joint-stock limited liability company Concepts

Kicking Awaythe Ladder

by Ha-Joon Chang · 4 Sep 2000 · 192pp

, granting of free imported machinery to private sector firms). In addition, some governments created institutional mechanisms that facilitated public-private cooperation (for example, public-private joint ventures and industry associations with close links with the government). It is important to note that many of these policies are greatly frowned upon these

…

state played a much more extensive and direct role in infant industry promotion than its US counterpart. As another example, Sweden relied upon public-private joint activity schemes far more than, say, Britain did. Thus, despite some remarkably strong historical patterns, there is also considerable diversity in the exact mix of

…

potential to create 'moral hazard', all societies have come to accept limited liability as a cornerstone of modern corporate governance.64 In many European countries, limited liability companies - or joint stock companies as they were known in those days - had existed under ad hoc royal charters since the sixteenth century.6S However, it was not

…

of course, rather than as a privilege. Generalized limited liability was first introduced in Sweden in 1844. England followed this closely with the 1856 Joint Stock Company Act, although limited liabilities for banks and insurance companies were introduced somewhat later (1857 and 1862 respectively), reflecting the then widespread concern that they could pose serious 'moral

…

liability (Saxony in 1861, Wiirttemberg in 1862 and Prussia in 1868-9). In France, limited liability only became generalized in 1867, but in Spain, while joint-stock companies (Sociedades Anonimas) began to emerge from as early as 1848, it was not fully established until 1951. It is interesting to note that

…

the twentieth century. The UK made external audit of companies a requirement through the 1844 Company Act, but this was made optional again by the Joint Stock Company Act of 1856 against the recommendation of critics such as John Stuart Mill.76 Given that limited liability companies require more transparency to

…

still without access to banking as late as 1863. Prussia had no more than a handful of banks until the eighteenth century, while the first joint stock bank was only founded in 1848. In Sweden, banks only appeared in the late nineteenth century. They went through a major expansion in 1870

…

only became fully established in the 1890s. In Portugal, the banking industry only saw major development in the 1860s and 1870s, after the formation of joint-stock banks was allowed.88 In the NDCs, banks only became professional lending institutions after the early twentieth century. Before then, personal connections strongly influenced

…

, especially in 1953, made collusive arrangements easier, especially among small firms, when they are related to aims like 'rationalisation', 'specialisation' (i.e., negotiated market segmentation), joint export activities, and structural adjustments (Shin 1994, pp. 343-355). Hodne 1981, pp. 514-15 (for Norway); Dahl 1982, p. 298 (for Denmark). Details in

…

126t, 135 intellectual property rights 86 ITT policies 61 judiciary 83 property rights 85 subsidies 47, 64 suffrage 75t, 121t tariffs 17t, 44, 54, 66 joint stock companies see limited liability judiciary 1, 71, 82-3, 121t Kenya 79t, 124, 126t Keynes, John Maynard 99-100, 135 Korea 16, 50, 51, 61, 65, 79t, 85

Money Changes Everything: How Finance Made Civilization Possible

by William N. Goetzmann · 11 Apr 2016 · 695pp · 194,693 words

compound interest. Finance began with the first cities—and vice versa. This first section focuses on the parallel emergence of urban civilization and finance. The joint emergence of finance and civilization in the ancient Near East teaches an important lesson. Higher levels of political and social development demand complex economic organization

…

concrete evidence of a limited partnership—in which the limited partner assumed no liability beyond the value of the paid-in capital. It was a joint venture with silent, but contributing, investors. This is the same way that such risky things as oil-drilling ventures and real estate investments are financed

…

to this day. Presumably, since Ea-nasir was the general partner who took the biggest risk, he made the largest profit. JOINT VENTURES Many of the tablets deciphered by Van De Mieroop and other Assyriologists indicate that such financial tools as loans, mortgages, and limited partnerships were

…

characters. Their text gives a merchant permission to transport goods and pay tariffs. The metallurgist who cast the two pieces made sure to preserve the joint of the bronze bamboo that divides the text on both halves into a top and bottom portion and served as a unique verification mechanism. While

…

was a self-governing republic for which the citizens had a say in the creation and maintenance of the debt meant that it was a joint venture in shifting money through time and ultimately depended on sharing responsibility for the survival and growth of state resources. With this new capital also

…

importance of the company at Bazacle is that it became the first since the Roman Republic to develop many of the features of the modern joint-stock corporation. In 1372, twelve mill companies operating at the Bazacle merged to form one big firm, the Honor del Bazacle. The shareholders in the

…

not say something to the effect that the king grants this company the right to operate. Feudal law evidently had already conferred the right of joint ownership of a business. Rather, all of the features of the corporation were spelled out by mutual agreement among the parties. Why was the document

…

passages in the document were devoted to a valuation of the shares in the individual mill companies that merged together. The essentially democratic process of jointly owning and operating the firm had to be spelled out to everyone’s satisfaction. This must have been done right, for not only were the

…

were called on to contribute money to rebuild. In some cases, they did not have the funds. This is where two useful features of the joint-stock company become apparent. Shareholders could not be compelled to pay an unlimited amount. Instead, they had the option of surrendering their shares to the

…

traded on the Paris Bourse—the company was incorporated in the form of a société anonyme—a publicly held corporation. Despite its long history of joint-stock ownership, the company of Bazacle was ultimately nationalized by the French government in the twentieth century. The nationalized firm, the Toulouse Electric Company, still

…

probabilistically assessable, whereas trading ventures to the other side of the world—almost by definition—confronted the unknown. And yet, as we shall see, the joint-stock company corporate form, with tradable shares and separation between ownership and control, sufficed for both. The immediate question explored in this chapter is whether

…

son, was one of the company’s founders. The Muscovy Company was officially chartered in 1555 and is widely considered to be the first modern, joint-stock company—the Toulouse mills long forgotten by most historians of the corporation. The company was structured as a self-perpetuating group of wealthy investors

…

power, James II pitched the Great Seal of the British crown into the Thames and fled to France, leaving William and Mary to rule as joint monarchs. Although the near-bloodless invasion was welcomed by the largely Protestant English populace and the political transition was surprisingly smooth, the conquest of Britain

…

is he that sells in time; till, like brass money, it will go at last for nothing at all. So have I seen shares in joint—stocks, patents, engines, and undertakings, blown up by the air of great words, and the name of some man of credit concerned, to 100 pounds

…

schemes and the stock-jobbing of shares, Defoe goes on in his book to propose a series of high-minded financial projects. His first visionary joint-stock project in the Essay was to vastly expand the British banking system. Why not raise a truly large sum of capital, he suggested, and

…

from a novel invention. The new financial market after 1688 married capital with creativity and intellectual property rights. Perhaps because they were engines of innovation, joint-stock companies grew dramatically in importance relative to the rest of the economy. The historian William Robinson Scott estimated that in 1695, they represented 1

…

a successful market is a crowd. But the main thing that brings order to the market is price. Jonathan’s posted prices for all the joint stock companies. Journalists like John Houghton, John Freke, and John Castaing sat in Jonathan’s sipping coffee, recording prices, writing up the rumors, and then

…

daily stories of the events in Paris and the quoted prices. Law created a system that quickly drew capital into France from abroad.17 The joint events of the South Sea Company flotation and the Mississippi Company flotation had, within the course of a few months, transformed vast sums of illiquid

…

profit. Rotterdam citizens already knew how this offering worked. The newspapers in Holland carried regular news of the great fortunes made in speculation in British joint-stock offerings in 1720. The papers had even begun quoting prices of Royal Exchange Assurance and London Assurance—a sure sign that Dutch capital was

…

1720, and financial technology took a different course of development in the decades that followed. The Bubble Act sharply curtailed the creation and trading of joint-stock companies in Great Britain. But in the Netherlands, public trading in stocks other than those of the VOC and WIC simply dried up. Even

…

, to whom a good part of every national loan renders the service of a capital fallen from heaven—the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy.2

…

on domestic enterprises to operate as limited liability corporations. This long-awaited freedom occurred by means of a series of parliamentary acts culminating in the Joint Stock Companies Act of 1856. The Hong Kong Shanghai Banking Company—situated as it was in a British-controlled treaty port halfway around the world

…

own spin on the process. China Merchants Steamship Navigation Company was organized and governed in a distinctive Chinese manner. It and the other domestic Chinese joint-stock companies were structured under the guandu shangban [官督商辦] system (“Official Supervision and Merchant Management”), which explicitly reserved a board role for government officials. This

…

joint government-merchant structure was borrowed from the organization of the Chinese salt monopoly, for which merchants provided capital, and government officials controlled production quotas.7

…

governing a profit-making business to ensure that public interests were properly represented. Of course, we have seen the deeper roots of this kind of joint public-private structure earlier in Chinese history (see Chapter 9). It can rightly be regarded as a financial innovation—a new re-configuration of corporate

…

and build firms to rival Western incorporated enterprises operating in China. While Li Hongzhang was a visionary who recognized the potential for funding enterprise through joint-stock companies, the firms he sponsored survived more because of his personal patronage and the quasi-monopoly they enjoyed rather than their capacity for attracting

…

in financial architecture and the dramatic power shift from local to global control were certainly important catalysts. China had rapidly adopted the financial tool of joint-stock financing and with it came a powerful realignment of allegiance and a change in expectations among an ever-widening set of participants in the

…

for unlocking a broader base of capital. The common individual can open the newspaper and see the potential for sharing in new and profitable enterprises. Joint-stock companies can capture the imagination and open the wallet. In the Chinese case, the railway rights movement in particular tapped into a hope that

…

daily “noise.” The theory sought to identify the primary trend by using stock price movements based on the Dow industrial and Dow transportation indexes. The joint movement of the industrial and transportation indexes upward or downward was thought to be a signal of a primary trend and worthy of a buy

…

techniques are ancient and widespread. They are embedded not only in the economics of culture, but in its social and intellectual structures as well. The joint development of financial tools and complex society was a process of give and take on many levels. Discoveries of various financial solutions led to some

…

. Mundy, John. 1954. Liberty and Political Power in Toulouse 1050–1230. New York: Columbia University Press, p. 60. CHAPTER 18 1. Scott, William Robert. 1995. Joint Stock Companies to 1720. Bristol: Theomes Press, p. 19. Original edition 1910–1912. 2. Scott (1995), p. 18. 3. Tyson, Peter. 2006. “Future of the

…

Non-Western Technology,” in Timothy Brook and Gregory Blue (eds.), China and Historical Capitalism. Cambridge: Cambridge University Press, p. 167. 4. Scott, William Robert. 1995. Joint Stock Companies to 1720. Bristol: Theomes Press, Bristol, vol. 1, p. 395. Original edition 1910–1912. 5. For details of the founding of the South

…

Bubble of 1929: Evidence from Closed-End Funds. No. w3523. Cambridge, MA: National Bureau of Economic Research. 18. The following paper was read before a joint meeting of the Econometric Society and the American Statistical Association, Cincinnati, Ohio, December 31, 1932. It was reprinted in Cowles, Alfred. 1933. “Can Stock Market

…

Gambling. East Rutherford, NJ: Gotham Books. Sciabarra, Chris Matthew. 1995. Ayn Rand: The Russian Radical. University Park: Pennsylvania State University Press. Scott, William Robert. 1995. Joint Stock Companies to 1720. Bristol: Theomes Press. Original edition 1910–1912. Seaford, Richard. 2004. Money and the Early Greek Mind: Homer, Philosophy, Tragedy. Cambridge: Cambridge

…

; customs revenues and, 426, 427, 428; erosion of sovereignty and, 423, 425–26, 437; forced encounter with the West in nineteenth century and, 141, 423; joint government-merchant structure in, 431–33; Opium Wars and, 425–26, 441; railways and, 141, 434–37, 438, 440; revolution of 1911 and, 436–37

…

, 303, 307, 316; speculative investments in eighteenth century and, 328; transition to modern form of, 318; voyages of exploration and, 305, 307, 320. See also joint-stock companies; limited liability; shareholders; stock markets corruption: Chinese concern with, 139, 201. See also agency problem Cowles, Alfred, 485–87, 504 Cowles Commission for Research in Economics, 487

…

River Company, 394 Jefferson, Peter, 389 Jiang Shang, 153, 154 Jiangsu Dasheng Group Company, 434 jiaozi, 184–85, 186 Jixia Academy, 155–57, 160–61 joint-stock companies: Age of Discovery and, 307; Bubble Act and, 380; in eighteenth-century England, 328, 338, 366, 380; Honor del Bazacle as, 300, 307

…

; Muscovy company as, 309; in nineteenth-century China, 431–32, 437; Rotterdam insurance company as, 366. See also corporations Joint Stock Companies Act of 1856, 427 Jones, Alfred Winslow, 488–89 Jones, David, 117, 119 Jonker, Joost, 316 Jordan, Julius, 22–23 Jovanovic, Franck, 278

Company: A Short History of a Revolutionary Idea

by John Micklethwait and Adrian Wooldridge · 4 Mar 2003 · 196pp · 57,974 words

an end. Now they were back. One of the themes of Utopia Limited, or The Flowers of Progress, was not an obvious rib-tickler: the limited-liability joint-stock company. That night’s operetta made fun of the idea that companies were sweeping all before them, enriching investors as they went. An English company promoter

…

in business: this definition, as we shall see, includes everything from informal Assyrian trading arrangements to modern leveraged buyouts. The second is more specific: the limited-liability joint-stock company is a distinct legal entity (so distinct, in fact, that its shareholders can sue it), endowed by government with certain collective rights and responsibilities. This

…

the world, conquering such obstinate refuseniks as the Chinese Communist Party and the partners of Goldman Sachs. Though this is primarily a book about the joint-stock company, it unapologetically strays into broader territory. From the beginning of economic life, businesspeople have looked for ways to share the risks and rewards

…

around companies. Nowadays it is assumed that the causes of capitalism and companies are inseparable. Yet many of the earliest critics of the joint-stock company and the “subsidy” of limited liability were economic liberals, taking their cue from Adam Smith, who had derided them as antiquated and inefficient. One noted Victorian thinker, A.

…

Mill settled his own doubts on this score only by wearily concluding that for new capital-hungry businesses, like railways, the only alternative to the joint-stock system was direct state control. Even after the Companies Acts, Victorians were still prey to the traditional cultural prejudices against these soulless institutions. The

…

different form of organization emerged in Florence and other inland towns: the compagnia. These began as family firms, operating on the principle of joint liability: all partners were jointly liable to the value of their worldly goods (“to their cuff links,” as all-too-liable investing “names” at Lloyds of London

…

limited liability. Colonization was so risky that the only way to raise large sums of money from investors was to protect them. The first chartered joint-stock company was the Muscovy Company, which was finally given its charter in 1555. Two decades earlier, a group of London merchants had dispatched

…

on the eve of the revolution employed only thirty people.6 At various points in this period, there were brief spasms of enthusiasm for the joint-stock concept among smaller businessmen (there was one splurge in London in the 1690s). Still, it was the big chartered companies that hogged the

…

on June 1, 1874, this extraordinary organization passed away quietly, with less fanfare than a regional railway bankruptcy. JOHN LAW AND THE GOD MAMMON Early joint-stock companies were instruments of rampant financial speculation as well as economic imperialism. In the early eighteenth century, the governments of France and Britain used

…

. And what the prime minister, Sir Robert Walpole, called “the never to be forgotten or forgiven South Sea scheme” still damned the name of joint-stock companies of all sorts.25 A BODY WITHOUT A SOUL The damage done to companies by these shenanigans was immense. These organizations had raised

…

and clandestine competition). For him, the chartered companies were “either burdensome or useless” and they “either mismanaged or confined” trade.30 Second, he thought that joint-stock companies were inherently less efficient than sole traders. In particular, he worried about the “agency” problem: hired managers would not bring the same “anxious

…

oddly prescient—all the more so because Madden was polemicizing against a declining economic organization. Set beside partnerships and various forms of unincorporated companies, incorporated joint-stock companies (i.e., ones recognized by state statute) fared badly for the next century. The British and the French treated them with suspicion. “

…

legal and economic changes from the 1820s onward that the modern company began to take shape.3 SLAVERS AND INDUSTRIALISTS In Britain, the prejudice against joint-stock companies created by the South Sea Bubble was later reinforced by scandals involving both the Charitable Corporation and the York Building Company. As we

…

have already noted, the ironically named South Sea Bubble Act survived the scandal. It required every joint-stock company to possess a charter from parliament—something that involved huge costs in terms of money, time, and uncertainty. Most British businessmen preferred other

…

transferable and doing something to limit the liability of sleeping partners who were not directly involved in the business).4 There were several frenzies of joint-stock company creation—most notably to build canals. Between 1758 and 1803, 165 canal acts were submitted to parliament. The Napoleonic Wars produced another

…

the two most dynamic and controversial parts of the British economy—the slave trade and the growing industrial sector—both preferred partnerships (and occasionally joint-venture associations) to joint-stock companies. By the eighteenth century, the Royal African Company, like all the other chartered companies set up for slavery, was a financial

…

which Watt dismissed immediately with “small hopes that a wheel carriage would ever become useful.”9 AN AMERICAN ALTERNATIVE In Britain, the marginal position of joint-stock companies could easily be blamed on the South Sea Company’s abuses. In newly independent America, by contrast, companies had been responsible for the

…

This granted limited liability to its sleeping (inactive) partners and only needed to be registered.15 Another pioneer was Sweden, which gave legal recognition to joint-stock firms as early as 1848. All the same, only a legal pedant would dispute the boast in Utopia Limited: that Victorian Britain gave birth

…

to worry whether professional managers could ever match the zeal of owner-managers, but he decided that for large businesses, the only alternative to the joint-stock system was government control. Christian Socialists also rallied to limited-liability firms, seeing them as a way of both enriching the poor and

…

had done something other than vote yet more money for the Crimean War. Pleydell-Bouverie was then replaced by Robert Lowe, who masterminded the landmark Joint Stock Companies Act of 1856 (which removed the qualifications of the Limited Liability Act). If anyone deserves the title “father of the modern company,”

…

of the new gunpowder. In May 1863, France, keen for its entrepreneurs to compete on equal terms, passed a law allowing businesspeople to establish joint-stock companies with full limited liability, provided that the capital involved did not exceed 20 million francs. Four years later, the limit was removed and general permission to form sociétés

…

anonymes was granted. In 1870, Germany also made it much easier to found joint-stock companies. The result was a boom in company creation: 203

…

to make his own barrels) and ships (to transport them). In 1870, hoping to take advantage of a recession to expand further, he formed a joint-stock company, Standard Oil, distributing shares mainly among his original partners, and admitting a handful of new investors. He also set up the South Improvement

…

s biggest employer and one of the most generous benefactors to Lewis’s beloved university.6 J. B. Priestley dismissed “the shoddy, greedy, profit grabbing, joint-stock company industrial system.”7 Almost everyone blamed industry for polluting the countryside, debasing the culture, and shattering their peace and quiet. This antiutilitarian bias

…

a series of committees that looked suspiciously like the boards of its individual constituents. I. G. Farben also had a whole series of cross-shareholdings, joint ventures, and pricing agreements with other German chemical firms. The second difference from Anglo-Saxon capitalism was the influence of the big banks. Germany’s

…

capital markets were too localized and inefficient to power its industrialization. Germany’s bankers stepped into the breach by forming joint-stock and limited-partnership banks that duly channeled money from savers of all sorts, first into the railways (which were financed by bank debt,

…

to concentrate on the Mittelstand of medium-sized family firms that also powered the country’s success. In 1913, seventeen of the biggest twenty-five joint-stock companies were banks. Universal banks financed almost half of the country’s net investment. Bankers also sat on the supervisory boards of all

…

difference vis-à-vis the Anglo-Saxon world: Germany’s two-level system of corporate control. The 1870 law that introduced free incorporation also obliged joint-stock companies to have two levels of control: management boards, responsible for day-to-day decisions, and supervisory boards, made up of big shareholders

…

the samurai to shed their feudal ways and wear Western clothes. It also created business opportunities by selling state-owned factories for a song, introducing joint-stock-company laws, abolishing the guilds and other restrictions on occupational choice, and preaching that moneymaking was perfectly compatible with Shinto and Buddhist religious beliefs

…

result was the Tokyo Electric Light Company, the ancestor of Toshiba. Shibusawa Eiichi, who founded the Dai Ichi bank, which financed many of the original joint-stock companies, worked for a spell in the Ministry of Finance. Mitsui liked to compare itself to the British East India Company. Mitsubishi, Mitsui’

…

was set by the zaibatsu. The zaibatsu were particularly successful in mixing family ownership with meritocratic management. The founding families were understandably nervous about the joint-stock concept, initially trying to keep control through special classes of shares, and then after those were banned in the 1890s, making arrangements so that

…

, it could rely on Chevys. Yet, if Sloanism was built on decentralization, it was controlled decentralization. The divisions were marshaled together to use their joint-buying clout to secure cheaper prices for everything from steel to stationery. And Sloan and Du Pont created a powerful general office, packed full of

…

was found in the triumph of private-sector capitalism, spurred on by privatization and deregulation around the world: the next twenty-five years saw the joint-stock company vastly expand its territory, trampling many of its rivals as it did so. The delusion was that it would be companies like

…

former Communist world. In 1992, the Yeltsin government embarked on a gigantic program of privatization. It first “corporatized” state-owned enterprises by rechartering them as joint-stock companies, with the state owning all the shares. It then issued vouchers to every Russian citizen (including children) to buy shares. By 1996, some

…

companies easier to set up: work began in Brussels on standardizing a European-wide company directive. Meanwhile, within the existing private sector, the publicly quoted joint-stock company consolidated its hold over capitalism. There were still plenty of different sorts of businesses. Indeed, financiers and tax accountants conspired to invent new

…

, they were not). But these were merely the outer defenses. In general, the larger businesses got, the more they tended to converge on the joint-stock idea. Around the world, institutions that had stuck to partnership structures or mutual societies for decades—Goldman Sachs, Lloyds of London, a whole host

…

jobs (by some counts, they provided three-quarters of the new jobs in the mid-1990s). Firms everywhere discovered the benefits of alliances, partnerships, joint ventures, and franchises. By one estimate, around a fifth of the revenues of America’s biggest one thousand companies in 1997 came from alliances of

…

chapter: the multinational. 8 AGENTS OF INFLUENCE: MULTINATIONALS 1850–2002 Few companies have attracted as much opprobrium as multinationals. Long before the emergence of modern joint-stock companies, the Medicis and Rothschilds exuded an air of sinister power and fleet-footed mystery. Multinationals have always aroused suspicion—from national elites (who

…

directors, one based in London and mainly concerned with financial management, the other in the relevant countries, concerned with day-to-day operations. The Victorian joint-stock companies copied this model in their other big foray overseas—the search for valuable raw materials. Gold, diamonds, and copper in Africa, tin in

…

died in 1938 on the Paris subway. Would the world be a better place if the Victorians had listened to the alarmists who suggested banning joint-stock companies after the bankruptcies of the 1860s? Would America be a richer country if the New Dealers had nationalized great chunks of corporate

…

indispensable, yet individually unpredictable? That question should be at the heart of the debate about the future of the corporation. In the meantime, the joint-stock company has plenty to be proud of. The organization that Gilbert and Sullivan celebrated in Utopia Limited deserves at least a round of applause

…

Books, 1971) traces the impact of a calamitous piece of legislation. One day a historian will write a great book on the debate about the joint-stock company in nineteenth-century England. Until then, the following books are useful: Charles Kindelberger’s A Financial History of Western Europe (Oxford: Oxford

…

Macmillan, 1991), xxii. 8. Quoted in Milton, Nathaniel’s Nutmeg, 91. 9. K. N. Chaudhuri, The English East India Company: The Study of an Early Joint-Stock Company, 1600–1640 (New York: Reprints of Economic Classics, Augustus M. Kelley, Bookseller, 1965), 208–11. 10. Keay, The Honourable Company, 113. 11.

…

Capital, 49. 12. Handlin and Handlin, “Origins of the American Business Corporation,” 119–20. 13. Roy, Socializing Capital, 46. 14. Ibid., 54. 15. Charles Freedeman, Joint-Stock Enterprise in France 1807–1867: From Privileged Company to Modern Corporation (Chapel Hill: University of North Carolina Press, 1979). 16. P. L. Cottrell, Industrial

…

“The Politics of the Company,” in John Parkinson, Andrew Gamble, and Gavin Kelly, The Political Economy of the Company (Oxford: Hart, 2000), 32. 26. Freedeman, Joint-Stock Enterprise in France 1807–1867, 132–33. 27. We are indebted to Dr. Simon Green of All Souls College for this insight. 28. Robert

…

classic account of this is AnnaLee Saxenian, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge, Mass.: Harvard University Press, 1994). 21. Joint Venture Silicon Valley, 2002 Index, see: http://www.jointventure.org/resources/2002Index/index.html. 22. Frances Cairncross, The Company of the Future (Boston: Harvard Business

The Power of Gold: The History of an Obsession

by Peter L. Bernstein · 1 Jan 2000 · 497pp · 153,755 words

, in return for which the institution would be established as the first private company to do business as a limited-liability corporation, or so-called joint stock company-in the rapidly growing field of banking just like the institutions of our own time.'" The founding of the Bank would turn out

…

private credit.... All ceremony or etiquette... was now out of the question when we had to think of what was to be done for our joint preservation on such an emergency.... The instant this resolution of paying no more specie was known in the street, a scene of confusion and uproar

…

came to be known as the Bullion Committee numbered 22 members, most of whom were experts from the world of finance; some, such as the joint Paymaster of the Forces, were civil servants. The hearings ran for a total of 31 days between February 22 and May 25, 1810, during which

…

monarchy, under Charles's son Charles II, was restored in 1660. *The Dutch East India Company, founded in 1602, was the first permanent joint stock company. Commercial banking firms with limited liability developed much more rapidly in the United States than in Britain during the first half of the nineteenth century. tSee Bernstein (1996), Chapter

The Ascent of Money: A Financial History of the World

by Niall Ferguson · 13 Nov 2007 · 471pp · 124,585 words

debt into shares in the bank), the Bank was endowed with distinctive privileges. From 1709 it was the only bank allowed to operate on a joint-stock basis (see Chapter 3); and from 1742 it established a partial monopoly on the issue of banknotes, a distinctive form of promissory note that

…

. It was only the proliferation of new kinds of bank, and particularly those taking deposits, that made monetary expansion possible. After 1858, the restrictions on joint-stock banking were lifted, paving the way for the emergence of a few big commercial banks: the London & Westminster (founded in 1833), the National Provincial

…

had to do was to take a walk down a typical street near the city centre. First there were the shopping malls and fast food joints, which is where Tennesseans do much of their spending. Right next door was a ‘tax advisor’ ready to help those short of cash to claim

…

Mrs. Anna Hawes the Sum of One hundred and one pounds being the Consideration for One hundred pounds Interest or Share in the Capital or Joint Stock of Five per Cent Annuities, consolidated July 6th, 1785 . . . transferable at the Bank of England . . . A 5 per cent consol purchased by Anna Hawes

…

greater than that of Baring Brothers and the Banque de France. By 1899, at £41 million, it exceeded the capital of the five biggest German joint-stock banks put together. Increasingly the firm became a multinational asset manager for the wealth of the managers’ extended family. As their numbers grew from

…

from investors’ concerns.51 Even those outside the Empire risked a visit from a gunboat if they defaulted, as Venezuela discovered in 1902, when a joint naval expedition by Britain, Germany and Italy temporarily blockaded the country’s ports. The United States was especially energetic (and effective) in protecting bondholders’ interests

…

birth of the bond market, the next step in the story of the ascent of money was therefore the rise of the joint-stock, limited-liability corporation: joint-stock because the company’s capital was jointly owned by multiple investors; limited-liability because the separate existence of the company as a legal ‘person’ protected the investors from losing

…

continents needed the company.1 However, the ability of companies to transform the global economy depended on another, related innovation. In theory, the managers of joint-stock companies are supposed to be disciplined by vigilant shareholders, who attend annual meetings, and seek to exert influence directly or indirectly through non-executive

…

of debased coinage by creating a reliable form of bank money (see Chapter 1). But perhaps the single greatest Dutch invention of all was the joint-stock company. The story of the company had begun a century before Law’s arrival and had its origins in the efforts of Dutch merchants

…

originally planned. This meant that any shareholders who wanted their cash back had no alternative but to sell their shares to another investor.19 The joint-stock company and the stock market were thus born within just a few years of each other. No sooner had the first publicly owned corporation

…

obliged to consult on ‘great and important matters’, and who would be entitled to oversee the annual accounting of the six chambers and to nominate, jointly with the Seventeen Lords, future candidates for directorships. In addition, in March 1623, it was agreed that the Nine Men would be entitled to attend

…

stock prices came back down to earth in London, there was no lasting systemic damage to the financial system, aside from the constraint on future joint-stock company formation represented by the Bubble Act. The South Sea Company itself continued to exist; the government debt conversion was not reversed; foreign investors

…

in smoke, turned into mere ‘wind’, just like the millions of livres lost in the Mississippi crash. Invented almost exactly four hundred years ago, the joint-stock, limited-liability company is indeed a miraculous institution, as is the stock market where its ownership can be bought and sold. And yet throughout financial history there have

…

of the Great Depression is sometimes seen as an end that justifies any means. Yet the history of the Dutch East India Company, the original joint-stock company, shows that, with sound money of the sort provided by the Amsterdam Exchange Bank, stock market bubbles and busts can be avoided. In

…

evidence to connect these trends with a long-run rise in liquidity, due partly to increased gold production and, more importantly, to financial innovation, as joint-stock banks expanded their balance sheets relative to their reserves, and savings banks successfully attracted deposits from middle-class and lower-class households.34 All

…

the acceptance houses went bust, the bill brokers would go down with them, and possibly also the larger joint-stock banks, which lent millions every day short-term to the discount market. The joint-stock banks’ decision to call in loans deepened what we would now call the credit crunch.40 As

…

, William 289-92 Jews 87n. moneylenders 33-5 Rothschilds see Rothschild family in Venice 33-8 see also anti-Semitism Jivaro people 18 jobbers 299 joint-stock banks/companies 49 Jones, Alfred Winslow 314n. Kaffir (gold mine) bubble 297 Kahn, Herman 209 Kahnemann, Daniel 344-5 Kast, Miguel 214 Katrina (Hurricane

Sapiens: A Brief History of Humankind

by Yuval Noah Harari · 1 Jan 2011 · 447pp · 141,811 words

have imagined. When the Agricultural Revolution opened opportunities for the creation of crowded cities and mighty empires, people invented stories about great gods, motherlands and joint stock companies to provide the needed social links. While human evolution was crawling at its usual snail’s pace, the human imagination was building astounding

…

order to increase the number of potential investors and reduce the risk they incurred, Europeans turned to limited liability joint-stock companies. Instead of a single investor betting all his money on a single rickety ship, the joint-stock company collected money from a large number of investors, each risking only a small portion of his

…

money to the king of Spain, and who would have thought twice before extending credit to the Dutch government, happily invested fortunes in the Dutch joint-stock companies that were the mainstay of the new empire. If you thought a company was going to make a big profit but it had

…

shares led to the establishment in most major European cities of stock exchanges, places where the shares of companies were traded. The most famous Dutch joint-stock company, the Vereenigde Oostindische Compagnie, or VOC for short, was chartered in 1602, just as the Dutch were throwing off Spanish rule and the

…

particularly notorious during what was called the Mississippi Bubble, the largest financial crisis of eighteenth-century Europe. That story also begins with an empire-building joint-stock company. In 1717 the Mississippi Company, chartered in France, set out to colonise the lower Mississippi valley, establishing the city of New Orleans in

…

empire was crumbling, the British Empire was expanding rapidly. Like the Dutch Empire before it, the British Empire was established and run largely by private joint-stock companies based in the London stock exchange. The first English settlements in North America were established in the early seventeenth century by

…

joint-stock companies such as the London Company, the Plymouth Company, the Dorchester Company and the Massachusetts Company. The Indian subcontinent too was conquered not by

…

by the British crown (1858) hardly ended the embrace of capitalism and empire. On the contrary, the connection only grew stronger during the nineteenth century. Joint-stock companies no longer needed to establish and govern private colonies – their managers and large shareholders now pulled the strings of power in London, Amsterdam

Americana: A 400-Year History of American Capitalism

by Bhu Srinivasan · 25 Sep 2017 · 801pp · 209,348 words

in the ventures of their choosing. As the century progressed, the capital requirements of overseas ventures had coincided with and propelled development of the joint-stock company—“joint-stock” implying shareholders with transferable interests as opposed to the more intimate, closed nature of partnerships. In addition to transferability of shares, this ongoing

…

and duration meant that such enterprises required ample levels of capital, far beyond the risk appetite of any one investor, no matter how wealthy. The joint-stock company allowed multiple investors to buy in to a venture and hold the interest. The final push to the English

…

joint-stock company occurred in 1553 with the Russia Company, in which adventurers committed £6,000 at £25 per share, marking the first use of the

…

corporate form for overseas ventures. Starting then, even English privateers, state-sanctioned pirate ships looking to confiscate cargo, began using the joint-stock form to raise capital from adventurers. Privateers had another reason to spread the risk. For individual operators, the risk of being charged criminally if

…

Drake’s twenty-one ships and 1,932 men stood out with invested capital of £57,000. In his thorough examination of the era’s joint-stock companies, W. R. Scott suggested that the flexibility of the corporate structure lent itself to the virtues of diversification and spreading risk, particularly in

…

Virginia the primary American gateway to its vast interior. To make this happen, the Virginia and Maryland legislatures, with Washington as an advocate and supporter, jointly formed the Potomac Company. General Washington was appointed head of the company. As gratitude and to serve as “durable monuments of his glory,” as the

…

the quota and sell as much as they could. Carnegie often violated his quota, preferring to partner with another large steel operation, Cambria, to bid jointly on large contracts. But Carnegie had the final advantage. As the low-cost producer was profitable at any price level at which his competitors could

…

state authorities, and Cook County’s, seemingly had no power to regulate the happenings in this small bedroom community. Cicero’s saloons, brothels, and gambling joints operated openly in what the article headlined as THE FREE KINGDOM OF TORRIO. John Torrio, a gangster transplanted from New York more than a decade

…

to small amounts. With days left in power, the Hoover administration was in a full panic and made repeated overtures to the president-elect for joint action, but Roosevelt refused any responsibility for anything until he assumed the office. With less than forty-eight hours to go, the situation worsened. Gold

…

guild. The group suggested to Rock that they needed around $750,000 to build next-generation semiconductors. After a fruitless search among dozens of prospective joint-venture partners, nearly all of them defense contractors, Rock called Fairchild Camera and Instrument. Sherman Fairchild, the controlling shareholder, agreed to invest, putting in $1

…

the Merchants: Ibid., 1, 9. implying shareholders with: Ibid., 17. The final push: William Robert Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720, vol. 1 (New York: Cornell University Library Digital Collections, 2015), 18. Sir Francis Drake’s: Ibid., 77. “Suppose, for instance”: Ibid

…

Passages from the Original to the Dissolution of the Virginia Company, cited in William Robert Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720, vol. 1 (New York: Cornell University Library Digital Collections, 2015), 287. seen with curiosity: Joseph C. Robert, The Story of Tobacco

…

will be very extraordinary”: Ibid., 22. “the prospect of large gains”: Ibid. “We will not go into”: Phineas Miller and Eli Whitney Jr. to the joint committee of both Houses of the Legislature of South Carolina, December 20, 1801, quoted in Olmsted, Memoir of Eli Whitney, 29. $20,000 up front

…

, 2008. Schwarz, Richard W. John Harvey Kellogg. Hagerstown, MD: Review and Herald, 2006. Scott, William Robert. The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720. Vol. 1. New York: Cornell University Library Digital Collections, 2015. Sears, Roebuck & Co. Consumer Guide for 1894. Facsimile edition. New York

…

–98, 100, 220 Corn Flakes, 262 corporate raiders, 445–49 corporations versus capitalism, in 1980s, 443–45 formation through state granted charters, 83–84 joint-stock companies, 6–8 corporations limited liability feature of, 7, 84, 85–86 New World ventures and, 6–8 purpose of, 442–45 transferability of shares and, 6–7, 84

…

, 479–80, 481, 482–83, 486–87, 491 John Deere, 490 Johnson, Jack, 313, 454 Johnson, James Weldon, 313 JOIN, OR DIE cartoon, 30, 31 joint-stock company, 6–7 Jordan, James, 461 Jordan, Michael, 453–56, 460–62 Jungle, The (Sinclair), 266–67, 269–74 junk bonds, 439–42, 446

…

H., 193 Van Syckel, Samuel, 157 venture capital funds, 425–26 origins of, 8, 425 ventures, financing of, 3–17 adventure capital and, 6–9 joint-stock companies and, 6–7 Pilgrims/Plymouth Colony and, 3–6, 8–17 privateering syndicates and, 7–8 subscriptions, 72 Vietnam War, 419 Virginia Colony

The Snowball: Warren Buffett and the Business of Life

by Alice Schroeder · 1 Sep 2008 · 1,336pp · 415,037 words

street, even though the police station was on the opposite corner. Woolworth’s sat kitty-corner from Sears. They could eat lunch and case the joint through the windows. After their hamburgers, the boys would stroll down the stairs into Sears’s lower level, bypassing the lunch counter and going straight

…

necked. Instead of necking, Warren rubber-necked. He had a regular Saturday night reservation with Lou Battistone at Jimmy Lake’s theater, a local burlesque joint, where they had a fantasy flirtation with one of the dancers, Kitty Lyne. Warren would roar with laughter when a comedian took a pratfall or

…

Dodd’s permission to cut class to attend the annual meeting of Marshall-Wells. A few months before starting at Columbia, he and Howard had jointly bought twenty-five shares of this stock. “Marshall-Wells was this wholesale hardware company up in Duluth, Minnesota. That was the first annual meeting I

…

go out on his own. Graham closed this business in 1925 when he and his backers disagreed over his compensation, and established the “Benjamin Graham Joint Account” on January 1, 1926, with $450,000 from clients and his own money. Shortly afterward, Jerome Newman, the brother of one of his clients

…

recouping his partners’ losses, but that meant he would have to more than triple their money. It would take some doing even to keep the Joint Account alive. Jerry Newman’s father-in-law saved it by putting in $50,000. And by December 1935, Graham did triple the money, and

…

earned the losses back. For tax reasons, in 1936 Graham and Newman reorganized the Joint Account into two businesses—Graham-Newman Corporation, and Newman & Graham.8 Graham-Newman charged a fixed fee and had issued shares to the public which

…

, still sitting at the table, engrossed.27 A few nights later, the two men took their wives to Johnny’s Café, a red-velvet steak joint, where Munger became so self-intoxicated at one of his own jokes that he slipped out of the booth and began rolling on the floor

…

circles, and, like the low-key Hollands, they were typical of the Buffetts’ friends. Warren and Susie stayed away from the Omaha social circuit. Their joint social life was evolving into a series of recurring events that followed the rhythm of Warren’s work and often took place when they were

…

token $725,000 and gave away less than $40,000 a year, nearly all to education.26 Susie ran the Buffett Foundation, which reflected their joint philosophy that money should go back to society. If she’d had access to them, Susie would have given away large amounts quickly. But Buffett

…

in loudest of all—and were ignored. Their protestations only alienated them from the employees. In one example, Salomon’s Phibro unit had formed a joint venture with a seven-year-old Houston company, Anglo-Suisse, to build oil fields in West Siberia, south of the Arctic Circle, that would supposedly

…

no Anglos and no Swiss involved in this company. The name alone is reason not to get involved.” But Salomon put $116 million into the joint venture anyway, thinking that oil was going to be integral to Russia’s future and that Western capital was needed to extract the oil. But

…

go away,” the Russian political system could go away. No margin of safety could cover that.40 Sure enough, as soon as the White Nights joint venture got going, the Russian government began toying with a tax on oil exports. The tax nearly wiped out White Nights’s profit. Then the

…

.” “Rotten to the core,” Meriwether repeated in shock, “rotten to the core.” All of them suddenly realized that the Treasury’s move had been a joint decision among the Federal Reserve, the Treasury, and the SEC, their condemnation a sudden reversal of the world’s opinion of Salomon, a dramatic payback

…

begun to talk with Peter Fisher, who ran trading activities at the Federal Reserve, and was drawing together Long-Term’s creditors to negotiate a joint bailout. The Federal Reserve had held a conference call at which its chairman, Alan Greenspan, spoke of an “international financial maelstrom” that must be causing

…

a week following the assassination. 45. American Express at the time was the only major U.S. public company to be capitalized as a joint stock company rather than a limited liability corporation. This meant its shareholders could be assessed for deficiencies in capital. “So every trust department in the United States panicked,” recalls Buffett

…

the Courier-Express. 21. If the trend had continued without the Evening News starting a Sunday paper, the logical outcome would have been either a joint operating agreement or outright acquisition of the Courier-Express to combine the papers—both expensive alternatives. 22. Buffalo Courier-Express, Inc., v. Buffalo Evening News

…

was $400 million. See also James D. Gwartney and Randall G. Holcombe, “Optimal Capital Gains Tax Policy: Lessons from the 1970s, 1980s, and 1990s,” A Joint Economic Committee Study, United States Congress, June 1997. 55. Berkshire Hathaway annual report, 1986. Notably, Buffett phrases the statement in terms of the costly consequences

…

. Interview with Frank Rooney. 26. Gifts of more than $12,000 are subject to this tax. 27. Source: IRS, Statistics of Income Division, March 2007; Joint Committee on Taxation, Description and Analysis of Present Law and Proposals Relating to Federal Estate and Gift Taxation, Public Hearing Before the Subcommittee on Taxation

The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

by David S. Landes · 14 Sep 1999 · 1,060pp · 265,296 words

, using handcrafted models whose parts fitted perfectly without nails. No detail was too small to escape the planning of the shipwrights: overlapping planks, multiple layers, joints between planks caulked with jute and covered with sifted lime and tung oil, iron nails sealed against rust, special woods for every purpose, even large

…

, and railways. Because the Bubble Act of 1720, passed in the wake of the notorious South Sea speculation and crash, prevented the creation of a joint stock with freely transferable shares, big projects typically went to large partnerships with assets vested in trustees. Not a happy solution in a commercial world

…

changed the rules.) In the nineteenth century, when things got costlier and risks greater, the most effective device for mobilizing capital was the chartered joint-stock company with limited liability—chartered because limited liability could be conferred only by the crown or Parliament. These large, semipublic enterprises never made much use of long-term bank

…

more than six partners. Not until 1826, and then only outside a sixty-five-mile radius from London, were joint-stock banks permitted; and only in 1833 were non-note-issuing joint-stock banks permitted inside that radius. Yet these new banks were little different in size and policy from their private

…

marital alliances, which could provide both funds and business contacts.4 Any effort to understand the Industrial Revolution in Europe before the age of public joint-stock companies and stock exchanges must take family and personal connections into account. In good times, short-term and demand loans could turn into long

…

one link to the next. This collective danger, and the need for long-term investment, led to the invention of a new financial intermediary, the joint-stock investment bank, or as the French came to call it, the crédit mobilier. The first inspiration for such institutions came from bureaucrats as well

…

in the 1830s the Société Générale, until then a quiet commercial bank, turned into a development bank; and that France spawned a gaggle of caisses—joint-stock limited partnerships (commandites par actions) created to finance industry at medium and long term.* Why caisses? The Bank of France was opposed to the

…

the balloon-frame house normalized and deskilled the building itself. Gone were the heavy members of traditional barns and dwellings; gone the mortise-and-tenon joints; gone the masonry and plaster walls, interior and exterior, of Old World construction.* Instead, one used precut 2x4’s and nailed them together, then sheathed

…

title essay goes back to 1951.) 6. The Germans too, by law of 11 June 1870. The point was whether businessmen could establish a joint-stock company with limited liability without obtaining prior government permission, whether by charter from the crown or a bill of the legislature. Tsarist Russia never got around to instituting such

…

. On “assistance for the strong,” see R. Tilly, “German Banking, 1850-1914.” 8. Ibid., p. 113. All industrial capital? Or just that held in public joint-stock companies? 9. On the triumph of trade liberalization, see Levasseur, Histoire des classes ouvrières…de 1789 a 1870, Vol. II, Book VI, ch. 5

…

: Theory and Practice. London: Routledge. Frank, Andre Gunder. 1998. ReOrient: Global Economy in the Asian Age. Berkeley: University of California Press. Freedeman, Charles E. 1979’. Joint-stock Enterprise in France, 1807-1867: From Privileged Companies to Modern Corporations. Chapel Hill: Univ. North Carolina Press. —————. 1993. The Triumph of Corporate Capitalism in

Owning the Earth: The Transforming History of Land Ownership

by Andro Linklater · 12 Nov 2013 · 603pp · 182,826 words

the financial and corporate environment. Its funding brought into existence such innovations as the public sale of shares, the concept of the joint stock company where the owners’ liability for debt was limited to their shareholding, the issue of bonds backed by future earnings, a stock exchange for trading the company’s shares, and a

…

and advanced steel manufacturers of the second industrial revolution, were different, Wells pointed out. “Those engaged in great industrial enterprises,” he wrote, “whether they form joint-stock companies or are simply wealthy individuals, are invested with such economic powers that none of them can be easily pushed to the wall.” * * * The

…

rail companies in densely populated areas—were attractive. In response to the need to bring in more investment, two pieces of legislation, the 1855 Limited Liability Act and 1856 Joint Stock Companies Act, offered protection to investors by restricting their liabilities, should a company fail, to the loss of their investment. The birth of the

…

rule. Some of the fiercest opposition flared up over the redistribution of land. With the backing of the United States, a five-man Chinese-American Joint Commission on Rural Reconstruction that included Ladejinsky began the process of redistribution in 1950. The measures were as draconian as in Japan and bore Ladejinsky

…

agriculture in the populous south and central regions from peasant to capitalist production, that this was followed in the 1850s by the rapid spread of joint-stock banks with multiple branches issuing paper money, that compulsory education from the 1830s had made literacy virtually universal, and that from 1866 an elected