[Sidenote: The South Sea Bubble.]

At that period, the English nation were intoxicated and led astray by one of those great commercial delusions which so often take place in all civilized countries. No mania ever was more marked, more universal, and more fatal than that of the South Sea Company. The bubble had turned the heads of politicians, merchants, and farmers; all cla.s.ses, who had money to invest, took stock in the South Sea Company. The delusion, however, pa.s.sed away; England was left on the brink of bankruptcy, and a master financier was demanded by the nation, to extricate it from the effects of folly and madness. All eyes looked to Sir Robert Walpole, and he did all that financial skill could do, to repair the evils which speculation and gambling had caused.

The desire for sudden wealth is one of the most common pa.s.sions of our nature, and has given rise to more delusions than religious fanaticism, or pa.s.sion for military glory. The South Sea bubble was kindred to that of John Law, who was the author of the Mississippi Scheme, which nearly ruined France in the reign of Louis XV., and which was encouraged by the Duke of Orleans, as a means of paying off the national debt.

[Sidenote: The South Sea Company.]

The wars of England had created a national debt, under the administration of G.o.dolphin and Marlborough; but which was not so large but that hopes were entertained of redeeming it. Walpole proposed to pay it off by a sinking fund; but this idea, not very popular, was abandoned. It was then the custom for government to borrow of corporations, rather than of bankers, because the science of brokerage was not then understood, and because no individuals were sufficiently rich to aid materially an embarra.s.sed administration. As a remuneration, companies were indulged with certain commercial advantages. As these advantages enabled companies to become rich, the nation always found it easy to borrow. During the war of the Spanish Succession, the prime minister, Harley, afterwards Earl of Oxford, in order to raise money, projected the South Sea Company. This was in 1710, and the public debt was ten million pounds sterling, thought at that time to be insupportable. The interest on that debt was six per cent. In order to liquidate the debt, Oxford made the duties on wines, tobacco, India goods, silks, and a few other articles, permanent. And, to allure the public creditor, great advantages were given to the new company, and money was borrowed of it at five per cent. This gain of one per cent., by money borrowed from the company, was to const.i.tute a sinking fund to pay the debt.

But the necessities of the nation increased so rapidly, that a leading politician of the day, Sir John Blount, proposed that the South Sea Company should become the sole national creditor, and should loan to the government new sums, at an interest of four per cent. New monopolies were to be given to the company; and it, on the other hand, offered to give a bonus of three million pounds to the government. The Bank of England, jealous of the proposal, offered five millions. The directors of the company then bid seven millions for a charter, nearly enough to pay off the whole redeemable debt of the nation; which, however, could not be redeemed, so long as there were, in addition, irredeemable annuities to the amount of eight hundred thousand pounds yearly. It became, therefore, an object of the government to get rid, in the first place, of these irredeemable annuities; and this could be effected, if the national creditor could be induced to accept of shares in the South Sea Company, instead of his irredeemable annuities, or, as they are now variously called, consols, stocks, and national funds. The capital was not desired; only the interest on capital. So many monopolies and advantages were granted to the company, that the stock rose, and the national creditor was willing to part with his annuities for stock in the company. The offer was, therefore, accepted, and the government got rid of irredeemable annuities, and obtained seven millions besides, but became debtor to the company. A company which could apparently afford to pay so large a bonus to government for its charter, and loan such large sums as the nation needed, in addition, at four per cent., was supposed to be making most enormous profits. Its stock rose rapidly in value. The national creditor hastened to get rid of irredeemable annuities--a national stock which paid five per cent.--in order to buy shares which might pay ten per cent.

[Sidenote: Opposition of Walpole.]

Walpole, then paymaster of the forces, opposed the scheme of Blount with all his might, showed that the acceptance of the company's proposal would countenance stockjobbing, would divert industry from its customary channels, and would hold out a dangerous lure to the unsuspecting to part with real for imaginary property. He showed the misery and confusion which existed in France from the adoption of similar measures, and proved that the whole success of the scheme must depend on the rise of the company's stock; that, if there were no rise, the company could not afford the bonus, and would fail, and the obligation of the nation remain as before. But his reasonings were of no avail. All cla.s.ses were infatuated. All people speculated in the South Sea stock. And, for a while, all people rejoiced; for, as long as the stock continued to rise, all people were gainers.

And the stock rose rapidly. It soon reached three hundred per cent.

above the original par value, and this in consequence of the promise of great dividends. All hastened to buy such lucrative property. The public creditor willingly gave up three hundred pounds of irredeemable stock for one hundred pounds of the company's stock.

[Sidenote: Mania for Speculation.]

And this would have been well, had there been a moral certainty of the stockholder receiving a dividend of twenty per cent. But there was not this certainty, nor even a chance of it. Still, in consequence of the great dividends promised, even as high as fifty per cent., the stock gradually rose to one thousand per cent. Such was the general mania.

And such was the extent of it, that thirty-seven millions of pounds sterling were subscribed on the company's books.

And the rage for speculation extended to all other kinds of property; and all sorts of companies were formed, some of the shares of which were at a premium of two thousand per cent. There were companies formed for fisheries, companies for making salt, for making oil, for smelting metals, for improving the breed of horses, for the planting of madder, for building ships against pirates, for the importation of jacka.s.ses, for fattening hogs, for wheels of perpetual motion, for insuring masters against losses from servants. There was one company for carrying on an undertaking of great advantage, but no one knew for what. The subscriber, by paying two guineas as a deposit, was to have one hundred pounds per annum for every hundred subscribed. It was declared, that, in a month, the particulars were to be laid open, and the remainder of the subscription money was then to be paid.

Notwithstanding this barefaced, swindling scheme, two thousand pounds were received one morning as a deposit. The next day, the proprietor was not to be found.

Now, in order to stop these absurd speculations, and yet to monopolize all the gambling in the kingdom, the directors of the South Sea Company obtained an act from parliament, empowering them to prosecute all the various bubble companies that were projected. In a few days, all these bubbles burst. None were found to be buyers. Stock fell to nothing.

[Sidenote: Bursting of the South Sea Bubble.]

But the South Sea Company made a blunder. The moral effect of the bursting of so many bubbles was to open the eyes of the nation to the greatest bubble of all. The credit of the South Sea Company declined.

Stocks fell from one thousand per cent to two hundred in a few days.

All wanted to sell, n.o.body to buy. Bankers and merchants failed, and n.o.bles and country gentlemen became impoverished.

In this general distress, Walpole was summoned to power, in older to extricate the nation, on the eve of bankruptcy. He proposed a plan, which was adopted, and which saved the credit of the nation. He ingrafted nine millions of the South Sea stock into the Bank of England, and nine millions more into the East India Company; and government gave up the seven millions of bonus which the company had promised.

By this a.s.sistance, the company was able to fulfil its engagements, although all who purchased stock when it had arisen beyond one hundred per cent. of its original value, lost money. It is strange that the stock, after all, remained at a premium of one hundred per cent.; of course, the original proprietors gained one hundred per cent., and those who paid one hundred per cent. premium lost nothing. But these const.i.tuted a small fraction of the people who had speculated, and who paid from one hundred to nine hundred per cent. premium. Government, too, gained by reducing interest on irredeemable bonds from five to four per cent., although it lost the promised bonus of seven millions.

The South Sea bubble did not destroy the rage for speculation, although it taught many useful truths--that national prosperity is not advanced by stockjobbing; that financiers, however great their genius, generally overreach themselves; that great dividends are connected with great risk; that circ.u.mstances beyond human control will defeat the best-laid plan; that it is better to repose upon the operation of the ordinary laws of trade; and that nothing but strict integrity and industry will succeed in the end. From the time of Sir Robert Walpole, money has seldom been worth, in England, over five per cent., and larger dividends on vested property have generally been succeeded by heavy losses, however plausible the promises and clear the statements of stockjobbers and speculators.

[Sidenote: Enlightened Policy of Walpole.]

After the explosion of the South Sea Company, Walpole became possessed of almost unlimited power. And one of the first objects to which he directed attention, after settling the finances, was the removal of petty restrictions on commerce. He abolished the export duties on one hundred and six articles of British manufacture, and allowed thirty-eight articles of raw material to be imported duty free. This regulation was made to facilitate trade with the colonies, and prevent them from manufacturing; and this regulation accomplished the end desired. Both England and the colonies were enriched. It was doubtless the true policy of British statesmen then, as now, to advance the commercial, manufacturing, and agricultural interests of Great Britain, rather than meddle with foreign wars, or seek glory on the field of battle. The principles of Sir Robert Walpole were essentially pacific; and under his administration, England made a great advance in substantial prosperity. In this policy he surpa.s.sed all the statesmen who preceded or succeeded him, and this const.i.tuted his glory and originality.

But liberal and enlightened as was the general course of Walpole, he still made blunders, and showed occasional illiberality. He caused a fine of one hundred thousand pounds to be inflicted on the Catholics, on the plea that they were a disaffected body. He persecuted Bishop Atterbury, and permitted Bolingbroke, with his restless spirit of intrigue, to return to his country, and to be reinstated in his property and t.i.tles. He flattered the d.u.c.h.ess of Kendall, the mistress of the king, and stooped to all the arts of corruption and bribery.

There never was a period of greater political corruption than during the administration of this minister. Sycophancy, meanness, and hypocrisy were resorted to by the statesmen of the age, who generally sought their own interests rather than the welfare of the nation.

There were, however, exceptions. Townsend, the great rival and coadjutor of Walpole, retired from office with an unsullied fame for integrity and disinterestedness; and Walpole, while he bribed others, did not enrich himself.

King George I. died on the 11th of June, 1727, suddenly, by apoplexy, and was succeeded by his son George II., a man who resembled his father in disposition and character, and was superior to him in knowledge of the English const.i.tution, though both were inclined to steer the British bark by the Hanoverian rudder. Like his father, he was reserved, phlegmatic, cautious, sincere, fond of business, economical, and attached to Whig principles. He was fortunate in his wife, Queen Caroline, one of the most excellent women of the age, learned, religious, charitable, and sensible; the patroness of divines and scholars; fond of discussion on metaphysical subjects, and a correspondent of the distinguished Leibnitz.

The new king disliked Walpole, but could not do without him, and therefore continued him in office. Indeed, the king had the sense to perceive that England was to be governed only by the man in whom the nation had confidence.

[Sidenote: East India Company.]

In 1730, Walpole rechartered the East India Company, the most gigantic monopoly in the history of nations. As early as 1599, an a.s.sociation had been formed in England for trade to the East Indies. This a.s.sociation was made in consequence of the Dutch and Portuguese settlements and enterprises, which aroused the commercial jealousy of England. The capital was sixty-eight thousand pounds. In 1600, Queen Elizabeth gave the company a royal charter. By this charter, the company obtained the right of purchasing land, without limit, in India, and the monopoly of the trade for fifteen years. But the company contended with many obstacles. The first voyage was made by four ships and one pinnace, having on board twenty-eight thousand pounds in bullion, and seven thousand pounds in merchandise, such as tin, cutlery, and gla.s.s.

During the civil wars, the company's affairs were embarra.s.sed, owing to the unsettled state of England. On the accession of Charles II., the company obtained a new charter, which not only confirmed the old privileges, but gave it the power of making peace and war with the native princes of India. The capital stock was increased to one million five hundred thousand pounds.

Much opposition was made by Bolingbroke and the Tories to the recharter of this inst.i.tution; but the ministry carried their point, and a new charter was granted on the condition of the company paying to government two hundred thousand pounds, and reducing the interest of the government debts one per cent. per annum. By this time, the company, although it had not greatly enlarged its jurisdiction in India, had acc.u.mulated great wealth. Its powers and possessions will be more fully treated when the victories of Clive shall be presented.

About this time, the Duke of Newcastle came into the cabinet whose future administration will form the subject of a separate chapter.

[Sidenote: Resignation of Townsend.]

In 1730 also occurred the disagreement between Walpole and Lord Townsend, which ended in the resignation of the latter, a man whose impetuous and frank temper ill fitted him to work with so cautious and non-committal a statesman as his powerful rival. He pa.s.sed the evening of his days in rural pursuits and agricultural experiments, keeping open house, devoting himself to his family and friends, never hankering after the power he had lost, never even revisiting London, and finding his richest solace in literature and simple agricultural pleasures--the pattern of a lofty and cultivated n.o.bleman.

The resignation of Townsend enabled Walpole to take more part in foreign negotiations; and he exerted his talents, like Fleury in France, to preserve the peace of Europe. The peace policy of Walpole ent.i.tles him to the grat.i.tude of his country. More than any other man of his age, he apprehended the true glory and interests of nations.

Had Walpole paid as much attention to the intellectual improvement of his countrymen, as he did to the refinements of material life and to physical progress, he would have merited still higher praises. But he despised learning, and neglected literary men. And they turned against him and his administration, and, by their sarcasm and invective, did much to undermine his power. Pope, Swift, and Gay might have lent him powerful aid by their satirical pen; but he pa.s.sed them by with contemptuous indifference, and they gave to Bolingbroke what they withheld from Walpole.

Next to the pacific policy of the minister, the most noticeable peculiarity of his administration was his zeal to improve the finances. He opposed speculations, and sought a permanent revenue from fixed principles. He regarded the national debt as a great burden, and strove to abolish it; and, when that was found to be impracticable, sought to prevent its further acc.u.mulation. He was not, indeed, always true to his policy; but he pursued it on the whole, consistently. He favored the agricultural interests, and was inclined to raise the necessary revenue by a tax on articles used, rather than by direct taxation on property or income, or articles imported. Hence he is the father of the excise scheme--a scheme still adopted in England, but which would be intolerable in this country. In this scheme, his grand object was to ease the landed proprietor, and to prevent smuggling, by making smuggling no object. But the opposition to the Excise Bill was so great that Sir Robert abandoned it; and this relinquishment of his favorite scheme is one of the most striking peculiarities of his administration. He never pushed matters to extremity. He ever yielded to popular clamor. He perceived that an armed force would be necessary in order to collect the excise, and preferred to yield his cherished measures to run the danger of incurring greater evils than financial embarra.s.sments. His spirit of conciliation, often exercised in the plenitude of power, prolonged his reign. This policy was the result of immense experience and practical knowledge of human nature, of which he was a great master.

[Sidenote: Unpopularity of Walpole.]

But Sir Robert was not allowed to pursue to the end his pacific, any more than his financial policy. The clamors of interested merchants, the violence of party spirit, and the dreams of heroic grandeur on the part of politicians, overcame the repugnance of the minister, and plunged England in a disastrous Spanish war; and a war soon succeeded by that of the Austrian Succession, in which Maria Theresa was the injured, and Frederic the Great the offending party. But this war, which was carried on chiefly during the subsequent administration, will be hereafter alluded to.

Although Walpole was opposed by some of the ablest men in England--by Pulteney, Sir William Windham, and the Lords Chesterfield, Carteret, and Bolingbroke, his power was almost absolute from 1730 to 1740. His most powerful a.s.sistance was derived from Mr. Yorke, afterwards the Lord Chancellor Hardwicke, one of the greatest lawyers that England has produced.

[Sidenote: Decline of his Power.]

In 1740, his power began to decline, and rapidly waned. He lost a powerful friend and protector by the death of Queen Caroline, whose intercessions with the king were ever listened to with respectful consideration. But he had almost insurmountable obstacles to contend with--the distrust of the king, the bitter hatred of the Prince of Wales, the violent opposition of the leading statesmen in parliament, and universal envy. Moreover, he had grown careless and secure. He fancied that no one could rule England but himself. But hatred, opposition, envy, and unsuccessful military operations, forced him from his place. No shipwrecked pilot ever clung to the rudder of a sinking ship with more desperate tenacity than did this once powerful minister to the helm of state. And he did not relinquish it until he was driven from it by the desertion of all his friends, and the general clamor of the people. The king, however, appreciated the value of his services, and created him Earl of Orford, a dignity which had been offered him before, but which, with self-controlling policy, he had unhesitatingly declined. Like Sir Robert Peel in later times, he did not wish to be buried in the House of Lords.

His retirement (1742) amid the beeches and oaks of his country seat was irksome and insipid. He had no taste for history, or science, or elegant literature, or quiet pleasures. His tumultuous public life had engendered other tastes. "I wish," said he to a friend, "I took as much delight in reading as you do. It would alleviate my tedious hours." But the fallen minister, though uneasy and restless, was not bitter or severe. He retained his good humor to the last, and to the last discharged all the rites of an elegant hospitality. Said his enemy, Pope,--

"Seen him I have, but in his happier hour Of social pleasure--ill exchanged for power; Seen him, unc.u.mbered by the venal tribe, Smile without art, and win without a bribe."

He had the habit of "laughing the heart's laugh," which it is only in the power of n.o.ble natures to exercise. His manners were winning, his conversation frank, and his ordinary intercourse divested of vanity and pomp. He had many warm personal friends, and did not enrich himself, as Marlborough did, while he enriched those who served him.

He kept a public table at Houghton, to which all gentlemen in the country had free access. He was fond of hunting and country sports, and had more taste for pictures than for books. He was not what would be called a man of genius or erudition, but had a sound judgment, great sagacity, wonderful self-command, and undoubted patriotism. As a wise and successful ruler, he will long be held in respect, though he will never secure veneration.

It was during the latter years of the administration of Walpole that England was electrified by the preaching of Whitefield and Wesley, and the sect of the Methodists arose, which has exercised a powerful influence on the morals, religion, and social life of England.

[Sidenote: John Wesley.]

John Wesley, who may rank with Augustine, Pelagius, Calvin, Arminius, or Jansen, as the founder of a sect, was demanded by the age in which he lived. Never, since the Reformation, was the state of religion so cold in England. The Established Church had triumphed over all her enemies. Puritanism had ceased to become offensive, and had even become respectable. The age of fox-hunting parsons had commenced, and the clergy were the dependants of great families, easy in their manners, and fond of the pleasures of the table. They were not expected to be very great scholars, or very grave companions. If they read the service with propriety, did not scandalize their cause by gross indulgences, and did not meddle with the two exciting subjects of all ages,--politics and religion,--they were sure of peace and plenty. But their churches were comparatively deserted, and infidel opinions had been long undermining respect for the inst.i.tutions and ministers of religion. Swearing and drunkenness were fashionable vices among the higher cla.s.ses, while low pleasures and lamentable ignorance characterized the people. The dissenting sects were more religious, but were formal and cold. Their ministers preached, too often, a mere technical divinity, or a lax system of ethics. The Independents were inclined to a frigid Arminianism, and the Presbyterians were pa.s.sing through the change from ultra Calvinism to Arianism and Socinianism.

The reformation was not destined to come from Dissenters, but from the bosom of the Established Church, a reformation which bore the same relation to Protestantism as that effected by St. Francis bore to Roman Catholicism in the thirteenth century; a reformation among the poorer cla.s.ses, who did not wish to be separated from the Church Establishment.

[Sidenote: Early Life of Wesley.]

John Wesley belonged to a good family, his father being a respectable clergyman in a market town. He was born in 1703, was educated at Oxford, and for the church. At the age of twenty, he received orders from the Bishop of Oxford, and was, shortly after, chosen fellow of Lincoln College, and then Greek lecturer.