Extraordinary Popular Delusions and the Madness of Crowds: Vol.1-3

by Charles Mackay

In reading the history of nations, we find that, like individuals, they have their whims and their peculiarities; their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.

Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.

He did not calculate upon the avaricious frenzy of a whole nation; he did not see that confidence, like mistrust, could be increased, almost ad infinitum, and that hope was as extravagant as fear.

But all these successes only paved the way for reverses.

The people, who, after the first burst of their resentment is over, generally express a sympathy for the weak, were indignant that so much severity should be used to so little purpose. They did not see the justice of robbing one set of rogues to fatten another.

Law's bank had effected so much good, that any promises for the future which he thought proper to make were readily believed.

Amid the intoxication of success, both Law and the Regent forgot the maxim so loudly proclaimed by the former, that a banker deserved death who made issues of paper without the necessary funds to provide for them.

The extraordinary present fortune dazzled his eyes, and prevented him from seeing the evil day that would burst over his head, when once, from any cause or other, the alarm was sounded.

People of every age and sex, and condition in life, speculated in the rise and fall of the Mississippi bonds. The Rue de Quincampoix was the grand resort of the jobbers, and it being a narrow, inconvenient street, accidents continually occurred in it, from the tremendous pressure of the crowd. Houses in it, worth, in ordinary times, a thousand livres of yearly rent, yielded as much as twelve or sixteen thousand. A cobbler, who had a stall in it, gained about two hundred livres a day by letting it out, and furnishing writing materials to brokers and their clients. The story goes, that a hump-backed man who stood in the street gained considerable sums by lending his hump as a writing-desk to the eager speculators! The great concourse of persons who assembled to do business brought a still greater concourse of spectators.

Two sober, quiet, and philosophic men of letters, M. de la Motte and the Abbe Terrason, congratulated each other, that they, at least, were free from this strange infatuation. A few days afterwards, as the worthy Abbe was coming out of the Hotel de Soissons, whither he had gone to buy shares in the Mississippi, whom should he see but his friend La Motte entering for the same purpose. "Ha!" said the Abbe, smiling, "is that you?" "Yes," said La Motte, pushing past him as fast as he was able; "and can that be you?" The next time the two scholars met, they talked of philosophy, of science, and of religion, but neither had courage for a long time to breathe one syllable about the Mississippi. At last, when it was mentioned, they agreed that a man ought never to swear against his doing any one thing, and that there was no sort of extravagance of which even a wise man was not capable.

The edifice thus reared might not unaptly be compared to the gorgeous palace erected by Potemkin, that princely barbarian of Russia, to surprise and please his imperial mistress: huge blocks of ice were piled one upon another; ionic pillars, of chastest workmanship, in ice, formed a noble portico; and a dome, of the same material, shone in the sun, which had just strength enough to gild, but not to melt it. It glittered afar, like a palace of crystals and diamonds; but there came one warm breeze from the south, and the stately building dissolved away, till none were able even to gather up the fragments.

"Never," says Duclos, in his Secret Memoirs of the Regency, "was seen a more capricious government-never was a more frantic tyranny exercised by hands less firm. It is inconceivable to those who were witnesses of the horrors of those times, and who look back upon them now as on a dream, that a sudden revolution did not break out—that Law and the Regent did not perish by a tragical death. They were both held in horror, but the people confined themselves to complaints; a sombre and timid despair, a stupid consternation, had seized upon all, and men's minds were too vile even to be capable of a courageous crime."

The crowds around the bank were so great, that hardly a day passed that some one was not pressed to death.

Eight days afterwards the concourse of people was so tremendous, that fifteen persons were squeezed to death at the doors of the bank. The people were so indignant that they took three of the bodies on stretchers before them, and proceeded, to the number of seven or eight thousand, to the gardens of the Palais Royal, that they might show the Regent the misfortunes that he and Law had brought upon the country. Law's coachman, who was sitting on the box of his master's carriage, in the court-yard of the palace, happened to have more zeal than discretion, and, not liking that the mob should abuse his master, he said, loud enough to be overheard by several persons, that they were all blackguards, and deserved to be hanged. The mob immediately set upon him, and, thinking that Law was in the carriage, broke it to pieces. The imprudent coachman narrowly escaped with his life. No further mischief was done; a body of troops making their appearance, the crowd quietly dispersed, after an assurance had been given by the Regent that the three bodies they had brought to show him should be decently buried at his own expense.

They made every arrangement for rendering their temporary exile as agreeable as possible. The President gave the most elegant suppers, to which he invited all the gayest and wittiest company of Paris. Every night there was a concert and ball for the ladies. The usually grave and solemn judges and councillors joined in cards and other diversions, leading for several weeks a life of the most extravagant pleasure, for no other purpose than to show the Regent of how little consequence they deemed their banishment, and that when they willed it, they could make Pontoise a pleasanter residence than Paris.

Of all the nations in the world the French are the most renowned for singing over their grievances. Of that country it has been remarked with some truth, that its whole history may be traced in its songs.

Lundi, j'achetai des actions; Mardi, je gagnai des millions; Mercredi, j'arrangeai mon menage, Jeudi, je pris un equipage, Vendredi, je m'en fus au bal, Et Samedi, a l'Hopital.

The populace of of Paris so detested him, that they carried their hatred even to his grave. As his funeral procession passed to the church of St. Nicholas du Chardonneret, the burying-place of his family, it was beset by a riotous mob, and his two sons, who were following as chief-mourners, were obliged to drive as fast as they were able down a by-street to escape personal violence.

"Ci git cet Ecossais celebre, Ce calculateur sans egal, Qui, par les regles de l'algebre, A mis la France a l'Hopital."

At length corruption, like a general flood, Did deluge all, and avarice creeping on, Spread, like a low-born mist, and hid the sun.

Timely as of 2025

Mr. Walpole was almost the only statesman in the House who spoke out boldly against it. He warned them, in eloquent and solemn language, of the evils that would ensue. It countenanced, he said, "the dangerous practice of stockjobbing, and would divert the genius of the nation from trade and industry. It would hold out a dangerous lure to decoy the unwary to their ruin, by making them part with the earnings of their labour for a prospect of imaginary wealth." The great principle of the project was an evil of first-rate magnitude; it was to raise artificially the value of the stock, by exciting and keeping up a general infatuation, and by promising dividends out of funds which could never be adequate to the purpose. In a prophetic spirit he added, that if the plan succeeded, the directors would become masters of the government, form a new and absolute aristocracy in the kingdom, and control the resolutions of the legislature. If it failed, which he was convinced it would, the result would bring general discontent and ruin upon the country. Such would be the delusion, that when the evil day came, as come it would, the people would start up, as from a dream, and ask themselves if these things could have been true. All his eloquence was in vain. He was looked upon as a false prophet, or compared to the hoarse raven, croaking omens of evil. His friends, however, compared him to Cassandra, predicting evils which would only be believed when they came home to men's hearths, and sta...

Several peers spoke warmly against the scheme; but their warnings fell upon dull, cold ears. A speculating frenzy had seized them as well as the plebeians. Lord North and Grey said the bill was unjust in its nature, and might prove fatal in its consequences, being calculated to enrich the few and impoverish the many.

It seemed at that time as if the whole nation had turned stockjobbers. Exchange Alley was every day blocked up by crowds, and Cornhill was impassable for the number of carriages. Everybody came to purchase stock. "Every fool aspired to be a knave." In the words of a ballad, published at the time, and sung about the streets, ("A South Sea Ballad; or, Merry Remarks upon Exchange Alley Bubbles. To a new tune, called 'The Grand Elixir; or, the Philosopher's Stone Discovered.'") Then stars and garters did appear Among the meaner rabble; To buy and sell, to see and hear, The Jews and Gentiles squabble. The greatest ladies thither came, And plied in chariots daily, Or pawned their jewels for a sum To venture in the Alley.

Already the directors had tasted the profits of their scheme, and it was not likely that they should quietly allow the stock to find its natural level, without an effort to raise it. Immediately their busy emissaries were set to work. Every person interested in the success of the project endeavoured to draw a knot of listeners around him, to whom he expatiated on the treasures of the South American seas.

Sounds familiar re: 2025 smh

Some of these schemes were plausible enough, and, had they been undertaken at a time when the public mind was unexcited, might have been pursued with advantage to all concerned. But they were established merely with the view of raising the shares in the market. The projectors took the first opportunity of a rise to sell out, and next morning the scheme was at an end.

Sensible men beheld the extraordinary infatuation of the people with sorrow and alarm. There were some, both in and out of Parliament, who foresaw clearly the ruin that was impending.

Notwithstanding this proclamation, roguish speculators still carried them on, and the deluded people still encouraged them.

Mr. Hungerford, who had rendered himself very conspicuous in the House of Commons for his zeal in behalf of the South Sea Company, and who was shrewdly suspected to have been a considerable gainer by knowing the right time to sell out, was very magniloquent on this occasion.

Various are the conjectures why the South Sea directors have suffered the cloud to break so early. I made no doubt but they would do so when they found it to their advantage. They have stretched credit so far beyond what it would bear, that specie proves insufficient to support it. Their most considerable men have drawn out, securing themselves by the losses of the deluded, thoughtless numbers, whose understandings have been overruled by avarice and the hope of making mountains out of mole-hills. Thousands of families will be reduced to beggary. The consternation is inexpressible—the rage beyond description, and the case altogether so desperate that I do not see any plan or scheme so much as thought of for averting the blow, so that I cannot pretend to guess what is next to be done." Ten

"And thus," to use the words of the Parliamentary History, "were seen, in the space of eight months, the rise, progress, and fall of that mighty fabric, which, being wound up by mysterious springs to a wonderful height, had fixed the eyes and expectations of all Europe, but whose foundation, being fraud, illusion, credulity, and infatuation, fell to the ground as soon as the artful management of its directors was discovered."

during the progress of this dangerous delusion, the manners of the nation became sensibly corrupted.

Mood

Nations, like individuals, cannot become desperate gamblers with impunity. Punishment is sure to overtake them sooner or later.

And the comeuppance can come centuries, decades, or even just a single presidency later.

Men were no longer satisfied with the slow but sure profits of cautious industry. The hope of boundless wealth for the morrow made them heedless and extravagant for to-day. A luxury, till then unheard-of, was introduced, bringing in its train a corresponding laxity of morals. The overbearing insolence of ignorant men, who had arisen to sudden wealth by successful gambling, made men of true gentility of mind and manners, blush that gold should have power to raise the unworthy in the scale of society.

every haughty look, every overbearing speech, was set down, and repaid them a hundredfold in poverty and humiliation.

Nobody seemed to imagine that the nation itself was as culpable as the South Sea Company. Nobody blamed the credulity and avarice of the people,—the degrading lust of gain, which had swallowed up every nobler quality in the national character, or the infatuation which had made the multitude run their heads with such frantic eagerness into the net held out for them by scheming projectors. These things were never mentioned. The people were a simple, honest, hard-working people, ruined by a gang of robbers, who were to be hanged, drawn, and quartered without mercy.

He was, however, acquitted by a majority of three only. The greatest exertions were made to screen him. Lord Stanhope, the son of the Earl of Chesterfield, went round to the wavering members, using all the eloquence he was possessed of to induce them either to vote for the acquittal or to absent themselves from the house. Many weak-headed country-gentlemen were led astray by his persuasions, and the result was as already stated.

Still happening

Mr. Aislabie, whose high office and deep responsibilities should have kept him honest, even had native principle been insufficient, was very justly regarded as perhaps the greatest criminal of all.

This verdict caused the greatest joy. Though it was delivered at half-past twelve at night, it soon spread over the city. Several persons illuminated their houses in token of their joy. On the following day, when Mr. Aislabie was conveyed to the Tower, the mob assembled on Tower-hill with the intention of hooting and pelting him. Not succeeding in this, they kindled a large bonfire, and danced around it in the exuberance of their delight. Several bonfires were made in other places; London presented the appearance of a holiday, and people congratulated one another as if they had just escaped from some great calamity.

This was the day on which Mr. Craggs, the elder, expired. The morrow had been appointed for the consideration of his case. It was very generally believed that he had poisoned himself. It appeared, however, that grief for the loss of his son, one of the Secretaries of the Treasury, who had died five weeks previously of the small-pox, preyed much on his mind. For this son, dearly beloved, he had been amassing vast heaps of riches: he had been getting money, but not honestly; and he for whose sake he had bartered his honour and sullied his fame, was now no more. The dread of further exposure increased his trouble of mind, and ultimately brought on an apoplectic fit, in which he expired. He left a fortune of a million and a half, which was afterwards confiscated for the benefit of the sufferers by the unhappy delusion he had been so mainly instrumental in raising.

This is a fascinating insight into the minds and motives of those who would rob their own country.

But it was a long time before public credit was thoroughly restored. Enterprise, like Icarus, had soared too high, and melted the wax of her wings; like Icarus, she had fallen into a sea, and learned, while floundering in its waves, that her proper element was the solid ground. She has never since attempted so high a flight.

Until the year 1634 the tulip annually increased in reputation, until it was deemed a proof of bad taste in any man of fortune to be without a collection of them.

People who had been absent from Holland, and whose chance it was to return when this folly was at its maximum, were sometimes led into awkward dilemmas by their ignorance.

The stockjobbers, ever on the alert for a new speculation, dealt largely in tulips, making use of all the means they so well knew how to employ, to cause fluctuations in prices. At first, as in all these gambling mania, confidence was at its height, and everybody gained. The tulip-jobbers speculated in the rise and fall of the tulip stocks, and made large profits by buying when prices fell, and selling out when they rose. Many individuals grew suddenly rich.

The few who had contrived to enrich themselves hid their wealth from the knowledge of their fellow-citizens, and invested it in the English or other funds. Many who, for a brief season, had emerged from the humbler walks of life, were cast back into their original obscurity. Substantial merchants were reduced almost to beggary, and many a representative of a noble line saw the fortunes of his house ruined beyond redemption.