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Striking It Rich: The National Library’s Treasury of Dutch Satires on the South Sea Speculative Bubble of 1720Joni Waiser, Research and Information Services
Losing money on the stock market is nothing new, yet this year's March madness on the stock exchange was still rather unnerving. One word used in the news to describe this huge downturn was "bubble." According to Frans De Bruyn, presenter of the March SAVOIR FAIRE seminar, this word entered popular usage, in the financial sense, during 1720 in England, France and the Netherlands. Professor De Bruyn, from the Department of English at the University of Ottawa, specializes in the study of 18th-century literature. His discussion centred around Het groote tafereel der dwaasheid, or The Great Picture of Folly, one of the most humorous, visually interesting and bibliographically complex items in the special collections of the National Library. Dr. De Bruyn related how four very fine copies ended up in the National Library of Canada’s collection, and explained what the European Bubbles of 1720 have to do with the history of Canada. In 1720, English, French and Dutch investors bought shares in companies at grossly inflated prices, and then lost a fortune when share prices collapsed. In Britain, it was called the South Sea Bubble. In France, it was known as the Mississippi Bubble, and in the Netherlands, people used the term winhandel, meaning literally "wind trade" or "trading in wind," to describe the astonishing financial speculation that took place. In the Netherlands, these events inspired a flood of satirical poems, plays and engravings mocking the greed and foolishness of investors. Professor De Bruyn highlighted some of the most memorable of these satirical productions, which were collected for posterity in a unique anthology that is now part of the Lawrence M. Lande Collection of the National Library. Financial markets in the early 18th century were very different from those of today. Trading in shares was dominated by a few nationally chartered and sponsored companies such as Britain’s South Sea Company, France’s Compagnie des Indes (also known as the Company of the West or the Mississippi Company) and the Dutch East India Company. The spectacular rise in share prices encouraged individuals to set up proposals for all kinds of companies: insurance, fishery and financial, and prompted others to initiate projects for exploiting inventions and new services and trades. In this greedy, speculative atmosphere, people were willing to put their money into almost anything. The London-based South Sea Company's plan was to take over Britain's national debt. In return, it would attain interest and sole trading rights to the South Seas (South America) and, in theory, access to the Peruvian and Mexican gold and silver mines. The problem was that Spain already controlled those trading rights, which made it difficult for the company to generate profits. The price of shares in the South Sea Company rose from £128 in January 1720, to about £1000 by August, and then fell to £290 by October 1; an increase of 800 percent, followed by a 400 percent decline. With the collapse of the market, many investors were ruined; the Chancellor of the Exchequer of the day landed in prison, and even Sir Isaac Newton experienced a loss.
Dr. De Bruyn noted that when modern-day journalists discuss the South Sea Bubble they use terms such as "irrationality," "gambling" and "crowd psychology" in their analyses of the speculative behaviour. They are resorting to a "durable language" - composed, in equal parts, of satire and moralizing - that originated in the popular cultural response to the events of 1720. One particularly rich example of that response is a hefty Dutch collection of Bubble satires collected in a book entitled Het groote tafereel der dwaasheid, or The Great Picture of Folly. Closely scrutinizing the book's engravings, which he presented on slides, Dr. De Bruyn used the prints as a vehicle to explain the significance of the book as a whole. The texts and pictures pioneer a skeptical, disapproving mode of commentary about financial speculation that survives to the present day. The text on the book’s title page is long but provides little indication of who the book’s creator(s) might have been. It reads in English: The great picture of folly, showing the rise, progress, and downfall of the share, bubble, and wind trade in France, England, and the Netherlands, perpetuated in the year 1720. Being a collection of all the terms and conditions of the incorporated companies of insurance, navigation, commerce, etc., in the Netherlands, both those that have been brought into operation, as well as those rejected by the States [legislatures] of various provinces. Accompanied with prints, comedies, and poems, published by various devotees, scoffing at this execrable [terrible] and deceitful trade, by which in this year various families and persons of high and low standing have been ruined, and bereft of their possessions, and honest [legitimate] trade impeded, in France and England as well as in the Netherlands. As long as the avaricious have money and goods, the deceiver will get his wish, because the miser and the fool will always feed him. Printed as a warning for posterity, in this fateful year for many fools and wise men, 1720. Thus, bibliographically the book is a mystery. No indication is given of its publisher(s), printer(s), editor(s) or compiler(s). Strangely, its contents grew haphazardly over time, with new sets of plays, poems and prints being added periodically. This led to the production of three distinct editions (probably between 1720 and 1721), with a fourth following some time later. All versions have the date 1720 on the title page, yet some copies have pages with watermarks from later in the century. These later books may have been reprinted during subsequent periods of speculation. The first edition is particularly complicated, since no two copies are alike. Apparently, customers bought the pages unbound, chose which materials they wanted to include, and may have added some other published materials of their own before having their copies bound. Dr. De Bruyn remarked that this frenetic publishing activity suggests that a printer, or a consortium of printers, was eager to cash in on the topical interest in the Bubble. Clearly, the speculation of stock traders resulted in a speculation in the book trade - printers themselves capitalizing on the fever of 1720. The booksellers’ silence about their part in bringing out the book was likely due to the fact that it contained materials that appear to have been pirated. Complaints had been made about the inclusion of several plays in the book, in contravention of a law granting a special privilege (an early form of copyright) to the Amsterdam playhouse for exclusive publication rights. The thick folio volume is composed of six separately paginated parts: a section comprising terms of subscription for the numerous Bubble companies floated in the Netherlands in 1720 (analogous to today’s stock prospectuses), a collection of satirical and didactic plays, a similar collection of poems, a jocular description of a set of topical playing cards (the cards themselves were printed with the engravings in the book), a set of polemical pamphlets denouncing the wind trade, and a thick sheaf of some 74 engravings sold at the time and collected here for posterity.
How the four copies of Het groote tafereel ended up in the National Library is related to the connection that the 1720 Bubble has with Canada. The copies are part of the Lawrence M. Lande Collection, which is named after its benefactor. Dr. Lande, a Montreal book dealer and bibliophile, was fascinated with the history of John Law, a Scotsman who was the mastermind behind the great financial reform in France that led to the Mississippi Bubble. Law advocated the systematic issuing of bank notes as legal currency in order to stimulate economic activity and thereby increase national power. Lawrence Lande collected a large body of works related to Law and the early development of financial capitalism in France. The bibliographies of Lande’s collection, which he himself produced, demonstrate just how interested he was in tracing the impact of Law’s financial schemes on Canada, or New France. In 1993, Dr. Lande made an exceptional gift to the National Library by donating four copies of Het groote tafereel: a rare example of the first version, two copies of the second version and one copy of the third version.
John Law had combined his banking scheme with an overseas trading company that came to be known as the Compagnie des Indes, and people eagerly bought shares in this venture. The company proposed to take over liability for the national debt of France in exchange for control over all of France’s overseas trade, including trade with Canada, Louisiana and the Far East. The Compagnie des Indes obtained the right to purchase Canadian beaver pelts at a fixed price for 25 years. The beaver was intended to help finance the national debt of France and stimulate its economy. In this way, Canada has a direct link to the 1720 Bubble. The South Sea Bubble in England was similar to Law’s Mississippi scheme in purpose (conversion of the national debt), modes of financing, and manipulation of share prices. However, the speculation in Holland was different. Although the Netherlands also had a formidable national debt, it had in place the means to finance it because of the highly advanced Dutch banking and trading system of the 17th century. In other words, the government was not interested in any schemes for converting debt into company shares. Moreover, three cities, Amsterdam, Haarlem and Leiden, prohibited the erection of any Bubble companies in their jurisdictions. This permitted smaller Dutch cities, such as Rotterdam, The Hague and Hoorn, to meet the enormous demand for speculative investment channels. Hordes of investors travelled to these cities to apply for shares in the newly floated companies. One of the numerous companies was Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam, or Rotterdam Insurance, Discounting, and Loan Company, which is still in existence today. In analyzing the satirical prints, Dr. De Bruyn emphasized that they are crowded with details that the viewer must "read" in order to figure out the meaning of the whole. The ideas are presented using emblems. The emblem was a popular pictorial literary genre, consisting of a visual image with a title and a motto attached to it. The engravings display many traditional emblematic and iconographic materials, such as the fall of Phaëthon or Icarus; the Eye of Providence, with its beam of light; Time; the globe; the sun; the moon; the signs of the zodiac and heraldic symbolism. Professor De Bruyn described a constant tension between realistic detail and allegory in these prints. The essential point is that the engravings simultaneously reported news and commented on it moralistically. In Het groote tafereel, the shade of Erasmus himself is conjured up to dramatize the abandonment of humanist values such as moderation, prudence, discretion, right reason, and the reciprocity between effort and reward. All would be fatally undermined by the wickedness of speculation. The great humanist is portrayed as leaving his native city of Rotterdam, on account of its enthusiasm for the windhandel. The tension between realism and allegory also applies to the book as a whole: the juxtaposition of legal documents and satirical poems, plays and prints.
The part of the seminar focussing on specific engravings in Het groote tafereel was informative and highly entertaining, as Professor De Bruyn expertly, and often humorously, acted as interpreter. One especially intriguing print was Monument consacré à la postérité en mémoire de la folie incroyable de la XXe année du XVIIIe siècle, or Monument Consecrated to Posterity in Memory of the Unbelievable Folly of the XXth Year of the XVIIIth Century. It features the progress of a chariot of speculation, driven by Folly (wearing a hoop skirt), pulled by various companies (depicted as injured people), and heralded by Fame or Rumour with her trumpet. The wheel is crushing legitimate commerce while a demon blows bubbles in the crowd. Mushrooms in the centre denote the significance of the crowd, which consists of people portraying the consequences of speculation: crime, envy, hopelessness, insomnia, violence and sickness. Countering this allegory is the realism of the coffeehouse, with proclamations, on the right. Modern economic historians tend to downplay any lasting harm the Bubble may have caused in the Netherlands. This is despite the apocalyptic portrayals of speculation in Het groote tafereel, implying that people at the time felt a strong apprehension about what was happening. Professor De Bruyn offered two reasons for the discrepancy between the orderly picture drawn by modern historical research and the chaotic tafereel depicted in the original work. First, there is the marked difference between the individual’s actual experience of contingent events, in all their alarm and confusion, and the benefit of hindsight, enjoyed by the historian. Second, the emblematic idiom inherited from the Middle Ages and the Renaissance was the only means of communication available at the time, and it tended to magnify and sensationalize any news of an unsettling nature. By studying the contents of Het groote tafereel, one can gain insight into the world of the early 18th century. The speculation of 1720 revealed new modes of economic behaviour that were poorly understood. The defensive reaction of many observers was to explain their uneasiness about unanticipated economic events in traditional and moral terms. Transactions similar to today’s futures trading were condemned in moral terms as gambling, or in religious terms as an impious provocation of divine providence. The use of such language to characterize the conduct of speculators has proved remarkably durable, and moralizing tones are often found even in journalistic commentaries of current financial crashes. One thing that the commentaries of the present day and those written in 1720 have in common is a fascination with the human side of speculation. Speculators exhibit the same intriguing traits: greed, the compulsion to gamble, the thrill of risk-taking, the power of fantasy and wishful thinking, and a susceptibility to being swindled. In 1720, such behaviour led to a great deal of mockery and stern finger pointing, though probably much of the laughter and disapproval masked people’s distress at not having themselves made a killing on the stock market. In presenting his research so eloquently, Professor De Bruyn made the European financial crisis and Bubble schemes of 1720 come alive. He also conveyed the richness of the National Library collection, with its treasury of four fine copies of Het groote tafereel der dwaasheid in the Lawrence M. Lande Collection. This eminent work is considered an accurate reflection of the public sentiment of its day. It is also regarded as an economic force and a profoundly influential instrument in the historical expression of public opinion. For more information on the Lawrence M. Lande Collection, or any other of the National Library’s special collections, please contact Research and Information Services |
