- 저자 Larry Neal
- 편집자 Michael D Bordo, Forrest Capie
- 도움을 주신 분들 Michael D Bordo, Forrest Capie
- 에디션 재판, 일러스트
- 발행인 Cambridge University Press, 1993
- ISBN 0521457386, 9780521457385
- 길이 292페이지
※ 메모: 국제 금융시장의 형성 과정을 다룬 책이다. "이성의 시대(In the Age of Reason)"라 함은 계몽사상을 꽃피웠던 서구 18세기(우리나라에서는 실학사상이 등장할 때다)를 가리킨다.
18세기 프랑스에서 미시시피 금융거품을 일으킨 존 로(John Law)를 다룬 다른 책의 몇 구절에 대해 인터넷에서 만난 어느 분이 문의해오신 내용(묻고 답하기: 함께 생각해요)을 연구하다가 찾아본 책이다. 아래에 간단히 발췌한 내용을 기록해 둔다. 한편, 1993년판 말고 2002년판도 발견된다. 발췌 내용은 1993년판의 것이다.
***
On the page 62:
Chapter 4. The Banque Royale and the South Sea Company: how the bubbles began
The Mississipi Bubble in France, the South Sea Bubble in England, and similar bubbles in Holland and Germany during the years 1719 and 1720 were parts of the first international stock market speculative boom and bust in capitalit Europe. The legacy of those episodes was substantial. The Bubble Act of 1720 in England limited the use of joint-stock corporations until well into the nineteenth century, and the French collective memory of John Law and his Banque Royale meant that "there was hesitation even in pronouncing the word 'bank' for 150 years thereafter,"[1] and, of course, they gave us the word "bubble" for describing purely speculative movements in asset prices. It is useful to present and analyze as clearly as possible these classic bubbles, useful not only for better understanding the economic history of the 18th century but also for grasping its significance for economic theory. It is intrinsically interesting for economic theory to observe the activities on capital markets when they were in a relatively pristine state.
The task of quantitative analysis and theoretical understanding is greatly aided by using the data set developed here for London capital market. it is unfortunate that nothing comparable has yet been found for France or the Netherlands. Financial initiatives in both countries help explain the peculiar course of the South Sea Bubble in England throughout its duration. Moreover, the repercussions of the South Sea Bubble for those two countries were, if anything, more important for European economic history than were the bubble's effects within England. France had the largest domestic economy in Europe, and the Netherlands dominated the overseas enterprises in Europe. Despite the absence of a data source for either of these two mercantile and financial powers comparable to Castaing's ^Course of the Exchange^, there do exist data resources for them that modern economic historians have just begun to exploit. Moreover, much more can be inferred about events in France and Holland from the data available in England.
On the page 63:
The bubbles in Frace, in England, and then later in the Netherlands and Portugal that occurred in the years 1719-21 were part of the same historical process. The governments in all those cases were in the beginning stages of political modernization, with more limited monarchies and more powerfull parliaments, but at the same time financially encumbered with antiquated tax systems and debt instruments. Political advantages were readily apparan to whichever party could tap directly into the financial markets and foreign trade opportunities emerging for northwestern Europe. The boldest initiatives were taken, as might be expected, by France, the most backward of the mercantile states. The greatest long-run success was enjoyed, as might also be expected, by England, the best endowed of the mercantile states in terms of both financial markets and foreign markets.
1719-1720.JPG)
In this chapter, explicit linkages are drawn between the two major stock market crises 1719-20 and the aftershocks in Amsterdam and Hamburg, using semiweekly exchange-rate data that were published regularly throughout that period. These have never been used before to analyze either the dynamics of the two major bubbles or the linkages between them. Though there has been extensive study of the two bubbles individually, there has been little investigation of the links between them, much less the links with the later bubbles in the Netherlands.[2] So the data we present in the various charts from both Paris and London provide a unique overview of each stock market bubble and the direct linkages between them.[3] The statsitical analysis to be presented regarding the daily price data from the Mississipi and South Sea cases also represents the first empirical effort at characterizing the course of these bubbles in terms of the events in the foreign exchanges.[4]
Using quotations from the ^Course of the Exchange^ for information on exchange rates, gold and silver prices, and stock prices on the London market, we can chart the progress of this first pan-European stock mania. The stock prices are daily for the six trading days in London, whereas the exchange rates and gold and silver prices occur as twice-weekly quotes(Tuesday and Friday) in the ^Course of the Exchange^. We begin our coverage with January 1719, four months before the Mississipi Bubble started, and end it after December 1720, when the South Sea and Amsterdam bubbles had collapsed. Because the dates in the ^Course of the Exchange^ were quoted from the Old Style(O.S) or Julian calendar, all dates listed in this book will be based on that calendar, even though both Amsterdam and Paris were using the New Style(N.S.) or Gregorian calendar.
On the page 65:
(중략...) Although each exchange-rate series has its peculiarites, all show perids of sustained rises and falls, and all are marked by occasional "blips"(a sudden rise or fall followed quickly by a reversal). (중략...)
On the page 68:
(... 중략) blip in the spring of 1719. This is easily overlooked, given the violent fluctuations to come, but it is interesting that this coincides with the start of Law's system in May 1719, with the formation of the Compagnie des Indes, the general trading monopoly company for France, on the basis of Law's existing Compagnie d'Occident. The historical literature suggests that money left London and Amsterdam for Paris in the late summer of 1719. Scott wrote that "Paris became the Mecca of speculators of Europe."[7] Carswell cited a report that 30,000 foreign speculators had entered Paris in the fall of 1710.[8] The graph of the London-Paris exchange rate shows a slight appreciation of the livre in mid-August, but the increase was small relative to the "background noise" of the previous two months. In September, at the height of the capital flow to Paris, the exchange rate actually depreciated!
The answer to the apparant paradox is that Law fostered the boom through a systematic money inflation(Table 4.1). The Paris exchange rate started to depreciate in late October 1719, and that continued to March 1720, when a brief period of stability began before the final burst of paper inflation. That depreciation was due to a slowing down and reversal of the capial inflow, along with the continued increase in the issue of bank notes and debasement of the livre by Law. In late November and early December 1719 the pound appreciated sharply with respect to the guilder and the livre. Because of the suddenness of the movements and the sharp drop in the price of French stock, we infer that a fair number of speculators took their profits and departed for England. Scott estimated that 500 million livres in bullion had been carried out in late 1719.[9] When the share quotations for the Compagnie des Indes had reached Law's target level of 10,000 lives(a 20-fold increase) in the middle of November(O.S), the issuance during the next week of 30 million livres worth of new shares stabilized the price.[10] At the end of that week, stock market speculators left Paris for London.
On the page 69: (중략)
On the page 72:
(...중략) This brief history of the effects of the English South Sea Bubble on the London exchange rates shows clearly that the influence of Law's system in France was paramount at all stages--beginning, speculative boom, increasing liquidity cruch, and final collapse, as well as the protracted period required for recovry. The summary of the system that follows relies essentially on the data and analysis presented by Faure. Faure's study, in turn, drew heavily on the previous work by Harsin, but supplemented it with important new data on the share prices of the Compagnie des Indes, exchange rates in Paris on both Amsterdam and London, and the market values of bank notes issued by the Banque Royale.[15] These data re incorporated into Figure 4.4 and Table 4.1 Those studies, however, emphasized the singularity of the French experience, rather than its linkages to the (중략...)
[15] Faure, ^Le Banqueroute de Law^, added his own delightful apparaisal of the high politics of the era, as acted out by prinicpals possessing an amazing variety of sexual idiosyncrasies!
On the page 75:
(...) The third step in Law's plan was to raise the market value of the shares to 10,000 livres--this in order to reduce the effective rate of interest to 2%.[18]
To facilitate speculation, or, in his view, to mobilize the necessary capital, Law took the following steps:
1. He divided shares into fractions small enough so that modest investors would be able to purchase them.
2. He provided for installment payments, 10% per month, and further provided that the first two months could be deferred to the third. That meant that December and March were the months of reckoning.
3. He provided loans from Banque Royale on the security of shares, even if only partially paid for.
To stabilze the price of Compagnie d'Occident stock after it had reached the desired level of 10,000 livres, Law took these additinal steps:
4. Starting on 19 December(O.S.), he opened an office for the purchase and sale of shares in the company.
5. He later fixed the price of each share at 9,000 livres.[19]
All these steps can be seen as establishing the rules for a game whose object was to increase the price of shares of the Compagnie des Indes to 10,000 livres, later reduced in light of of international pressures to 9,000 livres.
Law, in other words, manufactured the conditions necessary for a price bubble to occur in the stock of the Compagnie des Indes by encouraging foreign investors, mainly from England and Holland, as well as wealthy Frenchmen, to buy in while the price was being forced up. At the top of the bubble, when the price per share had reached his target level of 10,000 livres, the challenge to Law was to lock-in the foreigners or to offset thier exit from the Paris market by bringing in a broader range of French participants. In other words, Law was creating the conditions necessary for a short-lived "rational bubble." This is defined in the current economics literature as a continuing rise in the price of an asset that is generated by market participants anticipating that rises in its prices will continue to occur. By their actions, they make these anticipations self-fulfilling, at least for a limited period. The process must end, usually quickly, and when it does the price must return to the underlyinng fundamental level determined by long-run determinants of supply and demand. The challenge that Law posed for himself, and for the French state, was to sustain the high price of Compagnie des Indes stock at the top of the bubble so that the French economy might benefit from a higher degree of monetization and a lower long-term rate of interest. He failed that challenge--a result considered inevitable by Richard Cantillon and his cosmopolitan clients.[20]
On the page 76:
The appendix to this chapter provides some statistical tests to determine if the prices of Mississipi stock in the fall of 1719 followed a pattern consistent with such a "rational bubble." The statistical results are mixed, one set indicating that Law had generated a complex form of such a rational bubble, if only for the three months from mid-August to mid-November 1719, the other indicating that he was exercising the enormous power he possessed at that time(effectively controlling singlehandedly the fiscal, monetary, and exchange-rate policies of the largest economy in Europe) to shift market fundamentals in an unpredictable way.
These statistical results are not surprising from a historical viewpoint. The system of John Law contained such a great mixture of elements and controlled directly so many of the conceivable policy variables that it has remained a fascinating question whether or not it could have worked, either in part or with some minor modificaion. Faure distinguished two parts to it--^le plan sage^ and ^le plan fou^--and argued that the "wise plan" could have worked very well if left on its own, but the "mad plan" that ensued prevented that. These two "plans" correspond, perhaps, to the "rational" and "irrational" bubbles discussed in finance literature today.
Irrational bubbles are those in which the relationship of an asset to its market fundamental simply breaks down because of overzealous trading or an unrealistic appraisal of the value of the stock. Kindleberger espouses this view of market bubbles. In this scenario, a shock to the economic system changes the perceived profitability of a particular enterprise. When that is coupled with easy credit, a boom ensues. Speculation spreads to sectors of society whose members normally avoid playing market. These new entrants have little knowledge of the market and thus add an element of irrationality into it. Kindleberger's analysis suggests a mania that spreads from the market for the original asset to other assets--shares in all sorts of joint-stock companies, real estate, and a madcap variety of alternative assets. The South Sea Bubble fits his analysis as if tailor-made, especially if we rely soley on the analysis of Adam Anderson, who listed all the frivolous schemes that arose during the height of the speculation on South Sea stock.
On the page 77:
The motivation for the South Sea scheme was essentially the same as for the Mississipi Bubble: to refiance the immense debts accumulated by the government during the War of the Spanish Succession.[21] And the mechanics of the two schemes were very similar. In exchange for their annuities, holders of the existing government debt were offered new South Sea Company stock that promised capital gains. Two-thirds of the annuity owners made the exchange, in response to increasingly attractive terms offered by the directors of the South Sea Company. W. R. Scott, in his classic analysis, divided these directors into two groupd: (1) an inner ring of prime movers privy to most of the details of each successive stage of the scheme and (2) the remainder of the directors, who were probably not. This creates the two classes of traders needed for a rational bubble to arise.
The operations consisted of four new issues of stock that were made on 14 April, 29 April, 17 June, and 24 August 1720(O.S.) These could be purchased one-fifth down(first and fourth issues) or one-tenth down(second and third issues), with the balance due in equal installments spread over 16 months(fisrt issue), 32 months(second issue), 54 months(third issue), or 36 months(fourth issue). For the last two issues, loans could be obtained from the South Sea Company itself for the market value of the South Sea shares held by a purchaser.[22] According to Dickson, the rise in price of the shares occurred in three spurts: the second half of March, the second half of May, and during June. He argues that the first was due primarily to foreign speculation shifting from Paris to London, the second was due to increased participation by Dutch investors and the beginning of loans by directors of the company on security of South Sea stock, and the third was due to an immense increase in loans on stock, on subscription receipts, and even on subscriptions made verbally.[23]
The conclusion from our statistical tests, described fully in the appendix, is that a rational bubble in South Sea stock occurred, but only during the period 23 February through 15 June, precisely the period identified by Dickson as the interval when foreign participation was most active. In the periods before the entry of foreigners and after their exit, a rational bubble does not appear, nor, using the same statistical techniques, do we find a rational bubble in the price of shares of either the Bank of England or the East India Company at any time, despite the sympathetic rise and fall in their prices during the South Sea Bubble.
On the page 78:
In describing which periods to examine for evidence of rational bubbles, we have used the movements in the foreign exchange rates when there were sudden rises and relapses to mark the entry and exit of outsiders--their exchange-rate signatures. Although the "outsider" category can be further distinguished between "speculators" and "suckers," implicitly we ususally put foreign outsiders into the speculator group and domestic outsiders into the sucker group. In fact, of course, foreigners and natives could be either speculators or suckers, and as the earlier discussion of the Ashton effect demonstrated, both foreign and domestic speculators would have found it most convenient to enter and exit the capital markets of the 18th century through the medium of foreign bills of exchange.
The dominant foreigners mentioned at the time in both bubbles were Dutch, and contemporary accounts credited them with being extraordiinarily shrewd in picking their moments to enter and to leave. In fact, English and Irish investors played an important role in the Mississipi Bubble. Luethy mentioned the case of Jean Lambert, a director of the South Sea Company who came to Paris in August 1779 and who was expelled by Law in March 1720 under the charge that he had remitted ￡20 million to London in order to break the French exchange rate.[24] French investors were active in the South Sea episode. Luethy described the role of the Oglethhorpe family, members of which moved freely between London and the New World and the Jacobite court in Paris.[25] Hamilton gave details of the most amazing example of all: John Law's short sale of ￡100,000 of East India stock in late summer 1719 at ￡180,000 for delivery in August 1720. That had to be covered in the summer of 1720 by buying East India stock at nearly double the agreed sale price. Law lost a fortune in doing that, and his London banker failed by the end of 1720. And all this arose, apparently, from a bet he made with Thomas Pitt in the summer of 1719 when he was initiating his system. The probable basis was to show his assurance that his Compagnie d'Occident would cause the fortunes of the British competitor to suffer.[26]
[26] Earl J. Hamilton, "John Law of Lauriston: Banker, Gamester, Merchant, Chief?" ^American Economic Review^, 57(May 1967), pp. 275-6.
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