Defoe's Review had ceased publication before the South Sea calamity, but it is not likely that he would have spoken out against it. Few voices were raised in criticism as the financial miracle of 1720 unfolded. The South Sea venture was never in any real respect a trading company.22 To establish a trade with South America depended on an unlikely conjuncture of political circumstances opening a previously closed market, and this prospect had in any case disappeared by 1718. Where it did find success was in creating a counter-weight to the Whig-dominated East India Company and Bank of England, and by sucking in surplus liquidity it had soon raised a huge capital. With no trade in view the directors now made an audacious attack on the Bank by proposing to take on the whole national debt. In a period of frantic negotiation a counter-bid from the Bank was seen off, and the South Sea Company emerged victorious. Such a huge liability, however, required a greatly increased share capital, and a rising share price would also greatly increase the prospects of meeting the Company's obligations. By judicious management of the market this was for a time achieved. Between January and April 1720 the price of South Sea stock had risen from 130 to 300; in the next two months stock appreciated a further 300 per cent. The South Sea stock was not an isolated beneficiary of this frantic activity. Bank and East India stock also rose sharply, and during the year to August a further 190 projects were floated, most as joint stock companies. All were seeking to catch the same hopeful tide that created money from nothing.
At the height of the Bubble newspapers had remarkably little to say about the astonishing events unfolding at the heart of the financial district. The Daily Courant, a single-page daily news sheet established in 1702, was the only organ in a position to chart the day on day rises, which seemed so miraculously to be enriching those blessed with stock. On 31 May, South Sea stock moved from 590 to 610; on 1 June from 610 to 760; on 2 June it touched a high of 870 before falling back to 770. Then on 24 June, after South Sea stock had traded at 750 the day before, The Daily Courant offered this momentous, but curiously dispassionate announcement: ‘yesterday South Sea stock was 1000’.23
In such extraordinary times, the weekly or tri-weekly news-sheets despatched to out-of-town subscribers by post could scarcely keep up. Those in the provinces, who would not normally have been subscribers to the Courant, generally heard of developments through correspondence with London friends. The papers also gave notice of meetings of the court, and publicised its determinations, as during the summer the Company took steps to enhance its capital further. These heady days, before Parliament intervened to curb projecting, brought a cascade of other calls for capital.24 The London newspapers were happy to find room for the numerous advertisements placed by these hopeful entrepreneurs. There were also an increasing number of advertisements placed by those seeking to cash in their shares and invest the profits in property or the accoutrements of wealth. At this point there was little adverse comment; this was reserved for the inevitable search for scapegoats when the Company's share price first faltered and then tumbled precipitously: ‘All is floating, all falling, the directors are cursed, the top adventurers broke.’25
The social consequences of the Bubble should not be exaggerated. Most of those who had invested were moneyed, and few were left destitute.26 The collapse of the Company was most deadly for its directors, who had made stock available, often on very preferential terms, to numerous Parliamentarians. Faced with personal losses, the Members of Parliament were at their most virtuous and censorious. The directors were summoned before the House of Commons and stripped of much of their personal wealth. Having performed this ritual sacrifice, the appetite for more fundamental investigation palled. The most scandalous aspect of the project had been the terms under which stock had been made available to persons of influence. They were allowed an option to buy at a stipulated rate, at no payment. It was a risk-free trade: if the stock went up, they took the profit, and if it did not the option lapsed.27 This irregular procedure, a bribe by any other name, had been recorded in the famous green book of the Company Secretary, Robert Knight. This mysterious volume had disappeared when Knight fled the country, but its pages included many surprising names, including that of the king, George I. When Knight was taken into custody in the Austrian Netherlands, the ministry was obliged to make energetic public efforts to secure his return to face trial, while simultaneously making equally urgent representations to the Habsburg authorities to ensure that these formal requests were denied. Incredibly, this tortuous procedure was successful; still more surprisingly, it remained secret. Although long suspected, the full extent of the ministry's duplicity was only revealed by documents discovered in the imperial archives in Vienna during the past twenty years.28 The famous green book was never seen again.
By 1720 London had a large and vibrant press: at least twenty competing papers sold many thousands of copies every week. It could hardly have been said to have covered itself in glory. Perhaps the failure to anticipate the crash should not be too heavily censured. A bubble is only identified as such when it bursts; until that point the steady upward march of share prices can easily seem the natural order of things. Those who identify a downturn too early, and miss out on the easiest profits, can end up as the biggest losers.29 In a stampede the middle of the herd can be the safest place. In the Bubble the press did what it does best: joined the torrent of virtuous indignation unleashed on those who gave too much, too generously, to men who would not accept that their unearned windfall could vanish as easily as it had been conjured up. As the share price slid towards oblivion in the autumn of 1720, the advertisements in The Daily Courant for coach horses and fine houses were replaced by notices of recently published pamphlets seeking to make sense of these unprecedented events. This day is published, offered the Courant on 31 October, The Battle of the Bubbles from their first sudden rise to their late speedy decay. It was clearly popular: a second edition was on sale only a week later.30 Once again it was specially penned pamphlets, rather than the weekly or daily press, that offered the natural place to analyse great events.31 And there was always the catharsis of ridicule. The Post Boy of 22 October offered (for six pence) a newly written play, The Broken stockbroker: or work for the bailiffs: a new farce as it was lately acted in Exchange alley. And those with time on their hands could at least invest in a new pack of playing cards, ‘wherein are represented several bubbles, with a satirical epigram on each card’. The enterprising makers clearly anticipated a large sale, since The Post Boy advertised a long list of places where the cards could be purchased (at a cost of three shillings).32
The real economy, meanwhile, adapted smoothly to the humbling of the South Sea Company. The primacy of the Bank resumed; coach-makers and smart London tailors enjoyed a difficult season; above all commerce continued to fuel the steady enrichment of the emerging bourgeoisie. By 1727 London had come close to equalling Amsterdam as the financial capital of northern Europe, an outcome that would have been unimaginable when in the previous century England was repeatedly humbled by Dutch sea power.33
Advertising
The early business press, it seems, offered very little in the way of advice to those seeking to take advantage of the new investment opportunities of the age; still less to those with money but no wisdom, seeking to avoid its pitfalls. The business press produced no seers of prophecy, no masters of divination. Economic journalism learned from its earliest days that it was far easier to be wise after the event. Those seeking visions into the future were as well advised to pore over the printed almanacs, with their opaque and tantalising foretelling of the year ahead. These continued to sell in huge numbers, and also provided useful fillers as excerpts for newspapers short of material.34
The world of commerce made its principal impact upon the newspapers not in discussions of high policy or investment strategy, but as an adjunct to the trade in goods and services: through paid advertising. By the eighteenth century advertisements were a ubiquitous part of the market in periodical news. They throw a fascinat
ing light on the developing marketplace; they also played an increasingly important part in underpinning the economics of the news industry.
14.3 Bubble playing cards. An opportunity to beguile care and forget fortunes lost for three shillings a pack.
Advertisements made their first appearance in newspapers in that most commercial of societies, the Dutch Republic. Newspapers in Amsterdam carried advertisements from the 1620s. The very first, for a forthcoming book of emblems, in fact appeared simultaneously in the two competing Amsterdam papers, on 10 August 1624.35 Neither stated the price of the book. Advertisements for books would make up a large proportion of the earliest advertisements in Dutch papers, as they would also in England, where advertisements would first appear in news periodicals in any number during the Interregnum.36 Booksellers, who often sold newspapers from their stalls or shops, clearly saw the opportunity to tempt buyers in to view other interesting new stock.
The range of advertisements carried by Dutch papers broadened rapidly. They normally fell into one of three categories: notifications of sales or services; public service notices; and personal items. The Republic was an early centre of public auctions, of pictures and books, and these forthcoming events were often advertised in the newspapers. Tutors and schoolmasters advertised their services; the city of Utrecht even took out a series of advertisements to announce the opening of the new university in 1636. Other public notices included of market days, new postal routes, and wanted posters: the oldest, a hue and cry for a shoemaker suspected of murdering the mayor of Weesp. Amsterdam was also the centre of the European diamond trade, and dealers were happy to promise a reward to see stolen goods returned. Individual citizens would advertise for the return of lost property or fugitive servants; in one poignant case, a mother was seeking to be reunited with her young children.37
The Dutch were precocious in their development of the newspaper trade. By the 1650s advertisements frequently occupied half of the last column, that is, one eighth of the total space. The early German newspapers were in contrast reluctant to admit much beyond book notices in their early years, and here the market in paid advertisements developed more slowly. In England, although advertisements appear in any numbers only in the 1650s, they proliferated very rapidly. Here again, notifications of newly published books were most common, but newspapers also soon found space for lost and found goods, runaway servants and patent medicines. Medicinal remedies would become a mainstay of English advertising, partly because booksellers often stocked a few patent potions alongside their books.38 The Gazette, as a paper of record, resisted advertisements for six years, until in 1671 it started to accept personal ads. These were often, it must be admitted, of a rather superior nature. In the issue of 21 September 1671 the queen appealed for the return of a missing spaniel, with furry feet and liver-coloured spots. And who could imagine a grander lost-property notice than that inserted in The Gazette of 4 May 1685 after the coronation of James II:
Lost at their Majesties coronation the button [knob] of his Majesty's sceptre, set about with 24 small diamonds, three rubies and three emeralds; a pendant pearl from his Majesty's gown about 9 carets of 30 common grains, and about 16 great links of a gold chain. Whoever gives notice thereof to the officers of her Majesty's Jewel-house, shall be well rewarded.39
Advertising was important for the development of the news industry in two very different ways. Firstly, in newspapers still overwhelmingly dominated by foreign, military and diplomatic despatches, they introduced an important element of the local and often parochial. Sometimes the advertisements were the only local or domestic news to be found in the entire paper. Secondly, they rapidly came to play an increasingly important role in underpinning the economics of the industry. In mid-seventeenth-century England advertisers were customarily charged sixpence per notice, but when Marchamont Nedham was granted the monopoly under Cromwell he raised rates to two shillings and sixpence. This helped make him a rich man. In 1657 he was sufficiently confident of the market to attempt an advertising paper, The Public Advertiser.40 This contained a variety of publicly useful information, such as shipping and stagecoach schedules, sales of real estate and horses, advertisements for servants and commodities, such as chocolate and coffee. When John Houghton's commercial information sheet, A collection for the improvement of husbandry, failed after its first issues, Houghton was able to revive it by a carefully considered strategy for advertising. Restored by an injection of cash from interested subscribers, Houghton used his next issues to test the market for different sorts of services. Thus in April 1694 he asked his customers, ‘whether advertisements of schools, or houses and lodgings about London, may be useful, I submit to those concerned’. By June he was ready to lay out his full list of services:
I sell chocolate, which I know to be a great helper of bad stomachs and restorative to weak people. I'll answer for their goodness.
I also sell true German Spa-water and sago.
If applied to, I'll strive to help masters to clerks, apprentices and other valuable servants and such to masters. Also masters of ships to chirurgians and they to masters.
I find advertisements of schools, or houses and lodgings to be let, are useful.
I know of valuable estates to be sold.
I want several apprentices for valuable tradesmen.
I can help to ready money for any library great or small.41
These years also saw the publication of a number of free sheets consisting entirely of advertising. Usually distributed in the vicinity of the Royal Exchange, these City Mercuries had a chequered history.42 They were generally single sheets, and did not observe perfect regularity, being printed and distributed when sufficient advertisements had been received to turn a profit. Even so they seem to have been viable only in times of the Gazette monopoly; when that was broken they were soon superseded by papers combining news and advertising.
Though these free sheets make only a modest contribution to the history of consumption, they have a distinguished ancestry, for it was no less a figure than the French thinker Montaigne who in 1591 had first proposed a bureau of commercial exchange, bringing buyers together with those who had something to sell. This proposal would be extraordinarily influential: the first attempt to set up such a bureau in England quoted directly from Montaigne in its prospectus.43 This scheme, in 1611, fell victim to the Crown's desire to extract too high an annual fee in return for the proposed monopoly, but similar schemes recurred at intervals through the century, leading ultimately to the establishment of Marchamont Nedham's short-lived advertising paper, The Public Advertiser. Most successful of all was the Bureau d'Adresse established in Paris by Théophraste Renaudot, later the editor of the Paris Gazette. Renaudot conceived his commercial exchange service as a means of supporting his medical duties as Commissioner General for the Poor. This altruism aroused considerable suspicion, and in 1644 Renaudot was obliged to close his bureau. Henceforth he and his heirs would have to console themselves with the advertising revenue that came with their monopoly of news publications in France. The concept of an advertising paper found its purest expression in the foundation of The Daily Advertiser in London in 1731, but this again soon faltered. Within a month it was recognised that this was not viable: the familiar mix of advertising with news was now too well established. By undertaking to ‘publish daily the latest and freshest accounts of all occurrences foreign and domestic’, The Daily Advertiser joined the ranks of general newspapers.44
Despite this mis-step, it is obvious that the late seventeenth-century proliferation of newspapers in England would have been unthinkable without the healthy advertising revenue generated. In the early eighteenth century the new journals also relied heavily on advertisements. By the end of its run The Tatler carried as many as eighteen in each issue, and in The Spectator they took up half the total space.45 They also generated the entirety of the profits. These more upmarket periodicals advertised a more exotic variety of goods reflecting the commercial vitality of London: wigs,
slaves, birdcages, shoe polish, cosmetics and medicines.
Advertisements played an even more crucial role in the development of a provincial press. With far more limited pools of potential customers who were prepared to pay two pence for a weekly news-sheet, it was hard to envisage turning a profit from the cover price alone. Allowance had to be made for the profit to the seller and the cost of cartage to bring copies to a dispersed circle of readers. The grim economics were set out with brutal economy by Thomas Avis, editor of The Birmingham Gazette. Because of local competition, Avis was attempting to sell his paper for three halfpence. This was an uphill struggle:
That a great deal of money may be sunk in a very little time by a publication of this nature, cannot seem strange to anyone who considers, that out of every paper one half-penny goes to the Stamp-Office, and another to the person who sells it; that the paper it is printed on costs a farthing; and that consequently no more than a farthing remains to defray the charges of composing, printing, London newspapers, and meeting as far as Daventry the post; which last article is very expensive; not to mention the expense of our London correspondent.46
With these considerable expenses to meet from a residual farthing a copy, this paper would have run at a loss had it not been for advertising income. Here we might consider the sounder economics of the Western Flying Post, which by the mid-eighteenth century might cram up to forty advertisements into its four pages. At a profit of one shilling and sixpence each (after tax) the income, £3 4s 6d, would exceed the profits from sales of over 1,500 copies (an unlikely print run for a paper serving rural Somerset and Dorset).47 If the paper was only clearing the farthing claimed by Avis, then this advertising revenue returned more than selling 3,000 copies. Advertising was a lifeline.
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