Friday, 13 August 2010

Financial disasters - The South Sea Bubble

In my books, I have usually restricted myself to writing about disasters in which human beings are killed or injured, but for London’s Disasters I have broken new ground by devoting a section to financial disasters.

It begins with the story of the South Sea bubble, which is quite a story. In 1720, a British company whose core activity was transporting slaves from Africa to Spain’s South American colonies, was chosen by the government to get down the National Debt by inducing people to swap the government debt they held for shares in the company.

A judicious campaign of bribery and misinformation drove the share price up to dizzying heights, and some made fortunes. Then when, as it tends to, reality set in, the stock fell just as dramatically and other people were ruined.

Perhaps most striking to us today is the way the government did try to hold those responsible to account – confiscating their wealth, and using it to compensate the losers. It’s still a gripping and fascinating tale, full of colourful characters like the secretary of the Sword Blade Company, Sir John Blunt (really) and King George I's two anatomically contrasting mistresses – the” hop-pole” and the “Elephant and Castle”.

*The love Clapham website has an item on London's Disasters:-

http://www.loveclapham.com/clapham-history-past-local-disasters/2518

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