credit, which had suffered by the dismissal of the Whig ministry, and
of providing for the discharge of the army and navy debentures, and
other parts of the floating debt, amounting to nearly ten millions
sterling. A company of merchants, at that time without a name, took
this debt upon themselves, and the government agreed to secure them,
for a certain period, the interest of six per cent. To provide for
this interest, amounting to 600,000 pounds per annum, the duties upon
wines, vinegar, India goods, wrought silks, tobacco, whale-fins, and
some other articles, were rendered permanent. The monopoly of the
trade to the South Seas was granted, and the company, being
incorporated by Act of Parliament, assumed the title by which it has
ever since been known. The minister took great credit to himself for
his share in this transaction, and the scheme was always called by his
flatterers "the Earl of Oxford's masterpiece."

Even at this early period of its history, the most visionary ideas
were formed by the company and the public of the immense riches of the
eastern coast of South America. Everybody had heard of the gold and
silver mines of Peru and Mexico; every one believed them to be
inexhaustible, and that it was only necessary to send the manufactures
of England to the coast, to be repaid a hundredfold in gold and silver
ingots by the natives. A report, industriously spread, that Spain was
willing to concede four ports, on the coasts of Chili and Peru, for
the purposes of traffic, increased the general confidence; and for
many years the South Sea Company's stock was in high favour.

Philip V of Spain, however, never had any intention of admitting
the English to a free trade in the ports of Spanish America.
Negotiations were set on foot, but their only result was the assiento
contract, or the privilege of supplying the colonies with negroes for