ravaged: but these people, as well as their horses and especially their
camels, will live almost upon nothing. Scarcely an hour passed in which
I did not lose a score of men by the dysentery, or by the cannon from
the lines, which the infidels advanced more and more every night toward
my intrenchments. I was less the besieger than the besieged. My affairs
toward the city went on better. A bomb which fell into a magazine of
powder completed its destruction and occasioned the loss of three
thousand men.
At length I recovered from my illness; and, on August 15th,
notwithstanding the ill-advice of persons who were not fond of battles,
the matter was fixed. I calculated that listlessness and despair would
produce success.
I did not sleep, as Alexander did before the battle of Arbela; but the
Turks did, who were no Alexanders: opium and predestination will make
philosophers of us. I gave brief and explicit instructions touching
whatever might happen. I quitted my intrenchments one hour after
midnight: the darkness first and then a fog rendered my first
undertakings mere chance. Some of my battalions, on the right wing,
fell, unintentionally, while marching, into a part of the Turkish
intrenchments. A terrible confusion among them, who never have either
advanced posts or spies; and, among us, a similar confusion, which it
would be impossible to describe: they fired from the left to the centre,
on both sides, without knowing where. The janizaries fled from their
intrenchments: I had time to throw into them fascines and gabions, to
make a passage for my cavalry who pursued them, I know not how: the fog
dispersed and the Turks perceived a dreadful breach. But for my second
line, which I ordered to march there immediately, to stop this breach,
I should have been lost. I then wished to march in order: impossible! I
was better served than I expected. La Colonie, at the head of his
Bavarians, rushed forward and took a battery of eighteen pieces of
cannon. I was obliged to do better than I wished. I sustained the
Bavarians; and the Turks, after having fled to the heights, lost all the
advantages of their ground. A large troop of their cavalry wished to
charge mine, which were too much advanced; a whole regiment was cut in
pieces; but two others, who arrived opportunely to their aid, decided
the victory. It was then that I received a cut from a sabre; it was, I
believe, my thirteenth wound, and probably my last. Everything was over
at eleven o'clock in the morning. Viard, during the battle, retained the
garrison of Belgrad, which capitulated the same day. I forgot that there
was no Boufflers there: I played the generous man: I granted the honors
of war to the garrison, who, not knowing what they meant, did not avail
themselves of them. Men, women, and children, chariots and camels,
issued forth all at once, pell-mell, by land and by water.
At Vienna the devotees cried out, "A miracle!" those who envied me cried
out, "Good-fortune!" Charles VI was, I believe, among the former: and
Guido Stahrenberg among the latter. I was well received, as might have
been expected.
Here is my opinion respecting this victory, in which I have more cause
for justification than for glory; my partisans have spoken too favorably
of it, and my enemies too severely. They would have had much more reason
to propose cutting off my head on this occasion than on that of Zenta,
for there I risked nothing. I was certain of conquering: but here, not
only I might have been beaten, but totally ruined and lost in a storm,
for the enemy's artillery to the left, on the shores of the Danube, had
destroyed my bridges. I was, indeed, superior in saics and in workmen
and artillerymen to protect or repair them: I had a corps also at
Semlin.
Could I anticipate the tardiness or disinclination of the authorities
who engaged in this war, where there were so many vices of the interior
in administration, and so much ignorance in the chiefs of the civil and
commissariat departments? Hence it was that I was in want of everything
necessary to commence the siege, and to take Belgrad before the arrival
of the grand vizier, and which hindered me afterward from checking him
on the heights. This, however, I should have done--but for my cursed
fever--before his artillery arrived. And then that unlucky dysentery,
which put my army into the hospital, or rather into the burying-ground,
for each regiment had one behind its camp--could I anticipate that also?
These were the two motives which induced me to attack, and to risk all
or nothing, for I was as certainly lost one way as another. I threw up
intrenchments against intrenchments: I knew a little more upon that
subject than my comrade the grand vizier; and I had plenty of troops in
health to guard them. I obliged him for want of provisions--for, as I
have already said, I caused all the country in his rear to be
ravaged--to decamp, and, consequently, Belgrad to surrender. Thus, if
this manuscript should be read, give me neither praise, my dear reader,
nor blame. After all, I extricated myself, perhaps, as Charles VI said,
his confessor, and the pious souls who trust in God, and who wished me
at the Devil, by the protection of the Virgin Mary, for the battle was
fought on Assumption Day.
Europe was getting embroiled elsewhere. Some charitable souls advised
the Emperor to send me to negotiate at London, reckoning that they might
procure for another the easy glory of terminating the war.
I was not such a fool as to fall into this snare, and I set off for
Hungary at the commencement of June, with a fine sword worth eighty
thousand florins which the Emperor had presented to me.
BURSTING OF THE SOUTH SEA BUBBLE
A.D. 1720
LOUIS ADOLPHE THIERS
Never, perhaps, was there a time when rash monetary speculation
seized with a firmer grip upon people and governments than during
the early part of the eighteenth century. Concurrently with the
delusive "Mississippi Scheme" of John Law (1717), which resulted in
financial panic in France, a similarly disastrous enterprise was
carried on in England. This was the attempt to turn the South Sea
Company into a concern for enriching quickly both its private and
its governmental investors. The collapse of this scheme, in the same
year as that of Law's, caused even more serious and widespread ruin.
Thiers' relation of the origin and development of the South Sea
Company, of the forming and collapse of the "bubble," and of the
spread of the speculative mania which manifested itself in so many
other extravagant projects, makes a fitting counterpart to this
historian's narrative of the rise and fall of the contemporary
scheme in his own country.
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 his debt upon
themselves, and the government agreed to secure them for a certain
period the interest of 6 per cent. To provide for this interest,
amounting to six hundred thousand pounds 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
eastern coast of South America. Everybody had heard of the gold and
silver mines of Peru and Mexico; everyone believed them to be
inexhaustible, and that it was only necessary to send the manufactures
of England to the coast to be repaid a hundred-fold in gold and silver
ingots by the natives. A report industriously spread, that Spain was
willing to concede four ports on the coasts of Chile and Peru for the
purposes of traffic, increased the general confidence, and for many
years the South Sea Company's stock was in high favor.
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 Chile. 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 5 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 harbors 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 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 forever, 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 January 22, 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 toward 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 thirty million
nine hundred eighty-one thousand seven hundred twelve pounds, which the
company was anxious to take upon itself, upon consideration of 5 per
cent. per annum, secured to it 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 4 per cent. It was resolved, on
February 2d, that the proposals 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 130 the previous day, gradually rose to 300, and continued
to rise with the most astonishing rapidity during the whole time that
the bill in its several stages was under discussion. Sir Robert 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 labor 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."
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 rumors 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, which could be supplied to 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
400, but, after fluctuating a good deal, settled at 330, at which price
it remained when the bill passed the Commons by a majority of 172
against 55.
Contrary to all expectation South Sea stock fell when the bill received
the royal assent. On April 7th the shares were quoted at 310, and on the
following day at 290. 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 endeavored to draw a knot of
listeners round him, to whom he expatiated on the treasures of the South
American seas. Exchange Alley was crowded with attentive groups. One
rumor 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 25 per cent.
out of the profits, the company might build and charter as many ships as
it pleased, and pay no percentage whatever to any foreign potentate.
"Visions of ingots danced before their eyes," and stock rose rapidly. On
April 12th, five days after the bill had become law, the directors
opened their books for a subscription of a million, at the rate of three
hundred pounds for every one hundred pounds 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 in
five payments, of sixty pounds each for every one hundred pounds. In a
few days the stock advanced to 340, 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 April 21st, that the
midsummer dividend should be 10 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 moneyed men,
opened their books for a second subscription of a million, at 4 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 forty
thousand pounds by his speculations. 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 a 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
sawdust." This is, no doubt, intended as a joke; but there is abundance
of evidence to show that dozens of schemes, hardly a whit more
reasonable, lived their little day, ruining hundreds ere they fell. One
of them was for a wheel for perpetual motion--capital one million;
another was "for encouraging the breed of horses in England, and
improving of glebe and church lands, and repairing and rebuilding
parsonage and vicarage houses." Why the clergy, who were so mainly
interested in the latter clause, should have taken so much interest in
the first, is only to be explained on the supposition that the scheme
was projected by a knot of the fox-hunting parsons, once so common in
England. The shares of this company were rapidly subscribed for.
But the most absurd and preposterous of all, and which showed, 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 facts 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 one hundred
pounds each, deposit two pounds per share. Each subscriber paying his
deposit would be entitled to one hundred pounds 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 ninety-eight pounds
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 two thousand pounds. 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.
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 May 29th the stock had risen as high as 500, 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 550. In four days after this it took a prodigious leap, rising
suddenly from 550 to 890. 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 realizing 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 June 3d that the stock fell at once from 890 to 640. The
directors were alarmed and gave their agents orders to buy. Their
efforts succeeded. Toward evening confidence was restored, and the stock
advanced to 750. It continued at this price with some slight
fluctuation, until the company closed its books on June 22d.
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 1000 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 September 2d it was quoted at 700 only.
Day after day it continued to fall, until it was as low as 400. In a
letter dated September 13th, from Mr. Broderick, M.P., to Lord
Chancellor Middleton, and published in Coxe's _Walpole_, the former
says: "Various are the conjectures why the South Sea directors have
suffered the cloud to break so early. I made no doubt but they would do
so when they found it to their advantage. They have stretched credit so
far beyond what it would bear that specie proves insufficient to support
it. Their most considerable men have drawn out, securing themselves by
the losses of the deluded, thoughtless numbers, whose understandings
have been overruled by avarice and the hope of making mountains out of
mole-hills. Thousands of families will be reduced to beggary. The
consternation is inexpressible--the rage beyond description, and the
case altogether so desperate that I do not see any plan or scheme so
much as thought of for averting the blow; so that I cannot pretend to
guess what is next to be done." Ten days afterward, 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 grown 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."
At a general court of the Bank of England, held soon afterward, 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.