40 Industrial Experiments in Colonial America. 



East India Company for existence culminated in 1708, when it 

 consolidated with the New Company which Parliament had 

 erected in 1698. The combination, it is true, recovered exclu- 

 sive privileges by an act of Parliament, but only in view of their 

 important services to the government; and they paid heavily 

 for their monopoly by assuming as their chief stock a large debt 

 due from the government, on which the rate of interest steadily 

 fell, so that the company found themselves trading on a dead 

 capital.^ 



If such was the plight of the great Merchant Companies, 

 smaller companies, like Dudley's or Byfield's, had little reason 

 to expect exclusive charters. Still, the government was in- 

 clined to recognize the advantage of the joint-stock principle in 

 undertakings which required large capital, and they incorpo- 

 rated several companies for the purpose of stimulating new in- 

 dustries.- 



The Pennsylvania Company was in an anomalous position. 

 It was really a mere voluntary association of merchants, who 

 massed their capital in the joint-stock, but traded as if they were 

 a chartered company. This does not appear to have been an 

 unusual custom, and, although in a sense illegal, little notice 

 seems to have been taken of the practice until it was forbidden 

 by the Bubble Act (6 Geo. I, c. 18) passed in the interests of the 

 South Sea Company, who complained of the fraudulent pro- 

 ceedings of these irresponsible companies. The government, 

 when informed of the status of the Pennsylvania Company, in- 

 quired why, if they had traded so long without a charter, they 

 could not continue on the same footing. Mr. Byfield's reply 

 has been already quoted. It was, in substance, that for general 

 purposes of trade, i. e., exchange of merchandise, they had got 

 on very well ; but they did not care to assume the risk of in- 

 creasing their outlay in opening up trade in a new industry, 

 without a charter behind them. If they vmdertook to guarantee 

 that the products of their importation should be equal in quality 



ij. E. Thorold Rogers, "Industrial and Commercial History of 

 England," p. 124. 

 ^Cunningham, p. 283. 



