Virginia Company

The Virginia Company was a colonial and trading operation formed in London in 1606 with the intention of establishing an English settlement in Virginia. It was founded by a consortium of venture capitalists who were convinced that Virginia was a lucrative territory, promising vast monetary returns. The English king, James I, duly granted the company a royal charter to colonize and cultivate 100 square miles of land. The company settled and populated an area of the Chesapeake Bay, but the first waves of colonists fell prey to sickness and starvation. The company was held responsible, and ultimately went bankrupt in 1624. It retains a unique place in history, however, in organizing the first passage of permanent colonists to Virginia, and establishing the Jamestown settlement in 1607—important as the first permanent British settlement in America, and significant in being founded not as a crown possession, but by a financial organization.

Brief history

Earlier British attempts at settlement in the Americas, such as the Roanoke Colony (1585–1590), had failed, but the founders of the Virginia Company believed they possessed the geographical knowledge and financial acumen needed for success. Colonization via private investment was attractive to King James since it posed a smaller financial risk to the crown than state funding; responsibility for success or failure would be on the shareholders. Consequently, the Virginia Company of London (or simply London Company) was formed in 1606, and renamed the Virginia Company in 1609, with the goal of establishing a viable Virginian colony. A parallel operation launched in 1606 as the Virginia Company of Plymouth (later the Plymouth Company), to settle land further north in New England, did not meet the terms of its charter and soon collapsed.

The Virginia Company aggressively marketed opportunities in the New World to potential settlers back in England. In April 1607, three vessels arrived in the Chesapeake Bay, finally settling at a spot first named James Fort, then Jamestown. The company was successful in raising capital and financing the early settlement, but much less so at actually managing the colony and its inhabitants. Multiple supply missions, conveying colonists, materials, and resources, were sent in the years following 1607. The third mission, in 1609, encountered a hurricane and its vessels were separated, one of them foundering on an unpopulated archipelago. These islands, later known as Bermuda, were an unintended discovery of the company, which managed them until 1614.

The Jamestown settlers faced huge problems. Disease and starvation took a massive toll. On occasion, notably during the "Starving Time" of 1609–1610, the colony came close to dying out completely. Relations with the indigenous Powhatan people, based on bartering goods for crops and agricultural know-how, deteriorated so that eventually disagreements about terms descended into open hostility on both sides. This situation culminated in an attack led by Powhatan Chief Opechancanough in 1622. Sometimes called the Jamestown Massacre, the attack left three-fourths of the colonists dead and horrified the company’s London managers. An official inquiry held the Virginia Company to account, ruled it non-viable, and it was declared bankrupt in 1624.

Overview

King James I (reigned 1603–1625) wished to expand English trade into the New World. An innovative financial entity—the joint-stock company—was the preferred method for this expansion. Joint-stock companies gathered investors to acquire stock in foreign trading ventures, dividing profits according to the number of shares held. Businesses such as the East India Company and Muscovy (Russia) Company had already proved successful. A group of businessmen, notably Sir Thomas Smith, and Richard Hakluyt, a geographer and colonial entrepreneur, now looked to America.

By promising minerals, crops, and land, the Virginia Company strove to recruit settlers to colonize Virginia. They were guaranteed stocks, and a free passage, in return for working for the company for seven years. On arrival, the newcomers found life harsh. They endured bad harvests, leading notoriously to the "Starving Time" during the winter of 1609–1610, and were soon no longer able to rely on trade with the native Powhatan Confederacy. Under Jamestown Council President John Smith, the colonists had enjoyed good initial relations with the Powhatan. These soured, however, when some colonists violated exchange agreements and sent raiding parties into Powhatan land. Only the continuing dispatch of supply missions enabled the colony to struggle on. In total, the company sent more than one hundred shiploads of settlers (more than 7,000 people) in its eighteen years of existence. The mortality rate was appallingly high: only 20 percent of settlers, on average, survived the first few months. The company did not deny these early setbacks and hardships, but diminished their importance and continued to advertise Virginia as a Garden of Eden, abounding in necessities and luxury commodities alike. The company even urged English clergy to recommend investment in it to their parishioners as a godly and patriotic act.

Crop yields were low, with the exception of tobacco, which was grown in huge quantities. The company became concerned with over-reliance on tobacco, believing it harmful to the colonists’ health, and to the future of the colony itself, given the lack of interest in growing other cash crops. The company appealed to successive governors of the colony, but found it could not exert sufficient influence from London on the working practices of the settlers thousands of miles away. Nonetheless, ironically, after the company had been dissolved, it was the tobacco crop that secured the financial well-being of the settlement.

The 1622 Opechancanough attack was a blow from which the Virginia Company could not recover. A parliamentary commission was convened to review its performance, and the report was a devastating indictment: under the company’s management, the colony had cost thousands of British lives and become a financial black hole. More than £200,000 (equivalent to tens of millions of dollars in the 21st century) had been sunk into the venture, never to be recovered. King James revoked the company’s charter in May 1624. It went bankrupt and the administration of the colony passed into royal control, although Virginia retained the right to self-rule under its governor and council, setting a pattern of autonomous governance that became a model in colonial North America.

Bibliography

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Billings, Warren M., ed. The Old Dominion in the Seventeenth Century: A Documentary History of Virginia, 1606–1700. New ed., Chapel Hill: U of North Carolina P, 2007. Print.

Craven, Wesley F. The Virginia Company of London, 1606–1624. Charlottesville: UP of Virginia, 1957. Print.

Fleet, Beverly. The Virginia Company of London, 1607–1624. Greenville: Southern Historical P, 1983. Print.

Grizzard, Frank E., and D. Boyd Smith. Jamestown Colony: A Political, Social, and Cultural History. Santa Barbara: ABC-CLIO, 2007. Print.

Kupperman, Karen O. The Jamestown Project. New ed., Cambridge: Harvard UP, 2008. Print.

Lamont, Edward M. The Forty Years That Created America: The Story of the Explorers, Promoters, Investors, and Settlers Who Founded the First English Colonies. Lanham: Rowman, 2014. Print.

Roper, Louis H. The English Empire in America, 1602–1658. New York: Routledge, 2015. Print.

Russo, Jean B., and J. Elliott Russo. Planting an Empire: The Early Chesapeake in British North America. Baltimore: The Johns Hopkins UP, 2012. Print.

Woolley, Benjamin. Savage Kingdom: The True Story of Jamestown, 1607, and the Settlement of America. New York: Harper Perennial, 2008. Print.