“This means that when the South Sea Company first appeared, the Government gave them £113 on condition that the Company should give 2¾ per cent., which means £2 15s. on every £100 lent, for a certain number of years. In the reign of George I. the money matters of the country were in a very bad state. The Government was very much in debt, especially to those people who had purchased annuities, and had a right to receive a certain sum of money from the Government every year as long as they lived. Sir Robert Walpole, who was then Prime Minister, was most anxious to pay off part of this debt. He heard of a Company which had just been started, called the South Sea Company, whose object was to trade in the South Seas. This was what Walpole wished for. He suggested to them that they should pay off the debt due to the people who had bought annuities, and in return the Government would give them some priveleges (_sic_) and charts which would be useful to them. This the Company agreed to do, but instead of paying the people in money they gave them what were called ‘shares’ in the South Sea Company. These shares were supposed to be very valuable, and it was thought that the South Sea Company was really prosperous, and that those who had shares in it would have most enormous profit in the end. Thousands of people came to buy shares, and some of them were so anxious to get them that they spent enormous sums of money on these worthless pieces of paper. All was well for a time, but at last the people began to wish for their money instead of the shares, and claimed it loudly from the Company. It was then that the bubble burst. It was discovered then that the Company was quite unable to pay what was due, and that all this time they had been deluding the nation by promises and giving them shares, and that they had never been the rich and prosperous Company they made themselves out to be. Naturally, the most dreadful distress prevailed everywhere, and many were absolutely ruined, so that the Government had to help those who were most distressed. At this point Sir Robert Walpole came to the rescue. He made the Bank of England pay some of the debts, and behaved with such cleverness that he saved the country almost from ruin.” _Q._ What do you know of the States General? (Book studied, Mrs Creighton’s _First History of France_.) C. (aged 12):—