The "person" who was to go over to France as Plenipotentiary, was Sir James Harris, who had lately been made Lord Malmesbury—and he arrived at Paris on 22nd October. The usual diplomatic fencing took place, but this was brought to an end by a squabble respecting the annexation of the Netherlands to France. Lord Malmesbury wished to communicate with his Government on this point, but the Directory meant to force his hand, and required his ultimatum within twenty-four hours, and, as he still asked for time, he was told his presence in Paris was useless, and that he must depart within two days. He replied that he would leave next day, and demanded his passports. On the 20th December he left Paris for England, and so ended, for a while, all hopes of peace. That the French had but faint hopes of a successful end to the mission is evident, for, during the negotiations, on 2nd November, the Council of Five Hundred passed a decree, prohibiting the importation of British goods into the Republic.

As a proof of the patriotism of the English people, and their thorough reliance on the Government, Pitt asked for a loan of eighteen millions. This loan, called "The Loyalty Loan," was opened on 5th December, and in 15 hours 20 minutes it was all subscribed. The Times of 6th December says—"Yesterday, soon after 11 o'clock, the SUBSCRIPTION for EIGHTEEN MILLIONS STERLING, for the services of the ensuing year, closed at the Bank; and such was the general desire to subscribe, that the Court Room was a scene of the utmost confusion. Many gentlemen were altogether disappointed; and those who could get near the books to put down their names, did so with the utmost difficulty. There was very little remaining to be subscribed; for a great number of orders had been received by Mr. Newland in the morning, from the country, which claimed a preference; and, accordingly, the doors were shut some time, until these commissions were written down. There is no doubt but that many millions more would have been subscribed, if the public service had required it. There cannot be a greater proof of the patriotism of all ranks of people in thus assisting Government, because, at the time the loan was opened, the other funds were considerably the cheapest purchase."

Nor was it money only, that our forefathers gave. In October 195,000 men were voted for the land service for the year 1797, and 120,000 seamen and marines for the navy. There was also a levy of 15,000 men, from the different parishes, for sea service, and recruiting the regiments of the line, and a supplementary militia was raised, of 60,000 men, not to be immediately called out, but to be enrolled, officered, and completely trained, so as to be ready in a moment of danger, and a force of 20,000 irregular cavalry was also embodied.

The year closed with a frost which exceeded in severity any known for many years. Many people were frozen to death, and the thermometer was 34, and 35 degrees below freezing point.

1797 opened very gloomily; finance, the backbone of a nation, was somewhat dislocated. People were alarmed at the rapid growth of the National Debt, and, selling out of the funds, found other investments for their capital: there had been an enormous drain of bullion to subsidise the allies, and Pitt had borrowed from the Bank in the most reckless manner. It was in vain that the Bank remonstrated with him, but still he borrowed, so that at last he had to be told that if he took any more, it would probably lead to the insolvency of the Bank. There was a run upon the country banks, and its effects were soon felt in London; and, on 26th, an order of the Privy Council was made, forbidding the Bank of England from making cash payments, until Parliament had been consulted. On inquiry, it was found that the Bank was not only perfectly solvent, but, after payment of all liabilities, its capital would amount to £9,660,290. Under these circumstances Mr. Pitt brought in a bill (37 George III. cap. 28), permitting the Bank to issue notes from 20s. upwards, in lieu of cash. This measure brought relief, and saved the National credit.

Perhaps one of the chief National events in the year, was the mutiny of the fleets. Looking at it from this distance of time, one can hardly wonder at it, especially when we consider the way in which the crews were procured, by impressment and otherwise, their hard fare, the bad accommodation for them, the frequent punishments, from 50 to 500 lashes, at the discretion of a possibly irate captain, frequently for venial offences; add to this, small pay, and constant work, and we are fain to acknowledge that the men who could stand such treatment tamely, were almost more than human.

Yet they stated their grievances very properly, and quietly, sending petitions, either in February, or March, to Lord Howe, begging him to use his influence with the Admiralty, to procure them an increase of wages, and an improvement in the quality, and quantity, of their provisions. No notice whatever was taken of this temperate remonstrance, so the men, finding no help came to them, tried to help themselves, and secret communication was opened between all the vessels of the fleet. No one can defend the gross breach of discipline of which they were guilty, but it must be remembered that they were ignorant men, smarting under a sense of injury, rendered especially galling, by their just complaints, and moderate demands, being utterly ignored.

Their plot to seize the ships, and expel the officers, came to be known, and, on 15th April, Admiral Lord Bridport, in obedience to orders from the Admiralty, signalled for the fleet to sail. But the men refused to put to sea (unless an enemy was known to be at sea), until their grievances had been examined into, and redressed. A deputation, of two men from each ship, met in the Admiral's cabin, and another petition was drawn up. On the 18th, a Committee of the Lords of the Admiralty went to Portsmouth, to investigate the seamen's claims; and the result was, that Admiral Bridport returned to his ship on 23rd April, and, having hoisted his flag, he told his crew that he brought with him the redress of all their grievances, and the King's pardon for all offenders.

One would imagine that this would satisfy them, coming as it did from the mouth of their "father and friend," but when, on the 7th of May, he signalled to put to sea, no ship would obey him. The fact is, the men were suspicious; they had been so badly treated with regard to the granting of their moderate demands, that they thought the order for sailing was only a ruse to get them away, and then faith would not be kept with them. This mutiny was unfortunately accompanied by bloodshed, and it lasted until the 14th May. On the 11th, Lord Howe visited the fleet, saw the delegates, and assured them, that before a Royal pardon could be proclaimed, they must express contrition for their conduct. This they did, but solemnly declared they would never again receive on board those officers they had sent on shore. This was agreed to, and Lord Howe, on the 14th of May, showed them an Act of Parliament, which granted what they wished, and the fleet at St. Helens were, for a time, content.

But, at the Nore, there was much discontent, or rather open mutiny; the men had forced the Admiralty to grant their demands, and now thought they could go in for more; and, to enforce it, they attempted to blockade the Thames, and prevent any vessel from entering or departing,—and they did fire on several that attempted to run the blockade. Of course, such a state of things could not last long, and the removal of all the buoys, by the Admiralty, helped to bring about a surrender. Their provisions began to run short, and the Government peremptorily refused to accede to their demands. Some of the fleet left, and returned to their duty, on the 9th June. On the 10th, more struck the red flag, and on the 12th, there were but seven left that were not flying the Union Jack; and next day, five of them sought the protection of Sheerness.