fifteen millions of debt from its own shoulders to those of Law; but the public had to pay for it. Before the end of 1720 the bubble had burst — several arbitrary decrees of the government had in vain been issued to bolster it up, and Law flew for his life out of the kingdom. Unfortunately, the contagion of speculation originating in Law's French experiment had taken deep hold in this country before this explosion occurred. In 1711, Harley, being at his wit's end to maintain the public credit, established a fund to provide for the national debt, which amounted to ten millions of pounds. To defray the interest he made permanent the duties on wine, vinegar, and tobacco, &c. To induce the purchase of the government stock, he gave to the shareholders the exclusive privilege of trading to the Spanish settlements in South America, and procured them an act of parliament and a royal charter, under the name of the South Sea Company. The idea, hollow and groundless as it was, seized on the imagination of the most staid and experienced traders. All the dreams of boundless gold which haunted the heads of the followers of Drake and Raleigh were revived. The mania spread through the nation, and was industriously encouraged by the partisans of Harley. But this stupendous dream of wealth was based on the promises of ministers, who at the peace of Utrecht were to secure from the government of Spain this right to trade to its colonies. The right was never granted by that haughty and jealous power, further than for the settlement of some few factories, and the sending of one small ship annually of less than five hundred tons. This, and the shameful Assiento, or privilege of supplying those colonies with African slaves, were the sole advantages obtained, and these were soon disturbed by the war with Spain, which broke out under Alberoni. The South Sea Company, however, from its general resources, remained a flourishing corporation, and was deemed the rival of the Bank of England.
It was at the close of 1719, when George I. returned from Hanover, that this company, inspired by the apparent success of Law's project in France, proposed to ministers to consolidate all the funds into one. It was strange that both ministers and merchants could be deluded by the hope of enriching themselves by a share of the trade with the Spanish South American provinces, when Spain herself, in full enjoyment of them, was sunk into indigence and weakness, and presented the most determined resistance to the unfettered intercourse of any other nation with them. Yet Sir John Blunt, a leading director of the South Sea Company, persuaded the ministers that by granting the company power to deal with the public funds, and especially to buy up the unredeemable annuities which had been granted in the last two reigns, chiefly on terms of ninety-nine years, and which now amounted to about eight hundred thousand pounds a year, they could, in twenty-six years, pay off the entire national debt. But to enable them to do this, they must be empowered to reduce all the different public securities to one aggregate fund in their hands, to convert both redeemable and unredeemable debts into stock by such arrangements as they could make with the holders, and to have certain commercial privileges invested in them. Ministers accepted the proposals with great alacrity. Aislabie introduced the scheme to parliament in the month of February of the present year, declaring that, if it was accepted by the house, the prosperity of the nation would be amazingly enhanced, and all its debts liquidated in a very few years. Craggs seconded the proposal in most sangiune terms, expressing his conviction that every member of the house must be ready to adopt so advantageous an offer. Ministers had already closed with the proposals of the company, and they were themselves greatly disconcerted by the suggestion of Mr. Thomas Broderick, the member for Stockbridge, who expressed his entire accordance with ministers, but thought that the nation should endeavour to obtain the best terms for itself by opening the competition of every other company or association of men as well as that in question. Ministers were confounded by this proposal, and Aislabie endeavoured to get out of it by declaring that to do this would be like putting the nation up to auction, and that such things should be done with spirit. But Jekyll interposed, saying it was this spirit which had ruined the nation, and it was now requisite to consider seriously what was best for the public. A violent debate ensued, in which Walpole eloquently recommended open competition, and was sharply replied to by Lechmere. Walpole rejoined as warmly, and Lechmere was about to return to the charge, for the house was in committee, but the noise was become awful. The chairman called out, "Hear your member!" but nearly the whole house cried out, "We have heard him long enough!" The question was carried in favour of competition; and then the Bank of England, which before had coolly declined to enter into the proposals, suddenly appeared in a new temper, and made liberal offers for the privilege of thus farming the public debts. But the South Sea Company was not to be outdone; it offered seven millions and a half, and the Bank gave way in despair. The chancellor of the exchequer proposed that the rival companies should share the advantages of this scheme between them; but Sir John Blunt, making use of Solomon's words, said, "No, sir, we will never divide the child." The Scripture-quoting knight and his company retained the whole engagement. Walpole, however, continued to oppose the South Sea Bill in the commons, declaring that the terms were too extravagant ever to be fulfilled; that the experiment could result in nothing but a fearful increase of the costs of stock-jobbing, and final confusion and ruin. He insisted that, before the proposals of the company were accepted, the rise of their stock should be limited, and every means taken to prevent the fever of infatuation that would ensue from the promise of dividends out of funds which could never be realised. He proposed for this purpose the introduction of a clause, fixing the number of years' purchase to be granted to the annuitants of the South Sea Company; but to this it was objected that it was the interest of the company to take up the annuities; and, as the annuitants had the power of coming in or not, as they pleased, the company would, of course, offer advantageous terms, and, therefore, the whole affair might be safely left to private adjustment. Aislabie added that the South Sea Company would not submit to be controlled in an undertaking they were to pay so dear for.
On the 2nd of April the South Sea Bill was passed by a division of one hundred and seventy-two against fifty-five,
