| Who in
Secret, deals in Stocks secure |
 |
| And cheats
th' unknowing widow and the poor? |
| Who makes
a Trust, or charity a job, |
| And gets
an Act of Parliament to rob? |
| We all
of times corrupt have heard, |
| When paultry
minions were preferr'd; |
| When all
great offices, by dozens, |
| Were filled
by brothers, sons, and cozens. |
| A public
or a private robber; |
| A statesman
or a South Sea jobber. |
| A prelate
who no God believes; |
| A Parliament
or den of thieves. |
| By
Jonathon Swift. |
| In 1719 the South Sea company put up the idea
of an investment scheme that would allow the government to liquidate the
National Debt. In order to ensure the support of the Crown and Government
bribes and free shares were spread amongst the King's mistresses, ministers
and MPs. After the scheme went into practice small investors began covering
investments the government had previously been stuck with. Initial profits
were large and triggered a burst of speculation. As prices kept rising the
company began to issue more and more stock and soon profits came to rely
entirely on the drawing in of further rounds of investment. Such a pyramid
style scheme was bound to crash and when the "bubble" burst in
1720 small investors were left ruined and the economy badly damaged. |
| The larger investors and company directors were
tipped off well before the crash and got out with their fortunes intact.
With most of the Crown and government implicated in the scam it was never
likely that the real culprits would be prosecuted. Instead the few directors
who had attempted to expose the extent of corruption were stripped of their
property and earnings. Walpole, as one of the few MPs not involved, was
pushed to the fore as PM and the Tory and Whig wings of government united
for a cover up. |
| Following the crash some of the unfortunate
investors opted, in the time honoured manner, for suicide whilst others
sought revenge. Sir George Caswall, an MP implicated in the dodgy dealings,
was bashed by a large mob. Another mob attempted to murder a company director
who only survived through the timely intervention of soldiers. When Walpole,
with the aid of the King, secured an acquittal for the Secretrary of Treasury,
Charles Stanthorpe, rioting and arson broke out across the city. The sending
of one director to the Tower was celebrated with street parties and the
building of bonfires. Individual attacks on those central to the scam also
occurred with stabbings and window breaking. |
| The political fallout for the government was
harsh. Politicians were booed and abused in the streets. On one occassion
hundreds of failed investors appeared at the Commons to lobby MPs. After
their pleas were ignored they began to attack individual MPs. Justices of
the Peace and constables were brought in to disperse the crowd and only
managed to do so after a third reading of the Riot Act. |
| In the years to come scam after scam was uncovered
with corrupt government members and officials being implicated on every
ocassion. Whilst these later events contributed to the downfall of Walpole
the level of public retribution was not to match that of the South Sea affair.
Increasing government repression and the introduction of laws banning theatrical
and other satire helped to maintain the peace and silence the critics. |
| Sources: |
| Riots,
Risings and Revolution, Ian Gilmour, Random Century Group Ltd, 1992. |
| Popular
Disturbances in England, 1700-1832. John Stevenson, Longman, 1992. |
| England
in the Eighteenth Century, J.H. Plumb, Pelican, 1950. |
| Oxford
IllustratedHistory of England, K. Morgan, Oxford University Press, 1984.
|