The lords were not less eager than the commons to prosecute this inquiry, though divers members in both houses were deeply involved in the guilt and infamy of the transaction. Earl Stanhope said the estates of the criminals, whether directors or not directors, ought to be confiscated, to repair the public losses. He was seconded by lord Carteret, and even by the earl of Sunderland. The duke of Wharton declared he would give up the best friend he had should he be found guilty. He observed, that the nation had been plundered in a most flagrant and notorious manner; therefore, they ought to find out and punish the offenders severely, without respect to persons. The sub and deputy-governors, the directors and officers of the South-Sea company, were examined at the bar of the house. Then a bill was brought in, disabling them to enjoy any office in that company, or in the East-India company, or in the bank of England. Three brokers were likewise examined, and made great discoveries. Knight, the treasurer of the South-Sea company, who had been entrusted with the secrets of the whole affair, thought proper to withdraw himself from the kingdom. A proclamation was issued to apprehend him; and another for preventing any of the directors from escaping out of the kingdom. At this period, the secret committee informed the house of commons that they had already discovered a train of the deepest villany and fraud that hell ever contrived to ruin a nation, which in due time they would lay before the house; in the meanwhile, they thought it highly necessary to secure the persons of some of the directors and principal officers of the South-Sea company, as well as to seize their papers. An order was made to secure the books and papers of Knight, Surman, and Turner. The persons of sir George Caswell, sir John Blunt, sir John Lambert, sir John Fellows, and Mr. Grigsby, were taken into custody; sir Theodore Janssen, Mr. Sawbridge, sir Robert Chaplain, and Mr. Eyles, were expelled the house and apprehended. Mr. Aislaby resigned his employments of chancellor of the exchequer and lord of the treasury; and orders were given to remove all directors of the South-Sea company from the places they possessed under the government.
The lords, in the course of their examination, discovered that large portions of South-Sea stock had been given to several persons in the administration and house of commons, for promoting the passing of the South-Sea act. The house immediately resolved, that this practice was a notorious and most dangerous species of corruption: that the directors of the South-Sea company having ordered great quantities of their stock to be bought for the service of the company, when it was at a very high price, and on pretence of keeping up the price of stock; and at the same time several of the directors, and other officers belonging to the company, having, in a clandestine manner, sold their own stock to the company, such directors and officers were guilty of a notorious fraud and breach of trust, and their so doing was one great cause of the unhappy turn of affairs that had so much affected public credit. Many other resolutions were taken against that infamous confederacy, in which, however, the innocent were confounded with the guilty. Sir John Blunt refusing to answer certain interrogations, a violent debate arose about the manner in which he should be treated. The duke of Wharton observed, that the government of the best princes was sometimes rendered intolerable to their subjects by bad ministers: he mentioned the example of Sejanus, who had made a division in the imperial family, and rendered the reign of Cladius hateful to the Romans. Earl Stanhope conceiving this reflection was aimed at him, was seized with a transport of anger. He undertook to vindicate the ministry; and spoke with such vehemence as produced a violent headache, which obliged him to retire. He underwent proper evacuations, and seemed to recover; but next day, in the evening, became lethargic, and being seized with a suffocation, instantly expired. The king deeply regretted the death of this favourite minister, which was the more unfortunate as it happened at such a critical conjuncture; and he appointed lord Town-shend to fill his place of secretary. Earl Stanhope was survived but a few days by the other secretary Mr. Craggs, who died of the small-pox on the sixteenth day of February. Knight, the cashier of the South-Sea company, being seized at Tirlemont by the vigilance of Mr. Gandot, secretary to Mr. Loathes the British resident at Brussels, was confined in the citadel of Antwerp. Application was made to the court of Vienna, that he should be delivered to such persons as might be appointed to receive him; but he had found means to interest the states of Brabant in his behalf. They insisted upon their privilege granted by charter, that no person apprehended for any crime in Brabant should be tried in any other country. The house of commons expressed their indignation at this frivolous pretence; instances were renewed to the emperor; and in the meantime Knight escaped from the citadel of Antwerp.
SEVERE RESOLUTIONS AGAINST THE SOUTH-SEA COMPANY.
The committee of secrecy found, that, before any subscription could be made, a fictitious stock of five hundred and seventy-four thousand pounds had been disposed of by the directors, to facilitate the passing the bill. Great part of this was distributed among the earl of Sunderland, Mr. Craggs, senior, the duchess of Kendal, the countess of Platen and her two nieces, Mr. Secretary Craggs, and Mr. Aislaby chancellor of the exchequer. In consequence of the committee’s report, the house came to several severe, though just, resolutions against the directors and officers of the South-Sea company; and a bill was prepared for the relief of the unhappy sufferers. Mr. Stanhope, one of the secretaries of the treasury, charged in the report with having large quantities of stock and subscriptions, desired that he might have an opportunity to clear himself. His request was granted; and the affair being discussed, he was cleared by a majority of three voices. Fifty thousand pounds in stock had been taken by Knight for the use of the earl of Sunderland. Great part of the house entered eagerly into this inquiry; and a violent dispute ensued. The whole strength of the ministry was mustered in his defence. The majority declared him innocent: the nation in general was of another opinion. He resigned his place of first commissioner in the treasury, which was bestowed upon Mr. Robert Walpole; but he still retained the confidence of his master. With respect to Mr. Aislaby, the evidence appeared so strong against him, that the commons resolved, he had promoted the distinctive execution of the South-Sea scheme, with a view to his own exorbitant profit, and combined with the directors in their pernicious practices to the ruin of public credit. He was expelled the house, and committed to the Tower. Mr. Craggs, senior, died of a lethargy, before he underwent the censure of the house. Nevertheless they resolved that he was a notorious accomplice with Robert Knight, and some of the directors, in carrying on their scandalous practices; and therefore, that all the estate of which he was possessed, from the first day of December in the preceding year, should be applied towards the relief of the unhappy sufferers in the South-Sea company. The directors, in obedience to the orders of the house, delivered in inventories of their estates, which were confiscated by act of parliament, towards making good the damages sustained by the company, after a certain allowance was deducted for each according to his conduct and circumstances.
1721
The delinquents being thus punished by the forfeiture of their fortunes, the house converted their attention to means for repairing the mischiefs which the scheme had produced. This was a very difficult task, on account of the contending interests of those engaged in the South-Sea company, which rendered it impossible to relieve some but at the expense of others. Several wholesome resolutions were taken, and presented with an address to the king, explaining the motives of their proceedings. On the twenty-ninth day of July, the parliament was prorogued for two days only. Then his majesty going to the house of peers, declared that he had called them together again so suddenly, that they might resume the consideration of the state of public credit. The commons immediately prepared a bill upon the resolutions they had taken. The whole capital stock, at the end of the year one thousand seven hundred and twenty, amounted to about thirty-seven millions eight hundred thousand pounds. The stock allotted to all the proprietors did not exceed twenty-four millions five hundred thousand pounds; the remaining capital stock belonged to the company in their corporate capacity. It was the profit arising from the execution of the South-Sea scheme; and out of this the bill enacted, that seven millions should be paid to the public. The present act likewise directed several additions to be made to the stock of the proprietors, out of that possessed by the company in their own right; it made a particular distribution of stock, amounting to two millions two hun dred thousand pounds; and upon remitting five millions of the seven to be paid to the public, annihilated two millions of their capital. It was enacted, that, after these distributions, the remaining capital stock should be divided among all the proprietors. This dividend amounted to thirty-three pounds six shillings and eight-pence per cent, and deprived the company of eight millions nine hundred thousand pounds. They had lent above eleven millions on stock unredeemed; of which the parliament discharged all the debtors, upon their paying ten per cent. Upon this article the company’s loss exceeded six millions nine hundred thousand pounds, for many debtors refused to make any payment. The proprietors of the stock loudly complained of their being deprived of two millions; and the parliament in the sequel revived that sum which had been annihilated. While this affair was in agitation, petitions from counties, cities, and boroughs, in all parts of the kingdom, were presented to the house, crying for justice against the villany of the directors. Pamphlets and papers were daily published on the same subject; so that the whole nation was exasperated to the highest pitch of resentment. Nevertheless, by the wise and vigorous resolutions of the parliament, the South-Sea company was soon in a condition to fulfil their engagements with the public; the ferment of the people subsided; and the credit of the nation was restored.
