This article presents a picture of the changing character of the Nyassa Company at ground level, and it relates this to changes in the capital interests which controlled the company. In so doing it seeks to explain the undercapitalization which left the area economically undeveloped. During the first period of the company's existence, from 1894 to 1898, its publicly expressed aim was the economic development of Nyassa; but the directors were primarily concerned with financial speculation and the company's influence in Africa spread no further than isolated points on the coast. In the second period of its existence, from 1899 to 1914, the company became a conquering and occupying force; but the expense of overcoming the determined resistance of African political units, plus a more realistic appraisal of the area's economic potential, meant that by 1909 the aim of economic development had been abandoned and the company turned instead to expanding its role as a supplier of migrant labour. In 1913 migrant labour to South Africa ceased, the company changed hands, and shortly afterwards the European war found its way into the area. In the last period of the company's existence, from 1919 to 1929, with only ten years of the charter left since the Portuguese government refused to grant an extension, the principles of finance capital dictated that it was too late for profitable investment in realizing the early visions of extensive economic development. Instead, the company turned to raising the level of hut tax as a means of increasing revenue, and the administration was allowed to expand and intensify the abuses which it seems to have always practised.

Between the world wars, Colonial Office decisions regarding Kenya were subject to two opposed pressures: while the settlers wrestled with officials for greater control of their own affairs, a body of pro-African reformers loudly protested every concession and lobbied for equal rights and an end to the colour bar. This humanitarian lobby was largely the creation of two former colonial servants, Dr Norman Leys and W. McGregor Ross. Working mainly through the Labour Party, these men broadcast their social democratic ethics and demonstrated that the colony's political economy was badly weighted against African progress. They were the precursors of a more full-bodied socialist approach to colonial reform which during World War Two began to permeate the imperial bureaucracy. Until African initiative became a major determinant of Colonial Office policy in the early 1950s, these critics, with their colleagues in religious and humanitarian groups, were able to hold the front against settler self-government in a few indirect ways. Their allegations that Africans had been unjustly deprived of land and that they received far less in services than they paid in taxes were officially corroborated by command papers in the thirties. By creating a body of pro-African opinion which could exert political pressure on the Colonial Office they discouraged official plans to surrender responsible government to the settlers. Their direct impact on the Colonial Office was simply to alienate officials. Records of the confrontations between these reformers and Whitehall reveal that during this period Colonial Office officials were not only powerless to initiate reform. They were also, with few exceptions, uninterested in reforming the colony's political economy.