A History of Britain, Volume 2 (51 page)

The plan, dreamed up by the South Sea Company, was going to make everyone happy, except perhaps the directors of the Bank of England. Its pet project was an idea that was simplicity itself: essentially the privatization of a large portion of the National Debt. As the government's wartime demands had become more urgent, so the interest rates payable on long-term obligations like annuities had become steeper – around 6 per cent. The Company, founded in 1711 and always more of a financial management organization than a commercial enterprise, offered to buy out that burden. Holders of long-term irredeemable bonds like annuities (on which interest was payable every year until the holder died) would be persuaded to trade them for company stock. The Company, now capitalized to the tune of some £40 million, would be given the monopoly to trade in ‘The South Seas and West Indies'. A similar scheme, cooked up in France by the Scottish financier John Law, who had invented a ‘Mississippi Company', seemed, for the moment, to have worked like a dream. But despite the vision of exotic riches, everyone understood that the South Sea Company was a shipless wonder, essentially a fund-management company. The only reason why a holder should want to make the trade of annuities against stock was a belief that the swift appreciation of South Sea stock would make him more money than he could ever dream of in a lifetime's receipt of annual interest payments.

The prophecy was self-fulfilling. Between January and June 1720, South Sea stock rose from 128 to 950 and peaked at 1050 on 24 June. Annuity holders climbed over each other in the crush to get their hands on certificates, sending the price through the roof. Rents soared. New shell companies sprang up overnight with equally spurious commercial rationales: companies formed to trade in human hair or woad or coral fishing. On 23 May the government auditor, Harley, wrote to his brother Sir Robert, now Earl of Oxford, ‘The madness of stockjobbing is inconceivable.' It must have seemed, as booms always do, that it must go on for ever; a perfect instance of the fit between public interest and private profit. Until, that is, some prominent stockholders decided enough was enough, took their profit and departed. Isaac Newton made £7000; Thomas Guy, founder of the London hospital of that name, £180,000. The rhythm of selling began to accelerate, and the stock suddenly started to dip, then tumble, and finally, as panic took hold, it went into free-fall: between 1 September and 1 October, its value collapsed from 725 to 290. Countless investors who had dreamed of making overnight fortunes were now left with neither their old dependable annuities nor stock of any serious value. Lord Londonderry lost £50,000; many less exalted were wiped out. The country was left drowning in worthless paper, thrashing about looking for someone to blame.

There were plenty of choice targets: John Aislabie, Chancellor of the Exchequer from 1718 to 1728, and Walpole's principal rival, who had himself held £77,000-worth of South Sea Stock at almost 100 per cent profit; Charles Spencer, the third Earl of Sunderland, who had been one of the project's principal promoters. But Robert Walpole was certain it was not going to be him. He had muttered some lukewarm reservations about the Company that he now suggested had been deep and solemn second thoughts. But in fact Walpole had been lucky, not prescient. He had invested heavily himself, had sold some stock too early (unlike the canny Guy) and then, repenting, had tried to buy in again at the precise moment when it was poised to depreciate. Luckily for him, the bid had been held up by a delay in the mail. But Walpole did nothing to allay a wholly undeserved impression of clairvoyance. His real art, at this moment, was less financial wizardry than crisis management. He knew very well that the government itself was on a sound footing. Whatever the cost to individual stockholders, the Treasury had relieved itself of nearly 80 per cent of all its previous annuity holders. Fortunes had been lost. But others had been won. So the crisis was more psychological than fiscal. Like FDR in 1932 he understood that the first priority was to stop the self-seeding fear. Noises needed to be made about a rescue scheme for the Company, however vaguely defined and ambiguously guaranteed. Happily his own shrewd investment manager and banker, Robert Jacombe, came up with one, largely based on the reconsolidation of Company stock into solid Bank of England obligations.

It was not so much what he said as the way he said it. When Walpole spoke to the House of Commons with his effortless geniality and evenness of temper, the stricken calmed down and began to feel unaccountably better as though they had all had a glass or two of his best port. Better yet, when he read them balance sheets that would normally have had them perspiring with bewildered anxiety, they discovered – miracle of miracles – that they could actually understand what he was talking about. And it didn't seem, after all, the end of the world. The carriages and the hunting hounds could stay.

In short order Walpole became the rock to which apparently foundering fortunes, financial and political, anchored themselves. And for his ability to shield the culpable from the consequences of the disaster he also became known as the Skreen Master – the master, we would say, of spin. Everyone was in his debt, not least because he had his hands on explosive information as to who exactly had bribed whom to get the Company deal done. Aislabie would have to be sacrificed but Sunderland was spared. King George, whose own hands were not clean (nor were
those of his mistresses), was agog with admiration and gratitude. Walpole's ministerial colleagues, especially Sunderland, who had sniped at his presumptuous ambition, grovelled before his apparently arcane mastery of the spreadsheets, not to mention the discreet success with which he kept them out of prison. The serried ranks of the Whigs on the benches of the Commons loved him for deflecting popular anger. Even the more independently minded country gentry at least appreciated him making good his promise to keep the country out of the foreign wars that would raise their tax rates.

Walpole repaid their appreciation by departing from tradition and remaining in the Commons on becoming ‘First Lord of the Treasury', not so much Prime Minister as Prime Manager. Part of the decision was a matter of prudence. Apart from the solid core of Tories there was also a sizeable group of independent members, and those two non-government factions needed to be kept apart for his own ministry to maintain its domination. So no pains were too great in his careful cultivation of loyalty in the House. ‘So great was Walpole's love of the Commons,' wrote the Earl of Chesterfield, ‘that when going to face the House he dressed as carefully as a lover going to see a mistress.' In keeping with Walpole's belief in the bonds of mutual interest over the alignments of ideology, he built a barony of connections and obligations. And they began with small, telling gestures. Rival politicians like the Whig specialists in firebrand ‘patriot' oratory, William Pulteney and John Carteret, could always outshine him. But they could never outdine him. Walpole made a point of ensuring that every new Whig member of the Commons dined with him
tête-à-tête
. With a glass of his best claret in your hand, a juicy haunch of mutton oozing on the trencher and Cock Robin's glittering eyes twinkling benevolently in your direction as if the life of the party, the state of the nation depended on
you,
how could you possibly not swear undying devotion and loyalty to his interest?

And then, to be sure, there was the matter of jobs. Walpole sat at the heart of a vast empire of patronage. There had, of course, been first ministers before him who had made it their business to dispense offices to their followers or to strip them from the unobliging. But the expansion of the British state during the long decades of war had resulted in a massive multiplication of posts, especially in the strategically lucrative departments of revenue enhancement – customs, excise, land-tax assessment – and this gave Walpole an unprecedented bonanza of jobs to distribute. Some of them might be pure sinecures requiring nothing more of the holder than to sit back and collect, and these were especially useful assets in securing votes in the Commons. Many others were appointments
that required real effort and even a modicum of integrity. But they conferred status as well as cash on the holder and could make a somebody out of a nobody, especially in their native county or town.

In retrospect it is possible to see that what Walpole built was Britain's (in fact the world's) first party-political machine. He owned the placemen in parliament primed to vote as directed. And since the passage of the Septennial Act in 1716 (the pretext of which was to keep dangerous Jacobitism at bay) elections now came just once every seven years, extending the life of members' offices that much longer. Walpole had the hacks scribbling away to persuade the country that he was working assiduously in its best interests (as he quite sincerely believed he was). He had George I eating out of the palm of his hand, especially when his managerial skills produced the civil-list money needed to keep the king and queen in decent style. And lest anyone imagine they could break ranks from his parliamentary coalition of office-holders, placemen and Whig loyalists, he had the necessary information to make them think twice about such rashness.

Perhaps the most breathtaking evidence of Walpole's sense of invulnerability was the house he built for himself in Norfolk, the most incautiously palatial building made for a non-aristocrat since Cardinal Wolsey made the mistake of creating Hampton Court. Houghton Hall was the Whig Xanadu: the last word in opulence. Anything that riches could buy Walpole bought – marble in cartloads, figured damasks and watered silks, furniture designed by the painter and architect William Kent and made from exceptionally expensive mahogany, antique busts, extraordinary masterpieces of Renaissance and baroque art – Titian, Rubens, Poussin, Holbein, Murillo – all shipped to the East Anglian pleasure dome, some of them by strategically placed ambassadors and consuls in Rome or Madrid. Walpole's son, Horace, who was to become a compulsive connoisseur of painting and an acute critic, undoubtedly had his eye educated by his father's collection and grew up there, dressed in clothes made of French silk, attended on by his own retinue of footmen. But Houghton was not just an eye-popping demonstration of the good life that Walpole promised to the landed classes. It was also a statement of grandeur meant to stun the sceptics into acknowledging that only someone securely in command of the destinies (and money) of the nation could possibly afford something on that scale of conspicuous waste.

His entertainment was Lucullan. In one year alone, and to one of his six wine merchants alone, Walpole returned some 500 dozen empty bottles. To those who had sampled the Haut Brion and the Lafite at one of the ‘Norfolk Congresses', as the parties were called, it went without
saying that, if King George had the throne, it was Cock Robin who had the palace.

Walpole's critics, like Edward Harley, may have sneered at the vulgarity of Houghton, exhibiting ‘very great expense without either judgement or taste'. But there is no doubt that its owner's shameless appeal to enlightened self-interest was infectious. With the glittering prizes dangled before their noses, the governing caste of the country – some 180 peers and 1500 country gentry – lined up to trade party passion for Palladian architecture. They stopped shouting and started building. And what they built were sanctuaries from social unsightliness. Just as Walpole's political management was designed to choke off the din of political belligerence, so the building style recommended to the Whig oligarchs was meant to insulate them from any contact with the grubby irregularity of the material world. The managed state would be complemented by the edited landscape, both in the interests of the most advertised virtue of Walpolean England: harmony. In the treatises of architectural virtuosi like Richard Boyle, third Earl of Burlington (who seems to have been a covert Jacobite), the agreement of parts was a matter of geometry, as it had been for the ancients. But the cohesion and grace of the Hanoverian country house was a contrivance: the appearance of harmony through the manipulation of reality; continuous spaces and sightlines achieved through acts of separation and obliteration.

Earlier generations of country houses had most often been fronted by a road connecting them with a neighbouring village and parish. Now, however, status was measured by the distance separating the rustics from the lord, so the grander the house, the more deeply enclosed it was within its encircling park. At Houghton, a stone column marks the place where the local village once stood. Its proximity to Walpole's great house became an inconvenience, so he had it demolished and moved further away, beyond the gates. Once through those grandiose iron-grille barriers, bearing (as at Versailles or Blenheim) the coat of arms or monogram of the owner, the visitor would approach the house via a long avenue of elms or plane trees, which also served to demarcate a barrier between the managed property and the wild wood. The breadth of the avenue would be optically calculated to frame vistas of the great house, standing on its raised platform of grass like a throne upon a dais. Instead of rustics straying about the environs of the house, there would be choice domestic animals: a carefully selected herd of ornamental sheep or cattle. But this too was an illusion. It was, in fact, especially inappropriate to invoke the Palladian aesthetic since a prime principle of Andrea Palladio's revival of the Roman villa in the Veneto was to re-create the closeness between
landowner and his working farm. At the Villa Barbaro in Maser, Italy, for example, farm buildings, with room for animals, are linked to the main house by an arcaded loggia. At Houghton and houses like it, any whiff of the barnyard was banished well beyond the precincts, and the old clutter of stables, kitchen gardens or duckpond removed from the close vicinity of the house. Although, from the windows of the house, terrace, gardens and manicured pasture on which the glossy beasts grazed would appear to be a single unbroken space, it was in fact cut in two by the intervention of the ha-ha, a deep but narrow trench effectively preventing the animals from wandering towards the house.