The South Sea Bubble and Ireland

The South Sea Bubble and Ireland: Money, Banking and Investment, 1690-1721

Patrick Walsh
Copyright Date: 2014
Edition: NED - New edition
Published by: Boydell and Brewer,
Pages: 212
https://www.jstor.org/stable/10.7722/j.ctt6wp835
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  • Book Info
    The South Sea Bubble and Ireland
    Book Description:

    In late September 1720 the South Sea bubble burst. The collapse of the South Sea Company's share price caused the first great British stock market crash, the repercussions of which were felt far beyond the City of London. Patrick Walsh's book traces for the first time the impact of the rise and fall of the South Sea bubble on the peripheries of the British state. Its primary focus is on Ireland, but Irish developments are placed within a comparative context, with special attention paid to Scotland. Drawing on an impressive array of evidence, including bank ledgers, private correspondence, pamphlets, newspapers, and contemporary literary sources, this book examines not only investment in London but also the impact of the bubble on the fate of non-metropolitan projects in the 'South Sea Year', notably the failed project for an Irish national bank. Central to the book is the lived experience of the bubble and the wider financial revolution. The stories of individual investors - their strategies, speculations, aspirations, gains, losses and misunderstandings - are employed to create a new, more personal narrative of the momentous events of 1720, showing how they impacted on the lives of the inhabitants of early eighteenth-century Britain and Ireland. Patrick Walsh is Irish Research Council CARA Postdoctoral Fellow at University College Dublin. He is the author of The Making of the Irish Protestant Ascendancy: The Life of William Conolly, 1662-1729 (Boydell Press, 2010).

    eISBN: 978-1-78204-374-4
    Subjects: History, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-vii)
  3. Preface
    (pp. viii-ix)
    Patrick Walsh
  4. List of Plates, Figures and Tables
    (pp. x-x)
  5. Editorial Note
    (pp. xi-xi)
  6. List of Abbreviations
    (pp. xii-xii)
  7. Introduction
    (pp. 1-18)

    In late September 1720, the South Sea bubble burst. The South Sea Company’s share price which had been rising all summer collapsed more quickly than it had risen, causing the first great British stock-market crash. Its repercussions were felt far beyond the City of London. Its impact was felt right across western Europe from Aberdeen to Amsterdam, from Belfast to Berne and from Limerick to Lisbon. The dramatic rise and fall of the South Sea Company’s stock in the summer of 1720 was a source of wonder, excitement and despair for contemporary observers. Some of them had been drawn to...

  8. 1 Varieties of Innovation: Ireland, Scotland and the Financial Revolution 1688–1720
    (pp. 19-42)

    The period between the Glorious Revolution and the South Sea bubble has long been recognized as a particularly significant period in British and Irish financial history. This was the age of the ‘financial revolution’.¹ This revolution has traditionally been understood to encompass the series of English financial innovations in the period immediately after the constitutional and political revolution of 1688–89. These included the creation of a national debt, the foundation of the Bank of England in 1694 and the development of a sophisticated system of war financing, all of which enabled William III to continue his continental military conflict...

  9. 2 Banking and Investment on the Periphery: The Case of Ireland
    (pp. 43-58)

    The financial revolution encompassed more than just innovations in public credit and war financing. These developments coincided and were linked with innovations in banking, exchange and the stock market. For W. R. Scott writing at the beginning of the twentieth century, the period 1690–1720 was the era of the joint-stock company, while Larry Neal has described the same period as the ‘age of financial capitalism’. Such synoptic descriptions, along with Natasha Glaisyer’s uncovering of a burgeoning ‘culture of commerce’ in the same decades, capture something of the spirit of the age.¹ These years saw the growth of the English...

  10. 3 Investment from the Periphery: Irish Investors in the South Sea Company in Comparative and Transnational Perspective
    (pp. 59-84)

    The South Sea bubble was the great crisis of the financial revolution. The rapid rise of the South Sea Company’s share price in late spring and early summer 1720, followed by its even more dramatic collapse in late August through to early September, instantly became the stuff of myth and legend. News of events in London quickly spread, not just across England and Wales, or even to Scotland and Ireland, but also across the Channel to the European continent and beyond. The reverberations of the London stock-market crash were felt in major and minor financial markets: in Amsterdam, Paris and...

  11. 4 ‘Most of Our Money of This Kingdom is gone over to the South Sea’: Irish Investors and the South Sea Company
    (pp. 85-110)

    In 1723 George Berkeley, then a fellow of Trinity College Dublin and already a renowned philosophical thinker, received an unexpected bequest from a woman he had never met. It was for the not insubstantial sum of £2,000 and was partly derived from the profits of a successful investment in the South Sea Company during 1720.¹ Berkeley may not have been acquainted with his benefactor but she is well known to posterity. She was Esther Van Homrigh, the daughter of a prominent Dublin merchant and politician of Dutch origin. She is, however, better remembered as Jonathan Swift’s ‘Vanessa’ in which capacity...

  12. 5 ‘Nothing here but Misery’? The Economic Impact of the South Sea Bubble on Ireland
    (pp. 111-124)

    In autumn 1720 the South Sea bubble burst. The company’s share price tumbled, falling from a high of £950 per share in mid-July to £200 by the end of September. This dramatic collapse caught the imagination of contemporaries who were eager to understand and discuss both the reasons for the rapid crash, and its impact. Such debates were, of course, heard in the coffee-houses and ‘walks’ of Exchange Alley and the Royal Exchange in London, but they were also heard elsewhere across Britain, Ireland and even further afield, as word of the stock-market crash spread. The news circulated in many...

  13. 6 ‘A Thing They Call a Bank’: Irish Projects in the South Sea Year
    (pp. 125-142)

    During the first week of May 1720 a proposal was published in Dublin addressed to ‘the Nobility, Gentry and Commonalty of this Kingdom of Ireland’, calling for the establishment of a national bank. The proposed bank would address several contemporary economic grievances including the drain of Irish money to the South Sea Company. Public subscriptions were called for to raise the £500,000 capital believed to be necessary for its operation and subscribers’ names were to be collected daily in the Merchant’s Coffee House in the city from 19 May until the subscription was filled.¹ This was the beginning of a...

  14. 7 The Proposals for a National Bank and the Irish Investment Community in 1720
    (pp. 143-162)

    The various proposals for an Irish national bank in 1720–21 were ultimately unsuccessful. Nevertheless, the history of the project reveals much about both the impact of the financial revolution on Ireland and the effect of the South Sea bubble on that kingdom. Chapter 6 has shown how the various bank projects’ initial fortunes rose and fell in tandem with the South Sea Company’s share price. Meanwhile, chapter 8 shows how the debates about the bank, both within and without the Irish parliament in autumn 1721, were influenced and informed by alternative readings of the London and Paris bubbles. These...

  15. 8 ‘A Strong Presumption That This Bank May be a Bubble’: Misreading the Bubble and the Bank of Ireland Debates, 1721
    (pp. 163-180)

    In September 1721 the Irish parliament sat for the first time in almost two years. Much had changed since its last meeting. The passage of the Declaratory Act at Westminster in April 1720 had seen the British parliament reassert its legislative and constitutional superiority over its Irish counterpart. The South Sea bubble had also burst with consequences for British and Irish politics. In London, the political fallout that followed the stock-market crash had led to a changing of the guard at the apex of British politics with Sir Robert Walpole successfully manipulating the crisis to establish himself asde facto...

  16. Conclusion
    (pp. 181-182)

    In March 1733, on reporting the death of Sir Ralph Gore – the long-time chancellor of the Irish exchequer and one-time national bank promoter – a leading Irish politician, Marmaduke Coghill, noted with some surprise that Gore had ‘no ready money or any out on securities’.¹ Almost thirteen years after the South Sea bubble, it was clearly expected that members of the Irish elite would have some of their wealth laid out in stocks or securities, whether in London or Dublin. This is evident from other sources too. The diaries for the same period of John Perceval, now 1st Earl...

  17. Bibliography
    (pp. 183-198)
  18. Index
    (pp. 199-204)
  19. Back Matter
    (pp. 205-205)