330 COLONIES: GOVERNMENT OF, BY COMPANIES And nation who obtained a charter (dated in 1564) for foreign trade. The Muscovy Company was probably next, and its charter is quoted as a precedent for others, e.g. for the Company of Cathay, which received its charter in 1576. The Turkey Company was formed about the same time: the Company of Adventurers for Guinea and Benin, followed ten years later. The East India Company of London was incorporated in 1600, and thus preceded by three years the great Dutch Universal East India Company, which was destined to drive it into difficulties out of which arose the only company (commonly known as the British East India Company), which became a mighty territorial sovereign. The governor and company of Merchants of London for the discovery of the North-West Passage were incorporated at this period. the first half of the seventeenth century was rich in companies, the majority turning their eyes towards America. The Virginia Company, the Bermuda Company, the Newfoundland Company, the first African Company (which was reconstituted four times), the Dutch West India Company, an Amazon Company, a Guiana Company which never did anything, the New England Company, the Providence Company, the Canada Company, the Massachusetts Bay Company, the Nova Scotia Company, rapidly succeeded one another. There were also the French East and West India Companies the latter known as the Company of the Islands of America, and Canada Company formed during the same period; an English West India Company was projected but never became a reality. Most of the charters granted after 1650 are reconstitutions of old companies on a new basis, as in the case of the New Royal African Company. Charles II.'s reign teems with such new grants. The Hudson's Bay Company's first charter was granted in 1670. An alternative method of encouraging colonisation, which must be noticed here, was the grant to a body of lords proprietors, or sometimes to a single lord. All the British Caribee Islands were so granted in 1627; Maryland in 1669; the Bahamas and Carolina in 1670. In the case of these grants there seems to have been a clear understanding that the sovereignty rested with the crown; whereas the companies merely reserved a fixed nominal tribute to the sovereign in case he should come into their dominions; and when, as in the case of Virginia, the Bermudas, or more recently India, the Crown was required to intervene, a suspension or complete alteration of the charter was necessary. It is well to mention the notorious South Sea Company, early in the 18th century. And the list of older companies is closed towards the end of that century by a new departure in economical history, a politico- philanthropic settlement, namely the Sierra Leone Company. The old charters and grants which conceded their rights to the above-named companies or to lords proprietors were very much on the same lines and often almost in identical terms. Apart from arrays of names and verbiage, they were simpler documents than any recent charters. The monopoly, their raison d'être, the "sole privilege to pass and trade" to certain places is the leading provision in all. The necessary powers for securing the enjoyment of that privilege of trade and of the assigned territory are given, and this carried a right to exact customs duties from traders not members of the company. A governor and court of directors were usually instituted, and empowered to make laws, levy fines, and imprison. In some cases full jurisdiction of life and death is conferred, together with the power to declare martial law; in others power to make peace or war with heathen natives is also delegated; in one case (the Amazon Company) we find mention of "all customary privileges for sending ships, men, ammunition, armour, and other things." Provisions regulating the admission of members are usual, and the term of duration is commonly limited to a moderate period, though in the case of the Royal African Company it was for 1000 years. Briefly, the old charters regarded two things: 1st, the monopoly of trade; 2d, security against intruders or foreign foes. They were somewhat vague in language, and left each company to work out its own development according to circumstances. No kind of supervision by the supreme government was suggested; but in some cases a right of interference was preserved by the curious legal fiction of making the area of the grant a part of an English borough. It was a part of the policy of the companies to induce settlers to go out to their lands, and to keep these settlers in a kind of tutelage; if this was necessary to their first success, it was also essentially the cause of their troubles. The government of a few individuals who while attracting free settlers directed everything avowedly for their own profit, and denied the right of those settlers to enjoy the fruit of their own industry, was clearly indefensible. The operations of all the companies which made something of a permanent start, such as those of Virginia and Bermuda, were very early disturbed by complaints of their monopoly. privation of profits bred discontent; discontent proved difficult to handle. The domain of the company often became a scene of confusion; and discredit was cast not only on its monopoly, but upon its power to govern. It was this condition of affairs which Adam Smith reprobated; but the real root of the evil here was the exclusive privilege operating injuriously to others of the same race and ambition. De Government in the proper sense did not greatly enter into the schemes of any companies. COLONIES: GOVERNMENT OF, BY COMPANIES In most cases the disputes just referred to began so early in their history, and became so serious, that all future responsibility for the government really rested with the crown, which gradually absorbed the area of its own grant. Such was the case of the Virginia Company in 1624, some eight years after it was incorporated; the question of reform was mooted by the proposal to renew the charter for trade only, "but not for the government of the country, of which the king will himself take care.' In 1631 this plan took final shape, the protests of the "adventurers" delayed it, but they could not stifle the voices of dissatisfied Englishmen ; the administration of the company's territory fell in to the crown, and the company paid the charges. In one notable instance, under a special set of circumstances, a government of remarkable power and energy grew up almost against the will of the administrators. The British East India Company started with no ambitious scheme of government; they were content to have established their factories on the coasts of the Carnatic and Bengal, provided they could oust their foreign European rivals from the trade. The intrigues of the French forced them to fight, first for their existence, afterwards for quiet possession; the flame of war once lighted was not easily quenched; the brand had fallen amongst a restless and inflammable people; the small band of the company's servants had to choose between conquest and death. The man for the hour was at hand; success followed Clive's arms, and a British company became the lords of a vast empire. In this case the climate and distance had confined the numbers of adventurers of British race to but few besides the company's own servants or licensees; the directors were hardly hampered by internal discontent, and the objects of their earlier administration were a people who expected to be ruled. 331 interests of all classes in this country had become bound up with the possession of India, so that the sense of national responsibility was stronger than before. What the East India Company did in the old world the Hudson's Bay Company partly accomplished under quieter conditions in North America, laying the foundations of two great provinces of the Canadian dominion. The same thing might have been done by many of the old companies had conditions been equal. Indeed, as Mr. Merivale suggests of the Dutch India companies, the government of a company in those days was likely to be more generally beneficial than that of a nation. There was greater regularity and economy of administration; a sharp check was kept over employés ; if the court of directors itself wished to tyrannise or squeeze, it at least kept its subordinates in order. It is true that Adam Smith draws an exactly opposite picture; but it will be admitted by all who read history fairly that this great man was blinded by his hatred of monopolies of all kinds, and failed to give credit even where credit was due. The weak point of a company's government was apt to be in its external relations. On the one hand was the fear of embroiling itself and its nation; on the other the reluctance to throw away money. This is excellently illustrated by the later history of the Dutch West India Company in Demerara and Essequibo. The Spaniards were constantly encroaching without warrant on the limits of the Dutch colony; the Dutch governors were eager to drive them off once for all; but the company, partly actuated by its anxiety not to cause a national breach, partly avowing the need of economy, declined to take a step which might have saved endless trouble afterwards. The fact is that to govern with capacity a company must first be rich. It is chiefly this which Mr. Merivale has in mind when he states that the prosperity of companies declined as soon as they substituted empire for trade. Sovereignty brought large establishments and lavish expenditure. Because the means failed it is not a fair inference that the administration of trading companies is inherently rotten. The monopoly of the old companies produced factitious prosperity; this led them on to extravagance; and in but few cases could they withstand the simultaneous undermining of their monopoly and the unexpected strain of their own engagements. It would have been a strain on any nation to support the continued wars which for nearly half a century taxed the resources of the great East India Company; it was natural that support from the government should be asked for, and that its enjoyment should be accompanied with some measure of control. Nevertheless the government of India, even after the institution of the Board of Control in 1784, was in reality the government of the company; and that it was enlightened and careful, that it gradually handled with success the most difficult problems which confronted it, that it swept away great national evils such as childmurder and thuggism; in short, that it was conducted by a peculiarly able set of English-up with philanthropic interference, which is men on the lines most approved at home, will hardly be denied. The rule of the company came abruptly to an end in 1858, not so much because it was proved a failure, as because a greater crisis than ever had arisen, and the The Sierra Leone Company at the beginning of this century is hardly a fair example of the trading company. Its operations were mixed proverbially unbusiness-like. And after all, its government was hardly less successful than that of the West African colonies under the British crown. The Sierra Leone Company was the last of the 332 COLONIES: GOVERNMENT OF, BY COMPANIES older attempts to make a trading company selfadministering. The charter of the Falkland Islands Company was purely a trading charter. A colonial government had been established before Mr. Lafone obtained his grant. No positive monopoly was granted by the charter; the company was empowered to carry on operations for taming wild cattle and breeding stock, for establishing whale and seal fisheries, to enter into any sort of trade with the islands generally, and to contract for the performance of any services either to the government or individuals. These objects were not such as to demand a charter, the only practical aim of which appears to have been to give prestige; the effect, however, has been to create a monopoly in that distant colony which is bitterly assailed by the few independent islanders. It would not be right to omit all mention of the Sombrero Phosphates Company, holding the island of Sombrero in the West Indies under a lease which makes the lessees responsible for the maintenance of order amongst their employés and any other inhabitants, and so far creates a small dependent government. But broadly speaking, except that the East India Company lived on, ever approximating to state government, it may be said that colonisation by chartered companies dropped into abeyance in the 18th century, and that after a lapse of nearly a hundred years the system suddenly burst again into life in the charter of the British North Borneo Company. This charter was the first, and the example, of the modern grants. It was the result of a number of concessions in the same district coming into the hands of one man and forming a responsibility which he could not bear alone. The revival of the idea of a chartered company was not unnatural, in view of the extent and delicacy of the interests concerned. But the precise stipulations of the new charter gave it a stamp widely different from that of the old grants. The German New Guinea Company was the next in the field. And the Royal Niger Company, the Imperial British East Africa Company, and the British South Africa Company, all received charters on the new British model within the space of three and a half years; all three absorbing individual and competing interests which the government of Great Britain was disinclined to support. The German East African Company followed in the steps of the British Company of similar title. Modern philanthropy and respect of human life, the natural timidity of governments, and the special caution which characterises that of Great Britain, have laid an indelible mark on the new British charters. There is, of course, no exclusive enjoyment of trade; on the contrary, monopolies are carefully prohibited; but there is the exclusive right to grant concessions within the territory assigned, and to deal with it for the company's advantage; power is also taken for the establishment of any kind of business. At every point the control of the crown, through one of the principal secretaries of state, is jealously reserved; without reference to him no transfer of territory can be made, no dealings with native or foreign powers are final. The discouragement of all slavery and of the liquor traffic is specially enjoined; interference with native religions is forbidden; consideration of the customs of natives is required in the administration of justice. As already suggested, it is in these precautions that the real difference between the older and modern grants lies. It is nothing more than the difference of the spirit of their age. Both contemplate the necessity of administration, and make some sort of provision for it. But in the older cases a free hand is left to the directors; in the modern every precaution is taken against collision with foreign states or oppression of native races. There is no foundation for any attempt to differentiate ancient and modern chartered companies by the extent of their administrative purpose. This has always been the creature of circumstance, and it may be that when the history of existing companies some day comes to be written, one or more may be found to have rivalled the success of the British East India Company. A real difference in regard to method of government is found between the British and Dutch companies on one side, and the French and German companies on the other. The distinction applies alike to old and modern charters. The Britons and the Dutch are above all things traders, and traders who rely on their own resources; their charters are for trade, and the companies are left to stand or fall by themselves; intervention of the national government closes the company's rule. The French and Germans carry with them their fatherland; the imperial power must be close behind them; the sovereignty of their companies is the delegated sovereignty of the supreme government; the administration of justice and certain executive functions rest directly with the government; and all foreign relations are controlled by it. The German New Guinea Company and the German East African Company are veiled forms of the German government, hence the warships and bombardments which mark their operations. The obvious result is that the progress of the aided companies is at first more obtrusive; avowed dominion by the national government must come more rapidly; and, in the case of nations like the Germans and French whose policy is exclusive, this involves restrictions affecting the world. On the other hand the real grip of a district, which is the foundation of good administration, may never come by this COLONIES: SYSTEMS OF COLONISATION method. By the British plan the ground is carefully prepared for empire first; if the project is successful, there is little question that colonial government will take firm root, when its time comes at last. If we have dealt chiefly with British companies it is that in British hands the chartered company has been most widely and successfully used. In its present form the British chartered company is shorn of every objectionable feature. It may be a great pioneer of trade and confer lasting blessing on unopened districts. It may keep open tracts of land which would otherwise be closed by a selfish policy. But the government which encourages fresh companies must be prepared eventually to administer a new territory; and the real question of policy is brought down to this-whether, while there is yet room for expansion, a living empire must be a growing empire. [The locus classicus on the subject of government by companies is Adam Smith's excellent chapter bk. iv. ch. vii. and esp. pt. ii., where his distinction between "regulated" and "joint-stock" companies is worth noting. See also Sir G. C. Lewis's essay on The Government of Dependencies, circa p. 143.-Merivale's Colonisation and Colonies, pp. 50-60 (ed. 1861).-The Calendars of State Papers (Colonial) (1574-1674, 3 vols.) are a mine of history, and Mr. Sainsbury's prefaces are useful. -Sir W. Kaye's History of the East India Company is one amongst many works on that subject. sketch of the Dutch West India Company is found in Motley's United Netherlands. References to other special companies are scattered; but for the Hudson's Bay Company consult Parl. Paper 547 of 1842; and for recent charters the London Gazette of 8th November 1881 (British N. Borneo), 13th July 1886 (Royal Niger), 7th September 1888 (Imp. Brit. E. African Co.), 20th December 1889 (Brit. S. African Co.)] A SYSTEMS OF COLONISATION. In its economic or industrial aspect, colonisation must be deemed the outcome of modern necessities and the offspring of modern instincts. The settlement of colonies took place, indeed, in early times, but it proceeded usually in ways and from causes other than those recognised by modern systems. With the Phoenicians, colonies were little else than trading stations; to the Greeks they represented more, being founded oftentimes in response to political exigencies; the Roman colonies, united to the mother state by a common bond of citizenship, while at times little more than military settlements, were at times again a means of relieving distress or discontent. Nor was there any sign of conscious colonisation even at the close of the Middle Ages, when the discovery of America threw open a new world to Europe. About that time two chief motives led to settlements beyond the borders of the ment. 333 country or city whose citizens formed the new inhabitants. 1. The desire to form trading stations, as, for instance, in the cases of Venice and Genoa in the Mediterranean, of Spain and Portugal in the new world, and afterwards in the case of companies, such as the East India Companies. 2. The desire for adventure resulting at times in settlement. During the 16th and 17th centuries, the first of these objects met with encouragement from the new school of statesmen as Lord Burghley and Oliver Cromwell in England, Richelieu and Colbert in France. In the case of the former country, too, political conditions and love of adventure combined to add the notion of settlement to that of trade. There was, however, no conscious regulation of the new settlements with a view to their rapid industrial developColonisation, in its true sense, was unknown, whether the system adopted was proprietary or more immediately dependent on the crown. The growth of a system of colonisation may be best traced in the history of the British colonies. Here, indeed, relations of the colony to the mother country were fully recognised, especially by such a measure as the NAVIGATION ACT 1652 (q.v.) The system thus inaugurated was that of political freedom, but commercial restraint for the advantage of the mother country. An attempt to interfere with the former led to the loss of the American colonies, and in consequence to a change of policy. The colonies were governed more from home, but every encouragement was offered to their commercial development, as the effect of the trade restrictions (differential) imposed on both sides was to confine colonial products to the most important market in the world, though this might have the effect of limiting the sources from which England might derive her supplies of raw material. Thus matters stood at the beginning of the 19th century. In reality there were four points on which a decision had to be arrived at:-1. The position of the colony as an outlet for the rapidly increasing home population. 2. The settlement of this population so as to promote best the development of the colony. 3. In consequence, the political relations of the two countries. 4. The commercial relations of the two countries. The first two of these are those which relate most closely to the subject of colonisation, the others being in part their consequence, and from their nature involving a consideration of general administrative and commercial policy. The colonies were supplied with immigrants from home, but these being in general either convicts or paupers (cp. Wakefield, Art of Colonisation, Letter xxi.) were of doubtful advantage. In the next place, the new population, enticed by the offer of free grants of land, spread themselves over a larger surface than they had capital to cultivate. In 1829 the 334 COLONIES: SYSTEMS OF COLONISATION-COLQUHOUN system of free grants was opposed by Edward Gibbon Wakefield (Letter from Sydney, by R. Gouger) and in 1830 the Colonisation Society was formed. Its members attacked the system of transportation, and their accusations were confirmed by the report of the select committee in 1838, soon followed by the cessation of transportation. It Meantime the efforts of Wakefield were concentrated on the second of the two questions. Labour was needed on the land. It must be restrained from undue diffusion. When the need of labour had been felt at a much earlier date in the American colonies it had been met, in the southern states at least, by the employment of slaves. This remedy was out of the question. Now Wakefield proposed to cope with the matter by a reconstruction of the system according to which the public lands were disposed of. Free grants were to be abolished and the land to be sold at a price determined according to the circumstances of the case. was further proposed to apply the proceeds to the promotion of immigration, and also to the improvement of the means of communication (ep. Reign of Victoria, vol. ii. pp. 405-408). The important principle was that of the sale of land at a sufficient price. So far as the substitution of "sale" for "free grant" was concerned, it was adopted by the instruction of 1831, with reference to Australia (Grey, Colonial Policy, letter vii.), advocated in the Durham report and given full effect to by the Australian Land Act of 1842. But when it was attempted to put the plan more fully into practice, a difficulty occurred in the interpretation of the term "sufficient." This was shown in the history of the efforts of the South Australian Company (cp. Wakefield, Art of Colonisation, letter ix. and also despatch by Sir George Gipps, Parl. Papers, 1843, No. 323). The efforts of Wakefield were in fact directed to the discovery of means whereby capital and labour might be introduced into the colony in such a manner and in such proportions as to lead to its more stable development. For the fullest accounts of his system, see The Art of Colonisation, by E. G. Wakefield; Lectures on Colonisation, by Herman Merivale; Colonisation avec les peuples modernes, par P. Leroy Beaulieu. The two latter works are extremely critical in nature, though perhaps the most searching criticism of all is to be found in the above-quoted despatch from Sir George Gipps. It remains to consider the effect of colonisation on the home country. Its condition may be affected directly or indirectly-directly by the loss it sustains of population and capital, indirectly by the consequences involved in the development of a colonial trade. The question of emigration has attracted and continues still to attract a considerable amount of attention. While there must be considerable difference of opinion as to the benefit it confers, the three following propositions may be regarded as established. 1. It cannot be a permanent safeguard against over-population. 2. Unless concurrent with an increase of prudence in marriage and a rise in the standard of comfort, it can ameliorate but little the condition of the working classes from whose number the emigrants are theoretically drawn. 3. It is highly beneficial in relieving the congestion which from many incidental causes has taken place in particular districts. The exportation of capital, implying as it does the employment of such capital in circumstances more favourable than would have been the case at home, prevents the rate of interest, from falling. (For this and for its other effects see Merivale, Colonisation, Lecture vi.) The development of the colonial trade which involves the same better distribution of energy, has in consequence a beneficial effect on the condition of the people in the home country (see COLONIAL POLICY). [Works cited in text, and more particularly, H. Merivale, Lectures on Colonisation.-P. Leroy Beaulieu, Colonisation chez les peuples modernes ; Roscher, Kolonien, Kolonialpolitik und Auswanderung.-Colonel Torrens, Colonisation of South Australia.] E. C. K. G. COLQUHOUN, PATRICK (born 1745, died 1820), lord provost of Glasgow, police magistrate in London, in the course of an active life contributed to social science some thirty publications; among which may be distinguished: (1) Treatise on the Police of the Metropolis, 1795; (2) Treatise on Indigence, 1806; (3) Treatise on the Population, Wealth, Power, and Resources of the British Empire 1814. Mr. Giffen, in his Growth of Capital (p. 101), utilises Colquhoun's estimates of national wealth; and, while admitting that "many of his details are fanciful," considers that he was 66 most unjustly decried by M'Culloch" (Ibid. p. 50). Colquhoun himself confesses that his statistics are not accurate : "all that is attainable is approximating facts," he pleads. His general remarks are often sound; for instance, advocating savings banks, "The great desideratum in political economy is to lead the poor by gentle and practicable means into the way of bettering themselves." He has just views on the education of the poor (Indigence, ch. v.), and on the growth of the population (Wealth, Power, and Resources, ch. i.) On currency he is less happy (Letters to Dr. Boase, Brit. Mus. Addit. MS., 29,281). |