CHARLES MONTAGUE, EARL OF HALIFAX. (After the Portrait by Sir Godfrey Kneller.)

[[See larger version]]

Those matters being settled, the House voted fifteen thousand pounds for sailors for the year, the vote expressly stipulating for sailors only, lest the king should include some land forces under the name of marines. They also granted one million four hundred and eighty-four thousand pounds for the service of the year, to be raised by a land and income tax of three shillings in the pound. To this Act, availing themselves of their sole right to introduce money Bills, they also "tacked" a clause appointing commissioners to take an account of the estates forfeited in Ireland by the last rebellion, in order to their being applied in ease of the subjects in England. This was another sharp reminder of the king's proceedings. It had been promised by him that he would not bestow the forfeited estates without the sanction of the House, but in disregard of this he had given large estates to his favourites. William was deeply mortified by this clause, and some of the Lords entered a protest against it, on the ground that the clause was foreign to the contents of the Bill, and was contrary to the practice of Parliament. The king, however, did not venture to refuse his signature to the Act, which he passed on the 4th of May, 1699, and at the same time prorogued the Parliament.

Before quitting England, William was obliged to almost entirely remodel his Ministry. The Duke of Leeds retired from the Presidency of the Council; his influence had expired with the discovery of his bribe from the East India Company. The Earl of Pembroke, a moderate Tory, who performed his official duties with zeal and integrity, was put in his place. Villiers, Earl of Jersey, having returned from his embassy to France, was made Secretary of State in place of the Duke of Shrewsbury, who became Lord Chamberlain. The Earl of Manchester went as ambassador to France in place of Jersey, and Lord Lonsdale, another Tory, obtained the Privy Seal. On the 2nd of June, William, having appointed a regency, embarked for Holland, where he retired to Loo, but not to peace of mind, for he saw events marching to an ominous result. The forces of England and of the Continent were disbanded, except those of Louis, which were rapidly increased; and not only the Spanish monarchy, but all Europe, appeared at his mercy. But before following these movements, we must trace some nearer home.

Ireland was quiet. The Parliament of that kingdom had voted one hundred and twenty thousand pounds for the maintenance of the twelve thousand troops ordered by the English Parliament to be quartered in that country, and the Duke of Bolton and the Earls of Berkeley and Galway were appointed Lords Justices.

In Scotland far different was the state of things. There excitement raged against the Ministry of England, and not the less against the king, who disowned their Company, organised to carry out the Act granted for trading to Africa and the Indies. The charter for this Company was granted by the Scottish Parliament, and ratified by William in 1695. Its professed object was to trade with the East and West Indies and Africa; but there was a plan for carrying out these objects, which does not seem to have been made known to the Government, or made public generally, till after the acquisition of the charter. This was to seize on the Isthmus of Darien, to establish a strong colony there, and not only to grow rich through possession of the gold mines, but to found ports both on the Atlantic and on the Pacific, so that a great carrying trade might be prosecuted between Europe and China and the East Indies by that route.

William Paterson, the projector of this scheme, was the same man who had projected and carried into being, through the influence of Montague, the Bank of England. He has been generally represented as a visionary speculator and schemer, and has not unfrequently been confounded with John Law, of Lauriston, the author of the famous South Sea Bubble and Mississippi Scheme, which spread such ruin through both France and England. Paterson, however, was a very different man. Undoubtedly he was a most speculative genius, but in his speculations there was something grand, substantial, and based, for the most part, on the purest moral principles. The Bank of England is a lasting memorial of his real sagacity and acute talents. It was well devised, and immediately rose to entire success. Through some disagreement in the mode of management Paterson sold out his stock, and proposed the erection of an Orphan Bank, connected with the Orphan Fund established by the Corporation of London already mentioned. This was not entertained, and he then projected his grand scheme for the Scottish Company to trade to the Indies. This scheme, so far from being visionary, had all the elements of a great and far-seeing reality. The unsound portion of Paterson's project was the not sufficiently taking into account these political obstacles:—Spain possessed, or rather claimed to possess, the Isthmus of Darien. Louis of France was contemplating the seizure of Spain, and its American territories. William was under treaty of peace with both Spain and Louis. It was impossible, therefore, to obtain possession of the Isthmus of Darien without producing a fresh European war. To attempt it by treaty was useless, for Spain would never consent to permit England, of which she was in the highest degree jealous, thus to establish a great mercantile colony in the midst of her most valuable Transatlantic colonies, from which she was annually drawing her cargoes of gold and other valuable products. Louis of France, who was resolved to succeed to the Spanish Empire, was as little likely to permit such a thing. To obtain possession of Darien, then, could only be done by invasion, and that invasion must produce immediate war, for which William was not prepared.

But the scheme was got up ostensibly to trade to the East and West Indies and Africa. There was no mention of Panama; and its prospects were so fair that they seized on the imaginations of the English and Scottish public. The Company was to have the monopoly of trade with Asia, Africa, and America for thirty-one years. Paterson had spent ten years in the West Indies, and, as it is supposed, in Panama. At all events, he had the reputation of being intimately acquainted with those regions and their resources. His proposals of the Company were eagerly accepted both in London and Edinburgh. Though it was intended to raise only three hundred and sixty thousand pounds as the original stock for both countries, three hundred thousand pounds were subscribed in London alone in a few days. But this remarkable success excited all the vindictive feelings of Companies whose interests this new league appeared likely to affect. The East India Companies, new and old, immediately were on the alert, and raised such a feeling in the House of Commons that it resolved to impeach Paterson and the bankers, Coutts and Cohen, for the commission of an illegal act in daring to levy money in England without the sanction of the English Legislature. In the meantime a subscription list had been opened at Hamburg, and by this the Dutch East India Company was equally alarmed, and the influence both of the Dutch and of the English Companies was made to bear on the king. William, who had been too much absorbed by his warfare with Louis to perceive the hostile feelings which he was exciting by passing the Scottish Act, now made haste to condemn his own precipitancy. He complained that he had been deceived by the Scottish Government, and at once gave orders to prohibit the scheme, and sent similar orders to his consul at Hamburg to forbid the subscription there. The senate of the city of Hamburg was induced to prohibit the canvassing of the Company's agents; and the English subscribers, alarmed at the menaces of the king and Commons, withdrew their names. Nor were these all the enemies of this scheme. There were Scottish traders united for commerce with India by the ordinary route, and these joined in the cry. One of these, Mr. Robert Douglas, attacked the scheme in a very able letter. In this letter we are first let into the secret that the real destination is not so much the West Indies as Darien, on the mainland. It is not, however, from Paterson having mentioned expressly Darien that Douglas declares it to be that place, but he infers it from the fact that the locality darkly hinted at by Paterson is at once near the Caribbean isles, and at the same time so situated "that it will alter the whole method of trade in Europe, and effectually ruin both the English and Dutch East Indian Companies, because it opens a shorter, safer, and more convenient way to the East Indies by the Pacific from England and Holland."

Douglas then points out that it is not nearer or more convenient than the old way to the western or Bombay coast of the Indian peninsula; that it was then a very dangerous route, because our merchant vessels on that track would have to pass the Dutch, Batavian, and Spice Island settlements, which would show the utmost hostility to such a traffic; but still more, that it was impossible, because this Isthmus of Panama was the track by which Spain conveyed her treasure from Peru to Portobello; that as to the rightful possession of the country by Spain, the city of Darien, called Santa Maria, was one of the first cities built by them on the mainland of America, as the province was the first province possessed by them. These were sound reasons why the king could not consent to any such invasion of the territory of Spain, and why Spain was not likely to concede it by treaty. These reasons should have made Paterson and the Scots pause.