A history of England

by Charles Oman

Second attempt of the Pretender.

Even after his lamentable failure in 1715-16, the Pretender still nourished some hopes of exciting another rebellion. When France refused to help him, he turned to Spain, and got some small assistance from Philip V., who, as we shall see, had the best reasons for disliking the Whigs. A few hundred Spanish troops landed in Rosshire in 1719, and were joined by the clans of the neighbourhood; but no general rising took place, and the whole Jacobite force was dispersed or captured by Carpenter—the victor of Preston—at the battle of Glenshiel.

War with Spain.—Schemes of Alberoni.

The tale of "the Fifteen" is the one stirring incident in the inglorious annals of George I. The domestic interest of the remainder of his reign centred in the quarrels and intrigues of the various Whig parties with each other. The only important constitutional change which dates from this time is the "Septennial Act" of 1716, which fixed the duration of Parliament at seven years. Since 1694 three years had been their legal term, but, on account of the inconvenience of general elections at such short intervals, the longer term was substituted and still prevails. In foreign politics the only notable event was a short war with Spain in 1718-20. This was caused by an attempt of Philip V. and his able minister, Cardinal Alberoni, to reconquer the old Spanish dominions in Sicily and Naples. England, as one of the guarantors of the treaty of Utrecht, interfered to aid the Austrians and the Duke of Savoy, the two powers whom Spain had attacked, and an English fleet under Admiral Byng destroyed off Cape Passaro the Spanish squadron which had accompanied the army that invaded Sicily.

In revenge Cardinal Alberoni gave the Jacobites what help he could, and endeavoured to concert an alliance with Charles XII., the warlike King of Sweden. But he and his helpers were too weak to cope with Austria, France, and England, who were all leagued against him. Alberoni was forced from office, and his master Philip V. signed an ignominious peace, and gave up his ephemeral conquests in Sicily (1720).

The ministry which had carried on the war with Spain had been composed of that section of the Whigs who followed Stanhope and Sunderland. But in the same year in which peace was signed, that cabinet was replaced by another, and England saw the advent to power of the prime minister who was to rule the three kingdoms for the next twenty-two years (1721-42), Sir Robert Walpole.

The South Sea Bubble.

The Stanhope cabinet was overthrown, not by the strength of its enemies, but by its own misfortune in becoming involved in the great financial panic known as the "South Sea Bubble." The South Sea Company was a trading venture which had been started in 1711 for developing commerce with Spanish America and the countries of the Pacific. The undertaking had been very successful, and the shares of the company were much sought after, and commanded a very heavy premium. But the directors who managed it were venturesome and reckless men, who wished to extend their operations outside the sphere of trade into that of finance and stock-jobbing. They formed a great scheme for offering the Government the huge sum of £7,000,000 for the privilege of taking over the management of the National Debt, which had hitherto been in the hands of the Bank of England. They intended to recoup themselves by inducing the creditors who held the state loans to exchange them for new stock of the South Sea Company, which would thus accumulate a capital sufficient to develop its trade all over the world, and distance all rivals.

Stanhope and Sunderland accepted this wild offer; they were glad to get the burden of the National Debt off their shoulders, and did not stop to think if they were treating the public creditors fairly in handing them over to the mercies of a greedy trading company. Accordingly, the management of the debt was duly transferred to the South Sea Company, and the directors did their best to put off their shares on the late holders of Government stock. For a time they were successful; the exchange was in many cases effected, and on terms very favourable to the Company, whose prospects were so well thought of that a share nominally worth £100 was actually sold for £1000. But this prosperity was purely fictitious; the actual bulk and profit of the Company's trade with the Pacific was not able to bear a quarter of the financial mountain that had been built up upon it. The first shock to credit that occurred was sufficient to expose the fraud that had been perpetrated on the public. The success of the South Sea Company had led to the starting of many other companies, some of them genuine but hazardous ventures, some mere swindling devices for robbing the investor. A general madness seemed to have fallen upon the nation, and in the haste to make money quickly and without exertion, all classes rushed into the whirl of speculation and stock-jobbing. It is said that subscribers were found for schemes "to discover perpetual motion, and utilize it for machinery," "to make salt water fresh," "to render quicksilver malleable," "to fatten hogs by a new process," and even "to engage in a secret undertaking which shall hereafter be made public." Of course, all these bubble companies began to burst before they were many months old, and to ruin those who had engaged in them. The financial crisis which was brought about by these failures, led to a general panic, which affected all speculative enterprises, great and small. None suffered more than the South Sea Company itself, whose shares gradually sank from 1000 down to 135. This ruined thousands of investors, and finally broke the company itself, which proved unable to pay the Government the £7,000,000 that it had covenanted to give for the privilege of managing the National Debt.

Fall of the Stanhope cabinet.