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

1720. New proposals were accordingly sent in, both from the South Sea Company and the Bank of England. According to Aislabie, this was 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.

+ Second Speech, July, 1721. See also Sinclair's Public Revenue, part 2. p. 104.



CHAP. “ be bold to say, my Lords, and the gentlemen of XI.

“ the Bank, I believe, will own, that if they had “ carried the scheme upon their last proposals, “ they could not have succeeded; and I will show

your Lordships, from what they have done since, “ that they would have acted in the same manner “ as the South Sea Company.” Even at the time Aislabie had some glimmerings of the future danger, and proposed to Sir John Blunt that the two Corporations should undertake the compact jointly, and therefore with double resources.

But Sir John, who was, or pretended to be, a most austere Puritan, and who brought forward Scripture on all occasions, immediately quoted Solomon's judgment, and added, “ No, Sir, we will never “ divide the child !"

Thus then the South Sea Bill proceeded through the House of Commons without any further competition from the Bank.* An attempt was made to introduce a clause fixing how many years' purchase should be granted to the annuitants by the South Sea Company. To this it was objected, that, as it was the interest of the Company to take in the annuities, and as the annuitants had the power of coming in or not as they pleased, there

* I must observe, that the observations ascribed to Walpole by Coxe (vol. i. p. 130.) seem to have been drawn up on Coxe's own ideas of probability. He makes Walpole point out “ the “ruin and misery which then prevailed in France from similar “ measures.” Now this is quite an anachronism : the speech of Walpole was delivered Feb. 1. 1720; and at that time the system of Law was still in its glory,

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was no doubt that the Company would offer ad- CHAP.
vantageous terms, and that therefore the affair
might safely be left to private adjustment. “Nor,”

says Aislabie, “would the South Sea Company
“ submit to be controlled in an undertaking they
“ were to pay so dear for.” On these grounds
was the clause rejected, though only by a majority
of four. But these grounds, though specious and
indeed well-founded, were not the only ones, and
we shall see hereafter that several persons in Go-
vernment had probably other reasons as weighty,
though not quite so honourable, for supporting the

The South Sea Bill finally passed the Commons by a division of 172 against 55. In the Lords, on the 4th of April, the minority was only 17, notwithstanding an able speech from Lord Cowper, who compared the project to the Trojan horse, ushered in with great pomp and acclamation, but contrived for treachery and destruction. But, like every other statesman at this time, he did not foresee the real point or extent of danger; and nothing could be more erroneous than his prediction, that “ the main public intention of this bill, the re

purchase of annuities, would meet with insuper« able difficulties.” Such, on the contrary, was the rising rage for speculation, that on the passing of the bill very many of the annuitants hastened to carry their orders to the South Sea House, before they had even received any offer, or knew what terms would be allowed them! — ready to

CHAP. yield a fixed and certain income for even the XI.

smallest share in vast but visionary schemes ! 1720.

The offer which was made to them on the 29th of May (eight years and a quarter's purchase) was much less favourable than they had hoped ; yet nevertheless, six days afterwards, it was computed that nearly two thirds of the whole number of annuitants had already agreed.*

In fact, it seems clear, that during this time, and throughout the summer, the whole nation, with extremely few exceptions, looked upon the South Sea Scheme as promising and prosperous. Its funds rapidly rose from 130 to above 300. Walpole, although one of its opponents, readily, as we have seen, joined the Ministry at this period under very mortifying circumstances, which he would certainly not have done, had he foreseen the impending crash, and the necessity that would arise for his high financial talents. Lord Townshend concurred in the same view. Atterbury thought it a great blow to Jacobitism. He charitably hints to James, in his letters, that some attempt from the Duke of Ormond might “ disorder our finances, and throw us “ into a good deal of confusion.' But if the advice of this minister of peace and good will towards men cannot be taken in this respect, he then anticipates that “the grand money schemes “ will settle and fix themselves in such a manner

• Boyer's Polit. State, vol. xix. p. 518.

" that it will not be easy to shake them.” *


XI. being the feeling, not merely of the ministerial party, but of most of their opponents, it seems scarcely 1720. just to cast the blame of the general delusion on the Ministers alone, and to speak of them as deaf to warning and precipitate to ruin.

The example of these vast schemes for public wealth was set us from Paris. John Law, a Scotch adventurer, had some years before been allowed to establish a public bank in that city; and his project succeeding, he engrafted another upon it of an “ Indian Company,” to have the sole privilege of trade with the Mississippi. The rage for this speculation soon became general : it rose to its greatest height about December, 1719; and the “ actions,” or shares, of the new Company sold for more than twenty times their original value. The Rue Quincampoix, the chief scene of this traffic, was thronged from daybreak by a busy and expecting crowd, which disregarded the hours of meals, and seemed to feel no hunger or thirst but that of gold; nor could they be dispersed until a bell at night gave them the signal to withdraw. The smallest room in that street was let for exorbitant sums; the clerks were unable to register the growing multitude of claimants; and it is even said that a little hunchback in the street gained no less than 50,000 francs by allowing

• Letters to James and to General Dillon, May 6. 1720. (See Appendix.)

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