crown is dependent upon the Commons by | the end of seven years had been wrested the power of granting money; the Commons are dependent on the crown by the power of dissolution; the Lords will now be made independent of both. "The sixteen elective Scotch peers already admit themselves to be a dead court weight, yet the same sixteen are now to be made hereditary, and nine added to their number. These twenty-five, under the influence of corrupt ministers, may find their account in betraying their trust; the majority of the Lords may also find their account in supporting such ministers; but the Commons, and the Commons only, must suffer for all, and be deprived of every advantage. If the proposed measure destroys two negatives in the crown, it gives a negative to these twenty-five united, and confers a power superior to that of the king himself on the head of a clan, who will have the power of recommending many. The Scotch commoners can have no other view in supporting this measure but the expected aggrandizement of their own chiefs. It will dissolve the allegiance of the Scotch peers who are not amongst the twenty-five, and who can never hope for the benefit of an election to be peers of Parliament, and almost enact obedience from the sovereign to the betrayers of the constitution. "The present view of the bill is dangerous; the view to posterity, personal and unpardonable; it will make the Lords masters of the king, according to their own confession, when they admit that a change of administration renders a new creation of peers necessary; for by precluding the king from making peers in future, it at the same time precludes him from changing the present administration, who will naturally fill the vacancies with their own creatures; and the new peers will adhere to the first minister with the same zeal and unanimity as those created by Oxford adhered to him. "If, when the Parliament was made septennial, the power of dissolving it before from the crown, would not such an alteration have added immense authority to the Commons? And yet the prerogative of the crown in dissolving Parliament may be, and has been, oftener abused than the power of creating peers. "But it may be observed that the king, for his own sake, will rarely make a great number of peers, for they, being usually created by the influence of the first minister, soon become, upon a change of administration, a weight against the crown; and had Queen Anne lived, the truth of this observation would have been verified in the case of most of the twelve peers made by Oxford. Let me ask, however, is the abuse of any prerogative a sufficient reason for totally annihilating that prerogative? Under that consideration, the power of dissolving Parliaments ought to be taken away, because that power has been more exercised and more abused than any of the other prerogatives; yet in 1641, when the king had assented to a law that disabled him from proroguing or dissolving Parliament without the consent of both Houses, he was from that time under subjection to the Parliament, and from thence followed all the subsequent mischiefs and his own destruction. It may also be asked, whether the prerogative of making peace and war has never been abused? I might here call to your recollection the peace of Utrecht and the present war with Spain. Yet who will presume to advise that the power of making war and peace should be taken from the crown? 'How can the Lords expect the Commons to give their concurrence to a bill by which they and their posterity are to be for ever excluded from the peerage? How would they themselves receive a bill which should prevent a baron from being made a viscount, a viscount an earl, an earl a marquis, and a marquis a duke? Would they consent to limit the number of any rank of peerage? Certainly none; unless, perhaps, the dukes. If the pretence for this measure is that it will tend to secure the freedom | condition; its schemes had been sancof Parliament, I say that there are many tioned both by royal charter and by an other steps more important and less equivocal, such as the discontinuance of bribes and pensions. That this bill will secure the liberty of Parliament I totally deny; it will secure a great preponderance to the peers; it will form them into a compact impenetrable phalanx, by giving them the power to exclude, in all cases of extinction and creation, all such persons from their body who may be obnoxious to them. In the instances we have seen of their judgment in some late cases sufficient marks of partiality may be found to put us on our guard against committing to them the power they would derive from this bill, of judging the right of latent or dormant titles, when their verdict would be of such immense importance. If gentlemen will not be convinced by argument, at least let them not shut their ears to the dreadful example of former times; let them recollect that the overweening disposition of the great barons to aggrandize their own dignity occasioned them to exclude the lesser barons, and to that circumstance may be fairly attributed the sanguinary wars which so long desolated the country." Act of Parliament; its stock was high, and so sound and influential was its position that it was deemed the rival of the Bank of England. But success is always grasping and desirous of further advantages. Towards the close of the year 1719 the South Sea Company, aware of the wish of the ministry that all the funds should be consolidated into one, came forward with a proposal. Sir John Blunt, one of the leading directors, was the spokesman. He suggested that the company should be permitted to buy up the irredeemable annuities granted in the two last reigns, and which now amounted to some £800,000 a year, and reduce them to a redeemable state. The idea was encouraged by the ministry, several of its members having been bribed with presents of South Sea stock to give their consent, and the question came before Parliament. Aislabie, the chancellor of the exchequer, introduced the subject in the House of Commons, and declared that if the proposal of the South Sea Company were accepted, the national debt would be liquidated in twenty-six years. A rather stormy debate ensued, the question arising whether it was fair to other financial companies to accept the terms of the South Sea Company, and not put the matter up to competition. The House divided, and the question of competition was carried by a large majority. The Bank of England now entered the lists against its younger rival; but the South Sea Company had resolved, no matter at what cost, to outbid Threadneedle Street, and after a feverish competition the ruinous offer of £7,500,000 was accepted by the government from the South Sea directors. In the progress of the South Sea Bill through the House of Commons Walpole, who, with his usual clearheadedness, per The result of this speech was to inflict a severe defeat upon the government. The bill was rejccted by a majority of ninety-two. A few weeks after this debate Walpole again came prominently before the nation. The occasion of the notorious "South Sea Bubble" drew him forth from his retirement. Some few years ago Harley, earl of Oxford, desirous of providing for the floating debts, which amounted to nearly £10,000,000, and of improving public credit, had put himself at the head of a financial corporation called the South Sea Company, which was to have the monopoly of trade to Spanish America. Though circumstances had prevented the entire realiza-ceived how the offer of such high terms tion of the brilliant promises held out in the prospectus of the lord treasurer, still the company was in a very flourishing must inevitably lead the company into the rashest speculation to get its money back, opposed the project with all his influence. exchanged for valuable mining districts in Peru. Priceless treasures were hidden along the coasts of Spanish America. The South Sea trade was the only certain road to wealth. Enormous dividends would be paid. The South Sea Company were masters of the situation, for by monopolizing the fund of the whole national debt, government would be compelled to apply to them for loans, which would be advanced on their own terms. These and similar rumours were actively circulated, and found thousands of credulous listeners. A subscription of £1,000,000 was proposed, which was so eagerly taken up by the public that £2,000,000 were immediately forthcoming. A second subscription was opened, and was instantly covered. Then followed two other subscriptions, which met with the same success as their predecessors. The directors, in the intoxication of their prosperity, now passed a resolution declaring that their next yearly dividend should not be under 50 per cent. The stocks rose from 130 to 1000. "In vain," writes Archdeacon Coxe, "he | to impose upon the greedy and avaricious. displayed the fallacy of the South Sea Gibraltar and Port Mahon were to be scheme, and the great difference between that and the bank, by showing that the company was not limited in the price they were to put on the stock made over to them; whereas the bank offered a specific sum of £1700 stock for every £100 in the long annuities, and the same proportion for the short annuities. In vain he urged that it countenanced the pernicious practice of stock-jobbing, by diverting the genius of the nation from trade and industry; that it held out a dangerous lure for decoying the unwary to their ruin by a false prospect of gain, and to part with the gradual profits of their labour for imaginary wealth. In vain he insisted that if the proposal of the South Sea Company should be accepted, the rise of their stock ought to be limited. In vain he dwelt on the miseries and confusion which then prevailed in France from the adoption of similar measures. In vain he argued that as the whole success of the scheme must chiefly depend on the rise of the stock, the great principle of the project was an evil of the first magnitude-it was to raise artificially the value of the stock, by exciting and keeping up a general infatuation, and by promising dividends out of funds which would not be adequate to the purpose. In vain he predicted that if the establishment succeeded, the directors would become masters of the government, form an absolute aristocracy in the kingdom, and control the resolutions of the legislature; or if it did not succeed, the failure would cause a general discontent." His warning words, however, fell on idle ears, and the South Sea Bill became law. In spite of the terms they had offered, the directors of the South Sea Company had at first no reason to repent of their boldness. Aware that they could not fulfil their engagements with the government and pay the enormous sum of £7,500,000 without availing themselves of the credulity of the public, the directors, the better to rig the market, issued all kinds of reports calculated For the next few months speculation mania was at its height. Change Alley was thronged with eager bidders for South Sea allotments. The offices of the company, greatly enlarged though they had been, were yet too small to hold the crowd of purchasers, and it was found necessary to place tables and desks in the streets and neighbouring courts for the clerks to transact the business. "It is impossible to tell you," writes Secretary Scraggs to Stanhope, what a rage prevails here for South Sea subscriptions at any price. The crowd of those that possess the redeemable annuities is so great that the bank, who are obliged to take them in, has been forced to set tables with clerks in the streets." In this frantic race for wealth all had started. Here was a stanch Old Tory struggling with some St. Germain's intriguer to approach a courted clerk in order to obtain his coupons. There was a stout Protestant divine edging himself between a disguised Jesuit priest and a dame of easy virtue, on whose shoulders might yet be seen the scars of her last flogging in Bridewell cells, and crying out that Mr. Clerk might put his name down for three shares. Now it was a lady of the highest fashion imploring some young apprentice, who fiercely clutched the guineas he had saved from his wages or had embezzled from the till, to let her take his place and be a few steps nearer the desk. In that greedy gathering birth forgot its pride, sex its prudery, and politics its prejudices. Elbowing each other towards the chambers in Change Alley, or towards the tables set up in the streets, were to be seen Whig and Tory, Protestant and Papist, soldier and civilian, the haughty lady from Soho and her painted sister from Whitefriars, the dandies of the coffee-houses and the cut-throats from Wapping, the statesman from his family town-house in the Strand and the scribe from his attic in Grub Street-in short, every representative of society, from the lord to his valet, from the mistress to her maid, were to be found within a few yards of the offices of the South Sea Company absorbed in the one frenzy of gambling in its shares. But the bubble soon burst. The success of the South Sea scheme had caused numerous other companies to be formed, the subscription lists of which were quickly taken up by the deluded public, and for a time it seemed as if the nation had at last discovered the royal road to wealth. Then the end came. Company after company, which had been paying a dividend out of its capital, and then completed its operations by gambling away its entire capital, had to declare itself insolvent, and submit to the infuriated reproaches of its shareholders. A spirit of distrust succeeded the unlimited confidence that had been reposed in unscrupulous directors, and people were beginning to ask themselves whether they had been prudent in investing their all in the South Sea scheme. A rush was made upon the company's offices by a nervous crowd, anxious to convert their once much coveted bonds into money, only to find how bitterly they had been deluded. In less than one month the stock had fallen below 300. There was no money, and the vaunted paper coupons were worthless. The grossest fraud had been perpetrated. It was found that over half a million of fictitious stock had been created in order that the profit upon that sum might be disposed of by the directors to further the passing of the bill through Parliament. The favourites of the king had been bribed with stock. Many of the ministers had been bribed with stock. Several of the leading officials in the government departments had been in the pay of the company. But such people, with commendable prudence, had taken advantage of the credulity of the country and sold out when the market was at the flood, thus realizing immense profits. It was the middle class and those not behind the scenes who were the chief sufferers; these held on to their highly priced stock to the last, only to find that the company had been circulating an enormous amount of paper with no assets to redeem their promises to pay. "From the very beginning," writes Thomas Brodrick to Lord Chancellor Middleton, "I founded my judgment of the whole affair upon this unquestionable maxim, that ten millions (which is more than our running cash) would not circulate two hundred millions, beyond which our paper credit extended; that therefore, whenever that should become doubtful, be the cause what it would, our noble state machine must inevitably fall to the ground, or at best be brought within so much a narrower compass than what was projected, that our most sanguine people would find nothing more appositely expressive of their vain hopes than 'Parturiunt montes, nascetur ridiculus muc." The ruin was universal; the goldsmiths and bankers who had lent large sums upon the stock were obliged to stop payment and abscond; wealthy people found their resources terribly crippled, the middle | Company had agreed to pay the public, classes were reduced to beggary; whilst were remitted; various encumbrances were trade in all its branches was paralyzed. discharged from the estates which were conNever in the history of commerce was a fiscated of the directors; the credit of the nation so easily deluded by a scheme so bonds was fairly maintained, and the comutterly hollow. pany was soon in a position to fulfil its engagements with the public. It was felt that, if the country could be saved from a financial collapse, there was only one man capable of restoring public credit. Walpole, during this great excitement, was quietly amusing himself at Houghton in fitting up his galleries with pictures and improving his grounds. Though he had expressed his disapproval of the South Sea scheme, he yet saw no reason why he should not avail himself of the folly of his countrymen. Accordingly he had bought stock when it was at a minimum price, and had sold it when it had touched its maximum of one thousand. "I am fully satisfied," said he quietly, when a friend remonstrated with him for selling out. He was now summoned to London to undertake the arduous task of arranging chaos. "Everybody longs for you in town," writes the under secretary at war, "having no hopes from any but yourself, though I must own I don't see what effectual help can be given to them till some time has worn off people's fears and distrusts of one another. They all cry out for you to help them, so that when you come you will have more difficulties on you than ever you had. For though you are perfectly clear of this sad scheme, yet you will be prodigiously importuned by all the sufferers to do more than any man can do, and more than you, in your judgment, would think ought to be done if it could be done." Walpole readily undertook the arduous duties intrusted to him. He preserved inviolate the public contract with the South Sea Company; he grafted eighteen millions of the stock into the Bank of England and into the East India Company, and left twenty millions to the South Sea. By these arrangements five millions out of the seven, which the directors of the South Sea VOL. I. The misery which this hollow speculation entailed upon the country led to the restoration of Walpole to power. The fraudulent conduct of the government in the matter ushered in the downfall of the SunderlandStanhope cabinet. Sunderland was forced by the indignant voice of public opinion to resign, and was succeeded by Walpole as first lord of the Treasury; Stanhope, whilst attempting to justify his conduct, was seized with a rush of blood to the head, and died the next day; Aislabie, the chancellor of the exchequer, who had introduced the South Sea scheme to the House of Commons, was committed to the Tower and his property confiscated; Craggs, the second secretary of state, died of the smallpox whilst the inquiry into his conduct was pending. Such was the end of the notorious bubble and of its promoters-one of the wildest schemes that unhealthy speculation ever inspired, or the fraud of interested persons ever stimulated and conceived. During the closing years of the reign of George I. Walpole was left undisturbed in his possession of power. Intrigues were entered into against him by certain of his colleagues, but they came to nothing; strong from the confidence his sovereign reposed in him, Walpole alone commanded the ship of the state, and the whole tribe of needy pamphleteers, anxious for posts under the crown, loudly sung his praises as "sole pilot of the realm." He abolished many of the heavier duties upon our external and internal commerce, and was the first among our Leaders of the Senate to introduce the thin end of the wedge of free trade. He defeated the intrigues of the Jacobites, and brought to severe punishment such of the adherents of the Pretender as were unhesitatingly declared guilty by 5 |