' regulated companies.' The members of such a company were subject to certain common regulations, and were entitled to certain common privileges, but each of them traded on his own separate capital, and there was no joint stock. The trading privileges of the East India Company were reserved to the members, their sons at twenty-one, and their apprentices, factors, and servants. The normal mode of admission to full membership of the Company was through the avenue of apprenticeship or service. But there was power to admit ' others,' doubtless on the terms of their offering suitable contributions to the adventure of the Company.

When an association of this kind had obtained valuable concessions and privileges, its natural tendency was to become an extremely close corporation, and to shut its doors to outsiders except on prohibitory terms, and the efforts of those who suffered from the monopoly thus created were directed towards reduction of these terms. Thus by a statute of 1497 the powerful Merchant Adventurers trading with Flanders had been required to reduce to 10 marks (£6 138. 4d.) the fine payable on admission to their body. By similar enactments in the seventeenth century the Russia Company and Levant Company were compelled to grant privileges of membership on such easy terms as to render them of merely nominal value, and thus to entitle the companies to what, according to Adam Smith, is the highest eulogium which can be justly bestowed on a regulated company, that of being merely useless. The charter of Elizabeth contains nothing specific as to the terms on which admission to the privileges of the Company might be obtained by an outsider. It had not yet been ascertained how far those privileges would be valuable to members of the Company, and oppressive to its rivals.

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The chief privilege of the Company was the exclusive right Privileges of trading between geographical limits which were practically pany. the Cape of Good Hope on the one hand and the Straits of Magellan on the other, and which afterwards became widely famous as the limits of the Company's charter. The only

restriction imposed on the right of trading within this vast and indefinite area was that the Company were not to undertake or address any trade into any country, port, island, haven, city, creek, towns, or places being already in the lawful and actual possession of any such Christian Prince or State as at this present or at any time hereafter shall be in league or amity with us, our heirs and successors, and which doth not or will not accept of such trade.' Subject to this restriction the trade of the older continent was allotted to the adventurers with the same lavish grandeur as that with which the Pope had granted rights of sovereignty over the new continent, and with which in our own day the continent of Africa has been parcelled out among rival chartered companies. The limits of the English charter of 1600 were identical with the limits of the Dutch charter of 1602, and the two charters may be regarded as the Protestant counterclaims to the monopoly claimed under Pope Alexander's Bull. During the first few years of their existence the two Companies carried on their undertakings in co-operation with each other, but they soon began to quarrel, and in 1611 we find the London merchants praying for protection against their Dutch competitors. Projects for amalgamation of the English and Dutch Companies fell through, and during the greater part of the seventeenth century Holland was the most formidable rival and opponent of English trade in the East.

By virtue of our Prerogative Royal, which we will not in that behalf have argued or brought in question,' the Queen straitly charges and commands her subjects not to infringe the privileges granted by her to the Company, upon pain of forfeitures and other penalties. Nearly a century was to elapse before the Parliament of 1693 formally declared the exercise of this unquestionable prerogative to be illegal as transcending the powers of the Crown. But neither at the beginning nor at the end of the seventeenth century was any doubt entertained as to the expediency, as apart from the constitutionality, of granting a trade monopoly of this descrip

tion. Such monopolies were in strict accordance with the ideas, and were justified by the circumstances, of the time.

In the seventeenth century the conditions under which private trade is now carried on with the East did not exist. Beyond certain narrow territorial limits international law did not run, diplomatic relations had no existence 1. Outside those limits force alone ruled, and trade competition meant war. At the present day territories are annexed for the sake of developing and securing trade. The annexations of the sixteenth century were annexations, not of territory, but of trading grounds. The pressure was the same, the objects were the same, the methods were different. For the successful prosecution of Eastern trade it was necessary to have an association powerful enough to negotiate with native princes, to enforce discipline among its agents and servants, and to drive off European rivals with the strong hand. No Western State could afford to support more than one such association without dissipating its strength. The independent trader, or interloper, was, through his weakness, at the mercy of the foreigner, and, through his irresponsibility, a source of danger to his countrymen. It was because the trade monopoly of the East India Company had outlived the conditions out of which it arose that its extinction in the nineteenth century. was greeted with general and just approval.

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powers of

The powers of making laws and ordinances granted by the Legislacharter of Elizabeth did not differ in their general provisions from, and were evidently modelled on, the powers of making Company. by-laws commonly exercised by ordinary municipal and commercial corporations. No copies of any laws made under the early charters are known to exist. They would doubtless have consisted mainly of regulations for the guidance of the Company's factors and apprentices. Unless supplemented by judicial and punitive powers, the early legislative powers of

The state of things in European waters was not much better. See the description of piracy in the Mediterranean in the seventeenth century in Masson, Histoire du Commerce Français dans le Levant, chap. ii.

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The Massachusetts Company may be taken as the type of Other English the bodies of adventurers who during the early part of the trading seventeenth century were trading and settling in the newly panies. discovered continent of the West. It may be worth while to glance at the associations of English merchants, who, at the date of the foundation of the East India Company, were trading towards the East. Of these the most important were the Russia or Muscovy Company and the Levant or Turkey Company 1.

The foundations of the Russia Company 2 were laid by the Russia Company. discoveries of Richard Chancellor. In 1553-54 they were incorporated by charter of Philip and Mary under the name of the Merchants and Adventurers for the discovery of lands not before known or frequented by any English.' They were to be governed by a court consisting of one governor (the first to be Sebastian Cabot) and twenty-eight of the most sad, discreet, and learned of the fellowships, of whom four were to be called consuls, and the others assistants. They were to have liberty to resort, not only to all parts of the dominions of our cousin and brother, Lord John Bazilowitz, Emperor of all Russia, but to all other parts not known to our subjects.' And none but such as were free of or licensed by the Company were to frequent the parts aforesaid, under forfeiture of ships and merchandise-a comprehensive monopoly.

In 1566 the adventurers were again incorporated, not by charter, but by Act of Parliament, under the name of the fellowship of English Merchants for discovery of new trade", with a monopoly of trade in Russia, and in the countries

1A good account of the great trading companies is given by Bonnassieux, Les Grandes Compagnies de Commerce (Paris, 1892). See also Causton and Keene, The Early Chartered Companies (1896), the article on 'Colonies, Government of, by Companies' in the Dictionary of Political Economy, the article on 'Chartered Companies' in the Encyclopaedia of the Laws of England, and Egerton, Origin and Growth of English Colonies (1903).

As to the Russia Company, see the Introduction to Early Voyages to Russia in the publications of the Hakluyt Society.

This is said to have been the first English statute which established an exclusive mercantile corporation.