The winter of 1836-7 was marked by great commercial activity, and a strong tendency to over-trading, chiefly on the part of the banks. The result was a reaction, and considerable monetary embarrassment. In the reckless spirit of enterprise which led to these consequences, the American houses took the lead. The American speculators indulged an inordinate thirst for gain by land jobs, and over-trading in British produce. The most remarkable examples of this were afforded by three great American houses in London, called "the three W.'s." From an account of these firms, published in June, 1837, it appeared that the amount of bills payable by them from June to December, was as follows: Wilson and Co.,[411] 936,300; Wigan and Co., 674,700; Wildes and Co., 505,000; total acceptances, 2,116,000. This was upwards of one-sixth of the aggregate circulation of the private and joint-stock banks of England and Wales, and about one-eighth of the average circulation of the Bank of England. The shipments to America by Wigan and Co. amounted to 1,118,900. The number of joint-stock banks that started into existence at this time was remarkable. From 1825 to 1833 only thirty joint-stock banks had been established. In that year the Charter of the Bank of England being renewed, without many of the exclusive privileges it formerly enjoyed, and the spirit of commercial enterprise being active, joint-stock banks began to increase rapidly. There was an average of ten new companies annually, till 1836, when forty-five of these establishments came into existence in the course of ten months. In Ireland there were ten started in the course of two years. The consequence of this greatly increased banking accommodation produced a wild spirit of commercial adventure, which collapsed first in America, where the monetary confusion was unexampledbankers, importers, merchants, traders, and the Government having been all flung into a chaos of bankruptcy and insolvency. This state of things in America had an immediate effect in England. Discounts were abruptly refused to the largest and hitherto most respectable houses of Liverpool and London. Trade, in consequence, became paralysed; prices suddenly dropped from thirty to forty per cent.; and the numerous share bubblesthe railway projects, the insurance companies, the distillery companies, the cemetery companies, the sperm oil, the cotton twist, zoological gardens, and other speculationswhich had floated on the pecuniary tide, all suddenly collapsed, and there was an end to the career of unprincipled adventurers. It is satisfactory, however, to observe that the sound commerce of the country soon recovered the shock thus given; and in less than two years the pecuniary difficulties had passed away. Commerce had resumed its wonted activity, and flowed steadily in legitimate channels. The American banks resumed payment, and the three great American houses, which had involved themselves to such an enormous extent, were enabled to meet all their liabilities.

Parliament met on the 17th of January, 1727. The Royal Speech breathed a decidedly warlike tone. The king informed Parliament that he had received information, on which he could rely, that a secret article of the treaty between Spain and the Emperor bound those parties to place the Pretender on the throne of Great Britain, and that the surrender of Gibraltar and Port Mahon was the price to be paid for this service. He asked whether the public would not regard with indignation the imposition of a Popish Pretender on the nation at such a cost. He added that the King of Spain had ordered his Ambassador to quit the kingdom, leaving behind him a formal demand for the surrender of the above-named places. There was a great ferment in the House. Palm, the Emperor's envoy, wrote to his Imperial master, advising him to disavow any such secret agreement in the treaty at Vienna, and thus allay the excitement in England. But Charles, who owed his throne to the victories of Marlborough, and whose claims on Spain had been prosecuted by Britain at serious cost of men and money, performed this disavowal with as much arrogance as stupidity. He was not contented to say that the King of England was mistaken, but he declared that his speech was false. This gross insult to the head of the nation roused the indignation of all parties, even of the Opposition; and Wyndham, Pulteney, and Shippen denounced it as loudly as any, and supported a motion of Walpole, declaring it an insolent affront. Palm was ordered to quit the kingdom immediately.

The agitation extended to England, where also the "No Popery" cry was effectually raised. The Duke of Newcastle, Lord Winchilsea, and Lord Kenyon led the way in the formation of Brunswick Clubs. A great demonstration was got up on Penenden Heatha monster meeting of English Brunswickers. To counteract its effects, it was determined that some of the leading advocates of the Catholic cause, being freeholders of Kent, should go to the meeting. Among those who attended were Lord Darnley, Mr. Cobbett, Serjeant Shee, and Mr. Sheil; but none of them could obtain a hearing. Mr. Sheil had come prepared with a grand speech, carefully written out, as was his custom, and committed to memory, but not so strictly as to exclude such extemporaneous additions as might be necessary to adapt the oration to the actual circumstances. When he arrived at the meeting, the reporter from the Sun asked him for his manuscript, which he gave, with the understanding that he must make it correspond with his speech as delivered. The reporter, taking it for granted that it would be delivered all right, made all possible haste to get it into type. The speech appeared in extenso; but it unfortunately happened that, owing to the uproar and continued interruptions, it was not delivered. The circumstance became the subject of remark, eliciting comments by no means flattering to the Irish orator. The intended speech, however, was as able as any he had ever delivered. It consisted chiefly of an elaborate defence of the Roman Catholic Church from the charge of persecution. It admitted that it did persecute like every other church when in power; but that it was an incident of its establishment, not the natural result of its spirit and principles. Reproduced by Andr & Sleigh, Ld., Bushey, Herts.

At the time of this armistice, Napoleon, by the great battles of Lützen and Bautzen, had recovered his prestige sufficiently to induce the German Confederates of the Rhine to stand by him; but he was by no means what he had been. The[67] opinion of his invincibility had been irreparably damaged by the Russian campaign, and the success in these battles was not of a character to give confidence to his own army. They saw that the Allies had lost all superstitious fear of him. To assist in the negotiations of this armistice, Buonaparte sent for his two ablest heads, Fouch and Talleyrand, whom he had so long thrown from him for their sound advice. If Buonaparte could have heard, too, what was really going on in France, what were the growing feelings there, he would have been startled by a most ominous condition of things. But he had thoroughly shut out from himself the voice of public opinion, by his treatment of the press and of liberty, and he now was to suffer for it. Great Britain, on the 14th of June, had concluded an alliance with Russia and Prussia, and promised to send ample materials of assistance, even an army to the north of Prussia; and many British officers of the highest rank repaired to the headquarters of the Allies. When Great Britain was asked to take part in this negotiation she refused, declaring it useless, as Napoleon would not grant the only demands which the Allies ought to make.

The spirit of the country appeared to be running in a strong current for the return of Lord Chatham to the helm, as the only man who could save the sinking state, and bring the American difficulty to a happy issue. But the great obstacle to this was the still continued assertion of Lord Chathamthat the full independence of America could not be for a moment listened to, whilst to almost every other man of the Opposition that independence was already an accomplished fact. Lord Rockingham, who was looked up to as a necessary part of any Cabinet at the head of which Chatham should be placed, had, in the previous Session, asserted his opinion that the time had now passed for hoping to preserve the dependence of these colonies; and, now he saw France coming into the field against us, he was the more confirmed in this view. This was a fatal circumstance in the way of the establishment of a strong co-operative Cabinet, formed out of the present Opposition. But a still greater obstacle was the iron determination of the king. In vain did Lord North express his desire to resign and declare the necessity of conciliatory measures. George reproached him with intending to desert him. On further pressure he gave him leave to apply to Chatham and the Whigs, but only on the absurd condition that[250] they should join the present Ministry, serve under Lord North, and carry on the policy of the existing Government. As usual, Lord North gave way, and consented to stay in office, and to bring in a plan of conciliation opposed to his former declarations.