Joint Stock Company Historical Significance

Jamestown joint stock company: History, pros and cons - Video & Lesson Transcript

Find out more about the story of the Virginia Company, the corporation that formed the Jamestown Kolony in 1607, and the pros and cons of using a corporation to form a settlement. Joint stock was similar to today's stock market enterprises, which are selling shares to an investor in order to bundle together assets such as equity or cash for the purpose of developing new products, research, etc. The latter are not the same as the latter.

This was all done with the aim of making a gain and rewarding the investor with rising stock market values of their shares. Corporations were used in the seventeenth and seventeenth centuries (16th centuries) by British traders to bundle funds and divide the risk associated with trade trips to Asia and Africa.

The Virginia Company, a public limited company, was formed in 1606 to form a permanently established British settlement in North America with the aim of achieving success similar to that of the Spaniards with their expanding kingdom in parts of present-day Mexico. James I. gave the Virginia Company a charta to found a settlement in North America somewhere between the thirty-fourth and fifty-first centuries in the same period.

Immediately, the company began to sell stocks for 12 quid and 10 Schillings to an investor known as an "adventurer" to help establish a settlement in this declared area. More than 1,600 private equity holders purchased the company's stock, thus generating enough funds to cover the cost of shipping, stockpiling and recruiting workers. 144 British settlers came to the coast of present-day Virginia in April 1607.

Following an early assault by a small group of locals, the settlers quickly constructed a fortress in their re-established colony called Jamestown. In spite of the Virginia Company's deceptive advertising, which pledged that a heaven was awaiting colonization, the settlers quickly realized that they were facing enormous difficulties.

This challenge shows the pros and cons of using a corporation to form Jamestown. One of the main benefits of using a joint-stock company was that the organisation could attract investment and raised enough funds to try to set up a settlement. Virginia Company, as already mentioned, has been very succesful in this regard.

The company also provided the necessary organisation to prepare the first billing in Jamestown. Soon the first colonists realised that they were obliged to obey the instructions of the company officers when building a fortress and other apartments. Contract workers were given a gun, clothing and groceries, while investors were rewarded gentleman with land and extra shares in the company.

Even after the first accounting the company acquired extra equity from shareholders. During the first ten years of colonization, interest in the community began to dwindle because the promise of discovering Virginia was never kept. One of the main advantages of using a joint-stock company was an organisation that could change its own market strategies to attract new and existing shareholders to the city.

Instead of concentrating on the appeal of wealth and wealth, the Virginia Company began a new publicity drive that emphasized that every Englishman and Christian had the duty to help the British build a better nation in the eyes of their rival in France and Spain, and to help the "wild" and "pagan" locals to Christianize.

It also emphasized that the British Army gave the British the opportunity to purchase their own lands in the resource-rich Virginia area. According to a brochure issued by the Kolonie in 1620, the lands that have been filled with the most beautiful forests in the whole earth... both waters and lands that produce poultry in very large stocks and diversity... a lands that is too good for sick men and is reserved by God's Divine providence, because it will devote itself to his ministry with faithfulness and will be a force and honor for our Lord and our nations.

'' Virginia Company's new promotional impact worked, and new sponsors kept contributing the funds needed to keep the stricken community afloat.