Defeated in this object, the Patriots united all their force to embroil us with Spain. There were many causes in our commercial relations with Spain which led to violent discontent amongst our merchants. They found the trade with the Spanish settlements in America exceedingly profitable, but they had no right, beyond a very limited extent, to trade there. The Spaniards, though they winked at many encroachments, repressed others which exceeded these with considerable vigour. Their Coastguard insisted on boarding and searching our vessels which intruded into their waters, to discover whether they were bringing merchandise or were prepared to carry away colonial produce. By the treaty of 1670 Spain had recognised the British colonies in North America, and England had agreed that her ships should not enter the ports of the Spanish colonies except from stress of weather, or with an especial licence from the Spanish Government to trade. By the treaty of 1729 we had agreed to the old regulations regarding trading to the Spanish Main, namely, that we should have the Assiento, or right of supplying these colonies with slaves, and that, besides this, we should only send one ship annually to the Spanish West Indies and South America. As fast as that authorised ship discharged its cargo in a Spanish port, she received fresh supplies of goods over her larboard side from other vessels which had followed in her wake, and thus poured unlimited quantities of English goods into the place. Other English traders did not approach too near the Spanish coasts, but were met in certain latitudes by South American smugglers, who there received their goods and carried them into port. In short, such a system of contraband trade was carried on in these waters by our merchants, that English goods in abundance found their way all over the Spanish American regions, and the great annual fair for goods imported from or by Spain dwindled into insignificance.The South Sea Company, with a folly of which extreme greed only is capable, endeavoured to put down these rival schemes and obtained an order from the Lords Justices and writs of scire facias against several of these new bubbles. It was like raising a wind to blow away the bubbles, forgetting that their own was a bubble too, and would go with them. The moment that the people began to distrust one they distrusted all. The panic became as great as the mania had been. The South Sea stock dropped in less than a month from one thousand to below six hundred. There was a simultaneous rush to sell out, and the shares must have sunk instantly to nil but for the gigantic exertions of the Company to raise money and buy in. The relief, however, was but temporary. The bankers and pawnbrokers who had advanced money on scrip broke and fled; merchants, goldsmiths, and speculators rushed away after them. Walpole was summoned in haste from Haughton to devise some means of staying the panic. He endeavoured to get the Bank of England to circulate three millions of South Sea bonds for a year; but the Bank, seeing that the case was desperate, declined it. This was decisive. The rage and despair of the swarming dupes were indescribable. They heaped[48] execrations not only on the South Sea Company, but on Ministers, the king, his mistresses, and the Royal Family, who had all been deep in the affair, and who had taken good care of themselves. George landed at Margate on the 9th of November, soon after which the South Sea stock fell to one hundred and thirty-five. On the 8th of December Parliament met, and promptly began to investigate the scandal.
