company was deprived by the late convention between the courts of Great Britain and Spain, foon after the treaty of Aix la Chapelle in, 1748,

After this, fome other fums were lent to the government in the reign of queen Anne at 6 per cent, In the third of George I. the intereft of the whole was reduced to 5 per cent. and they advanced two millions more to the government at the fame intereft, By the ftatute of the 6th of George I. it was declared, that this company might redeem all or any of the redeemable national debts, in confideration of which the company were empowered to augment their capital according to the fums they fhould discharge: and for enabling the company to raife fuch fums for purchafing annuities, exchanging for ready money new exchequer bills, carrying on their trade, &c. the company might by fuch means as they thould think proper, raife fuch fums of money as in a general court of the company fhould be judged neceffary. The company were alfo impowered to raise money on contracts, bills, bonds or obligations under their common feal, on the credit of their capital ftock. But if the fub-governor, deputy-governor, or other members of the company fhould purchase lands or revenues of the crown, upon account of the corporation, or lend money by loan or anticipation, on any branch of the revenue, other than fuch part only on which a credit of loan was granted by parliament, fuch fub-governor, or other member of the company, fhould forfeit treble the value of the money fo lent..

The fatal South Sea fcheme tranfacted in the year 1720, was executed upon the laft-mentioned ftatute. The company had at firft fet out with good fuccefs, and the value of their ftock for the first five years had rifen fafter than that of any other company, and his majesty, after purchafing 10,000 l. ftock, had condefcended to be their governor. Things were in this fituation, when taking advantage of the above ftatute, the South Sea bubble was projected. The pretended

pretended defign of which was to raise a fund for carrying on a trade to the South Seas, and purchafing annuities, &c. paid to the other companies: and propofals were printed and diftributed fhewing the advantages of the defign, and inviting perfons into it. The fum neceffary for carrying it on, together with the profits that were to arife from it, were divided into a certain number of fhares, or fubfcriptions to be purchased by perfons difpofed to adventure therein. And the better to carry on the deception, the direc tors engaged to make very large dividends, and actually declared, that every 100 I. original ftock would yield 501. per annum, which occafioned fo great a rife of their ftock, that a fhare of 100l. was fold for upward of 1000 1. This was in the month of July: but before the end of September it fell to 1501. by which multitudes were ruined, and fuch a fcene of diftrefs occafioned as is fcarcely to be conceived. But the confequences of this infamous fcheme are too well known. We fhall pass over all the other tranfactions of this company in the reign of king George I. as not material to our prefent purpose.

By a ftatute of the 6th of his late majefty, it was enacted, that from and after the 24th of June 1733, the capital ftock of this company, which amounted to 14,651,103. 8 s. 1 d. and the fhares of the refpective proprietors, fhould be divided into four equal parts, three-fourths of which fhould be converted into a joint ftock, attended with annuities, after the rate of 4 per cent until redemption by parliament, and should be called, the new South Sea annuities, and the other fourth part fhould remain in the company as a trading capital ftock, attended with the refidue of the annuities or funds payable at the exchequer to the company for their whole capital, till redemption; and attended with the fame fums allowed for charges of management, and with all effects, profits of trade, debts, privileges and advantages belonging to the South Sea company. That

the

the accomptant of the company fhould twice every year, at Christmas and Midfummer, or within one month after, state an account of the company's affairs, which fhould be laid before the next general court, in order to their declaring a dividend: and all dividends fhould be made out of the clear profits, and fhould not exceed what the company might reasonably divide, without incurring any farther debt; provided that the company fhould not at any time divide more than 4 per cent. per annum, until their debts were discharged; and that the South Sea company, and their trading ftock, fhould, exclufively from the new joint stock of annuities, be liable to all the debts and incumbrances of the company; and that the company fhould caufe to be kept within the city of London, an office and books, in which all transfers of the new annuities fhould be entered and figned by the party making fuch transfer, or his attorney, and the perfon to whom fuch transfer fhould be made, or his attorney, fhould under-write his apceptance, and no other method of transferring the annuities fhould be good in law.

The annuities of this company, as well as the other, are now reduced to 3 1. per cent..

This company is under the direction of a governor, fub-governor, deputy-governor, and 21 directors; but no perfon is qualified to be governor, his majesty excepted, unless fuch governor has in his own name and right, 5000 l. in the trading stock; the fubgovernor is to have 4000l. the deputy 3000 L and a director 2000l, in the fame ftock. In every general court, every member having in his own name and right 500l. in trading stock, has one vote; if 20001. two votes; if 3000l. three votes, and if 50001. four votes.

The Eaft India company, the bank of England, and the South Sea company, are the only incorporated bodies to which the government is indebted, except the million bank, whofe capital is only one

million

million, constituted to purchase the reversion of the long exchequer orders.

The interest of all the debts owing by the govern→ ment is now reduced to 3 per cent. excepting only the annuities for the years 1756, and 1758, the life annuities, and the exchequer orders: but the South Sea company still continues to divide four per cent. on their prefent capital stock, which they are enabled to do from the profits they make on the fums allowed to them for management of the annuities paid at their office, and from the intereft of annuities which are not claimed by the proprietors.

As the prices of the different stocks are continually fluctuating above and below par; fo when a perfon who is not acquainted with tranfactions of that nature, reads in the papers the prices of ftocks, where bank ftock is marked perhaps 1271. India ditto 134 a 134 South Sea ditto 97, &c. he is to underftand that a 1001. of those respective stocks fell at fuch a time for those several fums.

In comparing the prices of the different stocks one with another, it must be remembered, that the intereft due on them from the time of the last payment, is taken into the current price, and the feller never receives any feparate confideration for it, except in the cafe of India bonds, we the intereft due is cal`culated to the day of the fale, and paid by the purchafer over and above the premium agreed for. But as the intereft on the different ftocks is paid at different times, this, if not rightly understood, would lead a perfon not well acquainted with them into confiderable mistakes in his computation of their value; fome always having a quarter's interest due on them more than others, which makes an appearance of a confiderable difference in the price, when, in reality, there is none at all. Thus, for inftance, old South Sea annuities fell at prefent for £. 85 or £85 10s. while new South Sea annuities fetch only £841, or £ 84 15 s. though each of them produce

the fame annual fum of £3 per cent, but the old annuities have a quarter's interest more due on them than the new annuities, which amounts to 15 s. the exact difference. There is, however, one or two causes that will always make one fpecies of annuities fell fomewhat lower than another, though of the fame real value, one of which is, the annuities making but a fmall capital, and there not being, for that reafon, fo many people at all times ready to buy into it, as into others, where the quantity is larger; because it is apprehended that whenever the government pays off the national debt, they will begin with that particular species of annuity, the capital of which is the smalleft.,

A stock may likewife be affected by the court of Chancery; for if that court fhould order the money which is under their direction to be laid out in any particular stock, that ftock, by having more purchafers, will be raised to a higher price than any other of the like value.

By what has been faid, the reader will perceive how much the credit and intereft of the nation depends on the support of the public funds.-While the annuities, and intereft for money advanced is there regularly paid, and the principal infured by both prince and people (a fecurity not to be had in other nations) foreigners will 'end us their property, and all Europe be interested in our welfare; the paper of the companies will be converted into money and merchandize, and Great Britain can never want cafh to carry her schemes into execution.

In other nations, credit is founded on the word of the prince, if a monarchy; or that of the people, if a republic; but here it is established on the interests of both prince and people, which is the strongest fecurity for however lovely and engaging honelty may be in other respects, intereft in money-matters will always obtain confidence; becaufe many people pay. great regard to their intereft, who have but little veneration for virtue.