Nov. 14, 1878] 



NATURE 



30 



paragraph in which this occurs is headed '"The Crisis of 

 1783," and on turning the page we at once come on 

 another paragraph headed "The Crisis of 1793." Here 

 then we have, in a few lines of a good autho- 

 rity concerning the history of finance, a statement 

 of four crises occurring at almost exactly decennial 

 intervals. It is wonderful that no writer has, so far as 

 I know, previously pointed out the strictly periodic 

 nature of these events ; and I may add that I have 

 several times lectured to my college classes about 

 these crises without remarking their periodicity. It is 

 true that we cannot, by any management of the figures, 

 bring them into co-ordination with later crises so long as 

 we adhere to the former estimate of the solar period. If, 

 starting from 1857, we count back nine interrals of ii"i 

 years each, we get to 1757 instead of 1763 ; we are landed 

 in the middle of a cycle instead of in the beginning or 

 end ; and there can be no possible doubt about the crises 

 of 1763 and 1857. But, if we are once allowed to sub- 

 stitute the new estimate of Broun, which is the same as 

 the old one of Lamont, the difficulty disappears ; for the 

 average interval is io'44 . . . years ! 



This beautiful coincidence led me to look still further 

 backwards, and to form the apparently wild notion that 

 the great crisis generally known as that of the South Sea 

 Bubble might not be an isolated and casual event, but 

 only an early and remarkable manifestation of the com- 

 mercial cycle. The South Sea Bubble is generally set 

 down to the year 1720, and the speculations in the shares 

 of that company did attain their climax and commence 

 their collapse in that year. But it is perfectly well known 

 to the historians of commerce that the general collapse 

 of trade which profoundly affected all the more advanced 

 European nations, especially the Dutch, French, and 

 English, occurred in 172 1. Now, if we assume that there 

 have been since 1721, up to 1857, thirteen commercial 

 cycles, the average interval comes out io'46 years ; or if 

 we consider that we are in this very month (November, 

 1878) passing through a normal crisis, then the interval 

 of 157 years from 1721 to 1878 gives an average cycle of 

 1 0*466 years. 



It would be impossible, however, to enlist the South- 

 Sea Bubble in our series unless there were some links to 

 connect it with subsequent events. I have, therefore, 

 spent much labour during the past summer in a most 

 tedious and discouraging search among the pamphlets, 

 magazines, and newspapers of the period, with a view to 

 discover other decennial crises. I am free to confess that 

 in this search I have been thoroughly biased in favour 

 of a theory, and that the evidence which I have so far 

 found would have no weight if standing by itself. It is 

 impossible in this place to state properly the facts which 

 I possess ; I can only briefly mention what I hope to 

 establish by future more thorough inquiry. 



It is remarkable to notice that the South Sea Company, 

 which came to grief in 1720-21, was founded in 171 1, just 

 ten years before, and that on the very page (312) of Mr. 

 Fox Bourne's "Romance of Trade," ^ which mentions 

 this fact, the year 1701 also occurs in connection with 

 speculation and stock-jobbing, as the promotion of com- 

 panies was then called. The occurrence of a crisis in 

 the years 17 10- 11- 12, is indeed almost established by the 

 lists of bubble insurance companies formed in those 

 years, as collected by Mr. Cornelius Walford, and 

 obligingly shown to me by him.' 



Again, it is quite plain that about ten years after stock- 

 jobbing had been crushed by the crisis of 1721, it reared 

 its head again. A significant passage in the Gentleman's 

 Magazine of 1732 (vol. iL p. 561) remarks that "Stock- 

 jobbing is grown almost epidemical. Fraud, corruption, 

 and iniquity in great companies as much require speedy 



"This book contains an interesting account o£ some o£ these early manias 

 and panics. 



'" .These lists are partly published in Mr. Walford's " Insurance Cyclo- 

 paxiia, a-t;ch Gambling. 



and effectual remedies now as in 1720. The scarcity of 

 money and stagnation of trade in all the distant parts of 

 England, is a proof that too much of our current coin is 

 got into the hands of a few persons." This " getting the 

 current coins into the hands of a few people " was the 

 favourite theory at that time to explain any slackness of 

 trade, just as now over-production is the theme of every 

 short-sighted politician. But the legislature of that 

 day thought they could remedy these things in a drastic 

 manner, so they passed in 1734 "An Act to prevent the 

 infamous practice of stock-jobbing." Mr. Walford, who 

 has inquired into the commercial history of this time far 

 more minutely than any other writer, remarks ' that 

 " gambling in stocks and funds had broken out with con- 

 siderable fervour again during the few years preceding 

 1734. It was the first symptom of recovery from the 

 events of 1720." 



I may add that there was in 1732 a great collapse of a 

 society called the " Charitable Corporation for Relief of 

 the Industrious Poor," A great many people were ruined 

 by the unexpected deficit discovered in the funds of this 

 kind of bank, and Parliament and the public were asked 

 to assist the sufferers, just as they might now be asked to 

 aid the shareholders of the City of Glasgow Bank. Thus 

 does history repeat itself ! 



Whether it was that the act of 1734 really did diminish 

 the infamous practice of stock-jobbing, or, whether the 

 sun-spots manifested less variation than usual, it is clear 

 that between 1732 and 1763 it is very difficult to discover 

 an)-thing approaching a mania or crisis. My learned and 

 obliging correspondents at Amsterdam and Leiden, Drs. 

 S. and W. Vissering, disclaim any knowledge of such 

 events in the trade of Holland at that time, and my own 

 diagram, showing the monthly bankruptcies throughout 

 the interval, displays a flatness of a thoroughly discourag- 

 ing character. Nevertheless, inquiry leads me to believe 

 that although there really was nothing to call a crisis, 

 mania, or panic, yet there were remarkable variations in 

 the activity of trade and the prices of some staple com- 

 modities, such as wool and tin, sufficient to connect the 

 earlier with the later periods. It is a matter of much 

 regret that I have hitherto been quite unable to discover 

 a connected series of price-lists of commodities of the 

 early part of last century. The accounts of prices of 

 goods at Greenwich Hospital, to be found in several 

 statistical works, are not only incomplete, but probably 

 misleading. Any reader of this article who can point out 

 to me series of prices of metals or other commodities, 

 not merely agricultural, before 1782, wiU confer a very 

 great obligation upon me by doing so. 



Deferring, however, for the present, any minuter 

 inquiry, I permit myself to assume that there were about 

 the years 1742 and 1752 fluctuations of trade which con- 

 nect the undoubted decennial series of 171 1, 1721, and 

 1732, with that commencing again in the most unques- 

 tionable manner in 1763. Thus the whole series of 

 decennial crises may be stated as follows : (1701 ?), 1711, 

 1721, 1731-32, (1742? 1752?), 1763, 1772-73, 1783, 1793, 

 (1804-5?), 1815, 1825, 1836-39(1837 in the United States), 

 1847, 1857, 1866, 1S78. A series of this sort is not, like 

 a chain, as weak as its weakest part ; on the contrary, the 

 strong parts add strength to the weak parts. In spite, 

 therefore, of the doubtful existence of some of the crises, 

 as marked in the list, I can entertain no doubt whatever 

 that the principal commercial crises do fall into a series 

 having the average period of about io'466 years. More- 

 over, the almost perfect coincidence of this period with 

 Broun's estimate of the sun-spot period (io"45) is by 

 itself strong evidence that the phenomena are causally 

 connected, The exact nature of the connection cannot 

 at preseat be established. As we have seen, Hyde 

 Clarke, Wilson, and Danson all argued, some thirty or 

 forty years ago, that commercial fluctuations must be 



"' ' "Insurance Cyclopaedia," art. Gambling, 



