Invested: How Three Centuries of Stock Market Advice Reshaped Our Money, Markets, and Minds by Paul Crosthwaite

CHAPTER ONE
Making the Market (1720–1800)
On April 22, 1720, as the South Sea Bubble began to inflate, an Irishwoman
named Jane Ashe, recently widowed, wrote to a friend of the family, the
Reverend Richard Hill. Hill was a prosperous diplomat and statesman who
managed Ashe’s investments. She was becoming concerned that she was
missing out on a good opportunity, writing that she was “very sorry to find”
from Hill’s last letter
that my little money was not in the South Sea, which might have
amounted to something considerable, but at the same time must return
my humble acknowledgements to you for your concern for me & I
must still depend upon it. I am an intire stranger to any thing of that
kind, & therefore cannot tell what to advice, but beg you will think of
some secure way to advance my little stock.
The letter reveals much about the early stock and share market. Sent from
Dublin to Hill in London, it shows that investment even at this point was
not confined to those living in the metropolis, thanks to regular packet boat
services facilitating relatively swift communications across the Irish Sea.
Nor did this market exclude women like Ashe who, at a time when they
faced numerous legal and economic constraints, were in many respects able
to participate on equal terms with men when buying and selling shares.
Above all, the letter, and others that have survived, gives an insight into the
personal connections that structured and sustained participation in the early
stock market. Jane’s late husband, St. George Ashe, bishop of Derry, had
been friends with Hill, and Jane—together with her son-in-law Sir Ralph
Gore—could tap into the wisdom of the well-connected Hill. These familial
connections allowed those who knew little about the stock market to place
their money in it with confidence. Gore, who conducted most of the
family’s correspondence with Hill, was thankful for the advice Hill gave
Ashe and himself, “both she and I being intire strangers to ye funds and ye
management of them.”
 With access to Hill, they did not need to trouble
themselves with learning about how to invest themselves or coming to their
own judgments: instead, Gore’s repeated request in his letters is that Hill
“dispose of her little stock as you do of your own.”
Ashe and Gore were lucky to know Hill. Enjoying the patronage of the
earls of Rochester and Ranelagh, he had amassed a fortune by middle age,
perturbing his father who reportedly observed, “My son Dick makes money
very fast: God send that he gets it honestly.”
 He was well placed to benefit
from the changes happening at the heart of the English state at the end of
the seventeenth century. The government’s need to leverage its tax revenues
to fund foreign wars led to a series of innovations at the heart of which was
the creation of a national (as opposed to royal) debt. A new financial
infrastructure was constructed, with the Bank of England, chartered in
1694, the New East India Company (1698), and the South Sea Company
(1711) all playing a part in servicing the state’s enormous borrowing needs.
Once described as the Financial Revolution, these reforms did not conjure
the modern impersonal financial world into being.
 Human intermediaries
remained critical at every level of the eighteenth-century market, such as
private loan-brokers who parceled government loans into smaller lots to sell
to their private lists of investors, and men like Hill, who could find
themselves handling the financial affairs of multiple family members and
friends.
In this environment, advice was something that circulated through
personal circuits more than print. If they had wanted to teach themselves
about London’s market for stocks and shares, Ashe and Gore would have
struggled to find a book explaining such things. The first manual to do so,
Thomas Mortimer’s Every Man His Own Broker, would not appear for
another forty years. Yet the pair were not entirely innocent of financial
matters, and their correspondence with Hill betrays an awareness of the
choice of investments and their relative merits, some of which may have
been gleaned from conversation with friends, but which also likely derived
from newspapers. In the earliest letter that survives from Gore to Hill, dated
late 1718, Gore explains that his mother-in-law “seems a little afraid of ye
Silesia Loane tho it bears a great interest,” and “would rather incline to
have it in ye Banque annuities as more safe tho less profitable.” But her
attitude changed when reports of the South Sea boom reached them in early

Invested: How Three Centuries of Stock Market Advice Reshaped Our Money, Markets, and Minds by Paul Crosthwaite