2.2 European Colonization

6 min readjanuary 2, 2023

Jillian Holbrook

Jillian Holbrook

AP US History 🇺🇸

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The Rise of Joint-Stock Companies 💸

After the Roanoke failure, English interest in American settlement declined. During Elizabeth’s reign, the major obstacle to the colonization of the New World was raising money. No single person could underwrite the cost of an expedition. The solution was a joint-stock company, which was a business organization in which a group of people could invest without the fear of bankruptcy.
A merchant or landowner could purchase a share of stock at a stated price, and in several years, the investor could anticipate recovering the initial amount plus a portion of whatever profits the company had made. Rather than one investor risking everything, many investors could split the risk, thereby increasing the number of new businesses.
Several benefits to using joint stock companies are:
  1. Access to capital rose and allowed businesses to finance expansion, development, and larger ventures through selling shares of stock to investors.
  2. Limited liability for individual shareholders reduced investment risk, meaning that shareholders were only responsible for the amount of money they personally invested rather than potential debt or obligations to the company.
  3. Shares of stock in a joint stock company could be bought and sold on the open market, making it easier for businesses to transfer ownership or raise capital.
  4. Joint-stock companies could attract and retain talented employees by offering them a share of the company's profits through stock options or other forms of equity.
Jamestown, the first permanent English settlement in the New World, was chartered in 1606 by King James I of England. The charter granted the Virginia Company of London, a joint-stock company, the right to establish a colony in present-day North Carolina to the Hudson and to govern the colony according to English law. Three ships, the Susan Constant, the Godspeed, and the Discovery, sailed for America.
The Virginia Company of London was chartered with the goal of establishing a profitable settlement in the New World and promoting the colonization and Christianization of the region. The charter granted the company the right to govern the colony, appoint officials, establish courts and laws, and regulate trade and commerce. The company was also given the right to import and export goods, collect taxes and duties, and administer justice in the colony.
The charter of Jamestown was a significant event in the history of the United States, as it marked the beginning of English colonization in the New World. Leaders of the colony selected what they considered a promising location for the settlement, roughly 30 miles from the mouth of the James River on a marshy peninsula. Although the area was an ideal location for a fort to tactically thwart surprise attacks by the Spanish or Native Americans, the low-lying ground proved to be a disease-ridden death trap, and the settlement struggled to survive.
Some of the misfortunes of Jamestown included:
  1. Lack of planning and preparation: The Virginia Company of London did not provide the colonists with enough food, supplies, or skilled labor
  2. Death and disease: Jamestown colonists suffered from starvation. The contaminated water around the settlement was dirty and salty, leading to poor farming and drinking water. Marshy conditions provided the perfect environment for mosquitoes, which infected colonists with diseases like malaria.
  3. Hostile relations with Indigenous people: The colonists at Jamestown faced hostility and conflict with the Indigenous people of the region. The colonists often encroached on Indigenous lands, and they clashed with the Indigenous people over resources and territory.
  4. Poor leadership and internal strife: The leadership of Jamestown was often ineffective and corrupt, and the colonists were divided and prone to infighting.
Almost immediately, the colonists began quarreling. Adventurers sat around Jamestown while the other men performed crucial agricultural tasks. People were starving because too little labor was expended on the planting and harvesting of crops. These adventurers expected instant wealth like the Spanish in Mexico because there had been tales of rubies and diamonds just laying on the beach, which inflamed their expectations. Instead of cooperating for the common good, individuals pursued personal interests. They searched for gold instead of planting corn. 🌽
However, most European emigrants to the new world were single males in their teens or early twenties who came as indentured servants. In exchange for passage across the Atlantic, they agreed to serve a master for a stated number of years. The younger the servant, the longer they had to serve. In return, the master promised to give the laborers proper care, and at the conclusion of their contracts, they provided them with tools and clothes according to the custom of the country. It dramatically skewed the colony’s sex ratio. Often, men outnumbered women 6 to 1. As a result, servants that lived to the end of their indenture had few prospects for marriage.

John Smith 

Virginia might have gone the way of Roanoke had it not been for John Smith. Smith quickly became a leader in Jamestown. He traded with the local natives for food, established a stronger system of government, motivated the early colonists, and mapped the Chesapeake Bay.
In 1608, he seized control of the ruling council and instituted military discipline. The colony became very successful as all members were expected to pull their weight in maintaining the settlement. However, after severe injury from a gunpowder explosion and John Smith's return to England, the colony again lacked capable authority. The winter of 1609-1610 was called the “starving time.” Some colonists were driven to cannibalism. In England, Smith heard that one colonist had killed his wife, salted her, and eaten part of her before being discovered and executed. 

The Powhatan 


John White, “Village of the Secotan, 1585. Wikimedia.

Colonists in Jamestown were living in an area controlled by the most powerful Native American confederation east of the Mississippi River: the Powhatan. The Powhatan confederacy was made up of over 30 tribes, and it was led by the powerful chief, Powhatan, who ruled over the confederacy from his capital at Werowocomoco. Their complex social and political organization resulted in a well-developed system of government and a sophisticated system of trade, negotiation, and diplomacy.
Beyond skilled craftsmanship of baskets, pottery, and jewelry, they were known for their agricultural skills. The Powhatans cultivated a variety of crops, including corn, beans, and tobacco. Once tobacco was brought to Jamestown, courtesy of the Powhatans, the cash crop became a valuable export for the colonists to make money. 🌿

A Successful Colony 

Jamestown later established an elective representative assembly called the House of Burgesses to make the colony more attractive to wealthy speculators. Colonists who covered their own transportation cost to America were guaranteed a headright, a 50-acre lot for which they paid only a small annual rent. Adventurers were granted additional headrights for each servant they brought to the colony. A record number of people started to come to Jamestown. English colonization efforts attracted a variety of migrants, all of whom sought social mobility, economic prosperity, religious freedom, and improved living conditions.

The French and Dutch

Colonial efforts by the French and the Dutch involved relatively few Europeans. Instead, these powers relied on trade alliances and intermarriage with Native Americans to build economic and diplomatic relationships and acquire furs and other products for export to Europe.
In particular, the French fur trade was driven by the demand for beaver pelts, which were used to make high-quality hats in Europe. The beaver was a valuable commodity, and the demand for beaver pelts fueled the expansion of the fur trade in the Americas. Trade was established and maintained by French traders and explorers, who built trading posts, forts, and trade networks. 🦫 🎩
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