ldest and most
unstable character, and the early eighteenth century saw many losses
and constant fluctuations in the realm of finance. The most famous
instance of this was the "South Sea Bubble," a speculative scheme by
which a regulated company, the South Sea Company, was chartered in
1719 to carry on the slave-trade to the West Indies and whale-fishing,
and incidentally to loan money to the government. Its shares rose to
many fold their par value and fell to almost nothing again within a
few months, and the government and vast numbers of investors and
speculators were involved in its failure.

The same period saw the creation of the permanent national debt. In
earlier times kings and ministers had constantly borrowed money from
foreign or native lenders, but it was always provided and anticipated
that it would be repaid at a certain period, with the interest. With
the later years of the seventeenth century, however, it became
customary for the government to borrow money without any definite
contract or expectation as to when it should be paid back, only making
an agreement to pay a certain rate of interest upon it. This was
satisfactory to all parties. The government obtained a large sum at
the time, with the necessity of only paying a small sum every year for
interest; investors obtained a remunerative use for their money, and
if they should need the principal, some one else was always ready to
pay its value to them for the sake of receiving the interest. The
largest single element of the national debt in its early period was
the loan of L1,200,000 which served as the basis for the Bank; but
after that time, as for a short time before, sums were borrowed from
time to time which were not repaid, but became a permanent part of the
debt: the total rising to more than L75,000,000 by the middle of the
century. Incidentally, this, like the deposits at the goldsmiths and
the Bank, became an opportunity for the investment of savings and an
inducement to create more capital.

Fire insurance and life insurance both seem to have had their origin
in the later decades of the seventeenth century.

Thus in the realm of finance there was much more of novelty, of
actually new development, during this period than in agriculture,
manufacturing, or commerce. Yet all these forms of economic life and
of the social organization which corresponded to them were alike in
one respect, that they were quite minutely regulated by the national