MISUNDERSTANDING IN REGARD TO CREDIT 447 
Until considerable experience had been gained, there was A.D. 1689 
. . 2 CLT 1776. 
special danger that the Bank, which exercised a unique in- 
fluence over English credit, should on the one hand aggravate 
the evils of a period of inflation, or on the other should induce 
commercial disaster by the hasty reduction of its issues. 
The difficulties of the directors were aggravated by the business 
fact that a change was coming over the habits of ordinary wn 1 
traders; legitimate business was becoming more speculative "tr 
in character. In the days when regulated companies had 
kept an effective control over the conditions of commerce, 
and enforced a system of well-ordered trade, there was little 
room for enterprise in pushing business. After the Revolu- 
tion, the companies had so far sunk in importance that it was 
possible for merchants to ship goods in any quantities they 
preferred, and to speculate on changes in the market rate 
for goods. The increased possibility of borrowing capital, 
when opportunity for using it offered, must have enabled 
shrewd and well-informed men to rise rapidly to considerable 
affluence. The system of joint-stock trading rendered it 
easy for the outside public to have a part in commercial 
gains, without the necessity of devoting themselves to the 
cares of business. So many companies were formed, that 
transactions in their shares became increasingly frequent, 
and this fresh field of business opened up a new range for 
speculative dealing. Davenant, Hutcheson, Defoe, and all 
the leading economic writers of the day, complain of the 
rapid development of stock-exchange gambling which oc- 
curred at this time. The new trades, which were being 
opened up, and the new industrial facilities, which the credit 
system seemed to offer, appeared to have turned the heads 
of many of the men of that day. Large sums had been 
made, especially by bankers, and it seemed as if there were 
no end to the fortunes which might be acquired. There 
was, in consequence, great violence in the changes of prices. 
If a business was doing well, the gains were exaggerated, 
and many men were eager to rush into it, so that the price 
which had to be paid for shares was forced up unduly; on 
the other hand, if a stock fell, there seems to have been a 
regular rush to get rid of it, and the price fell with rapidity. 
especially 
in connec- 
tion with 
the Stock 
exchange.