Memoirs of Extraordinary Popular Delusions - Chapters 2-3



      Chapter 2 - 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."

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 western 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 hundredfold
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 22nd 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 2nd 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.

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
stock-jobbers. 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,12*

"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."

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.

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
everywhere. 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.13* 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.

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
foxhunting 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 2,000l. 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 day,
when 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, sailmakers, 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 Burges, 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 leasable 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 of 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.

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 card-maker 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."

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 adulterate brass."

The eight of diamonds celebrated the company for the colonization
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.

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 3rd 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 22nd 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 2nd 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.

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.n 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. 14*

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 writer15* 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 novelist 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.

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.

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 re-establishment 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 ingraft
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,
front 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, ineluding 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 upon 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.16* 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.

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.

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 at 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.

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 to 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.

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 disturbances
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 of 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
scheme, of the guilt or innocence of my grandfather and his
brother directors, I am neither a competent nor a disinterested
judge. Yet the equity of modern times must condemn the violent and
arbitrary proceedings, which would have disgraced the cause of
justice, and rendered injustice still more odious. No sooner had
the nation awakened from its golden dream, than a popular, and
even a parliamentary clamour demanded its victims; but it was
acknowledged on all sides, that the directors, however guilty,
could not be touched by any known laws of the land. The
intemperate notions of Lord Molesworth were not literally acted
on; but a bill of pains and penalties was introduced—a
retro-active statute, to punish the offences which did not exist
at the time they were committed. The legislature restrained the
persons of the directors, imposed an exorbitant security for their
appearance, and marked their character with a previous note of
ignominy. They were compelled to deliver, upon oath, the strict
value of their estates, and were disabled from making any transfer
or alienation of any part of their property. Against a bill of
pains and penalties, it is the common right of every subject to be
heard by his counsel at the bar. They prayed to be heard. Their
prayer was refused, and their oppressors, who required no
evidence, would listen to no defence. It had been at first
proposed, that one-eighth of their respective estates should be
allowed for the future support of the directors; but it was
especially urged that, in the various shades of opulence and
guilt, such a proportion would be too light for many, and for some
might possibly be too heavy. The character and conduct of each man
were separately weighed; but, instead of the calm solemnity of a
judicial inquiry, the fortune and honour of thirty-three
Englishmen were made the topics of hasty conversation, the sport
of a lawless majority; and the basest member of the committee, by
a malicious word, or a silent vote, might indulge his general
spleen or personal animosity. Injury was aggravated by insult, and
insult was embittered by pleasantry. Allowances of 20l. or 1s.
were facetiously moved. A vague report that a director had
formerly been concerned in another project, by which some unknown
persons had lost their money, was admitted as a proof of his
actual guilt. One man was ruined because he had dropped a foolish
speech, that his horses should feed upon gold; another, because he
was grown so proud, that one day, at the Treasury, he had refused
a civil answer to persons much above him. All were condemned,
absent and unheard, in arbitrary fines and forfeitures, which
swept away the greatest part of their substance. Such bold
oppression can scarcely be shielded by the omnipotence of
parliament. My grandfather could not expect to be treated with
more lenity than his companions. His Tory principles and
connexions rendered him obnoxious to the ruling powers. His name
was reported in a suspicious secret. His well-known abilities
could not plead the excuse of ignorance or error. In the first
proceedings against the South-Sea directors, Mr. Gibbon was one of
the first taken into custody, and in the final sentence the
measure of his fine proclaimed him eminently guilty. The total
estimate, which he delivered on oath to the House of Commons,
amounted to 106,543l. 5s. 6d., exclusive of antecedent
settlements. Two different allowances of 15,000l. and of 10,000l.
were moved for Mr. Gibbon; but, on the question being put, it was
carried without a division for the smaller sum. On these ruins,
with the skill and credit of which parliament had not been able to
despoil him, my grandfather, at a mature age, erected the edifice
of a new fortune. The labours of sixteen years were amply
rewarded; and I have reason to believe that the second structure
was not much inferior to the first."

The next consideration of the legislature, after the punishment of
the directors, was to restore public credit. The scheme of Walpole
had been found insufficient, and had fallen into disrepute. A
computation was made of the whole capital stock of the South-Sea
company at the end of the year 1720. It was found to amount to
thirty-seven millions eight hundred thousand pounds, of which the
stock allotted to all the proprietors only amounted to twenty-four
millions five hundred thousand pounds. The remainder of thirteen
millions three hundred thousand pounds belonged to the company in
their corporate capacity, and was the profit they had made by the
national delusion. Upwards of eight millions of this were taken
from the company, and divided among the proprietors and
subscribers generally, making a dividend of about 33l. 6s. 8d. per
cent. This was a great relief. It was further ordered, that such
persons as had borrowed money from the South-Sea company upon
stock actually transferred and pledged at the time of borrowing to
or for the use of the company, should be free from all demands,
upon payment of ten per cent of the sums so borrowed. They had
lent about eleven millions in this manner, at a time when prices
were unnaturally raised; and they now received back one million
one hundred thousand, when prices had sunk to their ordinary
level.

But it was a long time before public credit was thoroughly
restored. Enterprise, like Icarus, had soared too high, and melted
the wax of her wings; like Icarus, she had fallen into a sea, and
learned, while floundering in its waves, that her proper element
was the solid ground. She has never since attempted so high a
flight.

In times of great commercial prosperity there has been a tendency
to over-speculation on several occasions since then. The success
of one project generally produces others of a similar kind.
Popular imitativeness will always, in a trading nation, seize hold
of such successes, and drag a community too anxious for profits
into an abyss from which extrication is difficult. Bubble
companies, of a kind similar to those engendered by the South-Sea
project, lived their little day in the famous year of the panic,
1825. On that occasion, as in 1720, knavery gathered a rich
harvest from cupidity, but both suffered when the day of reckoning
came. The schemes of the year 1836 threatened, at one time,
results as disastrous; but they were happily averted before it was
too late.17*



      Chapter 3 - The Tulipomania

Quis furor ô cives!—Lucan.

THE TULIP,—SO NAMED, it is said, from a Turkish word, signifying a
turban,—was introduced into western Europe about the middle of the
sixteenth century. Conrad Gesner, who claims the merit of having
brought it into repute,—little dreaming of the extraordinary
commotion it was to make in the world,—says that he first saw it
in the year 1559, in a garden at Augsburg, belonging to the
learned Counsellor Herwart, a man very famous in his day for his
collection of rare exotics. The bulbs were sent to this gentleman
by a friend at Constantinople, where the flower had long been a
favourite. In the course of ten or eleven years after this period,
tulips were much sought after by the wealthy, especially in
Holland and Germany. Rich people at Amsterdam sent for the bulbs
direct to Constantinople, and paid the most extravagant prices for
them. The first roots planted in England were brought from Vienna
in 1600. Until the year 1634 the tulip annually increased in
reputation, until it was deemed a proof of bad taste in any man of
fortune to be without a collection of them. Many learned men,
including Pompeius de Angelis and the celebrated Lipsius of
Leyden, the author of the treatise "De Constantia," were
passionately fond of tulips. The rage for possessing them soon
caught the middle classes of society, and merchants and
shopkeepers, even of moderate means, began to vie with each other
in the rarity of these flowers and the preposterous prices they
paid for them. A trader at Harlaem was known to pay one-half of
his fortune for a single root, not with the design of selling it
again at a profit, but to keep in his own conservatory for the
admiration of his acquaintance.

One would suppose that there must have been some great virtue in
this flower to have made it so valuable in the eyes of so prudent
a people as the Dutch; but it has neither the beauty nor the
perfume of the rose—hardly the beauty of the "sweet, sweet-pea;"
neither is it as enduring as either. Cowley, it is true, is loud
in its praise. He says—

"The tulip next appeared, all over gay,
But wanton, full of pride, and full of play;
The world can't shew a dye but here has place;
Nay, by new mixtures, she can change her face;
Purple and gold are both beneath her care,
The richest needlework she loves to wear;
Her only study is to please the eye,
And to outshine the rest in finery."

This, though not very poetical, is the description of a poet.
Beckmann, in his History of Inventions, paints it with more
fidelity, and in prose more pleasing than Cowley's poetry. He
says, "There are few plants which acquire, through accident,
weakness, or disease, so many variegations as the tulip. When
uncultivated, and in its natural state, it is almost of one
colour, has large leaves, and an extraordinarily long stem. When
it has been weakened by cultivation, it becomes more agreeable in
the eyes of the florist. The petals are then paler, smaller, and
more diversified in hue; and the leaves acquire a softer green
colour. Thus this masterpiece of culture, the more beautiful it
turns, grows so much the weaker, so that, with the greatest skill
and most careful attention, it can scarcely be transplanted, or
even kept alive."

Many persons grow insensibly attached to that which gives them a
great deal of trouble, as a mother often loves her sick and
ever-ailing child better than her more healthy offspring. Upon the
same principle we must account for the unmerited encomia lavished
upon these fragile blossoms. In 1634, the rage among the Dutch to
possess them was so great that the ordinary industry of the
country was neglected, and the population, even to its lowest
dregs, embarked in the tulip trade. As the mania increased, prices
augmented, until, in the year 1635, many persons were known to
invest a fortune of 100,000 florins in the purchase of forty
roots. It then became necessary to sell them by their weight in
perits, a small weight less than a grain. A tulip of the species
called Admiral Liefken, weighing 400 perits, was worth 4400
florins; an Admiral Van der Eyck, weighing 446 perits, was worth
1260 florins; a Childer of 106 perits was worth 1615 florins; a
Viceroy of 400 perits, 3000 florins, and, most precious of all, a
Semper Augustus, weighing 200 perits, was thought to be very cheap
at 5500 florins. The latter was much sought after, and even an
inferior bulb might command a price of 2000 florins. It is related
that, at one time, early in 1636, there were only two roots of
this description to be had in all Holland, and those not of the
best. One was in the possession of a dealer in Amsterdam, and the
other in Harlaem. So anxious were the speculators to obtain them
that one person offered the fee-simple of twelve acres of building
ground for the Harlaem tulip. That of Amsterdam was bought for
4600 florins, a new carriage, two grey horses, and a complete suit
of harness. Munting, an industrious author of that day, who wrote
a folio volume of one thousand pages upon the tulipomania, has
preserved the following list of the various articles, and their
value, which were delivered for one single root of the rare
species called the Viceroy:

      florins.
      Two lasts of wheat448
      Four lasts of rye558
      Four fat oxen480
      Eight fat swine240
      Twelve fat sheep120
      Two hogsheads of wine70
      Four tuns of beer32
      Two tons of butter192
      One thousand lbs. of cheese120
      A complete bed100
      A suit of clothes80
      A silver drinking cup60

      2500

People who had been absent from Holland, and whose chance it was
to return when this folly was at its maximum, were sometimes led
into awkward dilemmas by their ignorance. There is an amusing
instance of the kind related in Blainville's Travels. A wealthy
merchant, who prided himself not a little on his rare tulips,
received upon one occasion a very valuable consignment of
merchandise from the Levant. Intelligence of its arrival was
brought him by a sailor, who presented himself for that purpose at
the counting-house, among bales of goods of every description. The
merchant, to reward him for his news, munificently made him a
present of a fine red herring for his breakfast. The sailor had,
it appears, a great partiality for onions, and seeing a bulb very
like an onion lying upon the counter of this liberal trader, and
thinking it, no doubt, very much out of its place among silks and
velvets, he slily seized an opportunity and slipped it into his
pocket, as a relish for his herring. He got clear off with his
prize, and proceeded to the quay to eat his breakfast. Hardly was
his back turned when the merchant missed his valuable Semper
Augustus, worth three thousand florins, or about 280l. sterling.
The whole establishment was instantly in an uproar; search was
everywhere made for the precious root, but it was not to be found.
Great was the merchant's distress of mind. The search was renewed,
but again without success. At last some one thought of the sailor.

The unhappy merchant sprang into the street at the bare
suggestion. His alarmed household followed him. The sailor, simple
soul! had not thought of concealment. He was found quietly sitting
on a coil of ropes, masticating the last morsel of his "onion."
Little did he dream that he had been eating a breakfast whose cost
might have regaled a whole ship's crew for a twelvemonth; or, as
the plundered merchant himself expressed it, "might have
sumptuously feasted the Prince of Orange and the whole court of
the Stadtholder." Anthony caused pearls to be dissolved in wine to
drink the health of Cleopatra; Sir Richard Whittington was as
foolishly magnificent in an entertainment to King Henry V; and Sir
Thomas Gresham drank a diamond, dissolved in wine, to the health
of Queen Elizabeth, when she opened the Royal Exchange; but the
breakfast of this roguish Dutchman was as splendid as either. He
had an advantage, too, over his wasteful predecessors: their gems
did not improve the taste or the wholesomeness of their wine,
while his tulip was quite delicious with his red herring. The most
unfortunate part of the business for him was, that he remained in
prison for some months on a charge of felony preferred against him
by the merchant.

Another story is told of an English traveller, which is scarcely
less ludicrous. This gentleman, an amateur botanist, happened to
see a tulip-root lying in the conservatory of a wealthy Dutchman.
Being ignorant of its quality, he took out his penknife, and
peeled off its coats, with the view of making experiments upon it.
When it was by this means reduced to half its original size, he
cut it into two equal sections, making all the time many learned
remarks on the singular appearances of the unknown bulb. Suddenly
the owner pounced upon him, and, with fury in his eyes, asked him
if he knew what he had been doing? "Peeling a most extraordinary
onion," replied the philosopher. "Hundert tausend duyvel!," said
the Dutchman; "it's an Admiral Van der Eyck." "Thank you," replied
the traveller, taking out his note-book to make a memorandum of
the same; "are these admirals common in your country?" "Death and
the devil," said the Dutchman, seizing the astonished man of
science by the collar; "come before the syndic, and you shall
see." In spite of his remonstrances, the traveller was led through
the streets, followed by a mob of persons. When brought into the
presence of the magistrate, he learned, to his consternation, that
the root upon which he had been experimentalising was worth four
thousand florins; and, notwithstanding all he could urge in
extenuation, he was lodged in prison until he found securities for
the payment of this sum.

The demand for tulips of a rare species increased so much in the
year 1636, that regular marts for their sale were established on
the Stock Exchange of Amsterdam, in Rotterdam, Harlaem, Leyden,
Alkmar, Hoorn, and other towns. Symptoms of gambling now became,
for the first time, apparent. The stock-jobbers, ever on the alert
for a new speculation, dealt largely in tulips, making use of all
the means they so well knew how to employ, to cause fluctuations
in prices. At first, as in all these gambling mania, confidence
was at its height, and every body gained. The tulip-jobbers
speculated in the rise and fall of the tulip stocks, and made
large profits by buying when prices fell, and selling out when
they rose. Many individuals grew suddenly rich. A golden bait hung
temptingly out before the people, and, one after the other, they
rushed to the tulip marts, like flies around a honey-pot. Every
one imagined that the passion for tulips would last for ever, and
that the wealthy from every part of the world would send to
Holland, and pay whatever prices were asked for them. The riches
of Europe would be concentrated on the shores of the Zuyder Zee,
and poverty banished from the favoured clime of Holland. Nobles,
citizens, farmers, mechanics, seamen, footmen, maidservants, even
chimney-sweeps and old clotheswomen, dabbled in tulips. People of
all grades converted their property into cash, and invested it in
flowers. Houses and lands were offered for sale at ruinously low
prices, or assigned in payment of bargains made at the tulip-mart.
Foreigners became smitten with the same frenzy, and money poured
into Holland from all directions. The prices of the necessaries of
life rose again by degrees: houses and lands, horses and
carriages, and luxuries of every sort, rose in value with them,
and for some months Holland seemed the very antechamber of Plutus.
The operations of the trade became so extensive and so intricate,
that it was found necessary to draw up a code of laws for the
guidance of the dealers. Notaries and clerks were also appointed,
who devoted themselves exclusively to the interests of the trade.
The designation of public notary was hardly known in some towns,
that of tulip-notary usurping its place. In the smaller towns,
where there was no exchange, the principal tavern was usually
selected as the "show-place," where high and low traded in tulips,
and confirmed their bargains over sumptuous entertainments. These
dinners were sometimes attended by two or three hundred persons,
and large vases of tulips, in full bloom, were placed at regular
intervals upon the tables and sideboards, for their gratification
during the repast.

At last, however, the more prudent began to see that this folly
could not last for ever. Rich people no longer bought the flowers
to keep them in their gardens, but to sell them again at cent per
cent profit. It was seen that somebody must lose fearfully in the
end. As this conviction spread, prices fell, and never rose again.
Confidence was destroyed, and a universal panic seized upon the
dealers. A had agreed to purchase ten Sempers Augustines from B,
at four thousand florins each, at six weeks after the signing of
the contract. B was ready with the flowers at the appointed time;
but the price had fallen to three or four hundred florins, and A
refused either to pay the difference or receive the tulips.
Defaulters were announced day after day in all the towns of
Holland. Hundreds who, a few months previously, had begun to doubt
that there was such a thing as poverty in the land, suddenly found
themselves the possessors of a few bulbs, which nobody would buy,
even though they offered them at one quarter of the sums they had
paid for them. The cry of distress resounded everywhere, and each
man accused his neighbour. The few who had contrived to enrich
themselves hid their wealth from the knowledge of their
fellow-citizens, and invested it in the English or other funds.
Many who, for a brief season, had emerged from the humbler walks
of life, were cast back into their original obscurity. Substantial
merchants were reduced almost to beggary, and many a
representative of a noble line saw the fortunes of his house
ruined beyond redemption.

When the first alarm subsided, the tulip-holders in the several
towns held public meetings to devise what measures were best to be
taken to restore public credit. It was generally agreed, that
deputies should be sent from all parts to Amsterdam, to consult
with the government upon some remedy for the evil. The government
at first refused to interfere, but advised the tulip-holders to
agree to some plan among themselves. Several meetings were held
for this purpose; but no measure could be devised likely to give
satisfaction to the deluded people, or repair even a slight
portion of the mischief that had been done. The language of
complaint and reproach was in every body's mouth, and all the
meetings were of the most stormy character. At last, however,
after much bickering and ill-will, it was agreed, at Amsterdam, by
the assembled deputies, that all contracts made in the height of
the mania, or prior to the month of November 1636, should be
declared null and void, and that, in those made after that date,
purchasers should be freed from their engagements, on paying ten
per cent to the vendor. This decision gave no satisfaction. The
vendors who had their tulips on hand were, of course,
discontented, and those who had pledged themselves to purchase,
thought themselves hardly treated. Tulips which had, at one time,
been worth six thousand florins, were now to be procured for five
hundred; so that the composition of ten per cent was one hundred
florins more than the actual value. Actions for breach of contract
were threatened in all the courts of the country; but the latter
refused to take cognizance of gambling transactions.

The matter was finally referred to the Provincial Council at the
Hague, and it was confidently expected that the wisdom of this
body would invent some measure by which credit should be restored.
Expectation was on the stretch for its decision, but it never
came. The members continued to deliberate week after week, and at
last, after thinking about it for three months, declared that they
could offer no final decision until they had more information.
They advised, however, that, in the mean time, every vendor
should, in the presence of witnesses, offer the tulips in natura
to the purchaser for the sums agreed upon. If the latter refused
to take them, they might be put up for sale by public auction, and
the original contractor held responsible for the difference
between the actual and the stipulated price. This was exactly the
plan recommended by the deputies, and which was already shown to
be of no avail. There was no court in Holland which would enforce
payment. The question was raised in Amsterdam, but the judges
unanimously refused to interfere, on the ground that debts
contracted in gambling were no debts in law.

Thus the matter rested. To find a remedy was beyond the power of
the government. Those who were unlucky enough to have had stores
of tulips on hand at the time of the sudden reaction were left to
bear their ruin as philosophically as they could; those who had
made profits were allowed to keep them; but the commerce of the
country suffered a severe shock, from which it was many years ere
it recovered.

The example of the Dutch was imitated to some extent in England.
In the year 1636 tulips were publicly sold in the Exchange of
London, and the jobbers exerted themselves to the utmost to raise
them to the fictitious value they had acquired in Amsterdam. In
Paris also the jobbers strove to create a tulipomania. In both
cities they only partially succeeded. However, the force of
example brought the flowers into great favour, and amongst a
certain class of people tulips have ever since been prized more
highly than any other flowers of the field. The Dutch are still
notorious for their partiality to them, and continue to pay higher
prices for them than any other people. As the rich Englishman
boasts of his fine race-horses or his old pictures, so does the
wealthy Dutchman vaunt him of his tulips.

In England, in our day, strange as it may appear, a tulip will
produce more money than an oak. If one could be found, rara in
terris, and black as the black swan alluded to by Juvenal, its
price would equal that of a dozen acres of standing corn. In
Scotland, towards the close of the seventeenth century, the
highest price for tulips, according to the authority of a writer
in the supplement to the third edition of the Encyclopedia
Britannica, was ten guineas. Their value appears to have
diminished from that time till the year 1769, when the two most
valuable species in England were the Don Quevedo and the
Valentinier, the former of which was worth two guineas and the
latter two guineas and a half. These prices appear to have been
the minimum. In the year 1800, a common price was fifteen guineas
for a single bulb. In 1835, so foolish were the fanciers, that a
bulb of the species called the Miss Fanny Kemble was sold by
public auction in London for seventy-five pounds. Still more
remarkable was the price of a tulip in the possession of a
gardener in the King's Road, Chelsea;—in his catalogues, it was
labelled at two hundred guineas.