Boom, Bust, and Beyond by Stefano Condorelli Daniel Menning

Author:Stefano Condorelli, Daniel Menning
Language: eng
Format: epub
Publisher: De Gruyter
Published: 2019-09-02T12:11:51.166000+00:00

Moreover it is to be noted that trade has completely slowed down, that more than one hundred ships moored along the river Thames are for sale, and that owners of capital prefer to speculate on shares than to work at their normal business. The consequence of all this could be very prejudicial to the nation, all the more so if foreigners sell as many shares as possible and send their profits out of the kingdom in specie.27

Complaints like these, thus, may not only have resulted from a specific kind of criticism of stock market speculation. Rather, the Sound Toll Registers suggests that they were based on facts.

Compared to 1720, developments in the post-bubble year were exactly opposite. The relative number of ships sailing from London to the Baltic was quite small between January and June, again it was mostly convoys that caused lower numbers. On the other hand, over the next three-month period, noticeably higher digits are evident – though of course the absolute number was much lower than in the previous year, as shown above in Graph 2. While the seasonal variation in 1721 is not as exceptional as in 1720, keeping in mind that the absolute number of ships passing through the Sound in the first half of 1721 was particularly low, the London data does provide hints at economic troubles in London that persisted into the post-bubble year. In fact, it looks like many London merchants and captains early in 1721 were still unsure how trade would develop. Instead of taking chances, they hesitated and acted according to Ashton’s description. For a region like the Baltic Sea, which was burdened by a trade deficit, this meant restricting commercial exchange, since it had a negative impact on liquid assets, i. e. specie.

Only towards the summer did prospects for trade again look brighter, and ships were sent to the Baltic Sea in a rush, before winter arrived. Newspaper reports provide more general confirmation for this interpretation. For example, shortly before Christmas 1721, The American Weekly Mercury reprinted an article from London dated 9 September that stated:

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