Ann M. Carlos

Agency Problems in Early Chartered Companies: The Case of the Hudson’s Bay Company

The problem of controlling overseas managers confronts all multilocational firms. Historians have argued that because of the extreme time lags in communication, chartered companies were unable to control managerial behavior. We argue that not only did the Hudson’s Bay Company understand the agency problem but also put into operation strategies designed to attenuate opportunistic behavior. The company used employment contracts and control systems and established a social structure compatible with the company’s aims.

“Giants of an Earlier Capitalism”: The Chartered Trading Companies as Modern Multinationals

Much has been written about late-nineteenth-century multinationals and their relationship to the transnational firms of the present, but both historians and economists have largely discounted the relevance of the earlier chartered trading companies to this discussion. In an article emphasizing transaction cost analysis and the theory of the firm, Professors Carlos and Nicholas argue that the trading companies did meet the criteria of the modern MNE—the growth of a managerial hierarchy necessitated by a large volume of transactions and of systems to control those managers over space and time.

Theory and history: seventeenth-century joint-stock chartered trading companies

managers abroad. In those articles on managing the manager, we used archival sources to assess whether these companies recognized the problem of agency and to determine what mechanisms were implemented to attenuate the agency problems created by hierarchy. We concluded that the Hudsons Bay Company and the Royal African Company designed mechanisms well suited to controlling agent opportunism.2 In an attempt to reverse 20 years of revisionist history, S. R. H. Jones and Simon P. Ville assert that these seventeenth-century trading companies were inefficient organizations for

Commerce by a Frozen Sea: Native Americans and the European Fur Trade

Introduction: Native Americans and Europeans in the Eighteenth-Century Fur Trade 1. Hats and the European Fur Market 2. The Hudsons Bay Company and the Organization of the Fur Trade 3. Indians as Consumers 4. The Decline of Beaver Populations 5. Industrious Indians 6. Property Rights, Depletion, and Survival 7. Indians and the Fur Trade: A Golden Age? Epilogue. The Fur Trade and Economic Development Appendixes A. Fur Prices, Beaver Skins Traded, and the Simulated Beaver Population at Fort Albany, York Factory, and Fort Churchill, 1700-1763 189 B. Simulating the Beaver Population C. A Model of Harvesting Large Game: Joint Ownership Versus Competition D. Food and the Relative Incomes of Native Americans and English Workers Notes Bibliography Index Acknowledgments

Property Rights, Competition and Depletion in the Eighteenth-Century Canadian Fur Trade: The Role of the European Market

Pricing behavior at three Hudsons Bay Company trading posts is examined in terms of a model of long-run profit maximization of a depletable resource. At Fort Churchill, where the company acted as a monopsonist purchaser of furs from the Indians, rising European fur prices had little impact on prices paid to Indians and beaver stocks in the hinterland were maintained. At Fort Albany and York Factory, where the company faced competition from French traders, prices at the posts were raised and the beaver was depleted. These outcomes are consistent with optimal pricing behavior by the company. The lack of well-defined Native property rights to the beaver was a crucial element.

Indians, the Beaver, and the Bay: The Economics of Depletion in the Lands of the Hudson's Bay Company, 1700–1763

Indians depleted the beaver, yet we do not understand why. We analyzed the pattern and determinants of beaver exploitation in the hinterlands of three Hudsons Bay Company posts. Simulating beaver population, we found declining beaver stock within each hinterland, but overharvesting in only two. Central to this process was the Company reaction to French competition. Managers raised prices in the Albany and York hinterlands, and in response the Indians increased their harvests. Churchill, which did not experience French competition, had more stable fur prices and showed no evidence of overexploitation of the beaver.

Financial acumen, women speculators, and the Royal African company during the South Sea bubble

Abstract Price bubbles provide a unique opportunity to study the financial acumen of shareholders. We focus on the 1720 South Sea episode as experienced by the Royal African Company whose stock was more speculative than other joint stocks. During 1720 the company had a new large stock issue. This paper examines the financial acumen of those women who traded senior and engrafted stock across 1720. We find that depending on the pricing regime, these women at worst broke even on their activities or had positive speculative gains. Our findings are consistent with a growing literature on the positive link between gender, capital gains and financial markets.

TRADE, CONSUMPTION, AND THE NATIVE ECONOMY: LESSONS FROM YORK FACTORY, HUDSON BAY

Like Europeans and colonists, eighteenth-century Native Americans were purchasing a greatly expanded variety of goods. As fur prices rose from 1716 to 1770, there was a shift in expenditures from producer and household goods to tobacco, alcohol, and other luxuries by Indians who traded furs at the Hudsons Bay Companys York Factory post. A consumer behavior model, using company accounts, shows that Indians bought more European goods in response to higher fur prices and, perhaps more importantly, increased their effort in the fur trade. These findings contradict much that has been written about Indians as producers and consumers.

'A knavish people…': London Jewry and the stock market during the South Sea Bubble

In an era when financial markets were only beginning the move from personal to impersonal relations, this paper examines the role of Jewish brokers in the market for Bank of England stock at a time when their status as recent immigrants, subject to constraints due to religion and ethnicity, made them unlikely intermediaries beyond their own communities. Using formal network analysis, an examination of their activity during the first half of 1720 suggests a marginal role. However, as the Bubble began to burst a few Jewish financiers became disproportionately involved as purchasers of a stock clearly on the decline.

Stock Transfer Patterns in the Hudson's Bay Company: A study of the English Capital Market in Operation, 1670–1730

In recent years, there has been expanding interest in the growth, structure and integration of the early English securities market. However, much of the research on this market has focused on overall market data or the larger chartered companies. The purpose of this paper is to provide an alternative approach to studying the issue of market activity and development, utilising the stock ownership and transfer records of the Hudsons Bay Company. As a successful smaller chartered company it is possibly more representative of the majority of firms utilising the London financial market of the time. The records provide evidence of an organised and efficient market that was accessible to a variety of large and small investors, including a network of stockbrokers. The volume of transfers also indicates a dynamic pattern of market activity rather than a closely held firm which only obtained its initial capitalisation through the market.