You hear it all the time, “Corporate America is…”. Typically, the phrase “Corporate America” elicits a visceral response, it draws up imagery of fat cats scheming on how to turn profits and steal children’s souls. While it is possible that this is accurate in some contexts, it is lost on many Americans that this country was actually started by corporations. Some of you will read that sentence and remark, “that’s false, we learned in school that America was founded by colonists seeking religious freedom,” but that is only half true. There were three groups of people who created this country: First, there were colonial day versions of corporations, second there were the immigrants seeking freedom from oppression, and finally, there were feudal-like grants of land from the Crown to be ran similarly to the feudal era of European nations. I will address each of these in separate sections; today, we discuss the first group: corporations.
In the 16th and 17th century, England was on a massive expansion kick, and the method of this expansion was through commercial endeavors. One of the most successful methods of this commercial expansion was the “joint-stock company”, where a group of merchants would pool their incomes together to create an economy of scale, and a virtual monopoly over any given territory. There is speculation that this was actually borrowed from 15th century Italy (they had a similar business form). An alternative theory is that these “joint-stock companies” evolved directly from 12th century England, and the Merchant Guilds of that era. These groups would approach the Crown and request a charter incorporating them; which when granted provided benefits and restrictions. The charter also set forth the laws of the “corporation” (modern day bylaws). Further, membership in these corporations was secured through stock ownership (they had pooled some of their money into the coffers of the corporation.
Virginia was the earliest success of these “joint-venture companies”. In 1606, two charters were granted. One to the Virgina Company of London, and the other went to the Virginia Company of Plymouth. The London Company was granted rights to found a colony anywhere between the 34th and the 41st parallels on the North American continent, while the Plymouth Company was granted right between the 38th and 45th parallels. The charters for these two companies provided for a governor, who with an advisory council of thirteen was empowered to direct the general affairs of the company (CEO and board of directors). The London company founded Jamestown in 1607. The Plymouth Company had been unsuccessful in founding the Sagadahoc Colony in Maine. In 1609, the London Company sought a new charter to remedy some problems with governance at Jamestown and to sever ties with the Plymouth Company. In 1624, the London Company lost their charter because of financial failure and internal dissension. The King now named a royal governer, and the following year incorporated Virginia into royal domain.
In 1629, the charter of the Massachusetts Bay Company was secured, this one providing for four “great and general courts” each year, to be attended by the freemen of the company. Once the council became located in Massachusetts, it ran the Company as a closed corporation, the freemen did not like this, demanding to view the charter. Subsequently, the members of the company demanded that they adhere to the charter, providing for the four great and general courts a year; this was in a way the beginning of the legislative body as a check on the executive. After that point, many of the colonies in New England began to mimic the Massachusetts style of governance.
Yes, religious freedom had something to do with the foundation of America, but it is undeniable the corporations and the finances that are associated with them was one of the factors that allowed America to succeed, thrive, and eventually remove the English’s grip on the colony. So if anyone ever tells you that corporations are un-American, politely remind them that if it weren’t for corporations, America might not exist.
I hope you enjoyed reading this as much as I enjoyed writing it!