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No. 10. Vienna, 7th March 1902. 6th Year

Chartered Companies.

By Dr. jur. J. W. Marmorek.

A Charter (so called after the material on which it is written, Lat. charta, i.e. paper) is, in English law, an instrument by means of which the Crown conferred privileges and franchises upon corporations. Famous in history is the Magna Charta, the fundamental instrument of the English constitution, which the barons wrested from King John Lackland.

Afterwards, however, the name was understood more particularly to mean those instruments which, in the times of feudal oppression and legal insecurity, assured the protection of the law to the municipalities and guilds.

Lastly, however, a Charter is understood to be an instrument which granted privileges to trading companies, both foreign ones wishing to trade in England, such as the German Hansa, and English companies, in order to encourage them to trade abroad and to assure them of the royal protection and shelter.

At first these companies were the so-called Regulated Companies, associations in which every member traded on his own account, being bound only to conform to the general regulations of the association. In a district for which a Regulated Company was authorised, no one might trade without acquiring membership of the Company. The guild, at least in the early days, was not answerable for his obligations, but it furthered its members through its common institutions, and all stood up for one whenever he was injured in his rights and his business. To this end the corporation appointed, in the regions with which it traded, special representatives for the interests of its members, an arrangement out of which the modern consular system developed.

The chief English trading companies of this older form were the Turkey, the Russia and the Eastland Company. Later came the Merchant Adventurers, who, privileged under James I., chose the newly discovered quarters of the globe, America in particular, as the scene of their activity.

Some of these companies attained the very greatest importance, but for that very reason came to their end. For the demands, which through their labours had grown to gigantic proportions, had become too great for their resources, which rested upon the activity of the individual.

Their place was taken by corporations in which the individual resources were united into a common force, which conducted its undertakings on account of and to the advantage of the whole body. These were the Joint-Stock Companies, the share companies.

After the royal charter which became the foundation of their existence, these companies are called, quite simply, Chartered Companies. Some of them attained enormous extent and importance, having grown from trading companies into mighty political factors. Since they were founded not upon common private law but obtained a special Charter from the King, these companies were also obliged to take upon themselves, by way of return, sundry obligations which they would not otherwise have had to bear. In exchange, however, they received manifold special privileges, notably trading monopolies. Of particular importance, however, were the political rights conferred upon these Chartered Companies, above all the right of territorial sovereignty with all the consequences arising therefrom.

In this way the Chartered Companies fulfilled a twofold mission. First they opened distant regions of the world to British trade and thereby founded England's commercial power; then, however, they acquired rights of sovereignty over the territory in which they had won power and prestige through their trading monopoly, and thereby founded England's world power. The most important and most famous of all the Chartered Companies was the East India Company. On the 31st December 1599 a royal Charter empowered George, Earl of Cumberland, and 215 "knights, aldermen and merchants" to undertake, at their own cost and risk, voyages and expeditions to distant East India, which only shortly before had been brought, through the discoveries of the Portuguese, out of the realm of traditional myth into that of "tangible" reality. The Charter entitled the Company to carry on the trade between England and East India exclusively and to acquire land there. The founding capital of this Company amounted, all in all, to about 72 000 pounds, divided into shares of 50 pounds.