.

The Turks, who are far from being profound politicians, happily remained quiet while the Christian princes were most deeply embroiled among themselves; but no sooner was the general peace concluded, than Achmet III. commenced hostilities against the Venetians, and made himself master of the Morea, or ancient Peloponnesus. The emperor Charles VI. as guarantee of the treaty of Carlowitz, by which this territory had been assigned to the republic of Venice, was bound, in honour, to declare war against the Turks for infringing it :-and the pope, alarmed at the progress of the infidels, urged his imperial majesty to stand forth in defence of Christendom. Charles accordingly assembled a powerful army, under the celebrated prince Eugene; who passed the Danube, and defeated the grand vizier Ali, at Peterwaradin. The year following the same general undertook the siege of Belgrade. The Turks advanced to its relief, and besieged him in his camp. His danger was imminent: but military skill and disciplined valour triumphed over numbers and savage ferocity. He sallied out of his intrenchments; and falling suddenly upon the enemy, routed them with great slaughter, and took their cannon, baggage, and every thing belonging to their camp. Belgrade surrendered immediately after.

The consequence of these two victories was the peace of Passarowitz, by which the porte ceded to the emperor Belgrade and all the Bannat of Temeswaer. But the Venetians, on whose account the war had been undertaken, did not recover their possessions in Greece: the Morea was left, and still remains in the hands of the Turks.

What time the arms of the emperor were employed against the infidels, a new enemy was rising up against him in Christendom, and even from the bosom of the Catholic church. Philip V. of Spain, having lost his first queen, Maria Louisa of Savoy, had married, in 1714, Elizabeth Farnese, presumptive heiress to the dutchies of Parma, Placentia, and Tuscany, with all the territories belonging to them. This marriage, which not a little alarmed the emperor, was chiefly brought about by the intrigues of Alberoni, an Italian priest, and a native of Placenza, who soon rose to the highest favour at the court of Madrid, and was honoured by the pope with a cardinal's hat. The princess Ursini, who had long directed all things in Spain, and who, it is said, might have shared the throne, had she not hoped to govern more absolutely, and less invidiously, by means of another, was now ordered to quit the kingdom. The new queen, who was a woman of spirit, governed alone her too easy husband, and Alberoni governed the queen, by flattering her ambition.(1) The bold, rather than correct, or illuminated genius of that minister, made him form the most extraordinary projects. The principal as well as most rational of these, though in itself sufficiently romantic, was to recover all the territories that Spain had ceded at the peace of Utrecht, but more especially her Italian dominions. This idea seems to have occupied the mind of Alberoni when he negotiated the marriage of Philip V. with the princess of Parma, whose interest in Italy was great, and for whose offspring those speculative conquests were designed, as all hopes of their succeeding to the Spanish monarchy were cut off by the children of the first bed. In order to enable him to execute that ambitious project, which was highly flattering to the queen, he laboured indefatigably, and with no small degree of success, to put the Spanish finances on a respectable footing, while he new modelled and greatly augmented both the army and navy.

Alberoni, however, did not rely merely on the resources of Spain for the execution of so great an undertaking. He extended his negotiations and intrigues to every court in Europe. He endeavoured to engage the Turks, notwithstanding their losses, to continue the war against the emperor, whom he meant to strip of his Italian conquests. He persuaded Philip V. that his renunciation was invalid, and that he had still a better right than the duke of Orleans, not only to the crown of France, in case of the death of Lewis. XV. without male issue, but also to the regency during the minority of that

(1) Mem. de Noailles, tom. iii.

prince In hopes of bringing about this important revolution, and becoming prime minister of both France and Spain, he accordingly inflamed the French malecontents. He also encouraged the Scottish jacobites, with whom he held a secret correspondence; and he had formed a scheme, in conjunction with the duke of Ormond, the baron de Goertz, and Charles XII. of Sweden, who thirsted after revenge on the house of Hanover, of acquiring a new and powerful ally to his master, by placing the pretender on the throne of Great Britain. But all these dazzling projects soon vanished into air, and this meteor of a moment disappeared with them.

We have already seen in what manner the intrigues of the baron de Goertz were defeated, by the seizure of the papers of Gyllemburg, the Swedish ambassador at the court of England, and the subsequent death of Charles XII. Those of Alberoni were defeated, in like manner, by the seizure of the papers of prince Cellamar, the Spanish ambassador at the court of France. The project of prince Cellamar and his confederates was, to land a body of Spanish troops in Brittany, in order to favour the assembling the malecontents of Poitou; to seize the person of the duke of Orleans, and oblige him to resign the regency to Philip V. On the discovery of this plot, cardinal Polignac, one of the principal conspirators, was confined to his abbey; the duke and dutchess of Maine were taken into custody; the prince de Dombes and the count d'Eu were ordered to retire from court; the Spanish ambassador was conducted to the frontiers; five gentlemen of Brittany were executed, and the duke of Orleans found his authority thenceforth more firmly established.(1) The formerly precarious state of that authority, and the dangerous intrigues of Alberoni, had induced the regent of France, in 1716, to enter into a league with England and Holland; and the violent ambition of the court of Spain, which seemed to know no bounds, now disposed those three powers, in conjunction with the emperor, to form the famous QUADRUPLE ALLIANCE, as a dyke against its fury. After the articles which provided for the maintaining of the peace of Utrecht, the principal stipulations in that treaty were, That the duke of Savoy, in consideration of certain places in Italy, should exchange with the emperor the island of Sicily for that of Sardinia, of which he should take the regal title: and that the emperor should confer on Don Carlos, eldest son of the young queen of Spain, the investiture of the dutchies of Parma, Placenza, and Tuscany, on the death of the present possessors without issue. This formidable alliance made no alteration in the temper of Alberoni. The article that regarded the eventual succession of Don Carlos was rejected with scorn by the Spanish court, which had already taken possession of Sar dinia, under pretence of assisting the Venetians against the Turks, and of great part of the island of Sicily. The consequence of this obstinacy, and of these unprovoked hostilities, was a declaration of war against Spain, by France and England.

But, before that measure was embraced, every method had been tried, though ineffectually, to adjust matters by negotiation: Alberoni sought only to gain time, by amusing the ministers of the two crowns. He did not, however, succeed in his scheme. George I., even while he negotiated, sent a powerful fleet into the Mediterranean, under sir George Byng, who, being vested with very ample powers, and finding every proposal to induce the Spaniards to accede to a cessation of arms treated with disdain, proceeded to execute his ultimate instructions. He accordingly engaged the Spanish fleet near the coast of Sicily, and took or destroyed twenty-one ships out of twenty-seven, fourteen of which were of the line; yet could he not prevent the Spanish troops, commanded by the marquis de Leda, from making themselves masters of the citadel of Messina, the town having surrendered before his arrival. But by his activity in transporting German troops into Sicily, both the town and citadel were soon recovered: and the Spaniards made overtures for evacuating the island. The recovery of Sicily was followed by the surrender of Sardinia.

(1) Duke of Berwick's Mem vol. ii. Mem de Brandenburg, tom. ¡¡.

In the mean time, the duke of Berwick conducted a French army towards the frontiers of Spain, and made himself master of St. Sebastian and Fontarabia; the duke of Ormond failed in his attempt to land a Spanish army in Great Britain; and the duke of Berwick, having made preparations for opening the next campaign with the siege of Roses and Pampeluna, Philip V. acceded to the terms prescribed by the quadruple alliance, and Alberoni was disgraced.(1)

While this Italian priest, the son of a peasant, and formerly the curate of a petty village near Parma, was ambitiously attempting to change the political state of Europe, a great and real change was brought about in the commercial world, in the finances of nations and the fortunes of individuals, by a Scottish adventurer, named John Law. Professionally a gamester, and a calculator of chances, Law had been obliged to abandon his native country, for having killed his antagonist in a duel. He visited several parts of the continent: and, on his arrival at Paris, he was particularly struck with the confusion into which the ambition of Lewis XIV. had thrown the French finances. To remedy that evil appeared a task worthy of his daring genius:and he flattered himself that he could accomplish it. The greatness of the idea recommended it to the duke of Orleans, whose bold spirit and sanguine temper induced him to adopt the wildest projects.

Law's scheme was, by speedily paying off the immense national debt, to clear the public revenue of the enormous interest that absorbed it. The introduction of paper-credit could alone effect this amazing revolution, and the exigencies of the state seemed to require such an expedient. Law accordingly established a bank, which was soon declared royal, and united with the Mississippi or West India company, from whose commerce the greatest riches were expected, and which soon swallowed up all the other trading companies in the kingdom. It undertook the management of the trade to the coast of Africa; it also obtained the privileges of the old East India company, founded by the celebrated Colbert, which had gone to decay, and given up its trade to the merchants of St. Malo; and it, at length, engrossed the farming of the national taxes.

The Mississippi company, in a word, seemed established on such solid foundations, and pregnant with such vast advantages, that a share in its stock rose to above twenty times its original value. The cause of this extraordinary rise deserves to be traced.

It had long been believed, on the doubtful relations of travellers, that the country in the neighbourhood of the river Mississippi contained inexhaustible treasures. Law availed himself of this credulity, and endeavoured to encourage it by mysterious reports. It was whispered, as a secret, that the celebrated, but supposed fabulous mines of St. Barbe, had at length been discovered; and that they were much richer than even fame had reported them. In order to give the greater weight to this deceitful rumour, a number of miners were sent out to Louisiana, to dig, as was pretended, the abundant treasure; with a body of troops sufficient to defend them against the Spaniards and Indians, as well as to protect the precious produce of their toils! The impression which this stratagem made upon a nation naturally fond of novelty is altogether astonishing. Every one was eager to obtain a share in the stock of the new company: the Mississippi scheme became the grand object and the ultimate aim of all pursuits.(2) ́Even Law himself, deceived by his own calculations, and intoxicated with the public folly, had fabricated

(1) Duke of Berwick's Mem. vol. ii. Mem. de Brandenburg, tom. ii.

(2) The adventurers were not satisfied with a bare association with the company, which had obtained the disposal of that fine country. The proprietors were applied to from all quarters for large tracts of Jand for plantations; which, it was represented, would yield, in a few years, a hundred times the sum necessary to be laid out upon them. The richest and most intelligent men in the nation were the most forward in making these purchases; and such as could not afford to become purchasers, solicited the management of plantations, or even to be employed in cultivating them!-During this general infatuation, all persons who offered themselves, whether natives or foreigners, were promiscuously and carelessly crowded into ships, and landing on the burning sands of the Biloxi, a district in West Florida, between Pensacola and the mouth of the Mississippi, where a French settlement had been inconsiderately formed, and where these unhappy men perished in thousands, of want and vexation; the miserable victims of a political im posture, and of their own blind avidity. Raynal, Hist. Philos. et Politique, liv. xvi.

so many notes, that the chimerical value of the funds, in 1719, exceeded fourscore times the real value of the current coin of the kingdom, which was almost all in the hands of government.

This profusion of paper, in which only the debts of the state were paid off, first occasioned suspicion, and afterward spread a general alarm. The late financiers, in conjunction with the great bankers, exhausted the royal bank, by continually drawing upon it for large sums. Every one wanted to convert his notes into cash; but the disproportion of specie was immense. Public credit sunk at once; and a tyrannical edict, forbidding private persons to keep by them above five hundred livres, served only to crush it more effectually, and to inflame the injured and insulted nation against the regent. Law, who had been appointed comptroller-general of the finances, and loaded with respect, was now execrated and obliged to fly from a country he had beggared, without enriching himself, in order to discharge the debts of the crown. (1) The distress of the kingdom was so great, and the public creditors so numerous, that government was under the necessity of affording them relief. Upwards of five hundred thousand sufferers, chiefly fathers of families, presented their whole fortunes in paper; and government, after liquidating these debts, which are said to have originally amounted to a sum too incredible to be named, charged itself with the enormous debt of sixteen hundred and thirty-one million of livres, to be paid in specie.(2)

Thus ended in France the famous MISSISSIPPI SCHEME; So ruinous to the fortune of individuals, but ultimately beneficial to the state, which it relieved from an excessive load of debt, though it threw the finances, for a time, into the utmost disorder. Its effects, however, were not confined to that kingdom. Many foreigners had adventured in the French funds, and the contagion of stock-jobbing infected other nations. Holland received a slight shock; but its violence was more peculiarly reserved for England, where it appeared in a variety of forms, and exhausted all its fury. The SOUTH SEA SCHEME, evidently borrowed from that of Law, first excited the avidity of the nation. But it will be necessary, before I enter upon that subject, to give some account of the nature of the stocks, and the rise of the South Sea company.

Nothing, my dear Philip, is so much talked of in London, or so little understood, as the NATIONAL DEBT, the PUBLIC FUNDS, and the STOCKS: I shall, therefore, endeavour to give you a general idea of them. The national debt is the residue of those immense sums which government has, in times of exigency, been obliged to raise by way of voluntary loan, for the public service, beyond what the annual revenue of the crown could supply, and which the state has not hitherto found it convenient to pay off. The public funds consist of certain ideal aggregations, or masses of the money thus deposited in the hands of government, together with the general produce of the taxes appropriated by parliament to pay the interest of that money; and the surplus of these taxes, which have always been more than sufficient to answer the charge upon them, composes what is called the SINKING FUND, as it was originally intended to be applied towards the reduction, or sinking of the national debt. The stocks are the whole of this public and funded debt; which, being divided into an infinity of portions or shares, bearing a known interest, but different in the different funds, may be readily transferred from one person to another, and converted into cash for the purposes of business or pleasure, and which rise or fall in value according to the plenty or scarcity of money in the nation, or the opinion the proprietors have of the security of public credit.

Such is the present state of the stocks; which are subject to little fluctuation, except in times of national danger or calamity. For as the public creditors have long given up all expectation of ever receiving their capital from government, the stocks are not much affected by great national prosperity, unless when attended with a sudden or extraordinary influx of money. A strong probability, amounting to a speculative certainty, that the interest of the national debt will continue to be regularly paid, without any farther reduc

(1) Voltaire, Raynal, and other French authors.

(2) Voltaire.

tion, must raise the stocks nearly as high as they can go; and this is the common effect of peace and tranquillity. Formerly, however, the case was otherwise. The loans were chiefly made by corporations, or great companies of merchants; who, besides the stipulated interest, were indulged with certain commercial advantages. To one of those companies was granted, in 1711, the monopoly of a projected trade to the Spanish settlements on the South Sea, an entire freedom to visit which, it was supposed, England would obtain, either from the house of Austria, or that of Bourbon, in consequence of the prodigious successes of the war.

At the peace of Utrecht, no such freedom was obtained. But the assiento, or contract for supplying the Spanish colonies with negroes, conveyed to Great Britain by the commercial treaty with Philip V. as well as the singular privilege of sending annually to the fair of Porto Bello a ship of five hundred tons burden, laden with European commodities, was vested exclusively in the SOUTH SEA COMPANY. By virtue of this contract, British factories were established at Carthagena, Panama, Vera Cruz, Buenos Ayres, and other Spanish settlements: and the company was farther permitted to freight, in the ports of the South Sea, vessels of four hundred tons burden, in order to convey its negroes to all the towns on the coasts of Mexico and Peru; to equip them as it pleased; to nominate the commanders of them, and to bring back the produce of its sales in gold or silver, without being subject to any duty of import or export.(1)

Nor was this all. The agents of the British South Sea company, under cover of the importation which they were authorized to make by the ship sent annually to Porto Bello, poured in their commodities on the Spanish colonies, without limitation or reserve. Instead of a vessel of five hundred tons burden, as stipulated by the treaty, they usually employed one of a thousand tons, exclusive of water and provisions: she was accompanied by three or four smaller vessels, which supplied her wants, and mooring in some neighbouring creek, furnished her clandestinely with fresh bales of goods, in order to replace such as had been previously sold.(2)

By these various advantages, the profits of the South Sea company became excessively great, and the public supposed them yet greater than they really were. Encouraged by such favourable circumstances, and by the general spirit of avaricious enterprise, sir John Blount, one of the directors, who had been bred a scrivener, was tempted to project, in 1719, the infamous SOUTH SEA SCHEME. Under pretence of enabling government to pay off the national debt, by lowering the interest, and reducing all the funds into one, he proposed that the South Sea company should become the sole public creditor.

A scheme so plausible, and so advantageous to the state, was readily adopted by the ministry, and soon received the sanction of an act of parliament. The purport of this act was, That the South Sea company should be authorized to buy up, from the several proprietors, all the funded debts of the crown, which then bore an interest of five per cent.; and that, after the expiration of six years, the interest should be reduced to four per cent. and the capital be redeemable by parliament.(3) But as the directors could not be supposed possessed of money sufficient for so great an undertaking, they were empowered to raise it by different means; and particularly by opening books of subscription, and granting annuities to such public creditors as should think proper to exchange the security of the crown for that of the South Sea company, with the emoluments which might result from their commerce.(4)

While this affair was in agitation, the stock of the South Sea company rose

(1) Anderson's Hist. of Commerce, vol. ii.

(2) Id. ibid. See also Robertson's Hist. of America, book viii.

(3) See the printed act.

(4) These emoluments, as we have already seen, were very great; yet so intelligent a writer as Dr. Smollett has said, "That in the scheme of Law there was something substantial: an exclusive trade to Louisiana promised some advantage; but the South Sea scheme promised no commercial advantage of any consequence." (Hist. of Eng. vol. x.) So liable are men of the greatest talents to be the dupes of ignorance or prejudice.