State of British merchant shipping, temp. George I.
War, as we have too frequently seen, is a terrible obstacle to all industrial pursuits, and to no branch of commerce—however much a certain class of shipowners may have realised by having their vessels employed as government transports—is it a greater source of lasting injury than to the mercantile marine. This branch of industry, indeed, suffered not merely by the war itself, but by the hordes of privateers, buccaneers, and pirates which, up to the close of the last century, infested the seas whenever war was declared, thus interrupting legitimate commerce, and plundering wherever they had an opportunity, either by land or sea, too often with little regard whether the property they plundered was that of a friend or a foe. In the early part of the reign of George I. these marauders were almost as daring and as lawless as the pirates had been during the reign of Elizabeth and of the Henrys, and none more so than an Englishman named Roberts, who, in three vessels armed as frigates, the largest mounting forty guns, and commanded by himself, desolated the coasts of Africa and the West India Islands, plundering the ships of his own country with as little remorse as he did those of any other nation.
South Sea Company, 1710.
But while the buccaneers at this period scoured the seas, there were knavish speculators on land who, under the pretence of fostering and developing the commercial and maritime resources of England, were really its greatest enemies. Among the numerous concerns then floated as joint stock companies, no one was more conspicuous or more disastrous than the “South Sea Bubble.” Having for its professed object the trade of the South Seas, yet with no basis for its operations beyond the dishonourable privilege of supplying Spanish America for thirty years with slaves torn from Africa, a very questionable favour granted to Great Britain by the Treaty of Utrecht, this company, in competition with the Bank of England, sought and obtained a monopoly of the South Sea trade on condition that the national floating debt, then about ten millions, should be paid out of its surplus profits!! Though perhaps no wilder scheme was ever propounded, it readily received the sanction of Parliament, and consequently a thousand and one other bubbles were speedily projected. The disastrous results are well known: thousands of families once well to do were irretrievably ruined, and the frenzy with which the people were seized, together with the impulse given to every form of gambling instead of to the steady pursuits of industry, materially aided the convulsion caused by the bursting of these bubbles, thus for many years paralysing commerce in all its branches, and laying prostrate the energies of the country.
Seized for a time with the spirit of insane speculation, the people thought of nothing else, and though in our own day we have witnessed many wild schemes submitted for public support, none have really proved so thoroughly disastrous in their results as those which were then launched. South Sea stock of 100l. sold for 1000l.; the Orkney Fishery stock rose from 25l. to 250l.; the York Buildings stock, whose shares were 10l., reached 260l. The latter, a company erected to cut timber for ship-building and other purposes in Scotland, in spite of a protectionist bounty, proved a ruinous failure. There were besides eleven fishing projects; ten insurance companies; two companies for the remittance of money; four salt companies; two sugar companies; eleven companies for settlements in, or trading to, America; two building companies; thirteen land companies; six oil companies; four harbour and river companies; four companies for supplying London with coal, cattle, and hay, and for paving the streets; six hemp, flax, and linen companies; five companies for carrying on the manufacture of silks and cottons; one for planting mulberry-trees in Chelsea Park, and breeding silkworms;[203] fifteen mining companies; and some sixty more miscellaneous bubbles of the most preposterous character. One undertaking actually obtained subscriptions for an object “which in due time should be revealed!”
The bubble bursts, 1720.
But the South Sea Company, the greatest bubble of the lot, having prosecuted some of the rival bubble companies, and obtained a writ of scire facias from the Queen’s Bench, all stocks fell suddenly; and the South Sea scheme itself collapsed in the general ruin which ensued. The price of its stock fell from 1000l. to 175l. in a few weeks. The delusion was at an end, and the English nation awaking from its dreams of boundless wealth to a sense of its degradation, a terrible commercial distress ensued. Parliament stepped in at last with a bill to remedy the mischief which had been done, and which it had itself encouraged. Proofs were given of the deep and fraudulent complicity of the then Chancellor of the Exchequer (Aislabie), as well as of several South Sea directors and other persons of the highest rank at court and in the city. In the sequel, four members of the House of Commons who were South Sea directors were expelled the House; Aislabie was sent to the Tower; Knight, the cashier of the Company, absconded, and the estates of the chief criminals were confiscated.
But amid the numerous wildly speculative concerns then projected and launched, there were others which were sound and legitimate; among these may be mentioned the Royal Exchange Assurance Company, with a capital of 500,000l., and the London Assurance Company, with a subscription list of four times that amount. Each of these have maintained their position to this day, ranking high as marine and fire insurance associations. By their original charters they were empowered to insure ships and merchandise from the dangers and accidents of the sea, and were also authorised to lend money on bottomry bonds. Subsequently they obtained charters for insuring from loss by fire. From the first they have had no exclusive privileges, although they might well have demanded them, for, just before their formation, the losses of private underwriters had been so great that no fewer than one hundred and fifty of them had become insolvent in the previous five years.[204]
FOOTNOTES:
[175] There is a passage in Mr. Burke’s famous speech on Conciliation with America, March 22, 1775, where he states her growth in the life of one man, Lord Bathurst, which reads now almost like a prophecy.