Parliament were not more reasonable. Before the guilt of the South-Sea
directors was known, punishment was the only cry. The king, in his speech
from the throne, expressed his hope that they would remember that all
their prudence, temper, and resolution were necessary to find out and
apply the proper remedy for their misfortunes. In the debate on the answer
to the address, several speakers indulged in the most violent invectives
against the directors of the South-Sea project. The Lord Molesworth was
particularly vehement. "It had been said by some, that there was no law to
punish the directors of the South-Sea company, who were justly looked upon
as the authors of the present misfortunes of the state. In his opinion,
they ought upon this occasion to follow the example of the ancient Romans,
who, having no law against parricide, because their legislators supposed
no son could be so unnaturally wicked as to embrue his hands in his
father's blood, made a law to punish this heinous crime as soon as it was
committed. They adjudged the guilty wretch to be sown in a sack, and
thrown alive into the Tiber. He looked upon the contrivers and executors
of the villanous South-Sea scheme as the parricides of their country, and
should be satisfied to see them tied in like manner in sacks, and thrown
into the Thames." Other members spoke with as much want of temper and
discretion. Mr. Walpole was more moderate. He recommended that their first
care should be to restore public credit. "If the city of London were on
fire, all wise men would aid in extinguishing the flames, and preventing
the spread of the conflagration, before they inquired after the incendiaries.
Public credit had received a dangerous wound, and lay bleeding, and they
ought to apply a speedy remedy to it. It was time enough to punish the
assassin afterwards." On the 9th of December an address, in answer to his
majesty's speech, was agreed upon, after an amendment, which was carried
without a division, that words should be added expressive of the
determination of the house not only to seek a remedy for the national
distresses, but to punish the authors of them.
[Illustration: BRITANNIA STRIPT BY A SOUTH-SEA DIRECTOR.[23]]
[23] Britannia stript by a South-Sea Director. From _Het groote
Tafereel der Dwaasheid_.
The inquiry proceeded rapidly. The directors were ordered to lay before
the house a full account of all their proceedings. Resolutions were passed
to the effect that the calamity was mainly owing to the vile arts of
stock-jobbers, and that nothing could tend more to the reestablishment of
public credit than a law to prevent this infamous practice. Mr. Walpole
then rose, and said, that "as he had previously hinted, he had spent some
time upon a scheme for restoring public credit, but that the execution of
it depending upon a position which had been laid down as fundamental, he
thought it proper, before he opened out his scheme, to be informed whether
he might rely upon that foundation. It was, whether the subscription of
public debts and encumbrances, money subscriptions, and other contracts,
made with the South-Sea company, should remain in the present state?" This
question occasioned an animated debate. It was finally agreed, by a
majority of 259 against 117, that all these contracts should remain in
their present state, unless altered for the relief of the proprietors by a
general court of the South-Sea company, or set aside by due course of law.
On the following day, Mr. Walpole laid before a committee of the whole
house his scheme for the restoration of public credit, which was, in
substance, to engraft nine millions of South-Sea stock into the Bank of
England, and the same sum into the East India company, upon certain
conditions. The plan was favourably received by the house. After some few
objections, it was ordered that proposals should be received from the two
great corporations. They were both unwilling to lend their aid, and the
plan met with a warm but fruitless opposition at the general courts
summoned for the purpose of deliberating upon it. They, however,
ultimately agreed upon the terms on which they would consent to circulate
the South-Sea bonds, and their report being presented to the committee, a
bill was brought in under the superintendence of Mr. Walpole, and safely
carried through both Houses of Parliament.
A bill was at the same time brought in for restraining the South-Sea
directors, governor, sub-governor, treasurer, cashier, and clerks from
leaving the kingdom for a twelvemonth, and for discovering their estates
and effects, and preventing them from transporting or alienating the same.
All the most influential members of the House supported the bill. Mr.
Shippen, seeing Mr. Secretary Craggs in his place, and believing the
injurious rumours that were afloat of that minister's conduct in the
South-Sea business, determined to touch him to the quick. He said, he was
glad to see a British House of Commons resuming its pristine vigour and
spirit, and acting with so much unanimity for the public good. It was
necessary to secure the persons and estates of the South-Sea directors and
their officers; "but," he added, looking fixedly at Mr. Craggs as he
spoke, "there were other men in high station, whom, in time, he would not
be afraid to name, who were no less guilty than the directors." Mr. Craggs
arose in great wrath, and said, that if the innuendo were directed against
him, he was ready to give satisfaction to any man who questioned him,
either in the House or out of it. Loud cries of order immediately arose on
every side. In the midst of the uproar, Lord Molesworth got up, and
expressed his wonder at the boldness of Mr. Craggs in challenging the
whole House of Commons. He, Lord Molesworth, though somewhat old, past
sixty, would answer Mr. Craggs whatever he had to say in the House, and he
trusted there were plenty of young men beside him, who would not be afraid
to look Mr. Craggs in the face out of the House. The cries of order again
resounded from every side; the members arose simultaneously; every body
seemed to be vociferating at once. The speaker in vain called order. The
confusion lasted several minutes, during which Lord Molesworth and Mr.
Craggs were almost the only members who kept their seats. At last, the
call for Mr. Craggs became so violent, that he thought proper to submit to
the universal feeling of the House, and explain his unparliamentary
expression. He said, that by giving satisfaction to the impugners of his
conduct in that House, he did not mean that he would fight, but that he
would explain his conduct. Here the matter ended, and the House proceeded
to debate in what manner they should conduct their inquiry into the
affairs of the South-Sea company, whether in a grand or a select
committee. Ultimately, a secret committee of thirteen was appointed, with
power to send for persons, papers, and records.
The Lords were as zealous and as hasty as the Commons. The Bishop of
Rochester said the scheme had been like a pestilence. The Duke of Wharton
said the House ought to shew no respect of persons; that, for his part, he
would give up the dearest friend he had, if he had been engaged in the
project. The nation had been plundered in a most shameful and flagrant
manner, and he would go as far as any body in the punishment of the
offenders. Lord Stanhope said, that every farthing possessed by the
criminals, whether directors or not directors, ought to be confiscated, to
make good the public losses.
During all this time the public excitement was extreme. We learn from
Coxe's _Walpole_, that the very name of a South-Sea director was thought
to be synonymous with every species of fraud and villany. Petitions from
counties, cities, and boroughs, in all parts of the kingdom, were
presented, crying for the justice due to an injured nation and the
punishment of the villanous peculators. Those moderate men, who would not
go to extreme lengths, even in the punishment of the guilty, were accused
of being accomplices, were exposed to repeated insults and virulent
invectives, and devoted, both in anonymous letters and public writings, to
the speedy vengeance of an injured people. The accusations against Mr.
Aislabie, Chancellor of the Exchequer, and Mr. Craggs, another member of
the ministry, were so loud, that the House of Lords resolved to proceed at
once into the investigation concerning them. It was ordered, on the 21st
of January, that all brokers concerned in the South-Sea scheme should lay
before the House an account of the stock or subscriptions bought or sold
by them for any of the officers of the Treasury or Exchequer, or in trust
for any of them, since Michaelmas 1719. When this account was delivered,
it appeared that large quantities of stock had been transferred to the use
of Mr. Aislabie. Five of the South-Sea directors, including Mr. Edward
Gibbon, the grandfather of the celebrated historian, were ordered into the
custody of the black rod. Upon a motion made by Earl Stanhope, it was
unanimously resolved, that the taking in or giving credit for stock
without a valuable consideration actually paid or sufficiently secured; or
the purchasing stock by any director or agent of the South-Sea company,
for the use or benefit of any member of the administration, or any member
of either House of Parliament, during such time as the South-Sea bill was
yet pending in parliament, was a notorious and dangerous corruption.
Another resolution was passed a few days afterwards, to the effect that
several of the directors and officers of the company having, in a
clandestine manner, sold their own stock to the company, had been guilty
of a notorious fraud and breach of trust, and had thereby mainly caused
the unhappy turn of affairs that had so much affected public credit. Mr.
Aislabie resigned his office as Chancellor of the Exchequer, and absented
himself from parliament, until the formal inquiry into his individual
guilt was brought under the consideration of the legislature.
In the mean time, Knight, the treasurer of the company, and who was
entrusted with all the dangerous secrets of the dishonest directors,
packed up his books and documents, and made his escape from the country.
He embarked in disguise, in a small boat on the river, and proceeding to a
vessel hired for the purpose, was safely conveyed to Calais. The Committee
of Secrecy informed the House of the circumstance, when it was resolved
unanimously that two addresses should be presented to the king; the first
praying that he would issue a proclamation offering a reward for the
apprehension of Knight; and the second, that he would give immediate
orders to stop the ports, and to take effectual care of the coasts, to
prevent the said Knight, or any other officers of the South-Sea company,
from escaping out of the kingdom. The ink was hardly dry upon these
addresses before they were carried to the king by Mr. Methuen, deputed by
the House for that purpose. The same evening a royal proclamation was
issued, offering a reward of two thousand pounds for the apprehension of
Knight. The Commons ordered the doors of the House to be locked, and the
keys to be placed on the table. General Ross, one of the members of the
Committee of Secrecy, acquainted them that they had already discovered a
train of the deepest villany and fraud that hell had ever contrived to
ruin a nation, which in due time they would lay before the House. In the
mean time, in order to a further discovery, the Committee thought it
highly necessary to secure the persons of some of the directors and
principal South-Sea officers, and to seize their papers. A motion to this
effect having been made, was carried unanimously. Sir Robert Chaplin, Sir
Theodore Janssen, Mr. Sawbridge, and Mr. F. Eyles, members of the House,
and directors of the South-Sea company, were summoned to appear in their
places, and answer for their corrupt practices. Sir Theodore Janssen and
Mr. Sawbridge answered to their names, and endeavoured to exculpate
themselves. The House heard them patiently, and then ordered them to
withdraw. A motion was then made, and carried _nemine contradicente_, that
they had been guilty of a notorious breach of trust--had occasioned much
loss to great numbers of his majesty's subjects, and had highly prejudiced
the public credit. It was then ordered that, for their offence, they
should be expelled the House, and taken into the custody of the
sergeant-at-arms. Sir Robert Chaplin and Mr. Eyles, attending in their
places four days afterwards, were also expelled the House. It was resolved
at the same time to address the king to give directions to his ministers
at foreign courts to make application for Knight, that he might be
delivered up to the English authorities, in case he took refuge in any of
their dominions. The king at once agreed, and messengers were despatched
to all parts of the continent the same night.
Among the directors taken into custody was Sir John Blunt, the man whom
popular opinion has generally accused of having been the original author
and father of the scheme. This man, we are informed by Pope, in his
epistle to Allen Lord Bathurst, was a dissenter, of a most religious
deportment, and professed to be a great believer.[24] He constantly
declaimed against the luxury and corruption of the age, the partiality of
parliaments, and the misery of party spirit. He was particularly eloquent
against avarice in great and noble persons. He was originally a scrivener,
and afterwards became, not only a director, but the most active manager of
the South-Sea company. Whether it was during his career in this capacity
that he first began to declaim against the avarice of the great, we are
not informed. He certainly must have seen enough of it to justify his
severest anathema; but if the preacher had himself been free from the vice
he condemned, his declamations would have had a better effect. He was
brought up in custody to the bar of the House of Lords, and underwent a
long examination. He refused to answer several important questions. He
said he had been examined already by a committee of the House of Commons,
and as he did not remember his answers, and might contradict himself, he
refused to answer before another tribunal. This declaration, in itself an
indirect proof of guilt, occasioned some commotion in the House. He was
again asked peremptorily whether he had ever sold any portion of the stock
to any member of the administration, or any member of either House of
Parliament, to facilitate the passing of the bill. He again declined to
answer. He was anxious, he said, to treat the House with all possible
respect, but he thought it hard to be compelled to accuse himself. After
several ineffectual attempts to refresh his memory, he was directed to
withdraw. A violent discussion ensued between the friends and opponents of
the ministry. It was asserted that the administration were no strangers to
the convenient taciturnity of Sir John Blunt. The Duke of Wharton made a
reflection upon the Earl Stanhope, which the latter warmly resented. He
spoke under great excitement, and with such vehemence as to cause a sudden
determination of blood to the head. He felt himself so ill that he was
obliged to leave the House and retire to his chamber. He was cupped
immediately, and also let blood on the following morning, but with slight
relief. The fatal result was not anticipated. Towards evening he became
drowsy, and turning himself on his face, expired. The sudden death of this
statesman caused great grief to the nation. George I. was exceedingly
affected, and shut himself up for some hours in his closet, inconsolable
for his loss.
[24] "'God cannot love,' says Blunt, with tearless eyes,
'The wretch he starves, and piously denies.' . . .
Much-injur'd Blunt! why bears he Britain's hate?
A wizard told him in these words our fate:
'At length corruption, like a gen'ral flood,
So long by watchful ministers withstood,
Shall deluge all; and av'rice, creeping on,
Spread like a low-born mist, and blot the sun;
Statesman and patriot ply alike the stocks,
Peeress and butler share alike the box,
And judges job, and bishops bite the Town,
And mighty dukes pack cards for half-a-crown:
See Britain sunk in Lucre's forbid charms,
And France reveng'd of Ann's and Edward's arms!'
'Twas no court-badge, great Scriv'ner! fir'd thy brain,
Nor lordly luxury, nor city gain:
No, 'twas thy righteous end, asham'd to see
Senates degen'rate, patriots disagree,
And nobly wishing party-rage to cease,
To buy both sides, and give thy country peace."
_Pope's Epistle to Allen Lord Bathurst_.
Knight, the treasurer of the company, was apprehended at Tirlemont, near
Liege, by one of the secretaries of Mr. Leathes, the British resident at
Brussels, and lodged in the citadel of Antwerp. Repeated applications were
made to the court of Austria to deliver him up, but in vain. Knight threw
himself upon the protection of the states of Brabant, and demanded to be
tried in that country. It was a privilege granted to the states of Brabant
by one of the articles of the _Joyeuse Entrée_, that every criminal
apprehended in that country should be tried in that country. The states
insisted on their privilege, and refused to deliver Knight to the British
authorities. The latter did not cease their solicitations; but in the mean
time, Knight escaped from the citadel.
[Illustration: BRABANT SCREEN.[25]]
[25] The Brabant Screen. This caricature represents the Duchess of
Kendal behind the "Brabant Screen," supplying Mr. Knight with
money to facilitate his escape; and is copied from a rare
print of the time, in the collection of E. Hawkins, Esq.
F.S.A.
On the 16th of February the Committee of Secrecy made their first report
to the House. They stated that their inquiry had been attended with
numerous difficulties and embarrassments; every one they had examined had
endeavoured, as far as in him lay, to defeat the ends of justice. In some
of the books produced before them, false and fictitious entries had been
made; in others, there were entries of money with blanks for the name of
the stockholders. There were frequent erasures and alterations, and in
some of the books leaves were torn out. They also found that some books of
great importance had been destroyed altogether, and that some had been
taken away or secreted. At the very entrance into their inquiry, they had
observed that the matters referred to them were of great variety and
extent. Many persons had been entrusted with various parts in the
execution of the law, and under colour thereof had acted in an
unwarrantable manner, in disposing of the properties of many thousands of
persons amounting to many millions of money. They discovered that, before
the South-Sea Act was passed, there was an entry in the company's books of
the sum of 1,259,325l., upon account of stock stated to have been sold to
the amount of 574,500l. This stock was all fictitious, and had been
disposed of with a view to promote the passing of the bill. It was noted
as sold on various days, and at various prices, from 150 to 325 per cent.
Being surprised to see so large an account disposed of at a time when the
company were not empowered to increase their capital, the Committee
determined to investigate most carefully the whole transaction. The
governor, sub-governor, and several directors were brought before them,
and examined rigidly. They found that, at the time these entries were
made, the company was not in possession of such a quantity of stock,
having in their own right only a small quantity, not exceeding thirty
thousand pounds at the utmost. Pursuing the inquiry, they found that this
amount of stock was to be esteemed as taken in or holden by the company
for the benefit of the pretended purchasers, although no mutual agreement
was made for its delivery or acceptance at any certain time. No money was
paid down, nor any deposit or security whatever given to the company by
the supposed purchasers; so that if the stock had fallen, as might have
been expected had the act not passed, they would have sustained no loss.
If, on the contrary, the price of stock advanced (as it actually did by
the success of the scheme), the difference by the advanced price was to be
made good to them. Accordingly, after the passing of the act, the account
of stock was made up and adjusted with Mr. Knight, and the pretended
purchasers were paid the difference out of the company's cash. This
fictitious stock, which had been chiefly at the disposal of Sir John
Blunt, Mr. Gibbon, and Mr. Knight, was distributed among several members
of the government and their connexions, by way of bribe, to facilitate the
passing of the bill. To the Earl of Sunderland was assigned 50,000l. of
this stock; to the Duchess of Kendal, 10,000l.; to the Countess of Platen,
10,000l.; to her two nieces, 10,000l.; to Mr. Secretary Craggs, 30,000l.;
to Mr. Charles Stanhope (one of the secretaries of the Treasury),
10,000l.; to the Sword-blade company, 50,000l. It also appeared that Mr.
Stanhope had received the enormous sum of 250,000l. as the difference in
the price of some stock, through the hands of Turner, Caswall, and Co.,
but that his name had been partly erased from their books, and altered to
Stangape. Aislabie, the Chancellor of the Exchequer, had made profits
still more abominable. He had an account with the same firm, who were also
South-Sea directors, to the amount of 794,451l. He had, besides, advised
the company to make their second subscription one million and a half,
instead of a million, by their own authority, and without any warrant. The
third subscription had been conducted in a manner as disgraceful. Mr.
Aislabie's name was down for 70,000l.; Mr. Craggs, senior, for 659,000l.;
the Earl of Sunderland's for 160,000l.; and Mr. Stanhope for 47,000l. This
report was succeeded by six others, less important. At the end of the
last, the committee declared, that the absence of Knight, who had been
principally entrusted, prevented them from carrying on their inquiries.
The first report was ordered to be printed, and taken into consideration
on the next day but one succeeding. After a very angry and animated
debate, a series of resolutions were agreed to, condemnatory of the
conduct of the directors, of the members of the parliament and of the
administration concerned with them; and declaring that they ought, each
and all, to make satisfaction out of their own estates for the injury they
had done the public. Their practices were declared to be corrupt,
infamous, and dangerous; and a bill was ordered to be brought in for the
relief of the unhappy sufferers.
[Illustration: BONFIRES ON TOWER HILL]
Mr. Charles Stanhope was the first person brought to account for his share
in these transactions. He urged in his defence that, for some years past,
he had lodged all the money he was possessed of in Mr. Knight's hands, and
whatever stock Mr. Knight had taken in for him, he had paid a valuable
consideration for it. As for the stock that had been bought for him by
Turner, Caswall, and Co., he knew nothing about it. Whatever had been done
in that matter was done without his authority, and he could not be
responsible for it. Turner and Co. took the latter charge upon themselves;
but it was notorious to every unbiassed and unprejudiced person that Mr.
Stanhope was a gainer of the 250,000l. which lay in the hands of that firm
to his credit. He was, however, acquitted by a majority of three only. The
greatest exertions were made to screen him. Lord Stanhope, the son of the
Earl of Chesterfield, went round to the wavering members, using all the
eloquence he was possessed of to induce them either to vote for the
acquittal, or to absent themselves from the House. Many weak-headed
country gentlemen were led astray by his persuasions, and the result was
as already stated. The acquittal caused the greatest discontent throughout
the country. Mobs of a menacing character assembled in different parts of
London; fears of riots were generally entertained, especially as the
examination of a still greater delinquent was expected by many to have a
similar termination. Mr. Aislabie, whose high office and deep
responsibilities should have kept him honest, even had native principle
been insufficient, was very justly regarded as perhaps the greatest
criminal of all. His case was entered into on the day succeeding the
acquittal of Mr. Stanhope. Great excitement prevailed, and the lobbies and
avenues of the House were beset by crowds, impatient to know the result.
The debate lasted the whole day. Mr. Aislabie found few friends: his guilt
was so apparent and so heinous that nobody had courage to stand up in his
favour. It was finally resolved, without a dissentient voice, that Mr.
Aislabie had encouraged and promoted the destructive execution of the
South-Sea scheme with a view to his own exorbitant profit, and had
combined with the directors in their pernicious practices, to the ruin of
the public trade and credit of the kingdom: that he should for his
offences be ignominiously expelled from the House of Commons, and
committed a close prisoner to the Tower of London; that he should be
restrained from going out of the kingdom for a whole year, or till the end
of the next session of Parliament; and that he should make out a correct
account of all his estate, in order that it might be applied to the relief
of those who had suffered by his mal-practices.