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- Title
The decline of the Royal African Company: Fringe firms and the role of the charter.
- Authors
Carlos, Ann M.; Kruse, Jamie Brown
- Abstract
This article focuses on the decline of the Royal African Co. of England. In 1672 Royal African Co. received a royal charter giving it a legal monopoly of the British slave trade between Africa and the West Indies. By the late 1690s it was licensing private traders, and by the 1730s it had virtually disappeared from the market. The company faced the problem of poor performance of its overseas employees, the high cost of maintaining its forts in West Africa, and the growing floating debt owed to it by West Indian planters. Recent research suggests that these seventeenth-century long-distance firms understood the nature of the agency problem and used contract forms which were well designed to maintain agent incentives. In return for receiving its charter, the Royal African Co. was required to maintain forts in West Africa. These castles and posts were of little direct financial benefit for the conduct of the slave trade. However, death rates were higher among those slaves who were held in the forts even for short durations, making them more expensive for the company.
- Subjects
ENGLAND; SLAVE trade; ROYAL African Co.; CORPORATE debt; LABOR costs; DEATH rate; SLAVE traders
- Publication
Economic History Review, 1996, Vol 49, Issue 2, p291
- ISSN
0013-0117
- Publication type
Article
- DOI
10.2307/2597917