The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XII. Comparison and security clearance

Collection:: Economics Books

MISUNDERSTANDING IN REGARD TO CREDIT 449 South Sea Bubble, which was formed to carry on trade with AD Spanish America in the hope that large profits would be for Sih reaped from the slave-trade and from whale-fishing, There ‘Seatrading appeared to be an inexhaustible mine of wealth, and the shares rose rapidly from April 1720, when they stood at £120, till July, when they are said to have reached £10202, But, while on the one hand the possible profit had been overrated, the capital of the Company had been sunk in procuring concessions and in lending money to Government, so that there was no sufficient means of carrying on trade. When such mistakes were made in commerce there is no wonder that men entirely miscalculated the possible profits from new inventions. The list of projects which were floated in 1720 shows an extraordinary willingness on the part of the public to take shares in any scheme however wilds, As and mining in more recent times, mining offered a great field for such ?’¥** speculation ; there were one or two notorious projectors, like Sir Humphry Mackworth?, who were for ever producing new 1 y >f Y 3, 8 nN st ‘h or 18 Ba I: L Postlethwayt, Dictionary, s.v. Actions, 1. 14. The South Sea Company was partly a trading and partly a financial company; and as the promoters had secured the assiento contract for supplying Spanish America with slaves, and were also engaged in whale-fishery, they appeared to have great opportunities for profit- able commerce (Parl. Hist. vir. 628). It was, however, as a financial company that they seemed likely to have a fund of wealth which would give them un- exampled facilities for nsing their credit, as the directors were preparing to take over the whole of the National Debt. Under the influence of these large possi- bilities of gain the public rushed to buy shares, which rose rapidly in market price (Parl. Hist. vii. 653). Immense sums were made by those who speculated for the rise, while many bona-fide investors who had bought in when the stock was quoted at a high premium were forced to submit to terrible loss. The proprietors who had held on through the rise and the subsequent fall did not, of course, lose so seriously. The attempt to do justice in connection with the affairs of the Company was beset with many difficulties. On the one hand it was requisite to preserve the public engagements unviolated, on the other it was desirable if possible to punish the speculators for the misrepresentations which had gulled the public, and if possible to deprive them of their ill-gotten gains. But it was exceedingly difficult to discriminate between the different classes of shareholders, who had bought at different dates, in any attempt to reimburse them for their losses. The subject is discussed with great care in a series of tracts which were published at the time by Archibald Hutcheson, the Member for Hastings, who criticised the scheme in its earlier stages and kept his head cool during the disaster. A good account will be found in Andréades, ist. de la Banque da’ Angle- terre, 1. 179. The career of the South Sea Company in its financial aspect was at an end; it did not find whaling profitable, and had competitors in the slave-trade. ? See the Order of 12th July, 1720, and list of Bubbles, Parl. Hist. vir. 656. 8 Parl. Hist. vi. 892. _—

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