But the greater part of those proprietors seldom pretend to understand anything of the business of the company, and when the spirit of faction happens not to prevail among them, give themselves no trouble about it, but receive contentedly such half-yearly or yearly dividend as the directors think proper to make to them.This total exemption from trouble and from risk, beyond a limited sum, encourages many people to become adventurers in joint stock companies, who would, upon no account, hazard their fortunes in any private copartnery.Such companies, therefore, commonly draw to themselves much greater stocks than any private copartnery can boast of.The trading stock of the South Sea Company, at one time, amounted to upwards of thirty-three millions eight hundred thousand pounds.The divided capital of the Bank of England amounts, at present, to ten millions seven hundred and eighty thousand pounds.The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it.Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company.It is upon this account that joint stock companies for foreign trade have seldom been able to maintain the competition against private adventurers.They have, accordingly, very seldom succeeded without an exclusive privilege, and frequently have not succeeded with one.Without an exclusive privilege they have commonly mismanaged the trade.With an exclusive privilege they have both mismanaged and confined it.
The Royal African Company, the predecessors of the present African Company, had an exclusive privilege by charter, but as that charter had not been confirmed by Act of Parliament, the trade, in consequence of the Declaration of Rights, was, soon after the revolution, laid open to all his Majesty's subjects.
The Hudson's Bay Company are, as to their legal rights, in the same situation as the Royal African Company.Their exclusive charter has not been confirmed by Act of Parliament.The South Sea Company, as long as they continued to be a trading company, had an exclusive privilege confirmed by Act of Parliament; as have likewise the present United Company of Merchants trading to the East Indies.
The Royal African Company soon found that they could not maintain the competition against private adventurers, whom, notwithstanding the Declaration of Rights, they continued for some time to call interlopers, and to persecute as such.In 1698, however, the private adventurers were subjected to a duty of ten per cent upon almost all the different branches of their trade, to be employed by the company in the maintenance of their forts and garrisons But, notwithstanding this heavy tax, the company were still unable to maintain the competition.Their stock and credit gradually declined.In 1712, their debts had become so great that a particular Act of Parliament was thought necessary, both for their security and for that of their creditors.It was enacted that the resolution of two-thirds of these creditors in number and value should bind the rest, both with regard to the time which should be allowed to the company for the payment of their debts, and with regard to any other agreement which it might be thought proper to make with them concerning those debts.
In 1730, their affairs were in so great disorder that they were altogether incapable of maintaining their forts and garrisons, the sole purpose and pretext of their institution.From that year, till their final dissolution, the Parliament judged it necessary to allow the annual sum of ten thousand pounds for that purpose.In 1732, after having been for many years losers by the trade of carrying negroes to the West Indies, they at last resolved to give it up altogether; to sell to the private traders to America the negroes which they purchased upon the coast; and to employ their servants in a trade to the inland parts of Africa for gold dust, elephants' teeth, dyeing drugs, etc.But their success in this more confined trade was not greater than in their former extensive one.Their affairs continued to go gradually to decline, till at last, being in every respect a bankrupt company, they were dissolved by Act of Parliament, and their forts and garrisons vested in the present regulated company of merchants trading to Africa.Before the erection of the Royal African Company, there had been three other joint stock companies successively established, one after another, for the African trade.They were all equally unsuccessful.They all, however, had exclusive charters, which, though not confirmed by Act of Parliament, were in those days supposed to convey a real exclusive privilege.