In this general distress, Walpole was summoned to power, in older to extricate the nation, on the eve of bankruptcy. He proposed a plan, which was adopted, and which saved the credit of the nation. He ingrafted nine millions of the South Sea stock into the Bank of England, and nine millions more into the East India Company; and government gave up the seven millions of bonus which the company had promised.
By this assistance, the company was able to fulfil its engagements, although all who purchased stock when it had arisen beyond one hundred per cent. of its original value, lost money. It is strange that the stock, after all, remained at a premium of one hundred per cent.; of course, the original proprietors gained one hundred per cent., and those who paid one hundred per cent. premium lost nothing. But these constituted a small fraction of the people who had speculated, and who paid from one hundred to nine hundred per cent. premium. Government, too, gained by reducing interest on irredeemable bonds from five to four per cent., although it lost the promised bonus of seven millions.
The South Sea bubble did not destroy the rage for speculation, although it taught many useful truths—that national prosperity is not advanced by stockjobbing; that financiers, however great their genius, generally overreach themselves; that great dividends are connected with great risk; that circumstances beyond human control will defeat the best-laid plan; that it is better to repose upon the operation of the ordinary laws of trade; and that nothing but strict integrity and industry will succeed in the end. From the time of Sir Robert Walpole, money has seldom been worth, in England, over five per cent., and larger dividends on vested property have generally been succeeded by heavy losses, however plausible the promises and clear the statements of stockjobbers and speculators.
After the explosion of the South Sea Company, Walpole became possessed of almost unlimited power. And one of the first objects to which he directed attention, after settling the finances, was the Enlightened Policy of Walpole. removal of petty restrictions on commerce. He abolished the export duties on one hundred and six articles of British manufacture, and allowed thirty-eight articles of raw material to be imported duty free. This regulation was made to facilitate trade with the colonies, and prevent them from manufacturing; and this regulation accomplished the end desired. Both England and the colonies were enriched. It was doubtless the true policy of British statesmen then, as now, to advance the commercial, manufacturing, and agricultural interests of Great Britain, rather than meddle with foreign wars, or seek glory on the field of battle. The principles of Sir Robert Walpole were essentially pacific; and under his administration, England made a great advance in substantial prosperity. In this policy he surpassed all the statesmen who preceded or succeeded him, and this constituted his glory and originality.
But liberal and enlightened as was the general course of Walpole, he still made blunders, and showed occasional illiberality. He caused a fine of one hundred thousand pounds to be inflicted on the Catholics, on the plea that they were a disaffected body. He persecuted Bishop Atterbury, and permitted Bolingbroke, with his restless spirit of intrigue, to return to his country, and to be reinstated in his property and titles. He flattered the Duchess of Kendall, the mistress of the king, and stooped to all the arts of corruption and bribery. There never was a period of greater political corruption than during the administration of this minister. Sycophancy, meanness, and hypocrisy were resorted to by the statesmen of the age, who generally sought their own interests rather than the welfare of the nation. There were, however, exceptions. Townsend, the great rival and coadjutor of Walpole, retired from office with an unsullied fame for integrity and disinterestedness; and Walpole, while he bribed others, did not enrich himself.
King George I. died on the 11th of June, 1727, suddenly, by apoplexy, and was succeeded by his son George II., a man who resembled his father in disposition and character, and was superior to him in knowledge of the English constitution, though both were inclined to steer the British bark by the Hanoverian rudder. Like his father, he was reserved, phlegmatic, cautious, sincere, fond of business, economical, and attached to Whig principles. He was fortunate in his wife, Queen Caroline, one of the most excellent women of the age, learned, religious, charitable, and sensible; the patroness of divines and scholars; fond of discussion on metaphysical subjects, and a correspondent of the distinguished Leibnitz.
The new king disliked Walpole, but could not do without him, and therefore continued him in office. Indeed, the king had the sense to perceive that England was to be governed only by the man in whom the nation had confidence.
In 1730, Walpole rechartered the East India Company. East India Company, the most gigantic monopoly in the history of nations. As early as 1599, an association had been formed in England for trade to the East Indies. This association was made in consequence of the Dutch and Portuguese settlements and enterprises, which aroused the commercial jealousy of England. The capital was sixty-eight thousand pounds. In 1600, Queen Elizabeth gave the company a royal charter. By this charter, the company obtained the right of purchasing land, without limit, in India, and the monopoly of the trade for fifteen years. But the company contended with many obstacles. The first voyage was made by four ships and one pinnace, having on board twenty-eight thousand pounds in bullion, and seven thousand pounds in merchandise, such as tin, cutlery, and glass.
During the civil wars, the company's affairs were embarrassed, owing to the unsettled state of England. On the accession of Charles II., the company obtained a new charter, which not only confirmed the old privileges, but gave it the power of making peace and war with the native princes of India. The capital stock was increased to one million five hundred thousand pounds.
Much opposition was made by Bolingbroke and the Tories to the recharter of this institution; but the ministry carried their point, and a new charter was granted on the condition of the company paying to government two hundred thousand pounds, and reducing the interest of the government debts one per cent. per annum. By this time, the company, although it had not greatly enlarged its jurisdiction in India, had accumulated great wealth. Its powers and possessions will be more fully treated when the victories of Clive shall be presented.