Malcolm Balen - A Very English Deceit - The Secret History of the South Sea Bubble and the First Great Financial Scandal

His enemies should have taken note. Robert Walpole would prove to have a long memory.

The most fundamental overhaul ever carried out on the rules governing the way members of the royal family run their business lives was announced by Buckingham Palace last night. In an attempt to ensure that family members do not exploit their position for financial gain, the palace said new safeguards would ensure a ‘complete separation’ between official engagements andcommercial projects. ‘It is entirely in tune with today’s world that members of the royal family should be allowed to pursue careers, including in business, if that is what they wish to do,’ a Palace statement saidlast night.Observer , 8 July, 2001

King George I exhibited his eagerness to take over his new throne by dawdling all the way from Hanover to London. Weeks went by before his pernickety nature was satisfied with the detailed preparations for his forthcoming ordeal. When he finally set out, he made sure he stopped all the way along his route to receive the congratulations which befitted his new status and which put off the point at which he could no longer avoid stepping on to the timber-clad deck of the royal yacht for the sea journey to the grey, cold, inhospitable island which it was now his fate to rule. So disagreeable was this prospect that he clung to Holland as if it was home, meandering through its cities and basking in the receptions he was accorded, so that he did not embark for England until 27 September 1714, nearly two full months after Anne’s death.

The British weather retaliated, responding to George’s preconceived view of his kingdom as a damp and chilly outpost by exceeding his expectations. Dense fog shrouded London on his arrival, drifting ethereally over the waters of the Thames as his yacht neared port, wrapping itself around Wren’s masterpieces and obscuring the soaring cathedral. George could no more make out the spiritual grandeur of the city’s horizon than his bulging blue eyes could penetrate the narrow, twisting streets to glimpse the temporal realities of his subjects’ lives. So slow was his progress that he was forced to come ashore at night. Then he was rowed to Greenwich in his barge to avoid damage to the royal yacht. As he stepped ashore, to be greeted by ranks of fawning politicians, George could just make out the symmetrical splendour of Wren’s seamen’s hospital. But his kingdom was still a mystery. Even when the clinging fog finally relented, and throughout the rest of his reign, it remained so.

On dry land, the torchlit reception which greeted George appeared both to lend some atmosphere to the occasion and to give appropriate recognition to his new-found status. The Whigs, loyal throughout their parliamentary difficulties to the House of Hanover, were there in force to reap their reward. George singled out their standard-bearer, the Duke of Marlborough, for attention, while Harley was relegated to the background, his hopes that the King intended to rule without favourites or party already dead. With George the power of the Whigs would come irresistibly flooding back.

For the leading players in the South Sea drama which was about to unfold, the ground had also shifted. John Blunt had to court the new regime, as he had courted Harley, but Robert Walpole, at the age of thirty-eight was back in power. He held office first as Paymaster of the Forces, and then, within a year, as Chancellor of the Exchequer, posts which allowed him to see at first hand the debts of the nation, and which also gave him a licence to line his own pockets.

Political stability was absent at the start of George’s reign. He was a contingent king, an interloper who had taken the throne after a political battle of wills, not through divine right or the hereditary principle. His presence assured the Protestant succession, but not the warm embrace of his new countrymen. Both sides in this convenient compact eyed each other warily, not knowing quite what to expect; neither felt an emotional pull towards the other. George was an administrative convenience, a fruit grafted on to Anne’s barren reign, a foreigner who would have to win the respect of his citizens, but who possessed neither the charm nor the intellect to do so. Cruelly, the traveller and letter-writer Lady Mary Wortley Montagu noted: ‘The King’s character may be comprised in a very few words. In private life he would have been called an honest block-head.’

This was an exaggeration. George was a complicated man, not clever but not entirely stupid either; idle, but energetic enough to want to rule in his own way without interference, and short-tempered enough to cast out those who did not fall into line. At fifty-four, he was not in the full flush of youth; nor was he handsome, but he more than made up for this with an extraordinary appetite for women which was to make him an object of ridicule in his kingdom – less for his sexual charge per se, more for the way he chose to express it: the objects of his desire were, by common consent, downright ugly. Added to which, there was something positively medieval about his family background. His wife Sophia had once taken a lover, perhaps in retaliation for her husband’s considerable dedication to his extramarital activities. George’s revenge was terrible to behold. The lover, the Swedish Count von Königsmark, disappeared after he was lured to a false rendezvous with his lady. George probably ordered the murder, though he was away in Berlin when it happened. Sophia was divorced and incarcerated in the Castle of Ahlden, near Hanover, forbidden to see her children again. For her, there was no fairy-tale rescue by a handsome prince. For thirty-two years she languished there until her death, while George frolicked with his mistresses.

The two mistresses he brought with him to England were both, in their own ways, improbable recipients of their monarch’s favours. Baroness Eremengarda Melusina von der Schulenburg was tall and bony. She was called ‘the Maypole’ by the King’s subjects; Madame Carlotte Sophia Kielmansegge, fifty and fat, was known as ‘the Elephant’. As a child, the writer Horace Walpole was scared witless by her: ‘I remember being terrified at her enormous figure … [she] was as corpulent and ample as the Duchess was long and emaciated. Two fierce black eyes, large and rolling beneath two lofty arched eyebrows, two acres of cheeks spread with crimson, an ocean of neck that overflowed and was not distinguished from the lower parts of her body, and no part restrained by stays – no wonder that a child dreaded such an ogress!’

Money, or the lack of it, was still the driving force in politics, and with the presence of the royal mistresses it became even more so. Their grasping nature, the rapidly acquired debts of the new monarch and the shattering of the government Exchequer through war combined to form a corruption which wrapped itself around the very institutions of state. In this the strangeness of King George I also played a part. He was a foreigner, who spoke little or no English; an outsider, who had brought with him not just his own women to share the royal bed, but his own placemen who staffed his court and who needed to be bribed. An American businessman, William Byrd, attended court in the hope of being appointed Governor of Virginia and was advised to bribe one of the leading German courtiers, while the future Duke of Chandos oiled his way through the early years of George’s reign in order that his brother could become cashier of the Salt Office, dishing out 250 lottery tickets here, 400 guineas there. In 1715 he gave £3,000, an enormous sum, to Madame Kielmansegge, followed by a ring for her daughter. The Maypole, in particular, saw that she could make serious money out of her status. She sold the patent for copper coinage in Ireland for £14,000 and she also sold peerages. George’s arrival on the throne had accentuated the establishment’s tendency towards corruption.