Other officers of the company are governors and factors abroad, fome of whom have guards of foldiers, and live in all the ftate of fovereign princes.

Of the Bank of England.

The company of the bank was incorporated by parliament, in the 5th and 6th years of king William and queen Mary, by the name of the Governor and Company of the Bank of England; in confideration of the loan of 1,200,000l. granted to the government; for which the fubfcribers received almoft 8 per cent. By this charter, the company are not to borrow under their common feal, unlefs by act of parliament; they are not to trade, or fuffer any perfon in truft for them, to trade in any goods, or merchandize; but they may deal in bills of exchange, in buying or felling bullion, and foreign gold and filver coin, &c.

It

By an act of parliament paffed in the 8th and 9th year of king William III. they were impowered to enlarge their capital ftock to 2,201,1711. 10s. was then alfo enacted, that bank ftock fhould be a perfonal, and not a real estate; that ho contract either in word or writing, for buying or felling bank ftock, fhould be good in law, unlefs registered in the books of the bank within feven days; and the stock transferred in 14 days, and that it thould be felony, without benefit of clergy, to counterfeit the common feal of the bank, or any fealed bank bill, or any bank note, or to alter or erafe fuch bills or notes.

By another act paffed in the 7th of queen Anne, the company were impowered to augment their capital to 4,402,343 1. and they then advanced 400,000l. more to the government, and in 1714, they advanced another loan of 1,500,000 1.

In the third year of the reign of king George I. the intereft of their capital ftock was reduced to 5 per cent, when the bank agreed to deliver up as many exchequer bills as amounted to 2,000,000l. and to

accept

accept an annuity of 100,000l. and it was declared lawful for the bank to call from their members, in proportion to their interefts in the capital ftock, fuch fums of money as in a general court should be found neceffary. If any member should neglect to pay his fhare of the monies fo called for, at the time appointed by notice in the London Gazette, and fixed upon the Royal exchange, it should be lawful for the bank, not only to ftop the dividend of such member, and to apply it toward payment of the money in queftion; but also to ftop the transfers of the fhare of fuch defaulter, and to charge him with an interest of 5 1. per cent. per annum, for the money fo omitted to be paid: and if the principal and interest should be three months unpaid, the bank fhould then have power to fell fo much of the stock belonging to the defaulter as would fatisfy the fame.

After this, the bank reduced the intereft of the 2,000,000 l. lent to the government, from 5 to 4 per cent. and purchafed feveral other annuities, which were afterward redeemed by the government, and the national debt due to the bank reduced to 1,600,000l. But in 1742, the company engaged to fupply the government with 1,600,000l. at 3 per cent. which is now called the 3 per cent. annuities, fo that the government was now indebted to the company3,200,000l. the one half carrying 4, and the other 3 per cent.

In the year 1746, the company agreed that the fum of 986,800 1. due to them in the exchequer bills unfatisfied, on the duties for licences to fell fpirituous liquors by retail, fhould be cancelled, and in lieu thereof to accept of an annuity of 39,442 1. the interest of that fum at 4 per cent. The company alfo agreed to advance the further fum of 1,000,000 1. into the exchequer, upon the credit of the duties arifing by the malt and land-tax, at 4 per cent. for exchequer bills to be iffued for that purpofe; in confideration of which the company were enabled to F 4 augment

augment their capital with 986,800 1. the intereft of which, as well as that of the other annuities, was reduced to 31. 10 s. per cent. till the 25th of December 1757, and from that time to carry only 3 per cent.

And in order to enable them to circulate the faid exchequer bills, they eftablished what is now called bank circulation. The nature of which, not being well understood, we fhall take the liberty to be a little more particular in its explanation than we have been with regard to the other flocks.

The company of the bank are obliged to keep cafh fufficient to answer not only the common, but also any extraordinary demand that may be made upon them; and whatever money they have by them, over and above the fum fuppofed neceffary for thefe purposes, they employ in what may be called the trade of the company; that is to fay, in difcounting bills of exchange, in buying of gold and filver, and in government fecurities, &c. But when the bank entered into the above-mentioned contract, as they did not keep unemployed a larger fum of money than what they deemed neceffary to answer their ordinary and extraordinary demands, they could not conveniently take out of their current cafh fo large a fum as a million, with which they were obliged to furnish the government, without either leffening that fum they employed in discounting, buying gold and filver, &c. (which would have been very difadvantageous to them) or inventing fome method that fhould anfwer all the purpofes of keeping the million in cafh. The method which they chofe, and which fully an fwers their end, was as follows.

They opened a fubfcription, which they renew annually, for a million of money; wherein the fubfcribers advance 10 per cent. and enter into a contract to pay the remainder, or any part thereof, whenever the bank fhall call upon them, under the penalty of forfeiting the 10 per cent. fo advanced; in confideration of which, the bank pays the fubfcribers

4 per cent. intereft for the money paid in, and per cent. for the whole fum they agree to furnish; and in cafe a call fhould be made upon them for the whole, or any part thereof, the bank farther agrees to pay them at the rate of 5 per cent. per annum for fuch fum till they repay it, which they are under an obligation to do at the end of the year. By this means the bank obtains all the purposes of keeping a million of money by them; and though the fubscribers, if no call is made upon them (which is in general the cafe) receive 6 per cent. for the money they advance, yet the company gains the fum of 23,5001. per annum by the contract; as will appear by the following account.

The bank receives from the government

for the advance of a million The bank pays to the fubfcribers who advance 100,000l. and engage to pay (when called for) 900,000 l. more

The clear gain to the bank therefore is

£.

30,000

6,500

23,500

This is the fate of the cafe, provided the company should make no call on the subscribers, which they will be very unwilling to do, becaufe it would not only leffen their profit, but affect the public credit in general.

Bank ftock may not improperly be called a trading. ftock, fince with this they deal very largely in foreign gold and filver, in discounting bills of exchange, &c. Befide which, they are allowed by the government very confiderable fums annually for the management of the annuities paid at their office. All which advantages render a fhare in their stock very valuable, tho'. it is not equal in value to the East India ftock. The company make dividends of the profits half yearly, of which notice is publicly given; when thofe who have occafion for their money may readily receive it; but private perfons, if they judge convenient, are permitted

permitted to continue their funds, and to have their intereft added to the principal.

This company is under the direction of a governor, deputy-governor, and 24 directors, who are annually elected by the general court, in the fame manner as in the Eaft India company. Thirteen, or more, compose a court of directors for managing the affairs of the company.

The officers of this company are very numerous.

Of the South Sea Company.

During the long war with France in the reign of queen Anne, the payment of the failors of the royal navy being neglected, and they receiving tickets inftead of money, were frequently obliged by their neceffities to fell thefe tickets to avaritious men at a difcount of 401. and fometimes 501. per cent. By this and other means the debts of the nation unprovided for by parliament, and which amounted to 9,471,321 1. fell into the hands of thefe ufurers. On which, Mr. Harley, at that time chancellor of the exchequer, and afterward earl of Oxford, propofed a fcheme to allow the proprietors of thefe debts and deficiencies 61 per cent. per annum, and to incorpo. rate them in order to their carrying on a trade to the South Sea, and they were accordingly incorporated. under the title of the Governor and Company of Merchants of Great Britain, trading to the South Seas, and other parts of America, and for encouraging the Fishery, &c.

Though this company feem formed for the fake of commerce, it is certain the miniftry never thought feriously during the courfe of the war, about making any fettlements on the coast of South America, which was what flattered the expectations of the people; nor was it indeed ever carried into execution, or any. trade ever undertaken by this company, except the Affiento, in pursuance of the treaty of Utrecht, for furnishing the Spaniards with negroes, of which this.

company