of his share from the company; but
each member can, without their consent,
transfer his share to another person, and
thereby introduce a new member. The value
of a share in a joint stock is always the
price which it will bring in the market; and
this may be either greater or less in any proportion,
than the sum which its owner stands
credited for in the stock of the company.
Secondly, In a private copartnery, each
partner is bound for the debts contracted by
the company, to the whole extent of his fortune.
In a joint-stock company, on the contrary,
each partner is bound only to the extent
of his share.
The trade of a joint-stock company is always
managed by a court of directors. This
court, indeed, is frequently subject, in many
respects, to the control of a general court of
proprietors. But the greater part of these
proprietors seldom pretend to understand any
thing of the business of the company; and
when the spirit of faction happens not to prevail
among them, give themselves no trouble
about it, but receive contentedly such half-yearly
or yearly dividend as the directors
think proper to make to them. This total
exemption from trouble and from risk, beyond
a limited sum, encourages many people
to become adventurers in joint-stock companies,
who would, upon no account, hazard
their fortunes in any private copartnery.
Such companies, therefore, commonly draw
to themselves much greater stocks, than any
private copartnery can boast of. The trading
stock of the South Sea company at one time
amounted to upwards of thirty-three millions
eight hundred thousand pounds. The divided
capital of the Bank of England amounts,
at present, to ten millions seven hundred
and eighty thousand pounds. The directors
of such companies, however, being the managers
rather of other people's money than of
their own, it cannot well be expected that
they should watch over it with the same anxious
vigilance with which the partners in a
private copartnery frequently watch over their
own. Like the stewards of a rich man, they
are apt to consider attention to small matters
as not for their master's honour, and very
easily give themselves a dispensation from
having it. Negligence and profusion, therefore,
must always prevail, more or less, in
the management of the affairs of such a company.
It is upon this account, that joint-stock
companies for foreign trade have seldom
been able to maintain the competition against
private adventurers. They have, accordingly,
very seldom succeeded without an exclusive
privilege; and frequently have not succeeded
with one. Without an exclusive privilege,
they have commonly mismanaged the
trade. With an exclusive privilege, they
have both mismanaged and confined it.
The Royal African company, the predecessors
of the present African company, had
an exclusive privilege by charter; but as that
charter had not been confirmed by act of parliament,
the trade, in consequence of the declaration
of rights, was, soon after the Revolution,
laid open to all his majesty's subjects.
The Hudson's Bay company are, as to their
legal rights, in the same situation as the
Royal African company. Their exclusive
charter has not been confirmed by act of parliament.
The South Sea company, as long
as they continued to be a trading company,
had an exclusive privilege confirmed by act
of parliament; as have likewise the present
united company of merchants trading to the
East Indies.
The Royal African company soon found
that they could not maintain the competition
against private adventurers, whom, notwithstanding
the declaration of rights, they continued
for some time to call interlopers, and
to persecute as such. In 1698, however, the
private adventurers were subjected to a duty
of ten per cent. upon almost all the different
branches of their trade, to be employed by
the company in the maintenance of their forts
and garrisons. But, notwithstanding this
heavy tax, the company were still unable to
maintain the competition. Their stock and
credit gradually declined. In 1712, their
debts had become so great, that a particular
act of parliament was thought necessary, both
for their security and for that of their creditors.
It was enacted, that the resolution of
two-thirds of these creditors in number and
value should bind the rest, both with regard
to the time which should be allowed to the
company for the payment of their debts, and
with regard to any other agreement which it
might be thought proper to make with them
concerning those debts. In 1730, their affairs
were in so great disorder, that they were altogether
incapable of maintaining their forts
and garrisons, the sole purpose and pretext
of their institution. From that year till their
final dissolution, the parliament judged it necessary
to allow the annual sum of ten thousand
pounds for that purpose. In 1732, after
having been for many years losers by the trade
of carrying negroes to the West Indies, they at
last resolved to give it up altogether; to sell
to the private traders to America the negroes
which they purchased upon the coast; and to
employ their servants in a trade to the inland
parts of Africa for gold dust, elephants teeth,
dyeing drugs, &c. But their success in this
more confined trade was not greater than in
their former extensive one. Their affairs
continued to go gradually to decline, till at
last, being in every respect a bankrupt company,
they were dissolved by act of parliament,
and their forts and garrisons vested in
the present regulated company of merchants
trading to Africa. Before the erection of
the Royal African company, there had been