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 
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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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