According to Mainwaring, Handel stayed six weeks at Aix; the London papers announced his return on November 7, 1737. The management of the Opera had now been taken over by Heidegger, but the death of Queen Caroline on November 20 caused all theatres to be closed from that date until the end of December. It was announced in the papers that the Opera would reopen on January 10 with a new oratorio by Handel, called Saul, but this performance did not take place, and the theatre actually reopened on January 7 with his new opera Faramondo. This opera was the first work that Handel had undertaken after his return to London, but its composition was interrupted by that of the Funeral Anthem for the Queen. Although she died on November 20, Handel did not receive the King's command to write the anthem until December 7, as George II was strangely undecided in making arrangements for the funeral. It was finally fixed for December 17, and a special organ was hurriedly built for it in Henry VII's chapel at Westminster Abbey. Handel's anthem was performed by 80 singers and 100 instrumentalists. Queen Caroline had been one of his most faithful friends, and his gratitude and affection for her found utterance in music which Burney placed "at the head of all his works for expression, harmony and pleasing effects."

It was at ten at night on Christmas Eve that Handel finished the score of Faramondo; on Boxing Day he began the composition of Serse. Faramondo had only six performances, and Serse did not appear on the stage until April 15, when it ran for five nights only. It is remembered now, if at all, by the fact that the first song in it is the so-called "celebrated Largo," but the opera as a whole is of curious interest. "He was neither in health, prosperity, or spirits," says Burney, "when it was composed; appearances remain in his foul score [i.e. rough copy] of a mind disturbed, if not diseased. There are more passages, and even whole pages, cancelled in this score, than in any one of all his former operas." Serse, it must be explained, is a comic opera, and the only comic opera that Handel ever wrote. What induced him to attempt this style it is difficult to conceive. It is of course true that the failure of Handel's earlier operas was largely due to the success of The Beggar's Opera (1728), and of other comic entertainments which succeeded it—Hurlothrumbo (1729), Pasquin (1736) and The Dragon of Wantley (1737). A new type of comic opera had arisen in Italy too, and comic intermezzi were first seen in Italian grand opera in London in January 1737, although it was not until 1748 that a real company of Italian comic-opera singers came over to England. But what is more important to notice is that the whole style of Italian opera was changing during the second quarter of the century. Handel had continued to develop his own style, based on the grand manner of old Scarlatti, but Handel's operas were practically unknown outside London and Hamburg; in Italy, Scarlatti's style had already become old-fashioned before his death in 1725, and opera was moving on towards the lighter and flimsier manner of Galuppi, who first came to London in this year of Serse, 1738.

In choosing the libretto of Serse, Handel seems to have been making a desperate attempt to keep up with the taste of the day. Humour he had in plenty; one has only to recall Acis and Galatea. But the humour of Serse, diverting as it is to the modern historical student, is neither the musical nor the dramatic humour of 1737; the plot bears no resemblance whatever to the Neapolitan comic operas of Vinci and Pergolesi, but rather recalls the very early operas, based on Spanish comedies, composed by Alessandro Scarlatti in the 1680's. Serse was revived a few years ago in Germany, considerably cut about and reduced to one act, in which arrangement it had some success; but we can well understand its complete failure on its first London production.

The only satisfaction which Handel received in that unfortunate season of 1738 was the proceeds of his benefit concert at the Haymarket on March 28, organised for him by his friends, apparently rather against his own wish. According to Burney the net receipts were £800; Mainwaring puts the figure at £1,500. Even if we accept Burney's estimate, the sum is remarkable, and particularly so in view of the known hostility of a large section of society towards the composer. It can only be supposed that Handel's physical and mental collapse had been grave enough to awaken a wide-spread sense of pity for his misfortunes. Another mark of popular appreciation was the erection of a statue of Handel, executed by Roubiliac, at Vauxhall Gardens, in recognition of the pleasure which his music had afforded to the frequenters of that famous resort. This piece of "laudable idolatry," as Burney calls it, was thus described by a contemporary journalist: "Mr. Handel is represented in a loose robe, sweeping the lyre, and listening to its sounds; which a little boy sculptured at his feet seems to be writing down on the back of a violon-cello. The whole composition is in an elegant taste." Commissioned by an impresario who had made a fortune out of the use of Handel's music, it now appropriately adorns the vestibule of Messrs. Novello's music-shop in Wardour Street.

Charles Jennens, writing to his cousin Lord Guernsey on September 19, 1738, remarks that "Mr. Handel's head is more full of maggots than ever." Towards the end of July he had begun the composition of Saul, for which Jennens had provided the libretto three years before. It is evident that Handel intended to startle his audiences with his new oratorio scheme. He had ordered a new organ for the theatre at a cost of £500, constructed so that he might have a better command of his performers, and he had also acquired another instrument, which Jennens calls a "Tubalcain"—in other words a set of bells played from a keyboard—which he intended to use in the scene in which the Israelites welcome David after his victory over the Philistines. It is curious that Handel should have dramatised the insanity of Saul just after he had himself recovered from mental derangement.

No sooner was Saul finished (September 27) than Handel, four days later, began the composition of Israel in Egypt. Saul was first performed on January 16, 1739, and enjoyed a moderate success, but Israel (April 4) was a failure, even after it had been shortened and made more attractive by the insertion of Italian opera songs.

Israel in Egypt is the most conspicuous example of a strange and almost unaccountable habit which from about this period began to show itself in Handel's methods of composition—the incorporation of large quantities of music by other composers. Samuel Wesley was the first person to draw attention to this practice of Handel's, though only in a private letter of 1808. In 1831 Dr. Crotch, in his professorial lectures at Oxford, named no less than twenty-nine composers whom Handel had "quoted or copied." The researches of Chrysander, Dr. Max Seiffert, Ebenezer Prout, and Sedley Taylor eventually proved beyond dispute that not only Israel, but several other works of Handel were largely made up from the music of other men.

Chrysander maintained that Handel began appropriating other men's ideas as early as 1707, for not only Rodrigo and Agrippina, but also La Resurrezione and the Laudate pueri show obvious reminiscences of Keiser's opera Octavia (Hamburg, 1705). These were probably subconscious, like Handel's reminiscences of Scarlatti and others at this period; they need not be taken any more seriously than Schubert's frequent reminiscences of Beethoven. But in Atalanta (1736) and Giustino (1737), Prout discovered quotations and adaptations several bars long from a Passion by Graun, which is known to have been composed not many years before. Further fragments of this Passion were identified by Prout in Alexander's Feast and the Wedding Anthem (1736); Saul, like Israel, incorporates several movements from a Te Deum by Urio (fl. 1660). From this date onwards until the end of his career Handel systematically drew upon the works of other musicians.

There has been much controversy over this question, and many attempts have been made to explain away Handel's "borrowings" so as to leave no moral stain on his character, which indeed, by all contemporary accounts, was scrupulously upright. Sedley Taylor (1906) was certainly anxious to clear Handel's character, but still more concerned to arrive at the exact truth, and his method of presenting the evidence throws a new light on Handel's procedure. He showed that in most cases Handel made frequent alterations in the music which he utilised, almost as if Stradella (to cite one name out of many) had been a young pupil to whom he was giving a lesson in composition.

A careful study of these alterations suggests a reason for Handel's action which seems not to have occurred to any previous writer on the subject. No one seems to have noticed hitherto that Handel's "borrowings" begin in 1736 on a small scale, and become more frequent in 1737, after which they develop into a regular habit. It seems only natural therefore to connect them with Handel's mental collapse; it became acute in the spring of 1737, but it may well have been approaching in the previous year.