Memoirs of Extraordinary Popular Delusions and the Madness of Crowds
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Title: Memoirs of Extraordinary Popular Delusions and the Madness of Crowds
Author: Charles Mackay
Release date: February 5, 2008 [eBook #24518]
Most recently updated: June 26, 2021
Language: English
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*** START OF THE PROJECT GUTENBERG EBOOK MEMOIRS OF EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS ***
[Illustration: THE MISSISSIPPI SCHEME: GARDENS OF THE HOTEL DE
SOISSONS, 1720.]
MEMOIRS
OF
EXTRAORDINARY POPULAR DELUSIONS.
VOLUME I.
[Illustration: THE BUBBLERS' ARMS--PROSPERITY.]
LONDON:
OFFICE OF THE NATIONAL ILLUSTRATED LIBRARY,
227 STRAND.
1852.
MEMOIRS
OF
EXTRAORDINARY POPULAR DELUSIONS
AND THE
MADNESS OF CROWDS.
BY CHARLES MACKAY, LL.D.
AUTHOR OF "EGERIA," "THE SALAMANDRINE," ETC.
ILLUSTRATED WITH NUMEROUS ENGRAVINGS.
VOL. I.
N'en déplaise à ces fous nommés sages de Grèce,
En ce monde il n'est point de parfaite sagesse;
Tous les hommes sont fous, et malgré tous leurs soîns
Ne diffèrent entre eux que du plus ou du moins.
BOILEAU.
LONDON:
OFFICE OF THE NATIONAL ILLUSTRATED LIBRARY,
227 STRAND.
1852.
LONDON:
PRINTED BY ROBSON, LEVEY, AND FRANKLYN,
Great New Street, Fetter Lane.
CONTENTS.
THE MISSISSIPPI SCHEME.
John Law; his birth and youthful career--Duel between Law and
Wilson--Law's escape from the King's Bench--The "Land-bank"--Law's
gambling propensities on the continent, and acquaintance with the Duke
of Orleans--State of France after the reign of Louis XIV.--Paper money
instituted in that country by Law--Enthusiasm of the French people at
the Mississippi Scheme--Marshal Villars--Stratagems employed and
bribes given for an interview with Law--Great fluctuations in
Mississippi stock--Dreadful murders--Law created comptroller-general
of finances--Great sale for all kinds of ornaments in Paris--Financial
difficulties commence--Men sent out to work the mines on the
Mississippi, as a blind--Payment stopped at the bank--Law dismissed
from the ministry--Payments made in specie--Law and the Regent
satirised in song--Dreadful crisis of the Mississippi Scheme--Law,
almost a ruined man, flies to Venice--Death of the Regent--Law obliged
to resort again to gambling--His death at Venice
THE SOUTH-SEA BUBBLE.
Originated by Harley Earl of Oxford--Exchange Alley a scene of great
excitement--Mr. Walpole--Sir John Blunt--Great demand for
shares--Innumerable "Bubbles"--List of nefarious projects and
bubbles--Great rise in South-sea stock--Sudden fall--General meeting
of the directors--Fearful climax of the South-sea expedition--Its
effects on society--Uproar in the House of Commons--Escape of
Knight--Apprehension of Sir John Blunt--Recapture of Knight at
Tirlemont--His second escape--Persons connected with the scheme
examined--Their respective punishments--Concluding remarks
THE TULIPOMANIA.
Conrad Gesner--Tulips brought from Vienna to England--Rage for the
tulip among the Dutch--Its great value--Curious anecdote of a sailor
and a tulip--Regular marts for tulips--Tulips employed as a means of
speculation--Great depreciation in their value--End of the mania
THE ALCHYMISTS.
Introductory remarks--Pretended antiquity of the
art--Geber--Alfarabi--Avicenna--Albertus Magnus--Thomas
Aquinas--Artephius--Alain de Lisle--Arnold de Villeneuve--Pietro
d'Apone--Raymond Lulli--Roger Bacon--Pope John XXII.--Jean de
Meung--Nicholas Flamel--George Ripley--Basil Valentine--Bernard of
Trèves--Trithemius--The Maréchal de Rays--Jacques Coeur--Inferior
adepts--Progress of the infatuation during the sixteenth and
seventeenth centuries--Augurello--Cornelius
Agrippa--Paracelsus--George Agricola--Denys Zachaire--Dr. Dee and
Edward Kelly--The Cosmopolite--Sendivogius--The Rosicrucians--Michael
Mayer--Robert Fludd--Jacob Böhmen--John Heydon--Joseph Francis
Borri--Alchymical writers of the seventeenth century--Delisle--Albert
Aluys--Count de St. Germain--Cagliostro--Present state of the science
MODERN PROPHECIES.
Terror of the approaching day of judgment--A comet the signal of that
day--The prophecy of Whiston--The people of Leeds greatly alarmed at
that event--The plague in Milan--Fortune-tellers and
Astrologers--Prophecy concerning the overflow of the Thames--Mother
Shipton--Merlin--Heywood--Peter of Pontefract--Robert
Nixon--Almanac-makers
FORTUNE-TELLING.
Presumption and weakness of man--Union of Fortune-tellers and
Alchymists--Judicial astrology encouraged in England from the time of
Elizabeth to William and Mary--Lilly the astrologer consulted by the
House of Commons as to the cause of the Fire of London--Encouragement
of the art in France and Germany--Nostradamus--Basil of
Florence--Antiochus Tibertus--Kepler--Necromancy--Roger Bacon,
Albertus Magnus, Arnold Villeneuve--Geomancy--Augury--Divination: list
of various species of divination--Oneiro-criticism (interpretation of
dreams)--Omens
THE MAGNETISERS.
The influence of imagination in curing diseases--Mineral
magnetisers--Paracelsus--Kircher the Jesuit--Sebastian Wirdig--William
Maxwell--The Convulsionaries of St. Medard--Father Hell--Mesmer, the
founder of Animal Magnetism--D'Eslon, his disciple--M. de
Puysegur--Dr. Mainauduc's success in London--Holloway, Loutherbourg,
Mary Pratt, &c.--Perkins's "Metallic Tractors"--Decline of the science
INFLUENCE OF POLITICS AND RELIGION ON THE HAIR AND BEARD.
Early modes of wearing the hair and beard--Excommunication and
outlawry decreed against curls--Louis VII.'s submission thereto the
cause of the long wars between England and France--Charles V. of Spain
and his courtiers--Peter the Great--His tax upon beards--Revival of
beards and moustaches after the French Revolution of 1830--The King of
Bavaria (1838) orders all civilians wearing moustaches to be arrested
and shaved--Examples from Bayeux tapestry
LIST OF ENGRAVINGS IN VOL. I.
Frontispiece--Gardens of the Hotel de Soissons. (From a print in Mr.
Hawkins' collection.)
Vignette--The Bubblers' Arms, Prosperity. (_Bubblers' Mirror, or
England's Folly_.)
John Law. (From a rare print by Leon Schenk. 1720)
The Regent D'Orleans
Old Palais Royal from the Garden. (From a scarce print, _circa_
1720)
Law's House; Rue de Quincampoix. (From Nodier's _Paris_)
Humpbacked Man hiring himself as a Table
Hôtel de Soissons. (From Nodier's _Paris_)
The Coach upset
Murder of a Broker by Count D'Horn
John Law as Atlas. (From _England under the House of Hanover_)
Caricature--Lucifer's new Row Barge
Procession of Miners for the Mississippi
The Chancellor D'Aguesseau
Caricature--Law in a Car drawn by Cocks
M. D'Argenson
Caricature--Neck or Nothing, or Downfall of the Mississippi Company
The South-Sea House. (From a print, _circa_ 1750)
Harley Earl of Oxford
Sir Robert Walpole
Cornhill. (Print, _circa_ 1720)
Stock-jobbing Card, or the Humours of Change Alley. 1720. (From the
_Bubblers' Medley_)
Caricature--People climbing the Tree of Fortune. (From the
_Bubblers' Medley_)
The Gateway to Merchant Tailors' Hall. (Gateway from old print)
Mr. Secretary Craggs
Caricature--Beggars on Horseback. (From the _Bubblers' Medley_)
Caricature--Britannia stript by a South-Sea Director
Caricature--The Brabant Screen. (Copied from a rare print of the time,
in the collection of E. Hawkins, Esq., F.S.A.)
Bonfires on Tower Hill
The Earl of Sunderland
Caricature--Emblematic Print of the South-Sea Scheme. (From a print by
Hogarth)
Caricature--Bubblers' Arms: Despair. (From _Bubblers' Mirror, or
England's Glory_)
Conrad Gesner
The Alchymist. (From print after Teniers)
Albertus Magnus
Arnold de Villeneuve
Raymond Lulli
House of Jacques Coeur at Bourges. (From _Sommerard's Album_)
Cornelius Agrippa
Paracelsus
Dr. Dee
Dr. Dee's Show-stone and Magic Crystal. (Originals in the possession
of Lord Londesborough and British Museum)
Innspruck. (From Nodier's _Paris_)
House of Cagliostro (Rue de Clery, No. 278), Paris
Mother Shipton's House
Henry Andrews, the original "Francis Moore, physician"
Nostradamus. (From the frontispiece to a collection of his Prophecies,
published at Amsterdam A.D. 1666)
Serlo clipping Henry I.'s hair
Peter the Great
Bayeux Tapestry
PREFACE.
In reading the history of nations, we find that, like individuals,
they have their whims and their peculiarities; their seasons of
excitement and recklessness, when they care not what they do. We find
that whole communities suddenly fix their minds upon one object, and
go mad in its pursuit; that millions of people become simultaneously
impressed with one delusion, and run after it, till their attention is
caught by some new folly more captivating than the first. We see one
nation suddenly seized, from its highest to its lowest members, with a
fierce desire of military glory; another as suddenly becoming crazed
upon a religious scruple; and neither of them recovering its senses
until it has shed rivers of blood and sowed a harvest of groans and
tears, to be reaped by its posterity. At an early age in the annals of
Europe its population lost their wits about the sepulchre of Jesus,
and crowded in frenzied multitudes to the Holy Land; another age went
mad for fear of the devil, and offered up hundreds of thousands of
victims to the delusion of witchcraft. At another time, the many
became crazed on the subject of the philosopher's stone, and committed
follies till then unheard of in the pursuit. It was once thought a
venial offence, in very many countries of Europe, to destroy an enemy
by slow poison. Persons who would have revolted at the idea of
stabbing a man to the heart, drugged his pottage without scruple.
Ladies of gentle birth and manners caught the contagion of murder,
until poisoning, under their auspices, became quite fashionable. Some
delusions, though notorious to all the world, have subsisted for ages,
flourishing as widely among civilised and polished nations as among
the early barbarians with whom they originated,--that of duelling, for
instance, and the belief in omens and divination of the future, which
seem to defy the progress of knowledge to eradicate them entirely from
the popular mind. Money, again, has often been a cause of the delusion
of multitudes. Sober nations have all at once become desperate
gamblers, and risked almost their existence upon the turn of a piece
of paper. To trace the history of the most prominent of these
delusions is the object of the present pages. Men, it has been well
said, think in herds; it will be seen that they go mad in herds, while
they only recover their senses slowly, and one by one.
Some of the subjects introduced may be familiar to the reader; but the
Author hopes that sufficient novelty of detail will be found even in
these, to render them acceptable, while they could not be wholly
omitted in justice to the subject of which it was proposed to treat.
The memoirs of the South-Sea madness and the Mississippi delusion are
more complete and copious than are to be found elsewhere; and the same
may be said of the history of the Witch Mania, which contains an
account of its terrific progress in Germany, a part of the subject
which has been left comparatively untouched by Sir Walter Scott in his
_Letters on Demonology and Witchcraft_, the most important that
have yet appeared on this fearful but most interesting subject.
Popular delusions began so early, spread so widely, and have lasted so
long, that instead of two or three volumes, fifty would scarcely
suffice to detail their history. The present may be considered more of
a miscellany of delusions than a history--a chapter only in the great
and awful book of human folly which yet remains to be written, and
which Porson once jestingly said he would write in five hundred
volumes! Interspersed are sketches of some lighter matters,--amusing
instances of the imitativeness and wrongheadedness of the people,
rather than examples of folly and delusion.
Religious matters have been purposely excluded as incompatible with
the limits prescribed to the present work; a mere list of them would
alone be sufficient to occupy a volume.
[Illustration: JOHN LAW.]
MONEY MANIA.--THE MISSISSIPPI SCHEME.
Some in clandestine companies combine;
Erect new stocks to trade beyond the line;
With air and empty names beguile the town,
And raise new credits first, then cry 'em down;
Divide the empty nothing into shares,
And set the crowd together by the ears.--_Defoe_.
The personal character and career of one man are so intimately connected
with the great scheme of the years 1719 and 1720, that a history of the
Mississippi madness can have no fitter introduction than a sketch of the
life of its great author John Law. Historians are divided in opinion as to
whether they should designate him a knave or a madman. Both epithets were
unsparingly applied to him in his lifetime, and while the unhappy
consequences of his projects were still deeply felt. Posterity, however,
has found reason to doubt the justice of the accusation, and to confess
that John Law was neither knave nor madman, but one more deceived than
deceiving, more sinned against than sinning. He was thoroughly acquainted
with the philosophy and true principles of credit. He understood the
monetary question better than any man of his day; and if his system fell
with a crash so tremendous, it was not so much his fault as that of the
people amongst whom he had erected it. He did not calculate upon the
avaricious frenzy of a whole nation; he did not see that confidence, like
mistrust, could be increased almost _ad infinitum_, and that hope was as
extravagant as fear. How was he to foretell that the French people, like
the man in the fable, would kill, in their frantic eagerness, the fine
goose he had brought to lay them so many golden eggs? His fate was like
that which may be supposed to have overtaken the first adventurous boatman
who rowed from Erie to Ontario. Broad and smooth was the river on which he
embarked; rapid and pleasant was his progress; and who was to stay him in
his career? Alas for him! the cataract was nigh. He saw, when it was too
late, that the tide which wafted him so joyously along was a tide of
destruction; and when he endeavoured to retrace his way, he found that the
current was too strong for his weak efforts to stem, and that he drew
nearer every instant to the tremendous falls. Down he went over the sharp
rocks, and the waters with him. _He_ was dashed to pieces with his bark,
but the waters, maddened and turned to foam by the rough descent, only
boiled and bubbled for a time, and then flowed on again as smoothly as
ever. Just so it was with Law and the French people. He was the boatman,
and they were the waters.
John Law was born at Edinburgh in the year 1671. His father was the
younger son of an ancient family in Fife, and carried on the business of a
goldsmith and banker. He amassed considerable wealth in his trade,
sufficient to enable him to gratify the wish, so common among his
countrymen, of adding a territorial designation to his name. He purchased
with this view the estates of Lauriston and Randleston, on the Firth of
Forth, on the borders of West and Mid Lothian, and was thenceforth known
as Law of Lauriston. The subject of our memoir, being the eldest son, was
received into his father's counting-house at the age of fourteen, and for
three years laboured hard to acquire an insight into the principles of
banking as then carried on in Scotland. He had always manifested great
love for the study of numbers, and his proficiency in the mathematics was
considered extraordinary in one of his tender years. At the age of
seventeen he was tall, strong, and well made; and his face, although
deeply scarred with the small-pox, was agreeable in its expression, and
full of intelligence. At this time he began to neglect his business, and
becoming vain of his person, indulged in considerable extravagance of
attire. He was a great favourite with the ladies, by whom he was called
Beau Law; while the other sex, despising his foppery, nicknamed him
Jessamy John. At the death of his father, which happened in 1688, he
withdrew entirely from the desk, which had become so irksome, and being
possessed of the revenues of the paternal estate of Lauriston, he
proceeded to London, to see the world.
He was now very young, very vain, good-looking, tolerably rich, and quite
uncontrolled. It is no wonder that, on his arrival in the capital, he
should launch out into extravagance. He soon became a regular frequenter
of the gaming-houses, and by pursuing a certain plan, based upon some
abstruse calculation of chances, he contrived to gain considerable sums.
All the gamblers envied him his luck, and many made it a point to watch
his play, and stake their money on the same chances. In affairs of
gallantry he was equally fortunate; ladies of the first rank smiled
graciously upon the handsome Scotchman--the young, the rich, the witty,
and the obliging. But all these successes only paved the way for reverses.
After he had been for nine years exposed to the dangerous attractions of
the gay life he was leading, he became an irrecoverable gambler. As his
love of play increased in violence, it diminished in prudence. Great
losses were only to be repaired by still greater ventures, and one unhappy
day he lost more than he could repay without mortgaging his family estate.
To that step he was driven at last. At the same time his gallantry brought
him into trouble. A love affair, or slight flirtation, with a lady of the
name of Villiers,[1] exposed him to the resentment of a Mr. Wilson, by
whom he was challenged to fight a duel. Law accepted, and had the ill
fortune to shoot his antagonist dead upon the spot. He was arrested the
same day, and brought to trial for murder by the relatives of Mr. Wilson.
He was afterwards found guilty, and sentenced to death. The sentence was
commuted to a fine, upon the ground that the offence only amounted to
manslaughter. An appeal being lodged by a brother of the deceased, Law was
detained in the King's Bench, whence, by some means or other, which he
never explained, he contrived to escape; and an action being instituted
against the sheriffs, he was advertised in the Gazette, and a reward
offered for his apprehension. He was described as "Captain John Law, a
Scotchman, aged twenty-six; a very tall, black, lean man; well shaped,
above six feet high, with large pock-holes in his face; big nosed, and
speaking broad and loud." As this was rather a caricature than a
description of him, it has been supposed that it was drawn up with a view
to favour his escape. He succeeded in reaching the Continent, where he
travelled for three years, and devoted much of his attention to the
monetary and banking affairs of the countries through which he passed. He
stayed a few months in Amsterdam, and speculated to some extent in the
funds. His mornings were devoted to the study of finance and the
principles of trade, and his evenings to the gaming-house. It is generally
believed that he returned to Edinburgh in the year 1700. It is certain
that he published in that city his _Proposals and Reasons for constituting
a Council of Trade_. This pamphlet did not excite much attention.
[1] Miss Elizabeth Villiers, afterwards Countess of Orkney.
In a short time afterwards he published a project for establishing what he
called a Land-bank,[2] the notes issued by which were never to exceed
the value of the entire lands of the state, upon ordinary interest, or
were to be equal in value to the land, with the right to enter into
possession at a certain time. The project excited a good deal of
discussion in the Scottish Parliament, and a motion for the establishment
of such a bank was brought forward by a neutral party, called the
Squadrone, whom Law had interested in his favour. The Parliament
ultimately passed a resolution to the effect, that, to establish any kind
of paper credit, so as to force it to pass, was an improper expedient for
the nation.
[2] The wits of the day called it a _sand-bank_, which would
wreck the vessel of the state.
Upon the failure of this project, and of his efforts to procure a pardon
for the murder of Mr. Wilson, Law withdrew to the Continent, and resumed
his old habits of gaming. For fourteen years he continued to roam about,
in Flanders, Holland, Germany, Hungary, Italy, and France. He soon became
intimately acquainted with the extent of the trade and resources of each,
and daily more confirmed in his opinion that no country could prosper
without a paper currency. During the whole of this time he appears to have
chiefly supported himself by successful play. At every gambling-house of
note in the capitals of Europe he was known and appreciated as one better
skilled in the intricacies of chance than any other man of the day. It is
stated in the _Biographie Universelle_ that he was expelled, first from
Venice, and afterwards from Genoa, by the magistrates, who thought him a
visitor too dangerous for the youth of those cities. During his residence
in Paris he rendered himself obnoxious to D'Argenson, the
lieutenant-general of the police, by whom he was ordered to quit the
capital. This did not take place, however, before he had made the
acquaintance, in the saloons, of the Duke de Vendôme, the Prince de Conti,
and of the gay Duke of Orleans, the latter of whom was destined afterwards
to exercise so much influence over his fate. The Duke of Orleans was
pleased with the vivacity and good sense of the Scottish adventurer, while
the latter was no less pleased with the wit and amiability of a prince who
promised to become his patron. They were often thrown into each other's
society, and Law seized every opportunity to instil his financial
doctrines into the mind of one whose proximity to the throne pointed him
out as destined, at no very distant date, to play an important part in the
government.
[Illustration: THE REGENT OF FRANCE.]
Shortly before the death of Louis XIV., or, as some say, in 1708, Law
proposed a scheme of finance to Desmarets, the comptroller. Louis is
reported to have inquired whether the projector were a Catholic, and on
being answered in the negative, to have declined having any thing to do
with him.[3]
[3] This anecdote, which is related in the correspondence of
Madame de Bavière, Duchess of Orleans and mother of the
Regent, is discredited by Lord John Russell in his _History of
the principal States of Europe from the Peace of Utrecht_; for
what reason he does not inform us. There is no doubt that Law
proposed his scheme to Desmarets, and that Louis refused to
hear of it. The reason given for the refusal is quite
consistent with the character of that bigoted and tyrannical
monarch.
It was after this repulse that he visited Italy. His mind being still
occupied with schemes of finance, he proposed to Victor Amadeus, duke of
Savoy, to establish his land-bank in that country. The duke replied that
his dominions were too circumscribed for the execution of so great a
project, and that he was by far too poor a potentate to be ruined. He
advised him, however, to try the king of France once more; for he was
sure, if he knew any thing of the French character, that the people would
be delighted with a plan, not only so new, but so plausible.
Louis XIV. died in 1715, and the heir to the throne being an infant only
seven years of age, the Duke of Orleans assumed the reins of government,
as regent, during his minority. Law now found himself in a more favourable
position. The tide in his affairs had come, which, taken at the flood, was
to waft him on to fortune. The regent was his friend, already acquainted
with his theory and pretensions, and inclined, moreover, to aid him in any
efforts to restore the wounded credit of France, bowed down to the earth
by the extravagance of the long reign of Louis XIV.
Hardly was that monarch laid in his grave ere the popular hatred,
suppressed so long, burst forth against his memory. He who, during his
life, had been flattered with an excess of adulation, to which history
scarcely offers a parallel, was now cursed as a tyrant, a bigot, and a
plunderer. His statues were pelted and disfigured; his effigies torn down,
amid the execrations of the populace, and his name rendered synonymous
with selfishness and oppression. The glory of his arms was forgotten, and
nothing was remembered but his reverses, his extravagance, and his
cruelty.
The finances of the country were in a state of the utmost disorder. A
profuse and corrupt monarch, whose profuseness and corruption were
imitated by almost every functionary, from the highest to the lowest
grade, had brought France to the verge of ruin. The national debt amounted
to 3000 millions of livres, the revenue to 145 millions, and the expenses
of government to 142 millions per annum; leaving only three millions to
pay the interest upon 3000 millions. The first care of the regent was to
discover a remedy for an evil of such magnitude, and a council was early
summoned to take the matter into consideration. The Duke de St. Simon was
of opinion that nothing could save the country from revolution but a
remedy at once bold and dangerous. He advised the regent to convoke the
states-general, and declare a national bankruptcy. The Duke de Noailles, a
man of accommodating principles, an accomplished courtier, and totally
averse from giving himself any trouble or annoyance that ingenuity could
escape from, opposed the project of St. Simon with all his influence. He
represented the expedient as alike dishonest and ruinous. The regent was
of the same opinion, and this desperate remedy fell to the ground.
The measures ultimately adopted, though they promised fair, only
aggravated the evil. The first, and most dishonest measure was of no
advantage to the state. A recoinage was ordered, by which the currency was
depreciated one-fifth; those who took a thousand pieces of gold or silver
to the mint received back an amount of coin of the same nominal value, but
only four-fifths of the weight of metal. By this contrivance the treasury
gained seventy-two millions of livres, and all the commercial operations
of the country were disordered. A trifling diminution of the taxes
silenced the clamours of the people, and for the slight present advantage
the great prospective evil was forgotten.
A Chamber of Justice was next instituted to inquire into the malversations
of the loan-contractors and the farmers of the revenues. Tax-collectors
are never very popular in any country, but those of France at this period
deserved all the odium with which they were loaded. As soon as these
farmers-general, with all their hosts of subordinate agents, called
_maltôtiers_,[4] were called to account for their misdeeds, the most
extravagant joy took possession of the nation. The Chamber of Justice,
instituted chiefly for this purpose, was endowed with very extensive
powers. It was composed of the presidents and councils of the parliament,
the judges of the Courts of Aid and of Requests, and the officers of the
Chamber of Account, under the general presidence of the minister of
finance. Informers were encouraged to give evidence against the offenders
by the promise of one-fifth part of the fines and confiscations. A tenth
of all concealed effects belonging to the guilty was promised to such as
should furnish the means of discovering them.
[4] From _maltôte_, an oppressive tax.
The promulgation of the edict constituting this court caused a degree of
consternation among those principally concerned, which can only be
accounted for on the supposition that their peculation had been enormous.
But they met with no sympathy. The proceedings against them justified
their terror. The Bastille was soon unable to contain the prisoners that
were sent to it, and the gaols all over the country teemed with guilty or
suspected persons. An order was issued to all innkeepers and postmasters
to refuse horses to such as endeavoured to seek safety in flight; and all
persons were forbidden, under heavy fines, to harbour them or favour their
evasion. Some were condemned to the pillory, others to the galleys, and
the least guilty to fine and imprisonment. One only, Samuel Bernard, a
rich banker and farmer-general of a province remote from the capital, was
sentenced to death. So great had been the illegal profits of this
man,--looked upon as the tyrant and oppressor of his district,--that he
offered six millions of livres, or 250,000l. sterling, to be allowed to
escape.
His bribe was refused, and he suffered the penalty of death. Others,
perhaps more guilty, were more fortunate. Confiscation, owing to the
concealment of their treasures by the delinquents, often produced less
money than a fine. The severity of the government relaxed, and fines, under
the denomination of taxes, were indiscriminately levied upon all offenders;
but so corrupt was every department of the administration, that the country
benefited but little by the sums which thus flowed into the treasury.
Courtiers and courtiers' wives and mistresses came in for the chief share
of the spoils. One contractor had been taxed, in proportion to his wealth
and guilt, at the sum of twelve millions of livres. The Count ----, a man
of some weight in the government, called upon him, and offered to procure a
remission of the fine if he would give him a hundred thousand crowns. "Vous
êtes trop tard, mon ami," replied the financier; "I have already made a
bargain with your wife for fifty thousand."[5]
[5] This anecdote is related by M. de la Hode, in his _Life of
Philippe of Orleans_. It would have looked more authentic if
he had given the names of the dishonest contractor and the
still more dishonest minister. But M. de la Hode's book is
liable to the same objection as most of the French memoirs of
that and of subsequent periods. It is sufficient with most of
them that an anecdote be _ben trovato_; the _vero_ is but
matter of secondary consideration.
About a hundred and eighty millions of livres were levied in this manner,
of which eighty were applied in payment of the debts contracted by the
government. The remainder found its way into the pockets of the courtiers.
Madame de Maintenon, writing on this subject, says,--"We hear every day of
some new grant of the regent. The people murmur very much at this mode of
employing the money taken from the peculators." The people, who, after the
first burst of their resentment is over, generally express a sympathy for
the weak, were indignant that so much severity should be used to so little
purpose. They did not see the justice of robbing one set of rogues to
fatten another. In a few months all the more guilty had been brought to
punishment, and the Chamber of Justice looked for victims in humbler walks
of life. Charges of fraud and extortion were brought against tradesmen of
good character in consequence of the great inducements held out to common
informers. They were compelled to lay open their affairs before this
tribunal in order to establish their innocence. The voice of complaint
resounded from every side; and at the expiration of a year the government
found it advisable to discontinue further proceedings. The Chamber of
Justice was suppressed, and a general amnesty granted to all against whom
no charges had yet been preferred.
In the midst of this financial confusion Law appeared upon the scene. No
man felt more deeply than the regent the deplorable state of the country,
but no man could be more averse from putting his shoulders manfully to the
wheel. He disliked business; he signed official documents without proper
examination, and trusted to others what he should have undertaken himself.
The cares inseparable from his high office were burdensome to him. He saw
that something was necessary to be done; but he lacked the energy to do
it, and had not virtue enough to sacrifice his ease and his pleasures in
the attempt. No wonder that, with this character, he listened favourably
to the mighty projects, so easy of execution, of the clever adventurer
whom he had formerly known, and whose talents he appreciated.
When Law presented himself at court he was most cordially received. He
offered two memorials to the regent, in which he set forth the evils that
had befallen France, owing to an insufficient currency, at different times
depreciated. He asserted that a metallic currency, unaided by a paper
money, was wholly inadequate to the wants of a commercial country, and
particularly cited the examples of Great Britain and Holland to shew the
advantages of paper. He used many sound arguments on the subject of
credit, and proposed as a means of restoring that of France, then at so
low an ebb among the nations, that he should be allowed to set up a bank,
which should have the management of the royal revenues, and issue notes
both on that and on landed security. He further proposed that this bank
should be administered in the king's name, but subject to the control of
commissioners to be named by the States-General.
While these memorials were under consideration, Law translated into French
his essay on money and trade, and used every means to extend through the
nation his renown as a financier. He soon became talked of. The confidants
of the regent spread abroad his praise, and every one expected great
things of Monsieur Lass.[6]
[6] The French pronounced his name in this manner to avoid the
ungallic sound, _aw_. After the failure of his scheme, the
wags said the nation was _lasse de lui_, and proposed that he
should in future be known by the name of Monsieur He_las_!
On the 5th of May, 1716, a royal edict was published, by which Law was
authorised, in conjunction with his brother, to establish a bank under the
name of Law and Company, the notes of which should be received in payment
of the taxes. The capital was fixed at six millions of livres, in twelve
thousand shares of five hundred livres each, purchasable one fourth in
specie, and the remainder in _billets d'état_. It was not thought
expedient to grant him the whole of the privileges prayed for in his
memorials until experience should have shewn their safety and advantage.
Law was now on the high road to fortune. The study of thirty years was
brought to guide him in the management of his bank. He made all his notes
payable at sight, and in the coin current at the time they were issued.
This last was a master-stroke of policy, and immediately rendered his
notes more valuable than the precious metals. The latter were constantly
liable to depreciation by the unwise tampering of the government. A
thousand livres of silver might be worth their nominal value one day, and
be reduced one-sixth the next, but a note of Law's bank retained its
original value. He publicly declared at the same time, that a banker
deserved death if he made issues without having sufficient security to
answer all demands. The consequence was, that his notes advanced rapidly
in public estimation, and were received at one per cent more than specie.
It was not long before the trade of the country felt the benefit.
Languishing commerce began to lift up her head; the taxes were paid with
greater regularity and less murmuring; and a degree of confidence was
established that could not fail, if it continued, to become still more
advantageous. In the course of a year, Law's notes rose to fifteen per
cent premium, while the _billets d'état_, or notes issued by the
government as security for the debts contracted by the extravagant Louis
XIV., were at a discount of no less than seventy-eight and a half per
cent. The comparison was too great in favour of Law not to attract the
attention of the whole kingdom, and his credit extended itself day by day.
Branches of his bank were almost simultaneously established at Lyons,
Rochelle, Tours, Amiens, and Orleans.
The regent appears to have been utterly astonished at his success, and
gradually to have conceived the idea that paper, which could so aid a
metallic currency, could entirely supersede it. Upon this fundamental
error he afterwards acted. In the mean time, Law commenced the famous
project which has handed his name down to posterity. He proposed to the
regent (who could refuse him nothing) to establish a company that should
have the exclusive privilege of trading to the great river Mississippi and
the province of Louisiana, on its western bank. The country was supposed
to abound in the precious metals; and the company, supported by the
profits of their exclusive commerce, were to be the sole farmers of the
taxes and sole coiners of money. Letters patent were issued, incorporating
the company, in August 1717. The capital was divided into two hundred
thousand shares of five hundred livres each, the whole of which might be
paid in _billets d'état_, at their nominal value, although worth no more
than a hundred and sixty livres in the market.
It was now that the frenzy of speculating began to seize upon the nation.
Law's bank had effected so much good, that any promises for the future
which he thought proper to make were readily believed. The regent every
day conferred new privileges upon the fortunate projector. The bank
obtained the monopoly of the sale of tobacco, the sole right of refinage
of gold and silver, and was finally erected into the Royal Bank of France.
Amid the intoxication of success, both Law and the regent forgot the maxim
so loudly proclaimed by the former, that a banker deserved death who made
issues of paper without the necessary funds to provide for them. As soon
as the bank, from a private, became a public institution, the regent
caused a fabrication of notes to the amount of one thousand millions of
livres. This was the first departure from sound principles, and one for
which Law is not justly blameable. While the affairs of the bank were
under his control, the issues had never exceeded sixty millions. Whether
Law opposed the inordinate increase is not known; but as it took place as
soon as the bank was made a royal establishment, it is but fair to lay the
blame of the change of system upon the regent.
Law found that he lived under a despotic government; but he was not yet
aware of the pernicious influence which such a government could exercise
upon so delicate a framework as that of credit. He discovered it
afterwards to his cost, but in the meantime suffered himself to be
impelled by the regent into courses which his own reason must have
disapproved. With a weakness most culpable, he lent his aid in inundating
the country with paper money, which, based upon no solid foundation, was
sure to fall, sooner or later. The extraordinary present fortune dazzled
his eyes, and prevented him from seeing the evil day that would burst over
his head, when once, from any cause or other, the alarm was sounded. The
parliament were from the first jealous of his influence as a foreigner,
and had, besides, their misgivings as to the safety of his projects. As
his influence extended, their animosity increased. D'Aguesseau, the
chancellor, was unceremoniously dismissed by the regent for his opposition
to the vast increase of paper money, and the constant depreciation of the
gold and silver coin of the realm. This only served to augment the enmity
of the parliament, and when D'Argenson, a man devoted to the interests of
the regent, was appointed to the vacant chancellorship, and made at the
same time minister of finance, they became more violent than ever. The
first measure of the new minister caused a further depreciation of the
coin. In order to extinguish the _billets d'état_, it was ordered that
persons bringing to the mint four thousand livres in specie and one
thousand livres in _billets d'état_, should receive back coin to the
amount of five thousand livres. D'Argenson plumed himself mightily upon
thus creating five thousand new and smaller livres out of the four
thousand old and larger ones, being too ignorant of the true principles of
trade and credit to be aware of the immense injury he was inflicting upon
both.
The parliament saw at once the impolicy and danger of such a system, and
made repeated remonstrances to the regent. The latter refused to entertain
their petitions, when the parliament, by a bold and very unusual stretch
of authority, commanded that no money should be received in payment but
that of the old standard. The regent summoned a _lit de justice_, and
annulled the decree. The parliament resisted, and issued another. Again
the regent exercised his privilege, and annulled it, till the parliament,
stung to fiercer opposition, passed another decree, dated August 12th,
1718, by which they forbade the bank of Law to have any concern, either
direct or indirect, in the administration of the revenue; and prohibited
all foreigners, under heavy penalties, from interfering, either in their
own names, or in that of others, in the management of the finances of the
state. The parliament considered Law to be the author of all the evil, and
some of the councillors, in the virulence of their enmity, proposed that
he should be brought to trial, and, if found guilty, be hung at the gates
of the Palais de Justice.
[Illustration: PALAIS ROYAL FROM THE GARDEN.]
Law, in great alarm, fled to the Palais Royal, and threw himself on the
protection of the regent, praying that measures might be taken to reduce
the parliament to obedience. The regent had nothing so much at heart, both
on that account and because of the disputes that had arisen relative to
the legitimation of the Duke of Maine and the Count of Thoulouse, the sons
of the late king. The parliament was ultimately overawed by the arrest of
their president and two of the councillors, who were sent to distant
prisons.
Thus the first cloud upon Law's prospects blew over: freed from
apprehension of personal danger, he devoted his attention to his famous
Mississippi project, the shares of which were rapidly rising, in spite of
the parliament. At the commencement of the year 1719, an edict was
published, granting to the Mississippi Company the exclusive privilege of
trading to the East Indies, China, and the South Seas, and to all the
possessions of the French East India Company, established by Colbert. The
Company, in consequence of this great increase of their business, assumed,
as more appropriate, the title of Company of the Indies, and created fifty
thousand new shares. The prospects now held out by Law were most
magnificent. He promised a yearly dividend of two hundred livres upon each
share of five hundred, which, as the shares were paid for in _billets
d'état_ at their nominal value, but worth only 100 livres, was at the rate
of about 120 per cent profit.
[Illustration: LAW'S HOUSE; RUE DE QUINCAMPOIX.]
The public enthusiasm, which had been so long rising, could not resist a
vision so splendid. At least three hundred thousand applications were made
for the fifty thousand new shares, and Law's house in the Rue de
Quincampoix was beset from morning to night by the eager applicants. As it
was impossible to satisfy them all, it was several weeks before a list of
the fortunate new stockholders could be made out, during which time the
public impatience rose to a pitch of frenzy. Dukes, marquises, counts,
with their duchesses, marchionesses, and countesses, waited in the streets
for hours every day before Mr. Law's door to know the result. At last, to
avoid the jostling of the plebeian crowd, which, to the number of
thousands, filled the whole thoroughfare, they took apartments in the
adjoining houses, that they might be continually near the temple whence
the new Plutus was diffusing wealth. Every day the value of the old shares
increased, and the fresh applications, induced by the golden dreams of the
whole nation, became so numerous that it was deemed advisable to create no
less than three hundred thousand new shares, at five thousand livres each,
in order that the regent might take advantage of the popular enthusiasm to
pay off the national debt. For this purpose, the sum of fifteen hundred
millions of livres was necessary. Such was the eagerness of the nation,
that thrice the sum would have been subscribed if the government had
authorised it.
Law was now at the zenith of his prosperity, and the people were rapidly
approaching the zenith of their infatuation. The highest and the lowest
classes were alike filled with a vision of boundless wealth. There was not
a person of note among the aristocracy, with the exception of the Duke of
St. Simon and Marshal Villars, who was not engaged in buying or selling
stock. People of every age and sex and condition in life speculated in the
rise and fall of the Mississippi bonds. The Rue de Quincampoix was the
grand resort of the jobbers, and it being a narrow, inconvenient street,
accidents continually occurred in it, from the tremendous pressure of the
crowd. Houses in it, worth, in ordinary times, a thousand livres of yearly
rent, yielded as much as twelve or sixteen thousand. A cobbler, who had a
stall in it, gained about two hundred livres a day by letting it out, and
furnishing writing materials to brokers and their clients. The story goes,
that a hunchbacked man who stood in the street gained considerable sums by
lending his hump as a writing-desk to the eager speculators! The great
concourse of persons who assembled to do business brought a still greater
concourse of spectators. These again drew all the thieves and immoral
characters of Paris to the spot, and constant riots and disturbances took
place. At nightfall, it was often found necessary to send a troop of
soldiers to clear the street.
[Illustration: THE HUNCHBACK.]
Law, finding the inconvenience of his residence, removed to the Place
Vendôme, whither the crowd of _agioteurs_ followed him. That spacious
square soon became as thronged as the Rue de Quincampoix: from morning to
night it presented the appearance of a fair. Booths and tents were erected
for the transaction of business and the sale of refreshments, and gamblers
with their roulette tables stationed themselves in the very middle of the
place, and reaped a golden, or rather a paper, harvest from the throng.
The boulevards and public gardens were forsaken; parties of pleasure took
their walks in preference in the Place Vendôme, which became the
fashionable lounge of the idle, as well as the general rendezvous of the
busy. The noise was so great all day, that the chancellor, whose court was
situated in the square, complained to the regent and the municipality,
that he could not hear the advocates. Law, when applied to, expressed his
willingness to aid in the removal of the nuisance, and for this purpose
entered into a treaty with the Prince de Carignan for the Hôtel de
Soissons, which had a garden of several acres in the rear. A bargain was
concluded, by which Law became the purchaser of the hotel at an enormous
price, the prince reserving to himself the magnificent gardens as a new
source of profit. They contained some fine statues and several fountains,
and were altogether laid out with much taste. As soon as Law was installed
in his new abode, an edict was published, forbidding all persons to buy or
sell stock any where but in the gardens of the Hôtel de Soissons. In the
midst, among the trees, about five hundred small tents and pavilions were
erected, for the convenience of the stock-jobbers. Their various colours,
the gay ribands and banners which floated from them, the busy crowds which
passed continually in and out--the incessant hum of voices, the noise, the
music, and the strange mixture of business and pleasure on the
countenances of the throng, all combined to give the place an air of
enchantment that quite enraptured the Parisians. The Prince de Carignan
made enormous profits while the delusion lasted. Each tent was let at the
rate of five hundred livres a month; and, as there were at least five
hundred of them, his monthly revenue from this source alone must have
amounted to 250,000 livres, or upwards of 10,000l. sterling.
[Illustration: HOTEL DE SOISSONS.]
The honest old soldier, Marshal Villars, was so vexed to see the folly
which had smitten his countrymen, that he never could speak with temper on
the subject. Passing one day through the Place Vendôme in his carriage,
the choleric gentleman was so annoyed at the infatuation of the people,
that he abruptly ordered his coachman to stop, and, putting his head out
of the carriage window, harangued them for full half an hour on their
"disgusting avarice." This was not a very wise proceeding on his part.
Hisses and shouts of laughter resounded from every side, and jokes without
number were aimed at him. There being at last strong symptoms that
something more tangible was flying through the air in the direction of his
head, the marshal was glad to drive on. He never again repeated the
experiment.
Two sober, quiet, and philosophic men of letters, M. de la Motte and the
Abbé Terrason, congratulated each other, that they, at least, were free
from this strange infatuation. A few days afterwards, as the worthy abbé
was coming out of the Hôtel de Soissons, whither he had gone to buy shares
in the Mississippi, whom should he see but his friend La Motte entering
for the same purpose. "Ha!" said the abbé smiling, "is that _you_?" "Yes,"
said La Motte, pushing past him as fast as he was able; "and can that be
_you_?" The next time the two scholars met, they talked of philosophy, of
science, and of religion, but neither had courage for a long time to
breathe one syllable about the Mississippi. At last, when it was
mentioned, they agreed that a man ought never to swear against his doing
any one thing, and that there was no sort of extravagance of which even a
wise man was not capable.
During this time, Law, the new Plutus, had become all at once the most
important personage of the state. The ante-chambers of the regent were
forsaken by the courtiers, Peers, judges, and bishops thronged to the
Hôtel de Soissons; officers of the army and navy, ladies of title and
fashion, and every one to whom hereditary rank or public employ gave a
claim to precedence, were to be found waiting in his ante-chambers to beg
for a portion of his India stock. Law was so pestered that he was unable
to see one-tenth part of the applicants, and every manoeuvre that
ingenuity could suggest was employed to gain access to him. Peers, whose
dignity would have been outraged if the regent had made them wait half an
hour for an interview, were content to wait six hours for the chance of
seeing Monsieur Law. Enormous fees were paid to his servants, if they
would merely announce their names. Ladies of rank employed the
blandishments of their smiles for the same object; but many of them came
day after day for a fortnight before they could obtain an audience. When
Law accepted an invitation, he was sometimes so surrounded by ladies, all
asking to have their names put down in his lists as shareholders in the
new stock, that, in spite of his well-known and habitual gallantry, he was
obliged to tear himself away _par force_. The most ludicrous stratagems
were employed to have an opportunity of speaking to him. One lady, who had
striven in vain during several days, gave up in despair all attempts to
see him at his own house, but ordered her coachman to keep a strict watch
whenever she was out in her carriage, and if he saw Mr. Law coming, to
drive against a post and upset her. The coachman promised obedience, and
for three days the lady was driven incessantly through the town, praying
inwardly for the opportunity to be overturned. At last she espied Mr. Law,
and, pulling the string, called out to the coachman, "Upset us now! for
God's sake, upset us now!" The coachman drove against a post, the lady
screamed, the coach was overturned, and Law, who had seen the _accident_,
hastened to the spot to render assistance. The cunning dame was led into
the Hôtel de Soissons, where she soon thought it advisable to recover from
her fright, and, after apologising to Mr. Law, confessed her stratagem.
Law smiled, and entered the lady in his books as the purchaser of a
quantity of India stock. Another story is told of a Madame de Boucha, who,
knowing that Mr. Law was at dinner at a certain house, proceeded thither
in her carriage, and gave the alarm of fire. The company started from
table, and Law among the rest; but, seeing one lady making all haste into
the house towards him, while every body else was scampering away, he
suspected the trick, and ran off in another direction.
[Illustration]
Many other anecdotes are related, which even though they may be a little
exaggerated, are nevertheless worth preserving, as shewing the spirit of
that singular period.[7] The regent was one day mentioning, in the
presence of D'Argenson, the Abbé Dubois, and some other persons, that he
was desirous of deputing some lady, of the rank at least of a duchess, to
attend upon his daughter at Modena; "but," added he, "I do not exactly
know where to find one." "No!" replied one, in affected surprise; "I can
tell you where to find every duchess in France: you have only to go to Mr.
Law's; you will see them every one in his ante-chamber."
[7] The curious reader may find an anecdote of the eagerness of
the French ladies to retain Law in their company, which will
make him blush or smile according as he happens to be very
modest or the reverse. It is related in the _Letters of Madame
Charlotte Elizabeth de Bavière, Duchess of Orleans_, vol. ii.
p. 274.
M. de Chirac, a celebrated physician, had bought stock at an unlucky
period, and was very anxious to sell out. Stock, however, continued to
fall for two or three days, much to his alarm. His mind was filled with
the subject, when he was suddenly called upon to attend a lady who
imagined herself unwell. He arrived, was shewn up stairs, and felt the
lady's pulse. "It falls! it falls! good God! it falls continually!" said
he musingly, while the lady looked up in his face all anxiety for his
opinion. "Oh, M. de Chirac," said she, starting to her feet and ringing
the bell for assistance; "I am dying! I am dying! it falls! it falls! it
falls!" "What falls?" inquired the doctor in amazement. "My pulse! my
pulse!" said the lady; "I must be dying." "Calm your apprehensions, my
dear madam," said M. de Chirac; "I was speaking of the stocks. The truth
is, I have been a great loser, and my mind is so disturbed, I hardly know
what I have been saying."
The price of shares sometimes rose ten or twenty per cent in the course of
a few hours, and many persons in the humbler walks of life, who had risen
poor in the morning, went to bed in affluence. An extensive holder of
stock, being taken ill, sent his servant to sell two hundred and fifty
shares, at eight thousand livres each, the price at which they were then
quoted. The servant went, and, on his arrival in the Jardin de Soissons,
found that in the interval the price had risen to ten thousand livres. The
difference of two thousand livres on the two hundred and fifty shares,
amounting to 500,000 livres, or 20,000l. sterling, he very coolly
transferred to his own use, and giving the remainder to his master, set
out the same evening for another country. Law's coachman in a very short
time made money enough to set up a carriage of his own, and requested
permission to leave his service. Law, who esteemed the man, begged of him
as a favour, that he would endeavour, before he went, to find a substitute
as good as himself. The coachman consented, and in the evening brought two
of his former comrades, telling Mr. Law to choose between them, and he
would take the other. Cookmaids and footmen were now and then as lucky,
and, in the full-blown pride of their easily-acquired wealth, made the
most ridiculous mistakes. Preserving the language and manners of their
old, with the finery of their new station, they afforded continual
subjects for the pity of the sensible, the contempt of the sober, and the
laughter of every body. But the folly and meanness of the higher ranks of
society were still more disgusting. One instance alone, related by the
Duke de St. Simon, will shew the unworthy avarice which infected the whole
of society. A man of the name of André, without character or education,
had, by a series of well-timed speculations in Mississippi bonds, gained
enormous wealth in an incredibly short space of time. As St. Simon
expresses it, "he had amassed mountains of gold." As he became rich, he
grew ashamed of the lowness of his birth, and anxious above all things to
be allied to nobility. He had a daughter, an infant only three years of
age, and he opened a negotiation with the aristocratic and needy family of
D'Oyse, that this child should, upon certain conditions, marry a member of
that house. The Marquis D'Oyse, to his shame, consented, and promised to
marry her himself on her attaining the age of twelve, if the father would
pay him down the sum of a hundred thousand crowns, and twenty thousand
livres every year until the celebration of the marriage. The marquis was
himself in his thirty-third year. This scandalous bargain was duly signed
and sealed, the stockjobber furthermore agreeing to settle upon his
daughter, on the marriage-day, a fortune of several millions. The Duke of
Brancas, the head of the family, was present throughout the negotiation,
and shared in all the profits. St. Simon, who treats the matter with the
levity becoming what he thought so good a joke, adds, "that people did not
spare their animadversions on this beautiful marriage," and further
informs us, "that the project fell to the ground some months afterwards by
the overthrow of Law, and the ruin of the ambitious Monsieur André." It
would appear, however, that the noble family never had the honesty to
return the hundred thousand crowns.
Amid events like these, which, humiliating though they be, partake largely
of the ludicrous, others occurred of a more serious nature. Robberies in
the streets were of daily occurrence, in consequence of the immense sums,
in paper, which people carried about with them. Assassinations were also
frequent. One case in particular fixed the attention of the whole of
France, not only on account of the enormity of the offence, but of the
rank and high connexions of the criminal.
[Illustration]
The Count d'Horn, a younger brother of the Prince d'Horn, and related to
the noble families of D'Aremberg, De Ligne, and De Montmorency, was a
young man of dissipated character, extravagant to a degree, and
unprincipled as he was extravagant. In connexion with two other young men
as reckless as himself, named Mille, a Piedmontese captain, and one
Destampes, or Lestang, a Fleming, he formed a design to rob a very rich
broker, who was known, unfortunately for himself, to carry great sums
about his person. The count pretended a desire to purchase of him a number
of shares in the Company of the Indies, and for that purpose appointed to
meet him in a _cabaret_, or low public-house, in the neighbourhood of the
Place Vendôme. The unsuspecting broker was punctual to his appointment; so
were the Count d'Horn and his two associates, whom he introduced as his
particular friends. After a few moments' conversation, the Count d'Horn
suddenly sprang upon his victim, and stabbed him three times in the breast
with a poniard. The man fell heavily to the ground, and, while the count
was employed in rifling his portfolio of bonds in the Mississippi and
Indian schemes to the amount of one hundred thousand crowns, Mille, the
Piedmontese, stabbed the unfortunate broker again and again, to make sure
of his death, But the broker did not fall without a struggle, and his
cries brought the people of the _cabaret_ to his assistance. Lestang, the
other assassin, who had been set to keep watch at a staircase, sprang from
a window and escaped; but Mille and the Count d'Horn were seized in the
very act.
This crime, committed in open day, and in so public a place as a
_cabaret_, filled Paris with consternation. The trial of the assassins
commenced on the following day; and the evidence being so clear, they were
both found guilty, and condemned, to be broken alive on the wheel. The
noble relatives of the Count d'Horn absolutely blocked up the
ante-chambers of the regent, praying for mercy on the misguided youth, and
alleging that he was insane. The regent avoided them as long as possible,
being determined that, in a case so atrocious, justice should take its
course. But the importunity of these influential suitors was not to be
overcome so silently; and they at last forced themselves into the presence
of the regent, and prayed him to save their house the shame of a public
execution. They hinted that the Princes d'Horn were allied to the
illustrious family of Orleans; and added, that the regent himself would be
disgraced if a kinsman of his should die by the hands of a common
executioner. The regent, to his credit, was proof against all their
solicitations, and replied to their last argument in the words of
Corneille:
"Le crime fait la honte, et non pas l'échafaud:"
adding, that whatever shame there might be in the punishment he would very
willingly share with the other relatives. Day after day they renewed their
entreaties, but always with the same result. At last they thought, that if
they could interest the Duke de St. Simon in their favour--a man, for whom
the regent felt sincere esteem--they might succeed in their object. The
duke, a thorough aristocrat, was as shocked as they were that a noble
assassin should die by the same death as a plebeian felon, and represented
to the regent the impolicy of making enemies of so numerous, wealthy, and
powerful a family. He urged, too, that in Germany, where the family of
D'Aremberg had large possessions, it was the law, that no relative of a
person broken on the wheel could succeed to any public office or employ
until a whole generation had passed away. For this reason, he thought the
punishment of the guilty count might be transmuted into beheading, which
was considered all over Europe as much less infamous. The regent was moved
by this argument, and was about to consent, when Law, who felt peculiarly
interested in the fate of the murdered man, confirmed him in his former
resolution to let the law take its course.
The relatives of D'Horn were now reduced to the last extremity. The Prince
de Robec Montmorency, despairing of other methods, found means to
penetrate into the dungeon of the criminal, and offering him a cup of
poison, implored him to save them from disgrace. The Count d'Horn turned
away his head, and refused to take it. Montmorency pressed him once more;
and losing all patience at his continued refusal, turned on his heel, and
exclaiming, "Die, then, as thou wilt, mean-spirited wretch! thou art fit
only to perish by the hands of the hangman!" left him to his fate.
D'Horn himself petitioned the regent that he might be beheaded; but Law,
who exercised more influence over his mind than any other person, with the
exception of the notorious Abbé Dubois, his tutor, insisted that he could
not in justice succumb to the self-interested views of the D'Horns. The
regent had from the first been of the same opinion; and within six days
after the commission of their crime, D'Horn and Mille were broken on the
wheel in the Place de Grève. The other assassin, Lestang, was never
apprehended.
This prompt and severe justice was highly pleasing to the populace of
Paris. Even M. de Quincampoix, as they called Law, came in for a share of
their approbation for having induced the regent to shew no favour to a
patrician. But the number of robberies and assassinations did not
diminish; no sympathy was shewn for rich jobbers when they were plundered.
The general laxity of public morals, conspicuous enough before, was
rendered still more so by its rapid pervasion of the middle classes, who
had hitherto remained comparatively pure between the open vices of the
class above and the hidden crimes of the class below them. The pernicious
love of gambling diffused itself through society, and bore all public and
nearly all private virtue before it.
For a time, while confidence lasted, an impetus was given to trade which
could not fail to be beneficial. In Paris especially the good results were
felt. Strangers flocked into the capital from every part, bent not only
upon making money, but on spending it. The Duchess of Orleans, mother of
the regent, computes the increase of the population during this time, from
the great influx of strangers from all parts of the world, at 305,000
souls. The housekeepers were obliged to make up beds in garrets, kitchens,
and even stables, for the accommodation of lodgers; and the town was so
full of carriages and vehicles of every description, that they were
obliged, in the principal streets, to drive at a foot-pace for fear of
accidents. The looms of the country worked with unusual activity to supply
rich laces, silks, broad-cloth, and velvets, which being paid for in
abundant paper, increased in price four-fold. Provisions shared the
general advance. Bread, meat, and vegetables were sold at prices greater
than had ever before been known; while the wages of labour rose in exactly
the same proportion. The artisan who formerly gained fifteen sous per diem
now gained sixty. New houses were built in every direction; an illusory
prosperity shone over the land, and so dazzled the eyes of the whole
nation, that none could see the dark cloud on the horizon announcing the
storm that was too rapidly approaching.
Law himself, the magician whose wand had wrought so surprising a change,
shared, of course, in the general prosperity. His wife and daughter were
courted by the highest nobility, and their alliance sought by the heirs of
ducal and princely houses. He bought two splendid estates in different
parts of France, and entered into a negotiation with the family of the
Duke de Sully for the purchase of the marquisate of Rosny. His religion
being an obstacle to his advancement, the regent promised, if he would
publicly conform to the Catholic faith, to make him comptroller-general of
the finances. Law, who had no more real religion than any other professed
gambler, readily agreed, and was confirmed by the Abbé de Tencin in the
cathedral of Melun, in presence of a great crowd of spectators[8]. On
the following day he was elected honorary churchwarden of the parish of
St. Roch, upon which occasion he made it a present of the sum of five
hundred thousand livres. His charities, always magnificent, were not
always so ostentatious. He gave away great sums privately, and no tale of
real distress ever reached his ears in vain.
[8] The following squib was circulated on the occasion:
"Foin de ton zèle séraphique,
Malheureux Abbé de Tencin,
Depuis que Law est Catholique,
Tout le royaume est Capucin!"
Thus somewhat weakly and paraphrastically rendered by
Justandsond, in his translation of the _Memoirs of Louis XV._:
"Tencin, a curse on thy seraphic zeal,
Which by persuasion hath contrived the means
To make the Scotchman at our altars kneel,
Since which we all are poor as Capucines!"
At this time he was by far the most influential person of the state. The
Duke of Orleans had so much confidence in his sagacity and the success of
his plans, that he always consulted him upon every matter of moment. He
was by no means unduly elevated by his prosperity, but remained the same
simple, affable, sensible man that he had shewn himself in adversity. His
gallantry, which was always delightful to the fair objects of it, was of a
nature so kind, so gentlemanly, and so respectful, that not even a lover
could have taken offence at it. If upon any occasion he shewed any
symptoms of haughtiness, it was to the cringing nobles who lavished their
adulation upon him till it became fulsome. He often took pleasure in
seeing how long he could make them dance attendance upon him for a single
favour. To such of his own countrymen as by chance visited Paris, and
sought an interview with him, he was, on the contrary, all politeness and
attention. When Archibald Campbell, Earl of Islay, and afterwards Duke of
Argyle, called upon him in the Place Vendôme, he had to pass through an
ante-chamber crowded with persons of the first distinction, all anxious to
see the great financier, and have their names put down as first on the
list of some new subscription. Law himself was quietly sitting in his
library, writing a letter to the gardener at his paternal estate of
Lauriston about the planting of some cabbages! The earl stayed for a
considerable time, played a game of piquet with his countryman, and left
him, charmed with his ease, good sense, and good breeding.
[Illustration: LAW AS ATLAS.[9]]
[9] From a print in a Dutch collection of satirical prints
relating to the Mississippi Mania, entitled "Het groote
Tafereel der Dwaasheid;" or, The great picture of Folly. The
print of Atlas is styled, "L'Atlas actieux de Papier." Law is
calling in Hercules to aid him in supporting the globe. Quoted
in Wright's _England under the House of Hanover_.
Among the nobles who, by means of the public credulity at this time,
gained sums sufficient to repair their ruined fortunes, may be mentioned
the names of the Dukes de Bourbon, de Guiche, de la Force,[10] de
Chaulnes, and d'Antin; the Marechal d'Estrées; the Princes de Rohan, de
Poix, and de Léon. The Duke de Bourbon, son of Louis XIV. by Madame de
Montespan, was peculiarly fortunate in his speculations in Mississippi
paper. He rebuilt the royal residence of Chantilly in a style of unwonted
magnificence; and being passionately fond of horses, he erected a range of
stables, which were long renowned throughout Europe, and imported a
hundred and fifty of the finest racers from England to improve the breed
in France. He bought a large extent of country in Picardy, and became
possessed of nearly all the valuable lands lying between the Oise and the
Somme.
[10] The Duke de la Force gained considerable sums, not only by
jobbing in the stocks, but in dealing in porcelain, spices,
&c. It was debated for a length of time in the parliament of
Paris whether he had not, in his quality of spice-merchant,
forfeited his rank in the peerage. It was decided in the
negative. A caricature of him was made, dressed as a
street-porter, carrying a large bale of spices on his back,
with the inscription, "Admirez LA FORCE."
When fortunes such as these were gained, it is no wonder that Law should
have been almost worshipped by the mercurial population. Never was monarch
more flattered than he was. All the small poets and _littérateurs_ of the
day poured floods of adulation upon him. According to them, he was the
saviour of the country, the tutelary divinity of France; wit was in all
his words, goodness in all his looks, and wisdom in all his actions. So
great a crowd followed his carriage whenever he went abroad, that the
regent sent him a troop of horse as his permanent escort to clear the
streets before him.
It was remarked at this time that Paris had never before been so full of
objects of elegance and luxury. Statues, pictures, and tapestries were
imported in great quantities from foreign countries, and found a ready
market. All those pretty trifles in the way of furniture and ornament
which the French excel in manufacturing were no longer the exclusive
playthings of the aristocracy, but were to be found in abundance in the
houses of traders and the middle classes in general. Jewellery of the most
costly description was brought to Paris as the most favourable mart; among
the rest, the famous diamond bought by the regent, and called by his name,
and which long adorned the crown of France. It was purchased for the sum
of two millions of livres, under circumstances which shew that the regent
was not so great a gainer as some of his subjects by the impetus which
trade had received. When the diamond was first offered to him, he refused
to buy it, although he desired above all things to possess it, alleging as
his reason, that his duty to the country he governed would not allow him
to spend so large a sum of the public money for a mere jewel. This valid
and honourable excuse threw all the ladies of the court into alarm, and
nothing was heard for some days but expressions of regret that so rare a
gem should be allowed to go out of France, no private individual being
rich enough to buy it. The regent was continually importuned about it, but
all in vain, until the Duke de St. Simon, who with all his ability was
something of a twaddler, undertook the weighty business. His entreaties
being seconded by Law, the good-natured regent gave his consent, leaving
to Law's ingenuity to find the means to pay for it. The owner took
security for the payment of the sum of two millions of livres within a
stated period, receiving in the mean time the interest of five per cent
upon that amount, and being allowed, besides, all the valuable clippings
of the gem. St. Simon, in his _Memoirs_, relates with no little
complacency his share in this transaction. After describing the diamond to
be as large as a greengage, of a form nearly round, perfectly white, and
without flaw, and weighing more than five hundred grains, he concludes
with a chuckle, by telling the world "that he takes great credit to
himself for having induced the regent to make so illustrious a purchase."
In other words, he was proud that he had induced him to sacrifice his
duty, and buy a bauble for himself at an extravagant price out of the
public money.
Thus the system continued to flourish till the commencement of the year
1720. The warnings of the parliament, that too great a creation of paper
money would, sooner or later, bring the country to bankruptcy, were
disregarded. The regent, who knew nothing whatever of the philosophy of
finance, thought that a system which had produced such good effects could
never be carried to excess. If five hundred millions of paper had been of
such advantage, five hundred millions additional would be of still greater
advantage. This was the grand error of the regent, and which Law did not
attempt to dispel. The extraordinary avidity of the people kept up the
delusion; and the higher the price of Indian and Mississippi stock, the
more _billets de banque_ were issued to keep pace with it. The edifice
thus reared might not unaptly be compared to the gorgeous palace erected
by Potemkin, that princely barbarian of Russia, to surprise and please his
imperial mistress: huge blocks of ice were piled one upon another; ionic
pillars, of chastest workmanship, in ice, formed a noble portico; and a
dome, of the same material, shone in the sun, which had just strength
enough to gild, but not to melt it. It glittered afar, like a palace of
crystals and diamonds; but there came one warm breeze from the south, and
the stately building dissolved away, till none were able even to gather up
the fragments. So with Law and his paper system. No sooner did the breath
of popular mistrust blow steadily upon it, than it fell to ruins, and none
could raise it up again.
The first slight alarm that was occasioned was early in 1720. The Prince
de Conti, offended that Law should have denied him fresh shares in India
stock, at his own price, sent to his bank to demand payment in specie of
so enormous a quantity of notes, that three wagons were required for its
transport. Law complained to the regent, and urged on his attention the
mischief that would be done, if such an example found many imitators. The
regent was but too well aware of it, and, sending for the Prince de Conti,
ordered him, under penalty of his high displeasure, to refund to the bank
two-thirds of the specie which he had withdrawn from it. The prince was
forced to obey the despotic mandate. Happily for Law's credit, De Conti
was an unpopular man: every body condemned his meanness and cupidity, and
agreed that Law had been hardly treated. It is strange, however, that so
narrow an escape should not have made both Law and the regent more anxious
to restrict their issues. Others were soon found who imitated, from
motives of distrust, the example which had been set by De Conti in
revenge. The more acute stockjobbers imagined justly that prices could not
continue to rise for ever. Bourdon and La Richardière, renowned for their
extensive operations in the funds, quietly and in small quantities at a
time, converted their notes into specie, and sent it away to foreign
countries. They also bought as much as they could conveniently carry of
plate and expensive jewellery, and sent it secretly away to England or to
Holland. Vermalet, a jobber, who sniffed the coming storm, procured gold
and silver coin to the amount of nearly a million of livres, which he
packed in a farmer's cart, and covered over with hay and cow-dung. He then
disguised himself in the dirty smock-frock, or _blouse_, of a peasant, and
drove his precious load in safety into Belgium. From thence he soon found
means to transport it to Amsterdam.
Hitherto no difficulty had been experienced by any class in procuring
specie for their wants. But this system could not long be carried on
without causing a scarcity. The voice of complaint was heard on every
side, and inquiries being instituted, the cause was soon discovered. The
council debated long on the remedies to be taken, and Law, being called on
for his advice, was of opinion, that an edict should be published,
depreciating the value of coin five per cent below that of paper. The
edict was published accordingly; but failing of its intended effect, was
followed by another, in which the depreciation was increased to ten per
cent. The payments of the bank were at the same time restricted to one
hundred livres in gold, and ten in silver. All these measures were
nugatory to restore confidence in the paper, though the restriction of
cash payments within limits so extremely narrow kept up the credit of the
bank.
[Illustration: LUCIFER'S NEW ROW-BARGE.[11]]
[11] "Lucifer's New Row-Barge" exhibits Law in a barge, with a
host of emblematic figures representing the Mississippi
follies.--_From a Print in Mr. Hawkins' Collection_.
Notwithstanding every effort to the contrary, the precious metals
continued to be conveyed to England and Holland. The little coin that was
left in the country was carefully treasured, or hidden until the scarcity
became so great, that the operations of trade could no longer be carried
on. In this emergency, Law hazarded the bold experiment of forbidding the
use of specie altogether. In February 1720 an edict was published, which,
instead of restoring the credit of the paper, as was intended, destroyed
it irrecoverably, and drove the country to the very brink of revolution.
By this famous edict it was forbidden to any person whatever to have more
than five hundred livres (20l.) of coin in his possession, under pain of a
heavy fine, and confiscation of the sums found. It was also forbidden to
buy up jewellery, plate, and precious stones, and informers were
encouraged to make search for offenders, by the promise of one-half the
amount they might discover. The whole country sent up a cry of distress at
this unheard-of tyranny. The most odious persecution daily took place. The
privacy of families was violated by the intrusion of informers and their
agents. The most virtuous and honest were denounced for the crime of
having been seen with a _louis d'or_ in their possession. Servants
betrayed their masters, one citizen became a spy upon his neighbour, and
arrests and confiscations so multiplied, that the courts found a
difficulty in getting through the immense increase of business thus
occasioned. It was sufficient for an informer to say that he suspected any
person of concealing money in his house, and immediately a search-warrant
was granted. Lord Stair, the English ambassador, said, that it was now
impossible to doubt of the sincerity of Law's conversion to the Catholic
religion; he had established the _inquisition_, after having given
abundant evidence of his faith in _transubstantiation_, by turning so much
gold into paper.
Every epithet that popular hatred could suggest was showered upon the
regent and the unhappy Law. Coin, to any amount above five hundred livres,
was an illegal tender, and nobody would take paper if he could help it. No
one knew to-day what his notes would be worth to-morrow. "Never," says
Duclos, in his _Secret Memoirs of the Regency_, "was seen a more
capricious government--never was a more frantic tyranny exercised by hands
less firm. It is inconceivable to those who were witnesses of the horrors
of those times, and who look back upon them now as on a dream, that a
sudden revolution did not break out--that Law and the regent did not
perish by a tragical death. They were both held in horror, but the people
confined themselves to complaints; a sombre and timid despair, a stupid
consternation, had seized upon all, and men's minds were too vile even to
be capable of a courageous crime." It would appear that, a one time, a
movement of the people was organised. Seditious writings were posted up
against the walls, and were sent, in hand-bills, to the houses of the most
conspicuous people. One of them, given in the _Mémoires de la Régence_,
was to the following effect:--"Sir and madam,--This is to give you notice
that a St. Bartholomew's Day will be enacted again on Saturday and Sunday,
if affairs do not alter. You are desired not to stir out, nor you, nor
your servants. God preserve you from the flames! Give notice to your
neighbours. Dated, Saturday, May 25th, 1720." The immense number of spies
with which the city was infested rendered the people mistrustful of one
another, and beyond some trifling disturbances made in the evening by an
insignificant group, which was soon dispersed, the peace of the capital
was not compromised.
[Illustration]
The value of shares in the Louisiana, or Mississippi stock, had fallen
very rapidly, and few indeed were found to believe the tales that had once
been told of the immense wealth of that region. A last effort was
therefore tried to restore the public confidence in the Mississippi
project. For this purpose, a general conscription of all the poor wretches
in Paris was made by order of government. Upwards of six thousand of the
very refuse of the population were impressed, as if in time of war, and
were provided with clothes and tools to be embarked for New Orleans, to
work in the gold mines alleged to abound there. They were paraded day
after day through the streets with their pikes and shovels, and then sent
off in small detachments to the out-ports to be shipped for America.
Two-thirds of them never reached their destination, but dispersed
themselves over the country, sold their tools for what they could get, and
returned to their old course of life. In less than three weeks afterwards,
one-half of them were to be found again in Paris. The manoeuvre, however,
caused a trifling advance in Mississippi stock. Many persons of
superabundant gullibility believed that operations had begun in earnest in
the new Golconda, and that gold and silver ingots would again be found in
France.
In a constitutional monarchy some surer means would have been found for
the restoration of public credit. In England, at a subsequent period, when
a similar delusion had brought on similar distress, how different were the
measures taken to repair the evil; but in France, unfortunately, the
remedy was left to the authors of the mischief. The arbitrary will of the
regent, which endeavoured to extricate the country, only plunged it deeper
into the mire. All payments were ordered to be made in paper, and between
the 1st of February and the end of May, notes were fabricated to the
amount of upwards of 1500 millions of livres, or 60,000,000l. sterling.
But the alarm once sounded, no art could make the people feel the
slightest confidence in paper which was not exchangeable into metal. M.
Lambert, the president of the parliament of Paris, told the regent to his
face that he would rather have a hundred thousand livres in gold or silver
than five millions in the notes of his bank. When such was the general
feeling, the superabundant issues of paper but increased the evil, by
rendering still more enormous the disparity between the amount of specie
and notes in circulation. Coin, which it was the object of the regent to
depreciate, rose in value on every fresh attempt to diminish it. In
February, it was judged advisable that the Royal Bank should be
incorporated with the Company of the Indies. An edict to that effect was
published and registered by the parliament. The state remained the
guarantee for the notes of the bank, and no more were to be issued without
an order in council. All the profits of the bank, since the time it had
been taken out of Law's hands and made a national institution, were given
over by the regent to the Company of the Indies. This measure had the
effect of raising for a short time the value of the Louisiana and other
shares of the company, but it failed in placing public credit on any
permanent basis.
A council of state was held in the beginning of May, at which Law,
D'Argenson (his colleague in the administration of the finances), and all
the ministers were present. It was then computed that the total amount of
notes in circulation was 2600 millions of livres, while the coin in the
country was not quite equal to half that amount. It was evident to the
majority of the council that some plan must be adopted to equalise the
currency. Some proposed that the notes should be reduced to the value of
the specie, while others proposed that the nominal value of the specie
should be raised till it was on an equality with the paper. Law is said to
have opposed both these projects, but failing in suggesting any other, it
was agreed that the notes should be depreciated one half. On the 21st of
May, an edict was accordingly issued, by which it was decreed that the
shares of the Company of the Indies, and the notes of the bank, should
gradually diminish in value, till at the end of a year they should only
pass current for one-half of their nominal worth. The parliament refused
to register the edict--the greatest outcry was excited, and the state of
the country became so alarming, that, as the only means of preserving
tranquillity, the council of the regency was obliged to stultify its own
proceedings, by publishing within seven days another edict, restoring the
notes to their original value.
On the same day (the 27th of May) the bank stopped payment in specie. Law
and D'Argenson were both dismissed from the ministry. The weak,
vacillating, and cowardly regent threw the blame of all the mischief upon
Law, who, upon presenting himself at the Palais Royal, was refused
admittance. At nightfall, however, he was sent for, and admitted into the
palace by a secret door,[12] when the regent endeavoured to console him,
and made all manner of excuses for the severity with which in public he
had been compelled to treat him. So capricious was his conduct, that, two
days afterwards, he took him publicly to the opera, where he sat in the
royal box alongside of the regent, who treated him with marked
consideration in face of all the people. But such was the hatred against
Law that the experiment had well nigh proved fatal to him. The mob
assailed his carriage with stones just as he was entering his own door;
and if the coachman had not made a sudden jerk into the court-yard, and
the domestics closed the gate immediately, he would, in all probability,
have been dragged out and torn to pieces. On the following day, his wife
and daughter were also assailed by the mob as they were returning in their
carriage from the races. When the regent was informed of these occurrences
he sent Law a strong detachment of Swiss guards, who were stationed night
and day in the court of his residence. The public indignation at last
increased so much, that Law, finding his own house, even with this guard,
insecure, took refuge in the Palais Royal, in the apartments of the
regent.
[12] Duclos, _Memoires Secrets de la Régence_.
The Chancellor, D'Aguesseau, who had been dismissed in 1718 for his
opposition to the projects of Law, was now recalled to aid in the
restoration of credit. The regent acknowledged too late, that he had
treated with unjustifiable harshness and mistrust one of the ablest, and
perhaps the sole honest public man of that corrupt period. He had retired
ever since his disgrace to his country house at Fresnes, where, in the
midst of severe but delightful philosophic studies, he had forgotten the
intrigues of an unworthy court. Law himself, and the Chevalier de
Conflans, a gentleman of the regent's household, were despatched in a
post-chaise with orders to bring the ex-chancellor to Paris along with
them. D'Aguesseau consented to render what assistance he could, contrary
to the advice of his friends, who did not approve that he should accept
any recal to office of which Law was the bearer. On his arrival in Paris,
five counsellors of the parliament were admitted to confer with the
Commissary of Finance; and on the 1st of June an order was published
abolishing the law which made it criminal to amass coin to the amount of
more than five hundred livres. Every one was permitted to have as much
specie as he pleased. In order that the bank-notes might be withdrawn,
twenty-five millions of new notes were created, on the security of the
revenues of the city of Paris, at two-and-a-half per cent. The bank-notes
withdrawn were publicly burned in front of the Hôtel de Ville. The new
notes were principally of the value of ten livres each; and on the 10th of
June the bank was re-opened, with a sufficiency of silver coin to give in
change for them.
[Illustration: D'AGUESSEAU.]
These measures were productive of considerable advantage. All the
population of Paris hastened to the bank to get coin for their small
notes; and silver becoming scarce, they were paid in copper. Very few
complained that this was too heavy, although poor fellows might be
continually seen toiling and sweating along the streets, laden with more
than they could comfortably carry, in the shape of change for fifty
livres. The crowds around the bank were so great, that hardly a day passed
that some one was not pressed to death. On the 9th of July, the multitude
was so dense and clamorous that the guards stationed at the entrance of
the Mazarin Gardens closed the gate and refused to admit any more. The
crowd became incensed, and flung stones through the railings upon the
soldiers. The latter, incensed in their turn, threatened to fire upon the
people. At that instant one of them was hit by a stone, and, taking up
his piece, he fired into the crowd. One man fell dead immediately, and
another was severely wounded. It was every instant expected that a general
attack would have been commenced upon the bank; but the gates of the
Mazarin Gardens being opened to the crowd, who saw a whole troop of
soldiers, with their bayonets fixed ready to receive them, they contented
themselves by giving vent to their indignation in groans and hisses.
Eight days afterwards the concourse of people was so tremendous that
fifteen persons were squeezed to death at the doors of the bank. The
people were so indignant that they took three of the bodies on stretchers
before them, and proceeded, to the number of seven or eight thousand, to
the gardens of the Palais Royal, that they might shew the regent the
misfortunes that he and Law had brought upon the country. Law's coachman,
who was sitting at the box of his master's carriage, in the court-yard of
the palace, happened to have more zeal than discretion, and, not liking
that the mob should abuse his master, he said, loud enough to be overheard
by several persons, that they were all blackguards, and deserved to be
hanged. The mob immediately set upon him, and thinking that Law was in the
carriage, broke it to pieces. The imprudent coachman narrowly escaped with
his life. No further mischief was done; a body of troops making their
appearance, the crowd quietly dispersed, after an assurance had been given
by the regent that the three bodies they had brought to shew him should be
decently buried at his own expense. The parliament was sitting at the time
of this uproar, and the president took upon himself to go out and see what
was the matter. On his return he informed the councillors that Law's
carriage had been broken by the mob. All the members rose simultaneously,
and expressed their joy by a loud shout, while one man, more zealous in
his hatred than the rest, exclaimed, "_And Law himself, is_ he _torn to
pieces?_"[13]
[13] The Duchess of Orleans gives a different version of this
story; but whichever be the true one, the manifestation of
such feeling in a legislative assembly was not very
creditable. She says that the president was so transported
with joy, that he was seized with a rhyming fit, and,
returning into the hall, exclaimed to the members:
"_Messieurs! Messieurs! bonne nouvelle!
Le carrosse de Lass est reduit en cannelle!_"
Much, undoubtedly, depended on the credit of the Company of the Indies,
which was answerable for so great a sum to the nation. It was therefore
suggested in the council of the ministry, that any privileges which could
be granted to enable it to fulfil its engagements, would be productive of
the best results. With this end in view, it was proposed that the
exclusive privilege of all maritime commerce should be secured to it, and
an edict to that effect was published. But it was unfortunately forgotten
that by such a measure all the merchants of the country would be ruined.
The idea of such an immense privilege was generally scouted by the nation,
and petition on petition was presented to the parliament that they would
refuse to register the decree. They refused accordingly, and the regent,
remarking that they did nothing but fan the flame of sedition, exiled them
to Blois. At the intercession of D'Aguesseau, the place of banishment was
changed to Pontoise, and thither accordingly the councillors repaired,
determined to set the regent at defiance. They made every arrangement for
rendering their temporary exile as agreeable as possible. The president
gave the most elegant suppers, to which he invited all the gayest and
wittiest company of Paris. Every night there was a concert and ball for
the ladies. The usually grave and solemn judges and councillors joined in
cards and other diversions, leading for several weeks a life of the most
extravagant pleasure, for no other purpose than to shew the regent of how
little consequence they deemed their banishment, and that, when they
willed it, they could make Pontoise a pleasanter residence than Paris.
Of all the nations in the world the French are the most renowned for
singing over their grievances. Of that country it has been remarked with
some truth, that its whole history may be traced in its songs. When Law,
by the utter failure of his best-laid plans, rendered himself obnoxious,
satire of course seized hold upon him; and while caricatures of his person
appeared in all the shops, the streets resounded with songs, in which
neither he nor the regent was spared. Many of these songs were far from
decent; and one of them in particular counselled the application of all
his notes to the most ignoble use to which paper can be applied. But the
following, preserved in the letters of the Duchess of Orleans, was the
best and the most popular, and was to be heard for months in all the
_carrefours_ in Paris. The application of the chorus is happy enough:
Aussitôt que Lass arriva
Dans notre bonne ville,
Monsieur le Régent publia
Que Lass serait utile
Pour rétablir la nation.
_La faridondaine! la faridondon!_
Mais il nous a tous enrichi,
_Biribi!_
_A la façon de Barbari,_
_Mon ami!_
Ce parpaillot, pour attirer
Tout l'argent de la France,
Songea d'abord à s'assurer
De notre confiance.
Il fit son abjuration,
_La faridondaine! la faridondon!_
Mais le fourbe s'est converti,
_Biribi!_
_A la façon de Barbari,_
_Mon ami!_
Lass, le fils aîné de Satan
Nous met tous à l'aumône,
Il nous a pris tout notre argent
Et n'en rend à personne.
Mais le Régent, humain et bon,
_La faridondaine! la faridondon!_
Nous rendra ce qu'on nous a pris,
_Biribi!_
_A la façon de Barbari,_
_Mon ami!_
The following epigram is of the same date:
_Lundi_, j'achetai des actions;
_Mardi_, je gagnai des millions;
_Mercredi_, j'arrangeai mon ménage,
_Jeudi_, je pris un équipage,
_Vendredi_, je m'en fus au bal,
_Et Samedi_, à l'hôpital.
Among the caricatures that were abundantly published, and that shewed as
plainly as graver matters, that the nation had awakened to a sense of its
folly, was one, a fac-simile of which is preserved in the _Mémoires de la
Régence_. It was thus described by its author: "The 'Goddess of Shares,'
in her triumphal car, driven by the Goddess of Folly. Those who are
drawing the car are impersonations of the Mississippi, with his wooden
leg, the South Sea, the Bank of England, the Company of the West of
Senegal, and of various assurances. Lest the car should not roll fast
enough, the agents of these companies, known by their long fox-tails and
their cunning looks, turn round the spokes of the wheels, upon which are
marked the names of the several stocks and their value, sometimes high and
sometimes low, according to the turns of the wheel. Upon the ground are
the merchandise, day-books and ledgers of legitimate commerce, crushed
under the chariot of Folly. Behind is an immense crowd of persons, of all
ages, sexes, and conditions, clamoring after Fortune, and fighting with
each other to get a portion of the shares which she distributes so
bountifully among them. In the clouds sits a demon, blowing bubbles of
soap, which are also the objects of the admiration and cupidity of the
crowd, who jump upon one another's backs to reach them ere they burst.
Right in the pathway of the car, and blocking up the passage, stands a
large building, with three doors, through one of which it must pass, if it
proceeds farther, and all the crowd along with it. Over the first door are
the words, '_Hôpital des Foux_,' over the second, '_Hôpital des Malades_,'
and over the third, '_Hôpital des Gueux_.'" Another caricature represented
Law sitting in a large cauldron, boiling over the flames of popular
madness, surrounded by an impetuous multitude, who were pouring all their
gold and silver into it, and receiving gladly in exchange the bits of
paper which he distributed among them by handfuls.
While this excitement lasted, Law took good care not to expose himself
unguarded in the streets. Shut up in the apartments of the regent, he was
secure from all attack; and whenever he ventured abroad, it was either
_incognito_, or in one of the royal carriages, with a powerful escort. An
amusing anecdote is recorded of the detestation in which he was held by
the people, and the ill-treatment he would have met had he fallen into
their hands. A gentleman of the name of Boursel was passing in his
carriage down the Rue St. Antoine, when his farther progress was stayed by
a hackney-coach that had blocked up the road. M. Boursel's servant called
impatiently to the hackney-coachman to get out of the way, and, on his
refusal, struck him a blow on the face. A crowd was soon drawn together by
the disturbance, and M. Boursel got out of the carriage to restore order.
The hackney-coachman, imagining that he had now another assailant,
bethought him of an expedient to rid himself of both, and called out as
loudly as he was able, "Help! help! murder! murder! Here are Law and his
servant going to kill me! Help! help!" At this cry the people came out of
their shops, armed with sticks and other weapons, while the mob gathered
stones to inflict summary vengeance upon the supposed financier. Happily
for M. Boursel and his servant, the door of the church of the Jesuits
stood wide open, and, seeing the fearful odds against them, they rushed
towards it with all speed. They reached the altar, pursued by the people,
and would have been ill-treated even there, if, finding the door open
leading to the sacristy, they had not sprang through, and closed it after
them. The mob were then persuaded to leave the church by the alarmed and
indignant priests, and finding M. Boursel's carriage still in the streets,
they vented their ill-will against it, and did it considerable damage.
The twenty-five millions secured on the municipal revenues of the city of
Paris, bearing so low an interest as two and a half per cent, were not
very popular among the large holders of Mississippi stock. The conversion
of the securities was, therefore, a work of considerable difficulty; for
many preferred to retain the falling paper of Law's Company, in the hope
that a favourable turn might take place. On the 15th of August, with a
view to hasten the conversion, an edict was passed, declaring that all
notes for sums between one thousand and ten thousand livres, should not
pass current, except for the purchase of annuities and bank accounts, or
for the payment of instalments still due on the shares of the company.
In October following another edict was passed, depriving these notes of
all value whatever after the month of November next ensuing. The
management of the mint, the farming of the revenue, and all the other
advantages and privileges of the India, or Mississippi Company, were taken
from them, and they were reduced to a mere private company. This was the
death-blow to the whole system, which had now got into the hands of its
enemies. Law had lost all influence in the Council of Finance, and the
company, being despoiled of its immunities, could no longer hold out the
shadow of a prospect of being able to fulfil its engagements. All those
suspected of illegal profits at the time the public delusion was at its
height, were sought out and amerced in heavy fines. It was previously
ordered that a list of the original proprietors should be made out, and
that such persons as still retained their shares should place them in
deposit with the company, and that those who had neglected to complete the
shares for which they had put down their names, should now purchase them
of the company, at the rate of 13,500 livres for each share of 500 livres.
Rather than submit to pay this enormous sum for stock which was actually
at a discount, the shareholders packed up all their portable effects, and
endeavoured to find a refuge in foreign countries. Orders were immediately
issued to the authorities at the ports and frontiers, to apprehend all
travellers who sought to leave the kingdom, and keep them in custody,
until it was ascertained whether they had any plate or jewellery with
them, or were concerned in the late stock-jobbing. Against such few as
escaped, the punishment of death was recorded, while the most arbitrary
proceedings were instituted against those who remained.
Law himself, in a moment of despair, determined to leave a country where
his life was no longer secure. He at first only demanded permission to
retire from Paris to one of his country-seats--a permission which the
regent cheerfully granted. The latter was much affected at the unhappy
turn affairs had taken, but his faith continued unmoved in the truth and
efficacy of Law's financial system. His eyes were opened to his own
errors; and during the few remaining years of his life he constantly
longed for an opportunity of again establishing the system upon a securer
basis. At Law's last interview with the prince, he is reported to have
said,--"I confess that I have committed many faults. I committed them
because I am a man, and all men are liable to error; but I declare to you
most solemnly that none of them proceeded from wicked or dishonest
motives, and that nothing of the kind will be found in the whole course of
my conduct."
[Illustration: LAW IN A CAR DRAWN BY COCKS.[14]]
[14] Law in a car drawn by cocks; from _Het groote Tofereel der
Dwaasheid_.
Two or three days after his departure the regent sent him a very kind
letter, permitting him to leave the kingdom whenever he pleased, and
stating that he had ordered his passports to be made ready. He at the same
time offered him any sum of money he might require. Law respectfully
declined the money, and set out for Brussels in a post-chaise belonging to
Madame de Prie, the mistress of the Duke of Bourbon, escorted by six
horse-guards. From thence he proceeded to Venice, where he remained for
some months, the object of the greatest curiosity to the people, who
believed him to be the possessor of enormous wealth. No opinion, however,
could be more erroneous. With more generosity than could have been
expected from a man who during the greatest part of his life had been a
professed gambler, he had refused to enrich himself at the expense of a
ruined nation. During the height of the popular frenzy for Mississippi
stock, he had never doubted of the final success of his projects in making
France the richest and most powerful nation of Europe. He invested all his
gains in the purchase of landed property in France--a sure proof of his
own belief in the stability of his schemes. He had hoarded no plate or
jewellery, and sent no money, like the dishonest jobbers, to foreign
countries. His all, with the exception of one diamond, worth about five or
six thousand pounds sterling, was invested in the French soil; and when he
left that country, he left it almost a beggar. This fact alone ought to
rescue his memory from the charge of knavery, so often and so unjustly
brought against him.
As soon as his departure was known, all his estates and his valuable
library were confiscated. Among the rest, an annuity of 200,000 livres
(8000l. sterling) on the lives of his wife and children, which had been
purchased for five millions of livres, was forfeited, notwithstanding that
a special edict, drawn up for the purpose in the days of his prosperity,
had expressly declared that it should never be confiscated for any cause
whatever. Great discontent existed among the people that Law had been
suffered to escape. The mob and the parliament would have been pleased to
have seen him hanged. The few who had not suffered by the commercial
revolution rejoiced that the _quack_ had left the country; but all those
(and they were by far the most numerous class) whose fortunes were
implicated regretted that his intimate knowledge of the distress of the
country, and of the causes that had led to it, had not been rendered more
available in discovering a remedy.
At a meeting of the Council of Finance and the General Council of the
Regency, documents were laid upon the table, from which it appeared that
the amount of notes in circulation was 2700 millions. The regent was
called upon to explain how it happened that there was a discrepancy
between the dates at which these issues were made and those of the edicts
by which they were authorised. He might have safely taken the whole blame
upon himself, but he preferred that an absent man should bear a share of
it; and he therefore stated that Law, upon his own authority, had issued
1200 millions of notes at different times, and that he (the regent),
seeing that the thing had been irrevocably done, had screened Law by
antedating the decrees of the council which authorised the augmentation.
It would have been more to his credit if he had told the whole truth while
he was about it, and acknowledged that it was mainly through his
extravagance and impatience that Law had been induced to overstep the
bounds of safe speculation. It was also ascertained that the national
debt, on the 1st of January 1721, amounted to upwards of 3100 millions of
livres, or more than 124,000,000l. sterling, the interest upon which was
3,196,000l. A commission, or _visa_, was forthwith appointed to examine
into all the securities of the state creditors, who were to be divided
into five classes; the first four comprising those who had purchased their
securities with real effects, and, the latter comprising those who could
give no proofs that the transactions they had entered into were real and
_bonâ fide_. The securities of the latter were ordered to be destroyed,
while those of the first four classes were subjected to a most rigid and
jealous scrutiny. The result of the labours of the _visa_, was a report,
in which they counselled the reduction of the interest upon these
securities to fifty-six millions of livres. They justified, this, advice
by a statement of the various acts of peculation and extortion which they
had discovered; and an edict to that effect was accordingly published and
duly registered by the parliaments of the kingdom.
[Illustration: D'ARGENSON.]
Another tribunal was afterwards established, under the title of the
_Chambre de l'Arsenal_, which took cognisance of all the malversations
committed in the financial departments of the government, during the late
unhappy period. A Master of Requests, named Falhonet, together with the
Abbé Clement, and two clerks in their employ, had been concerned in divers
acts of peculation to the amount of upwards of a million of livres. The
first two were sentenced to be beheaded, and the latter to be hanged; but
their punishment was afterwards commuted into imprisonment for life in the
Bastille. Numerous other acts of dishonesty were discovered, and punished,
by fine and imprisonment.
D'Argenson shared with Law and the regent the unpopularity which had
alighted upon all those concerned in the Mississippi madness. He was
dismissed from his post of Chancellor to make room for D'Aguesseau; but he
retained the title of Keeper of the Seals, and was allowed to attend the
councils whenever he pleased. He thought it better, however, to withdraw
from Paris, and live for a time a life of seclusion at his country-seat.
But he was not formed for retirement; and becoming moody and discontented,
he aggravated a disease under which he had long laboured, and died in less
than a twelve-month. The populace of Paris so detested him, that they
carried their hatred even to his grave. As his funeral procession passed
to the church of St. Nicholas du Chardonneret, the burying-place of his
family, it was beset by a riotous mob, and his two sons, who were
following as chief mourners, were obliged to drive as fast as they were
able down a by-street to escape personal violence.
As regards Law, he for some time entertained a hope that he should be
recalled to France, to aid in establishing its credit upon a firmer basis.
The death of the regent in 1723, who expired suddenly as he was sitting by
the fireside conversing with his mistress, the Duchess de Phalaris,
deprived him of that hope, and he was reduced to lead his former life of
gambling. He was more than once obliged to pawn his diamond, the sole
remnant of his vast wealth, but successful play generally enabled him to
redeem it. Being persecuted by his creditors at Rome, he proceeded to
Copenhagen, where he received permission from the English ministry to
reside in his native country, his pardon for the murder of Mr. Wilson
having been sent over to him in 1719. He was brought over in the admiral's
ship--a circumstance which gave occasion for a short debate in the House
of Lords. Earl Coningsby complained that a man who had renounced both his
country and his religion, should have been treated with such honour, and
expressed his belief that his presence in England, at a time when the
people were so bewildered by the nefarious practices of the South-Sea
directors, would be attended with no little danger. He gave notice of a
motion on the subject; but it was allowed to drop, no other member of the
House having the slightest participation in his lordship's fears. Law
remained for about four years in England, and then proceeded to Venice,
where he died in 1729, in very embarrassed circumstances. The following
epitaph was written at the time:
"Ci gît cet Ecossais célébre,
Ce calculateur sans égal,
Qui, par les régles de l'algébre,
A mis la France à l'hôpital."
His brother, William Law, who had been concerned with him in the
administration both of the bank and the Louisiana Company, was imprisoned
in the Bastille for alleged malversation, but no guilt was ever proved
against him. He was liberated after fifteen months, and became the founder
of a family, which is still known in France under the title of Marquises
of Lauriston.
[Illustration: NECK OR NOTHING.[15]]
[15] Neck or nothing, or downfall of the Mississippi
Company.--_From a Print in Mr. Hawkins' Collection_.
In the next chapter will be found an account of the madness which infected
the people of England at the same time, and under very similar
circumstances, but which, thanks to the energies and good sense of a
constitutional government, was attended with results far less disastrous
than those which were seen in France.
[Illustration: SOUTH-SEA HOUSE.]
THE SOUTH-SEA BUBBLE.
At length corruption, like a general flood,
Did deluge all; and avarice creeping on,
Spread, like a low-born mist, and hid the sun.
Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown:
Britain was sunk in lucre's sordid charms.--_Pope_.
The South-Sea Company was originated by the celebrated Harley Earl of
Oxford, in the year 1711, with the view of restoring public credit, which
had suffered by the dismissal of the Whig ministry, and of providing for
the discharge of the army and navy debentures, and other parts of the
floating debt, amounting to nearly ten millions sterling. A company of
merchants, at that time without a name, took this debt upon themselves,
and the government agreed to secure them for a certain period the interest
of six per cent. To provide for this interest, amounting to 600,000l. per
annum, the duties upon wines, vinegar, India goods, wrought silks,
tobacco, whale-fins, and some other articles, were rendered permanent. The
monopoly of the trade to the South Seas was granted, and the company,
being incorporated by act of parliament, assumed the title by which it has
ever since been known. The minister took great credit to himself for his
share in this transaction, and the scheme was always called by his
flatterers "the Earl of Oxford's masterpiece."
[Illustration: HARLEY EARL OF OXFORD]
Even at this early period of its history the most visionary ideas were
formed by the company and the public of the immense riches of the eastern
coast of South America. Every body had heard of the gold and silver mines
of Peru and Mexico; every one believed them to be inexhaustible, and that
it was only necessary to send the manufactures of England to the coast to
be repaid a hundred fold in gold and silver ingots by the natives. A
report, industriously spread, that Spain was willing to concede four ports
on the coasts of Chili and Peru for the purposes of traffic, increased the
general confidence, and for many years the South-Sea Company's stock was
in high favour.
Philip V. of Spain, however, never had any intention of admitting the
English to a free trade in the ports of Spanish America. Negotiations were
set on foot, but their only result was the _assiento_ contract, or the
privilege of supplying the colonies with negroes for thirty years, and of
sending once a year a vessel, limited both as to tonnage and value of
cargo, to trade with Mexico, Peru, or Chili. The latter permission was
only granted upon the hard condition, that the King of Spain should enjoy
one-fourth of the profits, and a tax of five per cent on the remainder.
This was a great disappointment to the Earl of Oxford and his party, who
were reminded much oftener than they found agreeable of the
"_Parturiunt montes, nascitur ridiculus mus_."
But the public confidence in the South-Sea Company was not shaken. The
Earl of Oxford declared that Spain would permit two ships, in addition to
the annual ship, to carry out merchandise during the first year; and a
list was published, in which all the ports and harbours of these coasts
were pompously set forth as open to the trade of Great Britain. The first
voyage of the annual ship was not made till the year 1717, and in the
following year the trade was suppressed by the rupture with Spain.
The king's speech, at the opening of the session of 1717, made pointed
allusion to the state of public credit, and recommended that proper
measures should be taken to reduce the national debt. The two great
monetary corporations, the South-Sea Company and the Bank of England, made
proposals to parliament on the 20th of May ensuing. The South-Sea Company
prayed that their capital stock of ten millions might be increased to
twelve, by subscription or otherwise, and offered to accept five per cent
instead of six upon the whole amount. The bank made proposals equally
advantageous. The house debated for some time, and finally three acts were
passed, called the South-Sea Act, the Bank Act, and the General Fund Act.
By the first, the proposals of the South-Sea Company were accepted, and
that body held itself ready to advance the sum of two millions towards
discharging the principal and interest of the debt due by the state for
the four lottery funds, of the ninth and tenth years of Queen Anne. By the
second act, the bank received a lower rate of interest for the sum of
1,775,027l. 15s. due to it by the state, and agreed to deliver up to be
cancelled as many exchequer bills as amounted to two millions sterling,
and to accept of an annuity of one hundred thousand pounds, being after
the rate of five per cent, the whole redeemable at one year's notice. They
were further required to be ready to advance, in case of need, a sum not
exceeding 2,500,000l. upon the same terms of five per cent interest,
redeemable by parliament. The General Fund Act recited the various
deficiencies, which were to be made good by the aids derived from the
foregoing sources.
The name of the South-Sea Company was thus continually before the public.
Though their trade with the South American States produced little or no
augmentation of their revenues, they continued to flourish as a monetary
corporation. Their stock was in high request, and the directors, buoyed up
with success, began to think of new means for extending their influence.
The Mississippi scheme of John Law, which so dazzled and captivated the
French people, inspired them with an idea that they could carry on the
same game in England. The anticipated failure of his plans did not divert
them from their intention. Wise in their own conceit, they imagined they
could avoid his faults, carry on their schemes for ever, and stretch the
cord of credit to its extremest tension, without causing it to snap
asunder.
It was while Law's plan was at its greatest height of popularity, while
people were crowding in thousands to the Rue Quincampoix, and ruining
themselves with frantic eagerness, that the South-Sea directors laid
before parliament their famous plan for paying off the national debt.
Visions of boundless wealth floated before the fascinated eyes of the
people in the two most celebrated countries of Europe. The English
commenced their career of extravagance somewhat later than the French; but
as soon as the delirium seized them, they were determined not to be
outdone. Upon the 22d of January, 1720, the House of Commons resolved
itself into a committee of the whole house, to take into consideration
that part of the king's speech at the opening of the session which related
to the public debts, and the proposal of the South-Sea Company towards the
redemption and sinking of the same. The proposal set forth at great
length, and under several heads, the debts of the state, amounting to
30,981,712l., which the company were anxious to take upon themselves, upon
consideration of five per cent per annum, secured to them until Midsummer
1727; after which time, the whole was to become redeemable at the pleasure
of the legislature, and the interest to be reduced to four per cent. The
proposal was received with great favour; but the Bank of England had many
friends in the House of Commons, who were desirous that that body should
share in the advantages that were likely to accrue. On behalf of this
corporation it was represented, that they had performed great and eminent
services to the state in the most difficult times, and deserved, at least,
that if any advantage was to be made by public bargains of this nature,
they should be preferred before a company that had never done any thing
for the nation. The further consideration of the matter was accordingly
postponed for five days. In the mean time, a plan was drawn up by the
governors of the bank. The South-Sea Company, afraid that the bank might
offer still more advantageous terms to the government than themselves,
reconsidered their former proposal, and made some alterations in it, which
they hoped would render it more acceptable. The principal change was a
stipulation that the government might redeem these debts at the expiration
of four years, instead of seven, as at first suggested. The bank resolved
not to be outbidden in this singular auction, and the governors also
reconsidered their first proposal, and sent in a new one.
Thus, each corporation having made two proposals, the house began to
deliberate. Mr. Robert Walpole was the chief speaker in favour of the
bank, and Mr. Aislabie, the Chancellor of the Exchequer, the principal
advocate on behalf of the South-Sea Company. It was resolved, on the 2d of
February, that the proposals of the latter were most advantageous to the
country. They were accordingly received, and leave was given to bring in a
bill to that effect.
Exchange Alley was in a fever of excitement. The company's stock, which
had been at a hundred and thirty the previous day, gradually rose to three
hundred, and continued to rise with the most astonishing rapidity during
the whole time that the bill in its several stages was under discussion.
Mr. Walpole was almost the only statesman in the House who spoke out
boldly against it. He warned them, in eloquent and solemn language, of the
evils that would ensue. It countenanced, he said, "the dangerous practice
of stock-jobbing, and would divert the genius of the nation from trade and
industry. It would hold out a dangerous lure to decoy the unwary to their
ruin, by making them part with the earnings of their labour for a prospect
of imaginary wealth. The great principle of the project was an evil of
first-rate magnitude; it was to raise artificially the value of the stock,
by exciting and keeping up a general infatuation, and by promising
dividends out of funds which could never be adequate to the purpose." In a
prophetic spirit he added, that if the plan succeeded, the directors would
become masters of the government, form a new and absolute aristocracy in
the kingdom, and control the resolutions of the legislature. If it failed,
which he was convinced it would, the result would bring general discontent
and ruin upon the country. Such would be the delusion, that when the evil
day came, as come it would, the people would start up, as from a dream,
and ask themselves if these things could have been true. All his eloquence
was in vain. He was looked upon as a false prophet, or compared to the
hoarse raven, croaking omens of evil. His friends, however, compared him
to Cassandra, predicting evils which would only be believed when they came
home to men's hearths, and stared them in the face at their own boards.
Although, in former times, the house had listened with the utmost
attention to every word that fell from his lips, the benches became
deserted when it was known that he would speak on the South-Sea question.
[Illustration: SIR ROBERT WALPOLE]
The bill was two months in its progress through the House of Commons.
During this time every exertion was made by the directors and their
friends, and more especially by the chairman, the noted Sir John Blunt, to
raise the price of the stock. The most extravagant rumours were in
circulation. Treaties between England and Spain were spoken of, whereby
the latter was to grant a free trade to all her colonies; and the rich
produce of the mines of Potosi-la-Paz was to be brought to England until
silver should become almost as plentiful as iron. For cotton and woollen
goods, with which we could supply them in abundance, the dwellers in
Mexico were to empty their golden mines. The company of merchants trading
to the South Seas would be the richest the world ever saw, and every
hundred pounds invested in it would produce hundreds per annum to the
stockholder. At last the stock was raised by these means to near four
hundred; but, after fluctuating a good deal, settled at three hundred and
thirty, at which price it remained when the bill passed the Commons by a
majority of 172 against 55.
In the House of Lords the bill was hurried through all its stages with
unexampled rapidity. On the 4th of April it was read a first time; on the
5th, it was read a second time; on the 6th, it was committed; and on the
7th, was read a third time and passed.
Several peers spoke warmly against the scheme; but their warnings fell
upon dull, cold ears. A speculating frenzy had seized them as well as the
plebeians. Lord North and Grey said the bill was unjust in its nature, and
might prove fatal in its consequences, being calculated to enrich the few
and impoverish the many. The Duke of Wharton followed; but, as he only
retailed at second-hand the arguments so eloquently stated by Walpole in
the Lower House, he was not listened to with even the same attention that
had been bestowed upon Lord North and Grey. Earl Cowper followed on the
same side, and compared the bill to the famous horse of the siege of Troy.
Like that, it was ushered in and received with great pomp and acclamations
of joy, but bore within it treachery and destruction. The Earl of
Sunderland endeavoured to answer all objections; and on the question being
put, there appeared only seventeen peers against, and eighty-three in
favour of the project. The very same day on which it passed the Lords, it
received the royal assent, and became the law of the land.
It seemed at that time as if the whole nation had turned stockjobbers.
Exchange Alley was every day blocked up by crowds, and Cornhill was
impassable for the number of carriages. Every body came to purchase stock.
"Every fool aspired to be a knave." In the words of a ballad published at
the time, and sung about the streets,[16]
"Then stars and garters did appear
Among the meaner rabble;
To buy and sell, to see and hear
The Jews and Gentiles squabble.
The greatest ladies thither came,
And plied in chariots daily,
Or pawned their jewels for a sum
To venture in the Alley."
[16] _A South-Sea Ballad; or, Merry Remarks upon Exchange-Alley
Bubbles. To a new Tune called "The Grand Elixir; or, the
Philosopher's Stone discovered."_
The inordinate thirst of gain that had afflicted all ranks of society was
not to be slaked even in the South Sea. Other schemes, of the most
extravagant kind, were started. The share-lists were speedily filled up,
and an enormous traffic carried on in shares, while, of course, every
means were resorted to to raise them to an artificial value in the market.
[Illustration: CORNHILL, 1720.]
Contrary to all expectation, South-Sea stock fell when the bill received
the royal assent. On the 7th of April the shares were quoted at three
hundred and ten, and on the following day at two hundred and ninety.
Already the directors had tasted the profits of their scheme, and it was
not likely that they should quietly allow the stock to find its natural
level without an effort to raise it. Immediately their busy emissaries
were set to work. Every person interested in the success of the project
endeavoured to draw a knot of listeners around him, to whom he expatiated
on the treasures of the South American seas. Exchange Alley was crowded
with attentive groups. One rumour alone, asserted with the utmost
confidence, had an immediate effect upon the stock. It was said that Earl
Stanhope had received overtures in France from the Spanish government to
exchange Gibraltar and Port Mahon for some places on the coast of Peru,
for the security and enlargement of the trade in the South Seas. Instead
of one annual ship trading to those ports, and allowing the king of Spain
twenty-five per cent out of the profits, the company might build and
charter as many ships as they pleased, and pay no per centage whatever to
any foreign potentate.
"Visions of ingots danced before their eyes,"
and stock rose rapidly. On the 12th of April, five days after the bill had
become law, the directors opened their books for a subscription of a
million, at the rate of 300l. for every 100l. capital. Such was the
concourse of persons of all ranks, that this first subscription was found
to amount to above two millions of original stock. It was to be paid at
five payments, of 60l. each for every 100l. In a few days the stock
advanced to three hundred and forty, and the subscriptions were sold for
double the price of the first payment. To raise the stock still higher, it
was declared, in a general court of directors, on the 21st of April, that
the midsummer dividend should be ten per cent, and that all subscriptions
should be entitled to the same. These resolutions answering the end
designed, the directors, to improve the infatuation of the monied men,
opened their books for a second subscription of a million, at four hundred
per cent. Such was the frantic eagerness of people of every class to
speculate in these funds, that in the course of a few hours no less than a
million and a half was subscribed at that rate.
In the mean time, innumerable joint-stock companies started up every
where. They soon received the name of Bubbles, the most appropriate that
imagination could devise. The populace are often most happy in the
nicknames they employ. None could be more apt than that of Bubbles. Some
of them lasted for a week or a fortnight, and were no more heard of, while
others could not even live out that short span of existence. Every evening
produced new schemes, and every morning new projects. The highest of the
aristocracy were as eager in this hot pursuit of gain as the most plodding
jobber in Cornhill. The Prince of Wales became governor of one company,
and is said to have cleared 40,000l. by his speculations.[17] The Duke of
Bridgewater started a scheme for the improvement of London and
Westminster, and the Duke of Chandos another. There were nearly a hundred
different projects, each more extravagant and deceptive than the other, To
use the words of the _Political State_, they were "set on foot and
promoted by crafty knaves, then pursued by multitudes of covetous fools,
and at last appeared to be, in effect, what their vulgar appellation
denoted them to be--bubbles and mere cheats." It was computed that near
one million and a half sterling was won and lost by these unwarrantable
practices, to the impoverishment of many a fool, and the enriching of many
a rogue.
[17] Coxe's _Walpole_, Correspondence between Mr. Secretary
Craggs and Earl Stanhope.
Some of these schemes were plausible enough, and, had they been undertaken
at a time when the public mind was unexcited, might have been pursued with
advantage to all concerned. But they were established merely with the view
of raising the shares in the market. The projectors took the first
opportunity of a rise to sell out, and next morning the scheme was at an
end. Maitland, in his _History of London_, gravely informs us, that one of
the projects which received great encouragement, was for the establishment
of a company "to make deal boards out of saw-dust." This is no doubt
intended as a joke; but there is abundance of evidence to shew that dozens
of schemes, hardly a whit more reasonable, lived their little day, ruining
hundreds ere they fell. One of them was for a wheel for perpetual
motion--capital one million; another was "for encouraging the breed of
horses in England, and improving of glebe and church lands, and repairing
and rebuilding parsonage and vicarage houses." Why the clergy, who were so
mainly interested in the latter clause, should have taken so much interest
in the first, is only to be explained on the supposition that the scheme
was projected by a knot of the fox-hunting parsons, once so common in
England. The shares of this company were rapidly subscribed for. But the
most absurd and preposterous of all, and which shewed, more completely
than any other, the utter madness of the people, was one started by an
unknown adventurer, entitled "_A company for carrying on an undertaking of
great advantage, but nobody to know what it is_." Were not the fact stated
by scores of credible witnesses, it would be impossible to believe that
any person could have been duped by such a project. The man of genius who
essayed this bold and successful inroad upon public credulity, merely
stated in his prospectus that the required capital was half a million, in
five thousand shares of 100l. each, deposit 2l. per share. Each
subscriber, paying his deposit, would be entitled to 100l. per annum per
share. How this immense profit was to be obtained, he did not condescend
to inform them at that time, but promised that in a month full particulars
should be duly announced, and a call made for the remaining 98l. of the
subscription. Next morning, at nine o'clock, this great man opened an
office in Cornhill. Crowds of people beset his door, and when he shut up
at three o'clock, he found that no less than one thousand shares had been
subscribed for, and the deposits paid. He was thus, in five hours, the
winner of 2000l. He was philosopher enough to be contented with his
venture, and set off the same evening for the Continent. He was never
heard of again.
Well might Swift exclaim, comparing Change Alley to a gulf in the South
Sea:
"Subscribers here by thousands float,
And jostle one another down,
Each paddling in his leaky boat,
And here they fish for gold and drown.
Now buried in the depths below,
Now mounted up to heaven again,
They reel and stagger to and fro,
At their wit's end, like drunken men.
Meantime, secure on Garraway cliffs,
A savage race, by shipwrecks fed,
Lie waiting for the foundered skiffs,
And strip the bodies of the dead."
Another fraud that was very successful was that of the "Globe _Permits_,"
as they were called. They were nothing more than square pieces of
playing-cards, on which was the impression of a seal, in wax, bearing the
sign of the Globe Tavern, in the neighbourhood of Exchange Alley, with the
inscription of "Sail-Cloth Permits." The possessors enjoyed no other
advantage from them than permission to subscribe at some future time to a
new sail-cloth manufactory, projected by one who was then known to be a
man of fortune, but who was afterwards involved in the peculation and
punishment of the South-Sea directors. These permits sold for as much as
sixty guineas in the Alley.
Persons of distinction, of both sexes, were deeply engaged in all these
bubbles; those of the male sex going to taverns and coffee-houses to meet
their brokers, and the ladies resorting for the same purpose to the shops
of milliners and haberdashers. But it did not follow that all these people
believed in the feasibility of the schemes to which they subscribed; it
was enough for their purpose that their shares would, by stock-jobbing
arts, be soon raised to a premium, when they got rid of them with all
expedition to the really credulous. So great was the confusion of the
crowd in the alley, that shares in the same bubble were known to have been
sold at the same instant ten per cent higher at one end of the alley than
at the other. Sensible men beheld the extraordinary infatuation of the
people with sorrow and alarm. There were some both in and out of
parliament who foresaw clearly the ruin that was impending. Mr. Walpole
did not cease his gloomy forebodings. His fears were shared by all the
thinking few, and impressed most forcibly upon the government. On the 11th
of June, the day the parliament rose, the king published a proclamation,
declaring that all these unlawful projects should be deemed public
nuisances, and prosecuted accordingly, and forbidding any broker, under a
penalty of five hundred pounds, from buying or selling any shares in them.
Notwithstanding this proclamation, roguish speculators still carried them
on, and the deluded people still encouraged them. On the 12th of July, an
order of the Lords Justices assembled in privy council was published,
dismissing all the petitions that had been presented for patents and
charters, and dissolving all the bubble companies. The following copy of
their lordships' order, containing a list of all these nefarious projects,
will not be deemed uninteresting at the present time, when, at periodic
intervals, there is but too much tendency in the public mind to indulge in
similar practices:
"At the Council Chamber, Whitehall, the 12th day of July, 1720.
Present, their Excellencies the Lords Justices in Council.
"Their Excellencies the Lords Justices, in council, taking into
consideration the many inconveniences arising to the public from several
projects set on foot for raising of joint-stock for various purposes, and
that a great many of his majesty's subjects have been drawn in to part
with their money on pretence of assurances that their petitions for
patents and charters to enable them to carry on the same would be granted:
to prevent such impositions, their excellencies this day ordered the said
several petitions, together with such reports from the Board of Trade, and
from his majesty's attorney and solicitor-general, as had been obtained
thereon, to be laid before them; and after mature consideration thereof,
were pleased, by advice of his majesty's privy council, to order that the
said petitions be dismissed, which are as follow:
"1. Petition of several persons, praying letters patent for carrying on a
fishing trade by the name of the Grand Fishery of Great Britain.
"2. Petition of the Company of the Royal Fishery of England, praying
letters patent for such further powers as will effectually contribute to
carry on the said fishery.
"3. Petition of George James, on behalf of himself and divers persons of
distinction concerned in a national fishery, praying letters patent of
incorporation, to enable them to carry on the same.
"4. Petition of several merchants, traders, and others, whose names are
thereunto subscribed, praying to be incorporated for reviving and carrying
on a whale fishery to Greenland and elsewhere.
"5. Petition of Sir John Lambert and others thereto subscribing, on behalf
of themselves and a great number of merchants, praying to be incorporated
for carrying on a Greenland trade, and particularly a whale fishery in
Davis's Straits.
"6. Another petition for a Greenland trade.
"7. Petition of several merchants, gentlemen, and citizens, praying to be
incorporated for buying and building of ships to let or freight.
"8. Petition of Samuel Antrim and others, praying for letters patent for
sowing hemp and flax.
"9. Petition of several merchants, masters of ships, sail-makers, and
manufacturers of sail-cloth, praying a charter of incorporation, to enable
them to carry on and promote the said manufactory by a joint-stock.
"10. Petition of Thomas Boyd and several hundred merchants, owners and
masters of ships, sail-makers, weavers, and other traders, praying a
charter of incorporation, empowering them to borrow money for purchasing
lands, in order to the manufacturing sail-cloth and fine holland.
"11. Petition on behalf of several persons interested in a patent granted
by the late King William and Queen Mary for the making of linen and
sail-cloth, praying that no charter may be granted to any persons
whatsoever for making sail-cloth, but that the privilege now enjoyed by
them may be confirmed, and likewise an additional power to carry on the
cotton and cotton-silk manufactures.
"12. Petition of several citizens, merchants, and traders in London, and
others, subscribers to a British stock for a general insurance from fire
in any part of England, praying to be incorporated for carrying on the
said undertaking.
"13. Petition of several of his majesty's loyal subjects of the city of
London and other parts of Great Britain, praying to be incorporated for
carrying on a general insurance from losses by fire within the kingdom of
England.
"14. Petition of Thomas Surges and others his majesty's subjects thereto
subscribing, in behalf of themselves and others, subscribers to a fund of
1,200,000l. for carrying on a trade to his majesty's German dominions,
praying to be incorporated by the name of the Harburg Company.
"15. Petition of Edward Jones, a dealer in timber, on behalf of himself
and others, praying to be incorporated for the importation of timber from
Germany.
"16. Petition of several merchants of London, praying a charter of
incorporation for carrying on a salt-work.
"17. Petition of Captain Macphedris of London, merchant, on behalf of
himself and several merchants, clothiers, hatters, dyers, and other
traders, praying a charter of incorporation empowering them to raise a
sufficient sum of money to purchase lands for planting and rearing a wood
called madder, for the use of dyers.
"18. Petition of Joseph Galendo of London, snuff-maker, praying a patent
for his invention to prepare and cure Virginia tobacco for snuff in
Virginia, and making it into the same in all his majesty's dominions."
LIST OF BUBBLES.
The following Bubble-Companies were by the same order declared to be
illegal, and abolished accordingly:
1. For the importation of Swedish iron.
2. For supplying London with sea-coal. Capital, three millions.
3. For building and rebuilding houses throughout all England Capital,
three millions.
4. For making of muslin.
5. For carrying on and improving the British alum-works.
6. For effectually settling the island of Blanco and Sal Tartagus.
7. For supplying the town of Deal with fresh water.
8. For the importation of Flanders lace.
9. For improvement of lands in Great Britain. Capital, four millions.
10. For encouraging the breed of horses in England, and improving of glebe
and church lands, and for repairing and rebuilding parsonage and vicarage
houses.
11. For making of iron and steel in Great Britain,
12. For improving the land in the county of Flint. Capital, one million.
13. For purchasing lands to build on. Capital, two millions.
14. For trading in hair.
15. For erecting salt-works in Holy Island. Capital, two millions.
16. For buying and selling estates, and lending money on mortgage.
17. For carrying on an undertaking of great advantage; but nobody to know
what it is.
18. For paving the streets of London. Capital, two millions.
19. For furnishing funerals to any part of Great Britain.
20. For buying and selling lands and lending money at interest. Capital,
five millions.
21. For carrying on the royal fishery of Great Britain. Capital, ten
millions.
22. For assuring of seamen's wages.
23. For erecting loan-offices for the assistance and encouragement of the
industrious. Capital, two millions.
24. For purchasing and improving leaseable lands. Capital, four millions.
25. For importing pitch and tar, and other naval stores, from North
Britain and America.
26. For the clothing, felt, and pantile trade.
27. For purchasing and improving a manor and royalty in Essex.
28. For insuring of horses. Capital, two millions.
29. For exporting the woollen manufacture, and importing copper, brass,
and iron. Capital, four millions.
30. For a grand dispensary. Capital, three millions.
31. For erecting mills and purchasing lead-mines. Capital, two millions.
32. For improving the art of making soap.
33. For a settlement on the island of Santa Cruz.
34. For sinking pits and smelting lead ore in Derbyshire.
35. For making glass bottles and other glass.
36. For a wheel for perpetual motion. Capital, one million.
37. For improving of gardens.
38. For insuring and increasing children's fortunes.
39. For entering and loading goods at the Custom-house, and for
negotiating business for merchants.
40. For carrying on a woollen manufacture in the North of England.
41. For importing walnut-trees from Virginia, Capital, two millions.
42. For making Manchester stuffs of thread and cotton.
43. For making Joppa and Castile soap.
44. For improving the wrought-iron and steel manufactures of this kingdom.
Capital four millions.
45. For dealing in lace, hollands, cambrics, lawns, &c. Capital, two
millions.
46. For trading in and improving certain commodities of the produce of
this kingdom, &c. Capital three millions.
47. For supplying the London markets with cattle.
48. For making looking-glasses, coach-glasses, &c. Capital, two millions.
49. For working the tin and lead mines in Cornwall and Derbyshire.
50. For making rape-oil.
51. For importing beaver fur. Capital, two millions.
52. For making pasteboard and packing-paper.
53. For importing of oils and other materials used in the woollen
manufacture.
54. For improving and increasing the silk manufactures.
55. For lending money on stock, annuities, tallies, &c.
56. For paying pensions to widows and others, at a small discount.
Capital, two millions.
57. For improving malt liquors. Capital, four millions.
58. For a grand American fishery.
59. For purchasing and improving the fenny lands in Lincolnshire. Capital,
two millions.
60. For improving the paper manufacture of Great Britain.
61. The Bottomry Company.
62. For drying malt by hot air.
63. For carrying on a trade in the river Oronooko.
64. For the more effectual making of baize, in Colchester and other parts
of Great Britain.
65. For buying of naval stores, supplying the victualling, and paying the
wages of the workmen.
66. For employing poor artificers, and furnishing merchants and others
with watches.
67. For improvement of tillage and the breed of cattle.
68. Another for the improvement of our breed in horses.
69. Another for a horse-insurance.
70. For carrying on the corn trade of Great Britain.
71. For insuring to all masters and mistresses the losses they may sustain
by servants. Capital, three millions.
72. For erecting houses or hospitals for taking in and maintaining
illegitimate children. Capital, two millions.
73. For bleaching coarse sugars, without the use of fire or loss of
substance.
74. For building turnpikes and wharfs in Great Britain.
75. For insuring from thefts and robberies.
76. For extracting silver from lead.
77. For making china and delft ware. Capital, one million.
78. For importing tobacco, and exporting it again to Sweden and the north
of Europe. Capital, four millions.
79. For making iron with pit coal.
80. For furnishing the cities of London and Westminster with hay and
straw. Capital, three millions.
81. For a sail and packing-cloth manufactory in Ireland.
82. For taking up ballast.
83. For buying and fitting out ships to suppress pirates.
84. For the importation of timber from Wales. Capital, two millions.
85. For rock-salt.
86. For the transmutation of quicksilver into a malleable fine metal.
[Illustration: CHANGE-ALLEY.[18]]
[18] Stock-jobbing Card, or the humours of Change Alley. Copied
from a print called _Bubblers' Medley_, published by
Carrington Bowles.
Besides these bubbles, many others sprang up daily, in-spite of the
condemnation of the government and the ridicule of the still sane portion
of the public. The print-shops teemed with caricatures, and the newspapers
with epigrams and satires, upon the prevalent folly. An ingenious
cardmaker published a pack of South-Sea playing-cards, which are now
extremely rare, each card containing, besides the usual figures, of a very
small size, in one corner, a caricature of a bubble-company, with
appropriate verses underneath. One of the most famous bubbles was
"Puckle's Machine Company," for discharging round and square cannon-balls
and bullets, and making a total revolution in the art of war. Its
pretensions to public favour were thus summed up on the eight of spades:
"A rare invention to destroy the crowd
Of fools at home instead of fools abroad.
Fear not, my friends, this terrible machine,
They're only wounded who have shares therein."
[Illustration: TREE CARICATURE[19]]
[19] Tree, surrounded by water; people climbing up the tree. One
of a series of bubble cards, copied from the _Bubblers'
Medley_, published by Carrington Bowles.
The nine of hearts was a caricature of the English Copper and Brass
Company, with the following epigram:
"The headlong-fool that wants to be a swopper
Of gold and silver coin for English copper,
May, in Change Alley, prove himself an ass,
And give rich metal for adultrate brass."
The eight of diamonds celebrated the company for the colonisation of
Acadia, with this doggrel:
"He that is rich and wants to fool away
A good round sum in North America,
Let him subscribe himself a headlong sharer,
And asses' ears shall honour him or bearer."
And in a similar style every card of the pack exposed some knavish scheme,
and ridiculed the persons who were its dupes. It was computed that the
total amount of the sums proposed for carrying on these projects was
upwards of three hundred millions sterling.
[Illustration: MERCHANT'S GATEWAY]
It is time, however, to return to the great South-Sea gulf, that swallowed
the fortunes of so many thousands of the avaricious and the credulous. On
the 29th of May, the stock had risen as high as five hundred, and about
two-thirds of the government annuitants had exchanged the securities of
the state for those of the South-Sea company. During the whole of the
month of May the stock continued to rise, and on the 28th it was quoted at
five hundred and fifty. In four days after this it took a prodigious leap,
rising suddenly from five hundred and fifty to eight hundred and ninety.
It was now the general opinion that the stock could rise no higher, and
many persons took that opportunity of selling out, with a view of
realising their profits. Many noblemen and persons in the train of the
king, and about to accompany him to Hanover, were also anxious to sell
out. So many sellers, and so few buyers, appeared in the Alley on the 3d
of June, that the stock fell at once from eight hundred and ninety to six
hundred and forty. The directors were alarmed, and gave their agents
orders to buy. Their efforts succeeded. Towards evening, confidence was
restored, and the stock advanced to seven hundred and fifty. It continued
at this price, with some slight fluctuation, until the company closed
their books on the 22d of June.
It would be needless and uninteresting to detail the various arts employed
by the directors to keep up the price of stock. It will be sufficient to
state that it finally rose to one thousand per cent. It was quoted at this
price in, the commencement of August. The bubble was then full-blown, and
began to quiver and shake preparatory to its bursting.
Many of the government annuitants expressed dissatisfaction against the
directors. They accused them of partiality in making out the lists for
shares in each subscription. Further uneasiness was occasioned by its
being generally known that Sir John Blunt the chairman, and some others,
had sold out. During the whole of the month of August the stock fell, and
on the 2d of September it was quoted at seven hundred only.
The state of things now became alarming. To prevent, if possible, the
utter extinction of public confidence in their proceedings, the directors
summoned a general court of the whole corporation, to meet in Merchant
Tailors' Hall on the 8th of September. By nine o'clock in the morning, the
room was filled to suffocation; Cheapside was blocked up by a crowd unable
to gain admittance, and the greatest excitement prevailed. The directors
and their friends mustered in great numbers. Sir John Fellowes, the
sub-governor, was called to the chair. He acquainted the assembly with the
cause of their meeting; read to them the several resolutions of the court
of directors, and gave them an account of their proceedings; of the taking
in the redeemable and unredeemable funds, and of the subscriptions in
money. Mr. Secretary Craggs then made a short speech, wherein he commended
the conduct of the directors, and urged that nothing could more
effectually contribute to the bringing this scheme to perfection than
union among themselves. He concluded with a motion for thanking the court
of directors for their prudent and skilful management, and for desiring
them to proceed in such manner as they should think most proper for the
interest and advantage of the corporation. Mr. Hungerford, who had
rendered himself very conspicuous in the House of Commons for his zeal in
behalf of the South-Sea company, and who was shrewdly suspected to have
been a considerable gainer by knowing the right time to sell out, was very
magniloquent on this occasion. He said that he had seen the rise and fall,
the decay and resurrection of many communities of this nature, but that,
in his opinion, none had ever performed such wonderful things in so short
a time as the South-Sea company. They had done more than the crown, the
pulpit, or the bench could do. They had reconciled all parties in one
common interest; they had laid asleep, if not wholly extinguished, all the
domestic jars and animosities of the nation. By the rise of their stock,
monied men had vastly increased their fortunes; country gentlemen had seen
the value of their lands doubled and trebled in their hands. They had at
the same time done good to the Church, not a few of the reverend clergy
having got great sums by the project. In short, they had enriched the
whole nation, and he hoped they had not forgotten themselves. There was
some hissing at the latter part of this speech, which for the extravagance
of its eulogy was not far removed from satire; but the directors and their
friends, and all the winners in the room, applauded vehemently. The Duke
of Portland spoke in a similar strain, and expressed his great wonder why
any body should be dissatisfied; of course, he was a winner by his
speculations, and in a condition similar to that of the fat alderman in
_Joe Miller's Jests_, who, whenever he had eaten a good dinner, folded his
hands upon his paunch, and expressed his doubts whether there could be a
hungry man in the world.
[Illustration: MR. SECRETARY CRAGGS.]
Several resolutions were passed at this meeting, but they had no effect
upon the public. Upon the very same evening the stock fell to six hundred
and forty, and on the morrow to five hundred and forty. Day after day it
continued to fall, until it was as low as four hundred. In a letter dated
September 13th, from Mr. Broderick, M.P., to Lord Chancellor Middleton,
and published in Coxe's _Walpole_, the former says: "Various are the
conjectures why the South-Sea directors have suffered the cloud to break
so early. I made no doubt but they would do so when they found it to their
advantage. They have stretched credit so far beyond what it would bear,
that specie proves insufficient to support it. Their most considerable men
have drawn out, securing themselves by the losses of the deluded,
thoughtless numbers, whose understandings have been overruled by avarice
and the hope of making mountains out of mole-hills. Thousands of families
will be reduced to beggary. The consternation is inexpressible--the rage
beyond description, and the case altogether so desperate, that I do not
see any plan or scheme so much as thought of for averting the blow, so
that I cannot pretend to guess what is next to be done." Ten days
afterwards, the stock still falling, he writes: "The company have yet come
to no determination, for they are in such a wood that they know not which
way to turn. By several gentlemen lately come to town, I perceive the very
name of a South-Sea-man grows abominable in every country. A great many
goldsmiths are already run off, and more will daily. I question whether
one-third, nay, one-fourth of them can stand it. From the very beginning,
I founded my judgment of the whole affair upon the unquestionable maxim,
that ten millions (which is more than our running cash) could not
circulate two hundred millions, beyond which our paper credit extended.
That, therefore, whenever that should become doubtful, be the cause what
it would, our noble state machine must inevitably fall to the ground."
On the 12th of September, at the earnest solicitation of Mr. Secretary
Craggs, several conferences were held between the directors of the South
Sea and the directors of the Bank. A report which was circulated, that the
latter had agreed to circulate six millions of the South-Sea company's
bonds, caused the stock to rise to six hundred and seventy; but in the
afternoon, as soon as the report was known to be groundless, the stock
fell again to five hundred and eighty; the next day to five hundred and
seventy, and so gradually to four hundred.[20]
[20] Gay (the poet), in that disastrous year, had a present from
young Craggs of some South-Sea stock, and once supposed
himself to be master of twenty thousand pounds. His friends
persuaded him to sell his share, but he dreamed of dignity
and splendour, and could not hear to obstruct his own
fortune. He was then importuned to sell as much as would
purchase a hundred a year for life, "which," says Fenton,
"will make you sure of a clean shirt and a shoulder of mutton
every day." This counsel was rejected; the profit and
principal were lost, and Gay sunk under the calamity so low
that his life became in danger.--_Johnson's Lives of the
Poets_
The ministry were seriously alarmed at the aspect of affairs. The
directors could not appear in the streets without being insulted;
dangerous riots were every moment apprehended. Despatches were sent off to
the king at Hanover, praying his immediate return. Mr. Walpole, who was
staying at his country seat, was sent for, that he might employ his known
influence with the directors of the Bank of England to induce them to
accept the proposal made by the South-Sea company for circulating a number
of their bonds.
The Bank was very unwilling to mix itself up with the affairs of the
company; it dreaded being involved in calamities which it could not
relieve, and received all overtures with visible reluctance. But the
universal voice of the nation called upon it to come to the rescue. Every
person of note in commercial politics was called in to advise in the
emergency. A rough draft of a contract drawn up by Mr. Walpole was
ultimately adopted as the basis of further negotiations, and the public
alarm abated a little.
On the following day, the 20th of September, a general court of the
South-Sea company was held at Merchant Tailors' Hall, in which resolutions
were carried, empowering the directors to agree with the Bank of England,
or any other persons, to circulate the company's bonds, or make any other
agreement with the Bank which they should think proper. One of the
speakers, a Mr. Pulteney, said it was most surprising to see the
extraordinary panic which had seized upon the people. Men were running to
and fro in alarm and terror, their imaginations filled with some great
calamity, the form and dimensions of which nobody knew:
"Black it stood as night--
Fierce as ten furies--terrible as hell."
At a general court of the Bank of England held two days afterwards, the
governor informed them of the several meetings that had been held on the
affairs of the South-Sea company, adding that the directors had not yet
thought fit to come to any decision upon the matter. A resolution was then
proposed, and carried without a dissentient voice, empowering the
directors to agree with those of the South Sea to circulate their bonds,
to what sum, and upon what terms, and for what time, they might think
proper.
Thus both parties were at liberty to act as they might judge best for the
public interest. Books were opened at the Bank for a subscription of three
millions for the support of public credit, on the usual terms of 15l. per
cent deposit, 3l. per cent premium, and 5l. per cent interest. So great
was the concourse of people in the early part of the morning, all eagerly
bringing their money, that it was thought the subscription would be filled
that day; but before noon, the tide turned. In spite of all that could be
done to prevent it, the South-Sea company's stock fell rapidly. Their
bonds were in such discredit, that a run commenced upon the most eminent
goldsmiths and bankers, some of whom, having lent out great sums upon
South-Sea stock, were obliged to shut up their shops and abscond. The
Sword-blade company, who had hitherto been the chief cashiers of the
South-Sea company, stopped payment. This being looked upon as but the
beginning of evil, occasioned a great run upon the Bank, who were now
obliged to pay out money much faster than they had received it upon the
subscription in the morning. The day succeeding was a holiday (the 29th of
September), and the Bank had a little breathing time. They bore up against
the storm; but their former rivals, the South-Sea company, were wrecked
upon it. Their stock fell to one hundred and fifty, and gradually, after
various fluctuations, to one hundred and thirty-five.
The Bank, finding they were not able to restore public confidence, and
stem the tide of ruin, without running the risk of being swept away with
those they intended to save, declined to carry out the agreement into
which they had partially entered. They were under no obligation whatever
to continue; for the so-called Bank contract was nothing more than the
rough draught of an agreement, in which blanks had been left for several
important particulars, and which contained no penalty for their secession.
"And thus," to use the words of the Parliamentary History, "were seen, in
the space of eight months, the rise, progress, and fall of that mighty
fabric, which, being wound up by mysterious springs to a wonderful height,
had fixed the eyes and expectations of all Europe, but whose foundation,
being fraud, illusion, credulity, and infatuation, fell to the ground as
soon as the artful management of its directors was discovered."
In the hey-day of its blood, during the progress of this dangerous
delusion, the manners of the nation became sensibly corrupted. The
parliamentary inquiry, set on foot to discover the delinquents, disclosed
scenes of infamy, disgraceful alike to the morals of the offenders and the
intellects of the people among whom they had arisen. It is a deeply
interesting study to investigate all the evils that were the result.
Nations, like individuals, cannot become desperate gamblers with impunity.
Punishment is sure to overtake them sooner or later. A celebrated
writer[21] is quite wrong when he says, "that such an era as this is the
most unfavourable for a historian; that no reader of sentiment and
imagination can be entertained or interested by a detail of transactions
such as these, which admit of no warmth, no colouring, no embellishment; a
detail of which only serves to exhibit an inanimate picture of tasteless
vice and mean degeneracy." On the contrary,--and Smollett might have
discovered it, if he had been in the humour,--the subject is capable of
inspiring as much interest as even a novellist can desire. Is there no
warmth in the despair of a plundered people?--no life and animation in the
picture which might be drawn of the woes of hundreds of impoverished and
ruined families? of the wealthy of yesterday become the beggars of to-day?
of the powerful and influential changed into exiles and outcasts, and the
voice of self-reproach and imprecation resounding from every corner of the
land? Is it a dull or uninstructive picture to see a whole people shaking
suddenly off the trammels of reason, and running wild after a golden
vision, refusing obstinately to believe that it is not real, till, like a
deluded hind running after an _ignis fatuus_, they are plunged into a
quagmire? But in this false spirit has history too often been written. The
intrigues of unworthy courtiers to gain the favour of still more unworthy
kings, or the records of murderous battles and sieges, have been dilated
on, and told over and over again, with all the eloquence of style and all
the charms of fancy; while the circumstances which have most deeply
affected the morals and welfare of the people have been passed over with
but slight notice, as dry and dull, and capable of neither warmth nor
colouring.
[21] Smollett.
[Illustration: CARICATURE.[22]]
[22] Caricature, copied from _Bubblers' Medley_, published by
Carrington Bowles.
During the progress of this famous bubble, England presented a singular
spectacle. The public mind was in a state of unwholesome fermentation. Men
were no longer satisfied with the slow but sure profits of cautious
industry. The hope of boundless wealth for the morrow made them heedless
and extravagant for to-day. A luxury, till then unheard-of, was
introduced, bringing in its train a corresponding laxity of morals. The
over-bearing insolence of ignorant men, who had arisen to sudden wealth by
successful gambling, made men of true gentility of mind and manners blush
that gold should have power to raise the unworthy in the scale of society.
The haughtiness of some of these "cyphering cits," as they were termed by
Sir Richard Steele, was remembered against them in the day of their
adversity. In the parliamentary inquiry, many of the directors suffered
more for their insolence than for their peculation. One of them, who, in
the full-blown pride of an ignorant rich man, had said that he would feed
his horse upon gold, was reduced almost to bread and water for himself;
every haughty look, every overbearing speech, was set down, and repaid
them a hundredfold in poverty and humiliation.
The state of matters all over the country was so alarming, that George I.
shortened his intended stay in Hanover, and returned in all haste to
England. He arrived on the 11th of November, and parliament was summoned
to meet on the 8th of December. In the mean time, public meetings were
held in every considerable town of the empire, at which petitions were
adopted, praying the vengeance of the legislature upon the South-Sea
directors, who, by their fraudulent practices, had brought the nation to
the brink of ruin. Nobody seemed to imagine that the nation itself was as
culpable as the South-Sea company. Nobody blamed the credulity and avarice
of the people,--the degrading lust of gain, which had swallowed up every
nobler quality in the national character, or the infatuation which had
made the multitude run their heads with such frantic eagerness into the
net held out for them by scheming projectors. These things were never
mentioned. The people were a simple, honest, hard-working people, ruined
by a gang of robbers, who were to be hanged, drawn, and quartered without
mercy.
This was the almost unanimous feeling of the country. The two Houses of
Parliament were not more reasonable. Before the guilt of the South-Sea
directors was known, punishment was the only cry. The king, in his speech
from the throne, expressed his hope that they would remember that all
their prudence, temper, and resolution were necessary to find out and
apply the proper remedy for their misfortunes. In the debate on the answer
to the address, several speakers indulged in the most violent invectives
against the directors of the South-Sea project. The Lord Molesworth was
particularly vehement. "It had been said by some, that there was no law to
punish the directors of the South-Sea company, who were justly looked upon
as the authors of the present misfortunes of the state. In his opinion,
they ought upon this occasion to follow the example of the ancient Romans,
who, having no law against parricide, because their legislators supposed
no son could be so unnaturally wicked as to embrue his hands in his
father's blood, made a law to punish this heinous crime as soon as it was
committed. They adjudged the guilty wretch to be sown in a sack, and
thrown alive into the Tiber. He looked upon the contrivers and executors
of the villanous South-Sea scheme as the parricides of their country, and
should be satisfied to see them tied in like manner in sacks, and thrown
into the Thames." Other members spoke with as much want of temper and
discretion. Mr. Walpole was more moderate. He recommended that their first
care should be to restore public credit. "If the city of London were on
fire, all wise men would aid in extinguishing the flames, and preventing
the spread of the conflagration, before they inquired after the incendiaries.
Public credit had received a dangerous wound, and lay bleeding, and they
ought to apply a speedy remedy to it. It was time enough to punish the
assassin afterwards." On the 9th of December an address, in answer to his
majesty's speech, was agreed upon, after an amendment, which was carried
without a division, that words should be added expressive of the
determination of the house not only to seek a remedy for the national
distresses, but to punish the authors of them.
[Illustration: BRITANNIA STRIPT BY A SOUTH-SEA DIRECTOR.[23]]
[23] Britannia stript by a South-Sea Director. From _Het groote
Tafereel der Dwaasheid_.
The inquiry proceeded rapidly. The directors were ordered to lay before
the house a full account of all their proceedings. Resolutions were passed
to the effect that the calamity was mainly owing to the vile arts of
stock-jobbers, and that nothing could tend more to the reestablishment of
public credit than a law to prevent this infamous practice. Mr. Walpole
then rose, and said, that "as he had previously hinted, he had spent some
time upon a scheme for restoring public credit, but that the execution of
it depending upon a position which had been laid down as fundamental, he
thought it proper, before he opened out his scheme, to be informed whether
he might rely upon that foundation. It was, whether the subscription of
public debts and encumbrances, money subscriptions, and other contracts,
made with the South-Sea company, should remain in the present state?" This
question occasioned an animated debate. It was finally agreed, by a
majority of 259 against 117, that all these contracts should remain in
their present state, unless altered for the relief of the proprietors by a
general court of the South-Sea company, or set aside by due course of law.
On the following day, Mr. Walpole laid before a committee of the whole
house his scheme for the restoration of public credit, which was, in
substance, to engraft 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 brought in under the superintendence of Mr. Walpole, and safely
carried through both Houses of Parliament.
A bill was at the same time brought in for restraining the South-Sea
directors, governor, sub-governor, treasurer, cashier, and clerks from
leaving the kingdom for a twelvemonth, and for discovering their estates
and effects, and preventing them from transporting or alienating the same.
All the most influential members of the House supported the bill. Mr.
Shippen, seeing Mr. Secretary Craggs in his place, and believing the
injurious rumours that were afloat of that minister's conduct in the
South-Sea business, determined to touch him to the quick. He said, he was
glad to see a British House of Commons resuming its pristine vigour and
spirit, and acting with so much unanimity for the public good. It was
necessary to secure the persons and estates of the South-Sea directors and
their officers; "but," he added, looking fixedly at Mr. Craggs as he
spoke, "there were other men in high station, whom, in time, he would not
be afraid to name, who were no less guilty than the directors." Mr. Craggs
arose in great wrath, and said, that if the innuendo were directed against
him, he was ready to give satisfaction to any man who questioned him,
either in the House or out of it. Loud cries of order immediately arose on
every side. In the midst of the uproar, Lord Molesworth got up, and
expressed his wonder at the boldness of Mr. Craggs in challenging the
whole House of Commons. He, Lord Molesworth, though somewhat old, past
sixty, would answer Mr. Craggs whatever he had to say in the House, and he
trusted there were plenty of young men beside him, who would not be afraid
to look Mr. Craggs in the face out of the House. The cries of order again
resounded from every side; the members arose simultaneously; every body
seemed to be vociferating at once. The speaker in vain called order. The
confusion lasted several minutes, during which Lord Molesworth and Mr.
Craggs were almost the only members who kept their seats. At last, the
call for Mr. Craggs became so violent, that he thought proper to submit to
the universal feeling of the House, and explain his unparliamentary
expression. He said, that by giving satisfaction to the impugners of his
conduct in that House, he did not mean that he would fight, but that he
would explain his conduct. Here the matter ended, and the House proceeded
to debate in what manner they should conduct their inquiry into the
affairs of the South-Sea company, whether in a grand or a select
committee. Ultimately, a secret committee of thirteen was appointed, with
power to send for persons, papers, and records.
The Lords were as zealous and as hasty as the Commons. The Bishop of
Rochester said the scheme had been like a pestilence. The Duke of Wharton
said the House ought to shew no respect of persons; that, for his part, he
would give up the dearest friend he had, if he had been engaged in the
project. The nation had been plundered in a most shameful and flagrant
manner, and he would go as far as any body in the punishment of the
offenders. Lord Stanhope said, that every farthing possessed by the
criminals, whether directors or not directors, ought to be confiscated, to
make good the public losses.
During all this time the public excitement was extreme. We learn from
Coxe's _Walpole_, that the very name of a South-Sea director was thought
to be synonymous with every species of fraud and villany. Petitions from
counties, cities, and boroughs, in all parts of the kingdom, were
presented, crying for the justice due to an injured nation and the
punishment of the villanous peculators. Those moderate men, who would not
go to extreme lengths, even in the punishment of the guilty, were accused
of being accomplices, were exposed to repeated insults and virulent
invectives, and devoted, both in anonymous letters and public writings, to
the speedy vengeance of an injured people. The accusations against Mr.
Aislabie, Chancellor of the Exchequer, and Mr. Craggs, another member of
the ministry, were so loud, that the House of Lords resolved to proceed at
once into the investigation concerning them. It was ordered, on the 21st
of January, that all brokers concerned in the South-Sea scheme should lay
before the House an account of the stock or subscriptions bought or sold
by them for any of the officers of the Treasury or Exchequer, or in trust
for any of them, since Michaelmas 1719. When this account was delivered,
it appeared that large quantities of stock had been transferred to the use
of Mr. Aislabie. Five of the South-Sea directors, including Mr. Edward
Gibbon, the grandfather of the celebrated historian, were ordered into the
custody of the black rod. Upon a motion made by Earl Stanhope, it was
unanimously resolved, that the taking in or giving credit for stock
without a valuable consideration actually paid or sufficiently secured; or
the purchasing stock by any director or agent of the South-Sea company,
for the use or benefit of any member of the administration, or any member
of either House of Parliament, during such time as the South-Sea bill was
yet pending in parliament, was a notorious and dangerous corruption.
Another resolution was passed a few days afterwards, to the effect that
several of the directors and officers of the company having, in a
clandestine manner, sold their own stock to the company, had been guilty
of a notorious fraud and breach of trust, and had thereby mainly caused
the unhappy turn of affairs that had so much affected public credit. Mr.
Aislabie resigned his office as Chancellor of the Exchequer, and absented
himself from parliament, until the formal inquiry into his individual
guilt was brought under the consideration of the legislature.
In the mean time, Knight, the treasurer of the company, and who was
entrusted with all the dangerous secrets of the dishonest directors,
packed up his books and documents, and made his escape from the country.
He embarked in disguise, in a small boat on the river, and proceeding to a
vessel hired for the purpose, was safely conveyed to Calais. The Committee
of Secrecy informed the House of the circumstance, when it was resolved
unanimously that two addresses should be presented to the king; the first
praying that he would issue a proclamation offering a reward for the
apprehension of Knight; and the second, that he would give immediate
orders to stop the ports, and to take effectual care of the coasts, to
prevent the said Knight, or any other officers of the South-Sea company,
from escaping out of the kingdom. The ink was hardly dry upon these
addresses before they were carried to the king by Mr. Methuen, deputed by
the House for that purpose. The same evening a royal proclamation was
issued, offering a reward of two thousand pounds for the apprehension of
Knight. The Commons ordered the doors of the House to be locked, and the
keys to be placed on the table. General Ross, one of the members of the
Committee of Secrecy, acquainted them that they had already discovered a
train of the deepest villany and fraud that hell had ever contrived to
ruin a nation, which in due time they would lay before the House. In the
mean time, in order to a further discovery, the Committee thought it
highly necessary to secure the persons of some of the directors and
principal South-Sea officers, and to seize their papers. A motion to this
effect having been made, was carried unanimously. Sir Robert Chaplin, Sir
Theodore Janssen, Mr. Sawbridge, and Mr. F. Eyles, members of the House,
and directors of the South-Sea company, were summoned to appear in their
places, and answer for their corrupt practices. Sir Theodore Janssen and
Mr. Sawbridge answered to their names, and endeavoured to exculpate
themselves. The House heard them patiently, and then ordered them to
withdraw. A motion was then made, and carried _nemine contradicente_, that
they had been guilty of a notorious breach of trust--had occasioned much
loss to great numbers of his majesty's subjects, and had highly prejudiced
the public credit. It was then ordered that, for their offence, they
should be expelled the House, and taken into the custody of the
sergeant-at-arms. Sir Robert Chaplin and Mr. Eyles, attending in their
places four days afterwards, were also expelled the House. It was resolved
at the same time to address the king to give directions to his ministers
at foreign courts to make application for Knight, that he might be
delivered up to the English authorities, in case he took refuge in any of
their dominions. The king at once agreed, and messengers were despatched
to all parts of the continent the same night.
Among the directors taken into custody was Sir John Blunt, the man whom
popular opinion has generally accused of having been the original author
and father of the scheme. This man, we are informed by Pope, in his
epistle to Allen Lord Bathurst, was a dissenter, of a most religious
deportment, and professed to be a great believer.[24] He constantly
declaimed against the luxury and corruption of the age, the partiality of
parliaments, and the misery of party spirit. He was particularly eloquent
against avarice in great and noble persons. He was originally a scrivener,
and afterwards became, not only a director, but the most active manager of
the South-Sea company. Whether it was during his career in this capacity
that he first began to declaim against the avarice of the great, we are
not informed. He certainly must have seen enough of it to justify his
severest anathema; but if the preacher had himself been free from the vice
he condemned, his declamations would have had a better effect. He was
brought up in custody to the bar of the House of Lords, and underwent a
long examination. He refused to answer several important questions. He
said he had been examined already by a committee of the House of Commons,
and as he did not remember his answers, and might contradict himself, he
refused to answer before another tribunal. This declaration, in itself an
indirect proof of guilt, occasioned some commotion in the House. He was
again asked peremptorily whether he had ever sold any portion of the stock
to any member of the administration, or any member of either House of
Parliament, to facilitate the passing of the bill. He again declined to
answer. He was anxious, he said, to treat the House with all possible
respect, but he thought it hard to be compelled to accuse himself. After
several ineffectual attempts to refresh his memory, he was directed to
withdraw. A violent discussion ensued between the friends and opponents of
the ministry. It was asserted that the administration were no strangers to
the convenient taciturnity of Sir John Blunt. The Duke of Wharton made a
reflection upon the Earl Stanhope, which the latter warmly resented. He
spoke under great excitement, and with such vehemence as to cause a sudden
determination of blood to the head. He felt himself so ill that he was
obliged to leave the House and retire to his chamber. He was cupped
immediately, and also let blood on the following morning, but with slight
relief. The fatal result was not anticipated. Towards evening he became
drowsy, and turning himself on his face, expired. The sudden death of this
statesman caused great grief to the nation. George I. was exceedingly
affected, and shut himself up for some hours in his closet, inconsolable
for his loss.
[24] "'God cannot love,' says Blunt, with tearless eyes,
'The wretch he starves, and piously denies.' . . .
Much-injur'd Blunt! why bears he Britain's hate?
A wizard told him in these words our fate:
'At length corruption, like a gen'ral flood,
So long by watchful ministers withstood,
Shall deluge all; and av'rice, creeping on,
Spread like a low-born mist, and blot the sun;
Statesman and patriot ply alike the stocks,
Peeress and butler share alike the box,
And judges job, and bishops bite the Town,
And mighty dukes pack cards for half-a-crown:
See Britain sunk in Lucre's forbid charms,
And France reveng'd of Ann's and Edward's arms!'
'Twas no court-badge, great Scriv'ner! fir'd thy brain,
Nor lordly luxury, nor city gain:
No, 'twas thy righteous end, asham'd to see
Senates degen'rate, patriots disagree,
And nobly wishing party-rage to cease,
To buy both sides, and give thy country peace."
_Pope's Epistle to Allen Lord Bathurst_.
Knight, the treasurer of the company, was apprehended at Tirlemont, near
Liege, by one of the secretaries of Mr. Leathes, the British resident at
Brussels, and lodged in the citadel of Antwerp. Repeated applications were
made to the court of Austria to deliver him up, but in vain. Knight threw
himself upon the protection of the states of Brabant, and demanded to be
tried in that country. It was a privilege granted to the states of Brabant
by one of the articles of the _Joyeuse Entrée_, that every criminal
apprehended in that country should be tried in that country. The states
insisted on their privilege, and refused to deliver Knight to the British
authorities. The latter did not cease their solicitations; but in the mean
time, Knight escaped from the citadel.
[Illustration: BRABANT SCREEN.[25]]
[25] The Brabant Screen. This caricature represents the Duchess of
Kendal behind the "Brabant Screen," supplying Mr. Knight with
money to facilitate his escape; and is copied from a rare
print of the time, in the collection of E. Hawkins, Esq.
F.S.A.
On the 16th of February the Committee of Secrecy made their first report
to the House. They stated that their inquiry had been attended with
numerous difficulties and embarrassments; every one they had examined had
endeavoured, as far as in him lay, to defeat the ends of justice. 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 name of
the stockholders. There were frequent erasures and alterations, and in
some of the books leaves were torn out. They also found that some books of
great importance had been destroyed altogether, and that some had been
taken away or secreted. At the very entrance into their inquiry, they had
observed that the matters referred to them were of great variety and
extent. Many persons had been entrusted with various parts in the
execution of the law, and under colour thereof had acted in an
unwarrantable manner, in disposing of the properties of many thousands of
persons amounting to many millions of money. They discovered that, before
the South-Sea Act was passed, there was an entry in the company's books of
the sum of 1,259,325l., upon account of stock stated to have been sold to
the amount of 574,500l. 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 account 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 was not in possession of such a quantity of stock,
having in their own right only a small quantity, not exceeding thirty
thousand pounds at the utmost. Pursuing the inquiry, they found that this
amount of stock was to be esteemed as taken in 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 to 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 been chiefly at the disposal of Sir John
Blunt, Mr. Gibbon, and Mr. Knight, was distributed among several members
of the government and their connexions, by way of bribe, to facilitate the
passing of the bill. To the Earl of Sunderland was assigned 50,000l. of
this stock; to the Duchess of Kendal, 10,000l.; to the Countess of Platen,
10,000l.; to her two nieces, 10,000l.; to Mr. Secretary Craggs, 30,000l.;
to Mr. Charles Stanhope (one of the secretaries of the Treasury),
10,000l.; to the Sword-blade company, 50,000l. It also appeared that Mr.
Stanhope had received the enormous sum of 250,000l. 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. Aislabie, the Chancellor of the Exchequer, had made profits
still more abominable. He had an account with the same firm, who were also
South-Sea directors, to the amount of 794,451l. He had, besides, advised
the company to make their second subscription one million and a half,
instead of a million, by their own authority, and without any warrant. The
third subscription had been conducted in a manner as disgraceful. Mr.
Aislabie's name was down for 70,000l.; Mr. Craggs, senior, for 659,000l.;
the Earl of Sunderland's for 160,000l.; and Mr. Stanhope for 47,000l. This
report was succeeded by six others, less important. At the end of the
last, the committee declared, that the absence of Knight, who had been
principally entrusted, prevented them from carrying on their inquiries.
The first report was ordered to be printed, and taken into consideration
on the next day but one succeeding. After a very angry and animated
debate, a series of resolutions were agreed to, condemnatory of the
conduct of the directors, of the members of the parliament and of the
administration concerned with them; and declaring that they ought, each
and all, to make satisfaction out of their own estates for the injury they
had done the public. Their practices were declared to be corrupt,
infamous, and dangerous; and a bill was ordered to be brought in for the
relief of the unhappy sufferers.
[Illustration: BONFIRES ON TOWER HILL]
Mr. Charles Stanhope was the first person brought to account for his share
in these transactions. He urged in his defence that, for some years past,
he had lodged all the money he was possessed of in Mr. Knight's hands, and
whatever stock Mr. Knight had taken in for him, he had paid a valuable
consideration for it. As for the stock that had been bought for him by
Turner, Caswall, and Co., he knew nothing about it. Whatever had been done
in that matter was done without his authority, and he could not be
responsible for it. Turner and Co. took the latter charge upon themselves;
but it was notorious to every unbiassed and unprejudiced person that Mr.
Stanhope was a gainer of the 250,000l. which lay in the hands of that firm
to his credit. He was, however, acquitted by a majority of three only. The
greatest exertions were made to screen him. Lord Stanhope, the son of the
Earl of Chesterfield, went round to the wavering members, using all the
eloquence he was possessed of to induce them either to vote for the
acquittal, or to absent themselves from the House. Many weak-headed
country gentlemen were led astray by his persuasions, and the result was
as already stated. The acquittal caused the greatest discontent throughout
the country. Mobs of a menacing character assembled in different parts of
London; fears of riots were generally entertained, especially as the
examination of a still greater delinquent was expected by many to have a
similar termination. Mr. Aislabie, whose high office and deep
responsibilities should have kept him honest, even had native principle
been insufficient, was very justly regarded as perhaps the greatest
criminal of all. His case was entered into on the day succeeding the
acquittal of Mr. Stanhope. Great excitement prevailed, and the lobbies and
avenues of the House were beset by crowds, impatient to know the result.
The debate lasted the whole day. Mr. Aislabie found few friends: his guilt
was so apparent and so heinous that nobody had courage to stand up in his
favour. It was finally resolved, without a dissentient voice, that Mr.
Aislabie had encouraged and promoted the destructive execution of the
South-Sea scheme with a view to his own exorbitant profit, and had
combined with the directors in their pernicious practices, to the ruin of
the public trade and credit of the kingdom: that he should for his
offences be ignominiously expelled from the House of Commons, and
committed a close prisoner to the Tower of London; that he should be
restrained from going out of the kingdom for a whole year, or till the end
of the next session of Parliament; and that he should make out a correct
account of all his estate, in order that it might be applied to the relief
of those who had suffered by his mal-practices.
This verdict caused the greatest joy. Though it was delivered at half-past
twelve at night, it soon spread over the city. Several persons illuminated
their houses in token of their joy. On the following day, when Mr.
Aislabie was conveyed to the Tower, the mob assembled on Tower-hill with
the intention of hooting and pelting him. Not succeeding in this, they
kindled a large bonfire, and danced around it in the exuberance of their
delight. Several bonfires were made in other places; London presented the
appearance of a holiday, and people congratulated one another as if they
had just escaped from some great calamity. The rage upon the acquittal of
Mr. Stanhope had grown to such a height that none could tell where it
would have ended, had Mr. Aislabie met with the like indulgence.
To increase the public satisfaction, Sir George Caswall, of the firm of
Turner, Caswall, and Co., was expelled from the House on the following
day, committed to the Tower, and ordered to refund the sum of 250,000l.
[Illustration: EARL OF SUNDERLAND.]
That part of the report of the Committee of Secrecy which related to the
Earl of Sunderland was next taken into consideration. Every effort was
made to clear his lordship from the imputation. As the case against him
rested chiefly on the evidence extorted from Sir John Blunt, great pains
were taken to make it appear that Sir John's word was not to be believed,
especially in a matter affecting the honour of a peer and privy
councillor. All the friends of the ministry rallied around the earl, it
being generally reported that a verdict of guilty against him would bring
a Tory ministry into power. He was eventually acquitted by a majority of
233 against 172; but the country was convinced of his guilt. The greatest
indignation was every where expressed, and menacing mobs again assembled
in London. Happily no disturbance took place.
This was the day on which Mr. Craggs the elder expired. The morrow had
been appointed for the consideration of his case. It was very generally
believed that he had poisoned himself. It appeared, however, that grief
for the loss of his son, one of the secretaries of the Treasury, who had
died five weeks previously of the small-pox, preyed much on his mind. For
this son, dearly beloved, he had been amassing vast heaps of riches: he
had been getting money, but not honestly; and he for whose sake he had
bartered his honour and sullied his fame was now no more. The dread of
further exposure increased his trouble of mind, and ultimately brought on
an apoplectic fit, in which he expired. He left a fortune of a million and
a half, which was afterwards confiscated for the benefit of the sufferers
by the unhappy delusion he had been so mainly instrumental in raising.
One by one the case of every director of the company was taken into
consideration. A sum amounting to two millions and fourteen thousand
pounds was confiscated from their estates towards repairing the mischief
they had done, each man being allowed a certain residue in proportion to
his conduct and circumstances, with which he might begin the world anew.
Sir John Blunt was only allowed 5,000l. out of his fortune of upwards of
183,000l.; Sir John Fellows was allowed 10,000l. out of 243,000l.; Sir
Theodore Janssen, 50,000l. out of 243,000l.; Mr. Edward Gibbon, 10,000l.
out of 106,000l.; Sir John Lambert, 5000l. out of 72,000l. Others, less
deeply involved, were treated with greater liberality. Gibbon, the
historian, whose grandfather was the Mr. Edward Gibbon so severely
mulcted, has given, in the _Memoirs of his Life and Writings_, an
interesting account of the proceedings in parliament at this time. He owns
that he is not an unprejudiced witness; but, as all the writers from which
it is possible to extract any notice of the proceedings of these
disastrous years were prejudiced on the other side, the statements of the
great historian become of additional value. If only on the principle _audi
alteram partem_, his opinion is entitled to consideration. "In the year
1716," he says, "my grandfather was elected one of the directors of the
South-Sea company, and his books exhibited the proof that before his
acceptance of that fatal office, he had acquired an independent fortune of
60,000l. But his fortune was overwhelmed in the shipwreck of the year
1720, and the labours of thirty years were blasted in a single day. Of the
use or abuse of the South-Sea s
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