XI. 1720. The negotiations of Utrecht, however, in this as CHAP. 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 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 re XI. CHAP. ferred by Stanhope to Sunderland, as First Lord of the Treasury, and to Aislabie, as Chancellor of the 1720. 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 reduce 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 ques tion 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 our"selves a nation!" At length, after some violent 66 66 * 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. XI. wrangling between Lechmere and Walpole*, the CHAP 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 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 any thing 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 any thing but real; for such high terms almost of necessity drew the South Sea Directors into rash means for 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 * 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. + Second Speech, July, 1721. Revenue, part 2. p. 104. See also Sinclair's Public 1720. CHAP. yield a fixed and certain income for even the smallest share in vast but visionary schemes! XI. 1720. 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 good 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 Boyer's Polit. State, vol. xix. p. 518. XI. " that it will not be easy to shake them."* Such CHAP. being the feeling, not merely of the ministerial party, but of most of their opponents, it seems scarcely 1720. 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 Company," to have the sole privilege of trade with the Mississippi. The rage for this speculation soon became general: it rose to its greatest height about December, 1719; and the "actions," or shares, of the new Company sold for more than twenty times their original value. The Rue Quincampoix, the chief scene of this traffic, was thronged from daybreak by a busy and expecting crowd, which disregarded the hours of meals, and seemed to feel no hunger or thirst but that of gold; nor could they be dispersed until a bell at night gave them the signal to withdraw. The smallest room in that street was let for exorbitant sums; the clerks were unable to register the growing multitude of claimants; and it is even said that a little hunchback in the street gained no less than 50,000 francs by allowing Letters to James and to General Dillon, May 6. 1720. (See Appendix.) |