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Financial networks and the South Sea Bubble

In 2015 the Oxford Dictionary of National Biography introduced an annual research bursary scheme for scholars in the humanities. The scheme encourages researchers to use the Oxford DNB’s rich content and data to inform their work, and to investigate new ways of representing the Dictionary to new audiences. As the first year of the scheme comes to a close, we ask the first of the 2015-16 recipients—the economic historian, Dr Helen Paul of Southampton University—about her research project, and how it’s developed through her association with the Oxford DNB.

What was the South Sea Bubble and what’s its importance for a history of early eighteenth-century Britain?

The South Sea Bubble was a financial bubble on the London stock market in 1720. The South Sea Company’s shares reached very high prices before the bubble burst. The event was widely considered to be a disaster and the result of folly and fraud. The whig politician, Robert Walpole, took charge and established his political dominance, becoming prime minister in the following year. Economic historians doubt that the Bubble caused as much economic damage as contemporaries seem to have believed. The political scandal was real enough and there was a public enquiry. The Chancellor of the Exchequer, John Aislabie, was even put into the Tower of London for a short time. The Bubble was reflected in popular culture and prints, plays and all sorts of ephemera appeared as critiques. Daniel Defoe wrote about the Bubble and William Hogarth created a print depicting it. The Bubble was often used as an excuse to criticize financiers as a class, and also to blame particular groups such as Jewish people, foreigners and women.

Your research focuses on people involved in the Bubble and their associates. How has the Oxford Dictionary of National Biography added to your knowledge of these networks?

The Oxford DNB entries highlight connections between people and locations which are not easy to discover in any other way. I’ve been able to link people as individuals but also to see how they formed groups (both informally and formally) which connect back to the Bubble. Family networks or political allegiances were so important in the crisis and its aftermath. The Oxford DNB is rich in its coverage of early eighteenth-century political actors. Simple word searches in Full Text identify, and provide more detail about, minor players who might otherwise be overlooked as they were not central to the event. It can become quite addictive to read up on these people as their biographies are only a click away.

You’ve chosen to represent these networks visually: what value can visualization bring to our understanding of Hanoverian political and financial networks?

Visualizations help make complex networks easier to understand. They also show just how many different people were involved in each network and how closely they were connected to major players. It is possible to highlight connections which may have not been noted before. Digital humanities technologies allow a very simple diagram to be used to show connections between nodes (representing individual ODNB entries), and the interconnection of people via sub-networks we might not previously have identified as sharing a political or financial association. By clicking on the node, you can read about the person on the ODNB site. Thanks to a visual representation, it’s easy to see the overall network or to focus in on specific details. Ultimately, the visualization is just a digital version of drawing out a network on a piece of paper, though online it’s much more manipulable and extensible. It is highly intuitive.

I had no idea that the ODNB had so many features beyond the biographies themselves.

You’re also working with the National Trust: why is the South Sea Bubble, and its legacy, of interest here?

The National Trust manages Studley Royal (a world heritage site) and its adjoining property of Fountains Abbey in North Yorkshire. Studley Royal was owned by John Aislabie who was Chancellor of the Exchequer at the time of the Bubble. Aislabie fell from power and retired to Yorkshire to build his famous water gardens, so there a close connection between Hanoverian high politics and finance and this country house and grounds. Visitors and guides are still reliant on the old ‘gambling mania plus fraud’ explanation for the existence of the Bubble. This story implies that investors were all fools or gambling mad and that many lost fortunes in the South Sea. It ignores the rational reasons to invest in the South Sea Company itself. The Company helped the government service part of the National Debt, for which it received a fee, and it also engaged in the trade of enslaved people. Popular histories tend to exclude these details which make it difficult to understand why anyone would invest money. In addition, people who made money or who only lost a small amount are not focused on. Economic historians believe that the traditional version is an oversimplified story. It also tends to leave out the importance of slavery in the South Sea Company’s history.

What are uses of the Oxford DNB for historical research that you’ve come across during your bursary year?

The same visualization process can be applied to many other topics. The ODNB’s editors have suggested other eighteenth-century groups and networks which could benefit from the same treatment. They have also suggested linking in other ODNB resources such as their podcast collection. I had no idea that the ODNB had so many features beyond the biographies themselves. You can discover more about what is possible by having old-fashioned face-to-face meetings. Even though this is a digital project, it’s been really beneficial to come to Oxford and to meet the Dictionary’s editorial team. Networks of historical actors are important, but so are networks of historians themselves. I’ve learned a lot about the ODNB from doing this project, but I’m sure that there is more to discover.

What are the next steps for your research?

I would like to provide more online material for guides and visitors at Studley Royal using a new technology called Blupoint. This is designed to work at sites with little or no Wifi coverage. It was developed at the University of Southampton for use in remote parts of Africa. However, it would be ideal for the Studley Royal site which has problems with coverage. I’m also undertaking some more traditional archival research involving a group of investors based outside of London. They granted power of attorney documents to their representatives and some of the documents remain. I came across these records by a lucky accident—they were kept because a local antiquarian liked the signatures on the documents. I have not come across anything similar, so they were a real find. In the longer term, I would like to write a book about John Aislabie and the South Sea Bubble. It is useful to use the visualization to see how he fits in with the many other participants in the event, and how these relationships developed, taking in new people, after the Bubble.

Featured image credit: “South Sea Bubble”, by Edward Matthew Ward. Public domain via Wikimedia Commons

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