The British Empire and the Chartered Companies

The chartered companies of the late nineteenth century were the most aggressive instruments of British imperial expansion. Following the model of the East India Company — which had been, after all, a chartered company for nearly three centuries — these organisations were granted royal charters that gave them administrative authority over vast territories, and they were expected to develop those territories, build infrastructure, and prepare them for eventual incorporation into the formal British Empire. The most famous of the late-Victorian chartered companies — the British South Africa Company of Cecil Rhodes, the Imperial British East Africa Company, the Royal Niger Company, the British North Borneo Company — did not so much extend British rule as substitute for it. They were, in effect, the British state in Africa and Southeast Asia, and they left a legacy of boundaries, infrastructures, and administrative practices that persists in the contemporary period.

The Imperial British East Africa Company (1888–1895)

The Imperial British East Africa Company was established in 1888, with a royal charter to administer British interests in what is now Kenya and Uganda. The company was founded at the initiative of William Mackinnon (1823–1893), a Scottish shipping magnate who had long been interested in the East African trade. The company received a royal charter in September 1888, the first of the late-Victorian chartered companies.

The company assumed administrative responsibility for the British East Africa Protectorate in 1892, but it struggled to make the territory financially self-supporting. The principal problem was the cost of constructing the Uganda Railway from Mombasa to Lake Victoria, which was estimated at £3.5 million and was well beyond the company’s resources. The company repeatedly appealed to the British government for support, and in 1895 the British government decided to take over the administration of the protectorate. The company’s charter was surrendered, and the East Africa Protectorate became a formal British colony. The East Africa Protectorate became Kenya in 1920, and the territories administered by the company became the basis for British East Africa.

The British South Africa Company (1889–1965)

The British South Africa Company, established in 1889, was the most powerful of the late-Victorian chartered companies. The company was the instrument of Cecil Rhodes (1853–1902), the diamond magnate who had consolidated his position at Kimberley and who used the company as a vehicle for the British expansion into the lands north of the Limpopo River. The company was granted a royal charter in October 1889, authorising it to administer and develop the territory that would become known as Rhodesia — named after Rhodes himself.

The company conquered and administered the territories of the Ndebele and Shona peoples south of the Zambezi, in what became Southern Rhodesia (now Zimbabwe), and it also administered the territory north of the Zambezi that became Northern Rhodesia (now Zambia). The company raised its own police force and, in the early years, its own army. The Matabele War of 1893 and the Second Matabele War of 1896 were the major military events in the company’s history, and they resulted in the establishment of British administration in the territories. The company administered the territories until 1923–1924, when Southern Rhodesia became a self-governing colony and Northern Rhodesia was made a British protectorate. The Royal Charter was not formally surrendered until 1965 — by which time it had become a piece of imperial legal history rather than a serious instrument of governance.

The Royal Niger Company (1886–1900)

The Royal Niger Company, established in 1886 and granted a royal charter in 1886 as the United Africa Company (renamed the Royal Niger Company in 1900), was the principal British chartered company in West Africa. The company was founded by Sir George Goldie (1846–1925), who had consolidated several British trading firms in the lower Niger region. The company received a charter in 1886 that gave it administrative authority over the territories on both banks of the Niger River.

The company signed treaties with a large number of local rulers, and it established a military force to enforce its monopoly. The company clashed with French expansion from the west and with the British West African territories, and the boundaries established in this period became the basis of the modern boundary of Nigeria. The company’s charter was revoked in 1900, and the territories were incorporated into the Protectorate of Northern Nigeria and the Protectorate of Southern Nigeria, which were merged as the Colony and Protectorate of Nigeria in 1914.

The British North Borneo Company (1881–1946)

The British North Borneo Company, established in 1881, was the principal British chartered company in Southeast Asia. The company was granted a royal charter to administer the territory of North Borneo, which it had acquired from the Sultan of Sulu and the Sultan of Brunei. The company established its capital at Sandakan, and it developed the territory as a plantation colony, with tobacco, rubber, and timber as the principal exports.

The company struggled financially through most of its history, and in 1946 it was forced to surrender its charter to the British government. The territory became the Crown Colony of North Borneo and was incorporated into the Federation of Malaysia in 1963. The British North Borneo Company is now remembered primarily as a chapter in the history of British North Borneo and, more broadly, as an example of the late-Victorian chartered company system. The company’s records, preserved in the British National Archives, remain the principal source for the history of British North Borneo in this period.

The End of the Chartered Company System

The chartered company system gradually came to an end in the late nineteenth and early twentieth centuries. The transfer of the British South Africa Company territories to the Crown in 1923–1924 marked a major step in the process, and the dissolution of the Royal Niger Company in 1900, the end of the Imperial British East Africa Company in 1895, and the dissolution of the British North Borneo Company in 1946 all contributed to the conclusion of the system. By the mid-twentieth century the only major chartered company still operating in the British Empire was the Hudson’s Bay Company, which by then was a department store and trading company rather than a colonial administrator.

The reasons for the end of the chartered company system were both financial and political. The companies typically struggled to make their territories financially self-supporting, and they required subsidies from the British government to maintain their operations. The political objections to the system — that it placed sovereign powers in private hands, and that it was anachronistic in an age of democratic government — also grew louder as the twentieth century progressed. The principle of private colonial administration had been important in the founding of the British Empire, but it was no longer compatible with the modern imperial state. The chartered companies were, in this respect, victims of the same modernisation that produced the post-1858 Crown Raj in India.

The Legacy of the Chartered Companies

The chartered companies have had a long-term legacy in the contemporary era. The political boundaries they established, in many cases through treaties with local rulers whose authority they did not fully understand, became the boundaries of the modern African states. The infrastructure they built — the Uganda Railway, the roads and bridges of Northern Rhodesia, the ports of North Borneo — provided the foundation of the modern transport systems. The administrative traditions they developed, including indirect rule through local chiefs, shaped the colonial administrations that succeeded them.

The chartered companies have also been the subject of intense criticism, both in their own time and subsequently. The Royal Niger Company’s monopoly of the lower Niger trade was widely criticised as exploitative, and the British South Africa Company’s treatment of the Ndebele and Shona peoples was the subject of contemporary criticism and modern historical analysis. The legacy of the chartered companies, like the legacy of the British Empire generally, is therefore contested. The companies’ role in the expansion of European influence in Africa was central to the late-Victorian imperial project, and their dissolution in the early twentieth century was one of the first signs of the retreat from the Victorian model of imperial expansion.

Historiographical Note

The historiography of the chartered companies has been transformed, since the 1950s, by the integration of African perspectives and by the work of African economic historians. The older British tradition, of which the work of Jack Gallagher and Ronald Robinson is the most distinguished representative, treated the chartered companies as instruments of the British “imperialism of free trade” — necessary, on this view, because the British state was not prepared to administer these territories directly. The revisionist tradition, of which the work of the Cambridge historian D. K. Fieldhouse in Colonialism, 1870–1945 (1981) is the most comprehensive statement, has insisted on the centrality of the chartered companies to the late-Victorian imperial project. The current generation of historians, of whom the work of Bruce Berman, John Lonsdale, and the contributors to The Cambridge History of Africa are representative, has paid more attention to the African response to the companies and to the way in which the companies’ activities produced the political geography of modern Africa. The Chartered Companies Project at the Centre of African Studies, University of Cambridge, has produced a substantial body of work on the period.

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