The Royal Africa Company was an English (British after 1707) slave-trading company. It bought slaves on the west coast of Africa and shipped them across the Atlantic. It then transported goods back to Europe. The company was formed from an earlier group of English traders called the Royal Adventurers Trading to Africa (founded in 1660). The Royal Africa Company was granted a monopoly right by the king of England to trade along the African coast in 1672. It lost this right in 1698. It later joined forces with the South Sea Company to sell slaves to the Spanish colonies in the Americas. It ceased trading in 1752 and was replaced with the African Company. Throughout its existence, it shipped thousands of people across the Middle Passage. It maintained a British presence in Africa and helped the state to raise funds. It was one of the major companies that featured in the early London stock market.
The Royal Africa Company was a joint-stock company. A joint-stock company allowed individuals to invest in a business enterprise with limited liability. The company would hold a royal charter permitting it to exist. This was often combined with a monopoly right. The Royal Africa Company was the only English/British company allowed to trade along the African coast. Joint-stock companies could take on existing government debt or lend money to the state in exchange for new rights. (The British East India Company and the Bank of England are famous examples.) Joint-stock company shares were easily tradable. Trading went on in different places such as the Royal Exchange and surrounding coffeehouses. It also occurred in an area of London known as Exchange Alley. This is at the heart of the City (London’s financial district).
The Royal Africa Company rented land along the coast of Africa from local kings. It owned forts to hold slaves before they were put on ships. The slaves were brought to the forts by local African traders. The traders would barter for goods or accept different sorts of fiat money, for example, cowry shells or iron bars. The company’s main fort was Cape Coast Castle in modern-day Ghana. Many other European nations also had forts and trading posts nearby. Armed conflicts would be fought between European groups to take over forts. The company had to have soldiers and cannon to defend its property. Slave ships were
vulnerable to attack from pirates. So the company’s ships were heavily armed with guns. The ships often got a Royal Navy escort vessel to protect them. Convoy protection was not easily available in wartime. The Royal Africa Company was struggling to keep trading during the Nine Years War (1688–97). (This war is known under a variety of names including King William’s War [1689–97] in North America.)
Independent British traders had been able to break the monopoly. They lobbied the government and the Royal Africa Company lost its monopoly rights. The company was still expected to maintain its forts to protect other British traders. It was supposed to collect fees from other traders, but this was difficult in practice. The obligation to pay fees was revoked in 1712. The British government decided to pay subsidies to the company to maintain the forts from 1730 onward. The Royal Navy reported that the forts were often in disrepair.
The company entered into a contract with the South Sea Company (another joint-stock company formed in 1711). The South Sea Company was granted a monopoly contract by the Spanish crown to send slaves to Spanish colonies in the Americas. The South Sea Company gave its name to a financial market bubble, the South Sea Bubble (1720). Share prices increased to extremely high levels, especially for South Sea stock.
Then prices suddenly dropped. Both companies survived the crash and continued to ship slaves. However, the Royal Africa Company had been in a gradual decline for many years. It survived until 1752 when it was replaced by the African Company.
- Kenneth Gordon Davies, The Royal African Company (Atheneum, 1970);
- Larry Neal, The Rise of Financial Capitalism: International Capital Markets in the Age of Reason (Cambridge University Press, 1990);
- William Robert Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720 (Cambridge University Press, 1911);
- Richard B. Sheridan, Sugar and Slavery: An Economic History of the British West Indies, 1623–1775 (Caribbean Universities Press, 1974).
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