COMPANY, South Sea. The scheme for satisfying the national deficiencies by the establishment of this Company was ar ranged and brought forward in 1711, by Mr. Harley, then chancellor of the Ex chequer, and the opinion of its efficacy for retrieving the ]anguishing state of public credit was so great, that upon his being created Earl of Oxford, this service was particularly mentioned in the patent as one of the chief reasons for advancing him to that honour. It certainly afforded considerable relief to government,by con solidating a variety of debts and arrears of interest,and making a general pro. ision for them, which the expectatio from the commercial undertakings o the Company induced the proprietors readily to accept. These debts and deficiencies formed the first capital of the Company, which amounted to 9,177,96: /. 158. 4d. in cluding half a million raised towards the current services of the year. In 1715 their capital was increased to 10,000,0001. and in 1719 to 11,746,8441 88. 10d. ; but as all the sums thus subscribed into South Sea stock consisted of public debts, which were thus transferred from the individual proprietors of them to the company, it became necessary for the company to borrow money on bonds, to enable them to undertake their ostensible object of trade to South America.
In 1720, the Company engaged in one of the most memorable:projects ever attemp ted in Great Britain. It was founded upon an agreement with government, autho rizing the Company to take in, either by subscription or purchase, all the public debts, at such prices as they could agree upon with the respective proprietors; and they were empowered to raise the money which would be necessary for making these purchases,either by calls upon their members, by annuities, bonds, orbills, or by opening subscriptions for new stock. It is difficult to conceive how the Company could expect to derive such permanent advantages from this transaction, as would support any considerable increase of their dividend ; yej the expectation of great profits was so general, as to excite the most extensive, though the most extravagant, infatuation that was ever known in money transactions in this country. South Sea
Stock was soon sold at double the sum that had been paid in upon it, and in the course of a short time reached the enor mous price of 1000 per cent. The rapidi ty of its fall, however, exceeded that by which it rose ; for, before the end of the year, the difference of pricewas more than 800 per cent. in the course of only three weeks, by which thousands of persons suf fered very severe losses, and many were entirely ruined.
The only branches of trade in which the Company ever engaged were, in sup plying the Spanish colonies in America with negroes, and the Greenland whale. fishery. In both these undertakings the Company were considerable losers ; in consequence of which, in 1748, they gave up the contract with Spain, and from that period have not carried on any branch of commerce whatever, their whole business being confined to transferring and paying the dividends on the public funds, known by the title of South Sea Stock, Old and New South Sea Annuities, and South Sea Annuities of 175J.
The company is under the management of three governors and twenty-one direc tors. The whole expense of managing the concern in the year ending the 5th of Ja nuary, 1807, was 10,727/. of which 3,692/. was paid to the sub and deputy governors and directors, and 4,735/. to 36 officers and clerks employed by them. The sum annually paid by the public to the South Sea Company is 14,713/. 108. 6d. and about 70/. for fees and allowances to the cashier.