In June 1720, John Blunt was made a Baronet in recognition of ‘his extraordinary services in raising public credit to a height not known before.’ John Blunt made a Baronet. The antiquary and natural philosopher William Stukeley recorded in his ‘Memoirs of Sir Isaac Newton’s Life’ (1752) the ‘Suprizeing Scene in Change Alley’ when ‘Nobility, Ladys, Brokers, footmen’ all scrambled as equals in the sale of these shares 2. This was a new way of seeing and handling money, in which the Crown and its people might both ‘get rich quick’. There was a great deal of political investment in this scheme, as well as general public excitement. George I’s subscription to South Sea Stocks. The Company arranged to buy the monopoly contract or ‘asiento’ for the Spanish South Sea trade from the British government for around £9,500,000, in return for taking on a substantial amount of Britain’s national debt. It was devised by the Scottish trader, William Paterson, and was founded by the financier and former lottery promoter, John Blunt, and the new Lord Treasurer, Robert Harley. The South Sea Company was a joint-stock company set up in 1711 with a view to exploiting these new markets and to balance the power of the Whig-controlled Bank of England by furthering Tory political and commercial influence. Hopton Haynes, ‘Report on gold from the West Indies brought to the Mint by the South Sea Company’. In return, the Spanish would gain access to all the British forts along the West Coast of Africa, controlled by the Royal African Company. This was deemed a coup for Britain, because there were huge profits to be made by trading with the gold and silver-rich South American colonies located from the Orinoco river down to the Tierra del Fuego. In 1713, Britain secured the rights to supply slaves to Spanish America as part of the Treaty of Utrecht, a series of agreements between European powers concluding the War of Spanish Succession. The City of London grew richer and more powerful. There was a growth in lotteries, annuities, joint-stock companies, insurance firms and all manner of money-making schemes as well as an increase in financial news and investments from overseas, particularly from Amsterdam and France. The Bank of England had been established in 1694, creating the very first national debt, and had begun issuing Bills of Exchange: paper notes with a ‘promise to pay’ (the same words found on our banknotes today). Some forms of our modern financial markets had been established in London since the 1690s, when the government had sought out new ways to raise money to resource the Nine Years’ War (1688-1697). He captured the confusion and chaos of the times: The writer Jonathan Swift, who had initially championed the South Sea Company scheme, was one of the hundreds around the country who lost significant fortunes, from lords and ladies to humbler folk with life savings. ![]() Contemporaries spoke of a strange madness that had overwhelmed London, a financial frenzy of investment unlike anything ever witnessed before. This year marks the 300th anniversary of one of the most famous financial crashes in history: the ‘bursting’ of the South Sea Bubble in 1720.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |