South  Sea  Bubble

300  YEARS



Euro  Bonds

& Co.

« Every  mortal  that  has  common  sense

or  that  knows  anything  of  figures

sees  that  ’tis  not  possible

by  all  the  arts  and  tricks  upon  earth

long  to  carry  £ 400,000,000  of  paper  credit

with  £ 15,000,000  of  specie  »

Lady Churchill, Duchess of Marlborough


Winston S. Churchill, Marlborough: His Life and Times

(Chicago 2002), vol. II, pp. 1032 f.


Lord Treasurer Robert Harley, 1st Earl of Oxford and Mortimer, together with some merchants formed the South Sea Company, which was granted an although worthless monopoly of the British trade with Spain’s colonies in South America. Worthless, as for once the War of Spanish Succession still went on. Yet even more worthless as actually only one single British ship per year was allowed to enter the Spanish South American harbors. Of which on the Spanish side no secret was made, while at home the Company promised golden castles in Spain.

But for trading – to which later an Asiento, a monopoly for the delivery of slaves, was added – Harley & Co. had not formed the Company anyway. At least not for the trade with colonial produces.

For actually in this special purpose vehicle the national debt risen not least due to the War of Succession were to be parked past the Bank of England – and spread among the people.

Correspondingly the monopolies were not granted for free. On the contrary. In a first slice the Company assumed nearly 10 million pound Sterling in government bonds, for which the creditors received new stock of the Company. At the same time the administration guaranteed a perpetual interest to the Company’s credit and thereby its stockholders. Interest the administration planned to pay from tariffs on the imports to be expected from the trade monopoly. Imports, however, which, as already mentioned, did not exist and would not exist. 1717 further £ 2 million of national debt were assumed by the Company.

The real coup yet happened late 1719 – in the meantime King George I had become governor of the Company – by assuming about 60% – equivalent to about £ 30 million – of the then national debt against payment of £ 7.5 million. Of course the creditors had to be brought to exchange their bonds for new South Sea stock at a high premium. In other words, as many bonds as possible against the least possible stocks. On which behalf an unprecedented speculation was started by both the directors and members of the administration – among these not least John Aislabie, Chancellor of the Exchequer – by spreading rumors which seized all classes and had stock prices rise from £ 128 in January 1720 to £ 550 in late May and ultimately to a bare £ 1000 in July/August.

On which level the bubble burst: in late September 1720 the stock had already fallen down to £ 150 again. Just as some weeks before on the other side of the Channel in France already John Law’s Mississippi Bubble of uncovered promises on the base of uncovered paper money had burst.

« The  eurobond  is  an  instrument

by  which  each  country  decides  herself

about  her  expenditures  and  revenues ,

but  then  leaves  it

to  the  European  level  of  the  community

to  pay  the  bills »

Axel Weber

President of the German Bundesbank 2004-2011

Washington, September 25, 2011


the European Central Bank buys under breach of law and giving up its political independence in grand style government bonds which have become worthless, while the administrations create “stabilization mechanisms” and “facilities” and prepare eurobonds under the wellknown motto of the “We decide something, put it up in the space and wait some time if something happens … until there is no going back anymore” (Jean-Claude Juncker), to pave the golden path to perpetual wealth & growth by naturally “alternativeless” debt-jobbing.

It goes without mentioning that with such promise propaganda was made for the euro already at its introduction, against any common sense in the belief that economically and financially quite antagonistic cultures could be forced together for the general weal in a common currency. And this even without indeed a – even more illusionary – uniform economic and fiscal policy.

And just as already at the time of its creation the euro was connected in irresponsible thoughtlessness with old clichés of thinking of an encirclement of Germany à la 1913 (François Mitterrand) and of war and peace (Helmut Kohl) supposed to be overcome after half a century of European union and democracy, now again any discussion about the continued debt-jobbing is nipped in the bud with the very same argument by the leaders of administration to reach their aims in such a dictatorship of so-called alternativelessness. Today as then deliberately missing that words, repeated often enough, can become a self-fulfilling prophecy. To carry of then also all that what had been built up arduously in half a century to the real benefit of the general weal.

« Euro-Bonds

are  no  solution  for  the  debt  crisis …

And  for  the  foreseeable  future

they  neither  are  a  model

for  the  debt  financing  in  the  euro  region »

Jürgen Stark

chief economist of the European Central Bank

Vienna, September 15, 2011


The  South  Sea  Bubble

William Hogarth, South Sea Scheme


« Last  week  the  European  Central  Bank  has  bought

government  bonds  for  the  record  sum  of  22 billion  euro .

It  disregards  the  prohibition  of  national  financing .

The  reserve  bank  has  become  a  beadle  of  politics …

The  dangerously  inflated  risk  balance  of  the  ECB

should  be  warning  enough

of  the  supposed  great  success  of  the  eurobonds »

Holger Steltzner

The Fall of the ECB

Frankfurter Allgemeine Zeitung, August 16, 2011

“Who’l Ride ?”

The  South  Sea  Bubble


300  Years  National  Debt  Speculation

William Hogarth (1697 London 1764). An emblematic print on the SOUTH SEA. Memorial sheet on the people’s eagerness to speculate in connection with the worldwide stock market fraud of the South Sea Bubble (1711-1720) and John Law’s concurrent Mississippi Bubble. Engraving by Thomas Cook (ca. 1744 – London 1818). Inscribed: Designed by W. Hogarth. / Engrav’d by T. Cook. / London Published by G. G. & J. Robinson Paternoster Row August 1st. 1800., otherwise as above and in the following. 10⅝ × 13½ in (27 × 34.2 cm).

“ See here ye. Causes why in London, / So many Men are made & undone, / That Arts, & honest Trading drop, / To Swarm about ye. Devils shop, (A) / Who Cuts out (B) Fortunes Golden Haunches,

Trapping their Souls with Lotts & Chances, / Shareing em from Blue Garters down / To all Blue Aprons in the Town. / Here all Religions flock together, / Like Tame & Wild Fowl of a Feather,

Leaving their strife Religious bustle, / Kneel down to play at pitch & Hussle, (C) / Thus when the Sheepherds are at play, / Their flocks must surely go Astray, / The woeful Cause yt. in these times,

(E) Honour, & (D) honesty, are Crimes, / That publickly are punish’d by / (G) Self Interest, and (F) Vilany; / So much for monys magick power / Guess at the Rest you find out more. ”

The  rich  scenario  of  human  frenzy ,

golden  promises , lottery  fortunes ,

and  the  perversion  of  the  values  of  civilization :

On the left Guildhall with the statue of the Gog or Magog and below Fortune hanged naked by her hair, thrown in slices among the people by the devil with the scythe (“the Devil cutting Fortune into collops”, Walpole), on the right the monumental base of the Monument to the Great Fire of London together with fighting foxes, while the inscription is adjusted to the occasion:

“ This  Monument  was  erected

in  Memory  of  the  Destruction  of  this  City

by  the  South  Sea  in  1720 ”.

At the center, however, following Callot’s hanging tree from the Grandes misères de la guerre the wheel of fortune surmounted by a goat and the inscription “Who’l Ride” as merry-go-round with wooden horses on which representatives of all classes – whore, clergyman, boot black, hag, nobleman – chase after their supposedly certain luck. Counterpart to this the ladies of society queuing behind Guildhall below deer antlers for a raffle of husbands with lottery fortunes. In the background finally the dome of St. Paul’s. On the ground before the Wheel of Fortune stripped Honesty is broken on the wheel by Self-interest in the presence of an Anglican priest, on the right at the pillory in front of the memorial Villainy – the mask is fallen, the pistol of the highwayman peers out of the pocket – scourges Honor, whose cloak is appropriated by a monkey with bicorne and sword standing on the side as allegory of pretending. Far left finally, unaffected by the general tumult, one Catholic, Jew, and Puritan each attend to their own game of chance. The trade as source of real wealth, however, resting unnoticed front right or already passed away.

The crowd in Hogarth’s study of 1721 in the Royal Library, Windsor, barely indicated by the way and elaborated in the print only as

“ a  first  glimpse  of  Hogarth’s

vivid  characterisation  of  current  life ”

(Lawrence Gowing in the 1972 exhibition catalog of Tate Gallery, no. 2).

The wiser among the contemporaries of course recognized the dishonesty of the shifting of government bonds placed only with difficulty and at high interest anymore to the South Sea Company formed solely for this purpose – the trade monopoly with the Spanish colonies in South America promising immense gains, actually granting but one ship per year, was just a front for the paying audience – from the beginning.

« The  resignation


Jürgen  Stark

is  a  torch »

Holger Steltzner

Risk Central Bank

Frankfurter Allgemeine Zeitung, September 10, 2011

So then Robert Walpole, who as First Lord of the Treasury of many years led England back to prosperity after the bursting of the speculation bubble, was an outspoken opponent of the manipulations. What, however, did not keep him from taking part in the speculation and profiting from it by timely selling, and later to protect some of the primarily responsible from punishment – the debtors’ prison was, as always, reserved largely for the little debtors. And also Lady Churchill, Duchess of Marlborough, was not deceived:

“ In 1720 the amazing episode of the South Sea Bubble inflamed, scorched, and seared London society. Sarah, with her almost repellent common sense, forced the Duke out of the market before the collapse, and added £100,000 to the fortune which he and she had gathered. Nor was this feminine intuition. In a blistering letter she wrote, while all England was bewitched by speculation,

‘ Every  mortal  that  has  common  sense

or  that  knows  anything  of  figures

sees  that  ’tis  not  possible  by  all  the  arts  and  tricks  upon  earth

long  to  carry  £ 400,000,000  of  paper  credit  with  £ 15,000,000  of  specie .

This  makes  me  think

that  this  project  must  burst  in  a  little  while

and  fall  to  nothing ’ ”

(Winston S. Churchill, Marlborough: His Life and Times [Chicago 2002], vol. II, pp. 1032 f.)

Just as three centuries later the far-sighted again were not beguiled by the siren songs of immense growth and realized in time that a currency neither can be put upon a base of quite contrary financial and economical cultures nor this could be saved then by ever so faster galloping government bond-jobbing, which – no different than after the bursting of South Sea, Mississippi and other bubbles – ultimately has to be paid for by the masses.

« The … Euro  safety  net

is  not  even  yet  blessed  by  the  national  parliaments

when  there  is  talk  already  about  a  gigantic  raise …

Cardinal  point  of  this  financial  trick

shall  be  the  European  Central  Bank  (ECB) …

The  EFSF  buys  bonds  of  bankrupt  states …

and  deposits  these  as  ‹securities›

for  further  credits  with  the  ECB .

With  these  credits  it  again  buys  government  bonds

which  it  deposits  at  the  central  bank

as  securities  for  fresh  loans …

And  the  path  into

assets-wasting  hyperinflation

would  be  open »

Josef Urschitz

Politicians risk Hyperinflation

Die Presse, September 25, 2011

Hogarth’ South Sea Scheme besides – so Paulson – not only

“ the  one  original  Bubble  print  by  an  English  artist ”

but generally marking the beginning of satiric prints in England :

“ English  graphic  satire  really  begins  with

Hogarth’s  Emblematical  Print  on  the  South  Sea  Scheme ”

(John J. Richetti, in The Cambridge History of English Literature, 1660-1780, p. 85).

In  the  rich  palette  of  events & allusions  yet  already  a  full  Hogarth

as so not matched by the compositionally yet less energetic companion piece The Lottery produced some years later. – Cook “made his mark as Hogarth engraver, too, whose complete work he has engraved in copy” (Thieme-Becker) and whose original format he maintained contrary to all later Hogarth editions in his first, earlier edition. For some sheets not published by Hogarth himself Cook became their first engraver, just as he also gained approval of a contemporary connoisseur as Maximilian Speck von Sternburg. – Trimmed in the above platemark.

Offer no. 7,608 / sold

– – – The same in Cook’s popular later, smaller version. Inscribed: Emblematical Print of the South Sea. / Hogarth pinxt. / T. Cook sculp. / Published by Longman, Hurst, Rees & Orme, Aug 1st. 1809. Subject size 5¾ × 7½ in (14.5 × 19 cm). – Without the explanatory verses. – Trimmed within the wide white platemark which is slightly stained especially on the right.

Offer no. 8,728 / EUR  176. (c. US$ 213.) + shipping

« It  is  easy  to  duplicate

that  by  a  communitarization

of  national  debt  in  the  euro  region

incentives  for  budget  discipline

cease »

Jürgen Stark

chief economist of the European Central Bank

Vienna, September 15, 2011

Then  there  still  were  Debtors’  Prisons

in  which  one  could  ponder  excellently  on  the

National  Provision  of  Funds

Of  course  only  the  small  debtors  turned  up  there …

William Hogarth (1697 London 1764). Prison Scene. The new inevitable station in Rakewell’s life, interesting here, however, his two co-detainees. So in the background unperturbed in search for gold the alchemist at the live stove of his fully functional laboratory, yet foremost the outside left, whose

“ New  Proposition  to  pay  the  National  Debt ”

slipping from his hand should be just as welcome by higher authority as his smelling-bottle to the fainted Sarah Young, Rakewell’s guardian angel. And on the canopy of the bedstead above him by no means an exhausted vulture, rather, so Lichtenberg, “the skinning of a third. For this

the  myths  of  the  art  of  finance  and  chemistry  were  too  low ,

on the ode’s eagle wings he rushed to the Olympus, yet got, just as often his example, jammed between the canopy … and the ceiling of the room; with the head downwards.” Engraving by Thomas Cook (c. 1744 – London 1818). Inscribed: Designed by Wm. Hogarth / Engraved by T. Cook / Published Aprl. 1st. 1797, by G. G. & J. Robinson, Pater-noster Row, London. / Pl. VII. 14⅛ × 16½ in (35.8 × 42 cm).

« With  these  resolutions

( enlargement  of  the  safety  net  EFSF )

another  big  step  follows

in  the  direction  of  joint  liability

and  less  disciplining  by  the  capital  markets ,

without  that  in  turn  the  options  for  controlling  and  influence

on  the  national  fiscal  policies  are  distinctly  strengthened »

Jens Weidmann

President of the German Bundesbank

before the budget committee of the German Bundestag

September 19, 2011

The Rake’s Progress VII. – With multi-verse caption. – Cook “made his mark as Hogarth engraver, too” (Thieme-Becker) whose original folio size he kept contrary to all later Hogarth editions. Worth mentioning fine the chiaroscuro of his sheet here.

Hogarth’s  grandiose  depiction

William Hogarth, Prison Scene

of  the  execution  of  a  sentence  at  insolvents

full of charming details. It is a beerless, a horrible time. And experienced by the master himself indirectly or directly. Since according to Meyers Konversations-Lexikon, 4th ed., VIII, 624, his landlady brought him into the notorious Fleet prison for unpaid debts – and received her appropriate memorial in due time. The catalogue Zurich of 1983 nevertheless just mentions the father’s imprisonment.

Yet in spite of all also a time of unbroken hopes as embodied not only by the said falling memorandum, but far more so by the alchemist untouched by the rest of the lively company:

“ … who has a pot on the fire not just for the best of the nation, but whole mankind. The philosophical patience in the man’s face and whole bearing has something really agreeable indeed; one sees he has learned waiting, an art which is so necessary with any other business in the world than in making gold … The friendship between the man and his stove is touching indeed if one considers that both sit here just because of their relation, and each probably could have been something much better without the other. Nevertheless they stick together, like from one piece … and feed each other with hopes and coals until the day of the answer to the great problem. Far this day can be impossibly. The escape pipe through the barred window is installed too well, — it cannot fail; whereas the installation by which the great product shall be conducted into the bottle not much — it must fail … the circulus in destillando is unmistakable here, the condenser is closer to the fire than the retort, and while both quarrel about the possession of the tincture the infinite vastness outside has it all,

and  so  happens  the  dissolution  of  the  problem ”


Offer no. 7,518 / EUR  496. / export price EUR  471. (c. US$ 569.) + shipping

– – – The same in Cook’s smaller repetition worked together with his son without the caption here replaced by the series title. Inscribed: Pl. VIII. / Hogarth pinxt. / T. Cook & Son sc. / Published by Longman, Hurst, Rees, & Orme, Septr. 1st. 1808. Subject size 5¾ × 6¾ in (14.5 × 17.2 cm). – Trimmed within the wide white platemark.

Offer no. 8,729 / EUR  84. (c. US$ 102.) + shipping

– – – The same in steel engraving about 1840. 5 × 6 in (12.8 × 15.1 cm). – With the title in German.

Offer no. 5,804 / EUR  43. (c. US$ 52.) + shipping

« The  price  fluctuations  at  the  financial  markets

are  distinct  because  of  widespread  uncertainty .

It  is  the  result  of  political  mismanagement

and  the  bursting  of  most  varied  asset  price  bubbles

to  which  it  led  because  of  distinct  misguided  incentives …

Hopes  to  be  able  to  adjust  corresponding  problems

by  interventions  of  a  command  economy

are  an  illusion …

The  problems  will  only  be  solved  truly  by

making  distorted  markets  efficient  again .

This  is  only  possible  if  there  is  sufficient  transparency  and

if  those  take  all  the  risks  who  took  them »

Irrational Hopes for Command Economy

Frankfurter Allgemeine Zeitung, September 14, 2011

… for  the  Big  Debt-Jobbers

could  also  then  further  go  about  their  business

elsewhere  just  as  excellently

William Hogarth (1697 London 1764). Some of the Principal Inhabitants of ye Moon, as they Were Perfectly Discover’d by a Telescope brought to ye: Greatest Perfection since ye. last Eclipse; Exactly Engraved from the Objects, whereby ye: Curious may Guess at their Religion Manners, &c. (Royalty, Episcopacy and Law.) Engraving. Inscribed with text before. 10⅝ × 12 in (27.1 × 30.4 cm; subject size 9⅝ × 7⅜ in [24.5 × 18.6 cm]).

William Hogarth, Principal Inhabitants of the Moon

On a platform above the clouds as raised center figure the pope who lets the money machine spit by means of a prayer book – and thus demonstrating how even words can be turned into riches. At his right the monarch – his head being either a crown-piece or a guinea – receiving the moon ball as fief, additionally with symbols of fine arts. Enthroned on the left as the third of the alliance the law as the personified sword, not least a protector of prosperity figuring at its feet. Further two warriors and servants of the Lord. All by the way faceless.

« One  doesn’t  have  to  be  able  to  repeat  blindfolded

the  instruments  of  the  ‹Euro Financing Facilities›

to  see

where  the  fighting  of  the  national  debt  crisis

with  even  more  national  debt  will  lead  to :

even  deeper  into  the  debt  mire »

Holger Steltzner

Europe is more than «Euroland 17»

Frankfurter Allgemeine Zeitung, September 18, 2011

Impression on strong paper from the plate retouched by the royal engraver James Heath (1757 London 1834) about 1822 (“Even these impressions have become relatively rare today though”, Art Gallery Esslingen 1970; and Meyers Konv.-Lex., 4th ed., VIII [1888], 625: “A fine edition”, esteemed also already by contemporary collectors of the rank of for instance an A. T. Stewart [Catalog of the Stewart Collection, New York 1887, 1221, “fine plates”]). – Trimmed below in the extremely wide platemark.

Offer no. 7,881 / EUR  118. (c. US$ 143.) + shipping

– – – The same. Engraving by Thomas Cook (c. 1744 – London 1818). (1806-09.) Inscribed with the text above. Sheet size 10¾ × 8¼ in (27.3 × 21 cm). – Trimmed within the somewhat foxing or time-stained wide white platemark.

Offer no. 8,905 / EUR  202. (c. US$ 244.) + shipping

The  Lottery

William Hogarth, Lottery

The  Companion  Piece  to  the  South  Sea  Scheme

William Hogarth (1697 London 1764). The Lottery. Engraving by Thomas Cook (c. 1744 – London 1818). Inscribed: Painted by W. Hogarth. / Engrav’d by T. Cook. / Pubd.. Feb. 1-1803 by G. & I. Robinson, Paternoster-row, London., otherwise as above. 14½ × 13½ in (36.9 × 34.4 cm).

Instructive  representation , not omitting the calculability of luck. Otherwise that lottery “in which the March to Finchley (against the rebels under Charles Edward Stuart commonly known as Bonnie Prince Charlie or The Young Pretender and dedicated by Hogarth to Frederick II of Prussia) was disposed of as already mentioned in the explanation to that sheet …”. The painting was won by Captain Coram, founder of the Foundling Hospital. – Explanatory caption. – Impression of very fine chiaroscuro on strong paper. In its downright luxurious wide white margin right outside two feeble water marks. – Cook “made his mark as Hogarth engraver, too, whose complete work he has engraved in copy” (Thieme-Becker) and whose original format he maintained contrary to all later Hogarth editions in his first, earlier edition. For some sheets not published by Hogarth himself Cook became their first engraver, just as he also gained approval of a contemporary connoisseur as Maximilian Speck von Sternburg.

Offer no. 7,601 / EUR  445. / export price EUR  423. (c. US$ 511.) + shipping

– – – The same in Cook’s popular later, smaller version. Inscribed: Hogarth pinxt. / T. Cook sculpt. / Published by Longman, Hurst, Rees, & Orme, March 1st. 1808., otherwise as above. Subject size 5⅛ × 6¾ in (13 × 17.2 cm). – Slightly time-marked impression trimmed within the wide white platemark.

Offer no. 8,903 / EUR  118. (c. US$ 143.) + shipping

Know  History — Learn  from  History . Indeed .

“ Sir, yes, (the Rubens) is closer to the one in London (recte Dresden), but the one we have is on copper. Thank you for your time. Highest regards, D… A… (and yes America could use a blessing about now) ”

(Mr. D. A., November 4, 2003)