Front Page Titles (by Subject) NO. 9. SATURDAY, DECEMBER 31, 1720. Against the projected Union of the Three Great Companies; and against remitting to the South-Sea Company any Part of their Debt to the Publick. (Trenchard) - Cato's Letters, vol. 1 November 5, 1720 to June 17, 1721 (LF ed.)
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NO. 9. SATURDAY, DECEMBER 31, 1720. Against the projected Union of the Three Great Companies; and against remitting to the South-Sea Company any Part of their Debt to the Publick. (Trenchard) - John Trenchard, Cato’s Letters, vol. 1 November 5, 1720 to June 17, 1721 (LF ed.) 
Cato’s Letters, or Essays on Liberty, Civil and Religious, and Other Important Subjects. Four volumes in Two, edited and annotated by Ronald Hamowy (Indianapolis: Liberty Fund, 1995). Vol. 1.
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NO. 9. SATURDAY, DECEMBER 31, 1720. Against the projected Union of the Three Great Companies; and against remitting to the South-Sea Company any Part of their Debt to the Publick. (Trenchard)
The most successful deluders and oppressors of mankind have always acted in masquerade; and when the blackest villainies are meant, the most opposite spirit is pretended. Vice acts with security, and often with reputation, under the vail of virtue.
Hence atheists have set up for the greatest piety; and, to cover their own real want of it, have cruelly burned those who really had it. The most merciless tyrants have, in the midst of oppression, set up for the patrons of liberty; and, while their hands were deep in blood, impudently adopted the title of clemency; and publick liberty has almost always been given up by those, who passed for the patrons of publick liberty.
The cheating religious orders of the Church of Rome gain the greatest wealth, by a profession of the strictest poverty. The popish inquisitors, while they deliver over to the flames a poor wretch, already half dead with fears, famine, and torture, beseech and adjure the civil magistrate, who must see it done, by the love of God, and the bowels of Jesus Christ, not to hurt his life or limb. And our inquisitors at home began their Occasional Bill with a declaration for liberty of conscience; though the purpose of them, and their bill, was to destroy all liberty of conscience.
Companies and joint-stocks are always established for the encouragement and benefit of trade; though they always happen to mar and cramp trade. The Peerage Bill was to be granted as a favour to the Commons of England, by cutting off the Commons of England from all right to peerage. And some people, to save charges to England, are for giving up Gibraltar, which is of such advantage to England; being the security of all our trade. Sweden was once to be destroyed, to preserve the balance of power in the north; and now Sweden must be defended, for the very same reason.
When certain chiefs were at mortal odds, one side opposing (at all adventures) whatever the other projected, it was thought convenient to both sides to come to terms; for one party wanted to fill their coffers, and the other to save their bacon. However, the good of the publick was their sole aim: They, good men! sought no personal advantages, though they have since got considerable ones: But we must believe their sayings, notwithstanding their doings.
Stock-jobbing too must be declared against, whilst the greatest stock-jobbing is promoting. Last year a South-Sea project was to be established to pay off the national debts; and now a project is said to be in embryo, to remit the greatest part of the debt due to the nation by the South-Sea: And if so, the whole nation is to suffer this general loss, out of mere pity to a small part of the nation. Twelve months ago forty millions was not too much to be trusted with one company, high in credit, and its reputation hoisted up by publick authority; but now, when they are bankrupt and undone, and when their directors and undertakers are universally hated and detested, it is to be feared, it seems, that they will become too formidable, if all the stock subscribed into them be continued with them.
There is, therefore, I am told, a project on foot, in Exchange Alley, to deliver up the nation to three companies; and to let them divide us, their cully, among them. In order to prevail upon these three great societies to accept us as a present, to be used as they think fit, I humbly presume that we must behave ourselves as follows: We can do no less than sacrifice the poor halfstarved manufacturers to one of them, and oblige ourselves to lay no restraint upon India callicoes, &c. We must also confirm the clause which makes that society perpetual. New trades, more monopolies, and fresh privileges, must be given to another great and virtuous company, which had made so good use of the old: And the Bank of England, which long preserved its integrity, must be brought into the conspiracy; and without doubt something more must be given them, perhaps the increase of their term.
Now, if this mighty project, this noble design, can be accomplished; I suppose that every one will see, or be prevailed upon to see, the absolute necessity why all past errors, and former management, should be forgot; because publick credit, which depends upon temper and moderation, must not be interrupted by ill-timed enquiries, nor disturbed by publick vengeance. How finely we are to be disposed of; and how safe it is to provoke us!
The projectors of such a publick good must deserve well from their country; and I will give city security, that they shall be no losers by it. Where is the wonder, or ill policy of the plunderers and dishonourers of the nation, if the betrayers of their trust should keep a little ill-begotten wealth, to preserve the publick peace? Without doubt, they will give large shares of their prey to those who have power to let them keep the rest; and will readily help their projectors and coadjutors with their honest skill and endeavours, to form new projects, to get as much as they have done.
There lives in a certain kingdom, a certain gentleman, of no mean importance there at present, who was agent to one who had the custodium of a forfeited estate there, worth twelve thousand pounds a year; and when he gave in his account to his successor, brought the estate some hundreds of pounds in debt to himself. The other resented this with some menacing expressions, but could get no other answer from him, but that he would abide by his account: “However,” says he, “if you will be discreet, I will help you to the man that helped me to this account.”
But what now, if, after all, there should be a little job in a corner; and if any gentleman, of remarkable merit, should have amends made for his services, sufferings, and losses of late years? Why, there is nothing uncommon in it; for, who will serve the Lord for nought? This certainly can be no reason for rejecting a project, which will restore publick credit, fill the Alley again, raise South-Sea stock to three or four hundred, and help the present proprietors to new bubbles; without doing any other mischief, than that of ruining a few thousand families more, and of not paying off the nation's debts.
These, I confess, are potent reasons; and will, without doubt, have their due weight with all persons interested. But, for myself, who am so unfortunate as often to differ from my betters, I can find nothing in this proposal, which has any tendency to help the present company, or to raise credit, in any respect, or to retrieve us from our great and national calamities; but, on the contrary, to plunge the publick inevitably into irretrievable ruin, by making it impossible, by any medium in nature but that of a sponge, to discharge our national burdens: It will, besides, deprive us of our only colourable pretence, which could justify or excuse the late dreadful scheme; and which, I believe, I may safely say, was the only pretence ever offered to excuse it. I think that it will be listing the three great companies, with all the moneyed interest in England, against England; and will, at last, reduce, and even force, all parties not to oppose what I dread to name, and tremble to think of.
The project abovementioned is calculated, we are told, for the advantage of South-Sea, and for the improvement of their stock; and, in order to this, a great part of that stock is to be given away to the Bank of England, and to the East-India Company; without any apparent consideration to themselves, or any other use to the publick, than the uniting the three great companies in one interest; and consequently, the forming such a potent conspiracy against the whole kingdom, as nothing but a total confusion of all things can dissolve. O Companies, Companies! ye bane of honesty, and ruin of trade; the market of jobbers, the harvest of managers, and the tools of knaves, and of traitors!
It is proposed, that the South-Sea is to give the Bank an hundred and twenty pounds for every hundred pounds of stock in the Bank; which stock is said to be but barely worth ninety pounds; even though we should suppose that they had never divided any of their principal: Which, whether they have done it or not, no body but themselves can know: But at this rate, however, they must divide, whenever they are paid off by the government.
But we are told, that they are to be let also into the profits of banking; from which profits, ’tis said, that they are enabled to divide three per cent upon the old capital, besides the five per cent paid them by the government: But, even upon this foot, the greater their capital is, the less they will be able to divide: And consequently, when nine millions are added to their old capital, they will not be able to divide much above one per cent which is not the interest of the money paid in difference between ninety, which is the real value, and an hundred and twenty, which is the nominal value.
Besides, there is no probability that the Bank can continue to make, for the future, the same gain of banking, as heretofore. The trafficking in publick tallies, from whence that gain chiefly arose, will be at an end, unless there be new funds given, and new debts contracted.
The contract proposed by these people, to be made with the other company, is still worse; for, there they are to give a hundred and twenty pounds for a hundred-pound nominal stock, which is suspected to be worth very little; some men being of the opinion, that the greatest part of the ten per cent divided for some years past, has been pocketed out of other people's money, borrowed by the company upon their bonds: And yet for this choice bargain, they are to give six hundred thousand pounds at present, and subject nine hundred thousand pounds more to be disposed of according to the pleasure, skill, and honesty of the present directors. A pretty sum, and doubtless set apart to answer and accomplish some lovely job, which will appear in proper time, and by which the projectors of the scheme, I dare say, will be no losers!
’Tis said too, that the trade of this company may be enlarged; I suppose they mean, by bringing in more India manufactures, to the ruin of our own.
Now all this we are given to understand is for the sole benefit of the South-Sea; and if they have not sense to conceive it aright, a worse thing may befall them: We all know, what directors and their old patrons carry halters about their necks, though they have millions in their pockets; and who would not give away a little of other people's money, to save a great deal of their own, with their lives into the bargain? A special set of traitors, to negotiate for the very being of a kingdom!
But I must tell all these forgers of schemes, and inventors of grievances, that the nation, exhausted by past projects, cannot bear new ones, nor furnish out more millions to glut more harpies. The want of bread, long felt by the poor, begins now to be felt by the rich. The purses therefore of the new conspirators must be filled out of the extortions and depredations of the old, or remain empty: They may rack their invention, sift every topick of knavery, and toss and change their projects as much and as long as they please; but we know that nothing but plain honesty can ever save us; and to those who would practise honesty, plain speech is best. Let us honestly hang up those who have deceived and undone us, and let us beware of new deceivers and new destroyers: Let us, with a severity equal to our distress, examine what the directors and their masters have embezzled, and lost to their country, by their merciless villainy, and consuming avarice; and let us have the only satisfaction that they can make us, their lives, and their estates: Let, afterwards, a fair valuation be made of their present capital, and let all the world know it; that the purchaser may buy solid substance, and not a fleeting shadow. This is the honest way to restore credit again; this will prevent the roguish part of stock-jobbing; and this will throw the remaining money into trade once more.
But what, may some say, if we should give away from the South-Sea Company some millions to make new friends, and to save our old friends, so long as we can make that company amends out of the publick, for such a loss? A thing easily done! It is only giving them back again the seven millions already due by them to the publick; or at least the greatest part of those seven millions, as the same stand secured upon forty millions; and if we do this, behold the advantage that will accrue from it! We will then be under no necessity of hanging our countrymen, or calling up any to disgorge their honest gains: Besides, it is to be hoped that this proposal will be backed with such powerful motives, as to meet with little opposition.
This calls to my mind a comparison, which I have been for some time very apt to make, between the French projectors and those of another country which I know. The first plunder for the publick; the other plunder the publick: The one robs part of the people for the whole people; the other robs the whole people for a small part of the people.
This comparison may be the subject of another letter to you, if you think fit to print this.
T. I am, &c.