependent  on  the  taking  of 
the  symbol  for  the  thing  itself.  The  credit  system  of  the  country  was 
not  sufficiently  developed  to  produce  a  panic  through  any  abuse  of  credit- 
instruments.     There  was  no  debasement   of  the   currency;   and,  even 

1  State  Papers,  Domestic,  James  I.,  cxix.  139;  Calendar,  1619-23,  p.  211; 
Journals  of  the  House  of  Commons,  i.  p.  627. 

2  Proceedings  of  the  House  of  Commons  in  1621,  Oxford,  1766,  ii,  p.  139 ;  Causes 
of  Decay  of  Trade  amongst  EiigHsh  Merchants,  Add.  MS.  34,324  ff.,  191-5. 

3  Several]  Grievances  concerning  Trade  presented  to  King  James  I.,  by  Sir  R. 
Heath,  May  28,  1624:  Harl.  MS.  2,244,  f.  1. 

*  Tom  Tell-Troath:  Or  a  free  Discourse  touching  the  Manners  of  the  Time  pi622],  in 
Harleian  Miscellany  (1746),  ii.  p.  407;  State  Papers,  Domestic,  James  I.,  cxxii.  41; 
cxxviii.  50;  Calendar,  1619-23,  pp.  278,  358. 

^  State  Papers,  Domestic,  James  I.,  cxxx.  61;  cxxxi.  4:  printed  in  A  Dismal 
Depression  in  1622,  by  R.  H.  Clutterbuck  [1883],  pp.  9,  11. 

6  State  Papers,  Domestic,  James  I.,  cxxviii.  49  (1);  cxxx.  81;  Calendar,  1619- 
23,  pp.  358,  393. 


168         The  Cloth  Trade  and  the  Crisis  1617-21  [chap.  ix. 

though  a  temporary  scarcity  of  the  precious  metals  may  have  occasioned 
some  inconvenience,  Europe  had  enough  to  support  the  usual  level  of 
prices.  No  doubt  in  1620  England  was  short  of  bullion;  but  this 
phenomenon  was  a  symptom  of  the  malady  rather  than  the  true  cause 
of  the  distress.  Not  only  had  the  activity  of  trade  been  checked,  but, 
through  special  circumstances,  the  balance  of  indebtedness  had  turned 
against  England  in  foreign  trade.  The  enterprize  of  the  Dutch  and 
their  determination  to  secure  an  entrance  into  various  branches  of 
commerce  by  armed  interference,  where  force  could  be  used  without 
straining  international  relations — as  for  instance  at  the  whaling  grounds 
or  in  the  East  Indies — meant  a  necessary  arrest  of  the  expansion  of 
exports.  The  resulting  tendency  towards  depression  applied  only  to 
the  newer  branches  of  commerce,  but  a  much  graver  decline  in  English 
prosperity  arose  partly  from  another  side  of  the  same  competition,  partly 
from  the  hazardous  manipulation  of  the  cloth  trade  by  James  I.  No 
industrial  measure  in  the  beginning  of  the  seventeenth  century  was  more 
disastrous  in  its  immediate  effects  than  that  aimed  at  the  foundation 
of  the  dyeing  and  finishing  of  cloth  in  England  by  the  privileges  granted 
to  the  New  Merchant  Adventurers.  This  movement  had  a  plausible 
justification,  as  an  effort  to  remedy  the  decline  in  the  production  of 
cloth,  which  had  already  begun  to  show  itself  to  a  moderate  amount. 
The  English  cloth-making  trade  had  gained  through  the  wars  on  the 
Continent;  and,  with  the  recovery  of  the  Low  Countries  after  peace  was 
made,  some  falling  off  was  to  be  expected.  As  suggested  in  a  previous 
chapter^  it  would  have  been  worth  making  the  experiment  of  granting 
a  patent  for  the  introduction  of  dyeing,  as  a  new  trade,  for  a  term  of 
years.  Unfortunately,  the  financial  necessities  of  James  I.  enabled  the 
promoters  of  the  New  Merchant  Adventurers  company  to  obtain  such 
privileges  that  the  whole  trade  was  dislocated. 

It  might  be  expected  that,  if  a  crisis  were  to  come,  it  would  have 
arisen  when  the  industry  was  disorganized,  not  after  the  dyeing  privileges 
had  been  recalled.  As  a  matter  of  fact,  during  the  brief  period  that 
this  grant  had  been  in  operation,  so  much  injury  was  done,  that  it 
required  many  years  to  recover  the  ground  that  had  been  lost.  The 
Dutch  began  to  make  unfinished  cloth,  and  in  1617  it  was  discovered 
that  they  had  succeeded  in  establishing  the  industry  on  a  firm  basis. 
This  meant  more  than  might  be  anticipated,  unless  due  weight  be  given 
to  the  importance  of  the  export  of  cloth  in  the  foreign  trade  of  England. 
In  spite  of  the  progress  made  in  the  East  India  and  American  ventures, 
the  shipping  of  cloth  remained  at  this  period  by  far  the  largest  part  of 
the  exports,  and  the  falling  off  in  1620  was  remarkable.     The  Merchant 

1  Vide  supra,  p.  143. 


CHAP.  IX.]     Decline  in  Imports  of  Cloth  1620  169 

Adventurers  were  selling  about  one-half  of  the  amount  they  had  been 
able  to  dispose  of  abroad  in  1612-3,  and  the  Eastland  company  little 
more  than  one-third.  The  loss  in  value,  annually,  was  upwards  of  half 
a  million  in  the  exports  of  these  two  organizations  alone,  or  nearly 
25  per  cent,  of  the  total  amount  sent  abroad  in  a  year  of  good  trade 
such  as  1613^  If  there  be  added  the  further  losses  elsewhere  to  this 
decline  in  the  exports  to  the  Baltic,  the  whole  decrease  must  have  been 
very  great,  especially  in  its  ratio  to  the  total  volume  of  goods  sent  abroad. 
The  depression  extended  to  other  textile  trades,  and,  at  Manchester, 
there  were  853  pieces  of  friezes,  cottons  and  bays  at  the  Hall  which  could 
not  be  sold,  while  it  was  reported  that  "  there  was  a  far  greater  quantity 
of  cloth  of  these  sorts  lying  in  the  country  ready  to  be  sent  up,  if  the 
market  were  not  so  bad''.'"  The  responsibility  for  this  loss  is  to  be 
attributed  mainly  to  the  disturbance  of  the  trade  from  1613  to  1617, 
but  also,  in  part,  to  the  manner  in  which  the  old  company  of  Merchant 
Adventurers  was  re-established.  The  members  had  to  pay  some  .£70,000 
in  bribes  to  secure  a  new  charter;  and  those,  who  provided  the  money, 
recouped  themselves  by  a  tax  or  imposition  deducted  from  the  price 
offered  to  the  clothiers.  In  an  over-stocked  market,  this  meant  that 
the  nett  sum,  received  by  the  manufacturer,  was  reduced,  first  by  the 
competition  at  home  and  that  further  he  had  to  bear  this  deduction  in 
order  to  make  a  sale. 

The  period,  that  elapsed  between  the  dislocation  of  the  cloth  industry 
and  the  crisis,  is  a  striking  testimony  of  the  soundness  and  prosperity  of 
commerce  in  other  directions.  There  was,  however,  another  cause  which 
aided  in  delaying  the  crisis.  England  was  a  creditor-country  in  relation 
to  Holland,  and  the  repayments  of  the  capital,  advanced  by  Elizabeth 
(under  the  agreement  of  1609),  did  much  towards  reducing  the  adverse 
trade  balance  as  between  the  visible  exports  and  imports.  When  these 
repayments  came  to  an  end,  the  full  force  of  the  decline  in  the  cloth 
trade  was  experienced,  with  the  result  of  the  foreign  exchanges  being  at 
a  discount  and  the  export  of  bullion*.  ii 

While  the  main  cause  of  the  crisis  of  1620  is  to  be  found  in  the 
decline  of  the  cloth  trade,  in  so  far  as  that  decline  was  itself  the  effect 
of  the  financial  exigencies  of  James  I.,  of  his  extravagance  and  his  desire 

^  State  Papers,  Domestic,  James  I.,  cxv.  109;  Calendar,  1619-23,  p.  157; 
Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  204;  Severall  Grievances 
concerning  Trade  presented  to  King  James  I.,  by  Sir  R.  Heath,  May  28,  1624 : 
Harl.  MS.  2,244,  f.  1. 

2  State  Papers,  Domestic,  James  I.,  cxxviii.  74;  printed  in  A  Dismal  Depression 
in  1622,  by  R.  H.  Clutterbuck  [1883],  pp.  9,  10. 

2  The  Maintenance  of  Free  Trade  according  to  the  three  essentiall  Parts  of  Traffique, 
by  Gerard  de  Malynes,  1622,  p.  9  et  seq. ;  Center  of  the  Circle  of  Commerce,  1623, 
p.  31. 


170  Decline  in  the  carrying  Trade  1621    [chap.  ix. 

to  make  gifts  to  his  courtiers  either  in  money  or  in  kind,  the  same  evil 
resulted  in  other  burdens  on  trade  which  aggravated  the  depression.  In 
many  directions  new  impositions  had  been  levied,  which  meant  an  increase 
in  the  cost  of  production,  both  for  the  foreign  and  the  home  markets. 
The  rise  in  English  Customs  was  a  contributing  cause  to  the  diversion 
of  a  great  carrying  trade  to  the  Dutch.  In  the  latter  part  of  the  reign 
of  Elizabeth,  her  subjects  possessed  so  much  of  the  gains  from  shipping 
between  European  countries,  that  it  had  excited  the  jealousy  of  the 
Spaniards  ^  By  1621  there  had  been  a  great  reduction  in  the  number  of 
English  ships  trading  to  the  Baltic'^;  and,  after  allowing  for  the  tonnage 
employed  in  the  East  India  and  American  voyages,  it  seems  probable 
that  this  industry  was  certainly  not  expanding.  Moreover,  in  addition 
to  the  new  taxes  on  trade,  there  were  many  indirect  burdens,  all  traceable 
to  the  necessities  of  the  Crown  or  to  the  efforts  made  by  James  I.  to 
reward  his  favourites.  When  the  debt  had  become  unmanageable  and 
credit  all  but  exhausted,  James  granted  numerous  patents,  by  which  he 
delegated  certain  administrative  functions  of  the  government  to  individuals, 
such  for  instance  as  the  patent  for  the  supervising  of  ale-houses,  which 
occupied  much  of  the  attention  of  Parliament  in  1621.  Then  again  the 
obtaining  of  a  royal  charter  involved  the  bribing  of  prominent  courtiers, 
and  in  this  way  trade  was  subject  to  a  high  indirect  taxation,  since  those 
who  obtained  such  grants  were  forced  to  recoup  themselves  for  the  pre- 
liminary outlay.  In  some  cases  too  the  facility  with  which  warrants  were 
obtainable  for  the  imprisonment  of  persons,  who  were  alleged  to  have 
infringed  some  grant,  or  who  refused  to  pay  the  agents  of  the  patentee 
the  sums  demanded  for  real  or  imaginary  infringements,  constituted  yet 
another  strain  upon  the  industry  of  the  country. 

Still  the  burdens  of  the  home-trade  were  contributory  to  the  crisis, 
rather  as  impairing  the  elasticity,  it  would  otherwise  have  had,  in 
recovering  from  the  shock  of  the  interference  with  the  cloth  trade.  There- 
fore, primarily,  the  crisis  which  began  in  1620  was  one,  occasioned  by  that 
interference,  and  which  manifested  itself  in  an  adverse  balance  of  in- 
debtedness abroad.  These  facts  account  for  the  contemporary  descriptions 
of  the  period  of  depression.  The  farmer  depended  so  much  on  the  sale 
of  his  wool,  that  a  great  reduction  in  consumption  would  necessarily  affect 
him.  Owing  to  a  number  of  good  seasons,  the  price  of  grain  up  to  1621 
was  relatively  low,  while  the  importation  of  cattle  from  Ireland  had 
reduced  the  price  of  stock.  For  these  reasons  it  is  natural  that  many 
farmers  were  unable  to  pay  their  rents,  and  they  were  obliged  to  surrender 
their  leases.     The  interaction  of  depression,  both  in  agriculture  and  in 

1  Calendar  of  State  Papers... in  the  Archives  of  Simancas,  1580-6,  pp.  661,  652 
quoted  supra,  p.  88). 

2  State  Papers,  Domestic,  James  I.,  cxix.  142;  Calendar,  1619-23,  p.  211. 


CHAP.  IX.]         Financial  Stringency  1619-21  171 

the  weaving  industry,  occasioned  much  distress  in  the  rural  and  semi- 
rural  districts.  So  much  of  the  export  trade  was  engaged  in  dealing 
with  cloth  that  merchants,  whose  business  was  mainly  with  European 
markets,  also  suffered.  Nor  was  any  immediate  relief  experienced  from 
the  voyages  to  more  distant  countries.  In  Russia,  in  the  Levant,  in  the 
Indies  and  even  in  the  northern  seas,  the  Dutch  were  everywhere  pressing 
the  advantages  they  had  begun  to  obtain.  The  losses  in  these  trades 
and  the  postponement  of  the  interest  on  their  loans  by  the  Russia  and 
East  India  companies  injured  mercantile  credit^,  and  the  stringency  was 
accentuated  by  the  state  of  the  Crown  debt.  In  September  1616  the 
debt  had  been  returned  at  d£*726,000,  while  in  1620  it  was  stated  to 
have  been  =£^71 1,026.  1^.  7^ J.,  exclusive  of  sums  due,  not  certified,  which 
were  owing  by  the  public  offices,  or  close  on  ^6*800,000  in  all*.  Reductions 
had  been  made  in  the  Ordinary  Expenditure  to  the  extent  of  c^'l 00,000 
a  year  in  the  Household,  and  of  i^25,000  in  the  Navy*,  while  there  was 
an  estimated  surplus  of  .£'47,500,  without  taking  extraordinary  expenses 
into  account.  Such  a  statement,  however,  does  not  show  more  than  the 
financial  position  from  the  accountant's  point  of  view.  The  reduction 
of  the  extraordinary  expenses  had  been  effected  by  substituting  the  grant 
of  privileges  for  money  payments,  and  the  burden  of  the  latter  was  the 
greater,  when  allowance  is  made  for  the  arbitrary  proceedings  of  some 
of  the  patentees.  Then,  as  affecting  credit  in  the  City,  there  were  the 
anticipations  of  future  revenue,  which,  about  1 61 9,  amounted  to  .^£^1 17,000*. 
Moreover,  the  method  of  dealing  with  the  debt  was  most  unsatisfactory. 
At  Michaelmas  1620,  out  of  .^99,990,  borrowed  on  Privy  Seals  by 
Elizabeth,  only  ^385  had  been  paid.  The  carrying  on  of  this  debt  from 
year  to  year  was  discreditable,  in  view  of  the  large  sums  of  the  Elizabethan 
loan  to  Holland  which  had  recently  been  received  by  James  I.  Payments 
of  interest,  at  the  best,  were  highly  irregular.  London  had  provided 
dfi'l  17,098.  9*.  Sd.  on  Privy  Seals,  to  which  was  added  a  further  loan  of 
^^96,466. 13*.  U.  at  interest  in  1618.  In  1620  two-thirds  of  the  interest 
was  still  unpaid;  while  at  the  same  time  several  individuals,  who  had 
made  advances  in  1616,  had  received  neither  principal  nor  interest". 
The  credit  of  the  Crown  had  become  exceedingly  bad.  In  1619  it  was 
necessary  to  postpone  the  funeral  of  the  Queen  through  want  of  ready 
money.     Payments  by  the  Royal  Household  had  grown  so  irregular  and 

1  Vide  infra,  ii.  pp.  55,  58,  107. 

2  State  Papers,  Domestic,  James  I.,  cxi.  142;  cxv.  116;  Calendar ,  1619-23, 
pp.  110,  168. 

3  Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  7. 
*  State  Papers,  Domestic,  James  I.,  cxi.  142. 

^  A  Collection  of  His  Majesty's  debts... at  Mich.  1620:  Exchequer  of  Receipt 
(Miscellanea),  43  (3);  Analytical  Indexes  to  mis.  ii.  and  viii.  of... the  Remembrancia, 
1870,  p.  110. 


172  Measures  to  retain  Bullion  1621       [chap.  ix. 

were  so  long  delayed  that  tradesmen  were  in  the  habit  of  charging  the 
King  double  the  usual  prices  for  goods  supplied  to  him\ 

When  Parliament  met  in  January  1621,  two  great  questions  were 
agitating  the  public  mind.  There  was  a  widespread  desire  that  help 
should  be  afforded  to  the  Protestants  in  Germany,  whose  position  was 
precarious  after  the  battle  of  Prague,  which  had  been  fought  on  the 
29th  of  October  1620.  If  British  aid  were  to  be  given,  in  addition  to 
the  volunteers  who  had  already  been  enrolled  and  the  money  raised  by 
voluntary  subscription,  it  would  be  necessary  for  Parliament  to  vote 
supplies,  and  advantage  was  taken  of  the  opportunity  to  attempt 
legislation,  that  would  remedy  the  prevalent  depression. 

It  is  necessary  to  bear  in  mind,  not  only  the  fact  that  the  Parliament 
of  1621  endeavoured  to  stem  a  crisis  by  its  enactments,  but  also  that, 
since  the  cause  was  believed  to  be  the  "  scarcity  of  coin,"  all  efforts  were 
directed  towards  the  attraction  of  bullion  and  the  retaining  of  it  in 
England.  The  committee  "  concerning  the  decay  of  trade,""  the  chairman 
of  which  was  Sir  Edwin  Sandys,  reported  that  exports  to  Spain  were 
paid  for  by  importing  tobacco  to  the  value  of  ^100,000  a  year,  and  it 
was  recommended  that,  in  future,  no  tobacco  should  be  imported  except 
from  Virginia  and  the  Bermudas,  but  that  it  should  be  a  condition  that 
it  must  not  be  sold  at  a  price  exceeding  8^.  per  Ib.^  The  effect  of  the 
proposed  measure  would  be,  not  to  prevent  the  drain  of  bullion  from 
England,  but,  so  far,  to  divert  it  from  a  foreign  country  to  the  planta- 
tions. At  the  same  time,  when  it  is  recognized  that  Sandys  had  framed 
a  scheme  for  a  most  comprehensive  tobacco  monopoly  of  which  he  himself 
was  to  be  the  director^,  it  is  difficult  to  accept  the  proposals  of  the 
committee  as  being  entirely  honest.  It  might  indeed  be  thought  that 
this  scheme  was  conceived  with  an  Imperial  instinct;  but,  unfortunately, 
there  are  other  suggestions  that  show  a  complete  disregard  of  motives 
of  this  kind.  About  a  quarter  of  a  million  a  year  was  said  to  be  paid  in 
cash  to  Ireland  for  cattle,  imported  thence,  and  a  bill  was  promoted  for 
the  prohibition  of  such  importation  under  heavy  penalties'*.  Steps  were 
also  considered  for  reducing  the  imports  from  Scotland,  with  the  same 
object  of  keeping  bullion  in  England. 

The  movement  to  exclude  Irish  cattle  was  framed  in  the  interest  of 
agriculturalists;  while  the  proposal,  to  prevent  the  exportation  of  wool, 
was  designed  to  assist  the  cloth  trade.  Then  the  spirit,  that  had  already 
shown  itself  in  a  previous  period  of  depression,  was  manifested  in  the 

'  State  Papers,  Domestic,  James  I.,  cvii.  54;  A  Dismal  Depression  in  1622,  by 
R.  H.  Clutterbuck  [1883],  pp.  5,  6. 

2  Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  239. 

3  Vide  infra,  ii.  pp.  276-8. 

*  Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  97. 


CHAP.  IX.]        Inquiry  into  Monopolies  1621  173 

efforts  of  the  mercantile  class  to  secure  special  legislation  ^,  as  for  instance 
that  no  shop-keeper  in  London  might  engage  in  foreign  trade,  and  that 
alien  merchants  should  not  be  allowed  to  trade  in  England*. 

Another  side  of  the  investigation  brought  up  the  question  of  the 
monopolies.  The  attention  of  the  House  of  Commons  was  re-directed 
to  this  subject,  in  connection  with  the  scarcity  of  coin.  One  of  the 
main  causes  of  the  dearth  was  supposed  to  be  the  consumption  of  bullion 
by  the  patentees  for  making  gold  and  silver  thread,  who  were  bound  to 
import  the  precious  metals  they  required,  but  who  were  believed  to  have 
failed  to  do  so.  Immediately  numerous  abuses  came  to  light;  and, 
during  the  whole  of  the  Parliament,  there  was  a  continuous  investigation 
of  the  grievances  that  had  arisen. 

There  were  two  classes  of  grants  which  were  subjected  to  criticism. 
First  patents  such  as  those  for  registration  of  inns  and  ale-houses,  of 
pedlars  and  itinerant  musicians,  for  the  recovery  of  concealed  tithes 
or  Crown  lands,  as  well  as  many  others  of  a  like  nature,  involved  the 
delegation  of  certain  functions  of  the  administration  to  individuals. 
The  theory,  underlying  these  grants,  appears  to  have  been  that,  when 
a  "projector*"  discovered  some  means  by  which  either  the  Crown  revenue 
might  be  augmented  or  certain  abuses  reformed,  he  was  entitled  to  a 
remuneration  which  was  provided,  in  the  one  case,  by  a  percentage  on 
the  amount  he  added  to  the  revenue,  or,  in  the  other,  by  a  fee  for  his 
services  in  registering  and  supervising  certain  classes  of  the  population 
that  required,  or  were  supposed  to  require,  to  be  controlled.  Several  of 
these  patents  were  justifiable  in  theory,  as  is  shown  by  the  endorsement 
of  the  grant  for  the  licensing  of  inns  by  some  members  of  the  House  of 
Commons  in  162P.  It  was  the  mode  of  execution,  which  has  given  the 
word  monopoly  an  evil  reputation,  that  is  scarcely  yet  forgotten.  The 
carrying  out  of  the  patents  for  the  regulation  of  inns  and  ale-houses  had 
occasioned  a  great  amount  of  scandal.  There  was  no  limitation  to  the 
fees  that  the  patentees  could  charge,  and  a  system  grew  up  by  which  the 
work  to  be  undertaken,  together  with  the  prospective  profit,  was  farmed 
out  for  certain  areas.  Thus,  the  powers,  delegated  to  the  patentees, 
were  again  delegated  to  others  in  return  for  an  immediate  payment. 
Moreover,  these  sub-licenses  were  only  obtainable,  in  certain  cases,  by 
bribing  an  individual  patentee  to  use  his  influence,  in  favour  of  those 
who  had  secured  his  support  in  this  way^  Therefore,  it  followed  that 
the  men,  who  were  the  actual  collectors  of  the  fee,  were  compelled  in 
their  own  interests  to  increase  rather  than  to  diminish  the  number  of 
licenses,  so  that  the  disorders,  which  the  patents  were  designed  to  reform, 

^  Vide  supra y  p.  124. 

2  Proceedings  of  the  House  of  Comm(ms  in  1621,  i.  p.  237;  ii.  p.  192. 

3  lUd.,  I.  p.  64.  *  Ibid.,  i.  p.  84. 


174  Industrial  Monopolies  1621  [chap.  ix. 

were  increased,  not  lessened  ^  Moreover,  the  agents  of  the  patentees 
received  large  powers  for  dealing  with  those  who  refused  to  pay  the  fee, 
and,  in  1621,  1,000  persons  had  been  outlawed  upon  this  charged 

The  industrial  patents  were  not  numerous.  As  a  rule  the  grant,  at 
its  inception,  was  defensible,  either  in  the  modern  sense  of  a  new  invention 
or  of  a  trade  which,  as  introduced  from  abroad,  was  new  in  England  or 
again  (though  this  was  disputed)  as  an  industry,  which  was  new  in  the 
sense  that  it  had  been  previously  started,  but  had  died  out  before  it  had 
been  re-established  by  the  patentees.  In  several  cases,  abuses  crept  in, 
first,  through  the  privileged  persons  being  the  "  inventors  "  in  the  fore- 
going sense,  not  of  a  distinct  trade,  but  of  some  process.  For  instance, 
two  of  the  grants  related  to  the  making  of  glass  and  the  smelting  of  iron, 
by  coal,  instead  of  by  wood  as  had  been  the  practice  previously.  In  the 
case  of  the  patented  process  for  glass-making,  the  importation  of  foreign 
glass  was  prohibited,  and  in  other  ways  the  tendency  was  for  the  whole 
industry  to  fall  imder  the  control  of  those  who  were  originally  intended  to 
develope  a  new  process ^  Two  methods  were  adopted  for  diminishing 
the  consumption  of  wood  in  glass-houses.  In  the  one  group  of  cases,  the 
proprietors  received  a  pension,  on  condition  that  they  would  cease  to 
manufacture.  In  this  way  Sir  Jerome  Bowes,  who  held  a  patent  granted 
in  1606,  was  to  obtain  ^1,000  a  year,  and  three  others,  amongst  them, 
<^450^  The  other  plan  was  to  interdict  the  owner  of  an  existing  glass- 
house, and  then  license  him  to  re-commence  work,  on  condition  that  he 
paid  a  royalty  to  the  patentees.  In  one  instance,  an  agreement  was 
produced,  where  the  royalty  was  12^  per  cent.^  It  is  surprising,  although 
the  patentees  had  by  these  means  acquired  the  control  of  the  whole  glass 
industry,  that  prices  were  not  higher.  They  had  the  sole  right  both 
to  import  and  to  export,  while  any  glass  works,  owned  by  independent 
manufacturers,  were  forced  to  pay  them  a  royalty.  Apart  from  the 
monopoly,  some  rise  in  price  was  inevitable  if  the  undertaking  was  to 
pay  its  way.  The  original  outlay  was  c£'5,000,  but  when  men  like  the 
Earl  of  Montgomery  and  Sir  Robert  Mansell  were  admitted  into  the 
partnership  in  1615,  they  became  entitled  to  a  share  of  the  prospective 
profits.  It  is  doubtful  if  they  paid  anything;  their  influence  at  Court 
being  regarded  as  a  contribution  to  the  capital.  But,  the  first  promoters 
would  expect  at  least  reasonable  interest  on  their  investment,  and 
therefore  the  assumption  of  the  new  partners  would  have  the  same  effect 
towards  a  need  for  increasing  profits  as  the  ^*'  watering ""  of  the  stock  of 

1  Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  79. 

2  Ibid.,  I.  p.  156.  ^  State  Papers,  Proclamations,  James  I.,  No.  42. 
*  State  Papers,  Domestic,  James  I.,  lxxv.  9;  Calendar,  1611-8,  p.  207;  Proceed- 
ings of  the  HotLse  of  Commons  in  1621,  ii.  p.  72. 

^  Proceedings  of  the  House  of  Commons  in  1621,  ii.  pp.  71,  72. 


CHAP.  IX.]    Glass  and  Beacon  Monopolies  1621  175 

a  company.  Besides,  although  the  pensions  to  glass-makers  were  payable 
in  the  fii-st  instance  by  the  Exchequer,  the  burden  of  them  must  fall 
eventually  on  the  industry.  In  view  of  these  outgoings,  the  rise  in  the 
price  of  glass  was  moderate;  since  glass,  sold  in  cases,  was  dearer  by  not 
more  than  30  per  cent.,  while  looking-glasses  were  sold  at  less  than  those 
that  had  formerly  been  imported,  though  there  was  a  conflict  of  evidence 
as  to  the  quality  of  the  English  mirrors.  It  is  interesting  to  notice  the 
certificate  of  Inigo  Jones  in  this  connection,  from  which  it  appears  that 
James  I.  had  to  pay  £\bO  a  year  more  for  the  glass,  used  in  the  Royal 
Palaces,  than  had  been  usual  before  the  patents 

It  is  plain  that  the  abuse  in  the  patent  for  glass  was  not  in  the 
principle  of  the  protection  of  a  new  invention,  but  in  the  further 
privileges,  that  were  accorded  to  make  the  protection  effective.  In  this 
respect  the  mistake,  already  made  in  the  cloth  industry,  was  repeated; 
and,  in  order  to  effect  an  improvement,  the  trade,  already  in  existence, 
was  endangered.  It  is  to  the  credit  of  the  patentees  that  they  enforced 
their  monopoly  by  moral  suasion,  rather  than  by  physical  compulsion. 
Only  one  case  of  the  imprisonment  of  a  person,  who  infringed  the  patent, 
is  reported ;  and,  on  the  matter  coming  to  the  notice  of  the  partners,  he 
was  at  once  released  ^ 

There  were  other  instances  where  patentees  showed  less  consideration. 
Attention  was  directed  towards  the  execution  of  grants  for  the  erection 
of  certain  lighthouses.  These  were  of  the  nature  of  a  local  monopoly, 
such  as  the  toll  for  the  use  of  a  bridge,  or  for  entrance  of  a  market. 
Trinity  House  was  unable  to  erect  a  sufficient  number  of  beacons;  and 
persons,  who  took  the  risk,  reimbursed  themselves  by  a  charge  of  a  small 
sum  on  the  tonnage  of  ships  that  passed  the  place  where  the  light  was 
placed.  The  charge,  against  the  owners  of  the  lighthouse  at  Dunge  Ness, 
was  that  Trinity  House  had  approved  of  the  building,  on  condition  that 
it  should  be  of  stone  and  that  the  charge  was  to  be  \d.  per  ton,  whereas 
the  patentee  charged  9d,  per  ton  for  supplying  an  arrangement  of  lanterns, 
suspended  from  masts.  Somewhat  different  complaints  were  made 
against  the  owners  of  the  light  at  Winterton  Ness.  It  was  stated  that 
the  outlay  of  the  patentee  had  been  only  cs^600,  and  the  cost  of  upkeep 
was  £\S0  a  year,  whereas  he  received  ^^1,500  a  year  from  the  owners  of 
vessels,  sailing  from  Newcastle  to  London.  In  defence  of  the  action 
of  the  patentee,  it  was  urged  that  the  cost  of  obtaining  his  grant  and 
of  building  the  lighthouse  was  ^£^6,000  with  an  annual  charge  of  c^'SOO 
a  year.  This  would  give  a  return  of  20  per  cent,  or  double  the  rate  of 
interest  on  good  security.     Considering  the  risk,  this  W8is  no  more  than 

^  Proceedings  of  the  House  of  Commons  in  1621,  ii.  p.  73.     A  careful  account  of 
the  glass  patent  is  given  in  English  Patents  of  Monopoly jhy  W.  Hyde  Price,  pp.  71-7. 
2  Proceedings  of  the  House  of  Commons  in  1621,  ii.  p.  40. 


176  Arbitrary  Acts  of  Patentees  1621      [chap.  ix. 

a  moderate  yield  on  the  investment,  but  what  is  really  instructive,  is 
that,  assuming  the  figures  are  even  approximately  correct,  an  altogether 
disproportionate  amount  was  paid  for  the  obtaining  of  the  patent.  This 
was  where  the  real  grievance  lay;  since  in  this,  as  in  other  cases,  the 
sums  payable  to  influential  persons  at  Court  by  those  who  sought  for 
grants,  constituted  a  great  drain  on  industry  ^  In  some  respects  the 
patent  granted  to  George  Wood  is  of  interest.  This  grant  was  intended 
to  encourage  an  invention  for  the  printing  of  linen,  and  in  it  ^^10  a  year 
was  reserved  to  the  Crown,  while  .^^200  a  year  was  payable  to  those,  who 
had  been  influential  in  procuring  the  privilege.  As  in  other  cases,  the 
price  of  linen  advanced,  and  so-called  "  infringers  "  were  imprisoned.  It 
is  recorded  that  Wood  sold  shares  in  his  monopoly  "  for  2^.,  3^.,  5*., 
10*.,  40<y.  or  anything  he  could  get,"  while  the  purchasers  again  sold  to 
others^  This  was  an  anticipation  of  the  methods  of  promoters  during 
the  boom  from  1692  to  1695,  when  the  procedure  adopted  was  described 
in  similar  terms ^ 

In  the  execution  of  the  patent  for  bringing  live  fish  to  the  London 
market  from  Ireland,  there  were  several  kinds  of  interference  with  the 
personal  rights  of  individuals.  The  agents  of  the  patentees  were  said 
to  have  intercepted  fishermen  at  sea  and  to  have  seized  forcibly  their 
catch.  Like  the  partners  in  the  glass  monopoly,  they  interfered  with 
the  industry,  already  in  existence,  by  compelling  the  long-shoremen  to 
sell  them  lobsters  at  £4^  a  hundred,  for  which  they  obtained  £Q  a  hundred. 
Charges  were  made  of  their  breaking  open  houses  to  search  for  lobsters 
and  of  imprisoning  those  who  were  alleged  to  have  contravened  the 
patent"*. 

These  abuses,  serious  as  they  were  in  interfering  with  the  personal 
liberty  of  the  subject,  were  quite  negligible,  as  compared  with  the  mal- 
practices of  the  patentees  for  making  gold  and  silver  thread.  It  was 
the  existence  of  this  grant  which,  from  its  alleged  tendency  to  increase 
the  scarcity  of  coin  by  consuming  bullion,  first  re-awakened  the  interest 
of  the  House  of  Commons  in  the  monopolies.  As  far  back  as  the  reign 
of  Elizabeth  there  had  been  a  patent  for  this  industry,  which  was  con- 
sidered deserving  of  encouragement  in  order  to  provide  employment. 
Accounts  differ  as  to  whether  the  trade  had  died  out  early  in  the  reign 
of  James  I.,  and,  according  to  one  statement,  it  was  necessary  to  import 
a  foreigner  to  teach  the  art.     In   1611   a  patent  was  granted,  which 

^  Proceedings  of  the  House  of  Commons  in  1621,  i.  pp.  268,  269. 

2  The  Particular  Grievances  of  those... which  lye  under  the  oppressions  of  George 
Wood's  Patent  for  the  sole  printing  of  linnen  cloth  [1624],  Coll.  Broadsides,  Soc. 
Antiq.,  No.  222. 

3  Vide  infra,  Chapter  xvii. 

*  Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  295. 


CHAP.  IX.]     ''Sophistication"  of  gold  Thread  1618-20     177 

continued  in  existence  for  some  years  and  which  was  renewed  with 
extended  powers  in  1616.  As  yet,  the  industry  was  the  ordinary  case 
of  a  new  invention;  and,  since  the  art  was  easily  learned,  there  were 
many  infringements,  with  the  result  that  the  patentees  had  not  been 
successful.  In  1618  Sir  Giles  Mompesson  formulated  a  scheme,  according 
to  which  the  manufacture  was  to  be  transferred  to  the  Crown  as  a  royal 
monopoly,  in  the  expectation  that  James  I.  would  receive  a  profit  of 
<^1 0,000  a  year,  while  the  patentees  were  to  be  compensated  by  the 
grant  of  moderate  pensions. 

The  gold-thread  industry,  as  a  royal  monopoly,  was  conducted  with 
a  reckless  disregard  of  the  most  rudimentary  commercial  morality.  The 
silver  and  the  silk  were  "sophisticated''  shamelessly.  Lead  or  quick- 
silver was  mixed  with  the  silver;  and  a  workman  was  brought  from  Italy, 
who  could  dye  silk  "  with  an  advantage  of  weight,"  whereby  an  addition 
of  one-third  was  made^  When  it  is  remembered  that  the  thread 
produced  was  sold  by  weight,  the  dishonesty  of  this  course  will  be 
apparent.  The  ordinary  modus  operandi  was  simplicity  itself.  The 
artizans  were  bound  to  produce  a  certain  amount  each  week,  neither 
more  nor  less,  and  they  were  forced  to  pay  nearly  60  per  cent,  of  their 
earnings  to  the  Commissioners,  who  were  appointed  to  supervise  them^ 

The  effect  of  these  methods  was  to  increase  the  quantity  of  thread, 
made  by  persons  who  infringed  the  monopoly,  and  the  harshest  measures 
were  adopted  to  force  them  either  to  cease  work  or  to  bind  themselves 
to  the  Commissioners.  It  was  shown  that  Mompesson  threatened  wire- 
workers,  who  withstood  him,  that  he  "would  fill  all  the  prisons  of 
London  with  them  and  that  they  would  rot  there ^"  Sir  Edward  Villiers 
used  similar  language*,  and  this  was  sui*passed  by  the  brutality  of  the 
agents,  one  of  whom,  in  addition  to  arresting  a  workman,  threatened  "to 
pull  the  flesh  from  his  jaws  and  to  starve  his  wife  and  children ^'''  The 
depositions  of  the  wire-drawers  before  the  House  of  Lords  show  that 
these  were  no  mere  empty  threats :  great  violence  was  used  in  making 
arrests;  and  those  seized,  often  only  on  suspicion,  were  detained  in  prison 
for  long  periods*. 

The  fact  that  the  so-called  gold  and  silver  thread  patent  was  a  royal 
monopoly,  made  it  more  difficult  for  Parliament  to  prevent  similar  abuses 
in  the  future.  The  blame  was  of  course  laid  upon  Mompesson  and  the 
other  active  commissioners,  and  a  part  of  it  fell  on  the  law  officers,  who 

^  Proceedings  of  the  House  of  Commons  in  1621,  i.  p.  128. 

2  Ibid.,  I.  p.  125.  3  11,1^^^  I,  p,  126.  *  Ibid.,  i.  p.  156. 

s  Notes  of  Debates  in  the  House  of  Lords,  taken  by  Henry  Elsing,  1621  (Camden 
Soc.  1870),  p.  141. 

8  These  depositions  are  printed  in  Notes  of  Debates  in  the  House  of  Lord^,  ut  supra. 
Appendix  ii. 

S.  C,  I.  12 


178  The  Monopoly  Bill  and  Act  1621-4    [chap.  ix. 

had   approved   of    the   issue    of    the   warrants    for    imprisonment    of 
infringers. 

It  was  felt  that,  though  under  the  pressure  of  Parliament  James  I. 
might  be  induced  to  recall  most  of  the  patents,  as  he  had  done  before, 
some  step  should  be  taken,  which  would  prevent  the  recuiTence  of  the 
most  gross  abuses.  Before  the  end  of  the  session,  out  of  nineteen  grants 
that  had  been  condemned,  thirteen  had  been  "  decried  "  by  proclamation, 
leaving  the  glass  and  lobster  patents,  those  for  the  two  lighthouses  and 
a  pair  for  the  sole  drawing  of  bills  of  pleading  in  different  districts,  still 
in  being^  The  method  adopted  by  the  House  of  Commons  was  to  pro- 
ceed by  a  bill  "  against  monopolies,"  which  measure  began  by  stating  in 
general  terms  that  many  grants,  obtained  by  false  pretences  of  advantages 
to  the  public,  had  occasioned  great  grievances  and  inconvenience.  It 
was  therefore  proposed  to  be  enacted  that  any  privileges  of  a  monopolistic 
nature,  either  already  granted  or  to  be  granted  in  the  future,  should  be 
void  and  subject  to  trial  at  common  law.  There  were  however  several 
important  exceptions.  A  proviso  was  inserted  to  legalize  the  sole  working 
of  "  any  manner  of  new  manufacture  within  this  realm,'"*  for  a  period  of 
21  years  or  14  years.  Moreover,  the  measure  was  not  to  be  construed 
as  diminishing  the  privileges  of  any  city  or  borough,  nor  was  it  to  apply 
"  to  the  corporations,  companies  or  societies  of  merchants^.""  This  bill 
did  not  become  law  in  1621;  but  in  the  next  parliament,  in  1624,  it 
passed  both  Houses  after  a  number  of  additional  provisos  had  been 
inserted  by  the  Lords.  The  act,  as  revised,  fixed  the  period,  during 
which  a  new  invention  was  to  be  protected,  at  14  years;  and  it  excepted, 
in  addition  to  the  provisos  of  the  bill,  any  grants  confirmed  by  act  of 
Parliament,  the  powder,  ordnance  and  printing  industries,  alum  mines 
(which  were  to  remain  a  royal  monopoly),  the  privileges  of  the  Hostmen 
of  Newcastle,  the  glass  patent,  as  well  as  another  for  the  transportation 
of  calf-skins,  and  the  grant  for  the  making  of  smalt,  also  that  to  Dudley 
for  smelting  iron  with  coaP. 

There  was  nothing  in  this  act  that  had  not  been  long  recognized 
as  what  should  be  the  practice  in  England;  indeed,  in  some  respects, 
as  for  instance  in  excluding  from  its  provisions  the  trading  companies, 
it  was  more  moderate  than  might  have  been  expected.  In  the  interval 
between  1604  and  1624  there  had  been  a  considerable  change  in  public 
opinion,  which  at  the  later  date  had  returned  more  to  the  attitude  of 


*  Proceedings  of  the  House  of  Commons  in  1621,  ii.  pp.  347,  348. 

*  Printed  in  Notes  of  Debates  in  the  House  of  Lords,  1621,  pp.  151-5. 

»  Statutes,  IV.  pp.  1212-14;  The  Institutes  of  the  Laws  of  England,  by  Edward 
Coke,  London,  1797,  vi.  pp.  182-4— with  reference  to  Dudley's  invention  vide  infra, 
II.  pp.  464,  465. 


CHAP.  IX.]     Monopolies  for  foreign  Trade  1621  179 

statesmen  in  the  reign  of  Elizabeths  Companies  for  foreign  trade  were 
generally  admitted  to  require  extensive  immunities,  since  they  performed 
functions  which  the  State  was  not  able  to  undertake.  At  the  same  time, 
it  is  to  be  noted  that  the  existing  bodies  were  far  from  escaping  criticism, 
but  this  was  directed,  not  (as  in  1604)  to  their  being  endowed  with  a 
monopoly,  but  in  relation  to  certain  features  in  the  individual  organization 
of  each  company.  In  accordance  with  the  dominant  idea  of  the  Parlia- 
ment of  1621,  the  East  India  company  was  charged  with  being  responsible 
for  the  decline  in  the  stock  of  bullion  in  the  country,  but  it  was  able  to 
provide  a  fairly  satisfactory  answer.  In  fact  the  only  complaint,  that 
could  have  been  fairly  made  from  this  point  of  view,  was  that  the  capital 
lately  invested  in  the  undertaking  was  in  danger  of  being  lost,  and  so  an 
unprofitable  foreign  investment  was  to  be  added  to  the  other  causes  of 
the  crisis  as  an  element  in  the  adverse  balance  of  indebtedness  ^ 

The  African  company  was  mentioned  in  the  House  of  Commons, 
both  in  1621  and  1624.  By  the  proviso  in  favour  of  companies  in  the 
bill  and  the  act  against  monopolies,  it  should  have  been  exempt  from 
the  scope  of  these  measures.  In  this  case  there  was  a  distinct  peculiarity, 
which  however  was  not  mentioned  in  the  proceedings.  There  had  been 
two  previous  African  companies  and  therefore  the  monopoly  could  not 
be  j  ustified  as  the  discovery  of  a  new  trade.  But,  according  to  Elizabethan 
practice,  it  was  recognized  that,  either  re-discovery,  or  the  effective 
prosecution  of  a  branch  of  foreign  trade  was  a  sufficient  ground  for 
exceptional  privileges.  This  was  covered  by  the  clause  in  early  grants, 
which  stated  that  certain  places  had  "  not  been  commonly  frequented  '^ 
by  English  merchants.  Still,  there  was  the  great  irregularity  in  the 
patent,  granted  by  James  I.,  that  it  gave  the  monopoly  of  the  whole 
explored  African  coast,  whereas  the  previous  grant  of  Elizabeth  had 
limited  the  area  of  the  privileges  to  the  district  between  the  Senegal 
and  the  Gambia'. 

The  affairs  of  the  Russia  company  came  before  the  House  of  Lords 
solely  in  relation  to  its  methods  of  finance.  These  intricate  proceedings 
are  detailed  in  the  full  account  of  the  company*,  and  they  are  of  interest, 
chiefly,  as  showing  the  risks  to  which  owners  of  capital  were  sometimes 
subjected,  through  the  joint-stock  form  of  organization.  When  this 
body  co-operated  with  the  East  India  company,  in  forming  a  sub- 
ordinate undertaking  for  whaling,  it  had  raised  the  capital  required 
by  contracting  loans  on  the  security  of  its  property  and  privileges. 

'  ConsuetudOy  vel  Lex  Mercatoria,  by  Gerard  de  Malynes,  1622,  pp.  210,  217; 
Free  Trade  or  the  Means  to  make  Trade  Floriih  [by  E.  Misselden],  1622,  pp. 
66-84. 

2  Vide  infra,  ii.  pp.  105,  106. 

3  Ibid.,  II.  pp.  12,  13.  *  Ibid.y  ii.  pp.  57-65. 

12—2 


180  Depression  through  Plague  1625       [chap.  ix. 

Thus,  the  position  of  those  who  found  the  capital,  was  analogous  to 
that  of  the  modern  debenture-holder.  About  1620  the  company  sustained 
many  misfortunes.  The  joint-adventure  in  whaling  was  a  failure,  and 
the  Russian  trade  had  declined.  There  were  not  sufficient  funds  to  pay 
interest  on  the  debt,  but,  considering  the  large  divisions  paid  from  1608 
to  1615,  even  after  an  assessment  had  been  made  on  the  stock,  the 
proprietors  still  retained  substantial  gains.  Unfortunately  the  company 
endeavoured  to  evade  its  obligations.  The  old  stock  was  wound  up, 
and  a  new  one  formed,  which  contracted  to  pay  a  large  sum  for  the 
assets  transferred.  Then  two  separate  companies  were  established — the 
one  for  whaling  and  the  other  for  the  original  trade  to  Russia.  The 
result  was  that  those,  who  were  endeavouring  to  recover  arrears  of 
interest,  were  refused  by  each  of  the  three  bodies  on  whom  the  liability 
might  rest.  Not  only  so  but  an  order  of  the  Lords  was  evaded  by  what 
was  characterized  as  "gross  juggling"  in  the  accounts ^ 

The  depression  was  greatly  accentuated  by  the  appearance  of  plague 
in  1625.  During  four  weeks  in  August,  the  deaths  in  London  numbered 
16,455;  and,  during  the  year,  the  total  assigned  to  this  cause  was  35,417. 
Moreover,  the  mortality,  attributed  to  other  diseases,  was  more  than 
double  the  average,  so  that  it  is  probable  that  the  ravages  of  the 
pestilence  were  even  greater  than  those  shown  by  the  returns^.  The 
distress  following  the  interruption  of  trade  was  accentuated  by  bad 
seasons.  The  harvests  in  1622  and  1623  were  below  the  recent  average. 
In  a  time  of  good  trade,  the  consequent  moderate  rise  in  the  price  of 
grain  would  not  have  been  greatly  felt;  but,  when  work  was  scarce 
and  wages  low,  the  effect  was  to  increase  the  prevailing  distress  of  the 
working  classes.  The  cloth  trade  was  still  in  a  stagnant  state,  and  in 
1624  no  less  than  12,000  weavers  were  out  of  work 3.  The  continuance 
of  the  crisis  had  concentrated  attention  on  the  industrial  condition  of 
the  country;  and,  when  Parliament  met  in  1624,  much  juster  views 
had  been  formed  than  in  1621  of  the  causes  of  the  depression.  The 
more  clear-sighted  began  to  recognize  the  true  cause  of  the  crisis.  It 
was  seen  that  the  great  decline  in  trade  was  in  the  woollen  industry, 
where  the  loss  in  the  reduced  price  of  wool  alone  was  estimated  to  amount 
to  half-a-million  a  year*.  Moreover,  the  "  new  impositions '"  continued 
to  increase  to  such  an  extent  that  it  was  declared  that,  if  they  continued, 
they  would  "tend  to  the  utter  destruction  of  the  kingdom*."     It  was 

1  Vide  infra,  ii.  p.  60. 

2  Natural  and  Political  Observations... upon  the  Bills  of  Mortality,  by  Capt.  John 
Graunt,  London,  1665,  p.  174 ;  London's  Lord  ham  Mercy  upon  Us,  1665,  in  Somers' 
Tracts  (1750)  vii.  p.  54 ;  Historical  Account  of  Several  Plagues,  by  Dale  Ingram, 
1755,  p.  2. 

3  Journals  of  the  House  of  Commons,  i,  p.  711. 

♦  Ibid.,  I.  p.  752,  ^  Ibid,  i.  p.  753, 


CHAP.  IX.]       The  Merchant  Adventurers  1624  181 

not  only  the  very  high  Customs  that  were  oppressive;  but  in  addition, 
through  the  prevailing  laxity  of  the  administration,  the  farmers  were 
exacting  sums  over  and  above  those  recorded  in  the  book  of  rates.  It 
follows  that  taxes  on  commodities,  in  certain  cases,  were  immensely 
high.  The  merchant  had  to  pay  the  original  and  statutory  duties; 
these  had  been  augmented  by  the  new  and  additional  impositions,  and 
it  might  be  that  he  would  be  forced  to  disburse  a  further  sum  at  the 
will  of  the  officials  of  the  custom-house.  Both  the  causes  of  depression — 
the  decline  in  the  cloth  trade  and  the  burden  of  taxes — were  to  be  attri- 
buted to  the  financial  difficulties  of  James  I.;  who,  when  he  could  no 
longer  borrow,  had  been  forced  to  increase  the  Customs,  or  to  allow  the 
farmers  to  add  to  the  duties,  while  the  original  interference  with  the 
cloth  trade  had  been  undertaken  at  the  instance  of  courtiers,  who 
obtained  funds  from  the  promoters  of  the  charters,  at  a  time  when  the 
condition  of  the  Crown  finances  precluded  the  royal  favour  being  shown 
by  large  gifts  of  money.  Thus,  some  of  these  men  received  payments 
from  the  foundation  of  the  New  Merchant  Adventurers  and  again  from 
the  re-incorporation  of  the  members  of  the  old  company.  The  dis- 
advantageous effects  of  the  disorganization  of  the  cloth  trade  were 
lasting  in  the  reduction  of  the  total  exports;  and,  in  the  consideration 
of  the  situation  by  Parliament  in  1624,  comment  was  directed  to  the 
increase  in  the  dues  charged  by  the  Merchant  Adventurers.  A  part 
of  these  was  shown  to  be  attributable  to  higher  taxation  abroad,  and 
the  rest  is  to  be  assigned  to  the  cost  of  gaining  the  charter  of  1617. 
The  whole  discussion  is  of  interest  as  an  evidence  of  the  state  of  feeling, 
regarding  the  need  for  a  monopoly  in  the  conduct  of  a  certain  foreign 
trade.  It  would  appear  that,  by  the  corruption  of  the  Court  in  1617, 
an  important  opportunity  was  lost,  since  the  experiment  might  have 
been  tried  of  making  the  trade  in  cloth  to  the  Baltic  open  to  all 
Englishmen  ^  The  circumstances  of  the  case  differed  from  the  position 
in  India  or  the  Levant;  for,  in  Germany  or  the  Low  Countries,  there 
was  a  settled  government,  which  might  have  been  expected  to  afford 
protection  of  life  and  property  to  the  English  merchants.  It  is  therefore 
surprising  that  the  Parliament  of  1624  did  not  condemn  the  monopoly 
of  the  company,  instead  of  contenting  itself  with  passing  resolutions 
in  favour  of  rendering  the  export  of  certain  new  textile  fabrics  (which 
had  been  introduced  into  England  after  the  Adventurers  had  been 
incorporated  by  Elizabeth)  open  to  the  enterprize  of  merchants  who 
were  not  members  of  the  organization  2.     This  proposal   would   have 


*  A  Discourse  of  Free  Trade  against  Incorporated  Societies  (MS.  862  G.  4 .  13, 
No.  5,  Lib.  Triu.  Coll.  Dublin). 

2  Journals  of  the  House  of  Commons,  i.  p.  780, 


l82  T'he  Merchant  Adventurers  1624       [chap.  IX. 

left  the  earlier  trade  in  white  cloths  under  the  complete  control  of  the 
company. 

The  judgment  of  the  House  of  Commons  during  a  period  of  crisis 
cannot  be  accepted  as  a  guide  to  the  best  opinion  of  the  time,  for  it  was 
often  swayed  by  the  temporary  exigency  of  some  particular  interest. 
The  "  decay  of  trade ""  frequently  evoked  demonstrations  in  favour  of  the 
mercantile  class  as  such.  This  tendency  is  shown  in  the  approbation 
by  this  Parliament  of  the  policy  of  restricting  membership  of  trading 
companies  to  "  mere  merchants,''  and  in  the  efforts  of  that  of  1621  to 
exclude  tobacco  imported  from  Spain  in  favour  of  the  produce  of  the 
plantations  \  For  these  reasons  the  bona  fides  of  the  House  of  Commons 
cannot  be  accepted  without  ftirther  enquiry. 

In  this  case,  there  seems  to  be  more  to  be  said  for  the  continuance 
of  the  monopoly  in  undressed  cloth,  than  might  have  been  expected 
from  a  superficial  examination  of  the  evidence.  The  State,  at  this 
period,  was  not  able  to  take  efficient  steps  to  secure  an  extension  of 
the  foreign  market  for  English  goods.  Permission  to  trade  in  a  foreign 
country  on  favourable  terms  was  only  obtainable  at  a  certain  price. 
The  governments  there  expected  that  the  aliens,  they  admitted  to 
bring  in  certain  commodities,  should  contribute  to  the  needs  of  the 
sovereign,  by  supplying  financial  assistance  from  time  to  time.  To 
collect  capital,  when  it  was  required,  involved  some  organization. 
This  organization,  in  order  to  escape  as  much  as  possible  from  the 
jurisdiction  of  the  foreign  courts,  became  responsible  for  the  conduct 
of  the  merchants  of  the  country  to  which  it  belonged;  and,  in  return 
for  its  loans,  relaxation  in  the  Customs  against  foreigners  was  granted 
to  it.  The  privileges,  secured  by  the  Merchant  Adventurers,  were 
valued  at  a  large  sum  in  1624',  and  the  problem  arose  whether  the 
right  of  free  entry,  personal  security  and  low  Customs  abroad  could  be 
obtained  without  the  existence  of  a  body  of  this  kind.  This  is  the 
ultimate  antithesis,  for  there  was  no  possibility  of  the  company  con- 
tinuing to  exist,  if  there  were  no  advantage  attached  to  membership. 
It  is  clear,  too,  that  the  Adventurers  would  not  be  wise  in  becoming 
responsible  for  English  merchants,  over  whom  they  could  exercise  no 
authority,  nor  was  it  equitable  that  non-members  should  obtain  the 
whole  benefit  of  favourable  import  duties,  which  had  in  fact  been 
purchased  by  services  rendered  by  the  company.  For  these  reasons,  it 
is  probable  that  an  open  trade  to  the  Baltic  would  have  meant  the 
dissolution  of  the  company ;  and,  in  this  connection,  the  proposals  of 
the  Adventurers,  on  several  occasions,  to  surrender  their  charter  are 
significant.     Supposing,  then,  that  the  company  had  ceased  to  exist,  it 

*  Vide  supra,  p.  172. 

^  Jowmals  of  the  House  of  Commons,  i.  p.  784. 


CHAP.  IX.]       The  Merchant  Adventurers  1624  188 

would  follow  that,  as  things  were  at  the  beginning  of  the  seventeenth 
century,  the  privileges  it  had  obtained  abroad  would  lapse,  for  there 
would  be  no  object  in  the  foreign  governments  continuing  them. 
English  merchants  would  then  have  imported  their  cloth  into  the 
Low  Countries  and  Germany  as  non-privileged,  not  as  privileged  aliens ; 
and  they  would  have  been  at  a  disadvantage  in  doing  business,  in 
having  no  strong  body  behind  them  to  enforce  protection  of  their 
goods  or  the  recovery  of  debts  due  to  them.  Moreover,  an  individual 
trader,  who  dealt  fairly,  would  be  always  in  danger  of  the  seizure  of 
his  property,  and  even  sometimes  of  arrest,  should  a  fellow  countryman 
have  given  any  serious  cause  of  complaint.  Taking  these  circumstances 
into  account  and  considering  the  state  of  international  trading  relations 
at  the  time,  it  appears  probable  that  England  would  have  lost  more 
than  would  have  been  gained  by  a  completely  open  trade  to  the  Baltic. 
The  element  in  the  whole  situation,  that  pressed  most  hardly  on  the 
capitalist,  was  the  fact  that  the  companies  were,  to  some  extent,  made 
the  scape-goats  of  the  extravagance  of  the  Court.  The  large  sums, 
extracted  from  them  in  this  way,  constituted  a  burden  on  the  producers 
and  consumers — the  former  receiving  lower  prices  than  would  other- 
wise have  been  the  case  and  the  latter  having  to  pay  more.  The 
incidence  of  an  increased  duty  may  have  been  recognized  to  some  ex- 
tent, but  few,  if  any,  could  have  noticed  the  effects  of  the  benevolences 
and  bribes  that  had  to  be  paid  by  the  companies,  which  bodies  were 
in  the  unfortunate  position  at  a  parliamentary  enquiry  of  being  unable 
conveniently  to  adduce  in  evidence  the  charges  of  this  character,  to 
which  they  were  subjected. 

The  crisis  of  1620  left  its  mark  to  some  extent  on  the  plantation 
companies.  In  1624  certain  regulations  made  by  Fernando  Gorges 
(who  had  been  granted  the  tract  of  country,  that  afterwards  became 
the  province  of  Maine,  by  the  New  England  company^)  were  criticized 
by  the  House  of  Commons*.  On  the  other  hand,  the  dissolution  of 
the  Virginia  company  in  1624  is  to  be  attributed  to  political  forces 
and  to  the  dissensions  of  the  members.  This  event  may  be  taken  as 
marking  the  end  of  a  period  in  the  history  of  British  colonization. 
Two  of  the  plantation  ventures  had  come  to  an  end — the  First  Virginia 
company  by  dissolution  and  the  Second  by  its  failure  to  carry  out  the 
objects,  for  which  it  had  been  incorporated.  Both  the  Somers  Islands 
and  the  New  England  companies  had  reached  the  stage  at  which 
divisions  of  land  had  been  made,  and  already  subsidiary  undertakings, 
such  as  the  Adventurers  to  New  Plymouth  and  the  Laconia  company 

1  Vide  infra,  ii.  pp.  300,  304. 

2  Journal  of  the  Home  of  Commons,  i.  pp.  688,  697 ;  Sir  Fernando  Gorges  and  hi* 
Province  of  Maine,  by  J.  B.  Baxter,  Boston  (Prince  Society),  1890,  i.  p.  119. 


184  Plantation  Companies  1624  [chap.  ix. 

were  established.  Finally,  the  Scottish  scheme  for  effecting  a  settlement 
in  Canada  was  in  process  of  development,  and  funds  were  being  pro- 
vided by  the  creation  of  the  title  of  Baronet  of  Nova  Scotia,  which  was 
added  to  the  inducement  of  the  division  of  land\ 

The  most  remarkable  feature  of  this  movement  was  the  exceedingly 
small  capital  required  to  found  the  British  Empire  in  America.  The 
companies  were  responsible  for  providing  ships  to  convey  colonists  to 
their  respective  areas,  for  defending  them  when  there,  and  for  carrying 
on  the  government  of  the  plantation.  Once  the  country  had  been 
surveyed,  the  shareholders  received  their  dividend  in  land,  and  the 
outlay  for  the  cultivation  of  it  was  provided  by  the  owner.  The  total 
outlay  by  the  Virginia  company  under  these  various  heads  was  said,  in 
1623,  to  have  been  <£*200,000l  Probably  this  was  an  overestimate, 
and,  in  any  case,  it  is  to  be  remembered  that  only  ^36,862.  ^s.  9d. 
was  paid  in  on  account  of  shares  in  the  joint-stock,  the  remainder  being 
provided  by  the  adventurers  individually  in  developing  their  divisions 
of  land,  by  lotteries  and  by  subscriptions  to  the  subsidiary  under- 
takings^. Then,  with  regard  to  the  Somers  Islands,  the  disbursements 
were  returned  in  June  1622  as  100,000  marks  "and  upwards'*."  In 
order  to  make  this  estimate  end  at  the  same  time  as  that  relating  to 
the  Virginia  company,  it  may  be  calculated  that  the  whole  outlay, 
from  the  general  stock  and  by  individual  shareholders  up  to  1623-4, 
was  in  round  numbers  about  d£'75,000.  This  was  by  far  the  larger 
part  of  the  expenditure  on  colonization  proper  in  the  first  quarter  of 
the  seventeenth  century.  The  settling  of  the  territory,  originally 
assigned  to  the  "Second  Virginia  company,*"  had  as  yet  made  little 
progress.  That  area,  as  shown  elsewhere '^,  was  being  used  in  connection 
with  the  fishing  trade.  In  no  case,  as  far  as  is  known,  was  the  outlay 
on  colonization,  north  of  the  land  granted  to  the  First  Virginia 
company,  of  any  considerable  amount.  Judging  from  the  size  of 
expeditions  sent  to  the  Sagadahoc  settlement,  the  capital  provided  by 
the  adventurers  was  small.  That  of  the  New  England  council  cannot 
have  exceeded  .^^2,000 ;  while  that  of  the  New  Plymouth  Adventurers 
was  returned  at  d£'7,000  in  1624^  Besides  these,  there  were  the  Laconia 
company',  the  beginnings  of  the  Scottish  project  in  Nova  Scotia®,  and 
the  remaining  land-grants  from  the  council  of  New  England,  as  far  as 
these  had  been  occupied  up  to  1624.     In  view  of  the  small  amount  of 

1  Vide  infra,  ii.  pp.  263,  287,  288,  299,  300,  304-7,  316,  318,  319. 

2  Ibid.,  II.  p.  287;  cf.  Records  of  the  Virginia  Company,  ii.  p.  411. 

3  Vide  infra,  ii.  pp.  288,  289. 

*  Records  of  the  Virginia  Company,  ii.  p.  48  ;  cf.  infra,  ii.  p.  287. 

6  Vide  infra,  ii.  pp.  300,  301.  «  Ibid.,  ii.  pp.  299,  311. 

f  Ibid.,  II.  pp.  316,  316.  «  Ibid.,  ii.  pp.  318,  319. 


CHAP.  IX.]     Cost  of  British  Empire  in  America  1624       185 

colonization,  actually  effected  north  of  the  territory  of  the  Virginia 
company,  it  may  perhaps  be  calculated  that  up  to  this  date  .£^5,000 
would  cover  the  total  outlay  on  this  region.  Adding  this  sum  to  the 
total  already  arrived  at  for  the  Virginia  and  Somers  Islands  companies, 
the  whole  expenditure  on  colonization  in  North  America  up  to  1624 
may  be  taken  to  have  been  =£'300,000. 

Capital  outlay  on  plantations  in  North  America  up  to  1624. 

Name  of  Company  Total  outlay 

The  First  Virginia  Company       £200,000 

The  Somers  Islands  Company £75,000 

The  New  England  Council  

'ITie  New  Plymouth  Adventurers          i  c^nR  (y(^ 

The  Laconia  company,  other  partnerships  and'  ' 

plantations  by  individuals 


Total       £300,000 

From  the  point  of  view  of  the  shareholder,  the  main  return  on  his 
investment  was  the  land-dividend  he  obtained.  This  was  relative  to 
the  number  of  acres  divided  per  share  and  to  the  amount  paid  up  on 
the  share. 

The  subscribers  in  the  Virginia  company  were  entitled  to  100  acres 
of  land  for  each  share  of  £1%  10*.  that  they  owned.  This  division 
was  increased,  on  the  actual  occupation  of  the  grant,  in  proportion 
to  the  number  of  persons  transported  to  it.  Thus  the  cost  of  land  in 
Virginia  to  the  shareholders  varied  from  2*.  Qd,  to  perhaps  5s,  per  acre 
on  the  basis  of  the  value  of  the  shares  at  par^  The  rate  per  acre  in 
New  England  was  even  lower,  but  that  company  did  not  perform  as 
many  services  for  the  settlers  in  developing  the  territory  to  be  settled. 
Low  as  some  of  these  rates  were,  they  might  be  further  reduced,  if  any 
value  could  be  placed  on  the  remaining  rights  of  the  members  in 
plantation  companies  after  the  land  divisions  had  been  made.  The 
Bermuda  company,  for  instance,  continued  to  exist  long  after  the  land 
had  been  assigned.  It  had  the  right,  under  its  charter,  of  acting  as 
sole  agent  for  the  trade  with  the  plantation.  Out  of  the  revenue 
obtained  from  this  source  as  well  as  from  undivided  land,  the  expenses 
had  to  be  paid,  and  the  balance  was  available  for  dividends  from  time 
to  time^ 

1  Vide  infra,  ii.  pp.  260,  266,  266. 

2  Ibid,,  II.  pp.  289-97. 


CHAPTER  X. 
From  1624  to  the  Crisis  of  1630. 

In  spite  of  the  plague  in  1625,  trade  in  that  year  began  to  improve, 
and  there  were  several  indications  that  the  period  of  depression  had 
come  to  an  end.  For  instance,  by  July  25th,  it  was  recorded  that  the 
cloth- trade  had  "  quickened,"  and  that  there  were  then  no  complaints 
of  the  decay  of  the  industry  ^  For  this  reason,  as  well  as  through  the 
revival  of  trade,  pauperism  was  less  than  it  had  been  since  1620;  and, 
with  the  growth  of  the  wool  trade,  other  occupations  shared  in  the 
return  of  prosperity. 

At  the  same  time,  there  were  many  factors  which  prevented  the 
years  from  1626  to  1630  from  being  more  than  partially  good.  Al- 
though the  cloth-trade  had  shown  improvement,  it  is  probable  that 
it  had  not  recovered  from  the  ill-advised  interference  of  James  I.  from 
1613  to  1617.  Some  of  the  foreign  trades  (such  as  those  to  the  East 
Indies  and  Africa^)  had  suffered  serious  losses  of  capital  during  the 
crisis,  and  the  situation  was  still  too  uncertain  to  justify  the  risking 
of  further  considerable  resources. 

The  chief  element,  that  limited  the  reviving  activity  of  trade,  was 
the  state  of  foreign  politics.  After  a  long  period  of  peace,  England 
had  at  length  become  involved  in  hostilities  with  Spain.  While  the 
successive  unfortunate  expeditions  of  Mansfeld  to  the  Netherlands  and 
the  operations  at  Cadiz  and  the  Isle  of  Rhe  were  exceedingly  galling 
to  the  pride  of  the  nation,  they  exerted  no  direct  effect  on  the  condition 
of  industry.  Nor  was  the  cost  a  serious  burden,  in  view  of  the  accu- 
mulation of  wealth  during  the  period  of  peace.  At  the  same  time, 
the  fact  that  the  country  was  at  war,  occasioned  some  disturbance  of 
trade  by  the  closing  of  certain  markets  and,  still  more,  through  the 
attacks  on  shipping  by  privateers  in  the  Channel.  Much  more  im- 
portant than  either  of  these,  both  in  immediate  and  remote  effects, 
were  the  methods  by  which  the  struggle  was  financed. 

*  Debates  in  the  House  of  Commons  in  1625,  edited  by  S.  R.  Gardiner  (Camdea 
Soc.  1873),  p.  39. 

2  Vide  infra,  ii.  pp.  12,  13,  104. 


CHAP.  X.]         The  Crown  Finances  1617-24  187 

Towards  the  close  of  the  reign  of  James  I.  the  amount  of  the 
annual  deficits  had  been  considerably  reduced.  It  is  true  that  the 
improvement  was  more  apparent  than  real.  Extraordinary  receipts 
had  come  to  the  rescue  of  the  usual  revenue,  and  gifts  to  favourites 
were  made  in  kind  rather  than  in  money.  For  these  reasons,  the 
debt,  which  had  been  about  three-quarters  of  a  million  in  1617,  was  not 
very  materially  increased^,  except  by  the  addition  of  arrears  of  interest. 
By  1620  it  was  recognized  that  the  repayment  of  the  sums  lent  was 
scarcely  to  be  hoped  for,  while  the  interest  that  had  accrued  was 
recorded  rather  for  the  sake  of  completeness  than  with  any  serious 
intention  of  finding  funds  to  pay  it.  Thus  it  is  noted,  in  an  account 
of  this  time,  "that  interest  was  set  down  till  March  1620,  yet  we  leave 
it  to  His  Majesty  and  the  direction  of  the  Lords  how  much  shall  be 
paid  thereof^."*'  The  same  spirit  of  extravagance  and  neglect  of  financial 
uprightness  had  permeated  the  various  public  services.  The  adminis- 
tration of  the  Navy,  of  the  Customs  and  the  Exchequer,  was  corrupt; 
and  the  fall  of  Bacon  showed  that  the  purity  of  justice  was  certainly 
not  above  suspicion.  The  proceedings  against  Middlesex,  the  Treasurer, 
in  1624  tended  to  concentrate  attention  on  details  of  the  finances  rather 
than  to  present  a  general  view  of  their  condition.  For  the  two  years, 
ending  Michaelmas  1623,  the  Ordinary  Revenue  exceeded  the  Ordinary 
Expenditure  by  ^32,000,  but,  in  the  next  half  year,  the  issues  were 
greater  than  the  receipts.  Unfortunately,  during  the  same  period  the 
Extraordinary  Expenditure  came  to  over  <£*660,000,  without  taking 
account  of  money  owing  for  interest  and  to  pay  for  powder.  As  against 
this  great  outlay,  there  were  extraordinary  receipts,  such  as  a  further 
impost  on  wines,  and  the  remainder  had  been  met  by  additional  loans, 
with  anticipations  of  the  rent  due  from  the  farmers  of  the  great 
Customs^.  The  rest  of  the  expenditure  had  been  provided  by  borrowing 
to  a  limited  extent.  If  however  James  I.  went  to  war,  he  would  be 
at  once  plunged  into  difficulties,  through  the  want  of  further  credit. 
It  was  the  fashion  at  this  period  to  speak  of  the  penuriousness  of 
Elizabeth,  with  a  view  to  justifying  the  lavishness  of  James  I.  The 
difference  in  the  finances  of  the  two  sovereigns  was  nowhere  more 
marked  than  in  the  methods,  adopted  by  each,  in  dealing  with  the 
Crown  debt.  When  Elizabeth  borrowed  and  contracted  to  pay  interest, 
she  met  her  engagements,  while  the  Privy  Seal  loans  (on  which  no 
interest  was  payable)  were  all  discharged  during  her  reign  with  the 
exception  of  one  contracted  in  1597,  to  meet  which  there  were  funds 

1   Vide  supra,  pp.  142,  148. 
^  Exchequer  of  Receipt  (Miscellanea),  43  (3). 

3  Debates  in  the  House  of  Commons  in  1625,  ut  supra,  pp.  24,  25 ;  State  Papers, 
Domestic,  James  I.,  clx.  63;  Calendar,  1623-5,  p.  185. 


188  The  Crown  Finances  1624  [chap.  x. 

coming  into  the  Exchequer  soon  after  her  death.  This  obligation 
remained  undischarged  all  through  the  reign  of  James  I.,  and  only  a 
fraction  of  similar  loans,  made  in  1614,  had  been  repaid.  Other 
liabilities,  incurred  in  the  previous  reign,  were  still  outstanding — as 
for  instance  a  portion  of  the  money  borrowed  from  Pallavicino  in  1583*. 
Even  more  significant  is  the  complaint  of  an  executor,  who,  after 
paying  the  sums  owing  by  the  deceased,  found  himself  out  of  pocket, 
through  being  unable  to  collect  a  number  of  bad  debts,  prominent 
amongst  which  was  one  of  £150  due  by  the  King  2.  Moreover,  the 
leases  of  the  Customs  had  been  made  with  a  clause,  enabling  the 
farmers  to  obtain  a  "  defalcation  "  or  rebate  in  the  event  of  war  being 
declared^.  In  these  circumstances,  it  was  absolutely  necessary  that 
Parliament  should  be  summoned.  However,  though  both  James  I. 
and  the  Commons  were  agreed  on  the  desirability  of  war  with  Spain, 
each  party  differed  as  to  the  motive.  James  I.  was  prompted  mainly 
by  the  desire  to  aid  in  the  restoration  of  his  son-in-law  in  the 
Palatinate.  Parliament  represented  the  ideal  of  the  statesmen  of  the 
time  of  Elizabeth  who  believed  that  it  was  to  the  interest  of  England 
to  aid  the  Protestants  on  the  Continent.  While  each  of  these  objects 
involved  hostilities  against  Spain,  the  scope  of  the  operations  required 
would  be  very  different.  James  I.  had  in  view  extensive  preparations 
which  would  involve  great  expense,  and  it  appears  that  as  much  as 
three-quarters  of  a  million  to  a  million  a  year  was  contemplated.  On 
the  other  hand,  many  members  of  the  House  of  Commons  remembered 
the  success  that  had  attended  the  raids  of  the  privateers,  and  they 
were  inclined  to  regard  a  renewal  of  this  method  as  likely  to  yield 
the  best  results.  The  immediate  outlay  would  not  be  large.  It  would 
have  been  necessary  to  spend  money  on  the  Navy,  in  repairing  coast 
defences  and  in  garrisoning  Ireland.  The  adoption  of  expeditions 
against  Spanish  America  might  be  made  to  pay  their  way,  and  such 
ventures  would,  in  any  case,  inflict  losses  on  the  enemy,  altogether  out 
of  proportion  to  the  cost  incurred.  It  was  possibly  from  this  point  of 
view  that  Coke  declared  the  country  "  never  throve  so  well,  as  when  it 
was  at  war  with  Spain*.""  If  these  opinions  were  prevalent  in  Parlia- 
ment it  was  only  to  be  expected  that  a  Committee,  on  being  informed 
by  James  I.  that  he  required  ten-tenths  and  ten-fifteenths  for  the  war 
and  two-tenths  and  two-fifteenths,  annually,   towards  paying  off*  his 

1  State  Papers,  Domestic,  James  I.,  xxxviii.  21 ;  Calendar,  1625-6,  pp.  458,  459. 

2  Ibid.,  cu.  80;  Calendar,  1623-5,  p.  70. 

3  The  Parliamentary  or  Constitutional  History  of  England,  London,  1751,  vi. 
p.  94 ;  The  Proceedings  and  Debates  of  the  House  of  Commons  in  the  Sessions  of  Par- 
liament  begun  the  twentieth  of  January,  1628,  collected  by  Sir  Thomas  Crew,  1707, 
p.  118. 

*  State  Papers,  Domestic,  James  I.,  clx.  63 ;  Calendar,  1623-5,  p.  185. 


CHAP.  X.]  Financing  the  War  1625  189 

debts,  heard  the  proposal  "with  such  amazement  that  there  was  not 
one  '  God  save  the  King '  heard  as  they  went  away."  Subsequently, 
Buckingham  endeavoured  to  explain  that  the  whole  twelve-tenths  and 
twelve-fifteenths  were  needed  for  the  war;  but  Parliament  was  not 
satisfied  either  with  the  amount  asked  nor  that  it  would  be  spent  «is 
proposed ^  Eventually,  one-quarter  of  the  sum  required  {i.e.  three- 
tenths  and  three-fifteenths)  was  voted,  on  the  condition  that  it  should 
be  disbursed  by  persons  appointed  by  Parliament^.  As  the  money 
came  in,  it  was  used  to  prepare  the  expedition  of  Mansfeld ;  and,  by 
December  1624,  the  sums  collected  up  to  that  time  had  been  exhausted. 
It  was  only  through  a  loan  raised  by  Charles,  on  the  security  of  his 
revenues  as  Prince  of  Wales,  that  the  ships  were  enabled  to  put  to  sea 
at  the  end  of  January  1625.  By  this  time  the  preparations  already 
made  would  have  consumed  much  more  than  the  amount  voted  by 
the  Parliament  of  1624.  There  were,  however,  many  additional  en- 
gagements contracted,  which,  had  they  been  carried  out,  would  have 
required  the  provision  of  over  a  million  during  the  current  year'.  By 
July  20th,  1625,  there  was  absolutely  no  money  in  the  Exchequer,  and 
the  future  income  from  the  Customs  had  been  anticipated ^  Therefore, 
there  were  urgent  reasons  for  obtaining  further  supplies  from  Parlia- 
ment, which  had  met  in  May.  There  appears  to  have  been  every 
disposition  to  credit  Charles  I.  with  the  best  intentions ;  and,  had  he 
taken  the  members  into  his  confidence,  it  might  have  been  possible  for 
a  large  grant  to  have  been  obtained.  Unfortunately,  neither  he  nor 
his  advisers  realized  that,  while  the  war  was  popular  in  the  abstract, 
the  manner  in  which  it  was  being  conducted  did  not  meet  with 
approval.  Moreover,  James  I.  had  undertaken  to  furnish  a  statement 
of  how  the  subsidy  of  1624  had  been  expended.  No  such  particulars 
were  given,  neither  was  any  definite  sum  asked  for  the  future.  Charles  I., 
in  his  speech  at  the  beginning  of  the  session,  contented  himself  with 
"  suggesting  such  supply  as  the  greatness  of  the  worke  and  variety  of 
provision  did  required"  The  debate  on  the  amount  to  be  granted 
"  wavered  a  good  while.""  There  was  considerable  difference  of  opinion 
on  the  propriety  of  continuing  the  taxation  of  personal  property  (or 
"  the  fifteenths "") ;  and,  when  it  was  agreed  to  levy  on  the  usual  basis 
of  both  tenths  and  fifteenths,  the  number  to  be  granted  was  disputed, 
some  proposing  only  one  of  each,  others  four.     Finally  two-tenths  and 


*  State  Papers,  Domestic,  James  I.,  clx.  89;  Calendar,  1623-6,  p.  191. 

2  Statutes,  IV.  p.  1247. 

3  Debates  in  the  House  of  Commons  in  1625,  p.  vi. 

State  Papers,  Domestic,  Charles  I.,  iv.  92;  Calendar ^  1625-6,  p.  67. 

*  Debaiesofthe  House  of  Commons  in  1626,  p.  1. 


190     "  The  Country  sick  of  a  dry  Exchequer''  1627    [chap.  x. 

two-fifteenths  were  voted  \  These  were  to  be  paid  in  two  instalments 
at  an  early  date.  In  addition,  the  clergy  had  voted  three  subsidies 
each  of  4*.  in  the  £^  which  were  payable  in  six  equal  parts,  half-yearly, 
beginning  on  December  1st,  1627^. 

The  supply  of  1625  was  estimated  to  have  produced  about  ^120,000', 
and  this  fell  very  far  short  of  the  engagements  that  had  already  been 
incurred.  The  subsidies  of  1624  had  been  collected  by  the  persons 
appointed  by  Parliament,  and  the  money  had  been  disbursed.  Charles  I. 
was  anxious  to  effect  reforms  in  the  expenditure  of  the  Ordinary 
Revenue,  so  that  some  aid  to  his  finances  may  have  been  received  from 
this  source.  Still,  as  against  the  outlay  to  which  he  was  committed, 
the  extraordinary  receipts,  arising  from  the  vote  of  Parliament,  were 
quite  inconsiderable,  and  he  was  forced  to  find  some  expedient  by  which 
resources  could  be  obtained.  When  the  Parliament  of  1626  dissolved, 
without  an  additional  vote  having  been  made,  Charles  I.  resolved  to 
levy  a  sum,  equal  to  the  produce  of  five  subsidies,  by  a  compulsory 
loan.  About  i?300,000  was  expected,  and  on  November  16th,  1627, 
.^243,573.  14*.  ^d.  had  been  collected,  of  which  .^154,292.  12*.  S^d. 
had  been  paid  into  the  Exchequer — the  greater  part  of  the  remainder 
having  been  disbursed  directly  by  the  counties,  from  which  it  was 
levied,  on  maintaining  soldiers*.  At  this  time  the  country  was  described 
as  being  "  sick  of  a  dry  Exchequer,"  and  there  were  great  difficulties 
in  obtaining  a  sufficient  supply  of  powder  ^  By  March  1628,  future 
revenue  had  been  anticipated  to  the  extent  of  ^^220,422.  9*.  \d.^ 

At  the  end  of  the  financial  year  1627-8,  the  Extraordinary  Ex- 
penditure directed  by  Letters  of  Privy  Seal  for  the  past  three  years, 
exclusive  of  loans  repaid,  amounted  to  over  two  and  a  quarter  millions. 
As  against  this,  there  were  extraordinary  receipts  of  only  half  that 
amount.  This  left  more  than  a  million  unprovided  for,  outside  any 
saving  there  might  be  on  the  ordinary  expenditure  and  anticipations. 
Moreover,  to  eke  out  the  receipts,  it  had  been  necessary  to  include  the 
dowry  of  Henrietta  Maria,  which  amounted  to  <i£*l  16,929.  The  sub- 
sidies, prizes  and  sundries  came  to  d£*439,958,  and  the  balance  was 
procured  as  to  .^152,480,  derived  from  the  sale  of  lands  and  woods, 
added  to  .£'403,742,  which  had  been  borrowed  in  various  ways. 

The  following  statement,  which  is  condensed  from  the  financial 
tables  compiled  by  Mr  Gardiner,  will  make  the  position  clear': 

1  Debates  of  the  House  of  Commons  in  1625,  pp,  30,  31. 

2  Statutes,  V.  p.  3. 

3  State  Papers,  Domestic,  James  I.,  xxxvii.  38;  Charles  I.,  lxxxiv.  89. 

*  State  Papers,  Domestic,  Charles  I.,  lxxi.  25,  lxxxiv.  89;  Calendar,  1627-8, 
pp.  258,  437.  ^  Ibid.,  lxxxv.  72;  Calendar,  1627-8,  p.  452. 

«  Ihid.,  xcv.  26;  Calendar,  1628-9,  p.  5.        '  History,  1628-37  (1877),  ii.  346-9. 


CHAP.  X.]  Financing  the  Deficit  1625-9  191 

Extraordinary  Receipts  1625-6,  1626-7,  1627-8. 

Sale  of  lands  and  woods      £152,480 

Prizes             199,600 

Queen's  portion       116,929 

Privy  Seal   loans,  loans  from  private  persons,  forced 

loans,  loans  on  mortga^ire      403,742 

Subsidies        182,954 

Sundries         67,504 

1,113,109 
Extraordinary  expenditure  (less  loans  repaid) 2,229,211 

Deficit  as   between   extraordinary  receipts  and   extra- 
ordinary issues  £1,116,102 

When,  in  1628,  Parliament  granted  five-tenths  and  five-fifteenths, 
payable  between  July  10th,  1628,  and  March  1st,  1629,  some  progress 
had  been  made  towards  the  temporary  financing  of  the  deficit.  It  is 
true  that  these  subsidies  would  produce  only  about  d^300,000;  but, 
with  the  reduction  of  expenditure  on  naval  and  military  expeditions, 
beginning  in  the  financial  year  1628-9,  there  were  prospects  of  surpluses 
on  both  the  ordinary  and  extraordinary  accounts.  These  prospects 
were  altogether  changed  by  the  insecurity  of  the  Ordinary  Revenue 
derived  from  tonnage  and  poundage.  In  1625  there  had  been  several 
causes  which  had  induced  the  House  of  Commons,  instead  of  voting 
these  duties  for  the  life  of  the  sovereign,  as  had  been  usual  in  former 
cases,  to  limit  the  grant  for  one  year,  and  the  measure  did  not  become 
law\  Charles  I.  claimed  the  right  of  authorizing  the  collection  of 
these  taxes,  and  in  1628  it  wa^  resolved  that  such  collection  was  illegal, 
unless  sanctioned  by  Parliament.  The  merchants,  who  had  been  smarting 
under  the  increased  taxation,  that  had  been  imposed  under  the  name 
of  the  new  impositions,  without  the  consent  of  Parliament,  refused  to 
pay  either  class  of  duties.  Resistance  in  London  was  frequent,  and  the 
goods  of  the  merchants  were  detained  till  the  duties  were  paid.  In 
some  cases,  those  who  declined  to  pay  were  imprisoned ;  and,  as  time 
went  on,  the  indignation  became  widespread.  It  was  significant  that 
the  companies  engaged  in  foreign  trade  were  prominent  in  the  agi- 
tation. For  some  years  the  Levant  merchants  had  been  protesting 
against  the  duty  on  currants,  and  some  of  them   would  not  pay  if. 

^  In  January,  1628,  Cotton  pointed  out  the  danger  of  "unknowne  and  un- 
trodden ways"  towards  procuring  funds,  "which  although  they  tooke  as  it  were  a 
supply  at  first  and  received  no  generall  denial ;  yet  since  it  hath  drawn  many  to 
consult  with  themselves...!  much  feare,  if  now  againe  it  bee  offered  eyether  in  the 
same  face  or  by  Privie  Scale,  it  will  be  refused  wholly." — The  Danger  wherein 
the  Kingdome  now  Standeth  and  the  Remedie,  by  Sir  R.  Cotton,  1627,  in  Somers' 
Tracts  (1750),  v.  297. 

2  A  Detection  of  the  Court  and  State  of  England,  by  Roger  Coke,  1719,  i.  p.  277. 


192  Commercial  Progress  1627-9  [chap.  x. 

The  Merchant  Adventurers,  when  called  before  the  Privy  Council, 
persisted  in  refraining  from  exporting  cloth,  even  after  they  had  been 
threatened  with  the  dissolution  of  their  company,  previous  to  the 
transference  of  their  privileges  to  those  who  would  be  more  subservient 
to  the  Crown  ^ 

The  opposing  views  of  the  Crown  and  the  Commons  upon  this 
question  became  one  of  the  causes  leading  to  the  dissolution  of 
Parliament  in  1629,  and  it  thus  marked  another  stage  in  the  progress 
of  the  constitutional  struggle.  The  refusal  of  Parliament,  under  the 
circumstances,  to  sanction  this  method  of  taxation  raised  a  fresh 
financial  difficulty,  once  the  bulk  of  the  subsidy,  voted  in  1628,  had 
been  paid  into  the  Exchequer.  This  effect  showed  itself  fully  in  a 
few  years,  but  there  was  an  immediate  consequence,  that  had  already 
resulted,  towards  the  end  of  1628.  Up  to  that  time  trade  had  been 
moderately  active.  The  City  of  London  is  stated  to  have  been  "in 
great  splendour^,"  and  there  were  complaints  of  the  increase  of  luxury, 
especially  of  "the  monstrous  prodigality  in  appareP."''*  Land,  which 
had  sold  at  between  eighteen  and  twelve  years'  purchase  during  the 
early  part  of  the  crisis  of  1620*,  had  risen  in  1628  to  28  years'  purchase 
in  some  cases  ^.  The  cloth  trade  was  better,  and  several  of  the  other 
branches  of  foreign  commerce  had  improved.  As  the  Russia  company 
emerged  from  the  legacy  of  dishonest  finance,  the  two  new  undertakings, 
managing  the  one  the  Greenland  and  the  other  the  original  trade, 
were  meeting  with  considerable  success ^  Besides  the  plantation  com- 
panies, founded  before  1620,  a  new  one  had  been  started  in  1629  for 
the  cultivation  of  tobacco  and  spices  in  the  Mosquito  Islands'.  The 
New  Scotland  and  Guiana  ventures  were  both  showing  considerable 
activity,  mainly  in  the  direction  of  privateering*.  The  two  undertakings 
which  had  suffered  most  from  the  Dutch — i.e.  the  African  and  East 

1  Gardiner,  History,  1603-42  (1891),  vii.  pp.  82,  83. 

2  Historical  Collections,  by  John  Rushworth,  London,  1680,  ii.  p.  28. 

3  The  Present  State  of  England,  by  Walter  Carey,  1627,  in  Harleian  Miscellany 
(1746),  III.  pp.  198-201. 

*  Debates  in  the  House  of  Commons  in  1625,  ut  supra,  i.  p.  16 ;  The  Autobiography 
and  Correspondence  of  Sir  Simonds  B'Ewes,  edited  by  J.  O.  Halliwell,  1845,  i. 
p.  180. 

5  State  Papers,  Domestic,  Charles  I.,  cix.  44;  Calendar,  1628-9,  p.  197.  At 
first  sight  there  is  some  diflBculty  in  reconciling  these  rates  with  the  interest  on 
investments,  where  the  security  was  considered  good,  which  remained  about  8  per 
cent.  The  explanation  of  the  apparently  unduly  high  number  of  years  purchase  in 
the  case  of  land  is  that,  in  addition  to  the  rent,  the  purchaser  received  a  further 
income  from  the  fines  on  renewal  of  leases.  Therefore  the  number  of  years  purchase 
is  multiplied  by  a  part,  but  not  the  whole,  of  the  income. 

8  Vide  infra,  ii.  pp.  65,  71. 

7  Ibid.,  II.  pp.  328,  329.  8  jbid.,  ii.  pp.  318,  319. 


CHAP.  X.]  Trade  restricted  1629-30  193 

India  companies — had  experienced  somewhat  different  fortunes.  The 
former  had  lost  all  its  capital^;  while  the  latter  had  been  unable  to 
force  the  shareholders  to  pay  up  the  sums,  they  had  undertaken  to 
adventure  in  1617,  in  the  Second  Joint-Stock.  By  1628  it  was  feared 
that  much  of  this  capital  had  been  lost,  and  the  committees  were  only 
prevented  from  winding  up  the  stock  by  the  necessity  of  paying  off 
the  debt  that  had  been  contracted ^  Still  this  company  also  felt  the 
return  of  confidence  and  it  was  able  in  1628-9  to  form  another  separate 
undertaking,  known  as  the  First  Persian  Voyage^,  the  capital  of  which 
was  .^125,000. 

Activity  was  also  shown  in  the  home  trade.  As  a  consequence  of 
the  discovery  of  silver  in  Wales,  Middleton  had  formed  a  company, 
which  worked  under  a  grant  from  the  society  of  the  Mines  Royal; 
and  shares  in  this  undertaking  seem  to  have  been  readily  saleable  in 
1631*.  In  1628  and  again  in  1630  the  Mineral  and  Battery  Works 
obtained  not  only  fresh  grants  of  the  privileges  secured  in  the  time 
of  Elizabeth  but,  in  addition,  the  prohibition  of  the  selling  of  re-made 
wool  cards'*. 

The  improvement  in  trade,  that  had  begun  in  1626  and  which 
became  more  marked  in  1628,  was  checked  by  the  disputes  about 
tonnage  and  poundage  at  the  ports.  The  seizure  of  goods  made 
delivery  uncertain  in  England,  while  the  exports  were  held  back. 
Moreover  there  were  many  losses  through  captures  by  the  Dunkirk 
privateers.  The  House  of  Commons  had  stated  in  1628  that  "  what 
the  poverty,  weakness  and  misery  of  our  kingdom  is  now  grown  unto 
by  decay  of  trade  and  destruction  and  loss  of  ships  and  mariners, 
within  the  last  three  years,  we  are  almost  afraid  to  declare *."''  Trade 
in  the  English  Channel  was  subject  to  many  interruptions  from  the 
privateers  which  cruised  about  Land''s  End  where  they  were  a  plague 
as  bad  as  the  "caterpillars"  in  Egypt.  Often  for  weeks  at  a  time 
it  was  unsafe  for  vessels  to  sail  from  Dover  to  Calais,  and  the  depre- 
dations were  extended  as  far  as  the  herring  fleets  off  Yarmouth ^ 
These  losses  were  aggravated  in  1630  by  the  failure  of  the  harvest 
and  an  outbreak  of  the  plagued  In  1629  the  price  of  wheat  was 
considerably  above  the  average  of  the  previous  three  years,  and  1630 

»  Vide  infra,  ii.  pp.  12-14.  2  n^^i^^  j,.  pp.  108,  109. 

3  lUd.,  II.  pp.  109,  126.  *  Ibid.,  11.  p.  401. 

fi  Ihid.,  II.  pp.  424,  425. 

^  Parliamentary  History,  lU  supra,  viii.  p.  229. 

^  State  Papers,  Domestic,  Charles  I.,  cxlvii.  62,  cxlix.  26,  56,  clxix.  67; 
Calendar,  1629-31,  pp.  22,  52,  58,  296. 

^  This  was  however  only  a  minor  epidemic,  the  deaths  from  plague  in  London 
having  been  1,317  as  against  35,417  in  1625 — Natural  and  Political  Observations... 
upon  the  Bills  of  Mortality,  by  Capt.  John  Graunt,  1665,  pp.  174,  175. 

s.  a  I.  13 


194  Distress  through  the  Crisis  of  1630      [chap.  x. 

is  described  as  a  time  of  famine^  The  wool  trade  suffered  to  a  marked 
extent.  About  the  end  of  1629  or  the  beginning  of  1630  the  excep- 
tionally low  price  of  wool  was  under  the  consideration  of  a  special 
commission,  appointed  to  ascertain  the  causes  of  the  decline;  and,  at 
the  same  time,  the  state  of  the  cloth-trade  was  causing  anxiety'*. 
Towards  the  end  of  1630,  the  demand  for  cloth  had  fallen  off  to  such 
an  extent  that  the  manufacturers  were  compelled  to  dismiss  their 
weavers,  many  of  whom  were  in  danger  of  perishing  from  want  of 
work.  There  was  a  great  scarcity  of  corn,  and  those  who  were  receiving 
wages  were  unable  to  purchase  enough  to  supply  their  families,  owing 
to  the  enhanced  price:  while  there  were  some,  who,  through  lack  of 
employment,  were  destitute^.  In  Hampshire,  the  production  of  cloth 
had  declined  by  about  80  per  cent.  * ;  while,  in  Norwich,  the  magistrates 
had  to  raise  treble  the  usual  amount  for  relief  of  the  poor  from  the 
better  rank  of  citizens  and  double  from  the  rest,  besides  borrowing 
<£300  to  spend  on  com''. 

The  crisis  at  the  end  of  1630  was  severe  while  it  lasted,  but 
fortunately  its  duration  was  short.  The  return  to  more  normal  con- 
ditions may  be  dated  from  the  peace  with  Spain  (November  1630), 
and  early  in  the  next  year  there  was  a  general  revival  in  trade.  In- 
dustrial conditions  both  at  home  and  abroad  were  better  than  they 
had  been  since  1619 ;  but  the  return  of  prosperity  was  overshadowed 
by  the  methods,  adopted  by  the  Crown,  to  raise  a  revenue  independently 
of  Parliament.  It  is  this  fact  that  gives  the  crisis  of  1630  an  importance, 
which,  in  view  of  its  brief  continuance,  it  would  not  otherwise  possess. 
Provoked  partly  by  the  irregularities  in  the  collection  of  tonnage  and 
poundage,  partly  by  the  losses  arising  out  of  the  ill-advised  conduct 
of  the  war,  reacting  on  a  time  of  scarcity  in  agriculture,  it  marks  the 
dividing  line  between  the  period  when  Charles  I.  was  still  receiving  the 
proceeds  of  subsidies,  granted  by  Parliament,  and  the  time  when  this 
source  of  supply  was  no  longer  available,  except  the  small  amount 
of  arrears  that  remained  still  to  be  collected. 

Apart  from  the  influence  of  the  constitutional  issue,  involved  in  the 
levying  of  taxation,  the  most  important  question  afi^ecting  financial 
methods  up  to  1630  was  the  change  in  the  relative  positions  of  the 
English  and  the  Dutch  East  India  companies.  The  latter  had  con- 
tinued the  stock  formed  in  1602 ;  while,  in  the  case  of  the  former,  the 
new  undertaking  (known  as  the  Second  Joint-Stock,  subscribed  in  1617) 

1  Rogers,  Agriculture  and  Prices,  v.  pp.  197,  270. 

2  State  Papers,  Domestic,  Charles  I.,  clv.  52,  63;  Calendar ,  1629-31,  p.  147. 
»  Ibid.,  CLXxvi.  36;  Calendar,  1629-31,  p.  403. 

*  lUd.,  cLxxxii.  46,  46  (1);  Calendar,  1629-51,  p.  481. 
6  Ibid.,  cLxxxvi.  26;  Calendar,  1629-31,  p.  626. 


CHAP.  X.]   English  and  Dntch  East  India  Cos,  1618-30    195 

had  been  due  to  determine  in  1625,  but  was  continued  for  four  years 
more.  It  was  not  wound  up  until  1633.  The  effect  of  the  critical 
position  in  the  East  had  been  to  prevent  shareholders  from  paying 
their  calls,  and  this  stock  was  not  fully  paid  up^  Therefore,  the  First 
Persian  Voyage  (1628)  may  be  regarded  as  completing  the  subscription 
to  the  Second  Joint-Stock.  Moreover,  since  the  profits  of  both  enter- 
prizes  were  almost  all  made  by  1630,  for  purposes  of  comparison  with 
the  Dutch  company  they  may  be  taken  as  having  terminated  at  that 
date.  On  the  other  hand,  the  Second  Persian  Voyage  (1629)  had  not 
produced  sufficient  results  to  be  included  within  this  period.  Therefore 
any  profits  made  by  the  Second  Joint-Stock  and  First  Persian  Voyage, 
after  1630,  would  probably  be  balanced  by  those  of  the  Second  Persian 
Voyage,  gained  before  the  same  date. 

Up  to  1617  the  Dutch  company  had  divided  its  profits  at  an 
average  annual  rate  of  about  25  per  cent.,  while  the  dividends  of  the 
English  undertaking  on  the  estimated  capital  actually  employed, 
exclusive  of  the  principal  returned,  came  to  over  31  per  cent,  on  the 
Voyages  and  the  First  Joint-Stock.  Therefore,  roughly,  the  profits 
actually  divided  by  the  Dutch  company  were  a  little  more  than  two- 
thirds  of  those,  paid  by  its  English  rival,  in  terms  of  the  average  rate 
per  cent."^  There  is  every  reason  to  believe  that  the  lower  return  per 
cent,  of  the  Dutch  entei-prize  was  due  to  the  expenditure  of  considerable 
sums  on  laying  the  foundations  of  future  developments.  One  effect  of 
a  permanent  capital  was  that  this  body  was  able  to  provide  fortified 
stations,  which  became  of  great  value  to  it  in  the  struggle  with  its 
rival.  The  latter,  owing  to  its  system  of  terminable  stocks,  was 
unable  to  adopt  the  same  policy,  and  this  was  one  of  the  reasons  why 
it  suffered  most  during  the  years  of  strife  in  the  Indies. 

The  effects  of  the  contest  were  shown  in  the  reduced  rate  of  profit 
earned  from  1618  to  1630.  During  eight  of  these  thirteen  years,  the 
Dutch  company  did  not  pay  any  dividend ;  and,  in  the  other  five, 
distributions  of  120  per  cent,  were  made^  Over  the  whole  period,  this 
gave  an  average  annual  dividend  of  9  per  cent.,  or  just  about  the  same 
rate  as  was  obtainable  from  a  loan  on  good  security.  The  English 
company  was  even  more  unfortunate.  The  whole  divisions  on  the 
Second  Joint-Stock  were  only  112^  per  cent,  or  a  profit  of  12 J  per 
cent,  for  at  least  thirteen  years.  It  would  be  a  mistake  to  conclude  that 
the  average  annual  dividend  from  profits  was  under  1  per  cent.,  since 
only  one-eighth  of  the  nominal  capital  was  called  up  during  each  of 
the  first  five  years  of  this  stock.     Therefore,  at  the  end  of  1623,  about 

1  Vide  infra,  ii.  p.  107.  ^  Vide  supra,  p.  147. 

3  Klerk  de  Reus^  NiederldndiscJi-Ostindischen  Compagnie,  Appendix  vi.  ; 
Anderson,  Annals  of  Commerce,  edited  by  David  MacPherson,  1806,  iv.  p.  488. 

13—2 


196  English  and  Dutch  East  India  Cos.  1618-30   [chap.  x. 

a  million  sterling  was  actually  paid  in,  and  the  following  year  the 
committees  began  to  make  divisions,  averaging  one-eighth  of  the  total, 
annually.  Allowing  on  the  one  hand  for  the  calls  on  the  stock  being 
paid  in  instalments,  and  on  the  other  for  the  repayments  of  capital,  it 
seems  probable  that  no  serious  error  would  be  involved  in  treating  the 
profit  made  as  if  it  had  been  earned  on  a  capital  of  ^500,000,  taken  as 
paid  up  in  1618  and  returned  in  1630.  To  this  there  is  to  be  added 
the  stock,  subscribed  for  the  First  Persian  Voyage :  and,  distributing 
this  in  like  manner  over  the  whole  period,  the  capital,  actually  em- 
ployed, may  be  taken  as  being  about  equal  in  amount  to  that  of  the 
Dutch  company — neglecting  the  loans  of  each,  since  interest  on  these 
was  provided  for  before  dividends  were  paid. 

On  the  basis  of  this  calculation,  the  sum  total  of  the  profits  of  both 
companies  may  be  compared  directly  during  the  years  1618  to  1630. 
Strictly  speaking  the  English  organization  had  not  sufficient  realized 
assets  to  do  more  than  return  the  principal  of  the  Second  Joint-Stock. 
All  its  remaining  property  was  transferred  to  the  Third  Joint-Stock, 
in  return  for  an  allotment  of  shares  in  the  latter.  This  allotment 
amounted  to  12 J  per  cent.  Since,  moreover,  one  of  the  most  important 
of  these  assets  was  the  claim  for  damages  against  the  Dutch  company, 
no  account  need  be  taken  of  the  compensation  that  was  paid  eventually 
by  the  latter.  The  effect  of  the  arrangement  therefore  was  that  the 
proprietors  received  a  profit  of  12|^  per  cent,  in  stock  of  the  next 
undertaking.  Taking  this  at  par^,  it  would  be  worth  about  =i^200,000, 
to  which  is  to  be  added  the  profit  of  the  First  Persian  Voyage  of 
^75,000 2,  making  a  total  profit  over  the  whole  thirteen  years  of 
d^275,000.  Reducing  the  dividends  of  the  Dutch  company,  during 
the  same  period,  to  sterling,  these  would  come  to  over  three-quarters 
of  a  million,  so  that  the  result  is  reached,  that  in  the  yeare  under 
investigation  the  latter  made  almost  three  times  as  much  profit  as 
the  English  undertaking ;  and  the  average  annual  rate  of  profit  on  the 
share-capital  was  about  9  per  cent,  in  the  one  case  and  3  per  cent,  in 
the  other. 

The  financial  results  of  the  East  India  trade  from  1618  to  1630  are 
important,  not  so  much  as  an  instance  of  the  rate  of  profits,  but  from 
their  effects  on  the  whole  question  of  monopolies  for  foreign  trade  and 
also  indirectly  in  relation  to  the  development  of  the  joint-stock  system. 
Up  to  the  time  of  the  Amboyna  massacre,  the  grant  of  large  privileges 
for  trading  to  distant  and  uncivilized  countries  was  based  on  the  prin- 
ciple of  encouraging  discoveries.     In  principle,  therefore,  it  resembled 

1  In  1634  this  stock  sold  cum  divisions  at  80,  while  in  1640  it  was  from  91  to  95^ 
ex  divisions  of  50  per  cent. 

2  Vide  infra,  ii.  pp.  Ill,  126. 


CHAP.  X.]    Fortifications  and  Monopolies  1618-24         197 

the  exclusive  right  of  exercising  a  new  invention  for  a  term  of  years.  ^ 
This  was  the  view  of  the  more  moderate  members  in  the  House  of 
Commons.  To  this  there  was  opposed  a  body  of  opinion  which  aimed 
at  the  breaking  down  of  all  privileges  in  the  export  trade,  and  which 
finds  expression  in  the  "Instructions"  of  Sandys.  There  is,  however, 
reason  to  believe  that  this  agitation  was  no  more  disinterested'  than 
the  defence  of  the  companies,  which  was  undertaken  by  persons  who 
were  shareholders  in  these  ventures,  or  who  received  some  recompense 
for  their  support. 

The  conflict  between  the  English  and  the  Dutch  East  India  companies 
introduced  an  altogether  new  element.  Competition  took  the  form  of 
armed  intervention.  The  trader,  who  was  too  weak  to  defend  himself, 
ran  the  risk  of  being  deprived  of  his  goods ;  and,  once  the  Dutch  had 
established  themselves  in  the  Indies,  it  would  have  been  impossible  for 
English  merchants  to  have  sent  cargoes  there  without  the  protection 
of  armed  ships.  Moreover,  fortified  stations  were  required,  where  goods 
could  be  stored  until  they  were  conveyed  to  Europe.  For  these 
reasons,  during  a  period  when  the  Channel  was  not  always  safe  for 
British  ships,  some  kind  of  responsible  organization  with  large  powers 
was  necessary.  Even  the  existing  English  organization  had  not  as 
yet  risen  to  a  full  sense  of  its  responsibilities.  The  system  of  stocks, 
subscribed  for  short  terms,  precluded  the  best  development  of  the 
permanent  interests  of  the  trade.  The  cause  of  this  policy  is  difficult 
to  determine.  It  may  have  been  that  the  East  India  company  was 
following  the  precedent  of  the  Elizabethan  trading  voyage,  but  it 
seems  possible  that,  since  the  Russia  company  had  a  series  of  stocks 
which  had  been  terminable  only  by  liquidation,  there  were  other 
reasons.  These  are  perhaps  to  be  found  in  the  attitude  of  the  Stuarts 
to  the  company.  James  I.  had  granted  licenses  which  seriously 
threatened  its  privileges,  and  the  minutes  show  that  the  committees 
were  apprehensive  of  frequent  interferences  by  the  Crown.  Such  un- 
certainty made  it  inadvisable  to  expend  capital  in  any  directions,  where 
the  return  would  be  a  distant  one.  Thus  it  happened  that  the  company 
was  ill-prepared  to  face  the  aggression  of  the  Dutch,  and  that  it  suffered 
most  in  the  contest.  It  is  not  unlikely  that  it  was  the  effect  of  these 
events  which  caused  companies  to  be  excepted  from  the  scope  of  the  ^ 
monopoly  act  of  1624.  This  legislation  again  had  an  important 
consequence,  which  came  to  light  in  the  reign  of  Charles  I.,  namely 
that  there  was  no  obstacle  in  statute-law  to  the  grant  of  the  most 
objectionable  kind  of  monopoly  to  any  body  of  persons,  who  at  the 
same  time  were  incorporated  by  a  royal  charter. 

1  Vide  supra,  pp.  121,  182. 


198    Fines  for  Freedom  of  Cos.  reduced  1618-30    [chap.  x. 

The  low  level  of  profits  of  the  East  India  company  from  1618  to  1630 
tended  in  an  almost  accidental  manner  to  eliminate  some  characteristics 
of  the  regulated  body  from  its  organization.  At  first  any  non-member, 
who  purchased  shares,  had  to  pay  a  fine  on  admission.  From  1624  to 
1628  shareholders  were  anxious  to  sell  out,  so  as  to  escape  the  liability 
of  unpaid  calls.  Since,  for  the  same  reasons,  there  was  no  urgent 
demand  even  at  a  price  which,  allowing  for  the  divisions  of  capital 
already  made,  was  below  par^,  the  proprietors  objected  to  any  restric- 
tions which  tended  to  limit  the  market.  Therefore,  although  the  fine 
for  admission  was  not  finally  abolished  until  later,  it  was  reduced  so 
much,  that,  on  any  considerable  purchase,  it  was  no  more  than  a 
moderate  fee  payable  to  the  company  for  the  registration  of  the 
transfer. 

1  Vide  infra,  ii.  p.  126. 


CHAPTER  XL 

The  Delegation  of  Indirect  Taxation  by  the  Crown 
TO  Monopolistic  Companies  1630 — 1640. 

The  revival  of  trade  at  the  end  of  1630  was  accompanied  and 
strengthened  by  great  activity  in  the  extension  of  existing  companies 
and  still  more  by  the  formation  of  new  undertakings.  At  the  beginning 
of  the  year  1631  and  for  some  time  afterwards,  the  prospects  for  the 
investment  of  capital  appeared  to  be  exceptionally  promising.  The 
signature  of  a  treaty  of  peace  offered  security  for  merchants,  who  were 
prepared  to  equip  distant  voyages,  or  to  adventurers  who  were  desirous 
of  exploiting  schemes  for  colonization.  The  woollen  industry  showed 
signs  of  recovering  from  the  depression  which  had  lasted  since  the  ill- 
advised  interference,  resulting  in  the  formation  of  the  company  of  New 
Merchant  Adventurers  in  1614.  It  was  only  to  be  expected  that  this 
rash  proposal  had  checked  the  rate  of  increase,  which  might  otherwise 
have  been  established,  but  there  are  many  signs  that  both  the  clothiers 
and  the  sheep-farmers  had  begun  to  adjust  themselves  to  the  new  condi- 
tions ;  and  it  is  significant  that  complaints  of  "  decay  of  the  cloth-trade" 
had  become  less ;  while,  when  they  began  again,  they  related  only  to 
certain  localities  affected  by  special  conditions.  There  are  many  indica- 
tions which  point  to  a  considerable  amount  of  capital  having  been 
available  for  investment.  The  rate  of  interest  on  good  security  had 
fallen  to  that  current  before  the  crisis  of  1620,  namely  about  8  per 
cent.S  while  the  shops  of  the  goldsmiths  in  Cheapside  were  described  as  "a 
most  glorious  sight*.""  The  great  sums  expended  on  luxuries,  and  more 
especially  on  entertainments,  also  afford  evidence  that  there  were  large 
stores  of  wealth,  awaiting  profitable  outlets*. 

The  stimulus  of  renewed  hope  can  be  traced  in  most  directions  where 
a  large  capital  was  used.    The  off-shoot  from  the  Russia  company,  which 

1  State  Papers,  Domestic,  Charles  I.,  ccuv.  [Docquet],  Dec.  28,  1633;  Calendar, 
1633-4,  p.  337. 

2  Historical  Collections,  by  John  Rushworth,  London,  1680,  n.  p.  28. 

3  The  History  of  the  Rebellion  and  Civil  Wars  in  England,  by  Edward,  Earl  of 
Clarendon,  Oxford,  1712,  i.  p.  67  ;  Calendar  State  Papers,  Domestic,  1636-7,  p.  xxviii. 


200  Foreign  Trading  Companies  1630-4    [chap.  xi. 

was  beginning  to  be  known  (from  the  name  given  to  its  whaling  grounds) 
as  the  Greenland  company,  was  making  profits* ;  and,  as  far  as  can  be 
gathered,  the  same  statement  applies  also  to  the  parent  undertaking^. 
The  East  India  company  was  subject  to  the  conditions  of  commerce, 
both  at  home  and  in  the  East.  While  the  latter  remained  unfavour- 
able*, the  former  partially  neutralized  the  disadvantage.  Thus,  besides 
the  First  and  Second  Persian  Voyages,  which  had  already  been  established, 
a  third  and  similar  venture  was  made  in  1630,  with  a  capital  of  c£'100,000. 
This  was  followed  in  1632  by  a  Third  Joint-Stock,  with  which  the  Second 
Joint-Stock  was  incorporated  by  a  transfer  of  the  remaining  assets  of  the 
latter  at  a  valuation.  Then  in  1634  the  property  belonging  to  each  of 
the  three  Persian  Voyages  was  purchased  by  the  Third  Joint-Stock,  the 
amalgamation  being  effected  by  payment  being  made  in  cash  or  shares  of 
the  Third  Joint-Stocks  Thus,  after  1634,  there  was  only  one  under- 
taking controlled  by  this  company,  with  a  capital  of  ,£^420,700%  which 
only  exceeded  that  of  the  First  Joint-Stock  by  a  few  hundred  pounds. 
At  the  same  time,  while  the  situation  in  1613,  1617,  and  1634  may  be 
roughly  described  by  saying  that  the  nominal  capital  subscribed  in  1617 
was  four  times  that  in  existence  in  1613  and  again  in  1634,  certain 
differences  are  to  be  noted.  As  already  shown  ^,  in  the  case  of  the  First 
Joint-Stock,  the  earlier  calls  had  been  repaid  before  the  final  instalment 
was  due.  Therefore,  the  whole  nominal  capital  was  not  earning  profits 
at  any  one  time.  Again,  the  subscriptions  of  the  Second  Joint-Stock 
were  never  all  paid  up  ;  so  that,  while  there  was  a  considerable  reduction 
in  the  amount  of  the  Third  Joint-Stock,  as  compared  with  the  Second, 
that  reduction  is  not  so  large  as  it  appears  at  first  sight.  To  some 
extent,  this  Stock  was  unfortunate  in  the  terms  upon  which  it  expro- 
priated the  Adventurers  in  the  Persian  Voyages.  These  Voyages  had 
been  profitable.  Up  to  September  1634  the  First  had  made  divisions 
of  140  per  cent.,  the  Second  of  150  per  cent,  and  the  Third  of  100 
per  cent.  These  results  fostered  the  expectation  that  the  purchase 
of  their  assets  by  the  Third  Joint-Stock  would  prove  satisfactory,  and 
therefore  the  terms  arranged  were  more  favourable  to  stock-holders  in 
the  Voyages  than  they  would  have  been,  had  they  been  arranged  a  few 
years  later. 

Besides  the  Russia  and  East  India  trades,  other  branches  of  foreign 
commerce  were  developed,  notably  the  trade  to  Africa.  In  June  1630 
a  charter  was  signed,  establishing  a  new  African  company  with  still 

1  Vide  infra  J  ii.  p.  71.     At  this  time  "Greenland"  was  the  name  given  to 
Spitzbergeu  by  EngHsh  writers. 

2  Ibid.,  II.  p.  65.  3  Vide  supra,  p.  197. 
*  For  the  details  vide  infra,  ii.  p.  111. 

5  Ibid.,  II.  pp.  Ill,  127.  «  Vide  supra,  p.  146. 


CHAP.  XI.]        Plantation  Companies  1629-34  201 

wider  limits  and  extended  privileges.  It  is  noteworthy  that  the  leading 
adventurer  in  this  enterprise  was  Sir  Nicholas  Crisp,  who  had  broken 
down  the  monopoly  of  the  previous  company  ^ 

Numerous  circumstances  led  to  an  extension  of  colonizing.  On  the 
one  side,  already  religious  difficulties  had  induced  emigration,  and  the 
Adventurers  to  New  Plymouth  were  followed  by  the  Massachusetts 
Bay  company,  which  received  its  charter  in  1629.  This  grant  was 
unique  in  so  far  as  it  did  not  preclude  the  holding  of  meetings  in  the 
territory  settled ;  and,  therefore,  by  1631,  shareholders,  resident  in  Eng- 
land, had  disposed  of  their  holdings  to  those  who  had  emigrated.  Thus, 
on  the  divisions  of  land  being  made,  this  plantation  passed  from  company- 
administration  to  local  government^.  Another  group  of  circumstances 
tended  to  foster  further  settlements  in  America.  The  Virginia  and 
Bermuda  colonies  had  advanced  from  the  experimental  stage  and  had 
pointed  the  way  to  imitators.  Already  from  1627  settlements  had  been 
proposed  in  a  number  of  West  India  Islands,  such  as  the  Caribbees,  St 
Christopher  and  the  Mosquito  Islands.  With  more  favourable  monetary 
conditions,  these  enterprizes  were  developed  and  new  ones  commenced, 
as  for  instance  the  plantation  of  Carolina,  Maryland,  Montserrat  and 
Antigua.  Maryland  was  a  proprietary  colony,  owned  by  Lord  Balti- 
more', the  Mosquito  Islands  were  the  property  of  a  company,  founded 
in  1629,  which  obtained  a  charter  in  1630^  The  Caribbees  were 
granted  to  the  Earl  of  Carlisle  in  1627,  but  the  funds  for  the  work  of 
settlement  were  provided  by  a  small  group  of  London  merchants,  who 
became  under-ad venturers'^.  The  company,  that  had  obtained  the  grant 
of  the  Mosquito  Islands,  introduced  a  new  element  in  the  organization 
of  the  colonizing  undertaking.  It  has  already  been  shown*  that  planta- 
tion companies,  such  as  the  Virginia  and  Bermuda  associations,  proceeded 
at  an  early  stage  to  make  divisions  of  land  to  their  shareholders.  In 
this  case,  however,  although  that  course  had  been  contemplated,  it  was 
decided  eventually  that  the  territory  occupied  should  be  worked  on 
behalf  of  the  joint-stock,  with  the  result  that  the  capital  which  was 
only  ^2,000  in  1629  had  grown  by  1633  to  .^^24,000^.  In  addition  to 
this  large  outlay,  there  was  a  subordinate  company  for  planting  the 
Island  of  Tortuga,  on  which  £510  had  been  expended  in  16348.  It  is 
not  difficult  to  suggest  the  reason  for  this  change  in  practice.  The 
climate  was  bad,  and  the  land  was  not  suitable  for  the  occupation  of  the 

1  Vide  infra,  ii.  p.  14.  2  /j,-^^^^  jj^  pp  314^  315^ 

3  lUd.,  II.  pp.  318,  326.  *  Ibid.,  11.  p.  328. 

^  History  Civil  and  Commercial  of  the  British  Colonies  in  the  West  Indies,  1793, 
I.  p.  333. 

®  Vide  supra,  p.  184. 

'  Vide  infra,  11.  pp.  330,  301.  8  if^^.,  ir.  p.  329. 


202        Progress  in  Home  Enterprizes  1630-3    [chap.  xi. 

adventurers  themselves.  Besides,  an  important  element  in  the  operations 
of  this  company  consisted  of  trade  with  the  mainland  for  which  capital 
was  required ^  Finally,  it  is  worthy  of  note  that,  while  the  re-adjust- 
ment of  England's  foreign  relations  after  the  peace  of  1630,  was  beneficial 
to  most  of  the  colonizing  enterprises,  it  was  detrimental  to  those  on  the 
extreme  margin  of  the  plantation  area  both  to  the  north  and  the  south. 
On  the  one  side  there  was  the  Canada  company  and  on  the  other  the 
Guiana  adventurers.  There  was  a  clause  in  the  treaty  with  France  in 
1632  that  England  should  give  up  the  recent  acquisitions  of  territory  in 
Canada,  and  therefore  the  Adventurers  were  compelled  to  withdraw 
from  the  trading  stations  they  had  established ;  but  since  they  managed 
to  retain  a  large  quantity  of  furs  they  had  secured,  it  is  not  improbable 
that  they  realized  more  than  the  capital  subscribed 2.  At  the  same 
time,  the  secret  treaty  with  Spain  resulted  in  the  mainly  privateering 
ventures,  based  on  the  project  for  planting  Guiana,  being  discouraged 
by  the  Crown ;  and,  up  to  1637,  there  is  little  trace  of  activities  in  this 
direction  ^ 

The  same  spirit  of  enterprize  extended  to  the  home  trade.  Here  it 
is  necessary  to  distinguish  between  the  appearance  of  activity  and 
legitimate  progress.  Industrial  inventions  again  become  prominent — 
indeed  these  are  more  marked  than  they  had  been  since  the  early  part 
of  the  reign  of  Elizabeth.  With  invention  came  the  endeavour  to 
revive  former  industries  and  to  start  manufactures  in  England  already 
established  abroad.  These  developments  produced  changes  in  produc- 
tion ;  and,  as  a  consequence,  efforts  were  made  to  improve  transport, 
both  by  road  and  river,  as  well  as  to  extend  the  postal  service*.  From 
the  mass  of  seeming  progressive  movements,  there  must  be  distinguished 
a  number  of  so-called  inventions  which  were  either  wholly  or  in  the  main 
fiscal  devices  intended  to  augment  the  Crown  revenue.  Postponing  these 
for  investigation  later,  there  remain  many  extensions  of  the  home  trade 
— several  of  which  were  formed  by  joint-stock  companies.  Apart  from 
the  Elizabethan  societies  of  the  Mines  Royal  and  the  Mineral  and 
Battery  Works — the  former  still  earning  a  revenue  and  the  latter  giving 
employment  to  "  many  thousands'" — there  was  much  attention  paid  to 
the  recovery  of  land  by  drainage.  It  will  be  remembered  that,  at  the 
close  of  the  sixteenth  century  and  again  in  the  reign  of  James  I.%  such 
enterprizes  had  constituted  a  favourite  form  of  speculation.  Prior  to 
1630,  these  schemes  had  not  been  successful  on  any  large  scale.    In  fact, 

1  Vide  infra,  ii.  p.  331.  ^  Ibid.^  ii.  p.  321. 

3  lUd.,  II.  p.  326. 

*  FoRdera,  xix.  pp.  130,  397,  649,  686,  xx.  pp.  6,  47 ;  The  History  of  the  Post 
Office,  by  Herbert  Joyce,  London,  1893,  pp.  15-22. 

6  Vide  infra,  ii.  pp.  402,  426.  ^  Vide  supra,  p.  131. 


CHAP.  XL]  The  Fishery  Society  1631  203 

it  would  appear  that  previous  efforts  had  failed,  in  part,  through  the 
want  of  sufficient  resources.  In  this  period  there  was  again  a  boom  in 
drainage  propositions,  most  of  which  were  carried  on  by  small  com- 
panies. The  Bedford  Level  in  Cambridgeshire  and  adjoining  counties 
was  reclaimed  at  a  cost  of  .^93,000  up  to  1638.  On  this  basis  the  land- 
dividend  cost  about  ^1.  2^.  Qd.  an  acre  which  compares  with  2*.  6c?.  to 
5^.  an  acre  in  Virginia ^ 

The  success  of  the  Dutch  in  the  herring  fishery  off  the  coast  of  Great 
Britain  had  long  been  a  subject  of  envy  to  those  who  were  desirous 
of  increasing  the  volume  of  traded  In  the  deep  sea  fisheries  near 
Newfoundland,  as  well  as  in  whaling,  English  mariners  more  than  held 
their  own.  In  the  latter,  despite  the  financial  errors  of  the  Russia 
company,  very  large  profits  were  sometimes  made,  and  the  average 
annual  yield  of  oil  was  considerable.  In  1634  the  capital  employed  in 
the  Newfoundland  fishery  was  close  on  d^300,000,  and  the  profit  obtained 
was  12  per  cent.  This  must  be  counted  a  satisfactory  return  in  a  year 
acknowledged  to  have  been,  through  special  circumstances,  a  bad  one'. 
In  1630  a  commission  was  appointed  to  enquire  into  the  prospects  of  the 
home  fishery,  and  it  reported  in  favour  of  the  foundation  of  a  powerful 
joint-stock  company  to  carry  on  this  enterprize.  It  was  estimated  that 
a  capital  of  d£*l  67,000  would  suffice  at  the  beginning,  and  that  it  would 
yield  a  profit  of  70  per  cent,  per  annum''.  The  company,  which  was 
incorporated  in  1632,  was  noteworthy  in  several  respects.  It  was  the 
first  venture  which  was  explicitly  national  in  the  widest  sense,  since  it 
was  intended  to  send  fishing  fleets,  not  only  to  the  English  coasts,  but 
also  to  both  Scotland  and  Ireland.  For  this  reason,  it  was  incorporated 
as  the  Society  of  the  Fishery  of  Great  Britain  and  Ireland^  with  a 
governing  body  consisting  of  one  half  English  and  the  other  half  of 
Scottish  members.  The  organization  was  intricate.  Besides  the  society, 
there  were  several  subordinate  unincorporated  companies,  to  each  of 
which  a  certain  area  was  assigned.  These  subsidiary  undertakings  were 
intended  to  attract  local  support  and  to  secure  a  more  efficient  manage- 
ment, while  the  parent  society  not  only  interested  itself  in  the  trade 
generally  but  negotiated  large  contracts,  such  as  those  for  the  navy,  or 
for  export,  besides  maintaining  its  own  herring  boats  ^ 

Elsewhere  there  were  other  industrial  developments,  such  as  a 
corporation,  formed  in  1631,  to  amalgamate  existing  potash  works*. 
About  the  same  time  the  glass  industry  was  making  progress,  and  a 

1  Vide  infra,  ii.  pp.  364,  365.  2  /j^,^  „,  pp,  jqI,  102,  362,  363. 

3  State  Papers,  Domestic,  Charles  I.,  cclxxix.  73 ;  Calendar,  1634-6,  p.  293 ; 
cf.  infra,  11.  pp.  302-4. 

*  Vide  infra,  11.  p.  363.  ^  /^^.^  „,  pp.  353^  3^4^  370^  371. 

•  State  Papers,  Domestic,  Charles  I.,  cccvii.  84;  Calendar,  1636-6,  p.  38. 


204  Causes  of  commercial  Unrest  1633-5    [chap.  xi. 

partnership  was  formed  with  a  view  to  the  utilization  of  coal  in  several 
processes  ^ 

It  is  unfortunate  that  there  were  tendencies,  beginning  to  manifest 
themselves,  which  had  the  ultimate  effect  of  checking  the  tide  of 
prosperity.  These  were  connected  in  different  degrees  with  the  personal 
government  of  Charles  I.  The  religious  troubles  not  only  caused  dis- 
satisfaction amongst  an  industrious  class  of  the  community,  but  produced 
a  gi'owing  stream  of  emigration  to  the  colonies,  and,  in  a  less  degree,  to 
the  continent.  Thus  the  descendants  of  the  Walloons  in  Norfolk  and 
Suffolk  were  forced  to  leave  the  country,  and,  on  their  obtaining  excep- 
tional inducements  to  establish  themselves  in  the  Low  Countries,  they 
transplanted  their  trades  there^  Then  the  question  of  tonnage  and 
poundage  remained  unsettled.  It  is  true  that,  after  the  dissolution  of 
the  Parliament  of  1629,  the  Crown  was  able  to  collect  these  duties ;  but, 
at  the  same  time,  the  friction,  which  had  shown  itself,  remained  and 
gave  rise  on  the  one  hand  to  suppressed  dissatisfaction  amongst  the 
mercantile  class,  while  on  the  other  it  tended  to  increase  the  risk  of 
the  farmers  of  the  Customs  and  therefore  to  prevent  the  rent  from  rising 
with  the  improvement  of  trade. 

Moreover,  government  without  a  Parliament  necessarily  involved  the 
cessation  of  subsidies,  and  the  position  of  the  Crown  finances  was  such 
that  the  Ordinary  Revenue  did  not  suffice  for  the  expenses  of  the  govern- 
ment. The  deficit  in  1629  was  provided  for  by  the  levying  of  a  forced 
loan,  but  it  is  obvious  that  this  could  be  only  a  temporary  expedient. 
In  order  to  estimate  the  situation,  it  is  necessary  to  frame  some  calcula- 
tion of  the  outlay  of  the  State  about  1630  and  the  resources  available 
towards  meeting  it.  At  the  beginning  of  the  reign  of  James  I.  it  was 
estimated  that  the  total  Ordinary  Expenditure  should  have  been  about 
d£^260,000,  and  it  has  already  been  shown  that  many  of  the  difficulties  of 
his  times  were  due  to  the  laxity  of  supervision  in  the  disbursements  of 
the  ordinary  charges  and  still  more  by  the  extent  to  which  "extra- 
ordinaries"  were  permitted  ^  Under  Charles  I.  efforts  were  made  to 
reform  the  extravagance  at  the  Court,  and  a  period  of  rigid  economy  in 
the  royal  household  was  begun.  At  the  same  time,  the  habit  of  pro- 
fusion had  been  in  existence  for  a  generation,  so  that  a  complete  reform 
would  have  required  many  years  and  a  different  class  of  ministers. 
Allowance,  too,  must  be  made  for  the  growth  of  the  country  and 
changes  which  had  increased  the  unavoidable  expenditure.  Taking  all 
these  elements  into  account,  it  may  be  estimated  that  the  Ordinary 

*  FoBdera,  xix.  p.  189 ;  vide  infray  ii.  p.  465. 

2  A  Detection  of  the  Court  and  State  of  England,  by  Roger  Coke,  1719,  i.  pp.  311, 
312. 

3  Vide  supra,  p.  136. 


CHAP.  XI.]         The  Crown  Fitiances  1629-35  205 

Expenditure  in  a  time  of  peace  would  be  about  i?600,000  a  year^ 
Then  as  to  the  Extraordinary  Expenditure,  attention  must  be  paid  to 
the  fact  that  the  years  up  to  1629-30  were  affected  by  the  cost  of 
the  various  expeditions,  when  the  country  was  at  war,  while  after- 
wards the  increased  attention  to  the  navy,  which  led  to  the  writs  for 
ship-money,  began  to  manifest  itself.  Probably,  the  fairest  basis  for  a 
calculation  of  the  necessary  annual  amount  of  the  extraordinary  charge 
would  be  to  take  the  average  of  the  three  financial  years  1627-28, 
1628-29,  1629-30,  omitting  all  items  connected  with  the  war  as  well  as 
the  repayment  of  loans.  This  leaves  Navy  Extraordinaries,  Resumption 
of  Grants,  Special  and  Secret  Services,  Gifts,  Jewels  and  Plate,  Pictures 
and  Statuary,  Masques,  Extraordinaries  for  Ambassadors,  Entertaining 
foreign  Visitors  and  Sundries.  The  annual  average  of  these  items  is  in 
round  numbers  ^£^1 00,000 2,  which,  added  to  the  ordinary  charge,  gives  a 
total  of  d^700,000  a  year.  This  calculation,  however,  makes  no  pro- 
vision for  the  payment  of  the  Crown  debt,  which  had  grown  to  be  very 
large,  and  which  in  1635  amounted  to  <^1, 173,1 98 ^  To  have  provided 
for  the  extinction  of  that  part,  which  had  been  borrowed  up  to  1630 
(and  for  the  greater  portion  composed  of  anticipations  and  charges  of  the 
various  services,  accrued  due  but  not  paid)  would  have  required,  as  a 
minimum  estimate,  an  addition  to  the  extraordinary  issues  of  the 
Exchequer  of  at  least  ^150,000.  Therefore,  the  total  charge,  ordinary 
and  extraordinary,  would  have  been,  with  economy,  about  d^850,000  a 
year,  until  the  debt  had  been  liquidated. 

To  meet  this  large  liability  there  was  first  the  estimated  Ordinary 
Revenue,  as  augmented  by  the  new  impositions  of  James  I.  Making 
allowance  for  the  fact  that  there  was  no  increase  in  the  rent  receivable 
from  the  Great  Customs,  it  is  probable  that,  about  1630,  the  estimated 
Ordinary  Revenue  would  not  be  much  in  excess  of  J'550,000  a  year*.  In 
other  circumstances,  extraordinary  receipts  would  be  available  to  increase 
the  Ordinary  Revenue.  Unfortunately,  at  this  period,  the  whole  of  the 
items  under  this  head  consist  of  arrears  of  Parliamentary  subsidies, 
money  borrowed  and  sales  of  property".  Therefore,  in  estimating  the 
financial  position,  apart  from  subsidies  and  new  sources  of  revenue,  the 
estimated  Ordinary  Revenue  of  £550fi00  was  all   that   was  strictly 

1  The  estimated  Ordinary  Expenditure  in  the  year  1635,  which  was  a  time  of 
great  economies,  was  £636,536 — Ordinary  Expenditure  of  the  Exchequer,  printed 
by  Gardiner,  History  1628-37  (1877),  ii.  p.  345. 

2  Ihid.,  II.  pp.  346,  347.  3  jft^,^  ij,  p,  350. 

*  The  estimate  for  1635  was  £618,379  (Gardiner,  History  1628-37  (1877),  ii. 
p.  344)  which  included  £30,330  composition  for  purveyance,  besides  the  proceeds  of 
new  sources  of  revenue  rendered  available  in  the  interval. 

^  Ihid.,  II.  pp.  348,  349. 


206      Estimated  Position  of  the  Finances  1630    [chap.  xi. 

speaking  available  to  meet  a  total  charge  of  about  £S50fiOQ  a  year, 
leaving  an  annual  deficiency  of  approximately  ^£^300,000. 

Estimated  normal  financial  position  of  Charles  I.  about  1630. 

Ordinary  expenditure £600,000 

Extraordinary  expenditure  without  provision  for  repay- 
ment of  debt        100,000 

Provision  for  repayment  of  debt 150,000 


Ordinary  Revenue       ...         

Extraordinary  Revenue  apart  from  subsidies,  sale  of  Crown 
property,  loans  or  new  taxation 

Estimated  deficiency 


850,000 
550,000 

nil 
£300,000^ 


It  follows,  then,  that  the  policy  of  government  without  a  Parliament 
involved  both  constitutional  and  financial  difficulties.  The  latter  might 
be  formulated  as  the  problem  of  raising  an  additional  <£*!  50,000  a  vear 
to  meet  the  annual  charge,  but  before  providing  for  the  payment  of 
debt.  Including  the  service  of  a  sinking  fund  for  extinguishing  the 
indebtedness  of  the  Crown,  it  would  have  been  necessary  to  raise  a 
further  J*l  50,000  annually  for  a  number  of  years,  making  the  total  sum 
to  be  found  ^300,000  or  the  exact  amount  of  the  estimated  Ordinary 
Revenue  at  the  beginning  of  the  reign  of  James  I. 

This  estimate  only  provides  for  carrying  on  the  government  on 
the  same  lines  that  had  been  followed  up  to  1630.  Any  new  develop- 
ment would  mean  an  addition  to  the  sum  to  be  raised.  The  circum- 
stances, which  led  to  the  issue  of  the  writs  for  ship-money  constitute,  to 
a  considerable  extent,  such  an  addition  to  the  estimated  annual  deficiency. 
In  the  situation  there  were  two  diverse  elements  involved.  There  is  no 
doubt  that  in  1630  the  fleet  was  insufficient  for  the  protection  of  com- 
merce, even  in  the  immediate  vicinity  of  the  English  coasts.  It  is  to  be 
presumed  that  the  addition  to  the  estimated  ordinary  expenditure  of  the 
navy  as  well  as  the  navy  extraordinaries,  amounting  together  to  over 
=5^20,000  a  year,  was  intended  to  meet  this  need^     Superimposed  on 

1  On  the  whole,  this  estimate  is  confirmed  by  that  of  Mr  Gardiner  for  the  year 
1635.  He  calculates  the  annual  deficiency,  at  that  time,  as  £118,000,  before 
provision  was  made  for  the  payment  of  debt — History  1603-42  (1891),  viii.  pp.  81, 
82.  It  is  to  be  remembered  that,  in  the  interval  between  1630  and  1635,  new 
sources  of  revenue  had  been  made  available. 

2  Estimate  Ordinary  Navy  1623         £29,703 

„     1635  41,570 

Addition  to  Ordinary  Expenditure 11,867 

Average  Navy  Extraordinaries  1627-1630 12,060 

£23,927 


CHAP.  XI.]    Attempts  to  meet  the  Deficit  1630-3  207 

this  outlay,  which  is  included  in  the  previous  estimates,  was  the  idea  of 
the  dominion  of  the  sea,  and  therefore,  in  so  far  as  ship-money  was  devoted 
to  the  latter  purpose,  it  was  not  available  towards  a  reduction  of  the 
deficit.  Thus  Charles  I.  was  faced  by  the  dilemma  that,  if  he  imposed 
this  tax,  he  was  compelled  to  provide  increased  naval  forces  to  afford 
some  justification  for  the  impost.  But,  if  he  increased  the  navy,  ship- 
money  would  leave  only  a  small  surplus,  if  any,  towards  the  reduction  of 
the  deficit.  The  most  that  could  be  expected  would  be  the  relief  of  the 
existing  revenue  from  the  recent  increase  in  the  charge  for  the  navy. 
Supposing  that  this  had  been  feasible,  the  nett  result  of  the  imposition 
of  ship-money  would  have  been  to  reduce  the  deficiency  by  about  .£*20,000, 
leaving  a  balance  of  c£^l  30,000  a  year  still  to  be  provided  to  make  ends 
meet,  and  that  without  any  allowance  for  the  reduction  of  debt.  In  any 
case,  prior  to  1635,  the  hypothetical  surplus  from  ship-money  towards 
the  previous  additional  charge  for  the  navy,  would  not  be  available;  and 
it  remained  necessary  to  provide  for  the  estimated  annual  deficiency. 
Numerous  expedients  were  adopted,  which  may  be  divided  into  the 
following  classes.  First,  some  efforts  were  made  to  augment  the  existing 
Customs,  as  for  instance  by  an  increase  on  the  export-duty  on  coal  of  4^. 
per  chaldron  in  1632^  But  in  view  of  the  recent  opposition  to  tonnage 
and  poundage,  it  was  obvious  that  this  device  could  only  be  used  with 
the  greatest  circumspection.  Then,  some  additional  income  was  expected 
from  trading  by  the  Crown.  Thus  Charles  I.  became  the  sole-merchant 
of  gunpowder  in  England,  which  commodity  he  re-sold  at  a  profit  of  50 
per  cent.^  Similar  profits  were  estimated  on  a  royal  playing-card  and 
dice  monopoly ;  while  that  of  tobacco,  already  in  existence,  was  made 
more  lucrative'.  There  was  this  to  be  said  for  the  policy,  that  gunpowder 
was  essential  to  the  national  defence,  while  the  other  commodities  were 
luxuries.  Until  the  tobacco  monopoly  had  been  extended,  although  the 
ratio  of  profit  was  large,  the  increase  of  income  was  not  great;  but 
there  was  the  danger  that  an  attempt  would  be  made  by  the  Crown  to 
extend  the  system  to  some  commodity  in  common  use.  This  was  the 
case  with  the  coal  trade.  Though  the  farm  of  the  duties  on  it  was 
described  as  "  the  bravest  the  King  has'*,"  it  was  proposed  at  the  Com- 
mittee of  Trade  that  he  should  constitute  himself  "  sole-merchant,"  but 
it  was  recognized  that,  to  obtain  any  considerable  increase  in  revenue,  it 

1  State  Papers,  Domestic,  Charles  I.,  cciv.  42(1) ;  Calendar,  1631-3,  p.  200;  An 
Historical,  Geological  and  Descriptive  View  of  the  Coal  Trade  of  the  North  of  England, 
by  Matthias  Dunn,  Newcastle,  1844,  p.  15. 

^  State  Papers,  Domestic,  Charles  I.,  cclxxix.  48;  Calendar,  1634-6,  p.  387. 

3  Ibid.,  ccLxxxvi.  Notes  by  Windebank,  April  4,  1635;  -Calendar,  1635,  p.  8; 
vide  infra,  ii.  pp.  291,  292. 

^  State  Papers,  Domestic,  Charles  1.,  cclxxxv. — Notes  of  Meeting  of  Lords  of  the 
Treasury,  March  21,  1635 ;  Calendar,  1634-5,  p.  595. 


208       Revenue  derived  from  Companies  1630    [chap.  xi. 

would  be  necessary  to  advance  prices,  and  the  scheme  was  abandoned,  lest 
the  Crown  should  suffer  "  by  the  clamour  of  the  people^ " — as  will  be 
seen  the  same  results  followed,  but  they  were  reached  by  a  different 
road. 

Further,  under  the  pressure  of  financial  necessity,  a  search  was  made 
into  ancient  statutes  with  a  view  of  exacting  fines  for  the  non-observance 
of  laws  which  had  ceased  to  be  in  operation.  Such  were  the  compositions, 
known  as  the  "  knight-hood  fines,"  which  began  in  1630,  and  the  penalties 
for  alleged  infractions  of  the  forest-laws  in  1634. 

Again,  reverting  to  the  methods  adopted  in  the  time  of  James  I., 
administrative  functions,  connected  with  the  supervision  of  trade,  were 
delegated  to  individuals^,  who  undertook  to  make  a  fixed  payment  to 
the  Exchequer,  they  themselves  retaining  the  money  they  were  able  to 
recover  from  offenders  against  the  existing  laws  or  the  patents  and  pro- 
clamations under  which  such  commissioners  worked. 

Finally,  there  were  certain  industrial  corporations,  which  were  either 
created  or  transformed  with  a  view  to  the  increasing  of  the  resources  of 
the  Crown.  It  was  considered  dangerous  to  make  any  material  addition 
to  the  taxation  on  foreign  trade,  until  a  considerable  interval  had  elapsed 
since  the  Parliament  of  1628-9.  There  remained  however  the  home 
trade.  The  idea  of  royal  monopolies  for  the  sale  of  certain  commodities 
was  entertained,  and  then  abandoned.  But  advantage  might  be  taken 
of  the  fact  that  companies  were  excepted  from  the  monopoly  act^;  and, 
if  a  corporation  were  formed  and  granted  a  monopoly,  it  was  thought 
that  the  letter  of  the  law  could  be  observed.  When  a  substantial 
money-payment  was  reserved  to  the  Crown,  it  is  plain  that,  where  the 
privilege  was  granted  for  some  common  commodity  by  the  usual  methods 
of  production  and  not  by  a  new  process,  this  device  was  simply  a  wasteful 
method  of  collecting  indirect  taxes  on  native  commodities.  One  of  the 
first  arrangements  of  this  kind  was  made  with  a  craft-gild — namely  the 
Starch-makers'  company,  whereby,  on  an  annual  rent  being  paid  to 
the  Crown,  the  officials  of  the  company  received  the  right  of  supervising 
the  trade,  which  was  confined  to  members  of  this  body^ 

About  1630  some  members  of  the  Host-men  of  Newcastle  took 
advantage  of  events  in  that  year  to  propound  a  scheme  for  a  monopoly 
of  a  more  stringent  character  than  that  possessed  by  this  body,  as  a 
whole ^.  Owing  to  the  activity  of  foreign  privateers,  the  colliers  could 
not  make  the  voyage  from  Newcastle  to  London  without  a  convoy.     At 

1  State  Papers,  Domestic,  Charles  I.,  cccxv.  141 ;  Calendar,  1635-6,  p.  292. 

2  Vide  supra,  pp.  138,  173.  ^  Vide  mpra,  p.  178. 

*  Fcedera,  xix.  p.  338 ;  Anderson,  Annals  of  Commerce  (1790),  ii.  p.  458. 
^  For  the  early  history  of  the  Host-men  vide  Levy,  Monopole,  Kartelle  und  Trusts, 
p.  22. 


CHAP.  XI.]        Coal  and  Salt  Monopolies  1630-5  209 

the  end  of  the  winter  1629-30,  armed  ships  could  not  be  spared  for  this 
duty ;  and,  as  a  consequence,  the  Tyne  was  congested  with  shipping  and 
there  was  a  great  scarcity  of  coal  in  London  \  With  a  view  of  main- 
taining the  high  price,  some  free-men  of  the  company  of  Host-men 
offered  the  Crown  a  payment  oi  \%d.  a.  chaldron  on  all  coals  shipped  to 
London,  on  condition  that  the  captains  of  vessels  should  be  compelled 
to  purchase  from  this  gi-oup  only,  to  the  exclusion  of  the  other  Host- 
men  ^  The  acceptance  of  this  scheme,  which  was  in  operation  in  1635, 
instituted  a  monopoly  within  a  monopoly,  since  no  one  save  a  Host-man 
might  sell  coal  for  shipment ;  and,  of  the  Host-men,  only  an  inner  ring 
could  supply  the  London  market.  At  the  same  period  the  export  duty 
amounted  to  19>s.  M.  a  chaldron  which,  with  the  addition  of  dues  pay- 
able to  the  corporation  of  Newcastle,  made  a  total  charge  of  13*.  Sd.  on 
each  chaldron  sent  abroad'. 

Further,  salt  was  judged  to  be  capable  of  yielding  an  increase  for  the 
revenue.  In  1630  the  price  in  the  southern  counties  had  been  high;  and, 
by  an  order  of  the  Privy  Council,  exportation  was  prohibited.  The  salt- 
makers  accused  the  merchants, and  the  latter  retorted  on  the  makers*.  This 
dispute  afforded  an  opportunity  to  a  group  of  projectors,  who  propounded 
a  scheme  for  the  manipulation  of  the  quantity  produced  on  the  Tyne.  It 
was  proposed  that  a  company  should  be  established  to  take  over  the 
salt  pans  in  this  district,  the  annual  production  of  which  was  estimated 
at  2,087,000  bushels  or  52,175  weys.  This  company  was  either  to 
expropriate  the  owners,  or  else  to  purchase  their  output  at  a  fixed  price 
of  \Qd.  per  bushel,  as  against  the  previous  one  of  ^d.  Further,  authority 
was  to  be  given  to  the  projectors  to  sell  salt  at  £4^  the  wey  or  2*.  the 
bushel,  in  consideration  of  which  privilege  the  Crown  was  offered  a 
royalty  of  10*.  per  wey  or  M.  per  bushel'.  Nicholas  Murford,  who  had 
works  at  Yarmouth,  offered,  not  only  to  join  the  proposed  company,  but 
to  extend  its  scope  to  the  whole  production  of  England,  which  was 
estimated  at  80,000  weys.  On  the  basis  of  a  royalty  of  10.9.  a  wey,  the 
estimated  profit  to  the  Crown  would  be  about  £40,000^.  No  account 
was  taken  of  the  probability  that  so  great  an  advance  in  price  would 
tend  to  diminish  the  demand,  nor  that  the  annual  profit  of  .^£^200,000 — 
divisible  as  to  one-fifth  to  the  Crown  and  four-fifths  to  the  company — 
would  mean  a  corresponding  loss  of  at  least  as  much  to  consumers. 

1  State  Papers,  Domestic,  Charles  I.,  clxiii.  57;  Calendar,  1629-31,  p.  222. 

2  Ibid.,  CLxxx.  58 ;  Calendar,  1629-31,  p.  444. 

3  Ibid.,  ccxci.  130;  Calendar,  1635,  p.  168. 

*  A  True  Remonstrance  of  the  State  of  the  Salt  Business ..  .hy  the  Societie  of  Salt- 
Makers  of  South  and  North  Shields  and  of  Scotland  [1638]. 

^  State  Papers,  Domestic,  Charles  I.,  clxxvii.  71-4;  Calendar,  1629-31,  pp.  421, 
422. 

^  Ibid.,  ccLxxxv.  8 ;  Calendar,  1634-5,  p.  684. 
s.  c.  I.  14 


210  The  Society  of  Salt-makers  1635  [chap.  xi. 

Therefore,  for  the  revenue  to  be  increased  by  a  hypothetical  ^40,000 
would  have  meant  a  direct  loss  to  the  country  of  .£^200,000,  to  which  was 
to  be  added  the  restriction  of  industries  in  which  salt  was  used  as  raw 
material.     While  the  scheme  was  still  in  its  initial  stages,  fishermen, 
salters  and  fishmongers  joined  in  protesting  against  it,  at  the  same  time 
professing  their  willingness  to  pay  any  imposition  that  would  be  levied 
directly  \     In  reply  to  these  petitions,  the  promoters  pointed  out  that 
the  imposition  of  a  direct  tax  on  a  commodity,  produced  at  home,  would 
raise  difficult  constitutional  questions  2;  and  it  was  eventually  decided  to 
issue  a  charter  of  incorporation,  which  was  signed  on  December  23rd, 
1635  constituting  the  "  projectors ""  the  Governor^  Assistants  aiid  Com" 
monalty  of  the  Society  of  Salt-makers  at  the  North  and  South  Shields  in 
the  counties  of  Durham  and  Northumberland^.     By  an  indenture  of  the 
same  date,  between  the  Crown  and  the  society,  it  was  agreed  that  the 
stated  price  should  be  £^  a  wey  (or  1*.  Qd,  a  bushel),  instead  of  £^  as 
originally  proposed.     This  arrangement  applied  to  all  the  ports,  with 
the  proviso  that  salt,  purchased  for  fishing,  should  be  supplied  at  50*. 
the  wey.     The  effect  of  this  stipulation  would  be  to  reduce  the  direct 
loss  to  the  consumer  to  about  ^^1 00,000  a  year,  on  the  supposition  that 
the  Crown  exercised  its  right  of  supervision  and  prevented  the  company 
from  advancing  the  price  beyond  the  sums  stipulated''.     The  preference, 
granted  to  the  fishing  trade,  led  to  a  revision  of  the  royalty  reserved  to 
the  Crown,  which  was  agreed  to  at  3,s.  M.  the  wey  for  fishing  salt  and 
10*.,  as  originally  proposed,  for  the  remainder  sold  under  the  terms  of 
the  contract.     Finally,  the  arrangement  was  to  last  definitely  for  three 
years,  and  thereafter,  during  the  next  three  years,  it  was  determinable 
on  six  months  notice  by  the  King^.     Though  this  grant  did  not  apply 
directly  to  the  Yarmouth  works,  provision  was  made  for  the  co-operation 
of  Murford  and  his  partner,  who  signified  their  adhesion  to  the  terms  of 
the  contract  in  1636^. 

Another  scheme  of  a  similar  character  was  designed  to  draw  a  revenue 

1  State  Papers,  Domestic,  Charles  I.,  ccvi.  61,  cccii.  69-71 ;  Calendars,  1631-3, 
p.  239,  1635,  p.  501. 

2  Ibid.  J  CCCII.  72;  Calendar ,  1635,  p.  501. 

3  Ibid.y  cccv.     Docquet,  Dec.  23,  1635 ;  Calendar,  1635,  p.  589. 

4  As  a  matter  of  fact  the  immediate  result  of  the  establishment  of  the  company 
was  to  enhance  the  price  of  salt  at  Shields — Ibid.,  cccviii.  5;  Calendar,  1635-6, 
p.  43 ;  An  Answer  to  those  Printed  Papers  published  in  March  last  1640  by  the  late 
Patentees  of  Salt  in  their  Defence  and  against  Free  Trade,  composed  by  John  Davies, 
1641,  p.  6. 

^  State  Papers,  Domestic,  Charles  I.,  cccv.  [Docquet],  Dec.  23,  1635;  Calendar, 
1635,  p.  589. 

6  Ibid.,  cccxix.  3;  Calendar,  1635-6,  p.  373.  An  account  of  the  salt  and  soap 
monopolies  is  given  in  English  Patents  of  Monopoly,  by  W.  Hyde  Price,  Boston,  1906, 
pp.  112-28. 


CHAP.  XI.]  The  Soap  Trade  1623-32  211 

from  the  soap-making  industry.  At  the  same  time  there  were  certain 
important  differences,  both  in  the  inception  and  the  execution  of  the  two 
proposals.  The  beginnings  of  the  particular  branch  of  the  soap  trade, 
which  later  became  a  matter  of  national  importance,  are  to  be  dated 
from  a  patent  of  James  I.  of  February  1623,  granted  for  a  new  invention 
to  make  hard  soap  with  barilla,  to  which  a  further  grant  was  added  a 
year  later  for  the  production  of  soft  soap  by  sundry  motions,  instead  of 
by  boiling.  For  six  years  nothing  was  heard  of  the  new  processes.  In 
1631  Sir  William  Russell  and  others  alleged  that  they  had  perfected  the 
earlier  invention,  and  a  new  patent  was  signed,  conferring  a  monopoly 
of  these  processes  for  14  years.  This  grant  was  transferred  to  Sir  W. 
Compton,  who  stated  that  he  had  discovered  a  method  for  the  production 
of  white  soap  by  the  use  of  home  materials  only\  In  order  to  encourage 
the  syndicate,  which  had  purchased  the  patent,  a  proclamation  was 
issued  in  its  favour,  which  authorized  the  use  of  a  special  seal  for 
marking  the  new  soap,  with  powers  to  enter  premises  in  search  of  any 
that  was  suspected  of  infringing  the  patent^. 

These  privileges  constituted  the  basis,  on  which  there  was  erected 
a  corporation  destined  to  make  great  changes  in  the  trade.  It  was 
estimated  that  the  total  annual  consumption  of  soap  was  at  least 
10,000  tons,  of  which  5,000  tons  were  produced  in  London.  Besides 
the  imported  soaps,  there  were  only  two  qualities,  which  were  described 
as  "  the  best,"  sold  by  retail  at  ^{d.  to  M.  a  lb.  and  "  the  coarse,"  sold 
at  2<i.  per  lb.  It  was  calculated  that  the  foreign  commodities,  used  in 
the  manufacture  of  these,  such  as  whale-oil  and  potash,  came  to  .£'30,000 
a  year.  Therefore,  if  the  new  soap,  using  rape-oil  and  other  domestic  raw 
material,  were  encouraged,  home  production  in  these  commodities  would  be 
correspondingly  increased.  The  promoters  calculated  that,  if  they  were 
authorized  to  sell  their  soap  all  round  at  Sd.  per  lb.,  they  could  make  a 
profit  of  !</.  per  lb.  This,  on  the  estimated  production  of  4,000  tons  in 
1632,  would  yield  a  profit  of  ^^28,000 ;  and  thereafter,  supposing  they  could 
monopolize  the  whole  production,  the  profit  would  be  es^70,000  a  year^ 

In  view  of  these  prospects,  the  syndicate  believed  itself  to  be  in 
a  position  which  would  justify  it  in  making  a  large  offer  to  the  Crown, 
on  condition  that  it  obtained  still  wider  privileges.  Accordingly,  in 
a  petition  for  incorporation,  an  offer  was  made  of  ^4  a  ton  as  a  payment 
to  Charles  I.,  or  alternatively  that  the  company  was  prepared  to  sell  all 
the  soap  it  made  to  the  King's  agents.  Supposing  that  these  agents 
sold  to  the  public  at  M,  per  lb.,  the  profit  would  have  been  £\5  a  ton*. 

^  A  Short  and  True  Relation  concerning  the  Soap  Business,  London,  1641,  p.  4 ; 
Fcedera,  xix.  p.  323. 

2  Foedera,  xix.  p.  328. 

3  State  Papers,  Domestic,  Charles  I.,  ccx.  94 ;  Calendar,  1631-3,  p.  263. 
*  Ibid,,  cciv.  116 ;  Calendar,  1631-3,  p.  213. 

14—2 


212  The  Society  of  Soapers  1632  [chap.  xi. 

The  charter  of  incorporation  was  duly  signed  on  January  20th,  1632, 
creating  the  patentees  the  Governors,  Assistants  and  Fellows  of  the 
Society  of  Soapers  of  Westminster  -^  and,  by  an  indenture  of  May  3rd,  it 
was  agreed  between  the  Crown  and  the  society  that  <^4  per  ton  should 
be  paid  to  the  former,  while  the  new  soap  was  to  be  sold  at  Sd  per  lb. 
At  this  stage  of  the  scheme,  much  may  be  said  in  favour  of  the  policy 
of  Charles  I.  and  his  advisers.  The  soap  of  the  society  would  encourage 
home  industry,  it  was  believed  to  be  equal  in  quality  to  the  best  of  that 
made  from  train-oil  and  was  not  liable  to  become  offensive,  if  stored. 
Further,  the  Crown  was  within  its  rights  in  bargaining  for  a  share  in 
the  economies  anticipated  from  the  new  invention ;  since,  in  so  far  as 
the  soap  of  the  society  displaced  that  already  in  use,  there  would  be  loss 
of  the  Customs  on  imported  potash,  which  were  fixed  at  a  comparatively 
high  rate^  It  would  appear,  too,  that  on  this  supposition,  while  the 
consumer  might  suffer  to  some  slight  extent  in  price,  he  would  gain  in 
quality.  Averaging  the  cost  of  the  old  soap  at  ^\d.  per  lb.,  there  would 
be  a  direct  loss  to  consumers,  on  an  output  of  5,000  tons,  of  about 
£9^^,000  a  year.  Since  the  cost  of  production  was  calculated  at  ^{d. 
per  lb.,  the  manufacturers'  profit  on  the  same  quantity  would  be 
^£^35,000,  out  of  which  £^OfiOO  was  payable  to  the  Crown.  Finally, 
the  nett  gain  to  the  Revenue  would  be  the  latter  sum,  less  the  deduction 
of  any  decline  in  the  Customs  on  potash  and  oil. 

It  follows,  then,  that  at  the  beginning  of  the  year  1632  the  whole 
question  turned  on  the  quality  of  the  new  soap.  In  April  1632  a  trial 
had  been  made  by  a  committee  of  Aldermen  of  London,  which  reported 
that  it  would  wash  coarse  linen  as  well  as  the  best  sort  of  ordinary  soft 
soap.  They  added,  however,  that  more  labour  was  required,  and  that, 
generally  speaking,  the  new  soap  was  far  inferior  to  the  old 2.  In  spite 
of  this  unfavourable  verdict,  the  society  obtained  a  proclamation,  dated 
June  28th,  1632,  which  empowered  it  to  appoint  a  searcher,  who  was 
authorized  to  forbid  the  sale  of  any  soap,  which  did  not  conform  to 
a  standard  which  he  himself  fixed.  Thus  the  soap-boilers  were  placed 
at  the  mercy  of  their  competitors^. 

The  soap-boilers  were  men  of  energy  and  possessed  of  considerable 
wealth.  They  were  not  prepared  to  acquiesce  in  the  domination  of  the 
trade  by  the  Soapers  of  Westminster.  Complaints  of  the  new  soap  were 
frequent.  It  was  said  to  burn  the  hands  of  the  washer-women,  and  to 
destroy  linen^     Half  of  it  was  stated  to  be  lime  and  chalk  %  and  crowds 

^  A  History  of  the  Custom-Bevenue  of  England,  by  Hubert  Hall,  London,  1892, 
II.  p.  250. 

2  State  Papers,  Domestic,  Charles  1.,  ccxv.  Ill;  Calendar,  1631-3,  p.  321. 

3  Fcedera,  xix.  p.  383. 

*  State  Papers,  Domestic,  Charles  I.,  ccliv.  34  (1);  Calendar,  1633-4,  p.  338. 
^  Ibid.,  ccLxxi.  40;  Calendar,  1634-5,  p.  137. 


CHAP.  XI.]    Positio7i  of  the  Soap-boilers  1632-4  213 

of  women  and  "  mean  persons ""'  marched  through  the  City,  circulating 
these  statements  and  others  of  like  nature ^  Another  trial  was  made, 
on  this  occasion  by  the  Lord  Mayor  who  certified  that  the  new  soap 
was  as  good  as  the  old,  and  this  verdict  was  supported  by  the  testimony 
of  some  eighty  persons,  varying  in  rank  from  countesses  to  laundresses'. 
The  machinery  of  the  Star-Chamber  was  brought  to  bear  on  soap-boilers, 
who  did  not  submit  to  the  assay-master*.  Any  part  of  the  defences 
entered,  which  was  held  to  reflect  on  the  new  soap,  was  ordered  to  be 
suppressed  as  "impertinent"  or  " scandalous ^^  Even  a  shopkeeper, 
who  embodied  the  complaints  of  his  customers  in  a  petition,  was  com- 
mitted to  Newgate °. 

More  convincing  evidence  of  the  failure  in  the  manufacture  of  the 
new  soap  is  to  be  found  in  the  course  of  prices.  Already  in  January 
1634  it  is  recorded  in  a  proclamation  that  the  old  soap  was  then  sold  at 
"  intolerable  rates  ^"  and  in  July  of  the  same  year  it  fetched  Qd.  per  lb. 
in  London  and  was  as  high  as  \0d.  and  even  1*.  in  the  country''.  Such 
an  increase  of  price  points  to  the  silent  working  of  economic  forces, 
which  fixed  the  value  of  the  new  soap  much  below  that  of  the  old 
"  coarse  "  variety  with  the  result  that,  when  on  the  one  side  the  former 
was  to  be  sold  at  M.  per  lb.  and  the  output  of  the  latter  was  restricted 
by  seizures,  the  price  inevitably  advanced.  Under  these  circumstances, 
there  is  little  wonder  that  it  is  recorded  in  September  1634  that  there 
were  more  soap-boilers  than  ever^ 

The  rise  in  the  price  of  old  soap  introduced  a  new  element  into  the 
situation.  It  is  clear  that,  if  the  creation  of  the  society  of  Soapers 
caused  a  general  rise  in  the  value  of  the  product  of  the  boilers,  it  would 
be  to  the  advantage  of  some  of  these  to  obtain  licenses  under  the 
society.  By  this  means  the  boilers,  who  compounded,  would  be  exempt 
from  the  arbitrary  exactions  of  the  assay-master,  and  they  would  know 
what  quota  they  would  be  permitted  to  produce.  In  1634  the  agents 
of  the  society  were  busy  seizing  unsealed  soap  in  Bristol,  Taunton, 
Kingston-on-Hull  and  other  places.     Many  boilers,  both  in  London  and 

1  State  Papers,  Domestic,  Charles  I.,  cclii.  21 ;  Calendar,  1633-4,  p.  316. 

2  Ibid.,  ccLiv.  34,  34  (1);  Calendar,  1633-4,  pp.  337,  338;  Fcedera,  xix. 
p.  509. 

3  Fcedera,  xix.  p.  506. 

*  State  Papers,  Domestic,  Charles  I.,  ccxxxvii.  46 ;  ccxliv.  24;  Calendar,  1633-4, 
pp.  30,  172,  173. 

5  Ibid.,  ccLix.  59;  Calendar,  1633-4,  pp.  437,  444,  461,  515. 

8  Fcedera,  xix.  p.  610.  This  is  the  longest  proclamation  in  the  Collection  of  the 
Society  of  Antiquaries. 

^  Fcedera,  xix.  p.  566. 

8  State  Papers,  Domestic,  Charles  I.,  cclxxiv.  52 ;  Calendar,  1634-5, 
p.  218. 


214     Rise  in  Prices  through  Monopolies  1635     [chap.  xi. 

the  provinces,  agreed  to  work  under  the  orders  of  the  society.  Two 
different  kinds  of  agreements  were  made.  In  a  few  instances  the  boiler 
was  bound  to  sell  the  new  soap,  receiving  a  salary  from  the  society'.  In 
most  cases,  he  undertook  to  produce  a  certain  specified  quantity  per 
annum,  paying  the  royalty  of  ^4  to  the  Crown  and  a  percentage  to  the 
society.  In  Bristol,  for  instance,  the  quota  of  the  boilers  was  600  tons, 
which  w£is  produced  on  these  terms  ^. 

The  later  modifications  of  the  scheme  involved  changes  in  the 
positions  of  the  different  interests.  Obviously,  if  the  soap-boilers  were 
forced  to  pay  the  same  duty  to  the  Crown  as  the  society,  and  were  also 
to  be  liable  for  the  cost  of  licenses,  it  might  be  cheaper  for  them  to 
deal  with  the  King  directly,  and  it  was  not  long  before  negotiations 
were  opened.  Then  the  exaction  of  the  payment  of  £4i  a  ton,  from  all 
the  chief  makers  of  soap,  would  tend  to  augment  the  sum  due  to  the 
Crown.  These  sums  were  collected  by  the  society,  and,  if  it  became 
involved  in  financial  difficulties  or  if  there  was  dishonesty,  the  share  of 
Charles  I.  might  not  be  readily  recovered.  There  is  no  doubt  that, 
through  the  opposition  to  the  monopoly,  the  expenses  were  much  greater 
than  had  been  expected^,  but  on  the  other  side  of  the  account  there 
should  have  been  an  increase  in  revenue  from  the  payments  of  the 
compounding  boilers.  Lastly,  there  were  the  consumers,  who  suffered 
necessarily  from  the  rise  in  price.  This  seems  to  have  affected  different 
districts  in  varying  degrees,  but  every  indication  points  to  a  general 
advance  which  in  some  places  wasT  very  great,  amounting  to  200  per  cent. 
In  the  chief  soap-using  towns,  qualities,  that  had  cost  9,d.  before  the 
patent,  sold  at  4^?.,  and  those  that  had  been  2Jc^.  were  now  5d.  and  even 
6d^  If,  for  purposes  of  a  rough  estimate,  the  advance  be  averaged  at 
^.  per  lb.  {i.e.  from  9^\d.  to  ^\d.)  the  direct  loss  to  the  consumer  would 
be  about  d^l  40,000  a  year  on  a  reduced  consumption  of  7,500  tons. 
Therefore,  at  the  beginning  of  1635,  taking  the  payments  to  the  Crown, 
that  were  due  from  the  monopolies  in  starch,  coal,  salt  and  soap,  almost 
^80,000  a  year  gross  might  be  expected.  This  was  raised  on  a  rough 
estimate  at  a  direct  loss  of  between  ^^^200,000  and  ^£^300,000  a  year  to 
the  consumer,  to  which  is  to  be  added  the  further  loss  falling  on  trades 
affected  by  the  artificial  increase  in  prices.  The  general  consequence 
was  that  a  hypothetical  increase  of  revenue  of  .^80,000  certainly  cost 
the  consumer  at  least  ^200,000.  It  may  have  been  that  the  payments, 
made  by  the  monopolies,  did  not  exceed  the  very  moderate   amounts 

*  State  Papers,  Domestic,  Charles  I.,  ccclvi.  147 ;  Calendar,  1637,  p.  127. 

2  IMd.,  cccviii.  15;  Calendar,  1635-6,  p.  45. 

3  A  Short  and  True  Relation  of  the  Soap  Business,  p.  19. 

*  Faedera,  xix.  p.  566;  cf.  State  Papers,  Domestic,  Charles  I.,  ccccxux.  36  (1); 
Calendar,  1639-41,  pp.  601,  602. 


CHAP.  XI.]    Revenue  derived  from  Monopolies  1635       215 

recorded  in  the  accounts  of  the  Exchequer,  but  there  is  evidence  which 
tends  to  show  that  many  of  the  payments  due  were  dealt  with  in 
a  manner  which  renders  them  difficult,  if  not  impossible,  to  trace. 
When  the  sum,  reserved  to  the  Crown,  consisted  of  a  fixed  yearly  rent, 
it  was  assigned  to  some  creditor,  to  whom  the  patentees  were  authorized 
to  pay  it  direct — this  was  the  case  with  the  rent  reserved  under  the 
grant  to  the  starch-makers ^  Where  the  amount  receivable  was  con- 
tingent on  the  output  (as  in  the  case  of  the  society  of  Soapers),  money 
was  borrowed  on  account  of  the  income  expected,  and  thus  the  gain  to 
the  Crown  might  not  appear  under  its  proper  head,  or  would  not  be 
traceable  except  in  a  reduction  of  general  indebtedness^  Even  making 
allowance  for  such  increase  in  the  apparent  profits  of  the  Crown  from 
these  monopolies,  the  actual  receipts  fell  considerably  short  of  the 
original  estimates,  so  that  the  loss  to  the  consumer  was  great,  while  the 
gain  of  the  Crown  was  relatively  very  small. 

Applying  these  data  to  the  financial  situation  from  1630  to  1635,  it 
will  be  apparent  that  some  reduction  in  the  adverse  balance  was  effected. 
At  first,  the  bulk  of  the  improvement  was  due  to  the  receipts  from  fines. 
Thus  in  the  financial  year  1630-31  a  sum  of  <^4,311  was  actually 
received  from  compositions  for  knighthood,  and  in  the  following  year 
d£^80,997  was  obtained  from  the  same  source'.  As  yet,  the  income  from 
the  new  monopolies,  increased  taxes  and  offices  for  the  alleged  supervising 
of  trade  was  not  great,  so  that  the  total  income  to  be  added  to  the 
estimate  for  the  year  1630  would  not  exceed  ^100,000,  leaving  a 
deficiency  of  ^^50,000,  before  provision  was  made  for  the  payment  of 
debt.  In  1632-3  fines  for  knighthood  had  fallen  to  <£>12,007,  but  there 
was  an  exceptional  payment  of  over  .^50,000  from  Ireland,  whereby 
this  year  was  only  slightly  below  the  average  of  1630-2.  In  the  two 
succeeding  years  (1633-4,  1634-5),  the  fines  only  yielded  a  small 
amount ;  and,  making  allowance  for  the  undisclosed  revenue  from  the 
society  of  Soapei*s  and  other  grants,  it  seems  probable  that  the  deficiency 
was  about  =£^1 00,000  in  each  year. 

At  the  beginning  of  1635  the  condition  of  the  finances  was  alarming. 
The  debt,  which  had  been  very  large  in  1628,  had  been  increased  by  the 
deficits  of  the  intervening  years,  and  future  income  had  been  anticipated, 

^  State  Papers,  Domestic,  Charles  I.,  clxxx.  23;  Calendar,  1629-31,  p.  439. 

2  Ibid.f  cciixxxv.,  Notes  by  Windebank,  March  19,  1635,  cclxxxvi.  43; 
Calendars,  1634-5,  p.  592,  1635,  p.  13 ;  cf.  Hogg,  Character  of  a  Projector  (MSS. 
Lib.  Trin.  Coll.  Dublin,  G  .  4 .  8,  No.  1)  "  Hee  (i.e.  the  projector)  is  a  rare  extractor 
of  quintissences,  hee  will  drawe  from  the  essence  oft  beare,  ale... tobacco... soape, 
starch,  allome,  cards... lobsters  cum  multis  aliis,  the  pure  spirit  of  gold,  by  imposing 
a  fine  and  an  annuall  rent." 

3  Gardiner,  History,  1628-37  (1877),  ii.  pp.  348,  349. 


216        Indirect  Taxation  by  Monopolies  1636     [chap.  xi. 

in  some  cases,  until  the  end  of  1637^  The  position  soon  engaged  the 
attention  of  Laud,  and  steps  were  taken  to  increase  the  estimated 
revenue.  In  spite  of  the  protestations  of  the  society  of  Soapers,  it  was 
compelled  to  undertake  to  increase  the  sum,  payable  to  the  Crown,  by 
£9.  a  ton  (i.e.  from  £^  to  £Q)  for  the  next  two  years,  and  thereafter  to 
£S  per  ton^  The  immediate  effect  of  this  fresh  modification  would  be 
to  make  the  royalty  about  ^£'30,000  a  year,  or  an  addition  of  .^10,000. 
Then  the  payments  arranged  with  the  salt-makers  were  now  accruing  to 
the  extent  of  about  .£30,000  a  year.  A  further  increase  was  made  in 
the  Customs,  which  was  expected  to  produce  an  addition  of  ^30,000 
a  year,  and  the  tobacco  monopoly  was  raised  by  i?20,000^  Augmenta- 
tions were  also  made  in  the  rent  from  the  tin  farm,  from  playing-cards, 
from  the  Forest  of  Dean  and  from  the  sale  of  dyewood^  A  large 
revenue  was  anticipated  from  a  proposal  for  a  monopoly  of  malting^. 
Altogether,  the  effect  of  these  impositions  of  various  kinds  would  have 
been,  had  anticipations  been  fulfilled,  to  make  the  normal  revenue  suffice 
to  meet  the  normal  charge,  leaving  a  small  estimated  surplus  available 
for  the  reduction  of  debt. 

The  finance  of  the  advisers  of  Charles  I.  was  in  its  essence  a  system 
of  indirect  taxation  of  commodities,  produced  at  home,  and  that  too 
raised  in  a  most  wasteful  manner  by  the  grant  of  very  wide  privileges  to 
so-called  trading  societies,  which  were  brought  into  being  for  the 
collection  of  the  money  accruing  to  the  Crown  and  which  secured  for 
themselves  large  profits^.  Both  the  new  revenue  and  these  profits  were 
obtained,  not  only  at  the  expense  of  the  consumer,  but  also  at  that  of 
the  trader  and  manufacturer.  In  1636  and  1637  industry  had  begun  to 
feel  the  effect  of  these  grants.  The  great  staple  trade — that  in  wool — 
suffered  doubly  through  the  manipulation  of  the  soap-trade,  first  in  the 
increased  cost  of  that  commodity  and  secondly  by  the  scarcity  of  potash 
which   was   due  to  the  suspension   of  imports   and  the  demands   on 

*  State  Papers,  Domestic,  Charles  I.,  ccxc.  40;  Calendar,  1605,  p.  110. 

2  The  Works  of  the  Most  Revf^  father  in  God,  William  Laud,  D.D.,  Oxford,  1860, 
VII.  p.  159. 

3  State  Papers,  Domestic,  Charles  I.,  cclxxxvi.  Notes  by  Windebaiik,  April  4,  6, 
1635;  ccxciii.  127;  Calendar,  1635,  pp.  8,  11,  279. 

*  I  hid.,  ccLxxxv.,  CCLXXXVI.,  ccxciii..  Notes  by  Windebank,  March  16,  April  4, 
10,  July  4,  1635;  Calendars,  1634-5,  p.  583,  1635,  pp.  8,  11,  19,  250;  G.  R.  Lewis, 
The  Stannaries,  p.  219. 

»  State  Papers,  Domestic,  Charles  I.,  cclxxix.  68;  Calendar,  1634-5,  pp.  391, 
392;  cf.  A  Commission... to  Enquire  whether  Nicholas  Page  or  Sir  Nicholas  Halse  was 
the  first  Inventor  of  Certain  Kilns  for  the  Drying  of  Malt,  1637,  in  Supplement  to 
the  Series  of  Letters  Patent,  edited  by  Bennet  Woodcroft,  1858,  pp.  53,  54. 

6  The  patentees  of  salt  and  soap  are  mentioned  as  having  made  great  wealth 
from  their  respective  monopolies — The  Projector's  Downfall  or  Time's  Changeling, 
1642,  p.  4. 


CHAP.  XI.]         Position  of  Companies  1630-6  217 

home-supplies  by  the  society  of  soapers  and  the  King's  saltpetre  makers  ^ 
Similarly,  the  restriction  of  the  production  of  old  soap  was  a  serious 
blow  to  the  Greenland  company,  since  the  chief  consumption  of  train- 
oil  was  that  of  the  soap-boilers^  The  operations  of  the  salt-monopoly 
were  prejudicial  to  the  Fishery  society,  and  in  1636-7  both  these 
undertakings  were  in  difficulties^  The  same  policy  affected  the  other 
trading  bodies.  The  tobacco  monopoly  was  highly  detrimental  to  the 
Bermuda  company*;  while  the  East  India  merchants  were  exceptionally 
unfortunate,  in  so  far  as  they  failed  to  provide  what  was  judged  to  be 
their  share  towards  the  royal  necessities  and,  as  a  consequence,  at  the  ^ 
end  of  1635  a  rival  company  was  authorized,  in  which  Charles  I.  was  to 
receive  a  share  of  the  profits.  The  result  was  a  fall  in  the  price  of  the 
stock  to  80*^.  A  similar  breach  of  faith  is  shown  in  the  treatment  of 
the  New  River  company.  Under  the  agreement  with  James  I.  the 
Crown  was  entitled  to  one-half  the  profit.  In  1631  Charles  I.  commuted 
his  right  for  an  annual  rent  of  £500  a  year,  and  he  immediately  granted 
facilities  to  rival  schemes,  which  promised  larger  payments*.  The 
position  of  two  companies  was  exceptional.  The  African  Adventurers 
were  not  greatly  affected  by  the  various  interferences  with  trade,  and 
the  difficulties  of  that  company  are  to  be  attributed  to  want  of  capitaP. 
The  original  Russian  trade  (which  was  now  carried  on  by  a  separate 
company,  apart  from  whaling)  was  one  of  the  few  joint-stock  companies 
which  gained  at  this  period,  since  the  increase  in  the  supplies  for  the 
navy  meant  an  added  demand  for  the  chief  goods  it  imported^ 

A  preliminary  warning  of  the  cessation  of  prosperity,  through  the 
increased  cost  of  production  and  the  dislocation  of  trade,  was  occasioned 
by  the  plague  of  1636-7".  The  tendency  towards  depression  was 
accentuated  by  religious  troubles  in  Scotland  in  1637-8,  and  in  these 
years  there  were  symptoms  of  a  minor  crisis,  which  was  the  precursor  of 
that  of  1640.  The  parallel  between  the  two  decades  1610-20  and 
1630-40  is,  in  several  respects,  remarkably  close.  Both  began  with 
great  activity  in  trade,  which  developed  towards  fishing  and  drainage 
enterprizes.     In  either  period  there  is  the  same  tendency  to  stake  the 

^  State  Papers,  Domestic,  Charles  I.,  cccxix.  42,  cccxxii.  61;  Calendar,  1635-6, 
pp.  383,  465. 

2  Vide  infra,  ii.  p.  71;  State  Papers,  Domestic,  Charles  I.,  cclxxix.  71,  72; 
Calendar,  1634-5,  pp.  392,  393. 

3  Vide  infra,  ii.  pp.  71,  366. 

4  lUd,,  II.  p.  291. 

fi  Ihid.,  II.  p.  127.  »  Ibid.,  in.  p.  25. 

7  lUd.,  II.  p.  15.  8  Ibid.,  II.  pp.  65,  m. 

*  The  number  of  deaths  in  both  years  from  plague  in  London  was  13,482 — 
Natural  and  Political  Observations... upon  the  Bills  of  Mortality,  by  Capt.  John  Graunt, 
1665,  p.  175,  Rush  worth.  Historical  Collections,  n.  321. 


/ 


218  The  Soap-boilers  of  London  1637      [chap.  xi. 

future  of  an  important  trade  on  the  success  of  a  new  process.  Again, 
there  are  the  same  dangerous  offices  of  supervision,  the  same  arbitrary 
imprisonments,  in  the  early  period  of  gold  and  silver  thread-makers,  in 
the  later  of  the  soap-boilers.  Still  more  remarkable,  the  serious  in- 
dustrial crises,  which  began  in  1620  and  in  1640,  were  prefaced  by  minor 
ones  about  three  years  earlier,  namely  in  1617  and  in  1637. 

If  there  were  any  of  the  advisers  of  the  Crown,  who  saw  that  trade 
was  already  bearing  as  many  burdens  as  it  could  carry  without  serious 
danger,  the  necessities  of  the  Exchequer  made  it  impossible  to  heed  the 
warning.  Pressure  was  put  on  the  existing  monopolies  to  force  the 
holders  to  increase  their  royalties.  The  society  of  Soapers  was  unable 
to  make  good  its  promises  of  the  increased  royalty,  and  the  boilers 
renewed  their  offer  of  £H  per  ton  to  the  Crown,  together  with  an 
advance  of  .£^10,000  and  security  for  ^40,000.  The  Westminster  company 
signified  its  readiness  to  surrender  its  charter,  whereupon  its  rivals  were 
incorporated  in  May  1637  as  the  Governor,  Assistants  and  Commmialty 
of  the  Soap-makers  of  London,  as  a  regulated  company^  The  reinstated 
soap-boilers  undertook  to  take  over  the  houses  and  stock  of  the  dissolved 
company  at  the  valuation  of  the  latter,  which  amounted  to  .^23,050, 
and  also  to  pay  =^^40,000  for  the  goodwill  of  the  monopoly 2.  There 
can  be  no  possible  defence  of  the  action  of  the  Crown  in  accepting  the 
offer  of  the  soap-boilers.  When  the  original  agreement  was  made  in 
1632,  it  could  have  been  urged  that  the  royalty,  payable  to  the  Crown, 
might  be  secured,  without  injury  to  the  producer  or  to  the  consumer, 
by  the  economies  of  a  new  process.  The  economies,  as  a  matter  of  fact, 
had  not  become  actual;  and  the  new  company,  working  by  its  old 
methods,  would  be  forced,  in  justice  to  itself,  to  recover  the  Crown- 
royalty  as  well  as  the  sums  paid  to  the  members  of  the  late  society  of 
Soapers.  Moreover,  when  it  obtained  a  monopoly,  it  was  not  in  human 
nature  for  the  soap-boilers  to  abstain  from  obtaining  pecuniary  com- 
pensation for  their  past  sufferings  by  surreptitiously  advancing  prices,  in 
spite  of  proclamations  to  the  contrary  effect.  Therefore,  it  follows  that 
the  consumer  was  destined  to  pay  heavily  for  the  disturbance  of  the 
trade  during  the  past  five  years ;  and,  until  the  abolition  of  monopolies 
of  this  character,  the  price  was  close  upon  double  what  it  had  been  in 
1630^ 

In  other  commodities  there  were  similar  increased  demands  by  the 
Crown,  which  led  to  very  great  rises  in  prices.     By  1638  the  farm  of 

^  State  Papers,  Domestic,  Charles  I.,  ccclvii.  171 ;  Laud,  Works,  ut  supra,  vii. 
pp.  318,  326,  336 ;  Gardiner,  History,  1603-42  (1891),  viii.  p.  284. 

^  A  Short  and  True  Relation  of  the  Soap  Business,  pp.  24-6. 

3  State  Papers,  Domestic,  Charles  I.,  ccccxlix.  36  (i.),  (ii.);  Calendar,  1639-40, 
p.  601. 


CHAP.  XI.]  Increased  Revenue  from  Monopolies  1637-8   219 

wine  and  currants  had  been  advanced  to  over  cs£*60,000,  and  the  vintners 
were  compelled  to  pay  the  King  <^30,000  a  year^  Naturally,  the  result 
of  this  tax  was  a  marked  rise  in  prices,  and  the  same  consequence 
followed  a  patent  for  searching  for  leather  shipped,  laded,  tanned, 
curried,  bought  or  sold  contrary  to  the  law,  which  had  been  granted 
early  in  1639^  Two  other  monopolistic  companies  deserve  notice,  the 
one  that  of  the  Starch-makers,  incorporated  in  1638,  which  was  the  only 
body  in  this  group  constituted  on  a  strictly  joint-stock  basis.  Its  capital 
was  d^5,000,  and  the  reserved  rent  to  the  Crown,  beginning  at  d£^l,500 
and  rising  to  ^^3,500,  was  to  be  paid  before  any  dividend  was  made  to 
the  shareholders.  This  grant  was  justified  as  one  in  favour  of  a  new 
invention,  and  rates  for  the  sale  of  starch  were  fixed^.  How  easily  such 
rates  were  evaded  is  shown  in  the  case  of  the  coal  trade.  The  inner 
monopoly  of  some  of  the  Host-men  at  Newcastle  had  produced  an 
increase  in  price  at  London  and  along  the  east  coast.  For  instance, 
coal,  used  by  the  salt-pans  at  Shields,  had  advanced  by  about  40  per 
cent.*  In  1637  there  was  a  dispute  between  the  specially  privileged 
Host-men,  who  supplied  the  London  market,  and  the  shippers,  relative 
to  what  was  known  as  the  "  gift  coal,"'  which  was  an  old  allowance  of 
five  chaldrons,  thrown  in  without  payment,  upon  every  20  chaldrons 
purchased.  On  the  complaint  of  the  shippers  that  they  no  longer 
received  the  full  measure  of  '^  gift  coal,"  the  Privy  Council  intervened 
and  ordered  that  this  allowance  should  be  abolished  and  that  a  further 
duty  of  1*.  per  chaldron  was  to  be  paid  to  the  Crown.  The  effect  of 
this  ingenious  device  was  that,  whereas  formerly  the  King  received  20*. 
on  25  chaldrons  (counted  as  20),  he  would  now  obtain  60s.  Since  the 
price  at  Newcastle  remained  nominally  fixed  at  11*.  per  chaldron,  the 
merchant  would  have  to  pay  275*.  for  the  25  chaldrons  he  had  been 
supposed  to  obtain  previously  at  220*.'  The  ship-msistei's  naturally 
objected,  protesting  their  right  to  a  free  and  open  trade,  at  the  same 
time  offering  an  annual  payment  of  ^£^3,000  a  year,  in  lieu  of  the 
proposed  additional  impost  and  petitioning  for  a  charter  of  incorpora- 
tion ^     On  April  4th,  1638,  the  offer  to  the  Crown  was  increased  to 


1  Gardiner,  History^  1603-42  (1891),  viii.  p.  287. 

2  State  Papers,  Domestic,  Charles  I.,  ccccxv.  [Docquet],  March  29, 1639,  ccccxxvii. 
101 ;  Calendars,  1638-9,  p.  624,  1639,  p.  464. 

3  Ihid,y  cccciv.  [Docquets\y  Grant  of  incorporation  and  Indenture  of  covenants, 

both  dated   Dec.   13,  1638;  Calendar,  1638-9,  p.   165;  Proclamation  for  the  well 

.    .        ..  ,.         ;.        y.     f.      ^      ,  TBrit.  Mus.  816 .  m .  13"! 
ordering  of  the  making  of  white  starch — . 

*  State  Papers,  Domestic,  Charles  I.,  cclxxxix.  109;  Calendar,  1635,  p.  101. 
^  Ibid.,  cccLvii.  Ill ;  Calendar,  1637,  pp.  159, 160. 
«  Ibid.,  cccLxxxv.  28;  Calendar,  1637-8,  p.  295. 


220  The  Coal-shipping  Monopoly  1638-9    [chap.  xi. 

d£*l 0,000  a  year^,  and  on  May  2nd  it  was  arranged  that  a  corporation  of 
ship-masters  for  supplying  London  with  coal  should  be  erected,  subject 
to  the  proviso  that  the  new  body  should  not  charge  more  than  17*.  per 
chaldron  in  summer  or  than  19*.  in  winter 2,  this  being  a  material 
reduction  in  the  recent  price,  which  had  been  26*.  the  chaldron  at  the 
ship's  side^  At  the  beginning  of  the  winter  1638-9,  there  were 
numerous  complaints  of  the  "  immoderate  price  of  coal.*"  The  recently 
constituted  company  maintained  that  sales  were  made  at  the  price  fixed 
in  the  agreement  with  the  Crown,  while  the  brokers  and  other  middlemen 
also  protested  that  they  each  received  no  more  than  the  normal  profit. 
Still  the  consumer  was  forced  to  pay  more  than  formerly,  and  it  was 
necessary  to  appoint  a  committee  to  ascertain  how  the  advance  had  been 
effected.  This  body  distributed  the  blame  over  all  the  interests  involved 
in  the  handling  of  the  coal.  The  company  of  shippers  adopted  a  device 
of  nominally  selling  a  cargo  at  19*.  the  chaldron,  while  there  was  a  secret 
understanding  that  91s.  the  chaldron  should  actually  be  paid.  Through 
division  into  smaller  measures,  the  various  middlemen  retained  3*. 
amongst  them,  so  that  the  consumer,  who  bought  in  comparatively 
small  quantities,  had  to  pay  at  the  rate  of  24*.  the  chaldron^.  The 
whole  inquiry  is  instinictive,  as  showing  the  futility  of  the  limitation  of 
prices  added  to  monopolistic  grants,  in  which  the  Crown  exacted  a  tax 
that  could  not  be  paid  without  a  considerable  advance  in  quotations. 
At  the  same  time,  it  is  interesting  to  notice  that,  although  many 
monopolies  were  recalled  by  proclamation  in  1639,  none  were  included 
which  were  either  actually  producing,  or  which  were  expected  to  produce, 
any  considerable  revenue^. 

It  was  about  this  period  that  the  various  patents  were  producing 
the  maximum  estimated  revenue.  Including  the  different  taxes  levied 
upon  the  home  trade,  either  by  monopolistic  grants  to  combinations  of 
producers,  to  municipalities  and  to  officers  for  the  supervision  of  in- 
dustry, it  is  calculated  that  d^200,000  a  year  was  payable  to  the 
Exchequer*.      According   to   another    account,   based   on   the   income 

1  State  Papers,  Domestic,  Charles  I.,  ccclxxxvii.  19;  Calendar,  1637-8,  p.  347. 

2  lUd.y  cccLxxxix.  17 ;  Calendar,  1637-8,  p.  397. 

3  lUd.,  cccxc.  1;  Calendar,  1637-8,  p.  422;  England's  Grievance  Discovered  in 
relation  to  the  Coal  Trade,  by  Ralph  Gardner,  London,  1655  (reprint  Philipson, 
North  Shields,  1849),  pp.  92,  93. 

*  State  Papers,  Domestic,  Charles  I.,  cccci.  18,  27,  77,  ccccii.  4;  Calendar, 
1638-9,  pp.  88,  91,  104,  105;  Analytical  Indexes  to  vols.  ii.  and  viii.  of... the  Remem- 
brancia,  pp.  98,  99. 

^  Foedera,  xx.  p.  340;  English  Patents  of  Monopoly,  by  W.  Hyde  Price, 
pp.  173-5. 

®  The  Royal  Treasury  of  England,  London,  1725,  p.  284.  On  the  other  liand 
Clarendon,  History  of  the  Rebellion,  Oxford,  1712,  i.  p.  68,  puts  the  whole  sum  "drawn 
from  the  subject"  at  this  amount. 


CHAP.  XI.]  Rise  in  Prices  through  Monopolies  1640-1       221 

accrued  in  1640-41,  the  total  of  the  grants,  then  in  being  but  exclusive 
of  those  relating  to  salt,  silk,  starch,  gold-thread  and  powder,  was 
.^^120,955^  It  need  scarcely  be  added  that  the  Exchequer  only  received 
a  portion  of  this  amount.  Some  of  the  "projectors'^  failed  to  make 
their  schemes  profitable,  others  it  is  to  be  feared  were  dishonest. 
Moreover,  in  the  growing  financial  difficulties,  the  Treasury  had  become 
disorganized ;  and  payments  which  were  due,  but  were  difficult  to  collect, 
became  involved  "in  a  circular  motion  from  office  to  office,'"*  without 
eflPective  pressure  being  brought  to  bear  on  the  defaulters'.  Then,  when 
the  Ordinary  Revenue  had  been  anticipated  to  a  remarkable  degree — 
such  as  the  alum  profits  which,  in  1640,  were  drawn  in  advance  to  1645 
and  those  of  the  wine  license  till  1651' — it  was  a  distinct  convenience 
for  the  Crown  to  borrow  on  the  security  of  the  income  from  the 
monopolies,  and  the  payments,  made  by  the  patentees,  were  collected  by 
the  creditor.  Under  these  circumstances,  it  is  impossible  to  determine, 
even  approximately,  the  benefit  received  by  the  King  from  the  whole 
group  of  monopolies.  All  that  can  be  said  is  that  it  cannot  have  been 
very  great,  but  that  at  the  same  time  it  must  have  been  considerable. 
On  the  other  hand,  there  can  be  little  doubt  that  the  injury  to 
consumers,  as  a  whole,  by  the  rise  in  prices  was  immense.  An  eflPort 
was  made,  in  the  Remonstrance  of  the  Commons  of  December  1st,  1641, 
to  calculate  the  annual  loss  by  the  four  great  monopolies  which  affected 
the  soap,  salt,  wine  and  leather  trades.  This  was  estimated  at  a  million 
a  year,  to  which  was  to  be  added  that  of  all  the  rest  "  which,  if  it  could 
be  exactly  computed,  would  make  up  a  great  sum^.""  The  cost  to  the 
consumer,  occasioned  by  the  four  chief  monopolies,  is  divided  as  follows — 
soap  ^100,000,  wine  ^^300,000  "  while  the  leather  must  needs  exceed 
both  and  salt  could  be  no  less  than  that.*"  It  is  natural — indeed  almost 
inevitable — to  distrust  the  statement  of  a  controversial  document  of  this 
character,  but  the  figures,  already  adduced,  tend  to  show  that,  as  far  6is 
soap  was  concerned,  there  was  a  rise  in  price  which  would  have  meant 
an  average  loss  to  consumers  of  over  X^l  00,000  a  year**.  The  interference 
with  the  leather-trade  was  comparatively  brief ;  and  the  meagi-e  records 
of  prices,  which  survive,  do  not  support  the  increase  stated  in  the 
Remonstrance.  It  is  probable  that  in  the  remaining  cases — those  of  salt 
and  the  wine-trade — there  is  some  over-statement  but  that  the  advance 
in  price  occasioned  a  very  great  annual  loss.  With  regard  to  the  latter, 
it  is  to  be  noted  that  Pym,  in  his  speech  of  April  17th,  1641,  estimated 

1  Vide  infra,  iii.  p.  628. 

2  State  Papers,  Domestic,  Charles  I.,  cccclxxx.  85;  Calendar,  1640^1,  p.  692. 

3  Ibid.,  ccccxLiii.  10;  Calendar,  1639-40,  p.  393. 
*  Rushworth,  Collections,  v.  p.  446. 

^  Vide  supra,  p.  214. 


222     Loss  of  Consumers  by  Monopolies  1640-1     [chap.  xi. 

the  annual  loss  through  the  rise  in  price  at  d£*232,000,  of  which  the  King 
received  .£^30,000  and  the  farmers  made  a  profit  of  ^80,000  \  It  has 
already  been  shown  that  the  proposals  for  the  creation  of  the  society  of 
Salters  would  in  1635  have  cost  the  consumers  at  least  ^£^200,000^  By 
1 640  this  patent  had  been  surrendered ;  and,  during  the  later  years  of 
the  society,  there  had  been  complaints  of  the  great  price  of  certain  kinds 
of  salt.  Although  this  society  was  dissolved,  the  monopoly  remained, 
and  the  new  undertakers,  incorporated  in  1639  as  the  Corporation  of 
Salters  in  the  Salt  Works  near  Great  Yarmouth,  had  no  reason  to  reduce 
values^.  Therefore  collating  the  statistics  available,  relating  to  the  total 
consumption  and  the  rise  in  prices  of  the  commodities  affected  between 
1628-30  and  1638-40,  it  may  be  estimated  that  the  advance  at  the  later 
date  meant  a  difference,  against  consumers,  of  at  least  three-quarters  of 
a  million  a  year. 

The  question  remains  as  to  how  far  this  rise  in  prices  is  to  be 
attributed  to  the  action  of  the  monopolistic  grants,  since  it  is  possible 
that  this  phenomenon  might  have  been  only  one  aspect  of  a  general 
movement  towards  a  higher  level  of  values.  Fortunately,  there  is 
sufficient  evidence  to  decide  this  problem,  by  separating  the  commodities 
acted  on  by  monopolies  from  those  that  were  unaffected,  or  influenced  by 
these  in  a  very  slight  degree.  Prominent  in  the  latter  groups  are  the 
great  staple  products,  grain  and  wool.  Comparing  the  ten  years 
1621-30  with  1631-40  the  increase  in  the  price  of  wheat  is  only  about 
2  per  cent,  in  the  later  decade,  while  the  highest  quotation  of  the  twenty 
years  is  in  the  earlier  period''.  Wool,  according  to  Rogers,  was  station- 
ary ^  Moreover,  the  scarcity  of  silver  about  1636^  in  conjunction  with 
the  slackening  of  trade,  would  tend  pro  tanto  towards  a  lower  rather 
than  a  higher  level  of  general  prices.  It  follows  that  the  loss,  arising 
out  of  the  increase  in  the  cost  of  monopolized  commodities,  is  to  be 
assigned,  almost  altogether,  to  the  influence  of  these  monopolies. 

The  pressure  of  the  rise  in  prices  of  the  goods  affected  was  wholly 
out  of  proportion  to  the  benefit  accruing  to  the  Exchequer.  Assuming 
that  benefit  (either  as  disclosed  in  the  accounts  or  not)  to  have  been  in 
the  two  most  fruitful  years  ^100,000  a  year,  the  position  might  be 


1  State  Papers,  Domestic,  Charles  I.,  ccccji.  108;  Calendar,  1640,  p.  47; 
Rush  worth,  Collections  j  in.  p.  1136. 

2  Vide  supra,  p.  209. 

3  An  Answer  to  those  Printed  Papers  published  in  March  last  1640  by  the  late 
Patentees  of  Salt  in  their  Defence  and  against  Free  Trade,  composed  by  John  Davies, 
1641,  pp.  7-9. 

*  A  History  of  Agriculture  and  Prices,  by  J.  E.  T.  Rogers,  Oxford,  v.  p.  270. 

6  Ibid.,  V.  p.  407. 

^  Anderson,  Annals  of  Commerce,  ii.  p.  488. 


CHAP.  XI.]    Decay  of  Trade  through  Monopolies  1640      223 

stated  in  the  following  terms*.  Of  the  whole  revenue,  other  than  that 
from  this  source,  the  only  portion  that  could  be  described  as  consisting 
of  taxation  was  the  Customs.  Since  the  cost  of  collection  was  about 
one-sixth^  of  the  total  duties,  a  tax  on  consumers  of  about  .£*420,000 
produced  ^350,000.  To  add  a  possible  extra  1^100,000,  by  indirect 
taxation  through  monopolies,  cost  the  people,  if  the  foregoing  estimate 
is  well-founded,  at  least  three-quarters  of  a  million — that  is  in  other 
words  nearly  twice  as  much  as  their  previous  burden,  or  about  the  same 
sum  as  all  the  receipts  of  the  Exchequer  from  all  other  sources. 

It  cannot  be  a  matter  for  surprise  that  the  pressure  of  the  monopolies 
was  a  powerful  influence  in  alienating  the  affections  of  his  subjects  from 
Charles  L,  and  also,  when  he  appealed  to  the  arbitrament  of  the  sword, 
in  depriving  him  of  the  support  of  the  mercantile  classes.  A  quantita- 
tive valuation  of  the  injury,  inflicted  on  industry  by  this  policy,  gives 
reality  to  expressions  that  seem  to  be  the  outpourings  of  excited 
rhetoric.  When  account  is  taken  of  the  increase  of  the  direct  burden  in 
rise  of  price  by  the  curtailment  of  trade,  a  reason  can  be  seen  for  the 
complaints  that  commerce  alike  in  London,  the  provincial  towns  and 
the  country  was  "  greatly  decayed "  through  this  cause,  and  that  the 
merchants  were  much  impoverished  by  their  estates  being  "  squeezed " 
from  them  by  the  agents  of  the  monopolists ^  For  these  reasons,  the 
nation  was  described  as  "groaning  under  the  mountainous  weight  of 
these  exactions,"'  or  as  being  overrun  "with  swarms  of  projecting 
cankerworms^*"  Indeed,  according  to  one  writer,  "it  was  a  thing 
somewhat  dangerous  for  merchants,  foreign  or  native,  to  export  or 
import  merchandize  upon  payment  of  the  ancient  Customs... without 
a  second  fee  or  fine  to  Sir  John,  Sir  Paul  or  Sir  Thomas'.*" 

When  matters  were  in  this  condition  and  the  nation  was  distracted 
by  political  unrest,  any  untoward  events  would  result  in  a  serious  crisis. 
Such  causes  were  not  wanting  in  the  summer  of  1640.  Charles  I.  was 
in  great  straits  through  want  of  funds.  The  royal  treasury  was  in 
danger  of  bankruptcy,  if  Parliament  chose  to  be  obstructive.     Out  of 

*  Vide  infra,  in.  p.  528 — 

Total  Revenue  not  receivable  after  1641 £120,955 

Deduct  Pretermitted  Customs  and  Star-Chamber 

Fines  19,775 


Balance,  being  revenue  from  Monopolies  ...     £101,180 

2  A  History  of  the  Custom-Revenue  in  England,  by  Hubert  Hall,  London,  1892, 
II.  144. 

3  State   Papers,   Domestic,  Charles  I.,   ccqcxlix.   36  (1) ;    Calendar,  1639-40, 
p.  601 ;  Rush  worth.  Collections,  ii.  p.  1263,  iii.  p.  33. 

*  Speech  of  E.  Bagshaw,  Nov.  14,  1640— State  Papers,  Domestic,  Charles  I., 
ccccLxxi.  63;  Calendar,  1640-1,  p.  260;  Rushworth,  Collections,  iii.  p.  1129. 
fi  The  Projectors  Downfall,  1642,  p.  3. 


224  The  Crisis  of  1640  [chap.  xi. 

a  total  revenue  of  ^^862,660,  only  .£334,480  was  certain,  and,  of  this, 
.£267,454  had  been  anticipated.  Therefore,  Charles  I.,  apart  from  the 
grant  of  tonnage  and  poundage,  could  only  count  on  receipts  to  the 
meagre  amount  of  £67,026,  against  a  normal  expenditure  of  about  ten 
times  that  amounts  London,  disgusted  by  the  attack  on  its  property 
in  Ireland'^  and  suffering  from  a  slackening  of  trade,  for  which  the 
King's  advisers  were  blamed,  refused  to  make  advances.  After  en- 
deavouring to  borrow  without  success  from  the  Pope,  Spain,  France  and 
Genoa,  he  had  before  him  a  proposal  to  debase  the  coinage.  Rejecting 
this  scheme,  he  seized  bullion  to  the  value  of  £130,000,  lodged  by 
goldsmiths  and  merchants  at  the  mint  in  the  month  of  July^,  and  in 
August  the  stock  of  pepper  of  the  East  India  company*.  The  abstraction 
of  the  bullion  caused  a  serious  crisis,  for  it  represented  a  part  of  the 
metallic  reserve  of  the  London  traders.  Credit  had  been  shaken  by  the 
breach  with  Scotland,  and  foreign  merchants  had  been  steadily  reducing 
their  commitments  in  England^.  The  sudden  diversion  of  this  bullion 
prevented  many,  engaged  in  commerce  abroad,  from  meeting  bills  of 
exchange  they  had  accepted.  The  protestation  of  these  bills  led  to 
a  cessation  of  shipments  of  coin  to  London.  This  reacted  on  the 
exchange — "  the  only  sinews  and  livelihood  of  all  trade."  The  disorder 
of  trade  abroad  affected  the  home  market.  The  crisis  was  followed  by 
failures,  and  the  purchases  of  cloth  and  other  goods  for  exportation 
were  greatly  reduced^  Bankruptcies  became  numerous ;  and,  with  the 
suspension  of  credit,  the  amount  of  losses  multiplied''. 

It  is  characteristic  of  the  period  from  1631-40  that  the  joint-stock 
companies  gained  less  fi'om  the  prosperity  of  the  times  than  might  have 
been  expected,  unless  allowance  is  made  for  the  interference,  to  which 
most  of  them  were  subjected,  and  for  the  peculiar  circumstances  of  the 
case.  Even  at  the  beginning  of  these  years  of  prosperity,  trade  had 
begun  to  be  affected  by  the  coming  political  strife,  and  most  of  the 
recently  formed  undertakings  were  influenced  by  this  tendency.  Besides 
the  Massachusetts  Bay  company,  the  Adventurers  for  the  Mosquito 
Islands  were  mainly  Puritans ;  while,  on  the  other  hand,  the  Fishery 
society,  the  African  company  and  the  new  association  for  the  India 
trade  were  formed  by  the  Court  party.     Such  divisions  were  likely  to  be 

1  Vide  infra,  iii.  pp.  628,  529. 

2  Ibid.,  II.  p.  341. 

3  History  of  the  Bank  of  England,  by  A.  Andreades,  London,  1909,  p.  18. 
*  Vide  infra,  ii.  p.  116. 

^  State  Papers,  Domestic,  Charles  I.,  cccclxxviii.  86;  Calendar,  1640-1,  p.  624; 
Rushworth,  Collections,  v.  p.  233. 

^  State  Papers,  Domestic,  Charles  I.,  cccclxi.  104 ;  Calendar,  1640,  pp.  543, 
644. 

'  St  Hilary's  Tears,  1642,  in  Harleian  Miscellany,  ii.  p.  199. 


CHAP.  XI.]       Position  of  Companies  1630-40  225 

disadvantageous  to  any  organization  of  traders.  Besides,  the  tendency 
of  the  Crown  to  make  sudden  changes  in  privileges,  already  granted, 
produced  an  unsettling  effect,  more  especially  on  the  companies  immedi- 
ately affected.  The  East  India  undertaking  was  especially  unfortunate. 
No  sooner  had  the  evil  effects  of  the  competition  of  the  Dutch  been 
followed  by  the  brighter  era  of  the  Persian  Voyages  than  profits  again 
suffered  by  the  licensing  of  Courten'*s  Association  at  the  end  of  16S5. 
For  this  reason  profits  declined,  and  the  showing  of  the  ten  years  from 
1631  to  1640  was,  on  the  whole,  poor.  The  aggregate  gains  of  the 
Second  and  Third  Persian  Voyages  and  of  the  Third  Joint-Stock,  for 
this  period,  amounted  to  about  .£300,000.  Meanwhile  the  Dutch 
company  had  paid  dividends  of  between  four  and  five  times  as  much  in 
the  same  ten  years\  Possibly,  in  this  calculation,  allowance  should  be 
made  for  the  results  of  Courten''s  Association,  so  as  to  compare  the 
return  on  English  capital,  invested  in  this  trade,  against  that  employed 
in  Holland.  Though  at  first  Courten's  syndicate  made  profits,  these 
were  succeeded  by  large  losses  before  1640,  so  that  it  is  doubtful  if  any 
thing  can  be  added  to  the  account  of  the  English  profits  from  this 
source*.  The  consequence  of  the  treatment  of  this  trade  by  Charles  I. 
was  not  only  a  meagre  return  on  the  capital  employed*,  but  a  weakening 
of  the  position  of  the  English  in  the  East. 

For  various  reasons  by  1640  a  number  of  other  companies  had 
suffered  loss,  and  some  were  either  wound  up,  or  on  the  verge  of  failure. 
The  Greenland  company  and  the  Fishery  society  were  bankrupt*.  In 
1638  the  Russia  company  was  again  in  debt,  and  the  payment  of  an 
assessment  on  the  stock  was  only  enforced  by  the  imprisonment  of  the 
governo^^  The  Bermuda  company  was  weighted  by  the  manipulation 
of  the  tobacco  trade  by  the  Crown*.  Fortunately  there  were  some 
exceptions.  About  1636  a  fresh  discovery  of  silver  was  made  in  Wales 
and  was  mined  by  a  subsidiary  company  of  the  Mines  Royal  which 
met  with  some  success'.  In  spite  of  the  encouragement  of  rival  water- 
supply  schemes  by  Charles  I.,  the  New  River  company  was  able  to 
commence  the  payment  of  satisfactory  dividends.  In  1623  the  return 
on  the  nominal  value  of  an  adventurer's  share  appears  to  have  been 
under  4  per  cent.,  rising  to  4 J  per  cent,  from  1631  to  1633,  while  by 
1640  it  had  increased  to  over  12f  per  cent.®     The  company  for  the 

^  G.  C.  Klerk  de  Reus,  Niederlandisch-Ostindischen  Compagnie,  Appendix  vi. 

2  Vide  infra,  ii.  pp.  113-19. 

3  The  average  annual  profit  per  cent,  on  the  Second  and  Third  Persian  Voyages 
was  close  on  20  per  cent.     That  on  the  Third  Joint-Stock  under  6  per  cent. 

*  Vide  infra,  ir.  pp.  71,  72,  366,  367. 

fi  Ibid.,  II.  p.  66.  «  Ibid.,  ii.  p.  291. 

7  IHd.,  II.  p.  402.  8  Ibid.,  in.  pp.  23,  24,  31. 

s.  c.  I.  15 


226  Organization  of  Monopolies  1632-40    [chap.  xi. 

drainage  of  Bedford  Level  had  achieved,  at  least,  a  partial  success,  and 
the  land  recovered  was  divided  to  the  shareholders  in  1637^  Then 
there  seems  reason  to  believe  that,  although  the  Mosquito  Islands  were 
captured  by  the  Spaniards  and  the  English  settlement  destroyed,  the 
shareholders,  not  only  recovered  their  capital,  but  may  have  made 
a  respectable  profits 

During  this  period,  some  changes  began  to  show  themselves  in  the 
manner  in  which  the  union  of  amounts  of  capital,  belonging  to  different 
persons,  was  effected.  To  a  large  extent,  the  favourite  direction  for  the 
search  for  profit  was  towards  one  of  the  monopolies  for  the  control  of 
a  home  trade,  which  could  be  obtained  from  the  Crown.  The  organi- 
zation of  these,  where  not  controlled  by  an  individual,  was  through 
a  group,  nearly  resembling  a  regulated  company.  For  all  practical 
purposes,  the  body  incorporated  for  the  shipping  of  coals  to  London 
was  formed  on  this  model.  Of  the  other  important  monopolies,  that 
which  stands  closest  to  the  joint-stock  company  was  the  society  of 
Soapers  of  Westminster.  While  the  capital  required  was  owned  and 
used  by  individual  members,  these  were  bound  to  sell  to  the  society  at 
a  fixed  price,  and  the  profit  made,  in  retailing,  was  divisible  amongst 
the  generality.  Thus,  as  a  producer,  this  organization  conformed  to  the 
regulated,  as  a  merchant,  to  the  joint-stock  type.  The  closest  analogy 
is  to  be  found  in  the  Bermuda  company,  after  the  division  of  land  had 
been  made^  In  the  society  of  Soapers,  the  estimated  production  of 
5,000  tons  was  divided  into  40  parts,  and  the  possessor  of  ^th  of  the 
monopoly  had  the  right  of  making  125  tons  of  white  soap  annually*. 
These  parts  were  further  sub-divided  into  fractions,  and  one-fourth  part 
of  one  of  them  was  sold  at  £^00^.  Such  a  payment  would  correspond 
to  the  fine  for  the  freedom  of  a  regulated  company.  The  difference 
arose  from  the  fact  that  with  the  Westminster  Soapers,  profits  accrued 
from  the  sales  made  by  the  company  in  its  corporate  capacity,  and  these 
were  divisible,  rateably,  amongst  the  members,  as  in  a  joint-stock 
company.  Similarly,  in  the  case  of  the  vintners  and  the  wine  monopoly, 
there  was  another  instance  of  the  grafting  of  a  merchants'  company  on 
a  species  of  joint-stock  company.  The  vintners,  having  taken  the 
opinion  "  of  the  best  counsel  that  gold  could  buy,"  which  declared  the 
new  impost  of  40*.  per  tun  was  legal,  elected  ten  of  their  number  to 
manage  the  farm.  This  committee  was  empowered  to  invite  twenty- 
seven  others  to  join  them.     The  members  were  "to  underwrite  and 

1   Vide  infra,  ii.  p.  364.  «  Ibid.,  ii.  335-7. 

3  lUd.,  II.  pp.  289-97. 

♦  Indenture  between  the  Society  of  Soapers  of  Westminster  and  Sir  James 
Bagg,  July  4,  1636— State  Papers,  Domestic,  Charles  I.,  Case  D.  No.  8;  Calendar, 
1636-7,  p.  51. 

"  State  Papers,  Domestic,  Charles  I.,  ccclxxxv.  45 ;  Calendar,  1637-8,  p.  299. 


CHAP.  XL]       Tyj^es  of  Incorporation  1630-40  227 

bring  in  "  ^^1,000  each,  and  the  capital,  so  provided,  was  to  pay  the  two 
sums  of  ^30,000  and  i^7,000  due  to  the  Crown  for  the  first  year.  This 
body  was  entitled  to  any  profit  on  the  farm,  while  the  whole  body  of 
vintners  secured  that  made  on  the  retailing  of  the  wines.  Owing  to  the 
advance  in  prices,  there  was  opportunity  for  very  considerable  gains. 
For  instance,  there  was  a  difference,  as  between  the  wholesale  and  retail 
prices  of  sherry,  of  as  much  as  165  per  cent.  Even  after  the  new  duties 
and  working  expenses  were  deducted,  it  is  obvious  there  should  have 
been  a  substantial  margin,  the  greater  part  of  which  is  to  be  assigned  to 
the  retailing ^ 

The  type  of  incorporation  was  altered  to  some  extent  by  the  revival 
of  the  word  "  society,""  which  had  been  used  in  the  time  of  Elizabeth. 
Thus  both  the  soap  companies,  as  well  as  the  members  of  the  salt 
monopoly  and  the  fishing  undertaking,  were  described  in  their  official 
titles  as  "  societies.'"'  In  the  two  cases,  namely  those  of  the  Westminster 
Soapers  and  the  Fishery  society,  a  new  element  was  introduced  into  the 
constitution  by  the  inclusion  of  "  fellows,""  as  well  as  the  usual  governors, 
assistants  and  commonalty.  \ 

Amongst  the  true  joint-stock  companies,  new  legal  incorporations) 
were  comparatively  few.  When  an  organization  had  been  constituted; 
by  charter,  no  special  legal  status  was  sought  for  subsidiary  companies' 
formed  under  it.  It  has  already  been  shown  that  the  society  of  Mines' 
Royal  had  created  such  partnerships  at  a  very  early  period'*,  and  similar; 
subordinate  ventures  were  constituted  by  the  East  India  company  in  \ 
the  Persian  Voyages  %  by  the  Fishery  society*  and  by  the  Mosquito 
Islands  company^  Some  important  undertakings,  such  as  the  African 
adventurers"  and  Courten"'s  Association ^  did  not  seek  a  formal  charter 
of  incorporation ;  while  it  is  still  more  remarkable  as  showing  how,  at 
the  very  time  of  a  rigorous  interpretation  of  the  prerogative,  the  maxim 
that  only  the  King  can  make  a  corporation  was  not  strictly  observed, 
that  partnerships  began  to  be  recognized  as  possessed  of  a  quasi- 
corporate  character.  This  is  shown  by  the  appearance  of  a  type  of 
description  A.  B.  and  company  as  for  instance  Chevania  and  company 
(1632),  Lopez  and  Thomas  White  ajid  company  (1631). 

With  regard  to  the  shares  in  companies  the  practice  still  varied  as 

^  A  True  Discovery  of  the  Projectors  of  the  Wine  Project  out  of  the  Vintners'  own 
Orders,  1641  [Brit.  Mus.  E.  165  (13)],  pp.  7,  26;  Remonstrance  of  the  Farmers  and 
Adventurers  in  the  Wins  Farm  of  401"  per  tun  to  the  House  of  Commons,  [1641] — Coll. 
Broadsides  Soc.  Antiq.  No.  316  ;  The  History  of  the  Twelve  Great  Livery  Companies  of 
London,  by  William  Herbert,  London,  1834,  i.  pp.  166,  157. 

2  Vide  supra,  pp.  58,  59 ;  infra,  ii.  pp.  395-9. 

3  Vide  infra,  ii.  pp.  109-11,  126. 

*  Ibid.,  II.  363,  369-71.  *  lUd.,  ii.  pp.  329,  333. 

6  lUd.,  II.  p.  14.  r  Ibid.,  II.  p.  114. 

15—2 


228  Limitation  of  Liability  1637-8        [chap.  xi. 

j  between  large  and  small  denominations.  The  Bedford  LeveP  and 
1  Mosquito  Islands  companies^  were  instances  of  the  former  tendency; 
and,  as  in  similar  cases  previously,  such  shares  became  divisible  into 
fractional  parts.  The  peculiar  position  of  the  Bermuda  company 
necessitated  careful  regulations  being  framed  for  the  transfer  of  shares  to 
prevent  the  voting  of  "  titular  men,"  who  still  attended  meetings  after 
having  sold  their  shares.  It  was,  accordingly,  ordered  at  a  Quarter 
court  in  1629  that  both  parties  to  a  transfer  should  produce  evidence  to 
the  company  of  the  sale  and  purchase,  whereupon  the  new  adventurer 
should  be  registered  as  the  owner  of  the  shares'. 

It  is  remarkable  that  some  progress  towards  a  limitation  of  liability 

I  was  made  at  this  time.     In  the  Fishery  society,  there  had  been  a  loss  in 

1633  and   1634,  and  it  was   resolved  that  further  capital  subscribed 

•  should  be  held  exempt  from  any  liability  for  this  deficit.     It  follows, 

]  therefore,  that  under  these  conditions,  capital,  the  same  in  every  other 

i  respect,  was  rated  differently ;  and,  while  an  original  adventurer,  besides 

\  losing  the  amount  he  subscribed,  was  compelled  to  pay  £6^  per  cent,  as 

I  an  assessment,  the  subscriber  in  1637-8  received  back  £QS  per  cent,  of 

his  investment*.     Again  in  the  Mosquito  Islands  company  it  was  agreed 

that  any  member  who  had  paid  calls  up  to  <£^1,000  a  share  might  elect 

'*  not  to  go  farther,*"  in  which  case  he  should  be  free  from  further  calls*. 

This  resolution  would  have  raised  some  interesting  legal  questions,  had 

it  been  necessary  to  assess  the  shareholders  for  the  payment  of  the 

i  company ""s  debts. 

Some  light  is  afforded  on  the  conduct  of  meetings  of  shareholders  at 

this  time.     Since  1629,  votes  in  the  East  India  company  had  been  taken 

I    by  ballot*.     The  consequence  was  that,  on  a  division,  the  voting  right 

~    of  each  holding  must  have  been  equal.     Though  the  vote  by  ballot 

was  not  universal — as  for  instance  in  the  Mines  Royal  and  the  Mineral 

and  Battery  Works^  votes  were  proportionate  to  the  shares  owned — 

this   method  was   in  vogue   amongst   the   Regulated   companies.     An 

interesting  event  in  this  connection  affected  Charles  I.,  Edward  Misselden 

and  the  Merchant  Adventurers  in  1637.    The  King  had  "recommended" 

I  the  company  to  choose  Misselden,  as  its  deputy  at  Rotterdam.     The 

\  members,  on  a  vote  by  ballot,  refused  to  accept  the  nomination  of  the 

I  Crown,  whereupon  the  King  in   Council   ordered   that,  in  future,  no 

company  should  use  a  ballot-box  in  the  conduct  of  its  business^. 

»   Vide  infra,  ii.  pp.  331,  337.  ^  /^^.^  h.  p.  354. 

3  Rawl.  MS.  Bod.  Lib.  D .  764,  f.  23^. 

*  Vide  infra,  11.  p.  367.  *  Ibid.,  11.  p.  331. 

8  Court  Books,  xii.,  July  2,  1630,  xv.,  Feb.  6,  1635,  xvi.,  July  3,  1635. 
^   Vide  supra,  p.  58. 

*  State  Papers,  Domestic,  Charles  I.,  ccclxvii.  84;  Calendar,  1637,  p.  420. 


CHAP.  XI.]     Votes  at  General  Meetinga  1630-40  229 

The  change  in  the  fortunes  of  the  East  India  company  had  tended 
to  introduce  acrimony  at  its  meetings.  Since,  however,  the  opposition 
to  the  governor  and  committees  was  largely  personal,  few  questions  of 
constitutional  importance  emerge.  Many  of  the  charges  made  were 
unsupported  by  proof.  It  was  said  that  Sir  Morris  Abbott,  the  governor, 
had  endeavoured  to  make  himself  "a  perpetual  dictator,""  a  statement 
which  is  contradicted  by  his  refusal  to  allow  himself  to  be  nominated, 
and  his  deciding  all  questions,  where  there  was  a  difference  of  opinion, 
by  the  vote  of  the  majority ^  After  the  amalgamation  of  the  Persian 
Voyages  with  the  Third  Joint-Stock  had  been  fully  discussed  and  settled 
by  a  general  court,  a  motion  was  made  for  the  appointment  of  a 
committee  of  inspection.  The  governor  refused  to  put  this  motion  to 
the  meeting  and  directed  the  secretary  not  to  take  any  notes  of  it*. 
Owing  to  the  factious  nature  of  the  opposition,  it  was  found  that 
stockholders,  who  had  copied  accounts  and  documents,  were  making  an 
"  ill-use ""  of  the  transcripts  by  divulging  secrets  of  the  company.  It 
was,  therefore,  resolved  that  no  one  should  be  permitted  to  read  or  copy 
documents,  or  to  "  ravel  and  dive "  into  the  accounts,  without  the 
consent  of  the  committees^.  This  order  was  confirmed  in  1634;  and, 
when  the  danger  of  a  rival  company  became  a  reality  a  year  later,  still 
more  stringent  measures  were  taken  to  preserve  secrecy*. 

^  State  Papers,  East  Indies,  iv.  99. 

'^  Court  Book,  xv.,  Nov.  21,  1634. 

3  lUd.y  XIII.,  April  17,  1633,  xvii.,  March  10,  1640. 

*  Ibid.,  XV.,  Feb.  6,  1635,  April  24,  1635,  xvi.,  Sept.  9,  1635,  March  8,  1637. 


CHAPTER  XII. 
The  Depression  from  1640  to  1650. 

The  crisis  of  1640  was  followed  by  ten  years  of  great  depression. 
For  a  long  period  English  commerce  had  gained  through  the  disturbed 
condition  of  the  chief  producing  countries  on  the  Continent.  From  the 
end  of  1640,  this  process  was  reversed,  and  the  beginning  of  the  decline 
is  clearly  shown  by  the  shock  to  credit  through  the  seizure  of  bullion  at 
the  mint.  Foreign  merchants,  who  had  debts  due  to  them  at  London, 
endeavoured  to  secure  payment  as  soon  as  possible ;  while  the  resources 
of  English  traders  were  restricted,  not  only  by  the  seizm*e,  but  also 
through  their  inability  to  collect  outstanding  accounts.  For  this  reason 
even  those  "  of  good  estates  and  credit  were  hardly  able  to  go  on  with 
trade  or  to  pay  their  debts  and  maintain  their  charged"  The  political 
unrest  prevented  the  natural  process  of  recuperation ;  and,  as  goods 
were  sold,  the  vendors  preferred  to  hold  the  proceeds,  or  even  to  deposit 
them  with  foreign  bankers,  rather  than  to  run  new  and  unknown  risks  in 
trade  at  home*^.  It  follows  that,  on  the  one  side,  foreign  capitalists 
were  anxious  to  reduce  their  engagements  in  England ;  while,  on  the 
other  hand,  London  merchants  desired  to  keep  their  resources  in  a 
form  which  should  be  realizable  on  short  notice.  Some  of  those,  who 
had  been  engaged  in  the  working  of  the  monopolies  of  Charles  I., 
suffered  from  the  abrogation  of  these,  as  well  as  from  the  efforts  of 
Parliament  to  exact  restitution  where  their  proceedings  were  held  to 
have  been  oppressive.  Other  capitalists,  whose  assets  were  in  a  liquid 
form,  foreseeing  serious  trouble,  emigrated  with  their  effects^;  and,  in 
view  of  these  circumstances,  it  was  reported  that  the  trade  of  the  City 
was  "  much  decayed."  The  effect  of  the  crisis  was  shown  by  the  failure 
of  the  East  India  company  to  secure  a  reasonable  amount  of  subscriptions 

1  Rushworth,  CollectionSj  v.  p.  606. 

2  Ibid.,  V.  p.  609;  Anarchia  Anglicana:  or  the  History  of  Independency,  by 
Theodoras  Verax  [Clement  Walker],  1649,  Part  ii.  p.  197;  Court  Book  of  the  East 
India  Company,  xviii.,  Aug.  26,  1642. 

3  State  Papers,  Domestic,  Inter.,  ix.  61;  Calendar,  1650,  pp.  178-80. 


CHAP,  xu.]   ''An  Equality  of  Misery  and  Distress'*  1643    231 

for  its  Fourth  Joint-Stock  in  1640;  and  it  became  necessary  to  revert  to 
the  system  of  independent  undertakings  by  the  formation  of  the  First 
General  Voyage  in  1641,  the  nominal  capital  of  which  was  fixed  at 
£80,4^50\ 

An  outbreak  of  the  plague  in  1640-1  **,  together  with  the  menacing 
nature  of  the  political  situation,  the  frequent  riots  in  London  and  the 
rebellion  in  Ireland  in  1641,  tended  to  add  to  the  existing  difficulties. 
"  No  man,"  it  was  stated,  "  could  follow  his  trade  cheerfully,  whilest  the 
lives  of  himselfe  and  family  and  the  publique  safety  of  the  Kingdome 
were  in  jeopardy,""  whence  the  trade  of  the  City  was  "  much  more  of  late 
decayed  than  it  hath  beene  for  many  yeares  past'/'*  Merchants,  who 
remained  in  London,  attended  the  Exchange  rather  to  leani  the  latest 
news  than  to  do  business*.  The  great  staple  trade  in  wool  had 
suffered  seriously.  In  January  1642  Pym  had  pointed  out  that  "by 
reason  of  the  ill  vent  of  cloth  and  other  manufactures,  great  multitudes 
...who  live  for  the  most  part  by  their  daily  gettings,  will  in  a  short  time 
be  brought  to  great  extremity,  if  not  employed.  Nothing  is  more  sharp 
and  pressing  than  necessity  and  want,  what  they  cannot  buy  they  will 
take,  and  from  them  the  like  necessity  will  be  derived  to  the  farmers  and 
husbandmen  and  so  grow  higher  and  involve  all  in  an  equality  of  misery 
and  distress,  if  it  be  not  prevented'.""  That  this  was  no  highly  coloured 
picture,  meant  as  an  object  lesson  in  the  constitutional  struggle,  is 
shown  by  the  similar  language  used  by  Charles  I.  in  a  message  to  the 
House  of  Lords  in  the  following  month,  where  reference  is  made  to  the 
great  decay  of  trade,  more  especially  of  the  cloth-trade,  which  had 
brought  extreme  want  and  poverty  to  many  thousands,  and  which,  in 
a  very  short  time,  would  exert  a  marked  influence  on  the  very  substance 
of  the  nation^.  The  outbreak  of  the  Civil  War  in  the  following  August 
made  these  gloomy  prognostications  but  weak  anticipations  of  the  actual 
effects  on  the  cloth-trade.  In  the  midst  of  a  great  struggle,  involving 
such  vital  issues,  the  distress  of  the  weavers  and  other  artificers  finds 
little  mention.  Not  only  was  there  the  diversion  of  a  considerable  part 
of  the  population  from  productive  occupations  together  with  the  usual 
destruction  of  property  involved  in  the  operations  of  warfare,  but 
localities,  outside  the  actual  spheres  of  hostilities,  suffered  in  their  trade 

1  Vide  infra,  ii.  pp.  117,  127. 

2  The  deaths  from  plague  were  1450(1640),  1375(1641),  1274(1642),  996(1643), 
1492  (1644),  1871  (1645),  2365  (1646),  3597  (164:7)— Natural  and  PolUical  observations 
...upon  the  Bills  of  Mortality,  by  Capt.  John  Graunt,  1665,  p.  175. 

3  Petition  of  the  Mariners  and  Sea-men,  Inhabitants  in  &hd  about  the  Ports  of 
London  and  the  Thames  [1642]  in  Somers'  Tracts,  vi.  p.  39. 

*  England's  Tears  for  the  Present  Wars,  1644,  in  Somers'  Tracts,  xiii.  p.  172. 

^  Rushworth,  Collections,  v.  p.  509. 

®  Journals  of  the  House  of  Uyrds,  iv.  p.  681. 


232  Liabilities  of  Parliament  1641-2     [chap.  xil. 

by  the  proclamations  of  both  sides,  which  aimed  at  controlling  trade 
with  London.  More  especially  the  orders  of  Charles  I.,  prohibiting  the 
free  passage  of  cloth,  was  a  staggering  blow  to  the  wool  trade.  The 
whole  national  system  of  distribution  of  commodities  was  based  on  the 
principle  that  London  should  be  the  chief  port  for  export,  and  any 
interruption  of  the  supplies  to  the  capital  meant  a  very  serious  restriction 
of  trade.  In  several  districts  the  weavers  were  unable  to  obtain  work ; 
and,  being  left  without  resources,  they  emigrated  in  large  numbers  to  the 
Netherlands \  The  resultant  loss  to  the  English  cloth  trade  is  only 
comparable  to  that  sustained  through  the  interference  of  James  I.  from 
1613  to  1617. 

In  addition  to  these  elements,  arising  out  of  the  political  situation, 
there  was  the  financial  strain  involved  in  the  preparation  for,  and  the 
carrying  on  of  the  Civil  War.  It  is  true  that,  from  1640,  the  country 
was  freed  from  the  burden  of  the  great  monopolies,  and  therefore 
Parliament  had  done  all  in  its  power  towards  lessening  the  weight  of 
what  had  been  virtually  indirect  taxation.  But,  while  the  mercantile 
classes  as  a  whole  gained  from  this  source,  they  suffered  through  the 
considerable  borrowings  that  were  necessary  as  early  as  1640  and  which 
added  to  the  stringency  of  the  money-market.  From  the  time  that 
Parliament  took  control  of  the  finances,  it  found  itself  in  arrear.  The 
six  subsidies,  it  had  voted,  did  not  suffice  for  the  purposes  to  which 
they  were  to  be  assigned;  and,  in  June  1641,  there  was  owing  .5^427,800'' 
and  at  the  end  of  the  year  the  deficit  was  over  £500fi00\  In  June 
1642  the  liabilities  outstanding  had  increased  to  .£583,945.  9*.  dd. 
These  were  in  addition  to  disbursements  of  =£^1,262,185.  9*.  Id.  since 
November  3rd,  1640*.  It  might  be  expected  that  a  better  showing 
would  be  made  when  the  rest  of  the  Crown  Revenue,  besides  the 
Customs,  had  been  made  available ;  but  the  political  disturbance,  which 

1  State  Papers,  Domestic,  Inter.,  ix.  p.  61 ;  Calendar ^  1650,  p.  178. 

2  Journals  of  the  House  of  Commons ^  ii.  p.  177. 

3  im.,  II.  p.  336— 

Subsidies       

Poll-Money 

Customs        


Payments      

Deficit  

Outstanding  liabilities        

604,044     4     5 

*  A  Declaration  concerning  the  generall  Accompts  of  the  Kingdome.     With  the  true 
State  of  all  Receipts  and  Disbursements  of  Moneys  [1642]  in  Somers'  Tracts,  vi.  p.  146. 


£   s. 
205,134  5 
256,720  18 
165,000  0 

d. 
9 
2 
0 

626,855  3 
682,899  8 

11 
4 

66,044  4 
448,000  0 

6 
0 

CHAP,  xil]      Liabilities  of  Parliament  1642-3  233 

disorganized  trade,  would  diminish  the  receipts  from  this  source.  ITie 
average  Crown  Revenue,  both  ordinary  and  extraordinary,  from  1637  to 
1641  was  ^895,819.  5*.  Od}  Of  this  .£^210,493.  17*.  4J.  consisted  of 
payments,  such  as  ship-money,  receipts  from  monopoHes  &c.,  which 
Parliament  had  declared  illegal.  The  remainder,  amounting  to 
X^685,325.  7*.  Sd.,  included  between  .^^300,000  and  ^400,000  from 
Customs,  in  addition  to  which  there  were  the  rents  of  Crown  property 
with  miscellaneous  sources  of  income*.  Since  the  rent  of  the  Customs 
was  reduced  to  X^l 65,000  and  it  would  be  difficult  to  collect  many  of  the 
other  payments,  it  may  be  doubted  if  in  the  year  1642  more  than  half 
the  i^685,325.  7*.  8c?.,  apparently  available,  could  be  actually  collected. 
Now  a  revenue  of  ^£^340,000,  eked  out  by  voluntary  contributions  and 
the  poll  tax,  would  have  been  totally  insufficient  to  carry  on  the 
government,  if  there  had  been  unbroken  peace.  The  need  for  money,  to 
keep  armies  in  the  field  after  the  outbreak  of  the  war,  involved  a  huge 
burden  on  the  country.  The  expenditure  on  the  Royalist  forces  was 
defrayed  partly  from  loans  made  abroad,  partly  from  contributions  of 
supporters  and  lastly  from  assessments  made  on  the  districts  which 
supported  the  Crown.  While  such  outlay  was  an  important  item  in  the 
national  account,  the  financing  of  the  forces  of  the  Parliament  was 
more  immediately  important  £is  affecting  trade,  owing  to  the  facts  that 
London  was  the  stronghold  of  this  party  and,  at  the  same  time,  the  . 
City  occupied  a  position  of  outstanding  importance  in  the  foreign  / 
commerce  of  England.  The  cost  of  the  war  to  be  defrayed  by  Parlia- 
ment was  enormous  for  the  times.  It  was  estimated,  in  December  1642, 
that  the  annual  expenditure  on  the  army  would  be  over  a  million  and 
that  on  the  navy  more  than  ,^300,000'.  Allowing  for  the  cost  of 
government.  Parliament  was  faced  by  a  demand  for  close  on  a  million 
and  a  half  in  the  first  year  of  the  struggle.  It  became  necessary  to 
provide  funds,  through  the  authority  of  Parliament,  without  the  assent 
of  the  Crown.  In  November  1642  an  assessment  on  London  and 
Westminster  had  been  proposed  at  the  rate  of  5  per  cent,  on  the 
estimated  value  of  real  and  personal  property,  and  in  February  1643 
Commissioners  were  appointed  with  powers  to  make  requisitions,  at  their 
discretion,  over  the  whole  country.     It  was  calculated  that,  if  the  tax 

*  State  Papers,  Domestic,  Charles  I.,  mii.  112;  Calendar ,  1644-6,  p.  214. 

2  Journals  of  the  House  of  Commons^  viii.  p.  158.  Mr  Gardiner,  starting  from 
an  estimate  of  the  Revenue  of  Charles  I.,  before  the  Civil  War,  of  £819,000,  given 
in  Pari.  Hist.  iv.  p.  118,  calculates  the  amount  receivable  by  the  Parliament  in 
1047  at  £450,000  a  year.  Considering  that  the  yield  of  the  Customs  had  increased 
by  £97,000  between  the  two  dates,  probably  the  estimate  in  the  text  is  relatively 
higher  for  1642  than  that  of  Mr  Gardiner  for  1647— History,  1642-9  (1893),  m. 
p.  193. 

3  Gardiner,  History  1642-9  (1893),  i.  p.  72. 


234     ^  Eocpenses  of  the  Army  1645-6       [chap.  xii. 

could  have  been  collected  in  all  the  counties,  it  would  have  exceeded 
ri^l  ,600,000  ^  Since,  however,  the  authority  of  Parliament  was  not 
recognized  in  a  large  area,  it  is  plain  that,  even  on  the  basis  of  the 
estimates,  there  would  be  a  deficit,  apart  from  borrowing.  Moreover, 
it  was  almost  inevitable  that  the  estimates  should  be  exceeded.  Larger 
forces  than  had  been  expected  were  required,  and  an  improvised  army  is 
a  costly  army.  Not  only  so,  but  there  were  grave  suspicions  as  to  the 
purity  of  the  administration  of  the  Parliament.  The  system  of  super- 
vision of  expenditure,  by  means  of  independent  committees,  was  faulty 
in  principle  and  was  subject  to  abuses  in  practice.  For  these  reasons  a 
contemporary  critic  wrote  that  "  Parliaments  were  bona  peritura,  they 
cannot  keep  long  without  corruption,"  and  that  one  "might  as  easily 
find  mercy  in  hell  as  justice  in  a  committee'^.'*'*  Specific  instances  of 
bribery  are  on  record^,  and  complaints  were  made  of  the  sums  voted  to 
members  of  the  House*.  Information  as  to  the  state  of  the  finances  was 
withheld  from  the  people,  who  could  only  judge  of  the  situation  by  their 
knowledge  of  the  vastly  increased  taxation,  partly  in  the  form  of 
assessments  and  of  the  excise'  on  commodities,  partly  in  an  addition  to 
the  Customs,  by  the  revision  of  the  book  of  rates. 

How  far  the  estimated  expenditure  was  exceeded  may  be  gathered 
from  the  account  of  the  outlay  on  the  army  of  Fairfax  from 
March  28th,  1645,  to  March  1st,  1646.  There  had  actually  been  paid 
ri^l,110,115.  ISs.  Sd.  and  the  dragoons  were  in  arrears  for  no  less  than 

1  Journals  of  the  House  of  Lords j  v.  pp.  601,  602,  619. 

2  Relations  and  Observations  Historical  and  Politick  upon  the  Parliament  begun 
in  1640,  by  Clement  Walker,  London,  1648,  in  Maseres,  Civil  War  Tracts,  i. 
pp.  339-50. 

3  Gardiner,  History,  1642-9  (1893),  iv.  p.  76. 

*  The  Royal  Treasury  of  England,  London,  1725,  pp.  298-301.  Controversial 
writers  formed  very  large  estimates  of  the  total  expenses  of  the  Parliament  at  this 
period.  In  London's  Account:  or  a  calculation  of  the  Arbitrary  taxations  within  the 
lines  of  Communication  (1647)  the  expenditure  for  the  five  years  1041-6  is  stated 
to  have  been  £17,512,400.  Clement  Walker  asserts  that  in  the  same  period 
£40,000,000  had  been  '^  milked"  from  the  people — History  of  Independency,  Pt.  i., 
p.  8.  In  An  ai)stract  of  money  raised  in  England  by  the  Long  Parliament  from  Nov.  3, 
1640  to  November  1659  the  outlay  for  that  period  is  variously  stated  as  from  between 
83  millions  to  95  millions — Harleian  Miscellany,  vi.  p.  293,  Royal  Treasury  of 
England,  pp.  295,  296 ;  Historical  Sketches  of  Charles  /.,  Cromwell,  Charles  IL,  to 
which  is  annexed  an  account  of  the  sums  exacted  by  the  Commonwealth  from  the 
Royalists,  by  W.  D.  Fellowes,  1828,  p.  lxxiv.  (in  Appendix);  History  of  the  Public 
Revenue,  by  Sir  John  Sinclair  (1803),  i.  p.  284. 

^  It  has  been  shown  in  the  previous  chapter  {supra,  p.  216)  that,  from  the  fiscal 
point  of  view,  the  monopolies  of  Charles  I.  represented  a  disguised  system  of  excise- 
duties.  Howell  mentions  {Epistolce  Ho-Eliance,  1737,  p.  389)  that,  when  Sir  Dudley 
Carleton  suggested  this  impost  in  Parliament,  he  was  in  danger  of  being  sent  to  the 
Tower. 


CHAP.  XII.]     The  Burden  of  Taxation  1645-6  236 

43  weeks.  The  whole  arrears  on  this  army  alone  were  estimated  to 
amount  to  .£'331,000,  making  a  total  charge,  on  this  part  of  the  forces, 
for  337  days  of  06^1,441,115^  The  City  of  London  expressed  the 
prevalent  dissatisfaction  with  the  existing  system  of  peculation  and  waste 
in  the  following  terras — the  Mayor  and  Aldermen  stated  "they  could 
not  be  unsensible  how  much  arbitrary  power  hath  been,  during  these 
distempers,  exercised  by  Committees  and  others,  by  whom  the  good 
subject  hath  been  oftentimes  more  oppressed  than  the  delinquents 
suppressed  and  who  have  arranged  the  receipts  and  revenues,  which 
were  designed  to  maintain  the  publick  charge,  so  disoi*derly  and  in- 
effectually that  the  Kingdom  cannot  but  be  unsatisfied  concerning  the 
due  employment  thereof  and  doubt  that  much  of  the  publick  money 
hath  been  employed  to  private  ends  and  remains  obscured  in  the  hands 
of  such  as  were  intrusted  with  the  collection  of  those  assessments  and 
the  improvement  of  all  sequestration  to  the  publick  and  best  advantage'." 
Members  of  the  administration  were  charged  with  "  artificially  con- 
founding the  accompts  by  laying  on  a  multiplicity  of  taxes ;  so  (for  the 
same  reason)  they  set  the  money  run  in  so  many  muddy,  obscure 
channels,  through  so  many  Committees  and  officers'  fingers,  both  for 
collecting,  receiving,  issuing  and  paying  it  forth,  that  it  is  impossible  to 
make  or  ballance  any  publique  account  thereof;  and  at  least  one-halfe 
thereof  is  knowne  to  be  devoured  by  Committees  and  officers  and  those 
that  for  lucre  protect  them^"  In  similar  terms,  Thomas  Violet  describes 
the  abuses  and  confusion  of  "petty  exchequers,'*''  adding  that  the 
Customs  and  excise  had  been  specially  subject  to  embezzlements,  since 
he  knew  of  as  much  as  ^£^323,500  that  had  been  appropriated  by  forty 
persons  ^ 

It  was  unavoidable  that  the  necessities  and  the  extravagance  of  the 
government  should  tend  towards  increasing  the  serious  depression  of 
trade.  In  November  1643  the  City  was  described  "as  drawn  dry.  Our 
rich  men  are  gone  because  the  city  is  the  place  of  taxes  and  burdens, 
trade  is  decayed  and  our  shops  shut  up  in  a  great  measure,  our  poor  do 
much  increased"  It  was  recognized  that,  as  long  as  the  war  continued, 
whether  the  expenditure  was  necessary  or  not,  little  remission  could  be 
expected ;  but,  once  the  resistance  of  the  followers  of  Charles  I.  began  to 
die  out  in  England,  attention  was  drawn  to  the  burdens  imposed  on 

1  Journals  of  the  House  of  Commons,  v.  p.  126. 

2  The  History  of  London,  by  William  Maitland,  London,  1766,  p.  394. 

3  History  of  Independency,  by  C.  Walker,  Pt.  i.  pp.  6,  7. 

*  Proposals  for  the  calling  to  a  True  and  Just  Accompt  all  Committee-Men,  by 
Thomas  Violet,  1656,  pp.  31-9. 

^  The  Parliamentary  or  Constitutional  History  of  England,  London,  1753,  xii. 
p.  446. 


236        Monopolies  far  foreign  Trade  1643-6     [chap.  xii. 

trade,  which  prevented  business  from  coming  to  London  and  left  the 
merchants  with  insufficient  resources  to  recover  the  ground  that  had 
been  lost.  Thus  the  "  poor  tradesmen ''  asked  in  1647  that  taxes  should 
be  removed  "so  that  trading  may  revive,  and  our  pining,  hungry, 
famishing  families  be  saved^"  These  accounts  of  the  miseries  of  the 
great  trade  depression  obtain  definiteness  from  the  decline  in  the  revenue 
derived  from  the  Customs — a  decline  which  is  larger  than  it  appears, 
owing  to  revision  of  the  book  of  rates  in  1642^.  The  income  from  this 
source  was  only  ^£^225,000  in  1644  (or  three-fifths  of  what  it  had  been 
before  the  war),  rising  to  ^6^276,000  in  1646.  So  far  from  the  cessation 
of  serious  hostilities  in  England  producing  an  improvement,  the  return 
for  1647  shows  a  slight  decrease,  being  .^262,000 ^ 

Besides  the  direct  consequences  of  the  situation,  there  were  certain 
remote  effects,  more  or  less  closely  connected  with  it.  As  a  special  branch 
of  the  general  condition  of  trade,  there  is  the  position  of  the  great 
incorporated  companies  under  the  Long  Parliament.  In  view  of  the 
exceedingly  strong  language,  used  in  the  condemnation  of  monopolies  in 
the  years  1640  and  1641,  it  might  have  been  expected  that  these  bodies 
would  be  fortunate  if  they  escaped  condemnation.  It  seems  paradoxical 
that  the  same  Parliament,  which  endeavoured  to  penalize  the  Soapers  of 
Westminster,  confirmed  by  legislation  the  Merchant  Adventurers  and 
the  Levant  company  in  all  their  former  privileges  and  immunities* 
(1643);  and,  in  1646,  an  ordinance,  in  favour  of  the  East  India 
company,  was  passed  by  the  Commons,  but  rejected  by  the  House  of 
Lords'.  These  declarations  in  favour  of  bodies,  vested  with  extensive 
immunities  for  foreign  trade,  apparently  point  towards  the  conclusion 
that  there  was  a  consensus  of  opinion,  as  between  the  advisers  of  the 
Crown  and  the  members  of  Parliament,  that  trade  abroad  was  necessarily 
subject  to  different  conditions  from  that  at  home.  The  need  for  ships 
of  large  size  and  armaments  might  be  adduced  as  a  strong  argument  in 
favour  of  the  State  giving  special  concessions  to  such  companies,  which, 
either  expressly  or  tacitly,  became  responsible  for  the  safety  of  their 
respective  properties.  Arguments  such  as  these  may  have  had  weight 
with  some  of  the  members,  but  in  a  time  of  acute  political  feeling  it 
would  be  idle  to  neglect  the  influence  of  party  motives.     The   East 

/      *  The  Mournfull  Cryes  of  many  Thottsand  Poore  Tradesmen  who  are  ready  to 

y*  famish  through  decay  of  Trade,  1647,  quoted  by  Cunningham,  Growth  of  English 
Industry  in  Modern  Times,  pp.  182,  183. 
2   Vide  supra,  p.  234. 

3  Gardiner,  History,  1642-9  (1893),  m.  p.  193.    Mr  Gardiner  gives  the  Customs- 
revenue  for  1646  as  £192,000,  whereas  Mr  Hall  in  History  of  the  Customr-Revenue  in 
England,  i.  p.  184,  returns  it  for  that  year  at  £277,000. 
*  Anderson,  Annals  of  Commerce,  ii.  pp.  528,  529. 
6  A  History  of  British  India,  by  Sir  W.  W.  Hunter,  London,  1900,  ii.  p.  42, 


CHAP.  XII.]     The  Confirmation  of  Monopolies  1643^6       237 

India  company  had  suffered  grave  damage  at  the  hands  of  Charles  I.,  and 
the  members  of  Courten's  Association  belonged  to  the  Court  party,  while 
it  may  have  been  suspected  that  the   King   himself  had   a   pecuniary 
interest  in  the   latter \     Therefore,    the   proposed   recognition    of  the 
company  would  be  designed  chiefly  as  a  blow  to  its  rival.     The  Merchant 
Adventurers  were  in  a  somewhat  similar  position.     The  older  members 
would  remember  the  seizure  of  its  charter  by  James  I. ;  and,  within  its 
recent  history,  there  had  been  vexatious  interferences  with  the  meetings 
of  the  members  by  Charles  I.'^     Such  "grievances,""  though  less  loudly 
voiced  than  others,  were   sufficiently  real   and    were   likely  to   receive 
sympathetic   consideration   at  Westminster.     Moreover,  the  Merchant 
Adventurers  were  able  to  claim  the  indulgence  of  the  Commons.     In 
February  1643  the  King  had  written  to  the  governor  of  the  company 
asking  for  a  loan  of  .£^20,000.     This  letter  was  communicated  by  the 
company  to  Parliament,  with  the  result  that  it  received  the  thanks  of 
the  House  and  was  offered  a  convoy  to  the  Elbe^     At  the  same  time, 
the  wording  of  the   ordinances   shows   a   tendency  to  strengthen   the 
position    of    the   companies,   far   beyond   what   can   be   accounted    for 
exclusively  by  political  motives.     While,  in  the  case  of  the  Merchant 
Adventurers,  the  ordinance  apparently  opens  the  company  to  all,  there 
were  various  restrictions  introduced,   which  made   entrance   in    reality 
more  difficult  than  before.     The  fine  for   admission  was  doubled,  all 
previous  privileges  of  the  charters  were  confirmed ;  and,  most  important  ' 
of  all,  in  both  instruments  no  one  was  eligible,  as  a  free-man,  who  was 
not  "a  mere  merchant"  or  as  it  was  elsewhere  defined  "had  not  been 
bred  a  merchant."     Thus  legislative  sanction  was  given  to  the  idea  of 
limiting  membership  of  the  regulated  companies  to  persons  who  were  later 
described  as  "  legitimate  merchants,"  which  device  enabled  these  organi-  i 
zations  to  maintain  themselves  as  close  corporations*.     In  view  of  these  I 
facts,  it  is  highly  probable  that  the  ordinances  are  not  the  result  of  any  *^'- 
principle,  but  constitute  an  instance  of  the  recognition  that  the  companies 
"  had  shown  themselves  serviceable  to  the  State,"  by  ministering  to  its 
financial  necessities.     How  great  these  were  can  be  understood  from  the 
pressure  on  the  resources  of  the   Parliament.     As  already  shown",  it 
started  with  a  deficit ;  and,  in  spite  of  the  vast  sums  levied  by  taxation, 
the  army  was  often  brought  to  a  standstill  through  want  of  funds.     The 
borrowings  described  as  "  the  London  loans"  were  of  relatively  moderate 
amounts  and  were  far  from  tiding  over  the  difficulty.     Various  expedients 
were  devised  to  bring  in  money.     In  1642  a  discount  of  no  less  than 
15  per  cent,   was  offered  to  merchants,  who  advanced  money  on  the 

1  Vide  infra,  ii.  pp.  113-18.  2   vide  supra,  p.  228. 

^  Journals  of  the  House  of  Commons,  11.  p.  982. 

*  Vide  infra,  chapter  xv.  ;  also  11.  p.  142.  *»   Vide  supra,  p.  232. 


238      Ordinances  in  Return  for  Loans  1643-6    [chap.  xn. 

Customs  dues,  for  which  they  would  become  liable  in  the  future ^  Ten 
per  cent,  was  offered  for  loans  in  1641  ^  but  in  a  short  time  the  real  rate 
became  much  higher.  For  instance  when  £9^00^)00  was  borrowed  in 
London,  it  was  alleged  that  Parliament  was  forced  to  pay  interest,  not 
upon  this  sum  but  upon  ^6*230,000^  When  the  financial  pressure  was 
so  great,  it  is  not  surprising  that  application  was  made  to  the  great 
trading  companies.  The  Merchant  Adventurers  provided  ^^30,000*,  the 
Levant  company  at  least  ^^8,000'*  and  the  East  India  undertaking 
promised  to  find  c£*6,000'.  Therefore,  in  these  instances,  there  were  the 
double  facts  of  loans,  made  by  the  companies  to  the  Parliament,  and  of 
a  disposition  shown  by  the  House  of  Commons  to  encourage  the 
companies.  The  natural  inference  is  strengthened  when  it  is  noticed 
that  other  companies,  which  failed  to  provide  money,  received  no 
recognition  of  the  privileges  they  had  previously  acquired,  and  that,  in 
the  special  case  of  the  Russia  company,  the  House  of  Commons  ordered 
the  imprisonment  of  the  governor  in  1644^. 

Another  indirect  effect  of  the  monetary  stringency  was  the  great 
development  of  banking.  Very  soon  after  the  closing  of  the  Mint  by 
Charles  I.  the  goldsmiths  began  to  receive  deposits^;  and,  by  1643  the 
financial  necessities  of  the  Long  Parliament  had  caused  an  influx  of 
Jewish  capitalists*.  The  continued  insecurity  of  property  had  brought 
about  a  considerable  extension  of  deposit-banking  by  the  goldsmiths 
about  1645^®.  Several  causes  co-operated  towards  producing  this  effect. 
The  seizure  of  the  bullion  at  the  Mint  had  given  a  great  shock  to  credit 
which  was  increased  by  the  number  of  failures.  It  was  estimated  that 
at  this  date  there  were  8000  debtors  in  confinement  throughout  England 
and  Wales".     At  first  the  want  of  confidence  led  to  hoarding,  which  still 

^  Parliamentary  History  of  England,  ut  supra,  xi.  p.  344. 

2  Journals  of  the  Hotise  of  Commons,  ii.  p.  178. 

3  Clement  Walker,  Relations  and  Observations  in  Civil  War  Tracts,  ut  supra, 
I.  p.  343. 

*  Journals  of  the  House  of  Commons,  ii.  p.  605. 

^  State  Papers,  Domestic,  Charles  I.,  iii.  16;  Calendar,  1644,  p.  45. 

«  VUe  infra,  ii.  p.  119. 

^  Ibid.,  II.  p.  66. 

8  The  Rise  of  the  London  Money  Market,  by  W.  R.  Bisschop,  London,  1910, 
p.  43. 

®  Die  Juden  und  das  Wirtschaftsleben,  by  Wei*ner  Sombart,  Leipzig,  1911, 
p.  65. 

^^  Sir  Thomas  Roe,  speaking  in  1641,  described  banking  as  an  important  trade 
in  relation  to  the  foreign  exchanges — Sir  Thomas  Roe's  Speech  in  Parliament.  Wherein 
he  sheweth  the  Cause  of  the  Decay  of  Coin  and  Trade  in  this  Land  in  Harleian  Miscellany 
(1746),  IV.  p.  412. 

"  Cunningham,  Growth  of  English  Industry  and  Commerce  in  Modem  Times, 
p.  191. 


CHAP.  XII.]        The  Rise  of  Banking  1643-5  239 

further  diminished  the  available  supply  of  money.  When  Parliament 
was  a  frequent  borrower  at  high  rates,  the  tendency  would  be  for  mer- 
cantile loans  to  be  still  dearer ;  so  that  persons,  seeking  capital,  had  to 
offer  terms  that  would  be  tempting  to  lenders.  Moreover,  owing  again 
to  the  stringency,  some  method  of  organization  was  required,  which 
would  economize  the  scanty  supply  of  metallic  money  available.  Several 
circumstances  made  the  goldsmiths  the  class  fitted  for,  and  desirous  to 
establish  banking  businesses.  Owing  to  the  war,  much  of  their  trade  in 
plate  had  been  lost  to  them,  and  they  naturally  sought  some  new  branch 
which  would  partly  repair  this  loss.  On  the  other  side,  in  a  time  of 
frequent  scares,  hoarding  was  dangerous ;  and,  besides,  retail  tradesmen, 
who  had  been  in  the  habit  of  trusting  their  till-money  to  their  apprentices, 
were  forced  to  make  new  arrangements,  owing  to  many  of  the  latter 
departing  to  serve  in  the  army.  In  these  circumstances,  the  goldsmiths 
offered  to  keep  deposits  at  call,  allowing  a  small  rate  of  interest ;  and 
they  lent  out  a  part  of  such  resources  in  discounting  mercantile  bills,  and 
in  making  other  advances  ^  Later,  these  embryo  bankers  endeavoured 
to  attract  additional  deposits  by  dealing  with  the  apprentices,  who 
remained  in  the  city,  and  to  whom  they  offered  4d.  per  cent,  per  day  (or 
about  6  per  cent,  per  annum)  for  the  use  of  their  "running  cash.''  Then 
their  resources  were  increased  by  deposits  of  rents,  derived  from  country 
estates ;  so  that,  as  time  went  on,  the  funds,  rendered  available  by  the 
great  increase  of  banking  facilities,  exercised  an  important  influence  on 
the  monetary  situation. 

The  progress  of  banking  shows  that  about  1645-6  there  was  a  revival 
of  confidence,  and  further  evidence  in  the  same  direction  is  to  be  found 
in  the  formation  of  a  Second  General  Voyage  by  the  East  India  company 
in  1647-8^  Unfortunately,  the  adverse  influences  had  not  yet  been 
exhausted.  After  a  series  of  five  years,  ending  in  1645,  when  the  price 
of  wheat  had  been  below  the  average,  the  harvest  of  1646  was  bad. 
Com  rose  by  close  on  50  per  cent.  The  increased  cost  of  living  entailed 
great  distress,  and  in  April  1647  the  dearth  was  characterized  "as 
sharper  than  the  late  devouring  sword'."  The  south-eastern  counties 
suffered   about  the  same  time  from  the   march   of  the   army  towards 

1  The  Mystery  of  the  New  fashioned  Goldsmiths  or  Bankers,  1676,  pp.  1,2  (repro- 
duced in  The  Grasshopper  in  Lombard  Street,  by  John  Biddulph  Martin,  London, 
1892,  pp.  285-92) ;  The  Rise  of  the  London  Money  Market,  1640-1826,  by  W.  R. 
Bisscbop,  London,  1910,  pp.  43,  44. 

2  Vide  infra,  ii.  pp.  120,  128. 

3  Rushworth,  Collections,  vi.  p.  451.  It  is  noteworthy  that  in  1643,  owing  to  the 
departure  of  yeomen  and  farm-labourers  to  the  wars,  the  destruction  of  crops  and 
seizures  of  horses  for  the  army,  a  famine  was  predicted — England's  Petition  to  their 
King,  1643 ;  England's  Tears  for  the  present  Wars,  1644,  in  Somers'  Tracts,  xiii. 
pp.  159,  163. 


240     The  great  Dearth  and  Depression  1647-8    [chap.  xii. 

London.  These  causes  together  completely  arrested  the  returning 
confidence.  The  City  was  subject  to  riots,  and  for  several  days  at  a 
time  all  shops  were  closed  and  business  suspended ^  It  was  estimated 
that  the  loss  of  trade  at  this  period  was  as  much  as  ^^200,000  a  week, 
and  the  distress  was  increased  by  a  great  rise  in  the  price  of  coal  in  the 
winter  of  1648-9,  so  that  it  was  said  that  many  of  "  the  poor  perished 
with  cold  and  hunger,"  while  amongst  shopkeepers  there  were  "thousands, 
who  formerly  had  trading  and  work  for  subsistence,  now  sitting  hunger- 
starved  in  chimney-comers  without  employment  to  get  them  breads" 
The  feeling  of  insecurity  was  greatly  increased  by  the  losses  of  ships, 
sustained  by  merchants  engaged  in  foreign  trade,  since,  not  only  were 
merchantmen  liable  to  seizure  by  the  fleet  of  Prince  Rupert,  but  privateers 
of  all  nations  took  advantage  of  the  want  of  convoys,  and  "  most  of 
these  traders  were  discouraged  and  many  undone^."  The  premium  for 
marine  insurance  had  advanced  by  400  per  cent.,  being  increased  from 
2  per  cent,  to  10  per  cent.^  The  Levant  company  had  suffered  very 
severely,  and  early  in  February  1649  the  damage  it  had  sustained  was 
estimated  at  .j^300,000^  During  the  greater  part  of  the  year  1648,  this 
subject  was  considered  by  the  House  of  Commons  and  the  Admiralty 
was  directed  to  supply  convoys  when  it  was  possible*. 

Meanwhile,  the  effects  of  the  great  dearth  in  the  rural  districts  in  the 
vicinity  of  London  were  intensified  by  the  exaction  of  free-quarters  by 
the  army.  In  Essex  it  was  stated  that  the  burden  was  as  great  as  that 
of  all  previous  charges  put  together ^  Besides,  the  drought  continued, 
and  wheat  became  dearer.  In  1648  the  average  price  was  nearly  double 
that  of  the  five  years  from  1641  to  1645.  Comparing  this  period  with 
that  from  1646  to  1650,  in  the  former  the  average  was  34^.  \\d.  per 
quarter  as  against  60*.  Id.  in  the  latter^. 

These  causes  all  tended  towards  intensifying  the  depression ;  and,  in 
Edition,  there  was  the  continuation  of  the  war  in  Ireland  and  in 
Scotland,  involving  the  raising  of  additional  resources  by  the  government 

1  Memorials  of  English  Affairs,  by  B.  Whitelock,  London,  1732,  pp.  252, 
291,  299. 

2  History  of  Independency,  by  C.  Walker,  Part  i.  pp.  38,  129,  Part  ii.  p.  161  ; 
The  British  Bellman,  1648,  in  Harkian  Miscellany  (1746),  vii.  p.  591;  EpistokE 
Ho-Eliance,  by  James  Howell,  London,  1737,  p.  431. 

3  State  Papers,  Domestic,  Inter.,  ix.  61 ;  Calendar,  1650,  p.  178. 
*  Howell,  Epistolce  Ho-Eliance,  p.  431. 

^  State  Papers,  Domestic,  Inter.,  i.  10  (1);  Calendar,  1649-60,  p.  12.  In  April, 
1650,  the  losses  were  returned  at  a  million.     IHd.,  ix.  34. 

^  Whitelock,  Memorials,  ut  supra,  p.  296  ;  Journals  of  the  House  of  Commons,  vi. 
p.  45. 

7  Rushworth,  Collections,  vi.  p.  461. 

«  A  History  of  Agriculture  and  Prices,  by  J.  E.  T.  Rogers,  v.  pp.  270-3; 
Chronicon  Preciosum,  p.  125. 


CHAP,  xn.]     Unemployment  and  Poverty  1647-8  241 

and  producing  a  feeling  of  insecurity.  Owing  to  the  pre-occupation  of 
the  chief  departments  of  the  State  in  the  serious  exigencies  of  the  time, 
there  is  comparatively  little  mention  of  the  great  decline  in  commerce. 
The  joint-effects  of  the  great  dearth  and  the  reduction  of  exports,  with 
a  further  falling  off  in  the  cloth  trade,  are  shown  in  the  danger  of 
starvation  amongst  the  very  poor.  John  Cooke,  writing  about  1648, 
says  that  "good  magistrates  should  save  the  lives  of  many  thousand 
poore  men  and  women  and  children,  who  are  likely  to  be  famished  and 
perished  to  deathO**  In  1649  orders  were  sent  to  commanding  officers 
not  to  remain  for  more  than  a  week  in  one  place  and  that  they  should 
pay  for  quarters  "  lest  the  poor,  whose  sufferings  were  so  heavy  by  reason 
of  the  great  dearth,  should  be  further  oppressed'"** ;  and,  in  the  following 
year,  it  is  noted  that  the  meaner  sort  of  people  had  become  poor,  and  those, 
who  had  already  been  poor,  were  now  in  danger  of  "  perishing'.''  An 
instance  of  the  general  poverty  is  to  be  found  in  a  report  on  the  condition 
of  Dover  in  1649.  The  revenue  for  the  repair  of  the  harbour  had  been 
derived  from  dues  on  foreign  shipping,  and  this  trade  had  become  so 
reduced  that  the  piers  were  greatly  damaged,  through  want  of  money  to 
effect  repairs.  From  1642  no  less  than  60  sail,  owned  locally,  had  been 
lost.  Many  of  the  merchants  had  failed,  and  others  had  left  the  town, 
so  that  there  were  then  200  vacant  houses*.  Under  these  circumstances,  it 
was  inevitable  that  the  cloth  trade  was  in  a  most  depressed  condition. 
The  disorganization  of  agi-iculture,  by  military  operations,  affected  the 
supply  of  wool.  Some  of  the  weavers  had  become  soldiere,  and  many  of 
them  had  emigrated"*.  Abuses  had  crept  into  the  manufacturing  of 
cloth,  so  that  men  were  not  wanting  who  predicted  "  the  utter  ruin  of 
the  drapery  of  England,""  unless  some  measures  were  devised  for  its 
regulation  and  encouragement*. 

During  a  period  which  began  with  a  serious  crisis,  succeeded  by  ten 
years  of  trade -depression,  it  is  to  be  expected  that  the  joint-stock 
companies  would  be  affected.  Before  the  crisis  of  1640  many  under- 
takings had  already  become  embarrassed.  The  Russia  and  African 
companies  were  involved  in  financial  difficulties,  and  the  current  joint- 
stock  of  the  former  came  to  an  end  about  1646,  when  its  agents  were 
expelled  from  Russia^  The  African  Adventurers  were  unable  to 
prosecute   their   trade,  though   they   tried   to   obtain   a  royalty  from 

1  Poor  Man' 8  Case,  1648,  p.  27. 

2  State  Papers,  Domestic,  Council  of  State  to  Col.  Reynolds,  May  5,  1649 ; 
Calendar,  1649-50,  p.  125. 

3  State  Papers,  Domestic,  Inter.,  ix.  34;  Calendar,  1650,  p.  107. 
*  Ibid.,  III.  2;  Calendar,  1649-50,  p.  329. 

^  Ibid.,  I.  34,  IX.  61;  Calendar,  1649-50,  p.  64,  1650,  p.  178. 
«  THd.,  IX.  5;  Calendar,  1650,  p.  21.  '   Vide  infra,  ii.  p.  66. 

s.  0.  I.  16 


242   Position  of  Joint-Stock  Compariies  1640-9   [chap.  xii. 

merchants,  who  were  prepared  to  risk  single  voyages  to  parts  within  the 
limits  covered  by  their  charter^  The  Greenland  company,  possibly, 
met  with  some  success,  since  it  continued  to  fit  out  whahng  expeditions ; 
and  the  fact  that  other  vessels  were  sent  by  adventurers,  who  were  not 
members,  tends  to  show  that  there  were  profits  to  be  made^  The 
effect  of  the  Civil  War  on  the  societies  of  the  Mines  Royal  and  of  the 
Mineral  and  Battery  Works  was  in  some  respects  peculiar.  The  leading 
shareholders  in  both  were  prominently  identified  with  the  cause  of 
Charles  I. ;  and  therefore,  from  the  outbreak  of  the  Civil  War  until  the 
Restoration,  no  governor  was  chosen  by  either  company,  and  no  meetings 
were  held.  At  the  same  time,  mining  operations  were  not  wholly 
suspended  ;  for,  in  1642,  a  subordinate  undertaking  had  been  formed 
with  a  capital  of  ^^3,700,  and  a  year's  output  was  estimated  to  be  worth 
,^5,000.  This  body  continued  working  till  the  mint  at  Aberystwyth 
was  seized  by  the  Parliamentary  troops,  and  thereafter  traces  are  to  be 
found  of  work  being  carried  on  by  another  member  of  this  subsidiary 
company'. 

In  many  respects  the  East  India  company  was  the  most  unfortunate 
of  all.  When  its  organization  was  being  improved  in  1634-5,  a  rival 
association  had  been  founded  with  the  full  sympathy  and  support  of 
Charles  I.  Such  competition  depressed  the  value  of  the  shares,  and 
the  company  was  unable  to  secure  adequate  capital  to  carry  on  its  trade. 
Under  these  circumstances,  it  was  an  additional  hardship  that  great 
inroads  were  made  on  its  scanty  resources  by  the  contending  parties  of 
the  State.  Between  the  "  Pepper  loan ""  and  advances  to  the  Parliament 
(,^6,000  in  1643-4  and  .£'4,000  to  dg>10,000  in  1649),  the  company  had 
funds  of  about  ^80,000  diverted  from  its  trade.  Against  this  loss,  is  to 
be  set  the  coincidence  of  the  loans  and  Parliamentary  support — that  of 
1643  being  followed  by  a  favourable  draft  ordinance  and  the  later  one 
by  an  effort  to  mitigate  the  competition  of  the  rival  body*. 
I  To  a  certain  extent  the  restricted  trade  of  the  joint-stock  companies, 
!  during  a  period  of  remarkable  depression,  is  to  be  attributed  to  the 
'  rudimentary  form,  which  the  system  had  as  yet  assumed,  and  to  erroneous 
financial  methods.  There  was  always  a  tendency  to  revert  to  the  plan 
of  a  number  of  co-existing  undertakings,  which  tended  towards  weakness 
and  confusion.  A  still  graver  error  was  the  habit  of  dividing  the  profits, 
without  reserving  sufficient  sums  to  provide  against  any  exceptional 
calamity.  Quite  apart  from  all  other  elements,  this  difference  of  method 
was  an  immense  aid  to  the  Dutch  company  in  the  years  of  strife  for  the 
trade  of  India.  If  the  English  company  had  had  sufficient  capital, 
which  it  could  have  kept  available  for  trade,  opportunities  would  have 

»  Vide  infra,  n.  p.  15.  ^  Ibid.,  ii.  p.  72. 

»  Ibid.,  n.  pp.  402,  403.  *  Ibid.,  ii.  pp.  116-20. 


CHAP,  xn.]  Joint-Stock  dt  Regulated  Companies  1640-9  243 

arisen  for  making  profitable  expeditions.  As  things  were,  the  company 
was  not  in  a  financial  position  to  undertake  large  risks.  Thus  it  was 
forced  to  reduce  its  ventures,  and  in  1649  it  was  resolved  to  send  no 
ships  to  the  East. 

Though  a  convulsion  such  as  the  Civil  War  was  highly  detrimental 
to  the  joint-stock  companies,  it  also  affected  the  regulated  bodies. 
Prominent  members  of  both,  who  became  **  delinquents,''  lost  their 
freedom.  In  the  joint-stock  undertakings  this  resulted  in  forced  sales 
of  stock ;  and,  as  in  the  case  of  landed  property,  the  prices  realised  were 
low\  But  in  the  joint-stock  company,  on  a  revival  of  confidence,  there 
would  be  a  fresh  inflow  of  capital,  so  that  the  restriction  of  trade  would 
be  at  a  minimum:  whereas  in  the  regulated  body,  once  the  ordinances  had 
been  passed  limiting  membership  to  merchants,  who  had  served  an 
apprenticeship  to  a  particular  kind  of  business,  the  process  of  recuperation 
after  the  depression  was  unduly  delayed,  owing  to  the  fact  that  new 
resources  could  only  be  provided  from  the  savings  of  those  who  were 
already  freemen  or  from  borrowings  made  by  them.  Besides,  the  con- 
fining of  participation  in  certain  trades  to  what  was  in  practice  an 
hereditary  caste  of  merchants  cut  off  such  industries  from  two  valuable 
accessions  of  strength.  A  commercial  body  stood  to  gain,  on  the  whole, 
by  the  adhesion  of  self-made  men,  who  had  raised  themselves  from  small 
beginnings  by  exceptional  ability  or  industry.  Also  younger  sons  of  the 
landed  families  frequently  devoted  themselves  to  commerce ;  and,  unless 
these  men  started  as  apprentices,  they  would  find  it  difficult,  if  not 
impossible,  to  enter  the  regulated  company.  In  so  far  as  the  joint-stock  / 
undertakings  were  open  to  either  class,  they  gained  by  the  energy  of  the  .  / 
one  and  by  the  relatively  wide  outlook  of  the  other.  Thus  the  attacks,  ' 
made  later  on  the  joint-stock  company  by  the  regulated  bodies,  originated 
in  the  restriction  of  the  membership  of  the  latter,  and  at  the  same  time 
constitute  indirect  evidence  to  the  growing  success  of  the  former  type  of 
organization. 

^  It  appears  to  be  to  this  period  that  the  statement  in  the  pamphlet — Strange 
News  from  India  (1652) — refers,  namely  that  "actions"  or  shares  were  sometimes 
sold  at  much  more  than  40  per  cent,  discount. 


16—2 


CHAPTER  XIIL 

Joint-Stock  Companies  under  the  Commonwealth 
AND  THE  Protectorate. 

It  is  only  to  be  expected  that,  after  the  Civil  War  in  Great  Britain, 
the  commerce  of  the  country  would  remain  depressed  for  a  considerable 
period.  The  combination  of  unfavourable  circumstances  was  one  which 
involved  the  disorganization  of  industry  and  a  very  great  destruction  of 
wealth.  Added  to  this  was  the  continuance  of  bad  harvests  until  1651, 
and  the  pressure  of  high  taxation.  For  these  reasons  the  full  force  of 
the  losses  of  the  Civil  War  was  felt  for  several  years  afterwards  in 
a  scarcity  of  capital  for  the  prosecuting  of  existing  industries  or  for  the 
starting  of  new  ones.  Therefore,  the  recovery,  when  it  began,  was 
tentative  in  character  and  was  subject  to  frequent  counteraction. 

Despite  the  continuance  of  the  dearth  and  the  alarming  military 
situation  in  Ireland  and  Scotland,  the  beginning  of  a  revival  of  confidence 
can  be  traced  in  the  year  1650  in  England.  Scotland  had  been  affected 
to  some  extent  by  different  tendencies,  and  new  enterprize  showed  itself 
there  a  few  years  earlier.  This  development  is  marked  by  the  establish- 
ment of  three  factories  for  the  production  of  broad  cloth,  at  Ayr, 
Bonnington  and  New  mills  (Haddingtonshire),  not  long  after  the  passing 
of  the  act  of  the  Scottish  Parliament  for  the  encouragement  of  this 
industry  in  1645^  In  England  the  state  of  trade  had  been  causing 
serious  anxiety  in  1649,  and  the  extent  of  the  depression  had  aroused 
the  attention  of  Parliament.  The  position  of  the  East  India  company 
was  unsatisfactory;  since,  besides  the  events  which  had  been  prejudicial 
to  other  branches  of  commerce,  it  suffered  from  the  mal-practices  of 
Courten's  Association,  which,  being  on  the  verge  of  bankruptcy,  had 
circulated  base  money  in  India.  The  original  company  had  lost 
^100,000  by  these  practices ;  and,  what  was  more  important,  the  native 
princes  held  the  body,  to  which  they  had  granted  concessions,  responsible, 

*  The  Records  of  a  Scottish  Cloth  Manufactory  at  New   MillSj  Haddingtonshire 
(1681-1703),  edited  by  W.  R.  Scott  (Scottish  Hist.  Soc,  1905),  p.  xxxiv. 


CHAP,  xm.]     The  East  India  Company  in  1650  245 

with  the  result  that  English  trade  with  India,  as  a  whole,  was  reduced 
to  very  narrow  dimensions.  It  was  clear  that  the  situation  could  not 
continue,  and  in  January  1650  the  House  of  Commons  resolved  that  the 
trade  should  be  carried  on  by  one  company  with  one  joint-stocks  After 
negotiations  between  the  two  bodies  and  with  the  encouragement  of 
Parliament,  lists  were  opened  for  the  formation  of  a  fresh  stock, 
described  as  the  United  Joint-Stock.  For  the  first  time,  as  far  as  is 
known,  the  capital  offered  for  subscription  was  limited  to  a  definite 
amount,  namely  ^£^300,000  nominal ;  and,  in  the  preamble  for  applications, 
it  was  explicitly  announced  that  the  voting  rights  should  be  one  vote 
for  each  £500  of  stock'. 

Though  the  whole  capital  offered  to  the  public  by  the  East  India 
company  in  1650  was  not  taken  up,  the  fact  that  it  was  possible  to 
make  the  floatation  is  an  index  of  an  improvement ;  and  evidence  in  the 
same  direction  is  to  be  found  in  the  purchase,  up  to  January  1652,  of 
fee-farm  rents,  formerly  belonging  to  the  Crown,  to  the  value  of 
<£273,000'.  These  land-sales,  which  continued  for  the  next  three  years, 
were  absolutely  necessary  to  supply  funds  for  the  necessities  of  the 
government,  which,  after  pushing  taxation  to  the  highest  possible  point, 
would  have  otherwise  been  faced  by  a  series  of  deficits  so  large  as  to 
make  its  position  impossible*.  At  the  same  time,  although  the  purchases 
show  a  revival  of  confidence,  these  sales  had  a  doubly  prejudicial  effect. 
In  relation  to  trade  in  general,  the  provision  of  several  millions  by  the 
trading  classes  diverted  capital  from  commerce  where  it  w£is  greatly 
needed.     Then,  as   affecting   the   future   of  the   State,  there   was  the 

1  Vide  infra,  ii.  pp.  118-19 ;  Journals  of  the  House  of  Commons,  vi.  p.  363 ; 
A  History  of  British  India,  by  Sir  W.  W.  Hunter,  ii.  pp.  115,  116. 

2  Vide  infra,  ii.  p.  120. 

3  Gardiner,  History,  1649-60  (1894),  i.  p.  281. 

*  The  estimates  for  the  year  1651  were  as  follows  : 

Army ...     £2,115,849  4  8 

Navy 669,219  0  0 

Add  other  expenses,  say       ...  200,000  0  0 

£2,876,068  4  8 
The  navy  was  in  debt  to  the  extent  of  £496,514.  An  assessment  of  £120,000 
a  month  was  imposed,  which  with  the  addition  of  the  Customs  and  excise  would 
leave  an  estimated  deficit  (apart  from  land-sales)  of  about  three-quarters  of  a 
million— State  Papers,  Domestic,  Council  of  State,  Proceedings,  March  17,  1661  ; 
Calendar,  1651,  p.  90 ;  Journals  of  the  House  of  Commons,  vi.  pp.  550,  580,  617. 
Tlie  foregoing  estimate  exceeds  that  framed  by  Mr  Gardiner  {History,  1649-60 
(1894),  I.  p.  417),  who  seems  to  have  taken  the  year's  charge  for  the  army  as  twelve 
times  the  month's  charge.  It  is  clear  from  Carte  MS.  lxxiv.  f.  7  and  other  accounts 
that  the  month  was  a  lunar  one,  and  the  basis  of  calculation  was  to  take  twelve 
times  the  "month's  charge"  and  then  to  add  another  month  to  obtain  the  annual 
charge.     In  the  case  of  assessments  only  twelve  months  went  to  the  year. 


246  Revival  in  Trade  1650  [chap.  xm. 

sacrifice  of  a  valuable  national  asset.  These  lands  were  sold  for  from 
eight  to  ten  years'  purchase  on  the  rents.  But,  in  many  cases,  rents  were 
about  half  what  they  had  been  before  1640\  It  follows,  then,  that  the 
sales  by  the  Commonwealth  only  realized  about  five  years'  purchase  on 
the  old  rents,  which,  under  ordinary  conditions,  would  be  the  normal 
ones.  Under  the  circumstances,  some  of  the  purchasers  must  have  made 
bargains  exceedingly  favourable  to  themselves.  The  most  remarkable 
group  of  cases  was  that  in  which  full  advantage  had  been  taken  of  the 
financing  of  the  army-arrears.  Debentures  had  been  issued  against 
these,  which  were  sold  by  the  soldiers  at  a  discount  of  60  per  cent.  It 
is  alleged  that  persons  with  funds  at  their  disposal  bought  these 
debentures  at  the  depressed  price,  and,  on  being  paid  off  at  par,  they 
invested  the  proceeds  in  Crown-lands,  thus  obtaining  the  latter  at  two 
or  three  years'  purchase,  in  terms  of  the  sum  originally  used  in  purchase 
of  the  debentures  I  ITiat  the  mercantile  classes  were  becoming  more 
hopeful  was  shown  also  by  the  appearance  of  a  considerable  number  of 
new  schemes  and  inventions,  prominent  amongst  which  was  one  for  the 
foundation  of  a  State-bank,  with  branches  in  the  chief  foreign  monetary 
centres^.  Finally,  that  there  was  some  real  advance  in  trade  by  1650  is 
attested  by  the  returns  of  the  Customs,  which  for  that  year  amounted 
to  d^350,000*.  This  sum  closely  approximates  that  reached  before  the 
Civil  War;  but,  in  such  a  comparison,  allowance  must  be  made  for 
some  increase  in  the  rates.  Taking  the  average  for  the  two  years  1646 
and  1647,  the  revenue  from  this  source  in  1650  shows  an  improvement 
of  about  30  per  cent.' 

One  effect  of  the  want  of  capital  was  a  great  extension  of  the  joint- 
stock  system  in  the  formation  of  unincorporated  companies.  The 
tendency,  already  noticed^,  towards  the  adoption  of  the  style  "  A.B.  and 
Co."  increased  during  the  Commonwealth  and  Protectorate  to  such  an 
extent  that  notices  of  enterprizes,  controlled  by  companies,  exceed  those 
owned  by  individuals.  How  far  these  unincorporated  bodies  were 
partnerships,  how  far  they  had  a  sufficiently  large  membership  to  be 
called  companies  in  a  strict  sense,  it  is  difficult  to  determine.  Certainly 
in  some  instances  the  membership  was  large ^,  and  in  others  there  was 

1  Gardiner,  History,  1642-9  (1893),  iii.  p.  196. 

2  The  British  Bell-man,  1648,  in  Harleian  Miscellany  (1746),  vii.  p.  589 ;  History 
of  Independency,  by  C.  Walker,  Pt.  ii.  pp.  155,  207. 

3  Vide  infra,  iii.   p.   201  ;   Anderson,  Annals  of  Commerce,  ii.  pp.  553,  544 ; 
Andre'ades,  History  of  the  Bank  of  England,  pp.  26,  27. 

*  Hall,  Custom- Beven-ue,  ut  supra,  i.  p.  184. 

fi  Vide  supra,  p.  236.  ®  Vide  supra,  p.  227. 

7  E.g.  in  1652  Mainwaring,  Hawes,  Payne  and  Company  consisted  of  30  persons, 
interested  in  the  ship  Elizabeth— State  Papers  Domestic,  Inter.,  xxvi.  82  ;  Calendar 
1652-3,  p.  68. 


CHAP,  xni.]     Unincorporated  Companies  1650-5  247 

a  regular  constitution  with  a  committee  of  managements  The  following 
are  some  of  the  titles  of  unincorporated  companies — Samuel  Vassall  and 
Company,  Samuel  Lemott  and  Company,  both  in  the  African  trade*.  In 
the  whaling  industry,  besides  the  Greenland  company,  there  were  at 
least  four  others,  some  of  which  had  a  considerable  membership,  one 
being  described  as  the  Hull  Company  or  the  Hull  Adventurers*.  Trading 
to  the  East  Indies,  there  were  Thomas  Barnardiston,  Thomas  Bludworth, 
William  Love  and  Company,  also  Thomns  Kendall  and  Company*.  Other 
similar  organizations,  connected  with  shipping,  include  Henry  St.  John 
and  Company,  James  Pickering  and  Company,  Thomas  Cowell  and 
Company'',  Thomas  Fowke  and  Company,  Thomas  Drawatter  and  Com- 
pany*. Connected  with  home  trade  there  were  competitive  offers  from 
two  partnerships  for  the  working  of  the  postal  service',  and  from  1653-6 
there  was  an  undertaking,  known  as  John  Jervase,  Molyns,  Richardson 
and  Company,  which  owned  the  powder-mills  by  which  the  government 
was  supplied ^ 

The  formation  of  the  large  group  of  unincorporated  companies  was 
occasioned  also  in  part  by  the  position  of  the  chartered  organizations. 
During  the  Civil  War,  the  privileged  bodies  had  suffered  from  having 
no  constituted  authority,  that  could  give  time  to  consider  their  position; 
and,  meanwhile,  any  group  of  capitalists,  which  was  prepared  to  risk 
a  voyage  within  the  areas,  reserved  by  the  charters,  had  a  reasonable 
prospect  of  enjoying  the  proceeds  of  the  expedition  undisturbed.  It  has 
already  been  shown  that  the  urgency  of  the  case  of  the  East  India  trade 
caused  this  branch  of  the  general  question  to  be  dealt  with  hastily*. 
In  the  remaining  departments  of  foreign  commerce,  where  chartered 
companies  existed,  there  was  a  full  enquiry  by  the  Committee  for  Trade 
and  Foreign  affairs.  Ample  opportunities  were  afforded  for  the  estab- 
lished companies  and  their  opponents  to  give  evidence  and  to  submit 
their  main  contentions  in  writing.  In  the  special  circumstances  of  the 
Turkey  trade,  the  arguments  for  and  against  the  existence  of  a  regulated 
company  were  interchanged  between  the  parties,  and  the  Committee 
undertook  to  consider  the  replies,  which  it  invited^®. 

1  The  Adventurers  in  the  Ship  William  to  the  East  Indies — Home  Miscellaneous, 
XXVI.  at  the  India  Office,  cf.  Hunter,  History  of  British  India,  ii.  p.  122  (note). 

2  Vide  infra,  ii.  p.  15;  State  Papers,  Domestic,  Inter.,  cliv.  84;  Calendar, 
1656-7,  p.  341. 

3  Vide  infra,  ii.  pp.  73,  74.  *  Hunter,  History  of  British  India,  ii.  p.  121. 
6  Calendar  State  Papers,  Domestic,  1651-2,  pp.  217,  342,  345,  1655-6,  p.  350. 

®  State  Papers — Board  of  Trade  Commercial  Series  ii.  vol.  691. 
^  Vide  infra,  iii.  pp.  41,  42. 

*  Calendar  State  Papers,  Domestic,  1656-6,  pp.  130-1 ;  cf.  infra,  ii.  p.  472. 

*  Vide  supra,  p.  245. 

*®  State  Papers,  Domestic,  Committee  of  Trade,  Proceedings,  May  7,  1662; 
Calendar,  1651-2,  p.  235. 


248    Committee  for  Trade  on  Companies  1650    [chap.  xin. 

The  most  interesting  proceedings  were  those  affecting  the  African 
and  Greenland  trades.  As  against  the  two  old  companies,  were  arrayed 
several  partnerships  composed  of  those  who  had  entered  on  these  trades 
or  who  proposed  to  do  so.  Out  of  the  mass  of  arguments,  put  forward 
on  both  sides,  a  number  may  be  dismissed  as  irrelevant,  as  for  instance 
the  contention  of  a  company  of  independent  adventurers  to  Guinea, 
which  promised  to  import  d^300,000  of  gold  dust  the  first  year  and  to 
double  that  amount  after  six  years^  Equally  illusory  were  the  pro- 
fessions of  public  spirit  and  the  desires  of  a  freer  trade,  which  were 
made  by  the  newer  partnerships ;  since  it  appears  that,  in  several  cases, 
the  same  persons,  as  independent  adventurers  in  one  of  these  trades, 
argued  in  this  way ;  while,  as  members  of  some  privileged  company,  in 
that  capacity,  they  participated  in  petitions  for  maintaining  the  most 
exclusive  privileges.  Thus  the  chief  opponents  of  the  African  under- 
taking— Samuel  Vassall  and  company — were  members  of  the  chartered 
East  India  body*;  while  Thomas  Horth,  who  with  his  partners  offered 
a  determined  opposition  to  the  Greenland  company^,  appears  to  have 
been  the  same  person  who  had  been  the  moving  spirit  in  the  coal-shipping 
monopoly  of  1639,  which  was  condemned  as  oppressive*.  On  the  other 
hand,  it  was  clear  that  neither  of  the  companies  could  make  out 
a  reasonable  case  for  an  absolute  monopoly,  whether  of  the  whole  west 
coast  of  Africa  or  of  all  the  whaling  grounds.  While  some  of  the 
petitioners  were  new-comers,  others  had  gradually  built  up  an  established 
business,  and  it  was  equitable  that  their  enterprizes  should  be  respected. 
For  similar  reasons  the  argument,  in  favour  of  the  old  companies,  based 
on  the  right  of  discovery,  can  have  little  weight,  since  the.  African 
undertaking  had  possessed  a  nominal  monopoly  for  twenty  years  and 
that  for  the  whale-fishing  for  about  half  a  century. 

Omitting  the  extreme  contentions  on  either  side,  the  Committee  for 
Trade  had  to  deal  with  the  actual  facts  as  they  were,  and  there  were 
grounds  pointing  towards  two  different  conclusions.  It  was  argued  that 
the  established  companies  had  not  taken  the  fullest  advantage  of  their 
opportunities ;  as  for  instance  that  the  African  Adventurers  had  failed 
to  establish  trading  posts  on  more  than  half  the  area  within  the  limits, 
prescribed  by  the  charter,  and  that  the  whaling  organization,  by 
reducing  its  fleet,  had  enhanced  the  price  of  train-oiP.     The  former 

1  State  Papers,  Colonial,  xi.  13  ;  Calendar,  Colonial,  1574-1660,  p.  331. 

2  "We  humbly  conceive  that  they  [Vassall  and  Co.]  speak  not  against  the  East 
India  company  because  most  of  them  are  members  thereof" — Ibid.,  xi,  15 ;  Calendar, 
Colonial,  1574-1660,  p.  339. 

3  Vide  infra,  ii.  p.  74.  *  Vide  supra,  p.  220. 

^  It  is  stated  by  Thomas  Violet  that,  if  there  had  been  no  Greenland  company, 
the  price  of  oil  would  have  been  20  %  to  30  %  \q^s— Mysteries  and  Secrets  of  Trade 
(1653),  p.  9. 


CHAP,  xm.]    Committee  for  Trade  on  Companies  1650    249 

company  replied  that  it  htid  a  quick-stock  of  c£^40,000,  unemployed  in 
Africa,  which  it  had  not  been  able  to  invest  in  commodities  or  negroes 
there,  while  the  Greenland  adventurers  complained  that  the  restriction 
of  their  trade  had  been  due  to  attacks  made  upon  their  men  by  the  rival 
whalers.  The  aggressive  nature  of  seventeenth  century  competition 
constitutes  one  important  element  in  the  situation.  The  evidence  is 
clear  that  great  violence  was  used  on  both  sides  and,  certainly,  not  least 
by  the  independent  traders.  For  instance,  in  the  case  of  the  African 
dispute,  the  chartered  company  had  purchased  a  station  from  the  local 
chief  at  Wyamba  about  1633.  Buildings  were  erected,  and  the  place 
had  been  in  constant  use,  until  the  capture  of  some  ships  by  Prince 
Rupert  involved  a  re-arrangement  of  the  staff.  On  the  arrival  of  a  new 
factor  and  his  party,  it  was  found  that  the  agents  of  Vassall  and  company 
had  seized  the  station,  burned  it  and  then  fired  on  the  boats  of  the 
company.  Even  in  the  far  north,  there  were  similar  scenes  of  violence. 
At  this  period,  it  was  usual  for  the  boiling  of  the  blubber  to  take  place 
on  shore,  and  there  were  frequent  collisions,  accompanied  by  bloodshed, 
between  the  crews  of  the  various  companies.  Considerations  such  as 
these  suggest  that  the  solution  was  to  be  sought  by  way  of  the  grant  to 
each  company  of  a  reserved  area. 

On  the  other  hand,  it  was  argued  that,  in  the  African  trade,  the 
freer  it  was,  the  greater  the  export  of  English  goods  would  be;  and 
similarly,  in  whaling,  a  perfectly  open  trade  would  increase  the  quantity 
of  shipping.  Recent  experience  had  afforded  some  guidance  on  these 
points.  Just  as  had  happened  in  the  case  of  Hawkins  nearly  a  hundred 
years  before^,  the  reckless  commander  of  some  isolated  expedition,  by 
seizing  negroes  forcibly,  aroused  the  hostility  of  the  natives  over  a  wide 
area  against  all  the  regular  English  traders.  This  had  happened  not 
long  before  the  enquiry  of  1650,  and  many  of  the  members  of  such  an 
expedition  had  been  killed.  Again,  it  was  urged  that  the  effect  of 
competition  had  been  to  reduce  the  price  of  English  goods,  sold  in 
Africa,  and  to  increase  that  of  the  commodities,  received  in  exchange. 
This  element  was  important  in  relation  to  the  profits  of  the  trade ;  but, 
in  addition,  it  was  argued  that  competition  at  any  given  point  increased 
the  working  costs  of  an  expedition.  Where  a  ship  could  count  on 
obtaining  a  cargo,  it  was  possible  to  return  to  England  in  about  nine  or 
ten  months :  if  the  vessel  was  delayed  by  having  to  wait  for  her  lading, 
the  time  of  absence  was  almost  doubled.  Prior  to  the  adoption  of  lead 
or  copper  sheathing^,  such  a  protracted  absence  on  the  African  coast 
meant  that  the  cost  of  repairing  the  ship  was  almost  as  much  as  the 
original  outlay. 

1  Vide  infra,  ir.  p.  9.  *  Ibid.,  iii.  pp.  105,  106. 


250  The  Navigation  Act  1651  [chap.  xm. 

The  settlement  made  in  both  cases  was  based  on  a  common  principle, 
with  some  slight  variation  in  the  details.  That  affecting  the  African 
trade  was  reached  in  1651,  and  it  assigned  a  monopoly  to  the  company 
of  the  commerce  of  the  coast-line,  where  it  had  factories  established^ 
Two  years  later,  the  whaling  problem  was  dealt  with  by  the  appointment 
of  a  committee  of  management,  elected  by  the  different  companies.  A 
few  years  afterwards  this  arrangement  was  modified,  and  here  also  the 
idea  of  reserved  areas  was  adopted,  the  Greenland  company  obtaining 
the  monopoly  of  Bell  Sound  and  Horn  Sound,  while  other  whaling 
grounds  were  left  open^ 

The  arrangement  for  regulating  the  African  trade  was  a  return  to 
the  methods  of  the  time  of  Elizabeth,  when  it  will  be  remembered  that 
a  similar  solution  had  been  adopted  in  the  establishment  of  the  African 
company,  known  as  the  Senegal  Adventurers  ^  Another  aspect  of  the 
commercial  policy  of  the  Long  Parliament,  namely  its  attitude  to  the 
shipping  industry,  is  sometimes  regarded  as  a  return  to  Elizabethan 
methods.  This  policy  finds  expression  in  the  Navigation  Act,  which 
was  passed  on  October  9th,  1651  and  which  was  to  come  into  operation 
on  December  1st  of  the  same  year.  In  so  far  as  this  measure  aimed  at 
building  up  English  sea-power,  it  represented  an  ideal  which  had  been 
constantly  before  the  mind  of  Charles  I.,  and  which  had  resulted  in  the 
imposition  of  the  tax  of  ship-money.  Besides  the  fostering  of  naval 
force,  the  Navigation  Act  was  designed  to  effect  a  revival  of  the  English 
carrying  trade.  Towards  the  end  of  the  sixteenth  century,  the  importance 
of  this  industry  had  been  the  envy  of  the  chief  commercial  nations  of 
Europe*.  In  the  first  quarter  of  the  seventeenth  century,  through 
various  causes,  while  it  had  advanced  considerably,  English  shipping  was 
less  supreme  than  it  had  been.  There  was  an  improvement  up  to  1640 ; 
but,  during  the  Civil  War,  there  had  been  a  very  great  decline.  The 
volume  of  trade  had  been  much  reduced ;  and,  of  that  smaller  amount, 
English  ships  carried  a  less  proportion.  The  reason  for  this  is  obvious. 
The  merchant,  who  consigned  his  goods  in  an  English  bottom,  was 
subject  to  quite  exceptional  risks,  owing  to  the  activity  of  the  privateers 
of  Rupert  and  of  the  countries  in  sympathy  with  the  Royalist  cause. 
During  the  Civil  War,  English  merchantmen  were  an  easy  prey,  and 
there  was  little  risk  of  reprisals.  Therefore,  it  was  inevitable  that  the 
merchant,  who  had  any  choice,  would  decide  against  employing  an 
English  vessel. 

The  accounts  of  the  great  losses  of  ships,  as  well  as  the  statement 
that  those  which  remained  were  not  fully  employed,  show  the  consequences 
of  the  war  on  the  carrying  trade.     In  spite  of  the  statement  of  Adam 

1  Vide  infra,  ii.  p.  16.  2  /^^^^^  „.  pp,  72.4. 

3  Ihid.,  II.  pp.  10,  11.  *  Vide  supra,  p.  83. 


CHAP.  XIII.]    Effects  of  the  Navigation  Act  1652-4       251 

Smith,  it  may  well  be  questioned  whether,  on  the  whole,  the  Act  was 
wise,  and  especially  whether  it  was  desirable  at  this  particular  time*. 
It  is  necessary  to  bear  in  mind  several  distinct  considerations,  in 
investigating  the  causes  and  effects  of  the  measure.  If  any  parallel  be 
drawn  between  England  in  the  time  of  Elizabeth  and  in  that  of  the 
Commonwealth,  it  must  be  noted  that  Burghley  was  on  the  whole 
opposed  to  this  type  of  legislation*.  Moreover,  weight  must  be  given 
to  the  feeling  in  Holland  before  and  after  the  Act,  since  much  depended 
upon  whether  war  between  the  two  countries  was  inevitable  or  not. 
Judging  from  the  proposals,  made  by  the  Dutch  Commissioners  in  June 
1651  (that  is  nearly  four  months  before  the  passing  of  the  Act),  they 
were  prepared  to  grant  England  substantial  commercial  concessions.  It 
was  proposed  that  colonies  of  both  countries  in  America  and  the  West 
Indies  should  be  open  to  the  subjects  of  either,  and  that  Englishmen 
should  not  be  called  upon  to  pay  higher  taxes  in  Dutch  territory  than 
the  natives  and  conversely'.  It  follows,  then,  that  neither  on  the 
grounds  of  precedent  nor  of  national  security  was  the  Act  an  immediate 
necessity.  Further,  as  far  as  can  be  gathered,  the  passing  of  this  measure 
in  1651  was  a  serious  error.  The  chief  cause  of  the  decline  of  shipping 
was  the  series  of  circumstances,  arising  out  of  the  Civil  War,  which 
precluded  the  attention  of  the  government  being  given  to  the  carrying 
trade.  With  the  re-organization  of  the  administration,  it  should  have 
been  possible,  within  a  short  time,  to  have  effected  a  remedy.  Instead 
of  trusting  to  the  natural  development  of  trade,  which  had  already  begun 
and  which  would  have  gained  increased  momentum  once  the  main  causes 
of  the  depression  had  been  removed.  Parliament  made  the  mistake  of 
legislating  to  remove  a  temporary  decline  in  trade,  as  if  it  were  likely  to 
be  a  permanent  one.  Moreover,  the  decay  of  shipping  was  not  an 
isolated  phenomenon,  it  was  symptomatic  of  the  general  industrial 
situation  at  the  close  of  the  Civil  War.  After  the  immense  losses  of 
wealth  during  the  struggle,  the  country  had  an  insufficient  capital  to 
re-open  immediately  the  trades  that  had  diminished  or  ceased  since  1641. 
Not  only  so,  but  many  of  the  skilled  workers  had  emigrated  or  fallen  in 
the  wars,  and  therefore  the  process  of  recuperation,  under  the  most 
favourable   conditions,  would   have   been   slow.      The   passing   of  the 

1  "It  is  not  impossible,  therefore,  that  some  of  the  regulations  of  this  famous 
act  may  have  proceeded  from  national  animosity.  They  are  as  wise,  however,  as  if 
they  had  all  been  dictated  by  the  most  deliberate  wisdom.  National  animosity  at 
that  particular  time  aimed  at  the  very  same  object  which  the  most  deliberate  wisdom 
would  have  recommended,  the  diminution  of  the  naval  power  of  Holland,  the  only 
naval  power  which  could  endanger  the  security  of  England —  Wealth  of  Nations^ 
IV.  ii.     (Ed.  E.  Caunan,  i.  p.  428,  contrast  however,  n.  p.  116.) 

2  Cunningham,  Growth  of  English  Industry  and  Commerce  in  Modem  Times,  p.  70. 

3  Gardiner,  History,  1649-60  (1894),  i.  p.  365. 


252        Effects  of  the  Navigation  Act  1652-4    [chap.  xiii. 

Navigation  Act  involved  a  further  disorganization  of  trade,  superimposed 
on  that  occasioned  by  the  Civil  War.  The  immediate  effect  of  the  Act 
was  that  there  was  a  great  interruption  of  trade ;  since  it  was  alleged 
there  was  not  sufficient  English  shipping  to  carry  the  imports  and  many 
merchants  were  unable  to  obtain  supplies  of  goods  or  raw  materials \ 
It  was  not  long  before  the  administration  perceived  some  of  the 
inconveniences  of  the  change,  and  for  several  years  the  Order  Books  of 
the  Council  of  State  contain  numerous  entries,  permitting  certain  persons 
to  be  freed  from  the  operation  of  the  Act^  In  addition  to  the 
immediate  dislocation  of  the  national  production,  through  the  temporary 
interruption  of  imports,  there  was,  to  a  certain  extent,  a  permanent 
burden  placed  on  several  trades,  chiefly  those  dealing  with  foreign 
countries  and  enterprizes  in  remote  places.  In  theory,  it  was  supposed 
that  ships  would  be  required,  not  only  for  the  colonial  trade,  but  for 
that  with  Europe.  At  the  same  time,  this  change  meant  that,  in  some 
cases,  trade  was  restricted ;  in  others  the  cost  of  freight  was  increased ; 
or  again  the  profits  of  vessels  were  diminished,  and  the  cost  of  ship- 
building was  advanced  by  one-third;  while,  in  the  working  of  the 
Greenland  trade,  it  was  found  that  the  outlay  on  the  voyages  was  higher 
than  had  been  usual  in  the  past'.  It  follows,  then,  that  the  estimated 
benefits  were  remote :  while  the  losses  were  immediate  and,  in  certain 
instances,  pressing.  From  the  point  of  view  of  the  industrial  situation 
early  in  1652,  the  effects  were  exceptionally  unfortunate,  in  so  far  as  the 
trade-revival  which  had  just  begun  was  to  some  extent  checked;  and  the 
free  interchange  of  commodities,  which  was  required  to  enable  capital 
to  be  accumulated  to  restore  the  losses  of  the  war,  was  greatly  in- 
terrupted. 

All  the  consequences  of  the  Navigation  Act,  already  indicated,  would 
have  followed  had  there  been  no  Dutch  War ;  and  it  cannot  be  doubted 
that,  while  there  were  other  causes  tending  towards  a  rupture,  one  of  the 
main  grounds  of  the  conflict  was  the  irritation,  caused  in  Holland,  by 
the  operation  of  this  Act.  It  is  to  be  noted  that  the  first  engagements, 
in  the  Channel  in  May  1652,  were  the  immediate  outcome  of  interference 
with  Dutch  shipping,  which  were  occasioned  by  the  provisions  of  the 
measure^. 

The  official  justification  of  the  war  is  of  great  interest,  since  claims 
were  explicitly  made  by  England  on  Holland  for  the  damages  sustained 

1  Anderson,  Annals  of  Commerce,  ii.  p.  552. 

2  A  Detection  of  the  Court  and  State  of  England,  by  R.  Coke,  1719,  ii.  p.  75. 

3  Discourse  on  Trade,  by  Roger  Coke,  London,  1670,  p.  5 ;  ^  Detection  of  the 
CouH  and  State  of  England,  by  R.  Coke,  1719,  i.  p.  418. 

*  Letters  and,  Papers  Relating  to  the  First  Dutch   War,  1652-1654,  edited   by 
S.  R.  Gardiner,  Publications  (Navy  Records  Soc,  1899),  i.  pp.  197,  234. 


CHAP,  xm.]     Trade  Depression  after  the  War  1654-6     253 

by  the  East  India,  the  Russia  and  Greenland  companies,  through  the 
action  of  Dutch  subjects.  Such  a  claim  raised  an  important  matter  of 
principle,  governing  the  whole  question  of  the  monopolies  of  trading 
companies.  It  was  urged,  at  a  later  date  with  considerable  force,  that 
a  strong  argument  in  favour  of  such  grants  w€«  that  thereby  the 
companies  undertook  the  obligation  of  self-defence.  Upon  such  grounds 
then,  supposing  they  suffered  loss,  they  were  barred  from  securing  the 
intervention  of  the  State  on  their  behalf  at  the  risk  of  a  serious  war. 
On  the  other  hand,  if  the  State  undertook,  and  was  able,  to  protect 
English  commerce  in  the  most  distant  parts  of  the  globe,  a  strong  claim 
for  the  making  of  trading  monopolies  falls  to  the  ground.  i 

The  war  lasted  from  the  summer  of  1652  until  July  9th,  1654. 
During  that  period  Dutch  commerce  suffered  very  greatly.  Trading  in 
Holland  was  described  as  "  dead,  corn  dear,  fishing  prevented  and  the 
people  very  unquiet^" ;  while  the  loss  of  ships,  captured  by  the  English 
fleet  up  to  the  end  of  1653,  was  estimated  at  700  sail^,  and  the  total 
prizes,  over  the  whole  war,  taken  by  the  British  at  1,700^.  Naturally, 
the  captures  were  not  on  one  side  only,  and  many  English  vessels  were 
seized  by  the  enemy.  Trade  to  the  Baltic  and  to  the  Mediterranean 
had  almost  ceased,  and  the  interruption  extended  to  other  branches  of 
commerce,  apparently  outside  the  range  of  hostilities.  In  1654  the 
African  company  and  the  independent  traders  had  sustained  an  aggregate 
loss  of  <£300,000*,  while  all  the  undertakings,  engaged  in  whaling,  were 
unable  to  import  any  oil  in  that  year^  Partly  through  the  war,  partly 
owing  to  a  want  of  assimilation  of  the  original  East  India  adventurers 
and  the  members  of  Courten's  Association,  who  had  joined  in  the  United 
Joint-Stock,  there  were  great  dissensions  in  this  body.  In  1653  it  was 
resolved  that  no  ships  should  be  sent  to  India ;  and,  in  order  to  retain 
the  trade,  the  Council  of  State  licensed  persons,  who  were  not  free  of  the 
company,  to  make  voyages  to  the  East,  irrespectively  of  the  existing 
joint-stock.  At  the  same  time,  the  renewed  depression,  caused  by  the 
war,  was  to  some  extent  mitigated  in  certain  exceptional  directions. 
The  East  India  company  received  .£85,000  from  the  rival  Dutch 
undertaking,  while  in  1654  the  Russia  company  formed  a  new  joint- 
stock  and  secured  re-admittance  to  Russia.  Up  to  August  15th,  1655, 
this  body  had  exported  from  Archangel  goods  to  the  value  of  «^330,000*, 

1  Memorials  of  the  English  Affairs,  by  B.  Whitelocke,  London,  1722,  pp.  563, 
.569,  661. 

*  Anderson,  Annals  of  Commerce^  ii.  p.  662. 

^  A  Detection  of  the  Court  and  State  of  England,  by  R.  Coke,  1719,  n.  p.  67. 

*  Vide  infra,  ii.  p.  16.  ^  Ibid.,  ii.  p.  74. 

*  Ibid.,  II.  p.  67 ;  Thurloe,  State  Papers,  iii.  p.  713. 


254  The  Strain  on  the  Finances  1651-4    [chap.  xin. 

and  about  the  same  time  at  home  an  influential  company  was  formed  (in 
which  Cromwell  was  interested)  for  the  smelting  of  iron  with  coal  in  the 
Forest  of  Dean^ 

Not  only  had  the  Dutch  War  been  prejudicial  to  trade  but  it 
produced  a  grave  strain  on  the  finances.  Owing  to  the  cost  of  military 
operations  in  Scotland  in  1651,  the  estimated  expenditure  for  that  year 
had  been  over  two  and  three-quarter  millions'.  For  1652  it  was  about 
two  and  a  half  millions ;  and,  since  it  is  recorded  that  the  Treasury  was 
"  much  distracted,''  it  is  probable  that  the  actual  outlay  was  very  much 
more*.  Although  on  June  2nd  a  committee  was  appointed  to  consider 
how  a  considerable  retrenchment  of  the  army  and  an  improvement  in 
the  revenue  might  be  eff*ected*,  the  estimate  for  both  services  in  1653 
showed  an  increase,  which  brought  the  total  to  over  two  and  three-quarter 
millions'.  On  the  estimate,  there  was  a  deficit  of  d^508,504  ;  which  was 
increased  by  the  excess  of  the  actual  expenditure  on  the  navy,  making 
the  adverse  balance,  irrespective  of  the  army,  over  ^800,000  for  the 
year«.     For  1654  the  actual  cost  of  the  navy  was  <3ei,059,382.  18^.  MJ 

The  financing  of  the  repeated  deficits,  each  of  which  was  approxi- 
mately equal  to  a  year's  revenue  of  Charles  I.,  was  an  exceedingly 
difficult   problem  for  a  government  which   had  already  exhausted  its 

1  Vide  infra,  ii.  pp.  460,  461.  *  Vide  supra,  p.  245,  note  4. 

'  State  Papers,  Domestic,  Council  of  State,  Proceedings,  Sept.  30,  1652 ; 
Journals  of  the  House  of  Commons,  vii.  52,  70,  122,  128,  208.  The  estimate  for  the 
army  is  from  Xmas  1651  to  Xmas  1652,  that  for  the  navy  is  framed  on  different 
bases  according  to  the  changing  conditions.  It  varies  from  £829,490  to  £1,085,315. 
Taking  it  at  £1,000,000  the  following  estimate  may  be  arrived  at : 

Army        £1,328,579 

Navy  (as  above) 1,000,000 

Other  expenses 200,000 

£2,528,579 

*  Journals  of  the  House  of  Commons,  vii.  p.  138  ;  Whitelocke,  Memorials,  p.  534. 

*  Journals  of  the  House  of  Commons,  vii.  pp.  224,  300 — 

Army        £1,443,680 

Navy         1,115,000 

Other  expenses 200,000 

£2,758,680 

«  Navy  estimate     £1,115,000 

„     actual         1,410,312 

296,312 
Add  estimated  deficit     ...     •    ...  508,504 

£803,816 
— MS.  Rawlinson  (Bod.  Lib.),  A.  195  a,  f.  241;  Journals  of  the  House  of  Commons, 
VII.  p.  300. 

7  MS.  Rawl.  A.  196  a,  f.  241. 


CHAP.  XIII.]        Financing  the  Deficits  1651-4  255 

credit.  The  taxation  imposed  in  1650  could  not  be  maintained,  so  that 
there  only  remained  one  resource,  namely  the  sale  of  Crown,  Church  and 
forfeited  lands.  From  this  source,  as  well  as  the  fines  imposed  on 
delinquents,  which  amounted  to  .^1,304,957.  %f.  Id.,  the  greater  part  of 
the  deficiencies  had  been  met^  At  the  dissolution  of  the  Long  Parlia- 
ment in  April  1653,  the  State  was  indebted  to  the  extent  of  ^00,000. 
But  this  form  of  statement  only  disguises  the  magnitude  of  the  strain 
on  the  finances.  Had  it  been  possible,  through  a  more  developed  system 
of  credit  2,  for  the  government  to  have  effected  loans  to  the  extent  of  its 
annual  deficits,  though  the  debt  would  have  stood  at  a  very  much  higher 
figure,  the  valuable  assets  of  Crown  and  forfeited  lands  would  have 
remained  intact.  As  it  was,  apart  from  peculation  and  irregular  dealings 
by  officials,  by  far  the  greater  part  of  this  property  had  been  disposed 
of,  and  that  at  a  very  great  sacrifice*. 

Altogether  apart  from  the  question  of  the  financial  methods  adopted 
by  the  Long  Parliament,  it  is  clear  that  the  situation,  as  it  actually 
existed,  would  ultimately  affect  the  policy  of  the  Protectorate.  It  had 
only  been  possible  to  maintain  the  forces,  at  the  level  of  the  last  five 
years,  by  drawing  on  resources  which  were  now  practically  exhausted. 
Moreover,  it  was  found  impossible  to  retain  taxation  at  the  great  height 
of  recent  years.  In  September  1654  Cromwell  admitted  that  the  purse 
of  the  nation  could  not  have  been  able  much  longer  to  bear  war- 
expenditure*,  and  in  November  it  was  stated  in  Parliament  that  "  the 
counties  are  generally  exhausted  of  all  the  monies.  Men  are  forced  to 
mortgage  their  lands  and  to  sell  in  some  places  the  very  beds  from  under 
them  to  pay  the  taxes;  and  the  cheapness  of  commodities  is  not  so  much 
from  the  plenty,  as  from  the  scarcity  of  money,  which  is  drained  so 

^  A  Catalogue  of  the  Lords,  Knights  and  Gentlemen  that  have  compounded  for  their 
Estates,  London,  1655 ;  reprinted  by  Fellows,  Historical  Sketches  of  Charles  I., 
Appendix,  pp.  xiii.-lxxiv.  The  oppressiveness  of  the  proceedings  to  obtain  money 
from  fines  aroused  the  sympathy  of  Cromwell  who  said  "that  poor  men,  under  this 
arbitrary  power,  were  driven  like  flocks  of  sheep  by  forty  in  a  morning  to  the 
confiscation  of  goods  and  estates,  without  any  man  being  able  to  give  a  reason 
why  two  of  them  had  deserved  to  forfeit  a  shilling" — Oliver  CromwelCs  Letters  and 
Speeches,  edited  by  Thomas  Carlyle  (Copyright  edition),  iv.  p.  40. 

'  It  is  from  this  point  of  view  that  the  various  proposals  of  Benbrigge,  Gerbier 
and  Lambe  for  the  foundation  of  a  bank  {vide  infra,  iii.  pp.  200,  201)  are  explained 
In  addition  to  these,  Cromwell  made  overtures  to  Francis  Frescobaldi  with  a  view 
to  the  establishment  of  a  bank,  in  which  Cromwell  himself  proposed  to  invest 
60,000  ducats — The  Interest  of  Ireland  in  its  Trade  and  Wealth  stated,  by  Richard 
Lawrence,  Dublin,  1682,   Part  i. — Preface. 

3  Cromwell,  speaking  on  September  17,  1656,  said  that  "we  had  no  benefits 
of  those  estates  at  all  considerable" — Carlyle,  Cromwell,  ut  supra,  iv.  p.  214. 

*  Carlyle,  Cromwell,  iv.  p.  32. 


256         Finance  and  the  Spanish  War  1654    [chap.  xni. 

continually  from  the  country  by  their  monthly  taxes  as  it  never  returns 
again  in  such  plenty.  And  if  this  drain  should  run  long,  it  would,  nay 
it  is  to  be  feared,  that  it  will  make  the  poor  tenant  and  farmer  to  run 
too ;  and  ere  long  the  very  landlord  himself \"  Therefore,  if  the 
Protectorate  was  to  remain  solvent,  being  without  the  extraordinary 
receipts  of  the  Long  Parliament  and  being  compelled  to  reduce  the 
assessments,  it  must  carefully  avoid  any  policy  of  adventure.  There 
remained  one  alternative,  namely  the  continuance  of  both  forces  on 
a  war-footing  by  means  of  new  extraordinary  receipts.  It  was  supposed 
that,  by  reverting  to  the  practice  of  seventy  years  before,  a  war  with 
Spain  in  the  West  Indies  could  be  made  to  pay  its  way",  and  in  the 
latter  half  of  1654  the  fleet  sailed  on  this  mission.  The  analogy  to  the 
time  of  Elizabeth  was  misleading.  Then  England  had  no  American 
possessions :  whereas  now  colonies  had  been  founded,  and,  as  far  as  the 
Navigation  Act  was  effecting  its  purpose,  a  reserved  trade  was  being 
built  up  with  the  plantations.  Thus,  in  the  changed  circumstances, 
England  was  subject  to  reprisals.  Besides,  the  successful  Elizabethan 
expeditions  had  been  those  of  small  syndicates  of  adventurers ;  while,  as 
shown  elsewhere^,  the  large  ventures  had  failed  to  make  any  very 
considerable  captures.  The  sending  of  the  fleet  would  be  open  to  all 
the  disadvantages  of  previous  extensive  equipments  and  also  to  grave 
diplomatic  objections.  All  through  the  earlier  raids  on  Spanish  com- 
merce, considerable  care  was  taken  that  the  State  should  not  be  ostensibly 
involved ;  while  the  sending  of  the  fleet  of  the  Protectorate  could  not 
fail  to  be  regarded  as  an  unfriendly  act,  reacting  seriously  on  the 
considerable  trade  of  England  with  Spain.  For  these  reasons,  it  follows 
that  the  anticipated  gain  from  the  expedition  to  the  West  Indies  could 
not  be  realized,  and  that  the  country  would  be  forced  sooner  or  later  to 
face  the  expense. 

The  estimates  for  the  year  1655  were  made  to  balance,  owing  to  the 
assessments  in  England,  Scotland  and  Ireland  being  calculated  at  the 
very  high  figure  of  J'l  ,320,000.  The  total  outlay  provided  for  was  two 
and  a  quarter  millions^;  but  in  the  case  of  the  navy,  the  estimated  charge 

^  The  Diary  of  Thomas  Barton  from  1656  to  1659  with  an  account  of  the  Parliament 
of  1654  from  the  journal  of  Guihon  Goddard,  edited  by  J,  T.  Rutt,  London,  1828,  i. 
p.  Ixxxvi. 

2  The  World's  Mistake  in  Oliver  Cromwell:  Or  a  short  political  Discourse ,  shelving 
that  Cromwell's  Male- Administration... laid  the  Foundation  of  our  present  Condition  in 
the  Decay  of  Trade,  1668,  in  Harleian  Miscellany,  i.  p.  283. 

3  Vide  supra,  pp.  85,  98. 

*  This  was  exactly  the  amount  of  the  estimated  revenue  (Gardiner,  History, 
1649-60  (1901),  III.  p.  82,  where  the  details  are  given).  The  assessment  however 
should  at  the  most  have  brought  in  £900,000  {Journals  of  the  House  of  Commons, 


CHAP,  xra.]  The  Finances  1655-7  257 

was  exceeded  by  close  on  X'^0,000* ;  and,  in  addition,  there  was  probably 
a  large  deficiency  in  the  sum,  received  from  the  assessments,  as  compared 
with  that  estimated.  For  the  year  1656  the  estimates  showed  an 
adverse  balance  of  over  c£*350,000 ;  but,  by  the  exercise  of  economy,  the 
outlay  on  the  navy  was  reduced  below  the  estimate  by  <£*131,461'.  The 
following  year  (1657),  the  estimates  showed  an  increaise,  almost  repeating 
the  figures  of  1655'.  On  this  occasion,  there  was  no  deficit  on  paper, 
and  the  actual  expenditure  on  the  navy  was  less  than  that  calculated* ; 

VII.  pp.  387,  392,  395).     This  would  reduce  the  estimated  revenue  to  £1,842,000. 

The  estimated  expenditure  is  as  follows : 

Army  £1,608,000 

Navy  480,286 

Other  Expenditure  258,000 

£2,246,286 
—Add.   MSS.  (British  Museum)  4,156  f  89,  28,854  ff.  1-7,  32,471   ff.  63,  64; 
Burton,  Diary,  ut  supra,  i.  pp.  Ixxxvi.,  cxxi. 

1  Estimate  Navy       £480,285 

Actual         „  669,512 

Excess  Expenditure  over  estimate  ...         £89,227 
^  Estimated  Expenditure  (1656) 

Army           £1,051,819  12    0 

Navy           900,000    0    0 

Miscellaneous        124,220  15  10 

£2,076,040    7  10 
Estimated  Revenue  1,720,478    4    0 

Estimated  Deficiency       365,662    3  10 

Deduct  saving  on  the  Navy        131,461  11     8^ 

£224,100  12     1| 
—Carte  MS.  lxxiv.  f.  7;  MS.  Rawl.  A.  195  a,  f.  241 :  cf.  Gardiner,  Hist(yry,  1649-60, 
III.  (Supplementary  Chapter  1903),  p.  4  (note),  where  the  details  of  the  receipts  are 
printed. 

3  Estimates  1657  (for  Great  Britain  only) 

Army        £1,132,489     0    0 

Navy         994,500     0    0 


Miscellaneous      ...  200,000    0    0 


£2,326  989    0    0 


Assessments  ...     £1,464,000    4    0 

Customs  and  Excise  700,000    0    0 


Miscellaneous        ...  198,000    0    0 

£2,362,000    4    0 


One  year's  actual!  3^^^^    3    ^ 

deficit  Ireland       J 

£2,330,464    3    9^ 
From  Thurloe,  State  Papers,  vi.  p.  696. 

*  Estimate  for  Navy £994,500    0    0 

Actual  cost  of  „      742,034  12    3| 

Saving  on  estimate £252,465     7     8^    - 

The  actual  cost  of  the  navy  in  1658  was  £599,108.  18«.  8^.  (MS.  Rawl.  A.  196  a, 
f.  241),  and  the  saving  on  the  estimates  is  probably  to  be  assigned  to  the  captures  of 
Spanish  plate  ships,  £130,000  being  realized  up  to  January  1657  from  the  sale  of 

s.  c.  I.  17 


258  The  East  India  Company  1655-7     [chap.  xiii. 

but  this  apparently  favourable  showing  depended  upon  the  large  amount 
estimated  for  the  assessments  being  actually  received,  and  the  total 
authorized  by  Parliament  was  likely  to  have  realized  very  considerably 
less  than  that  calculated  ^ 

Thus  the  first  years  of  the  Protectorate  were  beset  with  financial 
difficulties.  The  expected  aid  from  the  capture  of  Spanish  prizes  had 
proved,  to  a  large  degree,  an  illusive  hope ;  and  little  assistance  could  be 
obtained  from  the  dispersion  of  the  few  remaining  realizable  assets  of 
the  State.  The  condition  of  the  Exchequer  brought  the  government 
into  relations  with  the  East  India  company,  through  the  borrowing  by 
the  former  of  dg'50,000  in  1655  and  a  further  sum  of  i?10,000  in  October 
of  the  same  year.  For  the  past  three  years,  the  status  of  the  trade  had 
been  precarious.  Although  the  United  Joint-Stock  had  made  a  reason- 
able profit — namely  105  per  cent.^,  which,  if  taken  to  have  been  gained 
in  the  six  years  ending  in  1656,  compares  with  107^  per  cent,  earned  by 
the  Dutch  company' — the  effect  of  voyages  under  license  had  not  been 
satisfactory,  either  to  the  members  or  to  the  independent  adventurers. 
The  pressing  needs  of  the  government  caused  an  intimation  to  be  made 
to  the  company  that  the  making  of  a  loan  "  would  be  taken  for  a  high 
favour *.'''  Such  a  hint,  at  a  time  when  an  enquiry  was  about  to  be  made 
into  the  best  means  of  conducting  the  trade^  foreshadowed  a  report, 
favourable  to  the  wishes  of  the  company — once  it  had  found  the  funds 
required  of  it.  The  report  was  duly  presented  on  December  18th,  1656, 
and  Cromwell  signed  a  charter,  which  explicitly  recognized  most  of  the 
privileges  claimed  by  the  company,  on  October  19th,  1657^  Under  this 
grant,  a  fresh  subscription  of  capital  was  made,  and  the  New  General 
Stock  was  begun.  The  total  applications  represented  stock  to  the  extent 
of  ^£^739,782.  105.  Od.  on  which  calls  of  50  per  cent,  were  made^ 

The  financial  assistance,  afforded  by  the  East  India  company,  was 
relatively  small  in  the  face  of  the  repeated  annual  deficits.  At  the  end 
of  1655  the  debt  was  at  least  £'lS\yS^6.  2*.  10d.\  and  it  was  little  aid  to 
the  credit  of  the  administration  that  a  report  was  current  that  the 

bullion  alone  to  a  single  firm  (State  Papers,  Domestic,  Inter.,  cliii.  20).  It  was 
unfortunate  that  the  savings  made  in  this  way  appear  to  have  been  more  than  con- 
sumed by  excesses  on  the  estimates  for  other  spending  departments,  so  that  as  shown 
below  (p.  259)  the  debt  kept  on  increasing,  till  it  became  unmanageable. 

^  Journals  of  the  House  of  Commons,  vii.  p.  487 ;  Burton,  Diary,  ub  supra,  i. 
p.  377. 

2  Vide  infra,  ii.  p.  128. 

^  G.  C.  Klerk  de  Reus,  Niederldndisch-Ostindischen  Gompa^nie,  Appendix  vi. ; 
Anderson,  Annals  of  Commerce  (edited  by  David  MacPherson),  1805,  iv.  p.  488, 

4  Court  Book  xxiii.  October  26,  1655. 

5  Vide  infra,  ii.  pp.  122,  123,  128,  129. 

8  md.,  II.  p.  130,  7  Carte  MS.  wcxiv.  f.  7. 


CHAP.  XIII.]    Public  Faith  "  the  public  Despair  "  1667-9    259 

amount  owing  was  as  much  as  two  and  a  half  millions*.  With  the 
addition  of  the  deficits  for  1656  and  1657,  the  pressure  on  the  finances 
was  more  and  more  apparent.  Tlie  debentures,  issued  in  lieu  of  pay, 
were  selling  at  an  immense  discount;  and,  in  1657,  the  debt  was 
described  as  "  insuperable,'*''  so  that  the  public  faith,  on  which  loans  had 
been  raised,  began  to  be  known  as  "  the  public  despair'.***  Money  was 
wanting  to  pay  the  pensions  of  wounded  sailors  and  of  widows ;  con- 
tractors and  officers  were  threatened  with  arrest,  on  account  of  liabilities 
incurred  on  behalf  of  the  State,  and  still  further  debts  were  contracted 
through  there  being  no  funds  to  pay  off  ships  on  arrival,  with  the  result 
that  the  crews  were  kept  on  the  pay-roll*.  In  1658  the  army  was  said 
to  be  going  barefoot  in  the  winter-time*;  and  their  "clamours,*"  as  well 
as  those  of  the  navy,  were  "  so  great  that  they  could  scarcely  be  borne*."" 
It  was  even  alleged  that  great  difficulty  had  been  found  in  paying  for 
the  state-funeral  of  Cromwell*.  The  reality  of  these  various  aspects  of 
financial  embarrassment,  so  great  that  it  verged  on  a  bankruptcy  of  the 
government,  may  be  judged  from  the  fact  that  in  1659  the  debt  was 
calculated  at  between  two  and  a  half  and  two  and  a  quarter  millions'. 
Of  this  amount,  over  one  half  (c£^l ,300,285)  was  owing  by  the  navy". 
In  spite  of  this  load  of  indebtedness,  the  estimate  for  1659  could  not  be 
reduced  much  below  two  and  a  quarter  millions,  and  it  turned  out  that 
the  actual  cost  of  the  navy  exceeded  the  estimate  by  about  30  per  cent.* 

^  Carlyle,  Gromwelly  iv.  p.  214 ;  A  True  and  Impartial  Narrative  of  the  most 
muierial  Debates  and  Passages  in  the  lust  Parliament,  by  Slingsby  Bethell,  16.59,  in 
isomers'  Tracts,  iv.  p.  531.  ^  Burton,  Diary,  ut  supra,  ii.  pp.  199,  238. 

3  Calendar  State  Papers,  Domestic,  1657-8,  pp.  xiv.-xvi. 

*  Burton,  Diary,  ut  supra,  ii.  p.  366. 

^  Thurloe,  State  Papers,  vii.  p.  99.  ^  Ibid.,  vii.  p.  415. 

'  Journals  of  the  House  of  Commons,  vii.  pp.  641,  675 ;  Thurloe,  State  Papers, 
VII.  p.  667. 

•*  State  Papers,  Domestic,  relating^  to  the  Navy,  ccxii.  24 ;  Calendar,  1658-9, 
p.  568. 

9  Estimate  for  1659,  dated  April  7,  1659  : 
England 

Army  £764,481  15  10        Assessments  ...     £420,000    0    0 

Navy  453,986     0    7        Customs       411,414  12    Sj 

Miscellaneous         ...       329,320    8     6^      Excise  584,170     8     2 

iMiscellaneous         ...        101,689  16    7^ 

£1,517,274  17  1 
Scotland— receipts...  143,652  11  11 
Ireland        „  ...       207,790    0    0 


£1,547,788  4  llj 
Scotland— charge  ...  307,271  12  8^ 
Ireland         „  ...       346,480  18    3 


£2,201,540  15  11 


£1,868,717    9    0 


Estimate  for  Navy        £453,986     0    7 

Actual  cost  of  „  601,601     7  10 

Excess £147,616    7    3 

-MS.  Rawl.  A.  195  a,  f.  241 ;  Journals  of  the  House  qf'CQmmons,  vi|.  pp.  627-31.    It 

17—3 


260       The  Government  without  Credit  1659    [chap.  xiii. 

There  could  be  few  stronger  arguments  for  a  change  of  the  whole  form  of 
government  than  the  financial  errors  of  the  Long  Parliament,  the 
Protectorate  and  the  re-called  Long  Parliament,  which  threatened  to 
culminate  in  national  bankruptcy,  and  which  had  already  produced 
a  crushing  debt.  The  average  expenditure  of  Charles  I.  had  been 
trebled,  according  to  the  estimates,  and  probably  much  more  than  trebled 
by  the  actual  disbursements.  The  Crown  property  and  the  confiscated 
lands  had  been  sold,  and  there  yet  remained  a  debt  more  than  double 
the  largest  recorded  Crown  liability  before  1641.  At  the  beginning  of 
the  constitutional  struggle,  great  stress  had  been  laid,  not  only  on  the 
method  of  raising  supplies,  but  also  on  the  cost  of  these  to  the  tax-payer. 
But  even  if  everything  that  Pym  said  in  1641,  concerning  the  cost  to 
the  consumer  through  the  monopolies,  be  accepted  and  the  whole  of  the 
rise  in  prices  be  assigned  to  the  operation  of  these  grants,  while  his 
figures  are  taken  for  the  loss  occasioned  by  this  rise — if  moreover  to  this 
be  added  the  other  items  of  expenditure,  raised  by  taxation — then  the 
total,  so  obtained,  would  be  less  than  the  estimates  from  1651  to  1659, 
and  therefore  considerably  less  than  the  average  actual  outlays  in  any 
one  of  these  years  ^ 

The  war  with  Spain  proved  highly  prejudicial  to  the  commerce  of 
the  country.  Not  only  had  the  cost  involved  grave  financial  strain  but 
the  interruption  of  trade  was  greatly  felt,  especially  at  a  time  when  there 
had  not  been  a  sufficient  interval  for  recuperation  after  the  destruction 
of  wealth  during  the  Civil  War  and  the  struggle  with  Holland.  The 
cloth  and  shipping  trades  were  specially  affected.  The  former  had  not 
recovered  from  the  peculiar  injuries  it  had  sustained  during  the  period 
before  1647.  It  suffered  from  the  prohibition  of  the  export  of  wool, 
and  the  interruption  of  supplies  from  Spain  added  to  the  depression. 
The  Spanish  reprisals  on  shipping  constituted  another  injury  to  trade. 
The  captures,  made  by  England,  were  much  less  than  had  been  expected, 
and  the  proceeds  went  into  the  Exchequer;  whereas  the  individual 
merchant  or  syndicate  had  to  bear  the  loss  of  the  seizures,  made  by 
Spain.  By  the  end  of  1657  these  had  reached  a  large  total.  Weymouth 
had  suffered  severely  in  this  way,  Bristol  alone  had  lost  250  sail;  and. 


was  on  these  figures  that  subsequent  criticisms  of  the  financial  methods  of  the  Long 
Parliament  and  Protectorate  were  based,  as  for  instance  when  it  was  said  that  the 
"  barbarous  rebells  took  up  arms  against  taxes  of  £200,000  a  year  and  by  their  own 
arbitrary  exactions  loaded  their  fellow-subjects  with  two  millions" — A  Speech  mads 
the  21«<  of  June  1715  upon  the  Question  about  impeaching  his  Grace  the  Duke  of  Ormonde, 
1716,  p.  7. 

*  Awake  0  England:  Or  the  People's  Invitation  to  King  Charles.  Being  a  Recital 
of  the  Ruins  over-running  the  People  and  their  Trades,  1660,  in  Harleian  Miscellany, 
I.  p.  269. 


CHAP,  xm.]  The  Crim  1659-60  261 

in  a  petition  of  the  merchants  and  traders  of  England,  the  number  of 
vessels  taken  was  estimated  at  1,800  "almost  to  our  ruin  and  the  over- 
throw of  thousands  of  famihes^'^  During  1658  complaints  of  the 
hindrance  to,  and  deadness  of,  trade  continued  %  which  were  intensified, 
early  in  1659,  by  the  depredations  of  privateers  in  the  Irish  Channel  to 
such  an  extent  that  trade  with  Ireland  had  almost  ceased^ ;  while,  at  the 
same  time,  many  busses  of  the  fishing  fleet  on  the  East  Coast  had  been 
seized*.  Early  in  the  same  year  it  was  reported  that  there  never  had 
been  greater  complaints  in  the  City  of  want  of  trade :  nine-tenths  of  the 
Spanish  merchants  had  incurred  losses,  and  house-rent  had  fallen  by  an 
average  of  ten  per  cent.'  Towards  the  close  of  the  year  the  depression 
tended  towards  a  crisis.  The  price  of  grain,  which  had  been  exceptionally 
low  in  1653  and  1654,  was  relatively  high  from  1657  to  1659*.  The 
depression  of  trade,  through  the  war  and  other  causes,  made  the  pressure 
of  taxation  very  severe.  The  indebtedness  of  the  administration  had 
become  extreme,  and,  added  to  all  these  causes  of  panic,  there  was  the 
great  political  uncertainty  which  occasioned  fears  lest  there  should  be 
a  renewed  civil  convulsion.  As  had  happened  just  before  the  Civil  War, 
there  was  a  considerable  export  of  bullion,  which  was  transferred  by  the 
English  goldsmiths  to  bankers  abroad  for  safe-keeping  on  behalf  of  their 
clients'.  In  London,  in  December  1659,  business  was  frequently  suspended 
through  riots ^,  and  it  was  stated,  in  a  petition  signed  by  23,500  persons, 
that  through  loss  of  trade  "  many  thousand  families  have  nothing  now 
to  do^""  The  petitions,  presented  on  behalf  of  the  contending  political 
parties,  all  agree  in  showing  the  country  as  in  the  throes  of  an  industrial 
crisis  during  the  winter  of  1659-60.  Allusion  is  made,  again  and  again, 
to  the  pressure  of  taxes,  the  general  depression  of  trade  and,  particularly, 
that  in  cloth,  the  miseries  of  the  poor  and  the  impaired  state  of  credit. 
Doubtless,  there  is  some  exaggeration,  attributable  to  political  motives, 
but  there  can  be  little  doubt  that  the  crisis  was  a  serious  one.  The 
Yorkshire  trade  in  cloth  was  described  as  "  ruined  "  and  "  dead  by  reason 
of  the  warres  with  Spain.**'     Trade   in   general  was  pictured   as  very 

1  State  Papers,  Domestic,  Inter.,  clviii.  17,  109;  Calendar,  1657-8,  p.  204;  The 
World's  Mistake  in  Oliver  Cromwell,  1668,  in  Harleian  Miscellany,  i.  p.  284. 

2  Sir  Rich.  Browne  to  [Sec.  Nicholas]  May  ^,  1658  (State  Papers,  Flanders 
Correspondence);  Calendar,  Domestic,  1658-9,  p.  114. 

3  State  Papers,  Domestic,  Inter.,  ccii.  53,  coin.  82;  Calendars,  1658-9,  p.  322, 
1659-60,  p.  24. 

*  Ibid.,  cciv.  11 ;  Calendar,  1659-60,  pp.  128,  129. 
^  Thurloe,  State  Papers,  vii.  p.  616. 
^  Rogers,  Agriculture  and  Prices,  ut  supra,  v.  p.  272. 

7  An  Appeal  to  Caesar,  1660,  p.  22.  »  Whitelocke,  Memorials,  p.  689. 

^  The   Engagement  and   Remembrance  of   the   City   of    London,   printed   by 
Dr  Cunningham,  Growth  of  English  Industry  and  Commerce  in  Modem  Times,  p.  927- 


262    "  Heart-piercing  Cries  of  the  Poore  "  1659    [chap.  xiii. 

defective  "  to  the  utter  ruin  of  many  and  fear  of  the  like  to  others."  In 
a  petition  from  Kent,  allusion  is  made  "  to  the  loud  and  heart-piercing 
cries  of  the  poore  and  the  disability  of  the  better  sort  to  relieve  them 
through  the  total  decay  and  subversion  of  trade."  The  credit  of  the 
mercantile  class  was  in  a  precarious  condition,  and  the  general  dis- 
satisfaction was  so  great  that  there  were  very  great  numbers  of  refusals 
to  pay  taxes*.  The  position  of  the  Long  Parliament  now  became 
untenable,  it  was  overwhelmed  with  debt,  and  the  end  of  its  credit  had 
been  reached.  The  pledges  of  large  bodies  of  men  not  to  pay  taxes 
would  have  meant  little,  if  the  army  could  have  been  depended  on  to 
exact  payment,  as  it  had  done  in  the  past ;  but  the  army  was  divided, 
and  therefore  it  would  be  impossible  to  raise  fresh  supplies.  The 
declaration  of  Monk  for  "a  free  parliament"  (February  1660)  was 
accepted  in  London  as  an  omen  towards  the  termination  of  the  existing 
unrest,  and  about  the  time  of  the  Restoration  there  was  an  improvement 
in  the  commercial  outlook,  which,  in  time,  was  followed  by  a  revival  of 
trade. 

1  State  Papers,  Domestic,  Inter.,  ccxix.  28,  29,  30,  31,  36,  37,  38,  39,  41,  42; 
the  portions  of  these  petitions  relating  to  trade  have  been  printed  by  Dr  Cunningham 
in  Growth  of  English  Industry  and  Commerce  in  Modern  Times,  Appendix  E  (pp.  921-7). 


CHAPTER  XIV. 

Industrial  Recuperation  after  the  Civil  War  (1660-71). 

With  the  Restoration  there  came  a  revival  of  confidence,  and  trade 
began  to  improve.  The  depression,  occasioned  in  part  by  the  want  of  a 
sufficient  period  of  peace  for  recuperation  after  the  losses  of  the  Civil 
War,  had  culminated  in  the  crisis  of  the  winter  1659-60.  This  crisis 
was  caused  by  the  disturbance  of  trade  through  the  wars  with  Holland 
and  Spain,  by  the  high  rate  of  taxation  and  also  by  anticipations  of 
serious  political  disturbances  at  home.  It  was  believed  that,  by  the 
Restoration,  tranquillity  would  be  secured  in  Great  Britain  and  peace 
would  be  made  with  foreign  powers ;  while  Parliament  considered  that, 
after  certain  liabilities  of  Charles  I.  and  the  Protectorate,  which  were 
held  to  be  debts  of  the  nation,  had  been  discharged',  the  ordinary  Crown 
expenditure  would  not  exceed  d^l, 200,000 2,  or  about  half  that  of  the 
government  since  1650. 

It  was  almost  inevitable  that  many  of  the  expectations,  formed 
towards  the  end  of  1660,  should  be  disappointed.  The  period  of  civil 
war  had  produced,  not  only  direct  results,  but  also  indirect  effects  which 
were  difficult  to  estimate.  Given  peace  and  a  stable  government,  it 
would  not  require  many  years  to  repair  the  direct  losses  of  the  struggle. 
The  indirect  consequences  were  not  so  apparent,  and  these  had  resulted 
in  a  great  change  in  the  relative  position  of  the  commerce  of  England, 
as  compared  with  that  of  certain  foreign  countries.  The  Dutch  and,  to 
a  less  extent,  the  French  had  extended  their  trade  during  the  war  in 
England;  and  therefore,  when  the  latter  country  was  able  to  give  its 
undivided  attention  to  trade,  it  found  competition  keener,  and  its  capital 
resources  were  insufficient  to  finance  all  the  enterprizes  which  were  open 
to  it.     Moreover,  the  famine  of  the  year  1661,  when  wheat  reached  the 

*  The  items  and  the  provision  to  meet  them  are  printed  in  the  Introduction  to 
Dr  W.  A.  Shaw's  Calendar  of  Treasury  Books,  1660-7,  pp.  i.-xx. 

2  Journals  of  the  House  of  Commons,  viii.  p.  150 ;  The  Charges  issuing  forth  of  the 
Crown  Eevenue  of  England  and  Wales,  by  Captain  Lazarus  Haward,  London^  1660. 


264  The  industrial  Position  1660-5      [chap.  xiv. 

highest  average  price  of  the  century,  tended  to  check  production  for  a 
time^ 

Regarded  from  the  point  of  view  of  industry,  the  period,  beginning 
in  1660,  represents  the  continuation  of  the  era  of  reconstruction,  which 
had  begun  in  1651,  but  which  had  been  hitherto  subject  to  frequent 
interruptions.  With  peace,  both  at  home  and  abroad,  it  at  length 
became  possible  for  the  individual  to  devote  himself  to  his  business  with 
some  prospect  of  security,  and  for  responsible  persons  to  endeavour  to 
take  stock  in  a  systematic  manner  of  the  position  of  the  country.  The 
latter  tendency  is  shown  by  the  labours  of  the  Committee  of  Trade,  and 
by  the  appearance  of  a  number  of  treatises  which  at  least  profess  to  deal 
with  trade  in  general  and  its  tendencies  from  different  aspects. 

In  many  respects  the  most  valuable  contribution  to  this  discussion 
is  the  calculation,  made  by  Sir  William  Petty,  of  the  national  wealth 
and  the  national  income  within  a  few  years  after  the  Restoration.  While 
exception  may  be  taken  to  some  of  his  results,  the  basis  of  calculation 
is  more  reliable  than  that  adopted  later  by  other  writers,  in  so  far  as 
each  total  is  arrived  at  independently,  instead  of  the  whole  series  being 
based  on  a  series  of  ratios,  all  dependent  on  a  single  datum ^  Thus  an 
error  in  the  total,  under  one  heading,  is  confined  to  that  part  of  the 
calculation,  instead  of  influencing  all  the  rest  of  the  estimate. 

P city's  Estimate  of  the  Wealth  of  England  and  Wales  circ.  1665. 
Agricultural  Land  (exclusive  of  houses)  8  mil.  £.  rent  @  18  years' 

purchase 
Farming  Stock,  Game,  Fisheries  @  \  the  capital  value  of  the  land... 
Houses  based  on  the  returns  of  Hearth  Money  @  about  12^  years' 

purchase         ...         ...         

Merchandize,  Furniture,  Plate 

Ships,  500,000  tons  @  £6  per  ton  

Coin  

Total  wealth 

The  National  Income, 

Rent  of  Land         

Profit  of  Personal  Property        

Labour  of  the  People        

Total  income^  ...         40    „ 

^  A  History  of  Agriculture  and  Prices,  by  J.  E.  T.  Rogers,  v.  p.  214. 

2  This  was  the  method  adopted  by  Andrew  Hooke  in  An  Essay  on  the  National 
Debt  and  National  Capital,  London,  1750.  Hooke  gives  an  estimate  of  the  national 
wealth  and  income  from  1600 ;  but,  for  the  reason  stated  in  the  text,  I  have  been 
unable  to  use  it.  The  results  of  his  method  will  be  sufficiently  indicated  by  men- 
tioning that  in  the  20  years,  1640  to  1659,  he  supposes  the  total  wealth  increased  by 
83^  millions.  Essay,  p.  58. 

3  Verbum  Sapienti,  Appendix  to  T?ie  Political  Survey  of  Ireland,  London,  1719, 
pp.  3-9. 


144  mil.  £. 

36 

)> 

30 

3> 

31 

fy 

3 

)i 

6 

if 

250 

if 

8 

ff 

7 

ff 

25 

a 

CHAP.  XIV.]  Petty' 8  Estimate  of  National  Wealth  1665    265 

In  the  estimate  of  the  income,  it  does  not  appear  that  allowance  has 
been  made  for  the  rent  of  house-property,  since  the  item  of  "  profit  on 
personality"*'  relates  to  profit  made  on  trading  capital  generally.  Rents 
of  houses,  at  this  time,  were  estimated  at  about  IJ  millions,  so  that  the 
annual  income  would  l)e  41^  millions;  and,  according  to  Petty's  estimate, 
the  outlay  was  40  millions  a  year,  leaving  a  balance  to  be  added  to  the 
national  capital  of  1^  millions.  This  on  the  whole  confirms  another 
estimate,  namely  that  in  1664  "the  annual  increment*"  in  stock  was 
about  IJ  millions \ 

Allowing  a  considerable  margin  for  under-statement  or  for  over- 
statement, this  calculation  is  important  in  several  respects.  It  shows 
the  relatively  large  ratio  of  fixed  capital  to  that  wealth,  which  was  free 
to  be  used  as  capital  in  any  direction,  where  it  was  required.  It  follows, 
then,  that  the  industrial  revival,  under  the  most  favourable  conditions, 
would  be  comparatively  slow,  since  it  would  be  ultimately  conditioned 
by  the  rate  of  the  accumulation  of  capital.  Moreover,  should  the  owners 
of  land  become  extravagant,  most  of  the  new  capital  must  come  from  the 
savings,  made  out  of  the  income  of  that  already  employed  in  trade ;  and, 
if  Petty  is  correct,  the  whole  trading  profits  were  only  7  millions.  In 
view  of  these  inferences  the  question  of  future  taxation  might  become 
a  serious  one.  While  a  revenue  of  <j^l  ,200,000  a  year,  most  of  which 
was  raised  by  Customs  and  excise'',  did  not  constitute  a  heavy  strain, 
if  well  distributed  over  an  income  of  above  40  millions,  an  additional 
assessment  which  fell  heavily  on  rent  or  profits,  even  if  of  comparatively 
small  amount,  would  have  the  effect  of  checking  the  inflow  of  new  capital 
to  trade,  where  it  was  greatly  needed. 

A  number  of  indications  point  to  the  conclusion  that  foreign 
commerce  had  not  recovered  from  the  disturbance  of  the  recent  wars. 
At  the  beginning  of  the  reign  of  Charles  II.  the  income,  received  by  the 
Crown  from  Customs',  was  less  than  it  had  been  twenty  years  before. 

^  Natural  and  Political  Observations  on  the  State  of  Great  Britain,  by  Gregory  King, 
Edinburgh,  1810,  p.  47 ;  A  Letter  from  a  Bystander  to  a  Member  of  Parliament, 
London,  1741,  p.  97. 

2  Estimate  for  1663 : 

Customs £600,000 

Excise     660,000 

Hearth-money 161,000 

Small  Branches            67,000 

£1,358,000 
— State  Papers,  Domestic,  Charles  II. ,  lxxxviii.  129.    The  settled  revenue,  apart  from 
special  parliamentary  grants,  for  Easter  1663  to  Easter  1664,  as  returned  by  the 
Exchequer,  was  under  £850,000,  Calendar  Treasury  Books,  1660-6,  p.  xxix. 

3  That  is  the  sum  actually  received  at  the  Exchequer  which  was  only  about  half 
that  estimated  in  1660  and  again  in  1663 — vide  supra,  note*. 


266  Foreign  Trade  1662-3  [chap.  xiv. 

Further,  a  detailed  account  of  the  total  exports  and  imports  of  London 
for  the  year  Michaelmas  1662  to  Michaelmas  1663  has  survived^  which 
is  as  follows : 

Foreign  Trade  of  the  City  of  London  1662-3. 

Exports £2,022,812    4 

Imports     4,016,019  18 

Total £6,038,832  ~2 

Davenant  notes  that  the  imports  are  overvalued,  and  that  no  account 
is  taken  of  foreign  goods  re-exported^;  but  this  error  applies  rather  to 
the  adverse  balance  than  to  the  total  trade.  Further,  at  this  time, 
judging  by  the  Customs-returns,  the  foreign  trade  of  the  rest  of  England 
and  Wales  (other  than  London)  was  about  28  per  cent,  of  the  total. 
Thus  the  total  for  the  whole  country  might  be  estimated  at  about 
7f  millions — an  amount  slightly  in  excess  of  Petty's  valuation  of  the 
annual  profit  on  trading  capital  and  giving  ^^1.  5*.  per  head  of  the 
supposed  population  ^ 

The  deliberations  of  the  Committee  of  Trade  were  concerned  with 
two  main  classes  of  problems — those  relating  to  commerce  generally  and 
others  to  special  industries.  Amongst  the  former,  may  be  mentioned 
the  relation  of  the  State  to  the  control  of  bullion  and  to  the  fostering 
of  shipping  and  fishing.  In  December  1660  the  Committee  "  enquired 
what  loadstone  attracted  these  metals  by  force  of  nature  to  itself,  against 
all  human  providence  or  prevision,  and  soon  found  that  it  was  alone  the 
present  course  of  trade  and  trafKque  throughout  the  world."  England 
"hath  of  its  own  growth,  manufacture  and  produce  always  enough  to 
oblige  the  importation  of  money  and  bullion  upon  all  occasions,  beyond 
any  other  nation  whatsoever  in  Christendom.'"  Accordingly,  it  was 
recommended  that  there  should  be  no  restriction  on  the  export  of  bullion, 
"  because  foreign  merchants  prefer  to  lodge  it  where  there  is  no  restraint 
on  withdrawals,""  and  the  financial  importance  of  Amsterdam  and  Leghorn 
was   attributed,   in   part,   to   their   adoption   of  this   policy*.      These 

1  An  Accompt  of  all  goods  and  Merchandises,  exported  from  the  City  of  London, 
and  the  value  thereof,  and  of  the  severall  goods  and  merchandises  and  the  value 
thereof,  imported  into  the  said  city,  in  the  years  1663  and  1669 — Add.  MS.  (Brit. 
Mus.)  36,785;  Anderson,  Annals  of  Commerce,  ii.  p.  633. 

2  Add.  MS.  (Brit.  Mus;)  36,7«5,  f.  1». 

3  Comparing  this  result  with  the  figures  of  Misselden  for  the  year  1613  {The 
Circle  of  Commerce,  p.  121),  the  total  foreign  trade  shows  an  increase  at  the  end  of  the 
fifty  years  of  about  83  per  cent.  As  indicated  in  the  text,  there  was  a  considerable, 
but  not  a  uniform  improvement  up  to  the  later  years  of  the  reign  of  Charles  I.  after 
which  there  was  a  large  decline,  followed  by  the  beginnings  of  a  period  of  expansion, 

^  Minutes  of  Committee  of  Trade  1660-2,  Add.  MS.  (Brit.  Mus.)  25,115,  ff.  44, 
47,  54;  A  Collection  of  Scarce  and  Valuable  Tracts  on  Money,  ed.  J.  R.  MCulloch, 


CHAP.  XIV.]       The  Committee  of  Trade  1660-2  267 

conclusions  represent  a  great  advance  on  the  attitude  of  Thomas  Violet 
ten  years  before,  who  considered  he  had  claims  on  a  pension  through 
having  secured  the  conviction  and  fining  of  exporters  of  bullion  ^  and 
they  are  the  more  enlightened  since  the  revival  in  trade  had  raised  the 
rate  of  interest.  A  similar  breadth  of  view  is  shown  by  the  answer  of 
the  Committee  to  the  petition  of  certain  London  shopkeepers,  who 
sought  to  increase  the  restraints  on  aliens.  Not  only  was  it  pointed  out 
that  foreigners,  already  in  England,  had  introduced  many  useful  trades, 
but  it  was  suggested,  subsequently,  that  the  cloth  trade  would  be 
improved,  if  foreign  artificers  were  induced  to  settle  in  England*. 

On  the  question  of  the  development  of  the  fishing  industry,  the 
Committee  continued  the  traditional  policy.  As  early  as  July  1660, 
Charles  II.  had  written  to  this  Committee,  recommending  the  trade  as 
a  method  of  employing  the  poor^,  and  in  1661  the  first  steps  were  taken 
towards  the  formation  of  a  company  which  was  later  incorporated  as  the 
Company  of' the  Royal  Fishery^. 

Much  of  the  time  of  the  Committee  was  given  to  the  consideration 
of  the  position  of  the  existing  chartered  bodies.  The  regulated  companies 
had  fallen  upon  evil  days.  The  Merchant  Adventurers  had  been  forced 
to  borrow  money,  in  order  to  meet  the  demands  made  upon  them  by 
both  the  Crown  and  Parliament.  By  the  time  of  the  Protectorate,  the 
company  was  unable  to  raise  further  sums;  and,  in  1657,  the  then 
Committee  of  Trade  passed  a  resolution  in  favour  of  the  "free""  merchants 
by  a  large  majority'*.  The  new  Committee  after  the  Restoration  was  of 
opinion  that  the  company  was  deserving  of  support,  if,  and  so  far  as, 
it  was  a  national  company*.  Early  in  1662,  the  peculiar  constitution  of 
the  organization  involved  it  in  difficulties.     Having  no  joint-stock,  the 

London,  1856,  p.  145.  Slingsby  informed  Pepys  in  1665  that  ''the  old  law  of  pro- 
hibiting bullion  to  be  exported  is,  and  ever  was  a  folly  and  an  injury,  rather  than 
good" — Diary  (Chandos  edition),  p.  231. 

1  A  True  Discoverie  to  the  Commons  of  England  how  th^y  have  been  cheated  of  almost 

(188    b    22\ 
Brit.  Mus.  '-—^ —  j ,  p.  46. 

2  State  Papers,  Domestic,  Charles  II.,  xxi.  108-10,  xli.  4;  Calendars,  1660-1, 
p.  363,  1661-2,  p.  80 ;  The  Grand  Concern  of  England  explained,  1673,  in  Harleian 
Miscellany  (1746),  viii.  pp.  533,  553. 

3  Mercurius  Redivivus,  Add.  MS.  (Brit.  Mus.)  10,117,  f.  170. 
<  Vide  infra,  ii.  p.  372. 

^  Burton,  Diary,  ut  supra,  i.  pp.  308,  309.  Burton,  for  family  reasons,  was 
hostile  to  the  company.  There  are  some  amusing  sentences  in  his  report  of  the 
debate.  "Sir  Christopher  Pack,  who  is  master  of  the  Merchant  Adventurers* 
company,  turned  in  the  debate  like  a  horse  and  answered  eveiy  man.     I  believe  he 

spoke  at  least  thirty  times He  did  cleave  like  a  clegg  and  was  very  angry  he  could 

not  be  heard  ad  infinitum." 

6  Add.  MS.  (Brit.  Mus.)  25,116,  f.  77. 


1/ 


268  The  Merchant  Adventurers  1660-2    [chap.  xiv. 

only  convenient  method  of  meeting  the  interest  on  its  loans  was  either 
by  assessing  the  members  or  by  levying  so  much  on  the  cloth.  The 
latter  method  was  adopted,  and  an  imposition  of  about  1  per  cent,  of 
the  value  had  been  exacted  for  many  years  past.  This  impost  was  held 
to  be  a  grievance  by  cloth-merchants  of  Exeter.  It  appears  that,  though 
at  one  time  there  had  been  a  branch  of  the  company  at  this  place,  during 
the  depression  of  the  woollen  industry  from  1646,  all  the  free-men,  but 
one,  had  retired.  In  1661  some  cloth-makers  in  that  district  had  again 
begun  to  export,  but  they  were  either  unable  or  unwilling  to  join  the 
chartered  organization.  They  complained  of  the  levy  on  cloth,  exported 
to  Holland;  and  the  company  replied  that,  by  its  exertions,  English 
exporters  received  a  remission  of  Customs  and  other  charges,  which  was 
valued  at  about  3  per  cent.  It  follows  that,  according  to  the  contention 
of  the  Adventurers,  the  existence  of  their  company  produced  a  balance 
of  advantage,  after  payment  had  been  made  of  the  levy,  which  was 
rendered  necessary,  in  order  to  secure  the  support  of  the  home  government 
at  various  periods  in  the  past.  Other  allegations,  made  by  the  Exeter 
clothiers,  accused  the  company  of  confining  the  trade  to  London,  of 
limiting  exports  and  of  giving  preferential  treatment  to  prominent 
members^  To  the  two  last  charges  the  Adventurers  replied  by  a  simple 
denial,  but  they  had  a  better  answer  to  the  statement  that  trade  was 
confined  to  London,  by  showing  that  free-men  might  ship  cloth  from  the 
nearest  port,  and  that  there  were  branches  of  the  company  at  York,  Hull, 
Beverley,  Leeds,  Newcastle,  Hartlepool,  Stockton,  Norwich,  Yarmouth, 
Lynn,  Ipswich  and  Colchester.  The  main  weaknesses  of  the  position 
of  the  organization  were  partly  financial,  partly  due  to  industrial 
progress.  Within  a  few  years  the  dyeing  and  dressing  of  cloth  was 
established  in  England,  with  the  result  of  a  reduction  in  the  export 
of  undressed  cloth^.  Moreover,  once  the  company  had  been  compelled 
to  borrow  largely,  the  regulated  type  of  organization  was  ill-adapted  to 
preserve  its  credit.  By  1664  the  debt  was  ^£^75,000,  and^  in  that  year, 
it  was  unable  to  pay  the  interest  when  due^ 

The  state  of  the  Levant  company  at  this  time  is  instructive.  It 
V  would  naturally  be  supposed  that  one  of  the  advantages  of  the  regulated 
I  type  of  organization  over  the  joint-stock  company  would  be  that,  in  the 
I  former,  the  merchants,  being  skilled  in  a  certain  trade,  would  be  able  to 
I    control  the  proceedings  of  the  factors  and  agents  abroad.     But,  as  a 

•  1  State  Papers,  Domestic,  Charles  II.,  li.  64;  Anderson,  Anmiia  of  Commerce, 

II.  pp.  617-20. 

2  Anderson,  Annals  of  Commerce,  ii.  p.  661. 

3  State  Papers,  Domestic,  Charles  II.,  glxxxvi.  73;  Calendar,  1666-7,  p.  403. 
In  1674  the  company  was  still  in  default.  Reports  Hist.  MSS.  Com.,  ix.,  Pt.  n., 
p.  47. 


CHAP.  XIV.]  The  Levant,  Rusdan  and  African  Trades    269 

matter  of  fact,  the  failure  of  this  company  to  exercise  an  efficient  super- 
vision was  even  more  remarkable  than  that  of  the  Russia  company  had 
been*.  In  1661  the  frauds  of  the  factors  in  the  Levant  had  almost  ruined 
the  company.  The  governor  admitted  that  he  was  ashamed  of  the 
excessive  rates  imposed  on  goods  exported,  which  were  to  be  attributed 
to  this  cause.  Not  only  so,  but  it  was  conceded  that  some  members 
defrauded  the  rest,  by  paying  less  than  their  due  proportion  of  the 
charges,  through  entering  false  bills  of  lading  which  were  accepted  with 
the  connivance  of  the  factors.  Like  the  Merchant  Adventurers  this  body 
was  heavily  in  debt,  though  its  obligations  had  been  incuiTed  mainly  in 
places  abroad  2.  It  is  significant  that  an  effort  was  made  to  remedy  these 
abuses  by  separating  off  the  trade  to  Morea,  which  was  conducted  by 
a  group  of  free-men,  who  traded  as  a  joint-stock  company,  which  was 
known  as  the  Morea  Adventurers.  In  January  1661  an  effort  was  made 
to  close  the  accounts,  the  capital  having  been  subscribed  only  for  a 
definite  period,  but  at  the  end  of  1663  this  undertaking  was  still  in 
existence*. 

The  joint-stock  companies  had  also  suffered  seriously  from  the  effect 
of  adverse  circumstances  before  the  Restoration.  The  Russia  company 
was  barely  able  to  carry  on  its  trade;  and,  since  1658,  its  off -shoot,  the 
Greenland  Adventurers,  had  ceased  to  have  an  active  existence*.  The 
African  trade  had  resulted  in  loss  for  several  years,  owing  to  captures 
of  ships  by  the  Dutch.  It  was  stated  that  the  independent  traders, 
during  the  few  years  prior  to  1660,  had  suffered  to  the  extent  of 
.£*300,000'*;  and,  about  1659,  the  value  of  one  ship,  which  was  taken, 
was  returned  at  ,^12,842*.  Accordingly,  the  position  in  1660  was  that 
the  forts  and  trading  stations,  already  established,  had  been  abandoned; 
and  there  was  no  regular  trade  or,  according  to  some  accounts,  no  trade 
at  all.  In  1662  it  was  decided  to  re-establish  the  company  with  a 
monopoly  of  the  whole  of  the  west  coast  of  Africa,  and  an  influential 
body  of  shareholders  was  incorporated  as  the  Governor  ami  Company  of 
the  Royal  Adventurers  of  England  trading  into  Africa''. 

1  Vide  infra,  ii.  pp.  42,  46,  47,  51,  54. 

2  State  Papers,  Levant,  i.  p.  118,  iv.  pp.  320,  349,  352,  357;  Calendars,  Domestic, 
1660-1,  pp.  491,  591,  592,  1661-2,  p.  605. 

3  Ibid.,  IV.  pp.  346,  396,  v.  p.  68;  Calendars,  Domestic,  1660-1,  p.  484,  1661-2, 
p.  421,  1663-4,  p.  388. 

*  Vide  infra,  ii.  pp.  67,  74.  

^  Certain  Considerations  relating  to  the  Royal  African  Company  of  England... in 
which  the  Original,  Growth  and  Natural  Adinntages  of  the  (hiiney  Trade  are  demon- 
strated as  also  that  the  Trade  cannot  be  carried  on  but  by  a  company  and  Joint-Stocky 
1680,  p.  8. 

«  State  Papei-s,  Board  of  Trade  Commercial  Series  ii.,  vol.  691— Petition  of' 
Bernard  Sparke. 

^  Vide  infra,  ii.  p.  17. 


27ui  Organization  of  Companies  1661-2    [chap.  xiv. 


The  East  India  company  was,  by  far,  in  the  best  financial  condition, 
as  compared  with  the  other  joint-stock  bodies.  After  obtaining  its 
charter  from  Cromwell  in  1657,  it  proceeded,  as  soon  as  possible,  to 
re-open  its  factories  and  to  obtain  new  concessions  in  the  East.  It  was 
unfortunate,  in  so  far  as  the  time  for  paying  calls  on  the  d^739,782.  10*. 
stock  subscribed  extended  to  March  1st,  1660.  Owing  to  the  acute 
depression  of  1659,  followed  by  the  crisis  of  1659-60,  it  was  found 
impossible  to  enforce  the  payment  of  the  later  calls ;  and  eventually  the 
paid-up  capital  was  fixed  at  one-half  of  the  nominal  amount.  Possibly, 
in  the  enthusiasm  of  the  first  months  after  the  Restoration,  the  fact  that 
a  charter  had  been  obtained  from  Cromwell  would  not  have  been  to  the 
interest  of  the  company.  Measures  were  taken  to  suppress  this  document, 
and  a  fresh  grant  was  signed  on  April  3rd,  1661.  Up  to  this  date  no 
dividends  had  been  paid,  such  profits  as  were  made  were  used  in  increasing 
the  capital ;  and,  partly  for  this  reason  partly  through  forced  sales  of 
stock  by  prominent  supporters  of  the  late  government,  the  price  of  £^0Q 
stock  nominal,  or  d^'lOO  actually  paid,  was  only  90  ^ 

There  are  several  points  of  interest  in  the  charters  granted  imme- 
diately after  the  Restoration.  In  those  of  the  African  Adventurers  and 
the  Royal  Fishery  company,  the  assistants  reached  the  comparatively 
large  number  of  36.  In  the  East  India  charter  of  1661,  the  voting 
rights  of  the  members  were  settled,  and  £500  stock  entitled  the  proprietor 
to  one  vote.  Persons,  holding  less  than  this  amount,  might  join  together 
y^  and  authorize  one  of  their  number  to  vote  for  their  aggregate  stock. 
While  the  capital  of  the  East  India  company  consisted  of  stock,  the 
sum  of  £\9/^y000^  subscribed  by  the  Adventurers  to  Africa,  was  divided 
into  shares  of  =5^400  each,  divisible  into  half-shares.  The  qualification 
of  an  assistant  was  the  holding  of  one  whole  share ^. 

r^  The  most  remarkable  feature,  connected  with  the  companies  of  the 
Restoration,  was  the  act  of  1662,  which  created  a  species  of  limited 
liability  in  favour  of  shareholders  in  the  East  India,  African  and  Fishery 
companies.  It  was  enacted  that  subscribers  to  these  undertakings  should 
not  pro  tanto  be  subject  to  the  law  of  bankruptcy,  in  the  event  of  losses 
being  incurred  by  any  one  of  the  companies  named ^  The  effect  of  this 
statute  was  that  a  shareholder  was  only  liable  for  the  amount  unpaid  on 
his  shares,  and  it  is  clear  that  such  legislation  was  disadvantageous  to 
unincorporated  companies  or  syndicates'*. 

1  Vide  infra,  ii.  pp.  130,  131,  177.  ^  /^^^.^  „,  pp.  17^  131^  372,  373. 

3  14  Car.  II.  c.  24. 

*  Such  companies  continued  to  exist,  e.g.  Sir  Francis  Topp  and  Company,  French 
merchants,  1669  (State  Papers,  Domestic,  Charles  II.,  cglix.  3),  Richard  Thompson 
and  Company,  bankers,  1670-5  {Case  of  Richard  Thompson  and  Company,  1678),  Elia^ 
Adrian  and  Company,  Jeremiah  Bonneel  and  Company,  John  Bryant  and  Company, 


CHAP.  XIV.]     Opinion  on  foreign  Trade  1663-5  271 

The  tendency  of  opinion  upon  the  problem  of  privileges  for  foreign 
trade,  in  the  years  immediately  following  the  Restoration,  began  to  be 
concentrated  upon  certain  definite  issues.  On  the  one  side,  there  was 
the  argument,  based  on  the  price  of  the  commodities  affected.  It  was 
contended  that  an  open  trade  would  result  in  English  goods  commanding 
higher  prices  abroad,  while  the  foreign  goods  imported  would  be  sold 
more  cheaply  than  by  the  privileged  bodies.  This  point  of  view  is 
expressed  in  a  concise  form  by  Samuel  Fortrey — "Mercantile  companies 
sell  at  what  unreasonable  rates  they  please... whereby  the  people  in 
general  are  very  much  damnified  and  the  companies  onely  enriched: 
whereas,  if  the  trade  were  free,  our  own  commodities,  having  more 
chapmen,  would  sell  at  better  rates,  and  what  is  brought  home  in  return 
would  be  distributed  at  much  cheaper  prices  amongst  the  people*.""  lu 
the  specific  case  of  the  African  trade,  it  was  alleged  that,  from  1662  to 
1664,  the  company  had  increased  the  price  of  negroes  in  the  plantations 
by  30  per  cent.,  that  the  workers  in  ivory  could  obtain  supplies  more 
cheaply  from  Holland  and  some  of  them  found  it  advantageous  to  carry 
on  the  industry  there ^  This  statement  was  made  by  Roger  Coke,  and 
it  was  contradicted  by  the  company  which  was  able  to  produce  evidence 
from  the  planters  that  its  cash-prices  for  negroes  compared  favourably 
with  those  charged  by  the  interlopers.  On  the  other  hand,  it  is  probable 
that,  owing  to  the  effect  of  the  more  stringent  Navigation  Act  of  1663^ 
the  price  of  slaves,  smuggled  into  the  plantations  by  the  Dutch,  would  be 
lower  than  the  average  rates  of  either  the  company  or  of  independent 
traders.  There  is  ample  evidence  that  this  measure  alone  was  sufficient 
to  account  for  an  addition  to  the  price  of  a  commodity  of  about  25  per 
cent.  Prior  to  the  Act,  for  reasons  already  explained*,  the  Dutch, 
Hamburgers  and  Flemings  were  able  to  charge  so  much  lower  rates  for 
freight  that  much  of  the  reduced  English  shipping  was  unable  to  obtain 

Edward  Brown  and  Company,  Edward  Clark  and  Company,  Richard  Dunidge  and 
Company,  Charles  Kerle  Junior  and  Company,  Nicholas  Holloway  and  Company,  Mr 
Collet  in  Company,  Tho.  Houghton  and  Bereclif  in  Company,  Thomas  Merry  and 
Company,  James  Pickering  and  Company,  Line.  Robinson  and  Company,  John  Scopen 
and  Company,  George  Willington  and  Company,  John  Addis  and  Company,  John 
Mawson  and  Company,  Samuel  Burlingham  and  Company  (A  Collection  of  the  Names 
of  Merchants  living  in  and  about  the  City  of  London,  1677  [reprinted  1878]). 

1  England's  Interest  and  Improvement,  Cambridge,  1663,  p.  40 ;  Reprint  (ed. 
J.  H.  Hollander,  Baltimore,  1907),  p.  36. 

'^  Reflections   cm,    the   East   Indy   and   Royal  African  Companies,   1695,   p.    11 

(Brit.  Mas.  12?£_£^0). 

3  This  Act  was  very  prejudicial  to  Scottish  Trade — The  Grievances  of  Scotland  in 
Relaiion  to  their  Trade  with  England  166f  in  Miscellanea  Aulica:  or  A  Collection  of 
State  Treatises  never  before  Published,  edited  by  T.  Brown,  1702,  pp.  199,  200, 

*  Vide  supra,  p.  260. 


272  Opinion  on  foreign  Trade  1663-5    [chap.  xiv. 

employments  After  the  Act  it  was  inevitable  that  rates  should  be  much 
higher.  Partly  owing  to  its  effects,  partly  through  other  causes,  the 
cost  of  working  an  English  ship  was  relatively  great.  The  vessel  itself 
cost  more  per  ton  than  one  built  in  Holland.  Through  the  Navigation 
Act  timber  was  dearer^ ;  and,  for  a  few  years  after  1660,  the  Swedish 
monopoly  of  pitch  had  advanced  prices  by  upwards  of  75  per  cent.^ 
Then  the  Dutch  had  a  certain  advantage  in  their  methods  of  managing 
their  mercantile  marine.  They  were  able  to  work  trading  ships  with 
smaller  crews ;  so  that,  in  proportion  to  the  tonnage,  the  capital  outlay 
was  less  and  also  the  wages-bill*.  It  follows  that  the  argument  from 
the  price  of  commodities  is  affected  by  the  influence  of  the  Navigation 
Act;  and  that,  out  of  the  rise  in  prices  of  commodities  imported  by 
privileged  companies,  it  is  impossible  to  assign  the  proportion  attributable 
to  the  monopoly  as  such.  On  the  whole,  the  argument  from  cheapness, 
considered  quite  abstractedly,  is  to  some  extent  adverse  to  the  companies ; 
but  perhaps  not  so  much  so,  as  might  have  been  expected,  when  the 
eff*ects  of  the  Navigation  Act  are  allowed  for. 

On  the  other  side,  these  considerations  were  met  by  others  of  a 
different  character.  As  against  the  a  priori  deductions  as  to  the  benefits 
of  open  competition,  there  had  to  be  set  the  experience  of  the  Protectorate, 
when  the  experiment  had  been  tried,  and  it  had  been  found  that  there 
had  been  violent  fluctuations  in  prices  and  that  there  was  a  tendency  for 
the  trades  affected  to  decline.  The  best  example  of  this  is  that  of  the 
African  trade  **;  and  the  granting  of  the  charter  of  1658  to  the  East  India 
company,  after  three  years  of  open  trade,  would  be  conclusive  evidence  in 
the  same  direction  were  it  not  that  Cromwell  may  have  been  influenced 
by  certain  causes,  other  than  the  merits  of  the  case^  In  fact  the  crux 
of  the  whole  question  lay  in  the  relations  of  the  different  nations  in 
remote  places,  such  as  the  whaling  districts  or  India  or  Africa.  If,  by 
international  agreement,  the  merchants  of  each  country  might  have  traded 
freely,  without  being  subject  to  their  ships  and  goods  being  seized  by 
their  rivals,  or  if,  again,  England  had  been  strong  enough  to  protect  its 
subjects  in  distant  places,  it  might  have  been  possible  to  dispense  with 
the  privileges  of  the  companies.  As  things  were,  the  element  of  force 
had  to  be  reckoned  with.     Where  the  Dutch  had  established  fortified 


^  Fortrey,  England 8  Interest,  ut  supra,  p.  36. 

2  A  Discourse  of  Trade  by  Roger  Coke,  London,  1670,  pp.  23-5. 

3  Minutes  Committee  of  Trade,  Add.  MS.  25,115,  f.  103. 

*  Coke,  Discourse  of  Trade,  p.  59.  Coke  says  that  the  cost  per  ton  of  a  Dutch 
ship  was  half  that  of  an  English  one,  and  that  the  crew  of  the  latter  was  twice  that 
of  the  former. 

^  Vide  infra,  ii.  pp.  16,  17. 

®  Vide  supra,  p.  258. 


CHAP.  XIV.]     Opinion  on  foreign  Trade  1663-5  273 

harbours^,  English  vessels  ran  an  excessive  risk.     Some  might  succeed  in 
making  the  voyage  in  safety  and  in  realizing  large  profits,  but  eventually 
the  captures  wore  out  the  enterprize  of  the  adventurers  and  expeditions 
became  fewer  and  fewer.     For  these  reasons,  it  became  necessary  that 
English  traders  should  possess  fortified  stations,  where  ships  might  find 
refuge  and  load  in  safety.     Fortifications  required  a  considerable  initicJV 
capital  outlay,  and  there  was  a  further  annual  charge  for  garrisons  andJ  ^ 
up-keep^     To  provide  this, some  kind  of  organization  was  required,  with' 
certain  powers  of  enforcing  contributions  and  of  regulating  the  trade.'  y 
Therefore,  the  drift  of  opinion  fluctuated  between  the  preference  for  a\l 
joint-stock  company  with  a  monopoly  or  a  regulated  company  which,  as 
far  as  its  privileges  were  concerned,  would  be  equally  exclusive.     The 
argument,  advanced  in  favour  of  the  latter  form  of  management,  was  the    I 
natural  one  that  the  competition  of  the  members  would  be  beneficial  to    ' 
the  English  producers  and  consumers;  and,  while  this  should  have  been 
so  in  theory,  there  had  been  frequent  complaints  of  avowed  combinations       / 
between  the  free-men  of  the  regulated  companies  ^     In  favour  of  the    ^ 
joint-stock  form  of  management,  it  was  urged  that  it  would  be  exceedingly 
difficult  to  collect  a  sufficient  levy  from  all   the   traders,  who   made 
occasional  voyages,  while  to  raise  the  whole  sum  required  from  those 
who  sent  ships  frequently  would  be  unjust.     If  the  proposed  regulated 
company  were  to  be  in  reality  open  to  all,  it  would  be  impossible  to 
exact  payment  in  England,  while  to  enforce  it  on  the  African  coast 
would  prove  a  temptation  to  the  factors  there.     An  even  more  weighty 
argument  arose  from  the  consideration  of  what  would  happen,  when 
England  was  at  war  with  a  naval  power.     The  risks  of  shipping,  at  such 
a  time,  would  be  greatly  increased,  and  the  crews  of  merchantmen  were 
liable  to  be  pressed  to  help  in  manning  the  fleet.     Therefore,  under  these 
circumstances  very  few  ships  would  make  the  voyage;  and,  as  a  con- 
sequence, the  revenue  for  the  maintenance  of  the  forts  would  be  greatly 
reduced  and  that,  too,  at  a  time  when  exceptional  outlays  were  necessary, 
if  the  defence  of  the  factories  was  to  be  effective*.     Though  the  whole 
question  was  narrowed  down  to  this  point  soon   after  1660,  opinion 
remained  divided,  with  a  leaning  towards  the  joint-stock  type;   and, 
when  the  controversy  became  acute  at  a  later  date,  it  centred  round  the 
differences  in  the  two  methods  of  organization. 

The  re-establishment  of  a   Fishery   and   an    African   company,  as 
well  as  the  activity  of  the  Committee  of  Trade,  are  indications  of  the 

^  Histoire  de  P Expansion  coloniale  des  Peuples  Europ^ens — Nierlande  et  Danemark 
(xvii«  et  xviii«  siecles),  par  C.  de  Laiinoy  et  H.  V.  Linden,  Bruxelles,  1911,  p.  127. 

2  A  New  Discourse  of  Trade,  by  ISir  Josiah  Child  (4th  ed.),  p.  111. 

3  Vide  supra,  pp.  219,  220. 
*  Certain  Considerations  relating  to  the  Royal  African  Company,  ut  supra,  p.  7. 

s.  c.  I.  18 


274  Development  of  Banking  1660-4     [chap.  xiv. 

commercial  revivgj  which  began  in  1660.  There  was  a  great  increase 
in  invention,  and  there  were  many  proposals  for  industrial  improvements 
of  various  kinds.  Prominent  amongst  these  were  two  propositions  for 
the  foundation  of  a  bank  in  1661  ^  and  for  a  marine  insurance  company, 
which  the  promoters  expected  would  be  the  leading  office  for  the  whole 
of  Europe  ^  Meanwhile,  business  amongst  the  private  bankers  had 
increased  enormously.  Most  of  those,  who  had  entered  on  this  trade, 
had  managed  to  maintain  their  credit;  and  their  services,  in  the  safe- 
keeping of  money,  had  met  with  increasing  demand ;  while  the  scarcity 
of  capital  had  brought  them  a  lucrative  business,  through  the  making 
of  loans  and  the  discounting  of  bills.  Moreover,  the  financial  difficulties 
of  the  Protectorate  had  compelled  that  government  to  be  a  large 
borrower;  and,  after  the  Restoration,  the  need  for  such  assistance 
became  even  more  marked.  Parliament  had  provided  Charles  II.  with 
funds  for  paying  oiF  certain  specified  debts  and  for  carrying  on  the 
administration  in  the  sense  that,  when  the  various  imposts  and  taxes 
were  collected,  these  liabilities  would  be  liquidated,  provided  the 
estimated  revenue  was  actually  received.  But  first  of  all,  since  the 
Exchequer  was  practically  empty  at  the  Restoration',  many  payments 
had  to  be  made  from  day  to  day;  and,  to  meet  these,  it  was  necessary 
to  borrow  in  anticipation  of  the  actual  receipt  of  the  Customs  and  other 
taxes.  Moreover,  the  ordinary  revenue,  settled  on  Charles  II.,  failed  to 
reach  the  estimate  of  .£'1,200,000.  Parliament  had  not  taken  sufficient 
account  of  the  effects  of  the  alterations  made  in  the  rates  of  the  Customs 
and  excise,  and  these  sources  of  revenue  fell  far  short  of  the  estimate. 
To  make  good  the  deficiency,  the  tax  of  Hearth-money  was  added  and, 
subsequently,  other  special  grants;  but,  for  the  period  ending  at  Easter 
1664,  all  the  receipts  of  the  Exchequer  (after  the  deduction  of  loans) 
only  averaged  about  =£^860,000  a  year,  or  less  than  three-fom-ths  of  the 
estimate.  Expressed  in  another  form,  the  actual  revenue  fell  short  of 
the  specified  .£'1,200,000  for  this  period  by  an  average  of  about  ^^340,000 
a  year*.  It  was  inevitable,  therefore,  that  the  Crown  should  soon  be 
heavily  in  debt,  and  in  a  short  time  most  of  the  revenue  passed  into  the 

1  Vide  infra,  iii.  p.  201.  ^  jj,-^,^  m,  p.  355. 

5  Calendar  of  Treasury  Books,  1660-7,  edited  by  W.  A.  Shaw,  pp.  i.-xxiv. ;  The 
Beginnings  of  the  National  Debt,  by  W.  A.  Shaw,  in  Owens  College  Hist.  Essays  (1902), 
p.  402 ;  Pepys,  Diary  (Chandos  edition),  p.  23. 

*  The  actual  receipts  are  printed  in  Calendar  Treasury  Books,  1660-7,  pp.  xxviii.- 
xxxi. ;  cf.  A  Full  Answer  to  a  Bystander,  by  R.  H.  [Thomas  Carte],  London,  1742, 
p.  142.  In  A  Letter  from  a  Bystander  to  a  Member  of  Parliament,  pp.  68-86,  it  is 
calculated  that,  after  paying  for  the  navy  and  army,  there  remained  a  surplus  from 
Christmas  1660  to  Christmas  1663  on  a  average  of  over  £1,660,000  a  year.  This 
estimate  takes  the  produce  of  various  taxes  at  the  estimated,  not  the  actual 
amounts. 


CHAP.  XIV.]         Indmtrial  Progress  1660-4  276 

hands  of  the  bankers  as  against  their  advances.  In  view  of  the  demand 
for  capital,  through  the  activity  of  trade  and  the  increasing  amount 
of  the  Crown  debt,  the  goldsmiths  were  able  to  obtain  high  rates  of 
interest*;  and  it  was  not  long  before  their  charges  amounted  to  about 
10  per  cent.,  so  that  it  was  said  that  the  King  and  kingdom  had  become 
"the  slaves  of  the  bankers ^"  The  severity  of  the  strain  on  the  finances 
is  shown  by  the  fact  that  Charles  II.  was  forced  to  pay  as  high  a  rate  of 
interest  as  Elizabeth  had  a  century  before,  and  that,  too,  at  a  time  when 
there  was  no  cause  tending  to  produce  an  exceptional  disturbance  of 
credit. 

Another  sign  of  the  improvement  in  trade  is  to  be  found  in  the  effort 
to  develope  Scotland  and  the  Plantations.  As  instances  of  the  former 
may  be  mentioned  the  Scottish  Act  of  1661,  which  promised  substantial 
privileges  to  those  who  introduced  capital  or  new  industries';  and  of  the 
latter,  the  formation  of  a  company  in  1663  for  the  re-settlement  of 
Carolina*.  In  Ireland,  also,  steps  were  taken  to  develope  the  commerce 
of  the  country.  A  Committee  of  Trade  was  constituted  in  1664,  which 
reviewed  the  whole  situation;  and,  partly  through  its  efforts,  several 
manufactures  were  established,  one  of  which  was  a  cloth  company  at 
Clonmel  described  as  "the  most  considerable  one  that  Ireland  had  as  yet 
seen^""  Coincident  with  the  broadening  of  industrial  activities,  there 
were  certain  improvements  in  the  conveniences  of  life,  such  as  a 
development  of  the  Post  Office*  and  of  the  water-supply  of  London. 
In  October  1660  Pepys  "was  very  much  pleased^'  with  the  ease  with 
which  pumping  engines  carried  up  water  from  the  Thames^  and  in  1663 
he  was  informed  by  the  Lord  Mayor  that  "the  City  was  as  well  watered 
as  any  in  the  world  and  that  the  bringing  of  water  to  the  City  hath  cost 
it  first  and  last  above  ^^300,0008."  This  estimate  would  include  the 
outlays  on  the  conduits ^  that  on  the  New  River  (on  which  large  sums 
had  been  expended  out  of  revenue,  in  addition  to  the  original  capital  *°) 
and  on  the  pumping  engines  on  the  banks  of  the  Thames  and  at  London 
Bridge". 

^  A  New  Discourse  of  Trade,  by  Sir  Josiah  Child  (4th  ed.),  p.  61 

2  The  Mystery  of  the  New-fashioned  Goldsmiths  or  Bankers,  London,  1676,  p.  3. 

3  Vide  infra,  in.  pp.  126,  127.  The  Records  of  a  Scottish  Cloth  Maiiufactory  at 
New  Mills,  Haddingtonshire  (1681-1703),  edited  by  W.  R.  Scott  (Scottish  Hist.  Soc. 
1905),  p.  xxxiv. 

*  Anderson,  Annals  of  Commerce,  ii.  p.  628. 

*  The  Interest  of  Ireland  in  its  Trade  and  Wealth  stated,  by  Richard  Lawrence, 
Dublin,  1682,  Part  i..  Preface,  Part  ii.,  p.   189. 

«  History  of  the  Post  Office,  by  A.  Joyce,  p.  28;  vide  infra,  in.  p.  43. 
^  Diary,  ut  supra,  p.  55. 

8  Ibid.,  p.  176.  9  Vide  infra,  in.  pp.  4,  12. 

10  Ibid.,  III.  pp.  21-6.  "  Ibid.,  HI.  pp.  11,  12. 

18—2 


276  The  Plague   1665       [chap.  xiv. 

The  period  of  active  trade  lasted  only  till  towards  the  end  of  1664, 
when  it  became  apparent  that  England  and  Holland  were  drifting 
towards  war.  There  were  thus  four  prosperous  years  during  which  time 
the  East  India  company  paid  dividends  of  60  per  cent.%  and  the  African 
adventurers  stated  that  they  had  added  to  their  original  capital  no  less 
than  210  per  cent.^  It  lay  with  the  latter  body  to  provide  an  ostensible 
cause  for  the  outbreak  of  hostilities,  by  ejecting  the  Dutch  African 
company  from  most  of  its  forts.  Reprisals  followed,  greatly  to  the 
detriment  of  the  English  capitalists,  and  the  struggle  between  the  two 
companies  proved  only  the  prelude  to  that  between  the  rival  nations^. 

From  the  concluding  months  of  the  year  1664  until  the  summer  of 
1667,  England,  and  more  especially  London,  experienced  a  succession 
of  misfortunes.  Beginning  with  the  Dutch  war,  there  followed  the 
Plague  in  1665,  the  Great  Fire  in  1666  and  finally  the  forcing  of  the 
defences  of  the  Thames  by  the  Dutch  fleet  in  June  1667.  The  joint- 
effect  of  these  calamities  upon  commerce  was  necessarily  serious.  Even 
prior  to  the  outbreak  of  the  war,  some  of  the  more  timorous  merchants, 
engaged  in  foreign  trade,  had  begun  to  reduce  their  commitments 
abroad*.  At  the  end  of  1664,  shipowners  were  afraid  to  expose  their 
vessels  to  war-risks,  and  there  was  a  marked  contraction  of  over-sea 
commerce.  Moreover,  the  pressing  of  merchant  sailors  for  the  navy  left 
insufficient  crews  available  for  the  export  of  the  cloth  produced;  and,  to 
mitigate  the  resulting  distress,  it  was  proposed  to  suspend  the  Navigation 
Act,  so  that  the  goods  might  be  carried  by  neutrals ''.  Then  the  ravages 
of  the  plague  produced  a  total  dislocation  of  business.  After  fifteen 
years  of  almost  complete  immunity  from  this  scourge,  there  came  the 
dreadful  visitation  of  1665,  when  the  deaths  from  pestilence  in  London 
were  returned  at  68,596,  being  almost  double  those  in  1603  and  1625*. 
The  panic  was  so  great  that  most  people  were  much  too  anxious  about 
escaping  the  deadly  contagion  to  pursue  their  ordinary  avocations.  Many 
fled  from  the  infected  area,  making  no  provision  for  the  payment  of  their 
debts;  and  there  was  an  unavoidable  delay  in  winding  up  the  affairs  of 
those  who  had  perished  by  the  epidemic  ^     Trade  was  described  as  being 

1  Vide  infra,  ii.  pp.  132,  177,  178. 

3  State  Papers,  Domestic^  Charles  II.,  ex.  10;  Calendar,  1664-6,  pp.  169,  160. 

3  Vide  infra,  ii.  pp.  17,  18. 

*  Pepys,  Diary,  ut  supra,  p.  105.  *  Ibid.,  p.  230. 

®  Natural  and  Political  Observations... upon  the  Bills  of  Mortality,  by  Capt.  John 
Graunt,  1666,  pp.  65,  176,  176;  London's  ''Lord  Have  Mercy  upon  us."  A  True 
Relation  of  Seven  Modern  Plagues  or  Visitations  in  London  viz.  1592,  1603,  1626, 
1630,  1636,  1637-8,  1665;  in  Somers'  Tracts  (1750),  vii.  pp.  56,  57;  An  Historical 
Account  of  the  Several  Plagues... since  1346,  by  Dale  Ingram,  1756,  pp.  4,  5. 

^  State  Papers,  Domestic,  Charles  II.,  cxxxix.  68 ;  printed  in  Calendar,  1665-6, 
pp.  X.,  xi. 


CHAP.  XIV.]  The  Great  Fire  1666  277 

"very  low^"  and  Change  was  almost  deserted'.  There  was  very  great 
distress,  through  want  of  employment  and  the  high  price  of  fuel.  Since 
so  much  of  the  trade  of  the  whole  country  passed  through  London,  the 
cordon,  drawn  round  it  for  sanitary  reasons,  caused  the  great  depression 
in  the  City  to  react  on  the  provinces;  and,  by  June  (1665),  the  woollen 
trade  was  in  a  declining  condition ^  Even  as  far  north  as  Edinburgh, 
the  effects  of  the  adverse  circumstances  were  felt  to  such  an  extent  that 
there  was  great  discontent  owing  to  the  decline  of  trade*.  In  August 
of  1666  confidence  had  been  so  shaken  that  there  was  no  discounting  of 
bills,  and  wholesale  business  was  reduced  to  the  transactions  connected 
with  the  realization  of  prizes''.  The  previous  losses  of  property  were 
however  inconsiderable,  when  compared  with  the  devastation  wrought 
by  the  Great  Fire,  which  began  on  September  2nd,  1666'.  The  damage 
was  estimated  as  follows: 

St  Paul's  Cathedral £2,143,200 

Other  buildings         6,972,800 

Contents  of  buildings  1,600,000 

Total  loss7  £10,716,000 

The  rental  of  the  properties  destroyed  was  calculated  at  d£^600,000  a 
year^  Not  only  had  capital  to  be  found  for  rebuilding,  but  large  sums 
were  being  raised  for  the  carrying  on  of  the  war.  Up  to  Michaelmas 
1666  the  charge  of  the  navy,  since  the  outbreak  of  hostilities,  had  been 
d£>3,200,000,  and  there  was  a  debt  of  <£900,000».  The  condition  of  the 
service  was  exceedingly  bad.  Even  before  the  war,  the  seamen  were 
compelled  to  sell  navy-bills  at  a  discount  of  15  per  cent.^®,and  Pepys  was 
much  troubled  and  perplexed  at  heart  "because  of  the  horrible  crowd 
and  lamentable  moan  of  the  poor  seamen  that  lie  starving  in  the  streets 
for  lack  of  money... and  more  at  noon  when  we  go  through  them,  for 
then  above  a  whole  hundred  of  them  followed  us;  some  cursing,  some 
swearing,  some  praying  to  us".*"     Up  to  Michaelmas  the  loss  by  the  Fire 

1  State  Papers,  Domestic,  Charles  II.,  clix.  41 ;  Calendar y  1665-6,  p.  447. 

2  Pepys,  Diary,  ut  supra,  p.  254. 

3  State  Papers,  Domestic,  Charles  II.,  clix.  119;  Calendar,  \m6-Q,  p.  459. 

4  Ibid.,  CL.  80;  Calendar,  1665-6,  p.  292. 

6  Ibid.,  CLxvi.  19  (1),  CLxvii.  166;  Calendar,  1666-7,  pp.  4,  46. 

6  In  one  of  the  informations,  which  attributed  the  Fire  to  a  Popish  Plot,  it  was 
asserted  that  John  Graunt  turned  off  the  water-supply  of  the  New  River  company  on 
the  night  prior  to  the  Fire — Maitland,  History  of  London,  i.  p.  435. 

^  The  Insurance  Cyclopaedia,  by  Cornelius  Walford,  iv.  p.  31. 

8  Pepys,  Diary,  ut  supra,  p.  323.  Even  allowing  for  additions  to  buildings 
between  the  date  of  Potty's  estimate  and  the  Fire,  the  above  figures  tend  to  show 
that  he  somewhat  undervalued  the  house  property  of  London. 

9  Ibid,,  p.  325.  w  Ibid.,  p.  149. 
"  Ibid.  J  p.  263, 


278  Pressure  of  the  War -Taxes  1665-7    [chap.  xiv. 

and  the  additional  taxes,  authorized  for  war-expenditure,  amounted  to 
close  on  fifteen  millions  or  about  6  per  cent,  of  the  estimated  total  wealth 
of  the  country.  This  would  represent  the  savings  of  about  ten  good 
years. 

The  pressure  of  these  cumulative  misfortunes  may  be  arrived  at  by 
another  method.  The  loss  on  the  Customs  alone  through  the  Plague, 
Fire  and  the  War,  during  the  two  years  September  29th,  1665  to 
September  29th,  1667,  was  .^319,905.  14^.  ld.\  and  the  reduction  of  the 
whole  settled  revenue  during  this  period  was  i?600,0002.  Although  the 
Dutch  had  spent  eleven  millions  on  the  contest,  the  raising  of  ^4,355,047, 
by  increased  taxation  in  England^,  was  found  to  be  a  crushing  burden, 
in  view  of  the  misfortunes  that  had  happened  since  the  beginning  of  the 
contest.  It  was  calculated,  that,  owing  to  the  area  on  which  new  taxes 
could  be  placed  being  so  small,  if  the  war  were  continued  till  Christmas 
1667,  on  the  same  scale  as  in  1665,  some  persons  would  have  been 
compelled  to  pay  to  the  State  one-third  of  their  whole  estates^;  and,  for 
this  reason  as  well  as  the  unmanageable  amount  of  the  Crown  Debt,  it 
was  decided  to  reduce  the  expenditure  on  the  navy  in  1667  in  view  of 
the  negotiations  for  peace  which  were  then  in  progress.  The  Dutch 
increased  the  captures  of  British  merchantmen  and  often,  for  weeks  at 
a  time,  sailings  from  the  threatened  ports  were  suspended.  Thus  in 
December  1666^  the  merchants  of  the  Tyne  and  the  Humber  "murmured 
cruelly"  of  the  want  of  convoys,  and  it  was  openly  said  that  trade  was 
better  guarded  in  the  time  of  Cromwell.  At  Newcastle  the  frequent 
interruptions  of  the  coal-trade  had  deprived  many  of  the  colliers  of  work, 
and  numbers  of  them  were  forced  to  beg.  On  two  occasions,  the  collectors 
of  Hearth-money  had  been  driven  out  of  the  town.  From  Plymouth 
round  to  the  Severn  similar  conditions  prevailed,  and  in  June  1667  no 
English  ships  could  sail  in  safety  from  these  ports^  These  results  of 
the  unavoidable,  but  premature  retrenchment  of  the  navy  were  in- 
considerable,  as    compared   with    the    consequences    of    the    national 


^  Calendar  Treasury  Books,  1667-8,  p.  xvii. 

2  State  Papers,  Domestic,  Charles  II.,  ccxvii.  84;  Calendar ,  1667,  p.  471.  A 
Full  Answer  to  a  Bystander,  p.  142. 

3  Calendar  Treasury  Books,  1667-8,  p.  Ixiv. 
*  Petty,  Verbum  Sapienti,  ut  supra,  p.  3. 

5  State  Papers,  Domestic,  Charles  II.,  clxxviii.  92,  clxxx.  127 ;  Calendar,  1666-7, 
pp.  266,  327.  The  value  of  the  prizes,  taken  by  the  English  fleets,  was  great,  but  it 
was  said  that  the  proceeds  were  not  devoted  towards  relieving  the  strain  on  the 
Exchequer— Letter  from  Sir  Henry  Bennet  to  the  Duke  of  Ormond,  September  11, 
1665,  printed  in  Miscellanea  Aulica,  p.  361 ;  A  Detection  of  the  Court  and  State  of 
England,  by  R.  Coke,  1721,  ii.  p.  141. 

6  State  Papers,  Domestic,  Charles  II.,  cciii.  80,  cciv.  80;  Calendar,  1667, 
pp.  162,  176. 


CHAP.  XIV.]  The  Panic  1667  279 

humiliation,  when  the  Dutch  fleet  made  its  appearance  in  the  Thames 
in  June  1667  and  obtained  command  of  the  North  Sea.  There  was  a 
panic  in  the  City^;  an  invasion  was  expected,  and,  in  the  desire  to 
escape  from  the  threatened  district,  those,  who  had  deposits  with  the 
goldsmiths,  demanded  payment  of  their  balances.  Thus,  there  resulted 
the  first  run  on  English  banks.  One  of  the  leading  firms,  that  of  the 
Viners,  had  ^100,000  available,  at  the  beginning  of  the  panic,  but  this 
was  soon  exhausted.  Indeed,  it  was  said  that,  in  this  case,  certain 
influential  persons  obtained  early  and  full  payments  Even  in  this  first 
run,  the  bankers  were  sufficiently  astute  to  adopt  every  possible  device 
to  procure  time,  in  the  hope  that  the  alarm  would  abate.  To  applicants 
for  withdrawals  they  replied — "It  is  payable  at  twenty  days,  when  the 
days  are  out  we  will  pay  you  and  those  that  are  not  so,  they  make  tell 
over  their  money,  and  make  their  bags  false  on  purpose  to  give  cause  to 
retell  it  and  so  spend  time^"  The  shock  to  confidence  was  too  severe 
to  be  repaired  by  such  methods,  and  there  was  a  universal  suspension 
of  cash  payments,  the  liabilities  of  the  bankers  being  estimated  at 
d^l,200,000^  Merchants,  who  were  depositors,  were  thus  unable  to 
meet  their  obligations,  and  failures  were  numerous.  On  June  15th  the 
state  of  feeling  was  graphically  described  by  John  Rush  worth,  who 
writes  that  "the  people  were  readie  to  tear  the  hair  off  their  heads"."*' 
The  suspension  of  credit  was  intensified  by  the  distress  of  the  poor, 
and  all  classes  suffered  by  the  interruption  of  the  supply  of  coal  from 
Newcastle.  In  July  fuel  had  reached  famine-prices,  and  sea-coal  was 
quoted  at  £G  the  chaldron**.  The  "deadness"  of  commerce  was  so  great 
that  collectors  of  taxes  were  unable  to  enforce  payments,  owing  to  "the 
infinite  wants  of  all  men'"*  in  their  districts'.  It  was  the  opinion  of 
experienced  merchants  that  the  nation  was  greatly  impoverished,  and 
that  none  of  them  had  known  trade  to  be  so  bad^ 

1  *^Tlie  alarm  was  so  great  that  it  put  both  country  and  city  into  fear,  a  panic 
and  consternation  such  as  I  hope  I  shall  never  see  more ;  everybody  was  flying,  none 
knew  why  or  whither" — John  Evelyn,  June  8th,  Diary  (Bohn's  edition),  ii.  p.  27. 
Roger  Coke,  who  was  in  London  at  the  time,  describes  "the  consternation  and 
confusion"  as  greater  than  that  in  the  time  of  the  Great  Plague  and  Fire — Detection 
of  the  Court  and  State  of  England,  ii.  p.  156. 

2  Pepys,  Diary,  ut  supra,  p.  403;  A  Handbook  of  London  Bankers,  by  F.  G.  Hilton 
Price,  London,  1890-1,  pp.  168-71. 

^  Pepys,  Diary,  ut  supra,  p.  398. 

*  Of  Trade,  by  J.  P.  1700  [Brit.  Mus.  08226 .  ee .  2],  p.  67- 

^  State  Papers,  Domestic,  Charles  IL,  ccv.  76,  ccvii.  113;  Calendar,  1667, 
pp.  188,  246. 

«  Mercurius  Politicus  Redivivus,  Add.  MS.  (Brit.  Mus.)  10,117,  f.  693. 

^  State  Papers,  Domestic,  Charles  IT.,  ccix.  67;  Calendar,  1667,  p.  289. 

8  Ibid.,  ccix.  149;  Calendar,  1667,  p.  302;  Omnia  Comesta  a  Bello,  1667,  p. 
[Brit.  Mus.  67  •  a]. 


280  Companies  during  the  Crisis  1665-7    [chap.  xiv. 

The  crisis  of  the  years  1665  to  1667  was  very  severe.  It  began  with 
an  interruption  of  trade,  followed  by  the  successive  misfortunes  of  the 
Plague  and  the  Fire  and  ending  with  the  panic  of  June  1667.  During 
this  period,  the  new  undertakings  experienced  their  share  of  the  general 
depression.  Some  of  them  had  been  started  too  recently  to  withstand 
the  accumulation  of  adverse  circumstances  they  had  to  face.  For  instance 
the  Fishery  company  was  unable  to  complete  the  subscription  of  the 
necessary  capital,  and  it  was  reduced  to  dependence  on  lotteries  and 
other  adventitious  sources  for  any  funds  it  secured  \  The  effect  of  the 
crisis  on  the  East  India  and  African  companies  is  of  great  interest,  for 
different  reasons  in  each  case.  The  capture  of  the  forts  of  the  latter 
by  the  Dutch  left  it  in  a  position  of  very  great  difficulty.  The  loss 
of  its  ships  and  their  cargoes  converted  the  surplus  of  1664  into  a 
considerable  deficit  2.  The  apparent  inference  from  these  events  would 
be  that  the  superiority,  claimed  for  the  joint-stock  over  the  regulated 
company  for  a  trade  of  this  kind^,  was  illusory.  At  the  same  time,  there 
were  special  circumstances,  affecting  this  particular  case.  The  company 
had  suffered,  not  so  much  from  the  rival  Dutch  organization,  but  from 
the  fleet  under  De  Renter.  Therefore,  its  losses  were  subject  to  the 
issue  of  the  subsequent  war;  and,  had  England  fared  better  in  the 
struggle,  compensation  could  have  been  exacted  for  the  company. 

The  East  India  company  had  prudently  conserved  its  resources 
during  the  war;  and,  while  it  was  subjected  to  little  direct  loss,  it  was 
forced  to  reduce  its  operations.  The  capital,  subscribed  in  1658,  had 
been  adventured  for  seven  years  only,  and  this  period  was  due  to  close 
at  the  end  of  1665.  Had  the  stock  been  wound  up,  it  would  have  been 
difficult,  if  not  impossible,  to  have  obtained  a  sufficient  amount  of  new 
capital.  The  extent  of  the  depression  may  be  gathered  from  the  fact 
that,  though  the  balance  sheet  of  December  1664  showed  total  assets  of 
130  per  cent,  and  a  dividend  of  40  per  cent,  was  actually  declared  (which 
was  payable  in  August  1665),  the  stock  cum  dividend  was  selling  at 
70  per  cent,  of  the  amount  actually  paid.  Therefore,  the  final  transition 
from  the  old  system  of  terminable  undertakings  to  a  permanent  capital 
was  due  to  the  coincidence  of  the  proposed  winding  up  of  the  General 
Stock  with  an  exceptionally  unfavourable  state  of  the  money-market. 
But,  while  the  committees  were  forced  to  depart  from  the  practice  of 
making  a  new  subscription,  they  continued  what  had  been  the  essential 
evil  of  that  system.  Although  it  was  decided  that  the  stock  should  not 
be  wound  up,  the  court  acted  as  if  a  new  subscription  were  inevitable, 
by  distributing  in  the  nineteen  months  between  July  3rd,  1665  and 
February  20th,  1667  no  less  than  90  per  cent,  in  dividends*.     The  reason, 

1  Vide  infra,  ii.  p.  373.  ^  Ihid.,  ii.  p.  18. 

3  Vide  supra,  p.  273.  *  Vide  infra,  ii.  pp.  133,  178. 


CHAP.  XIV.]     Compa/iiies  during  the  Crisis  1665  7  281 

assigned  for  this  course,  was  that  the  company  had  cash  to  this  amount, 
and  that,  as  a  consequence  of  the  war,  it  could  not  employ  it.  Under- 
lying this  ostensible  explanation,  there  were  doubtless  other  motives. 
Owing  to  the  great  depression  of  the  time  and  the  need  of  capital,  there 
can  be  little  doubt  that  the  stockholders  would  have  put  great  pressure 
on  the  committees,  had  they  refused  to  make  substantial  distributions. 
Moreover,  the  condition  of  the  national  finances  was  an  element  of  danger 
to  any  body  with  large  liquid  assets.  As  it  was,  the  company  had  been 
compelled  to  lend  the  Crown  .£^50,000  in  April  1666,  a  further  .£'20,000 
in  July  1667  and  d^50,000  on  December  4th  of  the  same  year^  It  was 
doubtless  recognized  that  the  future  of  the  trade  would  be  on  the  whole 
less  precarious,  if  the  stockholders  were  returned  nearly  the  whole 
subscribed  capital  (which  could  be  called  up  again  when  it  was  required), 
than  if  that  capital  were  in  the  hands  of  the  Crown,  when  repayment 
might  be  greatly  delayed.  On  the  other  hand,  if  it  proved  impracticable 
to  call  up  fresh  capital  on  the  declaration  of  peace,  the  company  would 
be  left  with  very  meagre  resources.  Little  profit  could  have  been  made 
during  the  war;  and,  after  the  payment  of  the  dividends  of  1667,  there 
would  remain,  according  to  the  valuation  of  1664  a  balance  in  property 
and  cash  of  not  much  more  than  <£*1 50,000.  Of  this  sum  .£^120,000  was 
lent  to  the  Crown ;  and,  pending  repayment,  the  company  was  left  with 
scarcely  any  capital  to  purchase  and  fit  out  ships. 

One  consequence  of  the  great  scarcity  of  capital  during  the  crisis 
had  been  the  appearance  of  proposals  for  the  extension  of  credit  by 
means  of  the  establishment  of  an  institution  for  the  accommodation  of 
merchants.  It  was  to  be  neither  "a  bank  nor  a  Lumbard'''  but  both 
combined,  the  intention  being  to  make  advances  to  traders  up  to  three- 
quarters  or  even,  in  special  cases,  to  nine-tenths  of  the  value  of  their 
goods^.  This  scheme  was  propounded  in  1665;  and,  in  the  following 
year,  another  was  mooted  for  the  issue  of  inconvertible  paper,  based  on 
the  "satisfying  security"  of  land  or  monies  granted  to  the  Crown  by 
Parliaments  The  second  suggestion  is  of  interest  as  an  anticipation 
of  the  land-banks,  which  became  important  in  the  closing  years  of  the 
century.  The  discredit  of  the  private  bankers  in  1667  delayed  the 
realization  of  these  projects,  and  trade  did  not  begin  to  revive  till  peace 
had  been  made  with  Holland.  Thereupon  merchants  everywhere  started 
to  fit  out  ships,  while  in  the  first  week  of  September  the  hemng-fleet 

1  Hunter,  Hist,  of  British  India,  ii.  p.  182  (note);  Court  Book  of  the  East  India 
Company,  xxiii.,  July  6,  December  4,  1667. 

2  A  Description  of  the  Office  of  Credit,  London  (printed  by  order  of  the  Society), 
1666  [Brit.  Mus.  1339.  f.  13],  pp.  1,  11. 

'  Experimental  Proposals  how  the  King  may  have  money  to  Pay  and  Maintain  hi$ 
Fleets,  by  Sir  Edward  Forde,  1666,  in  Harleian  Miscellany  (1746),  iv.  p.  186. 


282  Revival  of  Trade  1667-9  [chap.  xiv. 

had  already  sailed ^  The  return  of  activity  showed  itself  in  the  beginning 
of  fresh  undertakings.  Prominent  amongst  these  was  the  commence- 
ment of  modem  fire-insurance  in  1667,  in  an  office  founded  by 
Barbon,  which  was  subsequently  carried  on  by  a  company*.  The 
expedition,  sent  out  in  1668  by  a  group  of  adventurers,  resulted  in  the 
incorporation  of  the  Hudson's  Bay  company  in  1670^  At  the  same 
period  an  effort  was  made  to  recover  land  for  the  growing  of  hemp  by 
drainage*.  In  1670  a  subsidiary  company,  formed  by  the  old  societies 
of  the  Mines  Royal  and  Mineral  and  Battery  Works  (which  had  been 
re-established  soon  after  the  Restoration)  was  floated  under  the  title 
of  the  Undertaking  for  the  working  of  Mines  Royal  m  the  counties  of 
Cardigan  and  Merioneth,  with  a  nominal  capital  of  «£*4,200^  The 
improvement  in  trade  extended  to  Scotland,  where  a  company  for  making 
wool  cards  had  been  established  in  1663^  This  was  followed  by  a  whale- 
fishing  and  soap-boiling  partnership  in  1667  with  a  capital  of  <£*1 1,700, 
two  sugar  refineries  in  1667  and  1669  and  a  Fishery  company  in  1670^. 
The  latter  had  a  proposed  capital  of  =^25,000  sterling,  but  it  is  doubtful 
if  much  of  this  amount  was  paid  up,  owing  to  the  jealousy  of  the  gentry 
and  the  merchants,  and  the  enterprize  was  a  failure.  The  other  companies 
met  with  considerable  success,  and  all  of  them  were  in  existence  in  the 
eighteenth  century,  while  the  Soaperie  was  not  wound  up  till  1785. 

In  England  it  was  inevitable  that  the  recovery  should  be  slow,  owing 
to  the  inroads  made  on  the  national  capital  by  the  funds  required  for 
the  rebuilding  of  London  and  for  the  carrying  on  of  the  war.  In  1668 
complaints  of  bad  trade  continued  and  also  of  the  high  rate  of  interest^. 
During  the  year  1668-9  the  total  trade  of  London  had  only  increased 
by  about  4  per  cent.,  as  compared  with  1662-3^.  When  the  improve- 
ment had  made  further  progi-ess,  it  was  calculated  that,  since  1630, 
London  had  about  doubled  in  value i**,  while  it  was  claimed  that  the 
whole  trade  of  Holland  was  twice  as  much  as  it  had  been  in  1648". 
The  greater  weight  of  Customs  in  England  was  compared  unfavourably 
with  the  lighter  duties  at  the  Dutch  ports,  where,  through  the  larger 
volume  of  trade,  "they  receive  more  Customs  and  duties  to  their  State 
in  one  year  by  the  greatness  of  their  commerce  than  England  does  in 

I  London  Gazette,  No.  188,  September  2-5,  1667. 

*  Vide  infra,  iii.  p.  376.  ^  Ibid.,  ii.  p.  229. 

*  Evelyn,  Diary,  ut  supra,  ii.  p.  63.  ^  Vide  infra,  ii.  pp.  403,  404. 
6  Ibid.,  III.  p.  176.  7  Ibid.,  ii.  p.  377. 

8  Vox  et  Lacrimae  Anglorum  [1668] ;  Usury  at  6  per  Cent.  Examined,  by  Thomas 
Manly,  1069,  Preface,  p.  16. 

»  Add.  MS.  (Brit.  Mus.)  36,785,  ff.  5,  68,  59. 

w  Several  Essays  in  Political  Arithmetic,  by  Sir  W.  Petty,  London,  1756,  p.  169; 
A  New  Discourse  of  Trade,  by  Sir  Josiah  Child  (4th  ed.),  pp.  9-13. 

II  Anderson,  Annals  of  Commerce,  iii.  p.  7. 


CHAP.  XIV.]    Position  of  the  African  Company  1670-1     283 

two  by  the  greatness  of  its  Customs \'"  For  this  and  other  reasons,  it 
was  stated  in  1671  that  the  trade  of  Amsterdam  was  ten  times  that 
of  London'*. 

Such  comparisons  tend  to  disguise  the  real  advance  in  prosperity 
that  had  been  made  in  the  face  of  great  difficulties  from  1668  to  1671. 
The  shipping  trade  had  shown  considerable  expansion,  and  allusions 
occur  to  "the  multitude  of  ships  at  sea  and  the  floating  forest  of  masts 
in  the  Thames ^^  It  was  agreed,  also,  that  there  had  been  an  increase 
in  the  number  of  rich  merchants,  as  compared  with  any  period  since  the 
beginning  of  the  Civil  War*.  On  the  rebuilding  of  London,  it  was 
calculated  that  the  new  houses  commanded  double  the  rent  of  those 
which  they  replaced,  while  by  1673  buildings  on  new  foundations  were 
said  to  have  let  at  .£300,000  a  year». 

To  some  extent  the  leading  companies  failed  to  obtain  full  benefit 
from  the  activity  of  trade.  The  African  Adventurers  were  in  such 
difficulties  that  no  progress  could  be  made  until  an  arrangement  had 
been  effected  with  their  creditors^.  Capital  was  needed;  and,  although 
the  act  of  1662  protected  the  shareholders  from  liability  to  pay  any 
debts  in  excess  of  the  assets,  this  measure  would  not  preclude  the  creditors 
from  claiming  to  be  paid  out  of  any  fresh  capital  subscribed.  This  fact 
was  sufficient  to  prevent  new  funds  from  being  raised  by  the  issue  of 
additional  shares ;  since,  naturally,  no  one  was  willing  to  provide  money 
for  the  payment  of  liabilities,  for  which  he  was  not  personally  responsible. 
The  situation,  therefore,  resolved  itself  into  the  problem  of  a  re-construc-  V 
tion  of  the  company.  With  a  view  to  the  provision  of  further  capital, 
it  was  agreed  that  the  shareholders  should  receive  10  per  cent,  of  their 
holding  in  the  new  company  and  the  creditors  about  40  per  cent,  of  the 
sums  due  to  them'.  This  arrangement  was  agreed  to  in  1671,  and  the 
company  received  a  new  charter  in  the  following  year  by  which  the  title 
was  changed  to  the  Royal  African  Company  of  England^. 

The  position  of  the  East  India  company  exemplifies  the  danger 
of   drawing  hurried    conclusions   from   the   statistics    of    this    period. 

*  A  Discourse  of  Trade,  by  Roger  Coke,  p.  6. 
2  A  Treatise  wherein  is  demonstrated  that  the  Church  and  State  of  England  are  in 

equal  danger  with  the  trade  of  it,  by  Roger  Coke,  London,  1671    Brit.  Mus. ~ —  L 

p.  69. 

*  Regale  Necessarium,  by  Fabian  Philipps,  1671,  p.  621. 

*  A  New  Discourse  of  Trade,  by  Josiah  Child  (4th  ed.),  p.  10;    Usury  at  6  per 
Cent.,  by  Thomas  Manley,  Preface. 

s  The  Grand  Concern  of  England  Explained,  1673,  in  Harleian  Miscellany  (1746), 
VIII.  p.  527. 

8  Vide  infra,  ii.  p.  18.  7  Yot  the  details,  vide  infra,  ii.  p.  19. 

8  lUd.,  II.  p.  20. 


284    Dividends  of  East  India  Company  1658-71   [chap.  xiv. 

The  dividends   paid   from  1658  to    1671   may  be  divided  into  three 
groups : 

1658  to  1664      60  per  cent. 

1665  „  1667      90  „      „ 
10   „      „ 


The  apparent  inference  from  these  figures  is  that  the  years  from  1665 
to  1667  were  the  most  prosperous  and  those  from  1668  to  1671  were  the 
least  successful.  Whereas  the  facts  of  the  case,  when  fully  investigated, 
point  to  exactly  the  contrary  conclusion.  As  already  shown ^,  the 
payments  made  from  1665  to  1667  constituted  a  division  of  the  capital 
of  the  undertaking;  and,  since  the  shareholders  did  not  subscribe  fresh 
funds  when  trading  was  resumed,  it  was  necessary  to  retain  all  profits  to 
replenish  the  depleted  resources.  Therefore,  though  only  one  dividend 
of  10  per  cent,  was  paid  from  1668  to  1671,  the  trade  was  prosperous. 
This  is  shown  by  the  advance  in  the  price  of  the  stock  which  had  risen 
from  70  in  1665  to  108-130  in  1669-70^. 

The  effect  of  the  inadequate  capital  of  this  company  is  shown  by 
a  comparison  of  its  dividends  with  those  of  the  rival  Dutch  organization. 
From  1659  to  1671  the  latter  had  distributed  260  per  cent.^;  as  com- 
pared with  160  per  cent.,  divided  by  the  English  undertaking^  More- 
over, the  credit  of  the  former  was  very  good,  and  in  May  1671  its  stock 
changed  hands  from  560  to  570,  these  being  the  highest  prices  hitherto 
reached^. 

During  this  period  some  peculiarities  in  the  organization  of  joint- 
stock  companies  emerge.  The  Hudson  Bay  company  followed  the  model 
of  the  East  India  body  in  having  a  governor  and  committees^,  while  the 
Royal  African  company  was  the  first  to  introduce  a  sub-governor  in 
addition  to  a  deputy -go  vernor^  In  some  cases  a  long  interval  elapsed 
between  the  declaration  and  the  payment  of  a  dividend,  and  it  was  the 
practice  of  the  East  India  company  to  allow  proprietors  to  obtain 
immediate  payment,  subject  to  discounts  Connected  with  the  holding 
of  stock,  it  may  be  noted  that  on  a  transfer  being  lodged  with  the 
company  in  1668,  the  question  arose  whether  the  stock  was  owned  by 
a  native  of  England  or  by  a  foreigner,  and  it  was  resolved  that  the 

1  Vide  mpra,  p.  280.  «  Vide  infra,  ii.  pp.  132-4,  177,  178. 

3  G.  C.  Klerk  de  Reus,  Niederlandisch-Ostindischen  Compagnie,  Appendix  vi. ; 
Anderson,  Annals  of  Commerce  (edited  by  David  MacPherson),  1805,  iv.  p.  488. 

*   Vide  infra,  u.  pp.  177,  178. 

^  State  Papers,  Domestic,  Charles  II.,  cclxxxix.  173,  cclxxxx.  201;  Calendar, 
1671,  pp.  219,  317. 

6  Vide  infra,  ii.  p.  229.  ^  lUd.,  ii.  p.  20. 

»  Court  Book,  xxv.,  Feb.  2,  1666. 


CHAP.  XIV.]       Transfers  and  Votes  1660-70  285 

transferor  and  transferee  must  make  an  oath  that  the  beneficial  owner 
was  not  an  aliens  At  this  period  a  special  form  of  deed  was  drawn  up 
by  the  company,  which  was  as  follows :  "I,  A.  B.,  doe  sell  and  assign  to 
C.  D.  £\fiOO  subscription  in  the  New  General  Stock  of  the  East  Indies 
Company-  (on  which  was  paid  ^500)  with  all  present  and  future 
proceeds,  and  in  confirmation  hereof  as  my  act  and  deed  I  sett  my  hand 
ye  day  and  year  above  written  ^''"*  During  the  year  1668  transfers  of 
East  India  stock  (or  as  they  were  termed  "  transports  ^)  were  very 
numerous.  The  committees,  after  approving  of  the  transaction,  recorded 
it  in  the  court  books;  but,  except  in  special  circumstances,  the  price 
realized  was  not  entered.  It  remained  for  the  undertaking  for  the 
Mines  Royal  of  Cardigan  and  Merioneth  to  introduce  the  principle  of  a 
maximum  vote.  In  this  company  each  share  was  entitled  to  a  vote, 
subject  to  the  important  proviso  that  no  proprietor  might  use  more  than 
three  votes*. 

It  was  exceedingly  unfortunate  that  the  returning  activity  of  trade 
was  temporarily  checked  in  January  1672,  through  the  financial  necessi- 
ties of  Charles  II.  It  has  been  expected  that  a  portion  of  the  cost  of 
the  war  from  1665  to  1667  should  have  been  defrayed  from  prizes,  but 
the  sums,  realized  by  the  Exchequer,  were  comparatively  small.  The 
money,  voted  by  Parliament  for  the  navy,  had  been  spent  on  it  and 
other  sums  in  addition ^  It  follows  that  the  deficit  on  the  Ordinary 
Revenue,  which  was  inevitable,  would  be  still  further  increased,  and  the 
reduction  of  the  Customs  during  hostilities  added  to  the  deficit.  In 
1667  the  debt  on  the  navy  was  dfi'l  ,100,000^,  and  the  expenses  of  the 
Household  were  returned  at  c£*81 7,207.  Is.''  It  was  reported  that  "the 
King  intended  to  make  some  retrenchments  in  his  family,  and  to  take 
off  one  half  of  his  officers ^"'''  The  financial  embarrassments  are  shown  by 
the  state  of  the  Exchequer  in  the  following  year.  The  settled  revenue 
was  estimated  to  produce  slightly  over  a  million,  and  efforts  had  been 
made  to  reduce  the  expenses  of  the  Court.  While  the  actual  revenue 
was  about  two-fifths  of  the  estimate,  the  actual  outlay,  on  such  of  the 

1  Court  Book,  Jan.  3,  10,  1668. 

2  It  is  noteworthy  that  the  company  in  this  document  does  not  call  itself  by  the  i 
name  given  it  in  its  charters.  It  was  held  in  law  that,  while  a  corporation  by 
prescription  might  use  any  of  several  names,  one  by  charter  could  only  act  legally 
under  that  given  it  in  the  instrument  by  which  it  was  created — Reports  of  Cases 
1  Will,  and  Mary  to  10  Anne,  by  W.  Salkeld,  1795,  iii.  p.  102. 

»  Court  Book,  xxvi..  Sept  4,  1668.  *   Vide  infra,  ii.  p.  404. 

^  The  whole  financial  situation  is  ably  analysed  by  Dr  W.  A.  Shaw  in  the 
Introduction  to  the  Calendar  of  Treasury  Books,  1667-8. 

8  State  Papers,  Domestic,  Charles  II.,  ccxvii.  84;  Calendar,  1667,  p.  471. 

7  Ibid.,  ccxxxvi.  146;  Calendar,  1667-8,  p.  287. 

8  London  Gazette,  No.  188,  Nov.  25,  1667. 


286  The  Crown  Finances  1670-2        [chap.  xiv. 

departments  of  the  household  as  can  be  checked,  was  slightly  in  excess 
of  that  allowed  ^  In  view  of  the  fact  that  it  was  necessary  to  provide 
ri£*l 00,000  to  pay  interest  on  loans,  the  pressure  of  the  debt  was  found 
to  be  very  heavy';  and,  in  addition  to  these  obligations,  there  were 
immense  arrears  of  salaries,  for  instance  the  salary  of  the  King's  falconer 
had  not  been  paid  for  six  years ^  In  his  speech  at  the  opening  of 
Parliament  Charles  II.  had  said  "  When  we  last  met,  I  asked  you  a 
supply ;  and  I  ask  it  now  again  with  greater  instance :  the  uneasiness 
and  streightness  of  my  affairs  cannot  continue  without  very  ill  effects*." 
One  method,  adopted  to  reduce  the  indebtedness  of  the  Crown,  was  the 
sale  of  Crown  property  in  1670.  This  course  was  a  continuation  of  the 
practice  of  the  Long  Parliament,  and  in  this  case  also  the  lands  were 
sold  at  a  considerable  sacrifice.  The  total  sum  realized  is  said  to  have 
been  d£^l  ,300,000**;  and  if  the  whole  amount  had  been  devoted  towards 
the  extinction  of  debt,  Charles  II.  would  have  remained  liable  for  about 
a  million  and  a  half  in  1671^.  At  that  date,  although  many  salaries 
still  remained  in  arrear  and  the  revenue  was  heavily  anticipated'',  the 
financial  situation  was  less  difficult  than  it  had  been  since  the  conclusion 
of  the  Dutch  War.  The  outlook  for  the  future  introduced  several 
elements  of  danger.  By  the  secret  Treaty  of  Dover  (May  1670), 
Charles  II.  was  bound  to  aid  France  against  Holland.  The  subsidy,  he 
received  in  return  for  the  promised  assistance,  would  not  suffice  to  equip 
the  fleet,  and  it  was  thought  that  Parliament  would  not  vote  money  for 
such  a  contests  Thus  to  earn  his  subsidy,  Charles  II.  was  bound  to 
make  war  on  Holland,  and  there  was  little  prospect  of  his  obtaining  the 
necessary  funds  by  legitimate  means.  The  plan,  eventually  adopted, 
was  to  commit  England  to  the  war,  and  trust  that  Parliament  would 
grant  supplies  when  it  was  called  together  after  hostilities  had  begun. 
It  was  known  that  the  Dutch  merchant  vessels,  returning  home  from  the 
Levant,  which  were  valued  at  a  million  and  a  half,  would  sail  early  in 
1672,  and  it  was  hoped  that,  by  capturing  these,  a  rich  booty  would  be 

^  Vide  infra,  iii.  p.  531 ;  Calendar  Treasury  Books,  1667-8,  pp.  xxviii.-xxxiii.  : 
Actual  Outlay — Chamber,  Household,  Works 

-Mich.  1667  to  Mich.  1668        £127,429.  Os.  lOfrf. 

Estimate  calendar  year  1668 £118,000.  0«.  Orf. 

2  Vide  infra,  iii.  p.  531 ;  Journals  of  the  House  of  Commons,  ix.  p.  98. 

3  State  Papers,  Domestic,  Charles  II.,  cclxx.  84,  85;  Calendar,  1668-9,  p.  660. 
*  Journals  of  the  House  of  Commons,  ix.  p.  121. 

^  A  Letter  from  a  Bystander  to  a  Member  of  Parliament,  London,  1741,  p.  88 ; 
An  Account  of  the  Growth  of  Popery  and  Arbitrary  Government,  by  Andrew  Marvel, 
1677,  in  State  Tracts,  being  a  Collection  of  Several  Treatises  privately  printed  in  the 
Reiffn  of  King  Charles  11. ,  (1693),  i.  p.  78. 

6  Charles  II.,  by  Osmund  Airy,  London,  1904,  p.  269. 

7  Add.  MS.  (Brit.  Mus.)  28,078,  f.  63. 

®  Journals  qfthe  House  of  Commons,  ix.  p.  247. 


CHAP.  XIV.]  The  Crisis  1672  287 

secured ^  The  state  of  the  finances  was  so  bad,  that  funds  were  required 
to  despatch  the  fleet  and  to  make  other  preparations ;  and,  while  the 
King's  advisers  were  at  a  loss  to  obtain  money,  it  was  suggested  that  the 
difficulty  could  be  met  by  the  closing  of  the  Exchequer  for  payments  on 
assignation.  By  this  operation  the  incoming  revenue,  which  should  have 
been  paid  out  to  bankers  against  their  previous  advances,  would  be 
liberated  for  the  purposes  of  the  coming  war  and  would  carry  it  on  for 
some  months. 

The  "stop  of  the  Exchequer'"*  was  ordered  on  December  18th,  1671, 
and  the  consequences  were  disastrous,  not  only  to  the  credit  of  the 
Crown,  but  to  the  trade  of  the  country''.  Apparently  only  the  bankei*s 
immediately  concerned  were  affected,  but  it  is  to  be  remembered  that 
most  of  the  funds,  lent  by  them  to  the  Crown,  had  been  borrowed  from 
their  depositors.  The  bankers  were  unable  to  obtain  the  payment 
promised  them  at  the  due  dates,  and,  consequently,  they  could  not  meet 
their  obligations.  About  one-half  of  the  whole  number  failed,  and  from 
them  the  area  of  ruin  extended  to  the  merchants,  until  it  reached  many 
widows  and  orphans,  whose  income  was  derived  from  the  interest  on 
their  capital*. 

Some  effort  was  made  to  maintain  a  vestige  of  the  royal  faith,  by 
the  promise  of  6  per  cent,  interest  on  the  sum  of  <£*!, 328,526,  which  was 
stopped -*;  but,  even  had  this  promise  been  punctually  performed,  it 
would  have  been  small  compensation  to  those  whose  credit  had  been 
lost  in  the  crash.  Altogether  it  was  computed  that  nearly  ten  thousand 
families  were  serious  sufferers,  and  "  that  many  of  them  were  entirely 
ruined  ^'*'' 

1  Evelyn,  Diary,  ut  supra,  ii.  p.  73 ;  History  of  the  Public  Revenue  of  the  British 
Empire,  by  Sir  John  Sinclair,  London,  1803,  i.  p.  314. 

2  State  Papers,  Domestic,  Charles  XL,  cccii.  76;  Calendar,  1671-2,  pp.  87,  88. 

3  Evelyn,  Diary,  ut  supra,  ii.  p.  76;  History  of  England,  1660-1702,  by  R.  Lodge, 
1910,  p.  109. 

*  Sinclair,  History  of  the  Public  Revenue  of  the  British  Empire,  i.  p.  315 ;  History 
of  Banking,  by  W.  J.  Lawson,  1850,  pp.  197-200;  Andre'ades,  History  of  the  Bank  of 
England,  p.  39. 

^  Anderson,  Annals  of  Commerce,  iii.  p.  32;  Growth  of  Pojyery,  by  A.  Marvel,  in 
State  Tracts  of  the  Reign  of  Charles  II.,  i.  p.  79 ;  Memoirs  of  Sir  John  Beresby,  1735, 
p.  21. 


CHAPTER  XV. 

From  the  Stop  of  the  Exchequer  to  the  Crisis  of  1686. 

The  stop  of  the  Exchequer  constituted  the  beginning  of  a  period 
of  depression,  which  lasted  from  the  first  months  of  the  year  1672 
until  early  in  1674.  Some  measure  of  the  extent  of  the  shock  to 
credit  may  be  obtained  from  the  statements  that  in  1672  one  of  the 
bankers  had  obligations  outstanding  to  the  extent  of  ,£'1,100,000^ ;  and 
that,  in  1673,  the  business  of  lending  money  was  described  as  having 
been  effectually  suppressed  2.  The  time  was  spoken  of  as  one  "  of  general 
poverty*,'"  when  many  were  unemployed  and  the  indigent  in  England 
and  Wales  were  said  to  number  between  one  hundred  and  fifty  thousand 
and  half  a  million  persons*.  Attention  was  directed  to  "the  usurpation "" 
by  foreign  countries  of  the  trade  of  Britain,  and  the  Dutch  were  charged 
with  various  commercial  immoralities,  while  it  was  said  that  the  French 
aimed  at  "an  universal  commerce  as  well  as  an  universal  monarchy ^"''' 
In  spite  of  foreign  competition,  had  the  suspension  of  credit  been  an 
isolated  event,  it  is  probable  that  commerce  in  London  would  have 
begun  to  reassert  its  previous  activity  about  the  end  of  1672,  but  "  the 
stop  ^^  was  closely  connected  with  the  war  with  Holland,  which  involved 
losses  and  a  considerable  outlay.  Moreover,  the  financial  situation  in 
1674  resulted  in  a  second,  but  a  less  serious  run  on  those  bankers  who 
had  re-commenced  business.     The  methods,  adopted  for  the  provision  of 

1  Some  Considerations  of  the  Consequences  of  the  Lowering  of  Interest,  in  Works  of 
John  Locke^  London,  1727,  11.  p.  5. 

2  The  History  and  Proceedings  of  the  House  of  Commons,  London,  1742,  i.  p.  182. 

3  Two  Seasonable  Discourses  concerning  this  present  Parliament,  1675,  in  State 
Tracts  of  the  Reign  of  Charles  II.,  i.  p.  68. 

*  The  Art  of  Good  Hwiban4ry,  by  R.  T.,  1675,  in  Harleian  Miscellany,  i.  p.  378; 
How  to  Advance  the  Trade  of  the  Nation,  by  M'illiam  Gosse,  in  Ibid.,  iv.  p.  366. 

^  The  Dutch  Usurpation,  by  William  de  Britaine,  1672,  in  Harleian  Miscellany, 
III.  p.  14;  The  Present  State  of  Chridendom  and  the  Interest  of  England  with  regard  to 
France,  1677,  in  Ibid.,  1.  p.  245;  A  Discourse  of  Trade  wherein  is  plainly  discovered 
the  True  Cause  of  the  Great  Want  of  Money,  1675,  pp.  1-6. 


CHAP.  XV.]         The  Crown  Finances  1671-4  289 

resources  for  the  war,  were  exceedingly  involved.  The  funds,  diverted 
from  the  payment  of  the  liabilities  to  which  they  were  assigned,  became 
in  reality  a  forcible  postponement  of  the  satisf«u;tion  of  the  creditors  of 
the  Crown.  Therefore,  although  ready  money  was  provided,  the  liability 
remained.  The  war  was  unpopular \  and  the  House  of  Commons  granted 
a  supply,  estimated  to  produce  ^£^1 ,260,000,  unwillingly;  and  enquired 
closely  into  the  disbursement  of  this  and  other  sums,  available  for  the 
carrying  on  of  the  contest.  It  was  estimated  that  there  was  received 
from  the  Parliamentary  grant,  the  sale  of  prizes,  the  Dutch  indemnity, 
and  portion  of  the  Customs  revenue  assigned  to  the  navy,  a  total  of 
0^3,040,000 :  while  the  outlay  on  the  war  was  returned  at  <^2,040,000, 
leaving  exactly  a  million  unaccounted  for^  This  investigation,  like  that 
of  the  finances  of  the  previous  struggle  with  the  Dutch,  does  not  take 
account  of  the  normal  shortage  of  the  Ordinary  Revenue  and  of  the 
failure  of  the  grant  to  reach  the  estimated  amount,  as  well  as  the  falling 
off  in  the  Customs  during  the  period  of  hostilities.  For  instance,  the 
whole  amount  collected  (apart  from  recent  increases  of  rates)  for  the 
three  years,  Michaelmas  1671  to  Michaelmas  1674,  in  England  and 
Wales,  showed  a  reduction  of  about  one-third,  as  compared  with  the 
figures  of  1668^.  On  the  other  side,  the  funds  at  the  disposal  of  Charles  II, 
were  augmented  by  the  subsidy  from  France,  which  is  said  to  have  been 
spent  on  the  navy^ 

In  spite  of  the  known  and  secret  resources  of  the  Crown,  by  the  end 
of  1673  the  finances  were  in  an  exceedingly  embarrassed  condition.  The 
estimate  for  the  financial  year  Michaelmais  to  Michaelmas  was  framed  on 
the  basis  of  a  reduced  income  from  Customs,  and  it  was  found  that  the 
whole  settled  revenue  was  anticipated  with  the  exception  of  about 
d^l  50,000  ^  In  addition,  it  was  reported  that  there  was  no  fund  to  pay 
the  fees  and  salaries  in  the  Exchequer,  for  secret  service,  interest  on 
money  already  borrowed  and  the  arrears  of  the  household — "all  of 
which  amount  to  a  very  great  sum  of  money ^" 

The  explanation  of  the  difficulties  of  financing  the  Crown  involves 

*  The  Grand  Question  Resolved  whether  a  King  of  England  can  make  Wars  and 
Alliances  without  Notifying  it  to  Parliament  [1673],  in  Miscellanea  Aulica,  p.  260. 

2  Hist,  and  Proceedings  of  the  House  of  Commons,  i.  p.  238. 

3  In  both  cases  the  statistics  relate  to  the  actual  collection^  not  the  rent  of  the 
farm — 

1668  £828,200.  17*.  4d. 

1671-4,  annual  average,  deducting  additional  duties...         £658,566.  5*.  Q^d. 
—Add.  MS.  (Brit.  Mus.)  36,785,  ff.  59,  60;  Add.  MS.  28,078,  ff.  201-2;  cf.  An 
Estimate  of  the  comparative  Strength  of  Great  Britain,  and  of  the  Losses  of  her  Trade 
from  every  War  since  the  Revolution,  by  George  Chalmers,  Loudon,  1794,  p.  49. 

*  Vide  infra,  iii.  p.  530,  note  (10).  ^  Add.  MS.  28,078,  f.  116. 
«  Ihid.,  f.  119. 

s.  c.  I.  19 


290  The  Crown  Finances  1672-4         [chap.  xv. 

taking  note  of  a  number  of  varying  influences.  The  position  from  1672 
to  1674  might  be  described  in  the  following  terms.  The  estimated 
settled  revenue,  together  with  the  special  grant  for  the  war,  would  about 
meet  the  estimated  expenditure ^  But  there  was  no  allowance  made  for 
interest  on  the  large  outstanding  debt^  Contingent  receipts,  such  as 
Prize-money  and  the  indemnity,  should  have  sufficed  to  meet  this  charge 
and  to  have  provided  a  moderate  amount  towards  the  reduction  of  the 
anticipations.  This  statement  of  the  situation,  however,  was  only  true, 
subject  to  many  provisos.  First,  the  estimated  revenue  and  the  supply 
for  the  war  must  reach  the  sums  expected,  and  the  estimated  expenditure 
must  not  be  exceeded.  As  a  matter  of  fact,  all  these  conditions  were 
violated,  and  hence  the  difficulties  of  the  year  1674.  Mention  has 
already  been  made  of  the  decline  of  the  Customs  through  the  war^;  and, 
in  addition  to  this  cause,  there  was  another  which  tended  to  produce 
a  diminution  in  the  settled  revenue.  The  farming  of  the  Customs  and 
of  the  excise  was  subject  to  grave  abuses.  Petty  estimated  that  the 
total  Customs  duties,  which  should  have  been  collected,  ought  to  have 
reached  a  million  a  year.  Out  of  this,  owing  to  false  declarations  of 
merchants,  the  charge  of  collection  and  the  profit  of  the  farmers,  the 
Crown  only  obtained  one-half*.  Moreover,  the  fixing  of  the  rent,  pay- 
able by  the  farmers,  was  aff*ected  by  various  indirect  practices.  In  1673 
the  Commissioners  of  excise  were  interested  in  the  farm  to  the  extent  of 
seven  thirty-second  parts  of  the  whole.  On  this  share  of  the  profit,  they 
succeeded  in  raising  <i£^90,000,  besides  an  income  of  ^6,000  a  year  during 
the  currency  of  the  lease,  "  whereby ,'"*  according  to  the  report  of 
Godolphin,  "  contrary  to  law,  they  were  become  both  farmers  and  com- 
missioners^''''  In  other  cases,  the  Crown  suffered  through  the  persons, 
who  tendered,  offering  large  bribes,  with  the  result  that  the  highest  offer, 
with  the  best  security,  was  sometimes  not  accepted®.  The  same  corrup- 
tion extended  to  the  Exchequer,  and  it  is  significant  that,  at  a  later 
date,  it  was  discovered  by  Dudley  North,  that  one  of  the  auditors  had 
systematically  falsified  a  whole  set  of  books^  In  view  of  these  circum- 
stances and  the  original  insufficiency  of  the  settled  revenue,  it  was 
unavoidable  that  the  actual  receipts  of  the  Exchequer,  under  this 
heading,  should  fall  far  short  of  the  estimates. 

^  Vide  infra,  iii.  pp.  530. 

^  Reresby  states  that  in  1675  the  debt  was  returned  at  four  million  £s,  besides 
what  was  due  to  the  bankers  through  the  stop  of  the  Exchequer — Memoirs,  p.  27. 
3  Vide  supra,  p.  289. 

*  Several  Essays  in  Political  Arithmetick,  London^  1755,  p.  161. 

*  State  Papers,  Domestic,  Charles  II.,  Entry  Book,  lxxi.  p.  77. 
8  Burnet,  History  of  His  Own  Time,  Oxford,  1833,  ii.  p.  103. 

^  The  Lives  of  Francis  North,  Baron  Guilford  and  Sir  Dudley  North,  by  the  Hon. 
Roger  North,  London,  1826,  iii.  p.  150. 


CHAP.  XV.]      Increase  in  Expenditure  1672-5  291 

On  the  other  hand,  the  actual  outlay  largely  exceeded  that  esti- 
mated. In  the  spending  departments  there  was  similar  corruption ; 
and,  in  addition,  certain  large  sources  of  expense  were  either  greatly 
under-estimated  or  did  not  appear  in  the  estimates  at  all.  What  might 
be  described  as  the  expenses  of  the  Court  for  the  two  years  (Easter  to 
Easter)  1661-3  were  under  a  quarter  of  a  million  a  year^  For  the 
same  length  of  time  from  1672-3,  the  estimate  was  close  on  «£350,000, 
and  the  actual  disbursements  for  the  two  years  1673-5  came  to  over  half 
a  million  annually,  or  more  than  double  the  average  sum  that  sufficed 
for  1661-3^^.  The  greater  part  of  the  increase  is  accounted  for  by  the 
alarming  addition  to  the  pensions  and  bounties.  For  1672  and  1673 
the  total  estimate  was  i?l 60,000,  whereas,  in  the  two  years  1673-5  no 
less  than  ^387,233  was  distributed  under  this  heading,  or  over  six  times 
what  had  sufficed  between  1661  and  1663.  These  were  the  payments 
out  of  the  Exchequer,  and  to  these  must  be  added  the  gifts  to  the 
mistresses  of  Charles  XL  from  other  sources*.  That  popular  opinion  was 
alive  to  the  causes  of  the  increase  of  expenditure  is  shown  by  the  clause 
in  the  impeachment  of  Arlington  in  1674,  which  charges  him  with 
having  sanctioned  or  advised,  during  his  tenure  of  the  secretaryship, 
grants  amounting  to  at  least  three  millions*.  In  addition  to  the 
pensions,  there  was  a  comparatively  small,  but  an  almost  general  increase 
on  the  estimate  in  the  expenses  of  the  Court ;  so  that,  on  the  whole, 
apart  from  the  services,  the  actual  expenditure  was  much  gi-eater  than 
that  allowed  for.  But  the  revenue  was  much  less  than  that  expected, 
hence  it  follows  that,  if  the  expenses  of  the  war  were  paid,  there  would 
be  a  large  addition  to  the  arrears,  already  due  on  the  Ordinary  Expendi- 
ture. When  Sir  Thomas  Osborne  (afterwards  Earl  of  Dan  by)  became 
Treasurer,  the  Crown  had  reached  the  end  of  its  credit.  The  bankers 
were  extremely  dissatisfied',  and  it  was  found  impossible  to  borrow  until 
the  existing  anticipations  had  been  materially  reduced*.  The  situation  was 
further  complicated  by  the  advisability  of  providing  funds  to  pay  interest 
on  the  bank^s**  debt,  and  it  was  feared  that  this  liability  would  "devour'' 
any  savings  that  might  be  made  in  the  ordinary  coursed  Further, 
Danby  required  money  to  carry  out  his  scheme  of  purchasing  a  majority 
of  votes  in  the  House  of  Commons^     He  proposed  to  take  advantage 

1  Calendar  Treasury  Books,  1660-7,  p.  xxxii.         2  y^^  infra,  in.  pp.  630,  631. 
3  State  Papers,  Domestic,  Charles  II.,  cccxxxvii.  171. 

*  Journals  of  the  House  of  Commons,  ix.  pp.  294,  296. 

^  State  Papers,  Domestic,  Charles  II.,  cccxxxvu.  163;  Calendar,  1673-5,  p.  5. 
«  Add.  MS.  (Brit.  Mus.)  28,078,  ff.  11,  12.  ^  Ibid.,  f.  16. 

*  In  the  Session  of  1674  one  member  was  reported  to  have  said  he  expected  to 
make  it  worth  £5,000  to  him  {Journals  of  the  House  of  Commons,  ix.  p.  301).  It 
was  stated  that  the  usual  rate  at  this  time  was  a  guinea  a  vote  and  a  dinner  every 
day  in  the  week  during  the  Session,  "  unless  the  House  be  upon  money  or  a  Minister 

19—2 


292  The  Crisis  of  1674  [chap.  xv. 

of  the  provision,  which  exempted  the  Secret  Service  payments  from  a 
detailed  accounting,  by  making  his  bribes  through  this  fund\  Owing  to 
the  war  expenditure,  the  necessity  of  making  some  disbursements  for 
carrying  on  the  government  and  the  absence  of  credit,  Danby  was  left 
without  any  available  resources  to  discharge  current  liabilities,  much  less 
to  make  a  new  class  of  outlays.  The  method,  by  which  he  managed  to 
finance  the  Crown,  was  to  lessen  the  anticipations  by  effecting  a  drastic 
reduction  in  the  pensions.  With  reduced  anticipations,  he  expected  to 
be  in  a  position  to  borrow  enough  to  tide  over  the  present  difficulty 
until  the  Commons  granted  a  supply,  or  relief  came  from  some  other 
direction.  This  policy  had  certain  important  indirect  results.  The 
report  of  the  proposed  retrenchments  produced  great  uneasiness,  and  it 
was  supposed  to  be  only  the  prelude  to  another  stop  of  the  Exchequer. 
People  remembered  the  consequences  of  the  failure  of  the  bankers  two 
years  before,  and  there  was  a  general  desire  to  withdraw  deposits  so  that 
there  was  another  run ;  and,  for  a  short  time,  credit  could  scarcely 
be  obtained  ^ 

The  depression  from  1672  to  1674  was  noteworthy  in  so  far  as  it 
began  and  ended  with  a  panic,  in  each  case  occasioned  by  a  run  on  the 
bankers.  At  the  same  time,  it  is  to  be  remembered  that  credit  was 
in  its  infancy,  and  that  therefore  the  suspension  of  cash-payments  by 
a  number  of  the  goldsmiths  did  not  produce  such  serious  consequences 
as  might  have  been  expected.  Thus  the  effects  were  much  less  permanent 
than  those  of  the  great  crisis  from  1665  to  1667.  The  burden  of  the 
war,  both  in  extraordinary  taxation  and  losses,  was  less ;  while,  on  the 
later  occasion,  there  had  been  no  remarkable  catastrophe  such  as  the 
Plague  or  the  Fire.  For  these  reasons,  the  years  1672  to  1674  represent 
rather  a  check  to  the  recovery  of  the  previous  losses  than  the  incurring  of 
new  ones.  Similarly,  soon  after  the  peace  with  Holland  in  February 
1674,  a  period  of  great  activity  in  trade  began,  which  (with  the  excep- 
tion of  a  small  crisis  in  1678)  lasted  until  the  middle  of  1682.  Many 
circumstances  contributed  towards  this  prosperity.  Already  much  of  the 
wealth,  destroyed  by  the  Fire,  had  been  replaced  by  fresh  accumulations. 

of  State  " — A  Letter  from  a  Parliament  Man  to  his  Friend,  1676,  in  State  Tracts  of 
the  Reign  of  Charles  II. ,  p.  55. 

1  Total  Secret  Service  1661-1663  two  years        £56,025 

„  „  „       1671-1673        „  : £124,282 

„  „  „       1677-1678  one  year         £104,307 

„  „  „       1676-1679  three  years     £262,467 

— State  Papers,  Auditors'  Declaration  Books;  Calendar  Treasury  Books,  1660-7, 
p.  xxxii. ;  infra,  in.  p.  531 ;  A  Collection  of  Some  Memorable  and  Weighty  Transactions 
in  Parliament  in  the  year  1678  and  afterwards,  in  relation  to  the  Impeachment  of  the 
Earl  of  Danby,  London,  1695,  pp.  6,  23. 

2  Charles  II.,  by  Osmund  Airy,  London,  1904,  p.  295. 


CHAP.  XV.]  Revival  of  Trade  1675-6  293 

The  unsatisfactory  position  of  England  in  foreign  politics  tended  on  the 
whole  to  an  increase  of  trade.  France  and  Holland  were  still  engaged 
in  a  destructive  war ;  and,  while  this  lessened  the  purchasing  power  of 
each,  England  gained  by  the  reduction,  and  in  some  cases  the  cessation 
of  competition  in  the  remaining  foreign  markets.  The  woollen  trade 
especially  benefited,  particularly  in  manufacturing  for  the  Levant, 
where  for  several  years  English  merchants  secured  by  far  the  greater 
part  of  the  traded  For  the  time  being,  too,  the  commodities,  that  had 
formerly  been  purchased  by  Holland  from  France,  were  imported  from 
Britain,  and,  immediately  on  the  declaration  of  peace  in  1674,  London 
merchants  obtained  more  orders  than  they  could  execute.  It  is  recorded 
that,  on  one  occasion  in  the  winter  1674-5,  there  sailed  from  Rotterdam 
no  less  than  300  vessels,  all  owned  in  England,  Scotland  or  Ireland*. 
The  abatement  of  Dutch  competition  was  a  temporary  advantage  to  the 
East  India  and  African  trades^,  while  the  preoccupation  of  France 
enabled  the  Hudson's  Bay  company  to  establish  itself,  free  from  serious 
interruption*. 

The  industrial  activity  manifested  itself  in  an  increasing  demand  for 
credit.  By  1676  the  office  for  the  discount  of  mercantile  bills  was  in 
operation*^,  but  it  was  objected  that  such  an  institution  "having  no 
fund,  anchorage  and  secure  foundation  would  come  to  nothing'.'*"'  A 
much  more  elaborate  scheme  was  propounded  by  Andrew  Yarranton  for 
the  establishing  of  a  bank  in  each  important  trading  centre,  based  on 
land  security,  and  dependent  on  a  register  of  titles^.  A  combination  of 
this  idea  with  that  of  a  foreign  trading  company,  to  be  established  in 
Ireland,  was  worked  out  in  considerable  detail  by  Richard  Lawrence^. 

In  addition  to  the  general  activity  in  the  home  trade,  the  return  of 

^  Hist,  and  Proceedings  of  the  House  of  Commons,  i.  p.  249 .  On  October  26th 
(N.S.),  1674,  Sir  W.  Temple  wrote  from  the  Hague:  "But  what  makes  the  bent  of 
the  people  in  general  so  passionate  for  a  peace  is  the  immeasurable  burden  of  their 
taxes  and  the  interest  of  the  trading  towns ;  they  say  upon  all  occasions  none  gets 
by  this  war  but  England  and  that  if  it  should  continue  a  year  or  two  longer  the 
general  course  of  trade  would  run  so  far  into  our  channel  that  they  should  be  in 
danger  never  to  recover  it,"  Works,  iv.  pp.  57,  58. 

2  Anderson,  Annals  of  Commerce,  iii.  p.  47. 

3  Vide  infra,  ii.  pp.  21,  134,  135.  *  Ibid.,  ii.  p.  231. 

^  Proposals  for  the  Advancement  of  Trade  upon  such  Principles  as  must  necessarily 
enforce  it,  by  R.  Murray,  1676,  pp.  6,  6. 

'  England's  Improvement  by  Sea  and  Land,  by  Andrew  Yarranton,  1677,  p.  22. 

''  Ibid.,  pp.  18-36;  Reasons  and  Proposals  for  a  Registry  or  Remembrancer  of  all 
Deeds  and  Incumbrances  of  Real  Estates,  by  N.  Philpot,  1671 ;  A  Treatise  concerning 
Registers  to  be  made  of  Estates,  by  W.  Pierrepoint,  in  Harleian  Miscellany  (1746),  in. 
pp.  302-11. 

8  The  Interest  of  Ireland  in  its  Trade  and  Wealth  stated,  by  Richard  Lawrence, 
Dublin,  1682,  Part  ii.  pp.  4-6,  10-18,  33-42. 


294  Progress  in  Ir^ventions  1673-80       [chap.  XV. 

confidence  is  indicated  by  the  progress  of  invention.  The  development 
of  the  cloth  trade  is  shown  by  the  proposal  to  patent  a  mechanical 
device,  whereby  the  cessation  of  work,  through  want  of  water  to  drive 
water-wheels  in  the  summer  time,  would  be  avoided  ^  Another  scheme 
was  designed  to  effect  great  improvements  in  the  wheels  themselves*. 
Then,  in  connection  with  the  progress  of  shipping,  a  new  method  of 
buoying  vessels  was  propounded,  and  an  engine,  which  would  tow  ships 
in  and  out  of  harbours  without  the  use  of  oars^;  while  the  company, 
formed  in  1670  and  known  as  the  MiUed-Lead  Adventure^  for  supplying 
a  new  sheathing  for  ships,  was  apparently  becoming  successful*.  There 
were  a  number  of  ideas,  intended  to  increase  the  comforts  of  domestic 
life ;  such  as  a  secret  method  of  producing  suet  candles,  by  which  the 
usual  offensive  smell  of  these,  when  lighted,  was  avoided'.  Then,  a 
process  had  been  discovered  for  the  more  expeditious  printing  of  textile 
stuffs  to  be  used  for  hangings  in  rooms,  and  another  for  the  production 
of  artificial  marble  for  mantelpieces'.  A  patent  was  applied  for  to 
protect  an  invention  for  the  making  of  "  crystalline  glass  "  and  another 
for  an  engine  to  crush  apples  to  abstract  the  juice,  from  which  cider  was 
produced^.  Between  the  end  of  1673  and  1677,  there  were  at  least  four 
different  plans  for  pumping  engines,  designed  to  raise  water  to  houses, 
or  to  drain  mines  and  marshes'.  The  rebuilding  of  London  had  occa- 
sioned an  increased  demand  for  a  water-supply.  The  New  River 
company,  after  making  slow  progress  for  nearly  half  a  century,  was  now 
advancing  rapidly.  It  was  able  to  distribute  a  dividend  of  ^^145.  1,9.  Sd, 
on  each  adventurer'*s  share  in  1680*,  the  London  Bridge  Water  Works 
had  been  rebuilt  after  the  fire*®  and  the  patentees,  who  had  obtained 
a  concession  for  supplying  Thames  water  in  the  Westminster  district  in 
1665,  had  begun  to  sell  shares  in  the  undertaking  in  1675". 

The  progress  towards  the  repair  of  the  losses  of  the  Great  Fire  is 
indicated  on  the  one  hand  by  the  appearance  of  a  directory  of  London 
merchants  in  1677*'  and  in  another  manner  by  the  calculations  of  Petty 

*  State  Papers,  Domestic,  Petition  Entry  Book,  xxxvi.  p.  317 ;  Calendar y  1673-5, 
p.  65. 

2  Ihid.y  Petition  Entry  Book,  xlvi.  p.  151. 

3  lUd.y  H.  O.  Warrant  Book,  i.  p.  24,  Petition  Entry  Book,  xlvi.  p.  33. 
«     *  Vide  infra,  iii.  p.  106. 

fi  State  Papers,  Domestic,  Charles  II.,  ccclxii.  43,  44;  Calendar,  1673-5,  p.  390. 
«  Ibid.,  Petition  Entry  Book,  xlvi.  pp.  17,  151. 

7  Ibid.,  Petition  Entry  Books,  xl.  (minute),  xlvi.  p.  139;  Evelyn,  Diary,  ut 
supra,  II.  p.  115. 

8  State  Papers,  Domestic,  Petition  Entry  Books,  xl.  p.  166,  xlvi.  pp.  17,  31. 

9  Vide  infra,  iii.  pp.  25,  31.  *«  Ibid.,  in.  p.  12.  "  Ibid.,  in.  p.  419. 
**  A  Collection  of  the  Names  of  Merchants  living  in  and  about  the  City  of  London, 

1677  (reprinted  1878). 


CHAP.  XV.]    Parliament  and  Anticipations  1675  295 

in  his  Political  Arithmetick,  which  was  written  about  this  time*.  He 
estimates  the  national  dividend  of  England  and  Wales  at  about  42 
millions,  showing  an  increase  of  2  millions  £is  compared  with  1664.  The 
income  of  the  whole  Empire  he  supposed  to  be  70  millions.  The 
foreign  trade  of  the  world  is  returned  at  about  45  millions,  of  which 
Britain  possessed  two-ninths,  while  the  proportion  in  shipping  was  one- 
quarter  of  that  owned  by  the  other  nations  of  Europe.  The  housing 
of  London  was  supposed  to  have  doubled  in  value  since  1636*. 

While  the  tendency  through  the  country  was  to  resent  the  determina- 
tion of  the  foreign  policy  of  Great  Britain  by  France,  the  attitude  of 
isolation,  which  Charles  II.  had  so  far  preserved,  caused  Parliament  to 
grant  only  meagre  supplies  and  to  take  note  of  abuses  in  the  administra- 
tion of  the  finances.  In  1675  the  House  of  Commons  resolved  to 
present  an  address  to  Charles  II.,  pointing  out  that  the  anticipation  of 
the  Customs  was  a  disservice  to  the  kingdom,  and  asking  that  the  exist- 
ing practice  should  not  be  continued'.  The  point  at  issue  in  this  case, 
between  the  Crown  and  Parliament,  was  pithily  expressed  in  the  following 
dilemma — "  either  the  publick  revenue  is  sufficient  to  answer  the  necessary 
occasions  of  the  Government,  and  then  there  is  no  colour  for  anticipa- 
tions: or  else,  by  some  extraordinary  accident,  the  King  is  reduced  to 
want  an  extraordinary  supply,  and  then  he  ought  to  resort  to  his  Parlia- 
ment*."" At  the  same  time,  an  attempt  was  made  to  impeach  Danby, 
who  was  charged  with  perverting  the  ancient  course  of  the  Exchequer, 
whereby  the  accounts  were  brought  into  confusion  and  the  credit  of  the 
Crown  destroyed"*. 

In  spite  of  the  venal  party,  which  had  been  bribed  into  supporting 
the  Court,  there  was  a  powerful  opposition,  which  was  endeavouring  to 
force  a  breach  with  France  as  the  only  condition  on  which  supplies  could 
be  obtained.  In  the  session,  which  began  in  October  1675,  Charles  II., 
while  admitting  that  "  by  a  late  account  he  had  taken  of  his  expenses*, 

*  It  appears  that  the  MS.  was  begun  in  1671  and  that  Petty  was  still  working 
at  it  in  1671  and  1672.  There  are  references  in  the  work,  as  published,  which  show 
that  either  it  was  completed  not  earlier  than  1676  or  else  that,  if  finished  earlier, 
portions  were  added  which  relate  to  events  up  to  1676 — The  Economic  Writings  of 
Sir  William  Petty,  edited  by  H.  C.  Hull,  Cambridge,  1899,  i.  pp.  235,  236. 

2  In  his  estimate  of  the  total  British  and  Irish  trade  at  £10,180,000,  Petty 
takes  account  of  the  earnings  of  shipping  which  he  states  at  1^  millions.  At  the 
same  time  the  imports  from  the  countries  of  Europe  are  omitted ;  and,  as  a  result, 
the  imports  as  a  whole  are  under-stated.  Such  under-statement  necessarily  reflects 
on  the  adequacy  of  the  estimate  of  the  world's  foreign  trade. 

^  Journals  of  the  House  of  Commons,  ix.  p.  323. 

*  A  Just  and  Modest  Vindication  of  the... Two  Last  Parliaments  of  King  Charles  II. 
in  State  Tracts  of  the  Reign  of  Charles  II.,  p.  173. 

^  Journals  of  the  House  of  Commons,  ix.  p.  323. 
®  Vide  infra,  in.  p.  631. 


296  The  Revenue  anticipated  1675-8      [chap.  xv. 

he  had  not  been  altogether  so  good  a  husband  as  he  might  have  been," 
asked  for  a  supply  to  reduce  the  anticipations^,  which  were  admitted  to 
amount  to  about  a  million-.  The  House  of  Commons  expressly  refused 
funds  for  paying  the  King'*s  debts,  and,  in  granting  money  for  an  addi- 
tion to  the  navy,  it  took  steps  that  the  amount  collected  should  only  be 
spent  for  this  purpose. 

It  is  clear  that  the  settled  revenue,  even  when  augmented  by  the 
French  subsidy,  would  not  suffice  for  the  payment  of  the  fixed  charges, 
interest,  pensions  and  secret  service  money  with  a  concurrent  reduction 
of  the  debt.  As  time  went  on,  salaries  fell  more  and  more  into  arrears, 
and  many  of  the  payments  were  made  by  means  of  tallies.  Seamen 
and  soldiers  had  long  suffered  from  this  method;  but,  when  it  was 
applied  to  the  servants  of  the  Royal  Household,  there  were  loud  out- 
cries. About  November  19th,  1678,  the  "servants  below  stairs,"  in  a 
petition  to  the  Board  of  Green  Cloth,  demanded  that  the  best  of  the 
tallies  and  nearest  to  payment  should  be  given  to  them  and  those 
remotest  left  for  the  servants  above-stairs^  By  this  time,  partly  from 
financial  reasons,  partly  owing  to  other  causes,  Charles  II.  had  decided  at 
least  to  make  a  pretence  of  falling  in  with  the  foreign  policy,  which 
commended  itself  to  the  majority  in  Parliament ;  and,  by  the  beginning 
of  the  year  (1678),  a  supply  of  over  2  millions  was  proposed  for  the 
purpose  of  waging  war  with  France  ^  The  declaration  of  hostilities,  so 
anxiously  awaited,  never  came,  but  the  expectation  of  it  occasioned 
a  run  on  the  bankers  towards  the  end  of  the  year,  and  the  crisis  was 
prolonged  by  the  revelations  made  in  support  of  the  Popish  Plot^. 

On  March  31st,  1679,  the  Crown  debt  was  returned  at  close  on  a 
million  and  a  half,  of  which  <i^200,000  was  for  arrears  of  pensions.  This 
statement  took  no  account  of  the  bankers'*  debt,  or  other  sums  borrowed 
at  interests  With  the  revenue  so  heavily  anticipated  and  the  Parlia- 
mentary supply  definitely  earmarked  for  specific  purposes,  such  as  the 
building  of  men-of-war  or  the  disbanding  of  the  standing  army,  it 
became  necessary  to  make  a  fresh  investigation  of  the  finances.  On  the 
fall  of  Danby,  it  was  believed  that  retrenchments  could  be  effected,  by 

^  Journals  of  the  House  of  Commons,  ix.  p.  357. 

2  Hist,  and  Proceedings  of  the  House  of  Commons,  i.  p.  239.     The  estimate  before 
Parliament  was  as  follows — 

Settled  and  other  Revenue £1,600,000 

Navy,  Army  and  Government ...  £700,000 

3  State  Papers,  Domestic,  Charles  II.,  ccccviii.  120. 

*  Provision  Navy £1,414,920 

„         Army 637,000 

Total  annually  £2,061,920 

— Journals  of  the  Hov^e  of  Commons,  ix.  p.  438. 

^  Burnet,  History,  ii.  p.  155.  •  Vide  infra,  iii.  p.  544. 


CHAP.  XV.]  Improvement  in  the  settled  Revenvs  1679-81   297 

which  a  quarter  of  a  milHon  annually  would  be  available  for  the  reduc- 
tion of  the  anticipations  \  What  saved  the  situation  for  the  advisers  of 
Charles  II.  was  the  advance  of  the  settled  revenue,  under  the  stimulus  of 
the  improvement  of  trade.  The  estimate  for  1679  was  framed  on  the 
basis  of  over  <i^l  ,200,000,  and  the  actual  receipts  exceeded  this  amount 
by  more  than  c£^400,000,  chiefly  by  the  high  yield  of  the  excise.  Extra- 
ordinary Parliamentary  grants  and  casual  income  brought  in  an  equal 
amount,  so  that  the  whole  receipts  (apart  from  loans)  came  to  over  two 
millions.  The  expenditure,  including  a  considerable  payment  of  pensions 
and  secret  service  money,  but  without  repayments  of  specific  borrowings, 
came  to  ^£^1,940,000.  There  was  thus  a  surplus  of  close  on  .£'115,000, 
all  of  which  was  used,  with  the  addition  of  money  withdrawn  from  the 
cash-balance,  in  paying  oft*  ,6*1 37,800  of  tallies  on  the  excise.  In  the 
following  year,  a  further  ^^62,000  of  these  obligations  was  discharged*. 
In  1681  the  House  of  Commons  resolved  that  any  person,  who  advanced 
money  on  any  branch  of  the  settled  revenue  or  who  bought  any  tally, 
"shall  be  adjudged  to  hinder  the  sitting  of  Parliaments  and  be 
responsible  therefor  in  Parliament*.'^  In  that  year  it  was  proposed  to 
effect  considerable  reductions  in  the  expenditure.  The  settled  revenue 
was  estimated  at  close  on  .^1,200,000  and  the  ordinary  outlay  at  less 
than  ^^900,000"*.  The  actual  expenditure  (other  than  repayment  of 
loans)  was  d£*l, 163,000,  but  the  receipts  again  exceeded  the  estimate, 
and  there  was  a  surplus  of  over  a  quarter  of  a  million,  which  was  used 
for  the  extinction  of  a  part  of  the  debt**.     There  had  been  a  large 

1  Diary y  Life  and  Times  of  Charles  II.,  edited  by  R.  W.  Blencowe,  1843,  i. 
p.  189. 

2  For  the  detiiils  vide  infra,  iii.  pp.  630-41. 

Estimated  Settled  Revenue     £1,221,000 

Actual          „            „               1,638,654 

Casualties            19,301 

Parliamentary  Grants 397,499 

Total  (exclusive  of  loans) £2,055,454 

Expenditure,  exclusive  of  repayment  of  tallies  and  other 

advances      1,940,866 

Surplus          £114,588 

3  Journals  of  the  House  of  Commons,  ix.  p.  702. 
*  Vide  infra,  iii.  pp.  530,  531. 

fi  Estimated  Settled  Revenue £1,190,000 

„        Expenditure  878,000 

Settled  Revenue  (actual)         1,408,298 

Other  Receipts  (exclusive  of  loans) 43,763 

Total £1,452,061 

Actual  Expenditure 1,163,982 

Surplus          £288,079 


298  Eocpansion  of  Trade  1679-81         [chap.  xv. 

repayment  of  loans  in  1680,  so  that  altogether,  in  the  three  years 
Lady-Day  1679  to  Lady-Day  1682,  there  had  been  a  great  reduction  of 
the  indebtedness  of  the  Crown.  There  is  one  element  which  makes  it 
difficult  to  determine  the  exact  amount  paid  off  on  balance.  The 
accounts  show  the  issues  for  principal  and  interest,  thus  they  tend  to 
produce  the  impression  that  the  repayments  were  larger  than  they 
actually  were.  Since  the  estimate  of  the  year  1681  provides  for  a 
charge  of  d^l  20,000  for  interest,  the  whole  amount,  over  the  three  years, 
may  be  roughly  estimated  at  thrice  that  sum.  When  allowance  is  made 
for  this  and  for  the  discharge  of  ,^£'200,000  of  tallies  on  the  excise  from 
1679  to  1681,  the  whole  amount  of  debt,  paid  off  on  balance  from  1679 
to  1682,  was  close  on  d^l, 100,000,  or  just  about  the  estimated  amount  of 
a  year's  settled  revenue. 

The  increasing  yield  of  the  Customs  and  excise  only  reflected  the 
great  activity  of  trade  during  the  period,  bounded  on  the  one  side  by 
the  crisis  of  1678  and  on  the  other  by  that  of  1682.  This  activity  was 
marked  in  several  directions.  There  was  a  fresh  series  of  inventions, 
such  as  one  for  the  smelting  of  minerals  in  1680^,  another  for  an  engine 
to  raise  foundered  ships,  and  a  third  for  an  improved  log^.  Attention 
was  directed  to  the  rapid  depreciation  of  vessels  trading  into  the  tropics, 
and  there  were  several  proposals  to  preserve  their  timbers.  One  method 
was  impregnating  the  wood  "  with  a  bitter  sulphurous  matter',""  and  the 
other  was  the  rolled-lead  invention,  which  had  now  been  in  actual  use 
for  several  years*. 

Several  comparisons  made  during  this  period  show  traces  of  the 
prevalent  industrial  progress.  It  was  estimated  in  1678  that,  in  the 
thirty-six  years  1620-56,  7,500  new  houses  had  been  built  in  London : 
whereas,  in  twenty-one  years  from  1656  to  1677,  the  increase  had  been 
10,000,  the  rent  of  which  was  £lQfiOO\  From  1660  to  1666  the 
bullion  imported  averaged  .£'60,000  a  year ;  while,  from  the  latter  date 
to  1680,  it  was  returned  at  =£^372,000,  annually  ^  The  expansion  of 
trade  had  made  it  needful  to  increase  the  stock  of  metallic  money,  and 
in  the  two  years  1679  to  1681  there  was  coined  d£'l,618,746.  4*.  9|d,  as 
against  only  .£'540,583.  13*.  8|d  in  the  same  period  from  1672  to  1674^ 
This  growth  is  the  more  significant,  as  proceeding  side  by  side  with  the 
extension  of  credit  by  means  of  banking  facilities.  For  some  time  after 
the  stop  of  the  Exchequer,  confidence  in  the  goldsmiths  had  been  shaken, 
but  the  facilities,  they  afforded,  tempted  those  possessed  of  floating 

1  State  Papers,  Domestic,  Petition  Entry  Book,  lxi.  p.  4. 

2  IHd.,  Lv.  pp.  110,  278.  3  iiifi^^  Entry  Book,  lxxi.  pp.  29,  119. 
*  Vide  infra,  in.  pp.  106,  107. 

^  State  Papers,  Domestic,  Charles  II.,  ccccviii.  21.         *  Ihid.,  ccccxvi.  94. 
^  Ihid. ,  cccLx.  172 ;  ccclxviii.  94 ;  ccccxvi.  185,  187^ 


CHAP.  XV.]       Development  of  Credit  1678-80  299 

capital,  to  avail  themselves  of  the  services  offered;  while  the  high  rate  of 
discount  induced  others  to  enter  the  business  \  In  1678  proposals  were 
printed  for  the  extension  of  the  system  from  London  throughout  the 
provinces,  in  order  to  increase  the  national  capital  available  for  trade, 
whereby  the  circulation  of  money  would  be  made  more  rapid — which 
being  "  expeditiously  returned  would  seem  a  great  deal,  doing  the  work 
of  four  times  the  same  quantity  moving  slowly,  as  a  stick  moved  round 
very  quick  seems  to  be  in  every  place'."  In  1679  goldsmith'^s  bills  had 
become  so  common,  that  numerous  counterfeit  notes  were  in  circulation*. 
The  growth  of  wealth  is  shown  by  the  facility  with  which  the  East 
India  and  African  companies  could  borrow  money.  Both  these  bodies 
had  augmented  their  working  capital,  by  accepting  deposits,  payable  on 
demand  or  at  short  notice.  About  1680  the  former  company  was  able 
to  borrow  at  between  4  per  cent,  and  5  per  cent. — a  considerably  lower 
rate  than  that  paid  by  Charles  II. — and  in  1681  the  interest  was  no 
more  than  3  per  cent.*  The  phenomenon  of  a  low  rate  of  interest,  com- 
bined with  active  trade,  is  probably  to  be  explained  by  the  fact  that 
a  check  had  been  experienced  in  the  cloth  trade,  and  that  the  new 
channels  of  m vestment  did  not  suffice  for  the  employment  of  the  whole 
of  the  funds  thus  liberated'. 

The  broadening  of  trade  led  to  new  undertakings  being  started,  and 
to  some  of  those,  that  had  been  established  previously,  being  extended. 
In  1680  the  fire-insurance  office  founded  by  Barbon  in  1667  was  re-  -^ 
organized  on  a  broader  basis,  and  the  ownership  was  vested  in  a  small 
company,  composed  of  "persons  of  condition,""  who  guaranteed  its 
solvency  by  the  security  of  ground-rents  they  owned,  which  were  made 
liable  for  losses  in  excess  of  the  premiums  received*.  In  the  same  year 
the  postal  facilities  in  London  were  very  greatly  increased  by  the  ' 
establishment  of  the  Undertaking  of  the  Penny  PosV,  About  this 
date  there  was  a  proposal  for  infant  insurance,  which,  it  was  expected, 

1  The  Mystery  of  the  New  Fashioned  Goldsmiths  or  Bankers j  1676,  pp.  3,  4. 

'  Proposals  to  the  King  and  Parliament,  or  a  Large  Model  of  a  Bankj  by  M.  L[ewi8] 
D.D.  1678,  p.  4. 

'  State  Papers,  Domestic,  Entry  Book,  lv.  p.  28.  The  type  of  goldsmith's 
deposit  note  is  described  in  The  Grasshopper  in  Lombard  St.  by  J.  B.  Martin, 
London,  1892,  p.  127.  In  addition  to  this  there  was  the  banker's  promissory  note, 
which  appears  to  have  been  known  in  1668,  and  a  specimen  is  in  existence  dated 
November  28,  1684— T/ie  Rise  of  the  London  Money  Market  1640-1826,  by  W.  R. 
Bisschop,  London,  1910,  pp.  66,  67. 

*  Journals  of  the  Bouse  of  Commons  ix.  p.  422 ;  Anderson,  Annals  of  Commerce , 
III.  p.  76 ;  Collection  of  Letters  for  the  Improvement  of  Husbandry  and  Trade,  by 
John  Houghton,  1681-3,  i.  p.  148;  England's  Improvement  by  Sea  and  Land,  by 
Andrew  Yarranton,  1677,  pp.  17,  23. 

6  Vide  infra,  ii.  p.  136.  6  Ibid.,  iii.  p.  375. 

7  Ibid.,  III.  pp.  43,  44. 


300  Trade  Revival  in  Scotland  1681       [chap.  xv. 

would  give  the  Crown  the  use  of  a  million  sterling  for  about  twenty 
years  and  yield  a  profit  of  ^£^600,000.  It  was  suggested  that  subscribers 
should  be  entitled  to  pay  in  £%b  on  the  life  of  any  child  under  two 
years  of  age,  and  the  number  of  nominated  lives  should  be  limited  to 
40,000.  On  each  of  these,  attaining  the  age  of  21  years,  ,£100  should 
be  paid.  Since  60  per  cent,  of  infants  born  died  before  reaching  the 
specified  age,  the  policies  payable  would  only  amount  to  <£*400,000, 
leaving  a  gross  profit  of  £600,000  \ 

In  addition  to  the  water-supply  companies  already  founded,  another 
was  started  in  London  in  1681  which  was  incorporated  as  the  Governor 
cmd  Company  of  the  Waterwork  and  Water-houses  in  Shadwell\  and  in 
the  previous  year  a  provincial  undertaking  of  the  same  kind  had  been 
established  at  Newcastle-on-Tyne*. 

In  Scotland,  too,  a  trade-revival  was  in  progress,  and  a  company  for 
the  production  of  fine  cloth  was  founded  in  1681  at  New  mills,  in 
Haddingtonshire.  This  venture  is  of  peculiar  interest,  partly  because  it 
is  the  only  case  in  which  the  minutes  and  documents,  coiresponding 
to  the  articles  of  association  and  prospectus  of  a  British  manufacturing 
company  of  this  early  period,  have  been  discovered,  partly  as  an  instance 
of  the  difference  in  the  methods  of  establishing  companies  in  England 
and  in  Scotland.  Even  during  the  Protectorate,  it  was  held  in  theory 
\  /  (though  not  enforced  in  practice)  that  according  to  English  law  a  charter 
was  required  to  constitute  a  trading  corporation^;  and,  in  these  instru- 
ments, minute  regulations  were  framed  for  the  conduct  of  business  by 
the  bodies,  so  created.  In  Scotland,  on  the  other  hand,  the  acts  of  1661 
and  1662  authorized  individuals  to  incorporate  themselves,  without  any 
formality.  Therefore,  it  would  appear  that  a  Scottish  incorporation 
would  be  unable  to  obtain  the  privileges,  which  constituted  a  common 
part  of  the  English  charter.  This  difficulty  was  met  by  the  earlier  acts 
promising  certain  franchises  to  those  who  established  new  industries, 
such  as  exemption  from  taxes  for  nineteen  years  and  naturalization  for 
foreigners.  Though  several  companies  had  been  founded  in  Scotland 
between  1662  and  1680,  it  was  felt  that  the  inducements,  offered  by  the 
acts  of  1661  and  1662,  were  not  sufficient,  and,  in  each  case,  specific 
privileges  were  granted  by  further  measures.  A  new  act  was  passed 
in  1681,  which  completed  the  protection  of  Scottish  infant  industries  by 
the  exclusion  of  competitive  imports.  Therefore,  the  main  difference 
between  the  policy  of  the  two  countries,  in  encouraging  a  new  manu- 
facture, was  that,  in  England,  persons  who  provided  the  capital  might 

V  1  Add.  MS.  (Brit.  Mus.)  28,078,  f.  462. 

2  Yide  infra,  iii.  p.  32.  3  if^a.,  in.  p.  34. 

\        *  0/  Corporations,  Fraternities  and  Guilds,  by  W.  Sheppard,  1659 ;  Forms  and 
J    ^Jpresidents  of  Charters  Concerning  Corporations,  passim. 


i 


CHAP.  XV.]    English  and  Scottish  Companies  1681        301 

obtain  a  monopoly  for  the  process,  but  they  were  subject  to  such  foreign 
competition  as  was  deemed  advisable  under  the  existing  fiscal  arrange- 
ments. In  Scotland,  on  the  other  hand,  though  a  few  monopolies  were 
granted,  as  a  rule,  the  entrepreneur  had  to  be  prepared  to  face  domestic 
competition,  but  he  was  freed  from  that  of  foreigners ;  and,  at  this  time 
and  until  the  Union,  England  was  reckoned  as  a  foreign  country  for 
commercial  purposes. 

The  Scottish  company  differed  from  those  chartered  in  England,  not 
only  in  its  relation  to  the  State,  but  also  in  its  constitution.  The  direc- 
tion of  English  companies  had  been  the  result  of  a  long  process  of 
continuous  development  from  the  time  when  the  supreme  authority  had 
been  vested  in  the  governor,  to  whom  the  other  officials,  elected  by  the 
members,  were  subordinated  to  such  an  extent  that  at  first  they  had  no 
name\  Prior  to  the  adoption  of  the  joint-stock  system,  the  name  of 
those,  who  controlled  industrial  enterprizes,  had  been  fixed  as  the 
governor  and  assistants,  and  this  nomenclature  was  continued  during  the 
reigns  of  Elizabeth  and  the  Stuarts,  subject  to  the  modification  that  in 
some  cases  the  court  was  known  as  the  governor  and  committees ^  In 
Scotland  the  practice  differed.  There  the  chief  importance  was  assigned, 
not  to  a  single  head  of  the  company,  but  to  the  group  of  persons,  corre- 
sponding to  those  now  known  as  directors,  and  who  were  described  as 
"  managers."*"*  These  elected  a  "  praeses  '"*  for  each  of  their  meetings. 
There  were  other  points  of  individuality  in  the  constitution  of  the  New 
mills  company,  which  may  or  may  not  have  been  typical  of  contemporary 
undertakings.  At  its  formation,  a  "  memorial ""  or  prospectus  was  circu- 
lated which  fixed  the  share-capital  at  .£'5,000,  and  elaborate  calculations 
were  made  according  to  which  a  profit  of  25  per  cent,  was  anticipated  ^ 
The  earnings  were  subject  to  a  number  of  curious  provisos.  It  was 
stipulated  in  the  "  Articles "*"*  that  none  but  "actuall  tradeing  merchands" 
might  become  shareholders*.  When  cloth  had  been  produced,  the  cost 
of  production  was  noted,  and  to  this  was  added  a  proportion  for  profit 
on  the  capital  of  the  company.  Then  the  bales  were  distributed  amongst 
the  members  by  lot  at  the  prices  so  arrived  at.  By  confining  the  member- 
ship in  this  way,  the  New  mills  company  was  midway  between  the  true 
joint-stock  and  the  regulated  types  of  organization.  It  was,  in  fact, 
a  body  in  which  the  members  were  a  regulated  company,  as  retailers,  and 

1  Vide  supra,  pp.  4,  7. 

2  E.g.  the  East  India  company,  Carlile's  planting  company,  the  adventurers  for 
Lands  in  Ireland,  the  Hudson's  Bay  company,  the  Royal  Fishery  company — vide 
infra,  n.  pp.  92,  229,  242,  344,  374. 

5  The  Records  of  a  Scottish  Cloth  Manufactury  at  New  Mills,  Haddingtonshire  (1681- 
1703),  edited  W.  R.  Scott  (Scot.  Hist.  Soc.  1905),  pp.  Ivii.,  Ixxxiv.-lxxxix. 
"*  Ibid.,  p.  xc. 


302     Companies  in  the  Home  Trade  1672-81     [chap.  xv. 

a  joint-stock  one,  as  manufacturers.  Though  in  the  early  history  of  the 
Elast  India  company,  the  system  of  commodity-divisions  had  resulted  in 
a  somewhat  similar  form  of  constitution,  no  trace  of  such  a  combination 
is  discoverable  in  England  in  the  later  part  of  the  seventeenth  century  \ 
In  fact,  the  evidence  points  to  the  contrary  conclusion,  since  there  are 
frequent  notices  of  public  sales  of  the  products  of  the  chief  London 
manufacturing  companies.  The  profit  of  the  New  mills  company  being  a 
fixed  ratio  to  the  value  of  the  whole  production,  it  was  provided  that  no 
dividend  should  be  paid  in  the  first  three  years  and  only  5  per  cent, 
thereafter  for  a  like  period.  After  six  years,  the  funds  available  were  to 
be  dealt  with  by  first  providing  for  depreciation,  secondly  interest  at 
5  per  cent.,  thirdly  the  rent  of  the  factory,  and  fourthly  a  bonus  in 
addition  to  the  5  per  cent,  already  deducted.  After  seven  years  share- 
holders were  at  liberty  to  withdraw  the  capital  they  had  subscribed''. 

Turning  from  new  companies  to  those  already  founded,  the  period 
from  1672  to  1681  was  one  of  great  progress,  except  in  the  case  of  the 
Royal  Fishery  undertaking,  which  had  suffered  from  the  want  of  an 
adequate  capital.  An  effort  had  been  made  to  obtain  funds  in  1677  and 
in  the  following  year  the  House  of  Commons  appointed  a  Committee  to 
consider  proposals  for  the  revival  of  the  industry^.  About  1680  the 
company  sold  all  its  remaining  property ;  and  an  unincorporated  company 
made  a  further  attempt,  but  found  the  want  of  skill  of  the  English 
fishermen  rendered  success  impossible.  This  body  therefore  urged  that 
the  Navigation  Act  should  be  relaxed  in  its  favour,  so  that  Dutch  fishers 
and  salters  might  be  employed*.  At  this  time  a  small  company  was 
attempting  to  revive  whaling,  though  indications  were  not  wanting  that 
this  venture  was  not  likely  to  succeeds 

The  joint-stock  companies,  engaged  in  foreign  trade,  had  experienced 
ten  years  of  good  fortune.  The  East  India,  the  African  and  Hudson's 
Bay  undertakings  had  each  made  considerable  profits,  though  the  last- 
named  body  does  not  appear  to  have  paid  any  dividends  ^     The  African 

*  In  1700  there  was  an  isolated  case  of  a  glass  company  paying  dividends  in 
glass,  but  in  this  industry  wages  were  paid  in  the  commodity  produced — vide  infra, 
jii.  pp.  112,  113. 

2  Records  of  a  Scottish  Cloth  Manufactory,  pp.  Ixxxix.,  xc.  The  reason  for  making 
a  dividend  of  5  per  cent,  a  charge,  prior  to  the  rent,  was  that  one  of  the  promoters. 
Sir  James  Stanfield,  owned  buildings  where  a  cloth-making  business  had  been 
carried  on  before  the  Restoration,  which  he  was  anxious  to  let.  Cf.  Ibid.,  pp.  2,  3 
(note),  161  (note). 

3  Vide  infra,  ii.  pp.  372,  373.  Writing  about  1676,  Yarranton  offered  anyone, 
who  could  recover  him  1*.  in  the  £  of  his  subscription,  all  the  remainder  of  it — 
England s  Improvement  by  Sea  and  Land,  p.  17- 

*  vState  Papers,  Domestic,  James  II.,  v.  160.  *  Vide  infra,  ii.  p.  76. 
6  Ibid.,  II.  p.  231.     The  stock  in  1682  realised  350. 


CHAP.  XV.]    Foreign  trading  Companies  1672-82  303 

company,  on  receiving  its  charter  in  1672,  had  to  sink  most  of  its  capital 
in  re-establishing  its  forts  and  factories,  so  that  until  the  end  of  1675 
none  of  the  profits  were  divided.  In  the  six  years  from  1676  to  1681, 
70  guineas  per  cent,  were  paid*,  and  the  stock  sold  for  245.  The  East 
India  company  was  in  a  position  to  take  advantage  of  the  wave  of  pros- 
perity from  the  beginning;  and,  for  the  first  time  since  1617,  its  aggregate 
dividends,  calculated  in  terms  of  the  rate  per  cent.,  were  largely  in  excess 
of  those  distributed  by  the  rival  Dutch  organization.  From  1672  to  1682 
the  latter  paid  166|  per  cent.^  while  in  the  same  period  the  English 
company  divided  altogether  380  J  per  cent.,  of  which  100  per  cent,  was  in 
stock,  i  per  cent,  in  damaged  calico,  and  the  remaining  280  per  cent, 
in  cash^  Comparing  these  two  groups  of  dividends,  from  the  point  of 
view  of  the  total  profit  distributed,  it  is  to  be  remembered  that  the 
capital  of  the  Dutch  undertaking"*  was  larger  than  that  of  the  English 
one ;  and,  taking  account  of  this  fact,  it  is  noteworthy  that  the  latter 
had  the  advantage  in  the  aggregate  amount  of  profit  divided,  as  well  as 
in  rate  per  cent. 

This  alteration  in  the  relative  positions  of  the  two  bodies  is  reflected 
in  the  quotations  of  their  stocks.  In  1670-1  the  price  of  Dutch  East 
India  stock  was  no  less  than  five  times  that  of  the  shares  in  the  English 
company  ^  On  the  outbreak  of  war  in  1672,  the  quotation  of  the 
former  fell  from  570  to  400*,  and  in  1679,  more  than  a  year  after  peace 
had  been  made,  the  stock  fetched  422%  and  434  in  1680*.  At  this  date, 
the  actions  of  the  English  company  were  steadily  rising ;  and,  before  the 
end  of  the  year,  300  was  reached,  whence  the  price  advanced  to  460  in 
1682,  prior  to  the  payment  of  the  stock  dividend  of  100  per  cent.  The 
frequency  of  references  to  the  quotations  of  shares  in  the  East  India 
company,  not  so  much  in  the  mention  of  actual  prices  but  in  general 
terms   of  the  rise   or   fall  of  the   stock,  shows   that,  at  this  period, 

^  Vide  infray  ii.  pp.  21,  33.  These  distributions,  being  made  in  guineas,  realised 
close  on  75  per  cent. 

2  G.  C.  Klerk  de  Reus,  Niederl'dndisch-Ostindischen  Compagniey  Appendix  vi. ; 
Anderson,  Annals  of  Commerce  (edited  by  David  MacPherson),  1805,  iv.  p.  488. 

3  Vide  infra,  ii.  p.  178. 

*  The  original  capital  of  6,449,588  11.  4  st.  was  reduced  in  1664  to  6,440,203  fl. 
6.  8.  It  was  increased  to  6,440,200  fl.  in  1691 — A.  E.  Sayous,  Le  Fractionnement  du 
Capital  social  de  la  Compagnie  Neerlandaise  des  Indes  Orientales  in  NouveUe  Revue 
Historique  de  Droit  Frangais  et  Etranger,  1901,  p.  622. 

^  Vide  supra,  p.  284. 

*  State  Papers,  Domestic,  Charles  XL,  cccii.  13;  Calendar,  1671-2,  p.  65. 
Klerk  de  Reus  notices  a  quotation  of  250  in  1672,  but  without  giving  any  authority 
for  it — Niederldndisch-Ostindischen  Compagnie,  p.  178. 

^  Diary,  Life  and  Times  of  Charles  11.,  edited  by  R.  W.  Blencowe,  London,  1843, 
I.  p.  65. 

8  Lmdrni  Gazette,  No.  1634,  July  29,  1680 


304    Finance  of  East  India  Company  1667-82    [chap.  xv. 

transactions   were   numerous   and   that    they  aroused   the   interest   of 
thoughtful  observers. 

The  doubling  of  the  capital,  reckoned  as  paid  up,  by  the  East  India 
company  in  1682  constitutes  a  landmark  in  the  evolution  of  the  joint- 
stock  organization ^  As  long  as  the  capital  was  divided  into  "portions" 
or  shares,  any  appreciation  of  the  property  was  reflected  mainly  in  the 
dividend.  As  yet  there  was  no  instance  of  the  distribution  of  bonus 
shares  from  the  reserve  fund.  The  fact  that  the  nominal  capital 
consisted  of  stock  on  which  there  was  only  ^50  per  cent,  paid  up  made 
it  natural  for  the  court  to  decide  to  extinguish  the  liability,  rather  than 
to  make  a  dividend  of  100  per  cent,  in  cash.  Another  inducement 
in  the  same  direction — and  a  powerful  one — was  the  absence  of  liquid 
resources  for  such  a  payment. 

At  this  period,  the  financial  position  of  the  company  was  one  of 
some  difficulty.  In  1667  it  had  left  itself  without  working  capital. 
Undoubtedly  the  wisest  course  would  have  been  to  have  attracted  more 
capital  from  the  public.  For  several  reasons,  indicated  elsewhere 2,  this 
method  was  not  adopted,  and  it  became  necessary  to  provide  funds  from 
the  profits.  By  1678  the  assets  (subject  to  allowance  for  liabilities) 
were  valued  at  nearly  If  millions,  or  more  than  four  times  the  paid  up 
capital  at  that  date'.  In  the  following  year,  the  company  had  not 
sufficient  cash  in  hand  to  pay  its  debts  when  due.  At  this  point  the 
financial  situation  was  complicated  by  other  considerations.  Owing  to 
various  causes,  there  was  a  vigorous  agitation  against  the  company*,  and 
it  was  thought  that  this  might  be  met,  in  part,  by  increasing  the  capital. 
At  first  it  was  proposed  to  call  up  the  outstanding  50  per  cent,  of  the 
dP739,782.  10,5.  nominal  capital,  but  it  was  eventually  decided  to  fix  the 
stock,  reckoned  as  paid  up  at  this  sum,  by  crediting  each  shareholder 
with  the  bonus  necessary  to  make  his  adventure  fully  paid.  Undoubtedly 
the  least  advantageous  scheme  was  adopted.  While  the  company  had 
assets  (after  providing  for  liabilities)  of  more  than  twice  the  capital  as 
re-arranged  in  1682 ^  its  financial  condition  was  not  satisfactory.  The 
free  capital  was  too  small ;  and,  in  another  respect,  the  position  was  most 
insecure.  The  borrowings  of  the  company  were  a  species  of  striving 
towards  the  modern  debentures ^  But,  as  yet,  the  sums,  received  on 
loan,  were  repayable  at  short  notice,  and  therefore  these  bonds  closely 

^  Vide  infra,  11.  pp.  144,  146. 

«  Ihtd.,  II.  pp.  144-7.  '  Ihid.,  11.  p.  139. 

4  Ihid.,  II.  pp.  135-43.  «  Ihid.,  11.  p.  147. 

-«-  •  The  loans  of  early  companies  were  known  as  ''bonds."  These  obligations  are 
not  to  be  confused  with  the  modern  bearer  bond.  The  bonds,  issued  by  English 
companies  in  the  seventeenth  century,  were  all  registered,  as  is  shown  by  the  case 
of  Mrs  Brocas  against  the  Russia  company,  vide  infra,  11.  p.  59. 


I 


CHAP.  XV.]  The  Crisis  of  1682  305 

resembled  the  obligations  of  a  banker,  who  kept  a  very  small  cash- 
reserve.  Moreover,  there  was  a  certain  insecurity  in  the  legal  position, 
and  it  had  already  been  openly  stated  that,  since  the  company  was  not 
established  by  act  of  Parliament,  it^  bonds  were  in  a  precarious  con- 
dition \  It  follows  then  that,  during  a  crisis  involving  any  considerable 
disturbance  of  credit,  the  company  would  almost  inevitably  be  compelled 
to  suspend  payment.  Curiously  enough  such  an  episode  occurred  a  few 
months  after  the  paid  up  capital  had  been  doubled.  This  crisis,  which 
took  place  in  the  latter  half  of  the  year  1682,  had  its  origin  in  the  state 
of  politics  at  the  time  and  constituted  a  stage  in  the  events  which 
resulted  in  the  qvo  warranto  proceedings  against  the  City  of  London. 
The  Lord  Mayor,  Sir  John  Moor,  had  incurred  much  hostility  by  his 
action,  in  the  interest  of  the  Court  party,  at  the  disputed  election  of 
sheriffs  in  June  1682''.  According  to  the  account  of  John  Houghton, 
the  opponents  of  Moor  decided  to  obtain  revenge  by  engineering  a  run 
on  one  of  his  associates,  who  was  a  banker^  It  was  found  impossible  to 
confine  the  withdrawals  within  the  area  originally  planned,  and  several 
bankers  failed,  and  one,  named  Addis,  absconded.  At  this  stage, 
"everybody  thought  it  best  to  secure  their  own  and  ran  with  open 
mouth  on  all  the  bankers  for  money,  thinking  it  better  to  let  it  lye  dead 
a  while  in  their  chests  than  to  run  a  hazard  of  trusting  such,  who,  for 
ought  they  knew,  might  do  as  Mr  Addis  and  some  others  near  him  had 
done*.""  The  East  India  company  was  affected  by  the  run  and  that  at 
a  most  unfortunate  time,  since,  there  being  no  cash  available,  money 
was  required  to  fit  out  a  fleet  of  30  ships  for  the  coming  season. 
Instead  of  3  per  cent,  on  loans',  5  per  cent,  and  6  per  cent,  was  offered, 
with  the  additional  attraction  "  of  good  turns  to  be  done  by  the 
company  for  the  lenders  into  the  bargain."  Still  the  demands  for  pay- 
ment were  much  in  excess  of  the  loans  that  could  be  raised,  and  it  was 
necessary  to  suspend  payment  for  a  period  of  three  months*. 

^  Anderson,  Annals  of  Commerce,  in.  p.  60. 

2  Burnet,  History ,  ii.  pp.  332-6;  Maitland,  History  of  London ,  pp.  473-7. 

3  This  run  may  have  been  connected  with  the  Rye-House  Plot.  The  conspirators 
had  planned  to  make  '^a  sudden  push"  on  the  bankers  and  then  "to  borrow"  the 
funds  remaining  in  the  possession  of  the  goldsmiths  on  the  security  of  the  public 
faith — A  True  Declaration  of  the  Horrid  Conspiracy  against  the  late  King,  1685,  p.  44; 
Copies  of  the  Informations... relating  to  the  Horrid  Conspiracy,  1685,  p.  58. 

*  Collection  of  Letters  for  the  Improvement  of  Husbandry  and  Trade,  by  John 
Houghton,  1681-3,  i.  p.  148. 

^  At  this  period  the  Dutch  company  was  also  able  to  borrow  at  3  per  cent. — 
De  Lannoy  et  H.  V.  Linden,  Histoire  de  V Expansion  coloniale  des  Peuples  Europeens — 
NSerlande  et  Danemark,  pp.  345,  346. 

®  Houghton,  Coll.  for  Improvement  of  Husbandry  and  Trade,  i.  p.  149 ;  A  Brief 
Historical  Relation  of  State  Affairs,  by  Narcissus  Luttrell,  Oxford,  1857,  i.  pp.  210, 
223,  244. 

S.  c.  I.  20 


306  Trade  and  foreign  Policy  1674-8     [chap.  xv. 

The  crisis  of  1682  was  not  a  serious  one,  except  for  bankers  and  the 
foreign  trading  companies.  The  latter  for  some  years  had  been  subject 
to  a  series  of  organized  attacks,  which  externally  appear  to  resolve  them- 
selves, on  the  one  side,  into  a  dispute  between  the  regulated  and  joint- 
stock  companies  and,  on  the  other,  into  a  controversy  concerning  the 
merits  and  demerits  of  the  woollen  and  oriental  trades  respectively. 
In  reality,  the  roots  of  the  whole  discussion  strike  deeply  into  the 
basis  of  English  commerce,  as  it  had  developed  almost  since  the 
Restoration,  and  the  statement  of  the  ultimate  point  at  issue  requires  a 
brief  mention  of  several  tendencies  both  in  international  trade  and  in 
domestic  politics,  as  well  as  certain  elements  in  the  existing  condition  of 
the  companies  of  both  types. 

When  England  made  a  separate  peace  with  Holland  in  1674,  leaving 
that  country  still  at  war  with  France,  it  was  only  to  be  expected  that 
British  industry  should  benefit  at  the  expense  of  that  of  the  two 
contending  powers.  The  cloth  trade,  especially,  experienced  a  great 
stimulus,  and,  in  all  the  woollen-producing  districts,  there  was  marked 
activity,  which  lasted  until  after  the  peace  made  between  France  and 
Holland  in  1678.  The  beginning  of  the  slackening  of  trade  resulted, 
somewhat  paradoxically,  from  this  very  activity.  Much  of  the  carrying 
trade  of  Holland  had  fallen  to  English  ships — thus  partially  balancing 
the  converse  tendency  during  the  Civil  War — and  many  French  com- 
modities were  re-exported  from  England.  A  number  of  diiFerent  interests 
united  in  disapproving  of  the  growth  of  imports  from  France.  The 
extreme  mercantilists  were  alarmed  at  the  unfavourable  balance  shown 
in  this  branch  of  commerce.  Those  who  supported  the  ideal  of  plain 
living,  condemned  a  group  of  imports  which  consisted  mainly  of 
luxuries  \  Politicians  of  "  the  Country  Party ""  hoped  to  off -set  the 
dependence  of  Charles  II.  on  Louis  XIV.  by  an  attack  on  French  trade, 
while  cloth  manufacturers  believed  that  the  limitation  of  the  imports  of 
French  linens  would  increase  the  demand  for  their  product.  In  April 
1675  the  weavers  of  Essex,  Gloucester,  Devon,  Somerset,  Suflblk,  Hamp- 
shire and  Coventry  joined  in  petitioning  the  House  of  Commons ^  against 
the  excessive  imports  from  France,  and  treatises  were  produced  support- 
ing their  contentions^.     The  effect  of  this  agitation  was  the  act  of  1678, 

1  Reasons  to  prove  that  the  Trite  and  only  cause  of  want  of  Money  is  the  pre- 
ponderance of  Imports,  by  J.  H.  (1673)  (State  Papers^  Domestic,  cccxxxv. 
264) ;    An   Account  of  the  French    Usurpation  upon   the  Trade  of  England,   1679 

(Brit.  Mus.  —  J ;  England's  Wants:  Or  Several  Proposals  probably  beneficial 

to  England,  1685,  in  Somers'  Tracts  (1751),  xiv.  p.  63. 

2  Journals  of  the  House  of  Commons,  ix.  p.  327. 

3  The  Ancient  Trades  Decayed  Repaired  Again,  by  R.  L' Estrange,  1678,  p.  1. 


CHAP.  XV.]   Depression  in  the  Cloth  Trade  1680  307 

prohibiting  trade  with  France  ^  which  resulted  in  a  considerable 
dislocation  in  the  foreign  trade  of  England.  At  this  date  also, 
the  peace  on  the  Continent  resulted  in  strenuous  efforts  on  the 
part  of  the  Dutch,  more  especially,  to  regain  part  of  the  trade,  lost 
during  the  war.  By  1680  there  were  isolated  complaints  of  distress 
amongst  the  clothiers.  It  was  stated  that  formerly  160  persons  had 
maintained  themselves  at  this  trade  in  Reading,  and  that  the  number 
had  fallen  to  only  12,  while  pauperism  had  increased  to  such  an  extent 
that  the  relief  of  the  poor  cost  the  town  .£^1,000  a  year.  The  total 
export  of  broad  cloths  by  the  Eastland  company  had  been  20,000  pieces, 
now  it  was  only  4,000  ^  The  citation  of  the  case  of  this  company  was 
an  unfortunate  one,  since  its  circumstances  were  wholly  exceptional. 
It  was  universally  admitted  that  this  trade  had  suffered  from  the  Navi- 
gation Act ;  and,  since  1672,  it  appears  that  the  company  had  not 
adjusted  itself  to  the  change,  which  had  made  admission  open  to  all 
on  the  payment  of  a  moderate  fee'.  The  other  regulated  companies 
(amongst  which  that  trading  to  Russia  is  to  be  included  since  about--^ 
1669*)  were  in  far  from  a  satisfactory  position.  The  Levant  company 
was  distracted  by  the  dissensions  of  its  members',  and  the  Merchant 
Adventurers  were  involved  in  financial  difficulties.  The  creditors  of  the 
latter  appealed  to  the  House  of  Lords  in  1674 ;  and  it  shows  how  much 
way  had  been  made  by  the  joint-stock  principle,  that  a  "leviation"  was  1 
ordered,  as  if  there  had  been  a  capital  on  which  it  could  be  assessed.  . 
When  the  mistake  was  pointed  out,  the  levy  was  fixed  on  the  cloth  \ 
exported ^  Owing  to  its  indebtedness,  the  company  was  unable  to  afford  y^ 
financial  assistance  to  Charles  II.,  and,  for  this  or  other  reasons,  it 
received  scant  courtesy  from  the  Crown.  Sir  William  Temple,  writing 
to  the  company  on  March  26th,  1675,  says  that  "  being  a  very  plain 
man,  I  will  deal  so  with  you  in  this  matter,  and  tell  you  that  I  believe 
the  discouragements,  given  to  your  company  in  England  by  the  liberties 
allowed  to  the  interloping  trade,"  accounted  for  certain  difficulties 
experienced  at  Dort.  He  adds  significantly — "  but  I  have  not  told  you 
what  I  suspect,  which  is  that,  in  the  present  state  of  your  company  in 
England,  it  will  be  very  difficult  to  restore  it  to  its  former  state  here^" 
It  was  the  Levant  company  which  suffered  most,  or  which  made  at 

1  Cunningham,  Growth  of  English  Industry  and  Commerce  in  Modem  Times.  1903, 
p.  463. 

2  Britannia  Languens,  London,  1680,  in  McCuUough,  Tracts  on  Commerce  (1856), 
pp.  400-3. 

3  Anderson,  Annals  of  Commerce,  in.  p.  35. 
*  Vide  infra,  ii.  p.  67.  *  Vide  supra,  p.  269. 

6  Reports  Hist.  MSS.  Com.  ix.,  Part  H.,  p.  47, 

7  Works,  IV.  pp.  97,  98. 

20—2 


308    Levant  Co.  attacks  East  India  Co.  1680  [chap.  xv. 

least  the  greatest  outcry,  when  it  began  to  experience  the  renewed  com- 
petition of  the  French  and  the  Dutch,  within  the  area  assigned  it.     No 
doubt,  the  volume   of  its   trade  was  considerably  reduced,   but   such 
reduction  was  not  from  the  normal  average,  but  from  an  exceptionally 
high   level,   dependent   on   a   concatenation    of  causes  unlikely  to   be 
repeated.     Just  as  the  import  of  cattle  from  Ireland^  and  that  of  com- 
modities in  general  from  France  had  been  prohibited,  the  one  in  the 
interests  of  English  stock-raising  and  the  other  on  behalf  of  the  cloth 
trade,  so  now  the  foreign  trade  to  tropical  countries  was  attacked  in 
order  to  keep  the  woollen  industry  at  high  water  mark.    The  East  India 
trade,  particularly,  prejudiced  the  Levant  company,  by  importing  Eastern 
\  commodities  at  a  relatively  cheap  rate,  and  for  this  reason  it  was  chosen 
jfor  special  attack.    The  main  points  in  the  controversy  are  recapitulated 
^  jilelsewhere^,  but  what  is  of  interest  is  the  comparison  of  the  regulated  and 
ijoint-stock  types  of  organization.     It  was  admitted  by  both  sides  that 
Isome  kind  of  monopoly  was  required,  and  the  chief  point  in  dispute  was 
I  whether  such  a  privilege  should  be  granted  to  a  regulated  or  to  a  joint- 
<  stock  body.     The  Levant  company  had  undoubtedly  the  best  of  the 
argument,  when  it  charged  the  other  with  reckless  finance,  though  its 
own  operations  of  this  kind  were  not  above  reproach.     On  the  other 
hand,  the  East  India  company  was  able  to  show  that  the  exaction  of  the 
test  of  being  "a  legitimate  merchant""  from  intending  members  was 
illiberal.     Though  many  of  the  statements,  circulated  by  the  Levant 
company,  to  the  discredit  of  the  joint-stock  organization  were  repro- 
duced verbatim^  during  a  debate  in  the  House  of  Commons  (1680),  some 
were  inexact  and   misleading^.      It   was   asserted  that  the  stock   had 
become  "  engrossed  *"  by  a  few  members ;  whereas,  according  to  a  return 
made  in  1682,  about  one-third  of  the  500  proprietors  owned  ^1,000 
stocks     The  East  India  company,  like  the  Royal  African  undertaking, 
j    was  able  to  make  a  strong  case  for  the  sinking  of  a  large  capital  in  con- 
\    cessions,  forts  and  factories ;  and,  it  was  shown  that  where  such  "  dead 
I    stock"  became  considerable,  the  joint-stock  type  of  organization  was 
';    preferable  to  the  regulated.     It  is  surprising  that  the  Levant  company 
{    did  not  lay  more  stress  on  the  arbitrary  acts  of  its  rival  in  the  sup- 
pression of  interlopers,  since  the  practice  of  the  seizure  of  ships  and 

1  A  Treatise  of  Wool  and  Caitel,  London  1677  (firit.  Mus.  ^ — —  j  ;  Corre- 
spondence between  Sir  Henry  Bennet  and  the  Duke  of  Ormonde  in  Miscellanea  Aulica 
(1702),  pp.  413-26. 

2  Vide  infra,  ii.  pp.  136-43. 

3  Hist,  and  Proceedings  of  the  House  of  Commons,  i.  pp.  410,  411. 
*  State  Papers,  Domestic,  Charles  II.,  ccccxxxviii.  104.     In  the  previous  year 

there  had  been  133  court  meetings  of  which  Sir  Josia  Child,  the  governor,  had 
attended  122  and  Thomas  Papillon,  the  deputy-governor,  123. 


i 


CHAP.  XV.]  The  Crisis  of  1686  309 

cargoes  in  the  East  made  the  company  in  effect  both  plaintiff  and  judge 
in  the  same  cause.  On  the  whole,  while  the  controversy  had  brought  to 
light  some  abuses  and  imperfections  of  the  East  India  company,  the 
attack  succeeded  only  in  the  detection  of  these,  and  the  whole  discussion 
tended  to  show  that  the  joint-stock  form  of  organization  was  possessed 
of  several  advantages  for  the  prosecution  of  a  trade  to  distant  countries. 
The  failure  of  the  Levant  company  to  reduce  the  operations  of  the 
East  India  adventurei-s  left  the  former  face  to  face  with  a  marked  reduc- 
tion in  the  volume  of  the  trade  of  its  members,  as  compared  with  the 
prosperous  times  before  1678.  By  1686  the  woollen  industry  was  in 
the  throes  of  a  crisis  which  was  produced  partly  by  the  falling  off  in  the 
purchases  of  the  Levant  company.  This  depression  was  experienced 
most  in  the  districts  which  produced  for  export.  Sales,  made  in 
Gloucester  to  this  company,  had  declined  by  75  per  cent.,  those  of 
Coventry  by  33  per  cent.  The  clothiers  of  Suffolk  and  Essex  complained 
that  their  trade  was  "almost  undone,"  and  that  they  were  unable  to 
employ  numbers  of  poor  families,  which  had  recently  come  to  depend  on 
this  industry  for  support.  At  Coventry  some  hundreds  of  workers  were 
ruined,  and  the  city  was  described  as  being  reduced  to  a  deplorable  con- 
dition, through  the  decline  in  the  production  of  clothe  In  some  of  the 
parishes  in  Gloucester  one-fifth  of  the  whole  annual  value  was  distributed 
in  poor-relief,  owing  to  multitudes  of  workers  being  unable  to  subsists 
The  effect  of  the  depression  in  the  woollen  trade  would  have  bpen  of 
comparatively  little  consequence,  since  it  was  confined  to  certain  districts, 
had  it  not  been  co-existent  with  a  credit-crisis  in  London.  The 
corporation  there  had  founded  a  bank  in  1683,  which  was  intended 
to  make  advances  on  approved  mercantile  bills.  When  the  news  of 
Monmouth's  rebellion  reached  the  City  in  the  summer  of  1685,  there 
was  a  run  on  the  banks,  and  this  one  failed.  Many  traders,  whose 
credit  was  involved  in  the  crash,  were  imprisoned  for  debt";  and  such 
failures  involved  the  suspension  of  merchants  and  others  who  were 
sureties  for  those  who  had  fallen  into  difficulties.  It  was  calculated 
that  the  losses  from  the  latter  cause  exceeded  those  from  theft,  robbery 
and  frauds  From  the  City  the  great  bankruptcy  extended,  in  the 
words  of  a  contemporary  writer,  "  like  a  plague,"  to  the  country,  where, 
for  some  time,  the  land  lay  desolate  and  untilled^  A  distressing 
characteristic  of  the  crisis  was  the  locking  up  of  funds,  held  by  the 
Corporation  in  trust  for  widows  and  orphans,  in  the  general  suspension. 

1  State  Papers^  Domestic,  James  II.,  v.  120,  121, 124-128,  166. 

2  Ibid.,  V.  117.  y 

3  Ihid.,  III.  134.  / 
*  A  Caution  against  Suretiship,  by  R.  A.,  1688,  p.  11.    / 

fi  The  Happy  Future  State  of  England,  by  P.  P.,  London,  1688,  p.  267. 


310  Distress  after  the  Crisis  1686        [chap.  xv. 

According  to  the  "  case,*"  drawn  up  by  those  who  had  suffered  most,  the 
Rebellion,  though  it  "failed  to  subvert  the  government  of  the  nation,  did 
strangely  shake  that  of  this  City  and  blasted  the  credit  of  our  bank  and 
so  overthrew  in  a  moment  the  fortune  and  the  hopes  of  the  poor  widows 
and  orphans."  The  calamity  was  too  great  to  be  relieved  by  private 
charity,  since  "a  vast  number"  of  those  dependent  on  the  fund  "had 
been  reduced  to  the  utmost  necessities  of  poverty  ^^ 

^  State  Papers,  Domestic,  James  II.,  iii.  136  ;  A  Dialogue  between  Francisco  and 
Aurelia,  two  unfortunate  Orphans  of  the  City  of  London,  1690,  in  Harkian  Miscellany 
(1746),  IV.  p.  556  ;  vide  infra,  iii.  pp.  64,  55. 


CHAPTER  XVI. 

Foreign  Trading  Companies,  1682  to  1697. 

After  the  crisis  of  1682  the  course  of  English  commerce  was 
subjected  to  the  play  of  opposing  forces,  some  of  which  tended  towards 
the  maintenance  and  even  to  an  increase  of  the  previous  prosperity, 
while  others  pointed  towards  a  contraction  of  trade.  Amongst  the 
latter  allusion  has  already  been  made  to  local  crises  in  the  cloth  trade 
of  certain  districts  in  1686^ ;  and,  in  addition  to  this,  there  was  a 
prevalent  political  unrest,  which  had  been  a  contributory  cause  of  the 
crisis  of  1682  and  which  produced  the  disturbance  of  credit  in  London 
in  1685  and  the  more  serious  panic  of  December  1688.  An  eddy  of 
the  general  political  agitation  led  to  the  dissolution  of  one  of  the  old 
established  companies,  namely  that  for  planting  the  Bermudas.  Unlike 
most  of  the  other  colonizing  bodies,  this  organization  had  continued  to 
exist  after  the  land  had  been  divided.  It  followed  almost  inevitably 
that,  after  the  lapse  of  nearly  three-quarters  of  a  century,  the  share- 
holders in  the  company  had  ceased  to  own  land  in  the  islands;  and, 
not  only  so,  but  as  time  went  on  much  of  the  property,  which  had  been 
set  apart  at  the  beginning  of  the  enterprize  for  the  support  of  the 
government,  had  been  alienated.  It  is  obvious  that,  when  this  stage 
was  reached,  the  company  had  survived  the  age  of  usefulness  and  that 
its  interests  and  those  of  the  planters  would  tend  to  be  divergent. 
By  1680  the  shareholders  in  the  company  were  a  small  group  of  traders 
in  London,  who  had  entered  the  undertaking  simply  as  a  promising 
speculation.  The  company,  as  then  constituted,  imposed  levies  on  the 
goods  produced  in  the  islands,  and  this  occasioned  much  dissatisfaction 
amongst  the  inhabitants  there.  Still  the  company  remained  in  a 
comparatively  secure  legal  position,  being  established  by  charter.  But 
in  the  years  1683  and  1684,  through  political  reasons,  the  Crown  was 
attacking  its  own  charters  and  it  was  decided  to  take  advantage  of  this 
movement  by  the  institution  of  quo  warranto  proceedings.  Eventually 
these  succeeded,  and  the  company  came  to  an  end  in  1684=^. 

1  Vide  supra,  p.  309.  ^  ^r^  infra,  ii.  pp.  296-7. 


312  The  Crown  Finances  1682-9       [chap,  xvi 

While  the  trend  of  acute  political  disputes  was  an  adverse  factor  in 
diminishing  confidence,  in  another  respect  the  tension  between  King  and 
Parliament  was  not  altogether  unfavourable,  in  so  far  as  it  kept  taxation 
low  and  caused  the  revenue  to  be  administered  with  economy.  Up  to 
1682  the  debt  had  been  very  greatly  reduced,  and  in  the  six  years  from 
1682  to  1688  the  same  process  was  continued.  The  principal  and  interest, 
repaid  during  this  period,  was  in  excess  of  the  borrowings  by  close 
on  ^325,0001.  The  interest  paid  from  November  5th,  1688,  to 
September  29th,  1689,  was  .£20,207  ^  so  that,  if  the  average  annual 
payment  be  estimated  roughly  at  ^£^30,000  for  each  of  the  six  years, 
there  would  be  a  nett  reduction  of  debt  of  about  ,£^150,000  ^ 

The  rehabilitation  of  the  finances  was  aided  by  the  improvement 
of  trade  and  a  more  careful  supervision  of  the  Treasury,  so  that  the 
settled  revenue  (including  Hearth-money)  for  the  three  years  1682  to 
1685  was  almost  exactly  equal  to  the  sum  originally  estimated*.  This 
was  a  fortunate  circumstance  since  the  special  Parliamentary  grants  were 
inconsiderable,  and  the  average  total  revenue  (exclusive  of  loans)  was 
only  d£*l, 266,000,  while  the  annual  expenditure  (exclusive  of  repayments 
of  principal  and  interest)  was  on  an  average  J*93,000  a  year  less ;  or  in 
other  words  the  cost  of  the  services,  the  government  and  the  Court  was 
defrayed  from  the  settled  revenue. 

James  II.  started  his  reign  by  an  endeavour  to  reduce  the  allocation 
for  pensions,  and  he  received  a  grant  from  Parliament  for  discharging 
those  that  remained  outstanding  at  the  death  of  Charles  II.,  some  of 
which  had  been  in  arrear  since  1684^  However  in  1687-8  this  item 
was  again  as  large  as  it  had  been  at  the  end  of  the  previous  reign. 
The  payments  for  secret  service  were  also  great.  Moreover,  there  can 
be  little  doubt  that  the  services  had  been  neglected,  and  it  was  believed 
that  a  larger  outlay  was  necessary.  To  meet  this  increased  charge, 
additions  were  made  to  the  existing  indirect  taxes  and  new  duties  were 
imposed  on  French  goods  (in  lieu  of  the  prohibition  of  1678)  and  on 

1  Vide  infra,  iii.  pp.  534-41.  The  loans  and  interest  paid  in  1686-7  and  1687-8 
were  respectively  £270,105.  0*.  2d.  and  £126,234.  8*.  4^^. 

2  Lausd.  MS.  (Brit.  Mus.)  1,215,  f.  52. 

3  Principal  and   Interest,  repaid   Lady-day  1682  to 

Lady-day  1688      £1,509,772  16    1 

Sums  borrowed  during  same  period ...  1,185,811  15  11 

Difference  323,961     0    2 

Of  which  it  is  estimated  there  was  paid  for  interest  180,000    0    0 

Principal  repaid  on  balance £143,961     0    2 

*  Vide  infra,  in.  pp.  532,  533. 

^  Pensions  due  to  Christmas  1684  £340,314.  lis.  8|rf.  Pensions  per  annum 
£184,608.  0«.  11<;?.— State  Papers,  Domestic,  James  II.,  iv.  160. 


CHAP.  XVI.]      The  State  of  Invention  1682-6  313 

sugar  and  tobacco.  The  effect  of  these  changes  was  to  raise  the  total 
revenue  (exclusive  of  loans)  to  an  average  of  over  .^2,040,000,  for  the 
three  years  1685-8,  or  an  increase  of  about  60  per  cent.,  of  which  one 
half  is  to  be  attributed  to  the  new  duties.  After  making  allowance  for 
the  fact  that  the  receipts  of  the  Post  Office  (which  had  been  settled  on 
James  II.  when  he  was  Duke  of  York)  are  now  included,  this  leaves  a 
substantial  gain  in  the  income  of  the  branches  of  the  settled  revenue, 
which  averaged  close  on  d£?l, 475,000  a  yearK 

Another  cause  tending  towards  an  increase  of  prosperity  was  the 
influx  of  Protestant  refugees,  which  had  begun  before  the  Revocation 
of  the  Edict  of  Nantes  in  1685,  but  which  was  more  marked  during  and 
after  that  year.  It  was  estimated  that  these  immigrants  had  brought 
with  them  valuables,  tools  and  implements  valued  at  three  millions,  but 
the  addition  they  made  to  the  immaterial  wealth  of  England,  Scotland 
and  Ireland  was  of  very  much  greater  importance ^  Prior  to  this  period 
England  had  made  relatively  slow  progress,  as  compared  with  France 
and  Holland,  in  the  development  of  those  manufactures  and  industries, 
requiring  a  high  degree  of  technical  skill.  Therefore,  apart  from 
shipping  and  the  cloth  trade,  there  seemed  to  be  a  want  of  inventiveness 
and  adaptability  to  changing  conditions,  and  it  is  not  improbable  that 
it  was  a  consciousness  of  this  fact  which  produced  much  of  the  restrictive 
legislation  of  the  period.  Measures  of  this  type  were  beised  on  the  ideal 
of  encouraging  the  old-established  trades  at  the  expense  of  others  of 
more  recent  date,  which,  from  past  experience,  it  may  have  been 
feared  would  result  in  failure.  Remarkable  evidence  of  the  comparative 
backwardness  of  Englishmen  in  mechanical  inventiveness  during  the 
first  three-quarters  of  the  seventeenth  century  is  to  be  gleaned  from 
a  study  of  the  petitions  for  patents,  many  of  the  applicants  being 
foreigners;  and,  in  other  cases  where  a  native-born  subject  proposes 
to  found  an  industry  new  to  England,  he  states  either  that  he  had 
discovered  the  secret  of  the  process  by  his  observations  abroad  or  he 
was  prepared  to  import  foreign  artizans.  So  great  was  the  superiority 
of  method  amongst  the  most  advanced  nations  of  the  Continent  that 
the  Navigation  Act  was  relaxed  in  favour  of  adventurers  for  whale- 
fishing,  and  a  similar  relief  was  sought  for  the  salting  of  herring*. 
In  Scotland,  as  shown  elsewhere^,  the  immigration  of  skilled  workers 
was  encouraged  by  substantial  privileges,  promised  by  repeated  acts 
of  Parliament  and  of  the  Privy  Council. 

In  view  of  these  circumstances  the  ultimate  importance  of  the 
coming  of  the  Huguenots  can  scarcely  be  over-rated °.     What  had  been 

1  Vide  infra,  in.  pp.  632-39.  *  Anderson,  Annals  of  Commerce,  iii.  p.  96. 

8  Vide  infra,  n.  pp.  76,  374,  376,  377.  *  Ibid.,  in.  p.  128. 

^  Francis  Hutcheson  speaks  of  "the  ingenious  artisans,  who,  persecuted  in 


314  New  Industries  started  1682-8      [chap.  xvi. 

formerly  learned  at  second,  or  at  third  hand  was  now  taught  by  experts 
in  the  different  trades,  and  in  many  cases  it  was  not  necessary  to  re- 
create the  more  delicate  machines  since  these  were  brought  from  France 
by  the  refugees.  Moreover,  following  close  on  the  Huguenot  immi- 
gration, there  was  an  influx  of  Dutchmen,  who  came  in  the  train  of 
William  III.  in  the  first  couple  of  years  after  the  Revolution  and  who 
shared  with  the  French  the  honour  of  introducing  a  remarkable  variety 
of  trades,  new  to  England,  during  the  epoch  of  immense  activity  which 
will  be  described  to  some  extent  in  the  ensuing  chapter. 

The  activity  in  extending  the  home-trade  between  1682  and  1688 
followed  several  well-defined  lines.  Through  the  aid  of  French  workers^ 
and  under  the  high  duties  levied  on  French  imports,  effbrts  were  made 
to  start  the  manufacture  of  white  paper,  linen  (which  as  yet  had  been 
a  failure 2)  and  the  fashionable  material  known  as  "a  la  modes"  or 
lustrings  in  1685-7 ^  These  undertakings  were  all  developed  by  im- 
portant joint-stock  companies.  Then  there  were  a  number  of  patents 
for  minor  industries  such  as  the  sawing  of  wood,  the  tanning  of  leather, 
for  pumping  engines  and  for  producing  a  composition  resembling 
marble^.  Details  are  too  scanty  to  determine  the  character  of  the 
invention  of  Thomas  Smith,  a  cabinet-maker,  who  applied  for  a  patent 
for  "  a  gilded  speaking  head  or  the  improved  echo^.'' 

Mention  has  already  been  made  of  the  attempt  to  establish  a  bank 
under  the  auspices  of  the  corporation  of  London,  and  about  the  same 
time  there  emanated  from  the  Council  a  scheme  for  insurances  on  lives, 
based  on  the  tontine  principle,  which  Houghton  condemned  as  not 
giving  "a  penni worth  for  a  penny,"  since  the  majority  of  the  sub- 
scribers were  certain  to  lose  their  principal^.  The  success  of  Barbon's 
Fire  insurance  office,  which  had  been  carried  on  by  a  company  since 
1680^^,  had  tempted  the  City  to  promote  a  municipal  department  for 
the  same  class  of  business  about  1682  which  was  closed  soon  afterwards. 


their  own  country,  flee  to  ours  for  protection ;  they  instruct  us  in  manufactures 
which  support  millions  of  poor,  increase  the  wealth  of  every  person  in  the  State  and 
make  us  formidable  to  our  neighbours  " — An  Inquiry  into  the  Original  of  Our  Ideas 
of  Beauty  and  Virtue,  p.  117;  Lex  Talionis  in  A  Collection  of  the  Writings  of  the 
Author  of  the  Trus-bom  Englishman,  London  1703  [the  unauthorized  ed.  of  Defoe's 
Tracts],  p.  262. 

^  In  at  least  one  case  these  industries,  new  to  England,  were  started  by  French 
Roman  Catholics — vide  infra,  iii,  pp.  73,  75. 

2  Houghton,  Coll.  for  Improvement  of  Husbandry  and  Trade,  ut  supra,  i.  p.  111. 

3  Vide  infra,  in.  pp.  64,  74,  90. 

*  State  Papers,  Domestic,  Petition  Entry  Book,  lxxi.  pp.  10,  275,  299,  302. 
^  Ibid.,  Petition  Entry  Book,  lxxi.  p.  319. 

^  Houghton,  Coll.  for  Improvement  of  Husbandry  and  Trade,  ut  supra,  i.  p.  147. 
"f  Vide  infra,  in.  p.  375. 


CHAP,  xvl]  Activity  of  Trade  1682-8  315 

and  in  1683  the  Friendly  Society  was  established  on  the  mutual 
principle.  There  was  keen  competition  between  the  two  remaining 
undertakings,  and  in  1688  a  modus  vivendi  was  arrived  at,  by  order 
of  the  Privy  Council,  under  which  one  office  might  issue  policies  for 
three  months,  while  the  other  might  not ;  in  the  next  quarter  the  latter 
had  the  monopoly  of  business  and  so  on^  During  the  same  period  the 
benefits  of  marine  insurance  were  greatly  extended,  and  in  1686  there 
were  many  underwriters  of  this  class  of  risk^.  Following  on  the  previous 
inventions  for  the  preservation  of  the  hulls  of  ships  was  another,  relating 
to  marine  transportation,  which  aimed  at  providing  drinking  water  for 
the  crews  by  a  process  of  extracting  the  salt  from  sea-water.  This 
invention,  which  was  protected  by  a  patent,  was  worked  by  a  company 
described  as  the  Patentees  Jbr  making'  salt  water  fresh  and  wholesome. 
The  revenue  of  the  partners  was  calculated  on  the  basis  of  any  ship, 
which  used  the  apparatus,  paying  a  royalty  of  6d.  per  ton^  Finally, 
as  showing  the  progress  made  in  adding  to  the  conveniencies  of  life,  the 
formation  of  another  company  may  be  noticed,  which  aimed  at  street- 
lighting  by  means  of  oil  lamps.  This  venture,  like  that  last  mentioned, 
was  formed  on  the  basis  of  a  patent,  granted  to  an  individual  for 
reflectors  ("  convex  lights ""),  and  was  carried  on  by  an  unincorporated 
company  (1684),  which  was  sometimes  described  as  the  Convex  Lights 
Company  or  as  the  Proprietors  of' the  Convex  Lights^. 

These  various  developments  are  typical  of  the  activity  of  trade 
during  the  years  immediately  prior  to  the  Revolution ;  and,  when 
conjoined  with  great  gains  in  foreign  commerce,  this  period  on  the 
whole  was  one  of  prosperity.  For  this  reason  the  authors  of  works  on 
political  arithmetic  speak  of  the  year  1688  as  the  culmination  of  the 
good  times  and  as  representing  the  maximum  of  national  wealth  during 
the  seventeenth  century.  Comparing  the  estimates  of  Petty  (1664-5) 
with  those  of  Gregory  King  and  Davenant  for  1688,  the  national 
dividend  of  England  and  Wales  had  increased  by  between  2  millions 
and  4  millions,  an  advance  of  from  5  per  cent,  to  10  per  cent.,  while 
the  total  capital  had  risen  by  70  millions,  an  improvement  of  no  less 

1  Vide  infra,  iii.  p.  376. 

2  State  Papers,  Domestic,  Entry  Book,  lxxi.  p.  231. 

2  The  Conditions  upon  which  the  Patentees  for  making  salt  water  fresh  and  whole- 
some intend  to  conclude  with  su^h  persons  that  please  to  agree  with  them  for  the  use  of 
this  Invention;  Salt- Water  Sweetned  or  a  true  Account  of  the  Great  Advantages  of  this 
New  Invention  both  by  Sea  and  by  Land  [by  R.  Fitzgerald],  London,  1683;  Fons 
Perennis,  a  Poem  on  the  Invention  of  making  Sea  Water  fresh,  by  E.  Arwaker, 
London,  1686 ;  Answer  to  Mr  Fitzgerald's  State  of  the  case  concerning  the  Patent  for 

Making  salt  water  fresh,  by  William  Walcott,  Lond.  1693  (Brit.  Mus.         '^'    \. 

*  Vide  infra,  in.  p.  62. 


316  Increase  in  Wealth  1664-88        [chap.  xvi. 

than  ^  per  cent.  The  difference  between  the  ratios  of  increase  in  the 
income  and  the  capital  is  accounted  for  by  the  fact  that  Petty's  estimate 
of  the  latter  is  six  times  the  income,  while  King''s  calculation  works  out 
at  seven  and  one  third  years'*  purchase.  This  difference  is  roughly  pro- 
portionate to  the  decline  in  the  rate  of  interest  which  was  comparatively 
high  from  1660  to  1667,  very  low  in  1681  and  moderate  from  1683  to 
the  summer  of  1688.  The  following  statement  gives  a  comparison  of 
the  different  estimates : 

Estimates  of  the  National  Income  and  Wealth  of  England 

and  Wales^. 

Income  Wealth 


Petty        King  Petty        King 

1664-5       1688  1664-5       1688 

£s  millions  £s  millions 

Real  Property 8         13  210         234 

Labour 32  30*5 

Personal  Property      40           86 

40  43-5        250  320 

Probably  these  estimates  would  require  considerable  criticism,  if 
they  were  to  be  used  as  adequate  statements  of  the  total  wealth  or 
the  total  income,  but  they  will  serve  the  purpose  of  the  present  enquiry 
as  a  rough  expression  of  the  progress  of  the  nation  between  the 
Restoration  and  the  Revolution.  Moreover  the  same  tale  of  expanding 
resources  is  confirmed  by  other  considerations.  Though  there  were 
many  complaints  of  the  growth  of  luxury,  there  is  every  reason  to 
believe  that  in  England  and  Wales  the  community  was  not  only 
spending  less  than  its  income  but  that  an  increasing  sum  was  saved 
for  new  production.  In  1688  this  surplus  was  calculated  to  have  been 
about  ,£2,400,000 ^  Then  there  had  been  a  remarkable  expansion  in 
foreign  trade.  The  total  imports  and  exports  in  1662-3  may  be 
estimated  at  about  7f  millions,  or  £\.  5s.  per  head^  In  1688  the 
figures  (also  for  England  and  Wales)  had  risen  to  close  on  11|^  millions 
for  the  whole  recorded  external  trade,  or  £2  per  head'*.  The  progress 
made  may  be  summed  up  in  the  following  table  of  percentages : 

^  Natural  and  Political  Observations  on  the  State  of  Great  Britain,  by  G.  King, 
Edin.  1810,  pp.  47-9 ;  Davenant  estimates  the  income  in  1688  at  44  millions,  and 
the  total  wealth  at  322  millions — Essay  upon  the  Probable  Methods  of  Making  a 
people  Gainers  in  the  balance  of  Trade,  London  1700,  p.  95  ( Works,  ii.  p.  266) ;  also 
Wm-ks,  I.  p.  375. 

2  Davenant,  Works,  ii.  p.  276.  ^  Vide  supra,  p.  266. 

*  Exports  England  and  Wales  in  1688  £4,310,000 

Imports 7,120,000 

£11,430,000 
— Davenant,   Works,  ii.  p.  270 ;  King,  Natural  and  Political  Observations  (1810), 
pp.  1-42. 


CHAP.  XVI.]    Progress  in  foreign  Trade  1682-91  317 

Comparison  of  varioiis  statistics  1662-5  and  1688  showing  the  increase 
per  cent.  {England  and  Wales). 


The  national  income 

1664-5  and  1688  +  5% 

to  107, 

„           „       savings 

1664      „     1688  + 

100  7. 

„           „       wealth 

1664-5    „     1688  + 

28  7c 

Total  foreign  trade 

1662-3    „     1688  + 

50  7. 

Foreign  trade  per  head 

)i            ft           f>      "T 

60  7, 

These  results  tend  to  confirm  the  conclusion,  already  arrived  at  on 
other  grounds,  namely  that  in  this  period  the  main  source  of  the 
admitted  prosperity  was  the  growth  of  foreign  trade  and  that  there*/ 
may  have  been  stagnation,  or  even  a  slight  decline  in  the  woollen 
industry ;  while,  at  the  same  time,  new  industries  were  being  founded, 
but  as  yet  these  were  in  a  rudimentary  stage  of  development. 

Further  light  may  be  obtained  as  to  the  success  of  foreign  trade 
from  the  history  of  the  companies  engaged  in  it ;  and,  for  the  purpose 
of  the  present  enquiry,  it  will  be  advisable  to  isolate  the  results  achieved 
by  these  undertakings  from  other  contemporary  industries.  Such 
separation  is  the  more  necessary,  since,  between  the  crises  of  1682  and 
of  1696-7,  there  is  an  interesting  phenomenon  which  affects  the  position 
of  the  two  groups — those  engaged  in  the  foreign  and  the  home  trades 
respectively — in  a  different  manner  in  each  case.  Until  the  crisis  of 
1682  each  previous  disturbance  of  this  kind  produced  an  appreciable 
effect  on  practically  every  company  in  existence  at  the  time.  In  the 
same  way  the  effects  of  the  crises  from  1685  to  1688  may  be  traced 
on  companies  concerned  chiefly  in  the  home  trade,  while  those  whose 
business  lay  abroad  were  unaffected  (except  in  the  case  of  the  Levant 
company  which  may  have  suffered  during  the  crisis  of  1686).  Therefore 
the  three  joint-stock  bodies  formed  for  foreign  trade — the  East  India, 
the  Royal  African  and  the  Hudson's  Bay  companies — were  not  materially 
influenced  by  the  domestic  crises,  and  all  of  them  experienced  a  large 
degree  of  prosperity,  until  the  pressure  of  the  war  with  France  began 
to  be  felt  about  the  end  of  1691.  This  progress  was  not  uninterrupted, 
but  the  checks  came  from  events  in  the  foreign  countries  with  which 
each  of  them  was  connected,  as  for  instance  the  disputes  between  the 
Hudson's  Bay  company  and  the  French  in  1682  and  1686  and  that  of 
the  East  India  company  with  Aurangzeb  in  1688  and  1689^ 

On  the  whole  the  ten  years  from  1682  to  1691  were  the  most 
successful  in  the  history  of  English  foreign  trading  bodies.  The  East 
India  company  was  able  to  justify  the  distribution  of  a  stock-bonus  by 
maintaining  its  dividends  on  the  increased  capital ;  and,  in  1690  and 
1691,  the  Hudson  Bay  and  African  undertakings  followed  its  example 

1  Vide  infra  J  ii.  pp.  150,  231. 


318  Profits  in  foreign  Trade  [chap.  xvi. 

by  issuing  scrip  dividends,  the  former  giving  its  shareholders  one  of 
200  per  cent,  and  the  latter  one  of  300  per  cent.^ 

The  dividends  paid  in  cash  were  large,  in  the  case  of  the  East 
India  company  very  large.  From  1683  to  1692  inclusive  the  latter 
organization  paid  200  per  cent,  on  the  doubled  stock  or  400  per  cent, 
to  an  original  adventurer^.  Apart  from  the  bonuses  in  stock,  the 
African  company  divided  at  least  49J  per  cent.^  and  the  Hudson's  Bay 
company  275  per  cent.*  Thus  the  East  Indian  undertaking  distributed 
an  average  annual  dividend  of  40  per  cent,  on  its  original  capital,  the 
Hudson's  Bay  company  one  of  27J  per  cent,  also  on  its  original  capital 
and  the  African  paid  at  least  an  average  of  5  per  cent. 

While  such  a  statement  represents  a  convenient  summary  of  results, 
it  is  likely  to  be  misleading  in  several  respects.  Once  any  business  has 
been  established  for  a  considerable  period,  the  nominal  capital  is  of 
theoretical,  rather  than  practical  interest.  What  is  important  is  the 
relation  of  the  earnings  to  the  price  at  which  a  share  in  the  undertaking 
can  be  purchased.  Fortunately  quotations  of  East  India  stock  are 
sufficiently  numerous  between  1682  and  1690  for  an  estimate  to  be 
formed  of  the  course  of  prices.  The  lowest  recorded  is  122 J  and  the 
highest  500,  both  being  for  the  stock  in  its  new  form.  Further,  there 
are  many  references  to  transactions  in  the  stock  which  are  not  dated 
and  so  could  not  be  included  in  the  table  printed  elsewhere".  Curiously 
enough  most  of  these  quotations  are  300  exactly ;  and,  since  300  occurs 
several  times  in  those  returns  which  are  dated  and  at  considerable 
intervals  of  time,  this  quotation  may  be  taken  as  a  kind  of  index  of 
the  price  from  1682  (after  the  doubling)  to  1690  (just  before  the  last 
dividend  of  this  series  was  paid).  On  this  basis,  the  payment  of 
200  per  cent,  during  eight  years  on  J'lOO  nominal,  costing  d^300,  would 
yield  an  average  annual  return  of  about  8^  per  cent.  Deducting  what 
may  be  considered  to  have  been  the  usual  interest  on  a  first  class 
security  in  England  at  the  time,  there  would  remain  between  2  per  cent, 
and  3  per  cent,  as  a  provision  for  insurance  against  depreciation  of  the 
capital  invested — a  provision  which  later  events  showed  to  be  sadly 
inadequate. 

A  further  insight  into  the  position  of  the  company  may  be  obtained 
by  selecting  for  observation  the  outcome  of  the  investment  in  what  may 
have  been  a  few  representative  cases.  Suppose,  for  instance,  an  original 
adventurer  sold  his  stock  either  at  500  (the  highest  recorded  price) 
or  at  300  (a  frequent  price  from  1683  to  1690),  allowance  would  have 

1  Vide  infra,  ii.  pp.  21,  26,  232,  237.  ^  n^id,^  „.  p.  173. 

3  Probably  the  dividends  of  the  African  company  were  more  than  the  amount 
mentioned  in  the  text — ibid.,  11.  p.  34. 

*  Ibid.,  II.  pp.  231,  237.  ^  Ibid.,  11.  p.  178. 


CHAP.  XVI.]  Appreciation  of  East  India  Stock  1682-90   319 


to  be  made  for  the  stock-bonus  he  received  and  also  for  the  other 
dividends.  If  the  original  payment,  on  allotment,  be  deducted  from 
the  price  realized  plus  the  dividends,  the  balance  cannot  be  fairly  taken 
as  profit,  since  provision  must  be  made  for  the  interest  that  would  have 
accrued  on  the  capital,  if  placed  in  a  first  class  security.  For  the  whole 
period  from  1660  to  1688  such  interest  may  be  averaged  at  about 
6  per  cent.,  and  for  the  sake  of  simplicity  compound  interest  may  be 
neglected.     From  these  data  the  following  result  is  reached : 

The  Profit  made  by  an  original  Adventurer  in  the  East  India  Company 

who  sold  in  1685  at  500. 
1658-1660  To  £200stock,  1685  By  £200  stock,  fully 

£100  paid       £100    0    0  paid,  at  500 £1,000    0    0 


1682  To  £100  credited  as 

paid  (Bonus) 

1685  To  Profit 


1,340  10    0 
1,440  10    0 


By  Dividends  (1662-82) 


440  10    0 


1,440  10    0 


By  Gross  Profit  brought 
down 


1,340  10    0 


Allowance  for  interest  on 

£100  for  25  years  at 

6%     £150    0    0 

Balance,  being  nett  profit      1,190  10    0 

Thus  the  fortunate  adventurer,  who  sold  at  500,  made  a  nett  profit 
on  his  capital  after  allowance  for  interest  of  1,1 90 J  per  cent.  Further, 
though  this  high  price  was  not  maintained,  the  fall  was  almost  made 
good  by  the  increase  in  the  dividends,  for  by  a  similar  calculation  it  will 
be  found  that  the  original  adventurer,  who  sold  in  1690,  would  have 
made  a  profit  of  1,060 J  per  cent.  Even  greater  gains  were  made  by 
a  few  (of  whom  Sir  Josia  Child  was  said  to  be  one)  who  purchased  stock 
at  the  reduced  prices  of  1665.  There  may  be  added,  in  special  cases, 
certain  contingent  advantages  which  accrued  from  a  large  holding  in  the 
company,  such  as  profit  on  India  goods,  or  the  opportunity  of  obtaining 
lucrative  employments  for  the  nominees  of  an  important  member,  or 
again  a  small  additional  income  could  be  obtained  from  transactions  in 
the  company's  loans  on  bottomry  ^  Since  these  sources  of  additional 
gain  were  contingent,  no  exact  valuation  of  them  can  be  made,  and  the 
determinable  nett  profit  for  an  original  adventurer  (or  his  repre- 
sentatives) up  to  1690  may  be  fixed  at  about  10  times  the  original 
investment.  This  was  the  maximum,  since,  after  1690  the  price  of  the 
stock  fell  in  a  remarkable  manner,  being  below  par  from  1694  to  1699 
inclusive.  The  fall  in  the  value  of  the  stock  produced  a  change  in  the 
position  of  the  investor,  which  may  be  illustrated  again  by  a  reference 
to  the  account  of  an  imaginary  original  adventurer  and  secondly  to  that 
of  a  purchaser  in  1690  at  300.     Even  supposing  that  the  former  had 


Vide  infra,  ii.  p.  159. 


320   Gains  and  Losses  on  certain  Stocks  1682-96  [chap.  xvi. 


realized  at  the  lowest  recorded  price — 3SJ  in  1698 — his  profit  would 

remain  over  five  and  a  half  times  the  original  investment,  after  allowing 

interest  thereon  at  6  per  cent,  to  1690  and  thereafter  at  8  per  cent. 

The  case  of  the  investor  of  1690  was  very  different.     If  he  sold  at  the 

lowest  point,  his  loss,  including  interest,  would  have  been  no  less  than 

136  per  cent.,  while  in  the   more  normal   case   of  his  selling  at   50 

(which  was  a  frequent  price)  say  in  1696,  it  would  have  been  114  per  cent. 

Though  this   form  of  statement  is  in  reality  the  most  accurate,  it  is 

paradoxical  in  so  far  as  it  tends  to  suggest  that  a  call  was  made,  whereas 

this   was   not   so.      The  difficulty  arises  from  taking  account  of  the 

rate   of  interest  on   the  capital  invested,  and   the   situation   may  be 

described  in  another  form  in  the  following  terms.     Suppose  that  A.  and 

B.  have  each  of  them  ^£300  seeking  investment  in  1690.     A.  disposes  of 

his  capital  in  some  form  of  loan  on  the  best  available  security.     In  1696 

;  his  capital  might  be  supposed  to  be  intact,  and  he  would  have  obtained 

I  an  aggregate  return   of  at  least  =£^144,  so  that   on   this   transaction, 

I  neglecting  compound  interest,  he  would  be  worth  c£*444.     On  the  other 

hand,  suppose  B.  invests  his  £^00  in  c^^lOO  East  India  stock,  he  would 

i  receive  one  dividend  of  £50  (1691)  and  he  would  have  obtained  only 

i  another  £50  by  selling  his  stock  or  a  total  of  .^100  in  all,  as  against 

i  A.'s  d^444,  making  the  real  loss  of  B.  114  per  cent. 

The  causes  of  the  decline  of  the  value  of  East  India  stock  are  of  very 
great  interest;  but,  before  investigating  these,  it  is  necessary  to  deal 
with  the  position  of  the  investor  in  the  African  and  Hudson's  Bay 
companies,  as  far  as  the  materials  available  will  afford  data.  In  neither 
case  are  there  any  fairly  complete  records  of  prices  before  1692,  so  that 
the  enquiry  is  confined  to  the  account  of  an  original  investor.  The  prices 
of  Hudson's  Bay  stock  are  incomplete.  Quotations  exist  for  the  years 
1692  to  1700.  By  means  of  a  calculation  similar  to  that  made  in  respect 
of  the  East  India  company,  an  original  adventurer,  who  sold  at  the 
middle  prices  of  1692  and  1694,  would  have  made  a  nett  profit  of  nearly 
seven  and  three  quarter  times  his  capital  in  the  former  case  and  of  five 
and  a  half  times  his  original  investment  in  the  latter  by  1694^.    Taking 


11670    To  Cost  100  Stock 


1690 


„  Bonus  200 
„  Gross  Profit 


£100    0 


907  10 


£1,007  10 
To   allowance  for   interest 

on  £100         136    0 

„    Balance  (nett  profit)...  771  10 

£907  10 


1692    By  sale  £300  Stock 

at237i7o       ... 
„  Dividends  on  £100 

£712  10 

at  220  7, 

... 

220    0 

„  Dividends  on 

£300 

at26  7<, 

75    0 

By  Gross  Profit      ... 

£1,007  10 
907  10 

£907  10 


CHAP.  XVI.]     Companies  and  Party  Politics  1680-90       321 

the  African  company  in  1692  (the  year  of  the  last  dividend  for  a 
considerable  time  and  also  the  year  after  the  crediting  of  the  stock 
bonus  of  300  per  cent.)  and  again  in  1696,  at  the  middle  prices  in  each 
case,  the  original  adventurer  would  have  made  a  nett  profit  of  at  least 
79  per  cent,  in  1692  and  he  might  have  made  a  nett  loss  of  45  per  cent, 
in  1696^ 

These  results  are  useful  as  showing  the  fate  of  different  classes  of 
investors  in  the  important  foreign  trading  companies  towards  the  end 
of  the  seventeenth  century,  and  they  are  of  the  greatest  importance  in 
forming  a  judgment  on  certain  events  during  the  great  Parliamentary 
struggle  from  1689  to  1698.  It  may  be  premised  that  the  Hudson's 
Bay  company  was  in  a  class  by  itself.  Circumstances  had  forced  it  into 
being  the  pioneer  of  the  contest  with  France,  and  it  had  no  difficulty  in 
obtaining  an  act  of  Parliaments  Therefore,  having  in  addition  a  charter 
from  the  Crown,  its  legal  position  at  this  time  was  perfectly  secure. 
The  East  India  and  African  companies  had  charters,  but  not  acts  of 
Parliament,  though  curiously  enough  it  was  the  Lords  and  not  the 
Commons  which  had  prevented  measures,  promoted  by  each,  from 
becoming  law*. 

Externally,  and  in  its  final  results,  the  action  of  the  House  of 
Commons  at  the  beginning  of  the  reign  of  William  III.  was  directed 
towards  the  control  by  Parliament  of  grants,  made  by  the  sovereign 
relating  to  foreign  trade.  In  reality,  the  true  inwardness  of  the  situation 
depended  on  the  relation  of  the  companies  to  the  party  politics  of  the 
time.  The  African  company  had  been  the  creation  of  James  II.,  and  it 
w«is  natural  that  the  Parliaments,  held  after  the  Revolution,  should  view 
it  with  coldness.  The  East  Indian  undertaking  had  also  become  involved 
in  the  party-struggle  through  the  action  of  Sir  Josia  Child,  who,  as 
governor,  had  committed  the  company  to  the  support  of  James  II. 
Hitherto  the  court  had  kept  out  of  politics  as  far  as  possible,  and  the 
change  of  policy  was  bitterly  opposed  by  a  minority  of  the  stock- 
holders, amongst  whom  was  Thomas  Papillon.  Child  was  able  to  carry 
the  day,  and  the  dissentient  members  were  forced  to  sell  their  stock. 
After  the  Revolution  they  had  their  revenge,  since  the  party,  to  which 
they  belonged,  had  a  majority  in  the  House  of  Commons.  The  only 
difficulty  was  the  discovery  of  the  means  by  which  they  could  make 
the  best  use  of  their  victory.  The  different  moves  in  the  complicated 
financial  duel  are  detailed  elsewhere*,  and  it  only  remains  to  sketch  the 
progress  of  the  struggle  in  broad  outlines.    Many  of  the  ejected  members 

^  A  further  calculation  in  which  no  allowance  is  made  for  interest  on  the 
original  investment  will  be  found  infray  ii.  p.  28. 

2  Vide  infra,  ii.  p.  231.  3  /^j^.^  „,  pp.  21,  119. 

^  Ibid.,  II.  pp.  145-66. 

s.  c.  I.  ai 


322        Control  of  the  East  India  Co.  1688-92    [chap.  xvi. 

of  the  company  had  become  interlopers,  and  they  managed  to  force  the 
company  to  purchase  their  ships  and  goods  at  a  bonus  of  25  per  cent, 
and  to  pay  them  half  the  profit  made^  The  object  of  this  manceuvre 
was  to  exhaust  the  liquid  resources  of  the  company,  which  had  already 
been  depleted  by  the  payment  of  large  dividends.  It  is  usual  (and 
indeed  almost  inevitable  apart  from  specific  evidence  to  the  contrary) 
to  regard  this  contest  as  one  between  the  rich  corporation  on  the  one  side 
and  a  group  of  independent  merchants  of  moderate  means  on  the  other. 
As  a  matter  of  fact  the  contrary  was  the  truth  of  the  matter.  The 
minority,  who  had  sold  their  stock,  realized  at  prices  not  below  300; 
and  it  is  probable  that  with  reasonable  prudence  they  would  have  made 
as  much  or  more  by  the  use  of  their  capital  as  those,  who  retained  their 
shares,  received  in  dividends.  By  no  stretch  of  language  can  these  people 
be  described  as  "  poor  interlopers,'"*  when  they  retired  from  the  company 
having  made  the  large  nett  profit  of  upwards  of  1,000  per  cent.,  or  in 
some  cases  of  even  more.  Nor  were  they  conscientious  advocates  of  a 
less  restricted  foreign  trade,  since  Papillon,  their  leader,  had  written  in 
defence  of  the  monopoly  and  advocated  the  formation  of  a  new  company 
with  equally  extensive  privileges.  The  abrogation  of  the  monopoly  was 
the  ostensible  end  aimed  at  by  opponents  of  the  existing  company,  but 
it  may  well  be  doubted  whether  it  was  their  main  objective.  Traces 
are  discoverable  of  a  most  ingenious  secret  scheme,  which  had  two 
branches — the  one  to  force  Child  from  his  position  in  the  management 
of  the  company  by  limitation  of  the  votes  that  might  be  cast  by  any 
individual;  and  then,  either  by  Parliamentary  agitation  or  other  means, 
to  reduce  the  price  of  the  stock  to  a  low  level,  or  alternatively  to  compel 
the  company  to  make  a  new  issue  of  stock  at  par.  Obviously,  it  would 
be  a  dextrous  manipulation  of  the  situation  if  men,  who  had  sold  out  at 
300,  could  re-purchase  at  100  or  below  it.  It  should  be  carefully  noted 
that  these  two  parts  of  the  scheme  were  mutually  interdependent. 
Forcing  the  stock  to  a  low  price  would  be  useless,  unless  the  Whig 
faction  could  control  the  voting.  That  nothing  should  be  wanting  in 
the  organization  of  the  opponents  of  the  company,  they  formed  them- 
selves into  a  syndicate  in  1692,  and  adequate  funds  were  provided  for 
commencing  their  campaign  2. 

The  first  stage  in  the  battle  for  the  control  of  the  East  India 
company  resulted  in  an  apparent  victory  for  the  opposition -faction. 
It  had  almost  everything  in  its  favour,  ample  resources  in  hand  and 
the  support  of  a  large  body  of  capital  behind  it.  With  feeling  on  the 
whole  on  its  side  and   means  to  purchase  votes  in  a  venal  House  of 

1  A  Collection  of  the  Debates  and  Proceedings  in  Parliament  in  1694  and  1695  upon 
the  Enquiry  into  the  late  Briberies  and  Corrupt  Practices,  1696,  p.  11. 

2  Vid£  infra,  ii.  p.  160. 


CHAP.  XVI.]      Control  of  the  East  India  Co.  1693-5        323 

Commons^,  while  many  members  of  the  syndicate  were  also  members  of 
the  Committee  appointed  to  enquire  into  the  East  India  trade,  it  was 
easy  to  use  the  debates  and  resolutions  in  Parliament  as  a  most  effective 
device  for  "bearing'''  the  stock  of  the  company.  The  campaign  succeeded 
in  reducing  the  price  and  in  forcing  the  committees  to  receive  a  new 
subscription  at  par  in  1693  (which  brought  the  total  nominal  capital  to 
very  nearly  one  and  a  half  millions),  although  the  average  price  of  the 
stock  during  the  previous  year  had  been  145.  While  the  apparent 
victory  remained  with  the  syndicate,  its  operations  had  failed  in  one 
important  respect.  The  allotment  of  the  new  stock,  created  in  1693, 
was  to  be  made  proportionately  to  the  total  applications ;  and,  in  spite 
of  the  complicated  provisions  regulating  the  holding  of  stock  and  voting 
rights',  it  is  clear  that  the  control  of  the  undertaking  would  rest  with 
the  old  members.  In  all  other  respects,  even  after  the  most  lavish 
bribery  which  probably  exceeded  that  revealed  at  the  enquiry  of  1695, 
circumstances  were  against  the  policy  advocated  by  the  party  which 
supported  Child.  It  was  found  impossible  to  avoid  the  regulation  of 
the  company  by  the  State,  and  everything  was  against  the  supporting 
of  the  market  in  the  company's  stock.  The  declaration  of  dividends, 
that  were  probably  not  earned,  and  the  interruption  of  trade  through 
the  war  tended  to  depress  the  price,  while  the  covering  of  bribes  by 
dealings  in  the  stock  would  also  have  tended  to  reduce  quotations^ 

It  is  plain  that  the  failure  of  the  opposition  to  the  company  in  an 
essential  element  in  its  plan  of  attack  made  it  necessary  to  have  recourse 
to  the  second  and  more  doubtful  scheme,  and  it  was  resolved  to  secure 
the  complete  overthrow  of  the  original  company  which  was  to  be  re- 
placed by  a  new  one.  This  scheme  was  far  from  tending  towards  a  freer 
trade  with  India.  The  idea  of  the  syndicate  was  to  form  another 
monopolistic  company,  but  to  change  the  membership.  The  illiberal 
spirit  of  the  House  of  Commons  is  shown  by  its  arbitrary  treatment  of 
the  Darien  undertaking,  which,  though  it  needed  modification  for  the 
protection  of  existing  interests,  scarcely  merited  the  severity  that  would 
have  been  accorded  to  a  treasonable  plot*. 

The  formation  of  the  Scottish  undertaking  was  a  further  blow  to  the 
company  which  had  barely  survived  the  attack  on  it  in  the  Commons, 

1  While  the  bribery  of  the  company  was  exposed  at  the  enquiry  in  1695,  that  of 
its  opponents  was  not  made  public  but  it  is  frequently  alluded  to  by  contemporary 
writers,  e.g.  The  Anatomy  of  Exchange  Alley  in  Chronicles  and  Characters  of  the  i<tock 
Exchange,  by  John  Francis,  London,  1849,  pp.  380,  381.  Even  clearer  evidence  is 
afforded  by  the  raising  of  funds  by  the  syndicate  as  early  as  1692,  which  were  not 
required  for  any  legitimate  purpose, 

2  Vide  infra,  ii.  p.  158.  '  Ibid.,  ii.  p.  169. 
*  Ibid.,  II.  pp.  214,  215. 

21—2 


324  The  East  India  Company  1688-98      [chap.  xvi. 

and  its  opponents  succeeded  in  the  same  year  (1695)  in  obtaining  an 
enquiry  into  its  corrupt  practices  in   1693.      As  the  result  of  these 
adverse  factors,  the  stock  had  fallen  as  low  as  50  at  the  end  of  October 
1695,  and  it  was  clear  that  the  legal  and  financial  position  was  pre- 
carious.    The  second  stage  of  the  Parliamentary  struggle  was  reached 
in  1698,  when,  by  act  of  Parliament,  the  monopoly  of  the  East  India 
trade  was  conferred  on  those  who  subscribed  to  a  loan  of  ^2,000,000  to 
the  State  and  who  might  either  trade  independently  (as  in  a  regulated 
company)  or  might  form  a  joint-stock  and  be  incorporated,  or  finally 
me  subscribers  might  adopt  the  first  method  and  others  the  second, 
e  original  company,  which  was  henceforth  distinguished  from  the  new 
organization  as  "the  Old  Company"  or  "the  London  Company,**''  had 
sufficient  influence  to  obtain  the  insertion  of  a  clause  in  the  act  whereby 
corporations  might  subscribe  to  the  two  million  loan ;  and,  by  availing 
itself  of  this  provision,  it  remained  entitled  to  a  certain  proportion  of 
the   India   trade.     Thus,   in   the   short   space   of  ten   years,  the   Old 
Company  had  experienced  a  complete  change  in  its  status.     In  1689, 
like  the  African  company,  it  had  been  in  the  habit  of  licensing  the 
ships  of  owners,  who  were  not  members,  to  trade  within  the  limits 
assigned  to  it,  subject  to  certain  conditions  and  to  the  payment  of  a 
royalty.     Ten  years  later  its  vessels  were  in  effect  "permission-ships,*" 
which  were  under  the  general  orders  of  an  outside  body;  so  that  the 
company  had  fallen  from  its  former  dominance  to  an  inferior  position, 
entitled  only  to  about  one-sixth  of  the  trade,  though  still  able  to  act  as 
a  corporation. 

Owing  to  the  intricacy  of  the  capital  accounts  of  the  three  foreign 
trading  companies,  something  remains  to  be  said,  in  order  to  present  a 
summary,  showing  how  they  were  affected  by  the  issues  of  bonus  stock 
and  by  the  subscriptions  made  by  the  East  India  and  African  under- 
takings. In  1689  the  total  amounts  paid  in  by  members  of  these 
ventures  was  under  half  a  million  ^  Owing  to  the  doubling  of  the 
stock  of  the  East  India  company  in  1682,  the  aggregate  nominal 
capital  (1689)  was  over  =£^850,000.  Then  came  the  stock  dividends  of 
the  African  and  Hudson*'s  Bay  companies  (1690-1)  augmenting  the 
nominal  capital,  which  thus  became  upwards  of  IJ  millions^  There- 
fore, at  the  end  of  1691,  the  capitalization  was  about  two  and  a  half 
times  the  payments  made  by  the  members.  In  1692 — the  first  year  in 
which  there  are  quotations  for  the  shares  of  all  three  companies,  at 


'  Treating  the  small  amount  of  stock  issued  by  the  African  company  to  the 
creditors  and  shareholders  in  the  previous  undertaking  as  cash — vide  infra,  ii. 
pp.  19,  32,  177,  237. 

2  Ihid,j  II.  pp.  26,  232. 


CHAP.  XVI.]     Valuations  of  Capital  of  Cos,  1689-94        325 

middle  prices  in  each  case — the  valuation  on  this  basis  is  slightly  more 
than  an  increase  of  10  per  cent,  on  the  nominal  capital : 

Particulars  of  the  Capitalization  of  Foreign  trading  companies^ 

1689-92. 


Valuation  at 

Paid  in 

Nominal 

Nominal 

middle-prioe 

cash 

Capital  1689 

Capital  1692 

of  1692 

East  India  Company 

369,891 

739,782 

739,782 

1,068,986 

Royal  African     „ 

111,100 

111,100 

444,400 

213,312 

Hudson's  Bay     „ 

10,500 

10,600 

31,600 

74,812 

Totals        491,491  861,382       1,216,682         1,367,109 

In  1693  both  the  East  India  and  African  companies  made  issues  of 
stock  which  brought  the  whole  nominal  amount  to  close  on  .£'2,150,000, 
representing  actual  payments  of  d£*l  ,300,000  and  worth  at  the  middle 
market-prices  of  1694  less  than  J'l  ,435,000  or  a  depreciation  of  one- 
third  of  the  nominal  value: 

Particulars  of  the  Capitalization  of  Foreign  trading  companies, 

1693-4. 


Valuation  at 

Paid  in 

Nominal 

middle-price 

cash 

Capital  1694 

of  1694 

East  India  Company  * 

1,118,109 

1,488,000 

1,212,720 

Royal  African     „ 

183,440 

625,250 

168,176 

Hudson's  Bay     „ 

10,500 

31,500 

62,762 

1,312,049       2,144,750        1,433,667 

1  At  the  time  of  the  subscription  of  the  new  capital,  that  already  in  existence 
was  £744,000,  which  was  doubled.  It  appears  that  the  difference  between  the 
capital  in  1689  and  that  immediately  before  the  new  issue  was  paid  for  in  cash. 


CHAPTER  XVII. 
The  Boom  of  1692-5  in  the  Stock  and  Share  Market. 

One  of  the  most  striking  differences  between  modern  conditions  and 
those  which  obtained  in  the  seventeenth  century  is  the  comparative 
absence  of  interaction  between  different  branches  of  commerce  in  the 
earlier  period.  A  remarkable  instance  of  this  tendency  is  to  be  found 
in  the  depression  in  the  foreign  trades  from  1692  to  1695,  while  there 
was  very  great  activity  in  the  formation  and  development  of  under- 
takings for  home  and  colonial  industries.  This  activity  moreover  is 
of  special  interest ;  since,  for  the  first  time,  it  might  be  described  as 
Imperial  rather  than  English — Scotland,  Ireland,  Wales  and  the  colonies 
falling  within  the  scope  of  the  movement — while,  in  the  main,  the 
development  took  place  through  the  joint-stock  form  of  organization. 

Several  causes  contributed  towards  the  boom  which  resulted.  The 
earliest  in  point  of  time  was  one  which,  being  in  many  respects  acci- 
dental, stood  outside  the  general  historical  evolution,  though  it  produced 
an  assignable  portion  of  the  joint-effect.  This  was  the  salving  in  1688 
by  William  Phipps  on  behalf  of  a  company  formed  in  London,  of  the 
treasure  from  a  Spanish  plate  ship,  which  had  been  lost  in  1646  near 
Hispaniola.  The  return  to  the  adventurers  was  about  one  hundred 
times  the  respective  sums  they  had  subscribed ^  This  was  a  wonderfully 
successful  result;  and  while  the  total  bullion  recovered  was  about  equal 
to  that  divided  to  the  shareholders  in  Drake's  voyage  round  the  world, 
the  yield  per  cent,  was  twice  as  great  in  the  later  expedition  ^  It  is 
almost  unnecessary  to  add  that  many  other  treasure-seeking  companies 
were  formed  and  that,  as  long  as  the  news  of  the  success  of  the  original 
expedition  was  fresh,  the  shares  commanded  considerable  premiums. 
Particulars  can  be  recovered  of  ten  of  these  companies  during  the  period 
before  1696,  and  more  may  be  urged  in  their  favour  than  might  at  first 
sight  be  anticipated.  It  is  true  that  as  a  general  rule  two  cases  of  out- 
standing profits  in  the  same  kind  of  venture  rarely  occur  at  one  period ; 

1  Vide  infra,  ii.  pp.  485,  486. 

2  Divisions  to  shareholders — Drake's  expedition   4,700  per  cent..  Expedition 
1687-8  10,000  per  cent. 


CHAP.  XVII.]    Treasure-seeking  Companies  1688-92  327 

but,  in  justification  of  the  speculators  of  1690,  the  great  advance  of 
invention  must  be  remembered.  There  were  several  patents  for  early 
types  of  the  diving-bell  and  one  which  seems  an  anticipation  of  the 
outiit  of  the  modem  diver,  while  in  another  case  it  wets  proposed  to 
raise  the  fragments  of  a  wreck  by  means  of  a  system  of  levers  and 
grappling  irons,  known  as  "  the  sea-crab.*"  Many  of  these  patents  were 
developed  by  means  of  companies,  which  however  were  dependent  on  a 
second  group  of  undertakings,  which  received  a  grant  from  the  Crown 
of  the  wrecks  in  a  certain  area.  The  latter  class  of  company  either 
arranged  with  the  syndicate  owning  a  diving-engine  on  the  basis  of  a 
royalty,  or  proceeded  to  effect  salvage  from  any  wrecks  they  discovered 
by  less  scientific  means.  In  only  one  case  was  a  charter  of  incorporation 
obtained — that  of  the  Governor  and  Company  for  raising  wrecks  in 
England — the  remaining  companies  were  founded  on  the  patent  or 
royal  grant  to  an  individual,  or  to  an  individual  and  his  partners,  and 
were  established  by  a  deed  of  settlements 

Probably  at  any  period  the  success  of  the  Hispaniola  treasure-hunt 
would  have  occasioned  the  formation  of  similar  ventures,  but  since  there 
was  no  special  reason  for  this  discovery  having  happened  at  the  time 
that  it  did,  the  concurrence  of  these  schemes  with  a  number  of  others 
is  an  accidental,  rather  than  an  essential  element  in  the  movement. 
Including  wreck-recovery  and  foreign  trading  companies,  at  the  end 
of  1695  there  are  known  to  have  been  close  on  150  in  existence,  of 
which  two-thirds  were  English  and  the  remaining  third  Scottish.  The 
companies  formed  up  to  the  Revolution  only  amounted  to  about  15  per 
cent,  of  the  total  in  each  country.  In  England  there  were  the  three 
foreign-trading  companies^,  the  Mines  Royal,  the  Mineral  and  Battery 
Works^,  the  New  River^,  the  York-buildings  %  and  the  Shadwell  Water- 
works*, the  Fire-insurance  company  ^  that  for  making  Salt  Water  fresh ^ 
the  Convex  Lights^,  the  White  Paper  Makers^",  the  Royal  Lustring 
company  ^^  and  lastly  a  provincial  water  supply  undertaking  at  New- 
castle ^^  In  Scotland,  besides  the  Newmills  company^',  there  was 
another  for  the  production  of  cloth ^*,  the  Wool-card  manufactory", 
a  Soaperie^*,  two  Sugaries^',  a  glass ^^  and  also  a  fishing   company^*. 

1  Vide  infra,  ii.  pp.  486-9.  ^  Ibid.,  ii.  pp.  21,  160,  233. 

3  IHd.,  II.  pp.  404,  405,  427.  *  Ibid.,  in.  pp.  25,  26. 

6  Ibid.,  III.  pp.  418,  419.  «  Ibid.,  in.  pp.  32,  33. 

7  md..  III.  pp.  375,  376.  8  Vide  supra,  p.  315. 
9  Vide  infra,  in.  pp.  52,  53.  ^o  Ibid,,  in.  p.  64. 

"  Ibid.,  in.  p.  73.  i^  /^tU,  in.  pp.  34,  35. 

13  Ibid.,  in.  pp.  138-50.  "  IHd.,  in.  p.  159. 

1^  Ibid.,  in.  pp.  176-9.  w  Ibid.,  in.  pp.  150,  151. 

"  Ibid.,  ni.  pp.  133-5.  18  Ibid.,  in.  p.  189. 
i»  Ibid.,  II.  pp.  377,  378. 


328     Capital  diverted  to  Home  Trade  1690-3    [chap.  xvn. 

Thus  the  companies  formed  between  1688  and  1695  constitute  up- 
wards of  85  per  cent,  of  the  total  at  the  later  date;  indeed,  if  the 
companies  alresidy  established  in  England  together  with  the  treasure- 
seeking  enterprizes  be  deducted,  the  new  foundations  amount  to  nearly 
75  per  cent,  of  the  whole. 

The  coincidence  of  depression  in  foreign  trade  and  immense  activity 
in  new  schemes  for  the  development  of  Great  Britain  and  the 
colonies  is  to  be  explained  by  the  direct  and  indirect  effects  of  the  war 
with  France.  There  can  be  little  doubt  that,  through  this  contest, 
British  foreign  commerce  suffered  very  severely.  Up  to  1692  it  is 
recorded  that  the  French  had  captured  no  less  than  3,000  British  ships  ^; 
which,  according  to  another  account,  were  valued  at  15  millions 2.  In 
1696-7  the  total  exports  and  imports  were  just  over  7  millions^,  thus 
showing  a  slight  reduction  on  the  figures  of  1662-3  and  a  decline,  as 
compared  with  1688,  of  about  39  per  cent,**  Similar  results  are  arrived 
at  by  investigation  of  the  revenue  derived  from  the  Customs.  Com- 
paring the  financial  year  1687-8  with  1691-2,  1692-3,  1693-4  the 
annual  falling  off  was  close  on  30  per  cent."  It  follows  that,  at  the 
beginning  of  the  war,  there  was  a  large  portion  of  the  capital,  formerly 
used  in  extra-British  trade,  which  was  perforce  withdrawn.  For  a  short 
period,  namely  from  the  time  that  the  shipping  trade  was  seriously 
interrupted  until  the  great  cost  of  the  war  began  to  demand  more  and 
more  of  the  resources  of  the  nation,  this  floating  capital  was  available 
for  investments  at  home  that  were  considered  promising.  But  the 
interruption  of  trade  with  France  suggested  the  establishment  of 
factories  to  produce  goods,  previously  imported  from  abroad — an  ex- 
periment which  was  the  more  likely  to  succeed  owing  to  the  conjunction 
of  technical  skill  and  adequate  capital.  The  war  was  also  responsible 
for  the  formation  of  armament  companies  and  for  banking  and  finance 
undertakings.  The  latter  group  came  into  existence  towards  the  end  of 
the  period  of  activity  when  the  strain  of  the  struggle  began  to  be  felt. 
Then  the  animated  dealings  in  the  shares  of  these  companies  turned 
attention  to  other  home  investments,  such  as  mining,  water-supply 
and  miscellaneous  ventures.  Generally  speaking,  the  majority  of  the 
companies  started  in  this  period  were  designed  to  establish  either  an 


1  Anderson,  Annals  of  Commerce,  in.  p.  134. 

2  An  Essay  upon  Projects  [by  Daniel  Defoe],  1697,  p.  5. 

3  State  of  the  Trade  of  Great  Britain,  by  Sir  Charles  Whitworth,  London^  1776. 
*  1662-3  total  foreign  trade         7f  mil.  £s. 

1688        „         „  ,,  11^     „     „ 

1696-7    „         „         ,i  7      ,,     „ 

5  Vide  infra,  in.  pp.  536,  637 ;  The  Manuscripts  of  the  House  of  Lords  1693-5, 
pp.  60-92. 


CHAP,  xvn.]    Houghton's  Stock  and  Share  List  1692-4    329 

industry  new  to  the  country,  or  to  improve  an  existing  one  by  a  process 
not  in  ordinary  use. 

It  is  fortunate  that  the  whole  course  of  this  period  of  excitement 
has  been  chronicled  with  great  care  and  fulness  by  competent  con- 
temporary observers.  In  March  1692  John  Houghton  began  to  circulate 
his  newspaper,  which  was  intended  to  record  the  industrial  progress  of 
the  time^  After  a  leading  article  or  essay,  the  rest  of  the  publication 
was  devoted  to  commercial  intelligence,  amongst  which  was  included  a 
list  of  the  current  quotations  of  the  shares  of  companies.  Though  there 
had  been  previous  occasional  references  in  the  press  to  the  price  of  India 
stock,  this  series  of  prices,  compiled  by  Houghton,  was  (as  far  as  is 
known)  the  first  regular  record  of  the  fluctuations  of  the  share-market. 
It  begins  with  the  prices  of  only  eight  securities — which  are  entered  as 
follows — "  India,  Guinea,  H[udson"'s]  Bay,  Paper,  Linnen,  Copper,  Glass, 
Wreck '^.'^  Within  a  month  the  number  of  shares  was  nearly  doubled 
and  by  May  1694  the  names  of  52  companies  were  included.  Sub- 
sequently twelve  other  undertakings  were  added,  so  that,  altogether, 
he  mentions  64  concerns  in  the  shares  of  which  there  were  active 
dealings.  It  is  not  to  be  concluded,  however,  that  prices  are  recorded 
in  every  case.  When  the  list  was  greatly  extended  in  1694,  prices  are 
printed  opposite  the  names  of  some  ten  companies,  the  shares  of  which 
fluctuated  from  week  to  week ;  and  a  note  was  appended  that  sub- 
scribers, who  wished  to  possess  a  record  of  transactions  in  the  remaining 
shares,  could  have  these  written  in  by  hand  in  their  copies  at  a  small 
extra  charge. 

Houghton's  list  as  revised  in  1694  had  two  peculiarities  which  are  of 
some  interest.  He  had  a  special  notation  for  indicating  the  status  of  the 
companies — one,  which  was  incorporated  by  charter,  had  its  name  printed 
in  black-letter  type;  another,  founded  on  a  patent,  but  without  incor- 
poration, was  printed  in  italics,  and  the  remainder,  which  had  neither 
charter  nor  patent,  in  ordinary  type.  The  study  of  such  a  record, 
intended  for  temporary  use,  presents  certain  difficulties;  since,  in  order 
to  save  space,  Houghton  described  the  companies,  not  under  the  lengthy 
titles  by  which  they  were  established,  but  by  those  current  amongst  the 
brokers  in  the  Exchange.  These  names  seem  to  diff'er  even  more  widely 
from  those  in  official  use  than  the  "Coras,"  "Doras,"  or  "Bags"  of  the 
end  of  the  nineteenth  century.  For  instance,  the  following  are  a  few  of 
the  cases  where  there  is  a  considerable  diversity  between  the  correct  title 
and  that  employed  by  Houghton: 

^  Collections  for  Improvement  of  Husbandry  and  Trade  1691/2  to  1703. 

2  Reproductions  of  three  types  of  Houghton's  list  will  be  found  on  p.  351. 


330    Houghton's  Classijication  of  Cos.  1692-4    [chap.  xvii. 


As  printed  in  Houghton's  List 


Copper— ^earn 


Saltpetre — Dockwra 


*Leather 


Names  of  Companies. 

The  title  in  the  charter  or  (where  there 
was  no  charter)  that  used  by  the 
Company 

=  The  Governor    and    Company   of   the 

Copper  Miners  in  Enia^land^ — (founded 

by  Sir  Joseph  Heme). 
=  The  Governor  and  Company  for  casting 

and  making  guns  and  ordnance  in 

moulds  of  metal  2. 
=  The    Company   for    making    imitation 

Russia-leather  3. 


In  other  cases  Houghton's  nomenclature  is  liable  to  mislead  a  modem 
reader.  Under  the  head  of  "  Engines '"'  he  gives,  "  Overal,  Poyntz,  Night, 
Lofting.""  The  first  entry  relates  to  a  company  formed  to  exploit  the 
diving  machine  invented  by  John  Overing  or  Overal,  the  second  to  another 
for  Captain  Poyntz'  draining  pump"*.  One  is  inclined  to  assume  that  the 
third  undertaking  was  a  syndicate  to  develope  some  engine,  brought  out 
by  a  person  named  Night;  whereas,  on  the  contrary,  the  invention  in 
question  was  the  burglar-alarm  of  John  Tyzack^  Finally,  finding  that 
in  this  case  the  reference  is  to  a  "  night-engine,"  not  to  one  invented  by 
someone  named  Night,  the  natural  inference  would  be  that  the  last 
company,  under  this  heading,  was  connected  with  a  "  lofting-engine."" 
Once  more  the  clue  proves  misleading,  the  correct  title  of  the  company 
being  the  Company  for  the  Sucking-Worm  Engines  of  Mr.  John  Loftingh, 
Merchant,  at  Bow  Church  Yard,  Cheapside,  which  was  intended  to  quench 
fires*.  In  view  of  these  and  similar  difficulties,  connected  with  Houghton's 
list,  it  will  be  advisable  to  re-classify  the  undertakings  which  he  mentions 
with  the  addition  of  others  drawn  from  an  anonymous  pamphlet — Anglian 
Tutamen,  and  an  Essay  on  Projects  ascribed  to  Defoe. 

Leaving  on  one  side  for  the  present  the  companies  for  the  recovery 
of  treasure  from  wrecks,  the  most  convenient  method  of  classification 
will  be  to  collect  together  the  various  undertakings,  which  either  came 
into  existence  or  which  received  an  impetus  from  the  diversion  of  capital 
from  foreign  trade  and  the  other  circumstances  arising  out  of  the  war. 
'^  First  of  all,  there  was  a  group  of  companies  which  aimed  at  producing 
commodities  previously  imported,  the  supply  of  which  had  now  ceased 
or  which  was  precarious.  The  White  Paper  Makers  and  Royal  Lustring 
companies  received  a  great  stimulus^,  and  an  undertaking  was  promoted 
to  consolidate  several  of  the  mills  which  had  long  existed  in  England  for 


1  Vide  infra,  ii.  p.  430. 
3  Ibid.,  m.  pp.  119,  120. 
6  Ibid.,  II.  p.  483. 
1  Ibid.,  III.  pp.  66,  67,  75. 


2  Ibid.,  II.  p.  473,  III.  p.  109. 
*  Ibid.,  II.  pp.  482,  487,  488. 
«  Ibid.,u.  D.  481. 


OHAP.  XVII.]  Textile^  Armament,  Banking  Cos.  1692-5    331 

making  the  common  brown-paper^  A  "Blue  Paper  Company'"  was  in 
reality  a  venture  for  the  manufacture  of  wall-paf)er8'.  A  serious  effort 
was  made  to  produce  the  damask  and  fine  linens,  hitherto  imported  from 
France,  and  companies  were  established  to  carry  on  this  industry  in 
England,  Ireland  and  Scotland,  while  another  organization  was  incor- 
porated for  the  production  of  both  linen  and  paper  in  the  Channel 
Islands'.  Then  there  were  two  glass-making  companies — the  one  for 
plate-glass  and  the  other  for  bottles ^  The  title  of  the  Society  for 
Improving  Native  Manufactures  so  as  to  keep  out  the  Wet  is  self-explana- 
tory",  and  another  venture  of  the  same  kind  was  the  Company  for  making 
'' German  Balls''''  to  preserve  Leather  from  damp\  Finally  the  same 
causes  led  to  a  revival  of  English-tapestry  making,  and  in  1691  the 
Royal  factories  (established  in  1619)  were  transferred  to  a  company  ^ 

The  effect  of  the  war  was  apparent  in  the  formation  of  armament 
companies.  There  were  three  created  to  manufacture  powder^  two  to 
produce  ordnance*  and  another,  the  charter  of  which  had  a  curious 
history,  for  making  "hollow  sword  blades^"."  To  this  group  may  be 
added  the  Governor  and  Company  for  smelting  down  Lead  with  Pit  and 
Sea  Coal,  since  the  promotei-s  proposed  to  cast  the  lead  they  smelted 
into  shot  and  bullets". 

A  third  group  of  undertakings,  connected  with  the  war,  were  the 
banking  and  finance  companies.  The  Bank  of  England  came  into 
existence  through  the  provision  of  a  loan  to  the  government^''.  The 
Million  bank  (1695)  had  relation  to  a  previous  state-debt,  which  was 
in  the  form  of  short  term  annuities,  some  of  the  holders  of  which  joined 
together  with  a  view  to  using  the  aggregate  credit,  so  obtained,  in 
founding  a  financing  business  which  would  continue  to  yield  an  income 
after  that  of  the  annuities  had  terminated  ^^  Then  the  scarcity  of  money 
produced  the  land  bank  schemes,  which  proposed  to  establish  "  a  fund  of 
credit"  on  a  non-metallic  basis ^*.  There  was  yet  another  bank,  known 
as  the  Orphans',  which  arose  out  of  the  efforts  of  the  City  of  London  to 
remedy  its  previous  mismanagement  of  the  provident  fund  in  its  care. 
This  bank,  however,  in  which  shares  were  sold  to  the  public,  was  entangled 
in  the  speculative  management  which  had  caused  the  collapse  of  a  former 
undertaking,  started  by  the  same  promoters,  and  it  was  soon  wound  up". 

1  Vide  infra,  in.  p.  71.  ^  Ibid.,  iii.  p.  72. 

3  Ibid.,  III.  pp.  71,  00,  99,  164, 165.                        *  Ibid.,  ni.  p.  111. 

*  Ibid.,  III.  p.  120.  «  Ibid.,  in.  p.  120. 

7  Ibid.,  III.  p.  118.  8  jind.,  II.  pp.  472,  473. 

»  Ibid.,  III.  p.  109.  10  Ibid.,  iii.  pp.  109,  435. 

"  Ibid.,  II.  p.  442.  12  jf^^^  II,.  pp.  204,  205. 

13  Ibid.,  III.  pp.  275-7.  1*  Ibid.,  in.  pp.  246-52. 

1^  According  to  the  author  of  the  Anglice  Tutamen  "'\t  had  not  the  shadow  or 


332     Mining,  Fishery  and  Land  Cos.  1692-5    [chap.  xvii. 

This  movement  extended  to  Ireland,  since  about  this  time  several 
merchants  at  Dublin  proposed  to  establish  a  public  bank  there  ^ 

The  other  side  of  the  great  activity  lay  in  the  development  of  strictly 
localized  industries.  Mining  began  to  require  more  capital,  and  it,  too, 
gained  by  the  progress  of  invention  through  the  recovery  of  several  flooded 
workings  by  means  of  pumping-engines.  Up  to  1695  there  were  three 
coal  companies^,  six  for  copper  mining  and  smelting^,  the  same  number 
for  developing  lead-mines'*,  three  for  salt'',  and  four  for  alum,  lapis 
calaminaris,  tin  and  antimony^.  Amongst  these  are  included  the  two 
Elizabethan  societies  for  the  Mines  Royal  and  the  Mineral  and  Battery 
Works,  the  former  now  appearing  in  Houghton's  list  as  "  the  mines  royal 
of  Cumberland  and  Carolina,"  while  in  several  cases  the  rights  of  these 
bodies  were  safeguarded  in  charters  granted  prior  to  1693  when  an  act, 
changing  the  legal  position  of  mines,  where  there  were  veins  of  the 
precious  metals,  was  passed'^. 

Attempts  were  also  made  to  revive  industries,  which  had  formerly 
been  favoured.  Thus  there  was  a  group  of  fishing  companies,  which 
included  a  new  whaling  or  Greenland  undertaking^,  a  revival  of  the 
society  for  the  Royal  Fishery"  and  organizations  for  the  taking  of  cod 
at  Newfoundland  and  for  the  seeking  for  pearls.  Another  case  of  the 
revival  of  bodies,  similar  to  those  that  had  been  popular  in  earlier  periods, 
was  the  establishment  of  land  and  colonizing  companies,  amongst  which 
are  mentioned  the  Pennsylvania,  New  Jersey  and  Tobago^"  plantations, 
and  to  this  group  may  be  added  the  syndicate  for  Poyntz'  draining 
engine  which  was  said  to  have  added  to  the  quantity  of  arable  land 
previously  available". 

The  boom  of  1692-5  brought  into  existence  several  new  water-supply 
companies,  and  in  three  cases  very  long-established  undertakings  were 
transferred  from  private  or  municipal  to  joint-stock  management.  There 
were  the  London  Bridge  water  works,  dating  back  to  1582,  which  enter- 
prize  was  turned  into  a  company  before  1694^^  The  City  conduits  had 
been  in  the  hands  of  the  Council  since  their  inception,  and  these  were 
greatly  improved  by  the  expenditure  of  capital  in  making  reservoirs  and 
laying  new  mains ^^.     In  1692  another  water  company  was  founded,  which 

substance  of  real  good/'  in  fact  the  "  conduct  of  the  Chamber  had  been  so  bad  that 
the  City  remained  without  credit,"  pp.  13-16. 

1  Public  Record  Office,  Dublin,  Schedule  of  Petitions  to  Parliament,  ii.  p.  672 ; 
Reasonable  Proposals  for  a  Perpetual  Fund  or  Bank  in  Dublin  [1696]. 

2  Vide  infra,  n.  pp.  461,  462.  3  n^i^,^  „.  pp.  431^  436-9. 
*  Ibid.,  II.  pp.  440-4.                                             ^  Ibid.,  11.  p.  470. 

6  Ibid.,  II.  pp.  427,  475,  476,  III.  p.  417.  ^  Ibid.,  11.  pp.  404,  443. 

8  Ibid.,  II.  pp.  76,  379.  9  Ibid.,  11.  p.  376. 

10  lUd.,  III.  pp.  416,  417.  "  Ibid.,  11.  p.  482. 

12  Ibid.,  III.  pp.  11,  12.  13  ji^^^  ,j,,  pp,  12,  13. 


CHAP,  xvn.]      Water,  Iron  and  other  Cos.  1692-5  333 

is  specially  noteworthy.  It  was  known  as  the  Hampstead  Aqueducts^  and 
the  property  acquired  was  one  with  an  exceedingly  lengthy  history,  since 
it  was  fii-st  authorized  by  an  act  in  favour  of  the  City  in  1546.  It  is  of 
interest  to  note  that  this  company  (which  still  exists  in  its  corporate 
capacity)  brought  together  William  Paterson,  the  founder  of  the  Bank 
of  England,  and  John  Holland,  the  leading  promoter  of  the  Bank  of 
Scotland  \  Other  water  undertakings  owned  by  companies  were  described 
as  the  South wark,  the  Mill-bank  and  Marchmonfs  Water- works*.  As 
is  shown  elsewhere',  there  was  keen  competition  between  these  different 
bodies  not  only  as  to  areas,  but  also  in  the  engineering  methods  adopted. 
The  New  River,  the  City  C'onduits,  and  the  Hampstead  Aqueducts 
professed  to  supply  spring-water,  flowing  to  the  consumers  through 
gravitation.  On  the  other  hand,  the  converse  method  was  adopted  by 
other  companies  of  forcing  up  Thames  water  by  means  of  pumping 
devices.  The  York-buildings  undertaking  obtained  power  by  using 
horses  to  work  the  pumping  apparatus*.  The  London  Bridge  company 
availed  itself  of  power  arising  out  of  the  peculiar  construction  of  the 
bridge,  for  the  generation  of  which  water-wheels  were  employed'.  In 
the  undertaking  founded  by  Marchmont  and  others  the  idea  was  similar, 
the  fall  of  water  for  driving  the  wheel  being  obtained  from  the  sewers'. 

Another  group  of  companies  was  that  engaged  in  manufactures 
connected  with  iron  and  the  other  metals.  There  was  for  instance  the 
Governor  and  Company  for  making  Iron  with  Pit-coaP,  another  for  the 
production  of  Venetian  steel®,  one  for  gilding  metals,  known  as  the 
Dipping  company^,  and  a  fourth  "for  lacquering  after  the  manner  of 
Japan^"." 

Lastly  comes  a  group  of  miscellaneous  undertakings,  including  a 
sawing  company,  and  those  for  running  a  stage-coach,  for  making  whale- 
bone whips,  for  Russia  leather,  and  the  device,  known  as  the  night-engine, 
already  mentioned". 

These  companies  were  formed  in  London  and  the  scope  of  their 
operations  applied  to  the  whole  Empire,  except  Scotland.  North  of  the 
Tweed  there  were  similar  ventures  on  a  joint-stock  basis,  such  as  a 
powder  company,  a  bank  (the  Bank  of  Scotland,  1695),  glfiss-works, 
a  white-paper  undertaking,  mining  and  draining  companies  ^^     Moreover, 

1  Vide  infra,  iii.  pp.  4,  5.  2  ji^ia,^  m.  pp.  32,  33. 

3  Ibid.,  III.  pp.  13,  14,  25-7.  *  Ibid.,  in.  p.  419. 

6  Ibid.,  in.  p.  11.  8  Ibid.,  in.  p.  33. 

7  Ibid.,  II.  p.  467.  ®  Ibid.,  in.  p.  109. 

9  Ibid.,  III.  p.  108.  ^^  Vide  infra,  ui.  p.  119. 

"  Ibid.,  II.  p.  483;  Houghton,  Collections  for  Improvement  of  Husbandry  and 
Trade,  London,  1691-1703,  No.  166,  July  26,  1694;  Post-boy,  July  16,  Sept  3, 
1696. 

12  Vide  infra,  lu.  pp.  183,  186,  187,  189,  193,  263.. 


334  Scottish  Companies  1692-5         [chap.  xvn. 

owing  to  the  want  of  industrial  development,  it  had  been  found  possible  to 
obtain  privileges  for  certain  manufactures  which  were  new  there,  though 
long  established  in  England,  such  as  four  broad-cloth  companies,  one  for 
wool-cards,  another  sail-cloth  and  two  more  for  ropes  and  cordage  \  The 
combination  of  sugar  refining  and  the  distillation  of  rum  was  highly 
successful,  and  three  of  these  works  had  been  started  ^  In  England  soap- 
boiling  and  whaling  were  distinct  industries;  but  in  Scotland  these  were 
both  earned  on  by  the  same  company;  and,  after  it  had  abandoned  the 
Greenland  trade,  another  company  was  established  to  prosecute  the  latter 
enterprize^. 

In  order  to  obtain  a  quantitative  expression  of  the  importance  of  the 
joint-stock  movement  during  the  six  years  succeeding  the  Revolution,  it 
would  be  desirable  to  frame  a  statement  of  the  total  capital  of  the  150 
bodies  of  this  kind,  which  were  in  existence  up  to  the  end  of  1695.  It 
is  almost  inevitable  that  sufficiently  complete  materials  for  such  a  calcu- 
lation are  wanting.  There  was  no  registration  of  financial  details,  and 
many  of  the  ventures  (especially  in  Scotland)  were  semi-private  concerns. 
Further,  where  information  relating  to  the  capitalization  has  survived,  it 
is  often  fragmentary.  Sometimes  the  number  of  shares  in  a  company  is 
recorded  but  not  the  nominal  value  of  each,  or  again  there  may  be  a 
statement  of  the  total  shares  into  which  the  capital  was  divided  and  their 
amount,  but  in  some  cases  all  these  were  not  offered  for  subscription. 
Elsewhere  the  only  particulars  obtainable  consist  of  an  estimate  of  the 
funds  required  to  establish  a  certain  industry,  and  it  may  have  been  that 
the  amount  actually  provided  was  much  less.  Then,  there  were  the  cases 
of  the  old  companies  such  as  the  Mines  Royal,  the  Mineral  and  Battery 
Works  and  the  New  River.  Though  the  original  capital  of  the  two 
Elizabethan  societies  is  known,  it  is  obvious  that  such  figures  are  of  no 
value  for  an  estimate  of  the  worth  of  the  assets  from  1690  to  1694^ 
Therefore,  since  information  on  this  head  is  wanting  at  the  later  date, 
for  the  purposes  of  the  present  enquiry,  these  undertakings  must  be 
classed  as  those  of  which  the  capital  is  unknown.  The  New  River 
company  is  in  a  different  category.  During  three-quarters  of  a  century 
it  had  been  using  income  for  developing  and  extending  its  property',  and 
therefore  the  most  reliable  estimate  of  the  whole  value,  representing  the 
capitalization  of  its  earning  power,  would  be  that  based  on  the  price  at 
which  a  whole  share  changed  hands. 

Taking  then  137  joint-stock  companies  for  home  and  colonial  under- 
takings, in  the  shares  of  which  at  the  end  of  1695  there  is  known  to 
have  been  dealings,  the  capital  at  that  date,  subject  to  the  limitations 

1   Vide  infra,  iii.  pp.  169,  174-9.  ^  n^^t.,  iii.  p.  136. 

3  Ihid.,  III.  pp.  131,  132.  *  Ibid,  ii.,  pp.  387,  416-8. 

«  Ibid.,  III.  pp.  25,  28. 


CHAP.  XVII.]      Capital  invested  in  Companies  1695  336 

mentioned  above,  is  recorded  or  can  be  recovered  in  the  case  of  seventeen 
in  England  and  of  seven  in  Scotland.  It  is  certain  that  these  twenty- 
four  undertakings  include  all  those  with  a  very  large  capital ;  and,  except 
in  a  very  few  cases,  those  with  a  very  small  capital  are  excluded.  It 
remains  to  obtain  some  average  for  the  latter  undertakings,  some  of 
which  must  have  had  a  very  modest  outlay  for  starting  the  business, 
while  that  of  others  was  considerable.  Amongst  the  latter  may  be 
mentioned  one  of  the  salt-petre  companies  which  had  five  factories*,  and 
the  City  Conduits,  the  capital  of  which  (after  its  amalgamation  with  the 
London  Bridge  undertaking  in  1703)  was  ^150,000^  On  the  other 
hand,  the  average  original  expenditure  of  the  treasure-recovery  companies 
would  be  under  ^^2,000  each,  and  it  is  difficult  to  see  how  the  London 
to  Norwich  Stage-coach  company  or  that  for  making  whalebone  whips 
could  require  a  capital  of  more  than  a  few  hundreds.  For  these  reaisons, 
the  average  cost  of  establishing  73  companies  in  England  is  estimated  at 
£5fiOQ  each  up  to  1695  and  in  Scotland  at  <£3,000  each  to  the  same 
date.  The  following  statement  gives  a  detailed  estimate  of  the  capital 
of  all  the  companies  known  to  have  been  in  existence  in  1695: 

Estimate  of  the  Capital  of  Joint-Stock  Companies  1695. 

(1)  Companies — England  and  Wales,  Ireland  and  Colonies 

(exclusive  of  those  engaged  in  foreign  trade)  ^ 
The  New  River  Company— 72  shares  at  £4,000  per 

share*  £288,000 

„     White   Paper   Makers  of   England   (estimate  of 

capital  required)^ 100,000 

„    Hampstead  Aqueducts— capital  paid  up^ 12,000 

,,    Convex  Lights  Company^      25,600 

„    King's  and  Queen's  Corporation  for  the  Linen  Manu- 
facture in  England — nominal  capital   £10,000, 
amount  issued  and  paid  up  in  1696,  exclusive  of 
premium^     ...         ...         ...         ...         ...         ...  3,400 

„    King's  and  Queen's  Corporation  for  the  Linen  Manu- 
facture   in   Ireland— nominal  capital   £5,000— 

issued^  2,000 

„    Royal  Lustring  Company,  exclusive  of  premium  ^^  60,000 

„    Glass-Makers  of  London" 25,000 

„    York  Buildings  Water- Works  12       4,800 

Newcastle  Water  Company  13       3,500 


£624,300 


1   Vide  infra,  ii.  pp.  473,  474.  ^  /^^.^  „,.  p.  15. 
3  For  particulars  of  these  vide  supra,  p.  326. 

*  Ibid.y  HI.  pp.  25,  26,  31.  "  Ibid.,  in.  p.  64. 

6  Ibid.,  111.  pp.  5,  9.  7  Ibid.,  iii.  p.  59. 

8  Ibid.,  III.  p.  91.  »  Ibid.,  m.  p.  100. 

10  Ibid.,  III.  p.  75.  "  Ibid.,  iii.  p.  111. 

12  Ibid.,  in.  p.  419.  "  Ibid.,  iii.  p.  35. 


336  Capital  invested  in  Companies  1695    [chap.  xvii. 

Forward      £524,300 
Company  formed  to   develope  the  lead  mines  of  Sir 

Carberry  Price  ^—4,800  shares  from  1691-3  at  17  81,600 

Company  of  Copper-Miners  in   England — 700   shares 

sold  at  572      39,900 

Company  for  making  iron  with  Pit-coal — paid  up^      ...  10,500 

Royal  Fishery  Company — paid  up  about*  ...         ...  50,000 

Company  of  Merchants  trading  into  Greenland — paid 

upfi        40,000 

Bank  of  England— 60  %  called  up  on  £1,200,000  ^      ...         720,000 
Bank  of  Tickets  of  the  Million  Adventure — amount 

paid  up''  80,000 

Total  capital,  paid  up  or  taken  as  paid  up  of  17  companies      £1,546,300 

Estimated  capital  of  73  companies  at  £5,000  each        ...  365,000 

(2)  Scottish  Companies^ 
Capital   of  the  Scottish  Royal  Fishery  company,  the 

Glasgow    Soaperie,    Glasgow   Sugarie,   the    Paper 

Manufacture,    Bank  of  Scotland,   Glasgow   Rope 

company  and  Scots  Linen  Manufacture  (all  taken 

as  paid  up)        74,033 

Estimated  capital  of  40  other  manufactures  at  £3,000 

each       120,000 


194,033 


Total  paid  up  capital  of  137  English,  Scottish,  Irish 
and  colonial  companies  (exclusive  of  those  engaged 

in  foreign  trade)  2,105,333 

I  Nominal  capital  of  three  foreign-trading  companies®  ...  2,144,750 

Total  140  companies  (1695)  £4,250,083 

It  is  not  a  little  noteworthy  that,  out  of  a  total  capitalization  of 
,^4,250,083  amongst  140  companies,  no  less  than  ^^3,232,000  is  to  be 
assigned  to  six  undertakings — the  East  India,  African  and  Hudson's  Bay 
enterprizes  for  foreign  trade  and  the  New  River,  the  Bank  of  England 
and  the  Million  Bank.  The  proportion  of  Scotland  in  the  total  is  also 
worthy  of  attention. 

If  the  foregoing  estimate  is  well-founded,  it  is  of  value,  not  as  an 
isolated  statement,  but  in  relation  to  the  whole  wealth  employed  in  trade 
at  the  time.  According  to  King  the  stock  in  shipping,  forts,  stores, 
goods,  instruments  and  materials  of  England  and  Wales  amounted  to 

1  Vide  infra,  11.  pp.  440,  443,  444.  2  /j^^^^  ji^  pp^  432^  435. 

3  Ihid.,  II.  p.  467.  *  Ihid.,  11.  p.  375. 

5  Ihid.,  II.  p.  379.  «  Ihid.,  in.  pp.  206,  207. 

7  Ihid.,  III.  p.  277  (note). 

8  Ihid.,  II.  pp.  377,  378,  iii.  pp.  131,  134,  166,  174,  183,  256;  Records  of  a 
Scottish  Cloth  Manufactory  at  New  Mills  Haddingtonshire  1681-1703,  ed.  W.  R.  Scott 
(Scot.  Hist.  Soc.  1905),  pp.  xlvi.,  xlvii.  The  capital  of  the  Darien  company  is  not 
included  in  this  estimate  since  (though  a  charter  was  signed  in  1695)  the  capital  was 
not  paid  in. 

»  Vide  supra,  p.  325. 


CHAP.  XVII.]  Formation  of  Companies  1690-5  337 

33  millions  in  1688.  The  value  of  forts,  save  as  built  by  a  foreign- 
trading  company,  was  not  a  mercantile  asset,  and  on  the  other  hand  this 
total  omits  buildings  used  as  factories  or  stores^  Moreover,  between 
1688  and  1695,  there  had  been  a  considerable  reduction  in  this  portion 
of  the  national  wealth,  occasioned  by  losses  of  ships  and  goods  during 
the  war  and  by  the  ensuing  high  taxation.  Taking  these  various  elements 
into  account,  the  industrial  wealth  (exclusive  of  agriculture)  of  England 
and  Wales  in  1695  would  probably  be  somewhat  under  33  millions. 
Now  the  estimated  nominal  or  issued  capital  of  English  and  Welsh 
companies  was  over  4  millions  or  about  12  per  cent,  of  the  commercial 
investments  of  the  country.  The  fact  that  the  nominal  capital  of  the 
foreign-trading  companies  was  subject  to  a  considerable  depreciation 
must  be  allowed  for;  and,  while  some  of  the  other  companies'  shares 
were  above  par,  those  of  the  rest  showed  a  decline,  so  that  on  the  basis 
of  the  market-prices  of  1694-5  it  seems  possible  that  the  investments 
in  the  140  companies  dealt  in  were  considered  to  amount  to  about  one-  | 
tenth  of  the  wealth  which  was  estimated  to  be  employed  in  the  home 
and  foreign  trade. 

When  the  joint-stock  system  was  the  medium  for  directing  so  much 
of  the  commercial  capital  of  England,  it  is  worth  enquiring  with  some  '"^^ 
detail  how  these  companies  were  formed  and  organized.  There  can 
be  little  doubt  that  the  pre-occupation  of  the  government  by  the  war 
tended  to  favour  the  establishing  of  companies,  many  of  which  acted  as 
a  corporation  without  seeking  a  charter — a  course  which,  under  other 
circumstances,  would  have  attracted  the  attention  of  the  law-officers  of 
the  Crown.  As  it  was,  no  obstacle  was  placed  in  the  way  of  those  who 
wished  to  start  any  enterprize  by  means  of  a  joint-stock,  and  it  was  left 
to  the  founders  of  each  venture  to  prescribe  the  constitution  under  which 
it  was  to  work.  Houghton  describes  the  manner  in  which  a  company 
was  established  for  exploiting  a  new  industry  in  the  following  terms — 
-^"When  someone  has  thought  of  an  art  or  invention  or  discovered  some 
mine  or  knows  or  thinks  of  some  new  (or  new  manner  of)  way  of  trade, 
whereby  he  thinks  a  considerable  gain  may  be  gotten,  and  yet  this  cannot 
well,  or  not  so  well  as  otherwise,  be  carried  on  by  a  private  purse,  or  if 
it  could  the  hazard  would  be  too  great;  he  then  imparts  it  to  some  friend 
or  friends,  who  commonly  consider  or  enquire  of  the  learned  whether  it 
will  stand  good  in  law,  and,  if  so,  they  contrive  some  articles  for  a  con- 
stitution, whereof  to  give  the  first  inventor  a  sum  of  money  for  his  charge 
or  some  certain  number  of  the  shares  or  both  is  certainly  and  with  good 
reason  one  of  the  principal  articles.     This  done,  the  parties  concerned 

*  The  rent  of  business  premises  in  London  at  this  period  was  very  low — The 
First  Nine  Years  of  the  Bank  of  England,  by  J.  E.  T.  Rogers,  Oxford,  1887, 
pp.  15,  16. 

s.  c.  I.  22 


J 


338  Charters  of  Companies  1690-5     [chap.  xvn. 

let  it  be  known  and  each  brings  in  his  friend,  till  all  the  shares  be  bought 
at  such  a  price  as  stated,  either  presently  or  to  pay  down  all  the  money 
(which  is  generally  found  to  be  the  best  and  easiest  way)  or  only  some 
part  which  is  often  troublesome,  one  or  other  being  backward  of  paying 
his  quotas"  In  some  of  the  mining  companies,  the  constitution  had 
been  settled  before  much  development  work  was  accomplished,  and  the 
right  to  mine  in  a  certain  area  was  divided  in  certain  cases  into  400 
shares  which  were  issued  at  prices  varying  from  10*.  to  21*.''  Sub- 
sequently calls  were  made  as  required. 

In  a  few  cases  a  charter  was  sought,  either  in  the  case  of  an  important 
body,  such  as  the  Bank  of  England,  in  order  to  regularize  its  corporate 
character  or,  as  in  that  of  the  White  Paper  Makers,  to  induce  the  sub- 
scription of  capital*.  Companies  of  medium  size  endeavoured  to  obtain 
incorporation  for  a  variety  of  reasons.  Sometimes  special  privileges,  over 
and  above  those  generally  conferred  by  a  patent  for  a  new  invention, 
were  granted,  as  for  instance  in  the  case  of  the  King's  and  Queen's 
Corporation  for  the  Linen  Manufacture,  where  the  monopoly  of  certain 
processes  was  conveyed  for  ever*.  As  a  rule  existing  interests  were  safe- 
guarded in  the  charters.  Thus  the  company  for  digging  and  working 
Mines  by  a  Joint-Stock  in  England  was  obliged  to  make  agreements  with 
the  society  of  Mines  RoyaP,  and  the  Lustring  company  was  subject  to 
the  inspection  of  the  Weavers  of  London^.  It  often  happened  that  a 
charter  was  required  to  free  a  joint-stock  company  from  liability  for 
debts,  incurred  by  the  promoters  prior  to  its  formation.  This  reason 
was  urged  openly  by  the  shareholders  in  the  company  for  Smelting  Iron 
with  Pit-coal',  and  also  in  the  application  to  the  Scottish  Parliament  by 
the  Linen  Manufacture^. 

In  view  of  the  controversy  in  Parliament  concerning  the  East  India 
and  African  companies,  the  facility  with  which  acts  granting  or  confirming 
monopolies  were  passed  in  England  is  remarkable.  Not  only  was  a 
Greenland  company  re-established,  but  the  White  Paper  Makers,  the 
Royal  Lustring  company,  two  water-works  and  the  Droitwich  rock-salt 
undertaking  were  invested  with  extensive  privileges  under  act  of  Parlia- 
ments Owing  to  the  tendency  of  Scottish  commercial  policy,  the  Estates 
were  always  ready  to  extend  the  benefits  of  the  act  of  1681  to  new  or 
revived  ^  industries  ^S 

J 

^  Collections,  ut  supra.  No.  98,  June  16,  1694. 

2  Anglice  Tutamen,  p.  18. 

3  Vide  infra,  in.  p.  64.  *  Ibid.,  in.  p.  91. 

6  Ibid.,  II.  p.  441.  «  Ibid.,  in.  pp.  74,  75. 

7  Ibid.,  II.  p.  466.  8  Ibid.,  III.  pp.  165,  166. 
»  Ibid.,  II.  pp.  379,  470;  in.  pp.  32,  65,  66,  77,  419. 

w  Ibid.,  III.  pp.  128,  129. 


CHAP,  xvn.]   Government  of  Companies  1690-5  389 

The  constitution  formulated  by  the  charters  or  deeds  of  settlement 
in  England  mainly  followed  the  established  model  of  a  governor,  deputy- 
governor  and  assistants.  The  number  of  the  latter  varied,  but,  as  a  rule, 
it  was  a  multiple  or  sub-multiple  of  12.  It  was  15  in  the  English  Linen 
Corporation  S  24  in  the  Saltpetre  company  and  in  the  Shad  well  water- 
works ^  18  in  the  Guernsey  Linen  and  Paper  company'  and  12  in  the 
Royal  Lustring  and  Sword  Blade  companies*.  There  were  a  few  ex- 
ceptions. Both  the  company  for  the  working  and  digging  of  Mines  and 
the  Glass-Makers  had  20  assistants',  the  Merchants  trading  into  Greenland 
16",  the  company  for  smelting  Iron  with  Pit-coal  14',  and  the  York 
Buildings  company  only  7^  In  the  Million  Bank  and  the  Hampstead 
Aqueducts  (both  of  which  were  established  by  deed)  there  was  a  committee 
of  management,  consisting  of  24  members  in  the  former  and  of  from 
9  to  15  in  the  latter ^  The  use  of  the  term,  managers,  shows  a  trace  of 
Scottish  influence ^°,  and  conversely  many  of  the  companies,  working  in 
Scotland,  were  organized  on  the  English  model.  Finally,  for  the  first 
time  (after  the  exceptional  use  of  the  term  by  the  Guinea  company  in 
1618)  the  name  of  director  displaces  that  of  assistant — the  former  being 
used  by  the  banks  of  England  and  of  Scotland  and  by  the  Darien 
company,  while  the  Royal  Fishery  society,  when  reconstituted  in  1692, 
divided  its  12  committees  into  4  directors  and  8  masters". 

The  qualification  for  the  office  of  assistant,  director  or  committee 
varied  according  to  the  size  of  the  undertaking.  In  the  Royal  Lustring 
company  it  was  10  shares  (£^^0y\  in  the  Hampstead  Aqueducts  10  shares 
{£9>mY\  in  the  Million  Bank  ^^500  stock",  in  the  Bank  of  England 
«£'2,000  stock i»,  in  the  Bank  of  Scotland  <^3,000  Scots^«.  Those  eligible 
as  governors  of  the  Bank  of  England  must  hold  <£*4,000,  in  the  Bank  of 
Scotland  ^8,000  Scots. 

The  quorum  at  meetings  of  the  governing  body  was  frequently  seven, 
often  subject  to  the  proviso  that  the  governor  or  deputy -governor  must 
be  included.  Companies  which  fixed  on  this  number  were  constituted 
with  courts  of  varying  membership — those  of  the  Saltpetre  company 
and  the  Bank  of  Scotland  totalled  twenty-six^',  that  of  the  Guernsey 
Paper  company  twenty ^^,  that  of  the  company  for  smelting  Iron  with 

»   Vide  infra  J  in.  p.  91.  2  /^^^^  „  p  473.  j^  p,  32. 

3  IHd.,  III.  p.  71.  *  Ibid.,  iii.  pp.  76,  435. 

°  Ibid.,  11.  p.  441 ;  iii.  p.  111.  «  Ibid.,  11.  p.  379. 

7  lUd.,  II.  p.  467.  »  Ibid.,  in.  p.  420. 
9  Ibid.,  III.  pp.  6,  275. 

*®  Both  Paterson  and  Holland  were  interested  in  the  Hampstead  Aqueducts. 

"  Vide  infra,  11.  pp.  212,  374;  iii.  pp.  205,  254.           »=^  Ibid.,  iii.  p.  76. 

13  Ibid.,  III.  p.  6.  i^  Ibid.,  iii.  p.  275. 

15  Ibid.,  111.  p.  205.  18  Ibid.,  iii.  p.  254. 

"  Ibid.,  II.  p.  473;  ui.  p.  264.  ^  Ibid.,  in.  p.  71. 

22—2 


340  Voting  Rights  in  Companies  1690-5  [chap.  xvii. 

Pit-coal  16^  and  that  of  the  Copper-Miners  12 2.  On  the  other  hand,  it 
required  13  out  of  the  court  of  26  in  the  Bank  of  England  to  form  a 
quorum^;  5  out  of  14  in  the  Sword  Blade  company*,  while  the  Hampstead 
Aqueducts  was  unique  in  providing  that  a  majority  of  the  committee 
of  management,  present  at  any  meeting,  should  suffice ^^ 

The  controversy  on  the  subject  of  voting  rights  in  the  East  India 
company  affected  the  constitution  of  other  bodies  in  this  respect.  On 
the  one  side,  there  were  a  number  of  companies  in  which  there  was  no 
limitation,  for  instance  in  the  White  Paper  Makers,  the  Saltpetre 
company,  that  for  digging  Mines  and  the  Hampstead  Aqueducts  each 
share  entitled  the  holder  to  one  vote*.  On  the  other  hand,  while  there 
was  no  undertaking  which  followed  what  is  said  to  have  been  the  method 
of  a  regulated  company,  namely  the  decision  of  controverted  questions  by 
a  poll  of  persons,  the  Bank  of  England  approached  near  to  this  rule, 
since  it  was  decreed  that  no  member  should  have  more  than  one  vote'^. 
The  difference  lay  in  the  fact  that  those,  who  owned  less  than  =£^500 
stock,  had  no  voting-power.  Similarly  in  the  Million  Bank  «j^300  of 
stock  entitled  the  holder  to  one  vote  and  no  one  might  have  more  than 
one®.  In  the  Royal  Lustring  company  10  shares  (d^250)  conferred  a 
single  vote,  whifch  in  this  case  also  was  the  maximum  allowed  to  each 
member".  There  was  a  third  group  which  aimed  at  a  compromise 
between  the  extreme  tendencies.  Like  the  Bank  of  England,  a^500 
stock  in  the  Greenland  company  gave  a  right  to  one  vote,  .^1,000  stock 
to  two,  the  latter  being  the  maximum  for  any  person*".  According  to 
the  constitution  of  Barbon's  land  bank,  .^'SOO  stock  qualified  for  two 
votes,  £600  stock  for  three  votes,  =^1,000  stock  for  five  votes — the  latter 
being  the  maximum".  In  the  company  for  smelting  Iron  with  Pit-coal 
the  maximum  was  four  votes ^2,  in  the  Scots  Linen  manufacture  five  votes ^'. 
In  some  cases,  where  no  express  maximum  is  mentioned,  there  was  still 
a  limit  to  the  votes  of  any  shareholder,  arising  out  of  the  restriction 
which  limited  the  amount  of  stock  or  shares  that  might  be  subscribed 
for  or  owned  by  a  member.  Thus  in  the  Bank  of  Scotland  each  i?l,000 
Scots  carried  one  vote,  subject  to  the  proviso  that  no  one  might  take  up 
more  than  ^^20,000  Scots ^*;  and  in  the  society  of  White  writing  and 
printing  Paper,  while  each  five  shares  gave  a  vote,  the  maximum  holding 

1  Vide  infra,  n.  p.  467.  ^  IMd.,  11.  p.  431. 

3  Ibid.y  III.  p.  205.  *  Ibid.,  iii.  p.  435. 

fi  Ibid.,  111.  p.  6. 

6  Ibid.,  II.  pp.  441,  473;  iii.  pp.  6,  64. 

7  Ibid.,  III.  p.  206.  8  /ftjgj,^  III,  p.  435. 
9  Ibid.,  III.  p.  76.                                                 10  Ibid.,  11.  p.  379. 

"  IMd.,  III.  p.  250.  12  75,-^,^  I,,  p.  467. 

13  Ibid.,  III.  p.  167.  "  I  hid.,  in.  p.  254. 


CHAP,  xvn.]       Shares  in  Companies  1690-5  841 

was  20  shares  ^  The  final  step  in  this  tendency,  as  it  existed  in  the 
seventeenth  century,  was  made  by  the  charter  of  the  Old  East  India 
company  (1698),  which  introduced  a  sliding  scale,  but  not  a  uniformly 
progressive  one'.  s^ 

As  a  rule,  the  capital  was  divided  into  shares,  and  in  this  respect  bxi 
advance  was  made  on  the  cumbersome  methods  of  the  Mines  Royal  and 
the  New  River,  with  their  units  of  large  nominal  value  divided  into 
fractions.  In  the  Convex  Lights  company  there  were  originally  32 
shares  on  each  of  which  .£^800  was  called  up';  but,  as  a  rule,  almost  all 
the  shares,  created  after  1688,  were  of  small  amount  and  necessarily 
the  whole  number  was  increased.  Those  in  the  Lustring  company 
were  d£^25  nominal*,  in  the  English  Linen  corporation  £\0  nominal', 
and  in  the  Scottish^  and  Irish'  undertakings  of  £5  in  each  case.  French 
promoters  especially  departed  from  the  previous  practice  of  making  the 
whole  number  of  shares  consist  of  dozens.  In  the  ventures  promoted 
by  Nicholas  Dupin,  such  as  the  Linen  companies,  in  those  formed  for 
England  and  Ireland  there  were  1,000  shares  and  in  the  former  under- 
taking 340  were  first  sold  about  par,  and  soon  afterwards  another  issue 
was  made  at  a  premium  of  400  per  cent.*  The  whole  capital  of  the 
Lustring  company  was  placed  at  a  premium  of  20  per  cent.' 
^  The  methods  of  the  promoters  (or  as  they  were  called  the  "projectors'')  ^ 
of  the  period  varied.  Some  of  them,  like  Thomas  Neale,  who  was 
responsible  for  a  number  of  lotteries  and  treasure-seeking  ventures, 
seem  to  have  foisted  doubtful  schemes  on  the  investing  public  during 
a  time  of  excitement ^°.  Others  like  Nicholas  Dupin",  who  founded  the 
Linen  and  White  Paper  companies,  William  Paterson^'^  (the  Bank  of 
England,  Darien  company,  Hampstead  Aqueducts),  John  Holland" 
(the  Bank  of  Scotland,  Manufacture  of  Colchester  Baizes  &c.)  were 
quite  honest  and  above  board.  ITiey  agreed  that  they  were  to  have 
a  certain  sum  in  payment  for  their  preliminary  expenses  and  the  idea 
on  which  the  enterprize  was  based.  This  arrangement  was  either 
embodied  in  the  articles  of  the  company  or  each  share  was  charged 

*  Vide  infra,  iii.  p.  183. 

2  Charters  granted  to  the  East  India  Company  from  1601,  also  the  Treaties  and 
Grants  made,  or  obtained  from,  the  Princes  and  Powers  in  India  from  the  year  1756  to 
1772,  I.  p.  185. 

3  Vide  infra,  in.  pp.  63,  69.  *  Ibid.,  in.  p.  75. 

6  Ibid.,  III.  p.  91.  «  Ibid.,  in.  p.  167. 

7  Ibid.,  ill.  p.  99.  8  Ibid.,  in.  p.  93. 

9  Ibid.,  III.  p.  75. 

10  Ibid.,  II.  pp.  441,  488.  Cf.  Defoe's  description  of  the  Bloutegondegours  in 
The  Consolidator:  or  Sundry  Transactions  from  the  World  in  the  Moon,  1705, 
pp.  257-65. 

"  Vide  infra,  in.  pp.  64,  71,  91,  92. 

12  Ibid.,  II.  pp.  207-12;  in.  pp.  5,  204,  206.  "  Ibid.,  in.  pp.  173,  262. 


342  Promoters'  Profits  1690-5         [chap.  xvii. 

with  a  certain  amount  which  was  known  to  be  the  recompense  of  the 
promoter.  The  largest  payment  to  be  made  of  this  kind  was  that 
assigned  to  William  Paterson  by  the  Darien  company,  which  however 
he  afterwards  surrendered.  This  was  fixed  at  2  per  cent,  on  the  original 
nominal  capital,  which  would  have  brought  him  dS'l 2,000,  and  3  per 
cent,  on  the  profits  for  twenty-one  years.  The  latter  was  redeemable 
by  the  company  for  a  further  <£*12,000^  In  the  Hampstead  Aqueducts, 
Paterson  and  two  others  bargained  to  receive  100  shares,  equal  to  £%000 
nominal  between  them,  without  any  payment.  These  were  known  as 
•''  maiden  shares."  They  were  also  to  have  the  option  of  subscribing  in 
cash  for  a  like  number,  and  a  sum  of  £9.00  they  had  disbursed  on 
account  of  the  undertaking  was  to  be  deducted  from  the  calls  dae  on 
the  "chargeable  shares."  It  follows  that  the  vendors'*  shares  in  this  case 
came  to  18  per  cent,  of  the  whole  nominal  capitals 

Dupin  received  100  shares  of  £5  each  in  the  Irish  Linen  company,  but 
he  was  unable  to  retain  any  of  them  for  himself,  some  being  distributed 
to  possible  rivals  in  Ireland  while  the  balance  was  transferred  to  the 
English  corporation'.  Warned  by  this  experience  he  arranged  that 
those  who  applied  for  shares  in  the  Scottish  Linen  and  Paper  companies 
should  pay  him  personally  8*.  in  the  case  of  the  former,  and  18*.  in 
that  of  the  latter,  on  each  share  they  took  up^  Again,  in  the  land 
bank,  the  promoters,  Asgill  and  Barbon,  were  to  receive  ^3,000  stock 
and  ^2,000  stock,  respectively  ^  In  view  of  the  special  circumstances 
none  of  these  payments  were  excessive,  and  it  is  clear  that  the  more 
important  companies  were  not  mulcted  by  the  promoters."^ 

When  a  company  was  formed  a  difficulty  arose  in  the  payment  of 
calls.  Owing  to  the  scarcity  of  capital  it  was  found  that  the  advice  of 
Houghton^,  to  exact  the  full  payment  at  once,  was  a  counsel  of  per- 
fection; and,  if  adopted,  it  would  have  reduced  applications  for  shares. 
On  the  other  hand,  when  it  was  arranged  that  calls  were  to  be  met  at 
fixed  dates,  shareholders  were  dilatory  in  discharging  their  obligations 
in  this  respect.  From  the  beginning  of  the  joint-stock  system  in  every 
case,  where  there  are  details  of  the  proceedings  of  any  company,  there 
are  repeated  complaints  on  this  head.  In  the  Mines  Royal,  the  Mineral 
and  Battery  Works,  the  company  of  Kathai,  the  early  East  India 
voyages,  the  Virginia  and  Fishery  companies,  there  were  shareholders  in 
arrear  who  only  paid  under  pressure'.  The  Guinea  company  of  1631 
is  said  to  have  been  ruined  in  this  way^.     Royalty  was  no  exception,  for 

1  Vide  infra,  ii.  pp.  211,  212.  2  jud.,  in.  p.  5. 

3  Ihid.y  III.  pp.  92,  93.  *  IMd.,  iii.  pp.  167,  183. 

*  Ihid.,  III.  p.  260.  ®  Vide  supra,  p.  338. 

7  Vide  infra,  11.  pp.  79,  81,  94,  95,  100,  107,  261,  365,  387,  416. 

8  Ibid.,  II.  pp.  14,  16. 


CHAP.  XVII.]      CalU,  Fees  and  Fines  1690-5  343 

Charles  II.  was  one  of  the  defaulting  adventurers  in  a  later  African 
undertaking*.  Merchants  also  were  offendei*s  in  this  respect,  and  the 
managers  of  the  Newmills  company  found  it  necessary  to  institute  legal 
proceedings  against  members  who  were  far  behind  in  their  payments*. 
This  characteristic  of  the  seventeenth  century  shareholder  explains  a 
clause  which  appears  in  the  charters  of  the  Sword  Blade  company  and 
of  the  Copper  Miners  that  failure  to  meet  calls  when  due  rendered  the  \/l 
sums,  already  subscribed  on  the  shares,  liable  to  forfeiture '. 

The  relation  of  the  governing  body  to  the  shareholders  varied  in 
different  companies.  Mention  has  already  been  made  of  the  great  split 
in  the  East  India  company  but  it  is  worthy  of  note  that,  a  few  years 
later,  when  this  body  was  assailed  from  outside.  Cook,  the  governor, 
was  loyal  to  the  shareholders  in  refusing,  as  long  as  it  was  possible,  to 
disclose  the  destination  of  the  secret  service  fund*.  The  connection 
between  Paterson  and  the  Darien  company  reveals  a  spirit  of  self- 
sacrifice  that  could  scarcely  be  anticipated  in  a  commercial  concern*. 
There  was  a  striking  solidarity  amongst  the  stockholders  of  the  Bank  of 
England  during  its  early  history;  and,  in  this  case,  the  directors  had  no 
fixed  fees,  but  "submitted  themselves  wholly  to  what  the  generality 
allowed  them  *."*"'  In  other  companies  it  was  usual  to  grant  each  of  the 
assistants  a  sum  varying  from  £\  down  to  2*.  Qd.  for  every  meeting  they 
attended'.  Sometimes  a  moderate  honorarium  was  provided,  which 
was  divisible  amongst  those  present  at  the  court;  while,  when  the 
Newmills  company  began  to  succeed,  each  manager  received  £\9.  sterling 
a  year®.  Elaborate  rules  were  framed  for  a  system  of  fines  to  punish 
unpunctuality,  which  in  some  cases  embodied  a  graduated  scale',  and  in 
others  particularized  the  clock  by  which  the  degree  of  lateness  should 
be  decided*". 

Unfortunately  there  were  instances  where  members  of  the  governing 
body  and  individual  shareholders  knowingly  betrayed  the  general  interest. 
A  member  of  the  Newmills  company  was  discovered  to  be  one  of  the 
chief  smugglers  of  English  cloth",  and  an  assistant  of  the  Royal  Lustring 

1  State  Papers,  Domestic,  Charles  II.,  cxlii.  1. 

2  Minutes  in  Records  of  a  Scottish  Cloth  Manufactory,  ut  supra,  p.  19. 

3  Vide  infra,  ii.  p.  431 ;  in.  p.  435.  *  Ihid.,  ii.  p.  160. 
^  A  History  of  William  Paterson  and  the  Darien  Company,  by  J.  S.  Barbour, 

Edinburgh,  1907,  p.  187. 

®  A  Short  Account  of  the  Bank  of  England,  p.  1. 

^  Houghton,  Collections,  ut  supra.  No.  98,  June  16,  1694. 

®  Minutes  in  Records  of  a  Scottish  Cloth  Manufactory,  ut  supra,  p.  261. 

»  Ibid.,  pp.  17,  311. 

^°  Early  History  of  the  Scots  Darien  Company  by  H.  Bingham  in  Scottish  Historical 
Review,  in.  p.  326 ;  vide  infra,  ii.  p.  192. 

"   Vide  infra,  in.  p.  146. 


344      Glamour  of ''  a  Fund  of  Credit "  1690-5  [chap.  xvii. 

company  was  proved  to  have  acted  in  concert  with  a  French  firm  whose 
object  was  to  overthrow  the  English  undertaking*.  It  was  asserted  also 
that  large  shareholders  used  the  knowledge  they  obtained  of  the  affairs 
of  a  certain  company  to  make  profits  by  speculation  in  the  shares,  but 
there  is  not  sufficient  evidence  available  to  confirm  this  statement. 

A  few  peculiarities  in  organization  are  deserving  of  mention.  It  was 
announced  that  some  of  the  shareholders  in  the  London  to  Norwich 
stage  coach  company  would  give  all  the  dividends  they  received  to 
charity,  and  the  remaining  members  promised  to  distribute  in  the  same 
way  all  profit  accruing  to  them  in  excess  of  10  per  cent.  ^  In  the  con- 
stitution of  the  Royal  Fishery  company  it  was  agreed  that  the  committees 
might  use  10  per  cent,  of  the  capital,  without  giving  the  shareholders 
any  account  of  how  such  moneys  had  been  disposed  of^  The  prospectus 
or  "preamble"  for  subscriptions  of  the  Million  Bank  promised  limited 
liability,  in  so  far  as  no  subscriber  should  be  further  answerable  than 
for  the  amount  of  his  stock*.  Local  considerations  introduced  several 
varieties  of  type  in  the  Scottish  companies.  The  Royal  Burghs  were  to 
subscribe  one-half  of  the  capital  of  the  Linen  manufacture,  and  the 
Leather-stamping  undertaking  might  not  enter  any  town  to  transact 
business  without  an  invitation  from  the  magistrates".  Since  so  much 
of  the  capital  for  the  development  of  Scottish  industries  had  been  raised 
in  England,  it  is  not  surprising  that  duplicate  books  of  the  Newmills, 
Linen,  Baize  and  Paper  companies  were  kept  in  London*. 

The  financial  methods  of  the  period  reveal,  not  only  the  real  scarcity 
of  capital,  but  the  strange  glamour  exercised  by  what  was  called  "a  fund 
of  credit."  The  Fire  Insurance  company,  the  Bank  of  England  and 
the  Million  Bank  all  carried  on  business  without  any  working  capital 
provided  by  the  members.  In  the  Insurance  undertaking,  the  partners 
in  1680  paid  the  debt,  incurred  by  Barbon,  and  pledged  a  rental  of 
.^2,160  a  year  as  a  security  against  claims  ^  Supposing  each  share- 
holder "subscribed"  the  same  amount  of  rental,  the  whole  uncalled 
capital  would  (at  18  years'  purchase)  be  worth  c£*38,880,  on  which  basis 
the  uncalled  liability  would  be  close  on  ,£'3,240  for  each  of  the  twelve 
shares.  Those  who  joined  the  Million  Bank  simply  deposited  certain 
government  securities,  for  which  they  received  a  specified  amount  of  the 
nominal  capital  of  the  undertaking,  and  the  funds  for  banking  were 
provided  by  the  depositors^.  The  original  state  of  the  Bank  of  England 
was  even  more  hazardous.     The  company  lent  d^l  ,200,000  for  a  term 

1  Vide  infra,  iii.  pp.  81-3. 

2  Houghton,  Collections,  No.  166,  July  26,  1695. 

3  Vide  infra,  ii.  p.  375.  *  Ibid.,  in.  p.  276. 

6  Ibid.,  III.  pp.  167,  194.  «  Ibid.,  iii.  pp.  150,  166,  173,  183. 

7  Ibid.,  III.  p.  375.  8  lUd.,  III.  pp.  275-7. 


CHAP.  XVII.]  Fluctuations  in  Prices  of  Stocks  1690-4     345 

of  years  to  the  State,  but  only  ^£720,000  was  called  up  at  first  from  the 
stockholders,  and  the  balance  of  ^^480,000  was  supplied  from  other 
sources,  chiefly  out  of  the  deposits ^  The  Bank  of  Scotland  was  the 
sole  exception,  since  it  had  a  working  capital  of  :j^l  0,000,  paid  by  the 
members^  The  same  magnified  expectation  of  the  value  of  "a  fund  of 
credit "'"'  was  at  the  root  of  the  land  bank  schemes  of  1695-6". 

The  activity  of  the  period  from  1689  to  1695  is  reflected  by  the 
transactions  in  the  shares  of  the  chief  industrial  companies.  The 
mechanism  of  stock  exchange  dealings  had  been  developed.  Time- 
bargains  were  well  understood,  and  "put  and  call  options'"  were  not 
unknown.  The  business  of  a  stockbroker  was  specialized,  and  a  tariff 
of  charges  had  been  established,  varying  from  10*.  to  6s.  per  share, 
while  the  transfer  fee  of  the  companies  was  2*.  6c?.* 

The  commencement  of  the  excitement  arose  from  the  remarkable 
success  of  the  syndicate  for  the  recovery  of  bullion  from  the  wreck  of 
the  Spanish  plate-ship  at  Hispaniola  in  1688*.  Until  1693  speculation 
in  similar  ventures  was  exceedingly  active;  and,  according  to  Defoe, 
some  of  the  shares  (probably  of  £5  or  =£^10  nominal)  changed  hands  at 
as  much  as  cS^^lOO*.  Then  from  1690  there  were  exaggerated  expec- 
tations of  the  profits  that  would  result  from  the  production  of  goods 
previously  imported  from  abroad.  Since  the  middle  of  the  reign  of 
Charles  II.,  there  had  been  much  jealousy  of  the  pre-eminence  of  France 
in  the  finer  textile  and  paper  industries.  During  the  war,  such  impor- 
tation was  prohibited;  and,  with  an  adequate  supply  of  technical  skill, 
it  seemed  a  necessary  conclusion  that  the  gains  to  be  made  by  the 
companies,  with  a  monopoly  of  some  process  in  one  of  these  trades, 
would  be  immense.  The  trend  of  quotations  in  the  shares  of  the  White 
Paper  Makers  company  shows  the  magnitude  of  these  expectations. 
The  first  price  recorded  was  60  at  the  end  of  March  1692.  Until 
May  9th  there  was  a  reaction,  and  at  that  date  the  quotation  was  41. 
For  the  next  two  years  the  market  advanced.  In  September  1693,  70 
was  reached,  and  thereafter  the  rise  was  rapid.  By  February  1694,  100 
was  quoted,  and  in  May  150 — an  increase  of  200  per  cent,  on  the  average 
recorded  price  of  1692^ 

The  fluctuations  in  the  shares  of  the  English  Linen  corporation  were 
somewhat  sensational.    In  1690  the  issue-price  was  10,  and  the  following 

1  Vide  infra,  in.  p.  207.  ^  /Wrf.,  ni.  p.  256. 

3  Ihid.,  in.  pp.  247-9. 

*  Houghton,  Collections y  Nos.  99,  101,  June  24,  July  6,  1694 ;  The  Story  of  the 
Stock  Exchange,  by  Charles  Duguid,  London,  1901,  p.  5. 

6  Vide  infra,  ii.  pp.  485,  486. 

*  Essay  upon  Projects,  London,  1697,  pp.  12,  13. 
^   Vide  infra,  in.  p.  67. 


346  Prices  of  Paper  and  Textile  Shares  1692-4  [chap.  xvii. 

year  an  allotment  was  made  to  shareholders  at  50.  In  1692  the  quota- 
tion varied  from  42  to  29.  The  year  1693  began  with  the  price  at  45, 
by  May  the  shares  were  below  40,  at  the  end  of  July  below  30,  while 
in  December  they  were  no  better  than  18.  In  1694  the  fall  was  con- 
tinued until  8  was  quoted,  and  in  the  following  year  the  variations  were 
narrow,  being  only  between  7  and  8\  The  absence  of  uniformity  in 
the  movements  of  the  securities  of  these  two  companies  is  deserving  of 
attention.  During  the  two  years  1693  and  1694  the  shares  of  the  Paper 
company  rose  from  59  to  150,  while  those  of  the  Linen  corporation  fell 
from  45  to  8,  while  in  the  same  period  the  variation  in  the  actions  of 
the  Lustring  company  was  very  small  ^ 

These  diverse  fluctuations  in  the  valuation  of  shares,  subject  to 
the  same  general  conditions,  suggest  the  presence  of  some  exceptional 
influence.  This  is  to  be  found,  in  the  case  of  the  Linen  corporation,  in 
the  way  that  its  assets  were  dealt  with.  Through  the  agreement  with 
Dupin  this  undertaking  received,  without  payment,  a  number  of  shares 
in  the  Irish  company,  which  were  divided  to  the  shareholders  in  the 
parent  concern.  But  these  shares  were  saleable  at  upwards  of  ten  times 
their  face  value,  and  therefore  such  a  scrip  dividend  constituted  a  most 
substantial  bonus.  It  follows  that  the  high  price  of  the  shares  from 
1691  to  1693  included  this  bonus,  and  the  subsequent  fall  is  more 
apparent  than  real  and  represents  the  adjustment  of  the  price,  after 
scrip  in  the  Irish  corporation  ceased  to  be  divided'.  Information 
relating  to  the  cause  of  the  advance  in  the  shares  of  the  Paper  company 
is  wanting,  and  also  as  to  the  fate  of  the  market  after  150  was  reached. 
Making  allowance  for  the  bonus  paid  by  the  Linen  corporation,  the 
course  of  the  market  in  its  actions  is  uniform  with  that  in  the  securities 
of  the  Lustring  company,  the  average  discount  on  the  shares  of  the 
former  in  1695  being  about  25  per  cent,  and  of  the  latter  close  on 
20  per  cent.  In  other  manufacturing  companies  the  course  of  the 
market  yields  similar  results.  Thus  in  the  case  of  the  two  glass  com- 
panies, either  through  speculation  or  extrinsic  circumstances,  the  average 
quotation  of  1695  was  less  than  half  that  recorded  in  1692*. 

The  tendency  of  quotations  in  mining  and  smelting  shares  presents 
a  wonderfully  close  parallel  to  that  of  transactions  in  the  actions  of 
the  Linen,  Lustring  and  Paper  companies.  Here  too  there  is  the 
phenomenon  of  a  rapid  depreciation  in  the  prices  of  some,  co-existing 
with  absence  of  movement  in  others.  For  instance,  shares  in  the  Welsh 
Copper  company  (the  nominal  value  of  which  is  said  to  have  been  4J) 
were  32  in  1694  and  only  10  in  1695^     Similarly,  in  the  three  years 

1  Vide  infra,  in.  pp.  93-5.  *  Ibid.,  ui.  p.  78. 

3  lUd.,  III.  pp.  92,  93,  100.  *  Ibid.,  m.  pp.  Ill,  114. 

6  Ibid.,  u.  p.  439. 


CHAP,  xvn.]  Stringency  of  the  Money  Market  1695      347 

1692  to  1694,  there  was  a  depreciation  of  close  on  one-half  in  the 
securities  of  the  Derby  copper  mining  company  and  of  the  undertaking 
for  copper  smelting^  On  the  other  hand  during  the  same  period 
there  was  scarcely  any  change  in  the  quotation  of  the  actions  of  the 
syndicates  formed  by  William  Docwra  or  of  that  working  the  lead  mines 
on  the  property  of  Sir  Carben-y  Price'. 

The  effect  of  the  war  must  also  be  allowed  for.  At  first  it  would 
tend  towards  immense  profits  being  made  by  companies  (such  as  those 
producing  powder  or  ordnance)  which  supplied  the  forces.  Under  the 
influence  of  the  very  large  dividends,  which  were  no  doubt  paid,  the 
shares  of  such  undertakings  would  stand  at  considerable  premiums.  In 
other  industries  again  there  was  a  large  field  for  the  entrepreneur^  and 
respectable  gains  accrued  from  such  pioneering.  This  element  accounts 
for  some  of  the  advances  in  certain  cases,  such  as  that  of  the  Linen 
corporation.  These  phenomena  explain  the  premiums  reached  by  the 
shares  of  a  number  of  companies.  That  there  was  a  period  of  wild 
speculation  (as  is  suggested  by  the  Report  of  the  Commissioners  of 
Trade^)  is  disproved  by  the  fact  that,  up  to  the  beginning  of  the  crisis  in 
1695,  there  were  several  undertakings  which  attained  at  least  a  moderate 
success,  the  shares  of  which  did  not  appreciate. 

Any  inflation,  that  there  may  have  been  in  1694,  was  gradually 
reduced  by  the  growing  stringency  of  the  money-market;  and,  by  the 
summer  of  1695,  there  were  the  premonitory  symptoms  of  the  beginning 
of  a  crisis.  This  was  indicated  by  the  straits  to  which  the  government 
was  reduced  in  its  efforts  to  raise  money,  and  by  the  state  of  the  foreign 
exchanges.  Before  the  war,  exchange  on  Amsterdam  was  at  35*.  Flemish 
per  £^  or  at  a  discount  of  5*8  per  cent.*  On  August  16th,  1695,  the 
discount  was  as  high  as*  36*9  per  cent.'  This  adverse  state  of  the 
exchanges  was  occasioned,  partly  by  the  exceedingly  bad  state  of  the 
coinage,  partly  by  financial  difficulties  of  the  government.  For  a 
considerable  period  the  number  of  defective  coins  had  occasioned  much 
inconvenience  in  the  transaction  of  business.  For  instance,  in  1684, 
Philip  Madox  complained  that  the  goldsmiths  would  receive,  at  its  face 
value,  none  but  "choice  money,"  and  that  in  a  payment  of  £\^5  in 
guineas  25  of  those  he  tendered  had  been  rejected*.  As  time  went  on, 
the  better  coins  were  exported,  and  those  that  remained  were  much 
below  the  legal  weight.  The  evils  that  resulted  have  been  graphically 
pictured   by   Macaulay — "When    the   great    instrument   of    exchange 

1  Vide  infra,  ii.  pp.  435,  439.  «  IHd.,  ii.  pp.  439,  440. 

3  Journals  of  the  House  of  Commons,  xi.  p.  696. 

*  Add.  MS.  (Brit.  Mus.)  28,078,  f.  356. 

*  Rogers,  First  Nine  Years  of  the  Bank  of  England,  pp.  41,  164. 
«  Diary— MS.  Eg.  (Brit.  Mus.)  1,627,  f.64. 


348  Suspension  of  the  Bank  1696      [chap.  xvii. 

became  thoroughly  deranged,  all  trade,  all  industry  were  smitten  as 
with  a  palsy.  The  evil  was  felt  daily  and  hourly  in  almost  every  place 
and  by  almost  every  class,  in  the  dairy  and  on  the  threshing  floor,  by  the 
anvil  and  by  the  loom,  on  the  billows  of  the  ocean  and  in  the  depths  of 
the  mine.  Nothing  could  be  purchased  without  a  dispute.  Over  every 
counter  there  was  wrangling  from  morning  to  night.  The  workman 
and  his  employer  had  a  quarrel  as  regularly  as  the  Saturday  came 
round.  On  a  fair  day  or  a  market  day  the  clamours,  the  reproaches, 
the  taunts,  the  curses  were  incessant;  and  it  was  well  if  no  booth  was 
overturned  and  no  head  broken.  No  merchant  would  contract  to  deliver 
goods  without  making  some  stipulation  about  the  quality  of  the  coin  in 
which  he  was  to  be  paid.  Even  men  of  business  were  often  bewildered 
by  the  confusion  into  which  all  pecuniary  transactions  were  thrown  ^^ 
Though  some  of  the  details  in  this  picture  are  certainly  exaggerated, 
the  urgency  of  a  reform  of  the  currency  was  sufficiently  pressing  to 
induce  the  administration  to  undertake  a  re-coinage  in  the  midst  of 
a  costly  war,  and  at  a  time  when  the  strain  on  the  finances  had  become 
almost  intolerable.  This  step  had  been  resolved  upon  at  the  end  of 
1695,  and  the  re-coinage  was  actually  begun  early  in  the  following  year. 
The  carrying  out  of  this  policy  revealed  the  dangers  surrounding  the 
Bank  of  England,  which  was  without  an  adequate  reserve  for  the  critical 
times  in  which  it  had  to  work.  It  was  moreover  forced  to  strain  its 
credit  to  the  uttermost  in  the  service  of  the  State;  and,  at  the  same 
time,  it  was  subject  to  attacks  on  the  one  side  from  the  Tories  and  on 
the  other  from  the  private  bankers.  The  combination  of  all  these 
circumstances  produced  the  run  of  May  4th,  1696,  and  the  consequent 
suspension  of  cash  payments  of  the  notes  of  the  Bank^ 

Had  the  crisis  been  mainly  a  monetary  one,  it  would  have  passed 
away  when  the  new  coins  were  in  circulation,  but  it  lasted  until  about 
March  in  the  following  year  (1697).  AH  the  evidence  points  to  the 
conclusion  that  the  "want  of  money,""  in  this  as  in  previous  periods  of 
acute  depression,  was  a  symptom,  not  the  cause  of  the  malady.  The 
chief  influence  tending  towards  a  dislocation  of  credit  continued  to  make 
itself  felt.  This  was  the  cumulative  weight  of  the  cost  of  the  war, 
acting  at  a  time  when  the  volume  of  trade  was  becoming  more  and  more 
restricted. 

The  revenue  (exclusive  of  loans)  in  the  last  years  of  the  reign  of 
Charles  II.  had  been  about  IJ  millions.  At  the  Revolution  it  was 
2  millions;  and,  after  paying  this  sum,  it  was  calculated  that  the  nation 
was  saving  at  the  rate  of  «s^2,400,000  a  year.     One  result  of  the  war 

1  History  (1865),  iv.  pp.  626,  627 ;  cf.  Rogers,  First  Nine  Years  of  the  Bank  qf 
England,  pp.  30-6. 

2  Vide  infra,  iii.  pp.  208,  209. 


CHAP,  xvn.]  The  unfunded  Debt  1696  349 

was  at  least  to  wipe  out  this  surplus  by  losses  of  shipping  and  restriction 
of  trade.  According  to  Davenant  the  national  income  in  1698  (after 
the  peace)  was  a  million  less  than  it  had  been  ten  years  before';  so  that 
while  hostilities  were  in  progress,  in  view  of  the  recorded  captures  of 
ships  and  the  decline  in  foreign  trade,  it  is  probable  that,  without  any 
additional  burden,  the  national  dividend  would  have  just  met  the 
expenses  of  the  people.  But  the  cost  of  the  war  compelled  the  govern- 
ment to  augment  the  revenue;  and  in  the  three  financial  years  1691-2, 
1692-3,  1693-4,  in  addition  to  the  settled  revenue,  there  was  raised 
annually,  by  special  parliamentary  grants  for  the  war,  2|  millions,  this 
being  considerably  in  excess  of  the  average  from  this  source  during  the 
whole  reign  2.  It  follows  that  inroads  were  being  made  on  the  national 
capital  at  the  rate  of  over  two  millions  annually.  The  cumulative 
effect  of  such  a  burden  was  great,  and  there  is  to  be  added  the  weight 
of  debt,  which  involved  an  addition  to  the  expenditure  of  close  on  a 
quarter  of  a  million  in  1692  and  1693'.  Moreover,  the  extraordinary 
expenses  became  heavier  as  the  struggle,  progressed.  Thus  the  esti- 
mates, which  had  been  4  millions  for  the  navy  and  army  in  1692,  had 
grown  to  5\  millions  in  1696*,  with  the  result  that  by  1697  there  was 
a  debt  outstanding  of  17 J  millions*,  of  which  6^  millions  was  funded  at 
the  end  of  the  year*. 

The  unfunded  debt  was  the  measure  of  the  embarrassment  of  the 
administration.  It  represented  so-called  securities,  many  of  which  were 
hovering  on  the  verge  of  default.  Tallies  were  issued  when  there  was 
no  more  than  a  pious  hope  that  they  would  be  redeemed;  and,  in  view 
of  the  state  of  national  credit,  it  is  not  surprising  that  these  obligations 
were  at  an  immense  discount.  Even  the  recently  created  Exchequer 
Bills  were  14  to  15  per  cent,  below  par  in  the  middle  of  1696^     The 

^   Works,  ut  supra,  i.  p.  250. 

2  Vide  infra,  iii.  p.  539;  An  Abstract  of  the  Receipts  and  Issues  of  the  Publick 
Revenue,  Taxes  and  Loans  during  the  Reign  of  His  late  Majesty  King  William ;  that  is 
to  say  from  the  5th  of  November  1688... to  the  25th  of  March  1702,  in  Somers'  Tracts 
(1751),  XII.  p.  72*. 

^  Interest  paid  at  the  Exchequer  from  September  29th  to  the  same  day  in  the 
following  year — 

1689-1690        £48,716  11     7^ 

1690-1691         121,584  15     l| 

1691-1692        202,374    6    3| 

1692-1693         220,321     4  11} 

— Lansd.  MS.  1215,  f.  52. 

*  Journals  of  the  House  of  Commons,  x.  pp.  437,  647,  711 ;  xi.  pp.  345,  347. 
^  Davenant,  Works,  i.  p.  250. 

«  History  of  the  Earlier  Years  of  the  Funded  Debt,  1694-178C  [C .  9010],  p.  16. 
'   Vide  infra,  iii.  pp.  209-11 ;  Evelyn,  Diary,  ut  supra,  ii.  p.  358;  History  and 
Proceedings  of  the  House  of  Commons,  ut  supra,  iii.  pp.  60-1. 


350 


Fall  in  Stocks  1692-7 


[chap.  xvn. 


■ 


land  bank  had  been  expected  to  provide  two  millions,  but  it  utterly 
failed  to  make  good  its  offer,  besides  adding  to  the  want  of  credit  by 
increasing  the  suspicions  of  bank-notes  ^ 

Under  pressure  from  the  government,  the  Bank  of  England  was  induced 
to  adopt  a  device  in  January  1697,  which  at  once  tended  to  steady  the 
market  in  tallies  and  other  unfunded  debts,  but  which  was  temporarily 
most  depressing  in  its  effects  on  the  quotation  of  Bank  stock.  This 
scheme  consisted  in  the  distribution  of  the  reserved  profits  to  make  the 
stock  fully  paid,  and  then  the  taking  of  a  subscription  for  a  temporary 
addition  to  the  capital,  known  as  the  engrafted  stock,  which  might  be 
paid  as  to  four-fifths  in  tallies.  The  effect  of  this  method  of  support- 
ing the  credit  of  the  State  was  to  transfer  the  discount  at  which  tallies 
stood  to  Bank  stock.  Early  in  1696  the  latter  (then  partly  paid)  had 
been  at  48  premium.  Under  the  combined  effects  of  the  passing  of  the 
land  bank  act  and  the  suspension,  it  had  fallen  to  7  discount  at  the  end  of 
the  year.  The  engraftment  of  the  tallies  produced  a  more  serious  effect 
than  all  the  other  adverse  tendencies;  and,  in  February  1697,  the  fully 
paid  stock  was  at  51^ ,  or  a  discount  of  nearly  50  per  cent.  ^ 

The  severity  of  the  culmination  of  the  crisis  in  the  first  half  of  the 
year  1697  may  best  be  shown  by  a  comparison  of  the  highest  prices  of  a 
number  of  representative  securities,  beginning  in  1692,  with  the  lowest 
point  touched  up  to  the  end  of  1697 : 

Comparison  of  the  Highest  and  Lowest  Prices  of  certain 
stocks  and  shares,  1692-7. 


Highest  Price 

1692-7 
Lowest  Price 

1692-7 


Highest  Price 

1692-7 
Lowest  Price 

1692-7 


East  India 
Company 

200  (1692) 
37  (1697) 


Bank  of  England 
48  Prem.  (1696) 

48J  Disc.  (1697) 


Boyal  African 
Company 

52  (1692) 
13  (1697) 

Boyal  Lustring 
Company  £25  she. 
issued  at  £5  Prem. 

32  (1692) 
18  (1697) 


Hudson's  Bay 
Company 

260  (1692) 

80  (1697) 

King's  and  Queen's  Cor- 
poration for  the  Linen 
manufacture  in  England 
£10  shs. 

45  (1693) 
5  (1697) 


1  Vide,  infra,  in.  p.  252. 

2  For  a  ftdl  account  of  the  "  engraftment "  vide  infra,  iii.  pp.  209-24. 


CHAP.  XVII.]  Houghton's  Stockand  Share  List  1^92-1700  351 


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CHAPTER  XVIII. 

Joint-Stock  Companies  from  the  Crisis  of  1697 
to  that  of  1708. 

The  crisis  of  1696-7  began  to  pass  away  when  it  was  recognized  that 
the  negotiations  in  progress  were  likely  to  result  in  a  cessation  of  hostilities, 
and  the  restoration  of  confidence  preceded  the  actual  signature  of  the 
peace  at  Ryswick  by  some  months.  Both  the  Bank  of  England  and  the 
Hudson's  Bay  company  had  suffered  greatly  by  the  war — the  latter  by 
the  capture  of  its  forts  by  the  French*  and  the  former  through  being  forced 
to  engraft  into  its  stock  the  depreciated  tallies  2.  It  was  not  surprising 
therefore  that  the  securities  of  both  should  rise  apart  from  the  general 
recovery,  but  the  magnitude  of  the  rebound  from  the  lowest  point  during 
the  depression  is  only  to  be  explained  by  the  co-operation  of  both  series 
of  causes.  Hudson's  Bay  stock  advanced  from  80  to  130  in  1697,  or  a 
rise  of  no  less  than  62^  per  cent.^  The  extreme  quotations  of  Bank 
stock  during  the  same  period  are  51  and  98,  but  the  former  price  is 
that  of  this  security  with  ^80  paid,  while  the  latter  is  the  quotation  of 
it  as  fully  paid.  Therefore  dealings  in  the  stock,  with  d^80  paid,  at  51 
are  equivalent  to  a  price  of  63f  for  the  same  security  with  d^lOO  paid, 
and  hence  the  real  rise  was  about  53  per  cent.*  The  quotations  of 
East  India  stock  are  of  no  value  in  testing  the  extent  of  the  return  of 
confidence,  since  this  undertaking  was  affected  by  all  the  uncertainties, 
surrounding  the  expected  settlement  of  the  disputes  which  had  been 
hanging  over  the  market  since  1693'. 

It  is  only  to  be  anticipated  that  many  of  the  companies,  which  had 
been  formed  during  the  activity  from  1690  to  1695,  should  have  come 
to  grief  during  a  crisis  of  exceptional  severity,  indeed  it  was  the  custom 
of  writers  of  a  generation  later  to  represent  the  promotions  of  1690  to 
1695  as  "bubbles'"  or  schemes  which  were  chimerical,  when  not  dishonest. 

1  Vide  infra,  11.  p.  231.  2  7^,-^,^  j„,  p^  2IO. 

3  Ibid.,  II.  pp.  233,  237.  *  Ibid.,  iii.  pp.  211,  244. 

fi  Ibid.,  II.  pp.  163-7,  181. 


CHAP.  xvm.J     Companies  after  the  Crisis  of  1696         353 

While,  as  almost  invariably  happens  during  a  period  of  excitement,  the 
production  arranged  for,  in  some  directions,  was  in  excess  of  the 
demand,  there  were  very  few  schemes  which  could  not  be  justified  as 
speculative  investments.  Even  the  syndicates  for  the  recovery  of  treasure, 
if  regarded  as  a  whole,  left  a  large  balance  of  profits  Supposing  that 
there  were  in  all  twenty  schemes  with  an  average  capital  of  a^l,000  each 
and  that  all  the  imitators  of  the  original  expedition  involved  themselves 
in  loss,  the  success  of  the  first  venture  still  left  a  balance,  after  making 
good  such  loss  equal  to  nine  times  the  resources  estimated  to  have  been 
employed  in  this  class  of  venture. 

In  some  cases  {e.g.  the  Linen  corporation'')  errors  in  finance  were 
committed,  but  these  were  incidental  to  the  knowledge  of  the  time  and 
were  shared  by  companies  that  have  succeeded  as  well  as  by  those  that 
failed.  Thus,  in  this  respect,  the  Bank  of  England,  under  pressure  of 
the  administration',  was  one  of  the  chief  offenders.  Such  mistakes  were 
inevitable  in  critical  times,  when  many  of  the  industries  started  were 
experiments,  and  when  the  particular  mode  of  organization  was  new 
and  had  not  been  generally  adopted  hitherto,  outside  foreign  trades. 
That  the  activity  of  1690  to  1695  was  justified  is  shown  by  the  con- 
siderable proportion  of  undertakings  which  were  then  started  and  which 
survived  into  the  nineteenth  century.  In  this  connection  the  names  of 
the  Banks  of  England  and  of  Scotland  immediately  suggest  themselves 
and  to  these  are  to  be  added  the  Million  Bank,  the  Hampstead  Aqueducts 
and  the  London  Bridge  Water- works,  the  latter  including  two  companies 
of  the  1690  to  1695  period  which  were  amalgamated  in  1703*.  Needless 
to  say,  such  a  long  history  is  the  exception  amongst  commercial  con- 
cerns, but  there  were  many  companies  which  survived  the  crisis,  some  of 
which  recovered  afterwards  and  attained  to  a  respectable  success,  while 
others  continued  to  exist,  but  in  an  enfeebled  condition.  The  causes, 
which  resulted  in  the  failure  of  some  and  the  relative  success  of  others, 
differ  in  various  groups  of  undertakings;  and,  since  several  are  of  con- 
siderable interest,  it  is  worth  enquiring  which  of  the  ventures  survived. 
It  may  be  premised,  however,  that,  owing  to  the  disrepute  into  which 
transactions  in  stocks  and  shares  had  fallen  °,  information  relating  to 
companies  is  comparatively  rare  after  1697  and  many  undertakings 
may  have  enjoyed  great  prosperity  without  such  success  having  been 
recorded.  Accordingly  the  surviving  companies  mentioned  below  must 
be  taken  as  the  minimum,  and  it  is  probable  that  the  list  could  be 

1  Vide  infra,  ii.  pp.  485-8.  »  Ibid.,  ni.  pp.  96,  96. 

3  Andreades,  History  of  the  Bank  of  England,  p.  109. 
*  Vide  infra,  iii.  p.  15. 

^  Cf.  The  Villany  of  Stock- Jobbers  detected,  [by  D.  Defoe]  1701,  in  A  True  Collection 
of  the  Writings  of  the  Author  of  the  True-Bom  Englishman,  1703,  pp.  225-71. 

s.  c.  I.  23 


354    Effects  of  the  Peace  on  Companies  1697    [chap.  xvni. 

considerably  extended,  if  the  data  for  the  ten  years  after  1697  were  as 
complete  as  those  for  the  period  from  1690  to  1695.  Moreover  the 
crisis  was  primarily  an  English  one.  As  far  as  can  be  ascertained,  it 
only  affected  Scotland  in  so  far  as  the  inflow  of  English  capital  thither 
was  checked.  For  this  reason  it  will  be  advisable  to  deal  first  of  all 
with  the  state  of  companies  in  England  after  the  summer  of  1697,  and 
later  with  that  of  the  undertakings  in  Scotland  at  the  same  period. 

First  of  all,  as  already  indicated,  the  syndicates  for  the  recovery 
of  treasure  had  disappeared  by  this  date.  Then,  while  the  return  of 
peace  was  an  immense  advantage  to  industry  generally,  this  event  was 
prejudicial  to  certain  companies  whose  position  was  exceptional.  Of  the 
armament  undertakings,  nothing  more  is  heard  of  the  powder  companies^ 
or  of  those  for  making  ordnance^.  The  only  enterprize  of  this  descrip- 
tion, which  is  known  to  have  been  able  to  carry  on  business  after  the 
crisis,  was  the  Sword  Blade  company  which  was  in  the  position  of  being 
able  to  pay  dividends^.  Another  group  was  similarly  affected.  The 
companies  formed  to  produce  commodities,  of  which  the  importation 
was  difficult  during  the  war,  experienced  a  double  misfortune.  Even 
before  the  peace,  the  prosperity  to  which  they  might  otherwise  have 
attained,  was  checked  by  the  strain  on  the  finances  which  induced  the 
administration  to  impose  heavy  excise  duties  on  a  number  of  the  new 
manufactures  such  as  white  paper  and  glass ^  It  follows  that  under- 
takings in  this  group  were  deprived  of  the  full  measure  of  protection 
which  the  circumstances  of  the  time  would  otherwise  have  given  them, 
and  the  continuance  of  these  excises  after  the  peace,  when  foreign 
competition  had  to  be  faced,  further  weakened  such  companies  as  had 
weathered  the  period  of  stress.  The  White  Paper  makers  continued  to 
exist  in  1698^,  and  the  Linen  corporation  also  survived  the  crisis^,  but 
in  each  case,  after  a  short  interval,  both  businesses  appear  to  have  been 
wound  up.  The  same  tendency  is  shown  in  the  history  of  the  other 
companies  formed  to  carry  on  these  industries,  all  of  which  seem  to 
have  disappeared  by  1699,  with  the  exception  of  the  wall-paper  under- 
taking which  was  prosecuting  its  trade  actively  at  a  later  date^  One  of 
the  glass  companies  too  was  sufficiently  successful  to  distribute  dividends®, 
and  the  English  Tapestry  makers  continued,  though  it  was  found  neces- 
sary to  wind  up  this  concern  about  1703^     The  effect  of  the  peace  on  this 

1  Vids  infra,  ii.  p.  474.  2  j^,^  „,,  p   io9. 

3  lUd.y  III.  p.  436. 

*  A  History  of  Taxation  and  Taxes,  by  S.  Dowell,  London,  iv.  pp.   290,  304 ; 
vide  infra,  in.  pp.  69,  111,  112. 

6  Vide  infra,  in.  p.  68.  »  Ihid.,  in.  p.  97. 

y  Ibid.,  III.  p.  72.  8  jbid.^  m.  p.  113. 

»  Ibid.,  m.  p.  119. 


CHAP.  XVIII.]     Companies  after  the  Crisis  of  1696         365 

class  of  undertakings  is  clearly  shown  in  the  quotation  of  the  shares  of  the 
Lustring  company.  During  the  crisis  the  price  was  rarely  below  par 
{£9^)  and  was  often  higher.  As  other  securities  rose  on  the  prospects 
of  peace,  Lustring  shares  y^Z/,  from  38  in  1696  to  18  in  the  latter  half  of 
1697.  This  movement  is  to  be  attributed,  not  only  to  the  general  fear 
of  foreign  competition,  but  also,  in  this  special  case,  to  the  revelations  as 
to  the  extent  to  which  the  company  had  suffered  through  smuggling*. 

Of  the  banking  and  finance  companies,  besides  the  Bank  of  England, 
the  Orphans'  and  the  Million  Banks  remained,  but  the  latter  felt  the 
shock  of  the  crisis  in  being  driven  from  banking  proper  and  existed 
thereafter  exclusively  as  a  trust  or  investment  company". 

In  the  mining  group  the  old  society  of  the  Mineral  and  Battery 
Works  still  existed,  but  the  Mines  Royal  Act  of  1693  had  deprived  the 
companion  undertaking  of  any  scope  for  its  operations.  However, 
owing  to^he  practical  amalgamation  of  the  two  societies,  the  charters 
of  both  were  claimed  to  be  operative ;  and,  from  the  practice  of  holding 
meetings,  as  those  of  the  Mines  Royal  and  Mineral  and  Battery  Works, 
an  intricate  legal  point  arose  in  the  year  1720^  Amongst  other  mining 
companies,  that  formed  to  work  the  mines  of  Sir  Carberry  Price  and  the 
undertaking  established  by  Docwra  were  doing  well;  while  the  Copper 
Miners,  both  of  England  and  of  Wales,  continued  to  exist*. 

There  was  one  group,  namely  the  water-supply  companies,  numbering 
about  eight  separate  undertakings  for  the  London  area,  all  of  which 
survived  the  crisis.  At  the  same  time  the  period  of  activity  had  had 
the  effect  of  inducing  excessive  competition  with  the  consequence  of  an 
undue  inconvenience  to  the  public  in  the  breaking  up  of  the  streets  for 
the  laying  of  mains;  and,  through  much  of  the  outlay  proving  un- 
remunerative,  the  shares  of  the  weaker  companies  became  depreciated, 
several  of  them  finding  it  difficult  to  raise  capital  at  a  later  date  when 
it  was  required.  Thus  in  1700  the  shares  of  £^0  nominal  of  the 
Hampstead  Aqueducts  were  sold  at  <^15^ 

Finally  of  the  miscellaneous  companies  there  is  information  of  the 
fate  of  only  two  after  1697.  These  were  the  insurance  office,  originally 
founded  by  Barbon  and  the  Convex  Lights  company.  The  former  was 
in  an  unsatisfactory  condition;  and  the  company,  formed  in  1680,  was 
either  wound  up  or  reorganized  in  1703*.  The  Convex  Lights  company, 
though  its  success  led  to  the  starting  of  competitive  schemes,  continued 
to  do  well,  and  it  was  able  to  hold  the  contract  it  had  obtained  from  the 

»  Vide  infra,  in.  p.  89.  «  Jh%d,,  in.  p.  277. 

3  im.,  II.  pp.  404,  40.5,  428,  m.  p.  398. 

*  Ibid.,  II.  pp.  433,  437,  438,  444. 

*  Ibid.,  HI.  pp.  6,  7,  13,  14,  26,  32,  33, 
6  Ibid.,  in.  pp.  376,  377. 

23—2 


356  Scottish  Companies  1698         [chap.  xvm. 

Corporation  for  street-lighting  \  One  of  the  land-companies  is  to  be 
added  to  the  list  of  those  that  are  known  to  have  out-lasted  the  crisis^, 
so  that  altogether,  adding  the  three  joint-stock  organizations  for  foreign 
trade,  of  93  English  companies  that  were  carrying  on  business  from  1690 
to  1695,  28  can  be  ascertained  to  have  been  in  existence  in  1698,  or  at 
least  29  per  cent.,  and  it  is  probable  that  this  number  ought  to  be 
increased,  since  there  are  no  particulars  as  to  when  many  of  the 
manufacturing  and  mining  companies  were  wound  up. 

In  Scotland  the  crisis  from  1695  to  1697  produced  comparatively 
small  effects.  Its  influence  was  indirect  rather  than  direct.  The 
scarcity  of  capital  in  London  precluded  the  making  of  further  invest- 
ments of  English  resources  in  Scotland,  and  it  is  probable  that,  owing  to 
the  indignation  which  had  been  aroused  amongst  the  mercantile  classes 
of  both  countries  concerning  the  inception  and  development  of  the 
Darien  scheme,  even  had  there  been  no  financial  crisis,  such  investment 
would  have  ceased  for  a  considerable  period.  It  follows,  then,  that  there 
was  not  the  same  abrupt  check  to  prosperity  in  Scotland  that  there  had 
been  in  England,  and  it  is  significant  that,  while  there  was  an  almost 
complete  cessation  of  new  enterprize  south  of  the  Tweed  in  1696  and 
part  of  1697;  in  Scotland,  during  these  years,  capital  was  being  found 
for  manufactures  and  for  calls  on  the  stock  of  the  Darien  company*. 
The  only  change  in  the  situation  was  that  after  1695  such  capital  was 
raised  locally  and  not  supplied  in  part  from  England. 

When  Scotland  was  fortunate  in  escaping  the  full  effects  of  the  crisis 
of  1695-7,  it  might  be  concluded  that  more  of  the  companies  established 
there  would  have  been  in  existence  in  1698  than  remained  in  England 
at  the  same  date.  As  far  as  can  be  ascertained,  out  of  47  undertakings, 
which  had  been  at  work  between  1690  and  1695,  only  12  are  known  to 
have  been  able  to  carry  on  business  in  the  last  years  of  the  seventeenth 
century.  The  most  prominent  of  these  were  the  Darien  company,  the 
Bank  of  Scotland,  the  Soaperie,  two  Sugaries,  a  Roperie,  three  cloth 
companies,  one  for  paper  and  the  wool-card  manufactory*.  On  the 
whole  then,  taking  England  and  Scotland  together,  out  of  the  140 
companies  particularised  in  the  previous  chapter^,  there  is  information 
to  show  that  at  least  40  (or  about  28  per  cent.)  were  in  a  condition 
which  enabled  them  to  continue  to  carry  on  business  in  1698. 

During  the  continuance  of  the  crisis  in  England,  the  phenomenon  of 
the  recent  formation  of  many  new  companies,  accompanied  by  active 
dealings  in  their  shares,  followed  by  the  collapse  of  the  majority  of  these 

1  Vide  infra,  in.  p.  60.  2  /^^,^  m  p.  417. 

3  Ibid.,  II.  p.  218. 

*  Ibid.,  II.  pp.  217-9,  III.  pp.  132,  X36,  Ud,  159,  160,  174,  179,  258. 

*  Vide  supra,  pp.  335,  336. 


CHAP,  xviii.]     Stock-jobbers  condemned  1696  357 

undertakings,  naturally  excited  attention,  and  the  tendency  of  opinion 
was  to  attribute  the  series  of  failures  to  "  the  pernicious  art  of  stock- 
jobbing.''' As  in  most  other  periods  of  acute  depression,  the  popular 
remedy  for  the  disorder  of  credit  was  based  on  a  superficial  examination 
of  the  facts.  To  many  observers  it  was  sufficient  evidence  that  the 
crisis  had  followed  a  great  increase  in  the  dealings  in  shares  and  other 
securities,  whence  it  was  inferred  that  the  latter  event  was  the  cause  of 
the  former.  Moreover,  there  were  reasons  of  a  semi -political  nature,  which 
made  the  administration  prone  to  offer  the  "stock-jobber'*'' as  a  scape-goat 
to  bear  the  burden  of  the  great  decline  in  the  national  credit.  In  addition 
to  the  shares  of  companies,  tallies  and  other  obligations  of  the  govern- 
ment were  actively  dealt  in,  and  such  transactions  advertized  the  immense 
discount  at  which  some  of  these  securities  stood  from  1695  to  1697. 

The  condemnation  of  the  stockbroker  was  expressed  in  a  report  of  / 
the  Commissioners  appointed  to  look  after  the  Trade  of  England,  which 
was  dated  November  24th,  1696.  In  this  document  it  is  stated  that 
"the  pernicious  art  of  stock-jobbing  hath  of  late  so  perverted  the  end 
and  design  of  companies  and  corporations  erected  for  the  introducing  or 
can-ying  on  of  manufactures  to  the  private  profit  of  the  first  projectors, 
that  the  privileges  granted  to  them  have  commonly  been  made  no  other 
use  of  by  the  first  procurers  and  subscribers  but  to  sell  them  with 
advantage  to  ignorant  men,  drawn  in  by  the  reputation,  falsely  raised 
and  artfully  spread,  concerning  the  thriving  state  of  their  stock.  Thus 
the  first  undertakers  getting  quit  of  the  company  by  selling  their  shares 
for  much  more  than  they  are  really  worth  to  men  allured  by  the  noise  of 
great  profit,  the  management  of  that  trade  and  stock  comes  to  fall  into 
unskilful  hands,  whereby  the  manufactures  intended  to  be  promoted  by 
such  grants  and  put  into  the  management  of  companies  for  their  better 
improvement  come,  from  very  promising  beginnings,  to  dwindle  away  to 
nothing  and  be  in  a  worse  condition  than  if  they  were  perfectly  left  free 
and  unassisted  by  such  laws  and  patents;  an  instance  whereof  we  humbly 
conceive  is  to  be  found  in  the  paper  and  linen  manufactures,  which,  we 
fear,  feel  the  effects  of  this  stock-jobbing  management  and  are  not  in  so 
thriving  a  condition  as  they  might  have  been  had  they  not  fallen  under 
this  kind  of  misfortune \'"  This  report  is  directed  chiefly  against  the 
alleged  arts  of  the  promoter,  who  was  able  to  carry  out  the  designs  with 
which  he  was  charged,  by  means  of  the  mechanism  of  the  stock-market. 
It  was  said  of  the  brokers  that  "they  confederated  themselves  together," 
either  to  raise  or  depress  prices  as  suited  their  interests  ^  , 

1  Journals  of  the  House  of  Commons,  xi.  p.  596 ;  cf.  Essay  upon  Projects,  1697,  ? 
pp.  12,  13;  A  Letter  written  to  a  Member  of  Parliament  relating  to  Trade,  by  John  | 
Bgleton,  1702,  in  Somers'  Tracts  (1748)  in.  p.  660. 

2  Statutes,  VII.  p.  285. 


358        Operators  in  the  Stock  Market  1696    [chap,  xviii. 

Thus  the  censures,  made  on  transactions  in  stocks,  are  directed 
upon  two  different  interests,  on  the  one  side  against  the  promoter  and 
on  the  other  against  the  dealer.  As  regards  the  latter,  there  is  ample 
evidence  that  facilities  were  granted  for  the  purchasing  of  securities  on 
margins.  Options  were  understood,  and  "bear"  sales  were  made.  Still 
the  chief  operators  were  not  brokers  by  profession,  but  members  of  the 
rising  class  of  "monied  men,"  who  employed  agents  to  execute  their 
commissions \  Such  men  organized  an  elaborate  system  of  intelligence 
for  conveyance  of  the  earliest  possible  news  of  events  that  affected  their 
interests.  Thus  Sir  Josia  Child,  and  subsequently  his  son,  Sir  Francis 
Child,  established  a  private  express  service  from  the  south  of  Ireland, 
which  gave  early  information  of  the  arrival  of  East  India  ships,  while 
several  directors  of  the  Bank  of  England  were  in  possession  of  news  of 
events  on  the  continent  in  advance  of  the  government  offices.  These 
astute  operators  naturally  took  steps  to  reap  the  full  benefit  of  their 
enterprize,  by  instructing  brokers,  who  were  known  to  act  for  them,  to  sell 
when  they  had  just  received  favourable  information,  while,  on  a  reaction 
being  established,  other  agents  purchased  quickly^.  On  the  whole,  how- 
ever, the  effect  of  such  speculative  manipulation  of  the  stock  market,  as 
existed  in  the  seventeenth  century,  was  less  than  might  have  been 
expected.  It  is  to  be  remembered  that  the  investment  of  capital  was 
subject  to  immense  risks.  So  much  depended  on  the  issue  of  the  war 
that  the  future  of  Bank  stock  and  of  the  obligations  of  the  government 
was  exceedingly  uncertain.  East  India  stock  again  was  not  only  subject 
to  special  risks  during  hostilities,  but,  in  addition,  according  as  the 
expected  settlement  of  the  trade  was  unfavourable  or  favourable  to  the 
company,  its  securities  in  five  years  from  1697  might  be  worthless,  or 
selling  at  200  to  300  ^  In  purely  domestic  undertakings,  all  the  dis- 
appointments that  are  encountered  in  starting  a  large  number  of  new 
industries  simultaneously,  were  to  be  anticipated.  In  view  of  these 
factors,  all  of  which  tended  to  produce  great  instability  of  prices,  it  is 
remarkable  that  quotations  display  so  little  of  the  see-saw  movement 
due  to  market  manipulation,  but  on  the  contrary  follow   well  defined 


^  The  Consolidator :  or  Memoirs  of  Sundry  Transactions  from  the  World  in  the 
Moon,  1705,  pp.  256,  257. 

2  Chronicles  and  Characters  of  the  Stock  Exchange,  by  John  Francis,  London, 
1849,  pp.  23,  365. 

3  This  aspect  of  the  situation  was  overlooked  by  Defoe  when  he  wrote  that  East 
India  stock,  "within  ten  years  or  thereabouts,  without  any  material  difference  in 
intrinsick  value,  has  been  sold  from  £300  per  cent,  to  £37  per  cent,  from  whence 
with  fluxes  and  refluxes,  as  frequent  as  the  tides,  it  has  been  up  to  £150  per  cent. 
again"— Villany  of  Stock-jobbers  Detected  in  True  Collection  of  the  Writings  of  the 
Author  of  the  True-Born  Englishman,  1703,  p.  257. 


CHAP.  XVIII.]     Bona  fides  of  Promoters  1696  359 

lines  of  movement,  the  causes  of  which  can  generally  be  traced,  even 
after  the  lapse  of  a  long  interval  of  time*. 

The  attack  of  the  Commissioners  of  Trade  on  promoters,  as  a  class, 
comprises  two  main  charges.  First  that  they  circulated  false  or  mis- 
leading statements,  relating  to  the  prospects  of  the  companies  they  had 
formed,  and  then,  when  as  a  consequence  the  shares  advanced,  they 
sold  on  a  rising  market.  In  several  cases,  indeed  in  whole  groups  of 
companies,  the  shares  advanced  to  a  great  premium.  This  was  so 
especially  in  mining  undertakings  and  the  syndicates  for  the  recovery  of 
treasure 2.  In  each  of  these  instances  there  was  the  inducement  offered 
by  great  gains,  already  made,  and  there  is  no  record  of  misrepresentation 
by  the  promoters  of  these  companies  formed  from  1690  to  1695.  In 
the  manufacturing  group  of  undertakings,  information  is  wanting  suj  to 
the  cause  of  the  advance  in  the  shares  of  the  White  Paper  company", 
while  that  of  the  English  Linen  corporation  is  to  be  assigned  to  the 
manner  in  which  the  "community  of  interest"  between  this  concern  and 
the  Irish  undertaking  affected  prices^  In  the  remaining  companies  for 
new  manufactures  there  is  no  record  of  large  premiums  being  obtained 
on  the  shares.  It  follows,  therefore,  that  the  available  evidence  does 
not  support  the  charge  of  a  fraudulent  engineering  of  a  large  rise  in  the 
prices  of  shares  in  these  undertakings,  in  order  to  enable  the  promoters 
to  dispose  of  their  holdings.  On  the  contrary,  the  fact  that  the  sums, 
reserved  to  the  founders  of  a  company  at  its  inception  were  comparatively 
moderate,  points  to  the  opposite  conclusion,  while  the  allegation  that 
the  reputation  of  such  stocks  was  "falsely  raised  and  artfully  spi*ead" 
is  not  established  by  anything  published  in  the  newspapers  of  the  time. 
The  press,  with  the  exception  of  Houghton's  CoUectioihs^  contented  itself 
with  the  insertion  of  advertisements  without  comment,  while  the  latter 
explains  the  nature  of  the  different  schemes,  but  as  a  rule  without  adding 
any  strong  recommendation. 

If  then  there  weis  no  general  inflation  of  prices  by  means  of  the 
circulation  of  misleading  information,  the  explanation  of  the  collapse 
contained  in  the  Report — namely  that  the  only  persons,  possessed  of 
technical  knowledge,  having  sold  their  shares,  the  management  fell  into 
unskilful  hands — breaks  down.  Indeed,  in  the  two  companies  instanced 
in  the  Repoii  those  who  were  prominent  in  the  direction  about  1690 

1  These  causes^  as  far  as  they  affect  the  chief  stocks,  are  dealt  with  under  the 
heads  of  the  respective  companies — vide  infra,  ii.  pp.  28,  29, 159, 160, 163, 166,  168, 
173,  183,  186,  233,  432,  433,  437,  438,  450,  iii.  pp.  25,  26,  56,  59,  67,  78,  95,  96, 
97,  210-12,  244,  274,  280-1,  287.  Cf.  also  Rogers,  First  Nine  Years  of  the  Bank 
of  England,  pp.  25-7,  62,  70,  92,  93,  98,  100,  101,  132,  133,  163,  154,  158-60. 

^  Anglice  Tutamen,  p.  18 ;  An  Essay  upon  Projects,  pp.  12,  13 ;  The  ConsoHdator, 
1706,  p.  260. 

3  Vide  infra,  in.  p.  67.  *  Ibid.,  m.  pp.  93-6. 


360  ^tochbrohers'  Badges  1697       [chap.  xvni. 

continued  to  hold  their  shares  in  1697.  Amongst  such  inventors  and 
promoters  may  be  mentioned  Nicholas  Dupin  and  John  Tyzack,  who 
between  them  were  connected  with  about  ten  separate  companies ^ 

For  these  reasons,  it  appears  that  the  blame,  laid  on  stock-jobbing, 
was  to  a  large  extent  undeserved.  Still  the  imputation  was  so  widely 
accepted  that  various  legislative  and  other  devices  were  adopted  with 
a  view  to  restrict  transactions  in  stocks  and  shares.  It  was  enacted  in 
the  act  of  1697,  which  authorized  the  increase  in  the  capital  of  the  Bank 
of  England,  that  no  contract  for  the  sale  of  the  stock  should  be  valid  in 
law,  unless  it  was  registered  at  the  office  within  seven  days  and  actually 
transferred  inside  a  fortnight^.  The  object  of  this  clause  was  to  prevent 
dealings  on  margin.  Then  a  measure  was  passed  in  1697  "to  restrain 
the  number  and  ill -practices  of  brokers  and  stock-jobbers."  In  future 
the  number  was  limited  to  100,  and  candidates  were  required  to  be 
licensed  by  the  Court  of  Aldermen  of  the  City.  After  enrolment,  the 
authorized  broker  had  to  show  a  badge  on  the  completion  of  each 
transaction.  He  was  bound  to  keep  books  and  was  prohibited  from 
dealing  on  his  own  account  under  a  penalty  of  ^^200  for  each  offence. 
Anyone  who  acted  as  a  stockbroker,  without  the  statutory  authoriza- 
tion, was  subject  to  a  penalty  of  ^500,  and  to  be  thrice  pilloried^ 
Further  evidence  of  the  drift  of  opinion  against  the  stock-jobbers  is 
shown  by  their  expulsion  from  the  Royal  Exchange  in  1698,  whence 
they  migrated  to  Exchange  Alley* — a  locality  destined  to  become  as 
notorious  at  a  later  date  as  the  Rue  Quincampoix  in  Paris.  They  were 
violently  attacked  in  a  pamphlet  entitled  the  Villany  of  Stock-Jobbers 
Detected^ ;  and  the  joint  effect  of  the  crisis  and  the  obloquy  to  which 
the  brokers  were  subjected,  'caused  newspapers  which  had  begun  to 
quote  changes  of  prices  in  the  stock  market  to  discontinue  the  practice. 
Even  Houghton,  who  in  1694  had  printed  the  names  of  fifty  companies 
in  his  list,  in  1698  reduced  it  till  quotations  of  only  seven  securities  were 
included.  At  the  same  time  he  introduced  a  very  ingenious  departure 
by  placing  a  small  figure  at  the  side  of  the  quotation,  e.g.  Bank  stock — 
92  iq,  91  2q,  963^,  lOSoq.  No  explanation  is  given  of  this  notation, 
but  it  seems  highly  probable  that  these  small  figures  are  intended  to 
record  the  number  of  quotations  at  a  given  price  on  the  day  named. 
Thus  103  og'  would  mean  that  this  price  was  offered,  or  that  stock  was 
for  sale  at  this  limit,  but  that  no  business  resulted*. 

1  Vide  infra,  ii.  pp.  441,  487,  m.  pp.  64,  71,  90,  109,  119,  163,  182,  187. 

2  Statutes,  VII.  p.  227. 

3  Ibid.,  VII.  p.  285;  Beports  Hist.  MSS.  Com.  xni.,  Pt.  vi.,  p.  304. 

*  Anderson,  Annals  of  Commerce,  iii.  p.  195 ;  The  Story  of  the  Stock  Exchange, 
by  C.  Duguid,  London,  1901,  p.  17. 

^  Printed  in  1701.     It  was  written  by  Defoe.  *  Vide  supra,  p.  361. 


CHAP,  xvin.]      Revival  in  Trade  1698-1700  361 

The  disrepute  of  stock  dealing  explains  the  apparent  anomaly  that 
during  three  and  a  half  years  of  very  great  prosperity  from  the  middle 
of  1697  to  the  end  of  1700,  very  few  new  companies  were  established  in 
England.  In  Scotland,  on  the  other  hand,  between  1696  and  1702  no 
less  than  twelve  undertakings  were  started.  The  cloth  trade  there  had 
shown  signs  of  revival,  and  it  appears  that  about  1700  the  Newmills 
company  paid  a  dividend  of  18  per  cent.^  This  success  induced  com- 
petition, or  at  least  imitation,  and  woollen  manufacturing  companies 
were  established  at  Glasgow  (two),  at  Aberdeen  and  in  Berwickshire'. 
Two  new  "  sugaries ''  were  founded,  also  four  glass  companies  and  two 
factories  for  hardware'.  The  check  to  the  activity  in  Scotland  began 
to  make  itself  felt  about  1700;  when,  after  a  series  of  bad  harvests,  it  was 
discovered  that  the  country  had  been  investing  too  freely  in  new  enter- 
prizes  for  the  home  trade  and,  especially,  when  it  was  found  that  the 
Darien  scheme  had  miscarried*. 

The  wave  of  prosperity  in  England  continued  till  the  end  of  the 
year  1700.  With  the  return  of  peace,  trade  everywhere  expanded,  and 
the  recovery  was  aided  by  a  series  of  favourable  seasons.  From  1701  to 
1703  wheat  and  other  agricultural  products  were  sold  at  low  prices', 
and  there  was  much  activity  in  farming.  This  tendency  is  shown  by 
the  number  of  petitions  and  grants  at  this  period  for  the  establishing  of 
new  markets  and  fairs*.  Shipping  revived  after  it  was  known  that  the 
depredations  of  privateers  were  no  longer  to  be  feared,  and  steps  were 
taken  to  add  to  the  safety  of  navigation  by  erecting  new  beacons  and 
lighthouses^.  Internal  communication  and  transport  were  improved  by 
an  extension  of  water-carriage  through  the  making  of  a  number  of  rivers 
navigable^.  The  total  foreign  trade,  which  had  fallen  to  only  7  millions 
in  1696-7,  advanced  to  13 J  millions  in  1699-1700  and  to  close  on 
13 J  millions  in  1700-1,  an  increase  in  the  four  years  of  over  90  per 
cent.*  The  expansion  of  commerce,  coupled  with  the  improvement  in 
the  state  of  the  national  finances,  produced  a  marked  reduction  in  the 

^  Records  of  a  Scottish  Cloth  Manufactory,  ut  supra,  pp.  336,  337  (note). 

2  Vide  infra,  in.  pp.  160,  161. 

3  Ibid.,  HI.  pp.  136,  188,  189-92. 

*  The  Fiscal  Policy  of  Scotland  before  the  Union — Scot.  Hist.  Review,  i.  pp.  181, 
182 ;  On  the  Price  of  Wheat  at  Haddington,  by  R.  C.  Mossman,  Eldinburgh,  1900, 
p.  29. 

^  Rogers,  Agriculture  and  Prices,  ut  supra,  v.  p.  278. 

^  State  Papers,  Domestic,  Petition  Entry  Books  and  Home  Office  Warrant 
Books,  1701—1703. 

^  The  Growth  of  English  Industry  and  Commerce  in  Modem  Times,  by  W. 
Cunningham,  1903,  p.  488. 

^  Journals  of  the  Hou^e  of  Commons,  xi.  pp.  368,  372,  673. 

9  State  of  the  Trade  of  Great  Britain,  by  Sir  C.  Whitworth,  London,  1776 
Appendix. 


362      The  New  East  India  Company  1698    [chap,  xvm 


1 

at   I 


rate  of  interest.     Instead  of  the  government  being  forced  to  borrow 
8  per  cent,  or  even  at  greater  cost,  by  1700  proposals  were  made  for  a 
loan  at  5  per  cent.^ 

One  of  the  first  consequences  of  the  return  of  prosperity  was  the 
effort  to  effect  a  settlement  of  the  African  and  East  India  trades. 
In  either  case  the  administration  would  have  been  disposed  to  have 
granted  a  monopoly  to  any  group  of  capitalists  who  provided  a 
considerable  loan,  since  money  was  still  required  to  reduce  the  floating 
debt.  With  African  stock  selling  at  an  average  price  of  only  15  for 
£\00  nominal 2,  neither  the  company  nor  its  opponents  were  prepared 
to  undergo  extensive  risks,  and  in  1697  a  compromise  was  effected  by 
which  the  chartered  undertaking  was  compelled  to  license  independent 
traders,  on  condition  that  they  paid  a  royalty  which  was  intended  to 
provide  for  the  upkeep  of  the  forts  ^  The  underlying  principle,  adopted 
in  dealing  with  the  East  India  trade,  was  the  same,  though  the  working 
out  of  it  in  practice  differed  in  the  details.  It  was  clear  that  the 
dispute  between  the  two  opposing  interests  had  become  so  embittered 
that  there  was  no  prospect  of  both  factions  working  together  in  one 
organization.  In  1697  the  stock  of  the  Old  Company  was  so  much 
depreciated  that  it  would  have  been  easy  for  its  opponents  to  have 
acquired  a  considerable  interest  under  par.  By  this  time  they  aimed  at 
the  complete  extinction  of  the  existing  body;  and  it  was  fortunate  that, 
while  the  House  of  Commons  was  still  greatly  influenced  by  both  interests, 
sufficient  time  had  elapsed  to  moderate  the  extreme  views  that  had 
been  current  before  the  crisis  of  1695-7. 

The  date  of  the  attempted  settlement  was  conditioned  by  the  state 
of  the  money-market,  since  the  organization,  which  was  to  be  indued 
by  Parliament  with  the  control  of  the  trade  in  future,  would  be  expected 
to  provide  a  large  loan.  Thus  it  was  not  until  1698  that  the  tender  of 
two  millions  at  8  per  cent,  was  accepted.  The  act,  authorizing  this 
loan,  was  obviously  intended  to  be  a  compromise  between  a  number  of 
divergent  principles  and  between  persons  who  were  hostile  to  each  other. 
It  resembles  the  settlement  made  in  the  African  trade,  in  so  far  as 
Parliament  granted  a  footing  to  the  independent  merchant,  the  regulated 
and  the  joint-stock  company.  All  that  the  act  effected  was  to  confine 
the  India  trade  to  those  who  subscribed  capital  for  this  particular  loan, 
and  the  owners  of  this  stock  were  entitled  to  send  goods  to  the  East 
proportionate  in  value  to  the  amount  of  their  holding.  At  the  same 
time,  provision  was  made  that  any  of  the  subscribers  who  wished 
could  unite  and  become  incorporated  as  a  joint-stock  company.  Prior 
to  the  passing  of  the  £ict,  the  opponents  of  the  old  undertaking  had 

^  Rogers,  First  Nine  Years  of  the  Bank  of  England,  p.  101. 
2  Vide  infra,  ii.  p.  34.  ^  n^^^^  „,  p,  £3. 


CHAP,  xvm.]     The  New  East  India  Company  1698      363 

expressed  themselves  in  favour  of  an  unrestricted  trade  in  most  un- 
exceptionable terms.  They  urged  that  though  patents  might  be  granted 
to  joint-stock  companies  for  infant  industries,  "yet,  afterwards,  when 
such  trades  have  grown  considerable,  the  wisdom  of  the  nation  has 
always  or  generally  judged  it  fitting  to  open  a  way  for  the  kingdom 
to  receive  a  general  benefit  therefrom.'"  But,  though  the  promises  of 
the  promoters  of  the  act  pointed  either  to  a  regulated  company  or  to 
a  body  of  independent  traders  without  any  regulation  beyond  that 
required  to  maintain  the  general  monopoly,  it  is  a  significant  commentary 
on  these  professions  that  only  about  one  per  cent,  of  the  trade  was 
carried  on  in  this  way.  It  was  found  that  the  Old  Company  had 
subscribed  enough  of  the  loan  to  entitle  it  to  between  one-sixth  and 
one-seventh  of  the  traded  All  the  remaining  subscribers,  who  owned 
over  four-fifths  of  the  debt,  were  incorporated  into  one  joint-stock  body'. 
Therefore  the  situation  entered  into  a  new  phase,  with  keen  competition 
between  two  joint-stock  organizations,  which  were  denominated  "the  Old'' 
and  "the  New''  Companies.  The  most  important  element  in  the  begin- 
ning of  this  struggle  was  the  comparative  financial  weakness  of  the  rival 
undertakings.  Both  had  nominal  capitals  of  over  a  million  and  a  half, 
but  the  resources  of  the  Old  Company  were  depleted  by  losses  during 
the  war,  by  payments  for  secret  services  and  by  reduction  of  trade  in 
the  interval  while  the  settlement  was  under  the  consideration  of  the 
House  of  Commons.  On  the  other  hand,  the  New  Company  had  sunk 
its  subscribed  capital  in  the  loan,  made  to  the  State,  and  therefore,  at 
the  date  of  its  incorporation,  it  had  no  resources  available  for  prosecuting 
its  trade,  except  in  so  far  as  it  could  borrow  on  the  security  of  the 
goverinnent  debt  due  to  it.  To  provide  working  capital  a  new  security 
was  created,  known  as  "the  additional  stock"  or  "the  Shares."  There 
was  no  fresh  allotment,  since  calls  were  made  on  the  existing  stock- 
holders until  by  1702  over  half  a  million  had  been  raised.  It  is  doubtful 
if  much  of  this  sum  was  available  for  trading,  since  the  company  had 
promised  a  considerable  amount  in  bribes  before  the  act  was  passed,  and 
from  1698  to  1701  further  payments  were  made  on  account  of  "secret 
service  =*." 

Besides  the  new  East  India  company,  there  were  few  companies 
established  in  England  from  1698  to  1700.  The  chief  direction  in  which 
the  activity  showed  itself  was  in  provident  schemes.    In  1696  the  mutual 

1  For  the  details  vide  infra,  ii.  pp.  166,  180,  181. 

2  Stock  in  the  two  million  loan  was  held  as  follows — 

Persons  who  did  not  belong  to  either  company  ...         ...  £23,000 

The  Old  Company 315,000 

The  New  Company 1,662,000 

3  Vide  infra,  ii.  pp.  183-6. 


364  Classes  of  Share-Capital  1698     [chap,  xviii. 

fire-insurance  undertaking,  known  as  "the  Hand-in-Hand,""  was  started  \ 
and  in  1698  a  Society  of  Assurance  for  Widows  and  Orphans  was  founded^. 
In  the  following  year  the  Charitable  Corporation  for  the  Relief  of  the 
Industrious  Poor  began  a  career,  which  subsequently  became  remarkable. 
The  earliest  proposals  for  the  founding  of  banks  had  contemplated  the 
lending  of  money  on  pledges,  and  in  1678  "divers  poor  artificers  and 
handcraftsmen""  had  presented  a  petition  praying  that  loans  should  be 
made  to  them  at  the  rate  of  ^d.  in  the  £  per  week^  The  Charitable 
Corporation  was  established  to  meet  this  need  by  a  number  of  philan- 
thropic persons,  who  provided  the  necessary  capital,  subject  to  the 
condition  that  only  the  legal  rate  of  interest  should  be  paid  to  them. 

The  most  striking  promotion  of  this  period  was  that  which  was 
subsequently  incorporated  as  the  Mine-Adventurers  Company.  The 
undertaking  formed  to  develope  the  mines  of  Sir  Carberry  Price*  had 
been  doing  well,  and  its  shares  remained  steady  during  the  crisis  at 
about  17.  In  1698  Sir  Humphrey  Mack  worth  formed  a  syndicate, 
which  proposed  to  buy  out  the  existing  shareholders  on  behalf  of  a  new 
company.  They  might  either  sell  their  shares  for  cash  at  £9.0  per  share 
or  convert  them  into  so-called  bonds  of  the  new  undertaking.  These 
bonds  were  then  drawn,  not  for  repayment,  but  as  tickets  in  a  lottery 
where  the  prizes  were  shares  in  the  new  company.  The  bonds  were 
entitled  to  a  fixed  dividend  of  6  per  cent,  and  to  repayment  of  the 
principal,  while  the  shares  were  entitled  to  the  remaining  profits.  The 
effect  of  this  arrangement  was  to  increase  a  capital,  valued  at  d£^96,000 
in  the  market  during  1697,  to  one  of  ^^205,160  nominal,  and  this  was 
augmented  both  by  a  further  issue  of  shares  and  by  the  price  of  these 
counters  being  raised  very  greatly  above  the  so-called  par  value'. 

What  is  important  in  the  whole  transaction,  from  the  point  of  view 
of  historical  development,  is  the  gradual  emergence  in  the  joint-stock 
company  of  a  division  of  the  whole  capital  into  different  classes  with 
special  rights.  For  over  a  century,  borrowing  on  the  bonds  of  a  company 
had  been  in  existence.  In  some  respects  such  obligations  resembled 
debentures,  in  so  far  as  they  constituted  a  first  charge  on  the  earnings. 
They  differed,  however,  in  that  there  was  nothing  corresponding  to  a 
trust  deed,  no  properties  were  specifically  charged,  the  total  amount  was 
not  fixed,  and  they  were  repayable  either  on  demand  or  at  short  dates. 
In  the  case  of  the  new  East  India  company,  the  stock  as  such  was  divided 
into  two  separate  classes  each  of  which  had  distinct  rights — the  original 

1  Amalgamated  with  the  Commercial  Union  Assurance  Company  Ltd.  in  1905. 

2  Vide  infra,  iii.  p.  389. 

3  State  Papers,  Domestic,  Petition  Entry  Book,  xlvi.  p.  241. 
*  Vide  supra,  pp.  336,  347,  infra,  ii.  p.  440. 

^  Vide  infra,  ii.  pp.  444-7. 


CHAP,  xvm.]    Dividends  Bank  of  England  1697-1700    365 

stock  being  entitled  to  8  per  cent.,  paid  by  the  government,  and  to 
certain  contingent  advantages,  while  the  additional  stock  was  to  receive 
the  profits,  made  in  trading ^  Similarly,  in  the  Mine  Adventurers' 
company  the  bonds  were,  in  effect,  preference  shares,  with  priority  as 
to  a  moderate  fixed  dividend  and  to  capital,  but  subject  to  cancella- 
tion on  repayment  at  the  will  of  the  company.  It  is  interesting  to  note 
that  this  principle  in  joint-stock  finance  appeared  in  the  one  case  where 
the  additional  stock  came  to  an  end  through  the  interference  of  the 
State,  and  in  the  other  in  a  company  which  anticipated  later  develop- 
ments, not  only  in  this  respect,  but  in  some  of  the  most  undesirable 
characteristics  of  fraudulent  promotions. 

Some  measure  of  the  improvement  of  credit  and  the  general  prosperity 
of  the  three  years  ending  in  1700  may  be  obtained  from  the  position  of 
the  Bank  of  England  at  this  period.  In  1698  a  beginning  was  made 
towards  the  paying  ofl'  of  the  engrafted  stock.  These  payments,  which 
continued  until  1707,  make  the  dividends  appear  somewhat  complex; 
since,  while  the  total  distribution  for  the  half-year  or  year  was  calculated 
at  an  even  rate  per  cent,  (including  the  usual  fractions),  the  allocation 
of  the  whole  sum,  as  between  what  was  divided  from  profits  and  what 
represented  a  return  of  capital  on  account  of  the  engrafted  stock, 
involves  minute  subdivisions  which  are  sometimes  so  small  £is  to  involve 
farthings  per  cent.  Taking  the  three  and  a  half  years  from  July  1697  to 
December  1700,  there  was  divided  from  profits  very  nearly  29|  per  cent, 
or  an  average  of  nearly  8^  per  cent,  annually.  The  highest  dividend 
in  this  period  was  in  1700,  when  it  was  10  per  cent.  The  advance  in 
the  price  of  the  stock  was  remarkable.  In  February  1697  the  equiva- 
lent of  c£*100  of  fully  paid  stock  could  have  been  purchased  at  about 
d£*63.  15^.  In  March  1700  the  quotation  touched  148 J,  or  a  rise  of  no 
less  than  132^  per  cent,  in  three  years  2.  For  1698  the  yield  at  the 
average  price  of  the  year  was  Q^  per  cent.,  for  1699  8|  per  cent,  and, 
for  1700,  7J  per  cent.,  giving  an  average  from  1698  to  1700  of  7^  per 
cent.  It  shows  the  difference  in  the  state  of  credit  in  England  and 
in  Scotland  that  about  this  time  the  yield  on  the  stocks  of  the  New- 
mills  company  and  of  the  Bank  of  Scotland  was,  in  each  case,  about 
13  per  cent.^ 

In  the  year  from  March  1700  to  March  1701  there  came  a  startling 
change  from  abounding  prosperity  to  the  depths  of  depression  and  even 
panic.  Two  diverse  series  of  events  led  to  the  crisis  of  February  and 
March  1701,  on  the  one  side  the  doubtful  aspect  of  international 
politics  and  on  the  other  the  embittered  strife  between  the  Old  and  the 
New  East  India  companies.    In  the  spring  of  1700  there  were  grave  fears 

1  Vide  infra,  ii.  p.  186.  «  Ibid,,  iii.  pp.  214-16,  244. 

3  Ibid.,  lu.  pp.  153,  274. 


366  Strife  of  the  India  Companies  1698-1701   [chap,  xviii. 

as  to  what  would  happen  on  the  death  of  the  king  of  Spain,  whose  |j 
health  was  reported  to  be  precarious.  In  certain  contingencies  it  became 
apparent  that  a  renewal  of  war  with  France  would  be  inevitable,  and 
the  recollection  of  the  losses  from  1692  to  1697,  of  financial  difficulties 
and  of  the  late  crisis  was  too  recent  for  the  prospect  to  be  regarded 
without  serious  apprehensions.  The  news  of  the  nomination  of  the 
Duke  of  Anjou  for  the  crown  of  Spain,  which  came  in  November,  showed 
that  these  gloomy  anticipations  had  been  well-founded,  while  the  absence 
of  preparations  for  war  in  England  occasioned  great  alarm  in  the 
southern  counties,  which  were  greatly  disturbed  by  the  danger  of  a 
French  invasion  ^  At  a  time  when  trade  was  active,  the  uncertain 
political  outlook  might  occasion  a  crisis,  but,  when  the  mercantile  com- 
munity was  case-hardened  in  scares,  it  is  probable  that  no  panic  would 
have  resulted  had  there  not  been  other  elements  of  danger.  These  are 
to  be  found  in  the  condition  of  the  East  India  trade  from  1698  to  1700. 
The  act  of  1698  had  produced  an  impossible  situation.  The  New 
Company  was  entitled  to  more  than  four-fifths  of  the  trade,  but  its  rival 
was  firmly  established  in  India  with  the  consent  of  the  native  rulers,  who 
had  small  respect  for  the  votes  of  an  English  Parliament  at  Westminster. 
It  follows  then  that  the  Old  Company,  having  an  established  position 
where  its  mercantile  operations  were  carried  on,  could  hold  a  larger 
share  of  the  trade  than  it  was  allowed  by  the  act.  On  the  other  side, 
the  New  Company  was  strong  at  home,  where  the  other  organization 
was  weak.  Though  the  latter  was  able  to  make  the  greater  profits  in 
the  East,  its  methods  were  subject  to  the  interference  of  the  House  of 
Commons,  exerted  in  the  interests  of  the  younger  body.  The  only 
logical  escape  from  the  impasse  was  by  an  amalgamation,  but  the 
Old  Company  was  determined  to  obtain  better  terms  than  would  have 
followed  from  a  union  on  the  basis  of  the  allocation  of  trade  under  the 
act.  Therefore,  its  efforts  were  directed  towards  improving  its  con- 
dition at  home.  In  following  out  this  policy,  there  were  several  different 
steps  which  must  be  co-ordinated  in  their  proper  places  in  the  general 
scheme.  No  efforts  were  spared  to  make  interest  in  Parliament,  and 
both  organizations  became  brisk  bidders  for  the  small  and  corrupt 
boroughs  2.  Then  the  credit  of  the  New  Company  at  first  was  not  good, 
and  a  vigorous  campaign  was  begun  to  bring  it  into  discredit,  especially 
by  the  depreciation  of  its  stock  in  Exchange  Alley.     On  the  whole,  the 

1  Hist,  and  Proceedings  of  the  House  of  Commons,  iii.  p.  143. 

2  The  Freeholders  Plea  against  Stock-Jobbing  Elections  of  Parliament  men  [by 
Daniel  Defoe],  1701,  in  A  True  Collection  of  the  Writings  of  the  Author  of  the  True- 
Bom  Englishman,  1703,  pp.  166-83;  The  Consolidator,  1705,  p.  261 ;  The  Anatomy 
of  Exchange  Alley,  1710,  in  Chronicles  and  Characters  of  the  Stock-Exchange,  by  John 
Francis,  1849,  p.  380. 


CHAP,  xvin.]  The  Crisis  of  1701  367 

Old  Company  was  the  victor  at  almost  every  point.  Its  stock  during 
the  year  before  and  after  the  attempted  settlement  had  sold  at  an 
average  price  of  about  50,  and  in  1700  the  middle  quotation  was  as  much 
as  lOOJ.  Against  this  advance  of  over  dP50  or  100  per  cent,  the  stock 
of  the  New  Company  had  only  risen  41  per  cent.,  and,  in  the  following 
year,  the  older  undertaking  maintained  most  of  this  increase,  while 
the  premium  on  the  stock  of  the  other  undertaking  was  reduced  to 
20  per  cent. 

It  was  the  further  development  of  the  attack  on  the  credit  of  the 
New  Company  which  produced  the  crisis  of  1701.  It  had  many  obli- 
gations outstanding,  and  the  accommodation,  given  it  by  the  Bank 
of  England,  had  strained  the  resources  of  the  latter.  The  Old  Company, 
taking  advantage  of  the  shock  which  the  credit  of  the  bankers  had  already 
sustained,  organized  a  run  on  the  Bank  in  the  hope  that,  if  it  were  forced 
to  suspend  payment,  the  operations  of  the  new  East  India  company 
would  be  further  restricted.  The  Bank  narrowly  escaped ;  and,  in  saving 
itself,  it  was  forced  to  call  in  its  advances,  with  the  result  of  the  run 
becoming  general  and  the  failure  of  several  bankers  (amongst  whom  the 
financial  agent  of  the  Old  Company  is  said  to  have  been  included). 
This  crisis  came  in  February  1701,  and  it  lasted  well  into  the  following 
months  The  depreciation  of  the  chief  securities  from  the  highest 
point  of  the  previous  year  varied  between  34  per  cent,  and  as  much  as 
53  per  cent. 

Comparison  of  the  highest  recorded  price  of  certain  stocks  with 

the  lowest  during  the  Crisis  1701. 

Old  East  India       New  East  India 
Go. 


Highest  Price  -.j^o 

1700 
Lowest  Price 

1701 


76i 


Co. 

Bank  of  England 

Million  Bank 

164 

148i 

97 

100 

97 

67 

54 

J5  7o 

61i 

34  7o 

40 

41  7o 

Depreciation  "^ 

The  fall  in  stocks  and  failures  of  bankers  show  that  the  crisis  of 
February  and  March  1701  was  severe.  Contemporary  observers  spoke 
of  "the  great  declension  of  trade"  with  an  increase  of  poverty  and 
unemployment.  In  some  districts,  the  poor-rate  had  been  increased 
tenfold  in  the  last  25  years,  rising  in  Shoreditch  from  4*.  6d.  to  36*. 
in  the  £  on  the  same  valuation  ^  Fortunately  the  duration  of  the  crisis 
was  brief,  and  by  the  summer  the  commercial  situation  was  approaching 
the  normal.     It  was  recognized,  moreover,  that  the   contest   between 

1  Vide  infra,  ii.  pp.  184,  186,  in.  p.  217. 

2  A  Brief  History  of  Trade  in  England,  1702  [Brit.  Mus.  1138  .  b .  3],  pp.  26, 164, 
155. 


368   Agreement  of  the  India  Companies  1702    [chap.  xvin.  jj 

the  two  India  companies  had  become  httle  short  of  a  national  danger, 
and  steps  were  taken  to  effect  a  further  settlement,  which  it  was  hoped 
would  be  final.  Even  adherents  of  the  New  Company  admitted  that 
this  organization  was  unable  to  hold  the  proportion  of  the  trade  granted 
to  it  by  the  act  of  1698,  therefore  in  the  amalgamation  it  was  seen 
that  the  old  undertaking  must  be  treated  as  if  it  had  subscribed  more 
stock  in  the  loan,  on  which  the  monopoly  depended,  than  it  actually 
owned.  Once  this  point  was  reached,  it  was  not  difficult  to  advance 
a  stage  farther  and  to  make  it  a  basis  of  the  union  that  the  share  of 
each  company  in  the  trade  should  be  exactly  equal.  This  was  carried 
out  by  the  shareholders  of  the  New  Company  selling  to  the  Old  Company 
enough  stock  to  make  the  holdings  of  both  in  the  loan  of  the  same 
amount.  The  Old  Company  gained  an  important  advantage  when  it 
was  agreed  that  such  sales  were  to  be  made  at  par^  The  equalization 
of  the  holdings  of  the  two  bodies  in  the  loan  was  only  one  side  of  the 
arrangement.  It  was  also  agreed  that  th^  whole  management  of  the 
trade  was  to  be  committed  to  a  body  elected  equally  from  the  courts  of 
the  two  companies,  and  that  this  body  should  have  full  powers  to  raise 
further  capital  as  required.  Meanwhile  each  undertaking  was  to  exist 
as  a  corporation  for  seven  years  in  order  to  pay  off  its  debts,  incurred 
on  the  security  of  its  common  seal;  and,  at  the  expiration  of  that 
period,  the  amalgamation  should  be  consummated  by  the  stockholders 
of  the  Old  Company  receiving  the  scrip  issued  against  the  loan  of  1698. 
Then  this  corporation  was  to  be  dissolved,  and  the  remaining  organi- 
zation, founded  on  capital  subscribed  as  to  one  half  by  members  of  the 
Old  Company  and  as  to  the  other  half  by  members  of  the  New  Company, 
was  to  be  known  by  the  title  of  the  United  Company  of  Merchants  of 
England  trading  to  the  East  Indies^. 

This  agreement,  which  was  signed  in  instruments  described  as  the 
Indentures  Tripartite  and  Quinque  Partite  on  July  22nd,  1702,  con- 
stitutes one  of  the  developments  which  mark  the  period  of  prosperity 
beginning  in  1701  and  continuing  until  1704.  Of  new  schemes  there 
was  the  purchase  of  the  undertaking  owned  by  the  Sword  Blade  company, 
and  the  formation  of  an  offshoot  of  this  enterprize  for  the  purchase  and 
development  of  estates  which  had  been  forfeited  by  Jacobites  in  Ireland. 
By  1702  the  capital  invested  in  this  separate  venture  was  ^^200,000^ 
This  is  the  first  instance  of  the  use  of  a  charter  for  the  carrying  on  of 
some  enterprize  of  a  totally  different  character  from  that  for  which  it 

1  The  so-called  stock  of  the  New  Company  was  quoted  at  rather  over  135,  but 
135  per  cent,  had  been  called  up,  so  that  it  was  only  a  little  over  par — vide  infra, 
n.  pp.  168,  169,  185. 

2  For  the  details,  vide  infra,  ii.  pp.  169^76,  187,  188,  189-90,  206. 

3  Ibid.,  in.  pp.  436,  437. 


CHAP,  xviii.]    Fraudulent  Practices  in  Cos.  1700-2       369 

was  granted  in  the  first  instance*.  Such  a  method  was  quicker  and 
probably  cheaper  than  the  obtaining  of  a  new  grant;  while,  after 
the  repressive  legislation  against  stock-jobbing,  it  may  not  have  been 
easy  to  obtain  charters  for  companies  which  were  capitalized  with 
shares.  In  1703  the  London  Bridge  and  City  Conduits  companies 
were  amalgamated  with  a  capital  of  .£150,000,  originally  divided  into 
shares  of  £500\ 

Of  the  miscellaneous  companies  in  England  most  of  those  which 
had  survived  the  crisis  of  1695-7  still  continued  to  exist.  Two  of 
these  were  removed  from  the  list  in  1703,  these  being  the  Tapestry 
Makers  and  the  company  formed  to  carry  on  the  Fire-Insurance  office 
founded  by  Barbon.  The  latter  may  have  been  transferred  to  a  new 
undertaking  known  as  "the  Phoenix'."  The  chief  remaining  companies 
in  this  group  include  the  water  supply  organizations,  the  Copper 
Miners,  probably  Dockwra's  copper  company,  the  Royal  Lustring,  the 
Blue  Paper  undertakings  and  the  society  for  the  Assurance  of  Widows 
and  Orphans*. 

The  return  of  prosperity  gave  opportunity  for  certain  fraudulent 
practices  connected  with  companies.  The  Mine  Adventurers  had  started 
with  an  inflated  capital,  constituted  in  a  manner  calculated  to  appeal 
directly  to  the  gambling  disposition.  Every  artifice  was  adopted  that 
would  aid  in  the  inflation  of  the  price  of  the  shares;  and,  by  an 
arrangement  made  between  the  deputy-governor  and  the  manager, 
false  information  was  insidiously  circulated  ^  From  the  year  1702 
the  management  of  the  Royal  African  company  had  adopted  financial 
methods,  which  were  all  but  fraudulent.  Debts  had  been  incurred,  and 
more  capital  was  needed.  Ostensibly  calls  were  made  on  the  stock- 
holders for  which  bonds  were  given,  but,  at  the  same  time,  the  payment 
of  dividends  was  resumed.  The  effect  of  this  practice  was  that  the 
proprietors  received  back  a  part  of  the  sums,  recently  subscribed,  while 
they  ranked  as  creditors  for  the  whole  amount". 

From  the  summer  of  1701  to  1704  there  were  three  years  of  pros- 
perity. Though  war  had  been  declared  against  France  in  May  1702, 
it  was  discovered  that  the  effect  of  hostilities  on  trade  had  been,  at 
first,  less  than  had  been  anticipated.  While  it  was  necessary  to  increase 
taxation,  the  national   credit  was  in  a  better  condition  than  it  had 

1  The  company  known  as  Captain  Poyntz  and  Company  for  planting  the  Island  of 
Tobago  {vide  infra,  in.  pp.  416,  417)  also  carried  on  several  distinct  enterprizes  and 
that  at  an  early  date.  This  company  however  was  authorized  by  a  foreign  grant, 
not  by  an  English  charter. 

2  Ibid.,  III.  p.  16.  3  i(^^^  „,.  pp,  119^  377, 

;        *  Ibid.y  II.  pp.  433,  437,  m.  pp.  7,  16,  26,  32,  33,  60,  72,  84,  85,  390. 
i       5  Ibid.,  II.  pp.  447,  448,  450,  451.  «  Ibid.,  ii.  pp.  28,  29. 

'  8.  c.  I.  24 


370        Capital  invested  in  Companies  1703    [chap.  xvm. 

been  since  the  Revolution  \  At  this  time,  the  repayment  of  the 
engrafted  stock  of  the  Bank  of  England  was  the  barometer  by  which 
the  position  was  judged;  and,  from  1702  to  1704,  large  amounts  of 
this  stock  were  extinguished.  Another  favourable  factor  was  the 
tentative  amalgamation  of  the  East  India  companies  which  removed  a 
long-standing  source  of  irritation.  Trade  at  home  was  active,  while 
that  abroad  was  much  above  the  low  level,  touched  during  the  previous 
war.  As  compared  with  a  total  foreign  trade  of  13 J  millions  in  1700-1, 
the  figures  for  1702-3  were  llj  millions  and  for  1703-4  close  on 
12  miUions^. 

Though  the  number  of  companies  in  existence  in  1703  was  much 
less  than  ten  years  before,  the  stock  or  share  capital  had  almost  doubled. 
In  making  this  estimate,  it  is  necessary  to  take  several  different  con- 
siderations into  account.  Many  of  the  companies  had  borrowed  large 
amounts  on  bond,  but  there  is  no  information  sufficiently  complete  to 
enable  this  class  of  obligation  to  be  included.  At  least  two  under- 
takings were  wound  up  in  1703,  and  this  fact  renders  it  advisable  to 
make  the  calculation  at  the  end  of  that  year.  But,  owing  to  the 
involved  history  of  the  settlement  between  the  East  India  companies, 
by  this  date  the  amount  of  share-capital  of  the  New  Company  was 
apparently  reduced,  through  a  large  block  being  held  by  the  Old 
Company  in  its  corporate  capacity^.  Therefore,  the  situation  can  be 
presented  more  clearly  and,  on  the  whole,  not  less  accurately,  by  adopt- 
ing the  capital  of  these  two  bodies  as  it  stood  in  1702  just  before  the 
signature  of  the  Indenture  Tripartite.  Fortunately,  the  number  of 
companies,  where  information  as  to  the  finances  is  wanting,  is  compara- 
tively small.  Regarding  these  there  is  a  change  which  must  be  noted. 
The  smaller  concerns  had  disappeared ;  and  therefore,  in  averaging  the 
capital  to  be  assigned  to  those  which  remained,  it  is  advisable  to  increase 
the  sum  estimated  for  each  in  1695.  Finally,  since  details  of  nominal 
capital  are  liable  to  be  misleading  (owing  to  some  of  the  stocks  being 
quoted  at  considerable  discounts  or  premiums)  the  average  market  price 
for  1703  is  added  in  certain  cases : 

1  An  Estimate  of  the  Comparative  Strength  of  Great  Britain  during  the  present  and 
four  preceding  Reigns  and  of  the  losses  of  her  Trade  from  every  War  since  the  Revolution; 
by  George  Chalmers,  London,  1794,  pp.  85-7. 

2  Whitworth,  State  of  the  Trade  of  Great  Britain,  ut  supra. 

3  Vide  infra,  ii.  pp.  171,  188. 


CHAP,  xvin.]     Capital  invested  in  Companies  1703        371 

Share  capital^  paid  up  or  taken  as  paid  up,  of  the  undermentioned 
companies  (exclusive  of'  loatis)  in  1703. 
England : 

Foreign  Trading  Companies 
Governor  and  Company  of  Merchants  trading  to  the  East 

Indies  (the  Old  Company!)  [120g]        1,674,606 

The  English  Company  trading  to   the  East  ladies  (the 
New  Company) — 1702 

Original  stock  [186^]  1, 0(52,000 

Additional  stock  2 681,700 


2,243,700 

The  Royal  African  Company  3  [17] 1,101,050 

The  Hudson's  Bay  Company*  31,500 

Banks  The  Bank  of  England 

Original  stock  [182|]  1,200,000 

Engrafted  stock  outstanding*       592,039 

1,792,039 

The  Million  Banks  [83^]        320,000 

Water  Supply  Undertakings 

The  New  River,  York  Buildings,  London  Bridge  and  five 

others^       600,000 

Miscellaneous 

The  Convex  Lights  Company**  25,600 

The  Royal  Lustring  Company^         60,000 

The  Sword  Blade  Company — undertaking  for  the  develop- 
ment of  land  in  Ireland  lo  200,000 

The  Mine  Adventurers"  [about  20] 245,240 

The  Charitable  Corporation ^^  ...         ...         ...         ...  20,000 

Six  other  companies,  estimated  at  £7j500  each     46,000 

Total  capital  of  English  companies 8,158,737 

Scotland : 

The  Company  of  Scotland  trading  to  Africa  and  the  Indies 

(the  Darien  company)— 42 J  7„  called  up  on  £400,000 

(actually  paid)      153,631 

The  Soaperie,  Sugarie,  Bank  of  Scotland  and  Roperie     ...  35,033 

Twenty  other  companies  at  £5,000  each      100,000 

Total  paid  up  capital  England  and  Scotland  8,447,401 

Taking  into  account  the  loans  of  the  chief  companies  and  allowing 
for  the  existence  of  others,  not   included  in   the  foregoing  list,  it  is 
highly  probable  that  the  whole  capital  (nominal)  of  the  undertakings 
in  existence  at  the  end  of  1703  in  Great  Britain,  was  in  excess  of 

1  Vide  infra,  ii.  p.  177.  ^  /^irf.,  xi.  p.  171.  ^  Ibid.,  ii.  p.  33. 

*  Ibid,,  II.  p.  237.  *  Ibid.,  in.  p.  219.  «  Ibid.,  in.  p.  279. 
7  Ibid.,  III.  pp.  9,  15,  25,  2G,  32,  33.  8  Ibid.,  iii.  p.  59. 

•  Ibid.,  III.  pp.  75,  89.     It  is  possible  (as  mentioned  below,  iii.  p.  85)  that  the 
value  of  a  part  of  the  assets  may  have  been  returned  to  the  shareholders. 

10  Ibid.,  III.  p.  437.  "  Ibid.,  ii.  p.  456.  »«  Ibid.,  in.  p.  380. 

24—2 


372  Political  Unrest  1704  [chap,  xviii. 

10  millions  sterling.  It  is  to  be  remembered,  too,  that  the  great  in- 
crease between  1695  and  1703  took  place  in  spite  of  legislation,  intended 
to  restrict  dealings  in  stocks  and  shares.  As  far  as  it  is  possible  to 
ascertain  the  effect  of  such  measures,  it  appears  that  they  tended  to 
reduce  the  number  of  small  companies  and  to  concentrate  attention 
upon  the  securities  of  the  great  undertakings.  This  view  is  confirmed 
by  the  action  of  the  South  Sea  company  in  1720,  which  resulted  in  the 
issue  of  the  writs  of  scire  facias  and  which  was  expressly  intended  to 
encourage  speculation  in  the  stock  of  that  venture  by  suppressing  it 
in  other  shares  ^ 

In  the  last  months  of  the  year  1704  there  were  the  premonitory 
symptoms  of  another  crisis.  It  became  clear  that  the  war  would  be 
protracted,  and  merchants  began  to  complain  of  losses  of  shipping. 
At  home  the  tension  between  England  and  Scotland  had  become 
serious.  There  were  rumours  that,  after  the  passing  of  the  act  of 
Security  by  the  Scottish  Parliament,  an  army  was  being  raised  for 
service  against  England.  Commerce  between  the  two  countries  was 
interrupted,  partly  by  the  fears  of  the  merchants,  partly  by  restrictive 
legislation 2.  In  Scotland,  more  particularly,  the  shock  to  confidence 
was  soon  felt.  The  collapse  of  the  Darien  company  had  occasioned 
widespread  losses  which  the  stockholders  could  not  afford^.  From 
1695  to  1699  the  harvests  had  been  bad,  provisions  were  dear  and  there 
was  much  distress ^  The  highly  protective  policy,  judged  necessary  to 
encourage  the  new  manufactures,  produced  retaliation ;  and,  when 
Scotland  was  largely  excluded  from  foreign  markets,  the  failure  of  the 
colonizing  scheme  showed  that  no  outlet  for  her  products  was  to  be 
found  in  plantations^.  These  circumstances  reacted  on  the 'recently 
established  manufactories,  many  of  which  could  no  longer  find  a  market 
for  their  goods  ^.  There  was  a  general  want  of  ready  money,  and  failures 
were  numerous''.  The  scarcity  of  cash  was  so  great  that  the  Newmills 
company  adopted  the  extraordinary  course  of  making  advances  to  its 
shareholders  on  account  of  the  future  dividends,  which  were  expected 
to  be  due  to  them,  but  which  were  not  yet  declared^.     The  unrest  in 

1  Vide  infra,  in.  pp.  324,  325. 

2  Hist,  and  Proceedings  of  the  House  of  Commons,  in.  p.  436 ;  An  Aceompt  Current 
between  Scotland  and  England,  by  J[ohn]  S[pruel]  1705,  p.  1. 

3  Vide  infra,  ii.  p.  221. 

*  On  the  Price  of  Wheat  at  Haddington  from  1627  to  ]897,  by  R.  C.  Mossman, 
Edinburgh,  1900,  p.  28. 

^  Scotland's  Interest:  Or  the  great  Benefit  and  Necessity  of  a  Communication  of 
Trade  with  England,  1704,  pp.  5,  6. 

^  Scottish  Historical  Review,  i.  pp.  184-6. 

7  Records  of  a  Scottish  Cloth  Manufactory,  pp.  222-356. 

8  Ibid.,  pp.  246,  248. 


\ 


CHAP,  xvm.]     The  Crises  of  1704,  1706,  1708  373 

the  last  months  of  the  year  1704  made  those,  who  had  money  at  call 
in  the  Bank  of  Scotland,  anxious  to  have  the  actual  cash,  and  with- 
drawals were  in  excess  of  lodgments.  In  December  there  was  a  report 
that  the  current  coins  would  be  recalled,  and  the  Bank  was  forced  to 
suspend  payment  on  December  18th.  The  same  events  produced 
demands  on  the  Bank  of  England,  and  there  was  a  considerable  fall 
in  the  stock.  The  crisis  was  avoided  for  the  time  by  the  issue  of 
interest-bearing  bills,  but  the  uncertainty  continued  during  the  years 
1705  and  1706.  Besides  the  unrest  in  Scotland,  there  was  the  pressure 
of  the  war  and  the  consequent  losses  to  merchants,  while  there  were 
fears  of  a  French  expedition  which  might  effect  a  landing  in  one  of  the 
disaffected  districts.  Alarm  was  general  amongst  the  owners  of  capital, 
and  the  position  of  the  Bank  of  England  was  endangered.  In  both 
these  years  it  was  only  able  to  pay  7  per  cent,  annually  out  of  profits, 
or  1  per  cent,  less  than  the  interest  received  from  the  State.  This 
reduced  distribution  suggested  the  inference  that  either  great  losses 
had  been  made  or  that  the  situation  was  so  grave  that  profits  must 
be  withheld  to  maintain  the  credit  of  the  institution.  The  effect  of 
these  adverse  influences  on  the  price  of  the  chief  stocks  was  very 
marked.  That  of  the  Bank  of  England,  which  had  touched  138f  in 
1703 — a  relatively  high  quotation  during  a  great  war — fell  steadily 
from  the  winter  of  1704,  and  all  through  1706  it  was  below  par.  The 
crisis  seemed  to  be  over  in  1707,  although  the  depression  continued; 
but,  even  after  the  Union  had  been  completed,  there  was  great  dis- 
satisfaction in  Scotland  \  and  in  February  1708  there  came  an  actual 
descent  by  the  French,  the  news  of  which  produced  another  crisis  in 
London,  accompanied  by  a  run  on  the  Bank  of  England  and  a  gi*eat 
fall  in  the  price  of  stocks.  Owing  to  the  incompleteness  of  the  record 
of  quotations  in  1708,  it  is  impossible  to  determine  whether  lower  prices 
were  touched  at  this  time  or  in  1706,  indeed  the  whole  period  from 
October  1704  to  March  1708  must  be  regarded  as  one  of  very  great 
depression,  during  which  there  were  frequent  crises,  the  most  serious  of 
which  were  those  from  September  to  November  1706  anfl  in  February 
and  March  1708.  The  following  table  shows  the  extent  of  the  depre- 
ciation between  1702  and  1708 : 

^  A  Brief  View  of  the  late  Scots  Ministry;  and  of  the  Reasons  the  Scots  had  to  ttish 
for  a  Deliverance  from  them  by  the  Union,  1709,  in  Somers'  Tracts  (1751),  xv. 
p.  230. 


374  Fall  in  Stocks  1702-8  [chap.  xvni. 

Comparison  of  the  Highest  Prices  of  the  undermejitioned  Stocks  from 
1702  to  1704  with  the  lowest  from  1705  to  YiOSK 


Bank  of  England 

Old  East  India 
company 

New  East  India 
company 

138i 

139^ 

260 

76i 

87^ 

234 

62^ 

45  7o 

62 

37  7o 

26 

io7o 

Highest  Price 
1702-04 

Lowest  Price 
1705-08 


Though  the  East  India  companies,  owing  to  special  circumstances 
in  their  position,  were  to  a  large  degree  exempt  from  the  full  effect  of 
the  crisis,  other  undertakings  were  not  so  fortunate.  The  Sword  Blade 
company  had  issued  bills  on  the  security  of  its  purchases  of  land  in 
Ireland,  and  it  had  thus  realized  the  proposals  of  1696  for  a  land-bank. 
Its  competition  had  affected  the  Bank  of  England,  and  in  1708  it  was 
in  difficulties ^  The  position  of  the  Mine  Adventurers  was  much 
worse.  This  company  had  started  banking  in  Wales,  and  on  March 
17th,  1708,  it  was  either  forced  to  suspend  payment  or  else  it  fraudulently 
refused  to  meet  its  obligations^.  This  suspension  was  one  of  the  causes 
of  the  act  passed  in  this  year  in  favour  of  the  Bank  of  England,  which 
conferred  on  it  a  monopoly  as  against  corporations,  but  not  against 
individuals  or  partnerships,  not  exceeding  six  persons  in  number*. 

Another  instance  of  default  has  to  be  added,  also  arising  out  of  the 
crisis  of  1708,  namely  that  of  the  Royal  African  company.  Until  1707 
meagre  dividends  were  paid,  but  these  were  made  out  of  capital.  In 
the  following  year  it  was  no  longer  possible  to  find  money  to  pay  the 
interest  on  the  bonds,  and  these  obligations  fell  from  80  to  30 ;  while 
the  stock,  which  had  sold  at  the  average  price  of  about  17  from  1701 
to  1706,  relapsed  to  4|  in  1708  and  to  a  fraction  over  2  during  the 
next  four  years". 

1  The  Million  Bank  is  omitted  in  this  table,  since,  though  its  stock  also  declined^ 
the  fall  was  partly  due  to  causes  other  than  the  crises. 

2  Some  Reasons  against  the  clause  for  Restraining  all  Corporations  hut  the  Bank  of 


England  from  keeping  cash  or  borrowing  money  payable  on  demand,  p.  1    Brit.  Mus. 
-    ;  Vide  infra,  iii.  p.  438. 


712.  m 


28 

3  Vide  infra,  ii.  pp.  462,  453.  *  Ibid.,  in.  p.  438. 

s  Ibid.,  II.  pp.  29,  35. 


CHAPTER  XIX. 

The  amalgamation  of  the  East  India  companies,  the 
reorganizations  of  the  royal  african  company  and 
THE  Mine  Adventurers,  and  the  Crisis  of  1710. 

The  long  period  of  depression  which  had  begun  in  1704,  began  to 
pass  away  in  the  middle  of  April  1708.  Bank  of  England  stock  was 
111^  on  March  24ith,  and  by  the  12th  of  April  it  had  risen  to  128. 
During  the  same  period  the  improvement  in  the  securities  of  the  India 
companies  was  comparatively  small,  owing  to  circumstances  connected 
with  the  final  amalgamation  which  was  due  to  take  place  a  year  later. 
The  transition  from  a  time  of  crises  to  one  of  moderate  confidence, 
culminating  in  great  speculative  activity  in  certain  directions  towards 
the  end  of  1710,  is  to  be  assigned  to  the  belief  that  there  were  fewer 
indications  pointing  to  a  success  of  the  Jacobite  activity.  Important 
political  advantages  were  expected  to  accrue  from  the  Union  with 
Scotland,  and  shipping  was  less  subject  to  capture  by  the  privateers  of 
the  enemy.  At  the  same  time  the  continuance  of  the  war  was  a  factor 
tending  to  restrict  the  prosperity  which  might  otherwise  have  been 
experienced.  The  problem  of  providing  money  was  becoming  in- 
creasingly difficult,  since  the  crisis  had  restricted  bon*owing  by  the 
State,  in  fact  the  total  funded  debt  at  the  end  of  1708  was  only 
slightly  in  excess  of  what  it  had  been  in  1701.  This  result  was  reached 
through  new  loans  being  made,  when  a  portion  of  the  borrowings  on 
account  of  the  former  war  had  been  paid  ofT. 

It  is  only  to  be  expected  that  the  long  continued  depression  would 
have  affected  most  of  the  companies  already  established.  The  Union 
with   Scotland  had   most   important   consequences  in  relation   to  the 

1  Funded  debt  1701 £4,726,017  17    0 

1705  .i.         4,087,498    4  10 

1708  ;V*  *    'i.;-         4,777,243     0     0 

—History  of  the  Earlier  Years'  of  the  Funded  Debt,  from  1694  to  1786  [C.  9010], 

pp.  15-17. 


376  Companies  after  the  Crisis  1708      [chap.  xix. 

industries  there.  These  had  all  been  founded  on  the  basis  of  an 
exclusively  Scottish  commercial  policy ;  and,  after  1707,  the  competition 
of  English  products  had  to  be  faced.  In  cases  where  Scotland  was 
deficient  in  natural  or  acquired  advantages  it  was  found  impossible  to 
resist  this  competition ;  and,  in  particular,  the  companies,  founded  to 
manufacture  fine  cloth,  were  unable  to  hold  their  ground,  and  within 
a  few  years  most  of  these  were  wound  up,  the  property  of  the  Newmills 
undertaking  being  sold  in  1713\  There  were  however  some  exceptions, 
the  chief  of  which  were  the  Sugaries  and  the  Soaperie,  the  former  in- 
deed continued  to  do  very  welP.  The  Bank  of  Scotland  was  flourishing. 
It  paid  a  dividend  of  20  per  cent,  early  in  1709^;  and,  at  that  date, 
shares  were  sold  at  a  premium  of  close  on  100  per  cent.,  representing 
an  advance  of  over  20  per  cent,  since  1706.  Finally,  the  repayment 
of  the  whole  capital  of  the  unfortunate  Darien  company,  together  with 
interest,  was  a  most  valuable  aid  towards  lessening  the  great  scarcity 
of  capital,  which  had  depressed  Scottish  industry  since  1700^ 

In  England  about  twenty  companies  are  known  to  have  survived 
the  crisis.  There  were  the  four  foreign  trading  organizations  °,  two 
banks'  and  eight  water-supplying  undertakings^.  Of  miscellaneous 
ventures  there  remained  the  Convex  Lights,  which  still  obtained 
contracts  for  street-lighting^,  and  the  Royal  Lustring  company.  The 
latter  probably  gained  to  some  extent  from  the  war  though  its  trade 
was  injured  partly  by  a  falling  off  in  demand  for  alamodes  and  partly 
by  smuggling.  Its  shares  however  were  very  steady  at  the  reduced  level 
reached  in  1698,  being  about  half  the  issue-price  in  1706®.  Amongst 
mining  ventures  there  were  the  society  of  Mineral  and  Battery  Works, 
which  had  continued  by  this  date  for  upwards  of  a  century  and  a  half  ^®, 
the  company  of  Copper  Miners"  and  the  Mine  Adventurers ^2,  though 
the  latter  could  only  continue  its  operations  by  undergoing  a  recon- 
struction. Then  there  were  also  the  land-development  undertaking  of 
the  Sword  Blade  company ^^  and  the  Charitable  Corporation". 

En-oneous  financial  methods  were  responsible  for  the  difficulties  of 
at  least  three  undertakings,  namely  the  Royal  African,  the  Sword  Blade 

1  Vide  infra,  in.  pp.  167,  168,  160. 

2  lUd.y  III.  pp.  132,  137. 

3  Ibid.,  III.  pp.  268,  274.     This  dividend  was  earned  mainly  in  1708. 

*  Ibid.,  II.  p.  225.     For  the  general  effect  of  the  Union  on  Scottish  industry 
vide  Wealth  of  Nations,  i.  chapter  xi.  Pt.  iii.  (ed.  Caunan),  pp.  221,  222. 
5  Vide  infra,  ii.  pp.  29,  174,  187,  191,  234. 

«  Ibid.,  III.  pp.  224-6,  282.  ^  /^i^.^  m.  pp.  7^  15^  26,  32,  33. 

8  Ibid.,  III.  p.  60.  9  Ibid.,  in.  p.  89. 

10  Ibid.,  II.  p.  427.  "  Ibid.,  11.  p.  433. 

12  Ibid.,  II.  pp.  453,  454.  ^^  Ibid.,  in.  p.  437. 

1*  Ibid.,  III.  p.  380. 


CHAP.  XIX.]     Capital  Issues  of  the  Bank  1708-10         377 

companies,  and  the  Mine  Adventurers;  and,  from  1711  to  1713,  there 
were  in  two  cases  reconstructions  and  in  the  third  a  winding  up. 

The  effect  of  the  improvement  in  credit  is  shown  in  the  development 
of  the  Bank  of  England  and  the  amalgamation  of  the  East  India 
companies.  These  events  are  of  very  great  interest  and  importance, 
partly  in  aiding  the  financing  of  the  war,  partly,  too,  as  showing  the 
cumbersome  methods  by  which  rearrangements  of  capital  were  made. 
The  repayment  of  the  engrafted  stock  of  the  Bank  of  England  had 
been  completed  in  1707,  and  thus  it  may  be  remarked  that  this  stock 
both  began  and  was  extinguished  during  a  time  of  crisis. 

The  original  capital  of  the  Bank  was  d£*l  ,200,000,  the  amount  engrafted 
was  an  odd  sum  of  over  a  million  and  the  total  in  1697  was  i?2,201,171 .  10*. 
It  might  be  thought  that  the  directors  would  have  taken  advantage  of 
the  repayment  of  the  engrafted  stock  in  1707  to  have  eliminated  from 
their  capital  account  the  odd  pounds  and  shillings.  However  at  this 
time  more  resources  were  required  to  enable  the  Bank  to  circulate 
Exchequer  Bills,  and  it  was  decided  to  bring  in  fresh  capital  and  to 
fix  the  amount  of  stock  in  1708  at  the  same  sum  at  which  it  had  stood 
from  1697  to  1707.  This  was  effected  by  making  a  call  of  50  per  cent, 
on  the  total  of  the  original  and  engrafted  stock.  By  this  means  the 
funds  received  brought  the  capital  above  the  amount  that  w£is  looked 
upon  as  fixed,  and  the  difference  was  returned  to  the  stockholders*. 
The  improvement  in  credit  enabled  the  Bank  to  call  up  money  from 
the  proprietors  as  required.  On  February  22nd,  1709,  lists  were 
opened  for  a  new  subscription  at  115  equal  to  the  existing  capital, 
and  the  whole  amount  was  applied  for  inside  four  hours.  In  1710 
a  further  call  was  made,  bringing  the  total  stock  at  that  date  up  to 
^5,559,995.  14?.  M.^ 

The  capital  arrangements  in  the  East  India  trade  from  1703  to 
1708  were  much  more  complex.  At  the  later  date,  there  were  no  less 
than  seven  distinct  stocks  in  existence.  First  of  all  there  was  the 
capital  of  the  Old  Company  and  also  its  bonds.  Then  there  was  the 
stock  of  the  two  million  loan  to  which  the  monopoly  of  the  trade 
was  attached.  Under  the  arrangement  of  1702,  one  half  of  the  total, 
divided  between  the  two  companies,  was  now  the  stock  of  the  English 
company  which  might  be  sold  in  the  market,  while  the  other  half  was 
held  by  the  committees  of  the  Old  Company  in  trust  for  that  company 
in  its  corporate  capacity.  Further,  there  were  the  bonds  of  the  New 
Company  and  its  old  additional  stock,  which  was  in  process  of  repayment 
under  the  terms  of  the  Indenture  Tripartite.  Lastly  came  the  "new 
additional  stock  of  the  committee  of  management,"  which  constituted 

1  Vide  infra,  iii.  p.  224.  «  Ibid.,  in.  pp.  227,  243. 


378  The  Fund  of  Credit  Fallacy  1708     [chap.  xix. 

the  actual  trading  capital,  and  which  again  was  held  in  trust  by  that 
committee,  in  equal  moieties  on  behalf  of  the  two  companies,  to  be 
transferred  to  them  when  the  amalgamation  was  completed.  This 
stock,  it  may  be  recalled,  was  begun,  by  handing  over  to  the  managing 
committee  the  assets  in  India,  consisting  of  the  dead  stock,  of  each 
company,  and  it  was  increased  by  equal  calls  from  either  body\ 

The  position  in  1708  will  be  comprehended  most  easily  in  relation 
to  the  widespread  over- valuation  of  a  "  fund  of  credit,"  which  became 
common  after  the  Revolution  and  which  produced  disastrous  results  in 
1720.  The  old  East  India  company  had  worked  on  a  stock,  subscribed 
by  the  members,  which  constituted  the  bulk  of  its  trading  capital. 
The  subscription  of  the  two  million  loan  by  the  new  organization 
provided  no  working  capital,  and  a  further  issue  of  stock  was  made 
for  this  purpose.  But,  under  the  Indenture  Tripartite  of  1702,  this  old 
additional  stock  was  to  be  extinguished  before  the  final  union  of  the 
companies.  Therefore  the  committee  of  management,  while  it  was 
freed  from  the  debts  of  the  two  undertakings,  was  left  without  floating 
capital  to  carry  on  the  trade,  except  in  so  far  as  the  dead  stock,  vested 
in  it  in  trust,  constituted  a  nucleus,  and  to  this  the  funds  called  up 
from  the  companies  were  added.  To  obtain  resources  for  meeting 
these  calls  neither  body  had  powers  to  add  to  the  stock,  sanctioned  by 
the  act  of  1698,  and  therefore  each  had  to  borrow  by  its  bonds  on  the 
security  of  the  debt  due  to  it  by  the  State.  It  follows  then  that, 
although  the  funds  raised  by  the  committee  of  management  were 
described  as  "the  new  additional  stock,"  these  were  ultimately  of  the 
nature  of  bonds  and  that  the  companies  were  the  intermediaries 
between  that  committee  and  the  investing  public.  As  a  preliminary 
to  the  dissolution,  both  of  the  Old  company  and  of  the  committee  of 
management,  there  came  the  act  of  6  Anne  c.  17  (which  authorized  the 
creation  of  c^l ,200,000  stock,  to  be  added  to  that  already  existing)  and 
the  award  of  Lord  Godolphin  (September  29th,  1708).  Under  these 
instruments,  the  additional  stock  was  converted  into  6  per  cent,  bonds 
of  the  United  company,  and  these  bonds  were  divisible  to  the  Old 
and  the  New  companies  in  equal  parts.  Each  undertaking  was  entitled 
to  distribute  such  bonds  to  its  creditors  or  its  stockholders.  In  this 
way,  the  bonds  of  both  the  Old  and  the  New  companies  disappeared, 
and  there  remained  only  bonds  and  stock  of  the  United  company  and 
the  stock  of  the  Old  company.  At  this  point  a  difficulty  arose.  The 
share  of  the  bonds  of  the  United  company,  receivable  by  the  Old  com- 
pany together  with  its  remaining  assets,  did  not  suffice  to  pay  its  debts, 
and  a  call  of  25^  per  cent,  was  necessary.     Then,  when  the  debts  had 

1  Vide  infra,  ii.  pp.  169-71,  177,  181,  182,  188,  191,  206. 


CHAP.  XIX.]    Investments  in  India  Stock  1698-1708       379 

been  discharged,  the  stock  of  this  body  was  exchanged  for  that  of  the 
United  company,  and  the  charter  of  the  former  was  surrendered.  The 
proportion  of  United  stock  to  be  received  was  a  little  larger  than  that 
surrendered,  so  that  the  members  of  the  Old  company  had  a  small 
nominal  addition  made  to  their  holdings*. 

The  broad  effect  of  these  financial  methods  had  been  to  make  the 
India  trade  supply  the  exigencies  of  the  State  to  such  an  extent  that 
for  seven  years  there  had  been  a  great  want  of  free  capital  to  carry  on 
the  ordinary  commercial  operations,  for  which  the  undertaking  was 
supposed  to  exist.  Thus,  while  it  appears  that  the  capital  employed 
in  the  India  trade  was  much  more  than  it  had  been  twenty  years  before, 
as  a  matter  of  fact  it  was  very  much  less,  owing  to  almost  all  the 
subscribed  stock  and  much  of  that  borrowed  on  bond  having  been  lent 
to  the  government. 

The  formation  of  the  United  East  India  company  in  1709  suggests 
the  enquiry  as  to  how  its  predecessors  had  fared  as  investments.  The 
New  company  had  existed  altogether,  prior  to  the  union,  for  eleven 
years,  and  it  had  traded  independently  from  1698  to  1702.  Its  financial 
methods  were  comparatively  prudent,  and  up  to  1702  only  moderate 
dividends  were  paid  on  the  old  additional  stock  which  was  entitled  to 
the  profits.  Under  the  Indenture  Tripartite,  this  stock  was  to  receive 
the  proceeds  of  the  assets  which  had  been  employed  in  trade;  and, 
though  the  record  of  divisions  is  not  complete,  those  that  have  been 
recorded  show  that  the  proprietors  received  more  than  they  had  origin- 
ally invested^  After  1702  the  position  of  the  original  stock  was 
changed.  Up  to  the  date  of  the  Indenture  Tripartite  it  had  been 
analogous  to  a  fixed  charge  on  the  total  income,  whereas  afterwards 
it  became  an  ordinary  stock,  ranking  both  for  the  interest  paid  by  the 
government  and  for  its  share  of  the  profit  made  by  trade.  Under  these 
circumstances  it  is  not  surprising  to  find  that  the  quotation  appreciated. 
Up  to  the  date  of  the  agreement  of  July  22nd,  1702,  the  highest  price 
touched  was  154,  while  from  that  date  to  1708  the  maximum  was  as 
high  as  272  and  the  lowest  was  151f,  while  from  1704  to  1708  it  was 
never  less  than  200.  The  cause  of  this  high  level  is  to  be  found  partly 
in  the  over-estimation  of  the  advantages  of  the  amalgamation  and 
partly  (to  which  extent  it  was  justified)  in  the  addition  of  about 
two-thirds  to  their  holdings  in  the  United  undertaking  which  members 
of  this  company  were  to  receive  in  1709^ 

Naturally  the  chief  interest  rests  with  the  outcome  of  the  Old 
company  as  an  investment;  and,  in  an  undertaking  with  a  history 
extending  over  fifty  years,  much  will  depend  on  the  date  at  which 

*  For  the  details  of  this  arrangement  vide  infra,  ii.  p.  176. 
«  Ibid,,  II.  pp.  187,  188.  3  11^^^  „.  p.  189. 


380       Investments  in  India  Stock  1658-1709    [chap.  xix. 

stock  was  acquired.  It  will  be  necessary,  therefore,  to  select  for  this 
enquiry  certain  typical  transactions,  neglecting  purchases  of  stock  both 
at  extremely  high  and  low  prices.  First  of  all  there  is  the  position  of 
an  original  adventurer  or  his  representatives.  Supposing  him  to  have 
paid  in  =£*100  from  1658  to  1660,  he  would  have  had  this  doubled  in 
1682 ;  and,  on  his  holding  of  <£200  nominal  in  1708,  he  would  have 
paid  the  call  of  25^  per  cent.,  so  that  his  total  investment  would 
have  cost  from  first  to  last  £151\  The  holding  of  £W0  in  the  Old 
company  was  converted  in  1709  into  d£^200.  lis.  9d,  of  United  Stock, 
which,  at  the  mean  price  of  that  year,  could  have  been  sold  for 
^248.  10*.,  to  which  is  to  be  added  £912.  10s.  of  dividends  from  1662 
to  1708,  making  a  total  return  of  .£1,221  as  against  a  cost  of  <£*151 
or  a  gross  profit  of  .£*1,070.  Since  the  dividends  paid  on  the  stock  are 
included,  allowance  must  be  made  for  interest  on  the  capital  to  obtain 
the  nett  profit.  Neglecting  compound  interest  and  taking  only  average 
rates  roughly,  namely  6  per  cent,  from  1660  to  1690,  8  per  cent,  from 
1690  to  1700,  5  per  cent,  from  1700  to  1705  and  6  per  cent,  from  1705 
to  1709,  this  allowance  would  amount  to  i?309;  yielding  a  nett  incre- 
ment of  the  capital  of  ^^761  ^ 

Next  an  investor,  who  bought  cS^lOO  stock  at  <£300  in  1690,  by  a 
similar  calculation,  would  have  sustained  a  nett  loss  of  capital  of 
c£^472.  5*.  or  over  150  per  cent,  in  the  nineteen  years.  Again  the 
person,  who  subscribed  to  the  new  issue  in  1693,  would  have  made  a 


1  Vide  infra,  ii.  pp.  176-9. 

2  Calculation  showing  the  position  of  an  original  Adventurer  (or  his  representatives) 
in  the  Old  East  India  company  (1658-1709) ; 


1658-60  £100  Stock 

1681        100      „     bonus  ... 

200      „ 
1708-9  Call  of  25 J  7„ 
1 709     £200  Stock  converted 
into  £200.  lis.  9rf. 
stock  of  United  com- 
pany 
Gross  profit 


100    0 


51     0 


1,070    0 
1,221     0 


Dividends  to  1682  440^%  on  £100  440  10 

„         „  1691 200%   „  £200  400    0 

„        „  1708   667o  ,,     >,      132    0 

Value  of  £200.  17«.  M.   stock 

in  the  United  company  at  the 

middle  price  of  1709  (123})       248  10 


1,221     0 


Allowance  for  interest  (simple) 
30  years  at  6  7„  on  £100  ... 
10      „     J,  8  „        „ 

5        a      )9   ^   fi  }} 

4      „     „  6  „        „ 
Nett  Profit        


180 
80 
26 
24 

761 


1,070    0 


Gross  profit 


1,070    0 


CHAP.  XIX.]    Reorganizations  of  Capital  1710-13  381 

nett  loss,  on  this  basis,  of  J*40.  5*.  in  sixteen  years,  while  a  purchase 
at  50  in  1699  would  have  resulted  in  a  nett  profit  of  £^.  5s.  in  the 
ten  years  or  an  average  increment  per  annum  of  over  17  f)er  cent. 

It  will  thus  be  seen  that  an  investment,  made  in  East  India  stock 
up  to  1680,  would  have  yielded  a  nett  increment  of  capital  on  the 
basis  of  the  middle  price  of  1709  for  the  equivalent  security  of  the 
United  company.  At  any  of  the  recorded  quotations  from  1682  to  169S 
there  would  have  been  a  nett  loss.  To  have  made  a  nett  profit  from 
1695  to  1699  the  investor  must  have  bought  at  50  or  below  this  figure; 
while  no  one,  who  acquired  stock  at  the  quotations  of  1703  to  1707, 
could  have  gained  a  nett  increment  of  his  capital.  As  compared  with 
the  position  of  a  purchaser  of  Old  East  India  stock  from  1697  to  1707, 
the  members  of  the  Bank  of  England,  who  subscribed  the  engrafted 
stock,  were  more  fortunate.  They  received  their  capital  back  again 
inside  ten  years  with  an  addition  of  at  least  35  per  cent.,  while  some, 
who  like  Sir  Gilbert  Heathcote  took  advantage  of  the  great  advance 
in  quotations  and  sold  at  a  premium,  easily  doubled  the  original  in- 
vestment, besides  receiving  a  respectable  return  in  either  case  as  long 
as  they  held  the  stocks 

From  another  point  of  view  further  light  is  obtained  on  the  methods 
of  dealing  with  share  capital  from  the  reorganizations  of  the  Royal 
African  company  and  the  Mine  Adventurers.  Both  operations  belong 
to  this  period,  though,  owing  to  the  delay  in  obtaining  the  acts  of 
Parliament  that  were  necessary,  the  latter  was  not  completed  until 
1711  and  the  former  till  1713.  In  neither  case  was  there  any  prospect 
of  the  company  being  able  to  pay  its  debts  in  its  existing  condition ; 
and,  by  the  act  14  Charles  II.  c.  24,  creditors  had  no  recourse  against 
the  stockholders  of  the  African  company.  Parliament  took  the  view 
that  the  so-called  bonds  of  the  Mine  Adventurers  were  essentially  of 
the  nature  of  share-capital,  though  possessed  of  a  certain  priority  as 
compared  with  the  remainder.  Making  allowance  for  this  fact,  both 
reorganizations  proceed  on  similar  principles  up  to  a  certain  point, 
namely  in  so  far  as  persons  in  the  position  of  bona  fide  creditors  (that  is, 
those  to  whom  the  Mine  Adventurers  were  indebted  and  the  bond- 
holders of  the  African  company)  received  new  share-capital  in  full  for 
the  amounts  of  their  claims.  Then  the  owners  of  bonds,  issued  in  the 
lottery  by  which  the  Mine  Adventurers  company  was  floated  in  1698, 
had  their  holding  reduced  by  one-fifth  and  new  shares  were  given  for  the 
remainder.  The  other  securities  of  each  (namely  the  stock  of  the  African 
company  and  the  shares  of  the  Mine  Adventurers)  were  dealt  with  on 
different  principles.      The  latter  were  written  down  by  one-third  only  •; 

1  Vide  infra,  m.  pp.  211-24.  «  Ibid.,  ii.  p.  456. 


382  Reorganizations  of  Capital  1710-13    [chap.  xix. 

while  African  stock  was  cancelled  to  the  extent  of  90  per  cent.,  and,  before 
the  balance  could  be  converted  into  new  stock,  the  holders  were  forced 
to  pay  an  assessment  of  50  per  cent,  thereon.  So  far  from  this  disparity 
of  treatment  being  inequitable,  there  is  in  it  a  rough  measure  of  justice. 
From  1702  the  shareholders  of  the  African  company  had  been  receiving 
dividends,  while  calls  were  being  made  on  them  for  which  bonds  were 
given.  Such  devious  finance  had  two  consequences,  first  that  this  series 
of  dividends  was  made  out  of  capital  and  secondly,  as  affecting  the 
reorganization,  if  these  bonds  as  well  as  others  were  to  be  accepted  at 
their  par  value  for  exchange  into  new  stock,  the  shareholders  should 
be  compelled  to  make  restitution  of  what  they  had  received  in  dividends 
since  1702.  This  adjustment  was  effected  by  the  assessment  of  the 
reorganization;  which,  though  50  per  cent,  on  the  new  capital,  was 
only  5  per  cent,  on  the  old.  Now  the  dividends  paid  from  1702  to 
1707  came  to  4 J  per  cent.,  so  that  the  effect  of  this  part  of  the  settle- 
ment was  to  force  the  members  to  refund  the  distributions  which  had 
been  wrongfully  made\ 

This  reorganization  would  have  brought  the  holding  of  an  original 
adventurer  in  the  company  formed  in  1662  close  to  vanishing  point. 
Supposing  ^100  to  have  been  invested  in  1662,  the  arrangement  of 
1671-2  would  have  left  it  at  only  d^lO,  which  was  written  up  to  £¥) 
in  1691  and  was  now  reduced  to  <£4.  It  may  be  noted  that  while  the 
reorganization  was  in  progress  the  highest  price  of  the  stock  was  about 
4  for  ^100  nominal  and  that  for  a  year  afterwards  it  averaged  52, 
so  that  at  the  latter  quotation  the  market  value  of  what  remained  of 
the  £100  invested  in  1662  was  only  about  ^2.  The  position  of  the 
adventurer,  who  subscribed  at  the  formation  of  this  company  in  1672, 
was  for  practical  purposes  as  bad,  though  his  percentage  of  loss  was 
much  less.  TTiis  <^100  would  be  converted  into  d^400  in  1691  which 
was  written  down  to  £^0  in  1713  and  was  then  worth  about  ^20. 
The  loss  is  so  clear  that  it  would  be  useless  to  add  how  much  it  was 
increased  by  the  cessation  of  dividends.  Since  the  assessment  of  1713 
may  be  off-set  against  the  distributions,  wrongfully  made  from  1702 
to  1707,  the  position  was  in  effect  that  no  profits  had  been  divided 
since  1692,  and  further  allowance  has  to  be  made  for  the  depreciation 
of  such  payments  as  had  to  be  met  in  response  to  the  calls  from  1702 
to  1708  which  were  now  converted  into  stock  2. 

The  increases  of  capital  by  new  subscriptions  of  the  chief  companies 
between  the  middle  of  1708  and  before  the  end  of  1710  are  indications 
that  this  period  was  one  of  modified  prosperity.  Prices  of  stocks  rose, 
and  there  was  an  advance  in  the  dividends  distributed.     For  instance 

1  Vide  infra,  ii.  pp.  31,  36.  2  /^^^.^  „.  pp.  19^  28,  29,  31-5. 


CHAP.  XIX.]      Extension  of  Insurance  1706-10  383 

the  United  East  India  company  increased  its  rate  to  9  per  cent,  for 
the  year  1709-10;  and,  during  the  period  from  September  1708  to 
March  1710,  the  Bank  of  England  divided  as  much  as  ^\  per  cent.* 
While  these  events  show  that  there  was  a  considerable  activity  in  trade 
at  this  time,  it  is  probable  that  the  improvement  in  confidence  was 
largely  based  on  the  expectation  of  an  early  peace,  and  that  therefore 
to  that  extent  it  discounted  the  future.  This  estimate  of  the  inner 
meaning  of  the  situation  is  confirmed  by  the  state  of  British  foreign 
trade.  The  total  imports  and  exports  (including  those  of  Scotland) 
in  1709  and  1710  averaged  less  than  11  millions  as  against  over  lOj 
millions  annually  for  England  alone  between  1705  and  1707.  ITiere- 
fore  it  appears  that  the  improvement  consisted  chiefly  in  the  restoration 
of  confidence  and  a  renewal  of  hope.  Such  a  revival,  finding  compara- 
tively small  scope  in  the  legitimate  extension  of  existing  industries, 
tended  to  branch  out  in  an  altogether  new  direction.  Already  for 
several  years  past  attention  had  been  paid  to  insurance  schemes.  Thus 
in  1706,  the  Amicable  Society  for  life-insurance  was  established',  and 
before  1708  Charles  Povey  had  founded  two  undertakings  known  as 
the  Exchange  House  Offices  which  were  purchased  by  the  company  of 
London  Insurers,  whose  business  was  better  known  as  the  Sun  Fire  Office^ 
which  still  exists.  The  original  capital  paid  up  in  1710  was,  as  far  as 
can  be  ascertained,  under  £\fiOO^.  In  1709  a  company  known  as  that 
of  the  London  Insurers  upon  Lives  was  started  ^  These  enterprizes 
appealed  mainly  to  the  impulse  towards  thrift;  but  insurance,  as  yet 
being  in  its  infancy,  had  another  side  which  met  and  became  inter- 
mingled with  one  of  the  main  tendencies  of  the  time.  Wagering  was 
not  only  a  fashionable  amusement,  it  was  also  an  important  interest 
amongst  all  classes,  and  it  entered  to  a  considerable  extent  into  many 
business  transactions.  Since  the  outbreak  of  the  wars  with  France,  the 
course  of  trade  had  been  vitally  affected  by  the  progress  of  hostilities. 
Therefore,  there  arose  the  anomaly  that  it  was  often  the  prudent 
business  man  who  apparently  made  wild  bets  upon  the  Exchange.  For 
instance,  suppose  an  operator  in  the  stock-market  had  an  «u;count  open 
for  the  rise,  and  he  expected  an  advance  in  quotations  would  follow 
the  success  of  the  arms  of  the  allies  in  a  battle  that  was  anticipated. 
To  protect  himself  he  would  wager,  apparently  unpatriotically,  that 
they  would  not  achieve  a  victory  before  a  certain  date.  By  covering 
his  risk  in  this  manner,  he  reduced  the  maximum  gain  he  might  have 
made,  but  at  the  same  time  he  minimized  his  loss.  If  British  arms 
succeeded  within  a  given  date,  and  his  other  calculations  were  well 
founded,  he  had  the  profit  on  his  operation  in  stocks ;  if  on  the  other 

1   Vide  infra,  ii.  pp.  200,  206,  iii.  pp.  226-8,  246.  ^  /^.^  „,.  p.  390. 

3  lUd.,  III.  pp.  881,  382.  ^  Ibid.,  ui.  p.  394. 


384     The  Gamble  in  Life-Contingencies  1710    [chap.  xix. 

hand  there  was  no  battle  or  if  the  enemy  had  the  advantage,  he  was 
able  to  recover  on  his  bet.  Almost  all  important  financial  and  com- 
mercial transactions  were  influenced  by  the  progress  of  the  campaigns 
and  similar  wagers  were  frequent.  Moreover,  when  the  mercantile 
public  had  become  inured  to  risks,  there  arose  a  disposition  to  risk 
money  on  what  were  purely  matters  of  chance.  Instances  of  this 
tendency  are  to  be  found  in  the  Lottery  Loans  of  1694  and  1710 
and  the  floatation  of  the  Mine  Adventurers  company  by  similar  methods 
in  1698\  It  was  the  uniting  of  these  two  tendencies — on  the  one  side 
the  insurance  idea  on  the  other  the  willingness  to  risk  money  on  a  pure 
chance — during  a  period  of  moderate  credit  when  the  usual  channels  of 
investment  in  trade  were  not  specially  promising,  that  produced  the 
insurance  boom  of  1710.  During  a  period  of  about  a  year  there  was 
great  activity  in  what  was  virtually  a  gambling  in  life-contingencies. 
Professedly  provident  schemes,  these  insurance  offices  (of  which  over 
two  hundred  were  opened  in  London)  would  never  have  attracted  the 
public  had  it  iiot  been  for  the  speculative  element  involved.  In  most 
cases  these  were  organized,  on  the  tontine  principle,  as  what  are  known 
as  "  dividend  societies,"  that  is  they  bound  themselves  to  divide  all  the 
premiums  received,  less  a  certain  moderate  charge  for  management, 
amongst  those  members  who  had  qualified  according  to  the  conditions 
laid  down.  Most  of  the  offices  were  at  coffee-houses,  and  probably 
the  proprietors  considered  themselves  reimbursed  for  the  moderate 
charge  for  management  by  the  amount  of  additional  custom  they 
obtained.  The  most  important  contingencies  provided  for  (each  by 
separate  groups  of  undertakings)  were  the  payment  of  a  sum  on 
marriage,  on  the  birth  of  a  child,  on  the  completion  of  apprenticeship 
and  to  domestic  servants  who  had  remained  for  a  specified  period  in 
one  place.  The  speculative  element  arose  from  the  variation  in  the 
number  of  claimants  at  a  given  date,  and  it  sometimes  happened, 
especially  at  the  beginning,  that  they  received  sums  very  many  times  in 
excess  of  the  premium  paid.  Such  cases  were  advertized  in  the  papers 
and  new  offices  were  formed  with  reckless  profusion,  while  "policies 
and  premiums  were  in  the  mouths  of  all.  It  was  the  El-dorado  of  the 
London  craftsman,  the  alchymy  of  the  needy  tradesman^"  Such  schemes, 
hurriedly  formed  and  without  adequate  supervision,  were  subject  to  the 
risk  of  fraud  on  two  diff'erent  sides,  either  by  the  managers  or  by  the 
claimants.  Within  a  few  months  many  offices  failed,  and  there  is 
evidence  that  marriages  were  effected  solely  to  qualify  for  the  distri- 
bution to  be  made  at  a  certain  date^     There  was  a  special  objection 

1  Vide  infra,  ii.  pp.  446-7;  m.  pp.  275,  290. 

2  Annals f  Anecdotes  and  Legends  of  Life  Insurance,  by  John  Francis,  London, 
1853,  p.  66.  3  Vide  infra,  iii.  pp.  369-72,  391-4. 


CHAP.  XIX.]  The  Crisis  of  1710  385 

to  such  undertakings  from  the  point  of  view  of  the  administration.  It 
was  thought  that  this  easy  method  of  gambling  diverted  subscriptions 
from  the  Lottery  Loan  of  1710^  while  the  numerous  failures  of  these 
societies  came  at  an  unfortunate  time  when  credit  had  been  again 
severely  shaken. 

The  causes  of  the  crisis,  which  began  in  the  closing  months  of  the 
year  1710,  that  can  be  most  easily  discerned  were  the  defeat  of  the 
Whigs  at  the  general  election  of  that  year  and  the  collapse  of  the 
insurance  boom.  The  new  ministry  did  not  command  the  confidence 
of  the  classes  who  had  capital  to  invest,  and  it  is  recorded  that  such 
persons,  not  only  themselves  sold  large  quantities  of  stock,  but  recom- 
mended their  foreign  correspondents  to  dispose  of  their  holdings  of 
British  securities''.  Another  cause  of  uneasiness  was  the  suspicion  that 
had  begun  to  become  rife  as  to  the  management  of  the  Exchequer, 
indeed  it  was  stated  in  1712  that  the  moneys,  not  accounted  for,  were 
as  much  as  36  millions,  while  it  was  well  known  that  bribery  continued 
in  the  House  of  Commons'.  It  is  obvious,  however,  that  for  such 
action  to  result  in  a  grave  disturbance  of  credit  there  must  have  been 
an  element  of  weakness  in  the  financial  situation.  This  is  to  be  found 
in  the  cumulative  effect  of  the  strain  on  the  resources  of  the  country 
involved  by  the  continuance  of  the  war.  During  the  first  six  or  seven 
years  of  the  struggle  the  pressure  on  the  finances  of  Great  Britain  had 
not  been  sufficient  to  produce  any  greater  effect  than  the  curtailment 
of  trade.  That  this  was  so  is  established  by  the  fact  that,  as  far  as 
can  be  ascertained,  the  series  of  crises  from  1704  to  the  beginning  of 
1708  were  occasioned  by  friction  between  England  and  Scotland,  indeed 
up  to  1710  the  cost  of  the  war  had  not  imposed  any  great  strain  on 
the  national  credit.  By  the  terms  made  with  the  Bank  of  England 
and  the  United  East  India  company  in  1708-9,  these  institutions 
between  them  lent  over  1^  millions  without  interest*,  and,  up  to  1710, 
the  Bank  undertook  to  circulate  more  than  3  millions  of  Exchequer 

1  The  Petition  of  Dorothy  Petty,  a  director  of  the  Union  Society,  printed  in 
The  Insurance  CyclopcBdiay  by  Cornelius  Walford,  i.  p.  322. 

2  Truth  if  you  can  find  it:  Or  a  Character  of  the  present  M y,  1712,  p.  5;  An 

Essay  towards  the  History  of  the  last  Ministry  and  Parliament,  containing  seasonable 
Reflections  on  Favourites,  Ministers  of  State,  Parties,  Parliaments  and  Publick  Credit, 
1710,  in  Somers'  Tracts  (1748),  ii.  p.  269 ;  The  History  of  Great  Britain  dunng  the 
Reign  of  Queen  Anne,  by  Thomas  Somerville,  London,  1798,  p.  423. 

2  Truth  if  you  can  find  it,  1712,  p.  11 ;  A  Representation  of  the  Loyal  Subjects  of 
Albinia,  1712,  p.  6;  No  Punishment  no  Government  and  No  Danger  even  in  the  yVorst 
Designs,  1712,  p.  5 ;  An  Inquiry  into  the  Miscarriages  of  the  Four  Last  Years  Reign, 
1714,  p.  26;  The  Management  of  the  Last  Four  Years  Vindicated,  1714,  p.  19. 

*  This  loan  reduced  the  rate  of  interest  on  the  whole  debt  due  to  the  Bank  of 
England  to  6  per  cent,  and  to  5  per  cent,  in  the  case  of  the  East  India  company — 
vide  infra,  n.  p.  191,  iii.  p.  227. 

s.  a  I.  25 


386  The  Crisis  of  1710  [chap.  xix. 

Bills  \  By  these  temporary  expedients  the  annual  deficits  were  financed, 
and  the  hope  of  an  early  peace  had  enabled  the  government  to  meet 
the  outstanding  liabilities  by  contracting  a  large  floating  debt.  The 
administration  found  itself  unable  to  bear  the  protracted  financial  strain 
which  involved  an  outlay  of  over  65J  millions  by  March  1714^  Already 
in  1710  many  signs  of  embarrassment  were  observed,  taxes  granted  by 
Parliament  did  not  realize  the  estimated  amounts,  trade  was  heavily 
burdened,  many  branches  of  the  revenue  were  anticipated  and  the 
salaries  in  the  Royal  Household  were  eighteen  months  in  arrears^.  The 
obligations  comprised  in  the  floating  debt  began  to  fall  in  value  early 
in  1710.  For  instance  "Army  Debentures,""  which  had  been  91  in  the 
bad  years  1706  and  1707,  fell  below  80  in  January  1710^.  Other 
unfunded  debts  were  sold  at  greater  discounts  which  tended  to  increase 
during  the  year.  Under  such  circumstances  the  Bank  of  England 
hesitated  to  endanger  its  own  position  by  committing  its  credit  further, 
and  the  proprietors  became  alarmed  when  it  was  reported  that  the 
Whig  ministry  was  in  danger  of  dismissal.  The  governor  and  directors 
waited  on  the  Queen  and  urged  that  this  course  would  have  a  disastrous 
effect  on  credit  generally^.  Between  June  and  September  successive 
ministers  were  dismissed,  and,  as  the  insurance  offices  began  to  fail,  a 
crisis  was  reached  in  November  and  December,  when  all  the  leading 
securities  touched  the  lowest  prices  since  1707.  The  following  table 
shows  the  extent  of  the  fall  as  compared  with  the  highest  quotations 
in  1709  and  1710: 

Comparison  of  the  highest  price  of  the  undermentioned  securities  from 
1707  with  the  lowest  in  1710. 

Bauk  of  England        Army  Debentures 
Highest  quotation  in  1709  (except  in 

the  case  of  Army  Debentures  where 

the  quotation  used  was  recorded  in 

1707)  135  91 

Lowest  quotation  in  1710     95|  72 

39J  19 

29  7o  21% 

During  the  crisis  some  of  the  unfunded  securities  fell  to  low  prices, 
and  the  average  discount  appears  to  have  been  close  on  40  per  cent.* 

1  History  of  the  Earlier  Years  of  the  Funded  Debt,  ut  supra,  p.  69. 

2  A  Report  from  the  Commissioners  appointed... to  take  the  Publick  Accounts,  1714, 
in  Somers'  Tracts  (1748),  ii.  p.  113. 

3  An  Essay  towards  the  History  of  the  last  Ministry,  1710,  in  Somers'  Tracts  (1748), 
n.  p.  268. 

4  Vide  infra,  in.  p.  439.  ^  Ibid.,  in.  p.  229. 
6  Ibid.,  ni.  pp.  293,  297. 


CHAP.  XIX.]        Recovery  of  Securities  1711  887 

Even  Exchequer  Bills  were  at  one  time  below  par  to  the  extent  of 
3  per  cent.^;  and  a  contemporary  writer,  after  describing  credit  as 
"having  been  for  some  years  the  nation's  happy  guest,*'  recorded  the 
current  opinions  that  the  nation  was  exhausted,  there  "was  a  famine 
of  funds  and  we  are  at  a  full  stop'."  Another  writer  speaks  of  the 
"  remarkable  coldness  "  shown  by  investors  towards  all  public  securities*. 
The  situation  was  considered  so  alarming  that  early  in  January  1711 
an  an-angement  was  made  with  the  Bank  of  England,  under  which,  in 
consideration  of  receiving  X^45,000  from  the  State,  the  company  under- 
took to  cash  all  Exchequer  Bills  of  a  certain  issue  at  face  value.  The 
effect  of  this  agreement  was  that  the  discount  was  transferred  from  the 
holders  of  the  Bills  to  the  national  finances,  and  it  was  clear  that  such 
a  measure  could  be  no  more  than  a  temporary  expedient.  In  the 
meantime  it  sufficed  to  re-establish  some  degree  of  confidence  in  these 
obligations,  and  all  the  Exchequer  Bills  current  began  to  appreciate. 
The  discount,  which  had  been  as  much  as  <^1.  12*.  per  cent,  on  January 
19th,  1711,  was  below  1  per  cent,  from  the  26th  to  the  31st.  Up  to 
February  12th  it  rose  again  till  1^  per  cent,  was  cjuoted,  and  thereafter 
it  fell  rapidly,  being  under  J  per  cent,  in  the  beginning  of  March,  only 
^  per  cent,  on  the  9th  and  j'^  per  cent,  on  the  10th*. 

Owing  to  the  circumstances  under  which  the  elimination  of  the 
discount  on  Exchequer  Bills  was  manipulated,  this  event  cannot  be 
taken  as  representative  of  a  general  improvement  in  credit.  Other 
securities  gained  ground  to  some  extent,  but  the  crisis  may  be  said  to 
have  lasted  until  the  beginning  of  March  1711,  when  an  act  was  passed 
dissolving  the  societies,  recently  established  for  the  insuring  of  certain 
life-contingencies.  Apart  from  Exchequer  Bills,  other  stocks  recovered 
only  slowly  from  the  low  level  of  the  previous  December.  For  instance 
the  six  per  cent,  bonds  of  the  East  India  company,  which  were  quoted 
at  97i  on  January  19th,  1711,  were  96|  to  96J  until  the  end  of  February 
and  repeated  97:^  on  March  9th,  rising  to  97f  on  the  23rd  but  relapsing 
again  to  97 J  at  the  end  of  May.  By  March  12th  Bank  of  England 
stock  had  advanced  from  95J  (quoted  in  November)  to  106^,  but  the 
whole  of  this  gain  was  not  maintained.  The  prices  of  stocks  remained 
comparatively  low  until  the  end  of  August,  after  which  date  an  im- 
provement began  that  inaugurated  a  long  period  of  prosperity. 

^  History  of  the  Last  Four  Years,  p.  177. 

2  An  Essay  upon  Publick  Credit,  being  an  Enquiry  how  the  Publick  Credit  comes  to 
depend  upon  the  change  of  the  Ministry  or  the  Dissolution  of  Parliament,  London,  1710, 
pp.  9,  15,  17. 

3  A  Letter  to  a  Friend  in  which  is  shevm  the  Inviolable  Nature  of  Publick  Securitiet, 
London,  1717,  p.  32. 

*  These  quotations  are  taken  from  the  Post-man, 

25—2 


I. 


CHAPTER  XX. 

From  the  Return  of  Credit  in  1711  to  the  Culmination 
OF  THE  Boom  in  June  1720. 

In  September  1711  there  came  two  events,  which  were  instrumental 
in  the  restoration  of  credit.  These  were  the  signature  of  the  first 
preliminary  articles  for  peace  negotiations  and  the  arrangement  made 
for  dealing  with  the  unfunded  debt.  No  doubt,  ultimately,  a  return 
of  peace  was  a  most  important  element  towards  industrial  progress, 
but,  in  the  actual  circumstances,  the  funding  of  the  floating  debt  was 
even  more  satisfactory,  and  the  fact  that  such  an  important  operation 
could  be  carried  through  was  in  itself  testimony  to  the  return  of  con- 
fidence. The  method  by  which  this  transaction  was  accomplished  was 
precisely  the  same  as  that  adopted  in  the  floatation  of  the  engrafted 
stock  of  the  Bank  of  England^,  and  it  closely  resembled  the  type  of 
capitalization  adopted  in  the  land-development  undertaking  of  the 
Sword-Blade  company  (which  was  wound  up  just  about  this  time^). 
The  parallel  to  the  engrafted  stock  is  especially  close.  Both  in  1697 
and  in  1711  unfunded  obligations  were  at  a  great  discount,  being  worth 
only  from  60  per  cent,  to  70  per  cent,  of  the  par  value.  In  each  case 
it  was  decided  that  these  should  be  accepted  at  their  nominal  amounts, 
as  capital  subscribed  for  the  stock  of  a  trading  company — in  1697  for 
the  Bank  of  England  and  in  1711  for  a  new  undertaking  incorporated 
as  the  Governor  and  Company  of' the  merchants  of  Great  Britain,  trading 
to  the  South  Seas  and  other  parts  of  America  andjbr  Encouragement  of 
the  fishing^.  The  only  differences  between  the  two  operations  were 
that  in  1711  a  new  company  was  formed  and  that  the  sum  dealt  with 
was  much  larger.  In  this  case,  moreover,  the  capital  of  the  South  Sea 
company  was  permanent,  but  subject  to  redemption;  whereas  the 
engrafted  stock  of  the  Bank  of  England  was  intended  to  be  cancelled 
within  a  few  years. 

The  foundation   of  the   South   Sea  company  was   not  an    isolated 
event;    on  the  contrary,  it  represents  the  culmination  of  a  financial 

1  Vide  infra,  iii.  pp.  210,  211.  2  /^j^.^  m.  p.  437.  3  /^j^.^  m.  p,  295. 


p 

1^ 


CHAP.  XX.]    The  South  Sea  Company  founded  1711      389 

policy  (which  was  common  to  both  political  parties)  and  which  had 
been  in  vogue  since  the  Revolution.  On  the  one  side  there  was  the 
idea  of  the  utilization  of  capital  lent  to  the  State  as  "a  fund  of 
credit"  on  which  loans  could  be  raised  by  an  incorptorated  body  for 
its  trading  operations.  This  principle  was  at  the  root  of  the  foundation 
of  the  Bank  of  England^  as  well  as  of  the  New  and  the  United  East 
India  companies  ^ 

Apparently  by  this  method  both  the  State  and  its  incorporated 
creditors  gained.  The  unfunded  debts  were  due  for  repayment,  and 
no  resources  were  available  for  meeting  these  obligations,  llierefore 
it  was  inevitable  that  such  securities  should  be  sold  at  a  great  discount, 
and  that  the  national  credit  should  be  bad.  If,  however,  such  obliga- 
tions were  funded  as  redeemable  debts,  it  was  believed  that  interest  at 
6  per  cent,  could  be  paid  thereon,  and  there  was  the  prospect  of  dis- 
charging the  liability  in  the  future.  The  effect  of  the  operation  was  to 
add  over  9  millions  to  the  funded  debt,  which  was  increased  from 
4  millions  in  1705  to  25^  millions  in  1712». 

The  attractiveness  of  the  proposal  to  the  holders  of  floating  debts  is 
shown  by  the  appreciation  of  these  obligations  on  the  scheme  being 
mooted,  and  by  the  unanimity  with  which  it  was  accepted.  Undoubtedly 
the  prospect  of  gain  to  the  individual  investor  was  great.  He  had  before 
his  mind  the  outcome  of  the  subscription  of  tallies  into  the  stock  of  the 
Bank  of  England,  where  a  depreciated  security,  which  was  not  receiving 
interest,  had  been  transformed  into  an  appreciated  one,  returning  a 
satisfactory  yield*.  At  the  woi-st  he  had  the  advantage  of  exchanging 
an  unprovided-for-debt  for  one  which  ranked  for  interest  on  a  fund 
that  was  moderately  secured,  and,  in  addition,  there  was  the  hope  that 
the  income,  receivable  from  the  State,  would  be  augmented  by  profits 
made  in  trading.  Therefore  there  appeared  to  be  a  reasonable  pro- 
bability that,  by  the  conversion  of  the  unfunded  debts  into  South  Sea 
stock,  there  would  be  a  considerable  addition  to  the  capital  value  of 
the  former,  which  may  be  estimated  to  have  been  only  about  68  per 
cent,  on  the  average  of  the  nominal  amount  early  in  1711'. 

The  relief  of  the  money-market  from  the  pressure  of  the  floating 
debt  tended  to  produce  a  more  sanguine  spirit,  and  as  it  began  to  be 
recognized  that  peace  was  assured,  enterprize  broadened  out,  and  an 
era  of  prosperity  began  which  continued  until  1720.  Foreign  trade 
expanded  to  a  remarkable  extent.  The  total  British  imports  and 
exports,  which  had  been  under  11  millions  in  1710  increased  by  about 

1   Vide  infra,  m.  pp.  204-7-  ^  Ibid.,  ii.  pp.  165,  180,  191. 

3  History  of  the  Earlier  Years  of  the  Funded  Debt  from  1694  to  1786  [C— 9010], 
1898,  pp.  16,  17. 

4  Vide  supra,  p.  381.  ^  Vide  infra,  ui.  p.  297. 


390  Expanding  Trade  1711-14  [chap.  xx. 

a  million  in  each  of  the  three  following  years,  reaching  14^^  millions 
in  1714,  a  figure  approximately  double  that  of  1697.  Profits  were 
relatively  high.  The  Bank  of  England  had  been  forced  to  reduce  its 
dividend  after  the  crisis  of  1710  to  7  per  cent. ;  and,  up  to  the  end  of 
1714,  the  distribution  was  raised  to  8  per  cent.  This  rate  was  more 
satisfactory  than  would  appear  at  first  sight,  since  the  interest  receivable 
from  the  State  was  now  6  per  cent,  instead  of  the  original  8  per  cent.^ 
The  Bank  of  Scotland  for  the  three  years  1712-13,  1713-14  and  1714- 
15  divided  no  less  than  30  per  cent,  annually,  and  its  stock  realized 
227|^.  The  old-established  insurance  companies  gained  some  assistance 
from  the  compulsory  closing  of  the  ultra-speculative  offices  in  1711. 
The  Sun  Fire  office  was  able  to  pay  a  dividend  in  1713^,  and  in  the 
following  year  a  new  undertaking  in  the  same  department  was  started, 
which  was  called  the  Union  or  Double  Hand-in- Hand  Fire  Office^.  An- 
other new  company,  organized  on  the  basis  that  had  been  so  common 
twenty  years  before,  was  established  in  1713  as  the  Governor  amd 
company  for  making  and  vending  Beech  CHI.  In  this  venture  the  capital 
was  divided  into  classes,  one  part,  the  owners  of  which  were  known  as 
"  the  annuitants,"  being  entitled  to  a  fixed  and  preferential  charge  on 
the  profits,  while  the  balance  was  divisible  amongst  the  remainder  which 
was  described  as  "the  shares,''  the  owners  of  which  were  called  "the 
sharers**." 

The  tide  of  prosperity  was  checked  in  its  flow  from  the  end  of 
January  1714  to  the  beginning  of  April.  Probably  the  activity  of 
trade  had  made  considerable  demands  on  the  supply  of  capital  available, 
and  any  untoward  incident  would  produce  a  greater  effect  than  when 
business  was  dull.  The  shock  came  from  a  baseless  announcement  of  the 
death  of  Anne ;  and  for  a  short  time  there  was  great  uneasiness,  which 
culminated  in  a  run  on  the  Bank  of  England.  It  is  to  be  remembered 
that  the  dissemination  of  misleading  information  had  been  practised  for 
more  than  twenty  years  by  unscrupulous  operators  in  stocks^;  and  what 
made  the  report  of  1714  remembered  was  partly  the  spectacular  means 
by  which  it  was  circulated'',  and  partly  the  fact  that  it  brought  to  light 
the  prevalent  anxiety  concerning  the  succession.  Owing  to  the  frequent 
mention  of  the  episode  by  contemporary  writers,  some  recent  students 
of  convulsions  in  credit  have  treated  this  disturbance  as  the  most 
serious  one  between  1708  and  1720^.  As  compared  with  the  crisis  of 
1710  the  short  period  of  excitement  in  1714  was  less  intense,  the  fall 

1  Vide  infra,  iii.  pp.  280-3,  245.  2  7^^,^  uj,  pp.  £69,  274. 

3  Ibid.,  III.  p.  384.  4  Ibid.,  iii.  p.  379. 

^  Ibid.,  III.  p.  116.  ^  Vide  supra,  p.  358. 

7  Vide  infra,  in.  p.  282. 
®  Des  Crises  Commerciales,  par  Clement  Juglar,  Paris,  1889,  p.  294. 


CHAP.  XX.]      Trade  arid  Finance  in  1714-15  391 

in  stocks  was  only  half  as  great,  and  the  recovery  afterwards  was  very 
rapid.  For  these  reasons,  the  disturbance  in  credit  early  in  1714  can 
at  the  worst  be  described  only  as  a  minor  crisis,  and  it  may  be  doubted 
whether  it  was  sufficiently  grave  to  be  named  a  crisis  at  all.  The 
following  comparison  of  the  prices  of  stocks  at  the  lowest  during  the 
depression  of  1710,  at  the  highest  in  1713  and  again  at  the  lowest 
from  January  to  April  1714  will  show  the  extent  of  the  rise  in  1718 
and  of  the  fall  at  the  beginning  of  the  following  year: 

Comparison  of  the  lowest  prices  of  Stocks  in  1710  with  the  higheH  m 
1713  and  with  the  lowest  in  1714. 


East 

Booth 

Bank  of 

Differ- 

India 

Differ- 

Sea 

Differ 

England 

ence 

Co. 

ence 

Co. 

ence 

Lowest  price  in  1710 

95| 

Amount  of  fall  from  highest 

price,  1709-10      

-39  J 

Highest  price  in  1713 

130i 

128| 

m 

Amount  of  rise  from  lowest 

price,  1710           

+  34J 

+  19} 

Lowest  price,  1714  (Jan.  to 

April)        

116} 

116} 

83f 

Amount  of  fall  from  highest 

price,  1713           

-13i 

-12 

-14i 

*  From  estimated  par  value  1711. 

Not  only  was  the  fall  comparatively  small,  but  the  rebound  was 
rapid.  By  August  of  the  same  year,  most  of  the  securities  had  ad- 
vanced in  price  beyond  the  highest  quotation  of  the  previous  year; 
and,  before  the  end  of  September,  all  of  them  (save  the  Royal  African 
company)  showed  a  substantial  improvement  on  the  best  figures  of 
1713. 

For  just  a  year — from  August  1714  to  the  same  month  in  1715 — 
business  was  good  and  the  stock  market  was  strong.  The  accession  of 
George  I.  and  the  return  of  the  Whigs  were  accepted  in  the  City 
as  highly  satisfactory  events.  There  remained  however  at  least  one 
element  of  uncertainty,  namely  the  possibility  of  action  by  the  Jacobites. 
The  danger  of  an  insurrection  tended  towards  caution,  and  in  foreign 
trade  there  was  a  considerable  decline,  from  the  total  reached  in  1714, 
during  the  following  year^  Judging  from  the  state  of  the  stock- 
market,  the  position  at  home  was  one  of  marking  time.  Thus  Bank 
of  England  stock  for  the  first  eight  months  of  1715  fluctuated  about 
130,  which  had  been  a  common  high  level  during  periods  of  prosperity 
since  1702.     This  attitude  of  expectancy  and  of  financial  preparation 

1  Tliis  decline  was  attributed  by  many  writers  to  the  clauses  relating  to  commerce 
in  the  Treaty  of  Utrecht— Jrwi/i,  Truth,  Truth,  1715,  pp.  10-20. 


392    The  Stock-Market  and  the  Rehellion  1715    [chap.  XX. 

was  effective  in  minimizing  the  consequences  of  the  Rebellion,  news 
of  which  was  received  in  London  before  the  end  of  October.  The 
enterprize  of  John  Freke,  a  stock-broker,  has  provided  a  complete 
record  of  the  change  of  prices,  not  only  in  the  securities  of  public 
companies,  but  also  of  such  funds  as  were  dealt  in  at  the  time^  The 
total  fall  from  the  highest  quotations  of  1714-15  to  the  lowest  recorded 
from  October  to  November  1715  was  between  12  per  cent,  and  14  per 
cent,  in  the  stocks  of  the  Bank  of  England,  the  East  India  and  South 
Sea  companies  and  the  Million  Bank.  During  the  same  period  the 
decline  in  the  annuities,  guaranteed  by  the  State,  was  from  8  per  cent, 
to  10  per  cent.^  By  far  the  heaviest  sufferer  amongst  the  companies 
through  the  Rebellion  was  the  Bank  of  Scotland,  which  was  forced  to 
suspend  payment  and  was  unable  to  pay  any  dividend  for  the  year 
1715-16^ 

Comparison  of  the  highest  prices  of  stocks  of  the  undermentioned 
companies  from  1714  to  1715  with  the  lowest  in  1715. 


Bank  of 

East  India 

South  Sea 

Million 

England 

Company 

Company 

Bank 

Highest  price  in  1714,  1715... 

134^ 

144| 

101^ 

100 

Lowest  price  from  October  to 

December  1715       

115 

126 

88 

88 

Fall  19|  18|  13^  12 

14 7o  127o  137o  12  7o 

The  main  effect  of  the  minor  crises  at  the  beginning  of  1714  and  at 
the  end  of  1715  had  been  to  prevent  the  development  of  the  prosperity, 
which  had  begun  in  1711.  During  the  whole  five  years,  there  had  been 
a  series  of  oscillations  between  certain  narrow  limits,  which  is  very 
clearly  marked  in  the  fluctuations  of  Bank  of  England  stock : 

Fluctuations  of  Bank  of  England  Stock  1711-15. 

1711-13  1714-15  To  end  of  Feb.  1716 

Maxima—        ISOj  134j  130^ 

1714  (April)  1715  (Nov.) 

Minima—  116|  115 

From  the  middle  of  1716  the  progress,  which  had  been  arrested  by 
the  uncertainties  of  the  two  previous  years,  was  resumed ;  and,  apart 

1  The  Prices  of  the  Several  Stocks,  Annuities  and  other  Puhlick  Securities  S^c.  with 
the  Course  of  Exchange,  by  John  Freke,  Broker.  A  specimen  sheet  of  this  list  is 
reproduced  in  vol.  iii.  pp.  xiv,  xv. 

2  For  instance  the  Annuity  of  1708,  secured  on  the  old  tonnage,  was  quoted  at 
15|  years'  purchase  in  the  earlier  period  and  at  15  years'  purchase  in  the  later  one. 

3  It  was  stated  the  cause  of  the  suspension  was  political,  rather  than  financial, 
vide  infra,  iii.  p.  269. 


CHAP.  XX.]     Culmination  of  Prosperity  1716-17  393 

from  some  alarm  occasioned  amongst  holders  of  public  debts  by  Walpole's 
proposals  for  a  re-arrangement  of  the  loans \  the  outlook  was  promising  yy 
until  the  end  of  1717.  Trade  was  very  active,  the  total  imports  and 
exports  amounted  to  close  on  15^  millions,  as  compared  with  14 J  millions 
in  1714,  the  highest  point  hitherto  reached.  The  great  volume  of 
business  gave  full  employment  for  the  recent  accumulations  of  capital, 
and  the  rate  of  interest  was  comparatively  high.  Some  of  the  Long 
Annuities,  which  had  been  issued  in  1707  and  1708  during  a  period  of 
depression  and  when  the  pressure  of  the  war  was  severely  felt,  and  which 
gave  a  return  at  the  issue  price  of  6i  per  cent.,  yielded  at  the  quotations 
of  the  summer  of  1716  close  on  6|  per  cent.,  but,  owing  to  the  advance 
of  the  market  in  these  securities  at  the  end  of  the  year,  the  return  was 
reduced  to  5 J  per  cent.''  The  income  per  cent,  given  by  the  stocks  of 
the  Bank  of  England,  the  Million  Bank,  the  East  India  and  South  Sea 
companies  varied  from  £Q.  5s.  per  cent,  to  5 J  per  cent.,  while  the  average 
return  of  the  five  securities  was  just  over  6  per  cent.'  Bank  stock  was 
as  high  as  157^"*  (the  maximum  as  yet  recorded),  while  East  India  stock 
touched  210  at  the  end  of  1717°.  In  view  of  the  fact  that  interest  was 
greater  in  1716  than  it  had  been  during  a  considerable  part  of  the 
period  of  the  war,  the  advance  in  quotations  is  a  strong  testimony  to 
the  general  feeling  of  confidence.  The  years  1716  and  1717  represent  y 
the  culmination  of  the  era  of  prosperity  which  had  begun  in  1711,  and 
as  such  afford  a  convenient  opportunity  for  forming  an  estimate  of  the 
share-capital  of  the  companies,  which  are  known  to  have  been  in 
existence  at  this  time.  The  following  statement  is  confined  to  English 
undertakings,  since  there  are  not  sufficient  data  to  justify  the  inclusion 
of  the  Scottish  organizations.  Amongst  the  latter  the  Bank  of  Scotland 
still  had  a  paid  up  capital  of  ^6*1 0,000  sterling,  and  there  remained  the 
sugar-refining  partnerships,  the  soapen**,  and  probably  the  roperie  also*. 
The  Union  had  had  the  effect  of  destroying  such  of  the  woollen  manu- 
factories as  had  not  changed  their  product  from  fine  to  "coarse*"  cloth; 
but  the  admission  of  Scotsmen  to  the  plantation  trade  had  opened  up 
a  highly  prosperous  commerce  between  the  West  of  Scotland  and  the 
colonies,  most  of  the  capital  for  which  was  provided  by  small  companies. 
Thus  of  67  ships,  owned  in  the  Clyde  in  1735,  no  less  than  63  belonged 
to   companies,   some   of   which   are    returned    as    the   owners   of    five 

1  Vide  infra,  iii.  pp.  298,  299. 

2  For  particulars  of  these  loans  vide  infra,  in.  p.  292,  and  for  the  prices,  The 
Prices  of  the  Several  Stocks ,  Annuities  and  other  Publick  Securities  tSfc,  by  John  Freke, 
1716,  1716. 

3  Vide  infra,  ii.  p.  206 ;  iii.  pp.  244,  245,  280,  287,  360. 
*  Ibid.,  ni.  p.  244. 

6  lUd.,  II.  p.  206. 

«  Ibid.,  III.  pp.  132,  137,  174, 176,  269, 


394  Capital  invested  in  Companies  1717     [chap.  xx. 

vessels  \     Unfortunately  there  are  no  details  available  as  to  the  capital 
or  organization  of  these  firms. 

The  Share-Capital  of  English  companies  in  ea^istence  in  1717. 

Hudson's  Bay  company 2          £31,500 

Royal  African  company 3          ...            (about)  450,000 

The  Bank  of  England* 5,559,995 

The  Million  Bank  5        320,000 

Water-supply  undei-takings^ 500,000 

Mine  Adventurers '^       270,540 

The  Sun  Fire  Office 8     (about)  12,000 

The  Charitable  Corporation  ^ 30,000 

The  Convex  Lights  company  1®            26,500 

The  United  East  India  company  11      3,194,080 

The  South  Sea  company  12        10,000,000 

The  Beech  Oil  company  13        226,000 

£20,620,616 

The  increase  of  over  150  per  cent,  in  the  share-capital  of  companies 
in  England  since  1703  must  be  viewed  in  relation  to  the  peculiar  form 
of  the  joint-stock  type  of  organization  at  this  period.  It  must  always 
be  remembered  that,  owing  to  the  financial  policy  of  successive  govern- 
ments, the  share-capital  did  not  mean  resources  that  were  available  for 
trade.  As  yet  the  South  Sea  company  had  found  no  outlet  for  its 
resources ;  and,  in  the  main,  its  stock,  which  amounted  to  close  on  one- 
half  of  the  total  of  more  than  ^0^  millions,  was  simply  the  equivalent  of 
an  equal  amount  of  government  debt.  Similarly,  the  actual  trading 
resources  of  the  East  India  company  were  less  than  the  sum,  which  had 
been  lent  to  the  State  and  which  was  treated  as  the  stock  of  the 
undertaking  since  1709.  From  the  point  of  view  of  trade  at  any  given 
time,  the  importance  of  the  companies,  which  had  lent  capital  to  the 
government,  could  be  best  estimated  by  the  amount  of  loans  that  they 

1  E.g.  ''John  Lyon  and  company"  owned  5  ships,  also  "  Buchanan  and  company," 
'*  Somervilles  and  company" — The  History  of  Glasgow,  by  James  Gibson,  Glasgow, 
1777,  p.  210. 

2  Vide  infra,  ii.  pp.  232,  237.  ^  Ibid.,  ii.  p.  31. 

*  Ibid.,  III.  p.  243.  ^  Ibid.,  in.  p.  279. 

®  It  might  at  first  sight  appear  that  the  valuation  of  the  water  companies  should 
be  advanced  since  1703 ;  but,  owing  to  competition  amongst  them,  profits  had  not 
expanded  to  any  considerable  extent  since  1700.  Between  that  year  and  1720,  the 
dividend  of  the  New  River  company  increased  by  less  than  1^  per  cent,  {ibid.,  in. 
pp.  26,  31)  while  some  of  the  other  undertakings  had  lost  ground. 

7  Ibid.,  n.  p.  456.  »  Ibid.,  in.  p.  385.  "  Ibid.,  in.  p.  380. 

10  Ibid.,  111.  p.  59.  There  is  no  inforaiation  as  to  whether  there  had  been  any 
change  in  the  amount  of  the  capital  of  this  company. 

11  Ibid.,  n.  p.  206.  12  Ibid.,  in.  p.  360.  i3  Ibid.,  in.  pp.  116,  117- 


CHAP.  XX.]    Slackening  of  Activity  in  Trade  1718        395 

themselves  had  borrowed,  since  such  loans  would  represent  their  actual 
trading  capital  at  that  period,  and  this  method  could  be  applied,  with 
certain  modifications,  to  the  case  of  the  Bank  of  England.  At  the  same 
time,  the  limitation  of  the  enquiry  to  the  ascertaining  of  the  trading 
capital  only  would  present  but  one  side  of  the  financial  position,  since 
the  massed  holdings  of  government  debt  by  an  incorporated  company 
enabled  it  to  increase  its  borrowings  to  a  considerable  extent  at  need, 
and  in  addition  it  was  able  to  obtain  credit  to  a  large  amount,  without 
actually  executing  bonds  in  favour  of  the  creditor. 

While  to  all  appearance  the  period  of  prosperity  still  continued  in 
1718  and  1719,  there  were  underlying  causes  which  point  to  a  slackening 
in  the  great  activity  of  trade.  The  state  of  tension  between  Great 
Britain  and  Spain  caused  prudent  men  of  business  to  curtail  their 
operations,  and  the  wisdom  of  this  course  was  shown  by  the  £ictual 
outbreak  of  hostilities  later  in  1718.  Capital  was  comparatively  plentiful 
and  the  rate  of  interest  on  the  five  representative  securities  already 
referred  to^  was  about  5  per  cent,  as  compared  with  6  per  cent, 
approximately  in  1716.  The  yield  on  the  Long  Annuities  of  1708  and 
on  East  India  stock  at  the  middle  prices  of  1718  was  under  5  per  cent.*, 
while  the  bankers  of  the  South  Sea  company  fixed  the  rate  of  interest 
on  an  overdraft  up  to  .£100,000  at  4  per  cent.*  With  capital  relatively  ^ 
plentiful  and  the  rate  of  interest  ruling  comparatively  low,  the  prices  of 
Bank  of  England,  East  India  and  Million  Bank  stocks  were  higher  than 
in  1717,  and  all  these  securities  touched  the  highest  quotations,  as  yet  V" 
recorded,  in  the  first  quarter  of  1718*.  The  rumour  of  an  invasion, 
arising  out  of  the  war  with  Spain,  affected  public  securities  from  October 
8th  to  10th,  1718,  and  a  fall  from  the  highest  records  of  the  year  in  the 
stocks  of  the  chief  companies  is  recorded  varying  from  7  per  cent,  to 
14  per  cent.,  while  the  quotations  of  the  Long  Annuities  receded  during 
the  same  period,  on  the  average,  about  10  per  cent,  and  those  of  some 
of  the  Short  Annuities  by  as  much  as  15  per  cent. 

There  is  a  certain  symmetry  in  the  progress  of  British  commerce 
from  1711  to  1719.  The  maximum  of  activity  was  reached  about  1716 
and  on  each  side  of  this  point  there  were  two  minor  crises — those  of  , 
1714  and  1715,  before  the  culmination  was  reached,  and  again  two  more 
in  1717  and  1718,  when  the  activity  had  begun  to  slacken.  The 
circumstances,  already  indicated,  explain  the  phenomenon  of  a  declining 
volume  of  trade  in  1718  and  1719,  accompanied  by  an  advance  in  the 

1  Vide  supra,  p.  393. 

2  Freke,  Prices  of  the  Several  Stocks,  1718;  vide  infra,  ii.  p.  206. 

'  Court  Book  of  the  South  Sea  Company,  Dec.  12,  1718,  British  Museum — Add. 
MS.  26,498,  f.  77. 

*  Vide  infra,  ii.  p.  206,  iii.  pp.  244,  287. 


896    "  The  Alchemy  of  a  Fund  of  Credit''  1719   [chap.  xx. 

prices  of  stocks.  The  following  statement  shows  in  a  condensed  form 
the  check  to  the  upward  movement  by  the  alarms  of  March  1717  and 
October  1718,  together  with  the  rise  on  balance: 

Comparisons  of  the  Quotations  of  various  stocks  between  October  1716 

and  November  1718. 


Highest  price,  1716  (Oct.) 

Lowest  price,  1717  (Jan.  to 

March)  

Difference 

Highest  price,  1718  (Jan. 
to  March) 

Difference 

Lowest  price,  1718  (Oct.) 

Difference 

Highest  price,  1719 

Difference 


Bank  of 
England 


148 
131^ 

161| 

140 

158 


-16i 

+  30^ 
-21| 
+  18 


East  India 
company 


188 
158i 

219i 

183 

214 


-29| 
+61i 

+  31 


South  Sea 
company 


iioi 

120 

1031 

1271 


-15 

+24f 
-16i 

+23^ 


Million 
Bank 


104 

126 
118 

126 


+  22 

-8 

+8 


In  the  year  1719  there  were  several  conditions,  which  were  likely  to 
result  in  considerable  speculative  activity  in  the  stock-markets.  Owing 
to  the  checking  of  the  enterprize  in  1718,  capital  appeared  to  be 
relatively  plentiful,  and  the  rate  of  interest  was  low.  Moreover,  there 
were  some  pre-conceptions,  which  had  entered  almost  unconsciously  into 
the  methods  of  business-organization  and  which,  when  carried  to  their 
logical  issues  in  an  environment  favourable  to  them,  would  inevitably 
lead  to  wild  speculation.  The  chief  of  these  was  the  series  of  conclusions, 
drawn  from  the  potency  of  "  a  fund  of  credit."  In  order  to  grasp  the 
full  import  of  the  situation,  it  is  necessary  to  remember  that  the 
extensive  utilization  of  credit  was  new,  and  that  contemporary  observers 
noticed  that,  by  this  agency,  business  had  been  immensely  extended,  and 
the  results  achieved  were  viewed  with  amazement.  Thus  a  writer  of  the 
period  speaks  of  "the  mysteries,  or  indeed  miracles  wrought...  things  as 
incredible  as  the  greatest  impossibility  in  nature  could  be  thought  to  be, 
things  that  now  they  are  done  they  are  as  a  dream  to  those  that  see 
them^''  It  is  little  wonder,  then,  that  the  idea  of  a  fund  of  credit  was 
described  as  "  a  mine  of  gold,"  or  as  "  realized  alchemy  I"  Such  ideas 
were  not  confined  to  Great  Britain,  but  were  shared  by  the  chief  trading 
nations.  Everywhere,  when  men  considered  how  enterprizes  had  been 
started  and  had  been  carried  on  successfully  by  the  using  twice  over  of 
the  same  wealth,  it  came  to  be  thought  that  the  process  was  capable  of 

1  The  Chimera,  London,  1720,  p.  60. 

2  Quoted  by  Bastable,  Public  Finance,  p.  662. 


I 


CHAP.  XX.]  Growth  of  Fund  of  Credit  Idea  1694-1709    397 

infinite  extension.  But,  while  these  ideas  had  been  growing,  various 
causes  prevented  any  very  great  effort  being  made  to  realize  the  gains 
that  were  popularly  expected  to  flow  from  the  organization  of  a  fund  of 
credit  on  a  veist  scale  until  1719.  Still,  it  must  always  be  remembered 
that  the  dramatic  events  of  1719  and  1720  represent  only  the  inexorable 
conclusion  from  a  series  of  premisses  almost  universally  accepted ;  and, 
since  these  ideas  were  not  confined  to  a  single  country,  their  practical 
realization  became  an  incident  of  considerable  importance  in  European 
history.  Thus  the  crisis  of  1719-20  constitutes  simply  the  attempt  to 
realize  an  unconscious  ideal  of  the  indefinite  expansibility  of  a  fund  of 
credit. 

In  Great  Britain,  since  the  Revolution,  this  ideal  had  been  gathering 
importance.  In  addition  to  the  land-bank  schemes  of  1695\  the 
finances  of  every  important  company  had  been  determined  by  it.  Not 
only  was  all  the  capital  subscribed  by  the  members  of  the  Bank  of 
England  lent  to  the  State,  but,  in  addition,  a  further  sum  was  taken 
from  the  deposits  of  customers.  Thus  none  of  the  share-capital  was 
available  for  the  business  of  banking,  and  the  loan,  made  by  the  Bank 
to  the  State,  became  in  fact  a  fund  of  credit  to  support  the  operations 
of  the  institution^.  Similarly,  in  1695  and  as  long  as  the  Million  Bank 
carried  on  banking  operations,  it  had  to  depend,  not  on  its  share-capital, 
but  on  the  fund  of  credit,  constituted  by  the  original  subscription  of 
scrip  of  the  Million  loan^  Moreover,  once  the  system  had  been  started, 
it  was  found  capable  of  extension.  The  engrafted  stock  of  the  Bank  of 
England  was  formed  by  the  valuing  of  government  obligations,  which 
were  selling  at  the  time  at  a  discount  of  about  35  per  cent.,  at  their 
nominal  value.  Apparently  the  operation  was  justified,  for  those  who 
converted  their  tallies  into  engrafted  stock  secured  a  large  profit  by  the 
transaction*.  Similarly  the  whole  influence  of  Parliament,  as  affecting 
the  East  India  trade,  tended  again  and  again  to  force  this  branch  of  1 
foreign  commerce  to  depend  solely  on  capital  lent  to  the  State.  In  1 
1698  the  right  of  trading  to  India  was  confined  to  subscribers  to  the 
two  million  loan.  When  the  New  East  India  company  had  raised  a 
trading  capital  by  its  additional  stock,  it  was  forced  under  the  Indenture 
Tripartite  to  cancel  it,  and  therefore  the  joint  committee  of  management 
was  compelled  at  the  beginning  of  its  career  to  rely  solely  on  the 
resources  it  could  borrow  on  the  security  of  the  loan  to  the  State. 
Finally,  when  the  union  of  the  two  companies  was  completed  in  1709, 
the  trading  capital,  raised  by  the  committee  of  management,  was  once 
more  merged  in  a  State-loan.  Thus  on  three  different  occasions,  within 
the  space  of  eleven  years,  the  East  India  trade  was  compelled  by  the 

1  Vide  infra^  in.  pp.  246-52.  =*  Ibid.y  iii.  p.  207. 

3  lUd.,  III.  pp.  276,  277.  *  Ihid.y  m.  pp.  213-24. 


898      The  Fund  of  Credit  Idea  in  France  1717  [chap.  xx. 

State  to  rely  on  a  fund  of  credits  At  the  root  of  the  various  schemes 
for  an  increase  of  the  circulating  medium,  propounded  in  Scotland  from 
1699  to  1705,  there  is  the  same  idea  of  a  fund  of  credit.  Though  none 
of  the  proposals  were  adopted,  this  agitation  is  of  special  interest,  since 
one  of  the  plans  emanated  from  John  Law  and  was  in  many  respects 
similar  to  that  carried  out  by  him  in  France.  Then  again  in  England, 
one  aspect  of  the  land-bank  scheme  was  adopted  by  the  Sword  Blade 
company,  which  issued  notes  on  the  security  of  lands  it  had  purchased 
in  Ireland^  It  was  in  1711  that  the  most  ambitious  development  of 
the  idea  of  the  fund  of  credit  was  realized,  when  the  South  Sea  company 
was  incorporated,  with  a  nominal  capital  of  over  9  millions.  Like  the 
engrafted  stock  of  the  Bank  of  England,  the  South  Sea  capital  was 
formed  by  the  conversion  of  various  depreciated  government  securities 
into  the  stock  of  the  trading  company.  Similarly  in  France  in  August 
1717  the  compagnie  d'Occident  was  formed,  under  the  auspices  of  Law ; 
and,  exactly  as  in  the  case  of  the  South  Sea  company,  stock  was  obtained 
by  subscribing  depreciated  obligations  of  the  State.  The  only  difference 
between  the  two  floatations  was  that  in  France  the  securities  subscribed 
were  at  a  much  greater  discount.  This  fact  becomes  an  interesting 
commentary  on  the  fears,  expressed  in  England  for  a  number  of  years 
before  the  Revolution,  as  to  French  commercial  supremacy.  At  the 
end  of  the  reign  of  Louis  XIV.,  through  a  variety  of  causes,  the  country 
was  bankrupt.  Even  after  a  drastic  cancellation  of  debt,  it  was  found 
impossible  to  pay  interest  regularly  at  4  per  cent,  on  the  remainder. 
Moreover,  the  system  of  taxation  and  its  amount  imposed  a  crushing 
burden  on  the  industry  of  the  country.  Owing  to  the  default  of  the 
government,  its  securities  were  immensely  depreciated.  Even  the  re- 
organized debt  was  at  a  discount  of  close  on  75  per  cent.^  Thus,  while 
the  original  nominal  capital  of  the  compagnie  d'Occident  was  100  mil. 
livres  in  shares  of  500  livres  each,  or  approximately  5  millions  sterling 
in  shares  of  c£*25,  the  securities,  exchanged  into  that  nominal  capital, 
were  worth  no  more  than  30  mil.  livres  or  .^1,500,000.  Therefore  in 
1717  the  relative  positions  of  the  South  Sea  company  and  the  compagnie 
d'Occident  were  as  follows  : 

1  Vide  infra,  ii.  pp.  165,  170,  171,  185-7,  191. 

2  Ibid.,  III.  p.  438. 

3  Becherches  et  Considerations  sur  les  Finances  en  France  depuis  1595  jusquen  1721, 
par  F.  Veron  de  Forbonnais,  1758,  vi.  p.  274.  Elsewhere  the  depreciation  in  1717 
is  given  at  between  68  per  cent,  and  70  per  cent.;  Memoirs  of  the  Life  of  John  Law, 
by  John  Wood,  Edin.  1824,  p.  36. 


CHAP.  XX.]  Compagnie  des  Indes  1719  399 

Nominal  and  real  pa/r  value  of  the  capital  of  the  South  Sea  Company 
and  the  Compagnie  d* Occident  in  1717. 

Approximate  market  price  of 
Mourities,  exchanged  into 
Nominal  capital  the  nominal  capital 

South  Sea  company £10,000,000  £6,800,000 

Compagnie  d'Occident...     100,000,000  livres        30,000,000  livres  =  £1,500,000 

As  yet,  although  South  Sea  stock  had  never  fallen  below  what  may 
be  described  as  its  real  par  value,  it  had  never  for  long  been  maintained 
above  the  nominal  par  valued  It  follows  that  the  process  of  reducing 
the  "  watering"  of  the  stock  of  the  compagnie  d'Occident  was  one  which 
was  likely  to  be  protracted,  since  the  discount  on  the  French  obligations, 
converted  into  the  stock  of  the  trading  company,  was  more  than  twice 
as  large  as  that  on  those  similarly  exchanged  in  England  in  1711.  In 
other  words,  the  situation  may  be  conveniently  remembered  by  fixing  on 
the  figure  68  which  represents  the  estimated  actual  market  value  of  the 
securities  exchanged  for  South  Sea  stock  and  also  the  minimum  discount 
on  those  converted  into  shares  of  the  compagnie  d'Occident.  Under 
these  circumstances  it  is  not  surprising  that,  while  the  shares  of  the 
latter  undertaking  were  worth  more  than  the  billets  d'etat  which  had 
been  exchanged  for  them,  they  still  remained  much  under  the  nominal 
par.  For  about  a  year  the  price  did  not  exceed  300  livres  for  the  share 
of  500  livres  ^  While  such  a  quotation  constituted  a  satisfactory 
advance  for  the  person,  who  had  purchased  500  livres  of  billets  d'etat 
to  subscribe  at  150  to  160  livres,  the  financial  position  of  the  company 
cannot  be  described  as  flourishing,  when  its  stock  sold  at  only  60  per 
cent,  of  its  nominal  amount.  Still,  towards  the  end  of  the  year  1718, 
the  company  had  strengthened  its  position.  Like  all  other  ventures 
founded  on  a  fund  of  credit,  arising  out  of  obligations  of  the  State,  this 
undertaking  was  a  creditor  of  the  government  to  the  extent  of  the 
billets  d'etat,  exchanged  as  against  its  shares;  and,  through  the  influence 
of  Law  with  the  regent,  the  Duke  of  Orleans,  interest  was  paid  regularly 
to  the  company,  whereas  the  previous  irregularity  continued  in  the  case 
of  similar  securities  which  had  not  been  exchanged.  Further,  on 
September  14th,  the  tobacco  farm  was  acquired,  and  on  December  15th 
the  assets  of  the  compagnie  du  Senegal  were  added.  The  same  process 
of  consolidation  was  continued.  In  May  1719  these  undertakings  were 
amalgamated  with  the  compagnie  d'Orient  and  the  compagnie  de  la 
Chine  and  the  title  of  the  series  of  consolidations  became  the  comptignie 
des  Indes.     Then  further  in  June  1719  the  compagnie  d'Afriqne  was 

1  Vide  infra,  in.  pp.  297,  360. 

2  LaWf  son  Systeme  et  son  ^poque,  par  P.  A.  Cochut,  Paris,  1853,  p.  60 ;  Becherchet 
Historiques  sur  le  Systeme  de  Law,  par  E.  Levasseur,  Paris,  1854,  pp.  91,  92. 


400  The  South  Sea  Company  1719       [chap.  xx. 

acquired  ^  Thus  it  may  be  said  that,  in  the  period  extending  from  the 
summer  of  1718  to  that  of  1719,  the  energies  of  Law  were  mainly 
directed  towards  the  organization  of  the  whole  foreign  trade  of  France 
with  America  and  the  East  by  means  of  a  single  joint-stock  company. 
While  these  efforts  were  sufficiently  striking,  there  was  another  mode  of 
extending  the  sphere  of  operations  of  a  great  joint-stock  company,  which 
was  adopted  in  England  by  the  South  Sea  company ;  and  which,  while 
less  remarkable  at  the  moment,  contained  the  germ  of  the  great  financial 
transactions  during  the  latter  part  of  1719  and  in  the  following  year. 
This  was  the  offer  of  the  South  Sea  company  to  convert  into  its  stock 
the  Lottery  Loan  of  1710 ;  and,  though  a  bonus  was  given  both  to  the 
annuitants  and  to  the  State,  the  company  succeeded  in  making  a  profit 
of  £1%S00  on  the  transaction  ^  The  importance  of  this  operation, 
which  extended  from  February  till  July  1719,  consists  in  its  appearing 
to  prove  that,  when  a  fund  of  credit  had  been  established  by  a  company, 
further  assistance  could  be  rendered  to  the  State,  through  such  a 
company  undertaking  extensive  conversions  of  the  public  loans  into  its 
own  stock  to  the  mutual  profit  of  all  the  interests  concerned. 

In  the  month  of  May  and  the  early  part  of  June,  there  was  a 
remarkable  coincidence  in  the  prices  of  South  Sea  and  French  Indies 
stock.  At  that  time  both  stood  at  a  trifle  over  10  per  cent,  premium 
on  the  nominal  par  value.  At  this  date  the  capital  of  the  latter 
undertaking  was  in  process  of  being  increased  by  one  half,  in  order  to 
provide  funds  for  the  expropriation  of  the  shareholders  in  the  various 
foreign  trading  companies  recently  bought  up ;  and,  for  this  purpose, 
an  issue  of  50,000  shares  was  made,  at  550  livres  per  share,  or  a  premium 
of  10  per  cent.  It  is  to  be  noted  that  the  issue  price  was  payable  in 
cash  in  instalments ;  and  that  therefore,  expressed  in  terms  of  cash, 
these  shares  cost  more  than  three  and  a  half  times  the  sum  required 
to  obtain  the  billets  d'etat  which  were  accepted  at  face  value  in  1717. 
The  following  figures  summarize  the  positions  of  the  two  companies  at 
this  date : 

Relative  positions  of  the  South  Sea  Company  and  the  Compagnie  des 
Indes  at  the  date  of  the  first  issue  of  capital  by  the  latter. 

Nominal  capital       Market  price 

South  Sea  Company       llf  mil.  £s  110 

Compagnie  des  Indes  125  mil.  livres  (partly  paid)  =  6i  mil.  £s  110 

While  South  Sea  stock  was  never  quoted  above  117  during  the 
summer  of  1719,  there  was  a  rapid  advance  in  the  price  of  the  shares 

1  Memoire  sur  la  Situation  actuelle  de  la  Compagnie  des  Indes,  par  M.  I'Abbe 
Morellet,  Paris,  1769,  pp.  21,  22. 

2  For  the  details  vide  infra,  iii.  pp.  301-3. 


CHAP.  XX.  Speculation  in  Paris  1719  401 

of  the  French  Indies  company.  In  the  first  instance  this  undoubtedly 
arose  from  the  relations  of  the  shares,  just  created,  to  the  old  ones. 
The  payment  on  the  former  was  divided  into  twenty  equal  monthly 
parts  of  the  capital  value,  with  the  addition  of  the  premium  to  the 
instalment  first  due.  Thus  the  original  outlay  for  a  share  was  only 
75  livres^  Moreover  already  the  securities  of  Law's  company  were 
selling  at  three  and  a  half  times  the  value  of  the  obligations  subscribed, 
and  it  was  believed  that  further  developments  were  to  be  expected. 
Therefore  any  one,  who  had  600  livres  in  cash,  might  either  buy  one 
original  share  or  he  might  take  the  risk  of  purchasing  eight  of  the  new 
issue,  trusting  that  there  would  be  a  rise  in  price  which  would  enable 
him,  by  selling  part,  to  pay  the  calls,  as  they  became  due,  on  the 
remainder.  Thus,  in  the  former  case,  an  advance  of  15  per  cent  would 
yield  him  a  profit  of  that  amount,  whereas,  if  he  adopted  the  second 
course  he  might,  under  the  same  conditions,  more  than  double  his 
capital.  For  this  reason,  purchases  of  the  new  issues  became  frequent ; 
and,  as  the  price  advanced,  the  demand  increased,  until  before  the  end 
of  June  the  new  shares  were  sold  at  a  price  equivalent  to  1,000  livres 
for  the  old  share,  while  the  latter  was  sold  at  630  livres.  Obviously  the 
situation  was  an  artificial  one,  and  in  time,  had  events  been  allowed  to 
take  their  course,  the  premium  on  the  new  shares  would  have  gradually 
been  reduced.  But  Law  had  committed  himself  to  a  course  of  inflation, 
and  he  decided  to  force  the  old  shares  up  to  the  level  of  the  new  issue. 
This  was  effected  by  an  arret  of  June  30th,  which  made  it  a  condition 
for  the  valid  ownership  of  one  new  share  that  the  purchaser  should 
possess  four  original  shares.  Since  the  latter  were  regarded  as  giving 
birth  to  the  scrip  of  the  second  issue,  they  were  described  as  "  les  meres'" 
and  the  others  as  "les  filles";  and,  in  a  short  time,  the  former  were 
quoted  at  1,000  livres,  that  is  twice  their  face  value,  and  no  less  than 
seven  times  the  cash  equivalent  of  the  billets  d'etat,  subscribed  two  years 
before.  Had  the  series  of  new  developments  ceased  at  this  point,  it  is 
probable  that  the  inflation  in  the  market-price  of  the  shares  would  have 
been  gradually  reduced,  but  in  July  there  came  the  edict  transferring 
the  Mint  to  the  company,  with  the  issue  of  a  further  50,000  shares,  to 
pay  the  sum  agreed  upon  to  the  Regent.  This  brought  the  total 
nominal  capital  to  150  mil.  livres  (or  approximately  7^  millions  sterling). 
These  shares  were  issued  at  1,000  livres  and  were  offered  for  subscription 
for  cash,  subject  to  the  condition  that,  to  obtain  the  allotment  of  a 
single  share  of  the  third  issue,  it  was  necessary  to  produce  titles  to  the 
ownership  of  four  "  meres''  and  one  "  fille."  Hence  the  last  emission 
was  described  as  "les  petites  filles."     At  the  same  time  a  dividend  of 

»  I.e.  the  premium  of  10%  =  50  livres  and  the  monthly  instalment  of  25  Uvres. 
s.  c.  I.  26 


A 


402  Law's  Debt  Conversion  1719         [chap.  xx. 

12  per  cent,  was  promised  for  the  year  1720,  which  would  give  a  yield 
of  6  per  cent,  at  the  market  price,  or  50  per  cent,  more  than  the  interest 
paid  by  the  State.  If  this  dividend  could  be  justified,  it  is  clear  that 
there  was  room  for  a  further  advance  in  quotations,  but  the  revenue  of 
the  company  from  known  sources  would  have  been  insufficient  to  pay  it. 
Therefore,  either  Law  was  deliberately  misleading  investors,  or  else 
there  was  a  new  scheme  in  the  background,  which  would  add  to  the 
power  and  resources  of  this  all-embracing  company.  That  there  was 
such  a  project  is  shown  by  the  events  of  September.  The  crown  of 
Law''s  operations  consisted  of  a  double  scheme,  the  execution  of  which 
extended  from  the  last  days  of  August  into  October.  On  the  one  side, 
the  company  was  authorized  to  become  the  sole  agent  of  the  government 
for  the  collection  of  revenue,  thereby  displacing  the  wasteful  sub-division 
of  farms  of  the  taxes.  Thus  Law,  having  consolidated  the  foreign  trade 
with  tropical  countries,  now  proceeded  to  a  further  consolidation  of  the 
fiscal  system ;  and,  by  the  sweeping  away  of  vast  intermediate  profits,  it 
was  calculated  that  the  taxpayer,  the  administration  and  the  company 
would  gain\  But  the  increase  of  revenue  on  a  scale  of  reduced  taxes 
was  not  the  only  benefit  reserved  to  the  government.  It  was  a  condition 
of  the  transfer  of  the  farms  to  the  company  that  it  should  lend  to  the 
administration,  at  3  per  cent.,  a  sufficient  sum  to  repay  the  creditors  of 
the  State.  Since  the  interest,  previously  fixed  for  these  loans  was  4  per 
cent.,  there  was  thus  a  saving  of  25  per  cent.  The  result  of  this 
arrangement  was  that  the  company  incurred  an  obligation  to  find 
150  mil.  livres  or  about  7 J  millions  sterling,  a  sum  equal  to  its  whole 
nominal  capital.  Further  that  amount  was  payable  to  the  creditors  in 
cash  or  in  drafts  on  the  State-bank,  which  were  to  be  accepted  in  lieu  of 
cash,  and  the  company  was  bound  to  provide  funds  in  a  similar  form. 
As  matters  stood,  there  was  just  one  method  by  which  the  operation 
could  be  accomplished,  namely  by  a  creation  of  new  shares  of  the 
company,  and  also,  as  a  temporary  measure,  of  a  great  quantity  of 
bank-paper.  If  the  shares  of  the  company  were  sufficiently  popular,  the 
creditors,  when  paid  in  bank  money,  would  exchange  such  notes  against 
the  new  shares,  and  the  paper  would  return  to  the  company  and  would 
pass  again  from  the  company  to  the  bank  in  payment  of  its  loan  to  the 
latter.  Thus  the  final  effect  of  the  scheme  would  be,  supposing  the 
whole  plan  worked  without  a  hitch,  the  conversion  of  the  loans  into 
stock  of  the  company,  while  the  State  would  in  future  have  only  one 
creditor  instead  of  many  and  would  save  in  the  interest  required  for  the 
service  of  the  debt.     Law  himself  summarized  the  whole  method  of 

1  The  benefit  to  the  people,  by  the  withdrawal  of  oppressive  taxes^  is  dealt  with 
by  Prof.  J.  S.  Nicholson  in  his  "  Essay  on  John  Law  of  Lauriston"  in  A  Treatise  on 
Money,  London,  1901,  p.  187. 


CHAP.  XX.]         Law's  Debt  Conversion  1719  403 

conversion  in  the  following  terms: — ^*' L'intention  de  la  compagnie  etait 
que  ceux  qui  seraient  rembourses  fissent  acquisition  des  actions  qu'elle 
exposait  en  vente  au-dessous  de  leur  juste  valeur  et  qu'en  s'^assurant  a 
elle-meme  une  rente  fixe  contre  toute  evenement,  T^tat  fut  libere  et  les 
rentiers  enrichis^''  In  the  effecting  of  the  conversion,  much  depended 
on  the  price  at  which  shares  in  the  company  wei-e  offered.  Under  the 
stimulus  of  the  spirit  of  speculation,  which  had  been  by  now  aroused 
and  the  prospects  opened  up  by  the  grant  of  the  farms  of  the  taxes,  the 
shares  had  advanced  to  5,000  livres  or  ten  times  their  nominal  value. 
It  was  therefore  decided  that  the  capital  of  150  mil.  livres  should  be 
doubled,  and  that  the  new  issue  should  be  offered  at  5,000  livres  per 
share,  payable  in  instalments,  without  any  restriction  as  to  the  previous 
possession  of  shares  of  the  earlier  series.  The  first  payment  being  500 
livres,  this  issue  was  distinguished  from  the  others  by  the  name  of  the 
"  cinq  cents."  Further,  since  the  150  mil.  livres  of  new  capital  was 
offered  at  ten  times  its  nominal  value,  the  amount  receivable  for  it  in 
bank -money  was  exactly  equal  to  the  sum  of  the  debts  to  be  paid  off 
and  also  to  that  to  be  lent  by  the  company  to  the  State.  Finally,  if 
the  whole  amount  of  "  cinq  cents''  was  taken  up  at  the  price  of  5,000, 
the  conversion  would  be  complete,  and  those  who  had  formerly  been 
creditors  of  the  State  (or  their  assigns)  would  now  be  shareholders  in  the 
company,  whose  total  capital  was  300  mil.  livres  (or  15  millions  sterling'). 
This  operation  was  a  brilliant  success.  As  had  happened  in  the  case 
of  the  "filles,''  the  "  cinq  cents''  very  soon  acquired  an  additional  premium 
of  no  less  than  3,000  livres,  while  the  earlier  issues  relapsed  from  5,000 
to  4,000,  thus  the  former  were  quoted  at  twice  as  much  as  the  latter. 
As  before,  instead  of  the  "cinq  cents"  relapsing  to  the  price  of  the 
"  meres,"  that  of  the  latter  advanced  to  the  new  high  level.  On  this 
occasion  there  were  no  fresh  important  developments,  and  the  inflation 
was  due  in  the  main  to  an  apparent,  and  to  some  extent  to  a  real, 
plentifulness  of  money.  In  September,  Paris  became  the  Mecca  of  the 
speculators  of  Europe,  and  these  men  brought  funds  with  them,  so  far 
there  would  be  a  real  increase  in  money ;  but,  on  the  other  side,  much  of 
the  inconvertible  money,  created  by  the  bank,  remained  in  circulation, 
and  therefore  the  appreciation  in  the  shares  of  the  company  was 
accompanied  by  and,  to  a  large  degree,  was  the  result  of  the  deprecia- 
tion of  the  paper-money.  Therefore,  as  the  inconvertible  paper-money 
sank  in  value,  the  shares  rose ;  and,  at  the  beginning  of  December,  the 
quotation  was  almost  double  that  at  which  the  "  cinq  cents"  had  been 


1  Quoted  by  E.  Levasseur,  Recherches  Historiques,  p.  126. 

2  There  was  a  further,  but  unauthorized,  issue  of  12  mil.  livres  which  was 
afterwards  recalled. 

26—2 


404  Intense  Speculation  in  Paris  1719    [chap.  xx. 

issued  \  At  the  dividend  announced  for  the  year  1720,  this  would  yield 
the  investor  only  |  per  cent,  or  one-sixth  of  the  reduced  rate  paid  by  the 
State.  It  follows  that,  expressed  in  terms  of  the  earning  power  of  the 
investment,  the  price  was  much  too  high ;  but  in  justice  to  Law,  it  is  to 
be  remembered  that  this  dividend  had  been  fixed  before  the  recent 
extension  of  the  company's  operations.  Additional  revenue  was  expected 
to  accrue  from  these,  and  the  dividend  for  1720  was  augmented  to 
40  per  cent.,  and  thus  at  12,000  livres  per  share  the  return  was  under 
If  per  cent.  But  it  is  one  of  the  symptoms  of  an  acute  fever  of 
speculation  that  prospects  are  over-discounted,  and  it  is  not  surprising 
that  the  increased  dividend  was  regarded,  not  as  a  support  towards 
maintaining  the  already  too  inflated  price,  but  as  an  influence  to  raise 
it  still  higher.  After  the  announcement,  the  quotation  rose  to  15,180 
livres,  and  on  January  5th,  1720  to  18,000  livres.  The  last  price 
represents  the  culmination  of  the  boom  in  Paris,  and  constitutes  a 
remarkable  inflation.  The  market  price  was  no  less  than  thirty-six 
times  the  nominal  amount  of  the  share,  and  that  nominal  amount  again 
was  fictitious,  in  so  far  as  it  constituted  merely  the  paper  equivalent  of 
billets  d'etat,  purchasable  in  1717  at  about  150.  Thus  the  original 
shareholder,  who  sold  at  the  highest  price,  might  have  made  a  profit  of 
some  one-hundred-and-twenty  times  his  capital.  Such  a  profit,  however, 
was  to  some  extent  one  on  paper.  The  original  outlay  was  made  in 
coin,  whereas,  after  the  edicts  limiting  the  use  of  metallic  money  to  very 
small  transactions,  he  would  be  bound  to  take  payment  in  paper-money 
which  had  already  begun  to  depreciate.  Regarded  from  another  point 
of  view,  the  valuation  of  the  whole  capital,  taken  as  fully  paid,  would 
have  worked  out  at  between  500  and  600  millions  sterling  expressed  in 
French  paper-money.  To  obtain  the  real  equivalent  in  British  currency, 
it  would  be  necessary  to  deduct  from  this  estimate  a  sufficient  sum  to 
cover  the  depreciation  of  the  French  paper. 

The  immense  speculation  in  Paris,  during  the  closing  months  of  the 
year  1719,  was  sufficiently  striking  to  attract  the  attention  of  the 
mercantile  classes  in  other  countries.  Speculators  from  Holland  and 
from  Great  Britain  arrived  at  an  early  stage  of  the  boom,  and  many  of 
these  made  large  profits,  while  some  had  the  prudence  to  return  home 
with  their  gains.  It  was  estimated  that  in  a  short  period  no  less  than 
500  mil.  livres  in  bullion  had  been  carried  to  other  countries  in  this 
way.  There  are  particulars  of  several  Englishmen  and  Scotsmen,  who 
were  amongst  the  earliest  speculators,  and  there  seems  reason  to  infer 
that  the  Prince  of  Wales  sent  a  financial  agent  to  Parish     How  far  the 

1  I.e.  expressed  in  terms  of  the  equivalent  price  of  a  fully  paid  share^  the  price 
was  from  10,000  to  12,000  livres. 

2  Wood,  Life  of  Law,  ut  supra ^  pp.  73-102. 


CHAP.  XX.]  Speculation  in  Paris  and  Lo7ido7i  1719-20    405 

growth  of  speculation  in  London  is  to  be  assigned  to  the  influence  of 
that  at  Paris,  how  far  it  was  an  independent  growth,  fostered  by  similar 
conditions,  is  a  question  of  considerable  difficulty.  At  first  sight  the 
whole  weight  of  evidence  appears  to  be  in  favour  of  the  former  alterna- 
tive. The  boom  in  Paris  reached  its  height  in  the  closing  days  of  1719 
and  in  the  first  week  of  1720,  while  that  in  London  was  not  similarly 
advanced  until  six  months  later.  It  is  known,  too,  that  Englishmen 
had  speculated  in  Paris  and  returned  to  London  before  there  seemed  to 
be  much  speculative  activity  in  England.  Thus  it  appears  that  a  direct 
pei-sonal  transference  of  the  mania  can  be  traced.  Further,  the  careful 
and  exact  work  of  French  scholars  on  "  the  system '''  of  Law  and  the 
absence  of  similar  investigations  of  the  parallel  phenomena  in  England 
tend  in  the  same  direction.  It  is  not  unnatural  that  French  historians 
of  this  epoch  in  finance  should  regard  the  system  of  Law  as  daringly 
original  and  should  describe  the  speculation  in  Britain  as  "an  imitation*." 
The  incomplete  state  of  our  knowledge  of  the  financial  situation  in 
London  in  1719  and  1720  undoubtedly  fostei-s  this  belief.  Hitherto  it 
has  been  necessary  to  depend  on  the  account  of  this  time  given  by  Adam 
Anderson,  which  is  imperfect  in  so  far  as  the  phenomena  he  records  are 
not  co-ordinated,  and  moreover  he  fails  to  give  the  date  or  any  full 
description  of  the  many  new  promotions  which  he  classifies ^  The  first 
consideration  that  suggests  some  doubt  as  to  whether  the  commonly 
accepted  opinion  should  be  received  without  further  enquiry  is  that  it 
contains  an  error  in  holding  Law  to  have  been  completely  original.  He 
was  no  more  than  the  spokesman  of  the  exaggeration  of  the  fund  of  credit. 
Operations,  such  as  the  conversion  of  the  French  debt  in  1719,  were,  as 
already  pointed  out,  quite  common  in  England.  It  may  indeed  be  said 
that  Law's  transactions  were  on  a  scale  of  unexampled  magnitude,  but 
it  is  to  be  remembered  that  the  nominal  capital  of  the  South  Sea 
company  was  but  little  less  than  that  of  the  French  company  of  the 
Indies,  comparing  both  at  the  end  of  1719.  Another  claim  may  be 
advanced,  namely  that  Law  was  at  least  original  in  his  method  of  inflating 
the  price  of  his  shares,  but  in  so  far  as  his  method  involved  the  deprecia- 
tion of  paper-money,  there  is  no  parallel  in  actual  practice  at  this  time 
in  England,  though  in  the  idea  he  was  anticipated  by  Hugh  Chamber- 
lain ^  The  doubts,  which  these  various  considerations  suggest,  become 
strengthened  when  it  is  discovered  that  there  was  a  strong  undercurrent 
of  speculative  activity  in  London  as  early  as  September  1719,  that  is 

1  Cf.  Levasseur,  Becherches  Historiques,  ut  supra,  p.  400. 

2  A  chronological  list  of  these  promotions  will  be  found  infra,  in.  pp.  445-58. 
This  table  contains  fewer  entries  than  Anderson's,  owing  to  the  adoption  of  the 
principle  in  its  compilation  of  including  only  such  companies  as  could  be  dated. 

3  Vide  infra,  in.  pp.  204,  247-9,  260-1. 


y 


406 


Promotions  in  London  1719         [chap.  xx. 


before  the  rise  in  the  price  of  French  Indies  shares  had  become  remark- 
able. A  colour-mill  company  had  already  been  successfully  floated^, 
and  on  September  19th  it  is  recorded  that  a  subscription  of  capital  was 
being  taken  by  the  Royal  Fishery  company,  a  revival  of  the  undertaking 
incorporated  after  the  Restoration,  and  which  had  endeavoured  to 
obtain  more  capital  during  the  boom  from  1692  to  1694^.  In  October 
there  were  a  number  of  new  promotions.  Another  fishery  company, 
known  as  "the  Grand,''  invited  applications  on  the  14th  and,  since 
Scottish  investors  w^ere  dissatisfied  with  the  ^200,000  allotted  them,  the 
capital  was  increased  from  =£^1,000,000  to  ^1,500,0003.  xhen  came  a 
fortnight  later  the  undertaking  of  the  York  Buildings  company  for  the 
purchase  and  development  of  forfeited  estates,  the  nominal  capital  of 
which  was  .^1,200,000  *.  The  promotion  of  marine  insurance  companies 
was  remarkable.  About  this  time  two  companies  were  floated  for  this 
class  of  business,  the  one  by  Ram,  a  banker,  with  a  capital  of  ^1,200,000 
and  the  other  by  another  banker,  Colebrook,  with  d?l ,000,000 ^  It  is 
not  clear  whether  these  were  amalgamated  into  a  later  venture  with  a 
capital  of  ^^2,000,000,  which  became  the  basis  of  the  undertaking  after- 
wards incorporated  into  the  London  Assurance  company.  There  were 
numerous  other  joint-stock  enterprizes  connected  with  marine  insurance. 
Already  the  company,  afterwards  incorporated  as  the  Royal  Exchange^ 
had  allotted  shares  between  August  14th,  1717,  and  January  16th,  1718, 
and  it  was  now  carrying  on  business  under  the  charters  of  the  old 
Elizabethan  societies  of  the  Mines  Royal  and  the  Mineral  and  Battery 
Works.  It  too  had  a  capital  of  over  a  million^.  In  addition  to  these, 
there  were  two  other  promotions,  one  of  which  was  formed  by  Shale  and 
another  for  lending  money  on  bottomry,  each  with  a  capital  of  a  million, 
floated  before  the  end  of  December^  From  October  to  December  there 
were  many  financial  companies  formed  to  grant  annuities  (Nov.  21st 
and  Dec.  29th)  or  for  insuring  lottery  tickets  (December)®.  It  is  note- 
worthy that,  following  the  divergency  of  practice  to  which  attention  has 
already  been  frequently  directed^,  the  unit  of  capitalization  was  some- 
times the  number  10,  sometimes  12.  But  what  is  most  striking  is  the 
vast  multiples  used.  The  great  majority  of  capitals,  offered  for  subscrip- 
tion, were  either  ^1,000,000  or  ^1,200,000.  Only  in  two  cases  of  which 
particulars  have  been  preserved,  was  the  capital  less  than  a  million,  the 
one  being  "  a  company  to  encourage  British  manufactures  "  (Oct.  6th) 
with   <£*1 00,000  and  the  other  the   lottery-ticket   assurance,   already 


1  Vide  infra,  iii.  p.  445. 

•2  Ihid,,  II.  p.  376,  III.  p.  445. 

*  lUd.,  III.  p.  423. 

6  Ibid.y  II.  p.  405,  III.  p.  398. 

®  Ibid.,  Ill,  p.  445. 


3  Ihid.,  III.  p.  445. 

6  lUd.,  III.  pp.  399,  400. 

7  Ihid.,  in.  pp.  401,  445. 

®  Vide  supra,  pp.  151,  341. 


CHAP.  XX.]         Speculation  in  London  1719  407 

mentioned,  with  ^^1 20,000 ^  In  the  large  companies  the  shares  were 
frequently  of  .^1,000  each,  but  only  a  very  small  fraction  was  called  up 
varying  from  ^  per  cent,  to  1  per  cent.  Therefore  an  almost  infinitesi- 
mal cash  payment  controlled  a  very  large  amount  of  nominal  capital, 
and  a  brisk  trade  was  carried  on  in  the  selling  of  allotment-rights  at 
very  substantial  premiums  on  the  amounts  actually  called  up,  indeed  it 
was  not  long  before  a  merchant  in  London  stated  that  no  business  **  was 
minded  since  the  several  subscriptions  had  been  set  on  foot*.*"  The 
number  of  promotions  and  their  inflated  nominal  capital,  as  well  &s  the 
active  dealings  in  the  shares,  even  before  allotment,  shows  that  before 
the  end  of  1719  there  was  a  very  considerable  amount  of  speculation. 
It  might  be  said  that  the  fever  manifested  itself  differently  in  Palis  and 
in  London.  In  France  the  whole  movement  centred  round  a  single 
organization,  whereas,  at  the  beginning  in  England,  it  took  many 
different  forms,  though  showing  in  almost  every  case  evidences  of 
inflation.  It  is  perhaps  for  the  former  reason  that  thoughtful  observers 
declared  emphatically  that  there  was  no  danger  of  London  witnessing 
anything  comparable  to  the  meteoric  rise  of  the  French  Indies  company. 
"Where  is  the  man,^"*  it  was  asked  at  the  end  of  1719,  "who  having 
lent  his  money  to  the  publick  on  the  credit  of  Parliamentary  security, 
will  upon  a  whim,  discharge  that  fund  and  take  a  precarious  company 
of  private  men  for  the  money.**"  Elsewhere  Law  is  described  as  a  person, 
who  "  being  first  acquainted  with  the  solid  immovable  state  of  credit  in 
England  and  seeing  the  fluctuating  manner  of  things  in  France  plainly 
saw  also  how  easy  it  was  to  push  those  things  there,  which  he  would  not 
so  much  as  think  of  in  England  without  apprehensions  of  being  pulled 
in  pieces  by  the  rabble ^"  It  is  a  curious  commentary  on  these  expres- 
sions that  in  all  probability  before  they  were  written — certainly  long 
before  the  end  of  1719 — there  were  active  negotiations  for  the  conversion 
of  the  British  debt.  The  impoii^nt  fact  must  not  be  overlooked  that 
operations  of  this  kind,  as  already  explained,  were  well  known  in  London 
and  that  in  the  early  part  of  1719  the  South  Sea  company  had  made  a 
handsome  profit  by  converting  a  part  of  the  Lottery  loan  into  its  own 
stock.  Naturally  it  was  desirous  of  repeating  and  extending  this  class 
of  business.  But  there  were  many  difficulties  to  be  overcome  in  England 
that  did  not  exist  in  France.  In  the  first  place,  the  French  loans  had 
been  to  a  very  great  extent  consolidated,  whereas  the  British  loans 
remained  in  the  original  forms  in  which  they  had  been  issued.     More 

^  Vide  infra,  iii.  p.  445. 

2  Journals  of  the  House  of  CommonSy  xix.  p.  347. 

3  The  Chimera,  or  the  French  way  of  Paying  National  Debts  laid  open,  being  an 
Impartial  Account  of  the  proceedings  in  France  for  raising  a  Paper  Credit  and  Settling 
the  Mississipi  Stock,  London,  1720,  pp.  9,  10. 


408      Scheme  for  Conversion  of  the  Debt  1719  [chap.  xx. 

especially  there  was  the  difficulty  that  some  of  those  obligations  were  in 
the  form  of  irredeemable  annuities.     Besides,  in  that  portion  of  the  loan 
which  was  redeemable,  there  was  included  the  debt  of  the  State  to  the 
three  great  companies.   It  follows  that  any  one  of  these,  which  could  secure 
the  right  of  making  the  conversion,  would  be  in  a  position  to  capture 
the  business  of  the  other  two,  and  the  first  step  made  was  the  admission 
of  the  principle  that  the  portion  of  the  debt,  lent  by  the  companies  to 
the   State,   should   be   exempt   from   the   proposed   conversion.      This 
condition  was  accepted  as  early  as  November  1719,  and  it  yet  remained 
to  be  decided,  if  a  conversion  were  to  be  effected,  what  body  should  be 
authorized  to  make  it.     An  enterprize  of  this  nature  might  have  been 
undertaken  either  by  the  Bank  of  England  or  by  the  South  Sea  company. 
The  latter,  by  means  of  lavish  bribery,  had  secured  the  support  of  a 
number  of  the  most  influential   members  of  the  ministry  as  early  as 
December  1719 ;  and,  although  tenders  were  made,  both  by  the  Bank  and 
the  South  Sea  company  in  January  and  February  1720,  there  is  good 
reason  to  believe  that  the  ministry  was  committed  to  the  latter  body. 
The  scheme,  eventually  accepted  by  Parliament,  differed  from  that  of 
Law  and  was  in  fact  a  repetition  of  that  which  had  already  been  carried 
to  a  successful  issue  by  the  South  Sea  company  in  1719^     The  conver- 
sion was  to  be  at  the  option  of  the  creditors  of  the  State.    The  company 
was  left  free  as  to  the  terms  it  would  offer  to  those  who  were  to  be 
invited  to  exchange  their  government-debt  for  South  Sea  stock.     On 
the  other  hand,  the  respective  positions  of  the  State  and  the  company 
were   strictly   defined.      The   nation   admitted   itself  indebted   to   the 
company  for  the  par  value  of  all  the  redeemable  debts  converted,  while 
"the  long  annuities'"  were  to  be  capitalized  at  twenty  years'  purchase 
and  "the  short  annuities"  at  fourteen  years'  purchase.     Supposing  all 
the  loans  were  converted,  an  addition  of  nearly  31  millions  would  be 
made  to  the  debt,  due  to  the  company.     Further,  it  was  agreed  that 
the  company  might  increase  its  nominal  capital  proportionately  to  the 
debt  converted,  that  is,  if  the  whole  loans  were  exchanged,  the  stock 
would  be  augmented  by  upwards  of  31  millions,  making  it,  with  the 
amount  already  issued,  about  42f  millions,  or  nearly  three  times  as 
much   as  that  of  the  French  Indies  company.     With  regard  to  the 
interest  on  the  converted  debt,  after  1727,  the  nation  would  effect  a 
saving  of  .£'420,000  a  year,  and  in  addition  the  company  undertook  to 
pay  a  bonus,  dependent  on  the  amount  of  debt  converted,  which,  had 
all  the  loans  been  exchanged,   would  have  been  nearly  7f   millions ^ 
The  possibility  of  profit   for  the   company  is  not  apparent  without 
further  consideration.     It  arose  from  the  fact  that,  while  the  nominal 
capital  was  increased  pari  passu  with  the  debt  exchanged,  there  was  no 
1  Vide  infra,  iii.  p.  302.  2  j^^,^  „,,  pp  304^  306. 


CHAP.  XX.]     Companies  promoted^  J  an.,  Feb.  1720       409 

stipulation  as  to  the  price  at  which  the  company's  stock  should  be  rated 
for  the  purposes  of  that  exchange.     Obviously,  if,  as  in  1719,  the  stock 
were  at  a  premium,  the  quantity  of  South  Sea  stock,  required  to  satisfy 
the  holders  of  government  loans,  would  be  less  than  that  which  the 
company  was  authorized  to  create.     Therefore  such  surplus  stock  would 
constitute  the  gross  profit  on  the  transaction  for  the  company.     The 
proceeds  of  the  sale  of  that  surplus  stock  at  the  premium  would  be  the 
gross  cash  profit,  from  which  was  to  be  deducted  the  bonus  payable  to 
the  State,  and  any  balance  remaining  would  constitute  the  nett  gain. 
Expressed  in  this  form,  it  is  clear  that  only  a  very  great  premium  on 
South  Sea  stock  would  give  any  very  considerable  profit,  and  for  this 
reason  the  market  during  January,  while  active,  was  undecided.     More- 
over it  was  not  as  yet  known  whether  Parliament  would  accept  either  of 
the   rival   conversion   schemes.     This   uncertainty  is   reflected   by  the 
quotations.     South  Sea  stock  was  128 J  on  January  1st,  1720,  it  rose  to 
137i  on  the  12th  and  closed  on  Saturday  the  30th  at  128J  to  130^. 
Bank  stock  on  January  1st  was  150^,  rising  to  153}  on  the  13th, 
relapsing  to  149f  on  the  20th  and  closing  at  153.     Judging  solely  by 
these  figures  (and  the  movements  of  East  India  and  Million  Bank  stocks 
were  within  similar  narrow  limits),  there  was  little  speculative  activity. 
But,  outside  the  long-established  companies,  there  was  a  great  increase 
in  new  promotions  and  in  the  attention  paid  to  these.     In  fact,  during 
January  and  part  of  February,  the  new  ventures,  with  their  moderate 
sums  called  up  and  great  prospects,  absorbed  the  interest  of  speculators. 
The  increasing  popularity  of  these  companies  is  attested  by  the  growth 
of  new  enterprizes,  all  issued  with  only  very  small  sums  called  up.    Thus 
at  this  stage,  there  was  (to  borrow  an  expressive  American  phrase)  "  a 
poor  man's  boom"  in   progress.     In  January  companies,  that  can  be 
dated,  were  floated  with  a  nominal  capital  of  over  6  millions.     Two  of 
these  were  fishery  enterprizes,  two  financing  companies  and  another  was 
intended  "  to  encourage  the  growth  of  raw  silk  "  in  England*.     Large  as 
was  the  proposed  capital  for  the  time,  it  becomes  quite  inconsiderable, 
compared  to  that  of  the  promotions  of  February,     In  that  month, 
taking  account  only  of  schemes  that  can  be  assigned  to  a  definite  date, 
there  was  offered  for  subscription  a  total  nominal  capital  considerably 
more  than  the  whole  national  debt  of  upwards  of  31  millions,  which  it 
was  proposed  to  convert  into  South  Sea  stock.     Most  of  these  promo- 
tions had  capitals  of  at  least  a  million,  several  of  two  millions  and  one 
of  no  less  than  three  millions.     About  two-thirds  of  the  number  might 
be  described  as  insurance  and  financial  companies.    The  most  interesting 
of  this  group  is  perhaps  the  Sadlers'  Hall  Insurance,  which  had  a  capital 
of  d^2,000,000  and  the  partly-paid  shares  of  which  sold  at  a  premium  of 

*  Vide  infra,  in.  p.  446. 


410        Companies  promoted — Jan.,  Feb.  1720  [chap.  xx. 

300  per  cent.^  The  subscription  list  was  opened  on  February  16th, 
and,  later  in  the  year,  the  business  was  transferred  to  the  Royal 
Exchange  company  ^  Of  the  remaining  ventures,  there  was  an  attempt 
to  utilize  the  charters  of  the  Mines  Royal  and  of  the  Mineral  and 
Battery  Works  for  mining  operations.  It  is  to  be  remembered  that  one 
of  the  marine  insurance  companies  was  working  under  these  grants,  and 
therefore  this  undertaking  is  described  as  "the  Grand  Lessees  of  the 
governors  assistants  and  societies  of  the  City  of  London  of  and  for  the 
Mines  Royal  and  the  Mineral  and  Battery  Works"  (February  8th) ». 
Then  there  was  a  company  for  building  or  buying  ships  to  let  for  freight 
(February  11th),  and  another  for  the  Newcastle  coal  trade  (February 
23rd)  which  was  intended,  by  preventing  "prejudicial  combinations,'' 
to  save  consumers  6  per  cent,  to  8  per  cent,  and  to  pay  8  per  cent,  on 
the  capital.  Three  new  foreign  trading  companies  were  projected,  two 
to  trade  to  Germany  and  the  other  to  Spain.  This  month  is  distin- 
guished from  the  previous  December  and  January  by  the  slight  attention 
paid  to  fishing  societies.  There  was  only  one  which  was  intended  for 
whaling  (February  22nd).  There  were  three  other  promotions  one  of 
which — a  salt  company — was  floated  on  February  26th,  on  the  ground 
that  an  increased  production  of  salt  would  be  required  by  the  develop- 
ment of  the  fishing  trade.  To  these  may  be  added  two  rather  bizarre 
schemes,  the  one  "  for  furnishing  funerals  to  any  part  of  Great  Britain  " 
(February  19th)  with  a  capital  of  ^1,200,000  and  the  other  (February 
20th)  with  ,£2,000,000  was  partly  a  sanitary,  partly  a  saltpetre  under- 
taking*. 

The  whole  financial  situation  in  London  during  February  was  highly 
important  in  determining  future  events.  The  South  Sea  company  was 
likely  to  obtain  the  privilege  of  converting  the  debt,  but  the  necessary 
act  had  not  yet  been  passed.  It  was  calculated  that,  with  South  Sea 
stock  at  130,  the  company  could  convert  the  debt,  pay  the  bonus  to  the 
State  and  retain  a  considerable  profit ^     If,  therefore,  the  stock  was 

1  I.e.  the  share,  with  5*.  paid,  at  £1 — Journals  of  the  House  of  Commons ,  xix. 
p.  347. 

2  Vide  infra,  iii.  p.  408. 

3  The  full  titles  under  the  charters  of  James  I. ;  ihid.y  iii.  p.  446. 
*  lUd.,  III.  pp.  446,  447. 

^  According  to  Archibald  Hutcheson,  with  South  Sea  stock  at  125,  the  nett  cash 
profit  would  have  been  £480,000,  with  the  stock  at  150  it  would  have  been 
£3,707,500 — Some  Calculations  relating  to  the  Proposals  made  by  the  South  Sea 
Company  and  the  Bank  of  England  (March  1720),  reprinted  in  A  Collection  of 
Calculations  and  Remarks  relating  to  the  South  Sea  scheme  and  Stock,  London,  1720, 
p.  10.  In  Some  Paragraphs  of  Mr.  HtUcheson's  Treatises  on  the  South  Sea  Subject, 
London,  1723,  p.  4,  the  profit  on  a  conversion  with  South  Sea  stock  at  150  is  given 
as  £1,400,000;  cf.  Journals  of  the  House  of  Commons,  xix.  p.  433. 


CHAP.  XX.]   Rise  in  South  Sea  Stock— March  1720        411 

worth  120  to  130  before  the  scheme  had  been  developed,  it  was  value 
for  a  higher  price,  according  as  the  conversion  became  more  probable. 
Thus  it  is  not  surprising  that  the  day  (February  Ist)  after  the  bill  had 
passed  the  House  of  Commons,  the  quotation  advanced  from  128  to 
137 J,  closing  at  136}.  On  the  4th  the  improvement  wa«  continued, 
and  it  lasted  until  the  15th,  when  187  was  touched,  an  increase  of  69  in 
less  than  three  weeks.  At  this  point  the  directors  were  confronted  with 
a  serious  difficulty.  Owing  to  the  recent  great  increase  of  the  premium 
on  their  stock,  they  could  count  on  a  large  surplus  for  sale.  But,  to 
realize  the  profit,  it  was  necessary  the  market  should  be  in  a  position  to 
purchase  and  pay  for  such  surplus  stock.  If,  however,  the  new  promo- 
tions were  permitted  to  proceed  to  business  and  to  call  up  capital,  it 
was  in  the  highest  degree  improbable  that  there  would  be  enough 
floating  wealth  to  enable  sufficient  sales  of  South  Sea  stock  to  be  made 
at  a  high  price.  Therefore  it  was  to  the  interest  of  this  company  that 
the  promotions  of  new  ventures  should  be  checked,  and  there  can  be 
little  doubt  that  it  was  through  the  influence  of  the  directors  with  the 
administration  that  a  committee  of  the  House  of  Commons  was  appointed 
on  February  22nd,  to  enquire  into  the  several  subscriptions  for  fisheries, 
insurances  etc.,  "whereby  great  mischiefs  may  accrue  to  the  publick*." 
It  was  two  months  before  this  committee  reported,  and  its  appointment 
may  have  tended  to  prevent  a  further  increase  in  projects,  besides 
precluding  those  that  had  issued  shares  from  making  further  calls,  while 
the  investigation  was  in  progress.  The  immediate  effect  on  South  Sea 
stock  was  to  reduce  the  price,  and  it  was  almost  a  month  before  the 
quotation  of  February  16th  was  repeated''.  With  the  competition  of 
other  speculative  ventures  temporarily  suppressed,  the  price  of  South 
Sea  stock  advanced  with  great  rapidity,  since  every  point  above  125 
meant  that  there  would  be  more  surplus  stock,  and  that,  when  sold,  it 
would  realize  a  higher  price  per  cent.  On  March  18th,  200  was  touched 
for  the  first  time,  that  is  double  the  sum  at  which  purchases  could  have 
been  made  in  September  1716,  and  a  premium  of  almost  200  per  cent 
on  the  estimated  cash  price  of  the  securities  converted  in  1711.  It 
required  three  and  a  half  years  for  the  stock  to  advance  100 ;  but,  inside 
four  market  days,  a  further  increase  of  a  like  amount  was  recorded,  when 
300  was  touched  on  March  23rd.  Until  April  14th  the  price  fluctuated 
about  300,  being  more  frequently  above  than  below  that  figure.  It 
w£is  on  this  day  that  the  first  step  in  the  actual  conversion  was  under- 
taken, when  a  sale  of  stock  was  made  to  the  public  at  300,  followed  by 
a  further  issue  at  400  on  the  30th ».     On  May  19th  the  terms  on  which 

1  Journals  of  the  House  of  Commonsy  xix.  p.  274. 

2  Feb.  16,  17,  180—187;  March  16,  185— 186|. 

3  For  the  details  vide  infra,  iii.  pp.  308,  354.     It  may  be  noted  that  the  stock 


412  Conversion  of  Debt — May  1720      [chap.  xx. 

the  irredeemable  debt  might  be  converted  were  announced,  and  their 
chief  characteristics  consisted  in  the  com'pany  offering  a  greater  number 
of  years'  purchase  to  the  annuitants  than  it  received  from  the  State  on 
these  loans.  The  price,  arrived  at  in  this  way,  was  payable  partly  in 
cash,  but  the  larger  portion  consisted  of  South  Sea  stock  at  375,  that 
being  slightly  below  the  average  price  of  the  day  on  which  the  announce- 
ment was  dated ^  On  the  announcement  of  the  terms  (May  20th)  the 
quotation  rose  to  400,  an  addition  of  another  100  in  two  months — a 
rise  which  is  the  more  remarkable  since  it  took  place  in  spite  of  an 
attempt  by  Law  to  "  bear  "  the  stock  upon  a  very  large  scaled 

The  result  of  the  conversion  was  that  the  company  had  succeeded  in 
converting  debt  valued  at  9 J  millions  by  issuing  only  3 J  millions  of 
stock.  This  left  a  gross  profit  in  stocky  issuable  by  the  company,  of  6^ 
millions.  Of  this,  3|  millions  had  actually  been  issued  for  cash,  payable 
in  instalments,  and  would  realize  12|  millions,  leaving  a  balance  of 
issuable  stock  of  2J  millions  which,  at  400,  would  produce  another  10 
millions.  Thus  in  May  there  was  a  gross  profit  of  22|  millions.  From 
this  considerable  deductions  must  be  made  to  arrive  at  the  nett  profit. 
Part  of  the  price  of  the  converted  annuities  was  payable  in  cash,  and 
allowance  must  also  be  made  for  the  sum  due  to  the  State.  These  two 
amounts  may  be  placed  at  9J  millions.  Deducting  this  from  the  cash 
receivable  from  stock,  already  issued  (namely  the  12|  millions),  there 
remains  a  balance  of  3^  millions.  To  this  is  to  be  added  the  surplus 
issuable  stock  still  available  of  9>\  millions,  or  (taking  the  latter  at  400) 
there  would  be  a  nett  profit  on  the  transaction  of  13 J  millions  cash. 
Further  the  issuable  capital  was  now  increased  to  21 J  millions,  of  which 
in  May  1720  there  was  issued  18J  millions. 

The  wave  of  speculation,  which  had  now  set  in,  was  far  from  being 
equally  distributed.  The  stocks  of  the  Bank  of  England  and  the  East 
India  company  showed  a  comparatively  small  gain,  the  increase  varying 
from  34  per  cent,  to  36  per  cent.  On  the  other  hand,  the  advance  in 
the  quotation  of  South  Sea  stock,  since  the  beginning  of  the  year,  was 
225  per  cent.^,  and  even  this  immense  increase  is  surpassed  by  the  Royal 
African  company  where  the  rise  was  300  per  cent."* 


was  not  sold  in  the  market  at  400  until  May  20tli.  The  reason  that  subscribers 
were  willing  to  contract  to  pay  more  than  the  market  price  was  that  the  instalments 
were  distributed  over  a  long  period. 

1  May  19,  370—384. 

2  W,  Michael,  Der  Siidseeschwindel  vom  Jahre  1720  in  Vierteljahrschrijt  fur  Social- 
und  Wirtschnflsgeschichte,  vi.  pp.  568,  569. 

3  The  maximum  daily  fluctuations  in  the  stocks  of  these  three  companies  from 
May  to  September  are  represented  in  a  chart  in  vol.  iii. 

*  Vide  infra,  ii.  pp.  32,  35. 


CHAP.  XX.]    Companies  promoted— April,  May  1720      413 

Comparison  of  Prices  of  Stocks  on  Jan.  1*<,  1720,  and  on 
May  20th,  1720. 

Bank  of              India  South  Sea  Million  Bojral  AfrioMH 

England  company  company            Bank            company 

Jan.  1,  1720         160j                200^  128^                128                  25 

May  20,   „           204                  268  415                   —                 100 

53j  67i  2801  75 

367o  347,  2257.  3007. 

The  fact  that  there  w£is  so  great  a  disproportion  in  the  amount  of 
the  improvement  in  some  shares,  as  compared  with  others,  shows  that, 
as  yet,  the  influence  of  the  speculative  activity  was  partial  in  its  effects. 
The  reason  that  Royal  African  stock  had  risen  more  in  proportion  than 
that  of  the  South  Sea  company  is  to  be  found  in  the  revival  of  interest 
in  the  floatation  of  new  companies.  From  the  middle  of  April  there 
was  a  fresh  outburst  of  further  promotions.  From  November  to  Feb- 
ruary the  favourite  ventures  had  been  fishery,  insurance  and  financing 
undertakings.  In  April  and  May  the  most  popular  enterprizes  were 
those  for  foreign  and  colonial  commerce.  Out  of  about  50  which  can 
be  assigned  to  this  period,  close  on  one  half  would  fall  under  that 
category  and  of  these,  no  less  than  five  were  formed  for  the  African 
trade,  indeed  it  was  announced,  evidently  with  no  little  glee,  that  the 
charter  of  the  existing  company  "  not  being  exclusive,'"  there  were  great 
opportunities  for  "  the  more  effectual  carrying  on ""  of  this  branch  of 
commerced  In  addition,  an  undertaking  was  floated  for  the  Barbary 
trade,  and  the  promoters  mentioned  as  one  of  the  inducements  that 
thereby  "  our  country-men  would  be  preserved  from  being  carried  into 
slavery''.'*'*  There  were  also  at  least  four  enterprizes  started  to  trade 
with  America,  as  well  as  one  for  each  of  the  following  countries,  Norway, 
Russia,  Portugal  and  another  for  the  importation  of  rough  diamonds. 
There  were  in  addition  some  half-dozen  fishing  companies,  and  here 
again  the  same  general  tendency  manifests  itself,  which  differentiates 
this  group  from  the  previous  floatations  for  this  business.  Though  the 
Committee  of  the  House  of  Commons  had  reported  on  the  whole  in 
favour  of  that  trade,  it  was  recognized  that,  when  the  Royal  Fishery 
company  had  increased  its  nominal  capital  to  10  millions  and  there  were 
numerous  competitive  organizations,  the  home  fishing  had  been  fully 
provided  for,  therefore  the  promotions  of  April  and  May  tended  towards 
the  exploitation  of  colonial  waters,  such  as  Newfoundland  and  the  East 
coast  of  America.  Financial  undertakings  were  fewer  than  in  the 
previous  three  months,  and  became  more  original  in  their  nature.     A 

1  Po8t-bog,  April  14-16,  1720;  vide  infra,  in.  pp.  449,  450. 

2  Daily  Couranty  April  27,  1720. 


414       Companies  promoted — April,  May  1720   [chap.  xx. 

"Lombard  office''  was  established  on  the  model  of  the  Charitable 
corporation,  also  a  foreign  exchange  company  for  "the  remitting  of 
money  to  and  from  the  principal  trading  places  in  Great  Britain  and 
foreign  parts ^j"  as  well  as  two  new  insurance  ventures,  one  for  fire  (the 
Globe)  and  the  other  for  marine  risks.  There  remains  a  considerable 
number  of  miscellaneous  schemes,  several  of  which  were  concerned  with 
the  textile  trades.  The  Royal  Lustring  company,  after  having  apparently 
endeavoured  to  transfer  its  charter  to  an  insurance  company^,  was 
revived  for  the  resumption  of  the  manufacture  of  a-la-modes'.  Two 
woollen  enterprizes  were  proposed,  one  for  linen  and  another  for  sail 
cloth.  It  is  difficult  to  decide  whether  a  scheme  for  a  calico  company 
was  intended  to  be  taken  seriously.  This  was  to  be  established  by 
women  who  were  to  find  the  capital  and  "they  were  resolved,  as  one 
man,  to  admit  no  man,"  confining  applications  to  those  who  appeared 
at  a  certain  china-shop  dressed  in  calico — a  costume,  one  would  imagine, 
somewhat  light  for  April  19th*.  A  venture  for  the  tinning  of  iron 
plates,  which  was  started  on  April  13th  may  be  described  as  the 
foundation  of  this  industry  in  Great  Britain.  Then  comes  the  revival 
of  a  kind  of  enterprize  that  was  very  popular  for  some  years  after  the 
Revolution,  namely  the  working  of  an  improved  water  engine,  also 
another  not  dissimilar  in  character  for  draining  fens^  A  glass  company 
appeared  on  May  12th  and  another  which  seems  to  have  aimed  at  an 
improvement  in  the  production  of  pottery,  i.e.  "for  glazing  and  painting 
stone  [ware]  to  endure  the  fire^"*'  Finally  there  was  an  undertaking  for 
the  sale  of  the  goods  of  bankrupts  or  persons  deceaseds 

During  the  five  weeks  from  May  20th  to  June  24th,  the  speculation 
became  most  intense.  In  that  period  South  Sea  stock  advanced  over 
600,  while  those  of  the  new  promotions  considered  most  promising 
commanded  immense  premiums,  and  the  fresh  floatations  grew  still 
more  numerous  with  yet  larger  nominal  capitals.  All  these  pheno- 
mena co-operated  in  increasing  the  fever  of  the  time.  Profits  made 
in  one  stock  were  used  in  purchases  of  another,  and  what  was  most 
serious  for  the  future  was  that  speculators  mortgaged  their  credit  in 
order  to  participate  in  the  gains  shown  on  paper  by  the  general  rise 
in  the  prices  of  the  various  speculative  counters.  It  is  shown  elsewhere 
that  the  access  of  speculation  must  be  attributed  to  the  directors  of 

1  Post-bog,  April  14-16,  1720. 

2  As  to  the  negotiations  with  the  Sun  Fire  Office  vide  infra,  iii.  pp.  386,  387. 
It  appears  from  the  report  of  the  Committee  of  the  House  of  Commons  that  early  in 
the  year  there  had  been  negotiations  between  the  company  and  Overal's  Insurance, 
Journals  of  the  House  of  Commons,  xix.  p.  347. 

3  Vide  infra,  iii.  p.  88.  *  Daily  Post,  April  19,  1720. 
6  Cf.  infra,  ii.  pp.  481,  482.  «  Daily  Post,  April  16,  1720. 
"f  Ibid.,  May  6,  1720;  vide  infra,  in.  pp.  450,  451. 


CHAP.  XX.]   Manipulation  of  Stocks — Mai/  1720  416 

the  South  Sea  company*.  It  is  true  that  the  success  of  the  con- 
version operations  of  April  and  May  left  the  company  with  a  profit 
unexpectedly  large.  Even  granting  that  the  surplus  stock  would  sell  at 
400  or  over,  it  would  be  clear  to  a  dispassionate  observer  that  any 
further  rise  in  price  was  over-discounting  the  future.  But  the  arginnent 
of  the  speculator  was  that,  as  yet,  the  whole  debt  had  not  been  converted 
and  that  future  operations  would  yield  a  still  larger  proportion  of 
surplus  stock,  and  it  was  gravely  maintained  that  "  the  higher  the  price 
is  that  is  given  for  the  stock,  the  greater  benefit  will  the  purchaser  have 
thereby''.""  What  it  was  difficult,  if  not  almost  impossible,  to  recognize 
at  the  time  was  that  the  additional  rise  at  the  end  of  May  and  during 
June  was  almost  wholly  artificial.  Instead  of  using  the  funds  reali/x'd 
by  the  instalments  on  the  stock  issued  in  April  in  providing  for  the 
bonus  due  to  the  State,  the  directors  had  embarked  on  a  policy  of 
making  loans  on  the  security  of  the  stock  of  the  company,  and  the  eff'ect 
of  each  of  these  loans  can  be  clearly  seen  in  forcing  the  quotation 
upwards.  Between  May  20th  and  June  4th  South  Sea  stock  gained 
400%  and  it  was  inevitable  that  an  advance  so  great,  superimposed  on 
one  already  large,  should  give  an  overwhelming  stimulus  to  the  forma- 
tion of  new  companies.  At  the  end  of  May  and  early  in  June  issues  of 
capital  were  made  with  a  profusion  quite  bewildering.  Not  only  were 
the  issues  more  numerous,  but  the  nominal  capital  asked  was  growing 
larger.  A  subscription  of  ^£^1 ,000,000  had  ceased  to  be  common. 
With  a  few  exceptions,  the  joint-stock  was  to  be  at  least  i?2,000,000, 
often  ,£'4,000,000  or  .£'5,000,000.  Thus  it  is  not  sui-prising  to  learn 
that  the  total  nominal  capital  of  the  companies,  which  published  pre- 
ambles for  subscriptions  during  the  single  week  ending  on  June  11th, 
was  calculated  to  amount  to  224  millions^  Once  again  the  general 
character  of  the  new  enterprizes  had  changed  and  the  textile  trades, 
other  manufactures  and  land-development  ventures  became  most  promi- 
nent. In  the  former  group,  calico  was  most  popular,  and  upwards  of 
ten  undertakings  were  formed  from  May  21st  to  June  11th  (inclusive) 
for  developing  this  industry.  Wool  too  was  not  overlooked,  there  were 
several  promotions  to  sell  or  produce  woollen  goods,  besides  others  to 
develope  the  accessory  industries,  such  as  the  growing  or  giinding  of 
materials  used  in  dyeing — for  instance  woad,  madder — while  certain 
soaps  were   to   be   made   specially  for  the   cloth   trade.     Then   other 

1  Vide  infra,  in.  pp.  317,  318. 

2  Flying  Post,  April  9,  1720,  cf.  A.  Hutcheson,  Collection  of  Calculation,  ut  ntpra, 
p.  25. 

3  May  20,  381—415 ;  June  4,  820—770. 

*  Misfs  Weekly  Journal,  June  11,  1720  (reprinted  in  JJaniel  Defoe:  hi*  Life  and 
recently  discovered  Writings,  by  William  Lee,  1869,  ii.  p.  249). 


416  Companies  promoted — June  1720     [chap.  xx. 

companies  were  floated  to  make  Colchester  Bays,  Manchester  stuffs, 
crape,  sail  cloth,  and  two  to  import  lace.  Besides  all  these,  there  was  a 
resuscitation  of  the  Framework-Knitters.  As  showing  the  wide-reaching 
methods  of  organization  of  some  of  the  undertakings  in  this  group,  it 
may  be  noted  that  it  was  proposed  to  grow  a  certain  plant,  such  as 
cotton  or  hemp,  on  the  estates  of  the  company  and  to  manufacture  it  in 
factories  under  the  same  management.  Land-development  schemes  were 
also  numerous  and  covered  a  large  variety  of  objects.  One,  for  instance, 
aimed  at  improving  estates  by  a  "  particular  method "  which  increased 
the  value  by  between  £9>Q  and  £SQ  an  acre^,  another  at  reclaiming  bog 
lands  in  Ireland,  others  at  building  houses.  In  the  same  group  may  be 
included  a  venture  for  the  buying  of  titles  to  properties,  which  were 
disputed,  and  carrying  on  proceedings  to  make  good  the  claims.  Under 
the  same  general  heading  may  perhaps  be  added  enterprizes  relating  to 
agriculture,  such  as  companies  proposed  for  the  corn-trade,  for  seed-corn, 
for  improving  the  breed  of  horses.  A  third  group,  that  was  considered 
to  possess  considerable  speculative  attractions,  consisted  of  home  manu- 
factures, and  undertakings  (one  or  more)  were  formed  for  each  of  the 
following  trades,  sugar,  paper,  paste-board,  white-lead,  plate-glass, 
watches,  starch  and  brushes.  The  class  of  undertaking  that  had  been  so 
popular  in  April,  namely  that  for  foreign  or  colonial  trade,  was  now  less 
common,  these  being  now  confined  to  the  importation  of  naval  requisites 
like  masts,  wood,  pitch  and  tar.  Insurance  and  financial  ventures,  also, 
were  comparatively  rare.  Of  the  former,  two  may  be  mentioned,  the 
one  to  provide  against  the  thefts  of  servants  and  the  other  against 
burglary^.  More  peculiarly  financial  were  two  companies  founded  at 
this  time,  the  first  for  loan  offices  and  the  second  for  the  purchase  of 
South  Sea  and  other  stocks.  The  iron  and  steel  trade,  too,  had  a 
number  of  floatations.  The  milled-lead  undertaking  was  re-started  ^  and 
once  more  an  effort  was  made  to  smelt  iron  with  pit-coal.  Companies 
were  formed  to  work  lead  and  other  mines,  to  manufacture  and  to 
import  steel,  also  to  work  engines  for  draining  mines  or  clearing  harbours. 
There  remains  a  considerable  number  of  miscellaneous  enterprizes,  as  for 
instance  the  production  of  alum,  of  rock-salt,  another  company  for 
carrying  coal  from  Newcastle,  schemes  for  improved  methods  of  brewing 
(such  as  the  drying  of  malt  by  hot  air),  for  victualling  ships,  for  the  sale 
of  medicines  ("  the  Grand  Dispensary ''),  for  supplying  Liverpool  with 
water,  for  trading  in  hair  for  wig-making,  for  dealing  in  advowsons, 
importing  diamonds,  even  for  the  rearing  of  bastard  children. 

The  succession  of  companies  had  for  a  long  time  excited  considerable 
alarm  ;  ,and,  immediately  after  the  Committee  of  the  House  of  Commons 

^  Daily  Courant,  June  8,  1720. 

2  Vide  infra,  in.  pp.  374,  451-6.  ^  /^j^,^  „,.  pp.  i05-8,  453. 


CHAP.  XX.]  Culmination  of  the  Inflation — June  1720      417 

had  reported  in  April,  steps  were  taken  to  limit  the  new  promotions.  \  ^ 
In  §  18  of  6  George  I.  c.  18  it  was  enacted  that,  where  any  project  | 
offered  shares  for  public  subscription  after  June  24th,  1718,  and  acted  as 
a  company  without  a  charter,  or  under  a  charter  granted  in  the  first 
instance  for  some  other  purpose,  or  which  had  fallen  into  abeyance,  such 
undertakings  should  be  held  to  be  void,  and,  after  June  J44th,  1720, 
became  in  law  public  nuisances  and  would  incur  praemunire.  Though 
attention  was  drawn  to  this  act  by  a  proclamation,  issued  on  June  11th*, 
dealings  in  the  shares  of  the  threatened  schemes  continued  active,  and, 
what  is  more  remarkable,  a  few  completely  new  promotions  appeared  at 
intervals  after  the  proclamation,  even  after  the  date  at  which  the  act 
was  due  to  come  into  force.  The  chief  effects  of  the  action  of  the  State 
were  on  the  one  side  to  influence  the  market  in  South  Sea  stock,  on  the 
other  to  enhance  the  quotations  of  shares  in  the  ventures  already  formed. 
In  fact,  instead  of  the  flowing  tide  of  speculation  being  dissipated  in  i 
every  direction,  it  was  diverted  into  two  main  channels,  namely  towards  I 
the  South  Sea  market  and  to  that  for  the  new  shares.  On  June  4th 
all  stocks  had  reached  a  new  high  level,  South  Sea  stock  for  instance 
being  for  the  first  time  over  800.  After  the  proclamation  of  the  11th, 
at  first  the  price  was  considerably  weaker ;  but,  when  the  third  money 
subscription  was  announced  on  the  15th  at  1000,  together  with  the 
promise  of  10  per  cent,  dividend  in  stock^^  quotations  rose  and  on  June 
24th  and  25th  the  boom  reached  its  culminating  point.  At  this  time 
Bank  stock  was  265,  East  India  stock  440,  South  Sea  stock  1,050*. 
Thus  the  latter  was  ten  and  a  half  times  its  nominal  value  and  over 
fifteen  times  the  cash  payment  of  1711.  Striking  as  was  that  advance 
in  the  time,  it  becomes  insignificant  when  compared  with  the  rapid 
proportionate  increases  in  the  shares  of  some  of  the  lately  founded 
companies.  "  The  Bubble- Act,'"  so  far  from  damping  speculative  enter- 
prize,  merely  served  to  concentrate  it  on  some  of  the  favourite  companies. 
It  is  true  that  in  a  few  cases  the  highest  price  recorded  shows  only  a 
small  gain.  For  instance  there  is  no  evidence  that  shares  in  the  Liver- 
pool Water-supply  company,  or  an  ordnance  undertaking  ever  sold  at 
more  than  thrice  the  sum  paid  in.  Owing  to  the  immense  capital  of  the 
Royal  Fishery,  the  maximum  was  but  two  and  a  half  times  that  called 
up.     Out  of  forty  of  these  recent  promotions,  the  greatest  price  of  two 

1  London  Gazette,  June  11-13,  1720. 

2  I.e.  worth  in  cash  about  100  per  cent. 

3  In  A  History  of  Agriculture  and  Prices,  by  J.  E.  T.  Rogers,  vii.  Pt  ii.  p.  706, 
a  quotation  of  1060  is  noted  June  25.  The  only  verification  I  have  been  able  to 
obtain  of  this  price  is  the  mention  of  it  in  the  Caledonian  Mercury  which  quotes  the 
Evening  Post  of  June  25.  The  maximum  quotation  noted  by  Freke  and  the  Daily 
Courant  is  1050. 


S.  C.  I. 


27 


J 


418  Instances  of  Inflation  1720  [chap.  xx. 

was  three  times  that  paid  up,  in  three  cases  four  times,  in  two  six  times,  in 
two  again  seven  times,  in  four  eight  times  and  in  two  ten  times.  That  is, 
in  forty  instances  analyzed,  the  advance  in  eighteen  cases  was  less  than  that 
of  South  Sea  stock,  but  in  the  remaining  twenty-two  it  was  greater,  that 
is  more  than  ten  and  a  half  times  the  sum  called  up  in  cash.  In  the 
following  companies  the  highest  price  varied  from  twenty  to  thirty-five 
times  the  sums  paid  by  shareholders — Royal  Lustring,  English  Copper, 
Welsh  Copper,  British  Insurance,  Welby''s  Gold  Mines,  London  Assur- 
ance, York  Buildings  and  Royal  Exchange  Assurance.  But  these  were  not 
the  greatest  premiums.  The  shares  of  the  General  Insurance  were  sold  at 
no  less  than  sixty-four  times  the  sum  called  up,  while,  most  remarkable  of 
all,  in  a  company  promoted  by  Steele,  the  essayist  (the  object  of  which  was 
to  convey  fish  alive  in  tanks  from  the  fishing  ground  to  the  market,  and 
generally  described  as  "  the  Fish-PooP '"')  £\^^  was  paid  as  a  premium 
before  any  call  had  been  made.  It  may  be  noted  that  in  the  majority 
of  cases,  where  the  rise  was  greatest  proportionately,  the  companies  had 
a  charter  or  a  patent ;  and  doubtless  it  was  thought  that  the  Rose,  the 
General  Insurance  and  the  Fish  Pool  would  succeed  in  obtaining  such 
authorization.  At  the  same  time,  in  spite  of  the  act,  the  other  under- 
takings were  far  from  being  immediately  reduced  in  value,  since  it  was 
believed  that  a  legal  status  could  still  be  secured.  Few  had  described 
themselves  as  companies,  the  general  tenour  of  their  advertisements 
being  a  joint-stock  of  a  certain  sum  for  the  carrying  on  of  a  certain 
trade.  After  June  11th  it  was  thought  that  by  calling  themselves 
co-partnerships  the  proclamation  could  be  evaded 2,  and  therefore  the 
chief  effect  of  the  legislation  up  to  the  end  of  June  was  to  confer  an 
advantage  on  a  company  with  "  a  good ''  charter  or  on  one  which  was 
likely  to  secure  incorporation. 

It  will  be  clear  that  the  rage  of  speculation  in  the  shares  of  new 
companies  is  a  phenomenon  to  which  due  weight  must  be  given  in  any 
study  of  the  financial  conditions  in  1720.  Though  at  first  only  J  per 
share  or  per  cent,  was  called  up,  as  time  went  on  other  calls  were  made, 
and  in  the  Orkney  Fishing  company  the  share  was  £%h  paid,  in  an 
undertaking  to  trade  with  Hamburg  ^^15  paid.  Even  though  the 
actual  payments  on  each  share  were  comparatively  small,  when  the 
market  price  was  very  many  times  that  sum  and  when  the  nominal 
capital  was  very  large,  it  is  clear  that  the  demand,  made  on  credit  by 
the  speculation  in  these  shares,  was  immense.  It  was  estimated  that  at 
this   period   the  market-value  of  all   the   stocks  and   shares  dealt  in 

^  Tliis  enterprize  is  described  by  Defoe  in  Mist's  Journal,  September  6,  1718 
(reprinted  in  Daniel  Defoe:  his  Life  and  recently  discovered  Writings,  by  William 
Lee,  1869,  n.  pp.  68,  69). 

2  Caledonian  Mercury,  June  14,  1720. 


CHAP.  XX.]  Instances  of  Inflation  1720  419 

amounted  to  as  much  as  500  millions,  a  larger  sum  than  the  aggregate 
value  of  French  Indies  shares  at  the  highest  quotation*.  The  price  of 
some  of  the  securities  too  was  large,  thus  one  share  in  either  the  Temple 
Mills  Brass  Works,  the  Orkney  Fishery  or  the  Royal  Exchange  Assurance 
cost  ^50,  while  York  Buildings  touched  aP305.  The  effect  of  the 
inflation  too  may  be  seen  from  another  point  of  view,  by  selecting  for 
investigation  and  comparison  two  gi-oups  of  companies  in  the  first  of 
which  only  J  was  paid,  while  in  the  other  £5  was  paid. 

Highest  Price  recorded  for  the  shares  of  the  following  companies  cm 
all  of  which  J  was  paid. 

For  Drying  Malt  with  hot  airl 
„    Life  Insurance  J 

„    Saltpetre  \ 

„    Flax  and  Hemp       \       Ij 

„    Land  ImprovementJ 

„   General  Insurance  8 

Highest  Price  recorded  in  17 W  for  the  shares  of  the  following 
companies  on  all  of  which  £5  was  paid. 

Holy  Island  Salt           16 

Land  Improvement  (Lambert)           20 

Melioration  of  Oil  (Long)        60 

Navigation,  River  Douglas      70 

English  Copper  Company       105 

London  Assurance        ...         ...         ...         ...  176 

Finally  the  following  table  shows  the  nominal  value  of  fully-paid 
stocks  (or  in  the  case  of  partly-paid  shares  the  amount  paid)  and  the 
highest  recorded  price.  In  some  cases  the  advance  was  so  great  that  the 
statement  of  the  premium  can  no  longer  be  conveniently  expressed  in 
the  percentage  of  the  nominal  value,  and  therefore  the  figure,  added 
below  the  maximum  price,  represents  the  number  of  times  the  sum  paid 
up  is  contained  in  the  maximum  quotation. 

Table  showing  the  amount  paid  up  (or  held  as  paid  up)  on  each  of  the 
uTidermentioned  stocks  and  shares  and  the  highest  price  recorded 
in  1720^ 

Name                 South  Sea  Company  Bank  of  England—  East  India  Company — 

— vide  infra,  iii.  p.  360  vide  infra,  iii.  p.  244  vide  infra,  ii.  p.  206 

Nominal  value ...               100                               100  100 

Highest  price    ...            1,050                              265  449 

^  Anderson,  Annals  of  Commerce)  iii.  p.  330. 

2  Based  on  the  Bubbler's  Mirror— Print  Room,  British  Museum,  No.  1621,  also 
Nos.  1610,  1611,  1620,  1622,  1642.  Anderson,  Annal^t  of  Commerce,  in.  pp.  339-43. 
The  figures  in  brackets  after  the  name  of  some  of  the  companies  refer  to  the  list  of 
these  promotions,  infra,  m.  pp.  445-58. 

27—2 


420  distances  of  Inflation  1720  [chap.  xx. 

j^^jjjg  Million  Bank— vtd«  infra^  Royal  African  Company* 

III.  p.  287  —vide  infra,  ii.  p.  35 

Nominal  value ...                                100  100 

Highest  price   ...                               440  200 

Liverpool  Puckle's  Machine  Sun  Fire  Office  Royal 

Name  and  Ref.  No....              Water-  Gun — vide  infra,  — vide  infra.  Fishery 

Supply  [142]           III.  p.  109  iii.  p.  387  [2] 

Paid  per  share 10                       4  ?10  10 

Highest  price   20                       8  20  25 

(Highest  price) -j- (par)  2  2  2  2^ 

Name  and  Ref.  No. ...      Marine  Insurance  Holy  Island  Supplying  coals  from 

[?  36]  Salt  [162]  Newcastle  [40] 

Paid  per  share 16  \ 

Highest  price    3  15  1 

(Highest  price) -r  (par)  3  3  4 

Irish  Sail  Improvement  of  Westley's  Furnishing 

Name  and  Ref.  No....        Cloth  Land  (Lambert)  Actions  of  Funerals 

[?  87  or  71]                 [179]  [?  125]                   [30] 

Par i                            5  2                        2i 

Highest  price    1                         20  12                     15 

(Highest  price) -7- (Par)        4  4  6  6 

Name  and  Rpf  No       Pennsylvania  Whaling  Co.         Drying  Malt      Rose  Insur- 

JSameandiieLWo....  j-gg-j  j-g^^  by  Air  [129]        ance  [28] 

Par 5i  i  I  \ 

Highest  price    40  3^  .1  4 

(Highest  price)-r(Par)        7  7  8  8 

Name  and  Ref  No  ^^^®  ^^*  Trading  with        Grand  Fishery  Orkney 

isame  ana  i^ei.  JNO....     g^jance^  Hamburgh  [?  166]  [4]  FisheryS 

Par i  15  ^25 

Highest  price    4  120  5  250 

(Highest  price)  ^  (Par)        8  8  10  10 

Flax  and  Hemp  Rock-  Hemp  and  Melioration 

Name  and  Ref.  No....        growing  in  Salt  Flax  of  Oil  (Long) 

Pennsylvania  [79]  [113]  [?  71  or  87]  [181] 

Par 2i  IJ  I  6 

Highest  price    28  15  Ij  60 

(Highest  price)-^ (Par)        11  12  12  12 

*  The  quotation  of  the  Bubbler's  Mirror  is  200,  that  of  the  newspapers  180. 

2  ?  "  Symond's  Assurance  on  Lives,"  An  Exact  List  of  all  the  Bubbles,  1721,  in 
Somers'  Tracts  (1751),  xvi.  p.  419 ;  The  History  of  Banking,  by  W.  J.  Lawson,  1850, 
p.  489. 

3  Anderson,  Annals  of  Commerce,  in.  p.  341. 


CHAP.  XX.]  Instances  of  Inflation  1720  421 

Salt-  **  Stockings"?  Frame-  MaDuring  Water- 
Name  and  Bef.  No....         petre  work-Knitters  Co.  of  Land  Engine 
[32]  [169]  [?126]                   [76] 

Par \  »*  *                        4 

Highest  price    1^  30  1^                     60 

(Highest  price) -^  (Par)    12  12  12  \2\ 

Navigation  Building  or  Boyal  Lottring 

Name  and  Ref.  No...,     Bahama           of  the  River  buying  ships  Co.— vide  infrnt 

Islands^              Douglas'  to  freight  [22]  m.  p.  88 

Par 3                        6                        1  6j^ 

Highest  price    40                      70                      16  106  or  120 

(Highest  price) 4- (Par)      13  14  16  20^  or  23^ 

English  Copper  Welsh  Copper  British     Temple  Brass  Millf 

Name  and  Ref.  No. . . .     Co. — vide  infra^  Co. — vide  infra,  Insurance      — vide  infra, 

u.  p.  435  II.  p.  439  [25]          ii.  pp.  428,  429 

Par 5  4|  I                  ?10 

Highest  price    106  90  or  96  3                  260 

(Highest  price)^(Par)  21  22  or  23  24  26 

Royal  Exchange  As-        York  Buildings         Gold  Mining  Co. 
Name  and  Ref.  No....         surance — vide  infra,        Co. — vide  infra,  (Capt.  Welbe's) 

III.  pp.  404,  410  III.  p.  425  [174] 

Par 10  10  i 

Highest  price    260  306  16 

(Highest  price)-r-(Par)  25  30j  32 

.,  J  T,  /  XT  London  Assurance — vide         Generalln-  •*  Fish  Pool" 

Name  and  Ref.  No....       .^^^^^  ^^^  pp  ^^^^  411  ^^^^^^  ^24]         (Sir  R.  Steele)* 

Par 6  I  nil 

Highest  price    175  8  160  Prem. 

(Highest  price) -r  (Par)  36  64 

1  The  capital  was  £8,000  (Anderson,  Annals  of  Commerce,  iii.  p.  342).  The 
second  instalment  was  to  be  paid  on  July  20,  1720  (Daily  Courant,  July  14). 

^  Anderson,  Annals  of  Commerce,  m.  p.  346 ;  Rogers,  Agrumlture  and  Prices,  vii. 
Part  II.,  p.  608. 

»  On  September  13,  1720,  it  was  advertised  that  ships  were  almost  completed, 
and  share  certificates  were  then  ready  (Daily  Post,  Sept.  13,  1720). 


CHAPTER  XXL 

The  Collapse  op  the  Boom  of  1720. 

The  boom  of  1720  was  at  its  height  in  the  last  week  of  June. 
South  Sea  stock  was  quoted  at  1,000  on  each  of  the  six  week-days  from 
the  23rd  to  the  29th  \  But  already  there  were  signs  portending  serious 
trouble  in  the  future.  The  inflation  of  credit  had  been  carried  to  such 
lengths  that  later  on  it  became  customary  to  speak  of  the  financial 
operations  of  this  period  as  "  bubbles ^^  Towards  the  end  of  April,  the 
rate  of  interest  on  stock  exchange  loans  was  as  much  as  10  per  cent, 
a  month,  indeed  in  some  cases  1  per  cent,  a  day  was  paid'.  Foreign 
exchange  was  becoming  adverse  to  London,  though  the  change  was  to 
some  extent  disguised  by  the  influence  of  a  similar  speculative  fever  at 
Paris  and  Amsterdam^.     Though  the  diminution  of  further  floatations 

^  Vide  infra,  chart  in  vol.  iii. 

^  The  use  of  the  term  ''  bubble,"  in  this  connection,  is  often  supposed  to  have 
been  the  creation  of  the  South  Sea  period,  and  it  is  sometimes  derived  from  '^bob." 
Shakespeare  has  ^'  bubble  reputation,"  and  Wycherley  describes  one  of  his  characters 
as  "  bubbled  of  his  mistress."  The  plates  in  Het  Groote  Tafereel  der  Dwaasheid,  1720, 
show  that  the  word  was  understood  literally,  and  was  closely  connected  with  air- 
bubbles  or  soap-bubbles — as  something  unsubstantial,  which  was  capable  of  ^'  being 
blown  up"  rapidly  and  was  liable  to  burst. 

3  A.  Hutcheson,  Collection  of  Calculations,  ut  supra,  p.  25. 

*  Freke's  Prices,  ut  supra.  The  Paris  rate  which  had  been  34-8  on  January  13, 
1719,  went  to  a  greater  and  greater  discount  in  1720,  being  10,  7i,  6,  0  on  August  2, 
16,  September  9,  13;  cf.  MS.,  '^Second  and  Last  Advice  to  ye  Freeholders  of 
England,"  1721,  where  the  beginning  of  this  phenomenon  is  traced  to  the  exportation 
of  bullion  and  bills  on  behalf  of  the  foreign  favourites  of  George  I. — "The  locusts 
which  the  Ea^t  wind  brought  into  -^ypt  did  great  mischief,  but  they  carried 
nothing  away  but  their  carcasses  and  those  ye  ^Egyptians  had  ye  pleasure  to  see 
drowned  by  a  strong  West  Wind.  But  our  locusts  are  grievous  not  only  at  their 
visits  but  at  their  departure,  they  come  empty  and  go  away  loaded.... But  all  this, 
as  great  and  as  intolerable  as  it  was,  is  nothing  to  ye  plunder  of  ye  nation  in  1720, 

when  ye  K himself  sold  out  a  vast  deal  of  South  Sea  stock  and  subscriptions  at 

800  and  900  per  cent,  and  when  y*^  prodigious  deal  of  fictitious  stock  was  pretended 
to  be  sold  we  all  know  ye  greater,  much  ye  greater,  part  of  those  sums  were  paid  to 

ye  K and  ye  Duchess  of  Kendal... and  it  was  all  spirited  away  to  Hanover  of 

which  ye  proofe  are  plain.     For  besides  what  was  carried  away  in  specie  so  much 

was  remitted  by  bills  y*-  instantly  upon  the  K 's  departure,  the  exchange  to 

Holland  fell  very  much  against  us  and  could  never  afterwards  be  got  up  before  the 
total  catastrophe  and  crack  of  ye  South  Sea." 


CHAP.  XXI.]  AttemjJted  Comer  in  South  Sea  Stock  1720  423 

of  new  companies  strengthened  the  prices  of  South  Sea  stock  and  of  the 
shares  of  undertakings  already  established,  the  element  of  doubt  as  to 
the  legal  status  of  the  latter  was  prejudicial  to  the  continuance  of  a 
state  of  credit  already  subject  to  a  strain  that  must  increase  with 
cumulative  force  as  time  went  on.  It  is  shown  elsewhere  that  the 
finances  of  the  South  Sea  company  were  strained  to  the  uttermost  by 
the  malpractices  of  some  of  the  directors  and  by  the  system  of  making 
loans  on  the  stocks  Everything  points  to  the  conclusion  that  the 
condition  of  the  stock-market  in  June  was  exceedingly  unstable,  sup- 
posing there  had  been  no  further  demands  on  the  credit  of  the  country. 
But  the  situation  was  such  that,  if  financial  enterprize  stood  still,  a 
collapse  must  have  followed.  Only  the  future  could  justify  the  high 
level  of  the  quotations  of  stocks.  For  instance  the  whole  profit  of  the 
South  Sea  company  was  still  to  be  realized,  and  the  same  remark  applies, 
with  even  greater  force,  to  the  host  of  new  companies.  Therefore  to 
stand  still  was  to  court  disaster,  but  it  can  be  shown  that  to  go  forward 
was  only  to  meet  vast  misfortunes.  The  South  Sea  company  had 
immense  sums  due  to  it  in  the  future,  as  instalments  on  the  three  cash 
subscriptions.  But  such  of  the  new  companies  as  could  make  good  their 
footing  would  also  require  very  large  sums.  Now,  when  credit  was  so 
strained  already  in  June,  it  is  clear  that  it  was  absolutely  impossible 
that  the  necessary  funds  should  be  forthcoming.  Therefore  either  way 
a  terrible  collapse  was  inevitable.  If  speculation  had  been  checked  in 
June  it  would  have  come  quickly,  if,  on  the  other  hand,  the  directors  of 
the  South  Sea  and  other  companies  went  forward,  it  would  arrive  more 
slowly  but  no  less  surely,  and  the  panic  would  be  the  greater  the  longer 
the  delay. 

It  is  shown  with  some  detail  in  the  account  of  the  South  Sea 
company  that  its  policy  had  been  all  along  to  inflate  the  price  of  its 
script  Every  possible  device  was  adopted  to  support  the  market.  Not 
only  were  loans  made  on  the  stock,  but  there  was  a  sustained  effort  to 
corner  it.  Necessarily  those,  who  borrowed  on  their  holding,  had  to 
pawn  their  stock,  and  there  was  great  delay  in  issuing  new  scrip  against 
the  annuities  converted  in  May.  Thus  the  market  was  kept  bare  of 
stock,  but  here  again  the  management  of  the  company  was  involved  in  a 
dilemma.  The  price  of  the  stock,  being  artificially  enhanced  through 
the  loans  on  it,  to  support  the  market  it  was  necessary  to  continue  the 
policy.  But,  to  obtain  funds  for  such  financing,  further  issues  of  stock 
must  be  made.  Moreover  the  company  was  approaching  the  end  of  its 
issuable  stock,  and  to  create  more,  would  involve  the  opening  of  lists  for 
a  second  conversion  of  debts.     It  follows  then  that  the  operation  of 

1  For  the  details  vide  infra,  in.  pp.  317-19,  323,  324. 

2  Ibid.,  III.  p.  318. 


424        The  second  Conversion — August  1720    [chap.  xxi. 

cornering  the  stock  had  failed.  In  spite  of  the  widespread  speculative 
fever,  there  was  a  steady  undercurrent  of  real  selling  from  holders  of 
stock,  who  refrained  for  political  reasons  from  condemning  the  scheme. 
This  attitude  of  mind  is  expressed  by  William  King,  Archbishop  of 
Dublin,  in  a  letter  to  Molesworth  written  in  May — "I  send  you  the 
queries  about  the  South  Sea,  but  would  not  on  any  account  have  it 
known  that  I  am  concerned  in  it,  for  I  think,  if  the  debts  of  the  nation 
may  be  paid  by  the  folly  of  particulars... it  will  be  very  well  for  the 
publick,  and  I  know  no  obligation  on  me  to  hinder  it.  Perhaps  what 
would  be  spent  this  way  would  be  spent  on  gaming  or  on  luxury,  and 
I  am  of  opinion  that  most  that  go  into  the  matter  are  well  aware  it  will 
not  [succeed],  but  hope  to  sell  before  the  price  falP." 

For  these  various  reasons  the  stock  was  steady  during  July,  in  fact, 
allowing  for  the  deduction  of  the  dividend,  it  rose  slightly,  owing  to 
further  loans  to  stockholders  at  the  end  of  the  month.  Since  the 
second  step  in  the  conversion-scheme  was  now  inevitable,  the  time  was 
judged  favourable,  and  the  stock  was  rated  at  800  for  both  irredeemable 
and  redeemable  debts.  This  operation  was  carried  through  during  the 
first  twelve  days  in  August,  and  on  the  12th  a  final  issue  of  stock  for 
cash  was  made  at  1,000.  The  effect  on  the  market  soon  showed  itself. 
The  quotation,  instead  of  advancing  as  it  had  done  after  the  conversion 
in  May,  very  slowly  receded,  and,  when  the  operation  was  completed,  it 
fell  below  900. 

Meanwhile,  in  spite  of  the  act  and  proclamation  of  June^,  the  new 
or  revived  companies  continued  to  gain  popular  support.  There  was  no 
legislative  machinery  provided  for  taking  action  against  them ;  and,  in 
any  case,  those  that  stood  highest  could  only  be  touched  by  showing 
either  non-user  or  misuse  of  their  charters.  The  directors  of  the  South 
Sea  company  believed  that,  if  they  could  put  the  law  in  force  against 
such  undertakings  as  were  most  favoured,  the  way  would  be  clearer  for 
the  payment  of  calls  on  the  cash-subscriptions  and  also  for  the  main- 
taining of  the  price  of  South  Sea  stock.  But  two  of  the  undertakings, 
which  were  most  successful  in  the  market  were  legally  unassailable. 
These  w^e  the  marine  insurance  companies,  which  had  been  established 
by  act  of  Parliament.  There  was  a  stipulation,  however,  that  these 
companies  should  each  make  a  loan  to  the  State,  and  the  South  Sea 
company  endeavoured  to  force  them  into  such  a  position  that  they  could 
not  fulfil  the  conditions,  and  as  a  consequence  would  be  subject  to  the 
forfeiture  of  their  charters ^     Either  as  a  result  of  these  manoeuvres  or 

1  MS.  Letters  of  Archbishop  King,  Library,  Trinity  College,  Dublin,  N.  3.  6.  f.  87. 

2  Vide  supra,  p.  417. 

3  A  New  Year's  Gift  for  the  Directors  with  some  account  of  their  plot  against  the 
two  Insurances,  London,  1721,  p.  24. 


CHAP.  XXI.]    The  Writ  of  Scire  facias — Augitst  1720     426 

through  ill-advised  speculation,  the  insurance  companies  were  in  diffi- 
culties later  in  the  year,  but  they  managed  to  maintain  their  credit, 
longer  than  their  aggressor^  It  follows  that  out  of  ten  undertakings, 
the  shares  in  which  are  known  to  have  sold  at  over  twenty  times  the 
amount  paid  up'',  two,  the  Royal  Exchange  and  London  Assurance 
companies,  were  beyond  the  reach  of  the  directors  of  the  South  Sea 
company.  Of  the  remaining  eight,  four  (namely  the  British  and  the 
General  Insurances,  the  Temple  Brass  Mills  and  the  Gold  Mining 
company  promoted  by  Welbe)  had  no  charters  and  could  be  dealt  with 
under  the  act  of  June.  This  left  four  undertakings — the  Royal  Lustring 
company,  the  English  and  Welsh  copper  mines  and  the  York  Buildings 
— all  of  which  had  charters,  while  the  first  and  the  last  were  strengthened 
by  acts  of  Parliament.  It  follows  that,  if  the  South  Sea  company 
decided  to  attack  their  legal  status,  it  could  only  do  so  by  proving 
non-user  or  misuse  of  the  respective  charters.  Accordingly  on  August^  f 
18th,  the  directors  made  application  for  a  writ  of  scire  facias  against  I 
these  undertakings.  There  were  considerable  differences  in  the  legal  \ 
position  of  the  four  companies.  No  evidence  is  discoverable  which 
shows  that  the  Welsh  copper  company  had  continued  to  exist. 
Originally  founded  in  1694  it  does  not  appear  to  have  survived  the 
boom  that  gave  it  birth  ^,  and  therefore,  so  far  as  is  known,  this  was 
a  clear  case  of  a  charter  becoming  void  through  non-user.  The  cases 
of  the  Royal  Lustring  company  and  of  the  English  Copper  Mines  were 
more  doubtful.  The  former  had  been  founded  in  1688 ;  and  in  1706 
— a  year  of  great  depression — its  shares  were  still  quoted  at  half  the 
issue  price,  that  is  at  60  per  cent,  of  their  nominal  value.  The  joint- 
effect  of  peace  with  France  in  1713  and  the  approaching  determination 
of  the  monopoly  of  the  undertaking  led  to  the  announcement  that  its 
assets  were  to  be  realized  in  1713,  though  there  is  evidence  that  the 
shareholders  continued  to  meet  as  a  corporate  body  in  1716*.  The 
cessation  of  manufacturing,  as  well  as  the  attempts  to  sell  the  charter 
to  insurance  companies,  afford  evidence  that  the  status  of  the  company 
under  the  act  was  bad.  When  it  had  ceased  to  manufacture,  the  ^ 
charter  was  forfeited  under  the  non-user  clauvse.  The  company  of 
English  Copper  Mines  was  less  unfavourably  situated  in  law.  Founded 
in  1691,  this  organization  was  still  at  work  in  1711,  and  in  1720  an 
amalgamation  had  been  effected  with  two  other  smelting  and  copper- 
mining  undertakings.  The  united  capital  was  only  =^105,000*.  In  this 
case  there  was  no  question  of  a  misuse  of  the  charter,  since  all  the 
business,  carried  on  under  it,  was  exactly  of  the  character  originally 

^  Vide  infra,  iii.  pp.  405,  406.  *  Vide  supra,  p.  421. 

3  Vide  infra,  ii.  pp.  438,  439.  *  Ibid.,  in.  pp.  88,  89,  386. 

6  Ibid.,  II.  pp.  434,  435. 


426       Non-user  or  Misuse  of  Charters  1721     [chap.  xxi. 

authorized.  Moreover,  it  seems  that  a  fair  case  could  be  made  out  to 
show  that  the  company  continued  to  exist  between  1711  and  1720.  In 
1710  a  further  call  on  the  shareholders  had  been  made,  and  this  points 
to  the  conclusion  that,  at  that  date,  the  assistants  contemplated  the 
carrying  on  of  the  undertaking.  Further,  once  the  amalgamation  of 
1720  had  been  completed,  it  would  have  been  equitable  to  consider  the 
charter  as  applying  to  the  united  mines,  smelting-works  and  copper 
mills,  and  there  is  good  reason  to  believe  that  one  at  least  of  these 
enterprizes  had  been  established  some  years  before  1712  and  had  been 
at  work  from  that  date  until  1720^  Thus  there  seems  to  have  been  no 
ground  for  the  voiding  of  the  charter  on  account  of  non-user.  The 
case  of  the  York  Buildings  company  was  peculiar.  Founded  originally 
as  a  water-supply  company,  it  had  continued  as  such  until  the  end  of 
1719,  when  a  group  of  speculators  bought  up  the  water-works  and  the 
charter  and  floated  the  land-development  undertaking.  Therefore  this 
company  could  not  fail  by  reason  of  non-user,  but  it  might  be  reached 
on  account  of  misuse  of  its  charter.  That  grant  had  been  made  on 
behalf  of  what  had  been,  at  the  date  it  was  signed,  a  new  type  of 
water-supply  undertaking^,  and  the  whole  question  was  whether  the 
purchase  of  estates  in  Northumberland  and  Scotland  could  be  covered 
by  that  instrument  or  by  the  act  in  favour  of  the  company.  There  was 
one  technical  point  urged  on  its  behalf,  namely  that,  whereas  as  a  rule 
other  charters  limited  the  value  of  lands  purchasable  by  the  undertaking 
incorporated,  there  was  no  such  limitation  in  this  special  case.  Apart 
from  the  question  of  construction  of  the  charter,  it  appears  that,  while 
there  was  no  express  restraint  on  the  purchase  of  land,  whatever  amount 
was  acquired  should  be  in  relation  to  the  main  object  of  the  company ; 
and,  if  so,  it  follows  that  the  recent  operations  of  the  company,  while 
not  contrary  to  the  letter  of  the  charter,  were  not  authorized  by  that 
instrument  and  might  further  be  held  contrary  to  its  intention.  How- 
ever, in  view  of  the  influence  which  the  South  Sea  company  was  able  to 
command,  the  decision  of  the  Courts  was  adverse  to  three  of  the  four 
companies^.  The  consequences  of  this  verdict  were  very  far-reaching; 
and,  were  it  not  for  the  tragic  nature  of  the  causes  now  set  in  motion, 
they  would  have  been  highly  humorous.  It  has  been  shown  above*  that, 
with  the  exception  of  the  Welsh  copper  company,  something  at  least 
was  to  be  said  for  each  of  the  other  undertakings.  When  this  was  so, 
what  was  the  position  of  the  bankers  of  the  South  Sea  company,  who 

^  State  Papers,  Domestic,  Petition  Entry  Book,  xi.  p.  621. 
2  Vide  infraj  iii.  pp.  419,  424. 

2  The  charter  of  the  English  Copper  company  was  found  not  to  have  been 
invalidated. 

*  Vide  supra,  p.  426. 


CHAP.  XXI.]     Collapse  of  the  Boom— September  1720    427 

carried  on  business  under  a  charter  originally  granted  for  the  manu- 
facture of  hollow  sword-blades  in  the  north  of  England,  and  after  this 
industry  was  abandoned,  the  grant  was  used  to  purchase  estates  in 
Ireland  and,  after  being  for  some  years  in  abeyance,  was  revived  to 
authorize  banking  and  financing  on  a  vast  scale*?  In  this  case  there 
was  certainly  both  non-user  and  misuse. 

The  direct  result  of  the  issue  of  the  writs  of  scire  facias  was  a  rapid 
fall  in  the  shares  affected,  some  of  which  became  unsaleable.  Within  a 
month  York  Buildings  had  relapsed  from  305  to  30,  London  Assurance 
from  175  to  30,  Royal  Exchange  Assurance  from  250  to  60.  When 
these  were  the  shares  that  fared  hest^  it  may  be  gathered  that  those  that 
were  most  affected  became  worthless.  Considering  the  undue  strain  of 
the  credit  of  the  country  at  the  time,  losses  of  this  magnitude  could  not 
be  confined  within  a  given  area.  As  these  shares  had  risen  in  the 
market,  loans  had  been  made  on  them  by  bankers,  and  the  price  fell 
too  quickly  for  the  margin  to  protect  the  lenders.  Not  only  so,  but 
the  same  persons,  who  speculated  in  these  new  companies,  were  holders 
of  South  Sea  stock ;  and,  through  their  losses  in  the  former,  they  were 
compelled  to  sell  part  of  what  they  owned  in  the  latter.  Thus,  just  as 
all  stocks  tended  to  rise  together  during  the  height  of  the  boom,  so 
conversely,  the  state  of  credit  being  what  it  was,  a  great  fall  in  one 
direction  would  spread  until  the  relapse  became  universal. 

Possibly  it  may  have  been  some  consolation  to  the  companies 
attacked  by  the  South  Sea  directors  to  know  that  the  stroke  directed 
against  them  had  recoiled  with  crushing  force  upon  the  figgressors. 
Before  the  issue  of  the  writ  South  Sea  stock  had  stood  at  850,  a  month 
later  it  was  as  low  as  390.  Thus  in  the  month  from  May  24th  to  June 
23rd  there  had  been  a  rise  of  520  while  in  the  same  period  from  August 
20th  to  September  19th  there  was  a.  fall  of  about  450.  Comparing  the 
state  of  the  market  in  the  stock  with  the  position  of  York  Buildings 
shares ;  the  latter,  in  spite  of  the  attack  made  on  them,  commanded  as 
high  a  premium  on  the  sum  paid  up  as  could  now  be  obtained  on  South 
Sea  stock ^. 

The  great  fall  in  stocks,  during  the  last  ten  days  of  August  and  the 
month  of  September,  is  to  be  attributed  in  part  to  the  shock  to  credit 
by  the  issue  of  the  writs ;  but,  where  the  inflation  was  greatest,  there 
were  other  causes.  The  beginning  of  the  decline  came  from  the  losses 
in  the  new  companies.  But,  since  the  later  part  of  the  advance  had 
been  artificial,  any  disturbance  of  confidence  would  inevitably  produce 

*  Vide  infra,  iii.  pp.  440-2. 

2  South  Sea  stock,  Sept.  19 
York  Buildings 


/ 


Credited  as  paid  up 

Price 

100 

450—380 

10 

46—30 

428     Nemesis  of  bad  Finance — September  1720   [chap.  xxi. 

wide-reaching  effects.  In  a  time  of  wild  speculation  a  moderate  fall 
would  become  the  prelude  to  further  relapses ;  and,  once  the  downward 
movement  had  acquired  a  certain  momentum,  it  would  continue  irre- 
sistibly until  the  inflation  was  reduced.  Just  as  in  the  period  when 
prices  were  advancing,  the  fact  that  certain  stages  were  reached  tended 
towards  further  gains,  so  in  the  reverse  direction  other  limits  being 
touched  gave  an  added  force  to  the  panic.  For  instance,  up  to 
September  5th,  South  Sea  stock,  though  falling,  remained  over  700, 
but  600  was  the  figure  at  which  enormous  loans  had  been  made  by 
bankers ;  and,  at  the  former  price,  in  a  falling  market  it  was  clear  that 
the  margin  was  rapidly  shrinking.  To  protect  themselves,  the  lenders 
began  to  sell  the  pawned  stock,  with  the  result  of  a  further  relapse. 
Then  the  directors  of  the  company  themselves  began  to  make  bear-sales ^ 
and  such  action  added  to  the  panic,  until  on  September  19th  the  stock 
fell  below  400.  At  this  price,  the  whole  influence  of  the  annuitants, 
who  had  converted,  became  adverse  to  the  company.  Those,  who  had 
come  in  in  August,  saw  the  stock  selling  in  the  market  at  half  the  price 
at  which  it  had  been  rated  for  them,  while  the  position  of  those  who 
had  subscribed  at  1,000  was  necessarily  still  worse.  Instead  of  being 
able  to  sell  their  allotments  at  a  profit,  as  they  had  hoped,  they  would 
now  be  forced  to  pay  calls,  all  of  which  represented  a  dead  loss  at  the 
prices  then  ruling.  It  was  little  to  be  wondered  at  that  the  stock- 
holders began  to  clamour  for  a  revision  of  the  terms  of  subscription. 
But,  if  there  were  such  a  revision,  the  amount  of  surplus  stock  would  be 
reduced,  and  thus  the  great  argument  in  favour  of  advanced  quotations 
would  be  weakened.  The  fortnight  from  September  19th  to  the  end  of 
that  month  was  a  most  critical  period  in  the  stock-market,  gathering 
up  within  a  short  space  the  nemesis  of  bad  finance.  On  Monday  the 
19th  South  Sea  stock  opened  at  450,  and  an  angry  meeting  of  the 
company  on  the  following  day  tended  against  any  recovery.  As  con- 
fidence became  more  and  more  impaired,  doubts  arose  as  to  the  ability 
of  the  company  to  make  good  its  vast  financial  commitments.  In  the 
past  as  fast  as  cash  had  been  received  from  the  subscribers,  it  had  been 
lent  out ;  and  the  payments,  to  be  made  on  the  conversion-operations, 
were  satisfied  by  bonds.  When  almost  all  paper-securities  had  fallen 
under  suspicion,  the  position  of  these  bonds  was  doubted.  It  is  true 
that  the  market  was  temporarily  strengthened  by  the  announcement  on 
Friday  the  23rd  that  the  Bank  of  England  would  support  the  South  Sea 
and  Sword  Blade  companies,  and  the  price  closed  at  375,  but  the  next 
day  (before  the  agreement  could  be  completed)  the  Sword  Blade  company 
was  forced  to  suspend  payment,  and  within  a  few  days  many  other 

1  Vide  infra,  iii.  pp.  326,  328,  329. 


CHAP.  XXI.]         The  Panic— September  1720  429 

bankers  failed.  On  Monday,  Tuesday  and  Wednesday  (26th— 28th) 
the  panic  was  at  its  worst,  South  Sea  stock  touched  180  (a  fall  of  600 
in  a  month),  the  bonds  were  sold  at  75,  East  India  stock  fell  from  210 
to  150,  York  Buildings  from  30  to  17,  Royal  Exchange  Assurance  from 
Q5  to  40,  London  Assurance  from  35  to  20.  The  breakdown  of  credit 
was  felt  universally  ^  Loans,  even  on  good  security,  were  almost  un- 
obtainable ;  and  those  who  had  funds  to  lend  considered  that  they  had 
"acted  a  charitable  part  in  taking  no  more  than  five  per  cent. ^br  a 
month.''''  Most  credit-instruments  were  not  negotiable — as  it  has  been 
graphically  described  "  every  note  and  bill,  except  those  of  the  Bank, 
and  some  few  others,  is  now  become  as  mere  piece  of  waste  paper  as  if  a 
prayer  or  a  creed  was  writ  on  it  instead  of  money*.  It  was  "  unfashion- 
able not  to  be  a  bankrupt,""  the  consequences  to  trade  were  described 
*'  as  most  miserable  and  ruinous'"*  and  merchants  were  said  "  to  be 
reduced  to  such  misery  as  they  had  never  felt  before'.""  Though  the 
prices  of  stocks  were  considerably  lower  in  December,  the  most  acute 
stage  of  the  panic  had  passed  on  Thursday,  September  29th,  when  it 
was  definitely  agreed  that  the  price,  at  which  South  Sea  stock  had  been 
rated  for  the  conversions  of  the  summer,  should  be  reduced  to  400*. 
Great  efforts  were  now  made  to  maintain  the  stock  at  about  200.  All 
the  devices  that  had  been  used  from  May  to  August  were  revived  as  far 
as  they  could  be  applied  in  the  altered  circumstances.  Handsome 
dividends  were  promised  in  the  shape  of  "  divisions *'"*  out  of  the  surplus 
stock.  The  company  intimated  that  it  would  pay  30  per  cent,  at 
Christmas,  in  cash,  and  50  per  cent,  thereafter  for  a  term  of  years; 
while  treatises  were  issued  endeavouring  to  prove  that  these  distributions 
could  be  made  good,  even  after  the  readjustment  of  terms  with  the 
annuitants,  whereby  the  quantity  of  surplus  stock  was  greatly  reduced". 
In  this  way  the  price  was  maintained  at  about  200  till  the  middle  of 
November.  It  then  began  to  be  seen  that  an  enquiry,  during  the 
approaching  session  of  Parliament,  into  the  conduct  of  the  directors  was 
possible.  Besid^,  some  of  the  ulterior  consequences  of  the  panic  were 
still  producing  a  great  depression  in  trade,  so  that  towards  the  end  of 
December  prices  of  stocks  were  lower  than  they  had  been  when  the 

1  Vide  infra,  ii.  p.  204. 

2  Consideratiom  an  the  Present  State  of  the  Nation  as  to  Publick  Credit y  Stocks ,  the 
Landed  and  Trading  Interests,  London,  1720,  pp.  17,  21. 

3  Historical  Register  (1720),  v.  p.  380;  Some  Paragraphs  of  Mr.  HiUchesons 
Treatises,  ut  supra,  p.  14. 

*  It  will  be  seen  that,  owing  to  payments  made  in  cash  and  to  the  subsequent 
bonus,  this  was  not  the  price  at  which  the  annuitants  held  the  stock — vide  infra,  in. 
pp.  311,  322,  400. 

^  An  Argument  proving  that  the  SotUh  Sea  company  are  able  to  make  a  dividend  of 
38  per  cent,  for  12  years,  fitted  to  the  meanest  capacities,  London,  1720. 


430    Finance  Companies  after  the  Panic  1720    [chap.  xxi. 

panic  was  at  its  worst.  The  following  table  will  show  the  decline  from 
the  highest  point  during  the  boom ;  and,  for  the  purposes  of  comparison, 
the  quotations  of  January  1st,  1720  (or  in  the  case  of  new  companies 
the  amount  called  up)  are  added : 

Comparison  of  the  Prices  of  stocks  and  shares  from  June  to  August 
and  in  December  1720. 


1720. 


Bank  of 

East  India 

South  Sea 

Royal  African 

England 

Company 

Company 

Company 

June  to  August. . . 

265 

449 

1,050 

200 

December  13 — 14 

132 

145 

121 

45 

January  1st    

(150i) 

(200i) 

(128i) 

(26)1 

Koyal  Exchange            London 

York 

Assurance               Assurance 

Buildings 

June  to  August... 

250 

175 

305 

December  13—14 

9 

11 

15 

Paid  in    

10 

5 

The  great  fall  in  the  price  of  stocks  reflects  one  aspect  of  "the 
clearing  away  of  the  wreckage,*"  after  the  collapse  of  the  period  of  over- 
speculation.  Both  the  boom  and  the  consequent  panic  had  originated 
in  financial  operations,  and  it  is  natural  to  seek  for  the  most  important 
results  amongst  those  companies  which  undertook  this  class  of  business. 
Amongst  finance,  banking  and  insurance  undertakings  there  are  two 
groups,  the  one,  which  through  circumstances  or  choice,  was  closely 
related  to  the  South  Sea  scheme,  and  the  other  which  was  less  affected 
by  it.  In  the  first  class  may  be  mentioned  the  South  Sea  company 
itself,  as  the  prime  mover  in  the  inflation,  the  Million  Bank,  as  a  very 
large  holder  of  the  securities  converted  and  the  York  Buildings  company, 
which  though  attacked  by  the  South  Sea  directors,  yet  imitated  some  of 
the  most  objectionable  of  their  methods,  which  involved  it  in  difficulties 
during  a  lengthened,  but  not  a  reputable  existence'^.  The  Million  Bank 
appears  to  have  speculated  in  annuities  during  the  boom,  and  it  emerged 
in  a  somewhat  crippled  condition  which  involved  a  reduction  of  the 
dividend.  In  time  its  credit  became  re-established  and  it  endured  as 
long  as  terminable  annuities,  of  the  kind  common  after  the  Revolution, 
were  a  favourite  investments  The  dominating  figure  in  this  group  is 
the  South  Sea  company,  whose  directors  had  been  as  kings  in  the 
summer  and  were  execrated  as  "  the  scum  of  the  people""  in  the  winter. 
Strenuous  efforts  were  made  to  leave  the  position,  established  at  the  end 
of  September,  exactly  as  it  was.  This  course  would  have  involved  a 
menace  to  credit  and  a   slur   on   the   national   honesty.     There   still 

1  February  5th.  ^  Vide  infra,  iii.  pp.  426-34. 

3  jififi,^  III,  p.  286. 


CHAP.  XXI.]  Finance  Companies  after  the  Panic  1720    431 

remained  a  considerable  amount  of  surplus  stock ;  and,  had  no  further 
action  been  taken,  the  company  would  have  been  in  a  position,  when 
trade  again  became  active,  to  sell  this  stock.  Further,  when  the 
investigations  of  the  Committee  of  the  House  of  Commons  had  made 
some  progress,  it  was  seen  that  the  creditors  had  good  ground  of 
complaint  against  the  State,  which  had  appointed  the  South  Sea 
company  as  its  agent  for  making  the  conversion.  In  so  far  as  the 
ministry  had  betrayed  its  trust,  the  creditors  were  forced  into  wild 
speculation,  where  the  dice  were  loaded  against  them.  Clearly  therefore 
the  State  was  under  an  equitable  obligation  to  afford  some  relief  to  the 
subscribers  of  debts.  Two  methods  were  open  to  it.  The  company 
had  not  as  yet  paid  the  bonus  it  had  undertaken  to  provide  out  of  the 
surplus  stock,  and  besides  there  were  the  fines  levied  on  the  directors. 
Further,  to  remove  the  temptation  of  surplus  issuable  stock,  it  was 
decided  that,  on  the  State  foregoing  its  claim  to  the  bonus,  all  the 
issuable  stock  should  be  divided,  together  with  the  fines  on  the  directors, 
amongst  the  annuitants,  who  had  converted.  The  effect  of  this  re- 
adjustment was  that  the  long  annuitants  now  held  South  Sea  stock  on 
an  average  of  from  105  to  110  and  those  who  exchanged  redeemables  at 
about  160^  These  prices  were  below  the  average  of  December  1720, 
but  the  position  had  another  side,  which  was  less  favourable,  in  so  far 
as,  even  after  the  re-adjustment,  there  was  a  material  loss  of  income. 
The  settlement  of  the  affairs  of  this  company  introduced  certain  changes 
in  the  capital  account  which  affected  the  Bank  of  England  and  had 
been  intended  to  influence  the  East  India  undertaking  also.  The 
concession  to  the  annuitants,  who  had  converted,  removed  the  possible 
danger  from  the  existence  of  a  surplus  issuable  stock.  There  remained 
the  risk  of  the  operations  that  might  be  undertaken  in  the  future, 
through  funds  raised  on  the  credit  of  the  debt  due  by  the  government 
to  the  company.  It  was  therefore  intended  that  the  capital,  which  was 
37f  millions  at  the  end  of  1720,  should  be  reduced  by  20  millions — 
2  millions  were  cancelled  and  the  Bank  and  East  India  company  were 
offered  the  privilege  of  purchasing  9  millions  each.  It  shows  how  the 
estimation  of  a  fund  of  credit  had  fallen  after  the  severe  lessons  of  1720 
that,  before  the  panic,  the  South  Sea  company  had  bribed  ministers 
most  lavishly  to  obtain  the  right  of  increasing  its  capital ;  whereas  the 
East  India  company  in  1721-2  refused  this  offer,  even  as  gift^  and  the 
Bank  only  took  4  millions  instead  of  9  millions ^  After  this  adjustment 
was  made  the  capital  of  the  South  Sea  company  was  31 J  millions,  that 
of  the  Bank  almost  9  millions.  Apart  from  the  increase  of  its  capital, 
the  latter  institution  did  not  bear  any  lasting  marks  of  the  tmublesonie 

1  Vide  infra,  in.  pp.  347-9.  *  Ibid.,  u.  p.  206.  »  Ibid.,  in.  p.  242. 


432     Finance  Companies  after  the  Panic  1720  [chap.  xxi. 

times  through  which  it  had  passed.  Indeed  the  fact  that  its  credit  had 
stood  during  the  panic  strengthened  its  position,  besides  giving  the 
directors  a  salutary  lesson  on  the  evils  of  speculative  finance.  The 
Bank  was  fortunate  in  escaping  the  evils  that  beset  its  great  rival,  for 
it  must  not  be  forgotten  that  it  accepted  the  principles  that  had  ended 
so  disastrously.  The  directors,  like  their  contemporaries,  exaggerated 
the  advantages  of  a  fund  of  credit,  but  the  state  of  home-politics  and 
the  dishonest  methods  of  the  South  Sea  company  resulted  in  the  offer  of 
the  latter  being  accepted.  The  proposal  of  the  Bank,  had  it  been 
realized,  would  in  all  probability  have  been  carried  out  more  equitably ; 
but,  if  so,  there  would  have  been  no  little  danger  to  the  stability  of  the 
company.  Leaving  aside  the  dishonesty  of  the  South  Sea  directors 
(which  added  to  the  inflation  and  subsequent  collapse  in  1720),  the  real 
cause  of  the  panic  was  the  erroneous  views  held  as  to  the  extent  of  the 
fund  of  credit.  The  Bank  of  England  had  first  worked  out  the  idea  on 
a  large  scale  in  England ;  and,  had  a  different  government  been  in  office, 
it  is  possible  that  it  would  have  secured  the  privilege  of  making  the 
conversion.  Thus  the  success  of  the  South  Sea  company  in  being 
selected  was  in  truth  a  predestined  failure ;  for,  as  opinion  was  at  the 
time,  men  exaggerated  the  powers  of  a  fund  of  credit  to  such  an  extent 
that  it  was  inevitable  that  too  high  a  price  should  be  asked  from  the 
body  selected  to  carry  out  the  scheme,  with  the  result  that  eventually 
the  operation  would  involve  that  body  in  difficulties. 

While  those  financing  companies  which  were  brought  into  immediate 
contact  with  the  South  Sea  company  felt  the  effects  of  the  year  1720, 
the  other  members  of  this  group  came  through  the  crisis  bearing  marks 
of  the  period  of  stress.  The  two  new  marine  insurance  companies  were 
unable  to  pay  the  sum  they  had  promised  to  lend  to  the  government^, 
partly  through  losses  in  speculation,  partly  through  the  impossibility  of 
inducing  shareholders  to  pay  calls ;  and  they  were  compelled  to  come  to 
Parliament  and  obtain  remission  of  a  part  of  the  amount  they  had  each 
undertaken  to  provide.  The  management  of  the  Royal  Exchange 
company  had  been  particularly  enterprizing,  if  not  speculative.  Not 
content  with  the  marine  business,  secured  it  by  the  charter  and  act  of 
Parliament,  it  endeavoured  to  undertake  fire  risks,  by  buying  up  the 
Sadlers'  Hall  company,  besides  forming  a  community  of  interest  with 
the  Sun  by  an  extensive  purchase  of  the  shares  of  the  latter 2.  It*  is 
a  curious  commentary  on  the  over-capitalization  of  the  insurance 
companies  promoted  in  1720  that  the  Sun  Fire  Office,  which  was  now 
beginning  to  succeed,  could  have  been  bought  up  for  about  ^^50,000. 
This  company,  too,  was  affected  by  the  prevailing  excitement,  not  only 

1  Vide  infra,  iii.  pp.  405-7.  '^  lUd.y  in.  pp.  388,  408,  409. 


CHAP.  XXI.]    Finance  Companies  after  the  Panic  1720    433 

in  its  relations  with  the  Royal  Exchange  but  in  its  legal  status  and 
capitalization.  Having  no  charter,  it  appears  at  one  time  to  have 
endeavoured  to  purchase  that  of  the  Royal  Lustring  company.  Moreover, 
like  other  undertakings,  which  had  been  founded  before  the  boom,  it 
found  that  the  24  original  shares  soon  rose  to  a  price  that  was  un- 
manageable and  accordingly  each  was  subdivided  into  100  new  ones*. 
The  same  method  was  adopted  by  the  English  Copper  Miners  and  by 
a  company  (formed  in  1716)  for  lending  money  on  real  security*.  The 
Royal  Lustring  company  on  the  other  hand  retained  the  original 
number  of  shares,  but  created  in  addition  a  large  amount  of  new  ones 
on  which  calls  were  made^.  The  case  of  the  Bank  of  Scotland  shows 
how  widespread  the  fund  of  credit  fallacy  was.  The  South  Sea  company 
had  sought  the  making  of  a  conversion  of  debt,  but  strenuous  efforts 
were  made  to  force  such  an  operation  on  the  Scottish  institution  against 
its  will,  through  exchanging  its  shares  for  the  securities  known  as 
Equivalent  Debentures  which  were  created  in  1707*.  The  owners  of 
these  debentures,  being  repulsed  by  the  Bank,  used  them  to  establish 
a  fire  insurance  company  and  again  attempted  to  compel  an  amalga- 
mation °.  The  success  of  the  Bank  of  Scotland  not  only  aroused  envy 
at  home  but  a  desire  of  imitation  in  Ireland.  When  a  Bank  was 
proposed  in  Dublin  in  March,  1719,  one  of  the  inducements  held  forth 
to  prospective  shareholders,  was  that  the  shares  of  the  Bank  of  Scotland 
were  selling  at  150  per  cent,  premium;  and  the  proposed  capital  of 
.£^100,000  was  taken  up,  before  the  date  at  which  the  books  were  opened 
for  public  subscription.  As  has  often  happened  since  in  Ireland,  new 
industrial  developments  were  made  weapons  in  keen  party  strife,  and  the 
opponents  of  the  scheme  represented  it  as  "a  society  of  men  incorporated 
to  seize  the  money  of  the  kingdom  and  turn  it  to  their  private  benefit, 
whilst  the  people  circulated  their  papers  and  paid  them  interest  for  the 
use  of  them  *.""* 

After  the  purely  financial  companies,  those  which  suffered  most  in 
1720  were  the  undertakings  expressly  named  in  the  writ  of  scire  facias. 
The  Royal  Lustring  company  disappeared  altogether^,  and  the  York 
Buildings  continued  as  a  highly  speculative  ventured  The  two  mining 
enterprizes — the  English  and  Welsh  copper  undertakings — suffered  in 
the  market,  but  neither  admitted  defeat.     Both  continued  to  transact 

1  Vide  infra,  iii.  p.  387.  ^  Ihid.y  n.  p.  434,  iii.  p.  466. 

3  Ibid.y  III.  p.  88.  4  Ibid.,  in.  pp.  269-72. 

^  These  Equivalent  Debenture  holders  finally  became  incorporated  in  1727  as  the 
Royal  Bank  of  Scotland. 

8  MS.  Letters  of  Archbishop  King,  Library,  Trinity  College,  Dublin,  N .  3 . 7, 
ff.  11,  12,  19,  31,  49,  50. 

7  Vide  infra,  iii.  p.  89.  »  Ibid.,  ni.  pp.  426,  427. 

S.  C.  I.  28 


434      Mining  Companies  after  the  Panic  1720    [chap.  xxi. 

business.  The  former  opened  its  books  and  made  transfers  after  the 
issue  of  the  writ^;  and  in  February  1721  it  protested  vigorously  against 
the  action  of  the  London  Gazette  in  refusing  to  print  an  advertisement 
of  one  of  the  meetings^  Each  company  elected  officials' ;  and,  when 
Maitland  wrote  his  History  of  London^  he  mentions  both  as  being  then 
in  existence.  As  late  as  the  end  of  the  century  the  charter  of  the 
English  Copper  Miners  was  still  in  use,  while  in  1790  this  company 
entered  a  combine,  known  as  the  United  Mines,  which  for  several  years 
made  profits'*.  The  stimulus  of  the  boom  of  1720  aided  other  mineral 
enterprizes,  and  part  of  the  gain  was  retained  after  allowance  is  made 
for  the  damage  done  by  the  subsequent  panic.  A  lead  smelting  company, 
originally  incorporated  in  1692  as  the  Governor  and  Company  for  Smelting 
down  Lead  with  pit  and  sea  coaP  was  re-established,  and  continued  at 
work  long  afterwards^.  A  Brass  works,  founded  in  1702,  which  may 
have  been  that  owned  by  the  Temple  Mills  company,  was  described  in 
1803  "  as  having  continued  till  this  time  but  with  great  additions  and 
improvements,  and  this  is  now  perhaps  the  most  considerable  brass- 
work  in  Europe^."  The  tinned-plate  trade  was  founded^,  and  efforts 
were  made  to  re-start  the  milled-lead,  the  smelting  of  iron  with  pit  coal 
and  the  Mine  Adventurers  companies.  The  latter  continued  to  hold 
meetings  and  to  elect  officials  as  late  as  1731*.  Neither  were  the 
charters  of  the  Mines  Royal  and  of  the  Mineral  and  Battery  Works 
allowed  to  lapse.  It  appears  that,  after  the  decision  of  the  Commons' 
Committee  in  April  1720,  these  grants  became  useless  as  an  authori- 
zation of  marine  insurance;  and,  in  any  case,  when  the  Royal  Exchange 
Assurance  company  obtained  incorporation,  the  Elizabethan  instruments 
were  no  longer  required.  At  the  height  of  the  boom  an  attempt  was 
made  to  float  a  mining  venture  under  these  charters^",  and  subsequently 
it  appears  that  the  two  societies  were  separated.  Thus  in  1741  there  is 
reference  to  the  Governor,  Assistants  and  Society  of  the  Mineral  and 

^  Historical  Register,  v.  p.  294. 

2  State  Papers,  Domestic,  Petition  Entry  Book,  xvi.  p.  453. 

3  Gentleman's  Magazine,  i.  p.  497. 

*  Reports  from  Committees  of  the  House  of  Commons — Report  on  the  State  of 
Copper  Mines  (1803),  x.  pp.  666,  681,  685,  709-15.  Henry  English  gives  a  "  British 
United  Mining  Company"  as  in  existence  in  1826 — A  Complete  view  of  Joint  Stock 
Companies  formed  during  the  years  1824  and  1825,  p.  4 ;  H.  Levy,  Monopole,  Kartelle 
und  Trusts,  pp.  136-49. 

s  Vide  infra,  ii.  p.  442.  ^  Maitland,  History  of  London,  p.  627. 

7  Reports,  ut  supra,  x.  p.  666. 

8  Anderson,  Annals  of  Commerce,  iii.  p.  346. 

®  Gentleman's  Magazine,  i.  p.  497 ;  cf.  Wealth  of  Nations,  v.  ch.  i.,  Pt  iii.  §  1  (ed. 
Cannan,  ii.  p.  248). 

^^  Vide  infra,  in.  p.  446. 


CHAP.  XXI.]  Water  andfcyreign  trading  Companies  1720  435 

Battery  Works  carrying  on  mining  near  Ballycastle  in  Ireland*.  About 
1728,  it  is  related  that  an  invention  for  a  new  process  of  smelting  metals 
was  purchased  by  the  society  of  the  Mines  Royal  from  William  Wood, 
who  had  endeavoured  to  float  a  similar  scheme  in  1720*.  In  1790 
there  is  mention  of  the  Mines  Royal  joining  the  United  Mines  company 
already  mentioned'. 

While  the  boom  was  at  its  height,  other  old  charters  were  produced. 
For  instance,  the  King's  and  Queen's  corporation  for  the  Linen  Manu- 
facture appeared  before  the  Courts  with  a  view  to  the  suppressing  of  new 
floatations  in  this  trade,  on  the  ground  that  the  proprietors  intended 
themselves  to  take  a  new  subscription  for  the  prosecution  of  the  industry*. 
Another  manufacturing  grant,  that  became  prominent  for  a  time  during 
the  excitement,  was  the  Beech-Oil  company  on  the  process  of  Aaron 
Hill".     This,  however,  failed  to  secure  support. 

There  were  two  other  groups  of  companies  which  were  in  existence 
before  1720  and  which  in  most  cases  were  little  affected  either  by  the 
boom  or  the  panic.  These  were  the  water-supply  and  foreign  trading 
undertakings.  The  Hampstead  Aqueducts,  the  New  River,  the  London 
Bridge,  the  Shadwell  and  Southwark  companies*  seem  to  have  pursued 
the  even  tenor  of  their  way.  The  East  India  company  had  early 
grounds  for  resenting  the  causes  and  probable  effects  of  the  boom. 
More  than  any  other  organization  it  was  subject  to  the  consequences  of 
the  movement  towards  inflation,  as  it  existed  both  in  France  and  in 
Great  Britain.  The  original  plans  of  the  South  Sea  dii-ectors  had 
involved  the  control  of  the  East  India  company,  and  its  management 
could  scarcely  fail  to  view  with  apprehension  the  growth  of  a  most 
powerful  and  aggressive  rival  in  France.  In  the  midst  of  his  other  far- 
reaching  schemes.  Law  had  found  time  to  hint  that  he  intended  to 
attack  the  English  undertaking,  and  it  is  reported  that  he  made  large 
"  bear"  sales  of  the  stock  as  early  as  August  or  September,  1719'.  For 
these  reasons  the  directors  had  every  reason  to  dread  the  continuance  of 
the  speculative  movement,  and  they  appear  to  have  kept  outside  the  range 

1  Brit.  Mus.  ^^^T^      .    At  this  time  the  capital  was  divided  into  16,600  shares. 

2  Lett&r  from  a  Merchant  at  Whitehaven  to  his  friend  in  London     Brit  Mus. 

816.m.l3~l .  A^jjgj.g(,n^  ^^^^^lg  of  Commerce,  in.  p.  346 ;  Bexcare  of  Bubbles  (?  1729-30) 

r«  '.    Tijf       816.  m.  131 
Brit.  Mus.  — . 

3  Reports,  ut  supra,  x.  p.  681. 

*  Vide  infra,  iii.  p.  97.  *  ^Wd.,  ni.  p.  117. 

«  The  York  Buildings  company  had  virtually  transformed  itself  into  a  financing 
enterprize,  ibid.,  in.  pp.  7,  15,  27,  32,  426-34. 

7  Memoirs  of  the  Life  of  John  Law,  by  J.  P.  Wood,  Edinburgh,  1824,  p.  81. 

28—2 


i 


436  Foreign  trading  Companies  1720    [chap.  xxi. 

of  its  influence  as  far  as  was  possible^  The  African  and  Hudson's  Bay 
companies  were  to  some  extent  touched  by  the  prevailing  fever.  The 
former  had  long  been  in  want  of  capital  and  immediately  the  boom 
began,  it  issued  a  large  quantity  of  stock  in  April,  1720^.  Had  this 
emission  been  delayed  for  a  few  months,  double  or  treble  the  price  could 
have  been  obtained,  though  it  is  doubtful  if  the  stockholders  would 
have  been  able  to  pay  the  calls  when  due.  In  any  case,  the  funds 
received  would  have  been  of  no  benefit  to  the  company  ;  since,  like  the 
South  Sea  company,  it  made  loans  on  the  security  of  its  own  stock  2.  If 
this  undertaking  was  unfortunate  in  creating  new  stock  too  early,  the 
Hudson's  Bay  company  fell  into  the  opposite  error  of  being  too  late. 
Its  scheme  of  capital  re-organization  was  only  ready  on  August  29th 
(that  is  after  the  writs  had  been  issued).  It  was  proposed  to  treble  the 
nominal  amount  of  the  existing  capital,  by  way  of  a  bonus,  and  then  to 
offer  thrice  as  much  more  for  public  subscription.  The  effect  of  this 
arrangement  would  have  been  to  make  the  whole  capital  nine  times 
what  it  had  been  at  the  beginning  of  the  year.  However  the  panic 
came  before  many  of  the  new  subscribers  had  paid  their  first  call, 
and  it  was  found  necessary  to  cancel  almost  the  whole  of  the  recent 
issued 

The  events  of  the  year  1720  sum  up  to  a  certain  extent  the  history 
of  the  joint-stock  movement  since  the  Revolution,  and  at  the  same 
time  they  determined  the  course  of  the  future  for  over  a  hundred  years. 
The  exaggerated  ideas  as  to  the  extensibility  of  credit  had  been  floating 
through  men's  minds  for  the  past  twenty-five  years,  and  the  speculation 
of  1719  and  1720  exhibited  the  inevitable  outcome  of  an  economic 
fallacy,  developed  in  an  atmosphere  of  political  corruption.  In  this 
respect  the  South  Sea  panic  constitutes  a  distinctive  epoch  in  financial 
history.  From  a  different  point  of  view,  too,  this  eventful  period  marks, 
more  even  than  most  times  of  crisis,  the  end  of  an  old  order,  and  there 
is  certain  completeness  in  it,  since  it  brings  to  light  all  the  joint-stock 
companies  that  possessed  any  degree  of  vitality.  Those  that  were  able 
to  survive  the  panic  were  shown  to  be  endowed  with  a  remarkable  degree 
of  recuperative  force,  and  almost  all  of  them  had  a  lengthened  existence, 
while  the  majority  have  continued  to  flourish  during  the  nineteenth 
century. 

The  true  significance  of  the  panic,  however,  is  not  so  much  in 
terminating  one  epoch,  but  in  beginning  and  dominating  another.  To 
the  statesmen  of  the  first  quarter  of  the  eighteenth  century,  it  seemed 

1  Vide  infra,  ii.  pp.  204,  205. 

2  Treasury  Records,  Royal  African  Co.  (Court  Book  of  the  Assistants),  No.  743, 
ff.  2,  6,  7. 

3  Ihid.y  f.  45.  "*  Vide  infra,  ii.  pp.  235-7,  in.  p.  457. 


CHAP.  XXI.]  Restriction  of  Operatiom  in  Stocks  after  1721^  437 

demonstrable  that  the  joint-stock  system — "  the  pernicious  art  of  stock- 
jobbing"— was  the  sole  and  sufficient  explanation  of  the  miseries  of  the 
country.  No  words  were  too  strong  to  condemn  what  was  then  considered 
to  be  a  malign  perversion  of  industry,  destructive  of  commercial  probity, 
of  a  well-ordered  social  life,  even  of  i-eligion  tuid  virtue.  In  fact  the 
joint-stock  type  of  organization  received  only  a  little  less  abuse  than 
the  directors  of  the  South  Sea  company.  What  it  proved  convenient  to 
forget  was  that  the  real  proximate  cause  of  the  evil  had  Ix.'en  the  veniality 
of  the  ministry  and  of  the  House  of  Commons.  Had  the  legislature 
done  its  duty,  it  is  probable  there  would  still  have  been  a  conversion  of 
the  debt;  and,  through  the  influence  of  the  fund  of  credit  fallacy, 
consequent  inflation:  but,  with  an  honest  administration,  the  possibilities 
of  speculation  would  have  been  less,  and  the  subsequent  disturbance  of 
trade  would  have  been  smaller.  As  the  scheme  was  actually  carried 
through,  it  stands  as  a  permanent  warning  to  the  nation  both  against 
corruption  in  finance  and  also  against  attempted  reductions  of  the 
national  debt  by  juggling  obligations  of  the  State  from  one  fund  to 
another. 

Politicians  sometimes  find  a  remedy  for  their  mistakes,  but  they 
rarely  have  the  candour  to  make  a  public  recantation  of  the  principles 
that  caused  those  mistakes  to  be  made.  Everyone  at  the  end  of  1720 
blamed  the  mechanism  which  had  shown  the  disorder  of  credit,  no  one 
seized  upon  the  fallacy  that  had  been  the  true  cause  of  the  distemper. 
Even  those,  who  were  held  to  be  the  financial  experts  of  the  time,  such 
as  Walpole  and  Archibald  Hutcheson,  maintained  stoutly  that  credit 
was  good,  but  that  it  had  been  somewhat  impaired  by  the  canker  of 
stock-jobbing ^     In  short  the  result  of  opinion  in  1720  and  1721  was 

[that  the  rise  of  the  joint-stock  system  had  been  the  cause  of  the  panic, 
and  therefore  it  was  decided  that  the  Bubble  Act  should  be  strictly 
enforced.  As  a  consequence,  no  company  was  safe  in  beginning  business 
without  first  obtaining  a  charter,  and  such  instruments  were  now  only 
granted  after  a  more  searching  enquiry  than  had  been  usual  in  the  past. 
Under  the  existing  circumstances,  it  was  fortunate  that  no  more  restrictive 
measures  were  passed.  At  one  time  legislation  was  contemplated  to  make 
all  the  bargains  in  stocks  during  the  year  1720  null  and  void,  and  also 
to  prohibit  for  the  future  every  species  of  time-bargain  in  the  stock  of 
companies.  It  is  an  instance  of  the  common  sense  of  Parliament,  even 
in  a  time  of  exceptional  stress  and  excitement,  that  these  proposals  were 
not  persisted  in  ;  since  a  government,  which  endeavoured  to  suppress  all 

1  E.g.  Hutcheson,  Collection  of  Calculations,  ut  supra,  p.  118;  Some  Partigraphs 
of  Mr  Hutcheson' s  Treatises,  ut  supra,  pp.  11,  17;  Catos  Letters;  or,  Essays  on 
Liberty,  Civil  and  Religious,  and  other  important  Subjects,  Loudon,  1733,  i.  pp.  6, 
11-13,  17,  26,  44,  49. 


438     Growth  of  Companies  checked  1721-1825    [chap.  xxi. 

speculation  and  at  the  same  time  continued  itself  to  issue  lottery-loans, 
would  have  been  as  inconsistent  as  the  South  Sea  company  proceeding 
against  other  undertakings  for  non-user  or  misuse  of  their  charters, 
while  it  employed  the  Sword  Blade  house  as  its  own  banker.  In  truth 
the  evils  of  speculation,  though  brought  to  light  by  the  joint-stock 
system,  arose,  as  already  shown,  from  the  almost  universal  misconception 
of  the  limits  of  credit,  and  it  might  possibly  be  maintained  that  it  was 
owing  to  that  system  that  the  inevitable  crash  came  perhaps  sooner,  but 
that  the  losses  were  more  widely  diffused  and  were  less  than  they  might 
have  been  had  the  fund  of  credit  fallacy  been  translated  into  actual 
practice  through  the  medium  of  State-owned  land-banks  or  through 
excessive  issues  of  inconvertible  paper  by  the  government,  which  pro- 
posals and  others  of  a  like  nature  all  originated  from  the  one  error. 

The  legislation  and  consequent  procedure  in  1720  and  1721  might 
perhaps  be  described  as  the  purely  local  treatment  of  a  sore,  instead  of 
the  healing  of  the  malady  that  gave  rise  to  it.  The  decision  now 
reached  arrested  the  development  of  the  joint-stock  system  as  long  as 
the  Bubble  Act  was  rigorously  enforced.  It  became  both  difficult  and 
costly  to  obtain  the  necessary  legal  authorization  for  the  starting  of 
a  new  enterprize  needing  a  large  capital.  In  one  that  might  have  been 
established  with  a  moderate  outlay,  which  for  any  reason  it  was  desirable 
to  collect  from  a  large  number  of  persons,  the  trouble  and  cost  proved 
prohibitive.  Therefore,  for  upwards  of  a  century,  industry  was  deprived 
of  the  advantages  of  a  certain  amount  of  capital,  which  would  otherwise 
have  been  available ;  till  early  in  the  nineteenth  century  when,  in  spite 
of  the  law,  unchartered  companies  began  to  be  formed.  By  that  time 
it  was  recognized  that  the  fears  of  Parliament  in  1720  and  1721  had 
been  exaggerated,  and  the  act  was  repealed  in  1825  by  4  George  IV. 
c.  94. 


CHAPTER  XXII. 

Review  of  the  Joint-Stock  System  from  1553  to  1720: 
WITH  A  Note  on  the  Crises  during  that  Period. 

Few  industrial  developments  during  the  latter  half  of  the  sixteenth, 
the  whole  of  the  seventeenth  and  the  first  quarter  of  the  eighteenth 
centuries  are  more  striking  than  the  progress  of  the  joint-stock  system. 
Regarded  from  the  point  of  view  of  the  wealth  it  controlled,  the  progress 
had  been  remarkable.  The  capital  of  the  only  undertakings  of  this 
character — the  Russia  company  and  the  Adventurers  to  Africa — that 
are  known  to  have  been  in  existence  from  1553  to  1560  was  under 
c£*10,000^,  representing  only  about  '013  per  cent,  of  what  the  national 
wealth  may  be  guessed  to  have  been  at  that  time'.  By  1695  the  nominal 
capital  of  companies  had  increased  to  1*3  per  cent,  of  the  estimated  total 
wealth  at  that  time^.  Only  eight  years  later  it  had  doubled*,  while  in 
1717  it  was  again  doubled,  being  by  that  date  no  less  than  20  millions*. 
At  the  end  of  1720,  adding  the  augmented  capital  of  the  South  Sea 
company  after  the  conversion  and  the  sums  then  called  up  by  the  recently 
established  undertakings,  the  whole  amount  was  about  50  millions  or 
13  per  cent,  of  the  estimated  national  wealth  at  that  date*.  When  it 
is  remembered  that  of  this  total  of  370  millions  only  about  one- tenth 
consisted  of  instruments  of  trade — the  remainder  being  lands,  cattle, 
houses  and  household  goods — the  full  significance  of  the  proportion 
will  be  apparent.  Indeed  it  seems  that  the  result  is  a  paradox, 
namely  that  the  joint-stock  undertakings  used  between  them  con- 
siderably more  capital  than  the  whole  sum  which  it  was  calculated  was 

1  Vide  infra,  ii.  pp.  5,  37. 

2  There  is  no  estimate  known  for  this  early  period ;  but,  calculating  backwards 
from  the  figures  given  for  1000,  it  may  be  guessed  roughly  that  from  1653  to  1660 
the  national  wealth  might  have  been  about  76  millions. 

3  Vide  supra,  pp.  335-7.  *  Ibid.,  p.  394.  *  Ibid.,  p.  431. 

^  According  to  the  estimate  of  The  British  Merchant  as  corrected  by  Giffen — 
Growth  of  Capital,  pp.  84,  85. 


440  Companies  and  Sea-power  1553-99    [chap.  xxii. 

employed  in  every  kind  of  commerce  (inclusive  of  agriculture).  The 
explanation,  however,  is  very  simple  and  depends  upon  the  peculiar 
relations  of  the  larger  companies  to  the  State.  Several  of  them  had 
lent  the  money,  received  from  their  members,  to  the  government ;  and 
conversely,  as  already  shown,  others  had  been  created  in  order  that 
existing  loans  might  be  consolidated  into  their  respective  stocks^.  If 
then  allowance  be  made  for  these  facts,  the  apparent  paradox  is  resolved ; 
since,  in  the  case  of  the  South  Sea  company  in  particular,  only  a  fraction 
of  the  great  nominal  capital  was  employed  in  trade.  Thus,  through 
the  peculiarities  of  their  origin,  the  companies  used  very  considerably 
smaller  sums  in  commerce  than  their  aggregate  nominal  capitals.  At 
the  same  time  it  must  be  noted  that  an  organization  had  come  into 
being,  which,  by  1720,  possessed  the  control  of  funds  at  least  as 
great  as  the  whole  estimated  amount  of  the  trading  wealth  of  the 
country. 

From  another  point  of  view  the  growth  and  development  of  the 
system  gave  rise  to  important  results,  some  of  which  are  interwoven 
with  the  history  of  the  nation.  During  the  first  130  years  of  the 
progress  of  the  joint-stock  company  it  is  inseparably  connected  with 
British  naval  and  maritime  progress.  From  1553  to  1568,  little  as  the 
names  of  the  Fellowship  for  the  discovery  of  New  Trades,  the  societies 
of  the  Mines  Royal  and  of  the  Mineral  and  Battery  Works  suggest  it, 
these  enterprizes  find  their  unity  in  relation  to  the  equipment  of  the 
navy'*.  The  first  imported  masts  and  cordage,  while  the  Mines  Royal 
discovered  and  worked  the  copper  from  which  the  Mineral  and  Battery 
Works  made  bronze  or  brass,  which  again  in  its  turn  was  cast  into 
cannon.  Moreover,  the  flexibility  of  the  system  was  such  that  from 
1568  to  1588  its  dominant  manifestation  was  in  the  financing  of  the 
numerous  privateering  ventures,  most  of  which  were  managed  by  joint- 
stock  companies^  During  the  next  ten  years  (1589-99)  maritime 
progress  gave  a  fresh  direction  to  this  class  of  enterprize,  and  it  will  be 
found  financing  the  earliest  colonizing  expeditions''.  Thus,  during  the 
first  half  century  of  its  existence,  the  joint-stock  company  was  the 
organization  which,  at  each  successive  step,  provided  the  requisites  for 
the  obtaining  both  sea-power  and  colonial  possessions.  The  bravery  of 
the  privateersman  and  the  endurance  of  the  explorer  are  gratefully 
remembered;  but,  at  the  same  time,  the  faith  of  the  gentlemen  and 
merchants,  who  provided  the  necessary  capital,  should  not  be  forgotten, 
nor  the  system  which  had  worked  so  smoothly  on  the  whole  and  that 
made  the  co-operation  of  the  men  of  action  and  the  men  of  wealth 
possible.    From  1600  to  1635  the  main  activity  of  joint-stock  enterprize 

1  Vide  infra,  iii.  pp.  275,  295,  437.  ^  vide  supra,  pp.  30,  31,  39. 

3  Ihid.,  pp.  75-7.  *  Vide  infra,  ii.  pp.  241-4. 


CHAP,  xxn.]  Companies  and  colonial  Expamion  1600-35  441 

consisted  in  the  following  up  of  the  tentative  efforts  of  the  previous 
decade,  in  a  vigorous  planting  of  colonies,  joined  with  the  prosecution  of 
trade  to  tropical  countries,  such  as  the  East  Indies.  It  shows  how  popular 
the  system  had  become  that  even  emigrants,  who  were  forced  to  leaf« 
England  for  religious  reasons,  obtained  the  funds  required  by  consti- 
tuting themselves  joint-stock  companies.  To  the  companies  of  this 
period  belongs  the  honour  of  giving  England  a  foothold  in  India, 
Africa^  Virginia  and  New  England,  while  a  Scottish  enterprize  attempted' 
the  planting  of  Nova  Scotia''.  Closely  connected  in  principle  with  the 
colonizing  companies  were  those  which,  towards  the  end  of  this  period, 
aimed  at  the  reclamation  of  land  at  home  by  means  of  drainage".  Ilieae 
ventures  constitute  the  first  important  stimulus  of  home-industry  by 
means  of  joint-stock  enterprize,  and  to  the  same  branch  of  the  movement 
may  be  attributed  the  fishing  undertaking  which  belongs  to  this  epoch*. 
The  policy,  that  induced  Charles  I.  to  establish  the  monopolies*,  reacted 
on  the  companies  then  in  existence,  and  during  the  distraction  and 
depression  of  the  Civil  Wars,  joint-stock  undertakings  remained  neces- 
sarily depressed.  In  the  time  of  the  Protectorate  a  tendency,  which  had 
begun  earlier,  attained  to  considerable  dimensions.  This  was  the 
formation  of  an  extended  partnership  or  company,  many  of  which 
possessed  large  capitals,  trading  under  the  style  of  "  A.  B.  &  Co.**" 
After  the  Restoration  until  just  before  the  Revolution,  the  joint-stock 
system  was  confined  to  foreign  trading  enterprizes  and  a  few  other 
undertakings  of  moderate  size.  But  from  about  1687  there  was  a 
remarkable  expansion  of  activity;  and,  by  this  system,  capital  was 
provided  for  the  utilization  of  the  technical  skill  of  the  Huguenots  and 
other  immigrants,  while  from  1694 — what  was  even  more  important — 
the  joint-stock  company  became  the  means  of  an  immensely  enlarged 
credit,  which  could  not  have  been  carried  on,  even  with  a  moderate 
degree  of  success,  by  any  other  method.  Thus,  during  the  first  century 
of  its  existence  in  England,  the  joint-stock  company  was  the  organization 
that  provided  funds  for  the  growth  of  maritime  enterprize  and  for  the 
beginnings  of  colonization.  Thereafter,  for  about  thirty  years,  it  was 
instrumental  in  extending  and  consolidating  certain  distant  foreign 
trades,  and  in  the  remaining  quarter  of  a  century  it  laid  the  foundations 
of  an  organization  of  credit  on  a  new  and  augmented  basis.     But  it  has 

^  Though  there  had  been  companies  trading  to  Africa  at  interval  during  the 
second  half  of  the  sixteenth  century,  it  was  only  during  this  period  that  factories 
began  to  be  established. 

2  Vide  infra,  ii.  pp.  11-16,  91-112,  247-58,  306-11,  318,  319. 

3  Ibid.,  II.  pp.  353-6.  *  Ibid.,  ii.  pp.  361-7. 
^  H.  Levy,  Monopole,  Kartelle  und  Trusts,  pp.  14,  15. 

6  Vide  supra,  pp.  227,  247. 


442     Causes  of  Success  of  Joint-Stock  System    [chap.  xxii. 

been  shown  in  the  previous  chapter  that  the  joint-stock  company  was 
no  more  than  the  means  for  improving  production  by  arranging  for 
the  ready  inflow  of  capital,  and  therefore  it  could  only  realize  the 
prevalent  economic  ideals  \  Its  great  success  up  to  1720  in  developing 
a  system  of  credit  became  an  element  of  danger,  since  so  much  had  been 
accomplished  that  the  impossible  was  expected ;  and,  as  a  result,  came 
the  crisis  of  1720  which  again  led  to  the  arresting  of  a  further  develop- 
ment of  the  joint-stock  company  for  upwards  of  a  century. 

The  results  achieved  by  this  type  of  organization  during  the  hundred 
and  seventy  years  ending  in  1720  being  so  important,  whether  regarded 
in  relation  to  the  capital  controlled  by  companies  or  to  the  industrial 
and   political   consequences  of    their    activities,   the   further   question 
suggests  itself  "  what  were  the  causes  of  the  successes  achieved ""  ?     The 
answer — as  in  many  similar  enquiries  arising  out  of  highly  complex 
phenomena — is  not  to  be   found  in  any   single  influence,  but  in  the 
concurrence  of  a  number  of  causal  relations.     In  the  first  place,  despite 
what  has  been  written  by  many  eminent  investigatoi-s  in  condemnation 
of  the  exclusive  spirit  of  early  joint-stock  companies,  the  general  drift  of 
the  conclusions  to  be  drawn  from  the  previous  chapters,  as  well  as  from 
the  detailed  histories  of  the  individual  undertakings,  is  that  this  system 
tended  as  a  whole  to  break  down  the  quasi-monopoly  which  had  hitherto 
L^  been  accorded  to  the  capital  owned  by  merchants.     At  the  middle  of 
\     the  sixteenth  century,  when  there  was  the  possibility  of  the  commence- 
ment of  a  great  increase  in  foreign   trade,  the  practice   of  confining 
membership  of  the  regulated  companies  to  those  who  had  been  "  bred  to 
the  trade  of  merchandize,""  would  have  limited  this  new  opening  to  such 
funds  as  were  already  owned  by  persons  so  qualified.     Therefore,  at  the 
time  when  capital  was  exceedingly  scarce,  a  possible  supply  would  have 
remained  untapped,  had  there  not  been  some  means  by  which  the  wealth 
of  those,  who  were  not  merchants,  could  have  been  made  available.     It 
is  true  that  partnership  had  long  been  known  2;  but,  with  the  changed 
conditions,  there  came  a  time  when  it  was  desirable  that   a  greater 
capital  should  be  invested,  and  hence  a  kind  of  organization  came  into 
existence  with  a  larger  membership,  in  which  those  interested  necessarily 
had  the  right  of  selling  their  respective  interests  without  obtaining  the 
sanction   of  the   rest.     No   fixed  line  can  be  drawn  between  a  large 
.     partnership  and  a  small  company,  except  in  this  single  characteristic, 
;     that  the  member  in  the  latter  could  dispose  of  a  part  or  the  whole  of 
;    his  share  in  the  undertaking  without  receiving  the  consent  of  others 
I    concerned.     Thus,  from  an  early  period  in  England,  shares  were  bought 
\    and  sold  with  a  considerable  degree  of  freedom.     It  follows  that  the 
view  that  the  really  transferable  share  first  came  into  existence  in  the 
1  Vide  supra,  p.  432.  2  j^-^^^  pp,  2,  15. 


CHAP.  XXII.]    Non-mercantile  Capital  in  Companies      443 

eighteenth  century*  cannot  be  accepted.  Even  as  early  as  the  sixteenth 
century,  shares  were  sold  outside  personal  acquaintanceti  and  without 
limiting  conditions.  For  instance,  a  transaction  is  mentioned  below, 
where  Leicester  had  directed  a  share  should  be  sold,  just  as  a  modem 
stockholder  gives  an  order  to  his  broker'.  In  the  next  century  adventures 
in  the  East  India  company  were  sold  by  auction  at  the  court  of  sales*. 
It  is  true  that  purchasers  must  become  freemen  of  the  company,  but  in 
a  joint-stock  company  there  was  no  test  for  admission  (as  in  the  regulated 
companies),  and  the  fine  was  of  moderate  and  decreasing  amount  In 
the  second  half  of  the  century  references  to  dealings  in  shares  become 
more  numerous,  and  the  transfer  books  of  the  Royal  African  company — 
some  of  which  are  in  existence — show  many  changes  of  ownership*. 
Finally  transactions  became  so  frequent  that  a  stock  and  share  list  was 
printed — a  reproduction  of  which  will  be  found  in  this  volume'.  In  fact,  I 
early  in  the  reign  of  William  III.,  put  and  call  options,  bear  sales,  and 
bull  accounts  were  perfectly  well  known  ;  so  that,  before  the  end  of  the 
seventeenth  century,  there  was  an  open  and  highly  organized  market  at 
London  in  stocks  and  shares  of  companies. 

It  was  not  only  by  the  right  of  freedom  of  sale  or  purchase  of  shares 
that  the  joint-stock  company  was  distinguished  from  the  regulated  type. 
Even  at  the  inception  of  the  former  it  is  noticeable*  that  it  possessed 
a  very  large  non-mercantile  element.  Apparently  the  conclusion  which 
suggests  itself  is  that  (when  two  distinctive  types  of  trading  organization 
are  to  be  compared,  the  one  consisting  wholly  of  merchants,  who  were 
skilled  in  the  particular  trade  for  which  the  company  was  formed  or  in 
some  allied  trade,  while  the  membership  of  the  other  comprised,  together 
with  merchants  in  the  strict  sense,  pei-sons  engaged  in  other  branches  of 
commerce,  those  who  had  retired  from  some  industry,  gentlemen  and 
others)  the  former  would  be  the  more  successful.  Reasoning  on  purely  i 
general  principles,  everything  seems  to  point  to  this  conclusion. 
Technical  skill  and  experience  would  appear  to  be  wholly  in  favour  of 
the  regulated  company,  but,  as  a  matter  of  fact  between  1553  and  1720, 
the  joint-stock  type  haul  grown  enormously,  and  the  other  had  failed  to 
maintain  its  position.  While  the  importance  of  technical  knowledge 
can  scarcely  be  over-rated,  due  weight  must  be  given  to  the  peculiar 
nature  of  the  enterprizes  to  which  chief  attention  was  paid  from  1553 
to  1635.  In  foreign  trade  or  colonizing  much  more  than  the  specialized  \ 
information  of  the  merchant  was   required.     In   addition,  there   was  \ 

1  Werner  Sombart,  Die  Juden  und  dan  Wirtgchqflsleben,  Leipzig,  1911,  pp.  68,  69. 

2  Vide  infra,  ii.  p.  416  (note).  *  Vide  supra,  p.  161. 
*  Treasury  Records—  Royal  African  Company.                *  Vide  supra,  p.  351. 

«  Cf.  the  lists  of  members  of  the  Russia  company,  the  Mines  Royal,  the  Mineral 
and  Battery  Works,  at  the  formation  of  each. 


444      Non-mercantile  Capital  in  Companies    [chap.  xxn. 

needed  something  of  the  imagination  of  the  pioneer  and  of  the  diplomacy 
of  the  statesman.  The  privateering  ventures,  too,  demanded  a  peculiar 
temperament  in  the  investor,  in  so  far  as  he  must  undergo  very  great 
risks  in  the  hope  of  commensurate  gains.  Thus  the  admission  of  a  strong 
non-mercantile  element  by  the  joint-stock  company  not  only  was  advan- 
tageous in  increasing  the  supply  of  capital,  but  also  in  strengthening  its 
organization.  From  this  point  of  view,  that  strength  lay  not  so  much 
perhaps  in  the  mere  introduction  of  capitalists  who  were  not  actually  in 
trade,  but  in  the  union  of  these  in  one  body  with  the  mercantile  classes. 
Either  in  isolation  was  imperfect.  The  short-sighted  views  of  some  of 
the  regulated  companies  and  the  lamentable  ignorance  displayed  in  the 
equipment  of  the  Darien  company  are  cases  in  point.  Whereas  the 
combination  of  the  specific  and  detailed  knowledge  of  the  trader  with 
the  broad  outlook  of  the  man  of  affairs  tended  towards  a  greater 
efficiency ^  This  happy  result  is  to  be  attributed  in  no  small  degree  to 
the  relation  of  classes  in  England  where  members  of  different  social 
grades  could  work  together  with  the  minimum  of  friction,  and  both 
I  could  bear  adversity  with  fortitude  ^  In  another  unexpected  direction 
■  the  joint-stock  company  had  an  advantage  over  the  regulated  type.  The 
j  supervision  of  agents  in  distant  places  was  far  from  being  efficient  in 
either  case,  but  there  is  no  instance  on  record  where  a  joint-stock 
enterprize  was  quite  so  lax  as  the  Levant  company  for  a  number  of 
years  after  1660^. 

The  causes  already  indicated  tend  to  explain  why,  during  the  period 
under  review,  the  joint-stock  system  aided  in  the  extension  of  commerce, 
and  why  it  maintained  its  position  side  by  side  with  the  regulated  bodies. 
They  do  not  however  fully  account  for  its  great  popularity.  This  type 
of  organization  might  have  been  exceedingly  advantageous  in  providing 
new  outlets  for  capital  and  in  securing  not  inefficient  methods  for  con- 
trolling its  use,  but  these  were  mainly  gains  to  the  nation ;  and,  unless 
the  individual  investor  tended  to  benefit  on  the  whole,  it  would  be  idle 
to  expect  him  to  have  continued  adventuring  his  resources  over  a  pro- 
tracted period.  It  might  indeed  be  urged  that  on  general  principles,  at 
a  time  when  capital  was  exceedingly  scarce,  the  fact  that  such  support 
was  continuously  forthcoming  during  more  than  a  century  and  a  half  is 

1  This  principle  was  stated  by  Child  in  the  following  terms,  as  early  as  1681, 
''  I  am  of  opinion  and  have  found  by  experience  that  a  mixt  assembly  of  noblemen, 
gentlemen  and  merchants  are  the  best  constitution  that  can  be  established  for  the 
making  of  rules,  orders  and  by-laws  for  the  carrying  on  any  trade  for  the  publick 
utility  of  the  kingdom" — Treatise ,  wherein  it  is  demonstrated j  that  the  East  India 
Trade  is  the  most  national  of  all  Foreign  Trades,  in  Somers'  Tracts  (1748),  rv.  p.  35. 

2  The  relations  of  the  mercantile  and  other  classes  were  not  so  harmonious  in 
Scotland  as  late  as  1670,  vide  infra,  ii.  p.  376. 

3  Vide  supra,  p.  269. 


CHAP.  XXII.]   Profits  on  Capital  invested  in  Companies    445 

sufficient  evidence  of  the  relative  profitableness  of  these  investments ;  but 
it  has  been  found,  in  the  comparison  of  the  regulated  and  joint-stock 
companies,  that  the  legitimate  conclusions  of  purely  abstract  reasoning 
are  subject  to  considerable  modiHcation  when  corrected  by  the  peculiar, 
and  possibly  exceptional  phenomena  to  which  they  have  to  be  applied. 
Fortunately  the  detailed  examination  of  the  finances  of  all  the  companies 
up  to  1720,  as  far  as  data  are  recoverable,  affords  a  basis  for  a  reasonably 
complete  induction.  It  can  be  shown  precisely  what  dividends  were  paid 
by  certain  companies,  and  in  a  few  cases  there  are  plain  hints  indicating 
the  amount  of  undivided  profit  either  in  lieu  of,  or  in  addition  to,  these 
distributions.  On  the  other  side,  it  can  be  ascertained  that  some  under- 
takings resulted  in  a  loss,  while  the  fate  of  many  of  the  remainder  may 
be  inferred  in  several  ways.  It  follows  that  comparatively  accurate  in- 
formation may  be  obtained  in  the  case  of  almost  all  the  larger  and  more 
important  undertakings  ;  and,  as  a  consequence,  the  general  profitableness 
or  the  reverse  of  the  system  may  be  determined  with  some  approach  to 
accuracy.  Since  these  details  are  recorded  in  the  separate  histories  of  the 
several  companies,  it  would  be  needless  to  attempt  to  recapitulate  them, 
were  it  not  that  much  of  the  prevalent  opinion  on  the  financial  results  of 
early  joint-stock  enterprize  depends  on  the  industry  of  Adam  Anderson 
who  collected  and  summarized  such  references  as  he  could  discover. 
Admirable  as  this  work  was,  it  is  misleading  in  some  respects,  especially 
as  every  statement,  whatever  its  source,  is  recorded  without  any  critical 
estimation  of  its  value.  Neither  Anderson,  nor  those  who  have  followed 
him,  recognized  that  the  data,  instead  of  being  scientific  statements,  are 
highly  controversial  documents,  and  that,  if  any  approach  is  to  be  made 
to  the  truth,  they  must  be  treated  as  such.  As  in  other  cases  of  the 
same  kind,  the  question  of  motive  arises.  Most  of  the  more  important 
documents  consist  of  petitions  to  Parliament  or  to  the  Privy  Council 
either  by  the  privileged  companies  to  obtain  further  immunities  or  by 
their  opponents  to  secure  an  entrance  into  the  trade  without  the  cost  of 
purchasing  shares.  In  either  case,  it  would  have  been  a  fatal  mistake  in 
tactics  to  have  exhibited  a  particular  industry  as  being  financially  success- 
ful— the  company  believed  its  case  to  be  strengthened  if  it  could  sue  m 
forma  pauperis^  while  its  opponents  dare  not  represent  the  branch  of 
commerce  they  wished  to  capture  as  being  prosperous,  else,  if  they  suc- 
ceeded, a  great  burden  of  some  kind  would  be  imposed  on  them  by  the 
Stated  Thus  it  was  the  interest  of  almost  all  those,  who  must  be  relied 
on  as  authorities,  to  represent  trades,  that  received  privileges,  in  the  most 
gloomy  light,  and  cases  could  be  cited  whei-e  most  of  the  well-known 

1  E.g.  at  the  enquiry  after  the  Revolution,  the  Old  East  India  company  was 
forced  to  make  a  return  specifying  its  dividends  with  the  result  that  a  large  loan 
was  imposed  on  the  trade — vide  infra,  ii.  pp.  160,  177  (note). 


446    Profits  on  Capital  invested  in  Companies  [chap.  xxii. 

references  to  a  company  describe  it  as  being  a  failure,  and  yet,  even  I 
granting  these  represent  the  facts  at  the  time  when  they  were  each  written, 
in  the  intervals  between,  that  undertaking  was  highly  prosperous.  A 
remarkable  instance  of  this  tendency  is  to  be  found  in  the  Russia  company. 
All  the  petitions  represent  it  as  being  on  the  brink  of  failure,  yet  there 
is  the  peculiar  fact  that  it  continued  as  a  joint-stock  company  (or  rather 
as  a  succession  of  separate  stocks)  for  over  a  hundred  years,  and  it  is 
incredible  that  generations  of  investors  should  have  continued  to  keep  on 
losing  their  capital  for  such  a  lengthened  period.  Two  glimpses  of  the 
detailed  finances  of  the  undertaking  tend  towards  the  solution  of  the 
puzzle.  The  first  in  1568  to  1573  shows  an  expedition,  counted  un- 
successful, yielding  a  division  of  no  less  than  106  per  cent.,  while  the 
second  covers  the  eight  years  1608  to  1615  inclusive  yielding  total  divisions 
of  339  per  cent.^  that  is  an  average  of  over  42  per  cent,  per  annum, 
while  in  the  two  years  1611  and  1612  90  per  cent,  was  divided  on  each 
occasion'*.  Results,  so  much  at  variance  with  the  qualitative  descriptions 
of  the  financial  accounts  of  the  trade,  justify  the  obtaining  and  the 
examination  of  exact  statistical  data,  when  such  can  be  found,  and  these 
tend  to  show,  that,  though  joint-stock  companies  were  by  no  means 
uniformly  successful,  successive  generations  of  investors  were  justified  by  ^ 
the  profits  in  their  support  of  the  system. 

In  many  respects  the  period  from  1553  to  1568  was  a  most  critical 
one  for  the  joint-stock  company,  which  was  necessarily  on  its  trial.  The 
African  Adventurers  had  made  very  large  profits,  and  the  Russia  under- 
taking may  have  been  successful.  In  the  next  twenty  years  (1568  to 
1588)  privateering  ventures  had  proved  most  lucrative  investments. 
While  Drake''s  expedition  round  the  world  yielded  the  remarkable  profit 
of  4,600  per  cent,  on  the  capital  risked,  gains  of  30  per  cent.,  50  per  cent, 
and  100  per  cent,  in  similar  ventures  were  not  uncommon  ^  During  the 
first  twenty  years  of  the  sixteenth  century  the  foreign  trades  were  doing 
well,  as  may  be  gathered  from  the  dividends  of  the  East  India  and  the 
Russia  companies*.  The  colonizing  ventures  were  succeeding  w^hen  the 
former  trades  declined  temporarily  through  the  aggression  of  the  Dutch. 
The  chief  failure  of  the  epoch  before  the  Civil  War  was  the  Fishery 

1  These  distributions  were  made  as  profits,  i.e.  on  the  supposition  that  the  capital 
remained  intact.  The  capital  however  was  subsequently  lost  and  the  shareholders 
were  assessed  to  the  extent  of  35^  per  cent.  Therefore  the  nett  profits  were  203^ 
per  cent,  or  25^  per  cent,  per  annum. 

2  Vide  infra,  ii.  p.  53.  As  showing  the  difficulty  of  dealing  with  the  finances  of 
this  company,  it  is  only  candid  to  mention  that  the  history  of  it  printed  below  (ii. 
pp.  36-69)  has  been  several  times  re-written,  as  new  data  were  discovered,  and  that 
fresh  information  in  each  case  made  it  necessary  to  take  a  less  unfavourable  view  of 
the  profits  of  the  undertaking. 

3  Vide  supra,  pp.  146-7.  *   Vide  infra,  ii.  pp.  63,  101,  123-6. 


CHAP,  xxn.]   Profits  on  Capital  invested  in  Companies    447 

society  ^  Even  during  the  period  of  distraction  from  1640  to  1660,  some 
undertakings  were  sufficiently  successful  to  obtain  profit*  warranting 
dividends  of  more  than  the  customary  rate  of  interest  on  good  security. 
As  instances,  the  United  Stock  of  the  East  India  company  and  some  of 
the  unincorporated  partnerships  of  this  period  may  be  mentioned*.  From 
the  Restoration  to  the  Revolution  came  the  great  boom  in  foreign  tratle, 
when,  besides  paying  large  dividends,  the  East  India  company  doubled, 
the  Hudson's  Bay  company  trebled,  and  the  Royal  African  company 
quadrupled,  the  nominal  capital  by  way  of  bonus  out  of  reserved  profits". 
For  the  next  twenty  years  foreign  trade  was  depressed,  but  from  1692 
to  1695  there  was  great  activity  in  the  formation  of  companies  for  the 
development  of  industry  at  home.  There  is  some  doubt  as  to  the  out- 
come of  these  promotions  as  a  whole.  The  salving  of  a  Spanish  plate-ship 
yielded  the  adventurei*s  the  immense  profit  of  about  10,000  per  cent.* 
The  banks  of  England  and  of  Scotland  were  successful  and  some  of  the 
industrial  companies  paid  dividends,  and  may  have  given  a  fair  return ; 
but  the  remainder  suffered  from  foreign  competition  when  the  ports  were 
re-opened  after  the  Peace  of  Ryswick.  During  the  first  twenty  years  of 
the  eighteenth  century  almost  all  the  companies,  that  maintained  any 
degree  of  vitality  after  the  crisis  of  1696-7,  continued  to  be  profitable, 
subject  to  a  few  exceptions,  where  failure  was  attributable  either  to 
special  circumstances  or  to  downright  dishonesty  (e.g.  the  Mine  Adven- 
turers and  the  Royal  African  company"*).  Further,  not  only  were  the 
profits  of  the  successful  undertakings  very  considerable,  but  the  losses  of  | 
those  that  failed  were  not  great  in  the  aggregate.  In  several  cases,  where 
it  was  found  necessary  to  wind  up  a  company,  a  part  at  least  of  the  capital 
adventured  was  returned  to  the  shareholders.  Where  an  enterprize  was 
a  complete  failure,  there  were  certain  modifying  circumstances  which 
limited  the  loss  of  the  members.  The  Royal  African  and  Royal  Fishery 
companies  were  protected  from  liability  for  loss  beyond  the  amount  of 
the  nominal  capital  by  act  of  Parliament,  indeed  it  was  supposed  that  all^-r^ 
chartered  undertakings  were  in  a  similar  advantageous  position*.  This  ' 
view  is  erroneous,  since  there  are  a  number  of  instances  where  assessments 
were  made  on  the  shareholders  in  such  companies  over  and  above  any 
uncalled  capital,  e.g.  the  Russia  company,  the  company  of  Kathai,  the 
Fishery  company  founded  in  1630^     But  these  were  the  exceptions,  even 

1  Vide  infra,  ii.  p.  367. 

2  Ibid.,  II.  p.  128;  the  Adventurers  in  the  ship  William  (an  interloping  company 
in  the  India  trade  with  a  capital  of  £46,200)  made  divisions  of  50  per  cent  in  one 
and  a  half  years  1658-9 — MSS.  at  the  India  Office,  Home  Miscellaneous,  XXVI, 

3  Vide  mpra,  pp.  303,  318.  *  Vide  infra,  ii.  p.  486. 
*  Ibid.,  II.  pp.  29,  450-2. 

6  Adam  Smith,  Wealth  of  Nations,  v.  ch.  i.,  Pt  in.  §  1  (ed.  Cannan,  n.  p.  232). 
^  Cf.  M'^Culloch,  Dictionary  of  Commerce— company ;  vide  infra,  ii.  pp.  47,  48, 


448     Joint-Stock  Companies  and  the  Nation    [chap.  xxii. 

amongst  the  more  unfortunate  ventures.  In  many  enterprizes,  such  as 
water-supply  and  mining,  it  was  possible  so  to  manage  that  the  loss  did 
not  exceed  the  subscribed  capital.  It  is  important  to  note,  further,  that 
most  companies  of  this  period  were  of  gradual  growth  and  that  therefore 
any  undertaking,  that  was  unsuccessful  from  the  beginning,  was  able  to 
attract  only  a  relatively  small  capital.  It  follows  then  that  the  gains  of 
the  larger  and  profitable  companies,  though  subject  to  some  deduction 
for  the  losses  of  the  smaller  and  less  fortunate  ventures,  left  a  large  balance, 
giving  a  satisfactory  return  on  the  whole  amount  invested.  Thus  these 
facts  explain  the  continuous  and  increasing  inflow  of  capital  into  joint- 
stock  enterprizes. 

-y  The  advantage  to  the  individual  capitalists,  who  participated  in  the 
companies,  having  been  established,  it  remains  to  enquire  how  far  this 
was  coincident  with  a  gain  to  the  nation.  Mention  has  already  been 
made  of  the  new  branches  of  commerce  developed  either  altogether,  or 
in  the  main,  by  this  type  of  organization.  These  constituted  the  clear 
gain  of  the  system,  but  may  there  not  at  the  same  time  have  been  a  loss, 
only  discoverable  after  searching  enquiry,  and  if  there  be  such  loss,  it  may 
perhaps  happen  that  the  apparent  national  advantage  becomes  transformed 
into  an  actual  disadvantage?  In  order  to  deal  adequately  with  the  enquiry 
suggested,  it  will  be  necessary  to  give  a  fresh  consideration  to  the  question 
of  the  monopolistic  elements  in  many  early  companies.  Hitherto  this 
element,  which  has  recurred  from  time  to  time  in  the  previous  chapters, 
has  been  dealt  with  as  far  as  possible  from  the  point  of  view  of  con- 
temporary opinion  during  each  period.  Now,  it  will  be  advisable  to 
endeavour  to  approach  the  whole  position  from  a  wider  outlook;  and 
this  investigation  becomes  the  more  necessary,  since  opinion  on  the  nature 
and  results  of  the  early  joint-stock  movement  has  been  determined  by 
certain  expressions  in  the  work  of  Adam  Smith. 

It  may  be  premised  that  the  parts  of  the  Wealth  of  Nations,  treating 
of  companies,  show  less  of  the  remarkable  economic  investigation  of 
the  writer  at  first  hand  than  almost  any  other  part  of  the  book. 
Smith  depends  almost  altogether^  on  "  that  sober  and  judicious  writer 
Mr  Anderson,"  who  can  frequently  be  shown  to  have  drawn  erroneous 
inferences  from  incomplete  data.  Thus,  in  so  far  as  Smith's  enquiry  on 
this  subject  is  historical,  it  is  liable  to  be  imperfect  through  his  reliance 
on  Anderson.     Moreover,  it  may  well  be  questioned  whether  the  meagre 

59,  61,  66,  80,  367.  With  regard  to  the  real  loss  involved  in  the  assessment  of  the 
stockholders  in  the  Russia  company — ibid.,  ii.  pp.  54,  58.  The  assessment  on  the 
stock  of  the  African  company  in  1713  is  to  be  regarded  as  the  restoration  by  the 
stockholders  of  dividend  wrongfully  paid— ifric?.,  ii.  pp.  29,  32. 

1  His  only  other  authority  appears  to  have  been  Examen  de  la  reponse  de  M.  N.... 
au  Memoire  de  M.  tAhbe  Morelkt,  sur  la  Compagnie  des  Indes  (1769). 


CHAP,  xxn.]    Adam  Smith  on  the  Joint-Stock  System      449 

material  is  used  to  the  best  advantage.  It  almost  seems  as  if  Smith 
selected  from  his  authority  such  data  as  would  tell  against  certain 
companies,  and  there  are  a  few  passages  which  suggest — Uiough  one 
hesitates  to  say  it — almost  an  a/iiimus  against  the  East  India  under- 
taking^  If  it  should  turn  out  that  there  was  such  a  bias  in  Smith's 
mind  when  he  wrote,  it  may  perhaps  be  resolved  into  his  acceptance  of 
the  statements,  made  in  certain  periodical  articles  which  began  to  appear 
in  1720  and  which  were  subsequently  reprinted  under  the  title  of  Cato't 
Letters.  Several  of  these  deal  with  mqiiopolies  for  foreign  trade,  and 
Smith's  language  is  so  close  to  that  of  these  Letters  that  it  seems  possible 
that  he  had  read  them  and  been  influenced  by  them'.  Should  this  have 
been  so,  much  of  the  erroneous  information,  that  he  gives  in  relation  to 
early  companies,  can  be  easily  explained ;  since  it  is  natural  that  essays, 
written  j  ust  after  the  South  Sea  disaster  "  with  an  honest  and  humane 
intention  to  call  for  publick  justice  upon  the  wicked  managers  of  that 
late  fatal  scheme,"  cannot  be  expected  to  be  unprejudiced*. 

Following  the  treatment  of  the  Wealth  of  Nations^  there  is  first  of  all 
the  position  of  foreign  trading  joint-stock  companies,  in  relation  to 
monopolies.  It  is  clear  that  if  such  trades,  by  reason  of  the  privileges 
of  the  companies,  involved  higher  prices,  and  if  these  industries  could 
have  been  carried  on  by  an  open  trade,  then  there  is  an  element  of 
national  loss  to  be  set  against  those  of  gain,  already  mentioned.  Smith 
came  to  the  conclusion  that  there  was  such  loss,  and  that  it  was  very 
great.  This  argument  is  partly  founded  on  his  view  of  the  territorial 
maladministration  of  the  East  India  company  of  his  own  day,  partly  on 
the  history  of  joint-stock  foreign  trading  companies  in  England  since 
their  first  appearance.  The  former  contention  is  founded  on  events, 
which  only  began  after  the  period  at  which  this  work  closes,  but  the 
latter  concerns  those  undertakings  whose  history  it  has  been  its  main 
object  to  trace.  Perhaps  the  central  thought  in  Smith''s  historical 
argument  is  that  the  administration  of  a  foreign  trading  company  abroad 
is  inevitably  wasteful,  if  not  corrupt.  Thus  he  speaks  of  "all  the 
extraordinary  waste,  which  the  fraud  and  abuse,  inseparable  from  the 
management  of  the  affairs  of  so  great  a  company,  must  necessarily  have 
occasioned *,'*'*  and  elsewhere  "  of  negligence,  profusion  and  malversation 

^  Allowance  must  however  be  made  for  the  fine  sentences  at  the  end  of  ch.  vii. 
of  Bk.  IV.,  containing  the  comparison  of  the  conduct  of  the  councils  of  Madras  and 
Calcutta  '*  on  several  occasions  "  with  ^*  the  senate  of  Rome  in  the  best  days  of  the 
Republic"  (ed.  Cannan,  ii.  p.  140). 

2  Cf.  in  particular  Letter  No.  50  "Monopolies  and  Exclusive  Companies  how 
pernicious  to  Trade" — Caioa  Letters,  or  Essays  on  Liberty,  Civil  and  Retigious,  1733, 
III.  pp.  199-213. 

3  Ibid.,  I.  p.  xxi. 

*   Wealth  of  Nations  (ed.  Caiman),  ii.  p.  130. 
s.  c.  I.  29 


450     Was  the  Joint-Stock  System  wasteful?     [chap.  xxn. 

of  its  own  servants ^^  Again  in  a  well-known  passage,  he  writes,  "the 
directors  of  such  companies,  however,  being  the  managers  rather  of  other 
people'*s  money  than  of  their  own,  it  cannot  well  be  expected,  that  they 
should  watch  over  it  with  the  same  anxious  vigilance  with  which  the 
partners  in  a  private  co-partnery  frequently  watch  over  their  own.  Like 
the  stewards  of  a  rich  man,  they  are  apt  to  consider  attention  to  small 
matters  as  not  for  their  master's  honour,  and  very  easily  give  themselves 
a  dispensation  from  having  it.  Negligence  and  profusion,  therefore,  must 
always  prevail  more  or  less,  in  the  management  of  the  affairs  of  such  a 
company  2."  These  statements  relate  to  the  East  India  undertaking  at 
the  time  Smith  wrote  ;  and,  in  his  account  of  its  early  history,  he  is  careful 
to  say  that  the  capital  "  which  never  exceeded  seven  hundred  and  forty- 
four  thousand  pounds,  of  which  fifty  pounds  was  a  share,  was  not  so 
exorbitant,  nor  their  dealings  so  extensive,  as  to  afford  either  a  pretext 
for  gross  negligence  and  profusion,  or  a  cover  to  gross  malversation ^^ 
There  is  some  difficulty  in  determining  with  precision  to  what  period 
this  passage  is  to  be  taken  to  extend.  While  it  is  true  that  in  1693  the 
capital  was  =£744,000,  at  that  date,  owing  to  the  doubling  of  the  stock 
in  1682,  this  amount  was  regarded  as  fully  paid*.  Still  more  is  Smith 
in  error  in  supposing  that  from  the  end  of  the  reign  of  Charles  II.  to  the 
beginning  of  that  of  William  III.  the  company  was  reduced  "  to  great 
distress  ^""  Judging  from  the  references  in  Anderson,  which  Smith 
evidently  had  before  his  mind,  the  period  to  which  he  alludes  is  the 
eleven  years  from  1681  to  1691,  and  during  that  time  dividends  of  no 
less  than  570  per  cent,  were  made  on  the  original  paid  up  amount  of  the 
stocks  It  was  a  happy,  "  distressful "  company  that  could  divide  over 
50  per  cent,  per  annum  on  an  average  for  more  than  a  decade  !  Apart 
from  these  minor  inaccuracies,  it  is  clear  that  the  main  thought  in  Smith's 
mind  was  that  the  joint-stock  system  tended  towards  profusion  and 
waste ;  and  that  therefore  he  is  inclined  to  ignore  its  financial  successes 
and  to  record  only  the  other  side — even,  as  has  been  shown  above,  to 
assume  results  to  support  his  pre-conceived  opinion.  In  this  connection 
it  is  most  significant  that  during  the  first  ten  years  of  the  history  of  the 
United  company,  when  its  capital  had  increased  to  over  3  millions,  the 
directors  required  itemized  accounts  from  each  factory  which  were  most 
minutely  scrutinized,  and  the  burden  of  their  letters  to  India  is  the  cry 
for  economy  which  was  enforced  by  the  suspension  of  servants  or  agents 
who  failed  to  comply  with  the  directions  sent  them'.     Further,  in  his 

1  Wealth  of  Nations  (ed.  Cannan),  ii.  p.  245. 

2  Ibid.,  II.  p.  233.  3  jf)ici,^  „.  p.  238. 

4  Vide  infra,  ii.  pp.  145,  153.  ^   Wealth  of  Nations,  ii.  p.  238. 

6  Vide  infra,  ii.  pp.  178,  179.  '  jf^i^,^  n.  pp.  197,  193. 


CHAP.  XXII.]    Was  the  Joint-Stock  System  inefficient  ?    451 

account  of  the  Royal  African  company S  he  makes  no  mention  of  the 
period  when  it  was  successful  and  begins  his  history  of  it  just  when  it 
had  fallen  into  bad,  if  not  dishonest,  financial  methods'.  Finding  that 
the  Hudson's  Bay  company  had  made  profits,  he  treati  it  **  as  approaching 
very  neariy  to  the  nature  of  a  private  co-partnery  *"  on  the  ground  of 
"  the  very  small  number  of  proprietors ',""  though  about  the  time  he  wrote 
there  were  89  distinct  holdings  or  104  including  those  on  joint  account*; 
while,  during  the  period  from  1692  to  1700,  it  is  probable  that  the 
number  of  shareholders  was  larger,  since  the  shares  were  then  quoted 
regularly  °. 

Even  though  Smith  has  been  shown  to  be  in  error  on  points  of  detail 
in  the  history  of  early  foreign  trading  companies,  his  general  contention 
of  the  inefficiency  of  the  management  merits  further  investigation.  He 
supposes  that  unremitting  vigilance  and  attention  cannot  long  be  exj)ected 
from  the  directors  of  a  joint-stock  company".  ITiere  is  a  remarkable 
contradiction  of  this  statement  on  the  contemporary  evidence  of  Sir  Josia 
Child,  who  describes  in  vivid  language  how  his  own  holding  in  the  East 
India  company  wakened  him  often  in  the  night  and  how  he  had  been 
kept  from  sleeping  by  meditation  on  the  affairs  of  that  company'. 
Moreover,  contrary  to  the  opinion  of  Smith,  the  foreign  trading  com- 
panies had  met  with  a  very  considerable  measure  of  success,  and  this 
is  indirect  evidence  in  favour  of  the  management.  In  fact,  while  the 
methods  of  control  and  of  internal  organization  were  far  from  perfect, 
they  were  much  better  than  might  have  been  expected,  considering  the 
times  and  how  undeveloped  the  joint-stock  system  was  in  the  seventeenth 
century.  Despite  some  instances  of  fraud,  carelessness  and  profligacy  on 
the  part  of  agents  abroad,  numerous  instances  can  be  quoted  of  a  re- 
markable devotion  to  duty,  while  amongst  the  directors  or  assistants 
there  was  a  large-hearted  disinterestedness,  united  to  a  careful  supervision 
of  the  business,  which  is  highly  commendable.  It  is  noteworthy  that 
out  of  the  great  number  of  companies,  whose  affairs  have  been  inves- 
tigated in  this  work,  the  allegations  of  fraudulent  management  are 
comparatively  rare.  There  were  such  during  one  period  of  the  history 
of  the  Mineral  and  Battery  WorksS  also  in  that  of  the  Russia  company*, 
while  similar  breaches  of  trust  may  be  taken  as  proved  in  the  Royal 

1  Wealth  of  Nations y  ii.  p.  233.  *  Ibid.,  ii.  pp.  21,  28. 

3  Ihid.,  II.  p.  236. 

4  Reports  from  Committees  of  the  House  of  Commons,  u.  p.  250. 
6  Vide  infra,  ii.  pp.  232,  233,  237. 

«   Wealth  of  Nations,  ii.  p.  245;  cf.  p.  233. 

'  Treatise,  wherein  it  is  demonstrated  that  the  East  India  Trade  is  the  most  national 
of  all  Foreign  Trades  in  Somers'  Tracts  (1748),  iv.  p.  45. 

8  Vide  infra,  ii.  pp.  419-21.  »  Ibid.,  ii.  pp.  5»-e3. 

29—2 


452  Were  Directors  efficients  [chap.  xxii. 

African^  and  Mine  Adventurers  companies'^,  in  addition  to  the  out- 
standing abuses  of  the  South  Sea  financed  It  is  significant  that  Smith 
mentions  no  less  than  three  of  the  companies  that  may  be  held  to  be 
delinquents,  but  only  a  very  few  of  those  that  have  escaped  reproach. 
Apart  from  the  interpretation  of  the  historical  evidence,  there  remains 
the  further  question,  whether  the  interest  of  a  director  in  a  company, 
derived  from  his  stock,  or  his  fees,  or  both  together  was  sufficient  to 
make  him  devote  his  energies  to  the  business.  There  is  clear  evidence, 
in  the  early  history  of  the  East  India  company  that  this  was  so.  The 
committees  attended  at  the  offices  daily  and  refused  the  honorarium 
offered  by  the  general  court,  holding  themselves  to  be  satisfactorily 
recompensed  by  the  profits  on  their  respective  stocks*.  Smith,  in  dealing 
with  the  general  principles,  applicable  to  this  phenomenon,  seems  to 
have  been  mistaken  as  between  two  different  ratios.  He  regarded  the 
aggregate  holding  of  the  management  in  relation  to  the  total  capital 
of  the  company  as  the  measure  of  efficiency,  whereas  the  real  standard 
was  the  proportion  of  the  original  cost  of  the  stock  of  each  individual 
committee  or  assistant  to  his  whole  wealth.  If  that  proportion  were 
large  there  were  obviously  sufficient  inducements  towards  efficiency. 
Prince  Rupert  had  only  d^SOO  original  stock  in  the  Hudson's  Bay 
company,  but  his  financial  condition  was  such  that  this  sum  was  of 
importance  to  him,  and  he  appears  to  have  taken  a  very  great  interest 
in  the  enterprize^  In  the  East  India  company  the  qualification  of  a 
committee  was  c£'l,000  stock,  of  the  governor  £4ffiOO,  in  the  Royal 
African  company  that  of  an  assistant  was  <£^2,000 — sums  which  would 
probably  be  of  sufficient  importance  to  most  of  the  adventurers  in  the 
seventeenth  century  to  make  them  attentive  to  their  duties. 

The  erroneous  conclusions  arrived  at  in  the  Wealth  of  Nations,  as 
to  the  inevitable  mismanagement  of  the  affairs  of  a  joint-stock  foreign 
trading  company,  lead  further  to  the  position  that  such  organizations 
"have  seldom  been  able  to  maintain  the  competition  against  private 
adventurers^"  This  is  urged  as  a  further  argument  against  the  joint- 
stock  bodies,  but  the  reasoning,  when  investigated,  will  be  found  to  be 
a  little  specious.  In  the  foreign  trades  under  discussion  concessions  had 
to  be  piurchased  (giving  the  right  of  entry  into  the  country),  while  forts 
and  other  defensive  appliances  were  judged  necessary.  The  private 
trader  obtained  the  benefit  of  this  outlay  by  the  company;  and  therefore 
irrespective  of  the  quality  of  the  management,  he  could  carry  on  his 

1  Vide  infra  J  ii.  p.  29.  2  jMd.,  ii.  pp.  450-2. 

3  Ibid.,  III.  pp.  334-M. 

*  Court  Book,  East  India  Company,  in.      September  1,  1615. 

fi  Vide  infra,  ii.  pp.  229,  230. 

6   Wealth  of  Nations,  n.  p.  233. 


CHAP.  XXII.]    Fortifications  in  Relation  to  Monopolies    453 

business  on  a  much  lower  capital  outlay.  If  a  statement,  compiled  by 
the  East  India  company  about  1685  may  be  relied  on,  expenditure  of 
this  nature  amounted  to  between  one-fifth  and  one-quarter  of  the  whole*; 
and  therefore,  in  these  foreign  trades,  the  private  trader  in  competition 
with  a  joint-stock  company,  would  certainly  liave  had  a  diidinct 
advantage,  through  the  appropriation  of  the  fruits  of  the  risk  and 
labour  of  others.  In  spite  of  such  advantage  it  appears  that,  owing  to 
the  risk  involved,  the  individual  trader  had  been  almost  driven  out  of 
the  interloping  business  towards  the  end  of  the  seventeenth  century; 
though  at  that  time  these  voyages  were  numerous,  the  great  majority  of 
which  were  carried  on  by  stock-joint  companies  with  a  considerable 
membership''. 

This  question  of  the  existence  of  fortifications  introduces  the  further 
enquiry  as  to  the  economic  and  political  position  of  foreign  trading 
joint-stock  bodies  in  relation  to  monopolies.  Adam  Smith  admits  the 
need  for  forts  in  the  East  India  and  African  trades,  and  he  saw  that 
these  could  not  be  efficiently  maintained  by  regulated  companies. 
Further,  there  may  be  added  the  necessary  additional  outlay,  in  the 
purchase  of  the  right  of  trading  from  the  native  rulers.  When  such 
large  expenditure  had  to  be  incurred,  it  was  reasonable  that  the  benefits, 
resulting  from  it,  should  be  confined  to  those  persons  who  had  provided 
the  capital.  This  was  the  justification  of  the  monopolies  for  foreign 
trade  in  equity.  The  plea  of  "the  natural  liberty*"  of  1604  or  of 
extension  of  individual  freedom  in  1682=*  (to  mention  only  two  instances) 
represents  that  reprehensible  species  of  hypocrisy,  which  aims  at  a  private 
gain,  at  the  expense  of  others,  under  the  plea  of  public  service.  More- 
over when  it  is  said  that,  by  the  monopoly  of  such  a  company,  "  the 
other  subjects  of  the  State  [i.e.  those  who  are  not  members]  are  taxed... 
by  their  total  exclusion  from  a  branch  of  business,  which  it  might  be 
both  convenient  and  profitable  for  many  of  them  to  carry  on*,*"  two 
important  facts  are  overlooked.  In  the  first  place,  through  the  joint- 
stock  system,  it  was  possible  for  anyone,  wishing  to  adventure  his  capital, 
to  do  so  by  purchasing  stock,  and  it  has  been  shown  elsewhere  that,  even 
at  an  early  period,  transfers  of  shares  were  much  more  common  than 
might  have  been  supposed ^  in  fact,  soon  after  the  Revolution  it  is  stated 
that  the  whole  nominal  capital  of  the  East  India  company  changed 

1  Vide  infra,  ii.  p.  147.  *  /Wd.,  ii.  p.  162. 

3  Alluded  to  by  Adam  Smith  as  "when  the  principles  of  liberty  were  better 
understood,"  Wealth  of  Nations,  ii.  p.  238.  It  will  be  remembered  that  the  inter- 
lopers from  1682  to  1698,  were  those,  who  after  the  split  in  tlie  old  East  India 
company,  were  endeavouring  to  capture  the  control  of  it — vide  »upra,  pp.  323,  324  ; 
with  reference  to  the  motives  behind  the  declaration  of  1604  tnde  tupra,  p.  121. 

*   Wealth  of  Nations,  ii.  p.  245.  ^   Vide  supra,  p.  443. 


454       Chartered  Companies  and  Interlopers    [chap.  xxii. 

hands  once  in  two  years  \  If  it  be  urged,  that,  while  this  contention 
I  meets  the  case  of  the  would-be  East  India  merchant  as  far  as  the  profit 
[  on   his   capital   was   concerned,  he  remained   deprived   of  the  further 

•  earnings  he  might  gain  from  his  work  in  controlling  his  own  enterprize. 
;   In  fact,  as  an  independent  trader,  he  would  have  both  wages  of  manage- 

•  ment  and  profit  on  capital,  if  he  were  permitted  to  send  ships  to  India : 
I  whereas,  as  a  stockholder  in  the  company  he  was  confined  to  the  latter 

alone.  But  there  were  further  compensations  for  the  would-be  trader. 
•  The  East  India  company  was  often  charged  with  reserving  offices  of 
profit  for  those  who  were  members  or  relatives  of  members.  Thus,  in 
the  case  specified,  if  a  purchase  of  stock  were  made  by  a  man  possessed 
of  some  experience  of  foreign  trade,  he  had  the  opportunity  of  receiving 
not  only  a  dividend  but  of  earning  a  salary.  Suppose  further  the 
would-be  adventurer  were  unwilling  to  adopt  this  course,  he  might  still 
trade  independently  by  purchasing  a  license  for  one  or  more  "permission 
ships,"  the  cost  of  which  license  might  be  taken  roughly,  in  the  case  of 
the  East  India  trade,  as  his  contribution  towards  the  interest  of  the 
sums  invested  in  dead  stock  by  the  company ^  Finally,  if  he  believed 
that  the  trade  could  be  improved,  he  might  endeavour  to  establish 
himself  in  spite  of  the  privileges  of  the  companies.  This  course  was  as 
a  rule  only  possible  by  the  formation  of  an  interloping  company,  and  it 
is  a  curious  commentary  on  Adam  Smith's  views  on  the  superiority  of 
the  management  of  a  single  individual  or  a  partnership,  as  compared 
with  that  of  a  company,  that  as  far  as  can  be  discovered,  few  individual 
traders  who  broke  into  chartered  limits  succeeded,  but  that  from  time 
to  time  several  small  companies  in  the  same  class  of  business  met  with 
at  least  a  moderate  amount  of  good  fortune.  Further,  if  such  companies 
or  individuals  (if  there  were  such  individuals)  were  able  to  maintain 
their  position,  an  arrangement  was  eventually  arrived  at  with  the 
chartered  undertaking,  generally  of  the  nature  of  an  amalgamation. 
The  earliest  agreement  of  this  kind  was  that  made  by  the  act  of  1566  in 
the  case  of  the  Russia  company^.  Similarly  in  the  reign  of  James  I.  the 
Scottish  Whale  fishing  undertaking  was  purchased  by  the  joint  committee 
of  the  Russia  and  East  India  companies  for  this  industry*.  Again  the 
interloping  India  company  of  the  time  of  Charles  I.  was  eventually 
amalgamated  with  the  chartered  body''.  Finally,  during  the  middle  of 
the  seventeenth  century,  there  were  frequent  re-adjustments  of  fishing 
grounds  between  the  Greenland  company  and  the  rival  undertakings, 

^  Vide  in/rttf  ii.  p.  164. 

2  Ibid.,  II.  p.  149.     It  may  be  noted  that  there  are  grounds  for  thinking  that 
this  system  was  abused  by  the  Royal  African  company — ibid.,  ii.  p.  22. 

3  Ibid.,  II.  pp.  41,  42.  4  Ibid.,  ii.  pp.  56,  104. 
6  Ibid.,  II.  p.  121. 


CHAP.  XXII.]     Term  for  foreign  trading  Monopolies      466 

some  of  which  were  organized  on  a  joint-stock  basis  with  a  oomparativelT 
large  membership ^  Thus  it  will  be  seen  that  there  were  many  aveniiei» 
open  to  a  man  with  capital  and  ability,  to  obtain  extensive  advanta^Bt 
from  any  one  of  the  so-called  exclusive  trades. 

Adam  Smith  charges  the  companies,  holding  a  monopoly,  with 
levying  another  kind  of  tax  "  by  the  high  price  of  goods,  which,  in  the 
case  of  a  free  trade,  could  have  been  bought  much  cheaper*.*  The 
allegation,  made  against  the  companies,  was  disputed  on  their  behalf, 
and  some  interesting  statements  were  made,  which  are  noticed  in  the 
Wealth  of  Nations^.  Several  of  the  difficulties,  tliat  Smith  had  in  his 
mind  at  a  later  date,  were  operating  with  greater  force  in  the  seventeenth 
century.  The  chief  of  these  was  the  necessary  outlay  on  dead  stock  (the 
purchase  of  concessions,  fortifications  etc.)*.  There  can  be  little  question 
that  at  this  time  such  outlay  was  unavoidable.  It  could  not  be  provided 
satisfactorily  by  a  regulated  company  %  and  independent  traders  could 
not  be  expected  either  to  raise  such  funds  or  to  take  the  necessary 
trouble.  Smith's  solution  was  that,  while  a  company  might  receive  a 
monopoly  on  the  first  discovery  of  a  trade  for  a  number  of  years  (as  in 
the  case  of  an  invention  or  copyright),  on  the  expiration  of  that  term 
the  dead  stock  should  be  taken  over  by  the  State,  its  value  being  paid, 
and  the  trade  laid  open  to  all  subjects  of  that  State*.  Up  to  1720 
there  was  one  great,  indeed  insuperable  objection  to  the  carrying  out  of 
this  suggestion.  The  State  would  have  incurred  the  obligation  of 
maintaining  the  fortifications,  recompensing  itself,  if  necessary,  for  the 
outlay  and  for  interest  on  the  price  of  the  "  dead  stock  "  by  an  additional 
levy  on  all  the  goods  of  the  trade.  But  the  condition  of  home  and  foreign 
politics  up  to  1720  was  such  that,  while  the  duty  would  no  doubt  have 
been  collected,  nothing  could  have  been  done  in  return  for  it.  None  of 
the  Stuarts  could  have  been  expected  to  maintain  forts  in  India,  indeed 

^  Vide  infray  ii.  pp.  72-4.  The  whole  course  of  the  East  India  trade  from  1690 
to  1708,  involving  the  foundation  of  a  second  company  and  the  final  amalgamation 
of  the  two  might  also  be  adduced,  but  there  appears  to  be  good  reason  for  beheving 
that  the  interlopers  were  endeavouring,  after  they  had  sold  stock  in  the  Old  CompM^ 
at  a  high  price,  to  force  down  quotations  and  then  to  regain  controL 

2   Wealth  of  Nations,  ii.  p.  245.  ^  7^-^.,  11.  p.  239. 

*  It  was  often  argued,  on  behalf  of  the  foreign  trading  bodies,  that  all  the  leading 
European  countries  agreed  in  carrying  on  certain  branches  of  foreign  commerce  by 
means  of  joint-stocks.  To  this  Smith  replies  by  instancing  the  case  of  Portugal 
which  "enjoyed  almost  the  whole  of  it  [i.e.  the  trade  with  the  East  Indies]  for  more 
than  a  century  together  without  any  exclusive  company  "  (  Wealth  of  Natuma,  u. 
p.  132).  Literally  the  statement  is  true,  but  it  must  be  added  that  the  early  Connection 
of  the  Portuguese  with  India  is  such  as  to  afford  a  strong  argument  in  itself  for  other 
countries  adopting  some  other  course  for  the  management  of  that  trade  (cf.  A  HiHory 
of  British  India,  by  Sir  W.  W.  Hunter,  1899,  i.  pp.  93-185). 

fi   Wealth  of  Nations,  11.  pp.  228,  229.  •  Ibid.,  11.  pp.  138,  245. 


456  Suggested  Expropriation  of  Chartered  Cos.  [chap.  xxn. 

Charles  II.,  instead  of  retaining  Bombay,  rented  it  to  the  company  for 
«^10  a  year.  Cromwell,  possibly,  might  have  been  able  to  have  kept 
up  the  garrisons  and  to  have  given  naval  protection.  He  had  the 
opportunity,  since,  about  1655,  all  the  forts  in  India  and  Africa  could 
have  been  purchased  for  about  ,^10,000.  He  re -incorporated  the 
company,  though  it  may  be  doubted  whether  his  action  was  due  to  the 
strength  of  its  case  or  to  other  inducements \  After  the  Revolution, 
the  French  Wars  were  sufficient  to  preclude  any  prudent  government 
from  adding  to  its  responsibilities.  Moreover  there  was  the  financial 
difficulty.  Smith  speaks  of  the  value  of  the  dead  stock  being  paid  to 
the  company.  An  inspection  of  the  finances  shows  that,  up  to  1720,  it 
would  have  been  quite  impossible  to  have  met  any  fair  claim  in  cash. 
In  1685  the  book- value  of  the  dead  stock  of  the  East  India  company 
was  over  ^700,000.  By  the  time  of  the  amalgamation  in  1702,  that  of 
both  the  Old  and  the  New  undertakings  was  rated  at  ^400,000  only. 
Small  as  this  sum  appears,  it  could  not  have  been  raised  at  the  time, 
unless  exceedingly  tempting  terms  had  been  offered.  The  only  remaining 
method  would  have  been  to  endeavour  to  make  payment  in  some  form 
of  government  security.  In  view  of  the  history  of  the  Bankers'  debt^, 
no  one  would  have  accepted  such,  without  most  stringent  guarantees 
before  the  Revolution,  and  afterwards  the  depreciation  would  have  been 
so  great  that  there  would  have  been  a  real  injustice  to  those  expropriated. 
Thus,  there  can  be  little  doubt  that,  in  the  period  ending  with  1720, 
a  transfer  of  the  kind,  indicated  by  Adam  Smith,  would  have  been 
exceedingly  injudicious.  In  a  few  years  after  the  forts  had  been  handed 
over,  the  garrisons  would  have  been  reduced  or  withdrawn.  The  Dutch 
company  would  have  seized  such  an  opportunity  to  harry  and  oppress 
the  English  traders,  who  in  time  would  have  been  forced  either  to 
abandon  the  trade  or  else  perhaps  to  combine  in  a  new  company  for 
self-protection.  Had  the  latter  course  been  the  one  followed,  the  new 
body  would  soon  have  obtained  a  fresh  charter  of  monopoly.  On  the 
whole,  the  former  alternative  is  the  more  probable ;  and  it  would  have 
involved  higher  prices  of  Oriental  commodities  in  England,  since  the 
Dutch  organization  would  at  once  have  raised  quotations. 

In  view  of  all  these  various  considerations  it  may  be  concluded  that 
the  special  foreign  trades  under  investigation  could   only   have   been 

1  Vide  supra,  p.  258. 

2  The  principal  and  interest  by  1698  came  to  ...         ...     £3,321,313  10 

of  which  the  bankers  received  only  664,263    0 


Deficiency         2,657,050  10 

—The  History  of  Banking ,  by  W.  J.  Lawson,  1850,  pp.  202,  203 ;  History  of  the  Earlier 
Years  of  the  Funded  Debt  from  1694  to  1786  [C— 9010],  p.  14  ;  Andreades,  History 
of  the  Bank  of  England,  pp.  39-41. 


CHAP,  xxn.]  Was  England  ''ripe" for  East  India  Trade?  467 

carried  on,  if  they  were  carried  on  at  all,  by  joint-stock  companies  with 
far-reaching  privileges.  The  question  still  remains,  whether  it  wa«  really 
advantageous  that  they  should  be  enteretl  on  by  England  at  this  time ; 
in  other  words  was  the  country  "  ripe  "^  for  the  East  India  trade  in  the 
early  part  of  the  seventeenth  century  >  ?  According  to  Smith'g  argument 
"poor  countries"  tended  to  gain  by  their  refusal  to  foster  a  distant 
foreign  trade,  since  the  capital  required  must  have  been  withdrawn  from 
the  use  to  which  it  would  otherwise  have  been  put  at  home  or  in  a 
nearer  foreign  trade.  Data  are  available,  which  though  not  quite 
complete,  throw  some  light  on  this  discussion.  Assuming  that  the  total 
wealth  of  England  at  the  date  of  the  foundation  of  the  East  India 
company  was  100  millions^  and  that  the  average  capital  employed  by 
this  undertaking  was  not  more  than  d^200,000  in  any  one  year  up  to 
1617^  it  follows  that  the  latter  amount  was  only  one-fifth  of  one  per 
cent,  of  the  former;  and  it  is  to  be  remembered  that,  during  these 
seventeen  years,  great  additions  were  being  made  to  the  wealth  of  the 
country.  In  one  respect,  however,  this  calculation  is  scarcely  sufficiently 
definite,  since  in  a  country  so  predominantly  agricultural  a.s  England  was 
then,  the  ratio  needed  is  rather  that  of  the  capital,  i*equired  for  commerce 
to  distant  foreign  countries,  to  the  resources  used  in  trade  of  all  kinds 
(exclusive  of  the  cultivation  of  the  soil).  Towards  the  end  of  the 
century,  such  wealth  was  about  one-tenth  of  the  whole;  and,  if  the 
same  proportion  applied  in  1600,  it  would  come  to  about  10  millions. 
Further,  if  the  average  sum  employed  in  the  Russia,  East  India  and 
African  trades  be  estimated  altogether  at  a  quarter  of  a  million,  this 
involved  the  employment  of  about  one-fortieth  of  the  whole  trading 
capital  in  these  companies.  Taking  into  account  the  increase  in  wealth 
from  1600  to  1617,  the  proportion  towards  the  end  of  the  period  may 
not  have  been  more  than  one-fiftieth.  This  was  possibly  too  large  a  per- 
centage to  risk,  but  the  small  success  of  the  Second  Joint-Stock  of  the 
East  India  company  tended  to  curtail  this  class  of  investment,  and,  from 
1658  to  1662,  when  new  stocks  were  raised  for  both  the  Indian  and 
African  trades,  the  total  capital  they  employed  was  very  little  more 
than  one  per  cent,  of  that  which  may  be  estimated  as  devoted  to  trade 
at  this  time.  Thus  it  might  perhaps  be  contended  that,  from  this 
point  of  view,  England  entered  on  distant  foreign  trades  before  the 
country  was  "  ripe  "  for  these  enterprizes,  but  there  is  another  side  to  the 
question.  Adam  Smith,  in  his  estimation  of  the  position  of  a  "  poor 
country  "  in  this  respect,  takes  account  of  the  different  possible  levels  of 
prices  of  the  commodities  affected,  according  as  it  enters  on  or  refrains 

1   Wealth  of  Nations,  ii.  pp.  132,  133. 

«  Giffen,  Growth  of  Capital,  p.  83.  »  Vide  supra,  pp.  146,  147. 


458   Companies  and  Trades  involving  Routine  [chap.  xxn.  | 

from  these  trades.  While  he  allows  that  by  refraining  from  what  he 
holds  to  be  an  artificial  fostering  of  them,  the  commodities  that  would 
otherwise  have  been  imported  directly  would  be  "  somewhat  dearer^,""  he 
evidently  considered  that  the  absence  of  the  competition  of  such  a 
country  in  the  European  market  was  not  a  material  element  in  the 
situation.  In  this  respect  the  reasoning  does  not  apply  to  the  position 
of  England  in  relation  to  distant  foreign  trades  at  the  beginning  of  the 
seventeenth  century.  Had  there  been  no  English  East  India  company 
at  that  time,  the  Dutch  would  have  had  an  almost  absolute  monopoly 
for  certain  oriental  goods  in  the  markets  of  northern  Europe.  There  is 
evidence  that  the  establishment  of  the  English  undertaking  led  to  great 
reductions  in  the  price  of  the  commodities  affected.  Thus,  while  from 
the  point  of  view  of  the  symmetrical  apportionment  of  the  national 
trading  capital,  it  might  possibly  be  urged  that  by  reason  of  receiving 
monopolies,  some  of  the  joint-stock  foreign  trading  companies  were 
founded  too  soon,  such  loss,  if  it  existed  at  all,  was  more  than  covered 
by  the  reduction  in  prices. 

It  has  been  necessary  to  examine  at  considerable  length  Adam 
Smith's  views  on  foreign-trading  joint-stock  companies  up  to  1720,  not 
only  from  the  great  weight  to  be  given  to  any  of  his  views,  but  also, 
since  his  opinions  on  these  undertakings  determine  in  part  his  attitude 
to  similar  organizations  in  the  home  trade.  His  rooted  convictions  as 
to  the  inefficiency  of  joint-stock  management,  added  to  the  disrepute 
into  which  the  system  had  fallen  after  1720,  account  for  the  function  he 
assigns  to  these  bodies.  "  The  only  trades,""  he  writes,  "  which  it  seems 
possible  for  a  joint-stock  company  to  carry  on  successfully  without  an 
exclusive  privilege,  are  those  of  which  all  the  operations  are  capable  of 
being  reduced  to  what  is  called  a  routine,  or  to  such  a  uniformity  of 
method  as  admits  of  little  or  no  variation.""  There  are  four  industries, 
and  only  four,  which  are  covered  by  this  description,  namely  banking, 
fire  and  marine  insurance,  water  supply  and  canal-navigation  I     This 

^  Malynes  states  that  East  India  commodities  could  be  bought  cheaper  in  Lisbon 
before  1580  and  sold  at  lower  prices  in  England  than  after  the  East  India  company 
was  formed — Center  of  the  Circle  of  Commerce,  London,  1623,  p.  108.  According  to 
Thomas  Mun,  on  the  establishment  of  the  company,  prices  were  reduced  by  as  much 
as  66  per  cent. — A  Discourse  of  Trade  from  England  into  the  East  Indies,  London, 
1621,  in  Purchas,  His  Pilgrims  (1906),  v.  p.  267 ;  Anderson,  Annals  of  Commerce,  ii. 
pp.  373,  374.  Both  statements  may  be  true,  since,  after  the  accession  of  Philip  II. 
of  Spain  to  the  throne  of  Portugal  in  1580,  the  Lisbon  market  was  closed  to  Englishmen, 
cf.  The  Naval  Tracts  of  Sir  W.  Monson  (ed.  by  M.  Oppenheim — Publications  Navy 
Records  Soc,  xxii.  p.  150). 

2  Wealth  of  Nations,  ii.  pp.  246,  247.  It  is  noteworthy  that  Smith  does  not 
mention  life-assurance,  which,  owing  to  the  length  of  time  over  which  a  policy 
extends,  is  suitable  for  joint-stock  enterprize.     When  Smith  wrote,  the  system  of 


CHAP,  xxn.]  Experimental  Character  of  early  Banking  469 

description  is  of  great  interest  as  an  estimation  of  wliat  had  been 
achieved  by  the  joint-stock  system,  written  more  than  two  hundred 
years  after  its  inception  in  England.  It  appears  however  that  it  calli 
for  modification  in*  several  respects.  It  may  well  be  doubted  whether 
the  element  of  monopoly  is  absent  to  the  extent  supposed,  lliough 
there  was  competition  in  banking  in  Scotland,  in  London  the  Bank  of 
England  had  a  monopoly  against  companies  but  not  against  individuals 
or  partnerships  not  exceeding  six  persons.  The  water-supply  of  towns 
or  inland  navigation  involved  in  fact  some  species  of  local  monopoly. 
Thus  in  three  of  the  four  classes  specified,  there  is  involved  at  least 
a  trace  of  monopoly. 

Further,  in  view  of  the  history  of  banking  and  the  other  industries, 
it  is  by  no  means  clear  that  the  success  of  the  joint-stock  system  can  be 
assigned  in  these  cases  to  the  nature  of  the  businesses  being  reducible  to 
a  routine.  Joint-stock  banking,  at  its  inception,  was  full  of  surprises, 
and  each  institution  had  different  methods.  In  London  about  1695 
there  were,  besides  the  Bank  of  England,  the  Million,  the  Orphans'  and 
a  number  of  Land  banks.  Later  there  were  the  Sword  Blade  and  Muie 
Adventurers  companies  ^  Now,  if  routine  had  been  the  main  element 
in  success,  it  would  be  difficult  to  quote  any  class  of  business  more 
subject  to  surprises,  and  certainly  there  was  very  little  that  was  not 
purely  experimental  in  the  first  quarter  of  a  century  of  the  history  of 
the  Bank  of  England.  Thus  if  "absence  of  variation''  was  the  true 
criterion  of  success,  this  institution  should  not,  indeed  it  might  almost 
be  said  ccmld  not,  have  made  its  footing  good.  Methods  of  insurance, 
too,  were  in  a  constant  state  of  flux;  there  was  no  routine,  for  (except 
in  marine  risks)  there  was  no  definite  knowledge  to  be  taken  as  a  guide*. 
Water-supply  undertakings,  too,  were  in  a  peculiar  condition  during  the 
first  ten  years  of  the  eighteenth  century.  As  shown  elsewhere*  there 
was  a  war  between  the  systems  of  supply  adopted ;  and,  during  the  boom 
from  1692  to  1695,  a  considerable  number  of  companies  had  been 
promoted.  Though  each  had  an  area  in  which  there  was  no  competition, 
most  of  them  were  both  making  and  meeting  aggressive  attacks  in  their 

life-insurance  had  not  been  developed,  though  the  Equitable  Society  (1756),  by  con- 
stituting a  body  of  "charter-founders,"  was  midway  between  a  mutual  society  and 
a  joint-stock  company — Walford,  Insurance  Cyclopaedia,  ii.  p.  679. 

^  That  is  the  second  Sword  Blade  company  or  the  land  development  undertaking, 
which  carried  on  banking.  The  third  Sword  Blade  undertaking  was  also  a  bank, 
but  it  was  certainly  a  partnership — vide  infrOj  iii.  pp.  430-42. 

2  The  methods  of  Charles  Povey,  the  founder  of  the  Sun  Fire  Office,  were  always 
changing — An  Account  of  the  Fire  Insurance  Companies ,  associations,  mttUtUumi, 
projects  and  schemes,  established  and  projected  in  Great  Britain  and  Ireland  during  the 
17th  and  18th  Centuries,  by  F.  B.  Relton,  Loudon,  1893,  pp.  202-316. 

3  Vide  infra,  in.  pp.  13,  14. 


460  Why  Banking  and  Insurance  Cos.  succeeded  [chap.  xxn. 

respective  outlying  areas.  Thus,  while  there  was  a  possible  part  of  the 
business  where  there  was  no  actual  competition  and  where  consequently 
a  fixed  set  of  rules  might  be  followed,  in  the  remainder  original  methods 
of  seeking  consumers  were  required.  It  follows  then  that,  though  at  a 
later  date  the  classes  of  enterprize  specified  may  have  been  reducible  to 
set  rules,  up  to  1720  they  were  all  (with  the  exception  of  water-supplying 
to  some  extent)  in  the  position  of  new  industries  each  of  which  had  to 
create  its  own  organization.  The  explanation  of  the  success  of  joint- 
stock  management  in  banking  and  insurance  is  to  be  found  in  its  peculiar 
advantages  for  these  and  other  types  of  financial  business.  A  company, 
which  had  made  a  large  loan  to  the  State  {e.g.  the  Bank  of  England 
and  the  two  marine  insurance  corporations^),  or  which  owned  a  great 
quantity  of  government  securities  {e.g.  the  Million  Bank  2),  or  which 
again  had  made  available  as  security  freehold  ground  rents  (e.g.  the  Fire 
Insurance  company,  founded  by  Barbon^)  was  in  a  strong  position  to 
answer  any  sudden  large  demands  made  upon  it.  Thiis,  while  failures 
of  private  insurers  and  of  private  bankers  were  common,  the  increased 
credit  of  a  joint-stock  company  was  conducive  to  stability.  The  case  of 
the  water-supply  undertakings  differed.  There,  the  reason  for  the 
introduction  of  the  joint-stock  system  was  often  the  relatively  large 
fixed  capital  that  had  to  be  sunk  before  any  return  could  be  obtained, 
and  the  same  principle  would  apply  to  the  making  of  a  canal.  Thus  in 
banking,  insurance,  water-supply  and  inland  navigation,  the  joint-stock 
system  was  introduced  primarily  through  the  large  capital  required  for 
efficiency ;  while,  in  the  former  two  industries,  there  was  the  additional 
gain  in  a  great  increase  in  credit,  first  from  the  large  capital  subscribed ; 
and  in  the  second  place  and  in  addition  through  the  remaining  wealth 
of.  the  stockholders  as  a  further  security  towards  the  discharge  of  the 
engagements  of  such  companies.  The  great  defect,  not  so  much  of  the 
joint-stock  system  in  itself,  but  of  that  system  as  applied  in  practice  at 
the  close  of  the  seventeenth  and  the  beginning  of  the  eighteenth  centuries 
was  that  it  was  not  recognized  that,  if  the  association  of  capital  was 
artificially  pushed  beyond  the  amount  necessary  for  the  credit  of  a 
certain  industry,  grave  dangers  might  arise,  as  was  actually  the  case 
during  the  South  Sea  boom*.  It  is  a  marked  want  in  Adam  Smith's 
treatment  of  the  whole  question  that  he  fails  to  take  account  of  the 
gradations  between  the  true  partnership  and  the  overgrown  company, 

1  Vide  infra,  in.  p.  205.  2  j^d.,  iii.  p.  275.  3  ji^cl.,  in.  p.  375. 

*  Cf.  Wealth  of  Nations,  11.  pp.  235,  236— "The  South  Sea  company... had  an 
immense  capital  divided  among  an  immense  number  of  proprietors.  It  was  naturally 
to  be  expected,  therefore,  that  folly,  negligence,  and  profusion  should  prevail  in  the 
whole  management  of  their  affairs.  The  knavery  and  extravagance  of  their  stock- 
jobbing projects  are  sufficiently  known." 


CHAP.  XXII.]  Cos,  developed  new  and  hazardous  Trades  461 

with  a  dangerous  surplus  credit.  The  latter  was  not  a  consequence,  but 
an  abuse  of  the  joint-stock  system,  and  the  evils  to  which  it  gave  rite 
are  to  be  assigned  to  this  abuse  and  not  to  the  legitimate  and  neoe«ary 
development  of  the  idea  of  joint  ownership  of  capital,  extended  from 
time  to  time  according  to  the  needs  of  the  industry,  carried  on  by  its 
aid.  Between  such  a  dangerous  organization,  forced  into  a  false  puMition 
by  the  act  of  the  State  through  the  conversion  of  loans,  and  the  small 
partnership,  it  was  proved  by  experience  that  there  was  ample  room  for 
organizations  of  capital — some  only  a  little  larger  than  tlie  partnership, 
others  considerably  larger  and  yet  others  very  much  larger.  Moreover, 
during  the  early  history  of  the  system,  its  applicability  was  almost  the 
reverse  of  that  suggested  by  Adam  Smith.  The  capital  of  companies 
was  used  in  the  main,  at  the  time  at  which  each  undertaking  was  started, 
for  ventures  which  were  either  altogether  new  trades,  or  revived  in- 
dustries, or  those  proposed  to  be  conducted  by  new  methods,  or  again 
in  cases  where  there  was  an  exceptional  degree  of  risk.  The  advantage 
of  joint-stock  ownership  in  such  enterprizes  was  obvious ;  for,  while  no 
individual  would  be  prepared  to  undertake  the  whole  liability,  a  number 
of  persons,  acting  together,  were  willing  to  provide  the  funds  required. 
This  interpretation  of  the  facts  includes  the  phenomena  of  the  appear- 
ance of  companies  in  new  foreign  trades,  in  privateering,  in  colonizing 
and  in  the  development  of  inventions,  as  well  as  in  the  effort  to  introduce 
manufactures,  already  established  abroad.  A  remarkable  instance  of 
the  latter  tendency  is  to  be  found  in  the  analysis  of  the  promotions 
during  the  boom  of  1692.  Some  of  these  new  or  naturalized  trades 
seem  to  have  met  with  a  fair  measure  of  success,  and  no  doubt  the  profit 
of  the  whole  group  would  have  been  larger,  were  it  not  that  these  in- 
dustries were  started  when  several  of  the  competing  foreign  countries  were 
excluded,  owing  to  the  war.  Peace  brought  a  return  of  such  competition, 
and  the  limitation  of  joint-stock  enterprize  after  1720  precluded  the 
renewal  of  this  species  of  investment  for  a  lengthened  period.  Reviewing 
the  results  of  such  employments  of  capital  by  companies  in  hazardous 
ventures  as  far  as  they  can  be  ascertained,  it  appears  that,  as  might  be 
expected,  while  there  were  numerous  non -successes,  in  some  cases  the 
profits  were  very  great.  Thus  on  the  whole,  during  the  first  one 
hundred  and  seventy  years  of  its  history,  the  joint-stock  system  had 
shown  itself  fitted  for  undertakings  requiring  a  large  capital,  or  a  large 
credit,  or  again  where  the  element  of  risk  was  great. 

The  success  achieved  was  not  all  gain.  It  was  in  fact  only  the 
balance  remaining  after  allowing  for  the  disadvantages  inevitable  in  the 
development  of  a  new  type  of  organization.  For  over  a  century  most  of 
the  companies  were  determined  in  their  development  by  the  relation  of 
the  system  to  the  partnership  on  the  one  side  and  to  the  regulated 


462    Early  Companies  and  terminable  Stocks    [chap.  xxii. 

company  on  the  other.  Such  of  the  undertakings,  as  were  incorporated, 
failed  to  realize  the  full  benefit  of  the  clause  giving  them  "perpetual 
succession."  It  is  true  that  many  of  the  charters  remained  in  being  for 
very  long  periods,  but  during  that  time,  as  a  rule,  there  were  many 
separate  stocks.  Thus  the  man,  who  joined  a  company  at  its  foundation, 
might  be  interested  in  many  distinct  undertakings,  all  carried  on  under 
I  that  charter.  It  follows  that,  while  from  the  legal  point  of  view,  there 
was  only  one  company,  from  the  financial  standpoint,  there  had  been 
many.  This  fixed  idea,  favouring  terminable  stocks,  neutralized  the 
(j  advantage  of  perpetual  succession,  by  failing  to  make  the  joint-stock 
I  independent  of  the  decease  of  individual  members,  and  so  *'  the  clamour 
of  widows  and  orphans  ''**  was  often  heard  in  the  courts  of  the  East  India 
company,  when  the  winding  up  of  some  stock  was  delayed.  It  has  been 
shown  above  that  it  is  probably  owing  to  the  crisis,  occasioned  by  the 
misfortunes  of  the  years  1665  to  1667,  that  a  permanent  capital  for 
foreign  trade  was  accepted  as  desirable  \  Altogether  irrespective  of  the 
difficulty  of  making  permanent  outlay,  as  long  as  terminable  ventures 
were  the  rule,  there  was  the  great  disadvantage  that  no  reserves  of 
undivided  profits  could  be  retained,  and  thus  it  sometimes  happened 
that  an  undertaking  might  be  flourishing  at  one  time  and  ten  years 
later  be  involved  in  great  difficulties. 

Side  by  side  with  the  financial  improvement  in  organization,  there 
was  a  development  in  the  methods  of  administration.  The  progress  of 
municipal  government  as  well  as  the  growth  of  the  regulated  company 
had  afforded  models  for  the  conduct  of  business  as  far  as  the  control  and 
representation  of  individuals  were  concerned.  Therefore,  so  far,  the 
early  joint-stock  companies  were  proceeding  along  a  road  already 
travelled.  If,  on  the  other  hand,  their  membership  was  small,  it  was 
possible  to  modify  the  procedure  of  the  partnership  to  suit  their  needs. 
But  in  either  case,  it  became  necessary  to  create  machinery  by  which  the 
member  was  regarded,  not  as  an  individual,  but  as  representing  so  much 
of  the  capital  of  the  undertaking.  Thus  his  voting  power  had  to  be 
determined,  also  the  exact  amount  of  weight  to  be  assigned  to  his 
"  voice ""  in  the  management  of  the  concern.  As  shown  elsewhere,  the 
whole  question  of  voting-rights  became  complicated  by  personal  and 
political  dissensions  in  the  Virginia  and  Somers  Islands  undertakings 
from  1619  to  1624  and  later  in  the  East  India  company  towards  the 
end  of  the  reign  of  Charles  II. 2,  which  is  of  great  historical  importance 
as  introducing  the  " sliding-scale *"  and  the  "maximum  vote";  and 
diversity  of  practice  on  these  points  continues  down  to  the  present  day. 
As  time  went  on,  though  there  were  changes  according  to  circumstances, 

1  Vide  supra,  pp.  280,  281. 

2  2^.^  pp.  163,  321. 


CHAP.  XXII.]    Internal  Management  of  Campanieg        463 

the  relation  between  the  management  and  the  other  members  became 
settled  on  the  basis  that  the  former  decided  poinb*  of  detail,  while 
questions  of  principle  were  debated,  often  very  earnestly,  at  tlie  generml 
courts  \ 

One  possible  danger  was  happily  avoided,  namely  the  undoubted  risk 
of  fraud  by  the  management.  No  doubt  there  were  catiea  of  deliberate 
and  inexcusable  deceit,  as  well  as  of  falsification  of  accounts,  but  in  the 
joint-stock,  that  was  not  overgrown,  these  are  sufficiently  rare — a  result 
that  is  highly  creditable  to  the  commercial  probity  of  the  nation  at  this 
period.  The  remarkable  episode  of  the  South  Sea  company  arose  from 
special  circumstances,  which  were  accretions  to,  not  direct  developmenta 
of  the  joint-stock  system ^  However  the  fact  that  it  was  undoubtedly 
this  system,  which,  though  not  the  cause,  was  the  instrument  by  which 
the  crisis  of  1720  came  into  being,  suggests  the  enquiry  as  to  how  far 
the  existence  of  joint-stock  companies  either  tended  to  produce  or  to 
intensify  disturbances  of  credit.  It  has  already  been  shown  that,  thoogfa 
the  crisis  of  1696-7  was  attributed  to  "  stock-jobbing,^  the  real  cause 
lay  deeper*.  Possibly  if  there  had  been  no  joint-stock  system,  this  panic 
might  have  been  more  confined.  On  the  other  hand,  it  is  not  im- 
probable, on  the  same  supposition,  that  the  crisis,  which  must  have  been 
produced  some  time  by  the  exaggeration  of  the  fund  of  credit,  might 
conceivably  have  been  even  more  serious*.  On  the  other  side,  successive 
crises  had  important  effects  on  the  financial  condition  of  most  of  the 
companies  then  in  existence. 

It  is  somewhat  remarkable,  that  in  reviewing  the  crises  before  1720, 
a  fairly  well  marked  periodicity  appears  to  manifest  itself,  and  there  is 
a  most  striking  repetition  of  years  of  danger,  in  the  same  relative 
positions,  in  the  century  from  1550  to  1650  and  from  1650  onwards. 
Almost  invariably,  precisely  the  same  year,  in  each  decade  of  the  two 
centuries  compared,  can  be  shown  to  have  been  one  of  crisis.  The 
following  table  sets  out  the  years  of  crises  during  the  whole  period, 
arranged  to  show  the  parallelism  : 


1  The  statement  of  Adam  Smith  (  WeaUh  of  Nations,  u.  p.  232)  that  "  the  greater 
part  of  those  proprietors  [i.e.  in  a  joint-stock  company]  seldom  pretend  to  understand 
any  thing  of  the  business  of  the  company"  is  not  borne  out  by  the  evidence  up  to 
1720.  The  minutes  of  the  East  India  company  record  very  full  discussions;  and,  in 
the  thne  of  Elizabeth,  men  like  Burghley,  even  Elizabeth  herself,  took  a  personal 
interest  in  their  investments ;  while,  at  the  beginning  of  the  history  of  the  United 
East  India  company,  the  decisions  of  the  directors  were  sometimes  reversed  at  the 
general  courts. 

2  Vide  supra,  p.  432. 

3  Ibid.y  p.  357. 

4  Ibid.,  pp.  437,  438. 


464  Apparent  Periodicity  in  Crises  1550-1720  [chap.  xxii. 

Table^  showing  Crises  from  1550  to  1720. 


1558-9 

1658-9 

1563-4 

1664-7 

1569-74 

1672-4 

1586-7 

1686-8 

1596-7 

1696-7 

1620 

1720 

1630 

1640 

This  table  seems  to  suggest  a  series  of  decennial  periods.  The  first 
contains  two  members  of  a  chain,  1558-9  and  1569.  Then  comes  a 
break,  followed  by  a  second  pair,  also  separated  by  ten  years,  namely 
1586-7  and  1596-7.  This  is  followed  by  another  break,  and  the  series 
changes  to  1620,  1630,  1640.  There  were  again  a  group  of  crises  on 
either  side  of  1649.  It  is  exceedingly  striking  that  the  first  two  series 
repeat  themselves  step  by  step  up  to  1696-7,  just  in  every  case  a  century 
later.  The  parallelism  begins  in  the  third  series  again,  but  the  results 
of  Jevons  are  too  incomplete  to  enable  the  table  to  be  extended  with 
confidence,  and  the  same  qualification  applies  to  those  of  Juglar,  relating 
to  Great  Britain  ^ 

Looking  at  this  table,  one  is  inclined  to  say  that  it  is  too  symmetrical 
to  be  true.  Though  there  were  crises  in  the  various  years  mentioned, 
disturbances  of  this  kind  were  so  frequent  in  the  sixteenth  and  seven- 
teenth centuries  that  it  is  possible  to  extend  the  list  very  considerably. 
Moreover,  a  distinction  has  to  be  noticed  in  the  degree  of  the  crises. 
Some  were  of  much  greater  intensity  than  others ;  and  obviously  an 
approach  to  decennial  periodicity  which  depends  on  the  inclusion  of 
minor  crises,  if  they  happen  at  a  time  suitable  for  this  theory,  while 
major  ones  are  overlooked,  is  scarcely  satisfactory.  Further  a  difference 
in  the  nature  of  the  data  has  to  be  noticed.  Before  1692  (when  prices 
of  stocks  are  first  continuously  recorded),  the  chief  sources  of  information 
are  qualitative,  rather  than  quantitative.  The  records  show  at  the 
earliest  period  the  impossibility  of  renewing  loans,  great  increases  in  the 
number  of  failures,  sometimes  an  almost  complete  suspension  of  business, 
with  an  absence  of  credit.  After  banking  became  established,  informa- 
tion as  to  "runs"  is  also  most  important.  Moreover  the  extent  of 
a  "decay  of  trade"  affords  some  measure  of  the  force  of  a  preceding 
crisis,  as  measured  by  the  subsequent  depression.  Still,  even  with  such 
data,  it  is  sometimes  not  easy  to  distinguish  precisely  between  the  crisis 
itself  and  the  succeeding  depression,  nor  between  a  major  and  a  minor 
crisis.  Fortunately,  after  1692,  the  regular  quotations  of  stocks,  together 
with  other  statistical  data,  enable  exact  statements  to  be  made,  both  as 

1  Investigations  in  Currency  and  Finance,  by  W.  S.  Jevons,  London,  1884, 
pp.  210,  211;  Des  Crises  Commercialese  par  Clement  Juglar,  Paris,  1889,  p.  294. 


CHAP,  xxn.] 


Crises  1558-1620 


465 


to  the  duration  and  the  severity  of  these  disturbances.  Such  particulars 
show  that  one  reputed  crisis  may  be  dismissed  as  imaginary.  This  is 
that  assigned  by  Jevons  to  the  year  1700  by  a  process  of  reasoning  back 
on  a  decennial  periodicity  from  1720^  Also  the  only  crisis,  mentioned 
by  Juglar  between  1708  and  1720,  that  of  1714,  must  be  relegated  to 
a  subordinate  position'.  Moreover,  in  addition  to  a  knowledge  of  the 
years  of  crisis,  it  is  necessary  to  know  the  periods  of  good  and  bad  trade 
respectively,  so  as  to  be  able  to  gauge  the  ebb  and  flow  of  prosperity, 
and  therefore  the  following  more  detailed  statement  has  been  prepared : 

The  Years  of  Good  and  Bad  Trade,  respectively,  from  1558  to  1780 
(serious  crises  being  indicated  by  heavy  type). 


Bemarks 

Good 
trade 

Depressed 
trade 

Crises 

Remarks 

1558-9 

Famine  1656-8. 

1569 (end 

of  year) 

1560 

English  bills  refused  abroad. 

1561 

rade  fair  to  good. 

1562-3 

1564 
(winter) 

1563  (Aug.) 
1564*(Aug.) 

Plague  (the  number  of  deaths  said 
to  be  20,000),  interruption  of 
trade  with  Flanders,  famine. 

rade  fair  to  good. 

1666-8 

1569  (Jan.) 

to 

1574 

Seizures  of  English  goods  in  Flan- 
ders, January  1569,  followed  by 
failures.  Norfolk's  insurrection, 
December  1569,  followed  by 
failures.  Bad  harvests  from  1571 
to  1574.  It  is  slightly  uncertain 
whether  the  years  1570-4  should 
be  classed  as  a  part  of  the  crisii 
or  of  the  subsequent  depression. 

"he  eleven  good  years. 

1576-^6 

1586-7 

Babington  plot,  failures,  bad  har- 
vest 1587. 

"he    seventeen    bad 

1588-96 

Plague,    1592— deaths    in   London 

years — trade     de-    ■ 
pressed. 

1698-1602 

1596-7 
1603 

11,503. 
Famine,  1595-8. 

Plague,  deaths  in  London  30^561. 

"he  seventeen  good 

1603-16 

1616-17 

Crisis  in  cloth  trade. 

years. 

1618-20 

1  Investigations  in  Currency  and  Finance,  London,  1884,  p.  210. 

2  Des  Crises  Commercialese  Paris,  1889,  p.  294 ;  cf.  supra,  pp.  391,  382. 
SchmoUer,  Les  Phages  Typiques  des  Crises  Economiques  in  tim.n^e  Economique  Inttr- 
nationale,  i.  p.  140,  mentions  the  crisis  of  1711  as  intervening  between  those  of  1096 
and  1721. 


s.  c.  I. 


SO 


466 


Crises  1620-1688 


[chap.  xxn. 


Bemarks 


Trade  fair  to  good. 


Trade  very  depressed 
and  interrupted 
through  the  Civil 
War. 


Trade  fair  to  good. 
Trade  very  active. 


Good 
trade 

Depressed 
trade 

Crises 

1620-5 

1626-8 

1628-9 

1630 

1631-6 

1636-7 

1638-9 

1640 

1642-6 

1646-9 

1650-1 

1652-4 

1656-7 

1659-60 

1660-4 
1667-71 

1664 

(winter)  to 
1667(July) 

1672 

1674-8 

1678 

1679-81 

1682 

1684-6 

1686 

1687 
1689-90 

1688 

Bemarks 


Effects  of  crisis  in  cloth  trade,  Dut 
competition  in  foreign  trade,  ( 
fault  of  East  India  and  Rus 
companies,  bad  harvests,  plagi 
deaths  in  London  35,403. 


Famine,  tonnage  dispute,  plagt 
deaths  in  London  1,317. 

Depression  through  the  monopoli 
of  Charles  I.,  plague,  deaths 
London  10,400. 

Seizure  of  bullion   by   Charles 
(July),  of  pepper  (Aug.),  plagu 
deaths  1,450. 


Exhaustion  of  the  country  throu^ 
the  Civil  War,  great  dearth,  hi^ 
taxation. 

Losses  of  shipping  in  the  Dut( 
War,  possibly  too  effects  of  tl 
Navigation  Act. 

Losses  in  Spanish  War,  especial 
in  cloth  trade,  strain  of  continue 
high  taxation. 

Dutch  War,  plague  (deaths  68,596 
Great  Fire,  Dutch  Fleet  in  tl 
Thames,  1667-    Run  on  banker 

Stop  of  the  Exchequer,  failure  ( 
bankers. 

Prohibition  of  trade  with  Franc< 
expectation  of  war  with  Hollan( 
run  on  bankers. 

Run  on  bankers  occasioned  by  stat 
of  home  politics,  foreign  trad 
little  affected. 

Depression  in  cloth  trade,  failure  ( 
Corporation  bank,  foreign  trad 
still  fairly  prosperous. 

Revolution — run  on  bankers. 


CHAP.  XXII.] 


Crises  1696-1720 


467 


Remark,                     «-^ 

Depressed 
trade 

Orises 

Benmrks 

)me  trade  active. 

1692-6 

foreign  trade  very 
depressed  through 

war. 

1696-7 

The   financial   strain   of   the   war. 

exaggerated  ideas  of  the  luture 

of  credit,  bad  harvests,  suspension 
of  cash    payments   by    Bank   of 

England,  failure  of  Land  b«ak 

1697  (end) 

schemes. 

^eat  prosperity. 

1699-1700 

1701  (Feb.) 

Tension  between  East  India  com- 
panies, political  situation,  run  on 
tanks  and  consequent  failures. 

1702-3 

1704(Oct.) 
1708(Feb.) 

Losses  in  the  war,  financial  strain, 
tension  between  England  and 
Scotland,  fears  of  a  French  inv». 
sion,  run  on  Bank  of  England. 

1708-10 

1710-11 

(winter) 

Financial  strain  of  the  war,  change 

of  ministry. 

1711 

t"9turn  of  confidence. 

1712-14 

relief  of  the  financial 

strain  by  conversion 

of  unfunded  debt  into 

stock  of  South  Sea 

company,  1711. 

1714 (Jan. 
to  April) 

Fears  as  to  the  succession,  reported 
death  of  Anne,  run  on  Bank  of 
England. 

1714  (Aug.) 

to 
l7l5(Aug.) 

1716 
1717-18 

1716  (Oct.) 

1717  (Jan. 
to  March) 

1718  (Oct.) 

Rebellion. 

Walpole's  conversion  scheme. 

Fears  of  an  invasion. 

iackening  of  trade  in 

1719-20 

1719,     followed     by 

(summer) 

very  great  specula- 

tive activity. 

1720 

(Sept) 

Panic,  following  the  collapse  of 
speculation. 

This  tabular  statement  is  not  intended  to  supersede  the  accounts  of 
these  various  crises  in  the  previous  chapters,  but  merely  to  present  the 
salient  characteristics  in  a  condensed  form  for  easy  reference.  These 
particulars  are  of  considerable  importance  as  a  means  of  testing  some  of 

30—2 


468     Objective  or  subjective  Causes  of  Crises    [chap.  xxii. 

the  current  theories  of  crises  by  new  evidence.  Symmetrical  as  is  the 
parallelism  between  certain  years,  a  century  apart,  it  can  be  stated 
confidently  that,  when  the  full  list  of  crises  is  examined,  the  decennial 
periodicity  does  not  apply  within  this  epoch.  Though  there  are  traces 
of  it,  each  series  only  begins  to  break  off  abruptly.  Therefore  still  more 
is  the  sun-spot  theory  impossible ;  since  not  only  is  the  periodicity  too 
incomplete,  but  where  there  should  have  been,  on  this  assumption,  a 
maximum  of  prosperity  there  is  instead  an  intervening  crisis.  It  might 
appear  that  the  frequency  of  the  appearance  of  "  famines^,"  as  associated 
with  years  of  disturbance,  is  some  evidence  in  favour  of  this  or  a  related 
theory.  But  such  coincidence  is  far  from  universal.  The  series  of  very 
bad  years  which  ended  in  1700  had  begun  in  1694  at  which  date  until 
early  in  1696  the  home  trade  was  very  active,  while  again  there  was  a 
famine  in  1709  which  year  represents  the  height  of  a  relatively  good  period. 
Again  the  explanation  that  the  crises  were  due  to  over-speculation  2, 
must  necessarily  be  ruled  out  for  the  whole  period  before  banking  was 
developed.  Scarcely  any  trace  of  this  element  can  be  found  prior  to  the 
Revolution,  since  excessive  inflation  of  prices  was  soon  checked,  when 
credit-instruments  were  almost  totally  wanting.  Nor  can  over-production 
be  assigned  as  the  main  cause  ^,  though  occasionally  there  are  indications 
of  capital  tending  too  much  into  one  direction.  Possibly,  apart  from 
the  boom  of  1720,  the  most  interesting  instance  of  something  akin  to 
this  tendency,  was  the  too  great  fitting  out  of  privateering  expeditions 
from  1580  to  1586.  Fundamentally  the  miscalculation  was  the  same  as 
that  in  over-production,  namely  that  too  much  capital  was  invested  in 
this  direction  with  the  result,  not  merely  of  reducing  the  yield  per  cent., 
but  also  probably  the  whole  aggregate  return^. 

The  chief  objective  theories  having  proved  unsatisfactory,  it  cannot 
be  said  that  the  subjective  explanation,  such  as  the  Psychological 
hypothesis'*,  is  more  explanatory  of  these  early  crises.  The  importance 
of  bad  harvests,  plague,  interruption  of  commerce  by  war  or  sudden 
shocks  to  credit  through  bad  government  are  too  marked  to  be  ignored. 
Therefore  there  is  the  difficulty  that,  if  reliance  is  placed  exclusively  on 
some  objective  cause,  instances  can  be  quoted  where  that  cause  has  been 
in  operation  and  there  was  no  crisis ;  while,  on  the  other  hand,  there  is 
sufficient  evidence  that  the  purely  subjective  theory  can  only  be  accepted 
if  the  recurrence  of  certain  objective  conditions  is  taken  for  granted. 

1  Des  Crises  Generates  et  Periodiques  de  Sur production,  par  J.  Lescure,  Paris, 
1910,  p.  19. 

2  Geschichte  der  Handelskrisen,  von  Max  Wirth,  Frankfurt,  1890,  p.  17. 

3  Das  Grundgesetz  der  Wirthschaftskrisen,  von  R,  E.  May,  Berlin,  1902,  p.  6. 
*  Vide  supra,  pp.  85-88. 

fi  Economic  Crises,  by  Edward  D.  Jones,  New  York,  1900,  pp.  180-217. 


CHAP,  xxn.]     The  Unforeseen  as  a  Cause  oj  Crises      469 

ITiis  reasoning,  if  well-founded,  points  to  the  joint  action  of  subjective 
and  objective  conditions,  which  in  the  f)eriod  under  review  takes  the 
form  of  what  may  be  described  as  the  occurrence  of  "  the  unforeseen  ^^ 
It  is  the  function  of  those,  engaged  in  industry,  to  forecast  the  future ; 
and  the  whole  normal  course  of  trade  may  be  regarded  as  an  epoch  in 
which  such  estimations  are  moderately  correct  on  the  whole,  the  more 
successful  man  being  he  who  is  more  frequently  right  in  his  discounting 
of  the  future,  and  conversely.  It  is  when  the  forecast  of  the  majority 
of  traders  is  in  error  that  a  crisis  results.  The  cause  of  the  miscalcula- 
tion may  lie  either  mainly  in  the  men  who  judge  or  in  the  events  to  be 
judged.  Things  that  are  unpredictable  are  liable  to  cause  crises,  if  of 
sufficient  importance.  Numerous  instances  of  these  are  to  be  found  in 
the  crises  of  the  period  from  1563  to  1672.  Chief  in  importance  is 
a  sudden  and  unexpected  total  interruption  of  trade  between  two 
important  markets.  In  this  respect  an  outbreak  of  plague  was  a  very 
disastrous  event,  and  out  of  nine  important  crises  it  will  be  found  to 
have  been  present  in  no  less  than  six  instances.  During  the  same 
period,  too,  there  were  other  kinds  of  sudden  and  unforeseen  inter- 
ruptions, as  for  instance  the  concurrence  of  seizures  of  English  goods  in 
Flanders  and  the  insurrection  of  Norfolk  both  in  1569.  It  was  equally 
impossible  to  forecast  occurrences,  such  as  the  seizure  of  bullion  in  1640 
or  the  "stop  of  the  Exchequer'''  in  1672.  It  is  noticeable,  too,  how 
often  a  run  of  bad  harvests  either  was  present  at  the  beginning  of,  or 
else  aided  the  continuance  of  a  crisis.  Moreover  wars  were  prolific  of 
these  disturbances ;  but,  when  due  weight  is  given  to  any  one  of  these 
adverse  objective  tendencies,  or  even  to  the  simultaneous  appearance  of 
several  of  them,  allowance  has  to  be  made  for  the  human  factor.  ^Vhile 
unexpected  adverse  events  at  one  period  resulted  in  a  crisis,  at  another 
similar  happenings  failed  to  produce  one.  Sometimes  the  mere  rumour 
of  a  war  sufficed  to  cause  a  disturbance  of  credit,  on  other  occasions  an 
actual  outbreak  of  hostilities  found  trade  moderately  good.  Similarly, 
crises  happened  at  the  beginning  or  at  the  end  of  a  run  of  bad  years  in 
agriculture ;  and  they  came,  too,  when  harvests  were  about  the  average, 
while  again  there  were  famines,  but  not  crises.  At  later  periods  the 
importance  of  man's  judgment  and  calculation  becomes  marked  in  the 
period  of  speculative  activity  which  precedes  a  crisis.  But,  prior  to  the 
development  of  banking,  such  intense  activity  is  scarcely  to  be  expected. 
Though  the  active  dealing  in  industrial  shares  in  1692-5  preceded  the 
crisis  of  1696-7,  and  may  have  aggravated  it,  this  speculation  can 
scarcely  be  assigned  as  the  sole  cause.  Over-activity  in  insurances  in 
1710  has  been  greatly  exaggerated.  This  cannot  justly  be  described  as 
"  a  mania,""  producing  a  crisis,  since  from  its  nature  it  was  confined  to 
^  Roscher,  System  der  Volksmrthscha/t,  iii.  p.  783. 


470  Persistence  of  good  or  had  Trade    [chap.  xxn. 

servants,  apprentices  and  a  few  of  the  wage-earning  classes  in  London  \ 
There  was  however  undoubtedly  extreme  speculation  in  1720. 

Over-active  trade  having  been  shown  not  to  have  been  an  invariable 
precursor  of  these  early  crises,  as  can  indeed  be  seen  by  such  collapses 
happening  when  trade  was  depressed,  there  is  another  feature  to  be 
noticed  in  this  period,  namely  that  a  time  of  good  trade  tended  to 
persist,  once  it  had  set  in,  with  a  long  interval  between  crises,  while  in 
the  converse  case  the  interval  between  them  was  reduced.  For  instance, 
in  eleven  good  years  from  1575  to  1585,  there  was,  as  far  as  is  known, 
no  crisis,  again  in  seventeen  prosperous  years  (1603  to  1620),  there  was 
only  one,  whereas  in  an  equal  number  of  bad  years  (1586  to  1603)  there 
were  three,  and  again  from  1696  to  1708,  there  were  only  four  years 
free  from  very  great  disturbances  of  trade. 

After  the  stop  of  the  Exchequer,  there  comes  a  succession  of  minor 
crises,  during  a  period  which  on  the  whole  was  one  of  great  prosperity, 
terminating  in  the  panic  of  1696-7,  which  was  due  to  a  concurrence  of 
circumstances  the  effects  of  which  had  not  been  foreseen.  The  cost  of 
the  war  was  much  greater  than  had  been  expected,  and  credit  could 
effect  less  than  had  been  supposed.  Good  trade  had  induced  people  to 
believe  that  favourable  conditions  must  recur,  and  circumstances  pre- 
cluded the  realization  of  these  expectations.  During  the  next  ten  years, 
several  of  the  crises  were  occasioned,  or  at  least  became  acute,  through 
the  dread  of  events  which  never  happened,  as  for  instance  war  with 
Scotland,  a  French  invasion,  a  disputed  succession  with  the  possibility 
of  the  repudiation  of  the  national  obligations.  The  period  of  good 
trade  from  1712  to  1719  brought  to  light  some  unreasonable  expecta- 
tions, both  as  to  the  possibilities  of  credit  and  the  efficacy  of  vast 
combinations  of  capital.  No  doubt,  one  cause  of  the  high  price  of 
French  Indies  and  South  Sea  stocks  was  the  great  expectation,  formed  of 
the  prospects  of  the  trades  of  which  these  companies  had  the  monopoly, 
but  in  the  case  of  the  latter  undertaking,  it  has  been  shown  that  the 
malpractices  of  the  management  produced  necessarily  an  over-valuation 
of  the  surplus  stock.  Indeed,  had  the  facts  been  as  they  appeared  in 
the  early  summer  of  1720,  the  quotations,  while  high,  were  not  excessive. 
Thus,  even  in  this  case,  contrary  to  what  might  be  expected,  there  was 
a  concealed  factor  in  the  situation  which  inevitably  frustrated  all 
calculations  as  to  the  future. 

This  view  of  the  crises  up  to  1720  is  to  be  understood  as  applying 
solely  to  these.  In  giving  prominence  to  the  element  of  failing  to 
forecast  the  future  accurately,  as  the  explanation  of  the  chief  disturbances 
of  trade  during  this  early  period,  it  must  be  remembered  that  information 
as  to  current  events  was  very  slow,  and  that  the  little  that  existed  was 
1  Vide  infra,  in.  pp.  392-4. 


CHAP.  XXII.]     Crises  and  commercial  Intelligence  471 

diffused  over  a  small  circle.  Commercial  intelligence  only  came  into 
existence  after  the  Revolution.  Prior  to  that  period,  news  of  political 
tension  was  wanting,  and  therefore  when  a  rupture  came,  which  the 
modern  historian  can  see  to  have  been  inevitable,  it  might  be  a  veritable 
bolt  from  the  blue  to  the  merchants.  The  improvement  of  the  press 
appears  at  first  to  have  had  the  effect  of  making  crises  somewhat  more 
frequent,  since  the  increase  of  information  came  quickly,  and  business 
men  of  the  time  were  inclined  to  exaggerate  the  unfavourable  news 
which  was  supplied  to  them  copiously  \ 

This  explanation  of  the  cause  of  early  crises  may  be  distinguished 
from  that  type  of  theory  of  the  whole  subject,  which  tends  to  describe 
these  disturbances  of  credit  as  being  due  to  accident.  Juglar  points  out 
that  such  a  description  emphasizes  the  last  striking  event  before  a  crisis, 
irrespective  of  the  rest,  just  as  a  match  put  to  powder  may  be  spoken  of 
as  the  cause  of  the  explosion  or  the  last  drop  of  water  falling  into  a 
full  bowl  as  the  reason  of  the  overflow ''.  But  a  miscalculation  is  not  an 
accident.  It  may  be  due  mainly  to  the  training  or  the  state  of  mind  of 
the  persons  who  fail  in  their  forecast.  On  the  other  hand,  it  may  also 
arise  from  the  fact  that  those,  who  have  to  judge,  have  been  suddenly 
confronted  by  phenomena  which  appear  to  them  unconnected  with  the 
whole  series  on  which  their  estimates  of  the  future  were  based.  Thus, 
during  a  period  of  fairly  prosperous  trade,  English  merchants,  who  had 
calculated  on  the  continuance  of  normal  conditions  and  were  met  by  a 
sudden  outbreak  of  plague,  were  unable  to  obtain  payment  of  accounts 
or  a  market  for  their  stock  and  it  frequently  happened  that  a  crisis 
resulted.  Analysing  the  crises  up  to  1720 — while  as  has  been  shown,  in 
so  far  as  the  subjective  element  of  forming  a  forecast  cooperated  with 
the  objective  one  of  the  nature  of  the  phenomena  to  be  judged,  there 
was  a  concurrence  of  both  sides  of  the  relation — it  will  be  seen  that, 
owing  to  defective  intelligence  in  the  form  of  news  or  to  bad  government, 
the  objective  aspect  tends  to  predominate  during  this  period :  while,  by 
the  improvement  of  credit  and  communication  at  a  later  date  it  may  be 
found  that  the  subjective  portion  becomes  more  important,  or  again  it 
may  be  that  the  cause  assigned  to  the  crises  of  this  period  will  give  way 
to  another  which  has  come  into  existence  with  the  altered  circumstances. 

1  In  the  Anatomy  of  Exchange  Alley,  London,  1719,  it  is  alleged  that  bo^s 
foreign  news  was  published — "Sham  reports,  false  news,  foreign  letters  &c.  are 
things  that  have  been  often  trumped  upon  us.... It  was  written  from  Rome,  from 
Leghorn,  from  Genoa,  from  Turin  and  from  Paris.  Nay,  it  was  even  believed  at 
Court.  Exquisite  fraud  !  Who  could  have  believed  that  this  was  born  in  Exchange 
Alley,  sent  over  to  Rome,  agreed  to  there  and  executed  in  such  a  manner  as  to  cheat, 
not  the  town  only,  but  all  Europe"  (reprinted  in  Chronicles  and  Characters  of  the 
Stock  Exchange,  by  John  Francis,  London,  1849,  pp.  366,  367). 

2  Des  Crises  Commer dales,  ut  supra,  p.  165. 


INDEX 


Abbotsbuiy,  gild  at,  3 

Abbott,  Sir  Morris,  governor  of  the  East 

India  Co.,  229 
Aberdeen,  woollen  manufacture  in,  361 
Aberystwyth,  mint  seized  by  Parliamentary 

troops,  242 
Addis,  Mr,  banker,  failure  of,  305 
Advowsons,  company  for  trading  in,  416 
Africa,   expedition   by   Southampton   mer- 
chants, 18 
African  Adventurers,  217,   227,  241,  248, 
269,  270,  276,  439,  446 

—  company  (1553),  21,  33,  34,  45,  68,  76, 
153,  155 ;  foundation,  17,  18 ;  capitali- 
zation compared  with  Russia  company, 
22 ;  service  to  the  State,  30 ;  amount  of 
capital,  41,  42 

(1618),   151,  152,    166;    attitude  of 

the  House  of  Commons  to,  179 ;  Dutch 
competition  with,  192,  193 

(1630),    200,    201,    224;     financial 

difficulties,  241 ;  enquiry  by  Committee 
of  Trade,  248,  249 

(1662)  forts  captured  by  the  Dutch, 

280;   difdculties  of,  283 

Royal   (1672),   283,   299,   308,  317, 

336,  338,  369,  374,  381,  394,  413,  420, 
430,  436;  progress  of,  302,  303 ;  dividends 
and  value  of  shares,  318,  321,  324,  325 ; 
capital,  371 ;  position  of  stockholders, 
382 ;  sale  of  shares,  443 ;  Adam  Smith's 
view  of,  451 

(Dutch),  276 

(French),  121,  399 

—  expeditions,  60,  62 

—  trade,  33,  34,  41,  42,  130,  269,  293, 
362,  441 ;   profits  of,  22,  23,  43,  44 

Agriculture,  companies  concerned  with,  416 

A  la  modes,  414 ;  manufacture  introduced, 
314;  see  also  Lustring  company 

Aldermanni,  7 

Ale  houses,  patent  for  supervising,  170; 
abuse  of  patents  concerning,  173 

Alen^on,  payments  to,  82,  83 ;  large  ex- 
penditure on,  90 

AUens,  Committee  of  Trade  deprecate 
restrictions,  267 

Alum,  companies  for  production  of,  332,  416 

Alva,  Duke  of,  55 ;  difficulty  of  maintaining 
his  army,  49,  50 ;  his  action  against  the 
English,  51 ;  plot  to  capture  the  Merchants 
Adventurers'  fleet,  52 


Amboyna  massacre,  196 

America,  66,  71,  261 ;  plunder  of  Spftniah 
settlements,  72 ;  wealth  of  Spain  obtained 
from,  73;  bullion  smuggled  from,  81; 
mines  in,  86;  the  source  of  Philip's 
strength,  99 ;  Spaniards  in,  102 ;  coloni- 
zation of,  129, 130;  outlay  on  plantations 
in,  184, 185 ;  companies  to  traae  with,  418 

Amicable  Society,  383 

Amsterdam,  financial  importance  of,  266; 
trade  compared  with  London,  288 ;  speen- 
lation  in,  422 

AmweU,  water  supply  from,  161 

Anderson,  Adam,  value  of  his  work,  406, 
446,  448 

Andover,  gild  administration  at,  7 

Aniseed,  export  of,  108 

Anjou,  Duke  of,  nominated  for  the  crown 
of  Spain,  366 

Anne,  Queen,  nunonr  of  her  death,  890, 
467 

Antigua,  plantation  of,  201 

Antimony,  mining  of,  332 

Antwerp,  26,  27,  54,  56;  rate  of  exchange 
at,  16;  scarcity  of  money  at,  28,  48; 
closed  as  a  loan  market,  50 ;  fall  of,  90, 
91 

Apples,  invention  for  extracting  juice,  294 

Apprentices,  privileges  of,  11 

Aqua  vitae,  116 

Archangel,  38,  101,  164 ;  Russia  company's 
ship  at,  18 ;  exports  from,  253 

Aristotle,  54 

Arlington,  Earl  of,  impeachment  of,  291 

Army  debentures,  246,  269;   faU  in,  886 

—  Estimates,  349 

Asgill,  John,  payment  as  promoter,  849 

Assistants,  definition,  20,  152 

Associantes,  7 

Aurangzeb,  war  with,  317 

Ayr,  cloth  manufactory,  244 ;  dividend 
paid  in  commodities,  6 

Babington  conspiracy,  89,  466 

Bacon,  Lord,  on  monopolies,  108 ;  fall  of, 

187 
Bahama  Islands  company,  421 
Ballot-box,  use  forbidden  by  Charles  I.,  228 
Ballycastle,  mining  near,  436 
Baltic  Sea,  8,  18,  69,   164;    trade  to,  72, 

263;   decline  in  exports  to,  169;   cloth 

trade  to,  181-3 


474 


Index 


Baltimore,  Lord,  owner  of  Maryland,  201 

Banking,  influence  of  Italian  bankers,  2; 
development  of,  238,  239,  274,  275,  281, 
293,  298,  299 ;  scheme  for  a  State  bank, 
246;  runs  on  banks,  279,  288,  292,  305, 
309 ;  proposed  Corporation  bank,  314 ; 
early  difficulties  of  banking,  459 

Bank  of  England,  339,  340,  344,  353,  355, 
375,  392-5,  397,  398,  408,  412,  413,  428, 
430,  431,  460;  establishment  of,  331,  338, 
341;  capital,  336,  371;  votes  of  share- 
holders, 340;  financial  methods,  344, 
345;  difficulties  of,  348;  the  engrafted 
stock,  350,  352 ;  increase  of  capital,  360 ; 
prices  of  stock  and  dividends  declared, 
365,  383,  387,  417,  419  ;  run  on,  367, 
390,  467 ;  repayment  of  engrafted  stock, 
370 ;  in  financial  straits,  373,  374 ;  pro- 
gress of,  377 ;  loan  to  the  crown,  385 ; 
comparison  with  the  South  Sea  company, 
388;  suspension  of  cash  payments,  467. 

—  —  Scotland,  336,  339,  353,  356; 
foundation,  333,  341 ;  voting  rights, 
340;  financial  methods,  345;  dividend 
paid,  365;  success  of,  376,  433;  progress 
of,  390 ;  suspension  of  payment,  392 

Bankruptcy,  fraudulent  bankruptcy  de- 
nounced by  Parliament,  53,  54 

Bankrupts,  company  for  selling  their 
goods,  414 

Barbary,  trade  with,  88,  413;  English 
traders  excluded,  97,  98 

Barbary  pirates,  69 

Barbon,  Nicholas,  344;  payment  as  pro- 
moter, 342;  his  fire  office,  282,  314, 
355,  369,  460;   his  land  bank,  340 

Bardi,  Italian  bankers,  failure  of,  2 

Barilla,  used  in  soap  manufacture,  211 

Barnardiston,  Thomas,  247 

Baronets,  revenue  from  the  creation  of, 
140 

Bastard  children,  undertaking  for  rearing, 
416 

Bath,  trade  crisis  in,  167 

**Bear"  sales,  early  knowledge  of,  358 

Bedford,  Lady,  payment  to  for  a  patent, 
149 

~  Level  drainage,  203,  226,  228 

Beech  Oil  company,  390,  394,  435 

Beer,  patent  for  brewing,  109 

Bell  Sound,  monopoly  of  by  Greenland 
company,  250 

Berck,  town,  88 

Bermuda  company,  see  Somers  Islands  Co. 

Bermudas,  settlement  of,  130,  201 

Berwickshire,  woollen  manufacture  in,  361 

Beverley,  268 

Birmingham,  gild  of  the  holy  Cross  at,  3 

Bludworth,  Thomas,  247 

Blue  Paper  company,  331,  369 

Bombay,  rented  to  the  East  India  company, 
456 

Boniface,  Pope,  2 

Bonnington,  cloth  factory  at,  244 

Bookkeeping,  Italians  the  pioneers  in,  158, 
159 


Books,  licenses  to  print,  110 

Bordeaux,  98 

Bothwell,    Lord,   marriage   with   Mary    of 

Scotland,  48 
Bottles,  stone  bottle  patent,  117 ;  company 

for  manufacturing,  331 
Bowes,  Sir  Jerome,  his  patent,  174 
Brabant,  merchants  of,  9 

—  John,  Duke  of,  8 
Brandenburg,  132 

Brass,  manufacture  of,  31,  44,  67,  434; 
company  for  making,  39,  40;  see  also 
Temple  brass  mills 

Brazil,  85 

Bread  riots,  100 

Brewing,  109,  416 

Bridge-tolls,  175 

Bristol,  132,  213,  214;  losses  in  shipping, 
260 

British  Insurance  company,  418,  421,  425 

Broad-cloths,  export  of,  307 

Brome,  Richard,  140 

Brushes,  company  for  making,  416 

Bubble  Act,  417,  437,  438 

Buckhurst,  Lord,  112 

Building,  company  for  building  houses,  416 

"Bull  accounts,"  early  knowledge  of,  443 

Bullion,  export  forbidden,  25 ;  efforts  to 
retain  it  in  England,  172,  173;  decline 
of,  179 ;  seizure  by  Charles  I. ,  224,  230, 
238,  466,  469;  export  of,  261;  recom- 
mendations of  the  Committee  of  Trade, 
266;  amount  imported,  298 

Bulmer,  Bevis,  mining  speculations,  112 

Burghley,  Lord,  82,  112,  114;  governor  of 
the  Mines  Royal,  68;  on  the  disposal  of 
Drake's  treasure,  79 ;  on  England's  pros- 
perity, 84 ;  efforts  to  raise  money,  92 ; 
his  interest  in  the  starch  patent,  115 

Burglar-alarm,  invention  by  John  Tyzack, 
330 

Burglary,  insurance  against,  416 

Cabot,  Sebastian,  a  founder  of  the  Russia 

company,  18;   made  governor,  20 
Cadiz,  operations  at,  186  ,, 

—  voyage,  98 
Calais,  193 

Calamine,  31,  332;  mines  in  Somersetshire, 
40 ;  monopoly  of  calamine  stone,  108 

Calf-skins,  export  of,  108 ;  patent  for  trans- 
portation of,  178 

Calico  company,  414,  415 

Calls,  difficulties  with  payment  in  early 
companies,  342,  343 

Camden,  Wm.,  on  the  export  of  cloth,  42 

Canada  company,  184,  202 

(French),  121 

Candles,  new  method  of  making,  294 

Cannon,  production  of,  31,  39 

Cape  Horn,  78 

Cape  of  Good  Hope,  164 

Capital,  attitude  of  the  Church  to,  15; 
definition  and  use  of  the  term,  36,  37, 
59,  60,  61  note,  157-9;  amount  sub- 
scribed    to    early    companies,    41,    42; 


Index 


475 


effects  of  accumulation  of,  44 ;  soaroity 
in  early  years  of  Elizabeth,  110;  various 
forms  of  capitalization,  406,  407 

Caribbees,  201 

Carlisle,  Mary  Queen  of  Scots  at,  48 

—  Christopher,  voyage  to  America,  71 

—  Earl  of,  proposed  plantation  company, 
156;    the  Caribbees  granted  to,  201 

Carolina,  plantation  of,  201 ;  company  for 
re-settlement  of,  275 

Carr,  William,  his  brewing  patent,  109 

Carrying  trade,  diverted  to  the  Dutch,  170; 
restored  to  England,  306 

Caspian  Sea,  68,  164 

Cathay,  company  of,  20,  342,  447 

Catholics,  plots  in  the  reign  of  Elizabeth, 
52,  55,  65,  89 

Cato's  Letters,  449 

Cattle,  importation  from  Ireland,  170,  172 

Cecil,  Sir  Robert,  afterwards  Lord  Salisbury, 
40,  46,  95,  114,  132;  on  the  financial 
situation,  27;  sympathy  with  industrial 
schemes,  29;  experiments  in  making 
gunpowder,  31 ;  acquires  the  starch 
patent,  115;  on  the  abuse  of  patents, 
118 ;  crown  debts  during  his  treasurership, 
138,  139 

Cefifalonia,  158 

Chadwell,  water  brought  from,  151 

Chamberlain,  Hugh,  405 

Chancellor,  Bichard,  commander  in  the 
service  of  the  Russia  company,  18 

Channel  Islands,  linen  and  paper  produced 
in,  331 

"Charges,"  use  of  the  term,  61,  62 

Charitable  Corporation,  376,  394;  estab- 
lishment of,  364;   capital,  371 

Charles  I.,  150,  194,  230,  231,  237,  260, 
441;  finance  of,  189-92,  194,  204-24; 
his  influence  on  the  prosperity  of  Eng- 
land, 204;  soap  manufacturers'  offer  to, 
211,  212;  influence  of  monopolies  against 
him,  223;  attitude  to  the  East  India 
company,  225,  242;  discharge  of  his 
debts,  263;  seizure  of  bullion  by,  224, 
466    469 

Charles  II.,  265,  274,  345;  financial  em- 
barrassments of,  285,  286;  gifts  to  his 
mistresses,  291 ;  difference  with  the 
Commons,  295,  296 ;  a  defaulter  in  an 
African  company,  343 ;  revenue  in  his 
reign,  348;  rents  Bombay  to  the  East 
India  company,  456 

Charters  of  companies,  10,  338 

Cheapside,  goldsmiths'  shops  in,  199 

Chesterfield,  gild  of  B.  V.  Mary  at,  3 

Chevania  and  company,  227 

Child,  Sir  Francis,  his  financial  enterprise, 
358 

—  Sir  Josia,  his  profitable  investments, 
319 ;  his  policy  in  the  East  India 
company,  321-3 ;  his  enterprise,  358 ; 
interest  in  the  East  India  company, 
451 
Children,  insurance  of,  299,  300 
China,  north-east  passage  to,  18 


Charch  lands,  sale  of,  S8 

Churchyard,  ThomM,  on  tha 
England,  84 

**Cinq  oenit,"  ■hAret  in  Iaw'i 
408 

City  Oondaitfl,  883.  888;  oapltal,  S86: 
anited  with  the  London  Brldgt  wM«r 
works,  369 

CivU  War,  247,  861,  988,  466;  ootbrcAk  of, 
231,  282;  its  oost,  888-6;  dieet  oo 
companies,  241-4  ;  tnde  doprsMioo  ot> 
oaaioned  by,  368 

Clergy  subsidies,  96 

Cleves,  132 

Clonmel,  cloth  company  at,  376 

Cloth,  amount  exported,  42,  69.  143;  timda 
with  Germany,  88;  trade  to  the  Baltlo, 
181-3;  levy  on  exports,  268 

Clothiers,  distress  in  Beading,  807 

Cloth-trade,  13,  84 ;  injur^  by  fortign 
exchange  transaotions,  26 ;  effeeft  of 
Duke  of  Alva's  edict,  51,  63;  depres- 
sions and  crises  in,  97,  166,  166-70, 
180,  181,  194,  231,  232,  241,  261,  399, 
465,  466  ;  scheme  for  dyeing,  148;  injury 
to,  144,  145,  148;  revival  in.  186.  198, 
306;  export  of  broad-cloths,  307;  com- 
panics  established  in  Scotland,  6,  344 ; 
334,  361 ;   see  also  NewmilU  company 

Clyde,  river,  amount  of  shipping  in  1786, 
393 

Coal,  duties  on,  139,  140,  207;  use  in 
manufactures,  204 ;  scarcity  in  London, 
209,  279 ;  monopoly  of,  219,  220 ;  supply 
of  London,  226;  companies  for  mining, 
332 ;  company  to  carry  coal  from  New- 
castle, 416,  420 

Cockayne,  William,  his  scheme  for  dyeing 
cloth,  143,  144  ;  anger  of  weavers  agftinst 
him,  145 

Cod-fishing  off  Newfoundland,  832 

Coffee-houses,  insurance  offices  established 
at,  384 

Coin,  estimate  of  Sir  Wm.  Petty,  364 

Coinage,  restoration  of  the  Irish  coinage, 
136 

Coke,  Sir  Edw.,  on  monopolies,  106;  on 
the  advantages  of  privateering,  188 

—  Roger,  on  the  African  trade,  271 
Colchester,  Merchant  Adventurers  at,  368 

—  Bays,  companies  for,  341,  41G 
Colebrook's  Insurance,  see  Ram,  Stephen 
Cologne,  price  of  money  at,  65 
Colonization,  early  efforts,  86,  440,  441 
Colour  Mill  company,  406 

Comb  Martin,  silver  found  at,  67 

Commenda,  1,  11 

Commendatariusy  11 

Commissioners  of  Trade,  847;    report  on 

stock-jobbing,  367 
Committee  for  Trade  and  Foreign  Affairs, 

247-9 

—  of  Trade,  264,  878;  recommendations 
by,  266,  267 

Commodity  divisions,  6,  12,  301,  302 
Commons,   House  of,  64,   105,   109,   113, 


476 


Index 


114,  119,  132,  182,  188,  191,  193,  240, 
802,  308,  321,  362,  363,  411;  enquiry 
into  monopolies,  126,  137,  173 ;  pro- 
cedure against  monopolies,  178;  bribery 
in,  385 
Compagnie  de  la  Chine,  899 

—  d'Occident,  398 

—  du  S^n^gal,  399 

Companies,    see     Joint-stock     companies, 

Regulated  companies 
Company,  use  of  the  term,  40,  151 

—  promoters,  early  methods  of  payment, 
341,  342;   attack  on,  359 

—  to  trade  beyond  the  Equinoctial,  85 
Compton,  Sir  W.,  his  soap  monopoly,  211 
Conde,  Prince  of,  given  financial  assistance 

by  Elizabeth,  29;  his  privateers,  49,  50 
Constantinople,  158 
Consul,  origin  and  use  of  the  term,  20,  41, 

151,  152 
Convex   Lights   company,    315,   327,   355, 

394;   capital,  335,  341,  871 
Cooke,  Sir  Thomas,  governor  of  East  India 

company,  loyalty  of,  343 
— ,  John,  on  the  effects  of  trade  depression, 

241 
Co-option,  election  by,  9 
Copper,   104 ;    found   in   Cumberland,  31 ; 

importance  of,  39 ;    difficulty  in  selling, 

57,  58;  Sir  Thos.  Smith's  company,  63; 

sought   in  Ireland,    68 ;    companies  for 

mining,    332  ;     see    also    Derby    copper 

company,  English  Copper  Miners,  Welsh 

copper  company 
Copyright,  early  instances  of,  110 
Coral,  French  coral  company,  121 
Cordage,  import  of,   19,  69,   126 ;    Russia 

company's  monopoly,  35 ;    manufacture 

in  Scotland,  334,  336,  356 
Com,  price  of,  100,  239 
Cornwall,  mining  in,  13,  67,  68,  89 

—  Duchy  of,  112 

Corpus  Christi,  gild  at  York,  3,  4 

Cossacks,  interrupt  trade  of  Russia  com- 
pany, 164 

Cotton,  growth  of,  416 

Court  Beggar,  The,  140 

Court  of  Sales,  161 

Wards,  134 

Courten's  Association,  225,  227,  237,  258; 
circulation  of  base  money  by,  244 

Coventiy,  distress  among  cloth  workers, 
809 

Cowell  (Thomas)  and  Company,  247 

Crape,  company  for  making,  416 

Credit,  increase  of,  293,  298 

Crime,  decrease  of,  64 

Crises  in  trade,  465-7 

Crispe,  Sir  Nicholas,  201 

Cromwell,  Oliver,  255,  278;  gives  charter 
to  the  East  India  company,  258,  272 ; 
state  funeral,  259 

Crown  finance,  Henry  VIII.,  16;  Elizabeth, 
23-33,  48,  50,  52,  53-5,  64,  65,  82,  83, 
89-101,  187;  James  I.,  133-42,  148, 
149,  171,  187,  188;   Charles  I.,  189-92, 


194,  204-24,  232-5;  Commonwealth  and 

Protectorate,  245,  246,  254-62;   Charles 

II.,  263,  274,   277,  278,  285-92,   295-8, 

812,    848,    349;    James   IL,    312,   318; 

William    III.,    849,    850;     Anne,    385; 

George  I.,  407,  408,  412 
Crown  lands,  sale  of,  33,  245,  246,  286 
Cumberland,  copper  and  silver  found  in, 

39 ;   mining  in,  89 
—  Earl  of,  his  privateering  syndicate,  98 
Cunningham's  Scottish  company,  165 
Currants,    monopoly    of,    108,    125,    219; 

duty  on,  187,  191 
Customs,  revenue   from,   24,   53,    54,    97, 

180,  142,  265;   farming  of,  97,  290 
Czar,  the,  suspends  the  Russia  company's 

privileges,  88 

Damask,  manufacture  in  England  and 
Scotland,  331 

Danby,  Earl  of,  his  finance,  291,  292; 
fall  of,  297 

Danes,  attack  English  shipping,  101 

Dan  vers.  Lord,  his  patent,  181 ;  grant  of 
fines  and  forfeitures  to,  188 

Darcie,  Edmund,  his  playing  card  mono- 
poly, 110,  114;   its  abuse,  115 

Darien  company,  323,  339,  341-3,  356,  361, 
376,  444 ;  capital,  371 ;  losses  occasioned 
by  its  collapse,  372 

Darnley,  Lord,  his  marriage,  47  ;  murder 
of,  48 

Davenant,  Charles,  on  the  foreign  trade  of 
London,  266  ;  estimate  of  national  wealth, 
815 ;  on  the  national  income,  349 

Debtors,  number  imprisoned,  238 

Defoe,  D.,  on  the  shares  in  a  treasure 
recovery  company,  345 

Denmark,  132;  merchants  trading  to,  9; 
exclusion  of  English  traders,  98 

Derby  copper  company,  347 

De  Renter,  Admiral,  280 

Devon  men  seize  Spanish  ships,  49 

Diamonds,  company  for  importing,  416 

Dice  patent,  114,  207 

Dipping  company,  338 

Director,  early  use  of  the  term,  151,  889; 
payment  of  directors,  348 

Dispensary,  The  Grand,  416 

Diver,  early  form  of  outfit,  327 

Dividends,  pa3anent  out  of  capital,  60-2; 
distinguished  from  divisions,  153 

Diving  bell,  early  form  of,  827 

Divisions,  definition,  153,  159,  160;  com- 
modity divisions,  6,  12,  301,  802 

Dockwra,  William,  companies  promoted  by 
him,  330,  347,  855,  369 

Domini,  use  of  the  term,  9 

Dort,  307 

Dover,  fear  of  privateers  at,  193;  its  con- 
dition owing  to  trade  depression,  241 ; 
Treaty  of,  286 

Drainage,  schemes  and  inventions,  108, 
217,  416 

Drake,  Sir  Francis,  76,  88-5;  his  great 
capture,  70;  expedition  round  the  world. 


Index 


ill 


73,  103,  446;  voyage  of  1577,  74;  outlay 
and  profits  on  his  voyages,  77,  78,  81, 
82,  446;  amount  of  treasure  taken,  78, 
79;  his  share  of  the  treasure,  80;  voy- 
ages of  1585  and  1587,  86,  87;  relief 
afforded  to  the  crown  finances  by  his 
treasure,  90;   his  death,  102 

Draperies,  New,  sealing  grant  to  the  Duke 
of  Lennox,  138 

Drawatter  (Thomas)  and  Company,  247 

Droitwich  Kock  Salt  company,  338 

Drugs,  trade  in,  69 

Dublin,  proposed  bank,  331,  433 

Duckett,  Lionel,  loan  to  Queen  Elizabeth, 
58 

Dudley's  iron  smelting  patent,  178 

Dungeness,  lighthouse  at,  175 

Dunkirk  privateers,  193 ;  terrorize  the 
English  coast,  101,  102 

Dupin,  Nicholas,  inventor  and  promoter, 
360 ;  companies  founded  by,  341,  342 ; 
association  with  the  Linen  Corporations, 
346 

Dutch,  enter  the  Russian  trade,  38 ;  jealousy 
of  their  trade  with  Spain,  100;  compete 
in  the  whaling  industry  and  the  Indies, 
141;  effect  of  competition  on  English 
trade,  166,  168,  171,  192,  466;  their 
carrying  trade,  170 ;  success  in  the 
herring  fishery,  203 ;  commercial  con- 
cessions proposed  by,  251 ;  capture  ships 
in  the  African  trade,  269 ;  sail  up  the 
Thames,  276,  279,  466 ;  effect  of  their 
immigration  on  English  trade,  314 

—  African  company,  280 

—  East  India  company,  121,  154,  242,  284 ; 
comparison  with  the  English  company, 
146,  147,  258,  303 

—  War,  252,  253,  260,  263,  276 ;  cost  of, 
278,  289 

Dyeing,  encouraged  by  James  I.,  133; 
attempt  to  introduce  the  industry  into 
England,  168;    patent  for,  137,  142-4 

Dyer,  Sir  Edward,  his  tanning  patent,  108 

Dyewood,  sale  of,  216 

East  India  company,  122-4,  161,  162,  164, 
166,  217,  225,  227-31,  236,  237,  239,  299, 
321,  336,  338,  374,  392-4,  399,  412,  413, 
429-31,  435,  446,  447,  466;  dividend  paid 
in  kind,  6^  relation  to  the  Levant  com- 
pany, 103;  foundation,  129,  150,  151; 
pepper  ffionopoly,  140;  progress  of,  141, 
145,  200,  270,  302,  303 ;  comparison  with 
the  Dutch  company,  146, 147,  194-8,  283, 
284 ;  regulations  for  admission,  152,  153 ; 
capitalization,  154-7,  371 ;  divisions,  157, 
159,  160;  honorarium  refused  by  com- 
mittees, 163,  452;  voting  and  transfer  of 
shares,  163,  285,  340,  443;  proposed 
union  with  Dutch  company,  164 ;  decline 
of  bullion  attributed  to,  179;  Dutch 
competition  with,  192,  193;  loan  to  the 
State,  238,  258,  386;  influence  of  Civil 
War  on,  242 ;  affected  by  Courten's  As- 
sociation, 244 ;  issue  of  fresh  stock,  245  ; 


oompensation  from  th«  Dakeh  oonpMiy, 
258 ;  the  oriaii  of  1665-7,  280.  381 ;  (Ihi. 
dends  paid  and  Taloa  of  atook,  376u  S18- 
ao,  825.  417,  419;  ttook  donbl«d.  804; 
crisis  of  1682,  805;  attacked  hj  the 
Levant  company .808;  war  with  AonuBgwb, 
317 ;  struggle  for  oontrol  of  the  oonpaay, 
321-3 ;  new  oompanj  formed,  824 ;  tvwili 
leading  to  the  union  of  the  two  ooa» 
panies,  862,  868,  866-8;  amalgamatioB 
of  the  companies.  870,  877-81 ;  viewa  of 
Adam  Smith  on  the  company,  440,  450 

East  India  Company  (Dutch),  121. 154,  MS, 
284 ;  cumparison  with  English  compMiy. 
146,  147,  258,  303 

(French),  899,  419 

trade,    293;    Spain's  revenae  lh»m, 

99;  proposed  Scottish  company,  147. 
148 

Eastland  company,  17,  169;  foundation.  9; 
export  of  broad-cloths  by,  307 

Edinburgh,  277;  treaty  of,  28 

Edward  L,  2 

Edward  VL,  13,  25 

Elbe,  river,  237 

Elizabeth,  Queen,  16,  21,  87,  89,  40.  109. 
113-15,  118,  119,  180, 184, 188,  158.  171, 
179;  finance,  23-33,  48,  60,  52-6,  64,  65, 
82,  83,  89-101,  187;  her  share  in  the 
African  company,  30;  difficulties  with 
Mary  of  Scotland,  47;  takes  charge  of 
Phihp's  treasure,  50,  53,  65,  64;  con- 
fiscates merchandize  of  Spanish  subjects, 
61 ;  interest  paid  by,  64,  65 ;  royalty  from 
the  Mines  lioyal,  58;  loan  to  the  Mines 
Boyal,  67 ;  loan  to  the  Levant  company, 
70;  assists  the  Low  Countries,  72,  81; 
share  in  privateering  expeditions,  74,  98; 
share  in  the  African  Adventurers  and 
Frobisher's  voyages,  75 ;  interest  in  Drake's 
voyage,  80,  86,  87 ;  her  share  of  his  cap- 
ture, 81,  82;  defence  of  her  prerogative 
as  to  monopolies,  105,  106;  gives  the 
farming  of  tin-mines  to  Raleigh,  112; 
revenue  of,  134;  love  of  personal  adorn- 
ment, 135 ;  expenses  of  her  funeral,  136 ; 
punctual  in  meeting  her  engagements,  187 

Ellys,  John,  buys  the  starch  patent,  115 

Emden,  Merchant  Adventurers  at,  32 

England,  rumoured  Spanish  invasion,  66 ; 
industrial  development  of,  64;  thriving 
condition  of,  65;  contest  with  Spain  in 
the  reign  of  Elizabeth,  72,  73;  eJffect  of 
Drake's  captures  in,  83;  causes  of  pros- 
perity, 84 ;  views  of  a  Spanish  spy  on  the 
trade  depression  in,  88;  financial  diffi- 
culties in  opposing  the  Armada,  89-92; 
estimate  of  national  wealth,  129.  964. 
315,  316,  337,  457 

English  Channel,  privateering  in,  49.  72. 
186,  193,  197 

—  Copper  Miners,  company  of,  330,  840, 
355,  369.  376,  418,  419,  421.  433,  434; 
capital,  336;  clause  as  to  calls.  843; 
fluctuation  of  shares,  846;  aocoont  of. 
425,  426 


478 


Index 


Equivalent  debentures,  433 

Essex,  county  of,  109 ;  distress  in,  240 

—  Earl  of,  rebellion  of,  106 
Exchange,  Sir  Thomas  Gresham's  method 

of  dealing  with  the,  25-7 ;  rates  of,  347 ; 
adverse  to  London,  442 

—  Alley,  366;  stockbrokers  migrate  to, 
360 

—  House  ofl&ces,  383 

Exchequer,  134;  stop  of  the,  287,  288,  466, 
469,  470 

—  Bills,  349;  circulation  by  the  Bank  of 
England,  385-7 

Exeter,    122;    cloth-makers'   dispute  with 

Merchant  Adventurers,  268 
Exports,  prohibition  of,  108;  decline  in,  181 

Fairfax,  General,  outlay  onhis  army,  234, 235 
Famines,   influence  on  trade  crises,   465, 

466,  468,  469 
"Farming,"  successes  and  dangers  of  the 

system,  59,  66,  67,  138 
Fellowship,  its  use  in  company  titles,  40 
Ferthingmen,  7 

Feudal  privileges,  income  from,  24 
Fforwardmanni,  7 

"Filles,"  shares  in  Law's  scheme,  401 
Financial  crises,  385,  386,  463,  464 
Fines,  farming  of,  138 
Fire,   Great  Fire,    276,   292;    estimate  of 

damage,  277,  278;  influence  on  trade,  466 
Fire-engine,  Loftingh's  invention,  330 
Fire  Insurance,  314,  327,  344;   beginning 

of,  282;  Barbon's  office,  299 
Fisheries,  injury  to  by  the  Reformation,  35 ; 

the  industry  in  Scotland,  133,  282,  327, 

336;  profits  of,  203;  supply  of  salt  for, 

210 ;  vessels  seized  on  the  east  coast,  261 ; 

recommendations  of   the  Committee  of 

Trade,  267 
Fishery  company  (Grand),  406,  420 
(Royal),  267,   270,   280,   302,   332, 

339,   406,  413,  417,   420,   447;    capital, 

336;   peculiar  use  of  capital,  344 

—  society,  203,  217,  224,  225,  227,  228; 
its  failure,  446,  447 

"Fish  Pool,"  premium  paid,  418,  421 

Flanders,  49,  90,  95,  99 ;  payment  of  debt 
to,  25;  influence  of  its  troubles  on 
England,  48;  effect  of  war  on  the  wool 
trade,  51,  52 ;  crown  debt  in,  52,  55 ;  trade 
with,  53;  embargo  on  English  goods  re- 
moved, 66 ;  interruption  of  trade  to,  465, 
469 

Flax,  monopoly  of  cultivation,  110 ;  company 
for  growing,  419,  420 

Foreign  exchange.  Sir  Thos.  Gresham's  way 
of  dealing  with,  25-7 ;  rates,  347,  422 

—  trade,  266;  conditions  in  the  17th 
century,  120-8,  236;  organization,  129; 
monopolies  for,  179,  236 ;  losses  of,  186 ; 
estimate  of,  266,  361 ;  question  of  privi- 
leged companies  for,  271-3;  growth  of, 
316,  317 

Forest  of  Dean,  216;  iron  smelting  com- 
pany in,  254 


Forfeited  estates,  company  for  purchase  of, 
368,  406 

Forfeitures,  farming  of,  138 

Fortifications,  outlay  on,  24 

Fortrey,  Samuel,  statement  for  an  open 
trade,  271 

Fowke  (Thomas)  and  Company,  247 

Framework-knitters,  416,  421 

France,  66;  threatens  Scotland,  27,  28; 
rehgious  wars  in,  48;  trade  with,  88; 
operations  in,  95 ;  its  trading  companies, 
121 ;  extension  of  its  trade,  263 ;  subsidy 
from,  289,  296;  its  war  with  Holland 
affects  English  trade,  293,  306;  trade 
with  prohibited,  306-8,  466;  war  with, 
317;  effect  on  trade,  327;  fears  of  a 
French  invasion  affect  trade,  366;  peace 
with,  388,  425;  financial  speculation  in, 
398-406,  407 

Freke,  John,  his  stock  and  share  lists,  392 

Friendly  Society,  315 

Frobisher's  Voyages,  70,  71,  75,  78,  153; 
capital  outlay,  76,  77 ;  failure  of  the  last 
voyage,  85 

Fuller's  gild  of  Lincoln,  3 

Fund  of  Credit,  389,  463;  growth  of  the 
idea,  396-8 

Funerals,  company  for  furnishing,  410,  420 

Galleons,  disadvantage  of  their  great  size,  73 

Gambia,  179 

Gardiner,  S.  R.,  on  the  revenue  of  James  I., 
134,  135 

General  Insurance  company,  418,  419,  421, 
425 

Genoa,  13 ;  Bank  of  St  George  at,  1 ;  debt 
of,  20;  bankers  of,  50,  51,  64;  debts  to 
bankers  at,  55 ;  slave-trading  undertaking 
at,  121 

George  I.,  accession,  391 

"German  Balls,"  company  for  making,  331 

Germany,  91;  shares  owned  in,  39,  57; 
futile  attempt  to  borrow  money  in,  53; 
loss  of  cloth  trade  to,  88;  exclusion  of 
English  traders,  98;  Merchant  Adven- 
turers expelled  from,  100;  condition  of 
Protestants  in,  172;  position  of  English 
merchants  in,  181,  182;  company  to 
trade  to,  410 

Gherardi,  Simon,  2 

Gift  coal,  219 

Gilbert,  Humphrey,  proposed  expedition  to 
America,  71 ;  colonization  by,  86 

— ,  Sir  John,  his  successful  privateering,  101 

Gilda  mercatoria,  account  of,  5,  6 

Gilding  company,  333 

Gilds,  19;  their  influence  on  joint-stock 
companies,  2,  3,  4;  their  organization,  4; 
administration,  7;  traces  of  gild  life  in 
companies,  152 

Glasgow,  woollen  manufactures  in,  361 

Glass,  patent  for  drinking  glasses,  117; 
progress  of  the  industry,  203;  invention 
for  making,  294 ;  Scotch  glass  works,  327, 
333 

—  companies,  327,  331,  414 


Index 


479 


Glass  Makers  of  London,  335,  339 

—  patent,  141,  174,  175,  178 

Globe  Theatre,  owned  by  a  syndicate,  165 
Gloucester,  trade  crisis  in,  97,  167 ;  decline 

in  woollen  industry,  309 
Godolphin,  Lord,  on   the   farming  of   the 

Customs,  290 
Godolphin's  Award,  378 
Gold,    34,    78;    import,    23,    41;    Scottish 

mining  company,  36,   39;    company   to 

import,  248;  Captain  Welby's  company, 

421,  425 
Goldsmiths,  commence  banking   business, 

238    239 
Gold-thread  monopoly,  114,  176,  177,  218 
Gorges,  Sir  Fernando,  criticism  by  House 

of  Commons,  183 
Governor,  origin  of  the  term,  7,  20 
Graceman,  a  gild  oflicer,  4 
Grain,  56,  64,  89,  240,  263,  264;  price  of, 

100,  170,  180,  222,  239,  261 ;  scarcity  of, 

32 ;  see  also  Harvests 
Grand  Dispensary,  416 

—  Fishery,  406,  420 

Granville,  Sir  Richard,  death  of,  102 

Green  Cloth,  Board  of,  296 

Greenland  company,  200,  217,  225,  242, 
269,  338,  454;  enquiry  by  Committee  for 
Trade,  248-50;  capital,  336;  constitution, 
339 ;  voting  rights,  340 

—  trade,  success  of,  192 
Green-wax  patent,  131 

Gresham,  Sir  Thomas,  28-30,  32,  54;  his 
exchange  operations,  25-7;  on  the  cap- 
tured Spanish  treasure,  51;  attempt  to 
borrow  money  in  Germany,  53 

Gubernatores,  7,  9 

Guernsey  Linen  and  Paper  company,  339 

Guiana,  attempts  to  occupy,  130 

—  company,  156,  192,  202 

Guinea,  248;  Portuguese  in,  21;  trade 
with,  34 

—  company,  151,  339,  342;  see  also 
African  companies 

Gunpowder,  production  in  England,  31; 
grants  for  its  manufacture,  113,  114;  a 
crown  monopoly,  207 ;  company  to  manu- 
facture, 331 

Guns,  see  Cannon 

Hair,  for  wig  making,  416 

Hamburg,  52,  88;  debts  to  merchants  in, 
55;  price  of  money  at,  65;  company  to 
trade  to,  418,  420 

Hampshire,  depression  in  cloth  trade  in,  194 

Hampstead  Aqueducts,  341,  342,  353,  355, 
435;  foundation,  332,  333,  364;  capital, 
335 ;  constitution,  339 ;  voting  rights,  340 

Harris,  Christopher,  80 

Hartlepool,  Merchant  Adventurers  at,  268 

Harvests,  years  of  bad  harvests,  89,  180, 
193,  244,  372,  465-7;  influence  on  cost 
of  living,  239;  on  trade  crises,  468 

Hatton,  Sir  Christopher,  80 

Havre,  expedition  to,  29,  32 

Hawkins,  Sir  John,  72,  249;  embarks  in 


the  slave  trade,  84 ;  his  ToyagM,  eapital, 
41,  42;  profitfl  of  hu  ezprniitioiui,  48; 
third  voyage  anfortunate,  60 ;  expeditions 
to  the  West  Indie*.  66 ;  on  the  wealth  of 
England,  84 ;  his  death,  109 

Hearne,  Sir  Joseph,  his  mining  tomjpmay, 
880 

Hearth  money.  364,  274.  818;  eoUMlon 
driven  out,  278 

Hcathcote,  Sir  Gilbert,  his  profitable  sharv 
dealing,  881 

Hector,  Dr,  his  wool  lioense,  100 

Hemp,  monopoly  in  sowing,  110;  company 
for  growing,  416 

Henrietta  Maria,  dowry  of,  190 

Henry  VIII.,  7,  25,  64;  bis  extraraganet,  16 

Henry  of  France,  debt  to  England,  186 

Herring,  salting  of,  818 

Herring-fishery,  fleets  harassed  by  priTatoara, 
193 ;  success  of  the  Dutch,  208 

Heyners,  7 

Hide,  Laurence,  his  bill  against  monopolies, 
107 

Hill,  Aaron,  his  beeoh  oil  process,  485 

Hispaniola,  Spanish  plate  ship  salved  near, 
326,  827,  345 

Holland,  88,  128,  251;  merchants  of,  9; 
trading  companies  of,  121;  indebtedjMMi 
to  England,  136,  142;  repayment  of  debt, 
149,  169;  war  with,  252,  258,  260.  368, 
276;  cost  of  the  war,  278,  289;  levy  on 
cloth  exported  to,  268 ;  effect  of  war  with 
France  on  English  trade,  293;  trade 
affected  by  peace  with,  306 

Holland,  John,  association  with  the  Hamp- 
stead Aqueducts,  333 ;  companies  founded 
by,  341 

Holy  Cross,  gild  of,  at  Birmingham,  8;  at 
Stratford-on-Avon,  4 

—  Island  salt  company,  419,  420 

—  Trinity,  gild  at  Lancaster,  4 
Honorarium,  custom  of  voting,  163 
Horn  Sound,  monopoly  by  Greenland  com- 
pany, 250 

Horses,  used  for  pumping  by  the  York 
Buildings  company,  333 

Horth  (Thomas)  and  Partners,  348 

Host-men  of  Newcastle,  privil^^es  of,  178; 
their  monopoly,  208,  209,  219 

Houghton,  John,  305,  360;  hU  stock  and 
share  list,  329;  his  Collectiont^  859;  on 
the  manner  of  establishing  a  company, 
337,  338 

Houses,  valuation  by  Sir  Wm.  Petty,  964 

Hudson's  Bay  company,  284,  293,  809,  817, 
321,  336,  394,  436,  447;  incorporation. 
282;  dividend  paid,  318;  value  of  stock, 
320,  321,  324,  325;  fluctuations  of  shares, 
352;  capital,  371;  Adam  Smith's  view 
of,  451 

Huguenots,  support  by  Elizabeth,  29,  49; 
importance  of  their  immigration,  818, 814 ; 
utilization  of  their  skill,  441 

Hull,  122;  branch  of  Merchant  Adven- 
turers at,  268 

—  Company  or  Hall  Adventurers,  317 


480 


Index 


Humber,  river,  278 

Hutcheson,  Archibald,  on  the  panic  of  1720, 
437 

Imports,  limitation  of,  108 

Inch  of  candle,  sales  by,  161 

Indentures  Tripartite  and  Quinquepartite, 
368 

India,  181,  441;  Dutch  competition  in,  141 

Infant  Insurance,  299,  300 

Inns,  abuse  of  patent  for  registration  of,  173 

Inquisition,  126 ;  English  sailors  given  over 
to  the,  49,  72 

Insurance,  growth  of,  383,  384;  failure  of 
insurance  offices,  386;  activity  in  1710, 
469,  470 ;  &ee  also  British  Insurance  Co. , 
Fire  Insurance,  Infant  Insurance,  General 
Insurance  Co.,  London  Assurance,  Marine 
Insurance,  Royal  Exchange,  Sun  Fire 
Office 

Interest,  rates  of,  16,  28,  32,  37,  43,  53,  65, 
82,  92,  103,  112,  136,  139,  141,  199,  238, 
275,  287,  299,  362,  422;  limitation  by 
Parliament,  54 ;  rates  on  the  collapse  of 
the  South  Sea  company,  429 

Invention,  progress  of,  294,  298,  313-15 

Inventions,  327,  330;  grant  of  patents  for, 
106 ;  absence  of  in  early  17th  century,  131 

Ipswich,  122,  268 ;  gild  administration  at,  7 

Ireland,  expenses  of  rebellion,  52,  53,  101, 
135 ;  revolt  in,  65,  82,  90,  95,  231,  240, 
244;  search  for  lead  and  copper  in,  68; 
assistance  given  by  Philip  of  Spain, 
72,  80;  settlement  of,  130,  131;  the 
O'boharty  rebellion,  140 ;  import  of  cattle 
from,  170,  172;  injury  to  trade  by 
privateering,  261 ;  company  for  forfeited 
estates  in,  368 ;  company  to  reclaim  bog- 
lands  in,  416 

Irish  Channel,  privateering  in,  261 

—  linen  manufacture,  335,  341,  359 

—  Society,  131,  141,  150-5 

Iron,  companies  for  production  of,  13,  58, 
67,  104,  174,  254,  333,  336,  338-40,  416, 
434;  mines  in  Monmouthshire,  40;  im- 
port of,  108;  monopoly  of,  141 

Ispigliati,  Thomaso,  2 

Italy,  joint-stock  system  in,  1,  18;  trade 
with,  88 

Itinerant  musicians,  registration  of,  173 

Ivory,  import  of,  23,  24 

Jacobites,  forfeited  estates  of,  368;  threat 
of  insurrection,  391 

James  I.,  109,  150,  154,  164, 166,  179,  202, 
211 ;  receives  subsidy  from  Elizabeth,  90 ; 
recall  of  patents  by,  119;  succession  of, 
129;  character  and  political  views,  131, 
132 ;  financial  difficulties,  133,  142,  143, 
181 ;  increases  the  wardrobe  account,  135 ; 
coronation  expenses,  136 ;  his  interference 
with  the  cloth  trade,  143-5, 168, 186,  232 ; 
effect  of  his  extravagance  on  trade,  169, 
170;  anticipates  income  from  the  gold 
thread  monopoly,  177;  his  finance  com- 
pared with  that  of  Elizabeth,  187,  188 


James  II.,  creator  of  the  African  company, 
321 ;  state  of  his  revenue,  312,  313 

Janus,  doors  of,  132 

Jervase  (John),  Molyns,  Richardson  and 
Company,  247 

Jevons,  W.  S.,  on  trade  crises,  464,  465 

Jewish  capitalists,  influx  during  the  Long 
Parliament,  238 

Joint-stock  companies,  early  organizations 
in  Italy,  1;  capital  invested  at  various 
periods,  22,  42,  335,  336,  337,  370,  371, 
394,  443,  444;  profits  of,  23,  43,  44, 
445-7 ;  causes  arresting  development,  102 ; 
advantages  of,  123 ;  organization  of,  150, 
163,  270,  337-44;  comparison  with  regu- 
lated  companies,  152,  243,  273,  308; 
examples  of  incorporation,  227-9;  in- 
crease of  unincorporated  companies,  246, 
247;  English  and  Scottish  companies 
compared,  300,  301,  334,  356;  number 
existing  in  1695,  327 ;  effect  of  the  crisis 
of  1697,  352;  Law's  operations  in  France, 
398-405;  promotions  in  1720,  409-16; 
close  association  with  naval  and  maritime 
progress,  440;  condition  of  companies 
after  the  panic  of  1720,  430-6 ;  review  of 
period  1553-1720,  439-48 

Jones,  Inigo,  evidence  concerning  the  glass- 
patent,  175 

Jonson,  Ben,  116,  144 

Juglar,  C,  on  trade  crises,  464,  466,  471 

"Jurors"  patent,  131 

Justinian,  91 

Kathai,  company  of,  20,  342,  447 
Kelly,  Lord,  payment  to  for  a  monopoly,  149 
Kendall  (Thomas)  and  Company,  247 
Kent,  patent  relative  to  beer  brewed  in,  109 ; 

trade  depression  in,  262 
Keswick,  leasing  of  mines  at,  57,  58,  67,  68 ; 

inventory  of  the  mines  at,  60 
King,  Gregory,  estimate  of  national  wealth, 

315,  316 
— ,   Wm.,  Archbishop  of  Dublin,  on  the 

South  Sea  company,  424 
Kingston-on-Hull,  119,  213 
Knighthood  fines,  208,  215 

Labour,  value  estimated  by  Sir  Wm.  Petty, 
264 

Lace,  import  of,  416 

Laconia  company,  183 ;  capital,  184,  186 

Lacquering  company,  333 

Lancaster,  gild  of  Holy  Trinity  at,  4 

— ,  Duchy  of,  134 

Land,  Sir  Wm.  Petty's  estimate,  264;  re- 
clamation by  joint-stock  enterprize,  441 

Land-banks,  281;  failure  of  schemes,  467 

Land-development  companies,  415,416,  419, 
420 

Land-divisions,  154,  185,  203 

Land-drainage,  131,  141,  202,  203,  226,  228 

Land's  End,  193 

Lapis  calaminaris,  production  of,  332 

Laud,  Archbishop,  216 

Law,    John,  his    finanoial   operations    in 


Index 


481 


France,  398-405;  contemporary  descrip- 

tion  of,  407 ;  intended  attack  on  English 

undertakings,  435 
Lawrence,  Kichard,  his  banking  and  trading 

scheme,  293 
Lead,  sought  in  Ireland,  68;  companies  for 

mining,    332,    336,    416;    company    for 

smelting,  434 
Leather,  patent  for  tanning,  814 

—  monopoly,  219,  221 

—  stamping  company,  peculiar  restriction, 
344 

Leeds,  Merchant  Adventurers  at,  268 
Leghorn,  financial  importance  of,  266 
Leicester,   Earl  of,  40,  46,  79;   his  share 

transaction,  443 
Leith,  siege  of,  28 
Lemott  (Samuel)  and  company,  247 
Lennox,  Duke  of,  grant  to,  138 
Levant,  trade  with,  82,  83,  88,  129,  171, 181, 

293 ;  English  traders  excluded,  97,  98 
Levant  company,  84,  108,   123,   124,  137, 
153,  159,  163,  164,  307,  308,  309,  317, 
444;   foundation,  69,  70;  loss  of  ships, 
101;    effect  of  Spanish   War  on,   103; 
loan   to    Parliament,    238;    affected    by 
trade  depression,  240;  condition  of  the 
company,    268,    269;    dispute  with   the 
,    East  India  company,  308 
Levelookers,  7 

Life  insurance,  see  Insurance 
Lighthouses,  monopolies  for,  175,  178 
Lighthouse  tolls,  175 
Limited  liability,  early  form  of,  228,  270, 

344 
Lincoln,  gilds  at,  3,  4 

—  Deanery  of,  3 

Linen,  invention  for  printing,  176;  intro- 
duction of  the  manufacture,  314,  331; 
King's  and  Queen's  Corporation  (Eng- 
land), 335,  338,  339,  341,  345,  346,  354, 
359,  435,  (Ireland)  335,  341,  359,  (Scot- 
land) 331,  336,  340,  341 

Lists,  export  of,  108 

Live-fish  patent,  176 

Liverpool,  water  supply,  416,  417,  420 

Livery  companies,  loan  to  the  Crown,  92; 
shares  in  the  Irish  Society,  154 

Loan  offices,  company  for,  416 

Loans,  discouraged  by  the  Church,  1 

Lobster  patent,  178 

Loftingh,  John,  his  fire  engine,  330 

Log,  invention  for  an  improved,  298 

Logwood  patent,  137 

"  Lombard  office,"  established,  414 

London,  54,  71,  109;  plague  in,  32,  64, 
102,  129,  130,  180,  186,  193,  217,  276-8, 
280,  292,  465,  466,  468,  469;  brass  fac 
tories  in,  40 ;  high  price  of  wheat  in,  89 ; 
loans  by  the  City  to  the  Crown,  92;  trade 
of,  122;  water  supply,  131,  275,  294; 
coal  supply,  209,  226,  279;  importance 
as  the  trade  centre,  232,  233;  riots  in, 
239,  240,  261 ;  value  of  foreign  trade  of, 
266;  rebuilding  after  Great  Fire,  282; 
rent  of  buildings  in,  283 ;   directory  of 

S.  C.  I. 


merchants  pabliihed,  394 1 
of,  295;  estimate  of  new  baildingt, 
Corporation  sohemea  (or  bankion  and  in- 
surance, 314;  inooDvenienoe  of  layinc 
new  watermaini,  865;  ■peoolation  in, 
405-7 
London  Assaranoe,  406,  418,  419,  426,  427, 
429,  430 

—  Bridge,  276 

Water  Works.  294,  889,  868,  486; 

power  obtained  from  the  bridge,  888; 
capital,  335;  united  with  City  ConduitiL 
869 

—  Insurers,  company  of,  tee  Son  Pire 
Office 

upon  Lives,  883 

—  Session,  no  prisoners  In  1676,  84 

—  to  Norwich  Stage  coach  company,  844 
Long  Annuities,  398,  396 

—  Parliament,  236,  238,  266,  266;  attitodA 
to  the  shipping  industry,  260;  ftnanoe 
of,  260,  262 

Looking-glasses,  price  of,  176 

Lopez  and  Thomas  White  and  Company, 

227 
Lords,  House  of,  40,  124,  231;  considem- 

tion    of    monopolies,    178;   the  Russia 

company,  179,  180 
Lottery,  money  raised  for  the  Grown  by, 

53 

—  loans,  384,  385,  400 
Lottery-ticket  assurance,  406 
Louis  XIV.,  398 

Love  (William)  and  Company,  247 

Low  Countries,  see  Netherlands 

Ludlow,  Palmers'  gild  at,  3 

Lustring  company,  327,  338,  369,  376,  418, 
421,  425,  433;    capital,   335,  341,  871 
constitution,   339;    voting    rights,  840 
treachery    of    an    assistant,    343,    844 
fluctuation  of  shares,  346,  856;  reviTal, 
414 

Luxury,  growth  of,  69,  83,  316;  increase  in 
London,  192 

Lyme  Kegis,  119 

Lynn,  122,  268 

Macaulay,  Lord,  on  the  derangement  of  the 

currency,  347,  348 
Mackworth,  Sir  Humplirey,  364 
Madder,  company  for  growing,  415 
Madox,  Philip,  on  defective  coins,  347 
Madre  de  Dios,  capture  of  the,  102 
Magazine,  the  old  or  great,  160 
Maine,  province  of,  183 
Malt,  company  for  drying,  419,  420 
Malting  monopoly,  216 
Manchester,  trade  depression  in,  169 
Mansell,  Sir  Robert,  interest  in  the  glass 

industry,  174 
Mansfeld,  Count  Ernest,  expedition  to  the 

Netherlands,  186,  189 
Mantelpieces,  artificial  marble  for,  294 
Manuring  of  land,  company  for,  421 
Marble,  patent  for  imitation,  294,  314 
Marchmont's  water-works,  333 

31 


482 


Index 


Margins,  358;   act  to  prevent  dealings  on 

margin,  360 
Marine  insurance,  420;  growth  of,  315,  406 
Market  tolls,  175 

Marshall,  Edward,  his  paper-mill,  116,  117 
Martyn,    Sir  Bichard,  danger  of   farming 

system  shown  by  his  action,  58,  59 ;  his 

large  holding  of  shares,  61 
Mary,  Blessed  Virgin,  gild  of,  3 

—  Queen,  21,  31;  disasters  at  end  of  her 
reign,  23 

of  Scots,  27 ;  opposition  to  Elizabeth, 

47;  marriage  with  Bothwell,  48;  execu- 
tion of,  89 

Maryland,  plantation  of,  201 

Massachusetts  Bay  company,  201,  224 

Masts,  import  of,  19,  416 

Matthews,  Eliza,  monopoly  granted  to.  111 

Mediterranean,  69,  169;  pirates  in  the, 
123;  trade  to,  253 

Mendoza,  Spanish  ambassador,  69;  on  the 
Levant  company,  70 ;  on  Drake's  success, 
78,  79 ;  on  the  finances  of  Elizabeth,  82 

Merchant  Adventurers,  17,  106,  122,  124, 
228,  236 ;  foundation,  8,  9 ;  charter,  10 ; 
value  of  woollen  shipment,  22 ;  financial 
help  to  Elizabeth,  25;  foreign  exchange 
transactions,  26,  27 ;  their  mart  re- 
moved to  Emden,  32 ;  shipment  of  cloth, 
42 ;  plot  to  capture  their  fleet,  52 ;  ex- 
pelled from  Germany,  100;  amount  of 
their  exports,  142;  their  re-establish- 
ment, 145,  169 ;  attitude  of  Parliament 
to,  181-3;  refusal  to  export  cloth,  192; 
Charles  I.  asks  for  a  loan,  237 ;  loan  to 
Parliament,  238;  financial  embarrass- 
ments, 267,  268,  307 

(New),  143,  168,  181,  199 

of  Exeter,  137 

"  Meres,"  shares  in  Law's  scheme,  401 

Middlesex,  county,  109 

—  Treasurer,  proceedings  against,  187 
Middleton,  Hugh,  his  silver-mining  com- 
pany, 193 

Millbank  water  company,  333 
Milled-lead  adventure,  294,  416,  434 
Million  Bank,  353,  355,  392-5,  397,  413, 
420,  430,  460;   origin  of,  331;    capital, 
336,    371;     constitution,    339;     voting 
rights,  340;  limited  liability,  344 
Mine  Adventurers,  369,  376,  377,  381,  384, 
394,  434,  447,  452;  estabhshment  of,  364, 
365;  capital,  371;  perilous  position,  374 

—  royal,  privilege  of,  39 

Mineral  and  Battery  Works,  61,  62,  104, 
108,  151,  155,  161,  164,  193,  202,  228, 
282,  327,  332,  334,  342,  355,  376,  406, 
410,  434,  435,  440,  451;  incorporation, 
40;  government  and  capital,  41,  42; 
early  gains,  43,  44;  farming  system 
adopted,  58;  its  dangers  shown,  59; 
success  and  drawbacks  of  the  farming 
system,  66,  67;  number  of  quorum,  163; 
affected  by  the  Civil  War,  242 

Mines,  company  for  digging  and  working, 
338,  339 


Mines  Koyal,  13,  39,  45,  59-62,  66, 124, 131, 
151,  152,  155,  164,  193,  202,  225,  227, 
228,  282,  327,  332,  334,  338,  341,  342, 
410,  434,  435,  440;  proposed  dividend 
in  kind,  6;  foundation,  18;  incorpora- 
tion, government  and  capital,  40-2 ;  no 
profit  in  early  years,  43,  44;  effect  of 
trade  crisis,  57,  58,  104 ;  borrow  money 
of  Queen  Elizabeth,  65;  progress  of,  67, 
68;  collapse  of  subsidiary  companies, 
89 ;  charter,  163 ;  influence  of  Civil  War 
on,  242 

Act,  355 

—  —  of  Merioneth  and  Cardigan,  282,  285 
Mining,  development  of,  332 

Mint,  closed  by  Charles  I.,  238 

Misselden,  Edward,  incident  concerning, 
228 

Molesworth,  Lord,  424 

Molley,  — ,  his  justification  of  interest,  54 

Mompesson,  Sir  Giles,  his  gold-thread 
scheme,  177 

Monasteries,  economic  effects  of  the  disso- 
lution of,  23,  84 

Money,  amount  coined,  298 

Monmouth  rebellion,  effect  on  trade,  309, 
310 

Monmouthshire,  iron  mines  and  works  in, 
40,  104;  wire-works  in,  66 

Monopolies,  104,  149,  207-23;  discussion 
of,  35,  105-28;  enquiry  into,  173;  pro- 
cedure of  the  Commons  against,  178; 
cause  rise  in  prices,  214,  221;  revenue 
from,  215,  219;  condemnation  of,  236; 
grants  of,  338;  justification  of,  453; 
Adam  Smith's  view  of,  455;  influence 
on  trade,  466 

Montgomery,  Earl  of,  interest  in  the  glass 
industry,  174 

Montserrat,  plantation  of,  201 

Moor,  Sir  John,  Lord  Mayor,  305 

Moore,  Francis,  on  monopolies,  107 

Morea  adventurers,  269 

Mosquito  Islands,  captured  by  the  Spaniards, 
226 

company,  192,  201,  224,  227,  228 

Mountjoy,  46 

Murford,  Nicholas,  his  salt  works  at  Yar- 
mouth, 209,  210 

"  Mysterie,"  use  in  titles  of  companies,  40 

Nantes,  revocation  of  the  Edict  of,  313 
Narva,  capture  of,  23 ;  effect  on  the  Russia 
company,  35,  36;  trade  to,  36,  38,  128 
Navigation  Act,  250,  276,  313,  466;    con- 
siderations   concerning,   251,   271,   272, 
307 ;   effects  of,  252 

—  company  (River  Douglas),  419,  421 
Navy,  outlay  on,  24,  90,  135,  254 ;  its  im- 
portance in    the  war  with    Spain,   99 ; 
Pepys  on  the  condition  of,  277 

—  debt,  285 

—  estimates,  349 

Neale,  Thomas,  promoter  of  lotteries,  341 
Negroes,  trade  in,  41,  249;  price  of,  271 
Netherlands,  53,  55,  81, 91;  Phihp  of  Spain 


Index 


48S 


in  the,  28,  32,  48,  72,  81 ;  Duke  of  Alva 
in,  49,  51;  war  in,  effect  on  woollen 
industry,  65;  money  lent  to  Protestants 
in  by  Elizabeth,  82 ;  loan  raised  by,  89 ; 
outlay  by  Queen  Elizabeth  in,  90 ;  cost 
of  troops  in,  95;  manufacture  of  cloth 
in,  168;  position  of  English  merchants 
in,  181,  182;  expedition  to,  186;  settle- 
ment of  the  Walloons  in,  204 

Newcastle-on-Tyne,  122,  268;  Merchant 
Adventurers  of,  11;  merchants  of,  98; 
condition  of  the  coal  trade  at,  278 ;  water 
company  at,  300,  327,  336 ;  company  for 
coal  trade  at,  410 

New  Draperies,  sealing  grant  to  Duke  of 
Lennox,  138 

—  England,  441 

company,  130,  183 ;  capital,  156 

council,  capital  of,   184,  185 

Newfoundland,  413;  English  fisheries  near, 

203,  332 
Newhaven  expedition,  cost  of,  33 
New  Jersey,  plantation  of,  332 

—  Merchant  Adventurers,  143,  168,  181, 
199 

Newmills  company,  244, 327,  361 ;  dividends 
paid  in  kind,  6  ;  peculiar  organization  of 
the  company,  300-2 ;  payment  of  mana- 
gers, 343  ;  dividend  paid,  365 ;  advances 
to  shareholders,  372 ;  property  sold,  376 

New  Plymouth  adventurers,  183,  201 ; 
capital,  184,  185 

Newport,  Capt.,  reported  capture  of  treasure 
ships  by,  101 

New  River,  141 

company,   151,   155,   183,  217,  225, 

275,  327,  333,  334,  336,  435;  James  I. 
associated  with,  132,  133;  progress  of, 
294;  capital,  335,  341 

—  Scotland  company,  130,  184,  192 
Night  engine,  330,  333 

Norfolk,  Duke  of,  insurrection  of,  62,  465, 

469 
Norman  Conquest,  3,  5 
North,  Dudley,  290 

—  Sea,  8,  69;  in  command  of  the  Dutch, 
279 

North -West  Passage,  164 

Norway,  merchants  trading  to,  9 ;  com- 
pany to  trade  with,  413 

Norwegians,  attack  English  shipping,  101 

Norwich,  122,  268;  trade  depression  at, 
194 

—  stage-coach  company,  333,  335 
Nottingham,  brass  factory  at,  40 
Nova  Scotia,  441 ;   baronet  of,  184 

company,  130,  184,  192 

Nutz,  capture  of,  88 

O'Doharty  rebellion,  140 

Oil,  company  for  melioration  of  (Long's), 

419,  420 
Oppenheim,    Mr,    on    the    importance    of 

treasure  ships  to  Spain,  99 
Options,  358 
Orange,  Prince  of,  50 


Orcy,  3 

Ordnance.  expensM  of,  90;  ttoeoaa  to  ex- 
port, 137 ;  Dookwra'a  ordoAnet  eomnuiy, 
330 

Orkney  Fishing  oompany,  418-30 

Orleans,  Duke  of,  899 

OrphauH'  Bank,  881,  866.  469 

Osborne,  Sir  Thoa.,  $ee  Danby,  Karl  of 

Osmond  Iron,  40 

Overing,  John,  his  diving  maohine,  8t0 

Oxford,  Earl  of,  112 


Packington,  Sir  John,  aoqniraa  the 
patent,  115 

Pallavicmo,  91;  loan  from,  188 

Palmers,  gild  of,  at  Ludlow,  8 

Paper,  account  of  the  paper  patent,  116; 
manufacture  of,  314;  oompaniee  for 
making,  317,  830,  831.  416;  White  paper 
company,  327,  330,  835,  888,  840,  846, 
346,  354,  359;  Blue  paper  oompany,  881, 
369 ;  Scottish  white  paper  company,  888, 
336 

Papillon,  Thos.,  opposition  to  Sir  Joeia 
Child,  321,  322 

Paris,  speculation  during  Law's  operatioBe, 
403-5,  422 

Parliament,  64;  summoned  by  Rlinaheth, 
33,  53;  money  grants  by.  101,  194 

Paste-board,  company  for  making,  416 

Paterson,  Wm.,  associated  with  the  Hamp- 
stead  Aqueducts,  333 ;  companies  founded 
by,  341,  342 ;  connection  with  the  Darien 
company,  343 

Pauperism,  decline  of,  186 

Pearls,  78;   undertakings  for  seeking,  888 

Pedlars,  patent  for  registering,  178 

Pembroke,  Lord,  46 

Pennsylvania,  plantation  of,  332 

—  company,  420 

Penny  Post,  establishment  of,  299 
Pepper,  Charles  I.  seizes  the  stock  of  the 
East  India  company,  224,  466 

—  loan,  242 

—  monopoly,  140 

Pepys,  Samuel,  on  the  engines  for  pumping 
Thames  water,  275  ;  on  the  condition  of 
the  Navy,  277 

Persia,  Russia  company's  expeditions,  68- 
70;  trade  to,  127;  spice  from,  164 

Persian  Voyages,  193,  195,  196,  225.  227, 
229 

Peruzzi,  Stephanus,  2 

"Petites-fiUes,"  certain  shares  in  Law's 
scheme,  401 

Petty,  Sir  William,  estimate  of  national 
wealth,  264,  295,  315,  316;  revenue  from 
customs  estimated,  290 

Philip  of  Spain,  23,  53,  81,  84,  90,  100; 
threatens  Scotland,  28;  prohibits  im- 
ports from  England,  82;  aid  to  Mary 
Queen  of  Soots,  47 ;  hostility  to  Ehaabeth, 
48;  negotiates  a  loan,  49 ;  rate  of  interest 
paid  on  loans  by,  65 ;  supports  the  Irish 
insurrection,  72,  80;  his  embarraaeed 
finances,  85;    aided  by  the  Pope,    89; 


484 


Index 


Italian  bankers  pledged  to,  91;    depen- 
dence on  America  for  resources,  99 
Phipps,  William,  his  salving  company,  326 
Phoenix  Insurance  company,  369 
Pickering  (James)  and  Company,  247 
Piracy  in  the  Mediterranean,  123 
Pitch,  import  of,  416 
Plague,  64,  102,  129,  130,   180,  186,  193, 
217,  231,  276-8,  280,  292,  465,  466,  468, 
469;    introduced   from    Havre,   32;    in- 
fluence on  trade,  33,  102,  180,  277,  278, 
280,  468,  469 
Plantation  companies,  methods  of  procedure, 
153,  154;   effect  of  trade  depression  on, 
183,  184 
Plate-glass  companies,  331,  416 
Playing-card  monopoly,  114,  119,  207,  216 
Plymouth,  condition  of  trade  at,  278 
Poland,  132 ;  exclusion  of  English  traders, 

98 
Poor  "rate,  rise  at  Shoreditch,  367 
Popish  plot,  296 ;   see  also  Catholics 
Portator,  11 
Portugal,  88;  English  traders  excluded,  97, 

91;  company  to  trade  with,  413 
Portugal  voyage,  cost  of,  95 
Portuguese  established  in  Guinea,  21 
Postal  service,  202 ;    development  of,  275, 
299;    receipts   settled   on   the    Duke    of 
York,  313' 
Potash,  use  in  soap  industry,  211,  212 
Potosi,  silver  from,  99 
Poverty,  caused  by  trade  depression,  241 
Povey,  Charles,  his  insurance  schemes,  383 
Powder  Mills,  247;   see  also  Gunpowder 
Poyntz,  Capt.,  his  draining  engine,  330,  332 
Prague,  battle  of,  172 
Precious  stones,  78 
Press,  effect  of  its  improvement  on  trade, 

471 
Press-gang,  273,  276 
Price,  Sir  Carberry,  his  lead  mines,  336, 

347,  355,  364 
Prices  raised  by  monopolies,  221,  222 
Printing  licenses,  110 
Privateering,  69,  70,  250,  361,  440 ;  in  the 
reign  of  Elizabeth,  47-9;  success  of,  66, 
192 ;    raids  on   Spanish  commerce,  72 ; 
organization   of  the  expeditions,   73-5 ; 
outlay,     76-8 ;      England's     prosperity 
ascribed  to,  84 ;  later  voyages  of  Drake, 
86,  87 ;  effect  on  trade,  88 ;   decline  in, 
98,  99,  102;  revival  of,  101,  188;  injury 
to  shipping  in  the  Channel,  186  ;  activity 
of  the  Dunkirk  privateers,  193 
Privy  Council,  70,  71,  79,  80,  114,  116,  118, 
144,  149, 192,  209,  315,  445;  of  Scotland, 
313 

—  Seal,  Letters  of,  190 

—  Seals,  loans  on,  32,  91,  92,  171,  187 
Promoters,  profits  of,  342 
Protectorate,  267,  272 ;  financial  diiOBculties 

of,  258;  discharge  of  its  debts,  263 
Protestants,  assistance  sent  to  the  Nether- 
lands, 82;  condition  in  Germany,  172; 
immigration  from  the  Continent,  313 


Prussia,  merchants  trading  to,  8,  9 

Puckle's  machine  gun,  420 

Pumping-engines,  patents  for,  294,  314 ; 
devices  used  by  the  London  water  com- 
panies, 333 

Put  and  Call  Options,  early  knowledge  of, 
443 

Pym,  John,  260;  on  the  rise  in  prices, 
222;  on  the  depression  in  the  cloth 
trade,  231 

Quincampoix,  street  in  Paris,  360 
Quorum,  in  various  companies,  163,  339, 
840 

Rags,  collection  for  paper-making,  116,  117 
Raleigh,   Sir  Walter,  colonization  by,  86, 
103;  on  the  profits  of  privateering,  87; 
on  the  decay  of  trade,  98 ;    grants   to, 
111-13;    his  expedition   in   1602,    129; 
attempt  to  occupy  Guiana,  130 
Ram,  Stephen,  insurance  company,  406 
Rape-oil,  use  in  soap  industry,  211 
Reading,  distress  of  clothiers  in,  307 
Reformation,  65  ;  effect  on  capital,  15,  16 ; 

injury  to  fishing  trade,  35 

Regulated  companies,  10-12,  17,  70,  123, 

442;    organization    of,   10;    comparison 

with  joint-stock  bodies,   152,   153,  243, 

273,  308,  443-5 

Rent,  fluctuation  of,  100,  261;   estimated 

value  in  seventeenth  century,  265,  298 

Restoration,  264;  followed  by  a  revival  in 

trade,  263 
Revenge,  loss  of  the,  102 
Rh6,  Isle  of,  operations  at,  186 
Rhine,  river,  88 

Rivers,  George,  buys  the  starch  patent,  115 
Roberts,  Lewis,  account  of  the  division  of 

the  Spanish  treasure,  81 
Rock  Salt  company,  338,  416,  420 
Rope  and  Cordage,  import  of,  19,  69,  126; 
monopoly  of  Russia  company,  35 ;  manu- 
facture in  Scotland,  334,  336,  356 
Rose  Insurance  company,  418,  420 
Rotterdam,  trade  of,  293 
Royal  African  company,  see  African  com- 
pany 

—  Burghs,  subscription  to  the  Linen  Cor- 
poration, 344 

—  Exchange,  brokers  expelled  from,  360 
Assurance,  406,  410,  418,  419,  421, 

425,  427,  429,  430,  432,  434 

—  Fishery  company,  see  Fisheries 

—  Household,  payment  by  tallies,  296; 
salaries  in  arrear,  386 

Rum,  distillation  of,  334 

Rupert,  Prince,  249;  his  fleet  a  danger  to 

commerce,    240;     his    interest    in    the 

Hudson's  Bay  company,  452 
Rushworth,  John,  on  the  financial  panic 

of  1667,  279 
Russell,  Sir  William,  his  soap  monopoly, 

211 
Russia,  164,  171;  trade  with,  22,  23,  34-8, 

62,  84;   company  to  trade  with,  413 


Index 


486 


Russia  company,  40,  66,  122-4,  151-3,  167, 
162,  164,  166,  197,  199,  225,  253,  307, 
439,  446,  447,  451,  454,  466;  ceremony 
at  funeral  of  a  member,  5;  foundation 
and  charter,  17-20;  capital,  22,  42; 
services  to  the  State,  29,  30,  34-6; 
estimated  profits,  37;  trade  prohibited 
by  the  Czar,  38;  periods  of  prosperity 
and  depression,  43,  44,  68,  69,  141,  192, 
241,  269;  new  stock  proposed,  56;  ex- 
ploration by,  71 ;  second  joint-stock 
wound  up,  89 ;  loss  of  ships,  101 ;  efifect 
of  Spanish  war  on,  103;  its  privileges 
and  position,  127,  128;  success  of  the 
whaling  voyages,  130,  145;  afifairs  before 
the  House  of  Lords,  179-80;  governor 
imprisoned,  238 

—  leather  company,  330,  333 
Ryswick,  peace  of,  352,  447 

Sadlers'  Hall  Insurance,  409,  410;  pur- 
chased by  the  Royal  Exchange  assurance, 
432 

Sagadahoc,  settlement,  184 

Sail-cloth,  69;  manufacture  in  Scotland, 
334;  company  for  making,  416;  Irish 
company,  420 

St  Bartholomew,  massacre  of,  55 

St  Christopher,  201 

St  George,  bank  of,  at  Genoa,  1,  16,  20 

St  Jean  de  Luz,  Spaniards  defeat  Hawkins 
at,  50 

St  John,  feast  of,  8 

St  John  (Henry)  and  Company,  247 

St  Paul's  Cathedi'al,  damage  by  the  Great 
Fire,  277 

Salisbury,  Lord,  see  Cecil,  Sir  Robert 

Salt  companies,  332,  410 

Salters,  corporation  of,  222 

—  Society  of,  222 

Salt-makers,  Society  of,  210  ;  revenue  from 

the  monopoly,  216 
Salt-monopoly,  119,  209,  210,  217,  221,  227 
Salt-pans  at  Shields,  219 
Saltpetre,   118,   217;    how  obtained,   113, 

114 

—  company,  335,  410,  419,  421;  con- 
stitution, 339;   voting  rights,  340 

Saltpetre-patent,  137 

Salt  water,  patent  for  making  into  fresh, 
315,  327 

Sambrooke,  East  India  company's  returns, 
159-60 

Sandys,  Sir  Edwin,  his  ''Instructions  for 
Free  Trade,"  120,  121,  151,  152,  197; 
opposition  to  the  Russia  company,  127, 
128  ;   on  the  decay  of  trade,  172 

Sawing  company,  333 

Scotland,  cost  of  operations  in,  24,  254; 
financial  assistance  given  by  Elizabeth, 
27;  a  possible  base  for  a  catholic  in- 
vasion, 47;  subsidies  to  Protestants  in, 
48;  James  I.  on  union  with  England, 
132;  fishing  industry  in,  133;  steps  for 
reducing  imports  from,  172 ;  religious 
troubles    in,    217;    wai-    in,    240,    244; 


revival   of   indostry,  244;    inerMae   of 
manufactures,    282 ;    oompanj  TP^rtMHt 
compared  with  English,  800,  801;   mi- 
coorages  immigration  of  skilled  votkan, 
818;    companies  established,  827,  818, 
834.  861 ;  Uttle  affected  by  the  erisU  of 
1697,  354,  356;  capital  invested  in  Joint. 
stock  companies,  871;  oommerotal  eriaie 
in,  872,  873;    effect  of  the  Union  on 
trade,  375,  376;  teusion  with  England, 
385,  467,  470 
Scots  Linen  Manufacture,  tee  Linen 
Scottish  Royal  Fishery  Co.,  $ee  Fisbedet 
Sea-crab,  patent  for  raising  wrecks,  8S7 
Seals,  use  by  Gilds,  8 
Seeds,  grants  relating  to  sowing,  110 
Senegal,  179 

—  Adventurers,  122,  250 

—  company  (French),  899 
Severn,  river,  trade  on  the,  278 
Seville,  news  of  Drake's  success  reoeiTed 

from,  79 

Sewers,  pumping  power  obtained  ttom, 
333 

Shadwell  water-works,  300,  827,  889,  486 

Shakespeare  at  the  Globe  Theatre,  166 

Shale's  Insurance,  406 

Shares,  comparison  of  early  and  modem 
systems,  44,  45,  46 ;  arrangement  of,  56 ; 
increase  of  sales,  161;  early  transfers, 
442,  443,  453,  454 

*•  Shares,  the,"  creation  of,  868 

Sherry,  price  of,  227 

Shields,  salt  pans  at,  219 

Shipbuilding,  English  and  Spanish  com- 
pared, 73 

Ship-money,  97,  206,  207 

Shipping,  69;  capture  of  English  ahips, 
98,  100-2,  327;  diversion  of  carrying 
trade,  170;  losses  during  the  Spaiiish 
war,  260,  261 ;  Sir  Wm.  Petty's  estimate, 
264;  cost  of  English  and  foreign  com- 
pared, 271,  272;  growth  of  the  industry, 
283  ;  inventions  relating  to,  294 ;  revival 
in  British  shipping,  306,  361 ;  number  of 
ships  in  the  Clyde,  393;  losses  in  the 
Dutch  war,  466 

Ships,  inventions  for  preserving,  298; 
companies  for  building  or  buying,  410, 
421 

Shoreditch,  rise  in  the  poor-rate  at,  367 

Short  annuities,  395 

Shreds,  export  of,  108 

Silk,  industry  encouraged  by  James  I.,  188 ; 
company  to  encourage  the  growth  of  raw 
silk,  409 

Silver,  39,  78,  104;  found  in  Wales,  131, 
193,  225 ;   scarcity  of,  222 

Silver-thread  monopoly,  114,  176,  177,  218 

Skevins,  7 

Slave  trade,  34,  41,  249,  271;  undertaking 
at  Genoa,  121 

Smalt,  patent  for  making,  178 

Smelting,  invention  for,  298;  company  for 
smeltiuR  lead  with  pit  coal,  831 

Smith,  Adam,  250,  251 ;  value  of  his  work 


486 


Index 


on  companies,  448, 449 ;  views  on  foreign- 
trading  companies,  449-58 
Smith,    Thomas,    mining     operations     at 
Keswick,    68;    collapse    of    his    mining 
company,  89 

—  Thomas,  cabinet  maker,  his  patent,  314 

—  Sir  Thomas,  his  copper  company,  63 
Smythe,  Sir  Thomas,  honorarium  to,  163 
Soap,    416 ;     monopoly    of    manufacture, 

211-14 
Soap-boilers,    their    struggle    against    the 

Soapers  of  Westminster,   212-14;    they 

secure  the  monopoly,  218 
Soaperie  (Scotland),  282,  327,  334,  386,  356 
Soapers,  society  of  (Westminster),  212-16, 

218,  226,  236 
Soap-makers  of  London,  218 
Societasy  2,  12,  40 

—  Bardorum,  2 

—  Peruzzoruvi,  2 

—  Riezardorum,  2 

Society,  use  of  the  term    as    applied    to 

companies,  40,  151,  227 
Somersetshire,  calamine  in,  40 
Somers   Islands  company,  150,   151,   183, 

217,  225,  226,  462;  capital,   184,    185; 

dissolution  of,  311 
Southampton,     122 ;     African     expedition 

from,  18 ;   gild  merchant  of,  137 

—  Earl  of,  129 

South  Sea  company,  372,  392,  394,  412, 
415,  433,  440 ;  foundation  of,  388,  389 ; 
compared  with  French  companies,  398, 
401,  408 ;  conversion  of  the  Lottery  loan, 
407 ;  procures  the  suppression  of  rival 
companies,  411 ;  inflation  of  shares,  417, 
419;  coUapse  of  the  boom,  422-30; 
parliamentary  enquiry,  429 ;  effect  of  the 
collapse  on  other  companies,  430-6 ;  re- 
adjustment of  its  affairs,  431 ;  cause  of 
the  panic,  432 

Southwark  water  company,  333,  435 

Spain,  23,  55,  65 ;  fleet  defeated  in  the 
Mediterranean,  28;  engaged  in  the 
Netherlands,  48 ;  fleets  attacked  by 
English  privateers,  72-4  ;  trade  with,  84, 
125,  126;  precautions  against  English 
privateers,  85;  trade  with  affected  by 
privateering,  88 ;  her  enemies  subsidized 
by  Elizabeth,  89 ;  increased  taxation 
owing  to  war  with,  93 ;  effect  of  war  on 
trade,  97,  263;  exclusion  of  English 
traders  from,  97,  98,  102;  dependence 
upon  treasure  ships,  99;  import  of  wool 
from,  109 ;  national  wealth  affected  by 
war  with,  129 ;  war  with,  186,  188,  256 ; 
effect  of  war  on  commerce,  260;  un- 
certainty of  succession  affects  trade,  366 ; 
threatened  hostilities  with,  395 ;  company 
to  trade  to,  410 

Spanish  Armada,  73,  77,  85,  105;  ships 
collected,  89  ;  delay  in  saiHng,  91 ;  cost 
of  its  defeat,  92 ;  its  political  importance, 
93  ;  defeat  of,  99 

—  felts,  109 

—  treasure,    ships    driven    into    English 


ports,  49 ;  taken  in  charge  by  Elizabeth, 

50,  53,  55,  64,  66,  72 ;  amount  of  treasure 

in  the  Tower  and  its  disposal,  55,  79,  81, 

82 
Spene,  Lapo  Ughi,  2 
Spices,  trade  in,  34,  69,  142,  164 
Spilman,  John,  his  paper  grant,  116,  117 
Spinola,  Benedick,  46,  91;  loan  to  Queen 

Elizabeth,  58  ;  loan  to  the  State,  64,  65 
Stage  coach  company,  333,  335 ;  dividends 

for  charity,  344 
Stanhope,  Michael,  his  wool  license,  109, 

110 
Staple,  Merchants  of  the,  8,  17,  110,  149; 

invited  to  contribute  a  loan,  28 
Star  Chamber,  prosecution  of  soap  boilers, 

213 
Starch,  company  for  making,  416 
Starch-makers,  monopoly  of,  208,  215,  219 

—  patent,  account  of,  115,  116,  137 
Steel,  export  of,  108;    efforts  to  establish 

manufacture  in    England,    109;    patent 

for,  117;    production  in  England,   118; 

company  for  making  Venetian  steel,  333 ; 

companies  for  making,  416 
Steele,  Richard,  company  promoted  by,  418 
Steely 9,rd,  merchants  of  the,  05 
Stock,  early  use  of  the  term,  59-62,  75,  158 
Stockbrokers,  measures  for  their  control, 

360 
Stock  Exchange,  development  of  business, 

345 
Stock-jobbing,    condemnation   of,    857-61; 

legislation  against,  369 
Stockton,  268 
Stow's  Survey  quoted,  32 
Stratford-on-Avon,  gild  of  the  Holy  Cross 

at,  4 
Street-lighting  companies,  315,  327,  335, 

341,  355,  356,  371,  394 
Subsidies,  granted  by  Parliament,  53,  54, 82, 

83,  97,  129,  138 
Sucking-worm  engine,  330 
Suevia,  132 
Sugar,  Scottish  refineries  established,  282, 

327,    334,    336,  356;    company  for  pro- 
duction of,  416 
Sun  Fire  Office,   383,  390,  394,  420,  432, 

433 
Surrey,  patent  for  brewing  in,  109 
Sweden,  merchants  trading  to,  9 
Sword  Blade  company,  331,  354,  376,  398, 

459;    constitution,  339,  340;    clause  in 

charter  as  to  calls,  343 ;  charter  used  for 

another  enterprize,    368;    capital,    371; 

suspends  payment,  428 

Tallies,  payment  by,  296-8;  issue  of,  349, 

350,  352 
Tanning,  patent  for,  108,  314 
Tapestry,  revival  of  the  English  industry, 

331 

—  Makers,  354,  369 
Tar,  import  of,  416 

Tartars,  suggested  interference  with  Russia 
company's  trade  by,  69 


Index 


4ea 


Taunton,  115,  213 

Taxation,  93-5,  129,  139,  181 

Temple,  Sir  William,  letter  to  the  Merchant 

Adventurers,  307 
Temple  Brass  Mills,  419,  421,  425,  434 
Terminable    ventures,    disadvantages    of, 

462 
Thames,   river,  water  used  for  supplying 

London,    131,   333;    pumping    of,   275; 

Dutch  sail  up,  276,  279,  466 
Theft,  company  to  insure  against  thefts  of 

servants,  416 
Timber,  import  of,  19,  416 
Tin,  127  ;  export  of,  108 ;  farming  of,  216 

—  mining,  332;  farming  granted  to 
Raleigh,  110-12 

Tinned  plate,  foundation  of  the  trade,  414, 
434 

Tobacco,  Sir  Edwin  Sandys  and  the  mono- 
poly of,  121,  172;  efforts  to  exclude 
Spanish,  182 

Tobacco-monopoly,  207,  217,  399 

Tobago,  plantation  of,  332 

Tonnage  and  Poundage,  191,  193,  194,  204, 
224 

Tortuga,  Island  of,  plantation,  201 

Tower  of  London,  51,  53;  Spanish  treasure 
in,  55,  79,  80,  82 

Townshend,  H.,  117 

Tractatovy  11 

Trade,  activity  in,  29,  31,  33,  65,  84,  130, 
141,  192,  194,  199,  202,  281,  282,  298, 
300,  315,  361,  390,  393 ;  consideration  of 
independent  traders,  36,  37 ;  periods  of 
depression,  52,  54-7,  66,  97,  98,  100-2, 
105,  110,  129,  166,  224,  230,  240,  260, 
287,  288,  352,  372,  390,  391,  395,  463, 
464;  Spanish  view  of  the  depression  in 
England,  88 ;  trade  affected  by  the  Great 
Fire  and  Plague,  102,  180,  276-8,  280, 
465,  466;  Sandys'  work  on  free  trade, 
120,  121;  organization  of  foreign  trade, 
123 ;  foreign  trade  entitled  to  a  monopoly, 
124,  125;  effect  of  war  between  France 
and  Holland,  293 ;  influence  of  Protestant 
refugees  on,  313;  estimates  of,  328,  383, 
389,  390,  393 ;  table  showing  fluctuations 
of,  465-7 ;  causes  of  crises,  468-71 

Train  oil,  monopoly  for  its  manufacture, 
111;   use  in  soap  making,  212 

Tramp  steamer,  comparison  with  early 
traders,  36 

Transport,  improvements  in  England,  361 

Treasure-seeking  companies,  326,  327,  345, 
353,  354 

Treasury,  fraudulent  bankruptcy  amongst 
officials,  53 

Tremayne,  Edmund,  79,  80 

Trinity,  gild  of,  at  Worcester,  3 

—  House,  erection  of  beacons  by,  175 
Turkey,  trade  with,  71,  88 

Turks,  hostility  of,  69 
Tweed,  river,  356 
Tyne,  river,  209,  278 
Tyzack,  John,  inventor  and  promoter,  360 ; 
his  burglar  alarm,  330 


Ulster,  settlemeai  of,  141;  New  PlMitolioo 

in  150,  151 
Uuiun  or  Double  Hand  in  Hand  Fire  (MBoe. 

390 
United  Mines,  484,  485 
Usury,  6,  15;   statute  of,  54 

Vassall  (Samuel)  and  Company,  347-8 
Venetian  steel,  company  for  making,  SIS 
Venice,  13 
Villiertf,  Sir  Edward,  attiindo  to  iba  wira 

workers,  177 
Vinegar,  substitute  for,  116 
Viners,  a  firm  of  bankers,  279 
Violet,   Thomas,   on  the  wante  of  pablio 

money,  235;    attitude  to  the  export  of 

bullion,  267 
Virginia,  colony  in,  201 

—  company,  121,  161,  160,  342,  441,  462; 
admission  of  members,  158;  capital, 
156,  184,  185;  price  of  shares,  162; 
method  of  voting,  163;  dissolution  of, 
183 

Volga,  river,  68 

Voting,  methods  of,  168,  228;  righU  in 
various  companies,  270,  340 

Wages  paid  to  miners,  113;  to  weavers,  167 
Wales,  132 ;  right  of  mining  in,  104 ;  dis- 
covery of  silver  in,  131,  193,  226 
Walloons,  emigration  of,  204 
Wall-papers,  company  for  manufacture  of, 

331,  354 

Walpolo,  Sir  Kobert,  on  the  panic  of  1720, 
437;  his  conversion  schemf,  467 

Walsingham,  Sir  Francis,  79;  on  England 
in  1588,  92 

Watches,  company  for  making,  416 

Water  engine,  414,  421 

Water-supply,  progress  of,  131,  275,  294, 
300,  459,  460 ;  new  companies  established, 

332,  333  ;  companies  survive  the  crisis  uf 
1697,  355;  capital  of  companies,  371 

Wattes,  John,  alderman,  ms  privateering 
syndicate,  101 

Wax,  Eussia  company's  monopoly,  36; 
trade  in,  69 

Wealth,  national  wealth  of  England  and 
Wales  in  17th  century,  264,  265 

Weavers,  wages  of,  167;  number  of  un- 
employed, 180;  distress  of,  231;  emi- 
gration to  the  Netherlands,  232 

Welby,  Capt.,  his  gold  mining  company, 
418,  421 

Welsh  copper  company,  418,  421,  433; 
account  of,  425 ;  fluctuation  of  shares, 
346 

West  Indies,  251 ;  slave  trade  held  by 
Spain,  34;  expeditions  of  Sir  John 
Hawkins  to,  66;  Spain's  revenue  from, 
99 ;  colonies  in,  201 ;  conflict  with  Spain 
in  the,  256 

Westley's  Actions,  420 

Westminster,  109 

—  Soapers,  see  under  Soapers 
Weymouth  ships  captured  by  Spain,  260 


488 


Index 


Whale-oil  used  in  soap  manufacture,  211 

Whaling,  127,  164-6,  179,  180,  203,  313, 
332,  420;  undertaken  by  the  Russia 
company,  103,  130,  145;  competition  of 
the  Dutch,  141 ;  Scottish  companies,  282, 
334,  454 ;  attempt  to  revive  the  industry, 
302 

Wheat,  56,  64,  89,  100,  240,  263,  264 

Whigs,  defeat  of,  385,  386 

Whips,  company  for  making  whalebone 
whips,  333,  335 

White  lead,  company  for  making,  416 

—  paper  company,  327,  330,  335,  338,  340, 
345,  346,  354,  359;  Scottish  company,  333 

—  Sea,  69 

Widows  and  orphans,  society  for  assurance 

of,  364,  369 
Wig-making,  company  to  trade  in  hair  for, 

416 
William  III.,  314,  321 
Wiltshire,  trade  distress  in,  97 
Wine-monopoly,  137,  219,  221,  226,  227 
Winter,  Su*  William,  27 
Winterton  Ness,  lighthouse  at,  175 
Wire-workers,  brutality  to,  177 
Wire-works,   farming   of,    39,    40,   44,    58, 

66,  104 
Woad,  monopoly  for  sowing,  110;  company 

for  growing,  415 
Wood,  import  of,  19,  416 
Wood,  George,  his  linen -printing  monopoly, 

176 

—  William,  inventor  of  a  smelting  process, 
435 

Wood-sawing,  patent  for,  314 ;  company  for, 

333 
Wool,   import  and    export    of,    109,   110; 


farmers  dependent  on  sale  of,  170;  price 
of,  222;  companies  for  production  and 
sale  of,  415 

Wool-cards,  manufacture  of,  39,  40,  282, 
327,  334;   importation  forbidden,  104 

Woollen  industry,  40,  293;  value  of  ship- 
ments, 22 ;  injured  by  the  war  in 
Flanders,  51,  52,  65 ;  fluctuations  in, 
100,  102,  180,  186,  194,  199,  231,  232, 
309;  effect  of  soap  monopoly  on,  216; 
influence  of  the  Union  on  the  Scottish 
industry,  393 

Worcester,  gild  of  the  Trinity  at,  3 

Wrecks,  companies  for  raising  and  recovery 
of  treasure  from,  298,  326,  327 

Wroth,  Sir  Eobert,  his  list  of  monopolies, 
108 

Wyamba,  struggle  of  rival  companies  at, 
249 

Yarmouth,  132,  193,  268;  gild  admini- 
stration at,  7;   salt  works  at,  209,  210 

Yarranton,  Andrew,  his  banking  scheme, 
293 

York,  122,  268;  gild  of  Corpus  Christi  at, 
3,  4 

York  Buildings  company,  327,  333,  406, 
418,  419,  421,  427,  429,  430,  433; 
capital,  335;  constitution,  339;  account 
of,  425,  426 

Yorkshire,  cloth-trade   depression  in,  261 

Young  Scholars,  gild  of,  4 

Zante,  158 

Zealand,  merchants  of,  9 

Zinc,  search  for  in  England,  39 

—  ore,  31,  see  also  Calamine 


oambeidgb:  pbinted  by  john  clay,  m.a.  at  thb  univbrsitt  pbess. 


o 


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