SEVERE RESOLUTIONS AGAINST THE SOUTH-SEA COMPANY.

The committee of secrecy found, that, before any subscription could be made, a fictitious stock of five hundred and seventy-four thousand pounds had been disposed of by the directors, to facilitate the passing the bill. Great part of this was distributed among the earl of Sunderland, Mr. Craggs, senior, the duchess of Kendal, the countess of Platen and her two nieces, Mr. Secretary Craggs, and Mr. Aislaby chancellor of the exchequer. In consequence of the committee’s report, the house came to several severe, though just, resolutions against the directors and officers of the South-Sea company; and a bill was prepared for the relief of the unhappy sufferers. Mr. Stanhope, one of the secretaries of the treasury, charged in the report with having large quantities of stock and subscriptions, desired that he might have an opportunity to clear himself. His request was granted; and the affair being discussed, he was cleared by a majority of three voices. Fifty thousand pounds in stock had been taken by Knight for the use of the earl of Sunderland. Great part of the house entered eagerly into this inquiry; and a violent dispute ensued. The whole strength of the ministry was mustered in his defence. The majority declared him innocent: the nation in general was of another opinion. He resigned his place of first commissioner in the treasury, which was bestowed upon Mr. Robert Walpole; but he still retained the confidence of his master. With respect to Mr. Aislaby, the evidence appeared so strong against him, that the commons resolved, he had promoted the distinctive execution of the South-Sea scheme, with a view to his own exorbitant profit, and combined with the directors in their pernicious practices to the ruin of public credit. He was expelled the house, and committed to the Tower. Mr. Craggs, senior, died of a lethargy, before he underwent the censure of the house. Nevertheless they resolved that he was a notorious accomplice with Robert Knight, and some of the directors, in carrying on their scandalous practices; and therefore, that all the estate of which he was possessed, from the first day of December in the preceding year, should be applied towards the relief of the unhappy sufferers in the South-Sea company. The directors, in obedience to the orders of the house, delivered in inventories of their estates, which were confiscated by act of parliament, towards making good the damages sustained by the company, after a certain allowance was deducted for each according to his conduct and circumstances.

1721

The delinquents being thus punished by the forfeiture of their fortunes, the house converted their attention to means for repairing the mischiefs which the scheme had produced. This was a very difficult task, on account of the contending interests of those engaged in the South-Sea company, which rendered it impossible to relieve some but at the expense of others. Several wholesome resolutions were taken, and presented with an address to the king, explaining the motives of their proceedings. On the twenty-ninth day of July, the parliament was prorogued for two days only. Then his majesty going to the house of peers, declared that he had called them together again so suddenly, that they might resume the consideration of the state of public credit. The commons immediately prepared a bill upon the resolutions they had taken. The whole capital stock, at the end of the year one thousand seven hundred and twenty, amounted to about thirty-seven millions eight hundred thousand pounds. The stock allotted to all the proprietors did not exceed twenty-four millions five hundred thousand pounds; the remaining capital stock belonged to the company in their corporate capacity. It was the profit arising from the execution of the South-Sea scheme; and out of this the bill enacted, that seven millions should be paid to the public. The present act likewise directed several additions to be made to the stock of the proprietors, out of that possessed by the company in their own right; it made a particular distribution of stock, amounting to two millions two hun dred thousand pounds; and upon remitting five millions of the seven to be paid to the public, annihilated two millions of their capital. It was enacted, that, after these distributions, the remaining capital stock should be divided among all the proprietors. This dividend amounted to thirty-three pounds six shillings and eight-pence per cent, and deprived the company of eight millions nine hundred thousand pounds. They had lent above eleven millions on stock unredeemed; of which the parliament discharged all the debtors, upon their paying ten per cent. Upon this article the company’s loss exceeded six millions nine hundred thousand pounds, for many debtors refused to make any payment. The proprietors of the stock loudly complained of their being deprived of two millions; and the parliament in the sequel revived that sum which had been annihilated. While this affair was in agitation, petitions from counties, cities, and boroughs, in all parts of the kingdom, were presented to the house, crying for justice against the villany of the directors. Pamphlets and papers were daily published on the same subject; so that the whole nation was exasperated to the highest pitch of resentment. Nevertheless, by the wise and vigorous resolutions of the parliament, the South-Sea company was soon in a condition to fulfil their engagements with the public; the ferment of the people subsided; and the credit of the nation was restored.

chap_g3 (406K)