THE PRINCE OF HESSE ELECTED KING OF SWEDEN.
Sir John Norris had again sailed to the Baltic with a strong squadron to give weight to the king’s mediation. When he arrived at Copenhagen he wrote a letter to prince Dolgorouki, the czar’s ambassador at the court of Denmark, signifying that he and the king’s envoy at Stockholm were vested with full powers to act jointly or separately in quality of plenipotentiaries, in order to effect a peace between Sweden and Muscovy, in the way of mediation. The prince answered that the czar had nothing more at heart than peace and tranquillity; and in case his Britannic majesty had any proposals to make to that prince, he hoped the admiral would excuse him from receiving them, as they might be delivered in a much more compendious way. The English fleet immediately joined that of Sweden as auxiliaries; but they had no opportunity of acting against the Russian squadron, which secured itself in Revel. Ulrica, queen of Sweden, and sister to Charles XII., had married the prince of Hesse, and was extremely desirous that he should be joined with her in the administration of the regal power. She wrote a separate letter to each of the four States, desiring they would confer on him the sovereignty; and after some opposition from the nobles, he was actually elected king of Sweden. He sent one of his general officers to notify his elevation to the czar, who congratulated him upon his accession to the throne: this was the beginning of a negotiation which ended in peace, and established the tranquillity of the North. In the midst of these transactions, king George set out from England for his Hanoverian dominions; but before he departed from Great Britain, he was reconciled to the prince of Wales, through the endeavours of the duke of Devonshire and Mr. Walpole, who, with earl Cowper, lord Townshend, Mr. Methuen, and Mr. Pulteney, were received into favour, and re-united with the ministry. The earls of Dorset and Bridgewater were promoted to the title of dukes; lord viscount Castleton was made an earl; Hugh Boscawen was created a baron, and viscount Falmouth; and John Wallop baron, and viscount Lymington.
GEORGE I, 1714—1727
EFFECTS OF THE SOUTH-SEA SCHEME.
While the king was involved at Hanover in a labyrinth of negotiations, the South-Sea scheme produced a kind of national delirium in his English dominions. Blunt, the projector, had taken the hint of his plan from the famous Mississippi scheme formed by Law, which in the preceding year had raised such a ferment in France, and entailed rain upon many thousand families of that kingdom. In the scheme of Law there was something substantial. An exclusive trade to Louisiana promised some advantage; though the design was defeated by the frantic eagerness of the people. Law himself became the dupe of the regent, who transferred the burden of fifteen hundred millions of the king’s debts to the shoulders of the subjects, while the projector was sacrificed as the scape-goat of the political iniquity. The South-Sea scheme promised no commercial advantage of any consequence. It was buoyed up by nothing but the folly and rapaciousness of individuals, which became so blind and extravagant, that Blunt, with moderate talents, was able to impose upon the whole nation, and make tools of the other directors, to serve his own purposes and those of a few associates. When this projector found that the South-Sea stock did not rise according to his expectation upon the bill’s being passed, he circulated a report that Gibraltar and Port-Mahon would be exchanged for some places in Teru; by which means the English trade to the South-Sea would be protected and enlarged. This rumour, diffused by his emissaries, acted like a contagion. In five days the directors opened their books for a subscription of one million, at the rate of three hundred pounds for every hundred pounds capital. Persons of all ranks crowded to the house in such a manner that the first subscription exceeded two millions of original stock. In a few days this stock advanced to three hundred and forty pounds; and the subscriptions were sold for double the price of the first payment. Without entering into a detail of the proceedings, or explaining the scandalous arts that were practised to enhance the value of the stock, and decoy the unwary, we shall only observe, that by the promise of prodigious dividends and other infamous arts, the stock was raised to one thousand; and the whole nation infected with the spirit of stock-jobbing to an astonishing degree. All distinction of party, religion, sex, character, and circumstances, were swallowed up in this universal concern, or in some such pecuniary project. Exchange-Alley was filled with a strange concourse of statesmen and clergymen, churchmen and dissenters, whigs and tories, physicians, lawyers, tradesmen, and even with multitudes of females. All other professions and employments were utterly neglected; and the people’s attention wholly engrossed by this and other chimerical schemes, which were known by the denomination of bubbles. New companies started up every day under the countenance of the prime nobility. The prince of Wales was constituted governor of the Welsh copper company; the duke of Chandos appeared at the head of the York-buildings company; the duke of Bridgewater formed a third, for building houses in London and Westminster. About an hundred such schemes were projected and put in execution, to the ruin of many thousands. The sums proposed to be raised by these expedients amounted to three hundred millions sterling, which exceeded the value of all the lands in England. The nation was so intoxicated with the spirit of adventure, that people became a prey to the grossest delusion. An obscure projector, pretending to have formed a very advantageous scheme, which, however, he did not explain, published proposals for a subscription, in which he promised that in one month the particulars of his project should be disclosed. In the meantime he declared that every person paying two guineas should be entitled to a subscription for one hundred pounds, which would produce that sum yearly. In one forenoon this adventurer received a thousand of these subscriptions; and in the evening set out for another kingdom. The king, before his departure, had issued a proclamation against these unlawful projects; the lords-justices afterwards dismissed all the petitions that had been presented for charters and patents; and the prince of Wales renounced the company of which he had been elected governor. The South-Sea scheme raised such a flood of eager avidity and extravagant hope, that the majority of the directors were swept along with it, even contrary to their own sense and inclination; but Blunt and his accomplices still directed the stream.
The infatuation prevailed till the eighth day of September, when the stock began to fall. Then did some of the adventurers awake from their delirium. The number of the sellers daily increased. On the twenty-ninth day of the month the stock had sunk to one hundred and fifty; several eminent goldsmiths and bankers, who had lent great sums upon it, were obliged to stop payment and abscond. The ebb of this portentous tide was so violent, that it bore down everything in its way; and an infinite number of families were overwhelmed with ruin. Public credit sustained a terrible shock; the nation was thrown into a dangerous ferment; and nothing was heard but the ravings of grief, disappointment, and despair. Some principal members of the ministry were deeply concerned in these fradulent transactions; when they saw the price of stock sinking daily, they employed all their influence with the bank to support the credit of the South-Sea company. That corporation agreed, though with reluctance, to subscribe into the stock of the South-Sea company, valued at four hundred per cent., three millions five hundred thousand pounds, which the company was to repay to the bank on Lady-day and Michaelmas of the ensuing year. This transaction was managed by Mr. Robert Walpole, who, with his own hand, wrote the minute of agreement, afterwards known by the name of the bank contract. Books were opened at the bank to take in a subscription for the support of public credit; and considerable sums of money were brought in. By this expedient the stock was raised at first, and those who contrived it seized the opportunity to realize. But the bankruptcy of goldsmiths and the sword-blade company, from the fall of South-Sea stock, occasioned such a run upon the bank, that the money was paid away faster than it could be received from the subscription. Then the South-Sea stock sunk again; and the directors of the bank, finding themselves in danger of being involved in that company’s ruin, renounced the agreement; which indeed they were under no obligation to perform, for it was drawn up in such a manner as to be no more than the rough draft of a subsequent agreement, without due form, penalty, or clause of obligation. All expedients having failed, and the clamours of the people daily increasing, expresses were despatched to Hanover, representing the state of the nation, and pressing the king to return. He accordingly shortened his intended stay in Germany, and arrived in England on the eleventh day of November.
A SECRET COMMITTEE APPOINTED BY THE HOUSE OF COMMONS.
The parliament being assembled on the eighth day of December, his majesty expressed his concern for the unhappy turn of affairs, which had so deeply affected the public credit at home: he earnestly desired the commons to consider of the most effectual and speedy methods to restore the national credit, and fix it upon a lasting establishment. The lower house was too much interested in the calamity to postpone the consideration of that subject. The members seemed to lay aside all party distinctions, and vie with each other in promoting an inquiry, by which justice might be done to the injured nation. They ordered the directors to produce an account of all their proceedings. Sir Joseph Jekyll moved that a select committee might be appointed to examine the particulars of this transaction. Mr. Walpole, now paymaster of the forces, observed, that such a method would protract the inquiry, while the public credit lay in a bleeding condition. He told the house he had formed a scheme for restoring public credit; but, before he would communicate this plan, desired to know whether the subscriptions of public debts and incumbrances, money-subscriptions and other contracts made with the South-Sea company, should remain in the present state. After a warm debate, the question was carried in the affirmative, with this addition, “Unless altered for the ease and relief of the proprietors, by a general court of the South-Sea company, or set aside in due course of law.” Next day Walpole produced his scheme,—to ingraft nine millions of South-Sea stock into the bank of England, and the like sum into the East India company, on certain conditions. The house voted, that proposals should be received from the bank, and those two companies on this subject. These being delivered the commons resolved, that an engrossment of nine millions of the capital stock of the South-Sea company into the capital stock of the bank and East-India company, as proposed by these companies, would contribute very much to the restoring public credit. A bill upon this resolution was brought in, passed through both houses, and received the royal assent. Another bill was enacted into a law, for restraining the sub-governor, deputy-governor, directors, treasurer, under-treasurer, cashier, secretary, and accountants, of the South-Sea company, from quitting the kingdom till the end of the next session of parliament; and for discovering their estates and effects, so as to prevent them from being transported or alienated. A committee of secrecy was chosen by ballot, to examine all the books, papers, and proceedings relating to the execution of the South-Sea act.