July 2011: Berkshire and the South Sea Bubble
This document from the Benyon family papers records the sale of Francis Hawes's estate in Englefield in 1722.
Frank Hawes was one of the directors of the notorious South Sea Company. The firm, supposedly created to trade with South America, instead purchased huge amounts of Government debt.
Despite having no tangible business, the Company then set about promoting its stock. The result was the first stock market bubble.
All of the UK's financial system bought into a price spiral, with investors allowed to buy more and more stock on credit. When the top of the market was reached, and investors started to sell, the value of the stock plummeted. Many people were left with vast debts when their payments for stock became due. In turn, the Company itself became bankrupt, spending a fortune in the process as it attempted to shore up the prices of its own shares.
In the end, the collapse of the Company's stock led to ruin for the banking sector, which had granted the loans for people to buy stock in the first place, and now had no hope of recovering its money.
If the story so far sounds like a parallel to recent world events, then where things differed in the early eighteenth century was that those responsible were made to forfeit all their own goods. The personal estates of all the directors of the Company were confiscated by Parliament, and sold to pay off some of the Company's debt.
Frank Hawes was one of the directors to suffer. He had recently moved to Berkshire, purchasing Purley Hall in 1720, at the beginning of the Bubble. Two years later, all his properties were sold, though he was allowed to remain a tenant in Purley Hall for some years afterwards.
