Virginia Company Essay

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The Virginia Company was a joint-stock company that was chartered by King James I of England in 1606. Its purpose was to build up the British merchant fleet, find precious metals, and establish a permanent British presence in North America to counter the Spanish threat. Originally called the London Company, the Virginia Company held monopoly trading rights under its royal charter and was designed to generate a profit for its investors.

In 1607, 105 settlers arrived in current-day Virginia at the mouth of the Chesapeake Bay and founded the Jamestown Colony, which was America’s first permanent settlement. These settlers agreed to undertake the risky voyage across the Atlantic because they were offered land for farms by the Virginia Company. However, 67 of the 105 first settlers died within one year of arriving.

The surviving settlers were joined two years later by 800 new arrivals, most of whom also died of disease and starvation. By 1623 the mortality had been high enough that the British launched a royal investigation, which found that 4,000 of the approximately 6,000 settlers who had migrated to Virginia since 1607 had died. The life expectancy in the first two decades of the Virginia settlements was a mere two years.

Scholars have argued that the high mortality rates among settlers were not entirely because of harsh conditions and disease. While these were important factors, mismanagement has also been blamed. Rather than devoting company resources to agricultural equipment, livestock, and food supplies for the settlers, management of the company devoted its resources to sending more and more emigrants across the Atlantic. The colony may have therefore simply been overrun with colonists who did not have adequate food and housing facilities.

Another aspect of potential mismanagement may have led to the Indian massacre of 1622. Wesley Frank Craven argues that the Indian attack was invited by having settlements too widely scattered and by the Virginia Company’s failure to provide settlers with adequate arms and ammunition. Whatever the actual reasons for its failure, the Virginia Company charter was annulled in 1624.

The Virginia Company’s objective was to generate a profit; however, profitability was never achieved and the company’s venture into the New World was a financial disaster. The financial losses to the Virginia Company mirrored the hardships the settlers faced upon arrival. Neither principal nor interest on the Virginia Company’s total investment of over £200,000 was ever repaid.

Despite its initial failure, settlers in the region eventually discovered that tobacco crops flourished there. Tobacco was ultimately a perfect crop for British economic interests. As J. J. McCusker and R. R.

permitted the English to acquire a commodity from a colony rather than on the international market; it created a processing industry in England and a valuable product for re-export; it attracted capital and labor to profitable employment across the Atlantic; and it provided Virginians the means to purchase manufactures and commercial services in the English market.

The long-term importance of the short-lived Virginia Company lies in its organizational form as a joint-stock company. This form of organization was, at the time, very new. The first joint-stock companies were formed only about 50 years before the Virginia Company’s charter was issued. The risks of exploration of new territories an ocean away were very high and few investors, even those with partners, were willing to bear such risks. This was particularly true in explorations of this nature in which the investor had very little control over the project. Joint-stock companies circumvented these problems by limiting each investor’s liability to his investment. This allowed a large number of small investments to be combined for the large sums needed for such a venture. Many scholars believe that joint-stock companies, such as the Virginia Company, were among the most important developments in the building of the modern world.


  1. F. Craven, Dissolution of the Virginia Company: The Failure of a Colonial Experiment (Oxford University Press, 1932);
  2. David Feinberg, Virginia Company History Sources (Library of Virginia, Archival and Information Services Division, 2003);
  3. J. McCusker and R. R. Menard, The Economy of British America: 1607–1789 (University of North Carolina Press, 1985);
  4. Virginia Company of London and Susan M. Kingsbury, Records of the Virginia Company of London, Volumes 1–4 (Heritage Books, 1999).

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