directors of the company, in the prosecution
of their mercantile projects; the other half to
remain as before, a trading stock, and to be
subject to those debts and losses. The petition
was too reasonable not to be granted.
In 1733, they again petitioned the parliament,
that three-fourths of their trading stock might
be turned into annuity stock, and only one-fourth
remain as trading stock, or exposed to
the hazards arising from the bad management
of their directors. Both their annuity and
trading stocks had, by this time, been reduced
more than two millions each, by several different
payments from government; so that this
fourth amounted only to L.3,662,784 : 8 : 6.
In 1748, all the demands of the company upon
the king of Spain, in consequence of the
assiento contract, were, by the treaty of Aix-la-Chapelle,
given up for what was supposed
an equivalent. An end was put to their trade
with the Spanish West Indies; the remainder
of their trading stock was turned into an annuity
stock; and the company ceased, in every
respect, to be a trading company.
It ought to be observed, that in the trade
which the South Sea company carried on by
means of their annual ship, the only trade by
which it ever was expected that they could
make any considerable profit, they were not
without competitors, either in the foreign or
in the home market. At Carthagena, Porto
Bello, and La Vera Cruz, they had to encounter
the competition of the Spanish merchants,
who brought from Cadiz to those markets
European goods, of the same kind with
the outward cargo of their ship; and in England
they had to encounter that of the English
merchants, who imported from Cadiz
goods of the Spanish West Indies, of the same
kind with the inward cargo. The goods, both
of the Spanish and English merchants, indeed,
were, perhaps, subject to higher duties. But
the loss occasioned by the negligence, profusion,
and malversation of the servants of the
company, had probably been a tax much heavier
than all those duties. That a joint-stock
company should be able to carry on successfully
any branch of foreign trade, when private
adventurers can come into any sort of
open and fair competition with them, seems
contrary to all experience.
The old English East India company was
established in 1600, by a charter from Queen
Elizabeth. In the first twelve voyages which
they fitted out for India, they appear to have
traded as a regulated company, with separate
stocks, though only in the general ships of the
company. In 1612, they united into a joint
stock. Their charter was exclusive, and,
though not confirmed by act of parliament,
was in those days supposed to convey a real
exclusive privilege. For many years, therefore,
they were not much disturbed by interlopers.
Their capital, which never exceeded
seven hundred and fourty-four thousand
pounds, and of which fifty pounds was a share,
was not so exorbitant, nor their dealings so
extensive, as to afford either a pretext for gross
negligence and profusion, or a cover to gross
malversation. Notwithstanding some extraordinary
losses, occasioned partly by the malice
of the Dutch East India company, and
partly by other accidents, they carried on for
many years a successful trade. But in process
of time, when the principles of liberty
were better understood, it became every day
more and more doubtful, how far a royal
charter, not confirmed by act of parliament,
could convey an exclusive privilege. Upon
this question the decisions of the courts of justice
were not uniform, but varied with the authority
of government, and the humours of the
times. Interlopers multiplied upon them;
and towards the end of the reign of Charles
II., through the whole of that of James II.,
and during a part of that of William III., reduced
them to great distress. In 1698, a proposal
was made to parliament, of advancing
two millions to government, at eight per cent.
provided the subscribers were erected into a
new East India company, with exclusive privileges.
The old East India company offered
seven hundred thousand pounds, nearly the
amount of their capital, at four per cent. upon
the same conditions. But such was at that
time the state of public credit, that it was more
convenient for government to borrow two millions
at eight per cent. than seven hundred
thousand pounds at four. The proposal of
the new subscribers was accepted, and a new
East India company established in consequence.
The old East India company, however,
had a right to continue their trade till
1701. They had, at the same time, in the
name of their treasurer, subscribed very artfully
three hundred and fifteen thousand
pounds into the stock of the new. By a negligence
in the expression of the act of parliament,
which vested the East India trade in
the subscribers to this loan of two millions, it
did not appear evident that they were all obliged
to unite into a joint stock. A few private
traders, whose subscriptions amounted
only to seven thousand two hundred pounds,
insisted upon the privilege of trading separately
upon their own stocks, and at their own
risks. The old East India company had a
right to a separate trade upon their own stock
till 1701; and they had likewise, both before
and after that period, a right, like that of
other private traders, to a separate trade upon
the three hundred and fifteen thousand pounds,
which they had subscribed into the stock of
the new company. The competition of the
two companies with the private traders, and
with one another, is said to have well nigh
ruined both. Upon a subsequent occasion, in
1730, when a proposal was made to parliament
for putting the trade under the management
of a regulated company, and thereby