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!!!!隆堋響頼��紗秘慕禰厮宴和肝写偬堋響��
expense to which other joint stock companies for foreign trade
are subject。 But they had an immense capital divided among an
immense number of proprietors。 It was naturally to be expected��
therefore�察�that folly�察�negligence�察�and profusion should prevail
in the whole management of their affairs。 The knavery and
extravagance of their stock´jobbing projects are sufficiently
known�察�and the explication of them would be foreign to the
present subject。 Their mercantile projects were not much better
conducted。 The first trade which they engaged in was that of
supplying the Spanish West Indies with negroes�察�of which ��in
consequence of what was called the Assiento contract granted them
by the Treaty of Utrecht�� they had the exclusive privilege。 But
as it was not expected that much profit could be made by this
trade�察�both the Portuguese and French companies�察�who had enjoyed
it upon the same terms before them�察�having been ruined by it��
they were allowed�察�as compensation�察�to send annually a ship of a
certain burden to trade directly to the Spanish West Indies。 Of
the ten voyages which this annual ship was allowed to make�察�they
are said to have gained considerably by one�察�that of the Royal
Caroline in 1731�察�and to have been losers�察�more or less�察�by
almost all the rest。 Their ill success was imputed�察�by their
factors and agents�察�to the extortion and oppression of the
Spanish government�察�but was�察�perhaps�察�principally owing to the
profusion and depredations of those very factors and agents�察�some
of whom are said to have acquired great fortunes even in one
year。 In 1734�察�the company petitioned the king that they might be
allowed to dispose of the trade and tonnage of their annual ship��
on account of the little profit which they made by it�察�and to
accept such equivalent as they could obtain from the of Spain。
In 1724�察�this company had undertaken the whale´fishery。 Of
this�察�indeed�察�they had no monopoly�察�but as long as they carried
it on�察�no other British subjects appear to have engaged in it。 Of
the eight voyages which their ships made to Greenland�察�they were
gainers by one�察�and losers by all the rest。 After their eighth
and last voyage�察�when they had sold their ships�察�stores�察�and
utensils�察�they found that their whole loss�察�upon this branch��
capital and interest included�察�amounted to upwards of two hundred
and thirty´seven thousand pounds。
In 1722�察�this company petitioned the Parliament to be
allowed to divide their immense capital of more than thirty´three
millions eight hundred thousand pounds�察�the whole of which had
been lent to government�察�into two equal parts�此�The one half�察�or
upwards of sixteen millions nine hundred thousand pounds�察�to be
put upon the same footing with other government annuities�察�and
not to be subject to the debts contracted�察�or losses incurred�察�by
the directors of the company in the prosecution of their
mercantile projects�察�the other half to remain�察�as before�察�a
trading stock�察�and to be subject to those debts and losses。 The
petition was too reasonable not to be granted。 In 1733�察�they
again petitioned the Parliament that three´fourths of their
trading stock might be turned into annuity stock�察�and only
one´fourth remain as trading stock�察�or exposed to the hazards
arising from the bad management of their directors。 Both their
annuity and trading stocks had�察�by this time�察�been reduced more
than two millions each by several different payments from
government�察�so that this fourth amounted only to L3��662��784 8s。
6d。 In 1748�察�all the demands of the company upon the King of
Spain�察�in consequence of the Assiento contract�察�were�察�by the
Treaty of Aix´la´Chapelle�察�given up for what was supposed an
equivalent。 An end was put to their trade with the Spanish West
Indies�察�the remainder of their trading stock was turned into an
annuity stock�察�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�察�the only
trade by which it ever was expected that they could make any
considerable profit�察�they were not without competitors�察�either in
the foreign or in the home market。 At Carthagena�察�Porto Bello��
and La Vera Cruz�察�they had to encounter the competition of the
Spanish merchants�察�who brought from Cadiz�察�to those markets��
European goods of the same kind with the outward cargo of their
ship�察�and in England they had to encounter that of the English
merchants�察�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�察�indeed�察�were�察�perhaps�察�subject
to higher duties。 But the loss occasioned by the negligence��
profusion�察�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�察�when private adventurers can come into
any sort of open and fair competition with them�察�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�察�they appear to have traded as a
regulated company�察�with separate stocks�察�though only in the
general ships of the company。 In 1612�察�they united into a joint
stock。 Their charter was exclusive�察�and though not confirmed by
Act of Parliament�察�was in those days supposed to convey a real
exclusive privilege。 For many years�察�therefore�察�they were not
much disturbed by interlopers。 Their capital�察�which never
exceeded seven hundred and forty´four thousand pounds�察�and of
which fifty pounds was a share�察�was not so exorbitant�察�nor their
dealings so extensive�察�as to afford either a pretext for gross
negligence and profusion�察�or a cover to gross malversation。
Notwithstanding some extraordinary losses�察�occasioned partly by
the malice of the Dutch East India Company�察�and partly by other
accidents�察�they carried on for many years a successful trade。 But
in process of time�察�when the principles of liberty were better
understood�察�it became every day more and more doubtful how far a
Royal Charter�察�not confirmed by Act of Parliament�察�could convey
an exclusive privilege。 Upon this question the decisions of the
courts of justice were not uniform�察�but varied with the authority
of government and the humours of the times。 Interlopers
multiplied upon them�察�and towards the end of the reign of Charles
II�察�through the whole of that of James II and during a part of
that of William III�察�reduced them to great distress。 In 1698�察�a
proposal was made to Parliament of advancing two millions to
government at eight per cent�察�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�察�at four per cent upon the
same conditions。 But such was at that time the state of public
credit�察�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�察�and a new
East India Company established in consequence。 The old East India
Company�察�however�察�had a right to continue their trade till 1701。
They had�察�at the same time�察�in the name of their treasurer��
subscribed�察�very artfully�察�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�察�it did not
appear evident that they were all obliged to unite into a joint
stock。 A few private traders�察�whose subscriptions amounted only
to seven thousand two hundred pounds�察�insisted upon the privilege
of trading separately upon their own stocks and at their own
risk。 The old East India Company had a right to a separate trade
upon their old stock till 1701�察�and they had likewise�察�both
before and after that period�察�a right�察�like that of other private
traders�察�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�察�and with one another�察�is said to have well´nigh
ruined both。 Upon a subsequent occasion�察�in 1730�察�when a proposal
was made to Parliament for putting the trade under the management
of a regulated company�察�and thereby laying it in some measure
open�察�the East India Company�察�in opposition to this proposal��
represented in very strong terms what had been�察�at this time�察�the
miserable effects�察�as they thought them�察�of this competition。 In
India�察�they said�察�it raised the price of goods so high that they
were not worth the buying�察�and in England�察�by overstocking the
market�察�it sunk their price so low that no profit could be made
by them。 That by a more plentiful supply�察�to the great advantage
and conveniency of the public�察�it must have reduced�察�very much��
the price of Indian goods in the English market�察�cannot well be
doubted�察�but that it should have raised very much their price in
the Indian market seems not very probable�察�as all the
extraordinary demand which that competition could occasion must
have been but as a drop of water in the immense ocean of Indian
Commerce。 The increase of demand�察�besides�察�though in the
beginning it may sometimes raise the price of goods�察�never fails
to lower it in the run。 It encourages production�察�and thereby
increases the competition of the producers�察�who�察�in order to
undersell one another�察�have recourse to new divisions of labour
and new improvements of art which might never otherwise have been
thought of。 The miserable effects of which the company complained
were the cheapness of consumption and the encouragement given to
production�察�precisely the two effects which it is the great
business of political economy to promote。 The competition��
however�察�of which they gave this doleful account�察�had not been
allowed to be of long continuance。 In 1702�察�the two companies
were�察�in some measure�察�united by an indenture tripartite�察�to
which the queen was the third party�察�and in 1708�察�they were�察�by
Act of Parliament�察�perfectly consolidated into one company by
their present name of the The United Company of Merchants trading
to the East Indies。 Into this act it was thought worth while to
insert a clause allowing the separate traders to continue their
trade till Michaelmas 1711�察�but at the same time empowering the
directors�察�upon three years' notice�察�to redeem their little
capital of seven thousand two hundred pounds�察�and thereby to
convert the whole stock of the company into a joint stock。 By the
same act�察�the capital of the company�察�in consequence of a new
loan to government�察�was augmented from two millions to three