Society, knowledge and the behaviour of English investors, 1688-1702

The period between 1688 and 1702 witnessed remarkable changes in the nature of public and private investment in England. From 1688 a host of joint-stock companies emerged, offering investors the opportunity to commit their capital to projects ranging from the manufacture of paper to the search for sunken treasure. Prompted by the exigencies of the Nine Years' War, the state also employed innovative tactics to attract money, it sold annuities, floated lottery schemes and authorised the incorporation of the Bank of England in 1694 and the New East India Company in 1698 on the condition that those companies functioned chiefly as vehicles to provide government funding. This thesis presents a comprehensive study of the choices and actions of the investors who enthusiastically embraced those new opportunities. It documents the rise of an active and surprisingly sophisticated market that facilitated a wide variety of investment strategies. Yet, the market was also subject to many failings. Facilities for managing risk were limited and it was often difficult for investors to access and analyse financial information. Furthermore, although the market attracted a diverse range of investors, activity came to be dominated by the few and, in some cases, individuals or groups acting in concert were able to manipulate the prices of securities. However, while these failings undoubtedly led to the destruction of some of the enterprises established during this period and contributed to the representation of financial investment as a dangerous and dishonest endeavour, the larger joint-stock companies proved remarkably resilient and surprisingly capable of retaining the trust of their shareholders. Hence the revolution in private and public finance did bring about permanent changes in investment habits and the institutions created during this period - the Bank of England, the National Debt and an active stock market - survived, flourished and became the foundation of London's financial system.