The challenge of stock regulation came in preventing big fluctuations while maintaining the flow of investment




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The parliamentary debate of 1733, which was the only debate preserved among the anti-stock-jobbing bills, articulated the difference between virtue and corruption in the stock market. In 1733 Robert Walpole, the prime minister who had lost more than £27,000 in the South Sea crash, was one of the strongest supporters of this bill. He defended it from critics who worried that the bill would be “such a discouragement, that no man, I believe, will chuse to become a purchaser of any of our funds.”52 Walpole cited a recent example of a drop in East India Company stock to show that there was an honest way to operate in the market and a dishonest way:

There might be some, who upon its rise bought only with a view of selling out again at an advanced price. But I am persuaded there were others who bought even at the highest price with an honest intention, and without any other view but that of holding the stock they bought, and taking their dividends, and they should become due.53


By “honest intention,” he meant holding onto the stock for the long haul as opposed to selling it off for a quick profit. Quick selling was a trait of corruption. Walpole worried that “the game of stock-jobbing is often the cause” of corporate mismanagement. He wanted to improve the management of the British companies by cutting down on the stock gambling that so often lead the companies astray. “If we destroy the cause,” he said, “the effects must cease.” 54 In his view, stock-jobbing corrupted the operations of joint-stock companies, and the only way to right the company was to limit the stock-jobbing. It is interesting to see that, according to Walpole, the stock market was not inherently corrupt. Even in the heat of a debate against stock-jobbing, there was an affirmation that the stock trade could be virtuous if investors operated more like business partners than speculators. 55 The challenge of stock regulation came in preventing big fluctuations while maintaining the flow of investment.

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52 Parl. Deb., (1733): 51.

53 Ibid., 62. My emphasis.

54 Ibid., 63.

55 The idea that corruption was caused by stock trading—not stockholding—may explain why Jews were perceived as particularly pernicious stockjobbers. Bruce Carruthers counters the perception that the stock market had been “dominated” by people of “unorthodox social backgrounds”—including Jews, Heguenots, Quakers, and foreigners—by pointing out that, in the early eighteenth century, this group accounted for just 10 percent of East India stockholders. Despite their small numbers, they traded almost four times as frequently [as] “native English” stockholder, according to Carruthers. As we can see, this behavior clashed with the paradigm for “honest” stockholders. Perhaps this suggests how the morality and prejudices of the stock market grafted onto existing prejudices against Jews and other minority groups. Of course, it is also possible that the prejudice against frequent stock trading was a result of the anti-Semitic stereotype, not a cause of it. (Carruthers, City of Capital, 156-7.)

From Abel, Jonathan. “Taking Stock of Empire: Rethinking the Reform of the British East India Company in the Late Eighteenth Century.” Senior Thesis. Harvard University, 2005. (p. 30)


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