Stock transfer patterns in the Hudson's Bay Company: A study of the English capital market in operation, 1670-1730

Business History

Volumn 38, Issue 2, 1996, Pages 15-39

  Carlos, Ann M ^a   Van Stone, Jill L ^a  

^a UNIVERSITY OF COLORADO   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

CAPITAL MARKET; ECONOMIC HISTORY; HISTORICAL STUDY; HUDSON'S BAY COMPANY; MARKET ACTIVITY; STOCK OWNERSHIP;

UK;

EID: 0029818106     PISSN: 00076791     EISSN: 17437938     Source Type: Journal    
DOI: 10.1080/00076799600000049     Document Type: Review

References (72)

1. J. Brewer, The Sinews of Power: War, Money and the English State, 1688-1783 (London, 1988).
2. P.J. Cain and A.C. Hopkins, British Imperialism: Innovation and Expansion, 1688-1914 (London, 1993).
3. P.G.M. Dickson, The Financial Revolution in England: A Study in the Development of Public Credit, 1688-1756 (New York, 1967); L. Neal, The Rise of Financial Capitalism (Cambridge, 1990); M. Buchinsky and B. Polak, The Emergence of a National Capital Market in England, 1710-1880', Journal of Economic History, Vol. 53 (1993), p.1.
4. P.G.M. Dickson, The Financial Revolution in England: A Study in the Development of Public Credit, 1688-1756 (New York, 1967); L. Neal, The Rise of Financial Capitalism (Cambridge, 1990); M. Buchinsky and B. Polak, The Emergence of a National Capital Market in England, 1710-1880', Journal of Economic History, Vol. 53 (1993), p.1.
5. P.G.M. Dickson, The Financial Revolution in England: A Study in the Development of Public Credit, 1688-1756 (New York, 1967); L. Neal, The Rise of Financial Capitalism (Cambridge, 1990); M. Buchinsky and B. Polak, The Emergence of a National Capital Market in England, 1710-1880', Journal of Economic History, Vol. 53 (1993), p.1.
6. P. Mirowski, 'The Rise (and Retreat) of a Market: English Joint Stock Shares in the Eighteenth Century', Journal of Economic History, Vol. XLI (1981), p.563.
7. M. Patterson and D. Reiffen, 'The Effect of the Bubble Act on the Market for Joint Stock Shares', Journal of Economic History, Vol. L (1990) p. 163; R. Harris, 'The Bubble Act: Its Passage and Its Effects on Business Organization', Journal of Economic History, Vol. 54 (1994), p.610.
8. M. Patterson and D. Reiffen, 'The Effect of the Bubble Act on the Market for Joint Stock Shares', Journal of Economic History, Vol. L (1990) p. 163; R. Harris, 'The Bubble Act: Its Passage and Its Effects on Business Organization', Journal of Economic History, Vol. 54 (1994), p.610.
9. For a discussion of the various price lists see Neal, Financial Capitalism, Ch.2 and S.R. Cope, 'Stock Exchange Revisited', Economica (1978) p.1.
10. For a discussion of the various price lists see Neal, Financial Capitalism, Ch.2 and S.R. Cope, 'Stock Exchange Revisited', Economica (1978) p.1.
11. Mirowski, 'Rise (and Retreat)', pp.569-71.
12. Cope, 'Stock Exchange', p.20; Neal, personal communication.
13. Cope, 'Stock Exchange', p.20; Neal, personal communication.
14. New stock was issued at par, but subscribers were committed to paying a specified percentage of the costs over a given time period. Thus all future payments were part of the asset stream of the company.
15. H.V. Bowen, 'Investment and Empire in the Later Eighteenth Century: East India Stockholding, 1756-1791', Economic History Review, Vol. XLII (1989), p.186; K.G. Davies, 'Joint-Stock Investment in the Later Seventeenth Century', Economic History Review, Vol. IV (1952), p.283; K.G. Davies, The Royal African Company (London, 1957); E.E. Rich, The Hudson's Bay Company (2 vols., New York, 1961).
16. H.V. Bowen, 'Investment and Empire in the Later Eighteenth Century: East India Stockholding, 1756-1791', Economic History Review, Vol. XLII (1989), p.186; K.G. Davies, 'Joint-Stock Investment in the Later Seventeenth Century', Economic History Review, Vol. IV (1952), p.283; K.G. Davies, The Royal African Company (London, 1957); E.E. Rich, The Hudson's Bay Company (2 vols., New York, 1961).
17. H.V. Bowen, 'Investment and Empire in the Later Eighteenth Century: East India Stockholding, 1756-1791', Economic History Review, Vol. XLII (1989), p.186; K.G. Davies, 'Joint-Stock Investment in the Later Seventeenth Century', Economic History Review, Vol. IV (1952), p.283; K.G. Davies, The Royal African Company (London, 1957); E.E. Rich, The Hudson's Bay Company (2 vols., New York, 1961).
18. H.V. Bowen, 'Investment and Empire in the Later Eighteenth Century: East India Stockholding, 1756-1791', Economic History Review, Vol. XLII (1989), p.186; K.G. Davies, 'Joint-Stock Investment in the Later Seventeenth Century', Economic History Review, Vol. IV (1952), p.283; K.G. Davies, The Royal African Company (London, 1957); E.E. Rich, The Hudson's Bay Company (2 vols., New York, 1961).
19. S. Quinn, 'Tallies or Reserves? Sir Francis Child's Balance Between Capital Reserves and Extending Credit to the Crown, 1685-1695', Business and Economic History, Vol. 23 No. 1 (1994), p.39; L. Neal, '"For God's Sake, Remitt Me": The Adventures of John Law's London Goldsmith-Banker, 1712-1729', Business and Economic History, Vol. 23 No. 2 (1994), p.27.
20. S. Quinn, 'Tallies or Reserves? Sir Francis Child's Balance Between Capital Reserves and Extending Credit to the Crown, 1685-1695', Business and Economic History, Vol. 23 No. 1 (1994), p.39; L. Neal, '"For God's Sake, Remitt Me": The Adventures of John Law's London Goldsmith-Banker, 1712-1729', Business and Economic History, Vol. 23 No. 2 (1994), p.27.
21. Unlike those furs sold to furriers, beaver was valued not so much for its pelt as for its wool. The pelt has a double coating of hair. There is a layer of comparatively short, soft, barbed hairs next to the skin, protected by longer, smoother and suffer hairs which grow up through the soft layer. These longer hairs are known as guard hairs. The felt-making process uses only the short barbed hairs, which when treated, matt themselves into a pliable resilient material. This felt could then be transformed into various shapes. Of all the pelts available to the feltmaker, such as rabbit (coney) and muskrat, beaver was the most valued.
22. W.R. Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720 (3 vols., New York, 1951), Vol. 2, pp.325, 336-7.
23. Adam Smith, Wealth of Nations (Indianapolis, Library Classics, edn., 1976), Book V Ch. 1, Part III, para. e.21.
24. Rich, History, Vol. 1, p.64.
25. Hudson's Bay Company Records (HBC); Microfilm copy, Public Archives of Canada (PAC), Ottawa, Ontario, Transfer Book, PAC MG20 A 43/1.
26. In the period studied here, the Company became involved only once in a case where an individual was accused of private trade.
27. Although Parliament reconfirmed the validity of the Hudson's Bay Company charter in 1691, it did so only for a period of seven years. However, the issue was not really raised again until the middle of the eighteenth century.
28. The 1690 scrip dividend, which trebled the nominal value of the stock, was undertaken in part to increase the number of share holders and so to meet criticism delivered in Parliament against the Company. Rich, History, Vol. 1, p.272.
29. Before summation, stock transfer volumes were normalised for the scrip dividends paid in 1690 and in 1720. The normalised volume of shares related to death of a stockholder it 9963.4 shares.
30. These transfers account for 880 shares of normalised stock volume.
31. These transactions account for 1,931.1 shares of normalised stock volume.
32. This normalised volume of 1,680.8 shares includes six transactions (763.3 shares) back and forth between William and Benjamin Pitts. These transactions are not included in the 70 transactions counted as related to deaths.
33. Rich, History, Vol. 1, p.272.
34. Scott, Constitution, Vol. 2, pp.232-7. Scott states that after 1700 the newspapers ceased to record quotations which he attributed to the decline in public interest in the stock market after the crisis of 1696-97.
35. PAC, HBC Transfer Book, 28 April 1688.
36. Rich, History, Vol. 1, p.271.
37. Scott, Constitution, Vol. 2, p.235.
38. Patterson and Reiffen, 'Bubble Act', p.163.
39. If London was essentially a regional market, then the dramatic increase in the number of firms floating new issues over this period would reduce the level of activity in the older companies.
40. In the month between 20 August and 19 September, South Sea stock slid from £850 to £350 and by October the market was in panic. Rich, History, Vol.1, pp.478-9.
41. PAC, Book containing Charter, Important Deeds, ... 1670-1862, HBC MG20 A 37. As the Governor in the early years was a member of the royal family, a Deputy Governor was chosen to act in his place.
42. The Charter of the Royal African Company specifically rules out this possibility.
43. It was felt that Josiah Childe used his large block of EIC stock to determine company policy.
44. Scott, Constitution, Vol. 2, p.142, 180; Vol. 3, pp.205-6.
45. Scott, Constitution, Vol. 2, p.142, 180; Vol. 3, pp.205-6.
46. For the case of the East India Company, see Bowen, 'East India Stockholdings', p. 198.
47. Rich, History, Vol. 1, p.89.
48. Ibid., p.477.
49. Davies, 'Joint-Stock Investment', p.293.
50. Bowen, 'East India Stockholdings', pp.198-9.
51. Ibid., p. 198.
52. The Company's year ran from 1 December to 31 November. The General Court was held some time in November when decisions about dividends were also made. We therefore have calculated the first quarter to be December to February, and proceeded accordingly. That the purchase of sales occurred at particular times of the year can be tested formally by looking at the underlying statistical relationships between the series. Such testing shows no significant increases in the level of activity prior to a General Court.
53. The number of quarters with zero transactions increases after 1700 and correspond to the overall lower level of activity in the stock.
54. The obvious way to test these hypotheses is econometrically. This is the direction of future work.
55. Neal, Financial Capitalism; S. Quinn, 'Gold, Silver and the Glorious Revolution: International Arbitrage and Goldsmith-Bankers in Late Seventeenth Century London, with an Account of a Goldsmith-Banker's Bullion Book', working paper, Department of Economics, University of Illinois (1994); Buchinsky and Polak, 'National Capital Market'.
56. Neal, Financial Capitalism; S. Quinn, 'Gold, Silver and the Glorious Revolution: International Arbitrage and Goldsmith-Bankers in Late Seventeenth Century London, with an Account of a Goldsmith-Banker's Bullion Book', working paper, Department of Economics, University of Illinois (1994); Buchinsky and Polak, 'National Capital Market'.
57. Neal, Financial Capitalism; S. Quinn, 'Gold, Silver and the Glorious Revolution: International Arbitrage and Goldsmith-Bankers in Late Seventeenth Century London, with an Account of a Goldsmith-Banker's Bullion Book', working paper, Department of Economics, University of Illinois (1994); Buchinsky and Polak, 'National Capital Market'.
58. Location is given in a number of the listing. Not surprisingly, the majority of shareholders lived in London or in the Home Counties. One shareholder who moved to Dublin sold his shares, perhaps because of information flows.
59. Some of these could, of course, just be in the market for short periods of time.
60. Bowen, 'East India Shareholdings', p. 195.
61. The Hudson's Bay Company technically operated in Canada. Its charter specified control over the drainage basin of Hudson Bay which was known, at that time, as Rupert's Land.
62. From 1736, the Company kept a separate Fur Price Booke, PAC, HBC MG20 A. Prior to that point, a record of sales is to be found interspersed among entries in the Grand Journal, PAC, HBC MG20 A 15.
63. This is probably an underestimate, because we only have information on directors for the first half of the period.
64. This is very well documented in M.G. Lawson, Fur: A Study in English Mercantilism, 1700-1775, (Toronto, 1943).
65. Davies, 'Joint-Stock Investment'; Cope, 'Stock Exchange'.
66. Davies, 'Joint-Stock Investment'; Cope, 'Stock Exchange'.
67. Some discussion of the evolution of scriveners activities can be found in D.C. Coleman, 'London Scriveners and the Estate Market in the Later Seventeenth Century', Economic History Review, Vol. IV (1951).
68. Dickson, Financial Revolution, p.515.
69. In his history of the Royal African Company, Davies talks about William Shepherd as a jobber and says that 'no doubt there were abuses but ... they gave the public no more than it wanted'. Davies, Royal African Company, p.83. This seems an excessively negative view of these activities, when in fact these individuals were acting as brokers.
70. The size of the blocks transferred are typical of the whole period.
71. Rich argues that Evance played a very influential role as Governor of the Company. Yet Evance's activities stretched beyond this Company. He played a very important role in the international bullion market. For a discussion of this aspect of Evance, see Quinn, 'Gold, Silver and the Glorious Revolution'.
72. The records sometimes note when shares were being transferred because of death.