South Sea Company aftermath

The trials which followed the investigations led to the prosecution of many of the major players in the crisis, including company and government officials. Some of the guilty were sentenced and separated from part or almost all of their estates to replenish the company's coffers and help restore its credit.

The House of Commons left the lead director John Blunt only £5,000 of his £183,000. One of the representatives even suggested they leave him with one shilling.

Postmaster-general James Craggs the elder, who denied complicity in the affair killed himself on the eve of his trial. His son the Secretary of state, however, had been active in it. Others accomplicies were protected for political expediency.

But national anger was still high, after all many people had lost everything. Speculators, once wealthy, in a month became poor. The years to come would be filled with cautious conservatism, hardening social distinctions, ever more clearly formalized patronage, and hostility to change.

The Bubble Act of 1720 was passed at the urging of the South Sea Company to stop competing speculations and had banned all joint-stock corporations without parliamentary or royal authority. This helpful way of raising capital was no more available to anyone, even the healthy companies and in essence the South Sea Bubble may have diminished British economic development for several years.

Winners and losers
It is important to remember although some companies had dubious motives, many of them were quite honest in their intentions. For those who had realized big losses or gains, the mania redistributed wealth. The largest honest fortune was made by Thomas Guy, a stationer turned philanthropist, who owned £54,000 of South Sea stock in April 1720 and sold it over the following six weeks for £234,000.

Sir Isaac Newton, scientist and a rational man, traded less well. He sold his £7,000 of stock in April for a profit of 100 percent. But greed or something unknown induced him to reenter the market at the top, resulting in loss of £20,000. During that time he said one of the most quoted and truthful statements in the history of stock markets "I can calculate the motions of the heavenly bodies, but not the madness of people." Perhaps there is a lesson for us all.

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