CHAPTER XI. IN the spring of 1720, the administration of Lord Stanhope had attained a high pitch of success and renown. By negotiation, he had driven Alberoni from Madrid; by force the Spaniards from Sicily. The authority of the Regent had been secured in France, and his friendship with England confirmed; and some fresh difficulties which arose after Stanhope had left Paris in January, were adjusted by another journey of that Minister in March. At the same time the Cabinet of Vienna had been brought into a concert of measures, and the ancient alliance renewed with the Dutch. In the North, the confederacy against Sweden had been successfully broken; Prussians, Danes, and Poles were disarmed; and the languid hostilities which the Czar still continued from his want of temper, must, it was evident, speedily terminate from his want of support.* The Jacobites could no longer fix their station, or conduct their intrigues, on the neighbouring coasts; an edict for their total banishment from France had been granted to Stanhope at Paris.† The Pretender had not left him a single great power to afford him aid or countenance, and was reduced to vague hopes and empty promises-to the prophecies of monks or the dreams of exiles! Thus, therefore, the exertions of Stanhope had happily restored peace throughout Europe; and it was by pursuing this policy, and treading in his footsteps, that Walpole afterwards preserved this blessing for so many years. At home, the prospect for Stanhope was not less cheering. He had risen to much the highest place in the Royal confidence; a fact so well understood, that we find it publicly mentioned in some foreign State Papers of this period. The defeat on the Peerage Bill had not shaken him or Sunderland; they were not less strong with Parliament; they were not less trusted by the King; and the party of Walpole, hopeless of overthrowing, consented to join them. This junction was on far from equal terms. It made no change at all in the measures, and but little in the men. Walpole received no higher place than Paymaster of the Forces (out of the Cabinet), nor Townshend than President of the Council; while Methuen was satisfied with an office in the Royal Household.§ Their support, accordingly, The Peace of Nystad between Russia and Sweden was signed August, 1721. (Du mont, Suppl. Corps Diplom. vol. viii. part 2, p. 36.) In March, 1720. See St. Simon, Mem. vol. xviii. p. 153, ed. 1829. The vacancies were made by the Duke of Kent, the Earl of Lincoln, and Mr. Bos- cawen. was by no means warm and willing; they were treated as inferiors, and, of course, behaved as malcontents; but at all events, their opposition was disarmed, and their connection with the Tories broken. Another great advantage attending their accession was, healing the breach in the Royal family. Walpole, who had lately ingratiated himself with the Prince of Wales, induced him to write a submissive letter to the King; Stanhope induced His Majesty to receive it favourably a meeting ensued, and a reconciliation was effected. This union, both of Statesmen and of Princes, dashed the best hopes of Jacobitism. Bishop Atterbury writes to James, that, though the reconciliation is far from sincere, it will by degrees become so, or that at least the appearances and consequences of it will be the same as if it really were. "I think myself obliged," he adds, "to represent this melancholy truth, that there may be no expectation of any thing from hence, which will certainly not happen. Such, then, was the prosperous aspect of affairs, when in June the King, attended by Stanhope, set out for his German dominions. But the happy calm was not of long continuance. It is now for me to relate how that glittering and hollow bubble, the South Sea Scheme, rising to the surface, broke the tranquillity and troubled the clearness of the waters. The South Sea Company was first formed by Harley in 1711, his object being to improve public credit, and to provide for the floating debts, which at that period amounted to nearly 10,000,000l. The Lord Treasurer, therefore, established a fund for that sum. He secured the interest by making permanent the duties on wine, vinegar, tobacco, and several others; he allured the creditors by promising them the monopoly of trade to the Spanish coasts in America; and the project was sanctioned both by Royal Charter and by Act of Parliament. Nor were the merchants slow in swallowing this gilded bait; and the fancied Eldorado which shone before them dazzled even their discerning eyes. The exploits of Drake were quoted, and the dreams of Raleigh renewed. This spirit spread throughout the whole nation, and many, who scarcely knew whereabouts America lies, felt nevertheless quite certain of its being strewed with gold and gems. Meanwhile the partisans of Harley zealously forwarded this illusion, as tending to raise the reputation and secure the power of their chief; and they loudly vaunted the South Sea Scheme as the Earl of Oxford's masterpiece, and as not unworthy of Sully or of Colbert. The negotiations of Utrecht, however, in this as in other matters, fell far short of the ministerial promises and of the public expectation. Instead of a free trade, or any approach to a free trade, with the American colonies, the Court of Madrid granted only, besides the shameful Asiento for negro slaves, the privilege of settling some was a personal friend of Stanhope, had taken office only at his solicitation, and readily relinquished it. Bishop Atterbury to James, May 6, 1720, Appendix. See also the Marchmont Papers, vol. ii. p. 409. factories, and sending one annual ship; and even this single ship was not unrestricted: it was to be under 500 tons burthen, and a considerable share of its profits to revert to the King of Spain. This shadow of a trade was bestowed by the British Government on the South Sea Company, but it was very soon disturbed. Their first annual ship, the Royal Prince, did not sail till 1717, and next year broke out the war with Spain; when, as I have already had occasion to relate, Alberoni, in defiance of the treaty, seized all the British goods and vessels in the Spanish ports. Still, however, the South Sea Company continued, from its other resources, a flourishing and wealthy corporation: its funds were high, its influence considerable, and it was considered on every occasion the rival and competitor of the Bank of England. At the close of 1719, when the King returned from Hanover, this aspiring Company availed itself of the wish of Ministers to lessen the public debts by consolidating all the funds into one. Sir John Blunt, once a scrivener, and then a leading South Sea Director, laid before Stanhope, as chief minister, a proposal for this object. He was referred by Stanhope to Sunderland, as First Lord of the Treasury, and to Aislabie, as Chancellor of the Exchequer. Several conferences ensued with the latter; several alterations were made in the scheme; and it was at length so far adjusted to the satisfaction of Ministers, that the subject was recommended to Parliament in the King's Speech.* The great object was to buy up and diminish the burthen of the irredeemable Annuities granted in the two last reigns, for the term, mostly, of 99 years, and amounting at this time to nearly 800,000l. a year. But when the question came on in the House of Commons, a wish was expressed by Mr. Brodrick and many more, that every other company should be at liberty to make offers. This, exclaims the Chancellor of the Exchequer, was like setting the nation to auction; and the only point on which all parties concurred was one which experience has proved to be totally wrong. "I quite agreed with Ministers," says Mr. Brodrick, "that till the national debt was discharged, or at least in a fair way of being so, we were not to expect to make the figure we formerly had! Nay, further, I said, till this was done, we could not, properly speaking, call ourselves a nation!" At length, after some violent wrangling between Lechmere and Walpole,† the House divided, and the question of competition was carried by a very large majority. New proposals were accordingly sent in, both from the South Sea * Our best authorities for this negotiation, and the subsequent debate in the House of Commons, are, Mr. Brodrick's Letter to Lord Midleton, Jan. 24, 1720; and Mr. Aislabie's Second Speech before the House of Lords, July, 1721. The latter seems to be overlooked by Coxe. Both, however, require to be read with much suspicion; Aislabie being then on his defence, and Brodrick a violent partisan on the other side. †There seems to have been great uproar. When Lechmere attempted to speak a second time in Committee, the Opposition rose from their places; and on the Chairman exclaiming, "Hear your Member," they answered, "We have heard him long enough!" Brodrick to Lord Midleton, Jan. 24, 1720. Company and the Bank of England. According to Aislabie, this was a sudden resolution of the Bank, "who before had shown great backwardness in undertaking anything, to reduce the public debts, and had treated this scheme with much contempt.' Be this as it may, the two bodies now displayed the utmost eagerness to outbid one another, each seeming almost ready to ruin itself, so that it could but disappoint its rival. They both went on enhancing their terms, until at length the South Sea Company rose to the enormous offer of seven millions and a half, which was accepted. Yet the benefit of this competition to the public was anything but real; for such high terms almost of necessity drew the South Sea Directors into rash means of improving their rash bargain, into daring speculation, and into final ruin. The last proposals of the Bank had been little less extravagant. It is urged by Aislabie, in his defence next year before the Peers: "I will be bold to say, my Lords, and the gentlemen of the Bank, I believe, will own, that if they had carried the scheme upon their last proposals, they could not have succeeded: and I will show your Lordships, from what they have done since, that they would have acted in the same manner as the South Sea Company." Even at the time Aislabie had some glimmerings of the future danger, and proposed to Sir John Blunt that the two Corporations should undertake the compact jointly, and therefore with double resources. But Sir John, who was, or pretended to be, a most austere Puritan, and who brought forward Scripture on all occasions, immediately quoted Solomon's judgment, and added, "No, Sir, we will never divide the child!" Thus then the South Sea Bill proceeded through the House of Commons without any further competition from the Bank. An attempt was made to introduce a clause fixing how many years' purchase should be granted to the annuitants by the South Sea Company. To this it was objected, that as it was the interest of the Company to take in the annuities, and as the annuitants had the power of coming in or not as they pleased, there was no doubt that the Company would offer advantageous terms, and that therefore the affair might safely be left to private adjustment. "Nor," said Aislabie, "would the South Sea Company submit to be controlled in an undertaking they were to pay so dear for." On these grounds was the clause rejected, though only by a majority of four. But these grounds, though specious and indeed well founded, were not the only ones, and we shall see hereafter that several persons in Government had probably other reasons as weighty, though not quite so honourable, for supporting the Directors. Second Speech, July, 1721. See also Sinclair's Public Revenue, part ii. p. 104. † I must observe, that the observations ascribed to Walpole by Coxe (vol. i. p. 130), seem to have been drawn up on Coxe's own ideas of probability. He makes Walpole point out "the ruin and misery which then prevailed in France from similar measures." Now this is quite an anachronism: the speech of Walpole was delivered Feb. 1, 1720; and at that time the system of Law was still in its glory. The South Sea Bill finally passed the Commons by a division of 172 against 55. In the Lords, on the 4th of April, the minority was only 17, notwithstanding an able speech from Lord Cowper, who compared the project to the Trojan horse, ushered in with great pomp and acclamation, but contrived for treachery and destruction. But, like every other statesman at this time, he did not foresee the real point or extent of danger; and nothing could be more erroneous than his prediction, that "the main public intention of this bill, the repurchase of annuities, would meet with insuperable difficulties." Such, on the contrary, was the rising rage for speculation, that on the passing of the bill very many of the annuitants hastened to carry their orders to the South Sea House, before they had even received any offer, or knew what terms would be allowed them!-ready to yield a fixed and certain income for even the smallest share in vast but visionary schemes! The offer which was made to them on the 29th of May (eight years and a quarter's purchase) was much less favourable than they had hoped; yet nevertheless, six days afterwards, it was computed that nearly two-thirds of the whole number of annuitants had already agreed.* In fact, it seems clear, that during this time, and throughout the summer, the whole nation, with extremely few exceptions, looked upon the South Sea Scheme as promising and prosperous. Its funds rapidly rose from 130 to above 300. Walpole, although one of its opponents, readily, as we have seen, joined the Ministry at this period under very mortifying circumstances, which he would certainly not have done, had he foreseen the impending crash, and the necessity that would arise for his high financial talents. Lord Townshend concurred in the same view. Atterbury thought it a great blow to Jacobitism. He charitably hints to James, in his letters, that some attempt from the Duke of Ormond might "disorder our finances, and throw us into a great deal of confusion.' But if the advice of this minister of peace and good will towards men cannot be taken in this respect, he then anticipates that "the grand money schemes will settle and fix themselves in such a manner that it will not be easy to shake them."† Such being the feeling, not merely of the Ministerial party, but of most of their opponents, it seems scarcely just to cast the blame of the general delusion on the Ministers alone, and to speak of them as deaf to warning and precipitate to ruin. The example of these vast schemes for public wealth was set us from Paris. John Law, a Scotch adventurer, had some years before been allowed to establish a public bank in that city; and his project succeeding, he engrafted another upon it of an "Indian 1 Boyer's Polit. State, vol. xix. p. 518. † Letters to James and to General Dillon, May 6, 1720. See Appendix. [See the Chapters on the subject of the Mississippi scheme in the Count de Tocque ville's "Histoire Philosophique du Règne de Louis XV.," vol. i. chap. 7 and 8.] |