1720.

Forces (out of the Cabinet), nor Townshend than CHAP. President of the Council; while Methuen was XI. satisfied with an office in the Royal Household. * Their support, accordingly, was by no means warm and willing; they were treated as inferiors, and, of course, behaved as malecontents; but at all events their opposition was disarmed, and their connection with the Tories broken. Another great advantage attending their accession was, healing the breach in the Royal Family. Walpole, who had lately ingra tiated himself with the Prince of Wales, induced him to write a submissive letter to the King; Stanhope induced His Majesty to receive it favourably a meeting ensued, and a reconciliation was effected. This union, both of Statesmen and of Princes, dashed the best hopes of Jacobitism. Bishop Atterbury writes to James, that, though the reconciliation is far from sincere, it will by degrees become so, or that at least the appearances and consequences of it will be the same as if it really were. "I think myself obliged," he adds, "to represent this melancholy truth, that there

may be no expectation of any thing from hence, "which will certainly not happen." +

Such, then, was the prosperous aspect of affairs,

The vacancies were made by the Duke of Kent, the Earl of Lincoln, and Mr. Boscawen. The latter was rewarded with the title of Viscount Falmouth. Lord Lincoln was a personal friend of Stanhope, had taken office only at his solicitation, and readily relinquished it.

+ Bishop Atterbury to James, May 6. 1720, Appendix. See also the Marchmont Papers, vol. ii. p. 409.

XI.

CHAP. when in June the King, attended by Stanhope, set out for his German dominions. But the happy 1720. calm was not of long continuance. It is now for me to relate how that glittering and hollow bubble, the South Sea Scheme, rising to the surface, broke the tranquillity and troubled the clearness of the

waters.

The South Sea Company was first formed by Harley in 1711, his object being to improve public credit, and to provide for the floating debts, which at that period amounted to nearly 10,000,000l. The Lord Treasurer, therefore, established a fund for that sum. He secured the interest by making permanent the duties on wine, vinegar, tobacco, and several others; he allured the creditors by promising them the monopoly of trade to the Spanish coasts in America; and the project was sanctioned both by Royal Charter and by Act of Parliament. Nor were the merchants slow in swal-. lowing this gilded bait; and the fancied Eldorado which shone before them dazzled even their discerning eyes. The exploits of Drake were quoted, and the dreams of Raleigh renewed. This spirit spread throughout the whole nation, and many, who scarcely knew whereabouts America lies, felt nevertheless quite certain of its being strewed with gold and gems. Meanwhile the partisans of Harley zealously forwarded this illusion, as tending to raise the reputation and secure the power of their chief; and they loudly vaunted the South Sea Scheme as the Earl of Oxford's master-piece, and as not unworthy of Sully or of Colbert.

XI.

1720.

The negotiations of Utrecht, however, in this as CHAP. in other matters, fell far short of the ministerial promises and of the public expectation. Instead of a free trade, or any approach to a free trade, with the American colonies, the Court of Madrid granted only, besides the shameful Asiento for negro slaves, the privilege of settling some factories, and sending one annual ship; and even this single ship was not unrestricted: it was to be under 500 tons burthen, and a considerable share of its profits to revert to the King of Spain. This shadow of a trade was bestowed by the British Government on the South Sea Company, but it was very soon disturbed. Their first annual ship, the Royal Prince, did not sail till 1717, and next year broke out the war with Spain; when, as I have already had occasion to relate, Alberoni, in defiance of the treaty, seized all the British goods and vessels in the Spanish ports. Still, however, the South Sea Company continued, from its other resources, a flourishing and wealthy corporation: its funds were high, its influence considerable, and it was considered on every occasion the rival and competitor of the Bank of England.

At the close of 1719, when the King returned from Hanover, this aspiring Company availed itself of the wish of Ministers to lessen the public debts, by consolidating all the funds into one. Sir John Blunt, once a scrivener, and then a leading South Sea Director, laid before Stanhope, as chief minister, a proposal for this object. He was re

XI.

CHAP. ferred by Stanhope to Sunderland, as First Lord of the Treasury, and to Aislabie, as Chancellor of the 1720, Exchequer. Several conferences ensued with the latter; several alterations were made in the scheme; and it was at length so far adjusted to the satisfaction of Ministers, that the subject was recommended to Parliament in the King's Speech. The great object was to reduce the irredeemable Annuities granted in the two last reigns, for the term, mostly, of 99 years, and amounting at this time to nearly 800,000l. a year. But when the question came on in the House of Commons, a wish was expressed by Mr. Brodrick and many more, that every other company should be at liberty to make offers. This, exclaims the Chancellor of the Exchequer, was like setting the nation to auction; and the only point on which all parties concurred was one which experience has proved to be totally wrong. "I quite agreed with Ministers," says Mr. Brodrick, "that till the national debt was "discharged, or at least in a fair way of being "so, we were not to expect to make the figure we " formerly had! Nay, further, I said, till this was "done, we could not, properly speaking, call our"selves a nation!" At length, after some violent

* Our best authorities for this negotiation, and the subsequent debate in the House of Commons, are, Mr. Brodrick's Letter to Lord Midleton, Jan. 24. 1720; and Mr. Aislabie's Second Speech before the House of Lords, July, 1721. The latter seems to be overlooked by Coxe. Both, however, require to be read with much suspicion; Aislabie being then on his defence, and Brodrick a violent partisan on the other side.

XI.

wrangling between Lechmere and Walpole*, the CHAP. House divided, and the question of competition was carried by a very large majority.

New proposals were accordingly sent in, both from the South Sea Company and the Bank of England. According to Aislabie, this was a sudden resolution of the Bank, "who before had "shown great backwardness in undertaking any

thing to reduce the public debts, and had "treated this scheme with much contempt." + Be this as it may, the two bodies now displayed the utmost eagerness to outbid one another, each seeming almost ready to ruin itself, so that it could but disappoint its rival. They both went on enhancing their terms, until at length the South Sea Company rose to the enormous offer of seven millions and a half, which was accepted. Yet the benefit of this competition to the public was any thing but real; for such high terms almost of necessity drew the South Sea Directors into rash means for improving their rash bargain, into daring speculation, and into final ruin.

The last proposals of the Bank had been little less extravagant. It is urged by Aislabie, in his defence next year before the Peers, "I will

* There seems to have been great uproar. When Lechmere attempted to speak a second time in Committee, the Opposition rose from their places; and on the Chairman exclaiming, “Hear your Member," they answered, "We have heard him long "enough!" Brodrick to Lord Midleton, Jan. 24. 1720. See also Sinclair's Public

Second Speech, July, 1721.

Revenue, part 2. p. 104.

1720.