In the first debate the enemies of the South Sea Company were most violent. Lord Molesworth said he should be satisfied to see the contrivers of the scheme tied in sacks and thrown into the Thames. Honest Shippen, whom even Walpole could not bribe, looking fiercely in Mr. Secretary Craggs' face, said "there were other men in high station who were no less guilty than the directors." Mr. Craggs, rising in wrath, declared he was ready to give satisfaction to any one in the House, or out of it, and this unparliamentary language he had afterwards to explain away. Ultimately a second committee was appointed, with power to send for persons, papers, and records. The directors were ordered to lay before the house a full account of all their proceedings, and were forbidden to leave the kingdom for a twelvemonth.
Mr. Walpole laid before a committee of the whole house his scheme for the restoration of public credit, which was, in substance, to ingraft nine millions of South Sea stock into the Bank of England, and the same sum into the East India Company, upon certain conditions. The plan was favourably received by the House. After some few objections it was ordered that proposals should be received from the two great corporations. They were both unwilling to lend their aid, and the plan met with a warm but fruitless opposition at the general courts summoned for the purpose of deliberating upon it. They, however, ultimately agreed upon the terms on which they would consent to circulate the South Sea bonds; and their report being presented to the committee, a bill was then brought in, under the superintendence of Mr. Walpole, and safely carried through both Houses of Parliament.
In the House of Lords, Lord Stanhope said that every farthing possessed by the criminals, whether directors or not, ought to be confiscated, to make good the public losses.
LONDON STONE
The wrath of the House of Commons soon fell quick and terrible as lightning on two members of the Ministry, Craggs, and Mr. Aislabie, Chancellor of the Exchequer. It was ordered, on the 21st of January, that all South Sea brokers should lay before the House a full account of all stock bought or sold by them to any officers of the Treasury or Exchequer since Michaelmas, 1719. Aislabie instantly resigned his office, and absented himself from Parliament, and five of the South Sea directors (including Mr. Gibbon, the grandfather of the historian) were ordered into the custody of the Black Rod.
The next excitement was the flight of Knight, the treasurer of the Company, with all his books and implicating documents, and a reward of £2,000 was offered for his apprehension. The same night the Commons ordered the doors of the House to be locked, and the keys laid on the table.
General Ross, one of the members of the Select Committee, then informed the House that there had been already discovered a plot of the deepest villany and fraud that Hell had ever contrived to ruin a nation. Four directors, members of the House—i.e., Sir Robert Chaplin, Sir Theodore Janssen, Mr. Sawbridge, and Mr. F. Eyles—were expelled the House, and taken into the custody of the Serjeant-at-Arms. Sir John Blunt, another director, was also taken into custody. This man, mentioned by Pope in his "Epistle to Lord Bathurst," had been a scrivener, famed for his religious observances and his horror of avarice. He was examined at the bar of the House of Lords, but refused to criminate himself. The Duke of Wharton, vexed at this prudent silence of the criminal, accused Earl Stanhope of encouraging this taciturnity of the witness. The Earl became so excited in his return speech, that it brought on an apoplectic fit, of which he died the next day, to the great grief of his royal master, George I. The Committee of Secrecy stated that in some of the books produced before them, false and fictitious entries had been made; in others there were entries of money, with blanks for the names of the stockholders. There were frequent erasures and alterations, and in some of the books leaves had been torn out. They also found that some books of great importance had been destroyed altogether, and that some had been taken away or secreted. They discovered, moreover, that before the South Sea Act was passed there was an entry in the Company's books of the sum of £1,259,325 upon account of stock stated to have been sold to the amount of £574,500. This stock was all fictitious, and had been disposed of with a view to promote the passing of the bill. It was noted as sold on various days, and at various prices, from 150 to 325 per cent.
Being surprised to see so large an amount disposed of, at a time when the Company were not empowered to increase their capital, the committee determined to investigate most carefully the whole transaction. The governor, sub-governor, and several directors were brought before them and examined rigidly. They found that at the time these entries were made the Company were not in possession of such a quantity of stock, having in their own right only a small quantity, not exceeding £30,000 at the utmost. They further discovered that this amount of stock was to be esteemed as taken or holden by the Company for the benefit of the pretended purchasers, although no mutual agreement was made for its delivery or acceptance at any certain time. No money was paid down, nor any deposit or security whatever given to the Company by the supposed purchasers; so that if the stock had fallen, as might have been expected had the act not passed, they would have sustained no loss. If, on the contrary, the price of stock advanced (as it actually did by the success of the scheme), the difference by the advanced price was to be made good by them. Accordingly, after the passing of the act, the account of stock was made up and adjusted with Mr. Knight, and the pretended purchasers were paid the difference out of the Company's cash. This fictitious stock, which had chiefly been at the disposal of Sir John Blunt, Mr. Gibbon, and Mr. Knight, was distributed among several members of the Government and their connections, by way of bribe, to facilitate the passing of the bill. To the Earl of Sunderland was assigned £50,000 of this stock; to the Duchess of Kendal, £10,000; to the Countess of Platen, £10,000; to her two nieces, £10,000; to Mr. Secretary Craggs, £30,000; to Mr. Charles Stanhope (one of the Secretaries of the Treasury), £10,000; to the Sword Blade Company, £50,000. It also appeared that Mr. Stanhope had received the enormous sum of £250,000, as the difference in the price of some stock, through the hands of Turner, Caswall, and Co., but that his name had been partly erased from their books, and altered to Stangape.