dities, with the exporting the native. And it is reckoned that nation has the advantage in the balance of trade, that exports more of the native commodities, and imports lefs of the foreign. The reafon of this is, that, if the native commodities be of a greater value that are exported, the balance of that account must be made up in bullion or money; and the nation grows fo much richer as the balance of that account amounts to.

COMPANIES. Many of the most important and extensive claffes of British commerce have been, and fome ftill are, carried on by means of chartered companies. The moft diftinguished of thefe, the Eaft India Company, will claim notice in another divifion of the work; of fome others an account is now given. SOUTH SEA COMPANY. Of the origin of this company, and of its most celebrated tranfaction, the following account is extracted from Coxe's Memoirs of Sir Robert Walpole. The South Sea Company owed its origin to a chimerical project, formed by Harley in 1711, for the purpose of restoring the public credit which had been greatly affected by the difmiffion of the Whig miniftry, and of eftablishing a fund for the dif. charge of the navy and army debentures, and the other parts of the floating debt, which amounted to 9,471,325; and was afterwards increased to 10,000,000l. With a view to fettle a fund for paying the intereft of 6 per cent. on these arrears, which amounted to the annual fum of 568,279 1. all the duties upon wines, vinegar, tobacco, India goods, wrought filks, whale fins, and a few other duties were rendered permanent. In order to allure the creditors with the hopes of advantages from a new commerce, the monopoly of a trade to the South Sea, or coaft of Spanish America, was granted to a company compofed of the feveral proprietors of this funded debt, which being incorporated by act of parliament, took the appellation of the South Sea Company. The great advantages to be derived from this commerce had been held forth and exaggerated from the time of our firit voyages to Spanish America, in the reign of Elizabeth, and had been still further increafed by the reports of the buccancers. The confiderable riches which France had brought from America, fince the establishment of Philip V. on the throne of Spain, had contributed to raife the fanguine expedations of the British merchants; a rumour induftriously circulated, that four ports on the coafts of Peru and Chili, were to be ceded by Spain, inflamed the general ardour; the profpect of exchanging gold, filver, and rich drugs for the manufactures of England, were plaufible allurements for an enterprifing and commercial nation; and the mines of Potofi and Mexico were to diffuse their inexhaustible ftores through the medium of the new company.

The

The famous act of parliament, which incorporated the fubfcribers of the debts, under the name of the governor and company of merchants of Great Britain trading to the South Seas and other parts of the country, was called the earl of Oxford's maftcr-piece, and confidered by his panegyrifts as the fure means of bringing an inexhaustible mine of riches into England. But in fact this fcheme was fettled on a falfe foundation; for by the peace of Utrecht, Spain and the Indies being confirmed to Philip V. that monarch was too jealous to admit the English to a free trade in the South Sea, and inftead of the advantageous commerce' which Oxford had held forth, the company obtained only the aliento contract, or the privilege of fupplying the Spanish colonies with negroes for thirty years, with the permiffion of fending to Spanish America an annual fhip, limited both as to tonnage and value of cargo, of the profits of which the king of Spain referved one fourth, and five per cent. on the other three fourths. But this difappointment was attempted to be counteracted by the declaration made by Oxford, that Spain had permitted two fhips, in addition to the annual flip, to carry merchandize during the first year to the northern coafts of Spanish America, and a pompous nomination of the feveral ports where the company had leave to trade, and to fettle factories. But the grand benefits of this commerce were never realized. The firt voyage of the annual fhip was not made till 1717, and in the following year, the trade was fuppreffed by the rupture with Spain. Their effects, factories and fervants were feized and detained, notwithstanding the agreement in the aliento, which allowed, in cafe of a rupture, eighteen months for the removal of their effects.

Such was the fate of the South Sea Company, when in 1720 the miniftry, instead of attempting to letlen the national incumbrances, by the only juft and fuccefsful means, a clear and inviolable finking fund, adopted the vifionary schemes of projectors, and gave to the South Sca Company the power of fafcinating the minds of the public, and fpreading an infatuation fimilar to that which had recently involved France in a national bankruptcy. The grand point which government had in view, was the reduction of the irredeemable annuities, created in the reigns of William and Anne, for a period of 89, 96, and 99 years, amounting nearly to 800,000l. per annum, as no effectual measures could be adopted to leffen the public debts, whilft thefe annuities remained irredeemable.

In order to effect this liquidation, the minifter accepted propofals from the South Sea Company for reducing the debts to a redeemable state: as the object of the minifters, who had previously and fecretly arranged the scheme with the directors, was

to

to furprise the House of Commons into the measure of granting this extentive privilege to the South Sea Company, and of preventing competition, they entertained the moft fanguine hopes of fuccefs, from the fpecious advantages which they held forth to the public as the neceffary confequences. They accordingly laid the bufinefs before a committee of the Houfe of Commons.' After feveral debates it was adopted. The general phrenzy in favour of this project foon rofe to an enormous height. The compenfation to the South Sea Company, for the immediate payment of the 7,567,500l. feemingly for no value received, was to be drawn from the profits of their fcheme. Thefe profits were to arife from, 1ft. The exclufive advantages of the trade, which, although precarious, and depending on a peace with Spain, were ftated at no lefs than 200,000l. a year. 2d. The allowance for the charge of management, which was to be proportioned to the augmentation of their ftock. 3d. The difference of receiving 5 per cent. for the money expended in purchafing the public debts, when the ufual intereft was only 4 per cent. 4th. The great addition to their wealth, from the conftant rife of the price of the stock in confequence of the artifices ufed to enhance its value; on which the whole fuccefs of the fcheme depended.

The company could not fulfil its engagements with government, and pay fo large a fum as between feven and eight millions, without taking advantage of the general infatuation, and availing themfelves of that fpirit of pecuniary enterprise which had feized the public mind. Imaginary advantages were accordingly held forth; groundlefs and myfterious reports were circulated concerning valuable acquifitions in the South Sea, and hidden treasures; dividends of ten, thirty, and even fifty per cent. were voted, which the directors knew could never be paid, and for which there was no foundation.

The promoters of the fcheme highly exaggerated the profits; rumours were at the fame time fpread, that the company by monopolizing the fund of the whole national debt, would reduce government to the neceffity of applying to them for loans, which would be advanced on their own terms; and it was even infinuated, the proprietors would obtain, by the weight of their wealth, a majority in the houfe of commons, and make and depofe minifters. The public being intoxicated with thefe ideas, the ftock, which at the clofe of the books at Chriftmas, 1719, was only at 126, rofe, at the opening of the first fubfcription, on the 14th of April, to above 3ool. the market price being on that day 325: in other words, the creditors of the nation made over a debt of 100 for 33 in South Sea flock. As the phrenzy fpread, and the defie of making

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rapid

rapid fortunes became contagious, the ftock fucceffively rofe to above 1,000 per cent. at which price the books were opened for the fourth fubfcription on the 24th of Auguft, and this fubfcription, though the market price of the established stock was below 800l. was fold the fame day for a premium of 30 and 40 per cent.

The fanguine cupidity, which marked this speculation, was not confined to the South Sea fcheine: the whole nation became ftock jobbers and projectors; every day produced new proposals*, foine of apparent importance and utility, others fo abfurd and futile, that their fuccefs was matter of furprife, and almoft exceeds credibility. So prevalent was this rage, amongst perfons even of the highest rank, that the Prince of Wales was induced to become governor of the copper company. In vain Walpole and Compton endeavoured to diffuade him from this act of degradation, by reprefenting, that he subjected himself to a profecution, that he would be reviled in parliament, and that the Prince of Wales's bubble would be hawked about in 'Change-alley. Their remonftrances had no effect, the prince became governor, but afterwards on receiving notice that a profecution would be commenced against the company, withdrew his name, with a gain of 40,000l.

Thefe delufive projects received their first check from the power to which they owed their birth: the directors of the South Sea Company, jealous of their fuccefs, and defirous to monopolize all the money of the fpeculators, obtained writs of fcire facias against the conductors of bubbles, and thus put an end to them. But in opening the eyes of the deluded multitude, they took away the main prop of their own tottering edifice. Sufpicion once excited was not to be fuppreffed, and the public no longer amufed by pompous declarations and promifes of dividends, which they were convinced could never be realized, declined all farther purchases of stock, which fell in lefs than three weeks to 400, and those who had bought at large premiums were involved in distress and ruin. Amongst the numbers who fuffered by thefe fpeculations, were not only perfons of the first rank, but merchants and traders of every clafs, and bankers, who having advanced the monies committed

to

• The reader will find nearly two hundred of these bubles enumerated in Anderfon's Hiftory of Commerce, vol. iii. p. 103. Amongst the most abfurd may be mentioned, projects for tranfmuting quick-filver into malleable and fine metal. For importing a number of large jack-afles from Spain, in order to propagate a large breed of mules; and for trading in human hair. But the most impudent and bare-faced delufion, was that of a man who advertised that upon payment of two guineas, the tubferibers fhould be intitled to a hundred pound fhare, in a project which would be difclosed in a month. The extreme folly of the public was fuch, that he received a thoufand of these subscriptions in one day and then went off.

to them, on the fubcription receipts, by their temporary stoppages augmented the general calamity.

When the public diftrefs was arrived to a moft alarming height, and defpair pervaded all ranks of people, to Walpole every eye was directed, as the only perfon capable of affording affiftance, under the preffure of immediate neceffity. When the aid of the bank became neceffary to preferve the South Sea Company from ruin, he was called from the country, and importuned to use his intereft with the governors, to perfuade them to accept a propofal made by the South Sea Company, to circulate a number of their bonds. At this awful moment the clamour of diftrefs was irresistible, and the bank after great reluctance, arifing from a natural dread of being involved in the fame ruin which threatened the South Sea Company, was at length induced to liften to the propofals. Walpole was prefent at feveral conferences between the committees of the two companies, and drew up in the first conference, a minute well known afterwards by the name of the Bank contract, fpecifying the agreement of the Bank, to circulate three millions of South Sea bonds for one year, on certain conditions, which were specified at a fubfequent meeting. The report of his interference, and the intended aid to be given by the bank, occafioned a temporary rife in the South Sea ftock, but the public was in fuch a state of terror and agitation, and fo defperate was the fituation of the South Sea Company, that any community of interefts between the two companies was confidered as fatal to both. In confequence of this notion, fuch a demand was made on the bank, that the governors refused to abide by the terms of their agreement; alleging that it was deficient in legal validity.

The critical ftate of the nation having rendered the immediate prefence of the king neceffary, he haftily quitted his German dominions, and landed at Margate on the 9th of November. But his prefence had not the defired effect. South Sea ftock, which at the king's arrival was at 210, fell in a few days to 135. The public now looked with anxious expectation for the affembling of parliament, which was to meet on the 25th of November; yet fuch were the difficulties under which the miniftry laboured to form a proper fcheme for remedying the national diftrefs, which daily increased, that it was farther prorogued to the 8th of December.

Nor is it a matter of wonder that the miniftry were alarmed, and uncertain what measures to purfue. England had never experienced fo total a deftruction of credit, never was any country in fo violent a paroxyfm of defpondency and terror. The South Sea Company was confidered as the fole cause of

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