Wall Street History

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Wall Street History

08/06/2004

Jonathan Swift: The Bubble

I once paid way too much money (embarrassingly so) for a series
of books titled “Great Bubbles” that delves into old musings on
financial markets and manias, including Tulipmania and the
South Sea Bubble of 1720.

Back in 1999 I wrote of these classic examples of folly and
added a more recent piece last fall concerning a pamphlet put out
by Daniel Defoe of “Robinson Crusoe” and “Moll Flanders”
fame. And then the other day I came across a poem by Jonathan
Swift that the author of “Gulliver’s Travels” penned in December
1720, immediately following the demise of the South Sea
Company (SSC).

SSC traces its origins back to England, 1711, and was designed
to take advantage of a monopoly in trade to the South Seas, then
known as the eastern coast of South America for the most part.

But there were few real revenues and SSC later evolved into a
monetary corporation and then basically a giant Ponzi scheme.
Among those who lost a fortune in the ensuing debacle was Sir
Isaac Newton, who in the spring of 1720 stated “I can calculate
the motions of heavenly bodies, but not the madness of people.”
That April he sold out at a profit, but in the summer he reentered
the market at the top of the mania and lost 20,000 pounds.

An anonymous pamphleteer said of the SSC scheme:

“The additional rise above the true capital will only be
imaginary; one added to one, by any stretch of vulgar arithmetic
will never make three and a half, consequently all fictitious value
must be a loss to some person or other first or last. The only way
to prevent it to oneself must be to sell out betimes (sic), and so
let the Devil take the hindmost.”

This last phrase became the title of a popular book published in
1999 by Edward Chancellor, “Devil Take the Hindmost,” an
excellent history of financial speculation.

But back to Jonathan Swift, I have seen no evidence that he was
taken in like Newton, rather he merely observed the madness and
wrote “The Bubble: A Poem,” published anonymously. [It was
excerpted in January 1721 for The Evening Post and at that time
the author became readily apparent.]

*The following contains the original spelling and punctuation.

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The Bubble

Ye wise Philosophers explain
What Magick makes our Money rise,
When dropt into the Southern Main;
Or do these Juglers cheat our Eyes?

Put in your Money fairly told;
Presto be gone – ‘Tis here agen:
Ladies, and Gentlemen, behold,
Here’s ev’ry Piece as big as Ten.

Thus in a Basin drop a Shilling,
Then fill the Vessel to the Brim;
You shall observe, as you are filling,
The Pond’rous Metal seems to swim:

It rises both in Bulk and Height,
Behold it mounting to the Top;
The liquid Medium cheats your Sight,
Behold it swelling like a Sop.

In Stock Three Hundred Thousand Pounds;
I have in view a Lord’s Estate:
My Mannors all contiguous round;
A Coach and Six, and serv’d in Plate.

Thus the deluded Bankrupt raves,
Puts all upon a desp’rate Bett;
Then plunges in the Southern Waves,
Dipt over Head and Ears – in Debt.

So, by a Calenture misled,
The Mariner with Rapture sees,
On the smooth Ocean’s azure Bed,
Enamel’d Fields, and verdant Trees.

With eager Haste he longs to rove
In that fantastick Scene, and thinks
It must be some enchanted Grove;
And in he leaps, and down he sinks.

Rais’d up on Hope’s aspiring Plumes,
The young Advent’rer o’er the Deep
An Eagle’s Flight and State assumes,
And scorns the middle Way to keep:

On Paper Wings he takes his Flight,
With Wax the Father bound them fast;
The Wax is melted by the Height,
And down the tow’ring Boy is cast.

A moralist might here explain
The Rashness of the Cretan Youth,
Describe his Fall into the Main,
And from a Fable form a Truth.

His Wings are his Paternal Rent,
He melts his Wax at ev’ry Flame;
His Credit sunk, his Money spent,
In Southern Seas he leaves his Name.

Inform us, You, that best can tell,
Why in yon dang’rous Gulph profound,
Where Hundreds and where Thousands fell,
Fools chiefly float, the Wise are drown’d.

So have I seen from Severn’s Brink
A Flock of Geese jump down together;
Swim where the Bird of Jove would sink,
And swimming, never wet a Feather.

But I affirm, ‘tis false in Fact,
Directors better know their Tools;
We see the Nation’s Credit crackt,
Each Knave hath made a Thousand Fools.

One Fool may from another win,
And then get off with Money stor’d;
But if a Sharper once comes in,
He throws at all, and sweeps the Board.

As Fishes on each other prey,
The Great Ones swallowing up the Small;
So fares it in the Southern Sea:
But Whale Directors eat up all.

When Stock is high, they come between,
Making by second-hand their Offers;
Then cunningly retire unseen,
With each a Million in his Coffers.

So when upon a Moon-shine Night,
An Ass was drinking at a Stream;
A Cloud arose, and stopt the Light,
By intercepting ev’ry Beam:

The Day of Judgment will be soon,
Cries out a Sage among the Croud;
An Ass hath swallow’d up the Moon:
The Moon lay safe behind the Cloud.

Each poor Subscriber to the Sea,
Sinks down at once, and there he lies;
Directors fall as well as they,
Their Fall is but a Trick to rise.

So Fishes rising from the Main,
Can soar with moisten’d Wings on high;
The Moisture dry’d, they sink again,
And dip their Fins again to fly.

Undone at Play, the Female Troops
Come here their Losses to retrieve;
Ride o’er the Waves in spacious Hoops,
Like Lapland Witches in a Sieve.

Thus Venus to the Sea descends,
As Poets feign; but where’s the Moral?
It shews the Queen of Love intends
To search the Deep for Pearl and Coral.

The Sea is richer than the Land,
I heard it from my Grannam’s Mouth;
Which now I clearly understand,
For by the Sea she meant the South.

Thus by Directors we are told,
Pray, Gentlemen, believe your Eyes;
Our Ocean’s cover’d o’er with Gold,
Look round about how thick it lies:

We, Gentlemen, are your Assisters,
We’ll come and hold you by the Chin;
Alas! all is not Gold that glisters:
Ten Thousand sunk by leaping in.

Oh! would these Patriots be so kind,
Here in the Deep to wash their Hands;
Then, like Pactolus, we should find,
The Sea indeed had Golden Sands.

A Shilling in the Bath you fling,
The Silver takes a nobler Hue,
By Magick Virtue in the Spring,
And seems a Guinea to your View:

But as a Guinea will not pass
At Market for a Farthing more,
Shewn thro a multiplying Glass,
Than what it always did before;

So cast it in the Southern Seas,
And view it through a Jobber’s Bill;
Put on what Spectacles you please,
Your Guinea’s but a Guinea still.

One Night a Fool into a Brook,
Thus from a Hillock looking down,
The Golden Stars for Guineas took,
And Silver Cynthia for a Crown:

The Point he could no longer doubt,
He ran, he leapt into the Flood;
There sprawl’d a while, at last got out,
All cover’d o’er with Slime and Mud.

Upon the Water cast thy Bread,
And after many Days thou’lt find it;
But Gold upon this Ocean spread,
Shall sink, and leave no Mark behind it.

There is a Gulph where Thousands fell,
Here all the bold Advent’rers came;
A narrow Sound, though deep as Hell,
Change-Alley is the dreadful Name:

Nine times a Day it ebbs and flows,
Yet he that on the Surface lies,
Without a Pilot seldom knows
The Time it falls, or when ‘twill rise.

Subscribers here by Thousands float,
And justle one another down;
Each paddling in his leaky Boat,
And here they fish for Gold, and drown.

Now bury’d in the Depth below,
Now mounted up to Heaven again;
They reel and stagger to and fro,
At their Wits end, like drunken Men.

Mean time secure on Garr’way’s Cliffs,
A Savage Race by Shipwrecks fed,
Lie waiting for the founder’d Skiffs,
And strip the Bodies of the Dead.

But these, you say, are factious Lyes,
From some malicious Tory’s Brain;
For, where Directors get a Prize,
The Swiss and Dutch whole Millions drain.

Thus when by Rooks a Lord is ply’d,
Some Cully often wins a Bett,
By vent’ring on the cheating Side,
Tho not into the Secret let.

While some build Castles in the Air,
Directors build ‘em in the Seas;
Subscribers plainly see ‘em there,
For Fools will see as Wise-Men please.

Thus oft by Mariners are shewn,
Unless the Men of Kent are Lyars,
Earl Godwin’s Castles overflown,
And Castle-Roofs, and Steeple-Spires.

Mark where the sly Directors creep,
Nor to the Shore approach too nigh;
The Monsters nestle in the Deep,
To seize you in your passing by:

Then, like the Dogs of Nile, be wise,
Who taught, by Instinct, how to shun
The Crocodile, that lurking lies,
Run as they drink, and drink and run.

Antaeus could, by Magick Charms,
Recover Strength whene’er he fell;
Alcides held him in his Arms,
And sent him up in Air to Hell.

Directors thrown into the Sea,
Recover Strength and Vigour there;
But may be tam’d another way,
Suspended for a while in Air.

Directors! for ‘tis you I warn,
By long Experience we have found
What Planet rul’d when you were born;
We see you never can be drown’d:

Beware, nor over-bulky grow,
Nor come within your Cully’s Reach;
For if the Sea should sink so low,
To leave you dry upon the beach;

You’ll owe your Ruin to your Bulk;
Your Foes already waiting stand,
To tear you like a founder’d Hulk,
While you lie helpless on the Sand.

Thus when a Whale hath lost the Ride,
The Coasters crowd to seize the Spoil;
The Monster into Parts divide,
And strip the Bone, and melt their Oil.

Oh! may some Western Tempest sweep
These Locusts, whom our Fruits have fed,
That Plague, Directors, to the Deep,
Driven from the South-Sea to the Red.

May He, whom Nature’s Laws obey,
Who lifts the Poor, and sinks the Proud,
Quiet the Raging of the Sea,
And still the Madness of the Croud.

But never shall our Isle have Rest,
Till those devouring Swine run down,
(The Devil’s leaving the Possest)
And headlong in the Waters drown.

The Nation too too late will find,
Computing all their Cost and Trouble,
Directors Promises but Wind,
South-Sea at best a mighty Bubble.

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Sources:

Ross B. Emmett, editor. “Great Bubbles”
Charles Mackay. “Extraordinary Popular Delusions & the
Madness of Crowds”

Wall Street History will return Aug. 13.

Brian Trumbore

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