The South-sea Bubble.

Clutha Leader, Volume I, Issue 6, 13 August 1874, Page 5

The South-sea Bubble.

. At length corruption, like a general flood, Did delude all; and avarice creeping on. Spread, like a low-born mist, and hid the Bim Statesmen and patriots plied alike the stocks! Peeress and butler shared alike the boxAnd judges jobbed, and bishops bit the town, And mighty dukes packed cards for lialf-a-crown-Britain was sunk in lucre's sordid charms— Pope

iho 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 Whio*ministry, and of providing for the discharge of tho 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 LGOO,OOO 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 hunself for his share in this transaction, and tho 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. 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 manufacturies 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 tho 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 Chili, The latter permission was only granted upon the hard condition, that the King of Spain should enjoy one-fourth of the profits, and atax 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 ''Parturient montes, n'ascitur ridiculus finis." But the public confidence in the SouthSea Company was not Shaken. The Earl of Oxford declared that Spain would permit two ships, in addition to the an* nual ship, to carry out merchandise during the first year; and a list was published, on which all the ports and harbors of these coatss were pompously set forth as open to the trade of Great Britain. The first voj'ag-e 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 20 th of May ensuing. The South-Sea Company prayed that their capital stock of ten millions might be increase 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 ofthe South-Sea Company were accepted, and that body held itself ready to advance the sum of r two ngiillions 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 Queene Anne. By the second act, the bank received a lower •rate of interest for the sum L1',775,027 '

15s due to it I hy the stated -*; 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 wen further.required to be ready to advance, in case of need, a sum bt\L2,500,000 upon the same terms of five per cent interest, re- , deemable 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. Thei.r stock was in high request, and the directors, buoyed up with success, began to think of new means fbr extending*, their influence. The Mississippi scheme of\ John Law, which co 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|couid avoid his faults, carry on their schemes for ever, and stretch the cord of credit to its extremes!; 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 flue 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 bo outdone. Upon the 22nd of January, 1720, the House of Commons resolved itself into a committee ofthe 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, I the debts of the state, amounting to , L30,981,?12, which the company were ' anxious to take upon themselves, upon consideration of five per cent per annum, 1 secured to them until Midsammeri?27j after which time the whole was to become redeemable at the pleasue of the legislature, and the interest to be reduced to four per cent. The proposal was received with great favor ; 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 tho 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 anything^ 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 ih it, which they hoped would render it more acceptable. Tho 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 action, and the governors also considered their first proposal, and sent in a new one. - (To Jbe continued.)