But they refused to go further in carrying out a Hanoverian policy; the anger of the King was seconded by intrigues among the ministers; and in 1717 Townshend and Walpole had been forced to resign their posts. In the reconstituted cabinet Lords Sunderland and Stanhope remained supreme; and their first aim was to secure the maintenance of the Whig power by a constitutional change. Harley's creation of twelve peers to ensure the sanction of the Lords to the Treaty of Utrecht showed that the Crown possessed a power of swamping the majority in the House of Peers. In 1720 therefore the Ministry introduced a bill, suggested as was believed by Sunderland, which professed to secure the liberty of the Upper House by limiting the power of the Crown in the creation of fresh Peers. The number of Peers was permanently fixed at the number then sitting in the House; and creations could only be made when vacancies occurred. Twenty-five hereditary Scotch Peers were substituted for the sixteen elected Peers for Scotland. The bill however was strenuously opposed by Walpole. It would in fact have rendered representative government impossible.

For representative government was now coming day by day more completely to mean government by the will of the House of Commons, carried out by a Ministry which served as the mouthpiece of that will. But it was only through the prerogative of the Crown, as exercized under the advice of such a Ministry, that the Peers could be forced to bow to the will of the Lower House in matters where their opinion was adverse to it; and the proposal of Sunderland would have brought legislation and government to a dead lock. The Peerage Bill owed its defeat to Walpole's opposition; and his rivals were forced to admit him, with Townshend, into the Ministry, though they held subordinate places. But this soon gave way to a more natural arrangement. The sudden increase of English commerce begot at this moment the mania of speculation. Ever since the age of Elizabeth the unknown wealth of Spanish America had acted like a spell upon the imagination of Englishmen; and Harley gave countenance to a South Sea Company, which promised a reduction of the public debt as the price of a monopoly of the Spanish trade.

Spain however clung jealously to her old prohibitions of all foreign commerce; and the Treaty of Utrecht only won for England the right of engaging in the negro slave-trade, and of despatching a single ship to the coast of Spanish America. But in spite of all this, the Company again came forward, offering in exchange for new privileges to pay off national burdens which amounted to nearly a million a year. It was in vain that Walpole warned the Ministry and the country against this "dream." Both went mad; and in 1720 bubble Company followed bubble Company, till the inevitable reaction brought a general ruin in its train. The crash brought Stanhope to the grave. Of his colleagues, many were found to have received bribes from the South Sea Company to back its frauds. Craggs, the Secretary of State, died of terror at the investigation; Aislabie, the Chancellor of the Exchequer, was sent to the Tower; and in the general wreck of his rivals Walpole mounted again into power. In 1721 he became First Lord of the Treasury, while Townshend returned to his post of Secretary of State. But their relative position was now reversed.

Townshend had been the head in their earlier administration: in this Walpole was resolved, to use his own characteristic phrase, that "the firm should be Walpole and Townshend and not Townshend and Walpole".

If no Minister has fared worse at the hands of poets and historians, there are few whose greatness has been more impartially recognized by practical statesmen. The years of his power indeed are years without parallel in our history for political stagnation. His long administration of more than twenty years is almost without a history. All legislative and political activity seemed to cease with his entry into office. Year after year passed by without a change. In the third year of his Ministry there was but one division in the House of Commons. The Tory members were so few that for a time they hardly cared to attend its sittings; and in 1722 the loss of Bishop Atterbury of Rochester, who was convicted of correspondence with the Pretender, deprived of his bishopric, and banished by Act of Parliament, deprived the Jacobites of their only remaining leader. Walpole's one care was to maintain the quiet which was reconciling the country to the system of the Revolution. But this inaction fell in with the temper of the nation at large. It was popular with the class which commonly presses for political activity. The energy of the trading class was absorbed in the rapid extension of commerce and accumulation of wealth.

So long as the country was justly and temperately governed the merchant and shopkeeper were content to leave government in the hands that held it. All they asked was to be let alone to enjoy their new freedom, and develope their new industries. And Walpole let them alone. Progress became material rather than political, but the material progress of the country was such as England had never seen before. The work of keeping England quiet and of giving quiet to Europe, was in itself a noble one; and it is the temper with which he carried on this work which gives Walpole his place among English statesmen. He was the first and he was the most successful of our Peace Ministers. "The most pernicious circumstances," he said, "in which this country can be are those of war; as we must be losers while it lasts, and cannot be great gainers when it ends." It was not that the honour or influence of England suffered in his hands, for he won victories by the firmness of his policy and the skill of his negotiations as effectual as any which are won by arms. But in spite of the complications of foreign affairs, and the pressure from the Court and the Opposition, it is the glory of Walpole that he resolutely kept England at peace. Peace indeed was hard to maintain.