ismissal 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 his debt upon
themselves, and the government agreed to secure them for a certain
period the interest of 6 per cent. To provide for this interest,
amounting to six hundred thousand 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; everyone believed them to be
inexhaustible, and that it was only necessary to send the manufactures
of England to the coast to be repaid a hundred-fold in gold and silver
ingots by the natives. A report industriously spread, that Spain was
willing to concede four ports on the coasts of Chile and Peru for the
purposes of traffic, increased the general confidence, and for many
years the South Sea Company's stock was in high favor.

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 thirty years,
and of sending once a year a vessel, limited both as to tonnage and
value of cargo, to trade with Mexico, Peru, or Chile. The latter
permission was only granted upon the hard condition that the King of
Spain should enjoy one-fourth of the profits, and a tax of 5 per cent.
on the remainder. This was a great disappointment to the Earl of Oxford
and his party, who were reminded, much oftener than they found
agreeable, of the

"_Parturiunt montes, nascitur ridiculus mus._"

But the public confidence in the South Sea Company was not shaken. The
Earl of Oxford declared that Spain would permit two s