When business entered the New World
The Jamestown Project book cover
KAI RYSSDAL: There's a huge party in Jamestown, Va. this weekend. The first colony will be 400 years old on May 14.
If you don't remember your eighth-grade history, here's a quick refresher: The Virginia Company landed more than a hundred settlers in the New World in the spring of 1607. Things didn't start off so well. The site was unhealthy, the settlement was poorly managed and investors in the company were none too happy about it.
Karen Kupperman is a history professor at New York University. She's also the author of the book "The Jamestown Project." Professor, welcome to the program.
KAREN KUPPERMAN: Thank you.
RYSSDAL: Was the Virginia Company successful in its initial appeal for capital from investors? I mean, how did it actually finance its operations?
KUPPERMAN: It started out as a classic company of the time. That it was a very small number of highly-connected investors. And at the end of two years, when things were going badly, instead of walking away from it — which you might have expected them to do — what they did was reorganize. And they got a new charter, they set the price of a single share at 12 pounds, 10 shillings and 6 pence. Which was . . . it's still a lot of money. But it was something that made it possible for huge numbers of people to invest. It completely changed the whole nature of the enterprise. And I think that's, more than anything, responsible for its ability to hang on.
RYSSDAL: Do we see vestiges of the Virginia Company on Wall Street today and in London and in Paris and in the world's big stock markets?
KUPPERMAN: Certainly, the corporate form has changed. And one of the differences between a modern corporation and a joint-stock company is that there was no limited liability. Every single investor was responsible for the entire debt of the company. So it was quite high-risk. But I think it's also, we see vestiges in the sense that the Virginia Company was looking to the next quarterly report just like every company does today. And the problem was that the colonists — the poor, beleaguered colonists — were just trying to get set up and running. And they were being bombarded with these demands to send back something of value. Because the investors were not prepared to keep putting in money indefinitely without any sign of returns.
RYSSDAL: As you watched the Queen coming through the States this past week and then at the White House, what thoughts ran through your mind about us 400 years later, still celebrating this little spec of commerce?
KUPPERMAN: Well, I think it's actually more than . . . I mean I think it's a spec of commerce, but it's a particularly important spec of commerce. They first tried incredibly harsh martial law, where they were gonna absolutely force everybody to go to bed together, get up together, eat together — they've regulated every aspect of life and put on the death penalty for every slight infraction. But they then gave that up and said "OK, now we understand that actually turning over control to these people" . . . giving them a stake, giving them their 50 acres, giving them an assembly which would give them some control over the taxation of that land, sending over women so that you have a normal society . . . getting rid of the military men, which was also something they did at the same time. This was a breakthrough that the company made, and it was a breakthrough that I think is of extreme importance in American history, because what they ultimately decided was that only if people have a stake in the outcome are they going to behave as these social theorists wanted them to.
RYSSDAL: Karen Kupperman is silver professor of history at New York University. Professor, thanks so much for your time.
KUPPERMAN: Thank you.