“I never heard of the South Sea Bubble of which you speak,” said Louis.
“That is not strange, as it was an affair of one hundred and eighty-one years ago,” replied Lord Tremlyn. “I have not time now to describe it in full. The floating debt of England at that time was L10,000,000; and the Earl of Oxford concocted a scheme to pay it off, and formed a company of merchants for that purpose. The riches of the South Sea Islands, including South America, were most extravagantly estimated at that time, and the monopoly of the trade was secured by the company formed. The ’South Sea Company’ was bolstered up by the pledge of the duties on the imports from these far-off regions, and the shares sold like wild-fire, increasing in price in the most extraordinary manner. Shares at a par of L100 were quoted at L550 in May, and L890 in June.
“The failure of the Mississippi Scheme, projected in France by John Law to develop the resources of the American State of Louisiana, alarmed the shareholders; but the managers declared that they had avoided the errors of Law in their finances, and the enterprise still prospered. A mania for stock-gambling spread over England, and the people seemed to have lost their wits. The most tremendous excitement prevailed. The crisis came, and it was realized that the scheme was a fraudulent one. Some of the biggest operators sold out their stock, and a panic ensued. Consternation came upon the bubble capitalists, and financial ruin stared them and their dupes full in the face.
“The country was stirred to its very foundations. Parliament was called together, and the books of the company were examined. The ‘Bubble’ had burst, as it did in Bombay. The private property of the directors was confiscated. The ruin brought about by this enterprise, rightly called a ‘Bubble,’ was beyond calculation; but it taught its lesson, as such affairs always do.”
“We are approaching the harbor,” said Mrs. Woolridge, who was not much interested in the South Sea Scheme, though her husband and Louis listened to the explanation very attentively.
“We are, madam. You see to the northward of us two peninsulas. The one the more distant has two hills on it. The first is Malabar Hill, and the other Cumballa Hill. This is the aristocratic quarter of Bombay. The huge bungalows of the rich merchants and higher government officials are here. The scenery, natural and artificial, is very fine, and Asiatic magnificence prevails there. That will be one of our first rides. You observe near the point of the peninsula some towers, like pagodas, which will give you your first impression of the temples of India.”
Opera-glasses were then in demand, and were brought to bear on the towers.
“They are in the village of Walkeshwar. The peninsula now quite near is Colaba. Indian names are very much mixed in regard to their spelling. The c and the k are about interchangeable, and you can use either one of them. Hence this point is often written Kolaba, and the hill yonder Kumballa. The southern part of this neck of land is the native quarter. You will visit all these localities, and it is not worth while to describe them minutely.”