George I (George Louis; German: Georg Ludwig; 28 May 1660 – 11 June 1727) was King of Great Britain and Ireland from 1 August 1714 and ruler of the Electorate of Hanover within the Holy Roman Empire from 23 January 1698 until his death in 1727. He was the first British monarch of the House of Hanover as the most senior Protestant descendant of his great-grandfather James VI and I.
Born in Hanover to Ernest Augustus and Sophia of Hanover, George inherited the titles and lands of the Duchy of Brunswick-Lüneburg from his father and uncles. A succession of European wars expanded his German domains during his lifetime; he was ratified as prince-elector of Hanover in 1708. After the deaths in 1714 of his mother, Sophia, and his second cousin Anne, Queen of Great Britain, George ascended the British throne as Anne's closest living Protestant relative under the Act of Settlement 1701. Jacobites attempted, but failed, to depose George and replace him with James Francis Edward Stuart, Anne's Catholic half-brother.
During George's reign the powers of the monarchy diminished, and Britain began a transition to the modern system of cabinet government led by a prime minister. Towards the end of his reign, actual political power was held by Robert Walpole, now recognised as Britain's first de facto prime minister. George died of a stroke on a trip to his native Hanover, where he was buried. He is the most recent British monarch to be buried outside the United Kingdom.
TRIPLE AND QUADRUPLE ALLIANCES
George was active in directing British foreign policy during his early reign. In 1717, he contributed to the creation of the Triple Alliance, an anti-Spanish league composed of Great Britain, France and the Dutch Republic. In 1718, the Holy Roman Empire was added to the body, which became known as the Quadruple Alliance. The subsequent War of the Quadruple Alliance involved the same issue as the War of the Spanish Succession. The 1713 Treaty of Utrecht had recognised the grandson of Louis XIV of France, Philip V, as king of Spain on the condition that he gave up his rights to succeed to the French throne. But upon Louis XIV's 1715 death, Philip sought to overturn the treaty.
Spain supported a Jacobite-led invasion of Scotland in 1719, but stormy seas allowed only about three hundred Spanish troops to reach Scotland. A base was established at Eilean Donan Castle on the west Scottish coast in April, only to be destroyed by British ships a month later. Jacobite attempts to recruit Scottish clansmen yielded a fighting force of only about a thousand men. The Jacobites were poorly equipped and were easily defeated by British artillery at the Battle of Glen Shiel. The clansmen dispersed into the Highlands, and the Spaniards surrendered. The invasion never posed any serious threat to George's government. With the French now fighting against him, Philip's armies fared poorly. As a result, the Spanish and French thrones remained separate. Simultaneously, Hanover gained from the resolution of the Great Northern War, which had been caused by rivalry between Sweden and Russia for control of the Baltic. The Swedish territories of Bremen and Verden were ceded to Hanover in 1719, with Hanover paying Sweden monetary compensation for the loss of territory.
SOUTH SEA BUBBLE
In Hanover, the king was an absolute monarch. All government expenditure above 50 thalers (between 12 and 13 British pounds), and the appointment of all army officers, all ministers, and even government officials above the level of copyist, was in his personal control. By contrast in Great Britain, George had to govern through
In 1715 when the Whigs came to power, George's chief ministers included Robert Walpole, Lord Townshend (Walpole's brother-in-law), Lord Stanhope and Lord Sunderland. In 1717 Townshend was dismissed, and Walpole resigned from the Cabinet over disagreements with their colleagues; Stanhope became supreme in foreign affairs, and Sunderland the same in domestic matters.
Lord Sunderland's power began to wane in 1719. He introduced a Peerage Bill that attempted to limit the size of the House of Lords by restricting new creations. The measure would have solidified Sunderland's control of the House by preventing the creation of opposition peers, but it was defeated after Walpole led the opposition to the bill by delivering what was considered "the most brilliant speech of his career". Walpole and Townshend were reappointed as ministers the following year and a new, supposedly unified, Whig government formed.
Greater problems arose over financial speculation and the management of the national
debt. Certain government bonds could not be redeemed without the consent of the bondholder and had been issued when interest rates were high; consequently each bond represented a long-term drain on public finances, as bonds were hardly ever redeemed. In 1719, the South Sea Company proposed to take over £31 million (three fifths) of the British national debt by exchanging government securities for stock in the company.
The Company bribed Lord Sunderland, George's mistress Melusine von der Schulenburg, and Lord Stanhope's cousin, Secretary of the Treasury Charles Stanhope, to support their plan. The Company enticed bondholders to convert their high-interest, irredeemable bonds to low-interest, easily tradeable stocks by offering apparently preferential financial gains. Company prices rose rapidly; the shares had cost £128 on 1 January 1720, but were valued at £500 when the conversion scheme opened in May. On 24 June the price reached a peak of £1,050. The company's success led to the speculative flotation of other companies, some of a bogus nature, and the Government, in an attempt to suppress these schemes and with the support of the Company, passed the Bubble Act. With the rise in the market now halted, uncontrolled selling began in August, which caused the stock to plummet to £150 by the end of September. Many individuals
- including aristocrats - lost vast sums and some were completely ruined. George, who had been in Hanover since June, returned to London in November
- sooner than he wanted or was usual - at the request of the ministry.
The economic crisis, known as the South Sea Bubble, made George and his ministers extremely unpopular. In 1721, Lord Stanhope, though personally
innocent, collapsed and died after a stressful debate in the House of Lords, and Lord Sunderland resigned from public office.
Sunderland, however, retained a degree of personal influence with George until his sudden death in 1722 allowed the rise of Robert Walpole. Walpole became de facto
Minister, although the title was not formally applied to him (officially, he was First Lord of the Treasury and Chancellor of the Exchequer). His management of the South Sea crisis, by rescheduling the debts and arranging some compensation, helped the return to financial stability. Through Walpole's skilful management of Parliament, George managed to avoid direct implication in the Company's fraudulent
actions. Claims that George had received free stock as a bribe are not supported by evidence; indeed receipts in the Royal Archives show that he paid for his subscriptions and that he lost money in the crash.
SOUTH SEA COMPANY
The national debt investigation concluded that a total of £9 million was owed by the government, with no specifically allocated income to pay it off. Robert Harley and John Blunt had jointly devised a scheme to consolidate this debt in much the same way that the Bank of England had consolidated previous debts, although the Bank still held the monopoly for operating as a bank. All holders of the debt (creditors) would be required to surrender it to a new company formed for the purpose, the South Sea Company, which in return would issue them shares in itself to the same nominal value. The government would make an annual payment to the Company of £568,279, equating to 6% interest plus expenses, which would then be redistributed to the shareholders as a dividend. The company was also granted a monopoly to trade with South America, a potentially lucrative enterprise, but one controlled by Spain, with whom Britain was at war.
At that time, when the continent of America was being explored and colonized, Europeans applied the term "South Seas" only to South America and surrounding waters. The concession both held out the potential for future profits and encouraged a desire for an end to the war, necessary if any profits were to be made. The original suggestion for the South Sea scheme came from William Paterson, one of the founders of the Bank of England and of the financially disastrous Darien Scheme.
Harley was rewarded for delivering the scheme by being created Earl of Oxford on 23 May 1711 and was promoted to Lord High Treasurer. With a more secure position, he began secret peace negotiations with France.
The royal charter for the company, based on that of the Bank of England, was drawn up by Blunt who was paid £3,846 for his services in setting up the company. Directors would be elected every three years and shareholders would meet twice a year. The company employed a Cashier, Secretary and Accountant. The Governor was intended as an honorary position, and was later customarily held by the monarch. The charter allowed the full court of directors to nominate a smaller committee to act on any matter on its behalf. Directors of the Bank of England and of the East India Company were barred from being directors of the South Sea Company. Any ship of more than 500 tons owned by the company was to have a Church of England clergyman on board.
The surrender of government debt for company stock was to occur in five separate lots. The first two of these, totaling £2.75 million from about 200 large investors, had already been arranged before the company's charter was issued on 10 September 1711. The government itself surrendered £0.75 million of its own debt held by different departments (at that time individual office holders were at liberty to invest government funds under their control to their own advantage before it was required for government expenditure). Harley surrendered £8,000 of debt and was appointed Governor of the new company. Blunt, Caswall and Sawbridge together surrendered £65,000, Janssen £25,000 of his own plus £250,000 from a foreign consortium, Decker £49,000, Sir Ambrose Crawley £36,791. The company had a Sub-Governor, Bateman; a Deputy Governor, Ongley; and 30 ordinary directors. In total, nine of the directors were politicians, five were members of the Sword Blade consortium, and seven more were financial magnates who had been attracted to the scheme.
The company created a coat of arms with the motto A Gadibus usque ad Auroram ("from Cadiz to the dawn", from Juvenal, Satires, 10) and rented a large house in the City of London as its headquarters. Seven sub-committees were created to handle its everyday business, the most important being the "committee for the affairs of the company". The Sword Blade company was retained as the company's banker and on the strength of its new government connections issued notes in its own right, notwithstanding the Bank of England's monopoly. The task of the Company Secretary was to oversee trading activities; the Accountant, Grigsby, was responsible for registering and issuing stock; and the Cashier, Robert Knight, acted as Blunt's personal assistant at a salary of £200 per annum.
THE SLAVE TRADE - IMMORAL EARNINGS
The Treaty of Utrecht of 1713 granted Britain an Asiento de Negros lasting 30 years to supply the Spanish colonies with 4,800 slaves per year. Britain was permitted to open offices in Buenos Aires, Caracas, Cartagena, Havana, Panama, Portobello and Vera Cruz to arrange the Atlantic slave trade. One ship of no more than 500 tons could be sent to one of these places each year (the Navío de Permiso) with general trade goods. One quarter of the profits were to be reserved for the King of Spain. There was provision for two extra sailings at the start of the contract. The Asiento was granted in the name of Queen Anne and then contracted to the company.
By July the company had arranged contracts with the Royal African Company to supply the necessary African slaves to Jamaica. Ten pounds was paid for a slave aged over 16, £8 for one under 16 but over 10. Two-thirds were to be male, and 90% adult. The company trans-shipped 1,230 slaves from Jamaica to America in the first year, plus any that might have been added (against standing instructions) by the ship's captains on their own behalf. On arrival of the first cargoes, the local authorities refused to accept the Asiento, which had still not been officially confirmed there by the Spanish authorities. The slaves were eventually sold at a loss in the West Indies.
In 1714 the government announced that a quarter of profits would be reserved for Queen Anne and a further 7.5% for a financial adviser, Manasseh Gilligan. Some company board members refused to accept the contract on these terms, and the government was obliged to reverse its decision.
Despite these setbacks, the company continued, having raised £200,000 to finance the operations. In 1714 2,680 slaves were carried, and for 1716–17, 13,000 more, but the trade continued to be unprofitable. An import duty of 33 pieces of eight was charged on each slave (although for this purpose some slaves might be counted only as a fraction of a slave, depending on quality). One of the extra trade ships was sent to Cartagena in 1714 carrying woollen goods, despite warnings that there was no market for them there, and they remained unsold for two years.
It has been estimated that the company transported a little over 34,000 slaves with mortality losses comparable to its competitors, showing that slave trading was a significant part of the company's work, and that it was carried out to the standards of the day. Its trading activities therefore offered a financial motivation for investment in the company.
MORE DEBT FOR EQUITY - BUT EQUITY IN WHAT?
The 1719 scheme was a distinct success from the government's perspective, and they sought to repeat it. Negotiations took place between Aislabie and Craggs for the government and Blunt, Cashier Knight and his assistant and Caswell. Janssen, the Sub Governor and Deputy Governor were also consulted but negotiations remained secret from most of the company. News from France was of fortunes being made investing in Law's bank, whose shares had risen sharply. Money was moving around Europe, and other flotations threatened to soak up available capital (two insurance schemes in December 1719 each sought to raise £3 million).
Plans were made for a new scheme to take over most of the unconsolidated national debt of Britain (£30,981,712) in exchange for company shares. Annuities were valued as a lump sum necessary to produce the annual income over the original term at an assumed interest of 5%, which favoured those with shorter terms still to run. The government agreed to pay the same amount to the company for all the fixed-term repayable debt as it had been paying before, but after seven years the 5% interest rate would fall to 4% on both the new annuity debt and also that assumed previously. After the first year, the company was to give the government £3 million in four quarterly installments. New stock would be created at a face value equal to the debt, but the share price was still rising and sales of the remaining stock, i.e. the excess of the total market value of the stock over the amount of the debt, would be used to raise the government fee plus a profit for the company. The more the price rose in advance of conversion, the more the company would make. Before the scheme, payments were costing the government £1.5 million per year.
In summary, the total government debt in 1719 was £50 million:
- £18.3m was held by three large corporations:
- £3.4m by the Bank of England
- £3.2m by the British East India Company
- £11.7m by the South Sea Company
- Privately held redeemable debt amounted to £16.5m
- £15m consisted of irredeemable annuities, long-fixed-term annuities of 72–87 years, and short annuities of 22 years remaining to expiry.
The purpose of this conversion was similar to the old one: debt holders and annuitants might receive less return in total, but an illiquid investment was transformed into shares that could be readily traded. Shares backed by national debt were considered a safe investment and a convenient way to hold and move money, far easier and safer than metal coins. The only alternative safe asset, land, was much harder to sell and transfer of its ownership was legally much more complex.
The government received a cash payment and lower overall interest on the debt. Importantly, it also gained control over when the debt had to be repaid, which was not before seven years but then at its discretion. This avoided the risk that debt might become repayable at some future point just when the government needed to borrow more, and could be forced into paying higher interest rates. The payment to the government was to be used to buy in any debt not subscribed to the scheme, which although it helped the government also helped the company by removing possibly competing securities from the market, including large holdings by the Bank of
Company stock was now trading at £123, so the issue amounted to an injection of £5 million of new money into a booming economy just as interest rates were falling. Gross Domestic Product (GDP) for Britain at this point was estimated as £64.4 million.
INFLATING SHARE PRICES (MONEY FROM THIN AIR)
The company then set to talking up its stock with "the most extravagant rumours" of the value of its potential trade in the New World; this was followed by a wave of "speculating frenzy". The share price had risen from the time the scheme was proposed: from £128 in January 1720, to £175 in February, £330 in March and, following the scheme's acceptance, £550 at the end of May.
What may have supported the company's high multiples (its P/E ratio) was a fund of credit (known to the market) of £70 million available for commercial expansion which had been made available through substantial support, apparently, by Parliament and the King.
Shares in the company were "sold" to politicians at the current market price; however, rather than paying for the shares, these recipients simply held on to what shares they had been offered, with the option of selling them back to the company when and as they chose, receiving as "profit" the increase in market price. This method, while winning over the heads of government, the King's mistress, et al., also had the advantage of binding their interests to the interests of the company: in order to secure their own profits, they had to help drive up the stock. Meanwhile, by publicising the names of their elite stockholders, the company managed to clothe itself in an aura of legitimacy, which attracted and kept other buyers.
We have here an absurd situation where debt is worth more than hard goods or gold, being easy to trade and profit from, without solid backing of any kind. The beginnings of global warming and climate change. Borrowing for projects, with no real prospect of paying back. Who then are the pirates. The seafarers who go out and plunder, or the armchair floaters who do more damage to the economy as fraudsters.
British parliament and governments since, appear never to have recovered
from this mental immorality. With debt in 2023 at a staggering £2.7
George was ridiculed by his British subjects; some of his contemporaries, such as Lady Mary Wortley Montagu, thought him unintelligent on the grounds that he was wooden in public. Though he was unpopular in Great Britain due to his supposed inability to speak English, such an inability may not have existed later in his reign as documents from that time show that he understood, spoke and wrote English. He certainly spoke fluent German and French, good Latin, and some Italian and Dutch. His treatment of his wife, Sophia Dorothea, became something of a scandal. His Lutheran faith, his overseeing both the Lutheran churches in Hanover and the Church of England, and the presence of Lutheran preachers in his court caused some consternation among his Anglican subjects.
The British perceived George as too German, and in the opinion of historian Ragnhild Hatton, wrongly assumed that he had a succession of German mistresses. However, in mainland Europe, he was seen as a progressive ruler supportive of the Enlightenment who permitted his critics to publish without risk of severe censorship, and provided sanctuary to Voltaire when the philosopher was exiled from Paris in 1726. European and British sources agree that George was reserved, temperate and financially prudent; he disliked being in the public light at social events, avoided the royal box at the opera and often travelled incognito to the homes of friends to play
cards. Despite some unpopularity, the Protestant George I was seen by most of his subjects as a better alternative to the Roman Catholic pretender James. William Makepeace Thackeray indicates such ambivalent feelings as he wrote:
"His heart was in Hanover ... He was more than fifty years of age when he came amongst us: we took him because we wanted him, because he served our turn; we laughed at his uncouth German ways, and sneered at him. He took our loyalty for what it was worth; laid hands on what money he could; kept us assuredly from Popery ... I, for one, would have been on his side in those days. Cynical and selfish, as he was, he was better than a king out of St. Germains [James, the Stuart Pretender] with the French king's orders in his pocket, and a swarm of Jesuits in his train."
King of England, is Charles
son, the former Duke
of Cambridge, Prince
William, is now the Prince of Wales, a King in waiting - as of the death
of Elizabeth II.
Their mother and grandmother, respectively, Queen
Elizabeth II, passed on 8th September 2022, at the age of 96.
The previous King, Charles
II, ruled from 1630 until 1685, gave a Royal
Charter to export captured native Africans as slaves to British colonies,
to his brother James
Elizabeth I (Good Queen Bess), was famous for commissioning privateers
to carry out acts of piracy on the high seas, to boost the coffers of her
Treasury. As was Queen
Anne 1665 - 1714. King
George I carried on with privateers, then politics changed during his
reign 1714 to 1727.
Samuel - Black
- English Teach and the Queen
Anne - Pirate
Sir Francis - Privateer
England - Irish pirate, Edward Seegar
Age of Piracy
John - Privateer
Benjamin - Privateer Captain
Roger - Pirate flag
William - Captain Kidd, privateer/pirate
Henry - Privateer, Sir
Henry Governor of Jamaica
of the Caribbean, Disney's film
Jack - Calico Jack
Sir Walter - Privateers
Mary - Pirate
Bartholomew - Black
Bellamy - Black Sam, the pirate
and Crossbones - Pirate flag
to buried gold and jewels - Island
Charles - Pirate captain