the Protestant succession, the country was going steadily forward in a course of prosperity. Wherever there is superfluous wealth, beyond the ordinary demands of industry for capital, there will be always projectors ready to suggest modes for its co-operative uses. The machinery of directors and managers,-an organization with which our countrymen are now as familiar as that of a parish vestry,—was as ready, though not quite as efficient, at the beginning of the eighteenth century as in the middle of the nineteenth. There was then to be seen many a type of the subtle attorney, and the impudent secretary, who have spread such consternation in our own times. There was then to be seen the magnificent list of noble names, such as continue to attract the unwary to have confidence in some Board where very few know the secret transac tions. Even the prince of Wales was then the Governor of a Welsh Copper Company. But it seems to us that the belief of all the schemes of that scheming time being fraudulent and delusive is a mistake. Many of these schemes might be premature; and having chiefly in view the profit to be made by the rise of shares, might be called "Bubbles." But it is scarcely reasonable to class the following projects amongst the ridiculous schemes of that gam bling time: For improving alum works; for paving the streets of London; for supplying various towns with water; for improving the art of making soap; for improving the paper manufacture; for making iron with pit coal; for extracting silver from lead. It had been justly said by a writer who decried, in 1695, “many pernicious projects now on foot," that "some were very useful and suc cessful whilst they continued in a few hands, till they fell into stock-jobbing, now much introduced, when they dwindled to noth ing others of them were mere whims, of little or no service to the world."* Such, no doubt, was the general character of the manifold projects of 1720. In the summer of that year, the South Sea year, "the dog-star rages" over Exchange Alley with a fury that has never been equalled; because no capitalist, even to the possessor of a single shilling, was then too humble not to believe that the road to riches was open before him. Subscribers to projects recommended by "one or more persons of known credit," were only required to advance ten shillings per cent. A shilling, and even sixpence per cent. was enough to secure the receipt for a share in the more doubtful undertakings. Shares of every sort were at a premium, unless in cases where the office that was opened at noon on one day was found closed on the next, and the shillings and sixpences had vanished with the subscription books. But the

"Angliæ Tutamen," quoted in Anderson's "Commerce."

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great impulse to the frantic stock-jobbing of that summer was the sudden and enormous rise in the value of South Sea Stock. In July, Secretary Craggs wrote to earl Stanhope, who was abroad with the king, "It is impossible to tell you what a rage prevails here for South Sea subscriptions at any price. The crowds of those that possess the redeemable annuities is so great that the Bank, who are obliged to take them in, has been forced to set tables with clerks in the streets." * The hundred pound shares of the South Sea Company went up to a thousand pounds in August. The shares of the Bank of England and of the East India Company were transferred at an enormous advance. Smaller companies of every character-water-companies, fishery-companies, companies for various manufactures, companies for settlements and foreign trade-infinite varieties, down to companies for fatting hogs and importing jackasses from Spain-rushed into the market amidst the universal cry for shares and more shares. The Directors of the South Sea Company opened a second, a third, and a fourth subscription. They boldly proclaimed that after Christmas their annual dividend should not fall short of fifty per cent. upon their £100 shares. The rivalry of the legion of projects of that season was odious to these great lords of the money-market. The government itself began to think that some fearful end would come to the popular delusion; and a Royal Proclamation was issued against mischievous and dangerous undertakings, especially the presuming to act as a corporate body, or raising stocks or shares without legal authority." It was calculated that the value of the stock of all the Companies, with corporate authority or no authority, amounted at the current prices to five hundred millions sterling; being five times as much as the circulating medium of Europe, and twice as much as the fee simple of all the land of the kingdom. The attempt of the South Sea Company to lessen the number of their competitors was the prelude to their own fall. At their instance, writs of scire facias were issued, on the 18th of August, against four Companies; and the subscribers to these, and to all other projects not legalised, were ordered to be prosecuted by the officers of the Crown. A panic ensued. In a day or two, the Stocks of all the Companies not incorporated rapidly fell; and with the downward rush went down every description of Stock. Before August; knowing and cautious holders of South Sea Stock began to sell out. Walpole, who had originally opposed the scheme, did not carry his opposition to the extreme of neglecting his opportunity of largely adding to his fortune,

Coxe's "Walpole," vol. ii. p. 189.

by investing at the proper time, and selling out at the proper time. The earl of Pembroke applied to Walpole for his advice as to the great question of selling when the shares were at their culminating point. The adroit financier coolly answered— "I will only tell you what I have done myself. I have just sold out at £1,000 per cent., and I am fully satisfied." By the middle of September, holders of South Sea Stock were crowding the Exchange, not as eager buyers, but as more eager sellers. The Stock was at 850 on the 18th of August; in a month it had fallen to 410. Mr. Brodrick, on the 13th of September, writes, that the most considerable men of the Company, "with their fast friends, the Tories, Jacobites, and Papists," had drawn out; "securing themselves by the losses of the deluded thoughtless numbers, whose understandings were overruled by avarice, and hopes of making mountains of mole-hills. Thousands of families will be reduced to beggary.. . . The consternation is inexpressi ble; the rage beyond expression; and the case is so desperate, that I do not see any plan or scheme for averting the blow." † On the 29th of September, South Sea Stock had fallen to 175. This greatest of bubbles had burst. Many persons of rank and station were not so prudent as Walpole and the earl of Pembroke had been. The duke of Portland, lord Lonsdale, and lord Irwin, were provided with colonial governments to enable them to live-a species of consideration for ruined nobility which is rather in bad odour in our days. Merchants, lawyers, clergy, physicians, passed from their dream of fabulous wealth and from their wonted comforts into poverty; some "died of broken hearts; others withdrew to remote parts of the world, and never returned." It has been observed that "the calamitous effects of the madness were rather individual and immediate, than permanent or general. There was little, if any, absolute destruction of capital. The whole mischief consisted in a most quick and violent shifting of property from one hand to another." § But the derangement of the ordinary course of industry was to be added to this shifting of property. Serious as was this temporary evil; furious as it made the suffer ers in their reproaches against every one but themselves; eager as it rendered the Legislature for confiscation of the property of the South Sea Directors, the national credit was not permanently im paired by the infatuation which produced so much private misery. In this respect, the issue of the South Sea scheme was essentially different from the Mississippi scheme of John Law in France, • Coxe, vol. i. p. 730. ↑ Ibid., vol. ii. p. 190. ↑ Anderson.

G. L. Craik, "History of British Commerce," vol. ii. p. 194

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which also exploded in that fatal year for projectors; producing there what was equivalent to a national bankruptcy. When the South Sea crash came, there was alarm for its public consequences. But Walpole, who had again joined the government, though in a subordinate office, applied his great financial abilities to avert the difficulties which this convulsion might occasion to the State; and instead of joining the first cry for vengeance upon the South Sea Directors, he calmly said in Parliament, that if London were on fire, wise men would endeavour to extinguish the flames before they sought for the incendiaries. When the king opened the Session on the 8th of December, the royal speech recommended measures "to restore the national credit." Walpole was regarded by all parties as the man to effect this.

To endeavour to equalize, to the most inconsiderable extent, the losses and gains of individuals by the extravagant rise and sudden depression of South Sea Stock, would have been a task far beyond the province of any minister of state. The financial abilities of Walpole were necessarily directed to the very difficult labour of disentangling the government from the embarrassments of the South Sea Company. The English ministry had never attempted to sustain the value of the Company's shares by arbitrary edicts; or to interfere with their fall by regulations that were based upon other principles than the great natural laws by which the money market, like every other market, must be governed. The French ministry, when the scheme of Law for relieving its exhausted finances by a paper currency, based on the imaginary riches of Louisiana, was in the course of breaking down, gave its orders that individuals should not retain in their possession any sum beyond a small amount of gold and silver, and should be com pelled to carry on their transactions in Law's substitute for money. The shares were not to fall according to the rate at which their owners were willing to sell them, but to sink in nominal value, by a monthly reduction, till they had reached half their original price, at which rate they were to be fixed. All this, of course, was the merest convulsion of despotism. The Regent had shifted a large amount of the debts of the State to the deluded people, and no attempt was made to retrieve the national credit. Walpole had to pursue a policy which was the only possible one under a limited monarchy; and which indeed was not beset with the difficulties that the government of the Regent would have had to encounter in any struggle to be honest. The French finances were hopelessly embarrassed by a long course of extravagance, before Law thought he could perform the part of the magician in the Arabian

story, making a scrap of paper pass as a piece of silver. The English finances were healthy, though the national debt amounted to fifty or sixty millions. The French government adopted the schemes of Law, to furnish the means of new extravagances. The English government went into the scheme of the South Sea Company, with the view of redeeming a portion of the national debt, and thus of lessening the amount of taxation. Voltaire records that he had seen Law come to court with dukes, marshals, and bishops following humbly in his train. The English Court was not free from shame in the South Sea project. Half a million of fictitious Stock had been created by the Directors, previous to the passing of the Bill. The duchess of Kendal, as well as other favourites of the king, had large douceurs out of the profits which the Directors made by the transfer of these shares; and it is lamentable to add that Craggs, the Secretary of State, his father the Postmaster-General, and Aislabie, the Chancellor of the Exchequer, were amongst the recipients of this bribery. It was the business of parliament to trace the extent of the corruption; and to punish in some degree those Directors for vengeance upon whom the nation was frightfully clamouring. Although in the petitions to Parliament "for justice on the authors of the present calamities," we may see how individuals come to consider the losses produced by their own insensate desire for sudden riches as national misfortunes, we may yet observe how general is the calamity when a people think to grow rich by gambling instead of by work. The petition of the county of Kent avers that it was lately one of the most flourishing in the kingdom, "and is now reduced to a most unhappy condition by the execrable fraud of the late wicked South Sea Directors." The petition of the borough of Leicester states that "no sooner had the South Sea Directors, and the vile emissaries they despatched over the kingdom to propagate lies and forgeries, so imposed upon the honest credulous people as to draw all their ready money and treasure into their infamous hands, but we saw trade instantly struck dead, our manufactures disregarded,our combed wool (once the staple and glory of our industrious corpora tion) lie neglected in our work-houses, our poor increasing for want of employment." Maidstone cannot pay the duty on hops, for there is no money in circulation. Somerset represents that the clothier's trade is gone to decay. Warwick says that the South Sea parricides have reduced a plundered people, in the space of one year only, "to as deplorable a state of calamity and distress as they ever yet suffered by any civil tumult or foreign war." Birmingham complains that its trade is wonderfully reduced, and that there is