THE 1690S DIVING ENGINE BOOM

  

In June 1687 a ship called the James and Mary came up the Thames carrying roughly 32 tons of silver and jewels. Her captain was William Phips, a New England shipwright turned treasure hunter, and the cargo had spent forty-six years on a reef north of Hispaniola inside the wreck of the Nuestra Señora de la Concepción, the almiranta of the Spanish plate fleet of 1641.

The technology story
Every boom needs a story about the future, and the 1690s had the diving engine.

Christine MacLeod set out the numbers in "The 1690s Patents Boom: Invention or Stock-Jobbing?" in the Economic History Review in 1986. Five patents for diving engines were issued between 1672 and 1689. Between the autumn of 1691 and late 1693, seventeen petitions were filed and eleven enrolled. Diving engines alone accounted for almost a fifth of every patent issued in England in 1691 to 1693.

Not all of it was fraud. Edmond Halley, already known for the comet, built a diving bell of his own and worked it over the Guynie Frigott, a Royal African Company ship lost off Pagham in the spring of 1691. He kept three men at ten fathoms for an hour and three quarters. His real contribution was the resupply method, weighted casks of air lowered from the surface and vented into the bell, and it is genuine engineering rather than prospectus language. The venture still did not pay. That is the pattern of the decade in miniature: the technology sometimes worked, and the business almost never did.

The unwinding
The bubble did not die of embarrassment about diving bells. It died of a monetary crisis.

England's silver coinage had been clipped to the point of collapse. Full-weight silver in circulation fell from about £2.5 million in December 1693 to roughly £1 million by June 1695. William Lowndes, Secretary to the Treasury, proposed a 25 per cent devaluation. John Locke argued for a straight recoinage at the old standard, and Locke won the argument.

Parliament demonetised clipped coin in January 1696, and the Royal Mint could not produce replacements fast enough. The money supply fell from around £26 million in December 1695 to under £17 million six months later. The Land Bank, promoted as a rival to the two-year-old Bank of England, failed to raise its subscription. The Bank of England suspended redemptions from May to October 1696.

The equity market went with it. Between 1692 and 1697, East India Company stock fell from £200 to £37. The Royal African Company went from £52 to £13. Hudson's Bay went from £260 to £80. These were the blue chips.

To read the complete article, see:
How a sunken Spanish galleon set off London's first stock market boom, and how the boom ended (https://scripotime.substack.com/p/diving-engine-bubble-1690s-london)

	NBS (coinbooks.org) Web