In 1685, Sir William Phipps found caches of sunken treasure in Caribbean shipwrecks, setting off a burst of feverish speculation. Between 1691 and 1693, 11 out of the 61 patents issued in England were for diving bells. Many of these patenters apparently had no real invention to produce at all, but were simply seeking royal license to establish a diving-engine company to draw capital from credulous investors. One of those was Daniel DeFoe, who lost 200 pounds to a treasure-diving enterprise that evaporated as soon as it had cashed in on its patents. From Defoe’s An Essay on Projects:Here's Christine Macleod's "The 1690s Patents Boom: Invention or Stock-Jobbing?" offered free online (with sign-up) via JSTOR. In a nutshell "Get that patent, go raise some money".
There are, and that too many, fair pretences of fine discoveries,
new inventions, engines, and I know not what, which–being advanced
in notion, and talked up to great things to be performed when such
and such sums of money shall be advanced, and such and such engines
are made–have raised the fancies of credulous people to such a
height that, merely on the shadow of expectation, they have formed
companies, chose committees, appointed officers, shares, and books,
raised great stocks, and cried up an empty notion to that degree
that people have been betrayed to part with their money for shares
in a new nothing; and when the inventors have carried on the jest
till they have sold all their own interest, they leave the cloud to
vanish of itself, and the poor purchasers to quarrel with one
another, and go to law about settlements, transferrings, and some
bone or other thrown among them by the subtlety of the author to lay
the blame of the miscarriage upon themselves. Thus the shares at
first begin to fall by degrees, and happy is he that sells in time;
till, like brass money, it will go at last for nothing at all. So
have I seen shares in joint-stocks, patents, engines, and
undertakings, blown up by the air of great words, and the name of
some man of credit concerned, to 100 pounds for a five-hundredth
part or share (some more), and at last dwindle away till it has been
stock-jobbed down to 10 pounds, 12 pounds, 9 pounds, 8 pounds a
share, and at last no buyer (that is, in short, the fine new word
for nothing-worth), and many families ruined by the purchase. If I
should name linen manufactures, saltpetre-works, copper mines,
diving engines, dipping, and the like, for instances of this, I
should, I believe, do no wrong to truth, or to some persons too
visibly guilty....MORE
We've visited Defoe a dozen times (with two more coming), he seemed to be someone who went where the action was. We have only a couple posts that mention Phips [Phipps]
"When the William Phipps treasure-seeking expedition of 1687-1688 paid a 10,000% dividend to shareholders, it encouraged other corporations to be established for investors to profit from."
Ya think?
And on the 100-to-1 score: "Sunken Treasure: X Marks the Spot":
Sir William Phips was described by his contemporary, Daniel Defoe, as someone who “sought wealth and advancement through money-making schemes financed by others”.See also: Venture Capital
