SOUTH SEA SCHEME 



SOUTHWELL 



South Sea Scheme (or BUBBLE) was 

 originated by Harley (q.v.), Earl of Oxford, in 

 1711, with the view of restoring public credit 

 and providing for the extinction of the flout in;; 

 national debt, which at that time amounted to 

 10,000,000. This debt was taken up by a 

 niinilier of eminent merchants, to whom the 

 government agreed to guarantee for a certain 

 period the annual payment of 600,000 (being 

 6 per cent, interest), a sum which was to be 

 obtained by rendering permanent a numl>er of im- 

 port duties. The monopoly of the trade to the 

 South Seas was also secured to these merchant*, 

 who were accordingly incorporated as the ' South 

 Sea Company,' and at once rose to a high position 

 in the mercantile world. The extravagant ideas 

 then current respecting the riches of the South 

 American continent were carefully fostered by the 

 Company, who also spread the belief that Spain 

 was prepared to admit them to a share of its South 

 American trade. In 1717 the Company advanced 

 to government other 5 millions. Their snares never- 

 theless rose day by day ; and even when the out- 

 break of war with Spain in 1718 deprived the most 

 sanguine of the slightest hope of sharing in the 

 treasures of the South Sean, the Company continued 

 to flourish. Far from being alarmed at tlie expected 

 failure of the Mississippi Scheme (q.v.), the South 

 Sea Company believed sincerely in the feasibility 

 of Law's scheme, and resolved to avoid what they 

 considered as his errors. In the spring of 1720 

 they proposed to take upon themselves practically 

 the whole national debt (at that time upwards of 

 30 millions), on being guaranteed 5 per cent, per 

 annum for 7 A years, at the end of which time the 

 debt might be redeemed if the government chose, 

 and the interest reduced to 4 per cent The direc- 

 tors of the Bank of England, jealous of the pros- 

 pective benefit and influence which would thus 

 accrue to the South Sea Company, submitted to 

 government a counter-proposal ; but the more 

 Jazzling nature of their rivals' offer, in spite of 

 protest from Walpole and other long-headed 

 leaders, secured its acceptance by parliament. 

 During the passing of their bill the Company's 

 Btock rose steadily to 330 on April 7, falling to 1290 

 on the following day. 



Up till this date the scheme had l>een honestly 

 promoted ; but now, seeing l>efore them the pros- 

 pect of speedily amassing abundant wealth, the 

 directors seem to have thrown aside all scruples 

 and made use of every effective means at tfieir 

 command for keeping up the factitious value 

 of the stock. Their zealous endeavours were 

 crowned with success ; the 100 shares were quoted 

 at 550 on May 28, and 890 on June 1. A mania 

 of gambling seized the nation ; preposterous com- 

 panies of all kinds were floated, some of which 

 were even prosecuted by the .South Sea Company 

 (under the 'Bubble Act') and exposed as swin- 

 dling schemes. A general impression having by 

 this time gained ground that the Company's stock 

 had reached it* maximum, so many holders rushed 

 to realise that the price fell to 640 on June 3. 

 Thereupon the directors sent agents to buy up 

 eagerly ; and on the evening of June 3, 750 was the 

 quoted price. This nnd similar artifices were em- 

 ployed as required, and had the effect of ultimately 

 raising the shares to 1000 in the beginning of 

 August, when the chairman of the Company and 

 some of the principal directors sold out. On this 

 becoming known a wide-spread uneasiness seized 

 the holders of stock, every one was eager to part 

 with his shares, and on NeptemlxT 12 they fell to 

 400. The consternation of those who had )>ecn 

 either unwilling or unable to part with their scrip 

 was now extreme ; many capitalists absconded, 

 either to avoid ruinous bankruptcy or to secure 



i heir ill-gotten gains, and the government became 

 seriously alarmed at the excited state of public 

 reeling. Vain attempts were made to prevail on 

 the Bank to come to the rescue by circulating 

 some millions of Com|>nn\ V bonds. 



The country was now wound up to a most alarm- 

 ing pitch of excitement; the punishment of the 

 fraiidulentdirectors was clamorously demanded ; ami 

 parliament was hastily summoned ( pe.-eml.ei 8) to 

 deliberate on the l>est means of mil igating this great 

 calamity. Both Houses, however, proved to be in 

 as impetuous a mood as the public ; and, in spite of 

 the moderate counsels of \\ alpole, it was resolved 

 to punish the authors of the national distresses, 

 though hitherto no fraudulent acts had been prove. 1 

 against them. An examination of the proceedings 

 of the Company was at once commenced, with 

 results discreditable to the management ; the 

 private property of the directors was confiscated 

 (to the amount of upwards of 2 millions) for the 

 benefit of those who had suffered : seven millions 

 due to the government were remitted ; various 

 eminent persons in and about the government were 

 openly charged with receiving direct monev bribes 

 from the Company ; the Chancellor of the Ex- 

 chequer, Aislabie, "being found clearly guilty, was 

 expelled from the House of Commons, and im- 

 prisoned in the Tower. The niin wrought by the 

 Bubble was incalculable. See the histories of 

 Stanhope and Lecky, and Coxe's Walpole. 



The South Sea House in Threadneedle Street 

 was the headquarters of the South Sea Company. 

 When the company ceased to be a trading concern 

 its capital was converted into annuity stock ; and 

 its premises are now subdivided into numerous 

 offices. John Lamb was a clerk in South Sea 

 House ; and his brother Charles was admitted here 

 to learn book-keeping. 



South Shetland's, a group of islands in the 

 South Atlantic, lying on the lines of 60 S. lat. and. 

 60 W. long., and' covered ever with ice and snow. 



South Shields. See SHIELDS. 



Smith wark. or 'The Borough," on the Surrey 

 side of the Thames, was annexed to the City of 

 London (q.v.) in 1327. For its innumerable 

 memories reference may be made to Old Sonthvurk 

 atid its People (1878), by W. Rendle, or to Mr 

 Besant's romance, The Bell of St faul't. 



Southwell, a town of Nottinghamshire, since 

 1884 a cathedral city, on the anrient Krmine Street, 

 7 miles W. by S. of Newark and 12 NE. of Not- 

 tingham. A church was founded here by Panlinus 

 about 630; but the stately cruciform minster, which 

 with its three towers resembles York on a smaller 

 scale, is wholly of post-Conquest date, comprising 

 Norman nave and transepts (1110), Karly Knglisli 

 choir (1250), and Early Decorated chapter-house 

 (1300). It measures 306 feet by 123 across the 

 transepts, and the lantern tower is 105 feet high. 

 A collegiate church until 1841, it became in 1884 

 the cathedral of a new diocese including the coun- 

 ties of Notts and Derbyshire, and taken from 

 Lincoln and Lichfield ; ami in 1888 it was reopened 

 after restoration. Its eagle lectern originally be- 

 longed to Newstead priory, having been fished out 

 of the lake there about 1750. In the old ' Saracen's 

 Head ' Charles I. surrendered to the Scots com- 

 missioners (1646); Byron's mother occupied 

 Burgage Manor House (1804-7); and there are 

 picturesque ruins of the palace of the Archbishops 

 of York (r. 13(>0; much altered and enlarged by 

 Wblsey). The collegiate grammar-school was 

 refounded in Henry VIII. 's time ; and there are a 

 literary institute and free library. Pop. (1851) 

 3516 ; ( 1881 ) 2866 ; ( 1891 ) 2831. 



See works by Kastall (1787, 1801), Shilton (1818X 

 Dimook ( 1884 ), Livett ( 1883 ), and Leach ( 1890 ). 



