Wednesday, 17 October 2012

Field Study's Man in E17 is forever blowing bubbles

It is just over 300 years since the South Sea Company was formed (1711) as a public private partnership required to consolidate and reduce the cost of the National Debt. Wars and colonial expansion had added substantially to the Britain's national debt, and inefficient governance had hindered effective taxation that might have lessened the debt burden. By 1711 the government was increasingly dissatisfied with the Bank of England as the manager of the National Debt. The Bank of England was founded as a private company in 1694 and it's role involved making loans to the government on which interest was charged (8% around 1700) and loan management fees payable (£4000 per annum early on). In 1700 the National Debt was £12,000,000. That debt can be compared with the current debt courtesy of a graph via Wikipedia:

The United Kingdom of Great Britain was created in 1707, via the Treaty of Union, and Acts of Union. This union (and debt) may change with the Scottish independence referendum due to take place before the end of 2014. There is some argument that the whole of the UK should vote on Scottish independence. There is some nominal irony that the 'Royal Bank of Scotland' (established in 1727) played such a pivotal role in the 2007/2008 economic crisis and its continuing legacy. The beginning of the 18th century appears to have been a time of huge change economically and geopolitically; the beginnings of globalization.

In 1706, Clock House (Wood St, Walthamstow), the home of Sir Jacob Jacobsen, was completed. At that time the house was situated in a rural, agricultural area rather than the suburb Wood St is today. In 1714, Sir Jacob Jacobsen became a director of the South Sea Company. By 1720 the South Sea Company had generated such fervent and unsustainable commercial speculation the 'South Sea Bubble' burst, resulting in catastrophic losses for many so called gullible speculators or investors. 

The Clock House was temporarily taken from Jacobsen by the government as compensation for the chaos caused by the burst, and possibly as punishment for the illegality of many of the investment schemes which may or may not have been the direct responsibility of the South Sea Company directors.

In a previous post I was skeptical about Sir Jacob Jacobsen being referred to as 'successful'. Since then, in my efforts to try and understand this historical field better, I've read more about the South Sea Bubble, including an essay on 'globalization in historical perspective' in which economic historians, Larry Neal and Marc Weidenmier, assert the South Sea Company was 'successful ultimately in reducing the respective debt burden(s)' and that, 'the South Sea Bubble proved to be the 'big bang' for financial capitalism in England. In 1726, even the Bank of England had to acknowledge the success of the South Sea Company's three percent perpetual annuity when it issued its own "Three Percent Annuity"'.

Have I learned a lesson here?

The pictures above are taken from my archive of snaps of this years E17 Art Trail including some from a visit to the Bank of Walthamstow, courtesy of Jonathan Thomas.

I am the proud owner of one of 500 'one stowner' notes produced by J Thomas. The design of the note features an image of Walthamstow Dog Stadium. This note might be pertinently linked with the Archipelago of Truth's recent comment on the dog track debacle - Dog Track Dosh.
While I write I am a 'proud owner' I have hesitated to express some disappointment about my 'one stowner' - the back of the common weal note is blank. Who could be portrayed on the reverse? Would Sir Jacob Jacobsen be a worthy character to celebrate Walthamstow's place or role in the history of successful entrepreneurial-ism?*
Could the formation of an 'E17 Company' and canny management of an 'E17 Bubble' along with Walthamstownian independence create a state of debt free bliss?

* - I have not yet found an image of Sir Jacob Jacobsen however there is a portrait of his son, Theodore Jacobsen, by William Verelst and assuming there was some likeness between father and son, the ghost of JJ might be rendered visible if it exists.

I picked up a flyer recently advertising a 'London Ghosts Conference' - an event organised by the London Fortean Society which, sadly, I doubt my 'stowner' will not afford the price of admission. 



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