Founding
On 26 June 1695 the Parliament of Scotland passed the (c. 10), Act for a Company Tradeing to Affrica and the Indies, establishing the Company of Scotland trading to Africa and the Indies. The subscription book of the Company of Scotland was opened in Edinburgh on 26 February 1696, inviting investments from a minimum of £100 up to a maximum of £3,000. Such was the popularity of the scheme that on the first day alone 69 subscriptions were taken, worth £50,400. A second book was open in Glasgow between 5 March and 22 April. Although attempts to raise funds in London, Hamburg[2] and Amsterdam had been blocked, by the beginning of August 1696 the full target of £400,000 sterling had been reached.[1]
When the Company of Scotland was first formed, it was managed by its promoters, whose key task was to encourage subscriptions to the company. Once the subscription target of £400,000 sterling had been reached, however, the company required a more formal management structure. On 3 April 1696 a general meeting of subscribers elected a committee of twenty from their number to work with the promoters to establish rules and a constitution. By the middle of the month they had agreed that the company would be managed by a court of directors and a council general. The court of directors was to be an elected body with a maximum of fifty members, with each £1,000 of stock entitling its holder to one vote in the election. Twenty-five members would be elected by the subscribers, with up to a further twenty-five being elected by the first twenty-five. Subscribers with a holding of £1,000 or more could stand for election. A different director was to act as president of the court at each meeting. The first court of twenty-five directors was elected by shareholders on 12 May 1696. Candidates for election had to own at least £1,000 of company stock and so a limited number of shareholders, 119 out of a total of 1,320 (1,267 individuals and 53 institutions), were eligible to become directors. The court's directors came from across Scotland's wealthy classes, comprising two nobles, eight merchants and 15 lairds. Shortly afterwards, the first twenty-five directors appointed William Paterson and three others as additional directors. From July 1696 the court of directors met in the company's offices in Mylne Square on Edinburgh's High Street.
The council general was to be a larger body than the court of directors, comprising both the directors themselves and representatives of the remaining subscribers, with one representative for each £10,000 of stock. Whilst the court of directors was responsible for the day-to-day running of the company, the council general was convened to discuss major decisions, such as capital-raising, the election of future directors and the payment of dividends. The council general was only convened as and when there were matters to discuss, and therefore meetings were not held at regular intervals.
